Exhibit 10.20

 

LOGO [g95859image001.jpg]

 

March 9, 2004

 

Mr. David C. McCourt

Chairman and Chief Executive Officer

RCN Corporation

105 Carnegie Center

Princeton, NJ 08540

 

Dear David:

 

This letter confirms the understanding and agreement (the “Agreement”) between
The Blackstone Group L.P. (“Blackstone”) and RCN Corporation (together with any
affiliates and subsidiaries, the “Company”) regarding the retention of
Blackstone by the Company effective as of March 9, 2004 (the “Effective Date”)
as its financial advisor for the purposes set forth herein.

 

Under this Agreement, Blackstone will provide financial advisory services to the
Company in connection with a possible restructuring of certain or all
liabilities of the Company and the (i) sale, merger or other disposition of all
or a portion of the Company or its assets; or (ii) arranging of debt or equity
capital (collectively, a “Transaction”), and will assist the Company in
analyzing, structuring, negotiating and effecting the Restructuring or
Transaction pursuant to the terms and conditions of this Agreement. As used in
this Agreement, the term Restructuring shall mean, collectively, (i) any
restructuring, reorganization (whether or not pursuant to Chapter 11 of the
United States Bankruptcy Code) and/or recapitalization of the Company affecting
existing or potential debt obligations or other claims, including, without
limitation, senior debt, junior debt, trade claims and general unsecured claims
(collectively, the “Obligations”), and/or (ii) any complete or partial
repurchase, refinancing, extension or repayment by the Company of any of the
Obligations.

 

The financial advisory services to be rendered by Blackstone will include the
following:

 

  (a) Assist in the evaluation of the Company’s businesses and prospects;

 

  (b) Assist in the development of the Company’s long-term business plan and
related financial projections;

 

  (c) Assist in the development of financial data and presentations to the
Company’s Board of Directors, various creditors and other third parties;

 

    

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     The Blackstone Group® L.P.      345 Park Avenue      New York, NY 10154  
   212 583-5000

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  (d) Analyze the Company’s financial liquidity and evaluate alternatives to
improve such liquidity;

 

  (e) Analyze various restructuring scenarios and the potential impact of these
scenarios on the recoveries of those stakeholders impacted by the Restructuring;

 

  (f) Provide strategic advice with regard to a Restructuring of the Company’s
Obligations;

 

  (g) Evaluate the Company’s debt capacity and alternative capital structures;

 

  (h) Participate in negotiations among the Company and its creditors,
suppliers, lessors and other interested parties;

 

  (i) Advise the Company and negotiate with lenders with respect to potential
waivers or amendments of various credit facilities;

 

  (j) Assist in arranging debtor-in-possession (“DIP”) financing for the
Company, as requested;

 

  (k) Provide expert witness testimony concerning any of the subjects
encompassed by the other financial advisory services, if necessary;

 

  (l) Assist the Company in preparing marketing materials in conjunction with a
possible Transaction;

 

  (m) Assist the Company in identifying potential buyers or parties in interest
to a Transaction and assist in the due diligence process;

 

  (n) Assist and advise the Company concerning the terms, conditions and impact
of any proposed Transaction;

 

  (o) Seek sources of debt and equity capital in connection with a Restructuring
or a Transaction; and

 

  (p) Provide such other advisory services as are customarily provided in
connection with the analysis and negotiation of a Restructuring or a
Transaction, as requested and mutually agreed.

 

Notwithstanding anything contained in this Agreement to the contrary, Blackstone
shall have no responsibility for designing or implementing any initiatives to
improve the Company’s operations, profitability, cash management or liquidity.
Blackstone makes no representations or warranties about the Company’s ability to
(i) successfully improve its operations, (ii) maintain or secure sufficient
liquidity to operate its business, or (iii) successfully complete a
Restructuring. Blackstone is retained under this Agreement solely to provide
advice regarding a Restructuring or a Transaction, and is not being retained to
provide “crisis management.”

