Charter 2002 Annual Report Download - page 58

ratio will be calculated for (x) Charter Communications VII, LLC, CC VI Holdings, LLC and CC V
Holdings, LLC prior to the equity contribution and (y) CCH II, LLC subsequent to the equity contribution.
When Charter Operating is contributed to CCH II, LLC, appropriate adjustments will be made to the total
leverage ratio and interest coverage ratio.
The deÑnitive documentation relating to the facility will contain events of default that are usual and
customary for transactions of this nature or reasonably required by the lender for this transaction in particular,
including, but not limited to, the following (but subject to customary exceptions, qualiÑcations and grace
periods): (i) the failure of the borrower to pay principal, interest or fees on the loans or other amounts under
the facility when due; (ii) a default in (x) the payment of principal when due, (y) the payment of interest
when due after giving eÅect to any applicable grace period or (z) a non-payment default which causes, or
permits the holders of indebtedness to cause, after giving any required notice, such indebtedness to become
due prior to its stated maturity, in each case, under any instrument or instruments governing indebtedness of
us or any of our subsidiaries; (iii) Ñnal judgments aggregating in excess of a threshold amount to be agreed
rendered against us or any of our subsidiaries; (iv) certain events of bankruptcy, insolvency or reorganization
with respect to us or any of our subsidiaries; (v) misrepresentations in the deÑnitive documentation relating to
the facility; (vi) change of control (to be deÑned but, in any event, to exclude any change of control caused by
lender (or any of its aÇliates other than us and our subsidiaries); (vii) defaults under material agreements or
material loss of licenses; or (viii) non-compliance with any covenant in the deÑnitive documentation relating
to the facility.
We would be required to pay all reasonable out-of-pocket costs of the lender associated with the facility
whether or not any funds are drawn under the facility; except that expenses to be reimbursed through the date
of execution of the deÑnitive documentation shall not exceed $1,000,000.
We and our subsidiaries would indemnify the lender and its oÇcers, directors, employees, aÇliates and
agents collectively and hold them harmless from and against all reasonable costs, expenses (including
reasonable fees, disbursements and other charges of counsel) and liabilities of any such indemniÑed person
arising out of or relating to those matters set forth in the deÑnitive documentation relating to the facility,
including, without limitation, any claim or any litigation or other proceedings (regardless of whether any such
indemniÑed person is a party thereto) that relate to the facility, the formation of CCH II, LLC or any
transactions connected therewith (including, without limitation, the equity contribution), except that no
indemniÑed person will be indemniÑed for such costs, expenses and liabilities (a) arising from its gross
negligence or willful misconduct as determined by a court of competent jurisdiction in a Ñnal and
nonappealable decision, or (b) to the extent they relate to the duties owed by an indemniÑed person or any of
its aÇliates as a director or stockholder of us including any claims that arise out of any claim that the
transactions contemplated hereby involve interested director transactions.
The facility is subject to the negotiation and execution of deÑnitive documentation by June 30, 2003. If
the parties have not executed the deÑnitive documentation by that date, the facility will terminate. Once the
documentation has been executed, the borrower's ability to draw on the facility would be subject to certain
conditions, such as the use of other available funds for covenant compliance purposes, evidence of compliance
with Ñnancial covenants, accuracy of representations and warranties, no material adverse change having
occurred, there being no default under other credit facilities and indentures, and receipt of Ñnancial
statements. Although we believe that we will be able to satisfy those conditions, there can be no assurance that
we will be able to do so or that if we fail to do so we will be able to negotiate waivers of such conditions.
Related Party Transactions
See Note 23 to our consolidated Ñnancial statements for information regarding related party transactions
and transactions with other parties with whom we or our related parties may have a relationship that enables
the parties to negotiate terms of material transactions that may not be available from other, more clearly
independent parties, on an arm's length basis.
56