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EXHIBIT 10.9
ACCRETION PUT AGREEMENT
This Accretion Put Agreement ("Agreement") is made as of the 12th day of
November, 1999, by and between Xxxx X. Xxxxx, an individual ("Xxxxx"), and
__________ (the "Holder"), with reference to the following facts:
A Charter Communications Operating, LLC ("CCO") is a party to (1) that
certain Purchase and Sale Agreement by and among the persons or entities listed
on the signature pages thereto as "Sellers," and Xxxxxx Acquisition Partners,
L.L.L.P. ("RAP"), dated April 26, 1999 (the "RAP Agreement"), and (2) that
certain Purchase and Sale Agreement by and among the persons or entities listed
on the signature pages thereto as "Sellers," and InterLink Communications
Partners, LLLP ("InterLink"), dated April 26, 1999 (the "InterLink Agreement"
and, together with the RAP Agreement, the "Purchase Agreements"), pursuant to
which CCO and certain of its affiliates have acquired all of the outstanding
equity of RAP and InterLink, respectively.
B Xxxxx is the indirect controlling owner of CCO and expects to derive
benefit from the transactions contemplated by the Purchase Agreements.
C Holder is a former owner of interests in RAP and/or InterLink and, in
connection with the transaction by which CCO acquired RAP and InterLink, and
pursuant to the Contribution Agreement (as defined below), Holder was issued
preferred membership units of Charter Communications Holding Company, LLC
("Charter LLC").
D In connection with the initial public offering of Charter
Communications, Inc. ("CCI"), Holder exchanged its preferred membership units in
Charter LLC for CCI Stock (as defined below), and as a condition of such
exchange, Xxxxx agreed to enter into this Agreement, giving Holder certain
rights with respect to the CCI Stock.
NOW, THEREFORE, in consideration of the respective covenants and
agreements of the parties and for other good and valuable consideration (the
receipt and sufficiency of which are hereby acknowledged by each party), the
parties hereby agree as follows:
1. Definitions. As used in this Agreement, the following terms have the
following meanings:
"Closing Price" means, with respect to a share of CCI common stock, (i)
the last reported sales price, regular way, as reported on the principal
national securities exchange on which shares of CCI common stock are listed or
admitted for trading or (ii) if shares of CCI common stock are not listed or
admitted for trading on any national securities exchange, the last reported
sales price, regular way, as reported on the Nasdaq National Market or, in the
absence of any last reported sales price, the average of the highest bid and
lowest asked prices as reported on the Nasdaq Stock Market.
"CCI Stock" means all shares of common stock of CCI issued to Holder in
exchange for preferred membership units of Charter LLC, and all other securities
that constitute "CCI Stock" in accordance with Section 5 of this Agreement.
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"Contribution Agreement" means the Contribution Agreement dated as of
September 14, 1999, by and among, CCO, Charter Communications Holding Company,
LLC, the Investors, CCI and Xxxxx, as amended by the First Amendment to
Contribution dated as of November 12, 1999.
"IPO Price" means the price per share at which shares of common stock of
CCI are sold to the public in CCI's initial public offering (without reduction
for underwriters' fees, discounts, commissions, and other selling expenses).
"Lockup Agreement" means the agreement entered into between the Holder
and the underwriters of CCI's initial public offering, which, among other
things, prohibits the Holder from selling the CCI Stock until the Lockup
Termination Date.
"Lockup Termination Date" means the earliest date on which the Lockup
Agreement no longer prohibits the Holder from selling the CCI Stock.
"Minimum Amount" means the lesser of (i) CCI Stock for which the
Purchase Price under this Agreement is at least $1,000,000, or (ii) all CCI
Stock that is subject to the Holder's Put Option under this Agreement.
2. Put Option. Xxxxx hereby grants to the Holder the right and option
(the "Put Option"), exercisable from the date hereof through and including the
date of termination of the Put Option under Section 7 by written notice
delivered to Xxxxx, to sell and to permit any of the Holder's Permitted
Transferees to sell to Xxxxx or his designee, from time to time, on one or more
occasions, all or any portion of the CCI Stock held by the Holder and its
Permitted Transferees that represents at least the Minimum Amount. Upon the
giving of such notice, Xxxxx shall be obligated to buy or to cause his designee
to buy and, subject to Section 5.3, the Holder and the Permitted Transferees
identified in the Holder's notice pursuant to this Section 2 shall be obligated
to sell, the amount of the CCI Stock held by the Holder and its Permitted
Transferees that is specified in the Holder's notice pursuant to this Section 2,
at the price and upon the terms and conditions specified in Section 3.
3. Purchase Price; Closing.
3.1 The purchase price to be paid upon any exercise of the Put
Option (the "Purchase Price") shall be equal the IPO Price (calculated in
accordance with Section 5, if applicable), plus interest thereon at a rate of
four and one-half percent (4.5%) per year, compounded annually, for the period
from the date of this Agreement through the closing of the purchase and sale of
the CCI Stock hereunder (the "Closing").
