enterprise, against expenses, including attorneys' fees, judgments, fines and
amounts paid in settlement actually and reasonably incurred by the person in
connection with such action, suit or proceeding, if the person acted in good
faith and in a manner the person reasonably believed to be in, or not opposed
to, the best interests of the corporation and, with respect to any criminal
action or proceeding, had no reasonable cause to believe the person's conduct
was unlawful. In addition, the Delaware General Corporation Law permits
indemnification only for expenses (including attorneys fees) in connection with
an action or suit by or in the right of the corporation, and, in respect of any
claim, issue or matter as to which such person shall have been adjudged to be
liable to the corporation, such indemnification is permitted only to the extent
that the court in which such action or suit was brought shall determine upon
application that, despite the adjudication of liability, but in view of all the
circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses, which such court shall deem proper. To the extent
that a present or former director or officer of a corporation has been
successful on the merits or otherwise in defense of any action, suit or
proceeding referred to above, or in defense of any claim, issue or matter, such
person shall be indemnified against expenses, including attorneys' fees,
actually and reasonably incurred by such person.
INDEMNIFICATION UNDER THE LIMITED LIABILITY COMPANY AGREEMENT OF CHARTER
COMMUNICATIONS HOLDING COMPANY
The limited liability company agreement of Charter Communications Holding
Company, entered into as of February 9, 1999, by Charter Investment, Inc. as the
initial member, provides that the members, the manager, the directors, their
affiliates or any person who at any time serves or has served as a director,
officer, employee or other agent of any member or any such affiliate, and who,
in such capacity, engages or has engaged in activities on behalf of Charter
Communications Holding Company, shall be indemnified and held harmless by
Charter Communications Holding Company to the fullest extent permitted by law
from and against any losses, damages, expenses, including attorneys' fees,
judgments and amounts paid in settlement actually and reasonably incurred by or
in connection with any claim, action, suit or proceeding arising out of or
incidental to such indemnifiable person's conduct or activities on behalf of
Charter Communications Holding Company. Notwithstanding the foregoing, no
indemnification is available under the limited liability company agreement for
actions constituting bad faith, willful misconduct or fraud. Payment of these
indemnification obligations shall be made from the assets of Charter
Communications Holding Company and the members shall not be personally liable to
an indemnifiable person for payment of indemnification.
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.
The Registrant has not issued any common stock prior to the offering.
Concurrently with the consummation of the offering to which this registration
statement relates, Paul G. Allen, Jerald L. Kent, Barry L. Babcock and Howard L.
Wood will purchase a total of 50,000 shares of Class B common stock for an
aggregate purchase price of $1,000,000. The offering and sale of the shares of
common stock will not be registered under the Securities Act of 1933 because the
offering and sales will be made in reliance on the exemption provided by Section
4(2) of the Securities Act of 1933 and Rule 506 thereunder for transactions by
an issuer not involving a public offering.
At its inception, Charter Communications, Inc. issued in July 1999 100
shares of its Class A common stock to Charter Investment, Inc. This transaction
was undertaken as a private placement.
In September 1999, Charter Communications Operating, LLC, our affiliate,
acquired Rifkin Acquisition Partners L.L.L.P. and Interlink Communications
Partners, LLLP. In exchange for a portion of the equity of these entities,
Charter Communications Holding Company, LLC issued 133,312,118 of its Class A
preferred membership units to 27 individuals and entities. The Charter