Charter 2002 Annual Report Download - page 57

‚ A restriction on liens covenant that would (a) require the granting of liens on the assets of CCH II,
LLC and the subsidiaries holding the real estate and aircraft collateral securing the facility and would
otherwise prohibit the creation of any other liens on the assets of CCH II, LLC or such subsidiaries;
except that the equity interests of Charter Operating and other entities owned by CCH II, LLC may be
subject to a Ñrst priority lien in favor of the lenders under the Charter Operating credit facility, (b) to
the extent not prohibited by the operating company credit facilities, restrict the creation of liens by
CC V Holdings, LLC, CC VI Holdings, LLC and Charter Communications VII, LLC and their
respective subsidiaries, and (c) require that we and our subsidiaries (other than CCH II, LLC,
Charter Operating, CC V Holdings, LLC, CC VI Holdings, LLC and Charter Communications VII,
LLC and their respective subsidiaries) secure the facility as provided in the commitment letter and
attached term sheet.
‚ A restriction on investments and acquisitions covenant that would restrict investments and acquisitions
by CCH II, LLC, Charter Operating, CC V Holdings, LLC, CC VI Holdings, LLC and Charter
Communications VII, LLC and their respective subsidiaries but would permit investments by
operating companies in other operating companies and other investments, in each case, to the extent
permitted by the operating company credit facilities; except that, notwithstanding the foregoing,
investments in us and our subsidiaries (other than CCH II, LLC and its subsidiaries) would be
prohibited except for guarantees of the facility and investments by Charter Communications VII, LLC
in Charter Holdings from the proceeds of any loans to Charter Communications VII, LLC.
‚ A restriction on signiÑcant modiÑcations or restructurings of existing indebtedness covenant that would
permit amendments and reÑnancings of the operating company credit facilities and the CC V notes, so
long as such amendments or modiÑcations do not (a) modify the dividend covenants, (b) the change
of control defaults or covenants in any manner that increases the threshold for control, (c) the Ñnancial
covenants (subject to the right of the operating companies to modify existing Ñnancial covenant ratios
or to give eÅect to the impact of accounting adjustments on such Ñnancial covenants), or (d) the
transaction with aÇliates covenants (to the extent relating to the facility, the equity contribution or the
other transactions contemplated by the commitment letter and term sheet relating to the facility), in
each case, (1) in a manner that is materially adverse to the lender and (2) restricts, limits or impairs
(x) the ability of the operating companies to distribute funds to CCH II, LLC, CC VI Holdings, LLC,
Charter Communications VII, LLC, or CC VIII, LLC, or (y) the operation or eÅectiveness of
covenants and structural protections contained in the facility.
‚ A restriction on dividends and redemptions covenant that would prohibit dividends, distributions and
redemptions by (a) CCH II, LLC, Charter Operating, CC V Holdings, LLC, CC VI Holdings, LLC
and Charter Communications VII, LLC and their respective subsidiaries prior to the assumption of the
loans by CCH II, LLC, (b) CCH II, LLC and its subsidiaries after the assumption of the loans by
CCH II, LLC, if 100% of the equity interests of Charter Operating are contributed to CCH II, LLC
prior to the assumption of the loans by CCH II, LLC, and (c) CCH II, LLC, Charter Operating and
their respective subsidiaries after the assumption of the loans by CCH II, LLC, if 100% of the equity
interests of Charter Operating are not contributed to CCH II, LLC prior to the assumption of the loans
by CCH II, LLC; except that distributions to pay interest on indebtedness of us, Charter Holdings,
Charter Communications Holding Company and, subject to compliance with the restrictions on the
creation of holding companies covenant, new holding companies that are parents of CCH II, LLC
(without duplication) and management fees will be permitted to the extent permitted under the
operating company credit facilities so long as (a) no default or event of default under the facility shall
have occurred and be continuing and (b) the total leverage ratio and interest coverage ratio (in each
case modeled after the comparable ratios under the credit facilities, with appropriate adjustments) at
the time of such distribution is less than (in the case of the total leverage ratio) or greater than (in the
case of the interest coverage ratio) an amount to be determined.
The deÑnitive documentation relating to the facility would contain a total leverage covenant and an
interest coverage covenant, in each case modeled after the comparable covenants in the operating company
credit facilities, with appropriate adjustments to be determined. The total leverage ratio and interest coverage
55