ARRIS Enterprises, Inc. Fundamental Change Notice 2.00% Convertible Senior Notes Due 2026 CUSIP Number: 04269Q AC 4
SUWANEE, Ga., April 30, 2013 /PRNewswire/ – ARRIS Group, Inc. (NASDAQ: ARRS). NOTICE IS HEREBY GIVEN pursuant to the terms and conditions of the Indenture, dated as of November 13, 2006 (the “Original Indenture”), between ARRIS Enterprises, Inc. (formerly ARRIS Group, Inc.), a Delaware corporation (the “Company,” “we,” “us” and “our”), and The Bank of New York Mellon Trust Company, N.A. (formerly The Bank of New York Trust Company, N.A.), as trustee (the “Trustee”), as amended by the First Supplemental Indenture, dated as of April 16, 2013 (the “First Supplemental Indenture” and, together with the Original Indenture, the “Indenture”), among the Company, ARRIS Group, Inc. (formerly ARRIS Enterprises I, Inc.), a Delaware corporation (the “Parent”), and the Trustee, relating to the Company’s 2.00% Convertible Senior Notes Due 2026 (the “Notes”), that a Fundamental Change (as defined in the Indenture) occurred on April 16, 2013 and each holder of the Notes has the right to require the Company to repurchase all or part of such holder’s Notes not yet converted, upon the terms and subject to the conditions set forth in the Indenture (the “Repurchase Right”).
As previously described in a notice furnished to holders of the Notes on April 19, 2013, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”), by and among the Company, the Parent and ARRIS Enterprises II, Inc., a Delaware corporation and wholly owned subsidiary of the Parent (“Merger Sub”), pursuant to which on April 16, 2013, Merger Sub merged with and into the Company, with the Company continuing as the surviving corporation and as a wholly owned subsidiary of the Parent (the “Merger”). Pursuant to the Merger Agreement, each share of the Company’s common stock, $0.01 par value per share (“Company Common Stock”), was converted into the right to receive one share of the Parent’s common stock, $0.01 par value per share (“Parent Common Stock”). The Merger facilitated the acquisition of the Motorola Home business, which closed on April 17, 2013. As a result of the Merger, a Fundamental Change under the Indenture has occurred, and each holder of the Notes has the Repurchase Right described above.
In connection with the Merger, the Company, the Parent and the Trustee executed the First Supplemental Indenture. Among other things, under the First Supplemental Indenture, the Parent guaranteed the Company’s obligations under the Indenture. The First Supplemental Indenture also provides that the conversion value of the Notes will now be calculated by reference to the Parent Common Stock rather than the Company Common Stock, and any shares issuable upon conversion of the Notes will now be settled in the Parent Common Stock rather than the Company Common Stock.
Holders may exercise their Repurchase Right by tendering through the transmittal procedures of the Depository Trust Company (“DTC”) any time on or prior to 5:00 p.m., New York City time, on May 28, 2013 (the “Expiration Date”). Notes tendered for purchase may be withdrawn at any time on or prior to 5:00 p.m., New York City time, on May 28, 2013 (the “Withdrawal Date”). Holders of Notes who validly tender their Notes on or prior to 5:00 p.m., New York City time, on the Expiration Date will receive 100% of the aggregate principal amount of Notes validly tendered and not validly withdrawn, plus accrued and unpaid interest to, but not including the Repurchase Date (as defined herein) (collectively, the “Repurchase Price”). We estimate the Repurchase Price will be approximately $1,000.78 per $1,000 aggregate principal amount of Notes tendered pursuant to the Repurchase Right. Payment of the Repurchase Price for Notes validly tendered and not validly withdrawn shall be made on May 29, 2013 (the “Repurchase Date”). Interest on Notes tendered pursuant to the Repurchase Right will cease to accrue as of the end of the day immediately preceding the Repurchase Date, provided that we have not defaulted in making payment of the Repurchase Price on any Notes validly tendered for purchase and not validly withdrawn. All rights of holders of Notes tendered pursuant to the Repurchase Right will terminate following payment of the Repurchase Price.
