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EXHIBIT 10.14
PUT AGREEMENT
This Put Agreement ("Agreement") is made as of November 12, 1999, by and
among ▇▇▇▇ ▇. ▇▇▇▇▇, an individual ("▇▇▇▇▇"), Charter Investment, Inc., a
Delaware corporation formerly known as Charter Communications, Inc. ("CII") and
_______ (the "Holder"), with reference to the following facts:
A. The Holder currently owns Class A Common Stock of CII ("Common
Stock"). CII's primary asset is its ownership interest in Charter Communications
Holding Company, LLC ("Charter Holdco").
B. It is contemplated that Charter Communications, Inc., a Delaware
corporation ("CCI"), will effect an initial public offering (the "IPO") of its
shares of common stock ("CCI Stock"). After the IPO, CCI's primary asset will be
its ownership interest in Charter Holdco.
C. The Holder's Common Stock is not, and will not be, exchangeable or
convertible into shares of CCI, leaving no public market for the Holder's Common
Stock.
D. CII and ▇▇▇▇▇ have agreed to grant the Holder the rights set forth in
this Agreement.
E. The Holder has agreed to waive any rights which he, any of his
Permitted Transferees, CII, Charter Holdco and/or CCI has, had or might have in
the investment proposed to be made by affiliates of ▇▇▇▇▇ in RCN Corporation
("RCN") or any subsequent investments by ▇▇▇▇▇ or such affiliates in RCN.
NOW, THEREFORE, in consideration of the foregoing premises, the parties
hereby agree as follows:
1. Definitions. Capitalized terms not otherwise defined herein have the meanings
ascribed to such terms in the Purchase Agreement. As used in this Agreement, the
following terms have the following meanings:
"Business Day" means any day other than a Saturday, Sunday, or other day
on which commercial banking institutions in New York, New York are required or
authorized by law to remain closed.
"Closing Date" means that date on which the Closing occurs.
"Common Units" means any Membership Unit denominated "Common," including
without limitation Class A Common Units, Class B Common Units, Class C Common
Units, and Class D Common Units, as set forth in the LLC Agreement, and any
other securities into which such Common Units may thereafter be changed,
converted, or exchanged.
"Convertible Securities" means options, warrants, and other similar
instruments issued by CCI that are exercisable or convertible for shares of CCI
Stock.
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"Exchange Agreement" means that certain Exchange Agreement, dated as of
_________, 1999, by and among CCI, CII, Vulcan Cable III Inc. and ▇▇▇▇ ▇.
▇▇▇▇▇.
"GAAP" means generally accepted accounting principles in effect from
time to time in the United States of America, applied in a manner consistent
with that used in the preparation of the financial statements included in all
forms, reports and similar documents filed by CCI with the Securities and
Exchange Commission.
"IPO Date" means the date on which the registered public offering on
Form S-1 of shares of Class A Common Stock of CCI is consummated.
"LLC Agreement" means the Amended and Restated Limited Liability Company
Agreement for Charter Holdco, effective as of ___________, 1999, by and among
the members listed on Schedule A thereto.
"Membership Units" means units of membership interest issued by Charter
Holdco to its members that entitle the members to the rights set forth in the
LLC Agreement.
"Minimum Amount" means the lesser of (i) Common Stock which is put to
CII for which the Purchase Price under this Agreement is at least $5 million, or
(ii) all Common Stock that is subject to the Holder's (including those held by
its Permitted Transferees) Put Option under this Agreement.
"Permitted Transferee" means and is limited to those persons or entities
to whom Common Stock has been transferred in a "Permitted Transfer" as defined
in that certain Stockholders Agreement dated December 21, 1998 among the ▇▇▇▇▇▇,
▇▇▇▇▇ and the other parties thereto (the "Stockholders Agreement").
"Person" means any individual, corporation, partnership, limited
partnership, limited, liability partnership, limited liability company, trust,
association, organization, or other entity.
