<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 2, 1999
REGISTRATION NO. 333-77499
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT NO. 3 TO
FORM S-4
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
------------------------
CHARTER COMMUNICATIONS HOLDINGS, LLC
AND
CHARTER COMMUNICATIONS HOLDINGS
CAPITAL CORPORATION
(EXACT NAME OF REGISTRANTS AS SPECIFIED IN THEIR CHARTERS)
<TABLE>
<S> <C> <C>
DELAWARE 4841 43-1843179
DELAWARE 4841 43-1843177
(STATE OR OTHER JURISDICTION (PRIMARY STANDARD INDUSTRIAL (FEDERAL EMPLOYER
OF INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NUMBER)
</TABLE>
12444 POWERSCOURT DRIVE
ST. LOUIS, MISSOURI 63131
(314) 965-0555
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE
NUMBER, INCLUDING AREA CODE, OF REGISTRANTS'
PRINCIPAL EXECUTIVE OFFICES)
CURTIS S. SHAW, ESQ.
SENIOR VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY
12444 POWERSCOURT DRIVE
ST. LOUIS, MISSOURI 63131
(314) 965-0555
(NAME, ADDRESS, INCLUDING ZIP CODE, AND
TELEPHONE NUMBER, INCLUDING
AREA CODE, OF AGENT FOR SERVICE)
COPIES TO:
<TABLE>
<S> <C>
DANIEL G. BERGSTEIN, ESQ. ALVIN G. SEGEL, ESQ.
PAUL, HASTINGS, JANOFSKY & WALKER LLP IRELL & MANELLA LLP
399 PARK AVENUE 1800 AVENUE OF THE STARS, SUITE 900
NEW YORK, NEW YORK 10022 LOS ANGELES, CALIFORNIA 90067-4276
(212) 318-6000 (310) 277-1010
</TABLE>
-------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED OFFER TO THE PUBLIC EXCHANGE
OFFER: As soon as practicable after this Registration Statement becomes
effective.
If any of the securities being registered on this form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [ ]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
-------------------------
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2
EXPLANATORY NOTE
This Amendment No. 3 to the Registration Statement on Form S-4 (File No.
333-77499) of Charter Communications Holdings, LLC and Charter Communications
Holdings Capital Corporation (the "Issuers") is being filed in order to file
Exhibit 2.6(f).
<PAGE> 3
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS
INDEMNIFICATION UNDER THE LIMITED LIABILITY COMPANY AGREEMENT OF CHARTER
HOLDINGS.
The Limited Liability Company Agreement of Charter Holdings, entered into
as of February 9, 1999, by Charter Communications, Inc., as the initial member,
provides that the members, the manager, the directors, their affiliates or any
person who at any time serves or has served as a director, officer, employee or
other agent of any member or any such affiliate, and who, in such capacity,
engages or has engaged in activities on behalf of Charter Holdings, shall be
indemnified and held harmless by Charter Holdings to the fullest extent
permitted by law from and against any losses, damages, expenses, including
attorneys' fees, judgments and amounts paid in settlement actually and
reasonably incurred by or in connection with any claim, action, suit or
proceeding arising out of or incidental to such indemnifiable person's conduct
or activities on behalf of Charter Holdings. Notwithstanding the foregoing, no
indemnification is available under the Limited Liability Company Agreement in
respect of any such claim adjudged to be primarily the result of bad faith,
willful misconduct or fraud of an indemnifiable person. Payment of these
indemnification obligations shall be made from the assets of Charter Holdings
and the members shall not be personally liable to an indemnifiable person for
payment of indemnification.
INDEMNIFICATION UNDER THE DELAWARE LIMITED LIABILITY COMPANY ACT.
Section 18-108 of the Delaware Limited Liability Company Act authorizes a
limited liability company to indemnify and hold harmless any member or manager
or other person from and against any and all claims and demands whatsoever,
subject to such standards and restrictions, if any, as are set forth in its
limited liability company agreement.
INDEMNIFICATION UNDER THE BY-LAWS OF CHARTER CAPITAL.
The By-Laws of Charter Capital provide that Charter Capital, to the
broadest and maximum extent permitted by applicable law, will indemnify each
person who was or is a party, or is threatened to be made a party, to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, by reason of the fact that such
person is or was a director or officer of Charter Capital, or is or was serving
at the request of Charter Capital as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
against expenses, including attorneys' fees, judgments, fines and amounts paid
in settlement actually and reasonably incurred by such person in connection with
such action, suit or proceeding. To the extent that a director, officer,
employee or agent of Charter Capital has been successful on the merits or
otherwise in defense of any action, suit or proceeding referred to in the
preceding paragraph, or in defense of any claim, issue or matter, such person
will be indemnified against expenses, including attorneys' fees, actually and
reasonably incurred by such person. Expenses, including attorneys' fees,
incurred by a director or officer in defending any civil or criminal action,
suit or proceeding may be paid by Charter Capital in advance of the final
disposition of such action, suit or proceeding, as authorized by the Board of
Directors of Charter Capital, upon receipt of an undertaking by or on behalf of
such director or officer to repay such amount if it shall ultimately be
determined that such
II-1
<PAGE> 4
director or officer was not entitled to be indemnified by Charter Capital as
authorized in the By-Laws of Charter Capital. The indemnification and
advancement of expenses provided by, or granted pursuant to, the By-Laws of
Charter Capital will not be deemed exclusive and are declared expressly to be
non-exclusive of any other rights to which those seeking indemnification or
advancements of expenses may be entitled under any by-law, agreement, vote of
stockholders or disinterested directors or otherwise, both as to action in such
person's official capacity and as to action in another capacity while holding an
office, and, unless otherwise provided when authorized or ratified, will
continue as to a person who has ceased to be a director, officer, employee or
agent and shall inure to the benefit of the heirs, executors and administrators
of such person.
INDEMNIFICATION UNDER THE DELAWARE GENERAL CORPORATION LAW
Section 145 of the Delaware General Corporation Law, authorizes a
corporation to indemnify any person who was or is a party, or is threatened to
be made a party, to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative, by reason
of the fact that the person is or was a director, officer, employee or agent of
the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses, including attorneys' fees,
judgments, fines and amounts paid in settlement actually and reasonably incurred
by the person in connection with such action, suit or proceeding, if the person
acted in good faith and in a manner the person reasonably believed to be in, or
not opposed to, the best interests of the corporation and, with respect to any
criminal action or proceeding, had no reasonable cause to believe the person's
conduct was unlawful. In addition, the Delaware General Corporation Law does not
permit indemnification in any threatened, pending or completed action or suit by
or in the right of the corporation in respect of any claim, issue or matter as
to which such person shall have been adjudged to be liable to the corporation,
unless and only to the extent that the court in which such action or suit was
brought shall determine upon application that, despite the adjudication of
liability, but in view of all the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such expenses, which such court
shall deem proper. To the extent that a present or former director or officer of
a corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to above, or in defense of any claim, issue
or matter, such person shall be indemnified against expenses, including
attorneys' fees, actually and reasonably incurred by such person. Indemnity is
mandatory to the extent a claim, issue or matter has been successfully defended.
The Delaware General Corporation Law also allows a corporation to provide for
the elimination or limit of the personal liability of a director to the
corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director, provided that such provision shall not eliminate or limit
the liability of a director
(i) for any breach of the director's duty of loyalty to the corporation or
its stockholders,
(ii) for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law,
(iii) for unlawful payments of dividends or unlawful stock purchases or
redemptions, or
II-2
<PAGE> 5
(iv) for any transaction from which the director derived an improper
personal benefit. These provisions will not limit the liability of
directors or officers under the federal securities laws of the United
States.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
EXHIBITS
<TABLE>
<S> <C>
1.1 Purchase Agreement, dated as of March 12, 1999, by and among
Charter Communications Holdings, LLC, Charter Communications
Holdings Capital Corporation, Goldman, Sachs & Co., Chase
Securities Inc., Donaldson, Lufkin & Jenrette Securities
Corporation, Bear, Stearns & Co. Inc., NationsBanc
Montgomery Securities LLC, Salomon Smith Barney Inc., Credit
Lyonnais Securities (USA), Inc., First Union Capital Markets
Corp., Prudential Securities Incorporated, TD Securities
(USA) Inc., CIBC Oppenheimer Corp. and Nesbitt Burns
Securities Inc.*
2.1 Merger Agreement, dated March 31, 1999, by and between
Charter Communications Holdings, LLC and Marcus Cable
Holdings, LLC*
2.2(a) Membership Purchase Agreement, dated as of January 1, 1999,
by and between ACEC Holding Company, LLC and Charter
Communications, Inc.**
2.2(b) Assignment of Membership Purchase Agreement, dated as of
February 23, 1999, by and between Charter Communications,
Inc. and Charter Communications Entertainment II, LLC**
2.3(a) Asset Purchase Agreement, dated as of February 17, 1999,
among Greater Media, Inc., Greater Media Cablevision, Inc.
and Charter Communications, Inc.**
2.3(b) Assignment of Asset Purchase Agreement, dated as of February
23, 1999, by and between Charter Communications, Inc. and
Charter Communications Entertainment I, LLC**
2.4 Purchase Agreement, dated as of February 23, 1999, by and
among Charter Communications, Inc., Charter Communications,
LLC, Renaissance Media Holdings LLC and Renaissance Media
Group LLC**
2.5 Purchase Agreement, dated as of March 22, 1999, among
Charter Communications, Inc., Charter Communications, LLC,
Charter Helicon, LLC, Helicon Partners I, L.P., Baum
Investments, Inc. and the limited partners of Helicon
Partners I, L.P.**
2.6(a) Asset and Stock Purchase Agreement, dated April 20, 1999,
between Intermedia Partners of West Tennessee, L.P. and
Charter Communications, LLC*
2.6(b) Stock Purchase Agreement, dated April 20, 1999, between TCID
1P-V, Inc. and Charter Communications, LLC*
2.6(c) RMG Purchase Agreement, dated as of April 20, 1999, between
Robin Media Group, Inc., InterMedia Partners of West
Tennessee, L.P. and Charter RMG, LLC.*
2.6(d) Asset Exchange Agreement, dated April 20, 1999, among
InterMedia Partners Southeast Charter Communications, LLC,
Charter Communications Properties, LLC, and Marcus Cable
Associates, L.L.C.*
2.6(e) Asset Exchange Agreement, dated April 20, 1999, among
InterMedia Partners, a California Limited Partnership,
Brenmor Cable Partners, L.P. and Robin Media Group, Inc.*
2.6(f) Common Agreement, dated April 20, 1999, between InterMedia
Partners, InterMedia Partners Southeast, InterMedia Partners
of West Tennessee, L.P., InterMedia Capital Partners IV,
L.P., InterMedia Partners IV, L.P., Brenmor Cable Partners,
L.P., TCID IP-V, Inc., Charter Communications, LLC, Charter
Communications Properties, LLC, Marcus Cable Associates,
L.L.C. and Charter RMG, LLC+
</TABLE>
II-3
<PAGE> 6
<TABLE>
<S> <C>
2.7(a) Purchase and Sale Agreement, dated as of April 26, 1999, by
and among Interlink Communications Partners, LLLP, the
sellers listed therein and Charter Communications, Inc.*
2.7(b) Purchase and Sale Agreement, dated as of April 26, 1999, by
and among Rifkin Acquisition Partners, L.L.L.P., the sellers
listed therein and Charter Communications, Inc.**
2.7(c) RAP Indemnity Agreement, dated April 26, 1999, by and among
the sellers listed therein and Charter Communications,
Inc.**
2.7(d) Assignment of Purchase Agreement with Interlink**
2.7(e) Assignment of Purchase Agreement with Rifkin**
2.7(f) Assignment of RAP Indemnity Agreement**
3.1 Certificate of Formation of Charter Communications Holdings,
LLC*
3.2 Limited Liability Company Agreement of Charter
Communications Holdings, LLC*
3.3 Certificate of Incorporation of Charter Communications
Holdings Capital Corporation*
3.4 By-Laws of Charter Communications Holdings Capital
Corporation*
4.1(a) Indenture relating to the 8.250% Senior Notes due 2007,
dated as of March 17, 1999, between Charter Communications
Holdings, LLC, Charter Communications Holdings Capital
Corporation and Harris Trust and Savings Bank*
4.1(b) Form of 8.250% Senior Note due 2007 (included in Exhibit No.
4.1(a))
4.1(c) Exchange and Registration Rights Agreement, dated March 17,
1999, by and among Charter Communications Holdings, LLC,
Charter Communications Holdings Capital Corporation,
Goldman, Sachs & Co., Chase Securities Inc., Donaldson,
Lufkin & Jenrette Securities Corporation, Bear, Stearns &
Co. Inc., NationsBanc Montgomery Securities LLC, Salomon
Smith Barney Inc., Credit Lyonnais Securities (USA), Inc.,
First Union Capital Markets Corp., Prudential Securities
Incorporated, TD Securities (USA) Inc., CIBC Oppenheimer
Corp. and Nesbitt Burns Securities Inc., relating to the
8.250% Senior Notes due 2007*
4.2(a) Indenture relating to the 8.625% Senior Notes due 2009,
dated as of March 17, 1999, among Charter Communications
Holdings, LLC, Charter Communications Holdings Capital
Corporation and Harris Trust and Savings Bank*
4.2(b) Form of 8.625% Senior Note due 2009 (included in Exhibit No.
4.2(a))
4.2(c) Exchange and Registration Rights Agreement, dated March 17,
1999, by and among Charter Communications Holdings, LLC,
Charter Communications Holdings Capital Corporation,
Goldman, Sachs & Co., Chase Securities Inc., Donaldson,
Lufkin & Jenrette Securities Corporation, Bear, Stearns &
Co. Inc., NationsBanc Montgomery Securities LLC, Salomon
Smith Barney Inc., Credit Lyonnais Securities (USA), Inc.,
First Union Capital Markets Corp., Prudential Securities
Incorporated, TD Securities (USA) Inc., CIBC Oppenheimer
Corp. and Nesbitt Burns Securities Inc., relating to the
8.625% Senior Notes due 2009*
4.3(a) Indenture relating to the 9.920% Senior Discount Notes due
2011, dated as of March 17, 1999, among Charter
Communications Holdings, LLC, Charter Communications
Holdings Capital Corporation and Harris Trust and Savings
Bank*
4.3(b) Form of 9.920% Senior Discount Note due 2011 (included in
Exhibit No. 4.3(a))
</TABLE>
II-4
<PAGE> 7
<TABLE>
<S> <C>
4.3(c) Exchange and Registration Rights Agreement, dated March 17,
1999, by and among Charter Communications Holdings, LLC,
Charter Communications Holdings Capital Corporation,
Goldman, Sachs & Co., Chase Securities Inc., Donaldson,
Lufkin & Jenrette Securities Corporation, Bear, Stearns &
Co. Inc., NationsBanc Montgomery Securities LLC, Salomon
Smith Barney Inc., Credit Lyonnais Securities (USA), Inc.,
First Union Capital Markets Corp., Prudential Securities
Incorporated, TD Securities (USA) Inc., CIBC Oppenheimer
Corp. and Nesbitt Burns Securities Inc., relating to the
9.920% Senior Discount Notes due 2011*
5.1 Opinion of Paul, Hastings, Janofsky & Walker LLP regarding
legality**
8.1 Opinion of Paul, Hastings, Janofsky & Walker LLP regarding
tax matters**
10.1 Credit Agreement, dated as of March 18, 1999, between
Charter Communications Operating, LLC and certain lenders
and agents named therein*
10.2 Amended and Restated Management Agreement, dated March 17,
1999, between Charter Communications Operating, LLC and
Charter Communications, Inc.**
10.3 Consulting Agreement, dated as of March 10, 1999, by and
between Vulcan Northwest Inc., Charter Communications, Inc.
and Charter Communications Holdings, LLC**
12.1 Predecessor of Charter Communications Holdings, LLC, Ratio
of Earnings to Fixed Charges Calculation*
12.2 Charter Communications Holdings, LLC, Ratio of Earnings to
Fixed Charges Calculation*
21.1 Subsidiaries of Charter Communications Holdings, LLC and
Charter Communications Capital Holdings Corporation*
23.1 Consent of Paul, Hastings, Janofsky & Walker LLP (contained
in Exhibit No. 5.1)
23.2 Consent of Arthur Andersen LLP*
23.3 Consent of KPMG LLP*
23.4 Consent of Ernst & Young LLP*
23.5 Consent of KPMG LLP*
23.6 Consent of PricewaterhouseCoopers LLP*
23.7 Consent of PricewaterhouseCoopers LLP*
23.8 Consent of Ernst & Young LLP*
23.9 Consent of Ernst & Young LLP*
23.10 Consent of Ernst & Young LLP*
24.1 Power of Attorney (included in Part II of Amendment No. 2 to
the Registration Statement on the signature page)*
25.1 Statement of Eligibility of and Qualification (Form T-1) of
Harris Trust and Savings Bank*
99.1 Form of Letter of Transmittal**
99.2 Form of Notice of Guaranteed Delivery**
</TABLE>
- ---------------
* Filed by prior amendment.
+ Portions of this exhibit have been omitted pursuant to a request for
confidential treatment.
** To be filed by amendment.
II-5
<PAGE> 8
FINANCIAL STATEMENT SCHEDULES
Schedules not listed above are omitted because of the absence of the
conditions under which they are required or because the information required by
such omitted schedules is set forth in the financial statements or the notes
thereto.
ITEM 22. UNDERTAKINGS.
The undersigned Registrants hereby undertake that:
(1) Prior to any public reoffering of the securities registered
hereunder through use of a prospectus which is a part of this Registration
Statement, by any person or party who is deemed to be an underwriter within
the meaning of Rule 145(c), the issuer undertakes that such reoffering
prospectus will contain the information called for by the applicable
registration form with respect to the reofferings by persons who may be
deemed underwriters, in addition to the information called for by the other
items of the applicable form.
