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EXHIBIT 2.14(g)
AGREEMENT REGARDING CLOSING MATTERS
This Agreement Regarding Closing Matters ("Agreement") is entered into
among Charter Communications, Inc., on behalf of the Charter Entities, and AT&T
Broadband, LLC, on behalf of the AT&T Entities, as of February 26, 2001.
RECITALS
Various affiliates of the parties are contemporaneously entering into
the Alabama Reorganization Agreement, the Alabama Purchase Agreement, the Nevada
Reorganization Agreement, the Nevada Purchase Agreement, the St. Louis Agreement
and the Florida Agreement (collectively, the "Acquisition Agreements"). The
parties are entering into this Agreement to set forth provisions relating to the
closings under one or more of those Acquisition Agreements.
AGREEMENT
For valuable consideration, the parties agree as follows:
1. Definitions. Capitalized terms used but not defined in this
Agreement will have the meanings ascribed to them in the Reorganization
Agreements. In addition, the following terms will have the following meanings
when used in this Agreement:
"Alabama Purchase Agreement" means the Asset Purchase Agreement of even
date among Marcus Cable of Alabama, L.L.C., as buyer, and TCI of Selma, Inc.,
TCI of Xxx County, TCI Cablevision of Alabama, Inc. and Alabama T.V. Cable,
Inc., as sellers, and TCI Southeast, Inc.
"Alabama Reorganization Agreement" means the Reorganization Agreement
of even date among CCI, as buyer, and TCI TKR of Alabama, Inc., as seller, and
TCI Southeast, Inc.
"AT&T Entities" means TCI TKR of Alabama, Inc., TCI of Selma, Inc., TCI
of Xxx County, TCI Cablevision of Alabama, Inc. and Alabama T.V. Cable, Inc.,
TCI Southeast, Inc., TCI Cablevision of Nevada, Inc., TCI West, Inc., AT&T
Broadband, LLC, Communications Services, Inc., Ohio Cablevision Network, Inc.,
TCI Cablevision of California, Inc., TCI Washington Associates, LP., TCI of
Illinois, Inc., TCI Cablevision of Missouri, Inc., St. Louis
Tele-Communications, Inc., TCI Cable Partners of St. Louis, L.P., TCI TKR of
Central Florida, Inc. and TCI Holdings, Inc.
"CCI" means Charter Communications, Inc., a Delaware corporation.
"Charter Common Stock" means Class A Common Stock of CCI.
"Charter Common Stock Offering" means an underwritten public sale of
Charter Common Stock by CCI for cash pursuant to a registration statement.
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"Charter Common Stock Offering Proceeds" means the net aggregate
proceeds of a Charter Common Stock Offering in an aggregate amount equal to the
product of the total number of shares of Charter Common Stock sold in such
offering, multiplied by the per share price to the public for such Charter
Common Stock, less underwriting fees and commissions.
"Charter Entities" means CCI, Marcus Cable of Alabama, L.L.C., Falcon
Cable Systems Company II, L.P., Interlink Communications Partners, LLC, Charter
Communications, LLC, Falcon Cable Media, and Charter Communications
Entertainment I, LLC.
"Dedicated Sale Proceeds" means the first $3,000,000 of Charter Common
Stock Offering Proceeds, plus 50% of all such proceeds in excess of such amount.
"Florida Agreement" means the Asset Purchase Agreement of even date
among Interlink Communications Partners, LLC, Charter Communications, LLC, and
Falcon Cable Media, a California limited partnership, as sellers, CCI, and TCI
Cablevision of Missouri, Inc. and TCI Cable Partners of St. Louis, L.P., as
buyers.
"Nevada Purchase Agreement" means the Asset Purchase Agreement of even
date among Falcon Cable Systems Company II, L.P., as buyer, and AT&T Broadband,
LLC, Communications Services, Inc., Ohio Cablevision Network, Inc., TCI
Cablevision of California, Inc. and TCI Washington Associates, LP., as sellers.
"Nevada Reorganization Agreement" means the Reorganization Agreement of
even date between CCI, as buyer, and TCI Cablevision of Nevada, Inc., as seller,
and TCI West, Inc.