 

The Company will pay the following fees to Blackstone for its financial advisory
services:

 

  (i) a monthly advisory fee (the “Monthly Fee”) in the amount of $200,000 in
cash, with the first Monthly Fee payable upon the execution of this Agreement by
both parties and additional installments of such Monthly Fee payable in advance
on each monthly anniversary of the Effective Date;

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  (ii) an additional fee (the “Restructuring Fee”) as specified in the table
below. The Restructuring Fee shall be subject to reduction (the “Transaction
Credit”) by a percentage of the aggregate Transaction Fees received by
Blackstone pursuant to this Agreement. The percentage used to calculate the
Transaction Credit is specified in the table below. In no event will the amount
of the Transaction Credit exceed the amount of the Restructuring Fee; nor shall
the sum of (i) the Transaction Fee plus (ii) the Restructuring Fee, net of any
credits, exceed $10,500,000:

 

Date on which

Restructuring Fee is earned

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   Restructuring
Fee

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   Transaction
Credit
percentage

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Prior to September 4, 2004

   $ 8,000,000    None  

On or after September 4, 2004 but prior to March 4, 2005

   $ 7,000,000    25 %

On or after March 4, 2005

   $ 6,000,000    50 %

 

Except as otherwise provided herein, a Restructuring shall be deemed to have
been consummated upon (a) the binding execution and effectiveness of all
necessary waivers, consents, amendments or restructuring agreements between the
Company and its creditors involving the compromise of the face amount of such
Obligations or the conversion of all or part of such Obligations into
alternative securities, including equity, in the case of an out-of-court
restructuring; or (b) the execution and confirmation of a Plan of Reorganization
pursuant to an order of the Bankruptcy Court, in the case of an in-court
restructuring. The Restructuring Fee will be:

 

  (I) earned on the earliest of:

 

  (w) consummation of the Restructuring,

 

  (x) in the event the Company attempts to implement the Restructuring in whole
or in part by means of an exchange offer, then upon commencement of the exchange
offer,

 

  (y) in the event that the Company attempts to implement the Restructuring by
means of a prenegotiated plan of reorganization under chapter 11 of the United
States Bankruptcy Code, the receipt of sufficient commitments, agreements or
other expressions of intention to accept such plan that the Company elects to
file a chapter 11 case and therein represent to the Bankruptcy Court hearing
such case that the Company will seek to confirm a plan based on the
prenegotiated plan, and

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  (z) in the event that the Company solicits acceptances for a prepackaged plan
of reorganization under chapter 11 to implement the Restructuring, then on the
date established as the voting deadline for such acceptances or rejections,
provided that at least one class of creditors impaired by such plan has accepted
such plan and

 

  (II) payable, in immediately available funds, on the earliest of:

 

  (A) consummation of the Restructuring, and

 

  (B) consummation of the exchange offer.

 

Notwithstanding the foregoing, (a) a Restructuring specifically shall be deemed
to exclude any assumption at face value of Obligations in connection with the
sale or disposition of any subsidiaries, joint ventures, assets or lines of
business of the Company and (b) the restructured Obligations shall exclude any
Obligations in respect of which a Restructuring Fee has previously been paid;

 

  (iii) upon the consummation of a Transaction, a Transaction fee (“Transaction
Fee”) payable in cash directly out of the gross proceeds of the Transaction
calculated as 2% of the Consideration.

