Exhibit
10.4
RESTRUCTURING
AGREEMENT
This
RESTRUCTURING AGREEMENT (this “ Agreement ”) is
made and entered into as of February 11, 2009 by and between the
following parties:
(a)
Paul
G. Allen (the “ Undersigned Holder
”);
(b)
Charter Investment, Inc. (“ CII ”);
and
(c)
Charter Communications, Inc., a Delaware corporation (“
CCI ” or the “ Company ” and the
Undersigned Holder, CII and the Company, each, a “
Party ”, and collectively, the “ Parties
”).
RECITALS
WHEREAS
, the
Company has determined that a restructuring of certain of its
obligations is in the best interests of its
stakeholders;
WHEREAS
,
other holders of certain claims under that certain
11% Senior Notes Indenture dated as of September 28, 2005
(each, a “ Consenting 11% Old Senior Note Holder
”), by and between CCH I, LLC and CCH I Capital Corp., as
issuers, Charter Communications Holdings, LLC, as parent guarantor,
and The Bank of New York Trust Company, N.A., as trustee (the
“ 11% Indenture ”), each of whom are
unaffiliated parties, are party to other restructuring agreements
with the Company;
WHEREAS
,
other holders of certain claims under that certain 11% Senior Notes
Indenture dated as of September 14, 2006 (each, a “
Consenting 11% New Senior Note Holder ”), by and
between CCH I, LLC and CCH I Capital Corp., as issuers, Charter
Communications Holdings, LLC, as parent guarantor, and The Bank of
New York Trust Company, N.A., as trustee (the “
11% Supplemental Indenture ”), each of whom are
unaffiliated parties, are party to other restructuring agreements
with the Company;
WHEREAS
,
other holders of certain claims under that certain 10.25% Senior
Notes Indenture dated as of September 14, 2006 (each, a
“ Consenting 10.25% Old Senior Note Holder ”),
by and between CCH II, LLC and CCH II Capital Corp., as issuers,
Charter Communications Holdings, LLC, as parent guarantor, and The
Bank of New York Trust Company, N.A., as trustee (the “
10.25% Indenture ”), each of whom are unaffiliated
parties, are party to other restructuring agreements with the
Company;
WHEREAS
,
other holders of certain claims under that certain 10.25% Senior
Notes Supplemental Indenture dated as of July 2, 2008 (each, a
“ Consenting 10.25% New Senior Note Holder ” and
together with the Undersigned Holder, the Consenting 11% Old Senior
Note Holders, the Consenting 11% New Senior Note Holders and the
Consenting 10.25% Old Senior Note Holders, the “
Consenting Holders ”), between CCH II, LLC and CCH II
Capital Corp., as
issuers,
Charter Communications Holdings, LLC, as parent guarantor, and The
Bank of New York Mellon Trust Company, N.A., as trustee (the
“ Supplemental 10.25% Indenture ” and
together with the 11% Indenture, the 11% Supplemental
Indenture and the 10.25% Indenture, the “ Indentures
”), each of whom are unaffiliated parties, are party to other
restructuring agreements with the Company;
WHEREAS
, each
Consenting Holder is the holder of a claim, as defined in section
101(5) of the Bankruptcy Code, 11 U.S.C. §§ 101-1532
(the “ Bankruptcy Code ”) arising out of, or
related to the 11% Indenture and/or the 11% Supplemental
Indenture (each, a “ 11% Senior Note Claim
”) and/or the 10.25% Indenture and/or the 10.25% Supplemental
Indenture (each, a “ 10.25% Senior Note Claim ”
and together with the 11% Senior Note Claims, the “
Charter Claims ”);
WHEREAS
, the
Parties now desire to implement a financial restructuring (the
“ Restructuring ”) of the Company and the
Debtors (as defined in the Term Sheet (as defined below)) on the
terms and conditions set forth in the term sheet (including all
exhibits and financing commitments referenced therein, the “
Term Sheet ”) attached hereto as Exhibit 1
; 1
WHEREAS
, the
Parties intend to implement the Restructuring through a confirmed
joint plan of reorganization, consistent in all material respects
with the terms and conditions set forth in this Agreement, the Term
Sheet and the joint plan of reorganization contemplated thereby (as
the same may be amended from time to time in accordance with the
terms of this Agreement, the “ Plan ”), for the
Debtors in voluntary cases (the “ Chapter 11 Cases
”) to be commenced by the Debtors by jointly filing petitions
(the “ Petitions ”) under chapter 11 of the
Bankruptcy Code (the date of that event being the “
Petition Date ”) in the United States Bankruptcy Court
(the “ Bankruptcy Court ”);
WHEREAS
, the
Parties have engaged in good faith negotiations with the objective
of reaching an agreement with regard to restructuring the
outstanding claims of, and interests in, the Company in accordance
with the terms set forth in this Agreement and the Term
Sheet;
WHEREAS
, each
Party has reviewed, or has had the opportunity to review, this
Agreement and the Term Sheet with the assistance of professional
legal advisors of its own choosing;
WHEREAS
, each
Consenting Holder desires to support and vote to accept the Plan
and may enter into an agreement with the Company substantially
similar in form and substance to this Agreement;
WHEREAS
, the
Company desires to obtain the commitment of the Consenting Holders
to support and vote to accept the Plan, in each case subject to the
terms and conditions set forth herein and in the other
restructuring agreements to which the other Consenting Holders are
party; and
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Capitalized
terms not otherwise defined herein shall have the meaning ascribed
to them in the Term Sheet.
