EXHIBIT 10.4
COLLATERAL PLEDGE
AND SECURITY AGREEMENT
Dated as of November 22, 2004
among
CHARTER COMMUNICATIONS, INC.
as Pledgor,
▇▇▇▇▇ FARGO BANK, N.A.
as Trustee, and
▇▇▇▇▇ FARGO BANK, N.A.
as Collateral Agent
This Collateral Pledge and Security Agreement (as supplemented from time
to time, this "Pledge Agreement") is made and entered into as of November 22,
2004 among Charter Communications, Inc., a Delaware corporation (the "Pledgor"),
having its principal offices at ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇. ▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ Fargo Bank, N.A., a national banking association, as
trustee (in such capacity, the "Trustee") for the holders (the "Holders") of the
Notes (as defined herein) issued by the Pledgor under the Indenture referred to
below, and ▇▇▇▇▇ Fargo Bank, N.A., as collateral agent for the Trustee and the
holders from time to time of the Notes referred to below (in such capacity, the
"Collateral Agent") and securities intermediary.
W I T N E S S E T H:
WHEREAS, the Pledgor and Citigroup Global Markets, Inc. and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
& Co. Incorporated, as representatives of the initial purchasers (the "Initial
Purchasers"), are parties to a Purchase Agreement dated November 16, 2004 (the
"Purchase Agreement"), pursuant to which the Pledgor will issue and sell to the
Initial Purchasers $862,500,000 aggregate original principal amount of 5.875%
Convertible Senior Notes due 2009 (the "Notes");
WHEREAS, the Pledgor and ▇▇▇▇▇ Fargo Bank, N.A., as Trustee, have entered
into that certain indenture dated as of the date hereof (as amended, restated,
supplemented or otherwise modified from time to time, the "Indenture"), pursuant
to which the Pledgor is issuing the Notes on the date hereof;
WHEREAS, pursuant to the terms of a Pledge Agreement (the "Mirror Pledge
Agreement") between the Pledgor and Charter Communications Holding Company LLC
("Charter Holdco"), Charter Holdco is required to purchase, and pledge to the
Pledgor and pursuant to the terms of the Indenture, the Pledgor is required to
repledge to the Collateral Agent for the benefit of the Trustee and the Holders,
at the Time of Delivery (as defined in the Purchase Agreement), U.S. Government
Obligations (as defined in the Indenture) in an amount that will be sufficient
upon receipt of scheduled payments of such securities to provide for payment in
full of the first six scheduled interest payments due on the original principal
amount of the Notes (such obligation, together with the obligation to repay the
principal, premium, if any, interest (including Liquidated Damages, if any),
fees, expenses or otherwise on the Notes and under the Indenture, this Agreement
and any other transaction document related thereto in the event that the Notes
become due and payable prior to such time as the first six scheduled interest
payments on the original principal amount thereof shall have been paid in full,
being collectively referred to herein as the "Obligations");
WHEREAS, the Collateral Agent has established an account (the "Collateral
Account") with ▇▇▇▇▇ Fargo Bank, N.A., at its office at Sixth & Marquette,
▇▇▇▇▇-▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Account No. ▇▇▇▇▇▇▇▇, in the name of ▇▇▇▇▇
Fargo Bank, N.A., as Collateral Agent for the benefit of the trustee and holders
of the 5.875% Convertible Senior Notes Due 2009 of Charter
Communications, Inc. and designated as "Charter Communications, Inc. Pledge
Account"; and
WHEREAS, it is a condition precedent to the purchase of the Notes by the
Initial Purchasers pursuant to the Purchase Agreement that the Pledgor shall
have on-lent certain of the proceeds of the offering of the Notes to Charter
Holdco, that Charter Holdco shall have used such proceeds to purchase the
Pledged Securities (as defined below), that Charter Holdco shall have deposited
such Pledged Securities into the Collateral Account to be held therein subject
to the terms of the Mirror Pledge Agreement and this Pledge Agreement and that
the Pledgor shall have granted the assignment, security interest and control,
and made the pledge and assignment, contemplated by this Pledge Agreement.
NOW, THEREFORE, in consideration of the premises herein contained, and in
order to induce the Initial Purchasers to purchase the Notes, the Pledgor, the
Trustee and the Collateral Agent hereby agree, for the benefit of the Initial
Purchasers and for the ratable benefit of the Holders, as follows:
SECTION 1. Definitions, Appointment; Deposit and Investment
1.1 Definitions.
(a) Unless otherwise defined in this Pledge Agreement, terms defined or
referenced in the Indenture are used in this Pledge Agreement as such terms are
defined or referenced therein.
(b) Unless otherwise defined in the Indenture or in this Pledge Agreement,
terms defined in Article 8 or 9 of the Uniform Commercial Code in effect in the
State of New York ("N.Y. Uniform Commercial Code") from time to time and/or in
Section 357.2 of the Treasury Regulations (as defined in Section 1.1(c)) are
used in this Pledge Agreement as such terms are defined in such Article 8 or 9
and/or such Section 357.2.
(c) In this Pledge Agreement, the following terms have the following
meanings (such meanings to be equally applicable to both the singular and plural
forms of the terms defined):
"Allocable Collateral" means the percentage of the Collateral applicable
to one Note, which shall be determined by the Pledgor, as of any date, by
dividing $1,000 by the aggregate original principal amount of Notes outstanding
as of such date.
"Cash Equivalents" means, to the extent owned by the Pledgor free and
clear of all Liens other than Liens created hereunder, U.S. Government
Obligations.
"C.F.R." means U.S. Code of Federal Regulations.
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"Collateral" has the meaning specified in Section 1.3 hereof.
"Collateral Account" has the meaning specified in the recitals of the
parties hereof.
"Collateral Agent" has the meaning specified in the recitals of the
parties hereto.
"Collateral Investments" has the meaning specified in Section 5 hereof.
"Entitlement holder" has the meaning specified in N.Y. Uniform Commercial
Code Section 8-102(a)(7) or in respect of any Book-entry Security, the meaning
specified for "Entitlement Holder" in 31 C.F.R. Section 357.2 or as applicable
to such Book-entry Security, the corresponding federal book-entry regulations.
"FRBMN" means Federal Reserve Bank of Minneapolis.
"FRBMN Account" means the FRBMN Member Securities Account maintained in
the name of the Collateral Agent by the FRBMN.
"FRBMN Member" means any Person that is eligible to maintain (and that
maintains) with the FRBMN one or more FRBMN Member Securities Accounts in such
Person's name.
"FRBMN Member Securities Account" means, in respect of any Person, an
account in the name of such Person at the FRBMN, to which account U.S.
Government Obligations held for such Person are or may be credited.
"Holders" has the meaning specified in the recitals of the parties hereto.
"Initial Purchasers" has the meaning specified in the recitals of the
parties hereof.
"Mirror Pledge Agreement" has the meaning specified in the recitals of the
parties hereof.
"Notes" has the meaning specified in the recitals of the parties hereof;
provided that Note shall mean each $1,000 original principal amount of Notes.
"N.Y. Uniform Commercial Code" has the meaning specified in Section
1.1(b).
"Obligations" has the meaning specified in the recitals of the parties
hereof.
"Purchase Agreement" has the meaning specified in the recitals of the
parties hereof.
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"Pledged Securities" has the meaning specified in Section 1.3 hereof.
"Pledgor" has the meaning specified in the recitals of the parties hereto.
"Pledgor Funds" has the meaning specified in Section 6(b) hereof.
"Pledgor's Designee" has the meaning specified in Section 6(b) hereof.
"Securities intermediary" means a Person that is a "securities
intermediary" (as defined in N.Y. Uniform Commercial Code Section 8-102(a)(14))
and, in respect of any Book-entry Security, a "Securities Intermediary" (as
defined in 31 C.F.R. Section 357.2 or, as applicable to such Book-entry
Security, as defined in the corresponding federal book-entry regulations).
"Security" has the meaning specified in Section 8-102(a)(15) of the N.Y.
Uniform Commercial Code or, in respect of any Book-entry Security, has the
meaning specified for "Security" in 31 C.F.R. Section 357.2 (or as applicable to
such Book-entry Security, the corresponding federal book-entry regulations).
"Security entitlement" has the meaning specified in N.Y. Uniform
Commercial Code Section 8-102(a)(17) or, in respect of any Book-entry Security,
has the meaning specified for "Security Entitlement" in 31 C.F.R. Section 357.2
(or, as applicable to such Book-entry Security, the corresponding federal
book-entry regulations).
