Commitment Letter for Bridge Loan Financing between Charter Communications Holdings, LLC and Goldman Sachs Credit Partners L.P. and Morgan Stanley Senior Funding, Inc.

Summary

This agreement is a commitment letter in which Goldman Sachs Credit Partners L.P. and Morgan Stanley Senior Funding, Inc. agree to provide Charter Communications Holdings, LLC and its affiliate with up to $2 billion in bridge loans. The loans are intended to help Charter finance the acquisition of certain cable systems from AT&T and for other corporate purposes. The commitment is subject to conditions, including the completion of the acquisition, negotiation of final loan documents, and possible syndication to other lenders. Charter may also arrange for additional lenders within a set time period.

EX-10.24 11 y44579tkex10-24.txt COMMITMENT LETTER 1 EXHIBIT 10.24 CONFORMED COPY GOLDMAN SACHS CREDIT PARTNERS L.P. MORGAN STANLEY SENIOR FUNDING, INC. C/O GOLDMAN, SACHS & CO. 1585 BROADWAY 85 BROAD STREET NEW YORK, NEW YORK 10036 NEW YORK, NEW YORK 10004 COMMITMENT LETTER PERSONAL AND CONFIDENTIAL February 26, 2001 Mr. Kent Kalkwarf Chief Financial Officer Charter Communications Holdings, LLC Charter Communications Holdings Capital Corporation 12444 Powerscourt Drive St. Louis, Missouri 63131 Ladies and Gentlemen: We are pleased to confirm the arrangements under which Goldman Sachs Credit Partners L.P. ("GSCP") and Morgan Stanley Senior Funding, Inc. ("MSSF" and, together with GSCP, the "Administrative Agents") are exclusively authorized by Charter Communications Holdings, LLC and Charter Communications Holdings Capital Corporation (collectively, "Charter") to act as joint arrangers and joint syndication agents in connection with the bridge loans described herein, and, together with any additional initial lenders arranged for by Charter pursuant to Section 1(b) hereof and made party to this Commitment Letter (collectively with GSCP and MSSF, the "Initial Lenders") and any other entities that become lenders in accordance with the syndication arrangements set forth below (collectively with the Initial Lenders, the "Lenders"), commit, severally and not jointly, to provide the bridge loans described herein, in each case on the terms and subject to the conditions set forth in this letter and the attached Annex A (together, the "Commitment Letter") and the Fee Letter (as defined below). We understand that Charter has entered into agreements, dated today, with AT&T Broadband & Internet Services ("AT&T") to acquire certain cable systems owned by AT&T in Alabama, Missouri and Nevada (collectively, the "Acquisition"). We understand that Charter may require funds on an interim basis, in the form of bridge loans, to fund the Acquisition and Charter's accelerated capital expenditure plan and for general corporate purposes. 2 1. Commitment. (a) Each of GSCP and MSSF is pleased to confirm its commitment (each a "Commitment"), severally and not jointly, to provide Charter with Senior Increasing Rate Bridge Loans (the "Bridge Loans"), in the principal amount set forth opposite its name on Schedule I hereto, or such lesser pro rata amount as Charter may specify, having the terms set forth on Annex A, on the terms and subject to the conditions contained in this Commitment Letter; provided that the Commitments of GSCP and MSSF shall be reduced, on a pro rata basis, by an amount equal to the aggregate amount of additional commitments arranged by Charter pursuant to Section 1(b) hereof. Each Lender's Commitment is subject to the conditions set forth in this Commitment Letter, including, without limitation, the conditions precedent set forth in Annex A hereto, and to the negotiation, execution and delivery of definitive documentation, including, without limitation, a bridge loan agreement (the "Bridge Loan Agreement"), consistent with the terms of Annex A hereto and satisfactory to each of Charter, the Lenders and their counsel and the satisfaction of the terms, conditions and covenants contained therein. The terms of this Commitment Letter are intended as an outline of certain of the material terms of the Bridge Loans, but do not include all of the terms, conditions, covenants, representations, warranties, default clauses and other provisions that will be contained in the Bridge Loan Agreement. (b) Charter shall have the right, for a period of 15 business days after the date of the first announcement by Charter of the proposed Acquisition, to arrange for additional banks or financial institutions to commit to provide Bridge Loans pursuant to this Commitment Letter up to an aggregate amount of $600 million, subject to the consent of the Administrative Agents to any such additional bank or financial institution (which consent will not be unreasonably withheld). Charter, GSCP and MSSF agree to amend and restate this Commitment Letter as soon as practicable after the earlier of (x) the last day of such 15-day period and (y) the date that Charter notifies the Administrative Agents that it has arranged an aggregate of $600 million in additional commitments hereunder, to add hereto any such additional banks or financial institutions and to reflect their respective commitments to provide Bridge Loans in accordance with the terms of this Commitment Letter (as well as their pro rata allocation of the fees set forth in the Fee Letter (as herein defined)), the maximum aggregate commitments hereunder for all Lenders not to exceed $2 billion. (c) Notwithstanding the foregoing, if the Acquisition or any part thereof is not completed for any reason or if either Charter or AT&T, or any of their respective affiliates, publicly announces its intent (or if Charter decides or is notified that AT&T has decided) not to pursue or complete the Acquisition or any part thereof for any reason, the Commitments of the Lenders hereunder shall be automatically and permanently reduced, on a pro rata basis, by the principal amount or amounts set forth on Schedule II hereto, up to $1 billion. Charter shall promptly notify the Administrative Agents of any decision by it or AT&T not to pursue or complete the Acquisition or any part thereof. 2 3 2. Fees and Expenses. The fees for these services are set forth in a separate fee letter (the "Fee Letter"), dated the date hereof, entered into by GSCP, MSSF and Charter. In addition, pursuant to an engagement letter (the "Engagement Letter"), dated the date hereof, among Charter, Charter Communications, Inc., Goldman, Sachs & Co. ("Goldman Sachs") and Morgan Stanley & Co. Incorporated ("Morgan Stanley" and, together with Goldman Sachs, the "Underwriters"), Charter and Charter Communications, Inc. have agreed to offer the Underwriters the right to act as the exclusive initial purchasers, underwriters or placement agents in connection with the sale of Securities (as defined in the Engagement Letter) and to offer Goldman Sachs and Morgan Stanley the right to act as joint bookrunners, in each case, pursuant to the terms of the Engagement Letter. 