2. Put Option.
A. CII hereby grants to the Holder, effective six months after
consummation of the IPO and subject to the terms and conditions set forth
herein, the right and option (the "Put Option"), exercisable from time to time
on one or more occasions but no more frequently than four times each calendar
year by delivery of written notice to CII during the Put Period (as defined in
Section 9), to sell to CII or its designee, all or any portion of the Holder's
Common Stock (which may include Common Stock held by any Permitted Transferee of
such Holder) but not less than the Minimum Amount. Upon the giving of such
notice, subject to Section 5.B, CII shall be obligated to buy or to cause its
designee to buy, and the Holder shall be obligated to sell, the Holder's Common
Stock as to which the Put Option has been exercised, at the price and upon the
terms and conditions specified in Sections 3 and 4.
B. In the event that CII or its designee is for any reason (other than
the Holder's material breach of this Agreement) unwilling or unable to purchase
any Common Stock as to which a Put Option has been exercised, ▇▇▇▇▇ shall be
obligated to buy or to cause his
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designee to buy, and the Holder shall be obligated to sell, such Common Stock on
the terms and conditions applicable to CII in this Agreement.
3. Purchase Price.
A. The purchase price per share of Common Stock to be paid upon the
exercise of the Put Option (the "Purchase Price") shall be equal to (1) the
Adjustment Amount (as defined in Section 3.C), if any, plus the product of (i)
the Holdco Unit Value (as defined below), and (ii) the number of Membership
Units held by CII, divided by (2) the total number of outstanding shares of
Common Stock, assuming the exercise of all options, warrants or other similar
rights held by any person to purchase Common Stock.
B. The Holdco Unit Value shall be determined as follows:
(i) The Holdco Unit Value shall equal the average of the highest
and lowest quoted selling prices of a share of CCI's Class A Common Stock on the
principal national securities exchange on which the Class A Common Stock of CCI
is listed or admitted to trading, or, if not so listed or admitted to trading,
as reported by the NASDAQ Stock Market's National Market, on each of the thirty
(30) trading days immediately preceding the date on which a put notice is given
(the "Share Value"), so long as all of the following are true:
a. Clause (b) of Article Third and Clauses (a)(ii) and
(b)(iii) of Article Fourth of CCI's Certificate of Incorporation as in effect on
the IPO Date continue to be in effect and have not amended so as to
substantively modify the provisions thereof, and CCI is in substantial
compliance with those provisions; and
b. Sections 3.5.4, 3.6.1, 3.6.4(d), 3.6.4(e) and 5.1.7 of
the LLC Agreement have not then been amended so as to substantively modify those
provisions in a manner that would alter the amount per Membership Unit that any
class of Common Units would be entitled to receive on liquidation of Charter
Holdco.
(ii) If the conditions in Sections 3.B(i)a and 3.B(i)b are not
satisfied, then the Holdco Unit Value shall equal the fair market value of a
Common Unit held by CII, as determined in accordance with Section 2.3(b) of the
Exchange Agreement.
C. So long as CII has no material outstanding liabilities (other than
obligations pursuant to options, warrants or other similar rights held by any
person to purchase common stock of CII) and no material assets other than its
Membership Units, the "Adjustment Amount" (as used in the calculation of the
Purchase Price) shall be zero. To the extent necessary to reflect any additional
liabilities or assets of CII, the Purchase Price will be equitably adjusted by
increasing the Adjustment Amount by the value of any material assets of CII
other than the Membership Units held by CII, and decreasing the Adjustment
Amount (which may be a negative number) by the amount of any outstanding
material liabilities (other than obligations pursuant to options, warrants or
other similar rights held by any person to purchase common stock of CII), all in
the manner reflected in Section 2.3(b) of the Exchange Agreement.
