Charter 2003 Annual Report Download - page 83

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‚ 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
long as the proceeds of the sale are applied in accordance with the asset sale covenant, and issuances as
a result of which the restricted subsidiary is no longer a restricted subsidiary and any remaining
investment in that subsidiary is permitted by the covenant limiting restricted payments.
‚ The indenture governing the Renaissance Notes also restricts the ability of Renaissance Media Group
and its restricted subsidiaries to enter into certain transactions with aÇliates involving consideration in
excess of $2 million without a determination by the disinterested members of the board of directors
that the transaction is on terms no less favorable than arms length, or transactions with aÇliates
involving over $4 million with aÇliates without receiving an independent opinion as to the fairness of
the transaction to Renaissance Media Group.
All of these covenants are subject to additional speciÑed exceptions. In general, the covenants of our
subsidiaries' credit agreements are more restrictive than those of our indentures.
Our indentures include various events of default, including cross-default provisions. Under these
provisions, a failure by any of the issuers or any of their restricted subsidiaries to pay at the Ñnal maturity
thereof the principal amount of other indebtedness having a principal amount of $100 million or more (or any
other default under any such indebtedness resulting in its acceleration) would result in an event of default
under the indenture governing the applicable notes. As a result, an event of default related to the failure to
repay principal at maturity or the acceleration of the indebtedness under the credit facilities of our subsidiaries
or the CC V and Renaissance indentures could cause a cross-default under our indentures.
The Renaissance indenture contains a similar cross-default provision with a $10 million threshold that
applies to the issuers of the Renaissance notes and their restricted subsidiaries. The CC V indenture contains
events of default that include a cross-default to acceleration of, or failure to make payments when due or
within the applicable grace period, by CC V Holdings, CC V Holdings Finance or any restricted subsidiary, on
any indebtedness of $5 million or more. As a result, an event of default related to the failure to make a
payment when due or the acceleration of the indebtedness under the CC VIII Operating credit facility could
cause a cross-default under the CC V indenture.
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