3. Syndication. The Administrative Agents intend and reserve the right to syndicate the Commitments and/or the Bridge Loans to other Lenders (the "Syndication"), subject to Section 1(b) hereof. The Administrative Agents will lead the Syndication, including determining the timing of all offers to potential Lenders and the acceptance of commitments, any title of agent or similar designations awarded to Lenders, the amounts offered and the compensation provided to each Lender from the amounts to be paid to the Administrative Agents pursuant to the terms of this Commitment Letter and the Fee Letter. Subject to Section 1(b), the Administrative Agents will determine the identity of any entities that become Lenders after the date hereof and the final commitment allocations subject to the consent of Charter, which will not be unreasonably withheld, and will notify Charter of such determinations. Pursuant to the syndication process described herein, the rights and obligations of each Lender, including the right and obligation to make any Bridge Loan, may (with the consent of the Administrative Agents (in their sole discretion) prior to the earlier of (x) the date that is four months after the Closing Date (as defined in Annex A) and (y) the date on which the Syndication has been completed (as determined by the Administrative Agents), and thereafter with the consent of the Administrative Agents (such consent not to be unreasonably withheld), in each case subject to the consent of Charter in the case of transfers to non-affiliates, which consent will not be unreasonably withheld) be assigned by such Lender, in whole or in part, to any other bank, financial institution or other investor and upon such assignment, the assignee shall become a Lender hereunder and the assigning Lender will be relieved from all obligations with respect to any Commitment assigned. Prior to the date that is four months after the Closing Date, the Commitments and/or Bridge Loans of the Initial Lenders shall be reduced on a pro rata basis as and when commitments are received from other Lenders in the Syndication. To ensure an orderly and effective Syndication of the Bridge Loans, Charter agrees that until the later of the termination of the Syndication as determined by the Administrative Agents and 90 days following the date of initial funding under the Bridge Loans, Charter will not and will not permit any of its subsidiaries to syndicate or issue, attempt to syndicate or issue, announce or authorize the announcement of the syndication or issuance of, or engage in discussions concerning the syndication or issuance of, any debt 3 4 facility or debt or preferred or common equity security (other than the Bridge Loans), including any renewals or refinancings of any existing debt facility or debt or preferred equity security, without the prior written consent of the Administrative Agents (which consent will not be unreasonably withheld). Notwithstanding the foregoing, Charter may syndicate (and take appropriate actions in connection therewith) at any time (x) up to an aggregate of $590 million currently permitted to be incurred under the incremental term facilities, or greenshoes, under the current Falcon and Charter Operating credit facilities (not to exceed $400 million in the case of the Charter Operating facility) less the aggregate amount of any additional Falcon credit facility commitments syndicated pursuant to the following clause and (y) the refinancing or replacement of the current Falcon credit facility (including the syndication of up to $590 million in additional commitments in connection therewith less the aggregate amount of Falcon and Charter Operating incremental term facility borrowings syndicated under the preceding clause (x)). The Lenders acknowledge that Charter has no obligation to utilize the financing offered hereby and can terminate this Commitment Letter at any time. 4. Cooperation. Charter agrees to cooperate, and to cause its affiliates to cooperate, with the Administrative Agents in connection with (i) the preparation of an information package regarding the business, operations and prospects of Charter including, without limitation, the delivery of all information relating to the transactions contemplated hereunder and all other information deemed reasonably necessary by the Administrative Agents to complete the syndication of the Commitments and/or Bridge Loans and (ii) the presentation of such information package in lender meetings and other communications with prospective Lenders in connection with the syndication of the Bridge Loans. Charter agrees to make its representatives and senior management reasonably available to meet with the Lenders and prospective Lenders and rating agencies and to make customary "road show" presentations at such locations as the Administrative Agents may reasonably suggest. Charter shall be solely responsible for the contents of any such information package and presentation (other than information concerning the Lenders and the syndication process) and acknowledges that the Lenders will be using and relying upon the information contained in such information package and presentation without independent verification thereof. In addition, Charter represents and covenants that all information provided by Charter or its agents to the Administrative Agents or the other Lenders in connection with the transactions contemplated hereunder is and will be complete and correct in all material respects and does not and will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements contained therein, in light of the circumstances under which they were made, not misleading. Charter agrees to supplement such information from time to time until the Closing Date and, if requested by the Administrative Agents in writing, for a reasonable period thereafter (not to exceed six months) necessary to complete the syndication of the Commitments and/or Bridge Loans, so that the representations and covenants contained in the preceding sentence remain correct. 4 5 5. Indemnification and Contribution. In partial consideration for our commitments hereunder, Charter hereby agrees to indemnify and hold harmless each Lender, each of the members or shareholders or other investors or holders of interests in, or other transferees of any Lender (collectively, "Additional Investors"), any affiliates of the Lenders and the Additional Investors, and each other person, if any, controlling the Lenders or any Additional Investors and any of their respective affiliates, and any of the directors, officers, agents and employees of any of the foregoing (each, an "Indemnified Person") from and against any losses, claims, damages or liabilities related to, arising out of or in connection with the matters which are the subject of the commitments made hereunder (including, without limitation, any use made or proposed to be made by Charter of the proceeds from the transactions referred to above) (collectively, the "Subject Matter"), and will reimburse any Indemnified Person for all expenses (including fees and expenses of counsel) as they are incurred in connection with investigating, preparing, pursuing or defending any