AMENDED AND RESTATED SHARE LENDING AGREEMENT
Exhibit
10.1
AMENDED
AND RESTATED SHARE LENDING AGREEMENT
Dated
as
of October 2, 2007
Between
CHARTER
COMMUNICATIONS, INC. (“Lender”),
and
CITIGROUP
GLOBAL MARKETS LIMITED (“Borrower”), through CITIGROUP GLOBAL
MARKETS INC., as agent for Borrower (“Agent”),
and
CITIGROUP
GLOBAL MARKETS HOLDINGS INC., as guarantor of Borrower’s obligations hereunder
(the “Guarantor”),
and
CITIGROUP
GLOBAL MARKETS INC., in its capacity as Collateral Agent (as hereinafter
defined).
WHEREAS,
in connection with the issuance by Lender of $862,500,000 aggregate principal
amount of 2009 Convertible Senior Notes (as defined herein), Lender, Borrower
and Guarantor entered into that certain Share Lending Agreement dated as of
November 22, 2004 (the “Share Lending Agreement”);
WHEREAS,
Lender, Borrower and Guarantor desire to amend and restate the Share Lending
Agreement in connection with an exchange offer (the “Exchange
Offer”) pursuant to which $363,847,000 aggregate principal amount of
2009 Convertible Notes are being exchanged for 2027 Convertible Notes (as
defined herein) in order to maintain and extend the Loans (as defined herein)
to
Borrower under the Share Lending Agreement;
WHEREAS,
Agent is entering into this Agreement solely in its capacity as Agent for
Borrower;
AND
WHEREAS, this AGREEMENT sets forth the terms and conditions under which Lender
and Borrower agree to maintain and extend the Loans made to Borrower under
the
Share Lending Agreement.
NOW,
THEREFORE, in consideration of the mutual covenants contained herein and other
good and valuable consideration, the sufficiency of which is hereby
acknowledged, the parties hereto, intending to be legally bound, hereby mutually
covenant and agree as follows:
Section
1. Certain Definitions. The following capitalized
terms shall have the following meanings:
“2009
Convertible Notes” means the $862,500,000 aggregate principal amount of
Convertible Senior Notes due 2009 issued by Lender.
“2027
Convertible Notes” means the $479,168,000 aggregate principal amount of
Convertible Senior Notes due 2027 issued by Lender.
“Business
Day” means a day on which regular trading occurs in the principal
trading market for the Common Stock.
“Cash”
means any coin or currency of the United States as at the time shall be legal
tender for payment of public and private debts.
“Clearing
Organization” means The Depository Trust Company, or, if agreed to by
Borrower and Lender, such other securities intermediary at which Borrower (or
Agent) and Lender maintain accounts.
“Closing
Price” on any day means, with respect to the Common Stock (i) if the
Common Stock is listed on a U.S. securities exchange registered under the
Exchange Act, is traded on The Nasdaq National Market or is included in the
OTC
Bulletin Board Service (operated by the National Association of Securities
Dealers, Inc.), the last reported sale price, regular way, in the principal
trading session on such day on such market on which the Common Stock is then
listed or is admitted to trading (or, if the day of determination is not a
Business Day, the last preceding Business Day) and (ii) if the Common Stock
is
not so listed or admitted to trading or if the last reported sale price is
not
obtainable (even if the Common Stock is listed or admitted to trading on such
market ), the average of the bid prices for the Common Stock obtained from
as
many dealers in the Common Stock (which may include Borrower or its affiliates),
but not exceeding three, as shall furnish bid prices available to the
Lender.
“Collateral”
means any Cash or Non-Cash Collateral. Each of the parties to this
Agreement hereby agree that Cash and each item within the definition of Non-Cash
Collateral shall be treated as a “financial asset” as defined by Section
8-102(a)(9) of the UCC.
“Collateral
Account” means a securities account of the Collateral Agent maintained
on the books of Citigroup Global Markets Inc., as Securities Intermediary,
and
designated “Citigroup Global Markets Inc., as Collateral Agent of Charter
Communications, Inc., as pledgee of Citigroup Global Markets Limited, as
Borrower of Loaned Shares”. Any Collateral deposited in the
Collateral Account shall be segregated from all other assets and property of
the
Collateral Agent, which such segregation may be accomplished by appropriate
identification on the books and records of Collateral Agent, as a “securities
intermediary” within the meaning of the UCC. The Securities
Intermediary
acknowledges
that the Collateral Account is maintained for the Collateral Agent and
undertakes to treat the Collateral Agent as entitled to exercise the rights
that
comprise the Collateral credited to the Collateral Account. The
Collateral Agent shall establish the Collateral Account upon receiving notice
from Borrower of the occurrence of a Collateral Trigger Event.
“Collateral
Agent” means Citigroup Global Markets Inc., in its capacity as
collateral agent for Lender hereunder, or any successor thereto under
Section 20.
“Collateral
Percentage” means 100%.
“Collateral
Trigger Event” means that the senior unsecured debt rating assigned to
Guarantor (i) by both S&P and Xxxxx’x is at or below A- and A3, respectively
or (ii) by either S&P or Xxxxx’x is at or below BBB+ or Baa1, respectively,
or neither S&P nor Xxxxx’x assigns such a rating to Guarantor.
“Convertible
Notes” means collectively the 2009 Convertible Notes and the 2027
Convertible Notes.
“Common
Stock” means shares of Class A Common Stock, par value $.001, of
Lender, or any other security, assets or other consideration (including cash)
into which the Common Stock shall be exchanged or converted as the result of
any
merger, consolidation, other business combination, reorganization,
reclassification, recapitalization or other corporate action (including, without
limitation, a reorganization in bankruptcy).
“Cutoff
Time” shall mean 10:00 a.m. in the jurisdiction of the Clearing
Organization, or such other time on a Business Day by which a transfer of Loaned
Shares must be made by Borrower to Lender, as shall be determined in accordance
with market practice.
“Exchange
Act” means the Securities Exchange Act of 1934, as
amended.
“Facility
Termination Date” means the earlier to occur of (i) the first date as
of which all of the Convertible Notes have been converted, repaid, repurchased,
redeemed or are otherwise no longer outstanding and (ii) October 1,
2027.