(2) Every prospectus: (i) that is filed pursuant to the immediately
preceding paragraph or (ii) that purports to meet the requirements of
Section 10(a)(3) of the Securities Act and is used in connection with an
offering of securities subject to Rule 415, will be filed as a part of an
amendment to the Registration Statement and will not be used until such
amendment is effective, and that, for purposes of determining any liability
under the Securities Act, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
The undersigned Registrants hereby undertake to respond to requests for
information that is incorporated by reference into the prospectus pursuant to
Items 4, 10(b), 11, or 13 of this Form, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of the Registration Statement through the
date of responding to the request.
The undersigned Registrants hereby undertake to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the Registration Statement when it became effective.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrants pursuant to the foregoing provisions, or otherwise, the Registrants
have been advised that in the opinion of the Commission, such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrants of expenses incurred or
paid by a director, officer or controlling person of the Registrants in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrants will, unless in the opinion of their counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by then is
against public policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.
II-6
<PAGE> 9
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Charter
Communications Holdings, LLC has duly caused this Amendment No. 3 to the
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of St. Louis, State of Missouri on the second day
of July 1999.
CHARTER COMMUNICATIONS HOLDINGS, LLC
By: CHARTER COMMUNICATIONS HOLDING
COMPANY, LLC, its Member
By: CHARTER COMMUNICATIONS, INC., its Member
and Manager, and the Manager of Charter
Communications Holdings, LLC
By: /s/ CURTIS S. SHAW
------------------------------------------
Name: Curtis S. Shaw
Title: Senior Vice President, General
Counsel
and Secretary
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
CAPACITY WITH CHARTER COMMUNICATIONS, INC.
THE MANAGER OF CHARTER COMMUNICATIONS HOLDINGS, LLC
AND THE MANAGER AND SOLE MEMBER OF CHARTER
COMMUNICATIONS HOLDINGS COMPANY,
LLC, THE SOLE MEMBER OF CHARTER
SIGNATURE COMMUNICATIONS HOLDINGS, LLC DATE
--------- --------------------------------------------------- ----
<S> <C> <C>
* Director July 2, 1999
- ------------------------------------
William D. Savoy
* President, Chief Executive Officer and Director July 2, 1999
- ------------------------------------
Jerald L. Kent
* Senior Vice President and Chief Financial Officer July 2, 1999
- ------------------------------------
Kent D. Kalkwarf
*By: /s/ CURTIS S. SHAW
- -----------------------------------
Attorney-in-Fact
</TABLE>
II-7
<PAGE> 10
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Charter
Communications Holdings Capital Corporation has duly caused this Amendment No. 3
to the registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of St. Louis, State of Missouri on the
second day
of July 1999.
CHARTER COMMUNICATIONS HOLDINGS CAPITAL
CORPORATION
By: /s/ CURTIS S. SHAW
------------------------------------------
Name: Curtis S. Shaw
Title: Senior Vice President, General
Counsel
and Secretary
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY DATE
--------- -------- ----
<S> <C> <C>
* Director July 2, 1999
- ------------------------------------
William D. Savoy
* President, Chief Executive Officer and Director July 2, 1999
- ------------------------------------
Jerald L. Kent
* Senior Vice President and Chief Financial July 2, 1999
- ------------------------------------ Officer
Kent D. Kalkwarf
*By: /s/ CURTIS S. SHAW
- -----------------------------------
Attorney-in-Fact
</TABLE>
II-8
<PAGE> 11
EXHIBIT INDEX
<TABLE>
<S> <C>
1.1 Purchase Agreement, dated as of March 12, 1999, by and among
Charter Communications Holdings, LLC, Charter Communications
Holdings Capital Corporation, Goldman, Sachs & Co., Chase
Securities Inc., Donaldson, Lufkin & Jenrette Securities
Corporation, Bear, Stearns & Co. Inc., NationsBanc
Montgomery Securities LLC, Salomon Smith Barney Inc., Credit
Lyonnais Securities (USA), Inc., First Union Capital Markets
Corp., Prudential Securities Incorporated, TD
Securities (USA) Inc., CIBC Oppenheimer Corp. and Nesbitt Burns
Securities Inc.*
2.1 Merger Agreement, dated March 31, 1999, by and between
Charter Communications Holdings, LLC and Marcus Cable
Holdings, LLC*
2.2(a) Membership Purchase Agreement, dated as of January 1, 1999,
by and between ACEC Holding Company, LLC and Charter
Communications, Inc.**
2.2(b) Assignment of Membership Purchase Agreement, dated as of
February 23, 1999, by and between Charter Communications,
Inc. and Charter Communications Entertainment II, LLC**
2.3(a) Asset Purchase Agreement, dated as of February 17, 1999,
among Greater Media, Inc., Greater Media Cablevision, Inc.
and Charter Communications, Inc.**
2.3(b) Assignment of Asset Purchase Agreement, dated as of February
23, 1999, by and between Charter Communications, Inc. and
Charter Communications Entertainment I, LLC**
2.4 Purchase Agreement, dated as of February 23, 1999, by and
among Charter Communications, Inc., Charter Communications,
LLC, Renaissance Media Holdings LLC and Renaissance Media
Group LLC**
2.5 Purchase Agreement, dated as of March 22, 1999, among
Charter Communications, Inc., Charter Communications, LLC,
Charter Helicon, LLC, Helicon Partners I, L.P., Baum
Investments, Inc. and the limited partners of Helicon
Partners I, L.P.**
2.6(a) Asset and Stock Purchase Agreement, dated April 20, 1999,
between InterMedia Partners of West Tennessee, L.P. and
Charter Communications, LLC*
2.6(b) Stock Purchase Agreement, dated April 20, 1999, between TCID
1P-V, Inc. and Charter Communications, LLC*
2.6(c) RMG Purchase Agreement, dated as of April 20, 1999, between
Robin Media Group, Inc., InterMedia Partners of West
Tennessee, L.P. and Charter RMG, LLC*
2.6(d) Asset Exchange Agreement, dated April 20, 1999, among
InterMedia Partners Southeast, Charter Communications, LLC,
Charter Communications Properties, LLC, and Marcus Cable
Associates, L.L.C.*
2.6(e) Asset Exchange Agreement, dated April 20, 1999, among
InterMedia Partners, a California Limited Partnership,
Brenmor Cable Partners, L.P. and Robin Media Group, Inc.*
2.6(f) Common Agreement, dated April 20, 1999, between InterMedia
Partners, InterMedia Partners Southeast, InterMedia Partners
of West Tennessee, L.P., InterMedia Capital Partners IV,
L.P., InterMedia Partners IV, L.P., Brenmor Cable Partners,
L.P., TCID IP-V, Inc., Charter Communications, LLC, Charter
Communications Properties, LLC, Marcus Cable Associates,
L.L.C. and Charter RMG, LLC+
2.7(a) Purchase and Sale Agreement, dated as of April 26, 1999, by
and among Interlink Communications Partners, LLLP, the
sellers listed therein and Charter Communications, Inc.*
</TABLE>
<PAGE> 12
<TABLE>
<S> <C>
2.7(b) Purchase and Sale Agreement, dated as of April 26, 1999, by
and among Rifkin Acquisition Partners, L.L.L.P., the sellers
listed therein and Charter Communications, Inc.**
2.7(c) RAP Indemnity Agreement, dated April 26, 1999, by and among
the sellers listed therein and Charter Communications,
Inc.**
2.7(d) Assignment of Purchase Agreement with Interlink**
2.7(e) Assignment of Purchase Agreement with Rifkin**
2.7(f) Assignment of RAP Indemnity Agreement**
3.1 Certificate of Formation of Charter Communications Holdings,
LLC*
3.2 Limited Liability Company Agreement of Charter
Communications Holdings, LLC*
3.3 Certificate of Incorporation of Charter Communications
Holdings Capital Corporation*
3.4 By-Laws of Charter Communications Holdings Capital
Corporation*
4.1(a) Indenture relating to the 8.250% Senior Notes due 2007,
dated as of March 17, 1999, between Charter Communications
Holdings, LLC, Charter Communications Holdings Capital
Corporation and Harris Trust and Savings Bank*
4.1(b) Form of 8.250% Senior Note due 2007 (included in Exhibit No.
4.1(a))
4.1(c) Exchange and Registration Rights Agreement, dated March 17,
1999, by and among Charter Communications Holdings, LLC,
Charter Communications Holdings Capital Corporation,
Goldman, Sachs & Co., Chase Securities Inc., Donaldson,
Lufkin & Jenrette Securities Corporation, Bear, Stearns &
Co. Inc., NationsBanc Montgomery Securities LLC, Salomon
Smith Barney Inc., Credit Lyonnais Securities (USA), Inc.,
First Union Capital Markets Corp., Prudential Securities
Incorporated, TD Securities (USA) Inc., CIBC Oppenheimer
Corp. and Nesbitt Burns Securities Inc., relating to the
8.250% Senior Notes due 2007*
4.2(a) Indenture relating to the 8.625% Senior Notes due 2009,
dated as of March 17, 1999, among Charter Communications
Holdings, LLC, Charter Communications Holdings Capital
Corporation and Harris Trust and Savings Bank*
4.2(b) Form of 8.625% Senior Note due 2009 (included in Exhibit No.
4.2(a))
4.2(c) Exchange and Registration Rights Agreement, dated March 17,
1999, by and among Charter Communications Holdings, LLC,
Charter Communications Holdings Capital Corporation,
Goldman, Sachs & Co., Chase Securities Inc., Donaldson,
Lufkin & Jenrette Securities Corporation, Bear, Stearns &
Co. Inc., NationsBanc Montgomery Securities LLC, Salomon
Smith Barney Inc., Credit Lyonnais Securities (USA), Inc.,
First Union Capital Markets Corp., Prudential Securities
Incorporated, TD Securities (USA) Inc., CIBC Oppenheimer
Corp. and Nesbitt Burns Securities Inc., relating to the
8.625% Senior Notes due 2009*
4.3(a) Indenture relating to the 9.920% Senior Discount Notes due
2011, dated as of March 17, 1999, among Charter
Communications Holdings, LLC, Charter Communications
Holdings Capital Corporation and Harris Trust and Savings
Bank*
4.3(b) Form of 9.920% Senior Discount Note due 2011 (included in
Exhibit No. 4.3(a))
</TABLE>
<PAGE> 13
<TABLE>
<S> <C>
4.3(c) Exchange and Registration Rights Agreement, dated March 17,
1999, by and among Charter Communications Holdings, LLC,
Charter Communications Holdings Capital Corporation,
Goldman, Sachs & Co., Chase Securities Inc., Donaldson,
Lufkin & Jenrette Securities Corporation, Bear, Stearns &
Co. Inc., NationsBanc Montgomery Securities LLC, Salomon
Smith Barney Inc., Credit Lyonnais Securities (USA), Inc.,
First Union Capital Markets Corp., Prudential Securities
Incorporated, TD Securities (USA) Inc., CIBC Oppenheimer
Corp. and Nesbitt Burns Securities Inc., relating to the
9.920% Senior Discount Notes due 2011*
5.1 Opinion of Paul, Hastings, Janofsky & Walker LLP regarding
legality**
8.1 Opinion of Paul, Hastings, Janofsky & Walker LLP regarding
tax matters**
10.1 Credit Agreement, dated as of March 18, 1999, between
Charter Communications Operating, LLC and certain lenders
and agents named therein*
10.2 Amended and Restated Management Agreement, dated March 17,
1999, between Charter Communications Operating, LLC and
Charter Communications, Inc.**
10.3 Consulting Agreement, dated as of March 10, 1999, by and
between Vulcan Northwest Inc., Charter Communications, Inc.
and Charter Communications Holdings, LLC**
12.1 Predecessor of Charter Communications Holdings, LLC, Ratio
of Earnings to Fixed Charges Calculation*
12.2 Charter Communications Holdings, LLC, Ratio of Earnings to
Fixed Charges Calculation*
21.1 Subsidiaries of Charter Communications Holdings, LLC and
Charter Communications Capital Holdings Corporation*
23.1 Consent of Paul, Hastings, Janofsky & Walker LLP (contained
in Exhibit No. 5.1)
23.2 Consent of Arthur Andersen LLP*
23.3 Consent of KPMG LLP*
23.4 Consent of Ernst & Young LLP*
23.5 Consent of KPMG LLP*
23.6 Consent of PricewaterhouseCoopers LLP*
23.7 Consent of PricewaterhouseCoopers LLP*
23.8 Consent of Ernst & Young LLP*
23.9 Consent of Ernst & Young LLP*
23.10 Consent of Ernst & Young LLP*
24.1 Power of Attorney (included in Part II of Amendment No. 2 to
the Registration Statement on the signature page)*
25.1 Statement of Eligibility of and Qualification (Form T-1) of
Harris Trust and Savings Bank*
99.1 Form of Letter of Transmittal**
99.2 Form of Notice of Guaranteed Delivery**
</TABLE>
- -------------------------
* Filed by prior amendment.
+ Portions of this exhibit have been omitted pursuant to a request for
confidential treatment.
** To be filed by amendment.
<PAGE> 1
Exhibit 2.6(f)
COMMON AGREEMENT
dated as of April 20, 1999
between
INTERMEDIA PARTNERS, A CALIFORNIA LIMITED PARTNERSHIP,
INTERMEDIA PARTNERS SOUTHEAST,
INTERMEDIA PARTNERS OF WEST TENNESSEE, L.P.,
INTERMEDIA CAPITAL PARTNERS IV, L.P.,
INTERMEDIA PARTNERS IV, L.P.
BRENMOR CABLE PARTNERS, L.P.
TCID IP-V, INC.
CHARTER COMMUNICATIONS, LLC,
CHARTER COMMUNICATIONS PROPERTIES, LLC,
MARCUS CABLE ASSOCIATES, L.L.C., and
CHARTER RMG, LLC
<PAGE> 2
TABLE OF CONTENTS
Page
----
1. DEFINITIONS.......................................................... 3
1.1 Agreement...................................................... 3
1.2 Asset Group.................................................... 3
1.3 Charter Actual Revenues........................................ 4
1.4 Charter Shortfall Adjustment Amount............................ 4
1.5 Charter Targeted Revenues...................................... 4
1.6 IP Combined Actual Revenues.................................... 4
1.7 IP Combined Shortfall Adjustment Amount........................ 4
1.8 IP Combined Targeted Revenues.................................. 4
1.9 IP Systems..................................................... 4
1.10 IP-I Actual Revenues........................................... 4
1.11 IP-I Revenue Shortfall......................................... 4
1.12 IP-I Specific Revenue Shortfall................................ 4
1.13 IP-I Targeted Revenues......................................... 4
1.14 Party.......................................................... 4
1.15 Transferred Specific System Revenue Shortfall.................. 4
1.16 Transferred Systems Actual Revenues............................ 4
1.17 Transferred Systems Agreements................................. 4
1.18 Transferred Systems Revenue Shortfall.......................... 5
1.19 Transferred Systems Targeted Revenues.......................... 5
1.20 Other Definitions.............................................. 5
1.21 Usage.......................................................... 6
2. CLOSING PAYMENTS; ADJUSTMENTS........................................ 7
2.1 Closing Payments............................................... 7
2.2 Adjustments to Values.......................................... 10
2.3 Determination of Adjustment Amounts............................ 14
2.4 Post-Closing Rate Refunds...................................... 18
3. ADDITIONAL RIGHTS AND OBLIGATIONS.................................... 19
3.1 Additional HSR Termination Rights.............................. 19
3.2 Redemption Agreement........................................... 19
3.3 Escrow Agreement............................................... 19
3.4 Year 2000 Condition............................................ 20
3.5 Environmental Assessment....................................... 20
3.6 Orderly Closing................................................ 20
3.7 Opinions of Counsel............................................ 20
3.8 Rights With Respect to Stock in RMG............................ 20
3.9 Indemnity Insurance............................................ 20
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<PAGE> 3
4. CONDITIONS PRECEDENT AND CLOSINGS.................................... 21
4.1 Conditions to the Charter Parties' Obligations................. 21
4.2 Conditions to IPSE's and IPWT's Obligations.................... 24
4.3 Conditions to IP-I's, Brenmor's and TCID IP-V's Obligations.... 26
4.4 Closings....................................................... 27
5. TERMINATION.......................................................... 28
5.1 Termination Events............................................. 28
5.2 Effect of Termination.......................................... 28
6. SURVIVAL OF REPRESENTATIONS AND WARRANTIES;
INDEMNIFICATION...................................................... 29
6.1 Survival of Representations, Warranties Covenants and
Agreements..................................................... 29
6.2 Indemnification by IPSE and IPWT............................... 30
6.3 Additional Indemnification by IPSE............................. 32
6.4 Indemnification by TCID IP-V................................... 32
6.5 Indemnification by IP-I and Brenmor............................ 32
6.6 Indemnification by the Charter Parties......................... 33
6.7 Third Party Claims............................................. 34
6.8 Limitations on Indemnification - IPSE and IPWT................. 36
6.9 Limitations on Indemnification of TCID IP-V.................... 37
6.10 Limitations on Indemnification - IP-I and Brenmor.............. 37
6.11 Limitations on Indemnification - Charter Parties............... 38
6.12 Payments for Indemnification Amounts........................... 39
6.13 Exclusive Remedy............................................... 40
6.14 Nonrecourse.................................................... 40
6.15 Characterization of Indemnity Payments......................... 40
7. MISCELLANEOUS PROVISIONS............................................. 40
7.1 Parties Obligated and Benefitted............................... 40
7.2 Notices........................................................ 41
7.3 Waiver......................................................... 42
7.4 Captions....................................................... 43
7.5 Governing Law.................................................. 43
7.6 Time........................................................... 43
7.7 Late Payments.................................................. 43
7.8 Counterparts................................................... 43
7.9 Entire Agreement............................................... 43
7.10 Severability................................................... 43
7.11 Construction................................................... 43
7.12 Expenses....................................................... 43
7.13 Publicity...................................................... 44
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<PAGE> 4
7.14 Commercially Reasonable Efforts................................ 44
7.15 Resolution of Disputed Items in Final Reports.................. 44
7.16 Guarantee and Suretyship Matters............................... 44
Schedules:
Schedule A.1 Definitions
Schedule A.2 Systems, Asset Groups and Base Values
Schedule A.3 Applicable Budgets
Schedule A.4 Scheduled Subscribers
Schedule 1.12 IP-I Target Revenues
Schedule 1.15 Transferred Systems Target Revenues
Schedule 2.2(d)(ii) Rebuild Project and Budget for Charter Systems
Schedule 2.2(d)(iii) Technical Specifications for Blount County Systems
Schedule 2.2(d)(iv) Capital Expenditure Budgets
Schedule 2.2(e)(i) Deferred Channel Launch - IP Parties
Schedule 2.2(e)(ii) Deferred Channel Launch - Charter Parties
Exhibits:
Exhibit A Escrow Agreement
Exhibit B Insurance Policy
Exhibit C.1 Form of Legal Opinion of Pillsbury Madison & Sutro LLP
Exhibit C.2 Form of Legal Opinion of Irell & Manella LLP
Exhibit C.3 Form of Legal Opinion of Ross & Hardies
Exhibit C.4 Form of Legal Opinion of Dow, Lohnes & Albertson PLLC
Exhibit C.5 Form of Legal Opinion of Wiley, Rein & Fielding
-iii-
<PAGE> 5
COMMON AGREEMENT
THIS COMMON AGREEMENT (this "Agreement") is made as of April 20, 1999, by
and between INTERMEDIA PARTNERS, A CALIFORNIA LIMITED PARTNERSHIP ("IP-I"),
BRENMOR CABLE PARTNERS, L.P., a California limited partnership ("Brenmor"),
INTERMEDIA PARTNERS SOUTHEAST, a California general partnership ("IPSE"),
INTERMEDIA PARTNERS OF WEST TENNESSEE, L.P., a California limited partnership
("IPWT" and together with IPSE, each an "IP-IV Party," and collectively, with
IP-I and Brenmor, the "IP Parties"), INTERMEDIA CAPITAL PARTNERS IV, L.P., a
California limited partnership ("ICP-IV"), INTERMEDIA PARTNERS IV, L.P., a
California limited partnership ("IP-IV"), and TCID IP-V, INC., a Colorado
corporation ("TCID IP-V"), CHARTER COMMUNICATIONS, LLC, a Delaware limited
liability company ("Charter I"), CHARTER COMMUNICATIONS PROPERTIES, LLC, a
Delaware limited liability company ("Charter II"), and MARCUS CABLE ASSOCIATES,
L.L.C., a Delaware limited liability company ("Marcus"), CHARTER RMG, LLC, a
Delaware limited liability company ("Charter RMG," and together with Charter I,
Charter II and Marcus, each a "Charter Party," and collectively, the "Charter
Parties").
