Exhibit 10.18
PUT AGREEMENT
This Put Agreement ("Agreement") is made as of the 12th day of November
2001, by and between Xxxx X. Xxxxx, an individual ("Xxxxx"), and Falcon Holding
Group, Inc., Falcon Cable Trust, Xxxxxxxxx Family Trust, Blackhawk Holding
Company, Inc., Advance Company, Ltd., Advance TV of California, Inc., and Xxxx
Xxxxxxxxx, (each, a "Holder," and, collectively, the "Holders"), with reference
to the following facts:
A. Charter Investment, Inc., a Delaware corporation formerly known as
Charter Communications, Inc. ("Charter"), was a party to that certain Purchase
and Contribution Agreement (the "Purchase and Contribution Agreement"), dated
May 26, 1999, pursuant to which Charter and its affiliates acquired all of the
outstanding equity of Falcon Communications, L.P., and certain of its affiliated
entities.
B. Under the Purchase and Contribution Agreement, Falcon Holding Group,
L.P. ("FHGLP") acquired a limited liability company interest in Charter
Communications Holding Company, LLC ("Charter LLC") consisting of 20,581,117
Class D Common Units. FHGLP distributed 9,766,904 of those Class D Common Units
to the Holders. Pursuant to the Exchange Agreement, the Holders contributed
their Class D Common Units to Charter Communications, Inc., a Delaware
corporation incorporated on July 22, 1999 ("PublicCo"), in exchange for
9,766,904 shares of PublicCo's Class A Common Stock (the "Initial Shares").
C. Under Section 3.6.6 of the Amended and Restated Limited Liability
Company Agreement of Charter LLC, dated as of November 12, 1999 (the "LLC
Agreement"), Charter LLC has issued to PublicCo, as transferee of the Holders
with respect to the Class D Common Units assigned to PublicCo by the Holders
pursuant to the Exchange Agreement, an additional 328,165 Common Units. Pursuant
to the Exchange Agreement, PublicCo has in turn issued an additional 328,165
shares of Class A Common Stock to the Holders (the "Additional Shares").
D. The parties hereto wish to enter into this Put Agreement to provide
for a Put Option to sell the Shares to Xxxxx, subject to the terms and
conditions set forth herein.
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:
"Exchange Agreement" means the Exchange Agreement, dated as of November
12, 1999, among PublicCo, the Holders, and other partners of FHGLP.
"Issuer" means the issuer of the Shares.
"Minimum Amount" means the least of (i) Shares for which the Purchase
Price under this Agreement is at least $10,000,000, (ii) Shares representing at
least 50% of the equity represented by all shares of PublicCo common stock
acquired by the Holders pursuant to the Exchange Agreement, or (iii) all Shares
that are subject to the Holders' Put Option under this Agreement; provided,
however, if Falcon Holding Group, Inc. or any Permitted Transferee transfers any
Shares to Xxxxxxx X. Xxxxxxxxxx, Trustee of Xxxxxxx Xxxxxxxxxx Living Trust
u/t/d June 12, 1998, then (A) the Minimum Amount for Xxxxxxx X. Xxxxxxxxxx,
Trustee of Xxxxxxx Xxxxxxxxxx Living Trust u/t/d June 12, 1998 to exercise his
Put Option individually shall be all Shares held by such Permitted Transferee
and (B) if the Shares held by Xxxxxxx X. Xxxxxxxxxx, Trustee of Xxxxxxx
Xxxxxxxxxx Living Trust u/t/d June 12, 1998 are not included by the Holders in
any particular exercise of the Put Option, the Minimum Amount shall be
determined without including the Shares held by Xxxxxxx X. Xxxxxxxxxx, Trustee
of Xxxxxxx Xxxxxxxxxx Living Trust u/t/d June 12, 1998 in the number of Shares
subject to the Holders' Put Option under this Agreement.
"Representative" means Falcon Holding Group, Inc. or any other Holder
designated from time to time by the Holders as the Representative.
"Shares" means any of the Initial Shares and the Additional Shares, and
all other securities that constitute "Shares" in accordance with Section 5 of
this Agreement.
2. Put Option. Xxxxx hereby grants to the Holders the right and option
(the "Put Option"), exercisable from and after the date hereof through and
including the date of termination of the Put Option under Section 7 by written
notice delivered to Xxxxx by the Representative, to sell and to permit any of
each 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 Shares held by the
Holders and their respective 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 Holders and
Permitted Transferees identified in the Representative's notice pursuant to this
Section 2 shall be obligated to sell, the amount of the Shares held by the
Holders and their respective Permitted Transferees that is specified in the
Representative'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 to $25.8548 per share of PublicCo
common stock represented by the Shares to be purchased and sold (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 November 12, 1999, through the closing of the purchase and sale of the
Shares hereunder (the "Closing").