"Settlement Date" means, as to any U.S. Government Obligations, the date
on which the purchase of such U.S. Government Obligations shall have been
settled.
"Termination Date" means the earlier of (a) the date of the payment in
full in cash of each of the first six scheduled interest payments due on the
original principal amount of the Notes under the terms of the Indenture and (b)
the date of the payment in full of all obligations due and owing under this
Pledge Agreement (in cash), the Indenture and the Notes (whether upon
conversion, redemption, repurchase or otherwise), in the event such obligations
become due and payable prior to the payment of the first six scheduled interest
payments on the original principal amount of the Notes.
"Time of Delivery" has the meaning specified in the Purchase Agreement.
"Treasury Regulations" means (a) the federal regulations contained in 31
C.F.R. Part 357 (including, without limitation, Section 357.2, Section 357.10
through Section 357.14 and Section 357.41 through Section 357.44 of 31 C.F.R.)
and (b) to the extent substantially identical to the federal regulations
referred to in clause (a) above (as in effect from time to time) the federal
regulations governing other U.S. Government Obligations.
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"Trustee" has the meaning specified in the recitals of parties hereto.
"Uncertificated Security" has the meaning specified in Section
8-102(a)(18) of the N.Y. Uniform Commercial Code.
1.2. Appointment of the Collateral Agent. The Trustee and the Pledgor
hereby appoint the Collateral Agent as Collateral Agent for the holders of Notes
in accordance with the terms and conditions set forth herein and the Collateral
Agent hereby accepts such appointment.
1.3. Pledge and Grant of Security Interest. As security for the prompt and
complete payment and performance when due (whether at the stated maturity, by
acceleration or otherwise) of the Obligations, the Pledgor hereby assigns and
pledges to the Collateral Agent for the benefit of the Trustee and the ratable
benefit of the Holders and hereby grants to the Collateral Agent for the benefit
of the Trustee and for the ratable benefit of the Holders, a continuing lien on
and security interest in, and control of, all of its right, title and interest
in and to the following property, and all right, title and interest in and to
the following property over which it has the power to transfer, whether now
existing or hereafter acquired or arising: (a) the U.S. Government Obligations
identified by CUSIP No. in Part I of Schedule I to this Pledge Agreement (the
"Pledged Securities"), (b) the security entitlements described in Part II of
said Schedule I with respect to the financial assets described, the securities
intermediary named, and the securities account referred to therein, (c) the
Collateral Account, all security entitlements from time to time carried in the
Collateral Account, all funds held therein and all certificates and instruments,
if any, from time to time representing or evidencing the Collateral Account, (d)
all Collateral Investments (as hereinafter defined) from time to time and all
certificates and instruments, if any, representing or evidencing the Collateral
Investments, and any and all security entitlements to the Collateral
Investments, and any and all related securities accounts in which any security
entitlements to the Collateral Investments are carried, (e) all notes,
certificates of deposit, deposit accounts, checks and other instruments, if any,
from time to time hereafter delivered to or otherwise possessed by the
Collateral Agent for or on behalf of the Pledgor and specifically designated by
the Pledgor to be in substitution for any or all of the then existing
Collateral, (f) all interest, dividends, cash, instruments and other property,
if any, from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of the then existing Collateral and (g)
all proceeds of any and all of the foregoing Collateral (including, without
limitation, proceeds that constitute property of the types described in clauses
(a)-(f) of this Section 1.3 and, to the extent not otherwise included, all (i)
payments under insurance (whether or not the Trustee is the loss payee thereof)
or any indemnity, warranty or guaranty, payable by reason of loss or damage to
or otherwise with respect to any of the foregoing Collateral and (ii) cash
proceeds of any and all of the foregoing Collateral (such property described in
clauses (a) through (g) of this Section 1.3 being collectively referred to
herein as the "Collateral"). Without limiting the generality of the foregoing,
this Pledge Agreement secures the payment of all
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amounts that constitute part of the Obligations and would be owed by the Pledgor
to the Trustee , the Holders and the Collateral Agent under the Notes, the
Indenture, this Pledge Agreement and any other transaction documents related
thereto but for the fact that they are unenforceable or not allowable due to the
existence of a bankruptcy, reorganization or similar proceeding involving the
Pledgor.
SECTION 2. Establishment and Maintenance of Collateral Accounts.
(a) Prior to or concurrently with the execution and delivery hereof, the
Collateral Agent shall establish the Collateral Account on its books as a
separate account segregated from all other custodial or collateral accounts at
its office at Sixth & Marquette, N9303-120, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇. The Pledgor
and the Collateral Agent will maintain the Collateral Account as a securities
account in the State of Minnesota.
The following provisions shall apply to the establishment and maintenance
of the Collateral Account:
(i) The Collateral Agent shall cause the Collateral Account to be, and
the Collateral Account shall be, separate from all other accounts
maintained by the Collateral Agent.
(ii) The Collateral Agent shall, in accordance with all applicable laws,
have sole dominion and control over the Collateral Account.
(iii) It shall be a term and condition of the Collateral Account and the
Pledgor irrevocably instructs the Collateral Agent, notwithstanding
any other term or condition to the contrary in any other agreement,
that no amount (including interest on Collateral Investments) shall
be released to or for the account of, or withdrawn by or for the
account of, the Pledgor or any other Person except as expressly
provided in this Pledge Agreement.
(b) Prior to or at the Time of Delivery, the Pledgor shall transfer, or
cause to be transferred, to the Collateral Agent the U.S. Government Obligations
listed on Schedule I hereto totaling an amount equal to $143,781,664.73. All
such U.S. Government Obligations shall be credited to the Collateral Account as
Collateral hereunder and the Collateral Agent shall ensure that, upon transfer
of such U.S. Government Obligations on the relevant date, the FRBMN indicates by
book-entry that those U.S. Government Obligations being settled on such date are
credited to the FRBMN Account. The Collateral Account shall be subject to such
applicable laws, and such applicable regulations of the Board of Governors of
the Federal Reserve System and of any other appropriate banking or governmental
authority, as may now or hereafter be in effect.
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(c) The Collateral Agent will, from time to time, reinvest the proceeds of
Collateral that may mature or be sold in such Collateral Investments (in the
name of the Collateral Agent) as it may be directed in writing by the Pledgor,
and cause such Collateral Investments to be credited to the Collateral Account
as Collateral hereunder. Any such proceeds that the Pledgor directs the
Collateral Agent in writing not to reinvest in Collateral Investments or for
which no investment instructions are received shall be held in the Collateral
Account.
SECTION 3. Delivery and Control of Collateral. (a) All certificates or
instruments representing or evidencing Collateral shall be delivered to and held
by or on behalf of the Collateral Agent pursuant hereto and shall be in suitable
form for transfer or delivery, or, at the request of the Collateral Agent, shall
be accompanied by duly executed instruments of transfer or assignment in blank.
In addition, the Collateral Agent shall have the right at any time to exchange
certificates or instruments representing or evidencing Collateral for
certificates or instruments of smaller or larger denominations.
(b) With respect to any Collateral that constitutes a security and is not
represented or evidenced by a certificate or instrument, the Pledgor shall cause
the issuer thereof either (i) to register the Collateral Agent as the registered
owner of such security or (ii) to agree in writing with the Collateral Agent and
the Pledgor that such issuer will comply with instructions with respect to such
security originated by the Collateral Agent without further consent of the
Pledgor, the terms of such agreement to be consistent with the terms of this
Agreement (if applicable).
(c) With respect to any Collateral that constitutes a security
entitlement, (i) if the securities intermediary is the FRBMN, any other Federal
Reserve Bank, or the Collateral Agent (in its capacity as securities
intermediary), the Pledgor shall cause the securities intermediary with respect
to such security entitlement to identify in its records the Collateral Agent as
the entitlement holder of such security entitlement against such securities
intermediary, (ii) if such securities intermediary is neither the Collateral
Agent nor a Federal Reserve Bank, the Pledgor shall cause the securities
intermediary with respect to such security entitlement either (A) to agree in
writing with the Pledgor and the Collateral Agent that such securities
intermediary will comply with entitlement orders (that is, notifications
communicated to such securities intermediary directing transfer or redemption of
the financial asset to which the Pledgor has a security entitlement) originated
by the Collateral Agent without further consent of the Pledgor, the terms of
such agreement to be consistent with the terms of this Agreement (if
applicable), or (B) to deliver the financial assets underlying such security
entitlement to the Collateral Agent for deposit in the Collateral Account.