 

As used in this Agreement, Consideration means the gross value of all cash,
securities and other properties paid, payable or raised directly or indirectly,
in one transaction or in a series or combination of transactions, in connection
with the Transaction or a transaction related thereto (including, without
limitation, amounts paid (A) pursuant to covenants not to compete or similar
arrangements and (B) to holders of any warrants, stock purchase rights,
convertible securities or similar rights and to holders of any options or stock
appreciation rights, whether or not vested). Consideration shall also include
the face amount of any long-term liabilities or preferred stock (including
indebtedness for borrowed money and the amount set forth in the Company’s
financial statements for any pension liabilities and guarantees) indirectly or
directly assumed or acquired, or otherwise repaid or retired, in connection with
or in anticipation of the Transaction. Consideration shall also include the
aggregate amount of any extraordinary dividend or distribution made by the
Company from the date hereof until the closing of the Transaction. If the
Transaction takes the form of a purchase of assets, Consideration shall also
include (i) the value of any current assets not purchased, minus (ii) the value
of any current operating liabilities not assumed, in either case as relates to
the business(es) or operations being purchased. Consideration shall include all
amounts paid into escrow and all contingent payments payable in connection with
the Transaction, with fees on amounts paid into escrow to be

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payable upon the establishment of such escrow and fees on contingent payments to
be payable when such contingent payments are made. If the Consideration to be
paid is computed in any foreign currency, the value of such foreign currency
shall, for purposes hereof, be converted into U.S. dollars at the prevailing
exchange rate on the date or dates on which such Consideration is paid.

 

In this Agreement, the value of any securities (whether debt or equity) or other
property paid or payable as part of the Consideration shall be determined as
follows: (1) the value of securities that are freely tradable in an established
public market will be determined on the basis of the last market closing price
prior to the public announcement of the Transaction; and (2) the value of
securities that are not freely tradable or have no established public market or,
if the Consideration utilized consists of property other than securities, the
value of such other property shall be the fair market value thereof as mutually
agreed by the parties hereto; and

 

  (iv) reimbursement of all reasonable out-of-pocket expenses incurred during
this engagement, including, but not limited to, travel and lodging, direct
identifiable data processing and communication charges, courier services,
working meals, reasonable fees and expenses of Blackstone’s counsel and other
necessary expenditures, payable upon rendition of invoices setting forth in
reasonable detail the nature and amount of such expenses. In connection
therewith the Company shall pay Blackstone on the Effective Date and maintain
thereafter a $25,000 expense advance for which Blackstone shall account upon
termination of this Agreement.

 

In the event that the Company is or becomes a debtor under Chapter 11 of the
Bankruptcy Code, the Company shall use its best efforts to promptly apply to the
bankruptcy court having jurisdiction over the Chapter 11 case or cases (the
“Bankruptcy Court”) for the approval pursuant to sections 327 and 328 of the
Bankruptcy Code of (A) this Agreement, including the attached indemnification
agreement, and (B) Blackstone’s retention by the Company under the terms of this
Agreement and subject to the standard of review provided in section 328(a) of
the Bankruptcy Code and not subject to any other standard of review under
section 330 of the Bankruptcy Code. The Company shall supply Blackstone with a
draft of such application and any proposed order authorizing Blackstone’s
retention sufficiently in advance of the filing of such application and proposed
order to enable Blackstone and its counsel to review and comment thereon.
Blackstone shall have no obligation to provide any services under this Agreement
in the event that the Company becomes a debtor under the Bankruptcy Code unless
Blackstone’s retention under the terms of this Agreement is approved under
section 328(a) of the Bankruptcy Code by a final order of the Bankruptcy Court
no longer subject to appeal, rehearing, reconsideration or petition for
certiorari, and which order is acceptable to Blackstone in all respects.
Blackstone acknowledges that in the event that the Bankruptcy Court approves its
retention by the Company, Blackstone’s fees and expenses shall be subject to the
jurisdiction and approval of the Bankruptcy Court under section 328(a) of the
Bankruptcy Code and any applicable fee and expense guideline orders; provided,
however, that Blackstone shall not be

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required to maintain time records and, provided further, that Blackstone shall
not be required to maintain receipts for expenses in amounts less than $75. In
the event that the Company becomes a debtor under the Bankruptcy Code and
Blackstone’s engagement hereunder is approved by the Bankruptcy Court, the
Company shall pay all fees and expenses of Blackstone hereunder as promptly as
practicable in accordance with the terms hereof. Prior to commencing a Chapter
11 case, the Company shall pay all invoiced amounts to Blackstone in immediately
available funds by wire transfer.