3.2 At each Closing, (a) Xxxxx or his designee shall pay to each
selling Holder (for itself and on behalf of its Permitted Transferees, if
applicable) the Purchase Price in immediately available funds by wire transfer
or certified bank check; and (b) each selling Holder shall deliver or cause to
be delivered to Xxxxx or his designee one or more certificates evidencing the
Shares to be purchased from such Holder or its Permitted
- 2 -
Transferees at such Closing (if such Shares are certificated securities),
together with duly executed assignments separate from certificate in form and
substance sufficient to effectuate the transfer of such Shares to Xxxxx or his
designee, together with a certificate of the selling Holder and its Permitted
Transferee, if applicable, reaffirming the representations in Section 4;
provided, however, that no Holder or Permitted Transferee shall be required to
take any actions or deliver any documents to satisfy any restrictions imposed by
the Issuer on the transfer of the Shares, and provided, further, that, if the
Holder is unable to deliver certificates evidencing the Shares to be purchased
and sold at such Closing because PublicCo failed to deliver such certificates to
the Holder within the period specified in the Exchange Agreement, then, in lieu
of delivering such certificates to Xxxxx at the Closing, the Holder will deliver
to Xxxxx at the Closing its undertaking to deliver such certificates to Xxxxx as
soon as practicable after it receives them from PublicCo.
3.3 Each Closing shall be held at the offices of Irell & Xxxxxxx
in Los Angeles, California, on the tenth business day after the Representative
delivers the written notice described above, or at such other time and place as
the Representative and Xxxxx may agree. The selling Holders 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 Holders. Each Holder represents and warrants
to Xxxxx and any of his designees or assignees that on the date hereof and at
each Closing: (a) such 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 such Holder,
enforceable against such Holder in accordance with its terms; (c) at each
Closing in which Shares held by such Holder or any of its Permitted Transferees
are to be purchased and sold, such Holder or one of its Permitted Transferees,
as applicable, will own all of the Shares required to be purchased from and sold
by such Holder and its Permitted Transferees 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 Shares), other than those arising under
applicable law and those arising under the organizational documents of the
Issuer; (d) upon the transfer of any Shares required to be purchased from and
sold by such Holder and its Permitted Transferees at any Closing pursuant to
Section 3, Xxxxx or his designee will receive good title to the Shares, free and
clear of all liens, encumbrances and adverse interests created by such 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 the Issuer.
5. Adjustment for Exchange, Reorganizations, Stock Splits, etc.
5.1 If the Shares are increased, decreased, changed into, or
exchanged for a different number or kind of shares or securities of the Issuer
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
- 3 -
become subject to the Put Option pursuant to this Section 5.1 shall constitute
"Shares" for purposes of this Agreement.
5.2 Upon a reorganization, merger or consolidation of the issuer
with one or more other corporations or entities (any of the foregoing, a
"Business Combination") pursuant to which the outstanding Shares are 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 "Shares" 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 Shares pursuant to such Business Combination at a
price per share or unit of Replacement Securities equal to the aggregate
Purchase Price for all Shares 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. Any Replacement Securities that
become subject to the Put Option pursuant to this Section 5.2 shall constitute
"Shares" for purposes of this Agreement.
5.3 In the event of any proposed Business Combination pursuant to
which the outstanding Shares will be converted into a right to receive
consideration other than securities of the Issuer or Replacement Securities, (i)
Xxxxx will provide notice thereof to the Representative 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 Shares
that are specified in a notice delivered by the Representative pursuant to
Section 2 prior to such date. If the Representative 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 Shares specified in the
Representative'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 each
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;
and (b) this Agreement constitutes the legal, valid and binding obligation of
Xxxxx, enforceable against Xxxxx in accordance with its terms.
7. Termination of Put Option
7.1 The Put Option shall terminate on the earliest of the
following dates, except with respect to any Shares that are specified in a
notice delivered by the Representative pursuant to Section 2 prior to such
earliest date:
(a) November 12, 2003; or
(b) the date specified in Section 5.3.
7.2 The Put Option shall terminate as to any Shares on the date
on which such Shares are first transferred by any Holder or any Permitted
Transferee to a person or entity that is not a "Permitted Transferee."
- 4 -
8. Miscellaneous.
8.1 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 all the parties.
8.2 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.