4. Closing.
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A. At the Closing, (a) CII or its designee shall pay to the Holder an
amount equal to the product of (i) the Purchase Price, and (ii) the number of
shares of Common Stock that are to be purchased and sold at the Closing, in
immediately available funds by wire transfer or certified bank check; and (b)
the Holder shall deliver to CII or its designee one or more certificates
evidencing the Common Stock to be purchased and sold at the Closing, together
with duly executed assignments separate from certificate in form and substance
sufficient to effectuate the transfer of such Common Stock to CII or its
designee, together with a certificate of the Holder and its Permitted
Transferee, if applicable, reaffirming the representations in Section 5.
B. The closing (the "Closing") shall be held at the offices of Irell &
▇▇▇▇▇▇▇ LLP in Los Angeles, California, on a Business Day selected by CII (as to
which prompt written notice is to be given to the Holder) no later than 30
Business Days after the delivery of notice that the Put Option is being
exercised, or at such other time and place as the Holder and CII may agree. The
Holder and CII will cooperate so as to permit all documents required to be
delivered at the Closing to be delivered by mail, delivery service, courier, or
other agreed-upon method without requiring either party or his or its
representatives to be physically present at the Closing.
5. Adjustment for Exchange, Reorganizations, etc.
A. Upon a reorganization, merger or consolidation of CII with one or
more other corporations or entities (any of the foregoing, a "Business
Combination") pursuant to which outstanding shares of Common Stock are converted
into or exchanged solely for any other security ("Replacement Securities"), the
Put Option shall cease to be exercisable with respect to the securities that
previously constituted "Common Stock" and shall instead be automatically
converted into an option to sell such number of shares or units of Replacement
Securities issued in exchange for the Common Stock pursuant to such Business
Combination at a price per share or unit of Replacement Securities equal to the
aggregate Purchase Price for all Common Stock immediately prior to such
effectiveness divided by the number of shares or units of Replacement Securities
subject to the Put Option immediately following such effectiveness unless such
Replacement Securities are securities of CCI or another entity and are publicly
traded on a national securities exchange or on NASDAQ, in which case this put
shall immediately terminate and be of no further force or effect. Any
Replacement Securities that become subject to the Put Option pursuant to this
Section 5.A shall constitute "Common Stock" for purposes of this Agreement.
B. In the event of any proposed Business Combination pursuant to which
the outstanding Common Stock will be converted into a right to receive
consideration in whole or in part other than securities of CII or Replacement
Securities, (i) CII will provide notice thereof to the Holder at least twenty
(20) days prior to consummation of such Business Combination and (ii) the Put
Option will expire two days prior to such consummation except with respect to
any shares of Common Stock that are specified in a put notice delivered by the
Holder pursuant to Section 2 prior to such date. If the Holder delivers a notice
pursuant to Section 2 after its receipt of a notice from CII pursuant to this
Section 5.B, the purchase and sale of any of the Common Stock specified in the
Holder's notice may be conditioned at the Holder's option on the consummation of
the Business Combination described in CII's notice pursuant to this Section 5.B.
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6. Representations of the Holder. The Holder (and any applicable Permitted
Transferees) jointly represent and warrant to CII, ▇▇▇▇▇ and any of their
respective designees or assignees that on the date hereof and at each Closing:
(a) the Holder (or Permitted Transferee) has full power and authority to execute
and deliver this Agreement and consummate the transactions contemplated hereby;
(b) this Agreement is the legal, valid and binding obligation of the Holder (or
any Permitted Transferee), enforceable against the Holder in accordance with its
terms, except as the enforceability of this Agreement may be limited by
bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or
similar laws affecting creditors' rights generally or by judicial discretion in
the enforcement of equitable remedies; (c) at each Closing, the Holder (or any
Permitted Transferee) will own all of the Common Stock required to be purchased
and sold at the Closing, both of record and beneficially, free and clear of all
liens, encumbrances or adverse interests of any kind or nature whatsoever
(including any restriction on the right to vote, sell or otherwise dispose of
the Common Stock (other than those restrictions set forth in the Stockholders
Agreement, those arising under applicable law and those arising under the
organizational documents of CII)); (d) upon the transfer of the Common Stock to
CII or ▇▇▇▇▇, as the case may be, CII, ▇▇▇▇▇ or their respective designees will
receive good title to the Common Stock, free and clear of all liens,
encumbrances and adverse interests created by the Holder (or any Permitted
Transferee), other than those arising under applicable law or those arising
under the organizational documents of CII (if applicable).