 

With respect to Blackstone’s retention under sections 327 and 328 of the
Bankruptcy Code, the Company acknowledges and agrees that Blackstone’s
restructuring expertise as well as its capital markets knowledge, financing
skills and mergers and acquisitions capabilities, some or all of which may be
required by the Company during the term of Blackstone’s engagement hereunder,
were important factors in determining the amount of the various fees set forth
herein, and that the ultimate benefit to the Company of Blackstone’s services
hereunder could not be measured merely by reference to the number of hours to be
expended by Blackstone’s professionals in the performance of such services. The
Company also acknowledges and agrees that the various fees set forth herein have
been agreed upon by the parties in anticipation that a substantial commitment of
professional time and effort will be required of Blackstone and its
professionals hereunder over the life of the engagement, and in light of the
fact that such commitment may foreclose other opportunities for Blackstone and
that the actual time and commitment required of Blackstone and its professionals
to perform its services hereunder may vary substantially from week to week or
month to month, creating “peak load” issues for the firm. In addition, given the
numerous issues which Blackstone may be required to address in the performance
of its services hereunder, Blackstone’s commitment to the variable level of time
and effort necessary to address all such issues as they arise, and the market
prices for Blackstone’s services for engagements of this nature in an
out-of-court context, the Company agrees that the fee arrangements hereunder
(including the Monthly Fee, DIP Financing Fee, Restructuring Fee, and
Transaction Fee) are reasonable under the standards set forth in 11 U.S.C.
Section 328(a).

 

The advisory services and compensation arrangement set forth in this Agreement
do not encompass other investment banking services or transactions that may be
undertaken by Blackstone at the request of the Company issuing fairness opinions
or any other specific services not set forth in this Agreement. The terms and
conditions of any such investment banking services, including compensation
arrangements, would be set forth in a separate written agreement between
Blackstone and the appropriate party.

 

Except as contemplated by the terms hereof or as required by applicable law or
legal process, Blackstone shall keep confidential all material non-public
information provided to it by or at the request of the Company, and shall not
disclose such information to any third party or to any of its employees or
advisors except to those persons who have a need to know such information in
connection with Blackstone’s performance of its responsibilities hereunder and
who are advised of the confidential nature of the information and who agree to
keep such information confidential.

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The Company will furnish or cause to be furnished to Blackstone such information
as Blackstone believes appropriate to its assignment (all such information so
furnished being the “Information”). The Company recognizes and confirms that
Blackstone (a) will use and rely primarily on the Information and on information
available from generally recognized public sources in performing the services
contemplated by this Agreement without having independently verified the same,
(b) does not assume responsibility for the accuracy or completeness of the
Information and such other information, (c) is entitled to rely upon the
Information without independent verification, and (d) will not make an appraisal
of any assets in connection with its assignment.

 

In the event that the Information belonging to the Company is stored
electronically on Blackstone’s computer systems, Blackstone shall not be liable
for any damages resulting from unauthorized access, misuse or alteration of such
information by persons not acting on its behalf, provided that Blackstone
exercises the same degree of care in protecting the confidentiality of, and in
preventing unauthorized access to, the Company’s information that it exercises
with regard to its own most sensitive proprietary information.

 

Except as required by applicable law, any advice to be provided by Blackstone
under this Agreement shall not be disclosed publicly or made available to third
parties (other than the Company’s other professional advisors or, if appropriate
in the Company’s judgment, in any filings in a Chapter 11 proceeding) without
the prior written consent of Blackstone. All services, advice and information
and reports provided by Blackstone to the Company in connection with this
assignment shall be for the sole benefit of the Company and shall not be relied
upon by any other person.