RECITALS
A. Certain of the Parties are owners of cable television systems, as
follows (for which references to more detailed descriptions are set forth in
Schedule A.2):
(i) IPSE, IPWT and Robin Media Group, Inc., a Nevada corporation ("RMG"),
each a subsidiary of IP-IV, own the following systems (such systems are referred
to by the defined terms in the third column):
<TABLE>
<CAPTION>
Entity Cable Systems Located in: Referred to as:
- ------ ------------------------- ---------------
<S> <C> <C>
IPSE Greenville and Spartanburg, "IPSE Systems"
South Carolina
IPSE Kingsport, Tennessee "Kingsport Systems"
IPWT West Tennessee (excluding "West Tennessee Systems"
Dickson, Joelton and Lynchburg
Systems)
IPWT Dickson, Joelton and Lynchburg, "Dickson, Joelton and
Tennessee Lynchburg Systems"
</TABLE>
-1-
<PAGE> 6
<TABLE>
<S> <C> <C>
RMG Gainesville, Georgia "Gainesville Systems"
RMG East Tennessee "East Tennessee Systems"
RMG Brentwood, Tennessee "Brentwood Systems"
</TABLE>
(ii) The Charter Parties own systems located in Indiana, Kentucky, Montana
and Utah (the "Charter Systems"); and
(iii) IP-I and Brenmor own the following systems (such systems are also
referred to by the defined terms in the third column below and collectively as
the "IP-I/Brenmor Systems"):
<TABLE>
<CAPTION>
Entity Cable Systems Located in: Referred to as:
- ------ ------------------------- ---------------
<S> <C> <C>
IP-I Marion, North Carolina "IP-I Systems"
(excluding Elkin and Mt. Airy,
North Carolina)
Brenmor Asheville, North Carolina, "Brenmor Systems"
Athens, Georgia and Cleveland,
Tennessee
</TABLE>
B. Concurrently with or after the execution and delivery of this
Agreement:
(i) IPSE, and the Charter Parties have entered into an Asset Exchange
Agreement (the "IPSE/Charter Exchange Agreement") pursuant to which (i) Charter
I, Charter II and Marcus will convey, or cause to be conveyed, to IPSE the
Charter Systems and (ii) IPSE will convey to the Charter Parties the IPSE
Systems, all in such a manner as to effect, to the extent reasonably possible, a
like-kind exchange of such assets under Section 1031 of the Code, including
either party's assignment of its rights under the IPSE/Charter Exchange
Agreement to a "qualified intermediary" engaged by such party to effectuate a
deferred like-kind exchange under Section 1031 of the Code;
(ii) RMG, IPWT and Charter RMG, have entered into an RMG Purchase
Agreement (the "RMG Purchase Agreement") pursuant to which RMG has agreed (a) to
transfer the East Tennessee Systems to a single-member limited liability company
("Tennessee LLC") and (b) to sell, and Charter has agreed to purchase certain
membership interests (the "Tennessee LLC Interest") in Tennessee LLC;
(iii) IPSE will enter into a Distribution Agreement ("IPSE Distribution
Agreement") with IP-IV pursuant to which it will distribute the Kingsport
Systems to IP-IV;
(iv) IP-IV will enter into a Contribution Agreement with IPWT (the "IPWT
Contribution Agreement"), pursuant to which IP-IV will contribute to IPWT all of
IP-IV's equity
-2-
<PAGE> 7
interest in RMG, comprised of all of the issued and outstanding Class A Common
Stock of RMG, the Kingsport Systems and cash as specified therein;
(v) IPWT will enter into a Distribution Agreement ("IPWT Distribution
Agreement") with IP-IV pursuant to which IPWT will distribute the Dickson,
Joelton and Lynchburg Systems to IP-IV;
(vi) IP-IV will distribute its equity interests in IPWT to ICP-IV pursuant
to a Distribution Agreement (the "IP-IV Distribution Agreement");
(vii) TCI of Greenville, Inc. and TCI of Spartanburg, Inc. (the "TCI
Parties") and others have entered into an Exchange and Redemption Agreement (the
"Redemption Agreement") pursuant to which certain limited partners shall
withdraw from ICP-IV and become limited partners in IPWT;
(viii) IPWT and Charter I have entered into an Asset and Stock Purchase
Agreement (the "IPWT Purchase Agreement") pursuant to which IPWT has agreed to
sell, and Charter I has agreed to purchase the West Tennessee Systems, the
Kingsport Systems and all of IPWT's equity interests in RMG;
(ix) TCID IP-V and Charter I have entered into a Stock Purchase Agreement
(the "TCID IP-V/Charter Stock Purchase Agreement") pursuant to which TCID IP-V
has agreed to sell, and Charter I has agreed to purchase, all of TCID IP-V's
Class B Common Stock and Preferred Stock in RMG; and
(x) IP-I and Brenmor, on one hand, and RMG, on the other hand, have
entered into an Asset Exchange Agreement (the "IP-I/Charter Exchange Agreement")
pursuant to which IP-I has agreed to exchange the IP-I Systems and Brenmor has
agreed to exchange the Brenmor Systems, for the Brentwood Systems effective
immediately after consummation of the transactions contemplated by the IPWT
Purchase Agreement and the TCID IP-V/Charter Stock Purchase Agreement, all in a
manner as to effect, to the extent reasonably possible, a like-kind exchange of
such assets under Section 1031 of the Code, including either party's assignment
of its rights under the IP-I/Charter Exchange Agreement to a "qualified
intermediary" engaged by such party to effectuate a deferred like-kind exchange
under Section 1031 of the Code.
C. The Parties desire to set forth in an agreement certain of the terms
and conditions which govern adjustments to asset values, the payment of cash
consideration, closing conditions and indemnification which are common to the IP
Agreements and the transactions contemplated thereunder.
-3-
<PAGE> 8
AGREEMENTS
In consideration of the covenants and agreements set forth herein and for
other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties hereby agree as follows:
1. DEFINITIONS. In addition to the terms defined in Schedule A.1 to, and
elsewhere in, this Agreement, the following capitalized terms or terms otherwise
defined in this Section 1 shall have the meanings set forth set forth below:
1.1 Agreement. This Common Agreement.
1.2 Asset Group. Each of the (a) Charter Systems, (b) the IPSE Systems,
(c) the East Tennessee Systems, (d) the Kingsport Systems and the West Tennessee
Systems, (e) the Gainesville Systems, (f) the IP-I Systems and (g) the Brenmor
Systems.
1.3 Charter Actual Revenues. The Annualized Closing Revenues for the
Charter Systems.
1.4 Charter Shortfall Adjustment Amount. The product of (a) 6.7 times (b)
the amount by which the Charter Targeted Revenues exceed the Charter Actual
Revenues.
1.5 Charter Targeted Revenues. [text omitted pursuant to confidential
treatment request and filed separately with the Commission].
1.6 IP Combined Actual Revenues. The sum of the IP-I Actual Revenues and
the Transferred Systems Actual Revenues.
1.7 IP Combined Shortfall Adjustment Amount. The product of (i) 6.7 times
(ii) the amount by which the IP Combined Targeted Revenues exceed the IP
Combined Actual Revenues.
1.8 IP Combined Targeted Revenues. [text omitted pursuant to confidential
treatment request and filed separately with the Commission].
1.9 IP Systems. Collectively, the Transferred Systems and the IP-I/Brenmor
Systems.
1.10 IP-I Actual Revenues. The aggregate Annualized Closing Revenues for
the IP-I Systems and the Brenmor Systems.
1.11 IP-I Revenue Shortfall. The amount by which the IP-I Targeted
Revenues exceed the IP-I Actual Revenues.
1.12 IP-I Specific Revenue Shortfall. With respect to the IP-I Systems or
the Brenmor Systems the "Target Revenue" therefor set forth on Schedule 1.12
minus the Annualized Closing
-4-
<PAGE> 9
Revenues for such Systems.
1.13 IP-I Targeted Revenues. [text omitted pursuant to confidential
treatment request and filed separately with the Commission].
1.14 Party. Brenmor, IP-I, IP-IV, IPSE, IPWT, ICP-IV, TCID IP-V, Charter
I, Charter II, Marcus or Charter RMG, as the context requires.
1.15 Transferred Specific System Revenue Shortfall. With respect to a
Transferred System the "Target Revenue" for that System set forth on Schedule
1.15 minus the Annualized Closing Revenues for that System.
1.16 Transferred Systems Actual Revenues. The Annualized Closing Revenues
for the Transferred Systems.
1.17 Transferred Systems Agreements. (i) The IPSE/Charter Exchange
Agreement, (ii) the RMG Purchase Agreement and (iii) the IPWT Purchase
Agreement.
1.18 Transferred Systems Revenue Shortfall. The amount by which the
Transferred Systems Targeted Revenues exceed the Transferred Systems Actual
Revenues.
1.19 Transferred Systems Targeted Revenues. [text omitted pursuant to
confidential treatment request and filed separately with the Commission].
1.20 Other Definitions. The following terms have the meanings set forth in
the sections indicated in the table below:
<TABLE>
<CAPTION>
Term Section
---- -------
<S> <C>
Action 6.7(a)
Adjusted Value 2.1(a)
Arbitrator 7.15(a)
Appraiser 2.3(k)
Base Value 2.1(a)
Beneficiary 7.16
Brenmor First Paragraph
Brenmor Systems Schedule A.2
Brentwood Systems Schedule A.2
Charter I First Paragraph
Charter II First Paragraph
Charter Parties First Paragraph
Charter RMG First Paragraph
Charter Systems Recital A(ii)
</TABLE>
-5-
<PAGE> 10
<TABLE>
<S> <C>
Charter Threshold Amount 6.11(a)
Decrease 2.3(f)
Dickson, Joelton and Lynchburg Systems Recital B(i)
East Tennessee Systems Schedule A.2
Escrow Agreement 3.3
Final Adjusted Value 2.3(c)
Final Report 2.3(c)
Gainesville Systems Schedule A.2
Guaranteed Obligations 7.16
Guarantor 7.16
Guaranty 7.16
Holdback 2.3(i)
HSR Terminating Party 3.1
ICP-IV First Paragraph
Increase 2.3(f)
Indemnified Party 6.7(a)
Indemnifying Party 6.7(a)
IP Parties First Paragraph
IPSE First Paragraph
IPSE/Charter Exchange Agreement Recital B(i)
IPSE Distribution Agreement Recital B(iii)
IPSE Systems Schedule A.2
IP-I First Paragraph
IP-I Systems Schedule A.2
IP-I/Brenmor Systems Recital A(iii)
IP-I/Charter Exchange Agreement Recital B(xi)
IP-I Threshold Amount 6.10(a)
IP-IV First Paragraph
IP-IV Party First Paragraph
IP-IV Threshold Amount 6.8(a)
IPWT First Paragraph
IPWT/Charter Amount 2.3(f)
IPWT Contribution Agreement Recital (B)(iv)
IPWT Distribution Agreement Recital (B)(v)
IPWT Purchase Agreement Recital B(viii)
Kingsport Systems Schedule A.2
Marcus First Paragraph
Preliminary Report 2.3(b)
Preparing Party 2.3(a)
Prime Rate 6.12
Receiving Party 2.3(a)
Redemption Agreement Recital B(vii)
RMG Recital A(i)
</TABLE>
-6-
<PAGE> 11
<TABLE>
<S> <C>
RMG Purchase Agreement Recital B(ii)
Survival Period 6.1(a)
TCI Parties Recital B(vii)
TCID IP-V First Paragraph
TCID IP-V/Charter Stock Purchase Agreement Recital B(x)
TCID IP-V Threshold Amount 6.9(a)
Tender Offer 3.2
Tennessee LLC Interest Recital B(ii)
Tennessee LLC Recital B(ii)
Third Party 6.7(a)
Underlying Obligor 7.16
West Tennessee Systems Schedule A.2
</TABLE>
1.21 Usage. The definitions in Article 1 shall apply equally to both the
singular and plural forms of the terms defined. Whenever the context may
require, any pronoun shall include the corresponding masculine, feminine and
neuter forms. All references herein to Articles and Sections shall be deemed to
be references to Articles and Sections of this Agreement unless the context
shall otherwise require. The words "include," "includes" and "including" shall
be deemed to be followed by the phrase "without limitation." The words "hereof,"
"herein" and "hereunder" and words of similar import when used in this Agreement
shall refer to this Agreement as a whole and not to any particular provision of
this Agreement. Unless otherwise expressly provided herein, any agreement,
instrument or statute defined or referred to herein or in any agreement or
instrument that is referred to herein means such agreement, instrument or
statute as from time to time amended, modified or supplemented, including (in
the case of agreements or instruments) by waiver or consent and (in the case of
statutes) by succession of comparable successor statutes and references to all
attachments thereto and instruments incorporated therein.
2. CLOSING PAYMENTS; ADJUSTMENTS.
2.1 Closing Payments.
(a) Asset Values. For the purposes of this Agreement and the IP
Agreements, the base purchase price or value attributable to each Asset Group
shall be as set forth on Schedule A.2 (each, a "Base Value"). Each Base Value
shall be adjusted in accordance with the provisions of Section 2.2 (as adjusted,
an "Adjusted Value").
(b) Payments. At the Closings, the following payments shall be made:
(i) if, under the IPSE/Charter Exchange Agreement:
(A) the Adjusted Values of the IPSE Systems are more than the
Adjusted Values of the Charter Systems, the Charter Parties shall,
jointly and severally, pay IPSE or its designee the difference, at
the Closing thereunder or
-7-
<PAGE> 12
(B) the Adjusted Values of the IPSE Systems are less than the
Adjusted Values of the Charter Systems, IPSE shall pay the Charter
Parties or their designee the difference, at the Closing thereunder;
(ii) the Charter Parties shall cause Charter RMG to pay RMG the
percentage of the Adjusted Value of the East Tennessee Systems equal to
the percentage of interests in Tennessee LLC purchased under the RMG
Purchase Agreement, as the consideration for the Tennessee LLC Interest
purchased at the Closing thereunder;
(iii) RMG shall pay to IP-IV the amount received pursuant to Section
2.1(b)(ii) in partial repayment of the indebtedness owed to IP-IV;
(iv) Charter I shall pay IPWT, as provided in the IPWT Purchase
Agreement:
(A) the Adjusted Values of the Kingsport Systems, West
Tennessee Systems, Gainesville Systems and East Tennessee Systems,
(B) the Base Value of the Brentwood Systems,
(C) an amount equal to all cash and cash equivalents held by
RMG after its payment pursuant to Section 2.1(b)(ii),
(D) an amount equal to the current and long-term portion of
receivable balances due to RMG from programmers whose networks are
carried by Systems owned by RMG, which shall not include any amounts
owing to any Affiliates of RMG,
(E) an amount equal to the current and long-term portion of
amounts payable by third parties to RMG, including those amounts
payable by AVR of Tennessee, L.P. and Adelphia Communications, Inc.,
which shall not include any amounts owing to any Affiliates of RMG,
(F) to the extent not received by RMG prior to the Closing
Date, an amount equal to two million eight hundred fifty thousand
dollars ($2,850,000) representing the fair market value of RMG's 5%
limited partnership interest in AVR of Tennessee, L.P. as set forth
in the certain purchase and sale agreement between RMG and Hyperion
of Tennessee, Inc. dated February 11, 1999;
in each case of clauses (C) through (E), (x) to the extent not
included elsewhere in the calculations in this Section 2.1(b)(iv) or
in the calculation of Adjusted Value pursuant to Section 2.2, (y) as
reflected, or required to be reflected, on RMG's balance sheet,
prepared in accordance with generally accepted accounting principles
consistently applied, as of the Closing Date, and (z) excluding any
assets
-8-
<PAGE> 13
relating to the Brentwood Systems and rights of RMG under the IP-
I/Charter Exchange Agreement,
less:
(I) the principal amount of the outstanding indebtedness and
the accrued interest thereon owed by RMG to IP-IV at the time of the
Closing after giving effect to the payment made pursuant to Section
2.1(b)(iii);
(II) the liquidation value of then outstanding Series A Voting
Preferred Stock of RMG plus accrued and unpaid dividends through the
Closing and the purchase price of the Class B Common Stock of RMG as
specified in the TCID IP-V/Charter Stock Purchase Agreement;
(III) the amount paid for the Tennessee LLC Interest under the
RMG Purchase Agreement;
(IV) the amount necessary to make the deposits described in
Section 2.1(b)(vi); and
(V) an amount equal to any other liabilities of RMG to the
extent that such liabilities:
(x) will be retained by RMG after the Closing Time,
(y) have not been included elsewhere in the calculations
in this Section 2.1(b)(iv) or in the calculation of Adjusted
Value pursuant to Section 2.2, and
(z) are reflected, or are required to be reflected, on
RMG's balance sheet, prepared in accordance with generally
accepted accounting principles consistently applied, as of the
Closing Date.
