Charter 2002 Annual Report Download - page 53

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‚ Under the indenture governing the Renaissance notes, Renaissance Media Group and its restricted
subsidiaries are permitted to pay dividends on equity interests, repurchase interests, make restricted
investments, or make other speciÑed restricted payments only if Renaissance Media Group could incur
$1.00 of additional debt under the debt incurrence test, which requires that Renaissance Media Group
meet the 6.75 to 1.0 leverage ratio after giving eÅect to the transaction of the indebtedness covenant
and that no default exists or would occur as a consequence thereof. If those conditions are met,
Renaissance Media Group and its restricted subsidiaries are permitted to make restricted payments in
an aggregate amount not to exceed the result of 100% of Renaissance Media Group's consolidated
EBITDA, minus 130% of its consolidated interest expense, plus 100% of new cash equity proceeds
received by Renaissance Media Group and not allocated to the indebtedness covenant, plus returns on
certain investments, all cumulatively from June 1998. Renaissance Media Group and its restricted
subsidiaries may make permitted investments up to $2 million in related businesses and other speciÑed
permitted investments, restricted payments up to $10 million, dividends up to 6% each year of the net
cash proceeds of public equity oÅerings, and other speciÑed restricted payments without meeting the
foregoing test.
‚ Renaissance Media Group and its restricted subsidiaries are not permitted to grant liens on their assets
other than speciÑed permitted liens, unless corresponding liens are granted to secure the Renaissance
notes. Permitted liens include liens securing debt permitted to be incurred under credit facilities, liens
securing debt incurred under the incurrence of indebtedness test, in amounts up to the greater of
$200 million or 4.5 times Renaissance Media Group's consolidated EBITDA, liens as deposits for
acquisitions up to 10% of the estimated purchase price, liens securing permitted Ñnancings of new
assets, liens securing debt permitted to be incurred by restricted subsidiaries, and speciÑed liens
incurred in the ordinary course of business.
‚ Renaissance Media Group and the issuers of the Renaissance notes are generally not permitted to sell
or otherwise dispose of all or substantially all of their assets or merge with or into other companies
unless their consolidated net worth after any such transaction would be no greater than their
consolidated net worth immediately prior to the transaction, or unless Renaissance Media Group could
incur $1.00 of additional debt under the debt incurrence test, which would require them to meet a
leverage ratio of 6.75 to 1.00 after giving eÅect to the transaction.
‚ Renaissance Media Group and its subsidiaries may generally not otherwise sell assets or, in the case of
subsidiaries, equity interests, unless they receive consideration at least equal to the fair market value of
the assets, consisting of at least 75% cash, temporary cash investments or assumption of debt. Charter
Holdings and its restricted subsidiaries are then required within 12 months after any asset sale either to
commit to use the net cash proceeds over a speciÑed threshold either to acquire assets used in their
own or related businesses or use the net cash proceeds to repay debt, or to oÅer to repurchase the
Renaissance notes with any remaining proceeds.
‚ Renaissance Media Group and its restricted subsidiaries may generally not engage in sale and
leaseback transactions unless the lease term does not exceed three years or the proceeds are applied in
accordance with the covenant limiting asset sales.
‚ Renaissance Media Group's restricted subsidiaries may generally not enter into restrictions on their
abilities to make dividends or distributions or transfer assets to Renaissance Media Group except those
not more restrictive than is customary in comparable Ñnancings.
‚ The restricted subsidiaries of Renaissance Media Group are not permitted to guarantee or pledge assets
to secure debt of the Renaissance Media Group or its restricted subsidiaries, unless the guarantying
subsidiary issues a guarantee of the Renaissance notes of comparable priority and tenor, and waives any
rights of reimbursement, indemnity or subrogation arising from the guarantee transaction for at least
one year.
‚ Renaissance Media Group and its restricted subsidiaries are generally not permitted to issue or sell
equity interests in restricted subsidiaries, except sales of common stock of restricted subsidiaries so
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