“FHLMC
Certificates” means single-class mortgage participation certificates in
book-entry form backed by single-family residential mortgage loans, the full
and
timely payment of interest at the applicable certificate rate and the ultimate
collection of principal of which are guaranteed by the Federal Home Loan
Mortgage Corporation (excluding Real Estate Mortgage Investment Conduit
(“REMIC”) or other multi-class pass-through certificates,
pass-through certificates backed by adjustable rate mortgages and securities
paying interest or principal only).
“FNMA
Certificates” means single-class mortgage pass-through certificates in
book-entry form backed by single-family residential mortgage loans, the full
and
timely payment of interest at the applicable certificate rate and the ultimate
collection of principal of which are guaranteed by the Federal National Mortgage
Association (excluding REMIC or other multi-class pass-through certificates,
pass-through certificates backed by adjustable rate mortgages and securities
paying interest or principal only).
“GNMA
Certificates” means single-class fully modified pass-through
certificates in book-entry form backed by single-family residential mortgage
loans, the full and timely payment of principal and interest of which is
guaranteed by the Government National Mortgage Association (excluding REMIC
or
other multi-class pass-through certificates, pass-through certificates backed
by
adjustable rate mortgages and securities paying interest or principal
only).
“Loan
Availability Period” means the period that began on November 22, 2004
and ended on November 16, 2006.
“Loaned
Shares” means shares of Common Stock transferred in a Loan hereunder
until such Common Stock (or identical Common Stock) is transferred back to
Lender hereunder. If, as the result of a stock dividend, stock split
or reverse stock split, the number of outstanding shares of Common Stock is
increased or decreased, then the number of outstanding Loaned Shares shall
be
proportionately increased or decreased, as the case may be. If any
new or different security (or two or more securities) shall be exchanged for
the
outstanding shares of Common Stock as the result of any reorganization, merger,
consolidation, other business combination, reclassification, recapitalization
or
other corporate action (including, without limitation, a reorganization in
bankruptcy), such new or different security (or such two or more securities
collectively) shall, effective upon such exchange, be deemed to become a Loaned
Share in substitution for the former Loaned Share for which such exchange is
made and in the same proportion for which such exchange was made. For
purposes of return of Loaned Shares by the Borrower or purchase or sale of
securities pursuant to Section 6 or 12, such term shall include securities
of
the same issuer, class and quantity as the Loaned Shares as adjusted pursuant
to
the two preceding sentences.
“Market
Value” on any day means (i) with respect to Common Stock, the most
recent Closing Price of the Common Stock prior to such day and (ii) with respect
to any Collateral that is (a) Cash, the face amount thereof, (b) a letter of
credit, the undrawn amount thereof and (c) any other security or property,
the
market value thereof, as determined by the Collateral Agent, in accordance
with
market practice for such securities or property, based on the price for such
security or property as of the most recent close of trading obtained from a
generally recognized source or the closing bid quotation at the most recent
close of trading obtained from such source, plus accrued interest to the extent
not included therein, unless market practice with respect to the valuation
of
such
securities
or property in connection is to the contrary; provided that with
respect to Collateral consisting of (i) Treasuries and Mortgage-Backed
Securities with a maturity of at least one year but less than five years, such
Market Value shall be multiplied by 98%, (ii) Treasuries and Mortgage-Backed
Securities with a maturity of at least five years but less than ten years,
such
Market Value shall be multiplied by 97%, and (iii) Treasuries and
Mortgage-Backed Securities with a maturity of at least five years, such Market
Value shall be multiplied by 95%.
“Maximum
Number of Shares” means 29,845,200 shares of Common Stock, subject to
the following adjustments:
(a) If,
as
the result of a stock dividend, stock split or reverse stock split, the number
of outstanding shares of Common Stock is increased or decreased, the Maximum
Number of Shares shall, effective as of the payment or delivery date of any
such
event, be proportionally increased or decreased, as the case may
be.
(b) If,
pursuant to a merger, consolidation, other business combination, reorganization,
reclassification, recapitalization or other corporate action (including, without
limitation, a reorganization in bankruptcy), the Common Stock is exchanged
for
or converted into cash, securities or other property, the Maximum Number of
Shares shall, effective upon such exchange, be adjusted by multiplying the
Maximum Number of Shares at such time by the number of securities, the amount
of
cash or the fair market value of any other property exchanged for one share
of
Common Stock in such event.
(c) Upon
the
termination of any Loan pursuant to Section 6(a),
the Maximum Number of Shares shall be reduced by the number of Loaned Shares
surrendered by Borrower to Lender; provided that if the number of
Loaned Shares offered and sold by Borrower in any registered public offering
under the Securities Act is less than the number of shares of Common Stock
constituting the Loan made in connection with such registered public offering
(such difference, the “Unsold Amount”), any termination of a
Loan of the Unsold Amount prior to the date 30 calendar days following the
date
of the Borrowing Notice with respect to such Loan shall not so reduce the
Maximum Number of Shares.
“Moody’s”
means Xxxxx’x Investors Service and its successors.
“Mortgage-Backed
Securities” means FHLMC Certificates, FNMA Certificates or GNMA
Certificates, but excluding zero-coupon securities.
“Non-Cash
Collateral” means (i) any evidence of indebtedness issued, or directly
and fully guaranteed or insured, by the United States of America or any agency
or instrumentality thereof, including Treasuries and Mortgage-Backed Securities;
(ii) any deposits, certificates of deposit or acceptances of any institution
which is a member of the Federal Reserve System having combined capital and
surplus and undivided profits of not less than $500 million at the time of
deposit (and which may include the Collateral Agent or any affiliate of
the
Collateral
Agent so long as the Collateral Agent is other than Borrower or an affiliate
of
Borrower); (iii) any marketable obligations of any Person that is fully and
unconditionally guaranteed by a bank referred to in clause (ii); (iv) any
repurchase agreements and reverse repurchase agreements relating to marketable
direct obligations issued or unconditionally guaranteed by the United States
of
America or issued by any agency thereof and backed as to timely payment by
the
full faith and credit of the United States of America; (v) commercial paper
of
any corporation incorporated under the laws of the United States or any State
thereof that is rated “investment grade” A-1 by S&P or P-1 by Moody’s; (vi)
any money market funds (including, but not limited to, money market funds
managed by the Collateral Agent or an affiliate of the Collateral Agent)
registered under the Investment Company Act of 1940, as amended; (vii) any
letter of credit issued by a bank referred to in clause (ii); and (viii) all
proceeds of the foregoing; provided that in no event shall Non-Cash
Collateral include “margin stock” as defined by Regulation U of the Board of
Governors of the Federal Reserve System.