(v) Charter I shall repay, or shall cause RMG to pay, to IP-IV the
amount of indebtedness and interest thereon described in Section
2.1(b)(iv)(I);
(vi) Charter I shall deposit into:
(A) a first escrow fund created for the benefit of the Charter
Parties by the Escrow Agreement the amount specified in Section
6.2(c)(i) to secure IPWT's indemnification obligations under this
Agreement and
(B) a second escrow fund the amount of twenty-one million
eight
-9-
<PAGE> 14
hundred ninety-five thousand dollars ($21,895,000) created for the
benefit of the indemnified persons under the Redemption Agreement to
secure IPWT's indemnification obligations under that agreement;
(vii) Charter I shall pay TCID IP-V the cash consideration for the
Class B Common Stock of RMG and for the Preferred Stock of RMG as set
forth in the TCID IP-V/Charter Stock Purchase Agreement (which amount
shall be equal to the amount set forth in Section 2.1(b)(iv)(B));
(viii) if, under the IP-I/Charter Exchange Agreement:
(A) the Adjusted Value of the IP-I Systems is more than the
Base Value of the portion of the Brentwood Systems transferred to
IP-I by RMG, the Charter Parties shall cause RMG to pay IP-I or its
designee the difference, at the Closing thereunder, or
(B) the Adjusted Value of the IP-I Systems is less than the
Base Value of the portion of the Brentwood Systems transferred to
IP-I by RMG, IP-I shall pay RMG or its designee the difference, at
the Closing thereunder; and
(ix) if, under the IP-I/Charter Exchange Agreement:
(A) the Adjusted Value of the Brenmor Systems transferred by
Brenmor is more than the Base Value of the portion of the Brentwood
Systems transferred to Brenmor by RMG, Charter I shall cause RMG to
pay Brenmor or its designee the difference, at the Closing
thereunder, or
(B) the Adjusted Value of the Brenmor Systems is less than the
Base Value of the portion of the Brentwood Systems transferred to
Brenmor by RMG, Brenmor shall pay RMG or its designee the
difference, at the Closing thereunder; and
(x) If any of the following payments are required:
(A) the Charter Parties will pay to the appropriate party all
amounts which they agreed to pay under Sections 9.1(h) and 9.1(i) of
the Redemption Agreement;
(B) IPWT will pay to the appropriate party all amounts which
it agreed to pay under Sections 4.1(f)(i), 4.1(f)(iii), 4.1(g)(i),
4.1(g)(iii), 4.2(g)(ii), 4.2(i)(ii), 4.3(c) and 4.3(d);
(C) IP-I will pay to the appropriate party all amounts which
it agreed to
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<PAGE> 15
pay under Sections 4.1(f)(ii), 4.1(g)(ii), 4.2(g)(i) and 4.2(i)(i);
and
(D) IPWT shall pay the Charter Parties any amount which it may
be required to pay pursuant to Section 6.2(d)(i).
(c) Immediately Available Funds. At the Closing, each Party responsible
for paying any amount pursuant to Section 2.1(b) shall pay such amount at the
applicable Closing, by one or more federal wire transfers of immediately
available funds pursuant to wire transfer instructions which shall be delivered
by the recipient of such payment at least five (5) Business Days prior to
Closing. The Charter Parties agree that IPWT may, as RMG's agent and
attorney-in-fact under the RMG Purchase Agreement, enforce RMG's rights to
payments under Section 2.1(b)(ii); and IPWT shall provide any wire transfer
instructions required for such payments.
2.2 Adjustments to Values.
(a) Adjustments.
(i) The Adjusted Values of the Assets shall be calculated on the
basis:
(A) of the Asset Groups comprised by such Assets, and
(B) that adjustments in this Section 2.2 and Section 2.1(b)
shall not be duplicated.
(ii) The Base Value of the Brentwood Systems shall not be adjusted
but shall be included in the Preliminary or Final Report.
(iii) The Party responsible for preparing the Preliminary Report
pursuant to Section 2.3(a) shall calculate the applicable Adjusted Values
for the Asset Groups and the other adjustments under Section 2.1(b).
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<PAGE> 16
(b) Working Capital.
(i) The Base Value for each Asset Group shall be increased or
decreased, as applicable, on a pro rata basis as of the Closing Time for
all prepaid expenses other than inventory (but only to the extent the full
benefit of such prepaid expenses will be realizable within twelve (12)
months after the Closing Date), accrued expenses (including real and
personal property taxes, copyright fees, and franchise or license fees or
charges), prepaid income, funds of the Transferor on deposit with third
parties (other than those which are or relate to Excluded Assets or the
full benefit of which will not be available to the Transferee following
Closing), subscriber prepayments and accounts receivable in each case
related to the Cable Business conducted through such Asset Group, all as
determined in accordance with generally accepted accounting principles
consistently applied, to reflect the principle that all expenses and
income attributable to that Cable Business for the period through and
including the Closing Date are for the account of the Transferor, and all
expenses and income attributable to that Cable Business for the period
after the Closing Date are for the account of the Transferee.
(ii) The Transferor will receive no credit for (A) the portion of
any account receivable resulting from cable or internet service sales
which is sixty (60) days or more past due as of the Closing Date, (B) the
portion of any national agency account receivable resulting from
advertising sales which is one hundred twenty (120) days or more past due
as of the Closing Date, (C) any non-national agency account receivable
resulting from advertising sales any portion of which is ninety (90) days
or more past due as of the Closing Date, or (D) accounts receivable from
customers whose accounts are inactive as of the Closing Date. For purposes
of making "past due" calculations under this paragraph, the billing
statements of an Asset Group will be deemed to be due and payable on the
first day of the period during which the service to which such billing
statements relate.
(iii) Notwithstanding the foregoing, no adjustment will be made for
any items of income or expense which relate to any Excluded Assets with
respect to an Asset Group other than accounts receivable for advertising
sales and data services not otherwise excluded under clause (ii) above and
which accounts will be included in such Asset Group.
(c) Liabilities. The Base Value for each Asset Group shall be decreased
by:
(i) the amount of all unearned income of, advance payments received
by, or funds of third parties on deposit with, the Transferor as of the
Closing Date, relating to the Cable Business conducted through such Asset
Group, including advance payments and deposits by subscribers served by
that Cable Business for converters, encoders, decoders, cable television
service and related sales, all interest, if any, required to be paid
thereon through the Closing Date, and
(ii) the economic value up to a maximum per employee of four (4)
weeks of
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<PAGE> 17
vacation time and ten (10) days of sick time, in each case, to the extent
accrued as of the Closing Date and permitted to be taken after the Closing
Date by the System Employees (as defined in the applicable IP Agreement)
employed in such Asset Group who become employees of the Transferee upon
Closing.
(d) Capital Expenditures.
(i) The Base Value for each Asset Group, other than the Charter
Systems and the Systems identified on Schedule 2.2(d)(iii), shall be
increased by an amount equal to the capital expenditures (including items
in inventory) to the extent made between December 31, 1998 and the Closing
Date in connection with (A) the upgrade or rebuild of a plant associated
with the Assets of the Transferor, (B) headend consolidation and system
interconnection, (C) digital services equipment (customer premises and
headend), including digital converters and remotes in inventory, (D) data
services equipment (customer premises and headed), including cable modems
and ethernet cards in inventory, (E) construction costs related to fiber
lease agreements (plus a ten percent (10%) markup) and (F) any other
matter, to the extent such expenditure is approved in writing by the
Transferee.
(ii) If the rebuild projects described on Schedule 2.2(d)(ii) have
not been completed by the Closing under the IPSE/Charter Exchange
Agreement, the Base Value for the Charter Systems shall be decreased by an
amount equal to the total amount of capital expenditures set forth on
Schedule 2.2(d)(ii) for those projects less the amount of capital
expenditures made for such projects since December 31, 1998 up to but not
in excess of such scheduled amounts.
(iii) If the rebuild projects described on Schedule 2.2(d)(iii) have
not been completed by the Closing under the IPWT Purchase Agreement, the
Base Value for the Systems described therein shall be decreased by an
amount equal to the total amount of capital expenditures set forth on
Schedule 2.2(d)(iii) for those projects less the amount of capital
expenditures made for such projects since December 31, 1998 up to but not
in excess of such scheduled amounts.
(iv) The increase in the Base Value of an Asset Group pursuant to
Section 2.2(d)(i) will not include capital expenditures to the extent such
expenditures are inconsistent with the 1999 capital budget set forth on
Schedules 2.2(d)(iv) for that Asset Group.
(e) Deferred Channel Launch. The Base Value for each Asset Group shall be
decreased, in the aggregate, by an amount equal to deferred channel launch
revenue as presented on the Asset Group's balance sheet in accordance with
generally accepted accounting principles, consistently applied, as of the
Closing Date. The deferred channel launch revenue on the Asset Group's balance
sheet will represent that portion of launch support funds received by the Asset
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<PAGE> 18
Groups from programmers, for which the Transferee will be obligated to continue
the programming described on Schedules 2.2(e)(i) and 2.2(e)(ii) for a certain
period of time after the Closing, which have not been previously recognized into
income prior to the Closing Date.
(f) Year 2000 Condition. If applicable, the Base Value for an Asset Group
shall be decreased by the Y2K Adjustment Amount, subject to the provisions of
Sections 4.1(g), 4.2(i) and 4.3(d).
(g) Vehicle Leases. The Base Value for each Asset Group shall be decreased
by the aggregate rental payments remaining to be paid, together with any
transfer penalties or charges, under all vehicle and capital leases included in
such Asset Group.
(h) Revenue Adjustment.
(i) Subject to Section 2.2(h)(v), if the Charter Targeted Revenues
exceed the Charter Actual Revenues, the Base Value of the Charter Systems
will be decreased by an amount equal to the Charter Shortfall Adjustment
Amount.
(ii) Subject to Section 2.2(h)(v), if the IP Combined Targeted
Revenues exceed the IP Combined Actual Revenues, the following will apply:
(A) If there is a IP-I Revenue Shortfall and there is not a
Transferred Systems Revenue Shortfall, then the Base Value of the
IP-I/Brenmor Systems will be decreased by the amount of the IP
Combined Shortfall Adjustment Amount;
(B) If there is a Transferred Systems Revenue Shortfall and
there is not an IP-I Revenue Shortfall, then the Base Value of the
Transferred Systems will be decreased by the amount of the IP
Combined Shortfall Adjustment Amount; and
(C) If there is both a Transferred Systems Revenue Shortfall
and an IP-I Revenue Shortfall, then (1) the Base Value of the
IP-I/Brenmor Systems will be decreased by IP-I's and Brenmor's
proportionate share of the IP Combined Shortfall Adjustment Amount
(calculated to be equal to the same percentage of the IP Combined
Shortfall Adjustment Amount as the percentage that the amount of the
IP-I Revenue Shortfall represents of the sum of the amounts of the
IP-I Revenue Shortfall plus the Transferred Systems Revenue
Shortfall), and (2) the Base Value of the Transferred Systems will
be decreased by the amount of the balance of the IP Combined
Shortfall Adjustment Amount.
(iii) IPSE and IPWT shall allocate any decrease in the Base Value of
any Asset Group included in the Transferred Systems made pursuant to
Section 2.2(h)(ii) to each Asset Group by that Asset Group's proportionate
share of that decrease.
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<PAGE> 19
(iv) IP-I and Brenmor shall allocate any decrease in the Base Value
of any Asset Group included in the IP-I/Brenmor Systems made pursuant to
Section 2.2(h)(ii) to each Asset Group by that Asset Group's proportionate
share of that decrease.
(v) Notwithstanding any calculations made pursuant to this Section
2.2(h), the maximum amounts by which the Base Values of the Charter
Systems, the Transferred Systems or the IP-I/Brenmor Systems may be
decreased, in the aggregate, under this Section 2.2(h) is set forth
opposite their name below:
<TABLE>
<CAPTION>
Systems Maximum Liability
------- -----------------
<S> <C>
Charter Systems $31,500,000
IP-I/Brenmor Systems $25,125,000
Transferred Systems $71,827,500
</TABLE>
(i) Casualty Losses. The Base Value for any Asset Group will be decreased
by the Uninsured Casualty Adjustment.
2.3 Determination of Adjustment Amounts.
(a) Preliminary Reports. Each Party named ("Preparing Party") in the first
column below shall prepare the Preliminary Report and Final Report for the IP
Agreement and the Systems named in the second and third columns opposite its
name and deliver such reports to the Transferee as named in the fourth column
opposite its name ("Receiving Party"):
<TABLE>
<CAPTION>
Preparing
Party IP Agreement Systems Receiving Party
- ----- ------------ ------- ---------------
<S> <C> <C> <C>
Charter IPSE/Charter Exchange Agreement Charter Systems IPSE/IPWT
Parties
IPWT/IPSE IPSE/Charter Exchange Agreement IPSE Systems Charter Parties
IPWT/RMG RMG Purchase Agreement East Tennessee Charter Parties
Systems
</TABLE>
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<PAGE> 20
<TABLE>
<CAPTION>
Preparing
Party IP Agreement Systems Receiving Party
- ----- ------------ ------- ---------------
<S> <C> <C> <C>
IPWT IPWT Purchase Agreement East Tennessee Charter Parties
Systems
West Tennessee
Systems
Gainesville
Systems
Kingsport
Systems
Brentwood
Systems
IP-I IP-I/Charter Exchange Agreement IP-I Systems Charter Parties
Brenmor IP-I/Charter Exchange Agreement Brenmor Charter Parties
Systems
</TABLE>
(b) Delivery of Preliminary Reports. At least ten (10) Business Days prior
to the Closing, the Preparing Party (or its permitted assignee), shall deliver
to the Receiving Party a report (the "Preliminary Report"), certified as to
completeness and accuracy by an authorized officer of such Preparing Party
showing in reasonable detail for the applicable Asset Group, a good faith
preliminary determination of the calculations of the payments set forth in
Section 2.1(b) and the adjustments referred to in Section 2.2 for such Party,
each of which shall be calculated as of the Closing Date (or as of any other
date agreed by the Parties), together with appropriate documents substantiating
the estimates proposed in its Preliminary Report. The cash consideration payable
pursuant to Section 2.1(b), as preliminarily determined pursuant to this Section
2.3(b), will be paid by the applicable Party to the other at Closing.
(c) Final Report. Within ninety (90) days after the Closing, the Preparing
Party will deliver to the Receiving Party a report (the "Final Report"),
certified in a manner similar to the certifications required for the Preliminary
Reports, showing in full detail for the applicable Asset Group (i) the Preparing
Party's final determination of the Adjusted Values of the applicable Asset Group
and the calculations performed pursuant to Sections 2.1(b)(iv), (vii) and (x),
in each case as of the Closing Date, (ii) all adjustments which were not
calculated as of the Closing Date and (iii) any corrections to any of its
estimated adjustments or calculations contained in its Preliminary Report,
together with appropriate documents substantiating the calculations,
determinations and adjustments proposed in its Final Report. Each Receiving
Party will provide the Preparing Party with reasonable access to all records
which such Receiving Party has in its possession and which
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<PAGE> 21
are necessary for the Preparing Party to prepare its Final Report.
(d) Final Report Review. Within thirty (30) days after its receipt of a
Final Report, the Receiving Party will give written notice of its objections, if
any, to such Final Report. Any disputed amounts will be determined in accordance
with the provisions of Section 7.14. (The final determinations of values for
each Asset Group, as agreed between the Preparing Party and Receiving Party, or
as determined under Section 7.15 is referred to as the "Final Adjusted Value").
(e) IPSE and Charter Systems Payment. If the Adjusted Values for the
Charter Systems are higher than the Final Adjusted Values of the Charter
Systems, a positive "Charter difference" is created. If the Adjusted Values for
the Charter Systems are lower than the Final Adjusted Values of the Charter
Systems, a negative "Charter difference" is created. If the Adjusted Values for
the IPSE Systems are higher than the Final Adjusted Values of the IPSE Systems,
a positive "IPSE difference" is created. If the Adjusted Values for the IPSE
Systems are lower than the Final Adjusted Values of the IPSE Systems, a negative
"IPSE difference" is created. If the Adjusted Values included in the Preliminary
Report equal the Final Adjusted Values for either party, a zero difference for
that party is created. The "Final Charter/IPSE Adjustment Amount" will be equal
to (i) the Charter difference (positive or negative or zero) minus (ii) the IPSE
difference (positive or negative or zero). If the Final Charter/IPSE Adjustment
Amount is a positive number, Charter will pay IPSE the Final Charter/IPSE
Adjustment Amount. If the Final Charter/IPSE Adjustment Amount is a negative
number, IPSE will pay the Charter Parties the Final Charter/IPSE Adjustment
Amount.
