HomeMy WebLinkAboutCharter Communication
Augusta Richmond GA
DOCUMENT NAME: C- hartcv Comrnun(cC/ J-ion S
DOCUMENT TYPE:
YEAR:
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BOX NUMBER: J
FILENUMBEK 19%IOf
NUMBER OF PAGES:
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August 18, 1998
The Honorable Larry Sconyers
Mayor
Auglsta-Richmond County
530 Greene St.
Augusta, GA 30911
/ 3 ~J9
Dear Mayor Sconyers:
Over the past five years, Charter Communications, Inc. and its affiliated entities ("Charter") has
grown to be the 101h largest multiple system operator ("MSO") in the United States. Charter
accomplished this phenomenal growth with the aide' of some trusted and valued partners. Charter
provided the expertise and cable management acumen while our partners, primarily Kelso &
Company and Charterhouse Group International, Inc., provided access to equity and capital.
With the wave of consolidations in the industry, Charter's senior management has been looking at
way~ to consolidate the ownership and control of all of the cable properties managed by Charter
undl~r a single umbrella company. We have recently explored the idea of an IPO (issuing public
stock) to provide the liquidity needed to further grow and expand and may still pursue this option in
the future. As we explored all of our alternatives, we were presented with an option that provided for
consolidation of the entities, access to capital, and a vision which is unsurpassed in the industry.
We are extremely pleased to have been chosen by Paul G. Allen, co-founder of Microsoft, to manage
his cable properties and to help develop and deliver his vision of the 'Wired World." In short, Allen
envisions a connected future marked by the merger of high.bandwidth data channels, the power of
the personal computer and the availability of compelling content.
YOll will be pleased to know that there will be no increase in debt-to-equity ratios of the entities as a
result of this transaction. Mr. Allen will assume the current debt and in many instances liquidate
some debt instruments. Notwithstanding the consumer benefit of this transaction, the effect of this
transaction on you and your subscribers should be transparent for the most part. The current
corporate staff and system management will remain under my leadership. And of course, Charter will
retain its commitment to superior customer service.
In reviewing this, application, you are called upon to determine that the applicant meets the legal,
technical and financial qualifications to own and operate a CATV system. In this instance, legal and
technical qualifications are a non-issue since there is no change in either corporate or system
management. We think you will agree that the financial condition of the company can only be
strengthened by this consolidation and infusion of equity. The men and women of Charter are eager
to focus our energy toward deploying new technology and hope for a speedy transfer process.
Pclul Allen's vision helped bring forth the computer revolution. Just imagine the possibilities when
compelling content, personal computing and high bandwidth data channels combine. The staff at
Charter looks forward to bringing you the 'Wired World."
Sincerely,
~~/~
Jerald L. Kent
President and CEO
12444 Powerscourt Drive - Suite 400 - St Louis, Missouri 63131-3660 - (314)965-0555 - Fax (314)965-6640 -Internet http:\\www.chartercom.com
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TABLE OF CONTENTS
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INTRODUCTION
TAB
SECTION 1 - FCC 394 APPLICATION
Cover Letter ------------------------------------------------------- A
FCC Form 394 ---------------------------------------------------- B
Statement Regarding Completeness --------------------------- C
Statement Regarding Disclosure ------------------------------- D
Charter Communications Contact Person --------------------- E
Statement Regarding LLC --------------------------------------- F
Corporate Tree ---------------------------------------------------- G
Form of Transfer Resolution ------------------------------------ H
SECTION 2 - LEGAL QUALIFICATIONS
Organizational Structure ------------------------------------------ I
Corporate Authority ---------------------------------------------- J
SECTION 3 - FINANCIAL QUALIFICATIONS
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FCC Form 394 - Request for Confidential Treatment ------ K
Statement Regarding Committed Funds ---------------------- L
Forbes Article ---------------------------------------------------- M
* Proj ected Statement of Income --------------------------------- N
*Financial Statements --------------------------------------------- 0
SECTlON 4 - TECHNICAL QUALIFICATIONS
About Paul Allen -----------------------------------______________ P
Management -----------------------------------------------________ Q
Bio~phdes -------------------------------------------------------- R
Franchise Demographics Overview ---------------------------- S
SECTION 5 - PURCHASE AGREEMENT
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· Confidentiality Requested - Documents Submitted Under Seal
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INlRODUCIlON
Thi~i transaction involves the purchase of equity interests and the assumption of
debt which will effectively consolidate all entities currently managed and/or owned by
Charter Communications, Inc. Upon consummation of the pending transaction, along with
a series of related organizational changes, the entities will reside under common control,
ownership and management.
The organizational changes are disclosed and explained herein. One change of
note is tht3 pro forma conversion of all entities which currently 'operate as limited
partnerships into limited -liability companies (LLC).' This change will cause the'name of
the .franchisee ,to ,vary slightly from its currentdesignation. I The ,conversion to LLC will
,occur only after franchise authority 'approval :and .not ,later than 30 days :after closing.
80157.1
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SECTION 1
FCC FORM 394
APPLICATION FOR FRANCHISE AUTHORITY CONSENT
TO ASSIGNMENT OR TRANSFER OF CONTROL OF
CABLE TELEVISION FRANCHISE
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· li""C:HARTER
U COMMUNICA TIONS(!)
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August 21, 1998
The Honorable Lany Sconyers
530 Greene St.
Augusta, GiA 30911
Re: FCC Form 394 - Application For Franchise Authority Consent to Assignment or
Transfer of Control of Cable Television Franchise to
CHPRTER COMMUNICATIONS, LLC
Dear Mayor Sconyers,:
On July29, 1998, Charter Communications, Inc. ("Charter"), Kelso Investment Associates,
V, LP and its affiliates ("Kel so") , and Charterhouse Group Intemational and its affiliates
entered into a Purchase Agreement with Paul G. Allen which provided for the transfer of
control and assignment of those assets which comprise the franchise to operate a CATV
system within your community. M. this time, we respectfully request your consent to
assignment or transfer of control of the cable television franchise, the CATV System, and
the assets thereof as indicated on the attached FCC Form 394. Endosecl please find a
completed FCC Form 394 - Application for Franchise Authority Consent to Assignment
or Transfer of Control of Cable Television Franchise, along with a roodel transfer
ordinance and all required exhibits and documentation.
This FCC Form 394 is being submitted to you in accordance with FCC rules. 47 G.F.R
S76.502. FCC regulations also provide the standard of review upon which the franchising
authority is to judge the request for transfer. In considering this application, it is irTlX'rtant
to understand that the standard of review for a franchise transfer is different from the
standards used to renew a franchise. The substantive issues to be revieVv'ed in the
transfer process involve only whether or not the transferee possesses the legal, technical
and financial qualifications to operate the franchise. Additionally, while the renevval
process ma.y take up to 36 rronths or longer, the request for transfer is deerred granted
if not acted upon by the Franchise authority within 120 days of its submission. Although
the franchiEiing authority may make request(s) for additional infonration, these requests
VvOuld not toll the 120 day period.
p,s indicated in the attached documentation, the current management will remain in place,
and dearly possess the legal and technical qualifications to operate the system. Further,
Mr. Allen will assume the current debt without further borrowing. Indeed in some
instances oertain debt instruments will be eliminated. Therefore, the overall condition of
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the franchi:)8 can only improve after the dose of this transaction. It is our desire to \NOrk
dosely with the franchise authority to expedite the transfer process. We envision that the
process can be completed well within the time prescribed by FCC regulations as it is the
current plan to dose this transaction by year -end.
We look fo.rward to continuing to serve your cable needs, and believe we have provided
suffident information to enable you to make a speedy determination on this application.
If you haVE! any questions conceming the proposed transfer, please feel free to call any
of the individuals listed on the contact sheet. We thank you in advance for your efforts
in this regard.
Very truly yours,
Charter Communications, Inc.
By: Trudi McCollum Foushee
Vice President and Senior Counsel
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Federal Communications Commission
Washington, D.C. 20554
Approved by OMS
3060-0573
FCC 394
APPLICATION FOR FRANCHISE AUTHORITY
CONSENT TO ASSIGNMENT OR TRANSFER OF CONTROL
OF CABLE TELEVISION FRANCHISE
FOR FRANCHISE AUTHORITY USE ONLY
SECTION I. GENI:RAL INFORMATION
I DATE
August 18, 1998
1. Community Unit Identification Number:
GA9999
2. Application for:
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Assignment of Franchise
o Transfer of Control
3. Franchising authority:
AUQusta-Richmond County
4. Identify community where the systemlfranchise that is the subject of the assignment or transfer of control is located:
AUQusta, GA
5. Date system was acquired or (for system's constructed by the transferor/assignor) the date on which
service was provided to the first subscriber in the.franchlse area: .. .... 3/31/96
6. Proposed effectilre date of closing of the transactio!, _assigning or transferring ownership of ~e "
system to transfElree/assignee: 12/24/98
.7.
Attach as an Exh ibit a schedule of any and all additional Information or material filed with this application that is
identified in the franchise as required to be provided to the franchising authority when requesting its approval of
the type of transaction that is the subject of this application.
Exhibit No.
See Tab C
PART I . TRANSFERIJR/ASSIGNOR
1. Indicate the name mailina address and teleohone number of the transferor/assionor.
Legal name of Transfl~ror/Assianor (if Individual, list last name first)
CC II
Assumed name used for doing business (if any)
Charter Communications
Mailing street addreSH or P.O. Box
'12444 Powerscourt Drive, Suite 100
City State ZIP Code Telephone No. (include area code)
S1. Louis Missouri 63131 314-965-0555
2.(a) Attach as an Exhibit a copy of the contract or agreement that provides for the assignment or transfer of control
(including any exhibits or schedules thereto necessary In order to understand the terms thereof). If there is only
an oral agreement, reduce the terms to writing and attach. (Confidential trade, business, pricing, or mar1<eting
information, or other information not otherwise publicly available, may be redacted.)
Exhibit No.
See 95
(b) Does the contract submitted in response to (a) above embody the full and complete agreement between the
transferor/assignor and transferee/assignee?
o Yes ~ No
If No, explain in an Exhibit.
Exhibit No.
