Charter 2002 Annual Report Download - page 48

loan prepayments under speciÑc circumstances, including when signiÑcant amounts of assets are sold and the
proceeds are not reinvested in assets useful in the business of the borrower within the applicable time
requirement. The Charter Operating credit facility also provides that in the event that any existing Charter
Holdings notes or other long-term indebtedness of Charter Holdings remain outstanding on the date which is
six months prior to the scheduled Ñnal maturity, the term loans under the Charter Operating credit facility will
mature and the revolving credit facilities will terminate on such date. See ""Ì Certain Trends and
Uncertainties Ì Restrictive Covenants.''
The Charter Operating, CC VIII Operating, Falcon and CC VI Operating credit facilities generally
permit our subsidiaries to make distributions to Charter Holdings to pay interest on the Charter Holdings
notes and to Charter Communications, Inc. to pay interest on the convertible senior notes, in each case
provided the respective borrower's interest coverage test (as deÑned in the relevant credit agreement) for the
most recent Ñscal quarter preceding the distribution exceeds 1.75 times its cash interest expense for the same
period, including the amount of such distribution. Other distributions to Charter Holdings are also permitted if
the relevant borrower meets speciÑed Ñnancial ratios. In each case, such distributions are not permitted during
the existence of a default under the related credit facilities. See ""Ì Certain Trends and Uncertainties Ì
Restrictive Covenants.''
The events of default for these credit facilities include, among other things, (i) the failure to make
payments when due or within the applicable grace period, (ii) the failure to comply with speciÑed covenants
or (iii) the occurrence of events that cause or permit the acceleration of other indebtedness owing by the
guarantor, borrower or the borrower's restricted subsidiaries in amounts in excess of the amounts speciÑed
below.
Guarantor/Borrower Principal Amount
Charter Holdings/Charter Operating ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $50 Million
CC VI Holdings/CC VI OperatingÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $25 Million
Charter Communications VII/Falcon Cable Communications ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $10 Million
CC VIII Holdings, CC VIII Operating ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $25 Million
Although there are no direct cross-defaults between our subsidiaries' separate credit facilities, an event of
default resulting in the acceleration of the debt under any of our subsidiaries' credit facilities would cause an
event of default under the indentures governing the Charter Holdings notes, which would in turn trigger the
cross-default provision of the Charter Operating credit facilities. See ""Ì Certain Trends and Uncertainties Ì
Acceleration of Indebtedness of Subsidiaries.''
The credit facilities of our subsidiaries contain change of control provisions, making it an event of default,
and permitting acceleration of the debt, in the event of certain speciÑed changes of control, including if
Mr. Allen, his estate, heirs and related entities, fails to maintain, directly or indirectly, at least 51% voting
interest in the related borrower, or ceases to own of record or beneÑcially, directly or indirectly, at least 25% of
the equity interests in the related borrower. See ""Ì Certain Trends and Uncertainties Ì Long-Term
Indebtedness Ì Change of Control Payments.''
Indenture Restrictions and Covenants
This section summarizes certain of the restrictions and covenants with respect to our outstanding notes.
Convertible Senior Notes and High Yield Indebtedness Ì Change of Control. In the event of a speciÑed
change of control under each of the indentures governing the public notes of our subsidiaries described above,
our subsidiaries must oÅer to repurchase any then outstanding public notes at 101% of their principal amount
or accreted value, as applicable, plus accrued and unpaid interest, if any. See ""Ì Certain Trends and
Uncertainties Ì Long-Term Indebtedness Ì Change of Control Payments.''
In the event of a speciÑed change of control event in the indentures governing the Charter Communica-
tions, Inc. convertible senior notes, Charter Communications, Inc. must oÅer to repurchase any then
outstanding 5.75% convertible senior notes and 4.75% convertible senior notes at 100% of their principal
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