Charter 2003 Annual Report Download - page 81

‚ The CC V issuers and their restricted subsidiaries may not engage in sale and leaseback transactions
unless, at the time of the transaction, the applicable CC V issuer or restricted subsidiary could have
incurred indebtedness under the leverage ratio test described above in an amount equal to the present
value of the net rental payments to be made under the lease, the gross proceeds of the sale are at least
equal to the fair market value of the subject property, and the sale of the assets and application of
proceeds is permitted by the covenant restricting asset sales.
‚ The CC V issuers' restricted subsidiaries may not enter into restrictions on their abilities to make
dividends or distributions or transfer assets to the CC V issuers except under documents governing
debt, asset sales, leases and like transactions permitted by the indenture.
‚ The restricted subsidiaries of the CC V issuers are generally not permitted to guarantee or pledge assets
to secure debt of the CC V issuers, unless the guarantying subsidiary issues a guarantee of the CC V
notes, and waives any rights of reimbursement, indemnity or subrogation arising from the guarantee
transaction for at least one year.
‚ The CC V issuers and their restricted subsidiaries are generally not permitted to transfer equity
interests in restricted subsidiaries unless the transfer is of all of the equity interests in the restricted
subsidiary or the restricted subsidiary remains a restricted subsidiary and net proceeds of the equity
sale are applied in accordance with the asset sales covenant. Restricted subsidiaries of the CC V issuers
are not permitted to issue equity interests if as a result, the issuing subsidiary would no longer be a
restricted subsidiary.
‚ The indenture governing the CC V notes also restricts the ability of the CC V issuers and their
restricted subsidiaries to enter into certain transactions with aÇliates involving over $2.5 million
without a determination by the board of directors that the transaction is on terms no less favorable than
arms length, or transactions with aÇliates involving consideration in excess of $10 million with aÇliates
without receiving an independent opinion as to the fairness of the transaction to the holders of the
CC V notes.
Renaissance Notes
The 10% senior discount notes due 2008 were issued by Renaissance Media (Louisiana) LLC,
Renaissance Media (Tennessee) LLC and Renaissance Media Holdings Capital Corporation, with Renais-
sance Media Group LLC as guarantor and the United States Trust Company of New York as trustee.
Renaissance Media Group LLC, which is the direct or indirect parent company of these issuers, is now a
subsidiary of Charter Operating. The Renaissance 10% notes and the Renaissance guarantee are unsecured,
unsubordinated debt of the issuers and the guarantor, respectively. In October 1998, the issuers of the
Renaissance notes exchanged $163 million of the original issued and outstanding Renaissance notes for an
equivalent value of new Renaissance notes. The form and terms of the new Renaissance notes are the same in
all material respects as the form and terms of the original Renaissance notes except that the issuance of the
new Renaissance notes was registered under the Securities Act.
There was no payment of any interest in respect of the Renaissance notes prior to October 15, 2003. Since
October 15, 2003, interest on the Renaissance notes is payable semi-annually in arrears in cash at a rate of
10% per year. On April 15, 2003, the Renaissance notes became redeemable at the option of the issuers
thereof, in whole or in part, initially at 105% of their principal amount at maturity, plus accrued interest,
declining to 100% of the principal amount at maturity, plus accrued interest, on or after April 15, 2006.
Our acquisition of Renaissance triggered change of control provisions of the Renaissance notes that
required us to oÅer to purchase the Renaissance notes at a purchase price equal to 101% of their accreted
value on the date of the purchase, plus accrued interest, if any. In May 1999, we made an oÅer to repurchase
the Renaissance notes, and holders of Renaissance notes representing 30% of the total principal amount
outstanding at maturity tendered their Renaissance notes for repurchase.
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