Time Warner Cable 2008 Annual Report Download - page 37

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such transaction, are substantially as favorable to TWC or its subsidiaries as they would be able to receive in a
comparable arm’s-length transaction with a third party. Any such transaction involving reasonably anticipated
payments or other consideration of $50 million or greater also requires the prior approval of a majority of the
independent directors of TWC. The TWC By-laws also prohibit TWC from entering into any transaction having the
intended effect of benefiting Time Warner and any of its affiliates (other than TWC and its subsidiaries) at the
expense of TWC or any of its subsidiaries in a manner that would deprive TWC or any of its subsidiaries of the
benefit it would have otherwise obtained if the transaction were to have been effected on arm’s-length terms. Each
of these By-law provisions terminates in the event that Time Warner and TWC cease to be affiliates.
The provisions described above will not be included in TWC’s amended and restated By-laws that will become
effective in connection with the Separation.
Time Warner Registration Rights. At the closing of the TWE Restructuring, Time Warner and TWC entered
into a registration rights agreement (the “Time Warner Registration Rights Agreement”) relating to Time Warner’s
shares of TWC common stock. Subject to several exceptions, including TWC’s right to defer a demand registration
under some circumstances, Time Warner may, under that agreement, require that TWC take commercially
reasonable steps to register for public resale under the Securities Act of 1933, as amended, all shares of common
stock that Time Warner requests to be registered. Time Warner may demand an unlimited number of registrations. In
addition, Time Warner has been granted “piggyback” registration rights subject to customary restrictions and TWC
is permitted to piggyback on Time Warner’s registrations. TWC has also agreed that, in connection with a
registration and sale by Time Warner under the Time Warner Registration Rights Agreement, it will indemnify Time
Warner and bear all fees, costs and expenses, except underwriting discounts and selling commissions.
Concurrently with the execution of the Separation Agreement, TWC and Time Warner entered into Amend-
ment No. 1 to the Time Warner Registration Rights Agreement, which provides Time Warner with the right to
require TWC to file any registration statement necessary to consummate the Separation. In addition, under this
amendment, all of TWC’s and Time Warner’s rights and obligations under the Time Warner Registration Rights
Agreement will terminate upon the consummation of the Distribution.
27