action, claim, suit, investigation or proceeding related to, arising out of or in connection with the Subject Matter, whether or not pending or threatened and whether or not such action, claim, suit, investigation or proceeding is brought by you, your affiliates, creditors or any Indemnified Person, or any Indemnified Person is otherwise a party thereto. Charter will not, however, be responsible to an Indemnified Person for any losses, claims, damages or liabilities (or expenses relating thereto) that are finally judicially determined to have resulted from the bad faith or gross negligence of such Indemnified Person. Charter also agrees that no Indemnified Person shall have any liability (whether direct or indirect, in contract or tort or otherwise) to Charter for or in connection with the Subject Matter, except for any such liability for losses, claims, damages or liabilities incurred by Charter that are finally judicially determined to have resulted from the bad faith or gross negligence of such Indemnified Person. No Lender shall be liable or responsible for any consequential damages that may be alleged as a result of any failure to fund the Bridge Loans. Charter will not, without the prior written consent of the Lenders, settle, compromise, consent to the entry of any judgment in or otherwise seek to terminate any action, claim, suit, investigation or proceeding in respect of which indemnification may be sought hereunder (whether or not any Indemnified Person is a party thereto) unless such settlement, compromise, consent or termination includes a full and unconditional release of each Indemnified Person from any liabilities arising out of such action, claim, suit, investigation or proceeding. No Indemnified Person seeking indemnification, reimbursement or contribution under this agreement will, without Charter's prior written consent, settle, compromise, consent to the entry of any judgment in or otherwise seek to terminate any action, claim, suit, investigation or proceeding referred to in the preceding paragraph. If the indemnification provided for in the second preceding paragraph of this Commitment Letter is judicially determined to be unavailable (other than in accordance with the terms hereof) to an Indemnified Person in respect of any losses, 5 6 claims, damages or liabilities referred to herein, then, in lieu of indemnifying such Indemnified Person hereunder, Charter agrees to contribute to the amount paid or payable by such Indemnified Person as a result of such losses, claims, damages or liabilities (and expenses relating thereto) (i) in such proportion as is appropriate to reflect the relative benefits to Charter on the one hand, and the Lenders, on the other hand, of the financing or (ii) if the allocation provided by clause (i) is not available, in such proportion as is appropriate to reflect not only the relative benefits referred to in such clause (i) but also the relative fault of Charter on the one hand, and the Lenders, on the other hand, as well as any other relevant equitable considerations; provided that in no event shall any Lender's contribution to the amount paid or payable exceed the aggregate amount of fees actually received by such Lender under the Fee Letter. 6. Confidentiality. Please note that this Commitment Letter, the Fee Letter, the Engagement Letter and any written or oral advice provided by the Initial Lenders in connection with this arrangement is exclusively for the information of the Board of Directors of Charter and may not be disclosed to any other party or circulated or referred to publicly without the Initial Lenders' prior written consent, except, after providing written notice to the Initial Lenders, pursuant to law or a subpoena or order issued by a court of competent jurisdiction or by a judicial, administrative or legislative body or committee. In addition, we hereby consent to your disclosure of this Commitment Letter, the Fee Letter, the Engagement Letter and such advice to your officers, directors, agents and advisors who are directly involved in the consideration of the Bridge Loans to the extent such persons are obligated to hold such material in confidence and to the filing, after notice to the Administrative Agents, of this Commitment Letter with the SEC, if required, and the description of this Commitment Letter in any SEC filing, to the extent required. 7. Additional Matters. You may not assign any of your rights or be relieved of any of your obligations hereunder without the prior written consent of each of the Lenders. As you know, each of the Lenders is a full service securities firm and as such may from time to time effect transactions, for its own account or the account of customers, and hold positions in securities or options on securities of any of Charter Communications, Inc., Charter and their subsidiaries (collectively, the "Charter Entities") and other companies that may be the subject of this arrangement. In addition, the Administrative Agents may employ the services of their affiliates in providing certain services hereunder and may exchange with such affiliates information concerning any of the Charter Entities and their subsidiaries and other companies that may be the subject of this arrangement. 8. Choice of Law. This Commitment Letter shall be governed by and construed in accordance with the laws of the State of New York. 6 7 9. Trial by Jury. Charter (on its own behalf and, to the extent permitted by law, on behalf of its stockholders) waives any right to trial by jury in any action, claim, suit or proceeding arising out of or in connection with this Commitment Letter, the Engagement Letter and the Fee Letter. The Lenders' Commitments hereunder shall terminate on the earlier of (x) December 31, 2001 and (y) the execution and delivery of the Bridge Loan Agreement, subject to the terms and conditions contained herein. 7 8 Please confirm that the foregoing is in accordance with your understanding by signing and returning to each of GSCP and MSSF one of the enclosed copies of this Commitment Letter, together, if not previously executed and delivered, with the Fee Letter and the Engagement Letter on or before the close of business, on the date first above written, whereupon this Commitment Letter, the Fee Letter and the Engagement Letter shall become binding agreements among us. If not signed and returned as described in the preceding sentence by such date, this offer will terminate on such date. We look forward to working with you on this transaction. Very truly yours, GOLDMAN SACHS CREDIT PARTNERS L.P. By: /s/ Ed Forst --------------------------------------- Authorized Signatory MORGAN STANLEY SENIOR FUNDING, INC. By: /s/ John R. Orem --------------------------------------- Authorized Signatory Confirmed as of the date above: CHARTER COMMUNICATIONS HOLDINGS, LLC By: /s/ Eloise A. Engman --------------------------------------- Eloise A. Engman Vice President CHARTER COMMUNICATIONS HOLDINGS CAPITAL CORPORATION By: /s/ Eloise A. Engman --------------------------------------- Eloise A. Engman Vice President 8 9 Schedule I Commitments