“S&P”
means Standard & Poor’s Rating Services, a division of The XxXxxx-Xxxx
Companies, Inc. and its successors
“Securities
Act” means the Securities Act of 1933, as amended.
“Securities
Intermediary” means a “securities intermediary” as defined by Section
8-102(a)(14) of the UCC.
“Treasuries”
means negotiable debt obligations issued by the U.S. Treasury
Department.
“UCC”
means the Uniform Commercial Code as in effect in the State of New York on
the
date hereof and as it may be amended from time to time.
Section 2. Loans
of Shares; Transfers of Loaned Shares
(a) During
the Loan Availability Period, Lender loaned to Borrower 116,949,300 shares
of
Common Stock, of which 29,845,200 shares of Common Stock remain outstanding
as
of the date hereof. Such loans were made subject to the terms of the
Share Lending Agreement (each such issuance and loan, a “Loan”)
and were confirmed by a schedule and receipt listing the Loaned Shares provided
by Borrower to Lender (the “Confirmation”). Such
Confirmation constitutes conclusive evidence with respect to the Loan, including
the number of shares of Common Stock that are the subject of the Loan to which
the Confirmation relates, until such Loan is terminated and the Loaned Shares
are returned to Lender in accordance with this Agreement.
Section
3. Collateral.
(a) Prior
to
the occurrence of a Collateral Trigger Event, Borrower will not be required
and
is under no obligation to provide any Collateral to Lender for any Loan
hereunder.
(b) Upon
the
occurrence of a Collateral Trigger Event, Borrower shall notify Lender and
Collateral Agent in writing and upon receipt of such notice, the Collateral
Agent shall establish the Collateral Account and, unless otherwise agreed by
Borrower and Lender, Borrower shall, within five business days, transfer to
Collateral Agent, for deposit to the Collateral Account, Collateral with a
Market Value at least equal to the Collateral Percentage of the Market Value
of
all outstanding Loaned Shares.
(c) Following
the occurrence and during the continuance of a Collateral Trigger Event, unless
otherwise agreed by Borrower and Lender, Borrower shall, prior to or
concurrently with the transfer of the Loaned Shares to Borrower, but in no
case
later than the close of business on the day of such transfer, transfer to
Collateral Agent, for deposit to the Collateral Account, Collateral with a
Market Value at least equal to the Collateral Percentage of the Market Value
of
the Loaned Shares as of the date of such transfer.
(d) Any
Collateral transferred by Borrower to Collateral Agent shall be security for
Borrower’s obligations in respect of the Loaned Shares and for any other
obligations of Borrower to Lender hereunder. Borrower hereby pledges
with, assigns to, and grants Collateral Agent for the benefit of Lender a
continuing first priority security interest in, and a lien upon, all of
Borrower’s right, title and interest in and to the Collateral, whether now
existing or hereafter acquired or arising, together with all proceeds thereof,
which security interest shall not attach, in the case of Section 3(c) above,
until the transfer of the Loaned Shares by Lender to Borrower. To
provide for the effectiveness, validity, enforceability, perfection and priority
of Lender's rights as a secured party, Borrower acknowledges that Collateral
Agent has obtained control of the Collateral within the meaning of Sections
8-106 and 9-106 of the UCC, and Collateral Agent acknowledges that it has
control of the Collateral on behalf of Lender within the meaning of Section
8-106(d)(3) of the UCC. Notwithstanding anything to the contrary
herein or in the UCC, Lender may not use or invest the Collateral and Collateral
Agent shall take no instruction from Lender regarding the use or investment
of
Collateral.
(e) Following
written notice by Borrower to Lender that any Collateral Trigger Event no longer
exists, Collateral Agent shall release to Borrower Collateral with a Market
Value equal to the Collateral Percentage of the Market Value of all outstanding
Loaned Shares. Such transfer of Collateral shall be made no later
than the Cutoff Time on the Business Day immediately following the day that
Borrower provides such written notice.
(f) Following
the transfer to Lender of Loaned Shares pursuant to Section 6, Collateral Agent shall release to Borrower
Collateral with a Market Value equal to the Collateral Percentage of the Market
Value of the Loaned Shares so transferred but only to the extent that
immediately following such transfer of Collateral, no Collateral Deficit would
exist. Such transfer of Collateral shall be made no later than the
Cutoff Time on the day the Loaned Shares are transferred, or if such day is
not
a day on which a transfer of such Collateral may be effected under Section 13, or if the transfer of Loaned Shares by
Lender to Borrower occurs after the Cutoff Time on such day, then in each case
the next day on which such a transfer may be effected.
(g) If
Borrower transfers Collateral to Collateral Agent pursuant to Section 3(c)
above, and Lender does not transfer the Loaned Shares to Borrower, Borrower
shall have the absolute right to the return of the Collateral; and if Lender
transfers Loaned Shares to Borrower and Borrower does not transfer Collateral
to
Collateral Agent when required pursuant to Section 3(c) above, Lender shall
have
the absolute right to the return of the Loaned Shares.
(h) Borrower
may, upon notice to Lender and Collateral Agent, substitute Collateral for
Collateral securing any Loan or Loans; provided that such substituted
Collateral shall have a Market Value such that the aggregate Market Value of
such substituted Collateral, together with all other Collateral, shall equal
or
exceed the Collateral Percentage of the Market Value of the Loaned Shares as
of
the date of such substitution.
Section 4. Xxxx
To Market.
(a) If
at the
close of trading on any Business Day prior to the Facility Termination Date
following the occurrence and during the continuance of a Collateral Trigger
Event the aggregate Market Value of all Collateral shall be less than the
Collateral Percentage of the Market Value of all the outstanding Loaned Shares
(a “Collateral Deficit”), Lender may, by notice to Borrower and
Collateral Agent, demand that Borrower transfer to Collateral Agent, for deposit
to the Collateral Account, no later than the following Business Day, additional
Collateral so that the Market Value of such additional Collateral, when added
to
the Market Value of all other Collateral, shall equal or exceed the Collateral
Percentage of the Market Value of the Loaned Shares on such Business Day of
determination.