"Parties" means the AT&T Entities, on one hand, and the Charter
Entities, on the other hand.
"Purchase Price" will be as defined in the Alabama Reorganization
Agreement and/or the Nevada Reorganization Agreement, as applicable, and subject
to applicable adjustments specified in such Reorganization Agreement.
"Reorganization Agreements" means the Alabama Reorganization Agreement
and the Nevada Reorganization Agreement.
"St. Louis Agreement" means the Asset Purchase Agreement of even date
among Charter Communications Entertainment I, LLC, as buyer, and TCI of
Illinois, Inc., TCI Cablevision of Missouri, Inc., St. Louis
Tele-Communications, Inc., TCI Cable Partners of St. Louis, L.P. and TCI TKR of
Central Florida, Inc., as sellers, and TCI Holdings, Inc.
2. Reorganization Agreements. Under the Reorganization Agreements, the
selling entities are to receive Charter Common Stock in exchange for the Assets
to be transferred pursuant to the Reorganization Agreements. Notwithstanding
such agreements, the parties agree that if a
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Charter Common Stock Offering is consummated during the period from the date of
this Agreement through Closing under one or both of the Reorganization
Agreements, then the following will apply:
(a) If a Charter Common Stock Offering occurs prior to the Closing
under the Nevada Reorganization Agreement, then the Nevada
Reorganization Agreement will be deemed amended to provide that CCI
will deliver at Closing cash in amount equal to the amount of the
Purchase Price thereunder or the Dedicated Sale Proceeds, whichever is
less, and the number of shares of Common Charter Stock shall be reduced
by an amount equal to the amount of cash so delivered, divided by the
Charter Class A Per Share Value.
(b) If a Charter Common Stock Offering occurs prior to the Closings
under both Reorganization Agreements, and if the amount of Dedicated
Sale Proceeds exceed $349,800,000 (such excess being referred to as the
"Excess Dedicated Sale Proceeds"), then in addition to the use of cash
in lieu of Charter Common Stock referred to in clause (a) above, the
Alabama Reorganization Agreement will be deemed amended to provide that
CCI will deliver at Closing cash in an amount equal to the amount of
the Purchase Price thereunder or the Excess Dedicated Sale Proceeds,
whichever is less, and the number of shares of Common Charter Stock
shall be reduced by an amount equal to the amount of cash so delivered,
divided by the Charter Class A Per Share Value.
(c) If a Charter Common Stock Offering occurs prior to the Closing
under the Alabama Reorganization Agreement but after the Closing under
the Nevada Reorganization, then the Alabama Reorganization Agreement
will be deemed amended to provide that CCI will deliver at Closing cash
in an amount equal to the amount of the Purchase Price thereunder or
the Dedicated Sale Proceeds, whichever is less, and the number of
shares of Common Charter Stock shall be reduced by an amount equal to
the amount of cash so delivered, divided by the Charter Class A Per
Share Value.
(d) Each party to the Reorganization Agreements will use commercially
reasonable efforts to satisfy, or to cause to be satisfied, the
conditions to the obligations of the other parties thereunder to
consummate the transactions contemplated thereby as soon as
practicable.
(e) The "Maximum Per Share Value" under each Reorganization Agreement
is $25.02045. The "Minimum Per Share Value" under each Reorganization
Agreement is $20.47128.
(f) The parties will use commercially reasonable efforts to amend the
applicable Reorganization Agreement to give effect to the provisions of
this Section 2 and Sections 3 and 4, as applicable.
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3. Allocations of Consideration.
(a) If a Charter Common Stock Offering occurs prior to the Closing
under one or both Reorganization Agreements and cash in lieu of Charter
Common Stock is delivered to Seller pursuant to Section 2 above, and if
the purchase, sale and reorganization transaction contemplated by
either or both Reorganization Agreements fail to qualify as a
reorganization under the provisions of Section 368(a) of the Code and
the rules and regulations promulgated thereunder, then (i) the Share
Consideration, if any, the Cash and the Assumed Obligations and
Liabilities, each in the amount as determined under the Nevada
Reorganization Agreement and Section 2 above (the "Nevada Purchase
Consideration") and/or (ii) the Share Consideration, if any, the Cash
and the Assumed Obligations and Liabilities, each in the amount
determined under the Alabama Reorganization Agreement and Section 2
above (the "Alabama Purchase Consideration") will be allocated by Buyer
and Seller separately among the Assets acquired pursuant to the Nevada
Reorganization Agreement and the Assets acquired pursuant to the
Alabama Reorganization Agreement in each case as set forth in Section
3(b) below (with "Purchase Consideration" as used in the Section 3(b)
below to refer to either the Nevada Purchase Consideration and/or the
Alabama Purchase Consideration, as the case may be).