10 Schedule II Amount of Commitment Reductions Pursuant to Section 1(c)

11 ANNEX A SUMMARY OF TERMS AND CONDITIONS OF BRIDGE LOANS This Summary of Terms and Conditions outlines certain terms of the Bridge Loans and the Bridge Loan Agreement referred to in the Commitment Letter, of which this Annex A is a part. Certain capitalized terms used herein are defined in the Commitment Letter. BORROWERS........................................... Charter Communications Holdings, LLC and Charter Communications Holdings Capital Corporation (collectively, "Charter"), jointly and severally liable. LOANS............................................... Senior Increasing Rate Bridge Loans in a principal amount of up to $2.0 billion, subject to reduction as set forth in Section 1(c) of the Commitment Letter and as otherwise provided herein (the "Bridge Loans"). NUMBER OF PERMITTED DRAWS........................... Two (the first such draw, "Draw 1 Bridge Loan" and the second such draw, "Draw 2 Bridge Loan") on or prior to December 31, 2001. MINIMUM DRAW AMOUNT................................. $500 million. NOTICE.............................................. Charter must provide written notice to the Administrative Agents three business days prior to any requested funding date. MATURITY............................................ The Bridge Loans mature one year from the date of the making of Draw 1 Bridge Loan (the "Maturity Date"). If, upon the Maturity Date, the Bridge Loans have not been previously repaid in full, and provided no Conversion Default (as defined below) has occurred and is continuing, the outstanding Bridge Loans shall be automatically converted into Senior Term Loans (each a "Term Loan") due on the nine-year anniversary of the Maturity Date.

12 At any time on or after the Maturity Date, at the option of the applicable Lender, the Senior Term Loans may be exchanged in whole or in part for Senior Exchange Notes due on the nine-year anniversary of the Maturity Date (the "Exchange Notes") having an equal principal amount. The initial date of funding of the Draw 1 Bridge Loan is hereinafter referred to as the "Closing Date." "Conversion Default" shall have the same meaning (with all necessary and appropriate changes having been made) as the term "Conversion Default" set forth in Section 1.1 of the Senior Bridge Loan Agreement, dated as of August 4, 2000 (the "August Agreement"), among Charter and the initial lenders, the sole arranger and the agents parties thereto. The Senior Term Loans will be governed by the provisions of the Bridge Loan Agreement and will have the same terms as the Bridge Loans, except as expressly set forth on Exhibit 1 to this Annex A. The Exchange Notes will be issued pursuant to an Indenture that will have the terms set forth on Exhibit 1 to this Annex A. INTEREST............................................ The Draw 1 Bridge Loan will initially bear interest at a rate per annum equal to (a) the bid-side yield (as confirmed by the Administrative Agents), as of the Closing Date, on the 11.125% Senior Notes due 2011 of Charter or, at the discretion of the Administrative Agents, such other issue of cash-pay senior notes of Charter (the "Benchmark Notes") less (b) 25 basis points. If the Draw 1 Bridge Loan is not repaid in whole within 90 days following the Closing Date, the interest rate on such outstanding Bridge Loan will increase by

A-2 13 125 basis points at the end of such 90-day period and will increase by an additional 50 basis points at the end of each 90-day period thereafter. The last day of each such period being a "Step-Up Date." The Draw 2 Bridge Loan will initially bear interest at a rate per annum equal to the greater of (a) the interest rate on the Draw 1 Bridge Loan on the date of funding of the Draw 2 Bridge Loan and (b) the bid-side yield (as confirmed by the Administrative Agents), as of the date of funding of the Draw 2 Bridge Loan, on the Benchmark Notes. If the Draw 2 Bridge Loan is not repaid in whole by any Step-Up Date following the funding of the Draw 2 Bridge Loan, the interest rate on such outstanding Bridge Loan will increase on such Step-Up Date by an amount equal to the increase in interest rate on Draw 1 Bridge Loan on such Step-Up Date. Notwithstanding the foregoing, except in the case of default interest described below, at no time will the interest rate in effect on the Bridge Loans be less than 9% per annum or exceed 15% per annum. Interest will be payable quarterly in arrears and on the date of any prepayment of the Bridge Loans. Notwithstanding the foregoing, after the occurrence and during the continuance of an Event of Default (to be defined in the Bridge Loan Agreement, as herein specified), interest will accrue on the Bridge Loans at the then applicable rate plus 200 basis points per annum. USE OF PROCEEDS..................................... To fund the Acquisition and Charter's accelerated capital expenditure plan and for