(b) If
at the
close of trading on any Business Day prior to the Facility Termination Date
the
aggregate Market Value of all Collateral shall be greater than the Collateral
Percentage of the Market Value of all the outstanding Loaned Shares (a
“Collateral Excess”), Borrower may, by notice to Lender and
Collateral Agent, demand that Collateral Agent transfer to Borrower such amount
of the Collateral selected by Borrower so that the Market Value of the
Collateral, after deduction of such amounts, shall thereupon be at least equal
to the Collateral
(c) Notwithstanding
the foregoing, with respect to any outstanding Loans secured by Collateral,
the
respective rights of Lender and Borrower under Section 4(a) and Section 4(b)
may
be exercised only where a Collateral Excess or Collateral Deficit exceeds 2%
of
the Market Value of the Loaned Shares.
Section 5. Loan
Fee. Borrower paid Lender a single loan fee per Loan (a
“Loan Fee”) equal to $.001 per Loaned Share included in such
Loan.
Section 6. Loan
Terminations.
(a) Borrower
may terminate all or any portion of a Loan on any Business Day by giving written
notice thereof to Lender and transferring the corresponding number of Loaned
Shares to Lender, without any consideration being payable in respect thereof
by
Lender to Borrower. Any such loan termination shall be effective upon
delivery of the Loaned Shares in accordance with the terms hereof.
(b) All
outstanding Loans, if any, shall terminate on the Facility Termination Date
and
all Loaned Shares then outstanding, if any, shall be delivered by Borrower
to
Lender, without any consideration being payable in respect thereof by Lender
to
Borrower, no later than the fifth Business Day following the Facility
Termination Date.
(c) If
on any
date, the number of Loaned Shares exceeds the Maximum Number of Shares, the
number of Loaned Shares in excess of the Maximum Number of Shares shall be
delivered by Borrower to Lender, without any consideration being payable in
respect thereof by Lender to Borrower, no later than the third Business Day
following such date.
(d) If
a Loan
is terminated upon the occurrence of a Default as set forth in Section 11, the Loaned Shares shall be delivered by
Borrower to Lender, without any consideration being payable in respect thereof
by Lender to Borrower, no later than the third Business Day following the
termination date of such Loan as provided in Section
11.
Section 7. Distributions.
(a) If
at any
time when there are Loaned Shares outstanding under this Agreement, Lender
pays
a cash dividend or makes a cash distribution in respect of its outstanding
Common Stock, Borrower shall pay to Lender (whether or not Borrower is a holder
of any or all of the outstanding Loaned Shares), within one Business Day after
the payment of such dividend or distribution, an amount in cash equal to the
product of (i) the amount per share of such dividend or distribution and (ii)
the number of Loaned Shares outstanding at such time.
(b) If
at any
time when there are Loaned Shares outstanding under this Agreement, Lender
makes
a distribution in respect of its outstanding Common Stock (in liquidation or
otherwise) in property or securities, including any options, warrants, rights
or
privileges in respect of securities (other than a distribution of Common Stock,
but including any options, warrants, rights or privileges exercisable for,
convertible into or exchangeable for Common Stock) to the then holder or holders
of such Loaned Shares (a “Non-Cash Distribution”), Borrower
shall deliver to Lender in kind (whether or not Borrower is a holder of any
or
all of the outstanding Loaned Shares), within one Business Day after the date
of
such Non-Cash Distribution, the property or securities so distributed in an
amount (the “Delivery Amount”) equal to the product of (i) the
amount per share of Common Stock of such Non-Cash Distribution and (ii) the
number of Loaned Shares outstanding at such time; provided that in lieu
of such delivery, Borrower may deliver to Lender the market value of the
Delivery Amount, as determined by the Agent in accordance with market practice
for the property or securities constituting the Non-Cash
Distribution.
Section 8. Rights
in Respect of Loaned Shares.
(a) Subject
to the terms of this Agreement, including Borrower’s obligation to return the
Loaned Shares in accordance with the terms of this Agreement, and except as
otherwise agreed by Borrower and Lender, Borrower and any subsequent transferee
of Loaned Shares shall have all of the incidents of ownership in respect of
any
Loaned Shares, including the right to transfer the Loaned Shares to
others. Lender hereby waives the right to vote, or to provide any
consent or to take any similar action with respect to, the Loaned Shares in
the
event that the record date or deadline for such vote, consent or other action
falls during the term of the Loan. Borrower agrees that it and any of
its affiliates that are the record owner of any Loaned Shares will not vote
such
Loaned Shares on any matter submitted to a vote of Lender’s stockholders
generally.
Section 9. Representations
and Warranties.
(a) Each
of
Borrower and Lender represent and warrant to the other that:
(i) it
has
full power to execute and deliver this Agreement, to enter into the Loans
contemplated hereby and to perform its obligations hereunder;
(ii) it
has
taken all necessary action to authorize such execution, delivery and
performance;
(iii) this
Agreement constitutes its legal, valid and binding obligation enforceable
against it in accordance with its terms; and
(iv) the
execution, delivery and performance of this Agreement does not and will not
violate, contravene, or constitute a default under, (A)
its
certificate of incorporation, bylaws or other governing documents, (B) any
laws,
rules or regulations of any governmental authority to which it is subject,
(C)
any contracts, agreements or instrument to which it is a party or (D) any
judgment, injunction, order or decree by which it is bound.
(b) Lender
represents and warrants to Borrower, as of the date hereof, that the Loaned
Shares and all other outstanding shares of Common Stock of the Company have
been
duly authorized and are validly issued, fully paid nonassessible shares of
Common Stock; and the stockholders of Lender have no preemptive rights with
respect to the Loaned Shares.
(c) Lender
represents and warrants to Borrower, as of the date hereof, that the outstanding
shares of Common Stock are quoted on The NASDAQ Global Market.
(d) The
representations and warranties of Borrower and Lender under this Section 9 shall remain in full force and effect at all
times during the term of this Agreement and shall survive the termination for
any reason of this Agreement.
Section 10. Covenants.