(b) No later than 120 days after Closing, Buyer will deliver to Seller
a written estimate of the allocation of the Purchase Consideration and
the Assumed Obligations and Liabilities among the Assets, as such
Assets existed immediately prior to the Closing Time. The parties will
use reasonable good faith efforts to agree on the final allocation of
the Purchase Price and the Assumed Obligations and Liabilities among
the Assets within 60 days after delivery of Buyer's estimate of such
allocation (the "Final Allocation"). In determining the Final
Allocation, the Purchase Consideration will be allocated between the
tangible assets and the Franchises acquired by Buyer by allocating to
the tangible assets amounts equal to the book value of such tangible
assets on the Closing Date and the remainder to the Franchises.
(c) Each Seller and Buyer will timely file any forms required to be
filed under Section 1060 of the Code and any corresponding provision of
state or local tax law. In addition, Seller and Buyer each agree (i) to
file all Tax returns and determine all Taxes (including, without
limitation, for purposes of Section 1060 of the Code) in accordance
with and based upon the Final Allocation and (ii) not to take any
position inconsistent with such Final Allocation in any audit or
judicial or administrative proceeding or otherwise; provided however,
Seller and Buyer will not be required to take a position on their tax
returns that is not supported by "substantial authority" as defined in
Section 6662 of the Code and the regulations related thereto (and if a
party is taking a different position on a tax return based on the
preceding proviso, it will give the other at least 30 days' notice
prior to filing such return).
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4. Reorganization Agreement Representations, Warranties and Covenants.
(a) If a Charter Common Stock Offering occurs prior to the Closing
under one or both Reorganization Agreements and cash in lieu of Charter
Common Stock is delivered to Seller pursuant to Section 2 above, and if
the purchase, sale and reorganization transaction contemplated by
either or both Reorganization Agreements fails to qualify as a
reorganization under the provisions of Section 368(a) of the Code and
the rules and regulations promulgated thereunder, then, with respect to
each Reorganization Agreement which so fails to qualify:
(i) the following provisions shall have no force or effect:
Sections 4.21, 5.11, 6.32 and 6.33 and the last sentence of
Section 4.14; and
(ii) notwithstanding the provisions of such Reorganization
Agreement requiring Buyer thereunder to pay certain amounts to
Seller in shares of Charter Common Stock, including
adjustments and indemnification claims, all payments required
to be made thereunder will be made in cash.
(b) If a Charter Common Stock Offering occurs prior to the Closing
under one or both Reorganization Agreements and cash in lieu of Charter
Common Stock is delivered to Seller pursuant to Section 2 above such
that no Charter Common Stock will be delivered under either or both
Reorganization Agreements, then, with respect to each such
Reorganization Agreement, the following provisions shall have no force
or effect: Sections: 4.19, 5.9, 5.10, 6.30 and 6.34.
(c) Notwithstanding the provisions of the Reorganization Agreements, in
no event shall any of the Charter Entities be deemed to have breached
Section 5.11 or 6.33 as a result of any action required or permitted to
be taken by them pursuant to this Agreement.
5. Timing of Transactions.
(a) The Charter Entities will not be obligated to consummate the
transactions contemplated by the Alabama Reorganization Agreement and
the Alabama Purchase Agreement (the "Alabama Agreements") until all the
conditions to the Charter Entities' obligation to consummate the First
St. Louis Closing (as defined below) are met or waived or the closing
of all of the transactions pursuant to the St. Louis Agreement (the
"St. Louis Closing") or the First St. Louis Closing is occurring
simultaneously. The AT&T Entities will not be obligated to consummate
the transactions contemplated by the St. Louis Agreement until all the
conditions to the AT&T Entities' obligation to consummate the Alabama
Agreements are met or waived or the closings pursuant to the Alabama
Agreements are occurring simultaneously with the St. Louis Closing or
First St. Louis Closing. The closing of
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the Alabama Agreements will not occur unless they occur simultaneously.