A-3 14 general corporate purposes. MANDATORY REPAYMENT; COMMITMENT REDUCTION........... On the date of each borrowing under the Bridge Loan Agreement, the aggregate stated commitments of the Lenders to make advances shall be automatically and permanently reduced, on a pro rata basis, by an amount equal to the aggregate amount of the borrowings made on such date. The net cash proceeds received by any of the Charter Entities from (i) any direct or indirect public offering or private placement of any debt or equity securities by any of the Charter Entities, (ii) any future bank borrowings by any of the Charter Entities (other than (x) revolving credit borrowings under any of the existing credit facilities of Charter's subsidiaries (the "Credit Facilities") as in effect on the Closing Date, (y) borrowings by Falcon and Charter Operating pursuant to the incremental term facilities, or greenshoes, under the current Falcon and Charter Operating credit facilities, respectively, in an aggregate amount not to exceed $590 million (not to exceed $400 million in the case of the Charter Operating facility) (the "Incremental Borrowings") less the aggregate amount of any Additional Falcon Borrowings (as defined below), and (z) borrowings by Falcon under an amended and restated or new credit facility not to exceed $1.8 billion, representing the $1.21 billion committed under the current Falcon credit facility plus an additional amount of up to $590 million (such additional amount, the "Additional Falcon Borrowings"), less the aggregate amount of any Incremental Borrowings; provided that the aggregate amount under the Credit

A-4 15 Facilities, including the Falcon and the Charter Operating credit facilities, does not exceed $9.2 billion) and (iii) any future asset sales (it being understood that the provisions of the Bridge Loan Agreement regarding asset sales shall be substantially the same (with all necessary and appropriate changes having been made) as those set forth in the August Agreement) by any of the Charter Entities will be used to prepay the Bridge Loans in each case at 100% of the principal amount of the Bridge Loans redeemed plus accrued interest to the date of the redemption subject, in the case of clauses (ii) and (iii) only, to the terms of the existing Credit Facilities or indentures requiring prepayment of any amounts outstanding thereunder; provided that, for purposes of clause (i), "net cash proceeds" shall not include net cash proceeds received by Charter Communications, Inc. ("CCI") from any sale by CCI of shares of its Class A common stock in an amount not to exceed $550 million (or, if the net cash proceeds from such sale are less than $1.1 billion, not to exceed 50% of such net cash proceeds) if such amount of net cash proceeds is designated for payment to AT&T at the closing of the Acquisition or any part thereof as consideration therefor in lieu of CCI issuing shares of Class A common stock to AT&T in connection therewith as long as such amount can be transferred to Charter without restriction to fund the Acquisition or any part thereof and to prepay Bridge Loans and, if such amount were to be transferred to any other Charter Entity, as long as such amount could be subsequently transferred to Charter without restriction to fund the Acquisition or any part thereof and to prepay Bridge Loans (such amount, the "Designated Equity Amount"); provided

A-5 16 further that, if any portion of the Designated Equity Amount is not paid to AT&T in connection with the Acquisition or any part thereof, such portion shall be used promptly to prepay Bridge Loans. The Bridge Loan Agreement will contain a provision to the effect that Charter will be required to use all of the Designated Equity Amount to fund the Acquisition or any part thereof prior to the Lenders being required to make any Bridge Loan for the purpose of funding the Acquisition or any part thereof. The unused commitments of the Lenders (under the Commitment Letter or the Bridge Loan Agreement, as the case may be) shall be automatically and permanently reduced, on a pro rata basis, (A) by an amount equal to the net cash proceeds received by any of the Charter Entities from any transaction specified in clauses (i), (ii) and (iii) of the preceding paragraph minus the amount of such net cash proceeds applied to prepay Bridge Loans in accordance with the preceding paragraph, and (B) as provided in Section 1(c) of the Commitment Letter; provided that, for purposes of clause (A), "net cash proceeds" shall not include any Designated Equity Amount; provided further that, if any portion of the Designated Equity Amount is not paid to AT&T at the closing of the Acquisition or any part thereof, the unused commitments of the Lenders (under the Commitment Letter or the Bridge Loan Agreement, as the case may be), if any, shall be automatically and permanently reduced, on a pro rata basis, by such portion (without duplication of any commitment reductions as provided in Section 1(c) of the Commitment Letter).

A-6 17 In addition, at any time when the Underwriters are no longer entitled under the Engagement Letter to act as initial purchasers, underwriters or placement agents in connection with the sale of Securities and there still remain unused commitments of the Lenders, all unused commitments of the Lenders (under the Commitment Letter or the Bridge Loan Agreement, as the case may be) shall be automatically and immediately terminated in full if any of the Charter Entities enters into any mandate, commitment, engagement or other agreement, whether oral or written, with any person (other than the Underwriters in the capacities contemplated by the Engagement Letter) pursuant to which such person is offered the right to act as an initial purchaser, underwriter or placement agent in connection with any sale of Securities. CHANGE OF CONTROL................................... Each holder of Bridge Loans will be entitled to require Charter, and Charter must offer, to repay the Bridge Loans held by such holder at a price of 100% of principal amount, plus accrued interest, upon the occurrence of a Change of Control (which term shall have the same meaning as the term "Change of Control" set forth in the August Agreement) of Charter, subject to the optional redemption provisions described below. OPTIONAL REPAYMENT.................................. The Bridge Loans may be prepaid, in whole or in part, at the option of Charter at any time upon three business days' written notice at a price equal to 100% of the principal amount thereof plus accrued interest to the date of repayment. PAYMENTS............................................ Payments by Charter will be made by wire

A-7 18 transfer of immediately available funds. TRANSFERABILITY AND PARTICIPATIONS...................................... Each of the Lenders will be free (with the consent of the Administrative Agents (in their sole discretion) prior to the earlier of (x) the date that is four months after the Closing Date and (y) the date on which the Syndication has been completed (as determined by the Administrative Agents), and thereafter with the consent of the Administrative Agents (such consent not to be unreasonably withheld)), to sell or transfer all or any part of or any participation in any of the Bridge Loans to any third party and to pledge any or all of the Bridge Loans to any commercial bank or other institutional lender or the Federal Reserve Bank, to the extent permitted by law. MODIFICATION OF THE BRIDGE LOANS.................................... Modification of the Bridge Loans may be made with the consent of Lenders holding greater than 50% of the Bridge Loans then outstanding, except that no modification or change may extend the maturity of the Bridge Loans or time of payment of interest of the Bridge Loans, reduce the rate of interest or the principal amount of the Bridge Loans, alter the redemption provisions of the Bridge Loans or reduce the percentage of holders necessary to modify or change the Bridge Loans without the consent of Lenders holding 100% of the Bridge Loans affected thereby. COST AND YIELD PROTECTION........................... The Lenders will receive cost and yield protection customary for facilities and transactions of this type, including, but not limited to taxes (including but not limited to gross-up provisions for withholding taxes imposed by the United States or any