 

The Company acknowledges and agrees that Blackstone will provide its financial
advice exclusively to the members of the Board of Directors and senior
management of the Company and not to the Company’s shareholders or other
constituencies. The Board of Directors and senior management will make all
decisions for the Company regarding whether and how the Company will pursue a
Restructuring or Transaction and on what terms and by what process. In so doing,
the Board of Directors and senior management will also obtain the advice of the
Company’s legal, tax and other business advisors and consider such other factors
which they consider appropriate before exercising their independent business
judgment in respect of a Restructuring or Transaction. The Company further
acknowledges and agrees that Blackstone has been retained to act solely as
financial advisor to the Company and does not in such capacity act as a
fiduciary for the Company or any other person. Blackstone shall act as an
independent contractor and any duties of Blackstone arising out of its
engagement pursuant to this Agreement shall be owed solely to the Company.

 

In consideration of Blackstone’s agreement to provide financial advisory
services to the Company in connection with this Agreement, it is agreed that the
Company will indemnify Blackstone and its agents, representatives, members and
employees. A copy of our standard form of indemnification agreement is attached
to this Agreement as Attachment A.

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In the event that, as a result of or in connection with Blackstone’s engagement
for the Company, Blackstone becomes involved in any legal proceeding or
investigation or is required by government regulation, subpoena or other legal
process to produce documents, or to make its current or former personnel
available as witnesses at deposition or trial, the Company will reimburse
Blackstone for the reasonable fees and expenses of its counsel incurred in
responding to such a request. Nothing in this paragraph shall affect in any way
the Company’s obligations pursuant to the separate indemnification agreement
attached hereto.

 

Blackstone’s engagement hereunder may be terminated upon 30 days’ written notice
without cause by either the Company or Blackstone; termination for cause by
either party will occur forthwith. Notwithstanding the foregoing, (a) the
provisions relating to the payment of fees and expenses accrued through the date
of termination, the status of Blackstone as an independent contractor and the
limitation as to whom Blackstone shall owe any duties will survive any such
termination, (b) any such termination shall not affect the Company’s obligations
under the indemnification agreement attached as Attachment A or Blackstone’s
confidentiality obligations hereunder and (c) Blackstone shall be entitled to
the Restructuring Fee or Transaction Fee in the event that a Restructuring or
Transaction, respectively, is consummated at any time prior to the expiration of
24 months following the termination of this Agreement.

 

The Company does not appear on the Specially Designated Nationals and Blocked
Persons List of the Office of Foreign Assets Control of the United States
Department of the Treasury, nor is it a prohibited party according to other U.S.
government regulatory or enforcement agencies.

 

Notwithstanding anything to the contrary provided elsewhere herein, none of the
provisions of this Agreement shall in any way limit the activities of Blackstone
Group Holdings L.L.C. and its affiliates in their businesses distinct from the
restructuring advisory business of The Blackstone Group L.P., provided that the
Information is not made available to representatives of Blackstone Group
Holdings L.L.C. and its affiliates who are not involved in the restructuring
advisory business of The Blackstone Group L.P. and that appropriate “Chinese
wall” measures are taken to insure confidentiality. Notwithstanding the
immediately preceding sentence, neither Blackstone Group Holdings L.L.C. nor any
of its affiliates shall purchase, advise any third party regarding a purchase or
otherwise participate in the purchase of the Company’s or any of its
subsidiaries’ stock, assets, claims or securities without the prior written
consent of the Company.

 

This Agreement (including the attached indemnification agreement) embodies the
entire agreement and understanding between the parties hereto and supersedes all
prior agreements and understandings relating to the subject matter hereof. If
any provision of this Agreement is determined to be invalid or unenforceable in
any respect, such determination will not affect the Agreement in any other
respect, which will remain in full force and effect. No waiver, amendment or
other modification of this Agreement shall be effective unless in writing and

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signed by each party to be bound thereby. This Agreement shall be governed by,
and construed in accordance with, the laws of the State of New York applicable
to contracts executed in and to be performed in that state.