The closing of the Nevada Reorganization Agreement and the Nevada
Purchase Agreement will not occur unless they occur simultaneously.
(b) The AT&T Entities will not be obligated to consummate the
transactions contemplated by the Florida Agreement (the "Florida
Closing") until all the conditions to AT&T's obligation to consummate
the St. Louis Closing are met or waived or the St. Louis Closing is
occurring simultaneously or the First St. Louis Closing has already
occurred. Between the date of this Agreement and such closing, the AT&T
Entities and the Charter Entities will negotiate in good faith to
prepare a schedule ("Schedule 1") which will match up the assets to be
transferred under the Florida Agreement (the "Florida Assets") against
the assets to be transferred under the St. Louis Agreement owned by TCI
Cable Partners of St. Louis, L.P., and TCI Cablevision of Missouri,
Inc. (the "St. Louis Assets"), in a way that is tax efficient pursuant
to Section 1031 of the Code. The portion of the St. Louis Assets making
up the matched up assets (the "AT&T Matching Assets") will be listed on
Schedule 1 with their Purchase Price values and, separately, the
remaining St. Louis Assets (the "AT&T Unmatched Assets") will also be
listed on Schedule 1 with their Purchase Price values. The AT&T
Matching Assets shall include a cushion reasonably necessary, but as
small as practical, to ensure that there are sufficient assets in all
like-type and -kind categories to ensure a tax efficient matchup of
assets pursuant to Section 1031 of the Code; provided that the value of
the aggregate AT&T Matching Assets (such value, the "Matchup Holdback
Amount") (which value shall be determined based on the proportionate
share of the aggregate purchase price under the St. Louis Agreement
attributable to the AT&T Matching Assets) shall be at least equal to
the unadjusted purchase price pursuant to the Florida Agreement and
shall not exceed $299 million.
(c) If the conditions to the Florida Closing and the St. Louis Closing
(other than those conditions to be satisfied or waived at closing) have
been or will be met or waived by June 30, 2001, then the closing of
both transactions will occur pursuant to Section 6 below on the sooner
of (i) the date three days after all the conditions to closing both
transactions are met or waived; and (ii) June 30, 2001. If the
conditions to the St. Louis Closing (other than those conditions to be
satisfied or waived at closing) are or will be met or waived by June
30, 2001, but the conditions to the Florida Closing are not met by such
date, then the St. Louis Closing will occur on June 30, 2001 pursuant
to Sections 7 and 8 below.
(d) If the Florida Closing and the St. Louis Closing have not occurred
by June 30, 2001, then, subject to the termination dates contained in
the Florida Agreement and the St. Louis Agreement, the St. Louis
Closing will occur three days after all the conditions to the St. Louis
Closing (other than those conditions to be satisfied or
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waived at closing) are met or waived. If all the conditions to the
Florida Agreement (other than those conditions to be satisfied or
waived at closing) are met at that time the closings will occur
pursuant to Section 6 below and if the conditions to the Florida
Closing are not met at such time the closings will occur pursuant to
Sections 7 and 8 below.
6. Simultaneous St. Louis and Florida Closings. If the St. Louis
Closing and the Florida Closing occur pursuant to this Section 6, then: (i) the
St. Louis Closing and the Florida Closing will occur simultaneously; (ii) the
cash consideration that the AT&T Entities are entitled to receive and that the
Charter Entities are obligated to pay as the purchase price (as preliminarily
adjusted as of the St. Louis Closing, the "St. Louis Purchase Price") for the
St. Louis Assets, will be reduced by the amount of the purchase price (as
preliminarily adjusted as of the Florida Closing, the "Florida Purchase Price")
the AT&T Entities are obligated to pay for the Florida Assets and the AT&T
Entities will not be obligated to pay the Florida Purchase Price. All subsequent
adjustments with respect to the purchase price for the Florida Assets and the
St. Louis Assets shall be paid in cash by the appropriate Charter Entities or
AT&T Entities pursuant to the terms of the St. Louis Agreement and the Florida
Agreement.