See Tab 0
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PART II . TRANSFERI:ElASSIGNEE
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1.(a) Indicate the na l1e mailina address, and teleohone number of the transferee/assianee
Legal name of Transferee/Assignee (if individual, list last name first)
Charter Communications, LLC
Assumed name used for doing business (if any)
Charter Communications
Mailing street address or P.O. Box
1 :2444 Powerscourt Drive, Suite 100
City State ZIP Code Telephone No. (indude area code)
St. Louis Missouri 63131 314-965-0555
(bl Indicate the name. mailina address and teleohone number of the oerson to contact if other than the transferee/assianee.
Name of contact perse1n (list last name first)
See & 1, Tab E
Firm or company na/TIl~ (if any)
Mailing street address or P.O. Box
City State ZIP Code Telephone No. (Indude area code)
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(c) Attach as an EKhibit the name, mailing address, and telephone number of each additional person
who should be contacted, if any.
Exhibit No.
See Tab E
(d) Indicate the address where the system's racords will be maintained.
Street address
City
1.2444 Powerscourt Drive, Suite 100
I State
St. Louis MO
I ZIP Code
63131
2.
Indicate on an attached Exhibit any plans to change the current tenns and conditions of service
and operations of the system as a consequence of the transaction for which approval Is sought.
Exhibit No.
N/A
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SECTION II. TRANSFEREE'S1ASSIGNEE'S LEGAL QUALIFICATIONS
e1.
Transferee/Assignee Is:
D Corporation
a. Jurisdiction of Incorporation: d. Name and address of registered agent In
Jurisdiction
:
b. Date of Incorporation:
c. For profit or non-for-proflt:
D >L-Imlted.Partnershlp
a. Jurisdiction In which formed: c. Name and address of registered agent In
Jurisdiction:
b: Date of formation:
D General Partnclrshlp
D Individual
a. Jurisdiction whose laws govern formation:
b. Date of formation:
~ Other - Descrll", In an exhibit
e 2.
Exhibit No.
See Tab F
List the transfnree/asslgnee, and, If the transferee/assignee Is not a natural person, each of Its officers, directors, stockholders
beneficially hoh:tlng more than 5% of the outstanding voting shares, general partners, and limited partners holding an equity Interest of
more than 5%. Use only one column for each Individual or entity. Attach additional pages If necessary. (Read carefully - the lettered
Items below ref,er to corresponding lines In the following table.)
(a) Name, residence, occupation or principal business, and principal place of business. (If other than an Individual, also show name,
address arid citizenship of natural person authorized to vote the voting securities of the applicant that It holds.) List the applicant
first, officers next, then directors and, thereafter, remaining stockholders and/or partners.
(b) Citizenship.
(c) Relationship to the transferee/assignee (e.g., officer, director, etc.)
(d) Number of shares or nature of partnership Interest.
(e) Number of votes.
(f) Percentagll of votes.
(a)
See 91, Tab G
(b)
(c)
(d)
(e)
(f)
e
3.
If the applicant Is a corporation or a limited partnership, Is the transferee/assignee formed under the laws
of, or duly qualified to transact business In, the State or other Jurisdiction In which the system operates?
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If the answer hI No, explain In an Exhibit.
4. Has the transj'eree/asslgnee had any Interest In or In connection with an application which has been
dismissed or (Ienled by any franchise authority?
If the answer 1:1 Yes, describe circumstances In an exhibit
5. lias an adver.le finding been made or an adverse final action been taken by any court or administrative
body with respect to the transferee/assignee In a civil, criminal or administrative proceeding, brought
under the pro\'lslons of any law or regulation related to the following: any felony; revocation, suspension
or Involuntary transfer of any authority (Including cable franchises) to provide video programming
services; malls media related antitrust or unfair competition; fraudulent statements to another
governmental unit; or employment discrimination?
If the answer Is Yes, attach as an Exhibit a full description of the persons and matter(s) Involved,
Including an Identification of any court or administrative body and any proceeding (by dates and file
numbers, if applicable), and the disposition of such proceeding.
6. Are there any documents, Instruments, contracts or understandings relating to ownership or future
ownership rlgllts with respect to any attributable Interest as described In Question 2 (Including, but not
limited to, non-voting stock Interests, beneficial stock ownership Interests, options, warrants,
debentures)?
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If Yes, provide particulars In an exhibit.
7. Do documen'ts, Instruments, agreements or understandings for the pledge of stock of the
transferee/assignee, as security for loans or contractual performance, provide that: (a) voting rights will
remain with the-applicant, even In the event of default on the obligation; (b) In the event of default, there
will be either ~I private or public sale of the stock; and (c) prior to the exercise of any ownership rights by
a purchaser al a sale described In (b), any prior consent of the FCC and/or of the franchising authority, if
required pursuant to federal, state or local law or pursuant to the terms of the franchise agreement will be
obtained?
If No, attach all an Exhibit a full explanation.
SECTION 11I- TRJI,NSFEREE'S/ASSIGNEE'S FINANCIAL QUALIFICATIONS
1. The transfereH/asslgnee certifies that It has sufficient net liquid assets on hand or available from
commmed resources to consummate the transaction and operate the facilities for three months.
2.
Attach as an exhibit the most recent financial statements, prepared In accordance with generally
accepted accounting principles, Including a balance sheet and Income statement for at least one full year,
for the transferee/assignee or parent entity that has been prepared in the ordinary course of business, If
any such fln~,nclal statements are routinely prepared. Such statements, If not otherwise publicly
available, may be marked CONFIDENTIAL and will be maintained as confidential by the franchise authority
and its agents to the extent permissible under local law.
.
~ Ves
D No
Exhibit No.
See 92
DVes
~ No
Exhibit No.
D Ves
~ No
Exhibit No.
N/A
D Ves ~
No
Exhibit No.
N/A
o Ves
~ No
Exhibit No.
N/A
~ Ves
D No
Exhibit No.
See 93
SECTION IV - TRJ'NSFEREE'S/ASSIGNEE'S TECHNICAL QUALIFICATIONS
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Set forth in an Exhibit CI narrative account of the transferee's/assignee's technical qualifications. experience and expertise
regarding cable televis,ion systems, including, but not limited to, summary information about appropriate management
personnel that will be ilwolved in the system's management and operations. The transferee/assignee may, but need not,
list a representative sample of cable systems currently or formerly owned or operated.
Exhibit No.
See 94
SECTION V - CEFlTIFICA TIONS
PART 1 - Transferor/Assignor
All the statements made in the application and attached Exhibits are considered material representations, and all the Exhibits are a material part hereof
and are incorporated herein as if set out in full in the application.
I CERTIFY that the statements in this application are true, complete
and correct to the bE 1st of my knowledge and belief and are made in
good faith.
WILLFUL FALSE BTATEMENTS MADE ON THIS FORM ARE
PUNISHABLE BY FIPlIE AND/OR IMPRISONMENT. U.S. CODE, TITLE
18, SECTION 1001.
August 18, 1998
Print full name
By: Thomas C. Dircks, Vice President
Charterhouse Group International, Inc.
Check appropriate classification:
o Individual
o General Partner
o Corporate Officer
(Indicate Title)
o Other. Explain:
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PART II - Transferee/Assignee
All the statements ma:le in the application and attached Exhibits are considered material representations, and all the Exhibits are a material part hereof
and are incorporated herein as if set out in full in the application.
v. .... 'I '. 'L"-l l." .
The transferee/assign ee certified that he/she: -.. .-
(a) Has a current copy of the FCC's Rules goveming cable television systems.
(b) Has a current copy of the franchise that is the subject of this application, and of any applicable state laws or local ordinances and related
regulations.
(c) Will use its best efforts to comply with the terms of the franchise and applicable state laws or local ordinances and related regulations, and to
effect changes, ciS promptly as practicable, in the operation of the system, if any changes are necessary to cure any violations thereof or defaults
thereunder prese ntiy in effect or ongoing.
I CERTIFY that the s;tatements in this application are true, complete Signature
and correct to the b~st of my knowledge and belief and are made in ;P~~~
good faith.
WILLFUL FALSE STATEMENTS MADE ON THIS FORM ARE Date
PUNISHABLE BY FIIlE AND/OR IMPRISONMENT. U.S. CODE, TITLE August 18, 1998
18, SECTION 1001. Print full name
By: Paul G. Allen
Check appropriate classification:
00 Individual o General Partner o Corporate Officer o Other. Explain:
- (Indicate Title) See Tab F
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f:\ transfer\sonic\394[)ircks.doc
Page 5
September 1996
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STATEMENT REGARDING COMPLETENESS
All additional information or material required to be filed with an application for franchise
'authority consent to assignment or transfer of control of the franchise, if any, is attached
hereto and listed on the table of contents page. In all instances, the transferee/assignee
will assume all current obligations of the existing franchise and continue to provide the
level of service provided for therein.
80172.1
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STATEMENT REGARDING DISCLOSURES
The Purchase Agreement submitted with this application has been redacted. Confidential
trade, bw)iness, pricing and/or marketing information not publicly available and not
necessary in order to understand the terms of this transaction have, pursuant to FCC
rules and regulations, been omitted.
80167.1
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CONTACT PERSONS
REGION
Southern Reqion
Jim Bray, Vice President Operations
139 Hillcrest Drive
Suite 213 & 215
Clarksville, Tennessee 37043
931-906-6641
Facsimile: 931-906-6617
CORPORATE
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Trudi McCollum Foushee
Vice President and Senior Counsel
Charter Communications, Inc.
12444 Powerscourt Drive, Suite 400
St. Louis, Missouri 63131-3660
314-965-0555, Ext. 437
Facsimile: 314-965-6640
E-Mail: tfoushee@chartercom.com
M. James Bogart
Vice President - Government Relations
Charter Communications, Inc.
12444 Powerscourt Drive, Suite 400
St. Louis, Missouri 63131-3660
314-965-0555, Ext. 419
Facsimile: 314-965-6640
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j: \a lie n \394 tra nsfe r\Co ntacts. doc
(1 Sti~~~TT~BTM
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STATEMENT REGARDING LIMITED LIABILITY COMPANY
Under the Delaware Limited Liability Company Act, a business entity organized as a
limited partnership may convert to a limited liability company upon the filing with the
Delaware Secretary of State of the appropriate conversion documentation. The status of
the entity is converted and effective upon filing. Said documentation will be filed with the
Secretary of State immediately following the franchise authorities approval of the transfer
application and in no event later than 30 days after the close of the underlying
transaction.
