Charter 2002 Annual Report Download - page 56

payments would be required prior to maturity. The facility would mature on November 12, 2009, provided that
at such time as CCH II, LLC became the borrower under the facility the maturity date would become
March 1, 2007. The loan may not be prepaid prior to March 31, 2004, but the borrower would have the right to
make prepayments at any time after March 31, 2004, without the payment of any premium or penalty. The
borrower would be required to oÅer to purchase outstanding notes evidencing the loans under the facility with
the proceeds of certain asset sales and debt issuances.
The deÑnitive documentation would contain customary representations, covenants, events of default and
indemniÑcation provisions, including the following:
‚ A restriction on indebtedness covenant that would (i) prohibit additional indebtedness of Charter
Communications VII, LLC, the borrower, CC VI Holdings, LLC and CC VIII, LLC, (ii) restrict
indebtedness of our subsidiaries that are subject to the credit facilities, except indebtedness under the
credit facilities and other exceptions to be determined (including indebtedness permitted under the
current credit facilities) and, in each case, subject to protection of the structural seniority of the
facility, and (iii) require that most of our subsidiaries guarantee the facility on a senior basis.
‚ A restriction on the sale of assets covenant that would restrict sales of assets outside the ordinary
course of business by our subsidiaries that hold the real estate and aircraft collateral securing the
facility, Charter Operating, CC VI Holdings, LLC, Charter Communications VII, LLC, CC V
Holdings, LLC and their respective subsidiaries, except for sales of assets by Charter Operating,
CC VI Operating, Falcon and CC VIII Operating (which we refer to as the operating companies) to
the current operating company credit facilities and subject to compliance with the oÅer to purchase
requirement described above, except that sales or issuances of equity interests in the operating
companies or their subsidiaries to us and our subsidiaries will not be permitted except to other
operating companies and their subsidiaries. The restriction on sale of assets covenant would also
prohibit sales of assets by CCH II, LLC, except that cash distributions would be permitted to pay
interest on certain indebtedness and management fees.
‚ A restriction on the creation of holding companies covenant that would protect the structural seniority
of the facility as to all indebtedness of us and our subsidiaries, except for indebtedness under the
operating company credit facilities, the indenture governing the CC V notes and other ordinary and
customary exceptions to be determined. The covenant would prohibit the creation of new holding
companies by the borrower, Charter Operating, CC V Holdings, LLC, CC VI Holdings, LLC, Charter
Communications VII, LLC and their respective subsidiaries. The covenant would permit the creation
of additional holding companies as direct or indirect subsidiaries of Charter Holdings so long as 100%
of the equity interests in Charter Operating, CC V Holdings, LLC, CC VI Holdings, LLC and Charter
Communications VII, LLC have been contributed to CCH II, LLC prior to the formation of any such
holding companies. The covenant would not restrict the creation of holding companies that are our
subsidiaries and parent companies of Charter Holdings (or CCH II, LLC, after the equity contribu-
tion), so long as before any equity interests are oÅered to any person other than a wholly-owned
subsidiary of Charter Communications Holding Company, they are Ñrst oÅered to the lender. All new
holding company subsidiaries of ours will guarantee the facility on a senior basis. No transfer by
Charter Holdings of its equity interests in Charter Operating, CC V Holdings, LLC, CC VI Holdings,
LLC, and Charter Communications VII, LLC will be permitted except to CCH II, LLC. After the
equity contribution, Charter Operating, CC V Holdings, LLC, CC VI Holdings, LLC, and Charter
Communications VII, LLC would be direct wholly-owned subsidiaries of CCH II, LLC, and CCH II,
LLC would not be permitted to transfer such equity interests.
‚ A right of Ñrst oÅer on issuances of equity by us or our subsidiaries covenant that would prohibit the
issuance of any equity interests of us or any of our subsidiaries to any person (other than CCH II,
LLC) unless the lender is Ñrst oÅered the opportunity to acquire such equity interests on the same (or,
in the case of issuances for other than cash, economically equivalent) terms to be provided to any other
person or entity, and the lender declines to acquire such interests for 30 days after such oÅer is made.
This will be subject to customary exceptions, including for issuance of options to employees.
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