3.2 At each Closing, (a) Xxxxx or his designee shall pay to the
Holder (for itself and on behalf of its Permitted Transferees, if applicable)
the Purchase Price in immediately available funds by wire transfer (if wire
transfer instructions were provided in the notice of exercise) or certified bank
check; and (b) the Holder shall deliver or cause to be delivered to Xxxxx or his
designee one or more certificates evidencing the CCI Stock to be purchased and
sold at such Closing, together with duly executed assignments separate from the
certificate in form and substance reasonably acceptable to Xxxxx to effectuate
the transfer of such CCI Stock to
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Xxxxx or his designee, together with a certificate of the Holder and its
Permitted Transferee, if applicable, reaffirming the representations in Section
4.
3.3 Each Closing shall be held at the offices of Irell & Xxxxxxx
in Los Angeles, California, on (or before if Xxxxx so determines) the thirtieth
day after the Holder delivers the written notice described above (or, if such
day is not a business day, on the next business day thereafter), or at such
other time and place as the Holder and Xxxxx may agree. The Holder and Xxxxx
will cooperate so as to permit all documents required to be delivered at the
Closing to be delivered by mail, delivery service or courier without requiring
either party or his or its representatives to be physically present at the
Closing.
4. Representations of the Holder. The Holder represents and warrants to
Xxxxx and any of his designees or assignees that on the date hereof and at each
Closing: (a) the Holder 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, enforceable
against the Holder in accordance with its terms; (c) at each Closing, the Holder
or one of its Permitted Transferees will own all of the CCI Stock required to be
purchased and sold at such 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 CCI Stock), other than those arising under applicable law and
those arising under the organizational documents of CCI; (d) upon the transfer
of the CCI Stock pursuant to Section 3, Xxxxx or his designee will receive good
title to the CCI Stock, free and clear of all liens, encumbrances and adverse
interests created by the Holder, any Permitted Transferee, or any of their
respective predecessors-in-interest, other than those arising under applicable
law or those arising under the organizational documents of CCI.
5. Adjustment for Exchange, Reorganizations, Stock Splits, etc.
5.1 If the number of shares of CCI Stock is increased, decreased,
changed into, or exchanged for a different number or kind of shares or
securities of CCI through reorganization, recapitalization, reclassification,
stock dividend, stock split or reverse stock split, or other similar
transaction, an appropriate adjustment shall be made with respect to number and
kind of shares or securities subject to the Put Option, without change in the
total price applicable to the unexercised portion of the Put Option but with a
corresponding adjustment in the price per unit of any security covered by the
Put Option. Any shares or securities that become subject to the Put Option
pursuant to this Section 5.1 shall constitute "CCI Stock" for purposes of this
Agreement.
5.2 Upon a reorganization, merger or consolidation of CCI with
one or more other corporations or entities (any of the foregoing, a "Business
Combination") pursuant to which the outstanding CCI Stock is converted into or
exchanged for any other security ("Replacement Securities"), the Put Option
shall cease to be exercisable with respect to the securities that previously
constituted "CCI 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 CCI Stock pursuant to such Business Combination at a price
per share or unit of Replacement Securities equal to the aggregate Purchase
Price for all CCI Stock immediately prior to such effectiveness divided by the
number of shares or units of Replacement Securities subject to the
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Put Option immediately following such effectiveness. Any Replacement Securities
that become subject to the Put Option pursuant to this Section 5.2 shall
constitute "CCI Stock" for purposes of this Agreement.
5.3 In the event of any proposed Business Combination pursuant to
which the outstanding CCI Stock will be converted into a right to receive
consideration other than securities of CCI or Replacement Securities, (i) Xxxxx
will provide notice thereof to the Holder at least ten (10) 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 CCI Stock that is
specified in a 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 Xxxxx pursuant to this Section 5.3, the purchase and
sale of any of the CCI Stock specified in the Holder's notice may be conditioned
at the Holder's option on the consummation of the Business Combination described
in Xxxxx'x notice pursuant to this Section 5.3.
6. Representations of Xxxxx. Xxxxx represents and warrants to the Holder
and each Permitted Transferee that on the date hereof and at all times hereafter
through the Closing: (a) Xxxxx 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 Xxxxx,
enforceable against Xxxxx in accordance with its terms; (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 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); and (d) his Net Worth is and will be greater than $4 billion.
At the request of R&A Management, LLC, a Colorado limited liability company
("R&A"), made (on behalf of Holder together with all other holders receiving put
agreements in connection with the transactions under the Purchase Agreements) no
more frequently than once every 180 days, Xxxxx will within 10 days of such
request deliver to R&A a certificate signed by him or his attorney-in-fact as to
the representation and warranty in clause (d) being true and correct at such
time. "Net Worth" means the excess of the fair market value of Xxxxx'x assets
over the aggregate amount of Xxxxx'x liabilities.