80165.1
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RESOLUTION NO.
A RESOLUTION GRANTING THE CONSENT OF THE
LOCAL FRANCHISE AUTHORITY (LFA)
TO THE TRANSFER OF CONTROUCONSENT TO
ASSIGNMENT OF THE NON-EXCLUSIVE CABLE
TELEVISION FRANCHISE FROM (TRANSFEROR-SELLER)
TO (TRANSFEREE-BUYER)
WHEREAS, the [LOCAL FRANCHISE AUTHORITY] ("Grantor') granted to
[TRANSFEROR-SELLER] ("Grantee"), a franchise as set forth in Ordinance No.
dated __' 19_; as amended by Ordinance No. _' dated
19_ , and
Resolutioln No.
, dated
, 19_ to own and operate a cable television
system in [LFA] (the "Franchise");
WHEREAS, on July 29, 1998 Grantee entered into a Purchase Agreement (the
"Agreement") with Paul G. Allen ("Applicant" or ''Transferee'');
WHEREAS, the Agreement provides for the sale of stock, the transfer of control
and the rElstructuring of Grantee;
WHEREAS, Grantee filed an FCC Form 394 Application for Franchise Authority
Consent to Assignment or Transfer of Control of Cable Television Franchise with Grantor
on or abolJt
WHlEREAS, Grantor has duly conducted a thorough review and investigation into
the legal, technical and financial qualifications of Applicant and Transferee to own and
operate the cable television system in light of the above-referenced FCC Form 394; and
WH EREAS, all written comments and staff reports have been received, and made
a part of the record; and
80187.1
.
.
.
WHEREAS, following review and investigation, the Grantor has concluded that the
Transfere~e has established that it meets the legal, technical and financial criteria to
operate tile cable television system and has satisfied all criteria set forth in and/or under
all applicable or required (LFA) and federal documents, laws, rules and regulations,
including FCC Form 394.
NOW, THEREFORE, BE IT RESOLVED, that in consideration of the foregoing and
the promises set forth herein, the Grantor agrees to the following:
1. Grantor consents to the restructuring of Grantee and the transfer of
control/consent to assignment of franchise of the cable system serving Grantor effective
upon the closing of the transactions contemplated by the Agreement;
2. Grantor further consents to the change of name or corporate designation
attendant with the restructuring of Grantee, if any, as set forth within the FCC Form 394;
3. Grantor confirms that (a) the Franchise is valid and outstanding and in full force
and effect; (b) there have been no amendments or modifications to the Franchise, except
as set forth herein; (c) Grantee is materially in compliance with the provisions of the
Franchise: and (d) there are no defaults under the Franchise, or events which, with the
giving of notice or passage of time or both, could constitute events of default thereunder.
3. Upon acceptance of this Resolution and the Franchise, by signing below
TransfereE~ may (a) assign or transfer its assets, including the Franchise provided
however, that such assignment or transfer is to a parent or subsidiary of Transferee or
another entity under direct or indirect control of Paul Allen; (b) restructure debt or change
the ownership interests among existing equity participants in Transferee, and/or its
80187.1
2
.
.
.
affiliates; (c) pledge or grant a security interest to any lender(s) of Transferee's assets,
including but not limited to the Franchise, or of interests in Transferee, for purposes of
securing an indebtedness, without obtaining prior consent of Grantor; (d) sell capital stock
of Transferee, or any of Transferee's affiliated companies, in a transaction commonly
known a!; an "initial public offering" provided that: Transferee represents in writing to
Grantor that such transaction will have no foreseeable effect on the agreement between
Grantee ;and Transferee relating to the management and operation of the cable system
in the franchise service area.
4. This Resolution shall take effect immediately.
Duly adopted this _ day of _ 1998, by the Grantor.
BY:
Administrator
ATTEST:
BY:
(TOWN SEAL)
WE COI~SENT TO AND ACCEPT THE TERMS AND CONDITIONS OF THIS
RESOLUTION.
DATE OF ACCEPTANCE:
(TRANSFEREE)
BY:
ATTEST::
80187.1
3
.
SECTION 2
LEGAL QUALIFICATIONS
.
.
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CERTIFIED COPIES
Alabama
Charter Communications III, L.P.
Charter Communications, L.P.
California
Long Beach Acquisition Corp.
Charter Communications Entertainment II, L.P.
Charter Communications Properties, LLC
Colorado
Charter Communications Properties, LLC
ConnecticL!t
Charter Communications Entertainment I, L.P.
Delaware
Charter Communications, L.P.
Charter Communications II, L.P.
Charter Communications III. L.P.
Charter Communications Properties, LLC
Long Beach Acquisition Corp.
CCT Holdings, LLC
CCA Acquisition, LLC
Charter Communications Entertainment II, LP
Long Beach, LLC
Charter Communications Properties Holdings, LLC
Charter Communications Long Beach, LLC
Chartercomm Properties, LLC
Charter Communications Services, LLC
Charter Communications Entertainment I, L.P.
Cencom Ca.ble Entertainment, LLC
CCA Holdings, LLC
Charter Communications, Inc.
80169.1
Available Upon Request
e Georgia
PeachtreE! Cable TV, Inc.
Charter Communications, L.P.
Charter CDmmunications Properties, LLC
Charter Communications II, L.P.
Illinois
Charter Communications Entertainment I, L.P.
Kansas
Charter Communications Properties, LLC
Kentucky
Charter Communications II, L.P.
Louisiana
Charter Communications, L.P.
. Massachu~
Charter Communications Entertainment I, L.P.
Mississippi
Charter Communications, L.P.
Missouri
Charter Communications, Inc.
Charter Communications Entertainment I, L.P.
Montana
Charter Communications Properties, LLC
Nevada
Peachtree Cable TV, Inc.
.
80169.1 2
It
e
.
New Hampshire
Charter Communications Entertainment I, L.P.
North Carolina
Charter Communications II, L.P.
Charter Communications Properties, LLC
South Carcllina
Charter Communications II, L.P.
Charter Communications Properties, LLC
Tennessee
Charter Communications, L.P.
Charter Communications II, L.P.
.umh
Charter Communications Properties, LLC
80169.1
3
.
SECTION 3
FINANCIAL QUALIFICATIONS
.
.
.
.
.
Il1 ~~tt~,,~TT~~'
August 21, 1998
The Honorable Larry Sconyers
530 Greene St.
Augusta, CiA 30911
Re: FCC Form 394- Request for Confidential Treatment
Dear rv1ayor Sconyers,
In an effort to make this application as complete as possible, we are induding certain
highly sensitive and confidential trade, business and financial data. We respectfully
ask that you help maintain its confidentiality. Therefore, we are seeking the rraximum
possible protection for certain highly sensitive business trade and financial information
being submitted under seal herewith. If, for any reason the form of the current request
does not o::>rnport with your state or local standards or you are unable to accord these
documents confidential treatment, we ask that you retum the sealed documents. We
will take your retention of these documents as your agreement to treat them as
confidential.
Please not,s that we do not consent to disclosure of any information for which
confidentially is daimed to any person other than those public employees (induding
consultants and other agents) who have a specific need to review it in connection with
the franchise transfer application. The information is submitted on the explicit
understanding that we (1) do not relinquish its privacy interests and its propriety
interests in such material and (2) is relying on the franchising authority to protect the
confidentiality of such information to the rraximum extent possible under the law.
We are also requesting that the franchising authority commit to protecting the
confidentiality of the financial information in the following specific ways:
· By committing to restrict dissemination of the information to those public
employees 000 have a need to review it.
.
By committing to protect the information from public disclosure to the rraximum
extent possible under the law.
80090. J
.
.
.
.
By committing to inform us immediately if a request for public disclosure is
received, to allow us at least five business days to review the request and
attempt to negotiate a mutually agreeable disclosure arrangement with the
requester or to seek judicial review.
· By supporting us in any legal action, we may take (a) to oppose an injunction
requiring disdosure or (b) to seek an injunction forbidding disclosure of the
infolmation.
We appredate your attention to this matter and thank you in advance for your
cooperation in this regard.
Respectfully submitted,
Charter Communications, Inc.
i McCollum Foushee
esident and Senior Counsel
80090.1
.
.
.
~
YR~~~m
-,
VULCAN NORTHWEST INC.
110 110th Avenue Northeast
Suite 550
BeUevue, Washington 98004
Tel: 425.453.1940
Fax: 425.453.1985
August :l8, 1998
To those listed on the attached mailing list:
Dear Ladies and Gentlemen:
In connection with my pending acquisition of Cltarter Communications and its affiliated
entities, 1 intend to pay the entire purchase price ont of personal liquid assets, which I have
available and which I have committed for that pwpose.
Very truly yours,
Xd? 6 d~~
Paul G. Allen
98LET\0iAF~TER.l.DOC
.
.
:::;.~'<Z'l:t:.;.--..-~-, :---:-r'~~_ l-:'''J.....
WILuAM HEN'RY':'!, ;;:.'
GATES III
Net worth: $51 bllllorl
One of FORBES' top t-:n
entrepreneurs.
See page 190.
wAiTONFAMlLy:~3-~
Net worth: $48 billion
Widow, children ofWaJ-
Mart founder Sam
Walton. Rural discollilt
stores of 1960s now
largest U.S. retailc:r, with
salcs of $118 billion.
Expansion abroad start-
ing to payoff: interna..
tional profits now $262
million, up from $24
million in fiscal 1997.
Sam's eldest son, S.
Robson, Wal-Mart
chairman.
.
r.--:--.~:-...,....---,.~...~
WARREN E.'BUFFETTi~.:
Net worth: $33 billion
Those who try to glean
investment advice by
watching the way Buf-
fett, 67, steerS Berkshire
Hathaway have been
getting mixed messages.
Usually shuns bonds;
last year went long on
U.S. Treasurys. Picked
up International Dairy
Queen and 129.7 mil-
lion ounces of silver,
unloaded big chunks of
US Airways and
McDonald's. Probably
selling stocks on bal-
ance; could sell up to $5
billion in stocks and
bonds in 1998.
f"I'~':tr:'T'~ .1:::):'-:..:1:.:;.... -.'
PAUL ALLEN . - -
Net worth: $21 billion
Cofounder of Microsoft.
