EXHIBIT 10.2
CHARTER COMMUNICATIONS, INC.
5.875% CONVERTIBLE SENIOR NOTES DUE 2009
RESALE REGISTRATION RIGHTS AGREEMENT
November 22, 2004
Citigroup Global Markets Inc.
Xxxxxx Xxxxxxx & Co. Incorporated
As Representatives of the Initial Purchasers
c/o Citigroup Global Markets Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Charter Communications, Inc., a corporation organized under the laws
of Delaware (the "Company"), proposes to issue and sell to certain purchasers
(the "Initial Purchasers"), for whom you (the "Representatives") are acting as
representatives, its 5.875% Convertible Senior Notes Due 2009 (the
"Securities"), upon the terms set forth in the Purchase Agreement between the
Company and the Representatives dated November 16, 2004 (the "Purchase
Agreement") relating to the initial placement (the "Initial Placement") of the
Securities. The Securities will be convertible into fully paid, nonassessable
shares of Class A common stock, par value $0.001 per share, of the Company (the
"Class A Common Stock") on the terms, and subject to the conditions, set forth
in the Indenture (as defined herein). To induce the Initial Purchasers to enter
into the Purchase Agreement and to satisfy a condition to your obligations
thereunder, the Company agrees with you for your benefit and the benefit of the
holders from time to time of the Securities and the Class A Common Stock issued
upon conversion of the Securities (including the Initial Purchasers) (each a
"Holder" and, collectively, the "Holders"), as follows:
1. Definitions. Capitalized terms used herein without definition
shall have their respective meanings set forth in the Purchase Agreement. As
used in this Agreement, the following capitalized defined terms shall have the
following meanings:
"Act" shall mean the Securities Act of 1933, as amended, and the
rules and regulations of the Commission promulgated thereunder.
"Affiliate" shall have the meaning specified in Rule 405 under the
Act and the terms "controlling" and "controlled" shall have meanings correlative
thereto.
"Broker-Dealer" shall mean any broker or dealer registered as such
under the Exchange Act.
"Business Day" shall mean any day other than a Saturday, a Sunday or
a legal holiday or a day on which banking institutions or trust companies are
authorized or obligated by law to close in New York City.
"Closing Date" shall mean the date of the first issuance of the
Securities.
"Commission" shall mean the Securities and Exchange Commission.
"Damages Payment Date" shall mean each Interest Payment Date. For
purposes of this Agreement, if no Securities are outstanding, "Damages Payment
Date" shall mean each May 16 and November 16.
"Deferral Period" shall have the meaning indicated in Section 3(h)
hereof.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission promulgated thereunder.
"Final Memorandum" shall mean the offering memorandum, dated
November 16, 2004, relating to the Securities, including any and all exhibits
thereto and any information incorporated by reference therein as of such date.
"Holder" shall have the meaning set forth in the preamble hereto.
"Indenture" shall mean the Indenture relating to the Securities,
dated as of November 22, 2004, between the Company and Xxxxx Fargo Bank, N.A.,
as trustee, as the same may be amended from time to time in accordance with the
terms thereof.
"Initial Placement" shall have the meaning set forth in the preamble
hereto.
"Initial Purchasers" shall have the meaning set forth in the
preamble hereto.
"Interest Payment Date" shall have the meaning set forth in the
Indenture.
"Liquidated Damages" shall have the meaning set forth in Section 7
hereof.
"Losses" shall have the meaning set forth in Section 5(d) hereof.
"Majority Holders" shall mean, on any date, Holders of a majority of
the then outstanding shares of Class A Common Stock constituting Registrable
Securities (with Holders of Securities deemed to be Holders, for purposes of
this definition, of the number of outstanding shares of Class A Common Stock
into which such Securities would be convertible as of such date) registered
under a Registration Statement.
"Managing Underwriters" shall mean the investment banker or
investment bankers and manager or managers that administer an underwritten
offering, if any, conducted pursuant to Section 6 hereof.
"NASD Rules" shall mean the Conduct Rules and the By-Laws of the
National Association of Securities Dealers, Inc.
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"Notice and Questionnaire" shall mean a written notice delivered to
the Company substantially in the form attached as Annex A to the Final
Memorandum.
"Notice Holder" shall mean, on any date, any Holder of Registrable
Securities that has delivered a completed and executed Notice and Questionnaire
and any other information reasonably requested by the Company pursuant to
Section 3(l) hereof to the Company on or prior to such date.
"Prospectus" shall mean a prospectus included in the Shelf
Registration Statement (including, without limitation, a prospectus that
discloses information previously omitted from a prospectus filed as part of an
effective registration statement in reliance upon Rule 430A under the Act), as
amended or supplemented by any prospectus supplement, with respect to the terms
of the offering of any portion of the Registrable Securities covered by the
Shelf Registration Statement, and all amendments and supplements thereto,
including any and all exhibits thereto and any information incorporated by
reference therein.
"Purchase Agreement" shall have the meaning set forth in the
preamble hereto.