(a) Borrower
covenants and agrees with Lender that (i) it will not hedge any short position
resulting from the sale of any Loaned Shares (except in connection with a hedge
of the Convertible Notes) and (ii) at all times when it is the record owner
of,
or has the power to give instructions or entitlement orders with respect to,
any
Loaned Shares, it will not transfer or dispose of such Loaned Shares, in each
case except for the purpose of directly or indirectly facilitating the hedging
of the Convertible Notes by the holders thereof.
(b) The
parties hereto acknowledge that Borrower has informed Lender that Borrower
is a
“financial institution” within the meaning of Section 101(22) of Title 11 of the
United States Code (the “Bankruptcy Code”). The parties hereto
further acknowledge and agree that (i) each Loan hereunder is intended to be
a
“securities contract,” as such term is defined in Section 741(7) of the
Bankruptcy Code; and (ii) each and every transfer of funds, securities and
other
property under this Agreement is intended to be a “settlement payment” or a
“margin payment,” as such terms are used in Sections 362(b)(6) and 546(e) of the
Bankruptcy Code.
(c) Lender
shall, no later than five Business Days prior to any repurchase of Common Stock,
give Borrower a written notice of such repurchase (a “Repurchase
Notice”) if, following such repurchase, the Outstanding Borrow
Percentage after giving effect to such repurchase would be greater by 0.5%
than
the Outstanding Borrow Percentage included in the immediately preceding
Repurchase Notice (or, in the case of the first such Repurchase Notice, greater
than the Outstanding Borrow Percentage as of the date hereof). The
“Outstanding Borrow Percentage” as of any day is the fraction
(A) the numerator of which is the number of Loaned Shares outstanding on such
day and (B) the denominator of which is the
number
of
shares of Common Stock outstanding on such day, including such Loaned
Shares.
Section 11. Events
of Default.
(a) All
Loans
may, at the option of the Lender by a written notice to Borrower (which option
shall be deemed exercised, even if no notice is given, immediately on the
occurrence of an event specified in either Section
11(a)(iii) or Section 11(a)(iv) below), be
terminated (i) immediately on the occurrence of any of the events set forth
in
Section 11(a)(iii) or Section 11(a)(iv) below and (ii) two
Business Days
following such notice on the occurrence of any of the other events set forth
below, (each, a “Default”):
(i) Borrower
fails to deliver Loaned Shares to Lender as required by Section 6;
(ii) Borrower
fails to deliver or pay to Lender when due any cash, securities or other
property as required by Section 7;
(iii) the
filing by or on behalf of Borrower of a voluntary petition or an answer seeking
reorganization, arrangement, readjustment of its debts or for any other relief
under any bankruptcy, reorganization, receivership, compromise, arrangement,
insolvency, readjustment of debt, dissolution, winding-up or liquidation or
similar act or law, of any state, federal or other applicable foreign
jurisdictions, now or hereafter existing (“Bankruptcy Law”), or
any action by Borrower for, or consent or acquiescence to, the appointment
of a
receiver trustee or other custodian of Borrower, or of all or a substantial
part
of its property; or the making by Borrower of a general assignment for the
benefit of creditors; or the admission by Borrower in writing of its inability
to pay its debts as they become due;
(iv) the
filing of any involuntary petition against Borrower in bankruptcy or seeking
reorganization, arrangement, readjustment of its debts or for any other relief
under any Bankruptcy Law and an order for relief by a court having jurisdiction
in the premises shall have been issued or entered therein; or any other similar
relief shall be granted under any applicable federal or state law or law of
any
other applicable foreign jurisdictions; or a decree or order of a court having
jurisdiction in the premises for the appointment of a receiver, liquidator,
sequestrator, trustee or other officer having similar powers over Borrower
or
over all or a part of its property shall have been entered; or the involuntary
appointment of an interim receiver, trustee or other custodian of Borrower
or of
all or a substantial part of its property; or the issuance of a warrant of
attachment, execution or similar process against any substantial part of the
property of Borrower; and continuance of any such event for 15 consecutive
calendar
days unless dismissed, bonded to the satisfaction of the court having
jurisdiction in the premises or discharged;
(v) Borrower
fails to provide any indemnity as required by Section
14;
(vi) Borrower
notifies Lender of its inability to or intention not to perform its obligations
hereunder or otherwise disaffirms, rejects or repudiates any of its obligations
hereunder; or
(vii) any
representation made by Borrower in this Agreement or in connection with any
Loan
or Loans hereunder shall be incorrect or untrue in any material respect during
the term of any Loan hereunder or Borrower fails to comply in any material
respect with any of its covenants under this Agreement.
Section
12.. Lender’s
Remedies.
(a) Notwithstanding
anything to the contrary herein, if, upon the termination of any Loan by Lender
under Section 11 and, at the time of such
termination, the purchase of Common Stock in an amount equal to all or any
portion of the Loaned Shares to be delivered to Lender in accordance with Section 6(d) (i) shall be prohibited by any law, rules
or regulation of any governmental authority to which it is or would be subject,
(ii) shall violate, or would upon such purchase likely violate, any order or
prohibition of any court, tribunal or other governmental
authority, (iii) shall require the prior consent of any court,
tribunal or governmental authority prior to any such repurchase, (iv) would
subject Borrower, in the sole reasonable judgment of Borrower, to any liability
or potential liability under any applicable federal securities laws (including,
without limitation, Section 16 of the Exchange Act), or (v) shall be
commercially impracticable, in the reasonable judgment of Borrower, in the
time
period required by Section 6(d) (each of (i), (ii), (iii), (iv) and (v), a
“Legal Obstacle”), then, in each case, Borrower shall
immediately notify Lender of the Legal Obstacle and the basis therefor,
whereupon Borrower's obligations under Section 6(d)
shall be suspended until such time as no Legal Obstacle with respect to such
obligations shall exist (a “Repayment
Suspension”). Following the occurrence of and during the
continuation of any Repayment Suspension, Borrower shall use its reasonable
best
efforts to remove or cure the Legal Obstacle as soon as
practicable. If Borrower is unable to remove or cure the Legal
Obstacle within five Business Days of the termination of any Loan by Lender
under Section 11, Borrower shall pay to Lender, in lieu of the delivery of
Loaned Shares in accordance with Section 6(d), an amount in immediately
available funds (the “Replacement Cash”) equal to the product
of the Closing Price as of the Business Day immediately preceding the date
Borrower makes such payment and the number of Loaned Shares otherwise required
to be delivered.