(d) With respect to any Collateral that constitutes a securities account,
the Pledgor will comply with subsection (c) of this Section 3 with respect to
all security entitlements carried in such securities account.
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(e) Concurrently with the execution and delivery of this Pledge Agreement,
the Collateral Agent is delivering to the Pledgor and the Initial Purchasers a
duly executed certificate, in the form of Exhibit A hereto, of an officer of the
Collateral Agent.
(f) [RESERVED]
(g) [RESERVED]
SECTION 4. Delivery of Collateral Other than U.S. Government Obligations.
(a) Collateral consisting of cash will be deemed to be delivered to the
Collateral Agent (such that the Collateral Agent will have an enforceable lien
and security interest thereon and therein) when it has been (and for so long as
it shall remain) deposited in or credited to the Collateral Account.
(b) Collateral consisting of Cash Equivalents (other than U.S. Government
Obligations) will be deemed to be delivered to the Collateral Agent (such that
the Collateral Agent will have an enforceable lien and security interest thereon
and therein) when they have been (and for so long as they shall remain)
deposited in or credited to the Collateral Account.
(c) Collateral consisting of uncertificated securities (other than U.S.
Government Obligations) will be deemed delivered to the Collateral Agent when
the Collateral Agent (A) shall indicate by book entry that such securities have
been credited to the Collateral Account or (B) shall receive such security (or a
financial asset based on such security) for credit to the Collateral Account
from or at the direction of the Pledgor, and shall accept such security (or such
financial asset) for credit to the Collateral Account.
(d) Collateral consisting of securities, and represented or evidenced by
certificates or instruments, will be deemed delivered to the Collateral Agent
when all such certificates or instruments representing or evidencing the
Collateral, including, without limitation, amounts invested as provided in
Section 5, shall be delivered to the Collateral Agent and held by or on behalf
of the Collateral Agent pursuant hereto and shall be in registered form and
specially endorsed to the Collateral Agent by an effective endorsement, all in
form and substance sufficient to convey a valid security interest in such
Collateral to the Collateral Agent or shall be credited to the Collateral
Account.
SECTION 5. Investing of Amounts in the Collateral Accounts. The Collateral
Agent shall advise the Pledgor if, at any time, any amounts shall exist in the
Collateral Account uninvested, and if directed in writing by the Pledgor, the
Collateral Agent will, subject to the provisions of Section 6 and Section 13.
(a) invest such amounts on deposit in the Collateral Accounts in such Cash
Equivalents in the name of the Collateral Agent as the Pledgor may select and
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(b) invest interest paid on the Cash Equivalents referred to in clause (a)
above, and reinvest other proceeds of any such Cash Equivalents that may mature
or be sold, in each case in such Cash Equivalents in the name of the Collateral
Agent, as the Pledgor may select (the Cash Equivalents referred to in clauses
(a) and (b) above, together with the Pledged Securities, being collectively
referred to herein as "Collateral Investments"); provided, however, that the
amount in cash and Pledged Securities on deposit in the Collateral Account,
collectively, at any time during the term of this Pledge Agreement, shall be
sufficient to provide for the payment in full of the remaining interest payments
at such time on the Notes up to and including the sixth scheduled interest
payment. Interest and proceeds that are not invested or reinvested in Collateral
Investments as provided above shall be deposited and held in the Collateral
Account. Except as otherwise provided in Sections 11 and 12, the Collateral
Agent shall not be liable for any loss in the investment or reinvestment of
amounts held in the Collateral Account. The Collateral Agent is not at any time
under any duty to advise or make any recommendation for the purchase, sale,
retention or disposition of the Collateral Investments.
SECTION 6. Disbursements. The Collateral Agent shall hold the Collateral
in the Collateral Account and release the same, or a portion thereof, only as
follows:
(a) Prior to each of the first six scheduled interest payments on the
Notes, the Collateral Agent shall release from the Collateral Accounts an amount
sufficient to pay interest due on the original principal amount of the Notes on
such interest payment date and will take any action necessary to provide for the
payment of the interest on the Notes to the Holders in accordance with the
payment provisions of the Indenture from (and to the extent of) proceeds of the
Collateral in the Collateral Account. Nothing in this Section 6 shall affect the
Collateral Agent's rights to apply the Collateral to the payments of amounts due
on the original principal amount of the Notes upon acceleration thereof.
(b) If, prior to the date on which the sixth scheduled interest payment on
the Original Principal Amount of Notes is due, the Accreted Principal Amount of
the outstanding Notes has been accelerated pursuant to the terms of the
Indenture, then the Collateral Agent shall promptly, subject to applicable
bankruptcy laws, release the proceeds from the Collateral Account to the
Trustee, who shall apply such proceeds as set forth in the Indenture.
(c) Upon notice from the Trustee that any Notes have been submitted for
conversion pursuant to the terms of the Indenture, the Collateral Agent shall
liquidate a portion of the Collateral equal to the Allocable Collateral
multiplied by the number of Notes submitted for conversion as calculated by the
Pledgor; provided that if any Notes are converted between the close of business
on a Record Date but prior to the next Interest Payment Date (each as defined in
the Indenture), any portion of the Allocable Collateral maturing on such
Interest
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Payment Date shall not be liquidated and instead shall be released from the
Collateral Account pursuant to Section 6(a) above.
(d) The Collateral Agent shall release the proceeds of the liquidation of
Collateral described in Section 6(c) to the Trustee to the extent necessary to
pay to the converting Holders as the Early Conversion Make Whole Amount;
provided that if such liquidation proceeds exceed the Early Conversion Make
Whole Amount as a result of the application of the limitation described in the
second paragraph of Section 10.08(a) of the Indenture, any such excess shall be
paid over to the Pledgor or as reasonably directed by the Pledgor.
(f) [RESERVED]
(g) Except as expressly provided in Section 2(c), Section 5 or this
Section 6, nothing contained in this Pledge Agreement shall (i) afford the
Pledgor any right to issue entitlement orders with respect to any security
entitlement to the Pledged Securities or Collateral Investments or any
securities account in which any such security entitlement may be carried, or
otherwise afford the Pledgor control of any such security entitlement or (ii)
otherwise give rise to any rights of the Pledgor with respect to the Collateral
Investments, any security entitlement thereto or any securities account in which
any such security entitlement may be carried, other than the Pledgor's rights
under this Pledge Agreement as the beneficial owner of Collateral pledged to,
subject to the continuing lien thereon, and security interest in favor of the
Collateral Agent therein, and exclusive dominion and control (including, without
limitation, control with the meaning of Sections 8-106 and 9-106 of the N.Y.
Uniform Commercial Code) thereof, the Collateral Agent in its capacity as such
(and not as a securities intermediary). The Pledgor acknowledges, confirms and
agrees that the Collateral Agent holds a security entitlement to the Collateral
Investments solely as collateral agent for the Trustee and the Holders and not
as a securities intermediary for the Pledgor.
SECTION 7. Representations and Warranties. The Pledgor hereby represents
and warrants, as of the date hereof, that:
(a) The execution and delivery by the Pledgor of, and the performance by
the Pledgor of its obligations under, this Pledge Agreement will not contravene
any provision of applicable law or the certificate of incorporation, bylaws or
equivalent organizational instruments of the Pledgor or any material agreement
or other material instrument binding upon the Pledgor or any of its subsidiaries
or any judgment, order or decree of any governmental body, agency or court
having jurisdiction over the Pledgor or any of its subsidiaries, or result in
the creation or imposition of any Lien on any assets of the Pledgor, except for
the lien and security interests granted under this Pledge Agreement; no consent,
approval, authorization or order of, or qualification with, and no notice to or
filing with, any governmental body or agency or other third party is required
(i) for the performance by the Pledgor of its obligations under this Pledge
Agreement, (ii) for the pledge by the Pledgor of the Collateral pursuant to this
Pledge Agreement
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or for the execution, delivery or performance of this Agreement by the Pledgor
or (iii) for the perfection or maintenance of the pledge, assignment and
security interest created hereby (including the first priority nature of such
pledge, assignment or security interest), or (iv) except for any such consents,
approvals, authorizations or orders required to be obtained by the Collateral
Agent (or the Holders) for reasons other than the consummation of this
transaction, for the exercise by the Collateral Agent of the rights provided for
in this Pledge Agreement or the remedies in respect of the Collateral pursuant
to this Pledge Agreement.
