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CHARTER COMMUNICATIONS, INC. 2004 FORM 10-K

In addition, CCH II may make distributions or restricted speciﬁed liens incurred in the ordinary course of business. The

payments, so long as no default exists or would be caused by lien covenant does not restrict liens on assets of subsidiaries of

transactions: CCH II.

(to repurchase management equity interests in amounts not CCO Holdings, LLC Notes

to exceed $10 million per ﬁscal year, 83/4% Senior Notes due 2013

(regardless of the existence of any default, to pay pass- In November 2003, CCO Holdings and CCO Holdings Capital

through tax liabilities in respect of ownership of equity Corp. jointly issued $500 million total principal amount of

interests in CCH II or its restricted subsidiaries, 83/4% senior notes due 2013. The CCO Holdings notes are

general unsecured obligations of CCO Holdings and CCO

(regardless of the existence of any default, to pay interest Holdings Capital Corp. They rank equally with all other current

when due on Charter Holdings notes, to pay, so long as or future unsubordinated obligations of CCO Holdings and

there is no default, interest on the convertible senior notes CCO Holdings Capital Corp. The CCO Holdings notes are

(including the notes) of Charter, to purchase, redeem or structurally subordinated to all obligations of CCO Holdings’

reﬁnance, so long as CCH II could incur $1.00 of subsidiaries, including the Renaissance notes, the CC V Hold-

indebtedness under the 5.5 to 1.0 leverage ratio test referred ings notes, the Charter Operating credit facilities and the

to above and there is no default, Charter Holdings notes, Charter Operating notes.

Charter notes, and other direct or indirect parent company Interest on the CCO Holdings senior notes accrues at

notes (including the CCH II notes), 83/4% per year and is payable semi-annually in arrears on each

(to make distributions in connection with the private May 15 and November 15.

exchanges pursuant to which the CCH II notes were At any time prior to November 15, 2006, the issuers of the

issued, and CCO Holdings senior notes may redeem up to 35% of the total

principal amount of the CCO Holdings senior notes to the

(other speciﬁed restricted payments including merger fees up

extent of public equity proceeds they have received on a pro

to 1.25% of the transaction value, repurchases using

rata basis at a redemption price equal to 108.75% of the

concurrent new issuances, and certain dividends on existing

principal amount of CCO Holdings senior notes redeemed, plus

subsidiary preferred equity interests.

any accrued and unpaid interest.

The indenture governing the CCH II notes restricts CCH II

On or after November 15, 2008, the issuers of the CCO

and its restricted subsidiaries from making investments, except

Holdings senior notes may redeem all or a part of the notes at a

speciﬁed permitted investments, or creating new unrestricted

redemption price that declines ratably from the initial redemp-

subsidiaries, if there is a default under the indenture or if

tion price of 104.375% to a redemption price on or after

CCH II could not incur $1.00 of new debt under the 5.5 to 1.0

November 15, 2011 of 100.0% of the principal amount of the

leverage ratio test described above after giving effect to the

CCO Holdings senior notes redeemed, plus, in each case, any

transaction.

accrued and unpaid interest.

Permitted investments include:

(investments by CCH II and its restricted subsidiaries in Senior Floating Rate Notes Due 2010

CCH II and in other restricted subsidiaries, or entities that In December 2004, CCO Holdings and CCO Holdings Capital

become restricted subsidiaries as a result of the investment, Corp. jointly issued $550 million total principal amount of senior

ﬂoating rate notes due 2010.

(investments aggregating up to 100% of new cash equity Interest on the CCO Holdings senior ﬂoating rate notes

proceeds received by CCH II since September 23, 2003 to accrues at the LIBOR rate plus 4.125% annually, from Decem-

the extent the proceeds have not been allocated to the ber 15, 2004 or, if interest already has been paid, from the date

restricted payments covenant described above, it was most recently paid. Interest is reset and payable quarterly

(investments resulting from the private exchanges pursuant in arrears on each March 15, June 15, September 15 and

to which the CCH II notes were issued, December 15, commencing on March 15, 2005.

At any time prior to December 15, 2006, the issuers of the

(other investments up to $750 million outstanding at any senior ﬂoating rate notes may redeem up to 35% of the notes in

time, and an amount not to exceed the amount of proceeds of one or

(certain speciﬁed additional investments, such as investments more public equity offerings at a redemption price equal to

in customers and suppliers in the ordinary course of 100% of the principal amount, plus a premium equal to the

business and investments received in connection with interest rate per annum applicable to the notes on the date

permitted asset sales. notice of redemption is given, plus accrued and unpaid interest,

CCH II is not permitted to grant liens on its assets other if any, to the redemption date, provided that at least 65% of the

than speciﬁed permitted liens. Permitted liens include liens original aggregate principal amount of the notes issued remains

securing debt and other obligations incurred under our subsidi- outstanding after the redemption.

aries’ credit facilities, liens securing the purchase price of new

assets, other liens securing indebtedness up to $50 million and