A-8 19 State thereof as a result of a change in law, and income taxes associated with all gross-up payments), changes in capital requirements, guidelines or policies or their interpretation or application, illegality, change in circumstances, reserves and other provisions deemed necessary by the Lenders to provide customary protection for U.S. and non-U.S. financial institutions. CONDITIONS PRECEDENT................................ The several obligations of the Lenders to make, or cause one of their respective affiliates to make, Bridge Loans will be subject to closing conditions deemed appropriate by the Lenders for financings of this kind generally and for this transaction in particular, including, without limitation, the closing conditions set forth in paragraphs 1 through 8 below (and such other conditions substantially similar (with all necessary and appropriate changes having been made) to those set forth in the August Agreement except for section 3.1(b) thereof); provided that the Lenders shall not be required to make Bridge Loans to fund the Acquisition in a principal amount in excess of $1.8 billion in total and, with respect to the Missouri, Nevada and Alabama parts of the Acquisition, in excess of the purchase price therefor specified in the agreements for the Acquisition as agreed upon by the Administrative Agents. In addition, the several obligations of the Lenders to make, or cause one of their respective affiliates to make, Bridge Loans to fund the acquisitions of the Nevada and Alabama cable systems that are part of the Acquisition will be subject to the additional condition set forth in paragraph 9 below: 1. Defaults Under Financing Agreements. There shall not exist any default or

A-9 20 event of default under any of the Credit Facilities, the Bridge Loans, the Bridge Loan Agreement or any of the other documents to be executed in connection therewith (the "Loan Documents"), or under other material indebtedness of Charter or its subsidiaries. 2. Due Diligence. Each of the Lenders shall have conducted a due diligence review in form, scope and substance satisfactory to such Lender and shall be satisfied with the results thereof. Such review may include but may not be limited to an examination of (i) the capitalization, corporate and ownership structure of the Charter Entities, (ii) accounting, legal, regulatory, tax, labor, insurance, pension and environmental liabilities, actual or contingent (which, at the request of the Lenders, shall include an environmental audit satisfactory to the Lenders and their counsel), (iii) material contracts, leases and debt agreements and (iv) the general business, operations, financial condition, management, prospects and value of the Charter Entities. The Lenders shall not have become aware of any information relating to conditions or events not previously described to the Lenders or constituting new information or additional developments concerning conditions or events previously disclosed to the Lenders which they, in their judgment, believe may have a material adverse effect on the condition (financial or otherwise), assets, liabilities (contingent or otherwise), properties, solvency, business, management or

A-10 21 prospects of the Charter Entities. 3. Absence of Certain Changes. No material change in the capital stock, liabilities or long-term debt of the Charter Entities (other than increases in liabilities and long-term debt contemplated by and set forth in the supplemental unaudited pro forma data in Charter's Form 10-Q for the quarter ended September 30, 2000 and those incurred in the ordinary course of business consistent with past practice) or any material adverse change, or any development involving a prospective material adverse change, in or affecting the general affairs, management, financial position, stockholders' equity, results of operations or prospects of the Charter Entities, shall have occurred since September 30, 2000 (the date of the most recent financial statements that have been delivered to the Lenders as of the date hereof) and no material inaccuracy in such financial statements shall exist. No Change of Control shall have occurred. On or after the date hereof (i) no downgrading (other than a downgrading resulting from the execution of the Commitment Letter or funding of the Bridge Loans) shall have occurred in the rating accorded Charter's debt securities by any "nationally recognized statistical rating organization," as that term is defined by the Securities and Exchange Commission for purposes of Rule 436(g)(2) under the Act, and (ii) no such organization shall have publicly announced that it has under surveillance or review, with possible negative implications, its rating of any of Charter's debt securities, excluding

A-11 22 any such surveillance or review caused by the execution of the Commitment Letter or funding of the Bridge Loans. 4. Documentation, Legal Matters, etc. The Bridge Loan Agreement and the other definitive documentation evidencing the Bridge Loans shall be prepared by counsel to the Administrative Agents and shall be in form and substance reasonably satisfactory to the Initial Lenders and Charter. All other matters relating to the Bridge Loan Agreement shall be reasonably satisfactory to Charter and the Initial Lenders in all respects and the Lenders shall have received such additional certificates, legal and other opinions, in form and substance reasonably satisfactory to the Initial Lenders and counsel for the Lenders, and such other documentation as they shall request. 5. Market Disruption. There shall not have occurred any disruption or adverse change, as determined by GSCP and MSSF in their sole discretion, in the financial or capital markets generally, or in the markets for bridge loan syndication, high yield debt or equity securities in particular or affecting the syndication or funding of bridge loans (or the refinancing thereof) that may have a material adverse impact on the ability to sell or place Securities or to syndicate the Bridge Loans. 6. Approvals and Consents. All governmental, shareholder and third-party approvals and consents necessary or, in the reasonable opinion of the