"Record Holder" shall mean with respect to any Damages Payment Date,
each person who is a Holder of Securities that constitute Registrable Securities
on the record date with respect to the Interest Payment Date on which such
Damages Payment Date shall occur. In the case of a Holder of shares of Class A
Common Stock issued upon conversion of the Securities, "Record Holder" shall
mean each person who is a Holder of shares of Class A Common Stock that
constitute Registrable Securities on the May 1 or November 1 immediately
preceding the Damages Payment Date.
"Registrable Securities" shall mean Securities and each share of
Class A Common Stock issued upon conversion of Securities other than those that
have been (i) registered under the Shelf Registration Statement and disposed of
in accordance therewith or (ii) distributed to the public pursuant to Rule 144
under the Act or any successor rule or regulation thereto that may be adopted by
the Commission.
"Securities" shall have the meaning set forth in the preamble
hereto.
"Shelf Registration Period" shall have the meaning set forth in
Section 2(c) hereof.
"Shelf Registration Statement" shall mean a "shelf" registration
statement of the Company pursuant to the provisions of Section 2 hereof which
covers some or all of the Registrable Securities on an appropriate form under
Rule 415 under the Act, or any similar rule that may be adopted by the
Commission, amendments and supplements to such registration statement, including
post-effective amendments, in each case including the Prospectus contained
therein, all exhibits thereto and all materials incorporated by reference
therein.
"Special Counsel" means one law firm selected by the Representatives
or one such other successor counsel as shall be specified by the Majority
Holders.
"Trustee" shall mean the trustee with respect to the Securities
under the Indenture.
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"Trust Indenture Act" shall mean the Trust Indenture Act of 1939, as
amended, and the rules and regulations of the Commission promulgated thereunder.
"underwriter" shall mean any underwriter of Registrable Securities
in connection with an offering thereof under the Shelf Registration Statement.
2. Shelf Registration. (a) The Company shall as promptly as
practicable (but in no event more than 30 days after the Closing Date) file with
the Commission a Shelf Registration Statement providing for the registration of,
and the sale on a continuous or delayed basis by the Holders of, all of the
Registrable Securities, from time to time in accordance with the methods of
distribution elected by such Holders (subject to the restrictions set forth in
Section 6 hereof), pursuant to Rule 415 under the Act or any similar rule that
may be adopted by the Commission.
(b) The Company shall use its reasonable best efforts to cause the
Shelf Registration Statement to become or be declared effective under the Act as
promptly as practicable (but in no event more than 150 days after the Closing
Date).
(c) The Company shall use its reasonable best efforts to keep the
Shelf Registration Statement continuously effective, supplemented and amended as
required by the Act, in order to permit the Prospectus forming part thereof to
be usable by Holders for a period (the "Shelf Registration Period") from the
date the Shelf Registration Statement is declared effective by the Commission
until the earlier of (i) the date upon which there are no Registrable Securities
outstanding, (ii) the date as of which all the Registrable Securities have been
sold either under Rule 144 under the Act (or any similar provision then in
force) or pursuant to the Shelf Registration Statement, or (iii) the date on
which all Registrable Securities held by non-Affiliates are eligible to be sold
to the public pursuant to Rule 144(k) under the Act (or any similar provision
then in force).
(d) The Company shall cause the Shelf Registration Statement and the
related Prospectus and any amendment or supplement thereto, as of the effective
date of the Shelf Registration Statement or such amendment or supplement, (i) to
comply in all material respects with the applicable requirements of the Act; and
(ii) not to contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to make the
statements therein (in the case of the Prospectus, in the light of the
circumstances under which they were made) not misleading.
(e) At the time the Shelf Registration Statement is declared to be
effective, each Holder that became a Notice Holder on or prior to the date five
Business Days prior to such time of effectiveness shall be named as a selling
securityholder in the Shelf Registration Statement and the related Prospectus in
such a manner as to permit such Holder to deliver such Prospectus to purchasers
of Registrable Securities in accordance with applicable law, subject to the
terms and conditions hereof. Following the date that the Shelf Registration
Statement is declared effective, each Holder that is not a Notice Holder wishing
to sell Registrable Securities pursuant to a Shelf Registration Statement and
related Prospectus agrees to deliver a Notice and Questionnaire (and such other
information as is required by Section 3(l)) to the Company prior to any intended
distribution by it of Registrable Securities under the Shelf Registration
Statement. From and after the date the Shelf Registration Statement is declared
effective and during the
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Shelf Registration Period (but excluding any Deferral Period), the Company shall
as promptly as is practicable after the date a Notice and Questionnaire (and
such other information as is required by Section 3(l)) is delivered, and in any
event within the later of (x) 15 Business Days after such date or (y) 15
Business Days after the expiration of any Deferral Period in effect when the
Notice and Questionnaire (and such other information as is required by Section
3(l)) is delivered, file a supplement to the Shelf Registration Statement and
related Prospectus as is necessary and permitted to name such Holder as a
selling securityholder or if not permitted to name such Holder as a selling
securityholder by supplement, file any necessary post-effective amendments to
the Shelf Registration Statement or prepare and, if required by applicable law,
file an amendment or supplement to any document incorporated by reference or
file any other required document so that such Holder is named as selling
securityholder, and use its reasonable best efforts to cause such post-effective
amendment to be declared effective under the Act as promptly as practicable;
provided that the Company shall not be obligated to file more than one
post-effective amendment in any 60-day period. In connection with such filing,
the Company agrees to:
(i) provide such Holder copies of any documents filed pursuant
to Section 2(e) hereof; and
(ii) notify such Holder as promptly as practicable after the
effectiveness under the Act of any post-effective amendment filed
pursuant to Section 2(e) hereof;
Notwithstanding anything contained herein to the contrary, the Company shall be
under no obligation to name any Holder that did not become a Notice Holder
within the requisite time periods above as a selling holder in the Shelf
Registration Statement at the time it was declared effective or related
Prospectus; provided, however, that any Holder that becomes a Notice Holder
pursuant to the provisions of this Section 2(e) (whether or not such Holder was
a Notice Holder at the time the Shelf Registration Statement was declared
effective) shall be named as a selling holder in the Shelf Registration
Statement or related Prospectus in accordance with the requirements of this
Section 2(e).