(b) The Pledgor has the legal power to pledge the Collateral, free and
clear of any Lien or adverse claims of any Person (except for the lien and
security interests granted under this Pledge Agreement). No effective financing
statement or other instrument similar in effect covering all or any part of the
Collateral is on file in any public office other than the financing statements,
if any, to be filed pursuant to this Pledge Agreement or the Mirror Pledge
Agreement.
(c) This Pledge Agreement has been duly authorized, validly executed and
delivered by the Pledgor and (assuming the due authorization and valid execution
and delivery of this Pledge Agreement by each of the Trustee and the Collateral
Agent and enforceability of the Pledge Agreement against each of the Trustee and
the Collateral Agent in accordance with its terms) constitutes a valid and
binding agreement of the Pledgor, enforceable against the Pledgor in accordance
with its terms, except as (i) the enforceability hereof may be limited by
bankruptcy, insolvency, fraudulent conveyance, preference, reorganization,
moratorium or similar laws now or hereafter in effect relating to or affecting
the rights or remedies of creditors generally, (ii) the availability of
equitable remedies may be limited by equitable principles of general
applicability, whether arising in equity or at law, and the discretion of the
court before which any proceeding therefor may be brought, (iii) the exculpation
provisions and rights to indemnification hereunder may be limited by U.S.
federal and state securities laws and public policy considerations and (iv) the
waiver of rights and defenses contained in Section 13(b), Section 17.11 and
Section 17.15 hereof may be limited by applicable law.
(d) Upon the delivery to the Collateral Agent of the Collateral in
accordance with the terms hereof, the pledge of and grant of a security interest
in the Collateral securing the payment of the Obligations for the benefit of the
Trustee and the Holders will constitute a valid, first priority, perfected
security interest in such Collateral (except, with respect to Collateral in
which a security interest is perfected solely as a security interest in
proceeds, only to the extent permitted by Section 9-315 of the N.Y. Uniform
Commercial Code), enforceable as such against all creditors of the Pledgor and
any persons purporting to purchase any of the Collateral from the Pledgor other
than as permitted by the Indenture, and the Collateral Agent will have control
with respect thereto. Upon the establishment of the Collateral Account pursuant
to Section 2 hereof and the deliveries and other actions contemplated by
Sections 3 and 4 hereof, all filings
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and other actions necessary or desirable to perfect and protect such security
interest will have been duly taken.
(e) Other than as set forth in the Offering Memorandum, there are no legal
or governmental proceedings pending or, to the best of the Pledgor's knowledge,
threatened to which the Pledgor or any of its subsidiaries is a party or to
which any of the properties of the Pledgor or any of its subsidiaries is
subject, which, if determined adversely, would materially adversely affect the
power or ability of the Pledgor to perform its obligations under this Pledge
Agreement or to consummate the transactions contemplated hereby.
(f) The pledge of the Collateral pursuant to this Pledge Agreement is not
prohibited by law or governmental regulation (including, without limitation,
Regulations T, U and X of the Board of Governors of the Federal Reserve System)
applicable to the Pledgor.
(g) No Event of Default exists.
(h) The Mirror Pledge Agreement expressly authorizes the Pledgor to
rehypothecate the collateral pledged thereunder and repledge such collateral as
the Collateral pursuant to this Pledge Agreement.
SECTION 8. Further Assurances. The Pledgor will, promptly upon the request
by the Collateral Agent (which request the Collateral Agent may submit at the
direction of the Holders of a majority in aggregate original principal amount of
the Notes then outstanding), execute and deliver or cause to be executed and
delivered, or use its reasonable best efforts to procure, all assignments,
instruments and other documents, deliver any instruments to the Collateral Agent
and take any other actions that are necessary or desirable to perfect, continue
the perfection of, or protect the first priority of the Collateral Agent's
security interest in and to the Collateral, to protect the Collateral against
the rights, claims or interests of third persons (other than any such rights,
claims or interests created by or arising through the Collateral Agent) or to
effect the purposes of this Pledge Agreement. Without limiting the generality of
the foregoing, the Pledgor will, if any Collateral shall be evidenced by a
promissory note or other instrument, deliver to the Collateral Agent in pledge
hereunder such note or instrument effectively endorsed and accompanied by
effectively executed instruments of transfer or assignment; and execute and file
such financing or continuation statements, or amendments thereto, and such other
instruments or notices, as may be necessary, or as the Collateral Agent may
reasonably request, in order to perfect and preserve the pledge, assignment and
security interest granted or purported to be granted hereby. The Pledgor also
hereby authorizes the Collateral Agent to file any financing or continuation
statements, and amendments thereto, in the United States with respect to the
Collateral without the signature of the Pledgor (to the extent permitted by
applicable law). A photocopy or other reproduction of this Agreement or any
financing statement covering the Collateral or any part thereof shall be
sufficient as a financing statement where permitted by
12
law. The Pledgor will promptly pay all reasonable costs incurred in connection
with any of the foregoing within 60 days of receipt of an invoice therefor. The
Pledgor also agrees, whether or not requested by the Collateral Agent, to use
its reasonable best efforts to perfect or continue the perfection of, or to
protect the first priority of, the Collateral Agent's security interest in and
to the Collateral, and to protect the Collateral against the rights, claims or
interests of third persons (other than any such rights, claims or interests
created by or arising through the Collateral Agent).
SECTION 9. Covenants. The Pledgor covenants and agrees with the Collateral
Agent, Trustee and the Holders that from and after the date of this Pledge
Agreement until the Termination Date:
(a) it will not (and will not purport to) (i) sell or otherwise dispose
of, or grant any option or warrant with respect to, any of the Collateral nor
(ii) create or permit to exist any Lien upon or with respect to any of the
Collateral (except for the liens and security interests granted under this
Pledge Agreement and any Lien created by or arising through the Collateral
Agent) and at all times will have the right to pledge the Collateral, free and
clear of any Lien or adverse claims (except for the liens and security interests
granted under this Pledge Agreement and any Lien created by or arising through
the Collateral Agent);
(b) it will not (i) enter into any agreement or understanding (other than
the Indenture) that restricts or inhibits or purports to restrict or inhibit the
Trustee's or the Collateral Agent's rights or remedies hereunder, including,
without limitation, the Collateral Agent's right to sell or otherwise dispose of
the Collateral or (ii) fail to pay or discharge any tax, assessment or levy of
any nature with respect to the Collateral not later than three Business Days
prior to the date of any proposed sale under any judgment, writ or warrant of
attachment with respect to the Collateral; and
(c) it will not change its jurisdiction of incorporation without 30 days'
prior written notice to the Collateral Agent.
SECTION 10. Power of Attorney; Agent May Perform. (a) Subject to the terms
of this Pledge Agreement, the Pledgor hereby appoints and constitutes the
Collateral Agent as the Pledgor's attorney-in-fact (with full power of
substitution) to exercise to the fullest extent permitted by law all of the
following powers upon and at any time after the occurrence and during the
continuance of an Event of Default:
(i) collection of proceeds of any Collateral;
(ii) conveyance of any item of Collateral to any purchaser thereof;
13
(iii) the liquidation of any Collateral pursuant to Section 6(c)
hereof;
(iv) giving of any notices or recording of any Liens hereof; and
(v) paying or discharging taxes or Liens levied or placed upon the
Collateral, the legality or validity thereof and the amounts
necessary to discharge the same to be determined by the
Collateral Agent in its sole reasonable discretion, and such
payments made by the Collateral Agent to become part of the
Obligations secured hereby, due and payable immediately upon
demand.
The Collateral Agent's authority under this Section 10 shall include, without
limitation, the authority to endorse and negotiate any checks or instruments
representing proceeds of Collateral in the name of the Pledgor, execute and give
receipt for any certificate of ownership or any document constituting
Collateral, transfer title to any item of Collateral, sign the Pledgor's name on
all financing statements (to the extent permitted by applicable law) or any
other documents necessary or appropriate to preserve, protect or perfect the
security interest in the Collateral and to file the same, prepare, file and sign
the Pledgor's name on any notice of Lien (to the extent permitted by applicable
law), and to take any other actions arising from or necessarily incident to the
powers granted to the Trustee or the Collateral Agent in this Pledge Agreement.
This power of attorney is coupled with an interest and is irrevocable by the
Pledgor.
(b) If the Pledgor fails to perform any agreement contained herein, the
Collateral Agent may, but is not obligated to, after providing to the Pledgor
notice of such failure and five Business Days to effect such performance, itself
perform, or cause performance of, such agreement, and the expenses of the
Collateral Agent incurred in connection therewith shall be payable by the
Pledgor under Section 14.