Alternative to the Repurchase Right:
You May Elect to Convert Your Notes
The Indenture provides that, as a result of the Merger and notwithstanding the Repurchase Right, the holders of the Notes have a right to convert the Notes, at any time until 5:00 p.m., New York City time, on May 29, 2013 (the “Conversion Right”). Upon conversion, the holders of surrendered Notes will receive the consideration specified in Section 10.02 of the Indenture (the “Conversion Consideration”). The first component of the Conversion Consideration is comprised solely of cash paid by the Company. The second component, which is only paid if the trading price of the Parent Common Stock is above a certain threshold, is comprised of cash, shares of Parent Common Stock or a combination of both, at the Parent’s election. The amount of both components is based on formulas that include the conversion rate applicable to the Notes as well as the trading price of the Parent Common Stock for a 20-day trading period following the date of the conversion. For a full description of the Conversion Consideration, including the formulas used to calculate the consideration, see Section 2.3 of the related Offer to Purchase and Section 10.02 of the Indenture. The conversion rate for the Notes is 62.1504 shares of Parent Common Stock per $1,000 principal amount of the Notes. There was no change to the conversion rate in connection with the Merger.
Your Conversion Right is separate from your Repurchase Right. Holders who validly tender all or part of their Notes pursuant to the Repurchase Right may not surrender such Notes for conversion unless they validly withdraw their Notes on or prior to 5:00 p.m., New York City time, on the Withdrawal Date. Holders who validly tender and do not validly withdraw their Notes pursuant to the Repurchase Right will no longer be able to exercise the Conversion Right, unless we fail to pay the Repurchase Price. Notes surrendered for conversion may not be withdrawn.
As of April 29, 2013, approximately $232.1 million aggregate principal amount of Notes remained outstanding. The Trustee has informed us that, as of the date of this Fundamental Change Notice, all custodians and beneficial holders of the Notes held the Notes through DTC accounts and that there are no certificated Notes in non-global form. Accordingly, all Notes tendered for purchase or conversion must be delivered through the transmittal procedures of DTC.
We have appointed the Trustee as our paying agent (the “Paying Agent”) and conversion agent (the “Conversion Agent”) in connection with the Repurchase Right and the Conversion Right.
This Fundamental Change Notice is being provided pursuant to Section 3.09 of the Indenture. All capitalized terms used but not specifically defined in this Fundamental Change Notice shall have the meanings given to such terms in the Indenture. The Repurchase Right of each holder of the Notes is subject to the terms and conditions of the Indenture, the Notes, this Fundamental Change Notice, the related Offer to Purchase and related materials (collectively, as amended or supplemented from time to time, the “Repurchase Right Materials”).
You should review the Repurchase Right Materials carefully and consult with your own financial and tax advisors. You must make your own independent decision as to whether or not to exercise your Repurchase Right or to exercise your Conversion Right and, if so, the amount of your Notes to tender or convert. None of the Company, the Parent, their respective Boards of Directors, their respective employees, advisors or representatives, the Trustee, the Paying Agent or the Conversion Agent is making any representation or recommendation to any holder as to whether to exercise or refrain from exercising the Repurchase Right, or to exercise or refrain from exercising the Conversion Right.
The Paying Agent and Conversion Agent is:
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.
By Hand, Overnight Delivery or To Confirm By Telephone or For Registered or Certified Mail: Information: (770) 698-5184 The Bank of New York Mellon Bond Redemption Unit 111 Sanders Creek Parkway East Syracuse, NY 13057 Attn: Christopher Landers
Additional copies of the Repurchase Right Materials may be obtained from the Paying Agent at its address set forth above.
The date of this Fundamental Change Notice is April 30, 2013.
No person has been authorized to give any information or to make any representations other than those contained in the Repurchase Right Materials and, if given or made, such information or representations must not be relied upon as having been authorized. The Repurchase Right Materials do not constitute an offer to buy or the solicitation of an offer to sell securities in any circumstances or jurisdiction in which such offer or solicitation is unlawful. The delivery of the Repurchase Right Materials shall not under any circumstances create any implication that the information contained in the Repurchase Right Materials is current as of any time subsequent to the date of such information.
ARRIS is a premier video and broadband technology company that transforms how service providers worldwide deliver entertainment and communications without boundaries. Its powerful end-to-end platforms enable service and content providers to improve the way people connect – with each other and with their favorite content. The Company’s vision and expertise continue to drive the industry’s innovations, as they have for more than 60 years. Headquartered north of Atlanta, in Suwanee, Georgia, ARRIS has R&D, sales and support centers throughout the world. Information about ARRIS products and services can be found at www.arrisi.com.
SOURCE ARRIS Group, Inc.