The warrant and registration rights deal will allow Charter to buy shares in three tranches based on the amount of goods and services it buys from Arris.
The terms of the deal, which were disclosed in an SEC filing, state that between 0.5 million – 1.0 million shares are issuable under based on Charter’s purchases in 2016, 1.0 million-2.5 million are issuable based on purchases made in 2017, and 1.0 million – 2.5 million are issuable based on purchases made in 2018.
“In order for the warrant to vest above the 1.0 million share threshold in 2016 and above the 2.5 million threshold in both 2017 and 2018, specified increased purchases are required and a set percentage of the purchases must be for goods and services included in Arris’ Network and Cloud segment for 2016, 2017, and 2018, respectively,” according to the filing.
The deal follows a similar agreement between Arris and Comcast in July. The Comcast deal gives the company the right to purchase up to 8 million Arris shares, dependent on products and services Comcast buys from Arris in 2016 and 2017.