SECTION 11. No Assumption of Duties; Reasonable Care. The rights and
powers granted to the Collateral Agent hereunder are being granted in order to
preserve and protect the security interest of the Collateral Agent for the
benefit of the Trustee and the Holders in and to the Collateral granted hereby
and shall not be interpreted to, and shall not impose any duties on, the
Collateral Agent in connection therewith other than those expressly provided
herein or imposed under applicable law. Except as provided by applicable law or
by the Indenture, the Collateral Agent shall be deemed to have exercised
reasonable care in the custody and preservation of the Collateral in its
possession if the Collateral is accorded treatment substantially equal to that
which the Collateral Agent accords similar property held by the Collateral Agent
for similar accounts, it being understood that the Collateral Agent in its
capacity as such
14
(a) may consult with counsel of its selection and the advice of such
counsel or any Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it hereunder
in good faith and in reliance thereon and
(b) shall not have any responsibility for
(i) ascertaining or taking action with respect to calls,
conversions, exchanges, maturities or other matters relative
to any Collateral, whether or not the Collateral Agent has or
is deemed to have knowledge of such matters,
(ii) taking any necessary steps for the existence, enforceability
or perfection of any security interest of the Collateral Agent
or to preserve rights against any parties with respect to any
Collateral or
(iii) except as otherwise set forth in Section 5, investing or
reinvesting any of the Collateral, provided, however, that in
the case of clause (a) and clause (b) of this sentence,
nothing contained in this Pledge Agreement shall relieve the
Collateral Agent of any responsibilities as a securities
intermediary under applicable law.
In no event shall the Collateral Agent be liable for the existence,
validity, enforceability or perfection of any security interest of the
Collateral Agent, or for special, indirect or consequential damages or lost
profits or loss of business, arising in connection with this Agreement.
SECTION 12. Indemnity. The Pledgor shall fully indemnify, hold harmless
and defend the Collateral Agent and its directors and officers from and against
any and all claims, losses, actions, obligations, liabilities and expenses,
including reasonable defense costs, reasonable investigative fees and costs, and
reasonable legal fees, expenses, and damages arising from the Collateral Agent's
appointment and performance as Collateral Agent under this Pledge Agreement,
except to the extent that such claim, action, obligation, liability or expense
is directly caused by the bad faith, gross negligence or willful misconduct of
the Collateral Agent. The provisions of this Section 12 shall survive
termination of this Pledge Agreement and the resignation and removal of the
Collateral Agent.
SECTION 13. Remedies upon Event of Default. Subject to Section 6(b), if
any Event of Default under the Indenture shall have occurred and be continuing
and the Notes shall have been accelerated in accordance with the provisions of
the Indenture:
(a) The Trustee, the Collateral Agent and the Holders shall have, in
addition to all other rights given by law or by this Pledge Agreement or the
15
Indenture, all of the rights and remedies with respect to the Collateral of a
secured party upon default under the N.Y. Uniform Commercial Code (whether or
not the N.Y. Uniform Commercial Code applies to the affected Collateral) at that
time. In addition, with respect to any Collateral that shall then be in or shall
thereafter come into the possession or custody of the Collateral Agent, the
Collateral Agent may and, at the written direction of the Trustee or the Holders
of a majority in aggregate original principal amount of the Notes then
outstanding, shall appoint a broker or other expert to sell or cause the same to
be sold at any broker's board or at public or private sale, in one or more sales
or lots, at such price or prices such broker or other expert may deem
commercially reasonable, for cash or on credit or for future delivery, without
assumption of any credit risk. The purchaser of any or all Collateral so sold
shall thereafter hold the same absolutely, free from any claim, encumbrance or
right of any kind whatsoever created by or through the Pledgor. Unless any of
the Collateral threatens, in the reasonable judgment of the Collateral Agent, to
decline speedily in value, the Collateral Agent will give the Pledgor reasonable
notice of the time and place of any public sale thereof, or of the time after
which any private sale or other intended disposition is to be made. Any sale of
the Collateral conducted in conformity with reasonable commercial practices of
banks, insurance companies, commercial finance companies, or other financial
institutions disposing of property similar to the Collateral shall be deemed to
be commercially reasonable. Any requirements of reasonable notice shall be met
if notice of the time and place of any public sale or the time after which any
private sale is to be made is given to the Pledgor as provided in Section 17.1
hereof at least ten (10) days before the time of the sale or disposition. The
Collateral Agent or any Holder may, in its own name or in the name of a designee
or nominee, buy any of the Collateral at any public sale and, if permitted by
applicable law, at any private sale. The Collateral Agent shall not be obligated
to make any sale of Collateral regardless of notice of sale having been given.
The Collateral Agent may adjourn any public or private sale from time to time by
announcement at the time and place fixed therefor, and such sale may, without
further notice, be made at the time and place to which it was so adjourned. All
expenses (including court costs and reasonable attorneys' fees, expenses and
disbursements) of, or incident to, the enforcement of any of the provisions
hereof shall be recoverable from the proceeds of the sale or other disposition
of the Collateral.
(b) The Pledgor further agrees to use its reasonable best efforts to do or
cause to be done all such other acts as may be necessary to make such sale or
sales of all or any portion of the Collateral pursuant to this Section 13 valid
and binding and in compliance with any and all other applicable requirements of
law. The Pledgor further agrees that a breach of any of the covenants contained
in this Section 13 will cause irreparable injury to the Trustee and the Holders,
that the Trustee and the Holders have no adequate remedy at law in respect of
such breach and, as a consequence, that each and every covenant contained in
this Section 13 shall be specifically enforceable against the Pledgor, and the
Pledgor hereby waives and agrees not to assert any defenses against an action
for specific
16
performance of such covenants except for a defense that no Event of Default has
occurred.
(c) All cash proceeds received by the Collateral Agent in respect of any
sale of, collection from, or other realization upon all or any part of the
Collateral may, in the discretion of the Collateral Agent, be held by the
Collateral Agent as collateral for, and/or then or at any time thereafter be
released (after payment of any amounts payable to the Collateral Agent or the
Trustee pursuant to Section 14) to the Trustee for distribution to the Holders
in accordance with the terms of the Indenture.
(d) The Collateral Agent may, but is not obligated to, exercise any and
all rights and remedies of the Pledgor in respect of the Collateral.
(e) Subject to and in accordance with the terms of this Pledge Agreement,
all payments received by the Pledgor in respect of the Collateral (except any
Collateral released to the Pledgor in accordance with the terms hereof) shall be
received in trust for the benefit of the Collateral Agent, shall be segregated
from other funds of the Pledgor and shall be forthwith paid over to the
Collateral Agent in the same form as so received (with any necessary
endorsement).
(f) The Collateral Agent may, without notice to the Pledgor except as
required by law and at any time or from time to time, charge, set-off and
otherwise apply all or any part of the Obligations against the Collateral
Account or any part thereof.
(g) The Pledgor shall cease to be entitled to direct the investment of
amounts held in the Collateral Account under Section 5 hereof and the Collateral
Agent shall not accept any direction from the Pledgor to invest amounts held in
the Collateral Account.
SECTION 14. Fees and Expenses. The Pledgor agrees to pay to Collateral
Agent the fees as may be agreed upon from time to time in writing. The Pledgor
will upon demand pay to the Trustee and the Collateral Agent the amount of any
and all expenses, including, without limitation, the reasonable fees, expenses
and disbursements of its counsel, experts and agents retained by the Trustee and
the Collateral Agent, that the Trustee and the Collateral Agent may incur in
connection with:
(a) the review, negotiation and administration of this Pledge Agreement,
(b) the custody or preservation of, or the sale of, collection from, or
other realization upon, any of the Collateral,
17
(c) the exercise or enforcement of any of the rights of the Collateral
Agent, the Trustee and the Holders hereunder or
(d) the failure by the Pledgor to perform or observe any of the provisions
hereof.