(b) If
Borrower shall fail to deliver Loaned Shares to Lender pursuant to Section 6(d) when due, then, in addition to any other
remedies available to Lender under this Agreement or under applicable law,
Lender shall have the right (upon prior written notice to Borrower) to purchase
a like amount of Loaned Shares (“Replacement Shares”) in the
principal market for such securities in a commercially reasonable manner;
provided that if any Repayment Suspension shall exist and be
continuing, Lender may not exercise its right to purchase Replacement Shares
unless Borrower shall fail to pay the Replacement Cash to Lender when due in
accordance with Section 12(a) above. To the extent Lender shall
exercise such right, Borrower’s obligation to return a like amount of Loaned
Shares or to pay the Replacement Cash, as applicable, shall terminate and
Borrower shall be liable to Lender for the purchase price of Replacement Shares
(plus all other amounts, if any, due to Lender hereunder), all of which shall
be
due and payable within one Business Day of notice to Borrower by Lender of
the
aggregate purchase price of the Replacement Shares. The purchase
price of Replacement Shares purchased under this Section
12 shall include broker’s fees and commissions and all other reasonable
costs, fees and expenses related to such purchase; provided that Borrower shall
not be liable for any broker’s fees and commissions to the extent that an
affiliate of Borrower offered to act as broker for purchases of Replacement
Shares and Lender elected to use a different broker.
Section
13. Transfers.
(a) All
transfers of Loaned Shares to Lender hereunder shall be made by the crediting
by
a Clearing Organization of such financial assets to the transferee’s “securities
account” (within the meaning of Section 8-501 of the UCC) maintained with such
Clearing Organization. In every transfer of “financial assets”
(within the meaning of Section 8-102 of the UCC) hereunder, the transferor
shall
take all steps necessary (a) to effect a delivery of such financial assets
to
the transferee under Section 8-301 of the UCC, or to cause the creation of
a
security entitlement in favor of the transferee in such financial assets under
Section 8-501 of the UCC, (b) to enable the transferee to obtain “control”
(within the meaning of Section 8-106 of the UCC) of such financial assets,
and
(c) to provide the transferee with comparable rights under any corresponding
law
or regulation of any other applicable jurisdiction.
(b) All
transfers of cash hereunder to Borrower or Lender shall be by wire transfer
in
immediately available, freely transferable funds.
(c) A
transfer of securities or cash may be effected under this Section 13 on any day except (i) a day on which the
transferee is closed for business at its address set forth in Section 18 or
(ii) a day on which a Clearing Organization or wire transfer system
is closed, if the facilities of such Clearing Organization or wire transfer
system are required to effect such transfer.
Section
14 . Indemnities.
(a) Lender
hereby agrees to indemnify and hold harmless Borrower and its affiliates and
its
former, present and future directors, officers, employees and other agents
and
representatives from and against any and all liabilities, judgments, claims,
settlements, losses, damages, fees, liens, taxes, penalties, obligations and
expenses (and losses relating to Borrower’s market activities as a consequence
of becoming, or of the risk of becoming, subject to Section 16(b) under the
Exchange Act, including without limitation, any forbearance from market
activities or cessation of market activities and any losses in connection
therewith or with respect to this Agreement) incurred or suffered by any such
person or entity directly or indirectly arising from, by reason of, or in
connection with, (i) any breach by Lender of any of its representations or
warranties contained in Section 9 or (ii) any breach
by Lender of any of its covenants or agreements in this Agreement.
(b) Borrower
hereby agrees to indemnify and hold harmless Lender and its affiliates and
its
former, present and future directors, officers, employees and other agents
and
representatives from and against any and all liabilities, judgments, claims,
settlements, losses, damages, fees, liens, taxes, penalties, obligations and
expenses incurred or suffered by any such person or entity directly or
indirectly arising from, by reason of, or in connection with (i) any breach
by
Borrower of any of its representations or warranties contained in Section 9 or (ii) any breach by Borrower of any of its
covenants or agreements in this Agreement.
(c) In
case
any claim or litigation which might give rise to any obligation of a party
under
this Section 14 (each an “Indemnifying
Party”) shall come to the attention of the party seeking
indemnification hereunder (the “Indemnified Party”), the
Indemnified Party shall promptly notify the Indemnifying Party in writing of
the
existence and amount thereof; provided that the failure of the Indemnified
Party
to give such notice shall not adversely affect the right of the Indemnified
Party to indemnification under this Agreement, except to the extent the
Indemnifying Party is materially prejudiced thereby. The Indemnifying
Party shall promptly notify the Indemnified Party in writing if it accepts
such
claim or litigation as being within its indemnification obligations under this
Section 14. Such response shall be
delivered no later than 30 days after the initial notification from the
Indemnified Party; provided that, if the Indemnifying Party reasonably cannot
respond to such notice within 30 days, the Indemnifying Party shall respond
to
the Indemnified Party as soon thereafter as reasonably possible.
(d) An
Indemnifying Party shall be entitled to participate in and, if (i) in the
judgment of the Indemnified Party such claim can properly be resolved by money
damages alone and the Indemnifying Party has the financial resources to pay
such
damages and (ii) the Indemnifying Party admits that this indemnity fully covers
the claim or litigation, the Indemnifying Party shall be entitled to direct
the
defense of any claim at its expense, but such defense shall be conducted by
legal counsel reasonably satisfactory to the Indemnified Party. An
Indemnified Party
shall
not
make any settlement of any claim or litigation under this Section 14 without the written consent of the
Indemnifying Party.
Section
15. Termination
Of Agreement.
(a) This
Agreement may be terminated (i) at any time by the written agreement of Lender
and Borrower, or (ii) by Lender upon the occurrence of a Default.
(b) Unless
otherwise agreed by Borrower and Lender, the provisions of Section 14 shall survive the termination of this
Agreement.
Section
16. [Omitted].
Section
17.
Guarantee. Guarantor shall execute a guarantee in favor of
Lender substantially in the form attached hereto as Annex A (the
“Guarantee”) that will guaranty all obligations of Borrower
with respect to this Agreement.
Section
18. Notices.
(a) All
notices and other communications hereunder shall be in writing and shall be
deemed to have been duly given when received.