7. St. Louis Closing Prior to the Florida Closing. If the St. Louis
Closing occurs pursuant to this Section 7, then the following (the "First St.
Louis Closing") will occur:
(a) The assets identified on Schedule 1 as the "AT&T Unmatched Assets"
will be transferred to the Charter Entities pursuant to the terms of
the St. Louis Agreement and Section 6.3 of the St. Louis Agreement will
be applicable with respect to all of the System Employees, as defined
therein;
(b) The assets described on Schedule 1 as the AT&T Matching Assets will
not be transferred;
(c) The St. Louis Purchase Price, as adjusted for all the St. Louis
Assets (including the AT&T Matching Assets), will be reduced by the
Matchup Holdback Amount;
(d) All subsequent adjustments with respect to the purchase price for
the St. Louis Assets (including the AT&T Matching Assets) shall be paid
in cash by the appropriate AT&T Entities or Charter Entities pursuant
to the terms of the St. Louis Agreement; and
(e) The Charter Entities will manage the AT&T Matching Assets pursuant
to a management agreement to be entered into at the First St. Louis
Closing (the "Special Management Agreement") which will provide that:
(i) The Charter Entities will receive a fixed management fee equal to
5% of the net cash flow (gross revenues less direct expenses, excluding
capital expenditures) ("Net Cash Flow") generated by the AT&T Matching
Assets during the term of the Special Management Agreement (the
"Special Management Fee"); (ii) The AT&T Entities will receive the Net
Cash Flow
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generated by the AT&T Matching Assets during the term of the Management
Agreement; (iii) the AT&T Entities will reimburse the Charter Entities
for the direct expenses incurred by the Charter Entities in connection
with the management of the AT&T Matching Assets, as incurred; (iv) the
AT&T Entities shall reimburse the Charter Entities for the amount of
capital expenditures (including maintenance, capital and inventory)
made by the Charter Entities with respect to the AT&T Matching Assets
as incurred, provided that in no event shall the amount reimbursed for
such capital expenditures exceed an amount equal to the Net Cash Flow
minus the Special Management Fee; and (v) The AT&T Entities will bear
all risk of loss (other than loss caused by the Charter Entities'
management of the AT&T Matching Assets) with respect to the AT&T
Matching Assets during the term of the Special Management Agreement.
The Special Management Fee shall be payable annually, or if earlier,
upon termination of the Special Management Agreement. The date on which
the St. Louis closing occurs pursuant to Section 6 or the First St.
Louis Closing occurs pursuant to Section 7 shall be referred to as the
"St. Louis Closing Date".
8. Second Closing. If the First St. Louis Closing occurs pursuant to
Section 7, then, upon all conditions to the Florida Closing being met (other
than those conditions to be satisfied or waived at closing), the following (the
"Second St. Louis Closing") will occur, subject to the Charter Entities'
condition to closing that there has been no Material Adverse Effect (as defined
in the St. Louis Agreement) with respect to the AT&T Matching Assets:
(a) The Florida Assets will be transferred to the AT&T Entities
pursuant to the Florida Agreement and Schedule 1;
(b) The AT&T Matching Assets will be transferred to the Charter
Entities pursuant to the St. Louis Agreement and Schedule 1;
(c) The Charter Entities shall pay to the AT&T Entities an amount in
cash equal to (i) the Matchup Holdback Amount, minus (ii) the Florida
Purchase Price (provided, if such amount is negative, the amount shall
be paid by the AT&T Entities to the Charter Entities);
(d) No adjustments will be made under the St. Louis Agreement with
respect to the AT&T Matching Assets;
(e) The Special Management Agreement will terminate;
(f) The Charter Entities shall pay to the AT&T Entities an amount in
cash equal to the amount of interest calculated at 7% per annum on a
principal sum equal to the Matchup Holdback Amount, compounded daily
from the time of the First St. Louis Closing until the Second St. Louis
Closing; and
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(g) All subsequent adjustments with respect to the purchase price for
the Florida Assets shall be paid in cash by the appropriate Charter
Entities or AT&T Entities pursuant to the terms of the Florida
Agreement.