3. Registration Procedures. The following provisions shall apply in
connection with the Shelf Registration Statement.
(a) The Company shall:
(i) use its reasonable best efforts to furnish to the
Representatives and to Special Counsel for the Notice Holders, not
less than five Business Days prior to the filing with the Commission
a copy of the Shelf Registration Statement and each amendment
thereof and each amendment or supplement, if any, to the Prospectus
included therein (including all documents incorporated by reference
therein after the initial filing) and shall use its reasonable best
efforts to reflect in each such document, when so filed with the
Commission, such comments as the Representatives reasonably
proposes; and
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(ii) include information regarding the Notice Holders and the
methods of distribution they have elected for their Registrable
Securities provided to the Company in Notices and Questionnaires as
necessary to permit such distribution by the methods specified
therein.
(b) The Company shall give notice to the Representatives, the Notice
Holders and, subject to Section 6 hereof, any underwriter that has provided in
writing to the Company a telephone or facsimile number and address for notices,
and confirm such advice by notice in writing (which notice pursuant to clauses
(ii)-(v) hereof shall be accompanied by an instruction to suspend the use of the
Prospectus until the Company shall have remedied the basis for such suspension):
(i) when the Shelf Registration Statement and any amendment
thereto has been filed with the Commission and when the Shelf
Registration Statement or any post-effective amendment thereto has
become effective;
(ii) of any request by the Commission for any amendment or
supplement to the Shelf Registration Statement or the Prospectus or
for additional information;
(iii) of the issuance by the Commission of any stop order
suspending the effectiveness of the Shelf Registration Statement or
the institution of any proceeding for that purpose;
(iv) of the receipt by the Company of any notification with
respect to the suspension of the qualification of the Registrable
Securities included therein for sale in any jurisdiction or the
institution of any proceeding for such purpose; and
(v) of the happening of any event that requires any change in
the Shelf Registration Statement or the Prospectus so that, as of
such date, they (A) do not contain any untrue statement of a
material fact and (B) do not omit to state a material fact required
to be stated therein or necessary to make the statements therein (in
the case of the Prospectus, in the light of the circumstances under
which they were made) not misleading; provided that the Company
shall not specify the nature of any such event in such notice.
(c) The Company shall use its reasonable best efforts to prevent the
issuance of any order suspending the effectiveness of the Shelf Registration
Statement or the qualification of the securities therein for sale in any
jurisdiction, and if issued, to obtain as soon as possible the withdrawal
thereof.
(d) The Company shall furnish to each Notice Holder who so requests
in writing, without charge, at least one copy of the Shelf Registration
Statement and any post-effective amendment thereto, and, if a Notice Holder so
requests in writing, all materials incorporated therein by reference and all
exhibits thereto (including exhibits incorporated by reference therein).
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(e) During the Shelf Registration Period, the Company shall promptly
deliver to each Initial Purchaser, each Notice Holder, and any sales or
placement agents or underwriters acting on their behalf, without charge, as many
copies of the Prospectus (including the preliminary Prospectus) included in the
Shelf Registration Statement and any amendment or supplement thereto as any such
person may reasonably request. The Company consents to the use of the Prospectus
or any amendment or supplement thereto by each of the foregoing in connection
with the offering and sale of the Registrable Securities (except during any
Deferral Period, as defined below).
(f) Prior to any offering of Registrable Securities pursuant to the
Shelf Registration Statement, the Company shall arrange for the qualification of
the Registrable Securities for sale under the laws of such jurisdictions as any
Notice Holder shall reasonably request and shall maintain such qualification in
effect so long as required; provided that in no event shall the Company be
obligated to qualify to do business in any jurisdiction where it is not then so
qualified or to take any action in connection therewith that would subject it to
taxation or service of process in suits, other than those arising out of the
Initial Placement or any offering pursuant to the Shelf Registration Statement,
in any jurisdiction where it is not then so subject.