SECTION 15. Security Interest Absolute. All rights of the Collateral
Agent, the Trustee and the Holders and security interests hereunder, and all
obligations of the Pledgor hereunder, shall be absolute and unconditional
irrespective of:
(a) any lack of validity or enforceability of the Indenture or any other
agreement or instrument relating thereto;
(b) any change in the time, manner or place of payment of, or in any other
term of, all or any of the Obligations, or any other amendment or waiver of or
any consent to any departure from the Indenture;
(c) any exchange, surrender, release or non-perfection of any Liens on any
other collateral for all or any of the Obligations;
(d) any change, restructuring or termination of the corporate structure or
the existence of the Pledgor or any of its subsidiaries;
(e) to the extent permitted by applicable law, any other circumstance
which might otherwise constitute a defense available to, or a discharge of, the
Pledgor in respect of the Obligations or of this Pledge Agreement; or
(f) any manner of application of other collateral, or proceeds thereof, to
all or any item of the Obligations, or any manner of sale or other disposition
of any item of Collateral for all or any of the Obligations.
SECTION 16. Collateral Agent's Representations, Warranties and Covenants.
The Collateral Agent (in its capacity as securities intermediary) represents and
warrants that it is as of the date hereof, and it agrees that for so long as it
maintains the Collateral Accounts and acts as the securities intermediary
pursuant to this Pledge Agreement it shall be a Securities Intermediary and a
FRBMN Member. In furtherance of the foregoing, the Collateral Agent (in such
capacity) hereby:
(a) represents and warrants that it is a commercial bank that in the
ordinary course of its business maintains securities accounts for others and is
acting in that capacity hereunder and with respect to the Collateral Account;
(b) represents and warrants that it maintains a FRBMN Member Securities
Account with the FRBMN;
18
(c) agrees that the Collateral Account shall be an account to which
financial assets may be credited, and undertakes to treat the Collateral Agent
(in its capacity as such) as entitled to exercise rights that comprise (and
entitled to the benefits of) such financial assets, and entitled to exercise the
rights of an entitlement holder in the manner contemplated by the N.Y. Uniform
Commercial Code;
(d) hereby represents that, subject to applicable law, (i) it has not
granted, and covenants that so long as it acts as a securities intermediary
hereunder it shall not grant, control (including without limitation, control
within the meaning of Sections 8-106 and 9-106 of the N.Y. Uniform Commercial
Code) over or with respect to any Collateral credited to any Collateral Account
from time to time to, (ii) it has not acknowledged, and will not acknowledge,
that is has or is holding or maintaining control over any Collateral on behalf
of, and (iii) it has not transferred, and will not transfer, any right or
interest in any Collateral to, any other Person other than the Collateral Agent
(in its capacity as such);
(e) covenants that it shall not, subject to applicable law, knowingly take
any action inconsistent with, and represents and covenants that it is not and so
long as this Pledge Agreement remains in effect will not knowingly become, party
to any agreement the terms of which are inconsistent with, the provisions of
this Pledge Agreement;
(f) agrees that any item of property credited to the Collateral Account
shall be treated as a financial asset;
(g) agrees that any item of Collateral credited to the Collateral Account
shall not be subject to any security interest, Lien or right of set-off in favor
of it as securities intermediary, except as may be expressly permitted under the
Indenture (and in such capacity shall take such actions as shall be necessary
and appropriate to cause such Collateral to remain free of any Lien or security
interest of any underlying securities intermediary through which it holds such
Collateral or any security entitlement thereto);
(h) agrees to maintain the Collateral Account and maintain appropriate
books and records in respect thereof in accordance with its usual procedures and
subject to the terms of this Pledge Agreement;
(i) hereby agrees (and the Pledgor and the Collateral Agent (in its
capacity as Collateral Agent) agree) that the "securities intermediary's
jurisdiction" for purposes of Section 8-110(e) of the N.Y. Uniform Commercial
Code and Section 357.11 of the Treasury Regulations or the corresponding U.S.
federal regulations as they pertain to this Pledge Agreement, in respect of the
Collateral Account and any security entitlements relating thereto, shall be the
State of New York and that it has not and will not enter into any agreement
providing that the law of any other jurisdiction shall govern the Collateral
Account;
19
(j) agrees that, with respect to any Collateral that constitutes a
security entitlement, it shall comply with the provisions of Section 3(c)(i) or
(ii) of this Pledge Agreement and, with respect to any Collateral that
constitutes a securities account, it shall comply with the provisions of Section
3(c)(i) or (ii) of this Pledge Agreement with respect to all security
entitlements carried in such securities account; and
(k) agrees that if its jurisdiction as securities intermediary shall
change from that jurisdiction specified in Section 16(i), it will promptly
notify the Collateral Agent and the Trustee of such change and of such new
jurisdiction.
SECTION 17. Miscellaneous Provisions.
17.1. Notices. Any notice, approval, direction, consent or other
communication shall be sufficiently given if in writing and delivered in person
or mailed by first class mail, commercial courier service or telecopier
communication, addressed as follows:
if to the Pledgor:
Charter Communications, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Secretary
With a copy to:
Irell & ▇▇▇▇▇▇▇
1800 Avenue of the Stars
▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
if to the Collateral Agent:
▇▇▇▇▇ Fargo Bank, N.A.
Corporate Trust Services
Sixth & Marquette; ▇▇▇▇▇-▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Corporate Trust Services
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
if to the Trustee:
20
▇▇▇▇▇ Fargo Bank, N.A.
Corporate Trust Services
Sixth & Marquette; ▇▇▇▇▇-▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Corporate Trust Services
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
or, as to any such party, at such other address as shall be designated by such
party in a written notice to each other party complying as to delivery with the
terms of this Section. All such notices and other communications shall be deemed
to have been duly given: at the time delivered by hand, if personally delivered;
three Business Days after being deposited in the mail, postage prepaid, if
mailed; when receipt is confirmed, if telecopied; and on the next Business Day
if timely delivered to an air courier guaranteeing overnight delivery.
17.2. No Adverse Interpretation of Other Agreements. This Pledge Agreement
may not be used to interpret another pledge, security or debt agreement of the
Pledgor or any subsidiary thereof. No such pledge, security or debt agreement
(other than the Indenture) may be used to interpret this Pledge Agreement.
17.3. Severability. The provisions of this Pledge Agreement are severable,
and if any clause or provision shall be held invalid, illegal or unenforceable
in whole or in part in any jurisdiction, then such invalidity or
unenforceability shall affect in that jurisdiction only such clause or
provision, or part thereof, and shall not in any manner affect such clause or
provision in any other jurisdiction or any other clause or provision of this
Pledge Agreement in any jurisdiction.
17.4. Headings. The headings in this Pledge Agreement have been inserted
for convenience of reference only, are not to be considered a part hereof and
shall in no way modify or restrict any of the terms or provisions hereof.
17.5. Counterpart Originals. This Pledge Agreement may be signed in two or
more counterparts, each of which shall be deemed an original, but all of which
shall together constitute one and the same agreement.
17.6. Benefits of Pledge Agreement. Nothing in this Pledge Agreement,
express or implied, shall give to any Person, other than the parties hereto and
their successors hereunder, and the Holders, any benefit or any legal or
equitable right, remedy or claim under this Pledge Agreement.
17.7. Amendments, Waivers and Consents. Any amendment or waiver of any
provision of this Pledge Agreement and any consent to any departure by the
Pledgor, the Trustee or the Collateral Agent or from any provision of this
Pledge Agreement shall be effective only if made or duly given in compliance
with all of the terms and provisions of the Indenture, and none of the Trustee,
the Collateral
21
Agent, the Pledgor, or any Holder shall be deemed, by any act, delay,
indulgence, omission or otherwise, to have waived any right or remedy hereunder
or to have acquiesced in any default or Event of Default or in any breach of any
of the terms and conditions hereof. Failure of the Trustee, the Pledgor, the
Collateral Agent or any Holder to exercise, or delay in exercising, any right,
power or privilege hereunder shall not preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. A waiver by the
Trustee, the Pledgor, the Collateral Agent or any Holder of any right or remedy
hereunder on any one occasion shall not be construed as a bar to any right or
remedy that the Trustee, the Pledgor, the Collateral Agent or such Holder would
otherwise have on any future occasion. The rights and remedies herein provided
are cumulative, may be exercised singly or concurrently and are not exclusive of
any rights or remedies provided by law.
17.8. [RESERVED]
17.9. Continuing Security Interest; Termination.
(a) This Pledge Agreement shall create a continuing security interest in
and to the Collateral and shall, unless otherwise provided in the Indenture or
in this Pledge Agreement, remain in full force and effect until the Termination
Date. This Pledge Agreement shall be binding upon the parties hereto and their
respective transferees, successors and assigns, and shall inure, together with
the rights and remedies of the Trustee and the Collateral Agent hereunder, to
the benefit of the Trustee, the Collateral Agent, the Pledgor, the Holders and
their respective successors, transferees and assigns.