9. Failure of Florida Closing to Occur. If the First St. Louis Closing
has occurred and the conditions to the Florida Closing are not met by the date
which is one year from the date hereof, or, if prior to such date, the Florida
Agreement is terminated pursuant to its terms, then: (i) the Charter Entities
will pay the AT&T Entities the Matchup Holdback Amount plus interest thereon
calculated at 7% per annum compounded daily from the time of the First St. Louis
Closing until the date of such payment; (ii) The AT&T Entities will transfer the
AT&T Matching Assets to the Charter Entities; and (iii) The Special Management
Agreement will terminate.
10. Material Adverse Effect. If there is an event which has a Material
Adverse Effect, as defined in the St. Louis Agreement, on the AT&T Matching
Assets that is not caused by the management of the AT&T Matching Assets by the
Charter Entities, between the time of the First St. Louis Closing and the time
all the conditions to the Florida Closing are met, the Charter Entities will not
be obligated to close on the AT&T Matching Assets and the parties will negotiate
in good faith to determine how to proceed.
11. Section 1031 Intent and Mechanics with respect to Florida and St.
Louis Assets. The exchanges of assets pursuant Sections 6, 7 and 8 are intended
to qualify, to the extent reasonably possible as a tax free exchange of
like-kind assets under Section 1031 of the Code (the "Exchanges"). The AT&T
Entities and the Charter Entities agree to use all reasonable efforts to
structure the Exchanges in such a way that to the extent reasonably possible it
will be a tax free exchange of like-kind assets under Section 1031 of the Code,
including either Party's assignment of its rights under this Agreement to a
"qualified intermediary" engaged by such Party to effectuate a deferred
like-kind exchange under Section 1031 of the Code.
(a) Method of Exchange. The Exchange described in Sections 6, 7 and 8
is to occur as follows: (i) the AT&T tangible personal property and the
Charter tangible personal property are being exchanged each for the
other; (ii) AT&T's Real Property (as defined in the St. Louis
Agreement) included in the AT&T Matching Assets and Charter's Real
Property (as defined in the Florida Agreement) are being exchanged each
for the other; and (iii) AT&T's Contracts, Franchises, Licenses and
Intangibles (each as defined in the St. Louis Agreement) included in
the AT&T Matching Assets and Charter's Contracts, Franchises, Licenses
and Intangibles (each as defined in the Florida Agreement) are being
exchanged each for the other. In each case, the assets described in
this Section 9(a) shall be exchanged each for the other in "Exchange
Groups" as defined under Treasury Regulations Sections 1.1031(a)-2 and
1.1031(j)-1, and in each case to the maximum extent permitted by
Section 1031 of the Code and the regulations promulgated thereunder.
Liabilities assumed or taken subject to by
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each party are being exchanged each for the other to the maximum extent
permitted under Section 1031 of the Code and regulations thereunder.
(b) Calculation of Gross Values. For the purposes of this Agreement,
the gross value of AT&T's Assets (as defined in the St. Louis
Agreement) comprising the Systems (as defined in the St. Louis
Agreement) included in the AT&T Matching Assets in each AT&T Entity
shall be as set forth on Schedule 1 (each, an "AT&T System Value") and
the gross value of Charter's Assets (as defined in the Florida
Agreement) comprising the Systems (as defined in the Florida Agreement)
transferred to each AT&T Entity shall be as set forth on Schedule 2
(each, a "Charter System Value").
(c) Allocation of Value. Following Closing, the Parties shall use
reasonable good faith efforts to agree on the value to be allocated to
the tangible personal property and real property included in the Assets
pursuant to Treasury Regulations relating to like-kind exchanges of
multiple assets under Section 1031 of the Code. In the event the
Parties fail, within 90 days after Closing, to reach agreement on the
allocation of value, then the Parties shall hire an appraiser (the
"Appraiser") to prepare with respect to this Agreement, not later than
120 days after Closing, a written report regarding the value to be
allocated to the tangible personal property and real property included
in the Assets pursuant to Treasury Regulations relating to like-kind
exchanges of multiple assets under Section 1031 of the Code. The fees
of the Appraiser will be split equally between the Parties. The Parties
agree that for purposes of Sections 1031 and 1060 of the Code and the
regulations thereunder, each will report the transactions contemplated
by this Agreement in accordance with the values determined by this
Section 9(c). 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.
