Charter 2005 Annual Report Download - page 145

CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES 2005 FORM 10-K
Notes to Consolidated Financial Statements (continued)
amounts in excess of $200 million in aggregate principal such net proceeds have not been used to prepay loans or
amount, Exchange Notes. However, asset sales that generate net pro-
ceeds of less than $75 million will not be subject to such
(Paul Allen and/or certain of his family members and/or commitment reduction obligation, unless the aggregate net
their exclusively owned entities (collectively, the ‘‘Paul Allen proceeds from such asset sales exceed $200 million, in which
Group’’) ceasing to have the power, directly or indirectly, case the aggregate unused commitment will be reduced by the
to vote at least 35% of the ordinary voting power of amount of such excess.
Charter Operating, CCO Holdings will be required to prepay loans (and
(the consummation of any transaction resulting in any redeem or offer to repurchase Exchange Notes, if issued) from
person or group (other than the Paul Allen Group) having the net proceeds from (i) the issuance of equity or incurrence of
power, directly or indirectly, to vote more than 35% of the debt by Charter and its subsidiaries, with certain exceptions, and
ordinary voting power of Charter Operating, unless the (ii) certain asset sales (to the extent not used for purposes
Paul Allen Group holds a greater share of ordinary voting permitted under the bridge loan).
power of Charter Operating, The covenants and events of default applicable to CCO
Holdings under the Bridge Loan are similar to the covenants
(certain of Charter Operating’s indirect or direct parent and events of default in the indenture for the senior secured
companies having indebtedness in excess of $500 million notes of CCH I.
aggregate principal amount which remains undefeased three The Exchange Notes will mature on the sixth anniversary
months prior to the final maturity of such of the first borrowing under the Bridge Loan. The Exchange
indebtedness, and Notes will bear interest at a rate equal to the rate that would
(Charter Operating ceasing to be a wholly-owned direct have been borne by the loans. The same mandatory redemption
subsidiary of CCO Holdings, except in certain very limited provisions will apply to the Exchange Notes as applied to the
circumstances. loans, except that CCO Holdings will be required to make an
offer to redeem upon the occurrence of a change of control at
CCO Holdings Bridge Loan. In October 2005, CCO Holdings and
101% of principal amount plus accrued and unpaid interest.
CCO Holdings Capital Corp., as guarantor thereunder, entered
The Exchange Notes will, if held by a person other than an
into the Bridge Loan with JPMorgan Chase Bank, N.A., Credit
initial lender or an affiliate thereof, be (a) non-callable for the
Suisse, Cayman Islands Branch and Deutsche Bank AG Cayman
first three years after the first borrowing date and (b) thereafter,
Islands Branch (the ‘‘Lenders’’) whereby the Lenders committed
callable at par plus accrued interest plus a premium equal to
to make loans to CCO Holdings in an aggregate amount of
50% of the coupon in effect on the first anniversary of the first
$600 million. In January 2006, upon the issuance of $450 million
borrowing date, which premium shall decline to 25% of such
of CCH II notes discussed above, the commitment under the
coupon in the fourth year and to zero thereafter. Otherwise, the
bridge loan agreement was reduced to $435 million. CCO
Exchange Notes will be callable at any time at 100% of the
Holdings may draw upon the facility between January 2, 2006
amount thereof plus accrued and unpaid interest.
and September 29, 2006 and the loans will mature on the sixth
Based upon outstanding indebtedness as of December 31,
anniversary of the first borrowing under the Bridge Loan.
2005, the amortization of term loans, scheduled reductions in
Beginning on the first anniversary of the first date that
available borrowings of the revolving credit facilities, and the
CCO Holdings borrows under the Bridge Loan and at any time
maturity dates for all senior and subordinated notes and
thereafter, any Lender will have the option to receive ‘‘exchange
debentures, total future principal payments on the total borrow-
notes’’ (the terms of which are described below, the ‘‘Exchange
ings under all debt agreements as of December 31, 2005, are as
Notes’’) in exchange for any loan that has not been repaid by
follows:
that date. Upon the earlier of (x) the date that at least a
majority of all loans that have been outstanding have been
Year Amount
exchanged for Exchange Notes and (y) the date that is
18 months after the first date that CCO Holdings borrows 2006 $ 50
2007 385
under the Bridge Loan, the remainder of loans will be 2008 744
automatically exchanged for Exchange Notes. 2009 2,326
As conditions to each draw, (i) there shall be no default 2010 3,455
under the Bridge Loan, (ii) all the representations and warran- Thereafter 12,376
ties under the bridge loan shall be true and correct in all $19,336
material respects and (iii) all conditions to borrowing under the
Charter Operating credit facilities (with certain exceptions) shall
be satisfied.
The aggregate unused commitment will be reduced by
100% of the net proceeds from certain asset sales, to the extent
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