8.3 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 any Holder:
c/o Mapleton Investments
00000 Xxxxxxxx Xxxx., 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxx X. Xxxxxxxxx
Telecopy: (000) 000-0000
with a copy to:
Dow, Xxxxxx & Xxxxxxxxx
0000 Xxx Xxxxxxxxx Xxxxxx, X.X., Xxxxx 000
Xxxxxxxxxx, X.X. 00000-0000
Attention: Xxxxxxx X. Xxxx
Telecopy: (000) 000-0000
If to Xxxxx:
Xxxx X. Xxxxx
c/o Vulcan Ventures Incorporated
000 Xxxxx Xxxxxxx
000 Xxxxx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxx
Facsimile: (000) 000-0000
with a copy to:
Irell & Xxxxxxx LLP
1800 Avenue of the Stars, Xxxxx 000
Xxx Xxxxxxx, Xxxxxxxxxx 00000-0000
- 5 -
Attention: Xxxxx X. Xxxxx and 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.
8.4 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 Holders.
8.5 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 alteration, modification, or
impairment shall be implied by reason of any previous waiver, extension of time,
delay or omission in exercise or other indulgence.
8.6 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.
8.7 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).
8.8 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.
8.9 Assignments.
(a) Any Holder and any Permitted Transferee may transfer
some or all of its Shares 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 has entered into a
Put Agreement substantially similar to this Agreement upon the exchange by such
person or entity of Class D Common Units for shares of PublicCo common stock
pursuant to the Exchange Agreement;
(ii) any person or entity that owns an equity
interest in the transferor at the time of the transfer;
- 6 -
(iii) any person or entity that, directly or
indirectly, through the ownership of voting securities, controls, is controlled
by, or is commonly controlled with any Holder;
(iv) any charitable foundation, charitable trust,
or similar entity, or any charitable organization to which Shares are
transferred by such charitable foundation, charitable trust, or similar entity;
(v) if the transferor (whether a Holder or a
Permitted Transferee) is an individual, the estate, heirs, or legatees of the
transferor upon the transferor's death, any member of the transferor's family,
any trust or similar entity for the benefit of the transferor or one or more
members of the transferor's family, or any entity controlled by the transferor
or one or more members of the transferor's family; and
(vi) if the transferor is Falcon Holding Group,
Inc. or any Permitted Transferee of Falcon Holding Group, Inc., Xxxxxxx X.
Xxxxxxxxxx, Trustee of Xxxxxxx Xxxxxxxxxx Living Trust u/t/d June 12, 1998.
(b) Any 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 Shares 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.
8.10 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.
8.11 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.
8.12 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.
8.13 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.
8.14 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 Shares
pursuant to this Agreement.
8.15 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
- 7 -
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.
- 8 -
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the date first set forth above.
-----------------------------------
XXXX X. XXXXX, by Xxxxxxx X. Xxxxx,
attorney-in-fact
[THIS IS A SIGNATURE PAGE
FOR THE PUT AGREEMENT]
IN WITNESS WHEREOF, the undersigned has executed the foregoing this ____
day of ________________, 2001.
FALCON HOLDING GROUP, INC.
By:
-------------------------------
Name: Xxxx X. Xxxxxxxxx
Title: Chief Executive Officer
[THIS IS A SIGNATURE PAGE
FOR THE PUT AGREEMENT]
IN WITNESS WHEREOF, the undersigned has executed the foregoing this ____
day of ________________, 2001.
FALCON CABLE TRUST
By:
------------------------------
Xxxx X. Xxxxxxxxx, trustee
[THIS IS A SIGNATURE PAGE
FOR THE PUT AGREEMENT]
IN WITNESS WHEREOF, the undersigned has executed the foregoing this ____
day of ________________, 2001.
BLACKHAWK HOLDING COMPANY, INC.
By:
------------------------------
Xxxx X. Xxxxxxxxx, President
[THIS IS A SIGNATURE PAGE
FOR THE PUT AGREEMENT]
IN WITNESS WHEREOF, the undersigned has executed the foregoing this ____
day of ________________, 2001.
ADVANCE COMPANY, LTD.
By:
------------------------------
Xxxx X. Xxxxxxxxx, President
[THIS IS A SIGNATURE PAGE
FOR THE PUT AGREEMENT]
IN WITNESS WHEREOF, the undersigned has executed the foregoing this ____
day of ________________, 2001.
ADVANCE TV OF CALIFORNIA, INC.
By:
------------------------------
Xxxx X. Xxxxxxxxx, President
[THIS IS A SIGNATURE PAGE
FOR THE PUT AGREEMENT]
IN WITNESS WHEREOF, the undersigned has executed the foregoing this ____
day of ________________, 2001.
XXXXXXXXX FAMILY TRUST
By:
------------------------------
Xxx Xxxxxxxxx, trustee
[THIS IS A SIGNATURE PAGE
FOR THE PUT AGREEMENT]
IN WITNESS WHEREOF, the undersigned has executed the foregoing this ____
day of ________________, 2001.
By:
------------------------------
XXXX XXXXXXXXX
[THIS IS A SIGNATURE PAGE
FOR THE PUT AGREEMENT]
