Charter 2003 Annual Report Download - page 85

be redeemed within 45 days after the Charter Holdings leverage ratio is below 8.75 to 1.0, provided that such
ratio remains below such leverage ratio for the entire 45-day period.
Amended and Restated Charter Operating Credit Facilities Ì Restrictive Covenants
The Charter Operating credit facilities contain representations and warranties, and aÇrmative and
negative covenants customary for Ñnancings of this type. The Ñnancial covenants measure performance against
standards set for leverage, debt service coverage, and interest coverage, tested as of the end of each quarter.
The maximum allowable leverage ratio is 4.25 to 1.0 until maturity, tested as of the end of each quarter
beginning June 30, 2004. Additionally, the Charter Operating credit facilities contain provisions requiring
mandatory loan prepayments under speciÑed circumstances, including when signiÑcant amounts of assets are
sold and the proceeds are not reinvested in assets useful in the business of the borrower within a speciÑed
period, and upon the incurrence of certain indebtedness when the ratio of senior Ñrst lien debt to operating
cash Öow is greater than 2.0 to 1.0.
The Charter Operating credit facilities permit Charter Operating and its subsidiaries to make distribu-
tions to pay interest on the Charter Operating senior second lien notes, the CCH II senior notes, the CCO
Holdings senior notes, the Charter convertible senior notes and the Charter Holdings senior notes, provided
that, among other things, no default has occurred and is continuing under the amended and restated Charter
Operating credit facilities. Conditions to future borrowings include absence of default or an event of default
under the amended and restated Charter Operating credit facilities and the continued accuracy in all material
respects of the representations and warranties, including the absence since December 31, 2003 of any event,
development or circumstance that has had or could reasonably be expected to have a material adverse eÅect
on our business.
The events of default under the Charter Operating credit facilities include, among other things:
(i) the failure to make payments when due or within the applicable grace period,
(ii) the failure to comply with speciÑed covenants,
(iii) the failure to pay or the occurrence of events that cause or permit the acceleration of other
indebtedness owing by CCO Holdings, Charter Operating or Charter Operating's subsidiaries in amounts
in excess of $50 million in aggregate principal amount,
(iv) the failure to pay or the occurrence of events that result in the acceleration of other
indebtedness owing by certain of CCO Holdings' direct and indirect parent companies in amounts in
excess of $200 million in aggregate principal amount,
(v) Paul Allen and/or certain of his family members and/or their exclusively owned entities
(collectively, the ""Paul Allen Group'') ceasing to have the power, directly or indirectly, to vote at least
35% of the ordinary voting power of Charter Operating,
(vi) the consummation of any transaction resulting in any person or group (other than the Paul
Allen Group) having power, directly or indirectly, to vote more than 35% of the ordinary voting power of
Charter Operating, unless the Paul Allen Group holds a greater share of ordinary voting power of Charter
Operating,
(vii) certain of Charter Operating's indirect or direct parent companies having indebtedness in
excess of $500 million aggregate principal amount which remains undefeased three months prior to the
Ñnal maturity of such indebtedness, and
(viii) Charter Operating ceasing to be a wholly-owned direct subsidiary of CCO Holdings, except in
certain very limited circumstances.
83