7. Termination of Put Option.
7.1 The Put Option shall terminate on the earliest of the
following dates, except with respect to any CCI Stock that is specified in a
notice delivered by the Holder pursuant to Section 2 prior to such earliest
date:
(a) the later of (x) thirty days after the Lockup
Termination Date, or (y) the second anniversary of the date of this Agreement;
(b) the date specified in Section 5.3; and
(c) the later of (x) thirty days after the Lockup
Termination Date, or (y) the first date on which both of the following
conditions are satisfied:
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(i) the Closing Price of CCI common stock has
exceeded 115% of the IPO Price for any 90 trading days during the preceding 100
consecutive trading days; and
(ii) all shares of CCI common stock then held by
the Holder or any Permitted Transferee (as defined below) and subject to the Put
Option may be sold to the public in their entirety on such date (x) without
registration under the Securities Act of 1933, as amended (the "Act"), pursuant
to Rule 144 under the Act or another comparable provision or (y) pursuant to a
then effective registration statement under the Act.
7.2 The Put Option shall terminate as to any CCI Stock on the
date on which such CCI Stock is first transferred by the Holder or any Permitted
Transferee to a person or entity that is not a "Permitted Transferee."
7.3 For purposes of determining whether the condition in Section
7.1(c)(i) is satisfied, appropriate adjustments will be made to take into
account any subdivision (by stock split or otherwise) or combination (by reverse
stock split or otherwise) of outstanding shares of CCI common stock occurring
after the consummation of CCI's initial public offering.
8. Miscellaneous.
8.1 No Impairment of other Put Rights. Nothing herein is intended
to supersede, or limit Holder's ability to exercise its rights under, the
Registration Support Put (as defined in the Contribution Agreement).
8.2 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. This Agreement may not be amended, altered or modified
except by a writing signed by both parties.
8.3 Additional Documents. Each party 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.
8.4 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, to the address set forth on the signature page
attached hereto.
If to Xxxxx:
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Xxxx X. Xxxxx
c/o Xxxxxxx X. Xxxxx @ Vulcan Northwest
000 000xx Xxxxxx Xxxxxxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
Telecopy: (000) 000-0000
with a copy to:
Irell & Xxxxxxx LLP
0000 Xxxxxx xx xxx Xxxxx, Xxxxx 000
Xxx Xxxxxxx, Xxxxxxxxxx 00000-0000
Attention: Xxxxx X. Xxxxx
Telecopy: (000) 000-0000
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.
8.5 No Third-Party Benefits. 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, other than any Permitted Transferees of
the Holder.
8.6 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.
8.7 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.
8.8 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).
8.9 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.
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8.10 Assignments.
(a) The Holder and any Permitted Transferee may transfer
some or all of its CCI Stock to any of the following persons or entities (each
such person or entity, a "Permitted Transferee"), and the Permitted Transferee
shall thereupon have the rights provided in this Agreement:
(i) any person or entity that was among the
"Investors" who were party to the Contribution Agreement;
(ii) any person or entity that, directly or
indirectly, through the ownership of voting securities, controls, is controlled
by, or is commonly controlled with the Holder;
(iii) a trust for the benefit of the equity owners
of the Holder and of which the trustee or trustees are one or more persons or
entities that either control, or are commonly controlled with, the Holder or are
banks, trust companies, or similar entities;
(iv) any person or entity for which the Holder is
acting as nominee or any trust controlled by or under common control with such
person or entity;
(v) if the Holder is an individual, any charitable
foundation, charitable trust, or similar entity, the estate, heirs, or legatees
of the Holder upon the Holder's death, any member of the Holder's family, any
trust or similar entity for the benefit of the Holder or one or more members of
the Holder's family, or any entity controlled by the Holder or one or more
members of the Holder's family.
(b) The Holder may assign all its rights and delegate all
its obligations under this Agreement to any Permitted Transferee, and such
Permitted Transferee shall thereupon be deemed to be the "Holder" for purposes
of this Agreement.
(c) Xxxxx is entitled, in his sole discretion, to assign
his rights to purchase any CCI Stock under this Agreement to one or more
entities controlled by Xxxxx, but no such assignment will relieve Xxxxx of any
of his obligations under this Agreement.
8.11 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.
8.12 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.
8.13 Number and Gender. Throughout this Agreement, as the context
may require, (a) the masculine gender includes the feminine and neuter; and the
neuter gender includes the masculine and feminine; and (b) the singular tense
and number includes the plural, and the plural tense and number includes the
singular.
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8.14 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.
8.15 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 CCI Stock
pursuant to this Agreement.
8.16 Default. In the event of any legal action between the
parties arising out of or in relation to this Agreement, the prevailing party in
such legal action shall be entitled to recover, in addition to any other legal
remedies, all of his or its costs and expenses, including reasonable attorney's
fees, from the non-prevailing party, regardless of whether such legal action is
prosecuted to completion.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the date first set forth above.
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Xxxx X. Xxxxx, by Xxxxxxx X. Xxxxx,
attorney-in-fact
[SIGNATURE PAGE TO ACCRETION PUT]
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HOLDER
[SIGNATURE PAGE TO ACCRETION PUT]
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ADDRESS OF HOLDER:
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