(b) All
such
notices and other communications shall be directed to the following
address:
(i) If
to
Borrower or Agent to:
Citigroup
Global Markets Inc.
000
Xxxxxxxxx Xxxxxx
Xxx
Xxxx,
XX 00000
Telephone: 000-000-0000
Telecopier: 000-000-0000
Attention:
Xxxxx Xxxxxxx
(ii)
If
to Lender to:
Charter
Communications, Inc.
00000
Xxxxxxxxxxx Xxxxx
Xx.
Xxxxx, Xxxxxxxx 00000
Attention:
Executive Vice President and General Counsel
Telecopier
No.: (000) 000-0000
With
a
copy to:
Xxxxxx,
Xxxx & Xxxxxxxx LLP
000
Xxxx
Xxxxxx
Xxx
Xxxx,
XX 00000
Attention:
Xxxxxx X. Xxxxxxxx, Esq.
Telecopier
No.: (000) 000-0000
In
the
case of any party, at such other address as may be designated by written notice
to the other parties.
Section
19. Governing
Law; Submission To Jurisdiction; Severability.
(a) This
Agreement shall be governed by and construed in accordance with the laws of
the
State of New York, but excluding any choice of law provisions that would require
the application of the laws of a jurisdiction other than New York.
(b) EACH
PARTY HERETO IRREVOCABLY AND UNCONDITIONALLY (A) SUBMITS TO THE NON-EXCLUSIVE
JURISDICTION OF ANY UNITED STATES FEDERAL OR NEW YORK STATE COURT SITTING IN
NEW
YORK CITY, AND ANY APPELLATE COURT FROM ANY SUCH COURT, SOLELY FOR THE PURPOSE
OF ANY SUIT, ACTION OR PROCEEDING BROUGHT TO ENFORCE ITS OBLIGATIONS HEREUNDER
OR RELATING IN ANY WAY TO THIS AGREEMENT OR ANY LOAN HEREUNDER AND (B) WAIVES,
TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO, ANY DEFENSE OF AN INCONVENIENT
FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT AND
ANY
RIGHT OF JURISDICTION ON ACCOUNT OF ITS PLACE OF RESIDENCE OR
DOMICILE.
(c) EACH
PARTY HERETO HEREBY IRREVOCABLY WAIVES ANY RIGHT THAT IT MAY HAVE TO TRIAL
BY
JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
(d) To
the
extent permitted by law, the unenforceability or invalidity of any provision
or
provisions of this Agreement shall not render any other provision or provisions
herein contained unenforceable or invalid.
Section
20.. Designation of Replacement Collateral
Agent. If at any time while this Agreement is in effect (i)
Citigroup Global Markets Inc. ceases to be a Securities Intermediary or (ii)
Lender shall determine, in its sole discretion, that any of the relationships
by
or among the parties hereto are reasonably likely to prevent Lender from
acquiring, or jeopardize the continuation of, a first priority security interest
in any Collateral, Lender shall be entitled, following the occurrence and during
the continuance of any Collateral Trigger Event, to designate a bank or trust
company reasonably satisfactory to Borrower as a successor Collateral
Agent. In the event of a designation of a successor Collateral Agent,
each of the parties to this Agreement agrees to take all such actions as are
reasonably necessary to effect the transfer of rights and obligations of
Citigroup Global Markets Inc. as Collateral Agent hereunder to such successor
Collateral Agent, including the execution and delivery of amendments to this
Agreement as shall be necessary to effect such designation and
transfer.
Section 21. Counterparts. This
Agreement may be executed in any number of counterparts, and all such
counterparts taken together shall be deemed to constitute one and the same
agreement.
IN
WITNESS WHEREOF, the parties hereto to have executed this Share Lending
Agreement as of the date and year first above written.
|
CHARTER
COMMUNICATIONS, INC. as Lender
|
CITIGROUP
GLOBAL MARKETS LIMITED as Borrower
|
|
|
By:
/s/ Xxxxxx X. Xxxxxx
Name:
Xxxxxx X. Xxxxxx
Title:
Vice President - Finance and Corporate Treasurer
|
By:
/s/ Xxxxxx Xxxxxxxx
Name:
Xxxxxx Xxxxxxxx
Title:
Managing Director
|
|
CITIGROUP
GLOBAL MARKETS INC. as Collateral Agent
|
CITIGROUP
GLOBAL MARKETS INC. as Agent
|
|
|
By:
/s/ Xxxxxx Xxxxxxxx
Name:
Xxxxxx Xxxxxxxx
Title:
Managing Director
|
By:
/s/ Xxxxxx Xxxxxxxx
Name:
Xxxxxx Xxxxxxxx
Title:
Managing Director
|
Annex
A
Form
of Guarantee
Guarantee,
dated as of October 2, 2007, of CITIGROUP GLOBAL MARKETS HOLDINGS INC., aNew
York corporation (the “Guarantor”), in favor of CHARTER COMMUNICATIONS, INC.
(the “Counterparty”).
1. Guarantee. In
order to induce the Counterparty to amend and restate as of the date hereof
the
Share Lending Agreement, dated as of November 22, 2004 (the “Agreement” and as
such Agreement is amended and restated as of the date hereof, the “Amended and
Restated Agreement”), with the Guarantor's wholly-owned subsidiary Citigroup
Global Markets Limited (“Citigroup”), the Guarantor absolutely and
unconditionally guarantees to the Counterparty, its successors and permitted
assigns, the prompt payment of all amounts payable by Citigroup under the
Amended and Restated Agreement, whether due or to become due, secured or
unsecured, joint or several after taking into account the proceeds of
liquidation of any collateral or other security held by the Counterparty (the
“Obligations”) all without regard to any counterclaim, set-off, deduction or
defense of any kind which Citigroup or the Guarantor may have or assert, and
without abatement, suspension, deferment or diminution on account of any event
or condition whatsoever; providedhowever, that Guarantor’s
obligations under this Guarantee shall be subject to Citigroup’s defenses,
rights to set-off, counterclaim or withhold payment as provided in the Amended
and Restated Agreement. Any capitalized term used herein and not
otherwise defined shall have the meaning assigned to it in the Amended and
Restated Agreement.