7. Representations of CII. CII represents and warrants to the Holder and each
Permitted Transferee that on the date hereof and at all times hereafter through
the Closing: (a) CII has full corporate power and authority to execute and
deliver this Agreement and consummate the transactions contemplated hereby; (b)
this Agreement constitutes the legal, valid and binding obligation of CII,
enforceable against CII in accordance with its terms, except as the
enforceability of this Agreement may be limited by bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or similar laws affecting
creditors' rights generally or by judicial discretion in the enforcement of
equitable remedies; and (c) its execution and delivery of this Agreement does
not, and its performance of its obligations under this Agreement will not,
violate, conflict with or constitute a breach of, or a default under, CII's
certificate of incorporation or bylaws, or any material agreement, indenture or
instrument to which it is a party or which is binding on it, and will not result
in the creation of any lien on, or security interest in, any of its assets
(other than such violations, breaches, defaults, liens or security interests
that would not materially and adversely affect its ability to perform its
obligations under this Agreement).
8. Representations of ▇▇▇▇▇. ▇▇▇▇▇ represents and warrants to the Holder and
each Permitted Transferee that on the date hereof and at all times hereafter
through each Closing: (a) ▇▇▇▇▇ has full power and authority to execute and
deliver this Agreement and consummate the transactions contemplated hereby; (b)
this Agreement constitutes the legal, valid and binding obligation of ▇▇▇▇▇,
enforceable against ▇▇▇▇▇ in accordance with its terms, except as the
enforceability of this Agreement may be limited by bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or similar laws affecting
creditors' rights generally or by judicial discretion in the enforcement of
equitable remedies; and (c) his execution and delivery of this Agreement does
not, and his performance of his obligations under this Agreement will not,
violate, conflict with or constitute a breach of, or a default under, any
material agreement, indenture or instrument to which he is a party or
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which is binding on him, and will not result in the creation of any lien on, or
security interest in, any of his assets (other than such violations, breaches,
defaults, liens or security interests that would not materially and adversely
affect his ability to perform his obligations under this Agreement).
9. Put Period.
A. The "Put Period" shall begin six months after consummation of the IPO
and shall continue until the earlier of (x) the date specified in Section 5.A or
5.B, and (y) the date on which ▇▇▇▇▇ no longer owns a majority of the
outstanding shares of voting stock of CII.
B. Upon termination of the Put Period as to a given Holder, this Put
Option and all rights hereunder (other than rights associated with the proper
exercise of the Put Option during the Put Period) shall immediately terminate as
to both such Holder and any of his Permitted Transferees.
C. The Put Option shall terminate as to any Common Stock on the date on
which such Common Stock is first attempted to be transferred by the Holder to a
person or entity that is not a Permitted Transferee.
10. Waiver Relative to RCN. The Holder, on behalf of all of his Permitted
Transferees, and in their capacity as stockholders of CII hereby irrevocably
waive any rights, if any, that any of them has, may have or may have had
relative to the pending investment by an affiliate of ▇▇▇▇▇ in convertible
preferred stock of RCN or in any subsequent investment by ▇▇▇▇▇ or any of such
affiliates in RCN. The Holders further consents to the execution by CII of an
express waiver of any right that CII might have, directly or as a stockholder of
CCI, or as a holder of Membership Units in Charter Holdco, with respect to the
aforesaid investment in RCN by an affiliate of ▇▇▇▇▇ and consent to ▇▇▇▇▇ and
such affiliate consummating such investment and any future investment in RCN.
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11. Miscellaneous.
