Charter 2003 Annual Report Download - page 89

Until the guarantee and pledge date, the Charter Operating notes are secured by a second-priority lien on
all of Charter Operating's assets that secure the obligations of Charter Operating under the Charter Operating
credit facility and speciÑed related obligations. The collateral secures the obligations of Charter Operating
with respect to the 8% senior second lien notes due 2012 and the 8
3
/ 8 % senior second lien notes due 2014 on a
ratable basis. The collateral consists of substantially all of Charter Operating's assets in which security
interests may be perfected under the Uniform Commercial Code by Ñling a Ñnancing statement (including
capital stock and intercompany obligations), including, but not limited to:
‚ all of the capital stock of all of Charter Operating's direct subsidiaries, including, but not limited to,
CCO NR Holdings, LLC; and
‚ all intercompany obligations owing to Charter Operating including, but not limited to, intercompany
notes from CC VI Operating, CC VIII Operating and Falcon, which notes are supported by the same
guarantees and collateral that supported these subsidiaries' credit facilities prior to the amendment and
restatement of the Charter Operating credit facilities.
On and after the guarantee and pledge date, the collateral for the Charter Operating notes will consist of
all of Charter Operating's and its subsidiaries' assets that secure the obligations of Charter Operating or any
subsidiary of Charter Operating with respect to the Charter Operating credit facility and the related
obligations or certain other indebtedness on such date. It is currently contemplated that, as of the guarantee
and pledge date, such collateral will consist of the capital stock of Charter Operating held by CCO Holdings,
all of the intercompany obligations owing to CCO Holdings by Charter Operating or any subsidiary of Charter
Operating, and substantially all of Charter Operating's and the guarantors' assets (other than the assets of
CCO Holdings) in which security interests may be perfected under the Uniform Commercial Code by Ñling a
Ñnancing statement (including capital stock and intercompany obligations), including, but not limited to:
‚ with certain exceptions, all capital stock (limited in the case of capital stock of foreign subsidiaries, if
any, to 66% of the capital stock of Ñrst tier foreign Subsidiaries) held by Charter Operating or any
guarantor; and
‚ with certain exceptions, all intercompany obligations owing to Charter Operating or any guarantor.
In addition, within a time frame speciÑed under the Charter Operating credit facility (45 days after
Charter Holdings satisÑes the Leverage Condition, as deÑned), Charter Operating will be required to redeem,
or cause to be redeemed, in full the notes outstanding under the CC V indenture. Within Ñve business days
after the redemption, and provided that such Leverage Condition remains satisÑed, CC V Holdings, LLC and
its subsidiaries will be required to guarantee the Charter Operating credit facility and the related obligations
and to secure those guarantees with Ñrst-priority liens, and to guarantee the notes and to secure the Charter
Operating senior second lien notes with second-priority liens, on substantially all of their assets in which
security interests may be perfected under the Uniform Commercial Code by Ñling a Ñnancing statement
(including capital stock and intercompany obligations). In addition, if Charter Operating or its subsidiaries
exercise any option to redeem in full the notes outstanding under the Renaissance indenture, then, provided
that the Leverage Condition remains satisÑed the Renaissance entities will be required to provide correspond-
ing guarantees of the amended and restated Charter Operating credit facilities and related obligations and note
guarantees and to secure the Charter Operating notes and the amended and restated Charter Operating credit
facilities and related obligations with corresponding liens.
In the event that additional liens are granted by Charter Operating or its subsidiaries to secure obligations
under the amended and restated Charter Operating credit facilities or the related obligations, second priority
liens on the same assets will be granted to secure the Charter Operating notes, which liens will be subject to
the provisions of an intercreditor agreement. Notwithstanding the foregoing sentence, no such second priority
liens need be provided if the time such lien would otherwise be granted is not during a guarantee and pledge
availability period (when the Leverage Condition is satisÑed), but such second priority lien will be required to
be provided in accordance with the foregoing sentence on or prior to the Ñfth business day of the
commencement of the next succeeding guarantee and pledge availability period.
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