(g) Upon the occurrence of any event contemplated by subsections
(b)(ii) through (v) above, the Company shall promptly (or within the time period
provided for by Section 3(h) hereof, if applicable) prepare a post-effective
amendment to the Shelf Registration Statement or an amendment or supplement to
the related Prospectus or file any other required document so that, as
thereafter delivered to purchasers of the securities included therein, the
Prospectus will not include an untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
(h) The Company may suspend each Holder's use of the Shelf
Registration and any Prospectus for a maximum of 45 days in any 90-day period,
and not to exceed an aggregate of 90 days in any 12 month period, if (i) the
Company, in its reasonable judgment, believes it may possess material non-public
information the disclosure of which would have a material adverse effect on the
Company and its subsidiaries taken as a whole or (ii) the Shelf Registration
Statement and any Prospectus would, in the Company's judgment, contain a
material misstatement or omission as a result of an event that has occurred or
is continuing. However, if the disclosure relates to a proposed or pending
material business transaction, the disclosure of which the Company determines in
good faith would be reasonably likely to impede its ability to consummate such
transaction, or would otherwise have a material adverse effect on the Company
and its subsidiaries taken as a whole, the Company may extend the suspension
period from 45 days to 60 days. Any suspension period described in this Section
3(h) shall be referred to herein as the "Deferral Period." The Company shall
give notice to the Notice Holders that the availability of the Shelf
Registration is suspended and upon notice duly given pursuant to Section 10
hereof, each Notice Holder agrees not to sell any Registrable Securities
pursuant to the Shelf Registration Statement until such Notice Holder's receipt
of copies of the supplemented or amended Prospectus provided for in Section 3(g)
hereof, or until it is advised in writing by the Company that the Prospectus may
be used, and has received copies of any additional or supplemental filings that
are incorporated or deemed incorporated by reference in
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such Prospectus. The Company shall not specify the nature of the event giving
rise to a suspension in any notice to holders of the Securities of the existence
of such a suspension.
(i) Not later than the effective date of the Shelf Registration
Statement, the Company shall provide a CUSIP number for the Registrable
Securities registered under the Shelf Registration Statement and, if required,
provide the Trustee with printed certificates for such Securities, free of any
restrictive legends, in a form eligible for deposit with The Depository Trust
Company.
(j) The Company shall comply with all applicable rules and
regulations of the Commission and shall make generally available to its security
holders an earnings statement satisfying the provisions of Section 11(a) of the
Act as soon as practicable after the effective date of the Shelf Registration
Statement and in any event no later than 45 days after the end of a 12-month
period (or 90 days, if such period is a fiscal year) beginning with the first
month of the Company's first fiscal quarter commencing after the effective date
of the Shelf Registration Statement.
(k) The Company shall cause the Indenture to be qualified under the
Trust Indenture Act in a timely manner.
(l) The Company may require each Holder of Registrable Securities to
be sold pursuant to the Shelf Registration Statement to deliver to the Company a
completed and executed Notice and Questionnaire and to furnish to the Company
such other information regarding the Holder and the distribution of such
Registrable Securities as the Company may from time to time reasonably require
for inclusion in the Shelf Registration Statement. The Company may exclude (i)
from the initial Shelf Registration Statement the Registrable Securities of any
Holder that fails to return a completed and executed Notice and Questionnaire
and fails to furnish such other information no later than ten Business Days
before the initial effectiveness of the Shelf Registration Statement and (ii)
from any post-effective amendment or supplement the Registrable Securities of
any Holder that fails to return a completed and executed Notice and
Questionnaire and fails to furnish such other information no later than ten
Business Days before the date of filing any post-effective amendment or
supplement to the Shelf Registration Statement contemplated by Section 2(e), as
applicable.
(m) The Company shall enter into customary agreements (including, if
requested, but subject to Section 6 hereof, an underwriting agreement in
customary form) and take all other appropriate actions as reasonably requested
by the Notice Holders in order to expedite or facilitate the registration or the
disposition of the Registrable Securities, and in connection therewith, if an
underwriting agreement is entered into, cause the same to contain
indemnification provisions and procedures no less favorable than those set forth
in Section 5 hereof.