The 45-year-old using
his fortune for seeming-
ly far-out investments in
pursuit of his "wired
world." Latest bet: $2.8
billion for Marcus
Cable, the country's
tenth-largest cable oper-
ator. Big investments in
wireless networking
company Metricom,
U.S. Satellite Broadcast-
ing, DrcamWorks SKG.
r. ..'1.....-;;.......:-::.1:"""_ "-, -~.
JAY AND ROBERT "
PRITZKER
Net worth: $13.5 billion
Chicago brothers hired
a high-profile M&A
expert from investment
bank Lazard Freres last
year to help spend a bil-
lion on acquisitions. Jay,
75, and Robert, 71, stay
busy with their industri-
al conglomerate, which
includes a chewing
tobacco company and
Hyatt hotels.
i"~~~~:r_'-~-a-:(!?::~"":
FORREST EDWARD""";:'
MARS SR. AND FAMILY
Net worth: $13.5 billion
Father, three children
own supersecretive
candymaker Mars, Inc.
(M&.\IS, Snickers, Milky
Way). Also pet food
(Whiskas, KaI-Kan),
prepared food (Uncle
Ben's Rice).
[''''-''' -, ,'" -..
STEVEN A. BAUMER
Net worth: $10.7 billion
Bill Gates' alter ego, the
abrasive "General
Patton," 42, driving the
business side of
Microsoft. Seems to
have softened his tone as
arititrust lawsuits by the
Justice Department and
several state attorneys
general threaten to
blunt company's aggres-
sive ambitions.
r ;..-' ':. '. --: " .
MICHAEL DELL
Net worth: $10 billion
Racing ahead, despite
attempts by competitors
to emulate the 33-year-
old's direct-selling busi-
ness model. With earn-
ings almost doubling in
fiscal 1998, gave himself
$36 million compensa-
tion package-peanuts
compared to his stock
appreciation gains.
\' ~~ ... . ~ "
DONALD AND'
5.1. NEWHOUSE
Net worth: $9 billion
Brothers just sold their
Random House book
publishing unit to Ber-
telsmann for $1.4 bil-
lion. Now trying to turn
their bard)' profitable
Conde Nast magazine:
division (Vogue, Vani/)'
Fair, New YOrker) into
predictable performer
under President Steven
Florio. Advance Publica-
tions' 25 newspapers
continue to be fat
cash cow.
r..".-.{.f:...:-t> .-.... t.I'"'n,'~ ..~ ~ .' .~....-
PHil.lp' F: ANSCHUTz .
Net worth: $8.8 billion
One of FORBES' top ten
entrepreneurs.
See page 190.
m=;;<:'~:_y_~~.T.~:":7.~r.~~4;7-~
CARGILLFAMILY.:t~..:.,.:
Net worth: $8.8 billion
Grain trader Cargill Inc.,
world's largest privately
held company (1997
sales: $56 billion), split
among threc family
branches. A movement
by some heirs to take
the firm public was
quelled last year.
HAAS FAMILY -
Net worth: $8.2 billion
Robert D. Haas, great-
great-grandnephew of
Levi Strauss Co.
founder, took the jeans-
maker private in a $13
billion deal in 1996.
Business slipped 4% in
1997 as designer and
discount apparel makers
stole market share.
Result: Company fired
more than 6,000 work-
ers-34% of its North
American staff.
to 50 additional stores
in the U.K., Japan, Ger-
man)', France and
Canada.
JOHN KLUGE .
Net worth: $7.8 billion
America's onetime rich-
est man, still going
strong at 83. Gambling
big on fiber optics. His
Metromedia Fiber Net-
work is completing
installation of fiber-optic
backbone for the U.S.
East Coast and Chicago.
Likes low tech, too:
Ponderosa, Bennigans
restaurants; coin-operat-
ed laundries.
GORDON MOORE
Net worth: $7.5 billion
Author of Moore's b.w:
Power of chips would
Forbes
July 6,1998
r-'~:""'-;-r' ....-'t;---...-r;-:-:---r-'t:-1
FISHER FAMILY':':;"" .
Net worth: $8 billion
With Gap shares more
than doubling in the
past year, the store's co-
fowlders, Doris and
Donald, and their three
sons betting on growth
abroad: plan to open up
double every year. This
was anlended later to 18
months. First job at
Johns Hopkins research-
ing weapons propulsion.
Moore, 69, now Intel
chairman emeritus, still
owns 5.5% of company
he cofounded in 1968.
.
.
.
REQUEST FOR CONFIDENTIAL TREATMENT
DOCUMENTS UNDER SEAL *
*
T AS - N
Projected Statement of Income
*
T AS - 0
Financial Statements
.
.
.
REQUEST FOR CONFIDENTIAL TREATMENT
DOCUMENTS UNDER SEAL *
*
T AS - N
Projected Statement of Income
*
T AS - 0
Financial Statements
.
SECTION 4
TECHNICAL QUALIFICATIONS
.
.
.
.
.
Paul Allen's Wired World
Paul Allen owns and invests in a suite of companies exploring the potential of multimedia
digital Gommunications. Allen's business strategy includes encouraging communications
and synergy between his companies for mutual benefit. His primary companies include
Asymelrix Corp., Vulcan Ventures, Inc. and Vulcan Northwest, Inc. located in Bellvue,
Washington and Interval Research Corp. of Palo Alto, Calif. In April 1998, Allen acquired an
interest in Marcus Cable of Dallas. Allen, the owner of the Portland Trail Blazers NBA team
and the NFL's Seattle Seahawks franchises, is a partner in the entertainment studio
DreamWorks SKG and has invested in more than 50 new-media companies. A co-founder
of Microsoft Corporation with Bill Gates in 1975, Allen served as the company's executive
vice president of research and new product development until 1983, the company's senior
technoll)gy post. Since 1986, Allen has been investing in leading companies which further
his vision of a Wired World. Allen gives back to the community through the six Allen
Charitable Foundations which support the arts, medical research, forest protection and
other charitable needs in the Pacific Northwest. He is also the founder of the Experience
Music Froject in Seattle.
Allen's approach to his Wired World strategy is transforming business. His investment in
Charter marks another step forward in the Wired World strategy, which is a connected
future marked by the merger of high-bandwidth data channels, the power of the personal
computl~r and the availability of compelling content. He believes that cable is uniquely
positionl~d to deliver advanced data and transactional services to the next generation.
St. L,:>uis, Missouri will be headquarters for the combined Allen cable properties. At the
close of all pending transactions, the companies will operate cable systems in 24 states
includinn Alabama, California, Colorado, Connecticut, Georgia, Illinois, Indiana, Kansas,
Kentucky, Louisiana, Massachusetts, Minnesota, Mississippi, Missouri, Montana, New
Hampshire, North Carolina, South Carolina, Tennessee, Texas, Utah and Virginia. More
than 2.4 million customers will be served by Allen-owned companies making Allen and his
management team the nation's seventh largest cable operator.
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Charter Communications, Inc.
The management team of Charter Communications, Inc. ("Charter") has built
Charter into one of the most highly respected Multiple Systems Operators (MSO's) in the
United States. The team's collective experience in the cable and telecommunications
industry, their receptivity to new ideas, creative thinking and willingness to change, as well
as their 1inancial acumen, has proven a successful combination.
Cllarter recognized the importance of rebuilding and reinforcing infrastructure and
invested heavily in strengthening its core business and upgrading plant in its service
areas. New video services, new modems and high speed services were introduced to
consumers and schools. By operating with an entrepreneurial spirit, the management
team at Charter set themselves apart with solid commitments not only to technology, but
to serving our customers, investing in education and showing a strong interest in our
communities.
Charter's management team saw to it that millions of dollars were invested in
construction of its cable plant fiber optics infrastructure. More than $200 million was
spent in 1998. In 1997, Charter introduced Charter Pipeline™, high speed Internet
service to customers in California. The company was the first MSO to commercially
launch VVorldGate'" universal Internet access and e-mail service over cable television in
St. Louis I Missouri in the spring of 1998.
The cable systems are geographically clustered and are divided into five regions.
The clustering contributes to operational and marketing efficiencies as well as improved
employee morale and greater responsiveness to communities served by Charter.
Overseeing the regions are senior vice presidents to whom broad operational authority
is delegated. Senior vice presidents are in daily contact with system managers, and
together, they have significant decision-making authority. Charter believes that the best
results are achieved when operating decisions are made as close to the customer as
possible.
Charter ranks at the top of the cable industry in all key performance standards and
has achie!ved customer growth that is twice the industry average. In five years, Charter
acquired :22 cable systems and successfully assimilated employees into Charter's culture
to provide service that exceeds the customers' expectations. Charter has been honored
many times for its fast growth and management received the 1997 Ernst & Young
Entrepreneur of the Year award in the category of Communications! Entertainment.
Charter provides more than 2,800 public and private schools in the communities
we serve with free monthly service as part of the Cable in the Classroom program.
80175.1
.
.
.
Charter c:ommitted to equip one site in every consenting elementary and secondary
school passed in its service area with Charter Pipeline™ and WorldGate.... service.
Charter's commitment to its communities means hundreds of thousands of dollars in
support each year for national charities and local civic and charitable organizations.
Charter maintains a special focus on our communities' future leaders - the children -
recognizing that television plays an enormous role in influencing the lives and dreams of
young people.
80175.1
.
JE!rald L. Kent
President & Chief Executive Officer
Charter Communications, Inc.
Jerald L. Kent is a co-founder, President and Chief Executive Officer of Charter
Communications, Inc. and a Managing Partner of Charter Communications
Group. Prior to founding Charter, Mr. Kent was an executive officer of Cencom
Cable Associates, Inc.
He is charged with running the day-to-day activities of the company by directing
the operations, MIS, accounting, acquisition and finance activities of Charter.
Hi::; accomplishments include the engineering of nearly $3 billion of acquisitions
during Charter's five year history. Currently Charter serves more than 1.2 million
customers.
.
Mr. Kent served as' Executive Vice President and Chief Financial Officer of
Cencom Cable Associates, Inc., and was responsible for locating, acquiring and
financing cable television properties, in addition to overseeing the accounting,
finance, management information systems and investor relations departments of
thE~ company. Mr. Kent was also responsible for Cencom's California
operations. He served Cencom Cable Associates, Inc. as Senior Vice President
of Finance from May 1987, Senior Vice President of Acquisitions and Finance
from July 1988, and Senior Vice President and Chief Financial Officer from
Jal1uary 1989, and Executive Vice President and Chi.ef Financial Officer in March
1990. He joined Cencom Cable Associates, Inc. in 1983 as Senior Vice
President of Corporate Development, to lead the company's acquisition program.