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WHEREAS
,
subject to the execution of definitive documentation and
appropriate approvals by the Bankruptcy Court of the Plan and the
associated disclosure statement (as the same may be amended from
time to time, the “ Disclosure Statement ”),
each of which, including as amended, shall be consistent with the
Term Sheet, the following sets forth the agreement between the
Parties concerning their respective obligations.
AGREEMENT
NOW
THEREFORE , in
consideration of the promises and the mutual covenants and
agreements set forth herein, and for other good and valuable
consideration, the receipt and sufficiency of which is hereby
acknowledged, the Parties hereby agree as follows:
The
Term Sheet is incorporated by reference herein and is made part of
this Agreement as if fully set forth herein. The general
terms and conditions of the Restructuring are set forth in the Term
Sheet; provided , however , that the
Term Sheet is supplemented by the terms and conditions of this
Agreement. In the event of any inconsistencies between
the terms of this Agreement and the Term Sheet, the Term Sheet
shall govern.
2.
Effectuating
the Restructuring .
To
implement the Term Sheet, the Parties have agreed, on the terms and
conditions set forth herein, that the Company shall use its
commercially reasonable best efforts to:
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solicit
the requisite acceptances of the Plan (i) in accordance with
section 1125 of the Bankruptcy Code; and (ii) if solicited after
the Chapter 11 Cases have commenced, the Bankruptcy Court has
approved the Disclosure Statement;
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move
the Bankruptcy Court to confirm the Plan as expeditiously as
practicable under the Bankruptcy Code, including under section
1129(b) thereof, the Federal Rules of Bankruptcy Procedure and the
Bankruptcy Court’s local rules (the federal and local rules
being the “ Bankruptcy Rules ”); and
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provided
,
however , that the form and substance of the Plan
(including any Plan Supplement filed in connection therewith) and
the Disclosure Statement shall be consistent in all material
respects with the Term Sheet.
3.
Commitments
of the Undersigned Holder Under this Agreement and the Term
Sheet.
(a)
Voting by Undersigned Holder.
As
long as a Termination Event (as defined herein) has not occurred,
or has occurred but has been duly waived or cured in accordance
with the terms hereof, the Undersigned Holder agrees for itself
that, so long as it is the legal owner, beneficial owner and/or the
investment advisor or manager of or with power and/or authority to
bind any Charter Claims and has been properly solicited pursuant to
sections 1125 and 1126 of the Bankruptcy Code, it shall timely vote
its Charter Claims (and not revoke or withdraw its vote) to accept
the Plan, subject to the proviso in Section 2 hereof.
As
long as a Termination Event has not occurred, or has occurred but
has been duly waived or cured in accordance with the terms hereof,
the Undersigned Holder, agrees for itself that, so long as it
remains the legal owner, beneficial owner and/or the investment
advisor or manager of or with power and/or authority to bind any
Charter Claims, subject to the proviso in Section 2 hereof, by
having executed and become party to this Agreement, it
will:
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from
and after the date hereof not directly or indirectly seek, solicit,
support or vote in favor of any other plan, sale, proposal or offer
of dissolution, winding up, liquidation, reorganization, merger or
restructuring of the Company that could reasonably be expected to
prevent, delay or impede the Restructuring of the Company as
contemplated by the Term Sheet, the Plan or any other document
filed with the Bankruptcy Court in furtherance of confirming the
Plan;
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agree
to permit disclosure in the Disclosure Statement and any filings by
the Company with the Securities and Exchange Commission of the
contents of this Agreement; provided that the amount
of the Charter Claims held by the Undersigned Holder shall be
disclosed only to the Company and shall not be disclosed by the
Company to any other person or entity;
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cooperate
with the Company to secure consents, approvals or waivers required
to be obtained from governmental authorities in connection with the
Plan with respect to the transfer or change in control of
Franchises (as defined in the Communications Act of 1934, as
amended, 47 U.S.C. Sections 151 et seq. ), licenses and
permits; provided that the Company shall reimburse
the Undersigned Holder for all reasonable out-of-pocket expenses
incurred in connection with this Section 3(b)(iii); and
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forbear
from exercising, directly or indirectly, any right to accelerate or
commence any action to collect indebtedness outstanding under any
indenture to which the Company and/or any of its subsidiaries
(each, a “ Company Indenture ”) is a party or to
file or join in an involuntary petition for relief under the
Bankruptcy Code against the Company based upon the failure to pay
any such indebtedness.