(n) The Company shall:
(i) make reasonably available for inspection during normal
business hours by the Notice Holders of Registrable Securities to be
registered thereunder, any underwriter participating in any
disposition pursuant to the Shelf Registration
8
Statement, and any attorney, accountant or other agent retained by
the Holders or any such underwriter all relevant financial and other
records and pertinent corporate documents of the Company and its
subsidiaries;
(ii) cause the Company's officers, directors, employees,
accountants and auditors to supply all relevant information
reasonably requested by the Notice Holders or any such underwriter,
attorney, accountant or agent in connection with any offering of
Registrable Securities pursuant to the Shelf Registration Statement
as is customary for similar due diligence examinations; provided
that all records, documents and information provided pursuant to
clause (i) and (ii) that are designated by the Company in writing as
confidential shall be kept confidential by the Notice Holders and
any such underwriter, attorney, accountant or agent, unless such
disclosure is made in connection with a court proceeding or required
by law (only after such person shall have given the Company prompt
prior notice of such disclosure and to the extent practicable, such
Notice Holder, underwriter, attorney, accountant or agent shall
cooperate with the Company to limit such disclosure); and provided
further that the inspection and information gathering pursuant to
clause (i) and (ii) shall be coordinated by a single party (or a
single counsel (which shall be the Special Counsel) on behalf of the
parties so inspecting and gathering);
(iii) make such representations and warranties to the Holders
of Registrable Securities registered thereunder and the underwriters
in form, substance and scope as are customarily made by issuers to
underwriters in primary underwritten offerings and covering matters,
including, but not limited to, those set forth in the Purchase
Agreement;
(iv) obtain opinions of counsel to the Company and updates
thereof (which counsel and opinions (in form, scope and substance)
shall be reasonably satisfactory to the Managing Underwriters, if
any) addressed to each selling Holder and the underwriters, if any,
covering such matters as are customarily covered in opinions
requested in underwritten offerings and such other matters as may be
reasonably requested by such Holders and underwriters;
(v) obtain "comfort" letters and updates thereof from the
independent certified public accountants of the Company (and, if
necessary, any other independent certified public accountants of any
subsidiary of the Company or of any business acquired by the Company
for which financial statements and financial data are, or are
required to be, included in the Shelf Registration Statement),
addressed to each selling Holder of Registrable Securities
registered thereunder and the underwriters, if any, in customary
form and covering matters of the type customarily covered in
"comfort" letters in connection with primary underwritten offerings;
and
(vi) deliver such documents and certificates as may be
reasonably requested by the Majority Holders or the Managing
Underwriters, if any, including those to evidence compliance with
Section 3(i) hereof and with any
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customary conditions contained in the underwriting agreement or
other agreement entered into by the Company.
Notwithstanding the foregoing, the actions set forth in clauses (iii), (iv), (v)
and (vi) of this paragraph (n) shall only be performed in connection with an
underwritten offering pursuant to Section 6 hereof and only if requested by the
underwriters thereof.
(o) In the event that any Broker-Dealer shall underwrite any
Registrable Securities or participate as a member of an underwriting syndicate
or selling group or "assist in the distribution" (within the meaning of the NASD
Rules) thereof, whether as a Holder of such Registrable Securities or as an
underwriter, a placement or sales agent or a broker or dealer in respect
thereof, or otherwise, the Company shall assist such Broker-Dealer in complying
with the NASD Rules.
(p) The Company shall upon (i) the filing of the initial Shelf
Registration Statement and (ii) the effectiveness of the initial Shelf
Registration Statement, announce the same, in each case by release to Reuters
Economic Services and Bloomberg Business News.
(q) The Company shall use its reasonable best efforts to take all
other steps necessary to effect the registration of the Registrable Securities
covered by the Shelf Registration Statement.
4. Registration Expenses. The Company shall bear all expenses
incurred in connection with the performance of its obligations under Sections 2
and 3 hereof and shall reimburse the Holders for the reasonable fees and
disbursements of one firm or counsel (which shall be the Special Counsel) to act
as counsel for the Holders in connection therewith. The Holders will bear their
individual selling expenses, including commissions and discounts and transfer
taxes.
5. Indemnification and Contribution. (a) The Company agrees to
indemnify and hold harmless each Holder of Registrable Securities covered by the
Shelf Registration Statement, each Initial Purchaser, the directors, officers,
employees, Affiliates and agents of each such Holder or Initial Purchaser and
each person who controls any such Holder or Initial Purchaser within the meaning
of either the Act or the Exchange Act against any and all losses, claims,
damages or liabilities, joint or several, to which they or any of them may
become subject under the Act, the Exchange Act or other federal or state
statutory law or regulation, at common law or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue statement of a material
fact contained in the Shelf Registration Statement or in any amendment thereof,
in each case at the time such became effective under the Act, or in any
preliminary Prospectus or the Prospectus, or in any amendment thereof or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein (in the case of any preliminary
Prospectus or the Prospectus, in the light of the circumstances under which they
were made) not misleading, and agrees to reimburse each such indemnified party,
as incurred, for any legal or other expenses reasonably incurred by it in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the Company will not be liable in
any such case to the extent that any
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such loss, claim, damage or liability arises out of or is based upon any such
untrue statement or alleged untrue statement or omission or alleged omission
made therein in reliance upon and in conformity with written information
furnished to the Company by or on behalf of the party claiming indemnification
specifically for inclusion therein. This indemnity agreement shall be in
addition to any liability that the Company may otherwise have.
The Company also agrees to indemnify as provided in this Section
5(a) or contribute as provided in Section 5(d) hereof to Losses of each
underwriter, if any, of Registrable Securities registered under the Shelf
Registration Statement, its directors, officers, employees, Affiliates or agents
and each person who controls such underwriter on substantially the same basis as
that of the indemnification of the Initial Purchasers and the selling Holders
provided in this paragraph (a) and shall, if requested by any Holder (but
subject to Section 6), enter into an underwriting agreement reflecting such
agreement, as provided in Section 3(n) hereof.
(b) Each Holder of securities covered by the Shelf Registration
Statement (including each Initial Purchaser that is a Holder, in such capacity)
severally and not jointly agrees to indemnify and hold harmless the Company,
each of its directors, each of its officers who signs the Shelf Registration
Statement and each person who controls the Company within the meaning of either
the Act or the Exchange Act, to the same extent as the foregoing indemnity from
the Company to each such Holder, but only with reference to written information
relating to such Holder furnished to the Company by or on behalf of such Holder
specifically for inclusion in the documents referred to in the foregoing
indemnity. This indemnity agreement shall be acknowledged by each Notice Holder
that is not an Initial Purchaser in such Notice Holder's Notice and
Questionnaire and shall be in addition to any liability that any such Notice
Holder may otherwise have.