(f) IP-IV Payments.
(i) If the Adjusted Values for the Transferred Systems (excluding
the IPSE Systems) are higher than the Final Adjusted Values of the
Transferred Systems (excluding the IPSE Systems), IP-IV shall pay the
difference to Charter I. If the Adjusted Values for the Transferred
Systems (excluding the IPSE Systems) are lower than the Final Adjusted
Values of the Transferred Systems (excluding the IPSE Systems), Charter I
shall pay IP-IV such difference.
(ii) If the IPWT/Charter Amount included in the Preliminary Report:
(A) resulted in a Decrease in the Preliminary Report and the
IPWT/Charter Amount in the Final Report results in:
(I) a Decrease higher than the Decrease in the
Preliminary Report, IP-IV shall pay Charter I the difference;
or
(II) a Decrease lower than the Decrease in the
Preliminary Report or an Increase, Charter I shall pay IP-IV
the difference; or
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<PAGE> 22
(B) resulted in an Increase in the Preliminary Report and the
IPWT/Charter Amount included in the Final Report results in:
(I) an Increase higher than the Increase in the
Preliminary Report, Charter I shall IP-IV the difference; or
(II) a Decrease or an Increase lower than the Increase
in the Preliminary Report, IP-IV shall pay Charter I the
difference.
For purposes of this Section 2.3(f)(ii), "IPWT/Charter Amount" means
the sum of the amounts calculated pursuant to Sections 2.1(b)(iv)(C)
through (F) and Sections 2.1(b)(iv)(I) through (V); and "Increase"
and "Decrease" mean respectively that the IPWT/Charter Amount
results in an increase or a decrease, respectively, in the amount
otherwise payable by Charter I to IPWT pursuant to Section
2.1(b)(iv).
(g) IP-I Systems Payment. If the Adjusted Values for the IP-I Systems are
higher than the Final Adjusted Values of the IP-I Systems, IP-I shall pay RMG or
its designee such difference. If the Adjusted Values for the IP-I Systems are
lower than the Final Adjusted Values of the IP-I Systems, Charter I shall cause
RMG to pay IP-I or its designee such difference.
(h) Brenmor Systems Payment. If the Adjusted Values for the Brenmor
Systems are higher than the Final Adjusted Values of the Brenmor Systems,
Brenmor shall pay RMG or its designee such difference. If the Adjusted Values
for the Brenmor Systems are lower than the Final Adjusted Values of the Brenmor
Systems, Charter I shall cause RMG to pay Brenmor or its designee such
difference.
(i) Other Payments. If an amount included in the Preliminary Report with
respect to the calculations under Section 2.1(b)(vii) or (x) is more than the
corresponding amount included in the Final Report, the Party which received such
amount at the Closing shall pay the difference to the Party which paid such
amount. If an amount included in the Preliminary Report with respect to the
calculations under Section 2.1(b)(vii) or (x) is less than the corresponding
amount included in the Final Report, the Party which paid such amount at the
Closing shall pay the difference to the Party which received such amount.
(j) Recourse to IPWT. If:
(x) IPSE under Section 2.3(e) or IP-IV under Section 2.3(f) are
obligated to pay any amount to the Charter Parties with respect to the
Final Adjusted Value of the Transferred Systems, and
(y) the $15,000,000 (the "Holdback") retained by IPWT pursuant to
Section 2.7 of the Redemption Agreement is insufficient to pay all amounts
owed by IPWT to IP-
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<PAGE> 23
IV under Section 2.4(d) thereof,
then:
(i) IPWT shall pay the entire Holdback to IP-IV as provided in the
Redemption Agreement;
(ii) IP-IV shall:
(A) pay the Charter Parties from the Holdback 40.36% of the
portion of the payments required under Sections 2.3(e) and (f) in
respect of the Final Adjusted Value of the Transferred Systems (such
40.36% of such portion, the "IPWT/Charter Final Adjusted Value
Liability"), not to exceed $7,034,000; and
(B) assign its right to receive from IPWT and the "Withdrawing
Partners" as defined in the Redemption Agreement IP-IV's right to
receive the balance of the IPWT/Charter Final Adjusted Value
Liability; and
(iii) the Charter Parties:
(A) may demand that IPWT pay the balance of the IPWT/Charter
Final Adjusted Value Liability and
(B) may demand that IPWT, and IPWT shall, upon receipt of such
demand, diligently pursue collection from the Withdrawing Partners
of their pro rata share of the balance of the IPWT/Charter Final
Adjusted Value Liability and exercise any rights of set-off it may
have amount owed to a Withdrawing Partner against any amount owed
thereby in respect of its pro rata share of the IPWT/Charter Final
Adjusted Value Liability;
provided that if the Charter Parties make such demand, IP-IV shall,
to the extent such a demand is made by the Charter Parties, no
longer have the right to require that IPWT pay such amount to IP-IV
pursuant to the Redemption Agreement; and
(iv) IPSE and IP-IV shall have no obligation or liability to pay any
amount in respect of the IPWT/Charter Final Adjusted Liability in excess
of $7,034,000.
(k) Timely Payment. The cash payments required after determination of all
disputed amounts, and after taking into account the payments of cash made at
Closing, will be made to the appropriate Person(s) by one or more wire transfers
of immediately available funds by the appropriate Person(s) within three (3)
Business Days after the final determination.
(l) Allocation of Value. Following Closings under each of the IPSE/Charter
Exchange
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<PAGE> 24
Agreement and the IP-I Exchange Agreement, the parties thereto agree to jointly
hire an appraiser (the "Appraiser") to prepare with respect to each such
agreement, not later than 90 days after the Closing, a written report regarding
the value to be allocated to the tangible personal property included in the
Assets pursuant to Internal Revenue Service regulations relating to like-kind
exchanges of assets under Section 1031 of the Code. The fees of the Appraiser
will be split equally between IPSE and Charter as to the report under the
IPSE/Charter Exchange Agreement and will be paid by IP-IV as to the report under
the IP-I/Charter Exchange Agreement. IPSE, IP-I, Brenmor and the Charter Parties
agree that for purposes of Sections 1031 and 1060 of the Code and the
regulations thereunder, each will report the transactions contemplated by the IP
Agreement to which it is a party in accordance with the values determined by the
Appraiser. Each party promptly will give the other notice of any disallowance or
challenge of asset values by the Internal Revenue Service or any state or local
tax authority.
2.4 Post-Closing Rate Refunds. If, after the Closing Date:
(a) IPSE is required pursuant to a Final Rate Order to pay a refund to
subscribers of any of the Charter Systems acquired from a Charter Party for
periods prior to the Closing Date, the Charter Parties shall, jointly and
severally, pay the Rate Refund Amount to IPSE, or
(b) any Charter Party is required pursuant to a Final Rate Order to pay a
refund to subscribers of any of the Transferred Systems acquired from IPSE or
IPWT for periods prior to the Closing Date, IPWT and IPSE shall severally, in
proportions of forty and thirty-six one hundredths percent (40.36%) and
fifty-nine and sixty four hundredths percent (59.64%), pay the Rate Refund
Amount to the Charter Parties, or
(c) any Charter Party is required pursuant to a Final Rate Order to pay a
refund to subscribers of any of the IP-I/Brenmor Systems acquired from IP-I or
Brenmor for periods prior to the Closing Date, IP-I and Brenmor, jointly and
severally, shall pay the Rate Refund Amount to the Charter Parties;
provided, however, in no event will a Party be required to reimburse the other
for any portion of the Rate Refund Amount for any Regulated System that is in
excess of the amount that would have applied if the Rate Refund Amount were
calculated based on the rates that were applicable in such Regulated System
immediately prior to Closing.
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<PAGE> 25
3. ADDITIONAL RIGHTS AND OBLIGATIONS.
3.1 Additional HSR Termination Rights. The IP Parties and the Charter
Parties each will have the right to terminate the IP Agreements to which they
are parties by giving written notice to such effect, if such Party (the "HSR
Terminating Party") in good faith reasonably determines that (a) to overcome
objections in connection with the HSR Act or antitrust matters, any significant
change in the operations or activities of the business (or any material assets
employed therein) of such Party or any of its Affiliates would be required, and
that such change would be materially adverse to the operations or activities of
the business (or any material assets employed therein) of such Party or any of
its Affiliates having significant assets, net worth or revenue, or (b) it
determines in its reasonable business judgment that the aggregate out-of-pocket
costs that it will incur to respond to any requests for additional information
and documentation by a Governmental Authority in connection with the HSR Act
pursuant to the IP Agreements and the Redemption Agreement will exceed one
million dollars ($1,000,000) after using commercially reasonable efforts to
modify such request (which efforts will include negotiating in good faith with
the Governmental Authority making such request to limit the scope and content of
such request to make compliance with such request not unduly burdensome).
Notwithstanding the preceding, such notice of termination will not apply if one
or more of the non-terminating Parties, within ten (10) days after receipt of
such termination notice, agree in writing to reimburse the HSR Terminating Party
for all reasonable out-of-pocket costs incurred in excess of one million dollars
($1,000,000) in responding to such request(s) for additional information and
documentation promptly upon receipt of one or more invoices therefor. Any
reimbursement agreement pursuant to the preceding sentence will be in form
reasonably satisfactory to the HSR Terminating Party and obligations and
payments to the HSR Terminating Party will not be taken into account for
purposes of, or be subject to, any of the limitations of indemnifications of any
of the Parties pursuant to Section 6.8, 6.9, 6.10, or 6.11.
3.2 [text omitted pursuant to confidential treatment request and filed
separately with the Commission]
3.3 Escrow Agreement. On the Closing Date, IPWT and Charter I shall enter
into an escrow agreement (the "Escrow Agreement") to secure the indemnification
obligations of IPWT under this Agreement substantially in the form of Exhibit
6.2(c)(i).
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<PAGE> 26
3.4 Year 2000 Condition. If a notice of the Closing Date has been
delivered (or waived by the applicable Parties) and a Transferee is not
reasonably satisfied that the Y2K Condition for an Asset Group it will receive
will be met on the Closing Date or if the work on the Y2K Plan has not been
completed by the Closing Date, it will provide written notice to such effect to
the other Parties, and the Transferee and the Transferor will attempt to agree
on the Y2K Adjustment Amount for that Asset Group. If the Transferee and the
Transferor are unable to reach agreement on the Y2K Adjustment Amount within
fifteen (15) days after the Transferor receives such written notice, then the
Arbitrator will determine the Y2K Adjustment Amount for that Asset Group in
accordance with Section 7.15. The Closing or Closings shall be delayed until the
objections raised by the Transferee have been settled by mutual agreement or
finally determined as provided in Section 7.15.
3.5 Environmental Assessment. If a notice of the Closing Date has been
delivered (or waived by the applicable Parties) and a Transferee is not
reasonably satisfied that the condition precedent to its obligations in Section
4.1(d) or 4.2(e) will be satisfied on the Closing Date, it will provide written
notice to such effect to the other Parties and it will attempt to agree on the
amount of the liability for Hazardous Substances for the Systems being
transferred to it or RMG in the case of Charter I's purchase under the IPWT
Purchase Agreement. This section does not apply to the transfer to IP-I and
Brenmor of the Brentwood Systems.
3.6 Orderly Closing. The Parties shall use commercially reasonable efforts
to ensure that the Closings under the IP Agreements and the Redemption Agreement
proceed and are consummated in the order and otherwise as set forth in Section
4.4(a).
3.7 Opinions of Counsel. Exhibits C.1, C.2, C.3 and C.4 set forth the
forms of opinions to be delivered in connection with the IP Agreements at the
Closings.
3.8 Rights With Respect to Stock in RMG. At the Closing, the IP Parties,
TCID IP-V and ICP-IV shall assign to Charter I (but only to the extent such
rights are assignable), without additional consideration, all rights and
remedies (including without limitation indemnification rights) which such
parties have against Third Parties with respect to claims related to the title
to, or ownership of, any equity interests in RMG. To the extent that such rights
or remedies are not assignable, each of the IP Parties, TCID IP-V and ICP-IV
shall (to the extent they remain in existence) use commercially reasonable
efforts to exercise any such rights and remedies for the benefit of Charter I
and to assist Charter I otherwise in connection with any claims made by Third
Parties with respect to the title to any equity interests in RMG; provided,
however, unless (and only to the extent that) Losses with respect to such claims
are eligible for indemnification pursuant to this Agreement, the reasonable
costs of the IP Parties, TCID IP-V and ICP-IV pursuant to this sentence shall be
borne and reimbursed by Charter I.
3.9 Indemnity Insurance. Prior to the Closing, IPWT shall provide
reasonable assistance to the Charter Parties to obtain an insurance policy or
insurance policies in lieu of the insurance policies described in Section
6.2(c)(ii)(A), provided that IPWT shall not be required
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<PAGE> 27
to incur any out-of-pocket costs in connection with such assistance. If IPWT
receives notice of an election by the Charter Parties pursuant to Section 6.2(c)
that it will not require that IPWT obtain the insurance policies described
therein, IPWT shall promptly cancel such binders or policies and exercise
commercially reasonable efforts to obtain a refund or refunds of the premiums
paid with respect to the same. IPWT shall notify Charter I at least five (5)
Business Days prior to paying the premiums for any of the aforementioned
insurance policies
4. CONDITIONS PRECEDENT AND CLOSINGS.
4.1 Conditions to the Charter Parties' Obligations. The obligations of the
Charter Parties to consummate any Closing under an IP Agreement will be subject
to the satisfaction, at or before that Closing, of the following conditions (in
addition to the conditions precedent to the obligations of the Charter Parties
under each such IP Agreement), one or more of which may be waived by the Charter
Parties:
(a) Common Agreement. The other Parties shall have performed all
agreements and covenants in this Agreement which they were to have performed on
or before the Closing Date.
(b) Escrow Agreement. IPWT, Charter I and an escrow agent shall have
entered into the Escrow Agreement.
(c) Franchises.
(i) The aggregate number of Scheduled Subscribers located in areas
that are served without a franchise in the Transferred Systems or that are
served pursuant to Transferred Systems Franchises that either do not
require consent or as to which Required Consents have been obtained is at
least ninety-five percent (95%) of the total number of Scheduled
Subscribers in the Transferred Systems;
(ii) The aggregate number of Scheduled Subscribers located in areas
that are served without a franchise in the IP-I/Brenmor Systems or that
are served pursuant to IP-I/Brenmor Systems Franchises that either do not
require consent or as to which Required Consents have been obtained is at
least ninety-five percent (95%) of the total number of Scheduled
Subscribers for the IP-I/Brenmor Systems; and
(iii) In each case in Section 4.1(c)(i) and (ii), any applicable
waiting period (including extensions thereof) has expired with respect to
the FCC Form 394 filed in connection with the requests for consent to the
transfer of the Systems Franchises for which consents have not then been
obtained,
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<PAGE> 28
(d) Environmental Assessments.
(i) No environmental audit or assessment conducted by the Charter
Parties with respect to the Owned Property or the Leased Property of the
Transferred Systems or the Brentwood Systems (or with respect to RMG,
otherwise) will have indicated the presence thereon of Hazardous
Substances of a kind or in a quantity as could reasonably be expected to
give rise to a liability in excess of eight million dollars ($8,000,000),
other than environmental matters with respect to which, with the Charter
Parties' consent, the IPSE and IPWT Parties have, jointly and severally,
committed in writing to remediate as promptly as practicable after the
Closing Date or to indemnify (which obligations and payments to the
Charter Parties will not be subject to any of the limitations of
indemnifications of any of the Parties pursuant to Section 6.8) the
Charter Parties after the Closing Date.
(ii) No environmental audit or assessment conducted by the Charter
Parties with respect to the Owned Property or the Leased Property of the
IP-I/Brenmor Systems will have indicated the presence thereon of Hazardous
Substances of a kind or in a quantity as could reasonably be expected to
give rise to a liability in excess of eight million dollars ($8,000,000),
other than environmental matters with respect to which, with the Charter
Parties' consent, IP-I and Brenmor have, jointly and severally, committed
in writing to remediate as promptly as practicable after the Closing Date
or to indemnify the Charter Parties after the Closing Date (which
obligations and payments to Charter will not be subject to any of the
limitations of indemnifications of any of the Parties pursuant to Section
6.10).
(e) Revenue Shortfall Adjustments.
(i) The decrease, if any, in the Base Value of the IP-I/Brenmor
Systems pursuant to Section 2.2(h), calculated without giving effect to
Section 2.2(h)(v), does not exceed twenty-five million one hundred
twenty-five thousand dollars ($25,125,000); and
(ii) The decrease, if any, in the Base Value of the Transferred
Systems pursuant to Section 2.2(h), calculated without giving effect to
Section 2.2(h)(v), does not exceed seventy-one million eight hundred
twenty-seven thousand five hundred dollars ($71,827,500).
(f) Uninsured Casualty Adjustments.
(i) Either:
(A) the Uninsured Casualty Adjustment for the Charter Systems
does not exceed three million dollars ($3,000,000),
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<PAGE> 29
(B) IPSE has waived its rights to a decrease to the Base Value
greater than three million dollars ($3,000,000) for the Uninsured
Casualty Adjustment for the Charter Systems, or
(C) any excess of the Uninsured Casualty Adjustment for the
Charter Systems over three million dollars ($3,000,000) is paid in
cash to IPSE at Closing by IPWT;
(ii) Either:
(A) the Uninsured Casualty Adjustment for the Transferred
Systems does not exceed three million dollars ($3,000,000),
(B) IPSE and IPWT agree to a decrease to the Base Value for
such Transferred Systems in the full amount of the Uninsured
Casualty Adjustment for such Transferred Systems, or
(C) any excess of the Uninsured Casualty Adjustment for the
Transferred Systems over three million dollars ($3,000,000) is paid
in cash to the Charter Parties at Closing by IP-I; and
(iii) Either:
(A) the aggregate Uninsured Casualty Adjustment for the
IP-I/Brenmor Systems does not exceed two million dollars
($2,000,000),
(B) IP-I and Brenmor agree to a decrease to the Base Values
for those IP-I/Brenmor Systems affected by the Uninsured Casualty
Adjustment in the full amount of the Uninsured Casualty Adjustment
for the IP-I/Brenmor Systems, or
(C) any excess of the Uninsured Casualty Adjustment for the
IP-I/ Brenmor Systems over two million dollars ($2,000,000) is paid
in cash to the Charter Parties at Closing by IPWT.