During his tenure, Cencom Cable Associates, Inc. grew to a company providing
selvice to over 550,000 subscribers. In connection therewith, he directed
acquisitions and related financings totaling over $1 billion. During this time,
Cencom was included among Inc. Magazine's list of 500 fastest growing private
companies in the United States.
From 1979 to 1983, Mr. Kent served with Arthur Andersen & Co., certified public
accountants, where he attained the position of tax manager. His duties included
consulting on the analysis and structuring of limited partnerships with a major
emphasis in serving the media industry. In particular, Mr. Kent developed an
expertise in structuring partnership and joint venture agreements. His clients
included Telcom Engineering, Inc., T.C. Industries, Inc. and Cencom Cable
Associates, Inc.
.
Mr. Kent, a certified public accountant, received his undergraduate and MBA
dewees with honors from Washington University, St. Louis, MO. He serves on
the Board of Directors of Charter Communications, Inc., CCA Acquisition Corp.,
CCT Holdings Corp. and CCA Holdings Corp. He served on the board of
.
CableMaxx, Inc. Mr. Kent was honored in the St. Louis Business Journal's 40
Under 40 edition as one of the St. Louis area's outstanding business leaders
under the age of 40. He and Charter co-founders Barry Babcock and Howard
Wood were honored as 1997 Regional Entrepreneurs of the Year in
TE!lecommunications and Entertainment. Mr. Kent is a member of the Young
Presidents Organizations. He serves on the board of directors of The Magic
House, and is chairman of the finance committee of Incarnate Word Church. He
serves on the Alumni Association Executive Committee at Washington
University.
.
.
- 2 -
j:\Allen\394 T ransfer\Bios.doc
.
Barry L. Babcock
Chairman of the Board
Charter Communications
Barry Babcock began his career in the cable industry more than twenty years
ago. He is a co-founder and Chairman of the Board Charter Communications,
Inc., headquartered in St. Louis, Missouri. Prior to founding Charter, Mr.
Babcock was associated with Cencom Cable Associates, Inc.
Mr. Babcock was among the founders of Cencom Cable Associates in 1982,
serving as Executive Vice President and Chief Operating Officer. He managed
thB company's in-house legal work, contracts, governmental relations and
business matters in the decade from its inception to its sale to Crown Media in
1992.
Mr. Babcock joined the cable industry in 1979 when he became Vice President
of Telcom Engineering, Inc. of St. Louis, directing Telcom's cable television
governmental consulting activities and preparing franchise agreements for
numerous municipalities. Prior to that, Mr. Babcock served as Assistant
Municipal Counselor in Oklahoma City, Oklahoma.
.
Throughout his career in the cable television industry, Mr. Babcock has been
involved in leadership roles with national telecommunications organizations. He
is currently Chairman of the Board of Directors of the Cable Telecommunications
Association (CATA). He serves on the board of directors of the National Cable
Television Association (NCTA), C-SPAN and is a member of the board of
directors of the Cable Advertising Bureau (CAB) and Cable in the Classroom.
Mr. Babcock and Charter co-founders Jerald Kent and Howard Wood were
hOllored as 1997 Regional Entrepreneurs of the Year in Telecommunications
and Entertainment.
He is active in many civic endeavors in the St. Louis metropolitan area as a
member of the Board of Directors of the Missouri Historical Society and the St.
Louis Civic Entrepreneurs Organization. He also serves on the boards of
directors of Mercantile Bank-St. Louis and Charter Communications, Inc and
various affiliates. He is a frequent speaker on topics related to the cable
industry.
Mr. Babcock, an attorney, received his undergraduate and Juris Doctorate
dewees from the University of Oklahoma. He served four years as a line officer
in the United States Navy.
.
- 3 -
j :\Alhm\394 T ra nsfer\Bios.doc
.
K4mt D. Kalkwarf
5fmior Vice President & Chief Financial Officer
Charter Communications
MI". Kalkwarf joined Charter Communications, Inc. in July 1995 as Vice
President, Finance & Acquisitions and was promoted to Senior Vice President of
Ml3rgers & Acquisitions in 1996. He was named Senior Vice President & Chief
Financial Officer in 1997. He has been instrumental in Charter's acquisition of
more than 1.2 million customers.
Prior to joining Charter, Mr. Kalkwarf was a senior tax manager for Arthur
Andersen, certified public accountants. With Arthur Andersen, Mr. Kalkwarf was
primarily involved in the consumer products and telecommunications service
lines.
Throughout his career, his duties included extensive experience in the mergers
and acquisitions area. Mr. Kalkwarf has experience in the formation of
partnerships, both in the cable and real estate industries.
.
Mr. Kalkwarf also headed the international tax practice for Arthur Andersen in St.
Louis, Missouri where he was involved with international acquisitions and
divestitures, along with significant foreign tax credit planning.
Mr. Kalkwarf, a certified public accountant, received his undergraduate degree,
with honors, from Illinois Wesleyan University.
.
- 4 -
j:\Alhm\394Transfer\Bios, doc
.
Curtis S. Shaw
Se!nior Vice President, General Counsel & Secretary
Charter Communications
Curtis S. Shaw joined the Company in February 1997 as Senior Vice President,
GE~neral Counsel and Secretary, and is responsible for all legal aspects of
Charter's business, including major transactions and the duties of the corporate
secretary.
Prior to joining Charter, Mr. Shaw served as corporate Counsel to NYNEX since
19;38. From 1983 until 1988 Mr. Shaw served as Associate General Counsel for
Occidental Chemical Corporation, and, from 1986 until 1988, also as Vice
Pmsident and General Counsel of its largest operating division. Mr. Shaw has 24
years of experience as a corporate lawyer, specializing in mergers and
acquisitions, joint ventures, public offerings, financings, and federal securities
and antitrust law. Mr. Shaw received a SA with honors from Trinity College and
a JD from Columbia University School of Law.
.
.
- 5 -
j :\Allel1\394T ra nsfer\Bios,doc
.
David G. Barford
Senior Vice President, Operations
Urban Regions
Charter Communications
Dalvid Barford is Senior Vice President-Operations, Urban Regions for Charter
Communications. Mr. Barford is the senior operating officer for Charter's
systems in California and St. Louis overseeing all facets of operations in those
cities. He has been with the company since July 1995.
Prior to joining Charter, Mr. Barford served in several senior marketing and
operation roles at Comcast Cablevision for eight years. His last position at
Ccmcast was Vice President of Operations in the International Division in
Mexico, South America, and new Business Development in Europe.
During his eighteen 'year career in the cable industry, Mr. Barford has been
involved in leadership roles with various telecommunications organizations. He
has served as board member and president of the Southern California Cable &
Telecommunications Association and board member of the Southern California
Cable Television Marketing Council.
.
Mr. Barford is a graduate of California State University, Fullerton, where he
earned his B.A. in Communications. He also holds an MBA from National
University.
.
- 6 -
j :\Allen\394 T ransfer\Bios.doc
.
Mary Pat Blake
SE!nior Vice President Marketing
Charter Communications
Mary Pat Blake joined Charter Communications as Senior Vice President of
Marketing in August 1995.
Prior to joining Charter, Ms. Blake created and operated, then sold Dakota
Coffee & Bakery Company. She was president of Blake & Associates, a
marketing consulting firm. Her 20 years' experience includes senior
management positions in marketing, sales, finance, systems and general
management with companies such as General Mills, Pepsico (Taco Bell), Brown
Gr'::lup, and the West Coast Group, strategic marketing consultants.
Ms.. Blake earned a B.S. degree in Business Administration from the University
of Minnesota, an M.B.A. from Harvard Business School and earned election to
Phi Beta Kappa.
.
.
- 7 -
j:\Alle,n\394Transfe r\Bios,doc
.
Ra.lph G. Kelly
Senior Vice President, Treasurer
Charter Communications
Rcllph Kelly joined Charter Communications, Inc. in March 1993 as Vice
President, Finance, a position he held until April 1994 when he became Chief
Financial Officer of CableMaxx, Inc., a wireless cable television operator. Mr.
Ke.lly returned to Charter as Senior Vice President, Treasurer. His present
re~;ponsibilities include cash management financial reporting. He also assists
with Charter's finance and acquisition efforts.
Rcllph Kelly has worked in the cable industry since 1984 when he joined Cencom
Cclble Associates, Inc., as Controller. As Controller, Mr. Kelly was responsible
for all aspects of accounting and financial reporting for the cable company. Later
he served Cencom as Treasurer and was responsible for cash management,
loan compliance, budget administration, supervision of internal audit and filing
SEC reports. Mr. Kelly also assisted with projects relating to government
relations, franchise renewals, acquisitions and equity repurchases. He has
served on the accounting Committee of the Board of Directors for National Cable
Television Association.
.
HE~ is a certified public accountant. Mr. Kelly was in the audit division of Arthur
Andersen & Co. from 1979 until 1984. His clients included privately held
businesses, telephone clients and extractive industries.
Mr. Kelly received his undergraduate degree in accounting from the University of
Missouri-Columbia and his MBA degree from Saint Louis University.
.
- 8 -
j: IAllen\394 Transfer\Bios.doc
.
David L. McCall
Senior Vice President Operations
Southeast Region
David L. McCall joined Charter in January 1994 as Southeastern Regional
Operations Manager. He has primary responsibility for all of Charter's cable
sy~;tems operations in that portion of the United States.
Prior to joining Charter, Mr. McCall was employed by Crown Cable and its
predecessor, Cencom Cable Associates, Inc. from 1983 to 1993. As Regional
Melnager, his responsibilities included supervising all aspects of operations for
systems located in North Carolina, South Carolina and Georgia, consisting of
more than 142,000 subscribers.
From 1977 to 1982, Mr. McCall was System Manager of Coaxial Cable
Developers (DBA Teleview Cablevision) in Simpsonville, SC and prior to that he
was Line Foreman with Burnup and Sims, Inc. from 1974 to 1977.
Mr, McCall has served on the Board of Directors for the South Carolina Cable
Television Association for the past 10 years.
.
.