(c) Promptly after receipt by an indemnified party under this
Section 5 or notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section 5, notify the indemnifying party in writing of the
commencement thereof; but the failure so to notify the indemnifying party (i)
will not relieve it from liability under paragraph (a) or (b) above unless such
failure results in the forfeiture by the indemnifying party of substantial
rights and defenses; and (ii) will not, in any event, relieve the indemnifying
party from any obligations to any indemnified party other than the
indemnification obligation provided in paragraph (a) or (b) above. The
indemnifying party shall be entitled to appoint counsel (including local
counsel) of the indemnifying party's choice at the indemnifying party's expense
to represent the indemnified party in any action for which indemnification is
sought (in which case the indemnifying party shall not thereafter be responsible
for the fees and expenses of any separate counsel, other than local counsel if
not appointed by the indemnifying party, retained by the indemnified party or
parties except as set forth below); provided, however, that such counsel shall
be reasonably satisfactory to the indemnified party. Notwithstanding the
indemnifying party's election to appoint counsel (including local counsel) to
represent the indemnified party in an action, the indemnified party shall have
the right to employ separate counsel (including local counsel), and the
indemnifying party shall bear the reasonable fees, costs and expenses of such
separate counsel if (i) the use of counsel chosen by the indemnifying party to
represent the indemnified party would present such counsel with a conflict of
interest; (ii) the actual or potential defendants in, or targets of, any such
action include both the indemnified party and the indemnifying party
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and the indemnified party shall have reasonably concluded that there may be
legal defenses available to it and/or other indemnified parties that are
different from or additional to those available to the indemnifying party; (iii)
the indemnifying party shall not have employed counsel reasonably satisfactory
to the indemnified party to represent the indemnified party within a reasonable
time after notice of the institution of such action; or (iv) the indemnifying
party shall authorize the indemnified party to employ separate counsel at the
expense of the indemnifying party. An indemnifying party will not, without the
prior written consent of the indemnified parties, settle or compromise or
consent to the entry of any judgment with respect to any pending or threatened
claim, action, suit or proceeding in respect of which indemnification or
contribution may be sought hereunder (whether or not the indemnified parties are
actual or potential parties to such claim or action) unless such settlement,
compromise or consent includes an unconditional release of each indemnified
party from all liability arising out of such claim, action, suit or proceeding.
(d) In the event that the indemnity provided in paragraph (a) or (b)
of this Section 5 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, then each applicable indemnifying party shall
have a joint and several obligation to contribute to the aggregate losses,
claims, damages and liabilities (including legal or other expenses reasonably
incurred in connection with investigating or defending loss, claim, liability,
damage or action) (collectively "Losses") to which such indemnified party may be
subject in such proportion as is appropriate to reflect the relative benefits
received by such indemnifying party, on the one hand, and such indemnified
party, on the other hand, from the Initial Placement and the Shelf Registration
Statement which resulted in such Losses; provided, however, that in no case
shall any Initial Purchaser be responsible, in the aggregate, for any amount in
excess of the purchase discount or commission applicable to such Security
received by such Initial Purchaser in connection with the Initial Placement, nor
shall any underwriter be responsible for any amount in excess of the
underwriting discount or commission applicable to the securities purchased by
such underwriter under the Shelf Registration Statement which resulted in such
Losses. If the allocation provided by the immediately preceding sentence is
unavailable for any reason, the indemnifying party and the indemnified party
shall contribute in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of such indemnifying party, on the
one hand, and such indemnified party, on the other hand, in connection with the
statements or omissions which resulted in such Losses as well as any other
relevant equitable considerations. Benefits received by the Company shall be
deemed to be equal to the total net proceeds from the Initial Placement (before
deducting expenses) as set forth in the Final Memorandum. Benefits received by
the Initial Purchasers shall be deemed to be equal to the total purchase
discounts and commissions received in connection with the Initial Placement, and
benefits received by any other Holders shall be deemed to be equal to the value
of receiving Securities registered under the Act. Benefits received by any
underwriter shall be deemed to be equal to the total underwriting discounts and
commissions, as set forth on the cover page of the Prospectus forming a part of
the Shelf Registration Statement which resulted in such Losses. Relative fault
shall be determined by reference to, among other things, whether any untrue or
any alleged untrue statement of a material fact or omission or alleged omission
to state a material fact relates to information provided by the indemnifying
party, on the one hand, or by the indemnified party, on the other hand, the
intent of the parties and their relative knowledge, access to information and
opportunity to correct or prevent such untrue statement or omission. The parties
agree that it would not be just and equitable if contribution were determined by
pro
12
rata allocation (even if the Holders were treated as one entity for such
purpose) or any other method of allocation which does not take account of the
equitable considerations referred to above. Notwithstanding the provisions of
this paragraph (d), no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. For purposes of
this Section 5, each person who controls a Holder within the meaning of either
the Act or the Exchange Act and each director, officer, employee and agent of
such Holder shall have the same rights to contribution as such Holder, and each
person who controls the Company within the meaning of either the Act or the
Exchange Act, each officer of the Company who shall have signed the Shelf
Registration Statement and each director of the Company shall have the same
rights to contribution as the Company, subject in each case to the applicable
terms and conditions of this paragraph (d).