A-12 23 Administrative Agents, desirable in connection with the Bridge Loans shall have been received and shall be in full force and effect. 7. Litigation, etc. There shall not exist any action, suit, investigation, litigation or proceeding pending or threatened in any court or before any arbitrator or governmental authority that, in the reasonable opinion of the Administrative Agents, affects any of the transactions contemplated hereby, or that could have a material adverse effect on the Charter Entities. 8. Payment of Fees and Expenses. All fees and expenses due to the Lenders, GSCP, Goldman Sachs, MSSF, Morgan Stanley or the Administrative Agents on or before the Closing Date pursuant to the Commitment Letter, the Fee Letter, the Engagement Letter or otherwise shall have been paid in full. 9. The Acquisition. CCI shall have raised at least $490 million from the sale of its Class A common stock which amount is designated to fund the acquisitions of the Nevada and Alabama cable systems that are part of the Acquisition or AT&T and/or its affiliates shall have concurrently taken at least $490 million in CCI Class A common stock as partial consideration for such acquisitions. COVENANTS........................................... The Bridge Loan Agreement will contain such covenants by Charter (with respect to Charter and its subsidiaries) as are usual and customary for financings of this kind or as otherwise deemed appropriate by the

A-13 24 Lenders for this transaction in particular (in their sole discretion), based upon the covenants in the Credit Facilities (such covenants to be substantially the same (with all necessary and appropriate changes having been made) as those set forth in the August Agreement). The Bridge Loan Agreement will contain a covenant to the effect that, at any time when funded Bridge Loans, Senior Term Loans or Exchange Notes are outstanding and the Underwriters are no longer entitled under the Engagement Letter to act as underwriters, placement agents or initial purchasers in connection with any sale of Securities, no Charter Entity will enter into any mandate, commitment, engagement or other agreement with any person (other than the Underwriters in the capacities contemplated by the Engagement Letter) pursuant to which such person is offered the right to act as underwriter, placement agent or initial purchaser in connection with the sale of any Securities unless such mandate, commitment, engagement or other agreement (x) is in writing and (y) constitutes a firm commitment by such person to underwrite, place or sell such Securities (or, if such Securities cannot be sold or placed in the market for any reason, to purchase such Securities for its own account or to provide bridge or other loan financing in lieu of such offering or placement of Securities), which commitment is subject to closing conditions that are usual and customary for financings of the kind contemplated thereby and that are approved by the Administrative Agents (which approval will not be unreasonably withheld). For the avoidance of doubt, the net cash proceeds received by any Charter Entity

A-14 25 from any financing contemplated by the previous sentence, shall constitute "net cash proceeds" for purposes of the mandatory repayment and commitment reduction provisions of this Commitment Letter and the Bridge Loan Agreement. EVENTS OF DEFAULT................................... The Bridge Loan Agreement will include such events of default (and, as appropriate, grace periods) as are usual and customary for financings of this kind or as otherwise deemed appropriate by the Lenders for this transaction in particular (in their sole discretion), based upon the events of default in the Credit Facilities (such events of default to be substantially the same (with all necessary and appropriate changes having been made) as those set forth in the August Agreement). REPRESENTATIONS AND WARRANTIES.......................................... The Bridge Loan Agreement will contain such representations and warranties by Charter (with respect to Charter and its subsidiaries) as are usual and customary for financings of this kind or as are otherwise deemed appropriate by the Lenders for this transaction in particular (in their sole discretion), based upon the representations and warranties in the Credit Facilities (such representations and warranties to be substantially the same (with all necessary and appropriate changes having been made) as those set forth in the August Agreement). TAXES, RESERVE REQUIREMENTS AND INDEMNITIES......................................... The Bridge Loan Agreement will provide that all payments will be made free and clear of any taxes (other than franchise taxes and taxes on overall net income), imposts, assessments, withholdings or other deductions whatsoever assessed by the United States or any State thereof and resulting from a change in law. Foreign

A-15 26 Lenders will be required to furnish to the Administrative Agents appropriate certificates or other evidence of exemption from U.S. federal tax withholding. Charter will indemnify the Lenders against all increased costs of capital resulting from reserve requirements or otherwise imposed, in each case subject to customary increased costs and capital adequacy. INDEMNITY........................................... The Bridge Loan Agreement will contain customary and appropriate provisions relating to indemnity and related matters in a form reasonably satisfactory to the Administrative Agents and the Lenders and acceptable to Charter. GOVERNING LAW AND JURISDICTION........................................ The Bridge Loan Agreement will provide that Charter will submit to the non-exclusive jurisdiction and venue of the federal and state courts of the State of New York and will waive any right to trial by jury. New York law will govern the Loan Documents.

The foregoing is intended to summarize certain basic terms of the Bridge Loans. It is not intended to be a definitive list of all of the requirements of the Lenders in connection with the Bridge Loans. A-16 27 EXHIBIT 1 TO ANNEX A SUMMARY OF TERMS AND CONDITIONS OF SENIOR TERM LOANS AND EXCHANGE NOTES Capitalized terms used herein have the meanings assigned to them in the Summary of Terms and Conditions of Bridge Loans to which this Exhibit 1 is attached. SENIOR TERM LOANS On the Maturity Date, so long as no Conversion Default has occurred and is continuing, the outstanding Bridge Loans will be automatically converted into Senior Term Loans. The Senior Term Loans will be governed by the provisions of the Bridge Loan Agreement and, except as expressly set forth below, the Senior Term Loans will have the same terms as the Bridge Loans. MATURITY.................................... The Senior Term Loans will mature on the ninth anniversary of the Maturity Date. INTEREST RATE............................... The Senior Term Loans will initially bear interest at a rate per annum equal to the sum of (i) the greater of (a) the interest rate applicable to the Draw 1 Bridge Loan on the Maturity Date (after giving effect to any applicable step-up) and (b) the interest rate applicable to the Draw 2 Bridge Loan on the Maturity Date (after giving effect to any applicable step-up) plus (ii) 50 basis points. If the Senior Term Loans are not repaid within 90 days following the Maturity Date, the interest rate on the Senior Term Loans will increase by 50 basis points at the end of such 90-day period and will increase by an additional 50 basis points at the end of each 90-day period thereafter. Notwithstanding the foregoing, except in the case of default interest described below, at no time will the interest rate in effect on the Senior Term Loans be less than 9% per annum or exceed 15% per annum. Interest on the Senior Term Loans will be payable quarterly in arrears and on the date