(g) Year 2000 Conditions.
(i) Either:
(A) the Y2K Adjustment Amount for the Charter Systems does not
exceed three million dollars ($3,000,000),
(B) IPSE has waived its rights to a decrease to the Base Value
greater than three million dollars ($3,000,000) for the Y2K
Adjustment Amount for the
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<PAGE> 30
Charter Systems, or
(C) any excess of the Y2K Adjustment Amount for the Charter
Systems over three million dollars ($3,000,000) has been paid to
IPSE by IPWT at the Closing;
(ii) Either:
(A) the Y2K Adjustment Amount for the Transferred Systems does
not exceed three million dollars ($3,000,000),
(B) IPWT and IPSE agree to a decrease to the Base Value for
the Transferred Systems in the full amount of the Y2K Adjustment
Amount for the Transferred Systems, or
(C) any excess of the Y2K Adjustment Amount for the
Transferred Systems over three million dollars ($3,000,000) is paid
in cash to the Charter Parties at Closing by IP-I; and
(iii) Either:
(A) the Y2K Adjustment Amount for the IP-I/Brenmor Systems
does not exceed two million dollars ($2,000,000),
(B) IP-I and Brenmor agree to a decrease to the Base Values
for the IP-I Systems in the full amount of the Y2K Adjustment Amount
for the IP-I/ Brenmor Systems, or
(C) any excess of the Y2K Adjustment Amount for the
IP-I/Brenmor Systems over two million dollars ($2,000,000) is paid
in cash to the Charter Parties at Closing by IPWT.
4.2 Conditions to IPSE's and IPWT's Obligations. The obligations of IPSE
and IPWT to consummate any Closing under the Transferred Systems Agreements will
be subject to the satisfaction, at or before the Closing (in addition to the
conditions precedent to the obligations IPSE and IPWT under each such
Transferred Systems Agreement to which it is a party), of the following
conditions, one or more of which may be waived by IPWT and, with the consent of
the TCI Parties, by IPSE:
(a) Redemption Agreement. The satisfaction or waiver of the conditions to
the obligations of ICP-IV under the Redemption Agreement.
(b) Common Agreement. The Charter Parties shall have performed all
agreements and
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<PAGE> 31
covenants in this Agreement which they were to have performed on or before the
Closing Date.
(c) Escrow Agreement. IPWT, Charter I and an escrow agent shall have
entered into the Escrow Agreement.
(d) Franchises.
(i) The aggregate number of Scheduled Subscribers located in areas
that are served without a franchise in the Charter Systems or that are
served pursuant to Charter Systems Franchises that either do not require
consent or as to which Required Consents have been obtained is at least
ninety-five percent (95%) of the total number of Scheduled Subscribers for
the Charter Systems; and
(ii) Any applicable waiting period (including extensions thereof)
has expired with respect to the FCC Form 394 filed in connection with the
requests for consent to the transfer of the Systems Franchises for which
consents have not then been obtained.
(e) Environmental Assessments. No environmental audit or assessment
conducted by IPSE with respect to the Owned Property or the Leased Property of
the Charter Systems will have indicated the presence thereon of Hazardous
Substances of a kind or in a quantity as could reasonably be expected to give
rise to a liability in excess of eight million dollars ($8,000,000), other than
environmental matters with respect to which, with IPSE's consent, Charter has
committed in writing to remediate as promptly as practicable after the Closing
Date or to indemnify (which obligations and payments to IPSE will not be subject
to any of the limitations of indemnifications of any of the Parties pursuant to
Section 6.11).
(f) Revenue Shortfall Adjustments. The decrease, if any, in the Base Value
of the Charter Systems pursuant to Section 2.2(h), calculated without giving
effect to Section 2.2(h)(v), does not exceed thirty-one million five hundred
thousand dollars ($31,500,000).
(g) Uninsured Casualty Adjustments.
(i) Either:
(A) the Uninsured Casualty Adjustment for the Transferred
Systems does not exceed three million dollars ($3,000,000);
(B) the Charter Parties have waived their right to a decrease
greater than three million dollars ($3,000,000) for the Uninsured
Casualty Adjustment for the Transferred Systems; or
(C) any excess of the Uninsured Casualty Adjustment for the
Transferred Systems over three million dollars ($3,000,000) is paid
in cash to the
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Charter Parties at Closing by IP-I; and
(ii) Either:
(A) the Uninsured Casualty Adjustment for the Charter Systems
does not exceed three million dollars ($3,000,000);
(B) the Charter Parties agree to a decrease to the Base Values
for the Charter Systems in the full amount of the Uninsured Casualty
Adjustment for the Charter Systems; or
(C) any excess of the Uninsured Casualty Adjustment for the
Charter Systems over three million dollars ($3,000,000) is paid in
cash to IPSE at Closing by IPWT.
(h) Lender Consents. ICP-IV shall have obtained such consents as may, at
the time of the Closings, be required under (i) its Indenture dated July 30,
1996 for the Notes, including effecting the Tender Offer and (ii) the Revolving
Credit and Term Loan Agreement dated as of July 30, 1996, as amended, among
IP-IV, The Bank of New York, as agent, and the financial institutions party
thereto as lenders.
(i) Year 2000 Conditions.
(i) Either:
(A) the Y2K Adjustment Amount for the Transferred Systems does
not exceed three million dollars ($3,000,000);
(B) the Charter Parties have waived their right to a decrease
to the Base Value greater than three million dollars ($3,000,000)
for the Y2K Adjustment Amount for the Transferred Systems; or
(C) any excess of the Y2K Adjustment Amount for the
Transferred Systems over three million dollars ($3,000,000) is paid
in cash to the Charter Parties at Closing by IP-I.
(ii) Either:
(A) the Y2K Adjustment Amount for the Charter Systems does not
exceed three million dollars ($3,000,000);
(B) the Charter Parties agree to a decrease to the Base Values
for the Charter Systems in the full amount of the Y2K Adjustment
Amount for the Charter
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<PAGE> 33
Systems; or
(C) any excess of the Y2K Adjustment Amount for the Charter
Systems over three million dollars ($3,000,000) is paid in cash to
IPSE at Closing by IPWT.
4.3 Conditions to IP-I's, Brenmor's and TCID IP-V's Obligations. The
obligations of IP-I, Brenmor and TCID IP-V to consummate any Closing under an IP
Agreement to which it is a party will be subject to the satisfaction, at or
before the Closing (in addition to the conditions precedent to the obligations
of IP-I, Brenmor and TCID IP-IV under each such IP Agreement), of the following
conditions, one or more of which may be waived by IP-I, Brenmor and TCID IP-V,
as applicable:
(a) Redemption Agreement. The satisfaction or waiver of the conditions to
the obligations of the TCI Parties under the Redemption Agreement.
(b) Common Agreement. The other Parties shall have performed all
agreements and covenants in this Agreement which they were to have performed on
or before the Closing Date.
(c) Uninsured Casualty Adjustment. Either:
(i) the Uninsured Casualty Adjustment for the IP-I/Brenmor Systems
does not exceed two million dollars ($2,000,000);
(ii) the Charter Parties have waived their right to a decrease
greater than two million dollars ($2,000,000) for the Uninsured Casualty
Adjustment for the IP-I/Brenmor Systems; or
(iii) any excess of the Uninsured Casualty Adjustment for the
IP-I/Brenmor Systems over two million dollars ($2,000,000) is paid in cash
to the Charter Parties at Closing by IPWT.
(d) Year 2000 Conditions. Either:
(i) the Y2K Adjustment Amount for the IP-I/Brenmor Systems does not
exceed two million dollars ($2,000,000); or
(ii) the Charter Parties have waived their right to an adjustment
greater than two million dollars ($2,000,000) for the Y2K Adjustment
Amount for the IP-I/Brenmor Systems; or
(iii) any excess of the Y2K Adjustment Amount for the IP-I/Brenmor
Systems over two million dollars ($2,000,000) is paid in cash to the
Charter Parties at Closing by IPWT.
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<PAGE> 34
4.4 Closings.
(a) The Parties agree that, upon satisfaction or waiver of the conditions
to the Parties' respective obligations under the IP Agreements and this
Agreement, the transactions contemplated in the IP Agreements and the Redemption
Agreement shall be consummated in the following order, and only in the following
order:
(i) first, the IPSE/Charter Exchange Agreement;
(ii) second, the RMG Purchase Agreement;
(iii) third, the IPSE Distribution Agreement;
(iv) fourth, the IPWT Contribution Agreement;
(v) fifth, the IPWT Distribution Agreement;
(vi) sixth, the IP-IV Distribution Agreement
(vii) seventh, the redemption of IPSE's interest in IPWT pursuant to
the IPSE Redemption Agreement;
(viii) eighth, the Redemption Agreement;
(ix) ninth, the IPWT Purchase Agreement;
(x) tenth, the TCID IP-V/Charter Stock Purchase Agreement; and
(xi) eleventh, the IP-I/Charter Exchange Agreement.
(b) Any acceleration or delay in payment of the cash or the transfer of
assets or equity interests contemplated in Section 2.1(b) shall not alter the
order set forth in Section 4.4(a).
5. TERMINATION.
5.1 Termination Events. This Agreement and the IP Agreements shall
automatically terminate entirely and the transactions contemplated hereby may be
abandoned:
(a) upon termination of any IP Agreement;
(b) at any time, by the mutual agreement of the Charter Parties and
the IP Parties;
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<PAGE> 35
(c) by any of the Parties at any time fifteen (15) Business Days or
more after the execution and delivery by the Parties of this Agreement, if
all of the parties to the Redemption Agreement have not executed and
delivered the Redemption Agreement.
(d) by either the Charter Parties or IP Parties at any time, if the
other is in material breach or default of any of the other's covenants,
agreements or other obligations herein and the defaulting Party has failed
to cure such breach within thirty days of its receipt of notice of such
breach from another Party; or
(e) by either the Charter Parties or IP Parties if an injunction,
restraining order or decree of any nature of any Governmental Authority of
competent jurisdiction is issued that prohibits the consummation of any of
the transactions contemplated in this Agreement and such injunction,
restraining order or decree is final and nonappealable; provided, however,
that the Party seeking to terminate this Agreement pursuant to this clause
has used commercially reasonable efforts to have such injunction, order or
decree vacated or denied.
5.2 Effect of Termination. If this Agreement is terminated pursuant to
Section 5.1, all obligations of the Parties under this Agreement will terminate,
except for the obligations set forth in Sections 7.12 and 7.13. Termination of
this Agreement pursuant to Section 5.1 will not limit or impair any remedies
that any of IP Parties or the Charter Parties may have with respect to a breach
or default by another Party of its covenants, agreements or obligations under
any IP Agreement and this Agreement.
6. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION.
6.1 Survival of Representations, Warranties Covenants and Agreements.
(a) The representations, warranties, covenants and agreements of:
(i) IPSE and the Charter Parties under the IPSE/Charter Exchange
Agreement and the "Transaction Documents" as defined therein;
(ii) IPWT and Charter RMG under the RMG Purchase Agreement and the
"Transaction Documents" as defined therein;
(iii) IPWT and Charter I under the IPWT Purchase Agreement and the
"Transaction Documents" as defined therein;
(iv) TCID IP-V and Charter I under the TCID IP-V/Charter Stock
Purchase Agreement and the "Transactions Documents" as defined therein;
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<PAGE> 36
(v) IP-I, RMG and Brenmor under the IP-I/Charter Exchange Agreement;
and
(vi) each Party under this Agreement;
will, except as otherwise provided in Section 6.1(b), the IPWT Purchase
Agreement and the IP- I/Charter Exchange Agreement, survive the Closing for a
period of twelve (12) months after the Closing Date (the "Survival Period");
provided, however, notwithstanding anything to the contrary in this Agreement.
(b) The liabilities of each Party under its respective covenants,
representations and warranties in the IP Agreements will expire as of the
expiration of the applicable period set forth in Section 6.1(a); provided,
however, that such expiration will not include, extend or apply to:
(i) any covenant, agreement, representation or warranty the breach
of which has been asserted by a party to an IP Agreement in a written
notice to the other party or parties to such IP Agreement as provided
therein before such expiration or about which a party to an IP Agreement
has given the other party or parties to such IP Agreement as provided
therein written notice before such expiration indicating that facts or
conditions exist that, with the passage of time or otherwise, can
reasonably be expected to result in a breach (and describing such
potential breach in reasonable detail);
(ii) only so long as a Party remains in existence, that Party's
obligations under Sections 7.13 and 7.23 of each of the IPSE/Charter
Exchange Agreement, the RMG Purchase Agreement, the IPWT Purchase
Agreement and the IP-I/Charter Exchange Agreement or under Section 5.4 of
the TCID IP-V/Charter Stock Purchase Agreement;
(iii) only so long as a Party remains in existence, that Party's
obligations under Sections 7.16, 7.17.1, and 7.17.3 of each of the
IPSE/Charter Exchange Agreement, the RMG Purchase Agreement, the IPWT
Purchase Agreement and the IP-I/Charter Exchange Agreement or under
Section 5.5 of the TCID IP-V/Charter Stock Purchase Agreement, but only to
the extent reasonably practicable;
(iv) the covenants and agreements of the respective parties in each
IP Agreement to perform the "Assumed Obligations and Liabilities" as
defined therein; or
(v) the covenants and agreements in this Section 6 as to each of the
representations, warranties, covenants and agreements in the IP Agreements
to the extent that they survive under Sections 6.1(b)(i) through (iv).
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6.2 Indemnification by IPSE and IPWT.
(a) From and after the Closing, each of IPSE and IPWT shall, subject to
Section 6.7, severally and proportionally, as set forth in Section 6.2(b),
indemnify and hold harmless the Charter Parties and their Affiliates, and their
respective shareholders, officers, directors, partners, employees, agents,
successors and assigns and any Person claiming by or through any of them, as the
case may be, from and against any and all Losses (without duplication) incurred
by such indemnified parties and arising out of or resulting from:
(i) any breach of any representation or warranty made by IPSE or
IPWT in any IP Agreement to which it is a party, determined without giving
effect to any materiality qualification therein;
(ii) any breach of any covenant, agreement or obligation of IPSE,
RMG or IPWT in this Agreement or the IP Agreements to which it is a party
other than:
(A) breaches of covenants and obligations described Section
6.1(b) (ii) and (iii) occurring more than twelve (12) months after
the Closing Date;
(B) IPSE's failure to perform any of "IPSE's Assumed
Obligations and Liabilities" as defined in the IPSE/Charter Exchange
Agreement;
(C) obligations of RMG described in the IP-I/Charter Exchange
Agreement other than the RMG Specified Obligations as defined
therein; and
(iii) any liability or obligation arising out of:
(A) "IPSE's Cable Business" not included in "Charter's Assumed
Obligations and Liabilities" (each as defined in the IPSE/Charter
Exchange Agreement),
(B) the "Cable Business" not included in the "Assumed
Obligations and Liabilities" (each as defined in the RMG Purchase
Agreement), and
(C) the "Cable Business" not included in "Charter's Assumed
Obligations and Liabilities" (each as defined in the IPWT Purchase
Agreement).
(D) the "RMG Residual Liabilities" (as defined in the IPWT
Purchase Agreement).
(b) IPWT's and IPSE's respective proportions of their liability under
Section 6.2(a) are forty and thirty-six one hundredths percent (40.36%) and
fifty-nine and sixty-four hundredths percent (59.64%), respectively.
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(c) IPWT shall secure its obligations under this Section 6.2:
(i) by depositing, or causing the deposit of, on the Closing Date,
an amount equal to nineteen million three hundred twenty-six thousand
dollars ($19,326,000) in an escrow fund, representing its forty and
thirty-six one hundredths percent (40.36%) proportionate share of the
IP-IV Cap, withdrawals and disbursements from which shall be subject to
terms and conditions in the Escrow Agreement, substantially in the form of
Exhibit A; and
(ii) by providing the Charter Parties either of the following, as
the Charter Parties shall elect in a notice to IPWT not less than thirty
(30) days before the Six-Month Date:
(A) insurance policies issued on the Six-Month Date:
(I) substantially in the form of Exhibit B, with such
endorsements as are, after the date of this Agreement,
included by the insurer; and
(II) under which the maximum amount payable to the
Charter Parties shall be nine million six hundred sixty-three
thousand dollars ($9,663,000); or
(B) an amount equal to the premiums of not less than $415,000
which IPWT would have paid for the insurance policies described in
Section 6.2(c)(ii)(A) less any amounts which have been previously
paid by IPWT to the insurer for such insurance policies which are
not refunded by such insurer.
(d) If the Charter Parties elect to receive the premiums in lieu of the
insurance polices:
(i) prior to the Closing, then IPWT shall pay the amount of such
premiums to the Charter Parties on the Closing Date;
(ii) after the Closing, then IPWT shall pay the amount of such
premiums less any unrefunded premiums previously paid within five (5)
Business Days after the date of such election; and
(iii) the funds held in the escrow established pursuant to Section
6.2(c)(i) shall be released on the Six-Month Date, except for an amount
equal to IPWT's proportionate share of the aggregate amount of all claims
by the Charter Parties under Section 6.2 pending on the Six-Month Date.
Except for claims pending on the Six-Month Date, IPWT shall cease to have
any obligations or liability under this Section 6.2 after the Six- Month
Date if the Charter Parties receive such insurance policies or premiums.