- 9 -
j:\Alhm\394 T ransfer\Bios. doc
.
Thomas R. Jokerst
Senior Vice President, Engineering
Charter Communications
Thomas R. Jokerst joined Charter Communications, Inc. in December 1993 as
Senior Vice President, Engineering. Mr. Jokerst is responsible for all aspects of
en!~ineering, technological operation and technology assessment for Charter in
its growth from 10 systems in 1994 to 55 systems with more than 1.2 million
customers today. He has also overseen the rebuilding of systems that Charter
ha:5 undertaken.
.
From March 1991 to March 1993, Mr. Jokerst served as Vice President, Office of
Sc~ence & Technology for Cable Television Laboratories in Boulder, Colorado.
He participated in Cable Labs' Executive on Loan Program which allowed for a
two year sabbatical from Continental and was involved in numerous projects
which included the evaluation of proposals for the Digital Video Compression
SY:5tems. He conceived and promoted the development of a unique digital video
impulse noise reducer which has since made its way to successful commercial
development for use in headend applications. He was also active in the
CableLabs Consumer Electronics Subcommittee, making several visits to
Japanese CE-manufacturers on behalf of the cable industry. Also, while at
CableLabs, he was in charge of its major conferences and seminars.
Prior to joining Charter, Mr. Jokerst was employed by Continental Cablevision of
Illinois, Inc., between March and December 1993 as Assistant Vice President,
and from January 1979 to March 1991 as Assistant Vice President and Director
of Engineering. His responsibilities included the creation of a Regional Hub and
Headend Interconnect for the St. Louis area cable systems which interconnect
with all other area operators, long distance carriers, Teleport and others. Before
spending two years with CableLabs, he was responsible for total technical
intE!grity of cable systems, long range planning, budgeting, technology
ass,essment, systems operations review, safety, technical training, FCC
compliance and filings, and all equipment procurement for Continental's Illinois,
Iowa and Missouri Regions.
From May 1976 to January 1979, Mr. Jokerst served as Director of Engineering
for Quincy Cablevision, Inc. in Illinois and prior to that served as Midwest
Re!~ional Chief Technician for Cable Information Systems in New York.
.
Mr. Jokerst has also been active with a proposal for the Housing
Development Board of the Government of Singapore to create a technical
strcltegy for the migration of their current MA TV systems to a full featured
broadband communications network. Among his numerous industry activities,
Mr. Jokerst served as Chairman of the NCTA Engineering Committee and of the
- 10-
j: \Allen\394 T ransfer\Bios. doc
.
CableLabs Consumer Electronics Subcommittee. He served on the Board of
Directors of Society of Cable Telecommunications Engineers (SCTE) and is a
se"lior member of SCTE. In 1996, he was honored by being named to the Cable
TV Pioneers which recognizes men and women in the cable television industry
who have made significant contributions.
Mr. Jokerst is a graduate of Ranken Technical Institute in St. Louis with a
degree in Communications Electronics and Computer Technology and Southern
Illinois University in Carbondale, Illinois with a degree in Electronics Technology.
.
.
- 11 -
j: \Allen\394 T ransfer\8ios.doc
.
Gene F. Knoblauch
Senior Vice President, Operations
Northeast Region
Gene F. Knoblauch joined Charter Communications, Inc. in December 1994 as
Senior Vice President, Operations - Northeast Region. He is responsible for
operations in Connecticut, Massachusetts, and New Hampshire serving more
theln 120,000 *(check number) customers.
Prior to joining Charter, Mr. Knoblauch served four years as Vice President,
Operations - Eastern Region for United Video Cablevision, Inc. He was
re~,ponsible for overseeing operations for systems located in Maine,
Malssachusetts, New Hampshire and New York serving 82,000 customers.
From 1986 to 1990, he served as Area Manager for a 40,000 customer system
operated by A TC in Burham, North Carolina. Prior to serving as Area Manager,
he held various sales and marketing management positions at A TC.
.
Mr, Knoblauch received his Bachelor of Arts degree from the State University of
New York at Plattsburgh. He currently serves on the board of the New England
Cable Television Association (NECTA) Executive Committee for the State of
Connecticut.
.
- 12 -
j :\Allen\394 T ra nsfer\Bios. doc
.
Thl:>mas R. Schaeffer
Selnior Vice President, Operations
WE!stern Region
Charter Communications
Thomas R. Schaeffer joined Charter Communications in September 1997 as
Senior Vice President, Operations. He is responsible for all system operations
for Charter's Western Region which serves nearly 370,000 customers in the
communities of Alhambra, Azusa, Duarte, Long Beach, Norwalk, Pasadena,
West Covina and Riverside.
Mr. Schaeffer has nearly twenty-five years of experience in the cable industry.
Prior to joining Charter, he served as Vice PresidenUGeneral Manager for
MEDIAONE (formally Continental Cablevision) in Los Angeles, California. He
was responsible for complete profit and loss and capital expenditure for a
350,000 customer base.
.
Prior to MEDIAONE, Mr. Schaeffer served as Regional Vice President, Southern
Ca.lifornia for CABLEVISION Industries, Chatsworth, CA. He was responsible for
CVI's two largest systems, West Valley and Long Beach, serving 180,000
customers with annual cash flow of more than $40 million dollars. He was
actively involved in upgrading both operations; increasing channel capacity and
plant capability.
Mr. Schaeffer earned his undergraduate degree in Marketing from Nichols
College, Dudley, Massachusetts and Masters of Business Administration from
Claremont College, Claremont, California.
.
- 13 -
j :\P,lIen\394 T ra nsfer\Bios, doc
.
M. James Bogart
Vic:e President, Government Relations
Charter Communications
Jim Bogart joined Charter Communications, Inc. in January, 1995. His
re~iponsibilities as Vice President, Government Relations consist of overseeing
Charter's relationship between its 60 cable systems and 491 franchise
au'~horities including franchise renewals and transfers, as well as coordinating
state and federal government relations.
Mr. Bogart has worked in the cable industry since 1990. Prior to assuming his
current position at Charter, Mr. Bogart served as Vice President, Government
Relations with Crown Media, Inc., and Cencom Cable Associates. Before joining
the cable industry, he served for 10 years as Vice President of the St. Louis
Regional Commerce and Growth Association, the St. Louis area Chamber of
Commerce.
.
Mr. Bogart received his B.A. degree from Grinnell College and his M.A. from
Washington University. He serves on the Board of Directors of the Missouri
Cable Telecommunications Association, and is a current board member and past
chairman of the St. Louis County Economic Council. He is currently a member
of the Board of Directors of the St. Louis Sports Commission and the Foster
Care Coalition. In 1988 he co-founded the St. Louis Sports Commission and
latHr served as Secretary-Treasurer of the St. Louis Olympic Festival Organizing
Committee and Board of Directors.
.
- 14-
j:\AIII~n\394 T ra nsfer\Bios. doc
.
Jaimes E. Bray
Regional Vice President, Operations
Southern Region
James E. Bray serves as Regional Vice President of Charter's Southern Region
which includes customers in Kentucky, Tennessee, Alabama, Louisiana, Texas,
Mi:5sissippi, Colorado, Kansas and Montana.
Mr. Bray has more than 20 year' experience in the cable industry. He began his
ca:~eer with Times Mirror Cable Television headquartered in Irvine, California in
1976 where he served as an accounting supervisor.
He joined Charter in March 1996 as Vice President, Operations in South
Calrolina. Mr. Bray served as Chief Operating Officer for CableMaxx, a wireless
tek:wision company headquartered in Austin, Texas from June 1993 until March
1996.
Prior to CableMaxx he served as Regional General Manager for Cencom Cable
Associates and Crown Media in Riverside, California for more than three years.
.
Prior to Cencom, Mr. Bray spent eight years with ComcasVGroup W Cable,
serving as General Manager of the company's Orange County cable systems.
Mr. Bray received his Bachelor of Arts degree from California State, Fullerton in
1976.
.
- 15 -
j :\Allen \394Transfer\Bios.doc
.
Trudi McCollum Foushee
Vice President and Senior Counsel
Charter Communications
Trudi M. Foushee has been practicing law in the telecommunications industry for
the past eight years. As a partner with Green and Foushee of St. Louis and
Washington, D.C., Ms. Foushee served as consultant and regulatory legal
advisor to Charter Communications before joining the company in 1996.
From 1993 to 1995, Ms. Foushee served as Vice President - Law and
Regulatory Affairs for Crown Media, Inc., Dallas, Texas, a division of Hallmark
Cards, Inc. Ms. Foushee was responsible for company compliance with the
Consumer Protection & Competition Act of 1992 which entailed a massive
oVI~rhaul of all aspects of the cable business. Ms. Foushee served as lead in-
house counsel for Crown Media following the acquisition and consolidation of
Crown Media and eencom Cable Associates corporate headquarters in St.
Louis, MO to Crown's headquarters in Dallas, Texas from October 1992 to May
1993.
.
She served as Counsel and Assistant Secretary to Cencom Cable Associates,
Inc:. of St. Louis, Missouri from May 1990 to September 1992 providing legal
support for human resources, operations, government relations, accounting,
cu:;tomer service and engineering for the INC 500 company.
Ms.. Foushee was an attorney with Union Electric Company of St. Louis, Missouri
from 1987 until 1990. She was a Litigation Associate with Danna, Soraghan,
Stockenberg & Shaw of St. Louis from 1986 to 1987 and an Associate with
Miller, Loewinger & Associates Chartered of Washington, D.C. from 1982 until
1985.
.
- 16 -
j :\Allen\394 Transfer\Bios.doc
.
Paul R. Estes
Assistant to the President - Director, Financial Administration
Charter Communications
Paul R. Estes joined Charter Communications, Inc. in 1994 as Operations
Analyst and Budget Coordinator. He was promoted to Director of Financial
Administration in 1996 before being named Assistant to the President.
Mr. Estes has more than ten years' experience in both domestic and
intl~rnational financial auditing. He is charged with managing the corporate
intl~rnal audit department and more than 50 operating budgets company wide.
Mr. Estes is responsible for reviewing fiscal operations in which cash flow totals
more than 100 million dollars. He investigates any improprieties both internally
an d externally and is responsible for enforcing the company's Policies and
Procedures. Mr. Estes manages a 144,000 square foot commercial property for
thE! St. Louis Region 'and also facilitates the transition of cable systems acquired
by Charter.