A. Complete Agreement; Modifications. This Agreement constitutes the
parties' entire agreement with respect to the subject matter hereof and
supersedes all other agreements, representations, warranties, statements,
promises and understandings, whether oral or written, with respect to the
subject matter hereof other than as expressly contained in the Stockholders
Agreement. This Agreement may not be amended, altered or modified except by a
writing signed by the parties.
B. Additional Documents. Each of the parties hereto agrees to execute
any and all further documents and writings and to perform such other actions
which may be or become necessary or expedient to effectuate and carry out this
Agreement.
C. Notices. Any notice or other communication required or permitted to
be given hereunder shall be in writing and shall be sufficiently given if
delivered in person or transmitted by telecopy or similar means of recorded
electronic communication to the relevant party, addressed as follows (or at such
other address as either party shall have designated by notice as herein provided
to the other party):
If to the Holder:
with copy to:
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
Telephone: ▇▇▇ ▇▇▇ ▇▇▇▇
Facsimile: ▇▇▇ ▇▇▇ ▇▇▇▇
If to CII or ▇▇▇▇▇:
▇▇▇▇ ▇. ▇▇▇▇▇
c/o ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Vulcan Northwest Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: ▇▇▇ ▇▇▇ ▇▇▇▇
Facsimile: ▇▇▇ ▇▇▇ ▇▇▇▇
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with copy to:
Irell & ▇▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Telephone: ▇▇▇ ▇▇▇ ▇▇▇▇
Facsimile: ▇▇▇ ▇▇▇ ▇▇▇▇
Any such notice or other communication shall be deemed to have been given and
received on the day on which it is delivered or telecopied (or, if such day is
not a Business Day or if the notice or other communication is not telecopied
during business hours, at the place of receipt, on the next following Business
Day); provided, however, that any such notice or other communication shall be
deemed to have been given and received on the day on which it is sent if
delivery thereof is refused or if delivery thereof in the manner described above
is not possible because of the intended recipient's failure to advise the
sending party of a change in the intended recipient's address or telecopy
number.
12. No Third-Party Benefits. Except for any rights of a Permitted Transferee
hereunder, none of the provisions of this Agreement shall be for the benefit of,
or enforceable by, any person or entity that is not a party to this Agreement.
13. Waivers Strictly Construed. With regard to any power, remedy or right
provided herein or otherwise available to any party hereunder (a) no waiver or
extension of time shall be effective unless expressly contained in a writing
signed by the waiving party; and (b) no alternation, modification or impairment
shall be implied by reason of any previous waiver, extension of time, delay or
omission in exercise or other indulgence.
14. Severability. The validity, legality or enforceability of the remainder of
this Agreement shall not be affected even if one or more of the provisions of
this Agreement shall be held to be invalid, illegal or unenforceable in any
respect.
15. Undertakings. All authority herein conferred or agreed to be conferred upon
a party to this Agreement and all agreements of a party contained herein shall
survive the death or incapacity of such party (or any of them).
16. Successors and Assigns. Except as provided herein to the contrary, this
Agreement shall be binding upon and shall inure to the benefit of the parties,
their respective heirs, estates, personal representatives, conservators,
successors and permitted assigns.
17. Governing Law. This Agreement shall be governed by the laws of the State of
Delaware, without regard to any choice of law provisions of that state or the
laws of any other jurisdiction.
18. Headings. The Section headings in this Agreement are inserted only as a
matter of convenience and in no way define, limit, extend or interpret the scope
of this Agreement or of any particular Section.
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19. Counterparts. This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
20. Costs. Except as otherwise provided in this Agreement, each party will bear
his or its own costs in connection with the exercise of the Holder's right under
this Agreement and the purchase and sale of any Common Stock pursuant to this
Agreement.
[SIGNATURES BEGIN ON FOLLOWING PAGE]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first set forth above.
CHARTER INVESTMENT, INC.
By: _________________________________
Name:
Title:
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▇▇▇▇ ▇. ▇▇▇▇▇
HOLDER
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[SIGNATURE PAGE TO PUT AGREEMENT]