(b) Upon the Termination Date, the pledge, assignment and security
interest granted hereby shall terminate and all rights to the Collateral shall
revert to the Pledgor. At such time, the Collateral Agent shall promptly
reassign and redeliver to the Pledgor all of the Collateral hereunder that has
not been sold, disposed of, retained or applied by the Collateral Agent in
accordance with the terms of this Pledge Agreement and the Indenture and execute
and deliver to the Pledgor such documents as the Pledgor shall reasonably
request to evidence such termination. Such reassignment and redelivery shall be
without warranty by or recourse to the Collateral Agent or the Trustee in its
capacity as such, except as to the absence of any Liens on the Collateral
created by or arising through the Collateral Agent or the Trustee, and shall be
at the reasonable expense of the Pledgor.
17.10. Survival Provisions. All representations, warranties and covenants
contained herein shall survive the execution and delivery of this Pledge
Agreement, and shall terminate only upon the termination of this Pledge
Agreement. The obligations of the Pledgor under Sections 12 and 14 hereof and
the obligations of the Collateral Agent under Section 17.9(b) hereof shall
survive the termination of this Pledge Agreement.
22
17.11. Waivers. The Pledgor waives presentment and demand for payment of
any of the Obligations, protest and notice of dishonor or default with respect
to any of the Obligations, and all other notices to which the Pledgor might
otherwise be entitled, except as otherwise expressly provided herein or in the
Indenture.
17.12. Authority of the Collateral Agent.
(a) The Collateral Agent shall have and be entitled to exercise all powers
hereunder that are specifically granted to the Collateral Agent by the terms
hereof, together with such powers as are reasonably incident thereto. The
Collateral Agent may perform any of its duties hereunder or in connection with
the Collateral by or through agents or attorneys, shall not be responsible for
any misconduct or negligence on the part of any agent or attorney appointed with
due care by it hereunder and shall be entitled to retain counsel and to act in
reliance upon the advice of counsel concerning all such matters. Except as
otherwise expressly provided in this Pledge Agreement or the Indenture, neither
the Collateral Agent nor any director, officer, employee, attorney or agent of
the Collateral Agent shall be liable to the Pledgor for any action taken or
omitted to be taken by the Collateral Agent, in its capacity as Collateral
Agent, hereunder, except for its own bad faith, gross negligence or willful
misconduct, and the Collateral Agent shall not be responsible for the validity,
effectiveness or sufficiency hereof or of any document or security furnished
pursuant hereto. The Collateral Agent and its directors, officers, employees,
attorneys and agents shall be entitled to rely conclusively on any
communication, instrument or document believed by it or them to be genuine and
correct and to have been signed or sent by the proper Person or Persons. The
Collateral Agent shall have no duty to cause any financing statement or
continuation statement to be filed in respect of the Collateral. Neither the
Trustee nor the Collateral Agent makes any representation with respect to the
sufficiency of the Collateral. All parties hereto agree and acknowledge that the
recitals are statements of the Pledgor and that neither the Trustee nor the
Collateral Agent are responsible therefor.
(b) The Pledgor acknowledges that the rights and responsibilities of the
Collateral Agent under this Pledge Agreement with respect to any action taken by
the Collateral Agent or the exercise or non-exercise by the Collateral Agent of
any option, right, request, judgment or other right or remedy provided for
herein or resulting or arising out of this Pledge Agreement shall, as between
the Collateral Agent and the Holders, be governed by the Indenture and by such
other agreements with respect thereto as may exist from time to time among them,
but, as between the Collateral Agent and the Pledgor, the Collateral Agent shall
be conclusively presumed to be acting as agent for the Trustee and the Holders
with full and valid authority so to act or refrain from acting, and the Pledgor
shall not be obligated or entitled to make any inquiry respecting such
authority.
17.13. Final Expression. This Pledge Agreement, together with the
Indenture and any other agreement executed in connection herewith, is intended
23
by the parties as a final expression of this Pledge Agreement and is intended as
a complete and exclusive statement of the terms and conditions thereof.
17.14. Rights of Holders. No Holder shall have any independent rights
hereunder other than those rights granted to individual Holders pursuant to
Sections 6.05, 6.06 and 6.07 of the Indenture; provided that nothing in this
subsection shall limit any rights granted to the Trustee under the Notes or the
Indenture.
17.15. GOVERNING LAW; SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL;
WAIVER OF DAMAGES. (a) THIS PLEDGE AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, EXCEPT TO THE EXTENT THAT
THE VALIDITY OR PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES
HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A
JURISDICTION OTHER THAN THE STATE OF NEW YORK, AND, EXCEPT TO THE EXTENT THAT
THE VALIDITY OR PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES
HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A
JURISDICTION OTHER THAN THE STATE OF NEW YORK, ANY DISPUTE ARISING OUT OF,
CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED
BETWEEN THE PLEDGOR, THE TRUSTEE, THE COLLATERAL AGENT AND THE HOLDERS IN
CONNECTION WITH THIS PLEDGE AGREEMENT, AND WHETHER ARISING IN CONTRACT, TORT,
EQUITY OR OTHERWISE, SHALL BE RESOLVED IN ACCORDANCE WITH THE LAWS OF THE STATE
OF NEW YORK. NOTWITHSTANDING THE FOREGOING, THE MATTERS IDENTIFIED IN 31 C.F.R.
SECTIONS 357.10 AND 357.11 (AS IN EFFECT ON THE DATE OF THIS PLEDGE AGREEMENT)
SHALL BE GOVERNED SOLELY BY THE LAWS SPECIFIED THEREIN.
(b) THE PLEDGOR HEREBY WAIVES PERSONAL SERVICE OF PROCESS IN ANY SUIT,
ACTION OR PROCEEDING WITH RESPECT TO THIS PLEDGE AGREEMENT AND FOR ACTIONS
BROUGHT UNDER THE U.S. FEDERAL OR STATE SECURITIES LAWS BROUGHT IN ANY FEDERAL
OR STATE COURT LOCATED IN THE CITY OF NEW YORK (EACH A "NEW YORK COURT") AND
CONSENTS THAT ALL SERVICE OF PROCESS IN ANY SUCH SUIT, ACTION OR PROCEEDING
SHALL BE MADE BY REGISTERED MAIL, RETURN RECEIPT REQUESTED, DIRECTED TO THE
PLEDGOR AT THE ADDRESS INDICATED IN SECTION 17.1. EACH OF THE PARTIES HERETO
SUBMITS TO THE JURISDICTION OF ANY NEW YORK COURT AND TO THE COURTS OF ITS
CORPORATE DOMICILE WITH RESPECT TO ANY ACTIONS BROUGHT AGAINST IT AS DEFENDANT
IN ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF, CONNECTED WITH, RELATED TO, OR
INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THE
24
PLEDGOR, THE TRUSTEE, THE COLLATERAL AGENT AND THE HOLDERS IN CONNECTION WITH
THIS PLEDGE AGREEMENT, AND EACH OF THE PARTIES HERETO WAIVES ANY OBJECTION THAT
IT MAY HAVE TO THE LAYING OF VENUE, INCLUDING ANY PLEADING OF FORUM NON
CONVENIENS, WITH RESPECT TO ANY SUCH ACTION AND WAIVES ANY RIGHT TO WHICH IT MAY
BE ENTITLED ON ACCOUNT OF PLACE OF RESIDENCE OR DOMICILE.
(c) THE PLEDGOR AGREES THAT THE TRUSTEE SHALL, IN ITS CAPACITY AS TRUSTEE
OR IN THE NAME AND ON BEHALF OF ANY HOLDER, HAVE THE RIGHT, TO THE EXTENT
PERMITTED BY APPLICABLE LAW, TO PROCEED AGAINST THE PLEDGOR OR THE COLLATERAL IN
A COURT IN ANY LOCATION REASONABLY SELECTED IN GOOD FAITH (AND HAVING PERSONAL
OR IN REM JURISDICTION OVER THE PLEDGOR OR THE COLLATERAL, AS THE CASE MAY BE)
TO ENABLE THE TRUSTEE TO REALIZE ON SUCH COLLATERAL, OR TO ENFORCE A JUDGMENT OR
OTHER COURT ORDER ENTERED IN FAVOR OF THE TRUSTEE. THE PLEDGOR AGREES THAT IT
WILL NOT ASSERT ANY COUNTERCLAIMS, SETOFFS OR CROSSCLAIMS IN ANY PROCEEDING
BROUGHT BY THE TRUSTEE TO REALIZE ON SUCH PROPERTY OR TO ENFORCE A JUDGMENT OR
OTHER COURT ORDER IN FAVOR OF THE TRUSTEE, EXCEPT FOR SUCH COUNTERCLAIMS,
SETOFFS OR CROSSCLAIMS WHICH, IF NOT ASSERTED IN ANY SUCH PROCEEDING, COULD NOT
OTHERWISE BE BROUGHT OR ASSERTED.