(d) Retained Franchises. If there are any "Retained Franchises" as
defined in the St. Louis Agreement and the Florida Agreement which are
part of the AT&T Matching Assets or the Florida Assets, after either
the First St. Louis Closing or the Second St. Louis Closing then the
Parties will work together in good faith to identify and hold back
corresponding assets so as to fully utilize the benefits of Section
1031 of the Code consistent with Section 6.5.4 of the St. Louis
Agreement and the Section 6.5.4 Florida Agreement.
12. TCG. The Charter Entities will not be required to consummate the
St. Louis Closing unless they shall have received written confirmation, in form
and substance reasonably acceptable to the Charter Entities, from Teleport
Communications Group Inc. ("TCG") that:
(a) Notwithstanding Section 1(a) of each of the agreements with TCG set
forth on Schedule 4.6.XI of the St. Louis Agreement (collectively, the
"ARFA Agreements"),
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the indefeasible rights to use granted to TCG under each of the ARFA
Agreements shall not extend to any assets, rights or properties other
than those facilities set forth in previously scheduled buildouts
pursuant to the ARFA Agreements (which schedules have been, or within
30 days after the date of this Agreement will be, provided by the AT&T
Entities to the Charter Entities ) or those schedules entered into
prior to the St. Louis Closing Date in accordance with Section 6.31 of
the St. Louis Agreement (such Facilities, the "Specified Facilities").
The buildout of all Specified Facilities shall be complete prior to the
St. Louis Closing Date, and Grantor shall not be required to perform
any additional buildout with respect to the Specified Facilities;
provided that the buildout of the Specified Facilities set forth on
Schedule 2 attached hereto may be completed after the St. Louis Closing
Date provided that the AT&T Entities will be responsible for all costs
associated with such buildouts.
(b) The Charter Entities shall not be subject to any obligations set
forth in Section 1(b) or Section 8 of the ARFA Agreements, including
any obligations pursuant to such sections to provide information,
perform buildouts or allow overlashing after the Closing Date;
(c) The Charter Entities' obligations pursuant to clause (ii) of
Section 24 of the ARFA Agreements shall be limited to the requirement
to negotiate in good faith; and the Charter Entities' obligations
pursuant to clause (iii) of Section 24 of the ARFA Agreements shall be
limited to utilizing commercially reasonable efforts;
(d) The obligations set forth in Sections 25 and 26 of the ARFA
Agreements shall apply only to the extent that they relate to the
Specified Facilities;
(e) Section 30(c) of each of the ARFA Agreements shall be amended and
restated to read in its entirety as follows:
"(c) Governing Law and Binding Effect. This Agreement shall be
governed by and construed and enforced in accordance with the law
(other than the law governing conflicts of law questions) and decisions
of the State of New York applicable to contracts made and to be
performed entirely therein. This Agreement shall bind and inure to the
benefit of each of the parties and their successors and permitted
assigns (including any successors and assigns to any Grantor System
related to the Specified Facilities, or portion thereof), and Grantor
shall assign its rights, privileges and obligations under this
Agreement to any purchaser, operator or other transferee of any portion
of any System related to the Specified Facilities, with prior written
notice to Grantee."; and
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(f) The provisions set forth in clauses (a) through (e) above shall
inure to the benefit of all transferees, successors or assigns of the
Charter Entities and any subsequent operators.
(g) Notwithstanding anything in the St. Louis Agreement to the
contrary, Section 6.30 of the St. Louis Agreement is hereby amended to
add the following provision to the end of such Section:
"Notwithstanding the foregoing, nothing in this Section 6.30
shall affect assets owned or primarily used by TCG (but
excluding any assets owned by Seller or its Affiliates) to
support the Telephony Business or obligate TCG to provide
services to Buyer."