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As
long as a Termination Event has not occurred, or has occurred but
has been duly waived or cured in accordance with the terms hereof,
the Company and the Undersigned Holder, so long as it is the legal
owner, beneficial owner and/or the investment advisor or manager of
or with power and/or authority to bind any Charter Claim, further
agree that they shall not:
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object
to or otherwise commence any proceeding opposing any of the terms
of this Agreement, the Term Sheet, the Disclosure Statement or
the Plan; or
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take
any action that is inconsistent with, or that would delay approval
of the Disclosure Statement or Confirmation of the Plan.
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(c)
Transfer of Claims, Interests and Securities.
The
Undersigned Holder hereby agrees, for so long as this Agreement
shall remain in effect (such period, the “ Restricted
Period ”), not to sell, assign, transfer, hypothecate or
otherwise dispose of, directly or indirectly (each such transfer, a
“ Transfer ”), all or any of its Charter Claims
(or any right related thereto and including any voting rights
associated with such Charter Claims), unless the transferee
thereof (a) agrees in an enforceable writing to assume and be bound
by this Agreement and the Term Sheet, and to assume the rights and
obligations of the Undersigned Holder under this Agreement and (b)
promptly delivers such writing to the Company (each such transferee
becoming, upon the Transfer, an Undersigned Holder
hereunder). The Company shall promptly acknowledge any
such Transfer in writing and provide a copy of that acknowledgement
to the transferor. By its acknowledgement of the
relevant Transfer, the Company shall be deemed to have acknowledged
that its obligations to the Undersigned Holder hereunder shall be
deemed to constitute obligations in favor of the relevant
transferee as an Undersigned Holder hereunder. Any sale,
transfer or assignment of any Relevant Claim (as defined below)
that does not comply with the procedure set forth in the first
sentence of this Subsection 3(c) shall be deemed void ab
initio . To extent permitted by law, the Undersigned
Holder shall be permitted to Transfer Class A Common Stock of the
Company so long as an ownership change under section 382 of the
Internal Revenue Code would not occur as a result of the
Transfer. Notwithstanding any order establishing certain
notice periods with respect to monitoring transfers of Class A
Common Stock, upon request of the Undersigned Holder the Company
shall promptly (to the fullest extent permitted by any such order)
evaluate and notify the Undersigned Holder of whether it will
consent to or waive certain restrictions with respect to the
proposed Transfer, which consent and/or waiver shall not be
unreasonably withheld.
(d)
Further Acquisition of Charter Claims.
This
Agreement shall in no way be construed to preclude the Undersigned
Holder or any of its respective subsidiaries from acquiring
additional Charter Claims; provided that any such
additional Charter Claims acquired by the Undersigned Holder or any
subsidiary thereof shall automatically be deemed to be subject to
the terms of this Agreement. Upon the request of the
Company, the Undersigned Holder shall, in writing and within five
(5) business days, provide an accurate and current list of all
Charter Claims that it and any subsidiary holds at that time,
subject to any applicable confidentiality restrictions and
applicable law.
(e)
Representation of the Undersigned Holder’s
holdings.
The
Undersigned Holder represents that, as of the date
hereof:
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CII
is the legal owner, beneficial owner and/or the investment advisor
or manager for the legal or beneficial owner of such Charter Claims
set forth on its respective signature page (collectively, the
“ Relevant Claims ”);
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there
are no Charter Claims of which CII is the legal owner, beneficial
owner and/or investment advisor or manager for such legal or
beneficial owner that are not part of CII’s Relevant Claims
unless CII does not possess the full power to vote and dispose of
such claims; and
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CII
has full power to vote, dispose of and compromise the aggregate
principal amount of the Relevant Claims, subject to applicable
securities laws.
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(f)
Representation of Capacity
The
Undersigned Holder is executing this Agreement solely in his
capacity as the beneficial owner of claims against the Debtors and
of equity interests in the Debtors. No covenant,
agreement or understanding made by the Undersigned Holder in this
Agreement is made in his capacity as a chairperson or director of
CCI or shall prevent or in any way limit the Undersigned Holder
from taking any action or refraining from taking any action in his
capacity as a chairperson or director of CCI.
4.
The
Company’s Responsibilities.
Bondholder
Support Agreements.
(a)
The
Company represents and warrants that it has entered into (or
concurrently herewith is entering into) binding restructuring, plan
support or lock-up agreements consistent in all material respects
with the terms and provisions of this Agreement and the Plan
(“ Bondholder Support Agreements ”)
with:
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more
than two thirds in amount of holders of claims arising out of, or
related to, the 11% Senior Notes Indenture dated as of
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