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6.3 Additional Indemnification by IPSE. From and after the Closing, IPSE
shall indemnify and hold harmless the Charter Parties and their Affiliates, and
their respective shareholders, officers, directors, partners, employees, agents,
successors and assigns and any Person claiming by or through any of them, as the
case may be, from and against any and all Losses incurred by such indemnified
parties and arising out of or resulting from the failure of IPSE to perform
"IPSE's Assumed Obligations and Liabilities" as defined in the IPSE/Charter
Exchange Agreement.
6.4 Indemnification by TCID IP-V. From and after the Closing, TCID IP-V
shall, subject to Section 6.9, indemnify and hold harmless the Charter Parties
and their Affiliates, and their respective shareholders, officers, directors,
partners, employees, agents, successors and assigns and any Person claiming by
or through any of them, as the case may be, from and against any and all Losses
incurred by such indemnified parties and arising out of or resulting from any
breach of any representation or warranty made by TCID IP-V in the TCID
IP-V/Charter Stock Purchase Agreement and any breach of any covenant, agreement
or obligation of TCID IP-V in the TCID IP-V/Charter Stock Purchase Agreement.
6.5 Indemnification by IP-I and Brenmor. From and after the Closing, IP-I
and Brenmor shall, jointly and severally, subject to Section 6.10, indemnify and
hold harmless the Charter Parties and RMG and their respective Affiliates, and
their respective shareholders, officers, directors, partners, employees, agents
successors and assigns and any Person claiming by or through any of them, as the
case may be, from and against any and all Losses incurred by such indemnified
parties and arising out of or resulting from:
(a) any breach of any representation or warranty made by IP-I or
Brenmor in the IP-I/Charter Exchange Agreement without giving effect to
any materiality qualification therein;
(b) any breach of any covenant, agreement or obligation of IP-I or
Brenmor contained in this Agreement or the IP-I/Charter Exchange Agreement
other than breaches of covenants and obligations described in Section
6.1(b)(ii) and (iii) occurring more than twelve (12) months after the
Closing Date;
(c) any liability or obligation arising out of "IP-I's Cable
Business" or "Brenmor's Cable Business" not included in "RMG's Assumed
Obligations and Liabilities" (each as defined in the IP-I/Charter Exchange
Agreement); or
(d) the failure by IP-I or Brenmor to perform "IP-I's Assumed
Obligations and Liabilities" (as defined in the IP-I/Charter Exchange
Agreement).
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6.6 Indemnification by the Charter Parties.
(a) From and after the Closing, the Charter Parties shall, jointly and
severally, subject to Section 6.11, indemnify and hold harmless each of the IP
Parties and their Affiliates, and their respective shareholders, officers,
directors, partners, employees, agents, successors and assigns and any Person
claiming by or through any of them, as the case may be, from and against any and
all Losses incurred by such indemnified parties and arising out of or resulting
from:
(i) any breach of any representation or warranty made by the Charter
Parties in any IP Agreement determined without giving effect to any
materiality qualification therein;
(ii) any breach of any covenant, agreement or obligation of the
Charter Parties contained in this Agreement or any IP Agreement or by RMG
of any of the RMG Specified Obligations in the IP-I/Charter Exchange
Agreement, other than breaches of covenants and obligations described
Section 6.1(b)(ii) and (iii) occurring more than twelve (12) months after
the Closing Date;
(iii) any liability or obligation arising out of "Charter's Cable
Business" not included in "IPSE's Assumed Obligations and Liabilities"
(each as defined in the IPSE/ Charter Exchange Agreement); or
(iv) the failure by the Charter Parties or RMG to perform and
discharge the following obligations and liabilities respectively:
<TABLE>
<CAPTION>
Obligations and Liabilities As defined in the:
--------------------------- ------------------
<S> <C>
Charter Assumed Obligations and IPSE/Charter Exchange Agreement
Liabilities
Assumed Obligations and Liabilities RMG Purchase Agreement
Charter's Assumed Obligations and IPWT Purchase Agreement
Liabilities
RMG Assumed Obligations and IP-I/Charter Exchange Agreement
Liabilities
</TABLE>
(b) the Charter Parties shall pay any indemnification with respect to any
Losses incurred by:
(i) IPSE and IPWT and their Affiliates under the IPWT Purchase
Agreement and the RMG Purchase Agreement forty and thirty-six hundredths
percent (40.36%) to IPWT and fifty-nine and sixty-four hundredths percent
(59.64%) to IPSE, respectively;
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(ii) IPSE under the IPSE/Charter Exchange Agreement one hundred
percent (100%) to IPSE, and
(iii) IP-I or Brenmor under the IP-I/Charter Exchange Agreement one
hundred percent (100%) to IP-I or Brenmor, as the case may be.
6.7 Third Party Claims.
(a) Promptly after the receipt by any Party of notice of any claim,
action, suit or proceeding by any Person other than a Party or an Affiliate
thereof (a "Third Party") (collectively, an "Action"), which Action is subject
to indemnification under this Agreement, such Party (the "Indemnified Party")
will give reasonable written notice to the Party from whom indemnification is
claimed (the "Indemnifying Party").
(b) In case any Action is brought against any Indemnified Party, the
Indemnifying Party will be entitled, at the sole expense and liability of the
Indemnifying Party, to exercise full control of the defense, compromise or
settlement of any such Action, provided that the Indemnifying Party, within a
reasonable time after the giving of such notice by the Indemnified Party,
(i) agrees in writing to the Indemnified Party to assume and pay the
Indemnifying Party's Losses resulting from such Action, and
(ii) notifies the Indemnified Party in writing of the Indemnifying
Party's intention to assume such defense.
The Indemnified Party will cooperate with the Indemnifying Party assuming the
defense, compromise or settlement of any such Action in accordance with this
Agreement in any reasonable manner that such Party reasonably may request.
(c) If the Indemnifying Party so assumes the defense of any such Action,
the Indemnified Party will have the right to employ separate counsel and to
participate in (but not control) the defense, compromise or settlement of the
Action, but the reasonable fees and expenses of such counsel will be at the
expense of the Indemnified Party unless (i) the Indemnifying Party has agreed to
pay such fees and expenses, (ii) any relief other than the payment of money
damages is sought against the Indemnified Party or (iii) the Indemnified Party
has been advised by its counsel that there may be one or more defenses available
to it which are different from or additional to those available to the
Indemnifying Party, and in any such case that portion of the reasonable out of
pocket fees and expenses of such separate counsel that are reasonably related to
matters covered by the indemnity provided in this Article 6 will be paid by the
Indemnifying Party, provided that the Indemnifying Party shall not be obligated
to pay the expenses of more than one separate counsel in each jurisdiction for
each Indemnified Party so entitled to separate counsel. Expenses of counsel to
the Indemnified Party shall be reimbursed on a current basis by
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the Indemnifying Party if such expenses are a liability of the Indemnifying
Party and if there is no dispute as to the applicability of indemnification.
(d) Notwithstanding any of the foregoing, the Indemnified Party may, at
its own cost and expense, assume the defense, compromise or settlement of any
Action in which the Indemnified Party agrees to waive its rights to
indemnification under this Article 6 and to hold the Indemnifying Party harmless
from all Losses arising from such Action.
(e) No Indemnified Party will settle or compromise any such Action for
which it is entitled to indemnification under this Agreement without the prior
written consent of the Indemnifying Party (not to be unreasonably withheld),
unless the Indemnifying Party has failed, after reasonable notice, to undertake
control of such Action in the manner provided in this Section 6.7.
(f) No Indemnifying Party will settle or compromise any such Action
without the prior written consent of the Indemnified Party (not to be
unreasonably withheld); provided, however, in any Action in which any relief
other than the payment of money damages is sought against any Indemnified Party
or in the case of any Action relating to the Indemnified Party's liability for
any Tax, if the effect of such settlement would be an increase in the liability
of the Indemnified Party for the payment of any Tax for any period beginning
after the Closing Date, the consent of the Indemnified Party may be withheld by
the Indemnified Party in its sole and absolute discretion.
(g) If IPSE and IPWT are responsible, severally and proportionally, for
any indemnification obligation with respect to claims asserted:
(i) during the First Six-Month Period and thereafter with respect to
claims for indemnification that are not subject to the terms of an
insurance policy described in Section 6.2(c)(ii), IPSE will be deemed to
be the Indemnifying Party solely for purposes of controlling the defense
of any Action under this Section 6.7. In connection therewith, IPWT hereby
irrevocably grants to IPSE the power, on behalf of IPWT and as its
attorney in fact, to take the actions described in Sections 6.7(b)(i) and
(ii). Nothing in this subparagraph (g) will relieve IPWT of its
proportional liability for indemnified Losses under Section 6.2; and
(ii) with respect to claims for indemnification that are subject to
(x) the terms of an insurance policy described in Section 6.2(c)(ii)
during the Second Six-Month Period, (y) the consent of the insurer under
the insurance policies described in Section 6.2(c)(ii) and (z) the
agreement of such insurer to pay IPWT's allocable share of costs, IPSE
will be deemed to be the Indemnifying Party solely for the purposes of
controlling the defense of any Action under this Section 6.7 and IPWT
shall not exercise any rights to control such defense.
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6.8 Limitations on Indemnification - IPSE and IPWT.
(a) Neither IPSE nor IPWT will be liable for indemnification pursuant to
this Article 6 for any Losses of any Person entitled to indemnification from
such Party unless the amount of all such Losses for which an such Party would,
but for the provisions of this sentence, be liable exceeds, on an aggregate
basis, one million nine hundred fifteen thousand four hundred dollars
($1,915,400) (the "IP-IV Threshold Amount"), in which case the entire amount
will be due and payable within fifteen (15) days after an such Party's receipt
of a statement therefor; provided that the IP-IV Threshold Amount will not apply
to Losses resulting from or arising out of:
(i) an such Party's obligation to pay any amounts pursuant to
Sections 2.1 and 2.3, to the extent applicable,
(ii) IPSE's obligation to perform IPSE's Assumed Obligations and
Liabilities under the IPSE/Charter Exchange Agreement,
(iii) any agreement by IPSE and IPWT entered into pursuant to
Section 3.1 or 4.1(d)(i),
(iv) RMG Residual Liabilities,
(v) IPSE'S and IPWT's respective obligations to pay Taxes, fees
related to the Transferred Systems Franchises, copyright fees and any
related penalties for the nonpayment thereof, each in connection with the
operation of its Cable Business prior to the Closing Date, and
(vi) any refund of rates, charges or late fees, or credit, penalty
and/or interest payments with respect thereto, including payments made
under Section 2.4 hereof or Section 7.17.5 of each of the IPSE/Charter
Exchange Agreement, the RMG Purchase Agreement and the IPWT Purchase
Agreement, and
(vii) a failure to pay Taxes as provided in Section 7.8 of each of
the IPSE/Charter Exchange Agreement, the RMG Purchase Agreement and the
IPWT Purchase Agreement.
(b) IPSE and IPWT collectively shall not be liable for indemnification:
(i) for more than $47,885,000 with respect to all claims asserted
during the First Six-Month Period; and
(ii) for more than $23,942,500 with respect to all claims asserted
during the Second Six-Month Period minus the amount by which the aggregate
amount of claims paid pursuant to Section 6.2 with respect to claims
asserted during the First Six-Month Period
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exceeds $23,942,500; provided that if either the insurance policies are
issued or the premiums therefor paid to the Charter Parties pursuant to
Section 6.2(d),
(A) IPSE shall be the sole indemnitor under Section 6.2 with
respect to claims first asserted during the Second Six-Month Period;
and
(B) IPSE shall not be liable for more than $14,279,307 with
respect to all claims asserted during the Second Six-Month Period
minus the amount by which the aggregate of IPSE's pro rata share of
the amount of claims paid pursuant to Section 6.2 with respect to
claims asserted during the First Six-Month Period exceeds
$14,279,307.
(c) The limitations and calculations in Section 6.8(b) shall not apply to
Losses resulting from or arising out of the circumstances and events described
in subsections (i), (ii) and (iii) of Section 6.8(a).
6.9 Limitations on Indemnification of TCID IP-V.
(a) TCID IP-V will not be liable for indemnification pursuant to this
Article 6 for any Losses of any Person entitled to indemnification from TCID
IP-V unless the amount of all such Losses for which TCID IP-V would, but for the
provisions of this sentence, be liable exceeds, on an aggregate basis,
thirty-two thousand dollars ($32,000) (the "TCID IP-V Threshold Amount"), in
which case the entire amount will be due and payable within fifteen (15) days
after TCID IP-V's receipt of a statement therefor.
(b) TCID IP-V shall not be liable for indemnification:
(i) for more than $800,000 with respect to all claims asserted
during the First Six-Month Period; and
(ii) for more than $400,000 with respect to all claims asserted
during the Second Six-Month Period minus the amount by which the aggregate
amount of claims paid pursuant to Section 6.4 with respect to claims
asserted during the First Six-Month Period exceeds $400,000.
6.10 Limitations on Indemnification - IP-I and Brenmor.
(a) Neither IP-I nor Brenmor will be liable for indemnification pursuant
to this Article 6 for any Losses of any Person entitled to indemnification from
IP-I or Brenmor unless the amount of such Losses for which IP-I or Brenmor
would, but for the provisions of this sentence, be liable exceeds, on an
aggregate basis, six hundred seventy thousand dollars ($670,000), (the "IP-I
Threshold Amount") in which case the entire amount will be due and payable
within fifteen (15) days after IP-I's receipt of a statement therefor; provided
that the IP-I Threshold Amount will not apply to Losses resulting from or
arising out of:
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(i) IP-I's and Brenmor's respective obligations to pay any amounts
pursuant to Sections 2.1 and 2.3, to the extent applicable,
(ii) IP-I's obligation to perform IP-I's Assumed Obligations and
Liabilities under the IP-I/Charter Exchange Agreement,
(iii) any agreement by IP-I or Brenmor entered into pursuant to
Section 3.1 or 4.1(d)(ii),
(iv) Brenmor's obligation to perform Brenmor's Assumed Obligations
and Liabilities under the IP-I/Charter Exchange Agreement,
(v) IP-I's and Brenmor's respective obligations to pay Taxes, fees
related to the IP-I/Brenmor Systems Franchises, copyright fees and any
related penalties for the nonpayment thereof, each in connection with the
operation of IP-I's Cable Business or Brenmor's Cable Business prior to
the Closing Time;
(vi) any refund of rates, charges or late fees, or credit, penalty
and/or interest payments with respect thereto, including payments made
under Section 2.4 or any amounts payable pursuant to Section 7.17.5 of
each of the IPSE/Charter Exchange Agreement, the RMG Purchase Agreement,
the IPWT Purchase Agreement and the IP-I/Charter Exchange Agreement;
(vii) a failure to pay Taxes as provided in Section 7.8 of the
IP-I/Charter Exchange Agreement.
(b) IP-I and Brenmor collectively shall not be liable for indemnification:
(i) for more than $16,750,000 with respect to all claims asserted
during the First Six-Month Period; and
(ii) for more than $8,375,000 with respect to all claims asserted
during the Second Six-Month Period minus the amount by which the aggregate
amount of claims paid pursuant to Section 6.5 with respect to claims
asserted during the First Six-Month Period exceeds $8,375,000.
(c) The limitations and calculations in Section 6.10(b) shall not apply to
Losses resulting from or arising out of the circumstances and events described
in subsections (i), (ii), (iii) and (iv) of Section 6.10(a).
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6.11 Limitations on Indemnification - Charter Parties.
(a) No Charter Party will be liable for indemnification pursuant to this
Article 6 for any Losses of any Person entitled to indemnification from the
Charter Parties unless the amount of such Losses for which the Charter Parties
would, but for the provisions of this sentence, be liable exceeds, on an
aggregate basis, eight hundred forty thousand dollars ($840,000), (the "Charter
Threshold Amount") in which case the entire amount will be due and payable
within fifteen (15) days after the Charter Parties' receipt of a statement
therefor; provided that the Charter Threshold Amount will not apply to Losses
resulting from or arising out of:
(i) the Charter Parties' obligation to pay the amounts pursuant to
Sections 2.1 and 2.3, to the extent applicable,
(ii) the Charter Parties' obligation to perform Charter's Assumed
Obligations and Liabilities under the IPSE/Charter Exchange Agreement and
the IP-I/Charter Exchange Agreement,
(iii) any agreement entered into by any Charter Party pursuant to
Section 3.1 or 4.2(e),
(iv) the Charter Parties' obligations to pay Taxes, fees related to
the Charter Systems Franchises, copyright fees and any related penalties
for the nonpayment thereof, each in connection with the operation of
Charter's Cable Business prior to the Closing Time,
(v) any refund of rates, charges or late fees, or credit, penalty
and/or interest payments with respect thereto, including payments made
under Section 2.4 or any amounts payable pursuant to Section 7.17.5 of
each of the IPSE/Charter Exchange Agreement, the RMG Asset Purchase
Agreement, the IPWT Asset and Stock Purchase Agreement and the
IP-I/Charter Exchange Agreement, and
(vi) a failure of the Charter Parties to pay Taxes as provided in
Section 7.8 of each of the IPSE/Charter Exchange Agreement, the RMG
Purchase Agreement and the IPWT Purchase Agreement and the IP-I/Charter
Exchange Agreement.
(b) The Charter Parties collectively shall not be liable for
indemnification:
(i) for more than $21,000,000 with respect to all claims asserted
during the First Six-Month Period; and
(ii) for more than $10,500,000 with respect to all claims asserted
during the Second Six-Month Period minus the amount by which the aggregate
amount of claims paid pursuant to Section 6.6 with respect to claims
asserted during the First Six-Month Period exceeds $10,500,000.
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(c) The limitations and calculations in Section 6.11(b) shall not apply to
Losses resulting from or arising out of the circumstances and events described
in subsections (i), (ii) and (iii) of Section 6.11(a).