 

The Company hereby agrees that any action or proceeding brought by the Company
against Blackstone based hereon or arising out of Blackstone’s engagement
hereunder, shall be brought and maintained by the Company exclusively in the
courts of the State of New York located in the City and County of New York or in
the United States District Court for the Southern District of New York;
provided, if the Company commences a Chapter 11 case, all legal proceedings
pertaining to this engagement arising after such case is commenced may be
brought in the Bankruptcy Court handling such case. The Company irrevocably
submits to the jurisdiction of the courts of the State of New York located in
the City and County of New York and the United States District Court for the
Southern District of New York and appellate courts from any thereof for the
purpose of any action or proceeding based hereon or arising out of Blackstone’s
engagement hereunder and irrevocably agrees to be bound by any judgment rendered
thereby in connection with such action or proceedings. The Company hereby
irrevocably waives, to the fullest extent permitted by law, any objection it may
have or hereafter may have to the laying of venue of any such action or
proceeding brought in any such court referred to above and any claim that such
action or proceeding has been brought in an inconvenient forum and agrees not to
plead or claim the same.

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Please confirm that the foregoing correctly sets forth our agreement by signing
and returning to Blackstone the duplicate copy of this Agreement and the
indemnification agreement attached hereto as Attachment A.

 

Very truly yours,

THE BLACKSTONE GROUP L.P.

By:

 

 

--------------------------------------------------------------------------------

Name:

 

Timothy R. Coleman

Title:

 

Senior Managing Director

 

Accepted and Agreed to as

of the date first written above:

RCN Corporation

By:

 

 

--------------------------------------------------------------------------------

Name:

 

David C. McCourt

Title:

 

Chairman and Chief Executive Officer

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ATTACHMENT A

 

March 9, 2004

 

The Blackstone Group L.P.

345 Park Avenue

New York, NY 10154

 

INDEMNIFICATION AGREEMENT

 

Gentlemen:

 

This letter will confirm that we have engaged The Blackstone Group L.P.
(“Blackstone”) to advise and assist us in connection with the matters referred
to in our letter of agreement dated as of March 9, 2004 (the “Engagement
Letter”). In consideration of your agreement to act on our behalf in connection
with such matters, we agree to indemnify and hold harmless you and your
affiliates and your and their respective partners (both general and limited),
members, officers, directors, employees and agents and each other person, if
any, controlling you or any of your affiliates (you and each such other person
being an “Indemnified Party”) from and against any losses, claims, damages,
expenses and liabilities whatsoever, whether they be joint or several, related
to, arising out of or in connection with the engagement (the “Engagement”) under
the Engagement Letter and will reimburse each Indemnified Party for all expenses
(including reasonable fees, expenses and disbursements of counsel) as they are
incurred in connection with investigating, preparing, pursuing, defending or
assisting in the defense of any action, claim, suit, investigation or proceeding
related to, arising out of or in connection with the Engagement or this
agreement, whether or not pending or threatened, whether or not any Indemnified
Party is a party, whether or not resulting in any liability and whether or not
such action, claim, suit, investigation or proceeding is initiated or brought by
us. We will not, however, be liable under the foregoing indemnification
provision for any losses, claims, damages or liabilities (or expenses relating
thereto) that are finally judicially determined by a court of competent
jurisdiction to have primarily resulted from the gross negligence or willful
misconduct of Blackstone. We also agree that no Indemnified Party shall have any
liability (whether direct or indirect, in contract or tort or otherwise) to us
or our owners, parents, affiliates, security holders or creditors for or in
connection with the Engagement except for any such liability for losses, claims,
damages or liabilities incurred by us that are finally judicially determined by
a court of competent jurisdiction to have primarily resulted from the gross
negligence or willful misconduct of Blackstone.