2. Nature
of Guarantee. This Guarantee is a guarantee of payment and
not of collection. The Counterparty shall not be obligated, as a
condition precedent to performance by the Guarantor hereunder, to file any
claim
relating to the Obligations in the event that Citigroup becomes subject to
a
bankruptcy, reorganization or similar proceeding, and the failure of the
Counterparty to file a claim shall not affect the Guarantor's obligations
hereunder. This Guarantee shall continue to be effective or be
reinstated if any payment to the Counterparty by Citigroup on account of any
Obligation is returned to Citigroup or is rescinded upon the insolvency,
bankruptcy or reorganization of Citigroup.
3. Consents,
Waivers and Renewals. The Guarantor agrees that the
Counterparty may at any time and from time to time, either before or after
the
maturity thereof, without notice to or further consent of the Guarantor, change
the time, manner or place of payment or any other term of, any Obligation,
exchange, release, nonperfection or surrender any collateral for, or renew
or
change any term of any of the Obligations owing to it, and may also
enter into a written agreement with Citigroup or with any other party to the
Amended and Restated Agreement or person liable on any Obligation, or interested
therein, for the extension, renewal, payment, compromise, modification, waiver,
discharge or release thereof, in whole or in part, without impairing or
affecting this Guarantee. The Obligations of the Guarantor under this
Guarantee are unconditional, irrespective of the value, genuineness, validity,
or enforceability of the Obligations. The Guarantor waives demands,
promptness, diligence and all notices that may be required by law or to perfect
the Counterparty's rights hereunder except notice to the Guarantor of a default
by Citigroup under the Amended and Restated Agreement. No failure,
delay or single or partial exercise by the Counterparty of its rights or
remedies hereunder shall operate as a waiver of such rights or
remedies. All
rights and remedies hereunder or allowed by law shall be cumulative and
exercisable from time to time.
4. Representations
and Warranties. The Guarantor hereby represents and warrants
that:
(i) the
Guarantor is duly organized, validly existing and in good standing under the
laws of the State of New York;
(ii) the
Guarantor has the requisite corporate power and authority to issue this
Guarantee and to perform its obligations hereunder, and has duly authorized,
executed and delivered this Guarantee;
(iii) the
Guarantor is not required to obtain any authorization, consent, approval,
exemption or license from, or to file any registration with, any government
authority as a condition to the validity of, or to the execution, delivery
or
performance of, this Guarantee;
(iv) as
of the date of this Guarantee, there is no action, suit or proceeding pending
or
threatened against the Guarantor before any court or arbitrator or any
governmental body, agency or official in which there is a reasonable possibility
of an adverse decision which could affect, in a materially adverse manner,
the
ability of the Guarantor to perform any of its obligations under, or which
in
any manner questions the validity of, this Guarantee;
(v) the
execution, delivery and performance of this Guarantee by the Guarantor does
not
contravene or constitute a default under any statute, regulation or rule of
any
governmental authority or under any provision of the Guarantor's certificate
of
incorporation or by-laws or any contractual restriction binding on the
Guarantor; and
(vi) this
Guarantee constitutes the legal, valid and binding obligation of the Guarantor
enforceable in accordance with its terms, subject to
the
effect of any bankruptcy, insolvency, reorganization, moratorium or similar
law
affecting creditors' rights generally, and to general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).
5. Subrogation. Upon
payment by Guarantor of any sums to Counterparty under this Guarantee, all
rights of Guarantor against Citigroup arising as a result thereof by way of
right of subrogation or otherwise shall in all respects be subordinate and
junior in right of payment to the prior indefeasible payment in full of all
the
obligations of Citigroup under the Amended and Restated Agreement, including
all
Transactions then in effect between Citigroup and Counterparty.
6. Termination.
This Guarantee is a continuing guarantee and shall remain in full
force
and effect until such time as it may be revoked by the Guarantor by notice
given
to the Counterparty, such notice to be deemed effective upon receipt thereof
by
the Counterparty or at such later date as may be specified in such notice;
provided, however, that such revocation shall not limit or
terminate this Guarantee in respect of any Transaction effected under the
Amended and Restated Agreement which shall have been entered into prior to
the
effectiveness of such revocation. Notwithstanding anything to the
contrary in this Paragraph 6, this Guarantee shall terminate, and Guarantor
shall be released from all of the Obligations hereunder with respect to any
Transaction(s), immediately upon the transfer or assignment of such
Transaction(s) to an entity which is not an Affiliate of Citigroup (as such
term
is defined in Section 14 of the Amended and Restated Agreement), if such
transfer or assignment is completed in accordance with the provisions of Section
7 of the Amended and Restated Agreement.
7. Notices. Any
notice or communication required or permitted to be made hereunder shall be
made
in the same manner and with the same effect, unless otherwise specifically
provided herein, as set forth in the Amended and Restated
Agreement.
8. GOVERNING
LAW; JURISDICTION. THIS GUARANTEE SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING
EFFECT TO CHOICE OF LAW DOCTRINE AND WITHOUT GIVING EFFECT TO ANY PROVISION
THEREOF THAT WOULD PERMIT OR REQUIRE THE LAWS OF ANOTHER JURISDICTION TO
APPLY. THE GUARANTOR HEREBY IRREVOCABLY CONSENTS TO, FOR THE PURPOSES
OF ANY PROCEEDING ARISING OUT OF THIS GUARANTEE, THE EXCLUSIVE JURISDICTION
OF
THE COURTS OF THE STATE OF NEW YORK AND THE UNITED STATES DISTRICT COURT LOCATED
IN THE BOROUGH OF MANHATTAN IN NEW YORK CITY.
9. Miscellaneous. Each
reference herein to the Guarantor, Counterparty or Citigroup shall be deemed
to
include their respective successors and assigns. The provisions
hereof shall inure in favor of each such successor or assign. This
Guarantee (i) shall supersede any prior or contemporaneous representations,
statements or agreements, oral or written, made by or between the parties with
regard to the subject matter hereof, (ii) may be amended only by a
written instrument executed by the Guarantor and Counterparty and (iii) may
not
be assigned by either party without the prior written consent of the other
party.
In
Witness Whereof, the undersigned has
executed this Guarantee as of the date first above written.
CITIGROUP
GLOBAL MARKETS
HOLDINGS
INC.
By:
/s/ Xxxxxx Xxxxxxxx
Name:
Xxxxxx Xxxxxxxx
Title:
Managing Director