(h) Notwithstanding anything in the St. Louis Agreement to the
contrary, Section 6.31 of the St. Louis Agreement is hereby amended and
restated to read as follows:
"6.31. Additional TCG Obligations. Prior to the
Closing Date, Seller will not agree to build additional
facilities for TCG or permit TCG to overlash or interconnect
with the Systems (and Seller shall cause TCG not to do any of
the foregoing) pursuant to the Amended and Restated Facilities
Agreements between Sellers and TCG and their Affiliates
referenced in Schedule 4.6.XI hereto (the "ARFAs") without the
consent of Buyer, in its sole discretion."
13. Telephony.
(a) In order to facilitate discussions with respect to the potential
continuation by the Charter Entities of the AT&T Entities' local
exchange telephony business in the Service Areas described in the St.
Louis Agreement ("Telephony Business") following the First St. Louis
Closing, the AT&T Entities shall, within 30 days after the date of this
Agreement, deliver to the Charter Entities worksheets setting forth the
AT&T Entities' projections with respect to the potential operation of
the Telephony Business in the Systems following the First St. Louis
Closing. If the AT&T Entities and the Charter Entities are not able to
reach agreement on the transfer of the Telephony Business pursuant to
Section 6.30 of the St. Louis Agreement, then the AT&T Entities may, at
their option, (i) elect on or before the Closing Date to continue to
operate the Telephony Business for no more than 24 months following the
First St. Louis Closing, or (ii) if no such election is made, within
the 60-day period following the First St. Louis Closing and subject to
applicable Legal Requirements, cease the operations of the Telephony
Business.
(b) If the AT&T Entities elect to continue to operate the Telephony
Business under Section 13(a)(i), the Charter Entities will reasonably
cooperate with the AT&T
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Entities, at the AT&T Entities' expense, including the provision of
technical support and the lease, on reasonable business terms, of the
Charter Entities' facilities. In addition, and in such event, the
parties will enter into a mutually acceptable co-branding agreement
under which they will jointly brand and market the Telephony Business.
(c) The Charter Entities shall further reasonably cooperate with the
AT&T Entities in connection with the termination of the Telephony
Business, whether at the conclusion of the AT&T Entities' operations
under Section 13(a)(i) or as contemplated in Section 13(a)(ii). In
connection with such termination of the Telephony Business, the AT&T
Entities, on the one hand, and the Charter Entities, on the other,
shall share equally the net out-of-pocket costs incurred by both the
AT&T Entities (not including costs incurred to AT&T Affiliates
including TCG) and the Charter Entities in connection with such
termination (including employee severance costs); provided, however,
that if the AT&T Entities elect to continue the operation of the
Telephony Business under Section 13(a)(i), the Charter Entities' share
of such costs will not exceed their share of such costs had the
Telephony Business been terminated under Section 13(a)(ii), as
reasonably estimated by the parties at the First Closing.
14. Capital Budgets. The capital budgets referenced in Section 3.2.5 of
the Alabama Purchase Agreement, the Nevada Purchase Agreement, the St. Louis
Agreement and the Florida Agreement, and in Section 3.3.5 of each of the
Reorganization Agreements are attached hereto.
15. Agreements Survive. All covenants and agreements set forth in this
Agreement shall survive the closings pursuant to the Acquisition Agreements.
16. Miscellaneous. This Agreement will be governed by, and construed in
accordance with, the laws of the State of Delaware, without regard to principles
of conflicts of law. This Agreement may not be amended except pursuant to an
instrument in writing signed by each party hereto. This Agreement may be
executed in one or more counterparts, each of which will be deemed an original
and all of which will constitute one and the same instrument. This Agreement has
been negotiated by the parties hereto and their respective legal counsel, and
legal or 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 its construction or interpretation.
[SIGNATURE PAGE FOLLOWS]
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The parties are signing this Agreement Regarding Closing Matters as of
the date first written above.
AT&T BROADBAND, LLC
ON BEHALF OF THE AT&T ENTITIES
By /s/ Xxxxxxx Xx Xxxxxx
-------------------------------------
Xxxxxxx Xx Xxxxxx
Authorized Signatory
CHARTER COMMUNICATIONS, INC.
ON BEHALF OF THE CHARTER ENTITIES
By /s/ Xxxxxx X. Xxxx
-------------------------------------
Xxxxxx X. Xxxx
Senior Vice President