 

If the indemnification provided for in the preceding paragraph is for any reason
unavailable to an Indemnified Party in respect of any losses, claims, damages or
liabilities

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referred to herein, then, in lieu of indemnifying such Indemnified Party
hereunder, we shall contribute to the amount paid or payable by such Indemnified
Party 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 received (or anticipated to be received) by you, on the one
hand, and us, on the other hand, from the Engagement or (ii) if and only if the
allocation provided by clause (i) above is for any reason 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 each of you and us, as well
as any other relevant equitable considerations; provided, however, to the extent
permitted by applicable law, in no event shall your aggregate contribution to
the amount paid or payable exceed the aggregate amount of fees actually received
by you under the Engagement Letter. For the purposes of this agreement, the
relative benefits to us and you of the Engagement shall be deemed to be in the
same proportion as (a) the total value paid or contemplated to be paid or
received or contemplated to be received by us, our security holders and our
creditors in the transaction or transactions that are subject to the Engagement,
whether or not any such transaction is consummated, bears to (b) the fees paid
or to be paid to Blackstone under the Engagement Letter (excluding any amounts
paid as reimbursement of expenses).

 

Neither party to this agreement will, without the prior written consent of the
other party (which consent will not be unreasonably withheld), settle or
compromise or consent to the entry of any judgment in any pending or threatened
claim, action, suit or proceeding in respect of which indemnification may be
sought hereunder (a “Judgment”), whether or not we or any Indemnified Party are
an actual or potential party to such claim, action, suit or proceeding. In the
event that we seek to settle or compromise or consent to the entry of any
Judgment, we agree that such settlement, compromise or consent (i) shall include
an unconditional release of Blackstone and each other Indemnified Party
hereunder from all liability arising out of such claim, action, suit or
proceeding, (ii) shall not include a statement as to, or an admission of, fault,
culpability or a failure to act by or on behalf of Blackstone or each other
Indemnified Party, and (iii) shall not impose any continuing obligations or
restrictions on Blackstone or each other Indemnified Party.

 

Promptly after receipt by an Indemnified Party of notice of any complaint or the
commencement of any action or proceeding with respect to which indemnification
is being sought hereunder, such person will notify us in writing of such
complaint or of the commencement of such action or proceeding, but failure to so
notify us will not relieve us from any liability which we may have hereunder or
otherwise, except to the extent that such failure materially prejudices our
rights. If we so elect or are requested by such Indemnified Party, we will
assume the defense of such action or proceeding, including the employment of
counsel reasonably satisfactory to Blackstone and the payment of the fees and
disbursements of such counsel.

 

In the event, however, such Indemnified Party reasonably determines in its
judgment that having common counsel would present such counsel with a conflict
of interest or if we fail to assume the defense of the action or proceeding in a
timely manner, then such Indemnified Party may employ separate counsel
reasonably satisfactory to us to represent or defend it in any such

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action or proceeding and we will pay the fees and disbursements of such counsel;
provided, however, that we will not be required to pay the fees and
disbursements of more than one separate counsel for all Indemnified Parties in
any jurisdiction in any single action or proceeding. In any action or proceeding
the defense of which we assume, the Indemnified Party will have the right to
participate in such litigation and to retain its own counsel at such Indemnified
Party’s own expense.

 

The foregoing reimbursement, indemnity and contribution obligations of the
Company under this agreement shall be in addition to any rights that an
Indemnified Party may have at common law or otherwise, and shall be binding upon
and inure to the benefit of any successors, assigns, heirs and personal
representatives of the Company and such Indemnified Party.

 

The provisions of this agreement shall apply to the Engagement and any written
modification of the Engagement and shall remain in full force and effect
regardless of any termination or the completion of your services under the
Engagement Letter.

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This Agreement and the Engagement Letter shall be governed by and construed in
accordance with the laws of the State of New York applicable to contracts
executed in and to be performed in that state.

 

Very truly yours,

RCN Corporation

By:

 

 

--------------------------------------------------------------------------------

Name:

 

David C. McCourt

Title:

 

Chairman and CEO

 

Accepted and Agreed to as of the date first written above:

THE BLACKSTONE GROUP L.P.

By:

 

 

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Timothy R. Coleman

   

Senior Managing Director