.
Prior to joining Charter, he was an internal auditor for Americoal Services, Inc.,
Fairview Heights, Illinois. Prior to Americoal Services, Mr. Estes served as
Operational Analyst for Cencom Cable Associates, Inc., St. Louis, Missouri.
He received his Bachelor of Science degree in accounting from Southeast
Mi:,souri State University in 1988.
.
- 17 -
j:\Alen\394 T ransfer\Bios, doc
.
[1 ~tIM~N~TT~~.
FRANCHISE DEMOGRAPHICS OVERVIEW
Charter Communications, inc. owns, operates and/or manages cable systems in 18 states
with a total of 473 franchise agreements. These franchise areas represent diverse
demographics. However, the bulk of our franchises group together to form 9 key
clu::;ters.
. St. Louis County, MissourilIllinois
. Los Angeles/Long Beach, California
. Greenville-Spartanburg, South Carolina
Ashville, North Carolina
. Connecticut/Massachusetts
. Atlanta, Georgia
. Northern North Carolina
. Nashville, Tennessee
. Huntsville, Alabama
. New Orleans, Louisiana
.
Making up these clusters are several different franchise areas that range from small towns
and villages with just a few hundred customers, large bedroom communities such as
Cla~ksville, Tennessee and Coweta County, Georgia with between 10,000-25,000
customers to large urban areas such as Long Beach, California with over 65,000
cus1omers.
Outside of the clusters, Charter has franchise agreements that serve 3 military bases, Fort
Gordon, Ft. Riley and Ft. Carson and that serve rural areas in parts of the country such as
northern Missouri, southern Tennessee, and central Texas.
.
.
.
.
DO NY.14' 732.9
6/5196 4:39 PM
PURCHASE AGREEMENT
DATED JULY 29,1998
AMONG
THE SELLERS AND CHARTER ENTITIES
LISTED ON THE SIGNATURE PAGES HERETO,
AND
PAUL G. ALLEN
.
T ABLE OF CONTENTS
~
1. Interpretation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.1 Defined Terms. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
2. Purchase and Sale of Purchased Interests ......................... 8
2.1 Purchase and Sale of Purchased Interests ............. 8
2.2 Purchase Price .................................. 8
2.3 Payment of Purchase Price. . . . . . . . . . . . . . . . . . . . . . . . .9
3. Representations and Warranties of the Sellers. . . . . . . . . . . . . . . . . . . . . 11
3.1 Representations and Warranties of the Sellers. . . . . . . . . . . . . . . 11
.
3.2
Representations and Warranties Relating to Each
Charter Entity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
4. Representations and Warranties of the Buyer ..................... 52
4.1 Authority Relative to This Agreement. . . .. . . . . . . . .. . . . . . ..52
4.2 No Conflict: Required Filings and Consents. . . . . . . . . . . . . . . . 53
4.3 Financial Capability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
4.4 Litigation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
4.5 No Violation to FCC Cross Ownership Rules . . . . . . . . . . . . . . . 54
4.6 Investment Intent; Sophisticated Buyer. . . . . . . . . . . . . . . . . . . . 54
5. Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
5.1 Access. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
5.2
Interim Period Operations .............................. 56
.
DO NY.141732.9
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.
~
5.3 No Amendment to Organizational Documents ..............59
5.4 Filing and Consents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
5.5 Common Interests in CharterComm Holdings and
Preferred Interests ...................-................. 62
5.6 Restructuring. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
5.7 Commercially Reasonable Efforts . . . . . . . . . . . . . . . . . . . . . . . . 65
5.8 Exculpation and Indemnification. . . . . . . . . . . . . . . . . . . . ; . . . . 65
5.9 Notification. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
5.10 Special Interests . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . 66
.
5.11 Release. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
6.
Conditions to Closing ....................................... 68
6.1 Conditions to the Buyer's Obligations. . . . . . . . . . . . . . . . . . . . . 68
6.2 Conditions to the Sellers' Obligations. . . . . . . . . . . . . . . . . . . . . 71
7. Closing Arrangements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
7.1 Time and Place of Closing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
7.2 Closing Deliveries .................................... 74
7.3 Further Assurances. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
8. Survival of Representations and Warranties ...................... 75
9. Termination ...............................................75
9.1 Termination......................................... 75
9.2 Effect of Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
.
DO NY-1'11732,9
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11
.
10. General Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
Page
10.1
10.2
10.3
10.4
10.5
10.6
10.7
10.8
. 10.9
10.10
10.11
10.12
10.13
10.14
10.15
10.16
10.17
.
DO NY.141732,9
8/5/984:39 PM
Appointment of Seller Representative . . . . . . . . . . . . . . . . . . . . . 77
Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
Assignability and Enforceability ......................... 81
Expenses ........................................... 82
Consultation . . . . . . . . . . . . . . . . . . . . . . . . . '. . . . . . . . . . . . . . . . 82
Governing Law ...................................... 83
No Third Party Beneficiaries. . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
Currency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
Sections and Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
Number and Gender. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
Entire Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
Severability ......................................... 84
Amendments and Waivers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
Disclosure .......................................... 84
Knowledge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
Right to Specific Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
III
.
Schedule 1.1
Schl~dule 2.1
Schedule 2.3
Schedule 3. 1 (c)(i)
Schedule 3.1 (c )(ii)
Schedule 3 .2(b)
Schf:dule 3 .2( d)(i)
Schf:dule 3 .2( d)(ii)
Sche:dule 3 .2(g)( vi)
Schedule 3.2(g)(viii)
Schedule 3.2(h)
Schedule 3.2(i)(i)
Schedule 3.2(i)(ii)
-.
Schedule 3.2(i)(iv)
Schedule 3.20)
Schedule 3.2(k)
Schedule 3.2(1)(i)
Schedule 3.2(1)(ii)
Schedule 3.2(m)
Schedule 3.2(n)
Schedule 3.2(0)
Schedule 3.2(r)
Schedule 3.2(t)
Schedule 3.2(v)
Schedule 5.2
Schedule 5.4(a)
Schedule 10.2
Exhibit A
.
00 NY-141732.9
8/5/984:39 PM
Cable System Data
Purchased Interests
Allocation of Purchase Price
Conflicts; Breaches; Defaults
Required Filings; Governmental Approvals; Required Consents
Charter Organization Structure
Capitalization .
Put/Call/Security Issuance, SARs, Cash Out, Redemption
Copyright Act Compliance
Notices with Respect to Business and Trade Practices
Financial Statements
Franchise Status; Material Agreements
Actual and Threatened Overbuilds
Notice of Intention to Deny Renewal
Changes Since 12/31/97
Material Litigation
Employee Plans
Employment Plan - Payments Triggered
Trademarks
Joint Ventures, Tax Sharing Agreement
Environmental
Collective Bargaining Agreements; Union Employment Issues
Transactions with Affiliates
Outstanding Indebtedness
Interim Period Operations
Franchise Transfer Consent Required; Required Consent-Governmental
Names & Addresses of Sellers
Escrow Agreement
.
PURCHASE AGREEMENT
THIS PURCHASE AGREEMENT is made as of the 29th day of July, 1998, among
the respective sellers listed on the signature pages hereto as of the date hereof (together with
the sellers who will execute counterpart signature pages prior to ~he consummation of the
transactions contemplated hereby, the "Sellers"), Charter Communications, Inc., a Delaware
corporation ("Cel"), Charter Communications Long Beach, Inc., a Delaware corporation
("CCLB"), CCA Holdings Corp., a Delaware corporation ("CCA"), CCT Holdings Corp.,
a Delaware corporation ("CCT"), CharterComm II, Inc., a Delaware corporation
("CharterComm II, Inc."), CharterComm LLC, a Delaware limited liability company
("CharterComm LLC"), CharterComm Holdings, L.P., a Delaware limited partnership
.
("Cb.arterComm Holdings;" CharterComm Holdings, CharterComm II, Inc., CharterComm
LLC, CCT, CCA, CCLB, and CCI are collectively referred to as the "Charter Entities")
and Paul G. Allen (the "Buyer").
WITNESSETH:
WHEREAS, the Sellers own, directly or indirectly, or have the right to compel the
sale of, as set forth on Schedule 2.1 hereto, all of the outstanding capital stock (including, in
respect ofCCI, warrants for the purchase of capital stock), limited partnership interests (other
than Preferred Interests (as defined below)) or membership interests, as applicable, of CCI,
CCLB, CCA, CCT, CharterComm II, Inc., CharterComm LLC and CharterComm Holdings;
and
.
DO NY.141732,9
8/5/98 4:311 PM
.
WHEREAS, the Charter Entities, directly and indirectly through their Subsidiaries
(as defined below), own and operate cable television systems and businesses in respect
thereof in various areas of the United States; and
WHEREAS, the Sellers desire to sell to the Buyer, and the ~uyer desires to purchase
from the Sellers, all of the outstanding capital stock and membership interests of the Charter
Entities as set forth on Schedule 2.1 hereto, on the terms and subject to the conditions set
forth in this Agreement;
NOW THEREFORE, in consideration of the respective covenants and agreements
of the parties hereinafter contained, 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. Inter:pretation.
1.1 Defined Terms. For the purposes of this Agreement, including the Schedules
and Exhibits hereto, the following terms shall have the respective meanings set out below
and g:rammatical variations of such terms shall have corresponding meanings:
"Affiliate" has the meaning given to that term in the Exchange Act;
"Acquisition Transactions" means, collectively, all acquisitions during the
Interim Period by the Charter Entities or their Subsidiaries of cable television systems, not
to exceed $100,000,000 in the aggregate in total purchase price;
"Agreement" means this Purchase Agreement, including the Schedules and
Exhibits as the same may be amended from time to time;
.
DO NY-14"732,9
8/5/984:39 PM
2
.
"Antitrust Laws" has the meaning set forth in Section 5 A( d);
"Authorizations" has the meaning set forth in Section 3.2(g);
"Business" means the cable television business currently carried on by the
Charter Entities (including without limitation through their Subsidia,ries) in the United States;
"Buyer Confidentiality Agreement" means the Confidentiality Agreement
dated July 20, 1998 between eel and Buyer;
"Charter Entities" has the meaning set forth in the first paragraph of this
Agreement;
"CharterComm Membership Interest" means all of the outstanding equity
interests not owned by CCI in CharterComm L.L.c.;
.