(d) THE PLEDGOR AGREES THAT NEITHER ANY HOLDER NOR (EXCEPT AS OTHERWISE
PROVIDED IN THIS PLEDGE AGREEMENT OR THE INDENTURE) THE COLLATERAL AGENT IN ITS
CAPACITY AS COLLATERAL AGENT SHALL HAVE ANY LIABILITY TO THE PLEDGOR (WHETHER
ARISING IN TORT, CONTRACT OR OTHERWISE) FOR LOSSES SUFFERED BY THE PLEDGOR IN
CONNECTION WITH, ARISING OUT OF, OR IN ANY WAY RELATED TO, THE TRANSACTIONS
CONTEMPLATED AND THE RELATIONSHIP ESTABLISHED BY THIS PLEDGE AGREEMENT, OR ANY
ACT, OMISSION OR EVENT OCCURRING IN CONNECTION THEREWITH, UNLESS IT IS
DETERMINED BY A FINAL AND NONAPPEALABLE JUDGMENT OF A COURT THAT IS BINDING ON
THE TRUSTEE OR SUCH HOLDER, AS THE CASE MAY BE, THAT SUCH LOSSES WERE THE RESULT
OF ACTS OR OMISSIONS ON THE PART OF THE COLLATERAL AGENT OR SUCH HOLDERS, AS THE
CASE MAY BE, CONSTITUTING BAD FAITH, GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.
(e) TO THE EXTENT PERMITTED BY APPLICABLE LAW, THE PLEDGOR WAIVES THE
POSTING OF ANY BOND OTHERWISE REQUIRED OF THE TRUSTEE, THE COLLATERAL AGENT OR
ANY
25
HOLDER IN CONNECTION WITH ANY JUDICIAL PROCESS OR PROCEEDING TO ENFORCE ANY
JUDGMENT OR OTHER COURT ORDER PERTAINING TO THIS PLEDGE AGREEMENT OR ANY RELATED
AGREEMENT OR DOCUMENT ENTERED IN FAVOR OF THE TRUSTEE, THE COLLATERAL AGENT OR
ANY HOLDER, OR TO ENFORCE BY SPECIFIC PERFORMANCE, TEMPORARY RESTRAINING ORDER
OR PRELIMINARY OR PERMANENT INJUNCTION, THIS PLEDGE AGREEMENT OR ANY RELATED
AGREEMENT OR DOCUMENT BETWEEN THE PLEDGOR, ON THE ONE HAND, AND THE TRUSTEE, THE
COLLATERAL AGENT AND/OR THE HOLDERS, ON THE OTHER HAND.
17.16. Effectiveness. This Pledge Agreement shall become effective upon
the effectiveness of the Indenture.
26
IN WITNESS WHEREOF, the Pledgor, the Trustee and the Collateral Agent have
each caused this Pledge Agreement to be duly executed and delivered as of the
date first above written.
Pledgor:
Charter Communications, Inc.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
Trustee:
▇▇▇▇▇ Fargo Bank, N.A.,
as Trustee
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Assistant Vice President
Collateral Agent:
▇▇▇▇▇ Fargo Bank, N.A.,
as Collateral Agent
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Assistant Vice President
SCHEDULE I
PART I
PLEDGED SECURITIES
Original Cost at
Description of Debt CUSIP No(s). Final Maturity Principal Amount Time of Delivery
------------------- ------------ -------------- ---------------- ----------------
Treasury Strip ▇▇▇▇▇▇▇▇▇ 05/15/05 $24,352,000.00 $24,087,020.82
Treasury Strip ▇▇▇▇▇▇▇▇▇ 11/15/05 $25,337,000.00 $24,718,493.42
Treasury Strip ▇▇▇▇▇▇▇▇▇ 05/15/06 $25,337,000.00 $24,352,428.50
Treasury Strip ▇▇▇▇▇▇▇▇▇ 11/15/06 $25,337,000.00 $23,953,221.77
Treasury Strip ▇▇▇▇▇▇▇▇▇ 05/15/07 $25,337,000.00 $23,554,837.56
Treasury Strip ▇▇▇▇▇▇▇▇▇ 11/15/07 $25,337,000.00 $23,115,662.66
PART II
Issuer of Description of Securities Intermediary Securities Account
Financial Asset Financial Asset (Name and Address) (Number and Location)
--------------- --------------- ----------------------- ---------------------
U.S. Government Treasury Strip ▇▇▇▇▇ Fargo Bank, N.A., ▇▇▇▇▇ Fargo Bank, N.A.
Sixth & Marquette, N9303-120, Account No. ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
U.S. Government Treasury Strip ▇▇▇▇▇ Fargo Bank, N.A., ▇▇▇▇▇ Fargo Bank, N.A.
Sixth & Marquette, N9303-120, Account No. ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
U.S. Government Treasury Strip ▇▇▇▇▇ Fargo Bank, N.A., ▇▇▇▇▇ Fargo Bank, N.A.
Sixth & Marquette, N9303-120, Account No. ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
U.S. Government Treasury Strip ▇▇▇▇▇ Fargo Bank, N.A., ▇▇▇▇▇ Fargo Bank, N.A.
Sixth & Marquette, N9303-120, Account No. ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
U.S. Government Treasury Strip ▇▇▇▇▇ Fargo Bank, N.A., ▇▇▇▇▇ Fargo Bank, N.A.
Sixth & Marquette, N9303-120, Account No. ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
U.S. Government Treasury Strip ▇▇▇▇▇ Fargo Bank, N.A., ▇▇▇▇▇ Fargo Bank, N.A.
Sixth & Marquette, N9303-120, Account No. ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
I-1
EXHIBIT A
▇▇▇▇▇ FARGO BANK, N.A.
OFFICER'S CERTIFICATE
Pursuant to Section 3(e) of the Collateral Pledge and Security Agreement
(as supplemented from time to time, the "Pledge Agreement") dated as of November
22, 2004 among Charter Communications, Inc., a Delaware corporation (the
"Pledgor"), ▇▇▇▇▇ Fargo Bank, N.A., as trustee (the "Trustee") for the holders
of the $862.5 million aggregate original principal amount of 5.875% Convertible
Senior Notes due 2009 of the Pledgor and ▇▇▇▇▇ Fargo Bank, N.A., as collateral
agent and securities intermediary (the "Collateral Agent"), the undersigned
officer of the Collateral Agent, on behalf of the Collateral Agent, makes the
following certifications to the Pledgor and the Initial Purchasers. Capitalized
terms used and not defined in this Officer's Certificate have the meanings set
forth or referred to in the Pledge Agreement.
1. Substantially contemporaneously with the execution and delivery of this
Officer's Certificate, the Collateral Agent has acquired its security
entitlement to the Pledged Securities or through a "securities account" (as
defined in Section 8-501(a) of the N.Y. Uniform Commercial Code) maintained by
the Collateral Agent, for value and without notice of any adverse claim thereto.
Without limiting the generality of the foregoing, the Collateral Account, the
Pledged Securities and the other Collateral are not, and the Collateral Agent's
security entitlement to the Collateral is not, to the actual knowledge of the
corporate trust officer having responsibility for the administration of the
Pledge Agreement on behalf of the Collateral Agent, subject to any Lien granted
by or to or arising through or in favor of any securities intermediary
(including, without limitation, ▇▇▇▇▇ Fargo Bank, N.A., or the FRBMN) through
which the Collateral Agent derives its security entitlement to the Collateral.
2. The Collateral Agent has not knowingly caused or permitted the
Collateral Account or its security entitlement thereto to become subject to any
Lien created by or arising through the Collateral Agent.
A-1
IN WITNESS WHEREOF, the undersigned officer has executed this Officer's
Certificate on behalf of ▇▇▇▇▇ Fargo Bank, N.A., as Collateral Agent this 22nd
day of November, 2004.
▇▇▇▇▇ Fargo Bank, N.A.,
as Collateral Agent
By: ______________________________________
Name:
Title:
A-2