ALLOCATION OF BUSINESS OPPORTUNITIES WITH MR. ALLEN
As described under "-- Business Relationships", Mr. Allen and a number of
his affiliates have interests in various entities that provide services or
programming to a number of our subsidiaries. Given the diverse nature of Mr.
Allen's investment activities and interests, and to avoid the possibility of
future disputes as to potential business, Charter Communications Holding Company
and Charter Communications, Inc. may not, under the terms of their
organizational documents, engage in any business transaction outside the cable
transmission business except for the joint venture with Broadband Partners and
incidental businesses engaged in as of the closing of this offering. We will be
subject to this restriction until all shares of Class B common stock have
converted into Class A common stock. See "Description of Capital Stock and
Should we wish to pursue a business transaction outside of this scope, we
must first offer Mr. Allen the opportunity to pursue the particular business
transaction. If he decides not to do so and consents to our engaging in the
business transaction, we will be able to do so. In any such case, the restated
certificate of incorporation and the limited liability company agreement would
be amended accordingly to appropriately modify the current restrictions on our
ability to engage in any business other than the cable transmission business.
The cable transmission business means the business of transmitting video, audio,
including telephony, and data over cable television systems owned, operated or
managed by us from time to time. Under Charter Communications, Inc.'s restated
certificate of incorporation, the businesses of RCN Corporation, a company in
which Mr. Allen is making a significant investment, are not considered cable
transmission businesses. See "-- Business Relationships -- RCN Corporation".
Under Delaware corporate law, each director of Charter Communications,
Inc., including Mr. Allen, is generally required to present to Charter
Communications, Inc. any opportunity he or she may have to acquire any cable
transmission business or any company whose principal business is the ownership,
operation or management of cable transmission businesses so that we may
determine whether we wish to pursue such opportunities. However, Mr. Allen and
the other directors generally will not have an obligation to present to Charter
Communications, Inc. other business opportunities and they may exploit such
opportunities for their own account.
ASSIGNMENTS OF ACQUISITIONS
On January 1, 1999, Charter Investment, Inc. entered into a membership
purchase agreement with ACEC Holding Company, LLC for the acquisition of
American Cable. On February 23, 1999, Charter Investment, Inc. assigned its
rights and obligations under this agreement to one of our subsidiaries, Charter
Communications Entertainment II, LLC, effective as of March 8, 1999, or such
earlier date as mutually agreed to by the parties. The acquisition of American
Cable was completed in May 1999.
On February 17, 1999, Charter Investment, Inc. entered into an asset
purchase agreement with Greater Media, Inc. and Greater Media Cablevision, Inc.
for the acquisition of the Greater Media systems. On February 23, 1999, Charter
Investment, Inc. assigned its rights and obligations under this agreement to one
of our subsidiaries,