6.12 Payments for Indemnification Amounts. Amounts payable by a Party in
respect of any Losses that are subject to the indemnification obligations of
such Party under Section 6.2, 6.3, 6.4, 6.5 or 6.6 will be payable by the
Indemnifying Party within five (5) days of receiving written notice of such
Losses from the Indemnified Party, and will bear interest at the rate per annum
publicly announced from time to time by The Bank of New York as its prime rate
(the "Prime Rate") plus two (2) percentage points beginning on the sixth (6th)
day after receipt of such written notice and ending on the date of payment by
the Indemnifying Party.
6.13 Exclusive Remedy.
(a) The Parties hereby agree that the rights set forth in this Article 6
shall be each Party's sole and exclusive remedies against the other Parties for
any claims arising after the Closing Time and relating to any breaches of the
representations, warranties or covenants contained in this Agreement and the IP
Agreements other than based on fraud.
(b) Notwithstanding the foregoing, the Parties agree that (i) where any
breach or threatened breach of a covenant in an IP Agreement would cause
irreparable injury to a Party and money damages would not provide an adequate
remedy to such Party, then, in addition to the remedies available to it pursuant
to this Article 6, such Party shall have the right to obtain equitable relief in
the form of a temporary or permanent injunction or order for specific
performance, and (ii) each Party shall have the right to assert any claim for an
intentional tort or fraud against any other Party for any breach of or matter
concerning this Agreement or the applicable IP Agreement.
6.14 Nonrecourse. The Parties agree that, notwithstanding any other
provision in this Agreement or in any IP Agreement (or any Transaction Document
for such IP Agreement), and any rule of law or equity to the contrary, to the
fullest extent permitted by law, each Party's obligations and liabilities under
this Agreement will be nonrecourse to all direct and indirect equity holders or
other owners of such Party, except to the extent of distributions to such
Persons, directly or indirectly, from such Party that are required to be
returned, directly or indirectly, to such Party pursuant to applicable
provisions of law. "Nonrecourse" means that the obligations and liabilities are
limited in recourse solely to the assets of the Parties (for those purposes, any
capital contribution obligations of the equity holders or other owners of such
Party, or any negative capital account balances of such Persons will not be
deemed be assets of such Party) and are not guaranteed, directly or indirectly
by, or the primary obligations of, any owner of such Party in such capacity, and
no partner, member or other owner in such capacity of any successor entity
(including any limited liability company or partnership), either directly or
indirectly, will be personally liable in any respect (except to the extent of
(i) such Person's interests in the assets of such Party and (ii) any
distribution which has been received by such Person and is required by
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applicable law to be returned, directly or indirectly, to such Party) for any
obligation or liability of such Party under this Agreement.
6.15 Characterization of Indemnity Payments. The Parties agree that any
indemnifi cation payments made pursuant to this Agreement shall be treated for
tax purposes as an adjustment to purchase price, unless otherwise required by
applicable law.
7. MISCELLANEOUS PROVISIONS.
7.1 Parties Obligated and Benefitted. Subject to the limitations set forth
below, this Agreement will be binding upon each of the Parties and their
respective assigns and successors in interest and will inure solely to the
benefit of the Parties and their respective assigns and successors in interest,
and no other Person will be entitled to any of the benefits conferred by this
Agreement. Without the prior written consent of the other Parties, no Party will
assign any of its rights under this Agreement or delegate any of its duties
under this Agreement, provided that the appropriate Party may assign any or all
of its rights under this Agreement (a) to a "qualified intermediary" engaged by
such Party to effectuate a deferred like-kind exchange under Section 1031 of the
Code, and the other party agrees in connection with such an assignment to take
such actions and execute such documents as may be reasonably requested by the
assigning Party in order to facilitate such Party's intent to effectuate a
deferred like-kind exchange; provided, however, that no such assignment will
affect the assigning Party's liabilities or obligations pursuant to this
Agreement or (b) to an Affiliate, provided that such assignment will not result
in any adverse tax consequences to the other Parties, will not give rise to any
material requirements for additional Required Consents, and will not, in the
reasonable judgment of the other Parties, delay the Closing.
7.2 Notices. Any notice, request, demand, waiver or other communication
required or permitted to be given under this Agreement or any of the IP
Agreements to any Party will be in writing and will be deemed to have been duly
given only if delivered in person or by first class, prepaid, registered or
certified mail, or sent by courier or, if receipt is confirmed, by telecopier:
To IPWT or, prior to the Closing, to RMG, IP-IV, IPSE or ICP-IV c/o:
InterMedia Partners
235 Montgomery Street, Suite 420
San Francisco, CA 94104
Attention: Robert J. Lewis and Rodney M. Royse
Telecopy: (415) 397-3406
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With a copy (which shall not constitute notice) to:
Pillsbury Madison & Sutro LLP
235 Montgomery Street
San Francisco, CA 94104
Attention: Gregg F. Vignos, Esq./Robert J. Spjut, Esq.
Telecopy: (415) 983-1200
To IP-I, TCID IP-V or Brenmor or to IPSE, IP-IV or ICP-IV (except that,
prior to Closing, such delivery to IPSE, IP-IV or ICP-IV shall not
constitute notice) c/o:
AT&T Broadband & Internet Services
9197 South Peoria Street
Englewood, Colorado 80112
Attention: Derek Chang
Telecopy: (720) 875-5396
With a copy (which shall not constitute notice) to:
Sherman & Howard L.L.C.
633 17th Street, Suite 3000
Denver, Colorado 80202
Attention: Arlene S. Bobrow, Esq.
Telecopy: (303) 298-0940
To the Charter Parties or, after the Closing, to RMG, c/o:
Charter Communications, LLC
12444 Powers Court Drive, Suite 400
St. Louis, Missouri 63131
Attention: Jerald L. Kent, President
Telecopy: (314) 965-8793
With copies (which shall not constitute notice) to:
Curtis S. Shaw, Esq.
Senior Vice President & General Counsel
Charter Communications, LLC
12444 Powerscourt Drive
St. Louis, Missouri 63131
and
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Irell & Manella LLP
1800 Avenue of the Stars, Suite 900
Los Angeles, California 90067
Attention: Alvin G. Segel, Esq.
Telecopy: (310) 203-7199
Prior to the Closing, copies of notices given by a Party to another Party
shall be given to the other Parties. Any Party may change the address to which
notices are required to be sent by giving notice of such change in the manner
provided in this Section 7.2. All notices will be deemed to have been received
on the date of delivery, which in the case of deliveries by telecopier will be
the date of the sender's confirmation.
7.3 Waiver.
(a) This Agreement or any of its provisions may not be waived except in
writing. The failure of any Party to enforce any right arising under this
Agreement on one or more occasions will not operate as a waiver of that or any
other right on that or any other occasion.
(b) Neither this Agreement nor any IP Agreement may be amended or modified
except upon consent signed by all of the Parties. Any purported amendment or
modification of this Agreement or any IP Agreement made without such consent
shall be void and without force or effect.
(c) IPSE, IPWT and the TCI Parties shall ensure that no amendment, waiver
or modification to, or termination pursuant to Section 11.1(a) of, the
Redemption Agreement (other than amendments, waivers or modifications that will
not impact the Charter Parties or consummation of transactions as provided
herein) without the prior written consent of the Charter Parties, which consent
may not be unreasonably withheld.
7.4 Captions. The section and other captions of this Agreement are for
convenience only and do not constitute a part of this Agreement.
7.5 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware (other than its rules of
conflicts of law to the extent that the application of the laws of another
jurisdiction would be required thereby).
7.6 Time. Time is of the essence under this Agreement. If the last day
permitted for the giving of any notice or the performance of any act required or
permitted under this Agreement falls on a day which is not a Business Day, the
time for the giving of such notice or the performance of such act will be
extended to the next succeeding Business Day.
7.7 Late Payments. If any Party fails to pay the other any amounts when
due under this Agreement, the amounts due will bear interest from the due date
to the date of payment at the
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Prime Rate plus two (2) percentage points, adjusted as and when changes in the
Prime Rate are made; provided that the application of this Section 7.7 shall not
result in a double payment of interest.
7.8 Counterparts. This Agreement may be executed in counterparts, each of
which will be deemed an original.
7.9 Entire Agreement. This Agreement (including the IP Agreements and the
Redemption Agreement) contains the entire agreement of the Parties with respect
to the subject matter hereof and supersedes all prior oral or written agreements
and understandings with respect to such subject matter.
7.10 Severability. Any term or provision of this Agreement which is
invalid or unenforceable will be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the remaining rights
of the Person intended to be benefitted by such provision or any other
provisions of this Agreement.
7.11 Construction. This Agreement has been negotiated by the Parties and
their respective legal counsel, and legal or other equitable principles that
might require the construction of this Agreement or any provision of this
Agreement against the Party drafting this Agreement will not apply in any
construction or interpretation of this Agreement.
7.12 Expenses. Except as otherwise expressly provided in this Agreement,
each Party (other than RMG whose expenses shall be borne by IPWT) will pay all
of its expenses, including attorneys' and accountants' fees, in connection with
the negotiation of this Agreement, the performance of its obligations and the
consummation of the transactions contemplated by this Agreement.
7.13 Publicity. No Party will issue any press releases or make any other
public announcement concerning this Agreement and the transactions contemplated
hereby, except as required by applicable law, without the prior written consent
and approval of the other Party, which consent and approval may not be
unreasonably withheld.
7.14 Commercially Reasonable Efforts. For purposes of this Agreement,
"commercially reasonable efforts" will not be deemed to require a Party to
undertake extraordinary or unreasonable measures, including the payment of
amounts in excess of normal and usual filing fees and processing fees, if any or
other payments with respect to any Contract that are significant in the context
of such Contract (or significant on the aggregate basis as to all Contracts).
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7.15 Resolution of Disputed Items in Final Reports.
(a) If any Receiving Party gives written notice of its objections to the
Preparing Party's Final Report in accordance with the provisions of Section
2.3(d), such Parties shall negotiate in good faith for a period of thirty (30)
days, or such longer period of time as agreed by such Parties, to resolve any
disputed items. If, after such thirty (30) day period (as extended, if
applicable), such Parties fail so to resolve such disputed items, those Parties
shall submit all then-outstanding disputed items for resolution by Deloitte &
Touche (the "Arbitrator").
(b) If the relevant Parties are unable to reach agreement on (i) the Year
2000 Adjustment Amount under Section 3.4 or (ii) the Uninsured Casualty
Adjustment under Section 2.2(i) within the fifteen (15) day period set forth in
each such Section, the Parties shall, without further negotiation under this
Section, submit the outstanding disputed items for resolution by the Arbitrator.
(c) In any case, the Arbitrator shall render a decision in writing within
thirty (30) days after its selection, which decision shall be final and binding
on the relevant Parties (although the failure of the Arbitrator to render a
decision within such 30-day period will not affect the binding nature of such
decision). The Parties to such dispute shall share equally the expenses of the
Arbitrator. Other than disputes as to Final Reports pursuant to Section 2.3(d),
the Year 2000 Adjustment Amount under Section 3.4 or the Uninsured Casualty
Adjustments under Section 2.2(i), which shall be governed by the foregoing, no
other disputes under or in connection with this Agreement are required to be
resolved by negotiation or arbitration under this Section 7.15.
7.16 Guarantee and Suretyship Matters. The Parties acknowledge that,
notwithstanding that not all of the Parties are parties to each of the IP
Agreements, each of them will receive, in connection with the consummation of
the transactions contemplated by this Agreement, the IP Agreements and the
Redemption Agreement as a whole, fair and adequate consideration for its payment
and indemnification obligations under this Agreement. Each Party therefore
agrees that it and that each Indemnifying Party will be deemed for all purposes
to be a primary obligor under each of such obligations, and not a guarantor or
surety. Notwithstanding the foregoing, to the extent that any of the covenants
or agreements in this Agreement are determined by a court of competent
jurisdiction to be a guaranty (in such case, the "Guaranty") by IPWT, IPSE or
Charter (in such case, "Guarantor") of indemnity obligations (in such case, the
"Guaranteed Obligations") of any other person or entity (in such case the
"Underlying Obligor"), then, such Guaranty shall be continuing, absolute and
unconditional (subject only to the applicable terms and conditions of this
Agreement) and, to the maximum extent permitted by applicable law, each such
Guarantor hereby:
(a) Authorizes any beneficiary of such Guaranty (the "Beneficiary"), from
time to time in such Beneficiary's sole discretion, and without notice to or
demand upon Guarantor (i) to amend, extend, waive, restructure or otherwise
modify the Guaranteed Obligations in whole or part, (ii) to release, compromise,
collect, settle or otherwise liquidate the Guaranteed Obligations
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<PAGE> 53
in whole or part, (iii) to take, hold, exchange, enforce, waive, release and
otherwise deal with collateral for the Guaranteed Obligations, and (iv) to add,
release or substitute any one or more endorser(s) or other guarantor(s) for the
Guaranteed Obligations;
(b) Agrees that:
(i) if any one or more of the foregoing actions are taken;
(ii) if there is any change in the structure or existence of the
Underlying Obligor; or
(iii) if there occurs any other action, event or circumstance
whatsoever which constitutes or might be deemed to constitute an equitable
or legal discharge of an Underlying Obligor with respect to the Guaranteed
Obligations or of such Guarantor with respect to the Guaranty, whether in
bankruptcy or otherwise, then (in the cash of each of (i), (ii) and
(iii)), such action, event or circumstance shall not impair, reduce,
release or otherwise mitigate Guarantor's liability under the Guaranty.
(c) Waives its right to assert against any Beneficiary as a defense (legal
or equitable), setoff, counterclaim or cross-claim in connection with the
Guaranty, any defense (legal or equitable), setoff, counterclaim or cross-claim
Guarantor may now or in the future have against the Underlying Obligor or any
other person or entity;
(d) Waives all defenses, counterclaims and setoffs arising from the
present or future lack of perfection, sufficiency, validity or enforceability of
the Guaranteed Obligations or any security therefor or documents relating
thereto;
(e) Waives any defense arising by reason of any claim or defense based
upon an election of remedies by a Beneficiary;
(f) Waives all notices of acceptance, presentments, demand for
performance, protests, diligence, notices of nonperformance or default, and all
other notices or formalities which Guarantor may otherwise be entitled to under
applicable law;
(g) Waives all rights to require a Beneficiary to prosecute or seek
enforcement of any remedies against an Underlying Obligor or any other person or
entity liable on account of the Guaranteed Obligations, or to require a
Beneficiary to seek to enforce or resort to any remedies with respect to any
security interests, liens, encumbrances, collateral or other security for the
Guaranteed Obligations; and
(h) Agrees that Guarantor shall have no right of subrogation,
reimbursement, exoneration or contribution against the Underlying Obligor with
respect to the Guaranty, and irrevocably waives any such rights and any rights
to participate in any security now or hereafter
-49-
<PAGE> 54
held by a Beneficiary in connection with the Guaranteed Obligations.
[the remainder of this page intentionally left blank]
-50-
<PAGE> 55
The parties have executed this Agreement as of the day and year first above
written.
CHARTER COMMUNICATIONS, LLC
By: /s/ Curtis S. Shaw
---------------------------------
Name: Curtis S. Shaw
-------------------------------
Title: Senior Vice President
------------------------------
CHARTER COMMUNICATIONS
PROPERTIES, LLC
By: /s/ Curtis S. Shaw
---------------------------------
Name: Curtis S. Shaw
-------------------------------
Title: Senior Vice President
------------------------------
MARCUS CABLE ASSOCIATES, L.L.C.
By: /s/ Curtis S. Shaw
---------------------------------
Name: Curtis S. Shaw
-------------------------------
Title: Senior Vice President
------------------------------
CHARTER RMG, LLC
By: /s/ Curtis S. Shaw
---------------------------------
Name: Curtis S. Shaw
-------------------------------
Title: Senior Vice President
------------------------------
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<PAGE> 56
INTERMEDIA PARTNERS,
A CALIFORNIA LIMITED PARTNERSHIP
By: InterMedia Capital Management I, LLC,
its managing general partner
By: InterMedia Management, Inc.,
its managing member
By: /s/ Robert J. Lewis
---------------------------------
Robert J. Lewis
President and CEO
BRENMOR CABLE PARTNERS, L.P., a
California limited partnership
By: InterMedia Partners, a California Limited
Partnership, its general partner
By: InterMedia Capital Management I, LLC,
its managing general partner
By: InterMedia Management, Inc.,
its managing member
By: /s/ Robert J. Lewis
---------------------------------
Robert J. Lewis
President and CEO
INTERMEDIA PARTNERS SOUTHEAST
By: InterMedia Capital Management, LLC,
its managing general partner
By: InterMedia Management, Inc.,
its managing member
By: /s/ Robert J. Lewis
---------------------------------
Robert J. Lewis
President and CEO
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<PAGE> 57
INTERMEDIA PARTNERS OF WEST
TENNESSEE, L.P.
By: InterMedia Capital Management, LLC,
its managing general partner
By: InterMedia Management, Inc.,
its managing member
By: /s/ Robert J. Lewis
---------------------------------
Robert J. Lewis
President and CEO
INTERMEDIA PARTNERS IV, L.P.
By: InterMedia Capital Management, LLC,
its managing general partner
By: InterMedia Management, Inc.,
its managing member
By: /s/ Robert J. Lewis
---------------------------------
Robert J. Lewis
President and CEO
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<PAGE> 58
INTERMEDIA CAPITAL PARTNERS IV, L.P.
By: InterMedia Capital Management, LLC,
its managing general partner
By: InterMedia Management, Inc.,
its managing member
By: /s/ Robert J. Lewis
---------------------------------
Robert J. Lewis
President and CEO
TCID IP-V, INC.
By: /s/ Derek Chang
---------------------------------
Name: Derek Chang
-------------------------------
Title: Vice President
------------------------------
For purposes of Sections 3.2 and 7.3(c) only.
TCI OF GREENVILLE, INC.
By: /s/ Derek Chang
---------------------------------
Name: Derek Chang
-------------------------------
Title: Vice President
------------------------------
TCI OF SPARTANBURG, INC.
By: /s/ Derek Chang
---------------------------------
Name: Derek Chang
-------------------------------
Title: Vice President
------------------------------
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