A-17 28 of any prepayment of such Senior Term Loans. Notwithstanding the foregoing, after the occurrence and during the continuance of an Event of Default, interest will accrue on the Senior Term Loans at the then applicable rate plus 200 basis points per annum.

A-18 29 SENIOR EXCHANGE NOTES At any time on or after the Maturity Date, upon five or more business days prior notice, Senior Term Loans may, at the option of a Lender, be exchanged for a principal amount of Exchange Notes equal to 100% of the aggregate principal amount of the Senior Term Loans so exchanged in connection with a transfer of Exchange Notes to an unaffiliated third party. No Exchange Notes will be issued until Charter receives requests to issue at least $25.0 million in aggregate principal amount of Exchange Notes. Charter will issue Exchange Notes under an indenture, in form and substance reasonably satisfactory to the Administrative Agents, which complies with the Trust Indenture Act of 1939, as amended (the "Indenture"). Charter will appoint a trustee reasonably acceptable to the holders of the Bridge Loans. Charter will agree in the Bridge Loan Agreement to execute and deliver the Indenture within 150 days after the date of the initial borrowing under the Bridge Loan Agreement. MATURITY........................................... The Exchange Notes will mature on the ninth anniversary of the Maturity Date. INTEREST RATE...................................... Each Exchange Note will bear interest at a fixed rate equal to the greater of (x) the interest rate on the Senior Term Loans on the date of issuance of such Exchange Notes and (y) the bid side yield (as confirmed by the Administrative Agents) on the Benchmark Notes, on the date prior to the date of issuance of the Exchange Notes; provided that, except in the case of default interest described below, in no event will the interest rate in effect on the Exchange Notes be less than 9% or exceed 15% per annum. OPTIONAL REDEMPTION................................ Exchange Notes will be non-callable until the fifth anniversary of the Closing Date. Thereafter, each Exchange Note will be callable at par plus accrued interest plus a premium equal to one half of the coupon on such Exchange Note, which premium shall decline ratably on each yearly anniversary to zero on the date that is two years prior to the maturity of the Exchange Notes.

A-19 30 DEFEASANCE PROVISIONS OF EXCHANGE NOTES..................................... Customary. MODIFICATION....................................... Customary. REGISTRATION RIGHTS................................ Charter will agree in the Bridge Loan Agreement to execute and deliver a registration rights agreement, in form and substance satisfactory to the Administrative Agents (the "Registration Rights Agreement"), within 150 days after the date of the initial borrowings under the Bridge Loan Agreement. The Registration Rights Agreement will provide, among other provisions, that Charter will file as soon as practicable, but no later than 300 days after the Closing Date and will use all commercially reasonable efforts to cause to become effective as soon thereafter as practicable, but no later than the date that is 60 days prior to the Maturity Date, a shelf registration statement with respect to the Exchange Notes (a "Shelf Registration Statement"). If a Shelf Registration Statement is filed and becomes effective, Charter will use commercially reasonable efforts to keep such registration statement effective and available (subject to customary exceptions) until it is no longer needed to permit unrestricted resales of the Exchange Notes. If a Shelf Registration Statement for the Exchange Notes has not been declared effective on or before the date that is 60 days prior to the Maturity Date because Charter has failed to use commercially reasonable efforts to have it become effective, then Charter will pay liquidated damages in the form of increased interest of 50 basis points per annum on the principal amount of Exchange Notes and Senior Term

A-20 31 Loans outstanding to holders of such Exchange Notes and Senior Term Loans from and including the Maturity Date (if the Shelf Registration Statement has not been declared effective by such date) to but excluding the effective date of such Shelf Registration Statement. On the 90th day after the Maturity Date, if a Shelf Registration Statement for the Exchange Notes has not been declared effective because Charter has failed to use commercially reasonable efforts to have it become effective, the liquidated damages shall increase by 50 basis points per annum to a per annum rate of 100 basis points, and for all periods after the 90-day anniversary of the Maturity Date, if a Shelf Registration Statement for the Exchange Notes has not been declared effective because Charter has failed to use commercially reasonable efforts to have it become effective, the liquidated damages shall be 100 basis points per annum. Charter will also pay such liquidated damages for any period of time (subject to customary exceptions) following the effectiveness of a Shelf Registration Statement that such Shelf Registration Statement is not available for sales thereunder. All accrued liquidated damages will be paid on each interest payment date. COVENANTS.......................................... The Indenture relating to the Exchange Notes will include covenants that are substantially similar to those contained in the indenture governing the Benchmark Notes. EVENTS OF DEFAULT.................................. The Indenture relating to the Exchange Notes will provide for Events of Default similar to those contained in the indenture governing the Benchmark Notes.

A-21 32 ~~COUNSEL FOR THE LENDERS........................................ Debevoise & Plimpton.~~

The foregoing is intended to summarize certain basic terms of the Senior Term Loans and Exchange Notes. It is not intended to be a definitive list of all of the requirements of the Lenders in connection with the Senior Term Loans and Exchange Notes. A-22