"Charter Shares" means all of the outstanding warrants and capital stock of
CCI, and all equity interests not owned by eel in the following entities: CCLB, CCA, CCT
and CharterComm II, Inc.;
"Closing" has the meaning set forth in Section 7.1;
"Closing Date" means the date upon which the Closing occurs;
"Code" means the Internal Revenue Code of 1986, as amended;
"Communications Act" has the meaning set forth in Section 3.1 (c )(ii);
"Company 1997 Balance Sheet" has the meaning set forth in Section 3.2(n);
"Copyright Act" has the meaning set forth in Section 3.2(g)(vi);
.
DO NY-141732.9
8/5/98 4::\9 PM
3
.
"Divestiture Transactions" means, collectively, all divestitures during the
Interim Period by the Charter Entities or their Subsidiaries of cable television systems owned
by any of them in the aggregate amount not to exceed $25,000,000;
"Environmental Law" has the meaning set forthJn Section 3.2(0);
"ERISA" has the meaning set forth in Section 3.20)(i);
"ERISA Affiliate" has the meaning set forth in Section 3.2(1)(i);
"Exchange Act" means the Securities Exchange Act of 1934, as amended;
"Expiration Date" has the meaning set forth in Section 9 .1 (b);
"FAA" means the Federal Aviation Administration;
"FCC" means the Federal Communications Commission;
.
"FCC Licenses" means permits, licenses and authorizations of the Charter
Entities and their respective Subsidiaries granted by the FCC;
"Form 394" means the FCC form to be filed with Franchise authorities,
where required, to initiate the process of approval by such Franchise authorities with respect
to the transfer of control of the entity to whom such Franchise has been granted;
"Franchises" means the cable television franchises of the Charter Entities
and their respective' Subsidiaries;
"GAAP" means generally accepted accounting principles in the United States
of America as in effect from time to time set forth in the opinions and pronouncements of
the Ac~ounting Principles Board and the American Institute of Certified Public Accountants
and the: statements and pronouncements of the Financial Accounting Standards Board, or in
.
DO NY-141732.9
8/5/98 4:39 PM
4
.
such other statements by such other entity as may be in general use by significant segments
of the accounting profession, which are applicable to the circumstances as of the date of
determination;
"Governmental Authority" has the meaning set f~rth in Section 3.1 (c )(ii);
"Hazardous Substances" has the meaning set forth in Section 3.2(0);
"hereof', "hereunder", "hereby", "hereto" and similar terms refer to this
Agreement in its entirety and not only to the particular Section in which they appear;
"HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended;
"Interim Period" means the period from, and including, the date hereof to
.
the Closing;
"IRS" means the Internal Revenue Service;
"Liens" means any lien, encumbrance, option to purchase, option to lease,
contract to sell, transfer or exchange, claim, charge, restriction, pledge, mortgage, security
interest or other encumbrance;
"Material Agreement" has the meaning set forth in Section 3.2(i);
"Material Adverse Effect" means any effect that is or is reasonably likely
to be materially adverse to the business, results of operations or financial condition of the
Charter Entities and their respective Subsidiaries, taken as a whole, except for effects due to
general economic or industry-wide conditions;
.
DO NY."141732.9
8/5/984 39 PM
5
.
.
.
"person" means an individual, a firm, a corporation, a syndicate, a
partnership, a limited liability company, an association, a joint venture, a government or
agency thereof or any other legal or business entity whatsoever;
"Plans" has the meaning set forth in Section 3.2(1)~
"Preferred Interests" means the Preferred LP Units of CharterComm
Holdings and the Class A and Class B Preferred Membership Interests in Charter
Comnunications Properties L.L.c.;
"Purchase Price" has the meaning set forth in Section 2.2;
"Purchase Price Allocation Schedule" has the meaning set forth in Section
2.3(a);
"Purchase Price Deposit Escrow Agent" means The Chase Manhattan
Bank;
"Purchase Price Escrow Deposit" has the meaning set forth in Section
2.3(a);
"Purchased Interests" means, collectively, all of the Charter Shares, the
CharterComm Membership Interest, the limited partnership interests (other than Preferred
Interests) in CharterComm Holdings and the Special Interests, as set forth in Schedule 2.1,
to be purchased by the Buyer pursuant to this Agreement;
"SEC Reports" has the meaning set forth in Section 3.2(h);
"Securities Act" means the Securities Act of 1933, as amended;
"Seller Charter Entities" has the meaning set forth in Section 3.1 (c )(i);
DO NY.1417:12.9
8/5/984:39 PM
6
.
.
.
"Seller Representative" means CCI;
"Special Interests" has the meaning set forth in Section 5.10;
"Subsidiary" means, with respect to any person, (i) any corporation,
asso ciation or other business entity of which more than 50% of the total voting power of
shar,es of capital stock or equity interests that are entitled (without regard to the occurrence
of any contingency) to vote in the election of directors, managers or trustees thereof is at the
time owned or controlled, directly or indirectly, by such person or one or more of the other
Sub~:idiaries of such person (or a combination thereof), (ii) any partnership (a) the sole
general partner or the managing general partner of which is such person or a Subsidiary of
such person or (b) the only general partners of which are such person and/or one or more
Subsidiaries of such person (or any combination thereof), and (iii) any limited liability
company (a) the sole manager of which is such person or a Subsidiary of such person or (b)
the only managers of which are such person and/or one or more Subsidiaries of such person
(or any combination thereof), provided that Subsidiaries shall not include Cencom Cable
Income Partners, L.P., Cencom Cable Income Partners I L.P. and Cencom Partners, L.P.;
"Swap Transactions" means, collectively, all transactions during the Interim
Period by the Charter Entities or their Subsidiaries involving exchanges of Systems
containing not more than 50,000 subscribers in the aggregate for cable television systems
ownec. by other persons;
"Systems" means cable television systems and businesses owned and
operated by the Charter Entities or their Subsidiaries, as listed by Franchise on Schedule 1.1;
DO NY-141732.9
8/5/984:3\1 PM
7
.
"T~xes" means all income, alternative or add-on minimum tax, gross income,
gross receipts, gains, sales, use, payroll, employment, franchise, profits, excise, transfer,
recording, environmental, withholding, occupation, premium, property, value added,
business license, possessory interest, severance, windfall profit, c~tom and other taxes, fees,
stamp taxes and duties, assessments or charges of any kind, including estimated taxes
relating to the foregoing, together with any interest and penalties, additions to tax or'
additional amounts imposed by any taxing authority with respect thereto; and
"Tax Return" means any return, report, statement, information statement and
the like required to be filed with any authority wlth respect to Taxes.
2. Purchase and Sale of Purchased Interests.
.
2.1
Purchase and Sale of Purchased Interests. On the terms and subject to the
conditions set forth in this Agreement, and subject to Section 5.6(b), each Seller, severally
and not jointly, hereby agrees to sell to the Buyer, and the Buyer hereby agrees to purchase
from each Seller, the' Purchased Interests listed opposite the name of such Seller on Schedule
LL hereto.
2.2 Purchase Price. Subject to Sections 5.5 and 7.1, the aggregate purchase price,
payable by the Buyer for the Purchased Interests shall be $2,272,000,000 (the "Purchase
Price").
.
DO rIY-141732.9
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8
.
.
.
00 ..., .U1T.1:Z.I1
7~8:14 PM
,... ,""LO.t:. :.</
IN WlTNESS WHEREOF "the parties have executed this AgrecJDQlt.
SELLERs:
~~
NBXD.e: L. Bahrock .
. Title: Partner
By:~Q~
Jerald L. Kent
TItle: Partner
~, · -Sf? n,~
'Jemld L. Kent
~~
CHARTER. COMMUNICATIONS, INe.
By:C~SJJ5!K
Name:ClJ~ s. S;~Dc.aJ
TItle: ~Qt. V1C~ Pfi.8 'DEw.r-
"-
F:l
07/29/98 WED 18:52 fTXlRX NO 9517) ~002
lU:
t-' P.LO e.:
:<:/:
....'
~UL-29-sa 17.16 PROMo
.
JQ=I sn lNVESIMENT ASSOCIATES V..L.P.
By iIs g=aal ~ itdSDP~ V~ L.P.
By:
N:o=e:
TIde: <J--r.al ~
"0:1 SO EQUITY PAR.l'NERS v ~ L.P.
By:
Name:
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SELLERS:
CHARTERCO~CATIONSGROUP
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KELSO INVESTIvfENT ASSOCIATES V, L.P.
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CHARTER EN1TIlES:
CHARTER COMUNICATIONS
LONG BEACH., INC.
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5/1'
CHARTERCOMM HOLDINGS, LoP,
By:
Name:
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PAUL C. ALLL"'l
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CHARTER COMMUNICATIONS, LLC
PROFORMA CLOSING BALANCE SHEET
DECEMBER 31, 1998
Total Assets
8,448,860
256,105,295
1,262,768,866
4,772,378
1,532,095,399
Ourrent Assets
Property, Plant & Equipment
Franchise Costs
Other Assets
Current Liabilities
Long T enn Debt
Owner's Equity
Total Liabilities & Equity
41,506,123
479,206,624
1,011,382,652
1,532,095,399
J:\l...OTUS\AUENSAL 'PHOFORMA. WK4
I17t"'CClC::C:U=hT~ :nT
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CHARTER COMMUNICATIONS, LLC
1998 PROFORMA INCOME STATEMENT
.BJ~VEN U-.E..S
Basic
Premium
Other
Total Revenue
147,329,293
20,399,299
30,7.6;1...0.2..q
198,491,617
OI?.E,MI.t~.G_EXE.~NS.E.S
Service Costs
Programming Expenses
Local Origination & Ad Sales
Marketing Expenses
General & Administrative Exp_
Total Operating Expense
16,739,183
42.560,530
1,681,001
3,627,127
~~Q~JiQ.5
99,111,696
OPERATING INCOME
99,379,921
Management Fees
Interest Expense
9,650,570
37,965,408
Income *
51.763.943
* Does not reflect non-cash charges for depreciation and
amortization expense.
J:"U.OTUSlALLENSAL IP,<IDFORMA. WK4
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~NnTI~~TNnwwn~ ~qI~~H~'WO~~ 99'11 86-1~-~nW