(e) The provisions of this Section 5 shall remain in full force and
effect, regardless of any investigation made by or on behalf of any Holder or
the Company or any of the indemnified persons referred to in this Section 5, and
shall survive the sale by a Holder of Registrable Securities covered by the
Shelf Registration Statement.
6. Underwritten Registrations. (a) The Registrable Securities may be
sold in an underwritten offering only with the consent of the Company, and, in
such event, the Managing Underwriters shall be selected by the Majority Holders
and shall be reasonably acceptable to the Company.
(b) No person may participate in any underwritten offering pursuant
to the Shelf Registration Statement unless such person (i) agrees to sell such
person's Registrable Securities on the basis reasonably provided in any
underwriting arrangements approved by the persons entitled hereunder to approve
such arrangements; and (ii) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents reasonably
required under the terms of such underwriting arrangements.
7. Registration Defaults. (a) If:
(i) the Shelf Registration Statement is not filed with the
Commission on or prior to the 30th day following the Closing Date;
or
(ii) the Shelf Registration Statement is not declared
effective by the Commission on or prior to the 150th day following
the Closing Date; or
(iii) the Company has failed to perform its obligations set
forth in Section 2(e) within the time required therein; or
(iv) the aggregate duration of Deferral Periods in any period
exceeds the number of days permitted in respect of such period
pursuant to Section 3(i) hereof (in each case except as the result
of filing a post-effective amendment solely to add additional
selling securityholders);
(each such event referred to in the foregoing clauses (i) through (iv), a
"Registration Default"), the Company hereby agrees to pay liquidated damages
("Liquidated Damages") with respect to
13
the Registrable Securities from and including the day following the Registration
Default to but excluding the earlier of (1) the day after the end of the Shelf
Registration Period; (2) in the case of a Registration Default described in
clause (i) or (ii), the date on which the Shelf Registration is filed or
declared effective; (3) in the case of a Registration Default described in
clause (iii) above, the date on which the required obligations have been
performed; and (4) in the case of a Registration Default described in clause
(iv) above, the last day of the Deferral Period giving rise to the Registration
Default. The amount of Liquidation Damages payable during the foregoing period
shall be:
(A) in respect of the Registrable Securities that are
Securities, to each holder thereof, (x) with respect to the 90-day
period following the occurrence of such a Registration Default, in
an amount per year equal to an additional 0.25% of the accreted
principal amount of the Securities and (y) with respect to the
period commencing on the 91st day following the occurrence of such
Registration Default, in an amount per year equal to an additional
0.50% of the accreted principal amount of the Securities; provided
that in no event shall Liquidated Damages accrue at a rate per year
exceeding 0.50% of the accreted principal amount of the Securities;
and
(B) in respect of Registrable Securities that are shares of
Class A Common Stock issued upon conversion of the Securities, to
each holder thereof, (x) with respect to the 90-day period following
the occurrence of such a Registration Default, in an amount per year
equal to 0.25% of the accreted principal amount of the converted
Securities and (y) with respect to the period commencing the 91st
day following the occurrence of such Registration Default, in an
amount per year equal to 0.50% of the accreted principal amount of
the converted Securities; provided, however, that in no event shall
Liquidated Damages accrue at a rate per year exceeding 0.50% of the
accreted principal amount of the converted Securities.
Notwithstanding the foregoing, with respect to a Registration Default
described in clause (iii) above, Liquidated Damages shall only be payable to
those Record Holders of Registrable Securities who (x) have requested to be
named as a selling securityholder in the Shelf Registration Statement pursuant
to the second sentence of Section 2(e) after the date the Shelf Registration is
declared to be effective, (y) have delivered to the Company the Notice and
Questionnaire (and all other information required by Section 3(l)) and (z) were
not named as selling securityholders in the Shelf Registration Statement as a
result of such Registration Default.
(b) All accrued Liquidated Damages shall be paid in arrears to
Record Holders by the Company on each Damages Payment Date by wire transfer of
immediately available funds or by federal funds check. Following the cure of all
Registration Defaults relating to any particular Securities or share of Class A
Common Stock, the further accrual of Liquidated Damages with respect to such
Securities or share of Class A Common Stock will cease.
14
All obligations of the Company set forth in this Section 7 that are
outstanding with respect to any Registrable Securities at the time such security
ceases to be a Registrable Security shall survive until such time as all such
obligations with respect to such Registrable Security shall have been satisfied
in full. All Liquidated Damages shall be computed on the basis of a 360-day year
composed of twelve 30-day months.
The parties hereto agree that the Liquidated Damages provided for in this
Section 7 constitute a reasonable estimate of the damages that may be incurred
by Holders by reason of a Registration Default and that such Liquidated Damages
are the only monetary damages available to Holders with respect to a
Registration Default.
8. No Inconsistent Agreements. The Company has not entered into, and
agrees not to enter into, any agreement with respect to its securities that is
inconsistent with the rights granted to the Holders herein or that otherwise
conflicts with the provisions hereof.
9. Amendments and Waivers. The provisions of this Agreement may not
be amended, qualified, modified or supplemented, and waivers or consents to
departures from the provisions hereof may not be given, unless the Company has
obtained the written consent of the Holders of a majority of the then
outstanding shares of Class A Common Stock constituting Registrable Securities
(with Holders of Securities deemed to be Holders, for purposes of this Section,
of the number of outstanding shares of Class A Common Stock into which such
Securities would be convertible as of the date on which such consent is
requested); provided that, with respect to any matter that adversely affects the
rights of any Initial Purchaser hereunder, the Company shall obtain the written
consent of each such Initial Purchaser against which such amendment,
qualification, supplement, waiver or consent is to be effective; provided,
further, that no amendment, qualification, supplement, waiver or consent with
respect to Section 7 hereof shall be effective as against any Holder of
Registrable Securities unless consented to in writing by such Holder; and
provided, further, that the provisions of this Article 9 may not be amended,
qualified, modified or supplemented, and waivers or consents to departures from
the provisions hereof may not be given, unless the Company has obtained the
written consent of the Initial Purchasers and each Holder.
10. Notices. All notices, requests and other communications provided
for or permitted hereunder shall be made in writing by hand-delivery,
first-class mail, telex, facsimile or air courier guaranteeing overnight
delivery:
(a) if to a Holder, at the most current address given by such holder
to the Company in accordance with the provisions of the Notice and
Questionnaire, which address initially is, with respect to each Holder, the
address of such Holder maintained by the Registrar under the Indenture;
(b) if to the Initial Purchasers or the Representatives, initially
at the address or addresses set forth in the Purchase Agreement; and
(c) if to the Company, initially at its address set forth in the
Purchase Agreement.
15
All such notices and communications shall be deemed to have been
duly given on the earliest of (i) at the time delivered, if delivered by
hand-delivery; (ii) three business days after being deposited in the mail,
postage prepaid, if mailed by first-class mail; (iii) when receipt is
acknowledged and confirmed as sent by sender's telex or facsimile machine, if
sent by telex or facsimile transmission; and (iv) on the day delivered, if sent
by overnight air courier guaranteeing next day delivery.
The Initial Purchasers or the Company by notice to the other parties
may designate additional or different addresses for subsequent notices or
communications.
11. Remedies. Each party, in addition to being entitled to exercise
all rights provided to it herein, in the Indenture or in the Purchase Agreement
or granted by law, including recovery of liquidated or other damages, will be
entitled to specific performance of its rights under this Agreement. Each party
agrees that monetary damages would not be adequate compensation for any loss
incurred by reason of a breach by it of the provisions of this Agreement and
hereby agrees to waive in any action for specific performance the defense that a
remedy at law would be adequate.
12. Successors. This Agreement shall inure to the benefit of and be
binding upon the parties hereto, their respective successors and assigns,
including, without the need for an express assignment or any consent by the
Company thereto, subsequent Holders of Registrable Securities, and the
indemnified persons referred to in Section 5 hereof. The Company hereby agrees
to extend the benefits of this Agreement to any Holder of Registrable
Securities, and any such Holder may specifically enforce the provisions of this
Agreement as if an original party hereto.
13. Counterparts. This Agreement may be signed in one or more
counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same agreement.
14. Headings. The section headings used herein are for convenience
only and shall not affect the construction hereof.
15. Applicable Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York applicable to
contracts made and to be performed in the State of New York. The parties hereto
each hereby waive any right to trial by jury in any action, proceeding or
counterclaim arising out of or relating to this Agreement.
16. Severability. In the event that any one of more of the
provisions contained herein, or the application thereof in any circumstances, is
held invalid, illegal or unenforceable in any respect for any reason, the
validity, legality and enforceability of any such provision in every other
respect and of the remaining provisions hereof shall not be in any way impaired
or affected thereby, it being intended that all of the rights and privileges of
the parties shall be enforceable to the fullest extent permitted by law.
17. Securities Held by the Company, etc. Whenever the consent or
approval of Holders of Registrable Securities is required hereunder, Registrable
Securities held by the Company or its Affiliates (other than subsequent Holders
of Securities who are Affiliates by
16
virtue of their ownership of equity securities of the Company or of Charter
Communications Holding Company, LLC or of Registrable Securities) shall not be
counted in determining whether such consent or approval was given by the Holders
of such required percentage.
17
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this letter and your acceptance shall represent a binding agreement between the
Company and the several Initial Purchasers.
Very truly yours,
Charter Communications, Inc.
By: /s/ Xxxxxx Xxxxxxx
--------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Vice President
The foregoing Agreement is hereby confirmed and
accepted as of the date first above written.
Citigroup Global Markets Inc.
By /s/ Xxxxx Xxx Xxxxx
--------------------------------------
Name: Xxxxx Xxx Xxxxx
Title: Vice President
For itself and the other several
Initial Purchasers named in Schedule I
to the Purchase Agreement.
