Charter 2005 Annual Report Download - page 77

CHARTER COMMUNICATIONS, INC. 2005 FORM 10-K
Until the guarantee and pledge date, the Charter Operating In addition, if Charter Operating or its subsidiaries exercise
notes are secured by a second-priority lien on all of Charter any option to redeem in full the notes outstanding under the
Operating’s assets that secure the obligations of Charter Operat- Renaissance indenture, then, provided that the Leverage Condi-
ing under the Charter Operating credit facility and specified tion remains satisfied, the Renaissance entities will be required
related obligations. The collateral secures the obligations of to provide corresponding guarantees of the Charter Operating
Charter Operating with respect to the 8% senior second-lien credit facilities and related obligations and note guarantees and
notes due 2012 and the 83
/8% senior second-lien notes due 2014 to secure the Charter Operating notes and the Charter
on a ratable basis. The collateral consists of substantially all of Operating credit facilities and related obligations with corre-
Charter Operating’s assets in which security interests may be sponding liens.
perfected under the Uniform Commercial Code by filing a In the event that additional liens are granted by Charter
financing statement (including capital stock and intercompany Operating or its subsidiaries to secure obligations under the
obligations), including, but not limited to: Charter Operating credit facilities or the related obligations,
second priority liens on the same assets will be granted to
(all of the capital stock of all of Charter Operating’s direct secure the Charter Operating notes, which liens will be subject
subsidiaries, including, but not limited to, CCO NR to the provisions of an intercreditor agreement (to which none
Holdings, LLC; and of Charter Operating or its affiliates are parties). Notwithstand-
(all intercompany obligations owing to Charter Operating ing the foregoing sentence, no such second priority liens need
including, but not limited to, intercompany notes from CC be provided if the time such lien would otherwise be granted is
VI Operating, CC VIII Operating and Falcon, which notes not during a guarantee and pledge availability period (when the
are supported by the same guarantees and collateral that Leverage Condition is satisfied), but such second priority liens
supported these subsidiaries’ credit facilities prior to the will be required to be provided in accordance with the foregoing
amendment and restatement of the Charter Operating sentence on or prior to the fifth business day of the commence-
credit facilities. ment of the next succeeding guarantee and pledge availability
period.
Since the occurrence of the guarantee and pledge date, the
collateral for the Charter Operating notes consists of all of Renaissance Media Notes
Charter Operating’s and its subsidiaries’ assets that secure the The 10% senior discount notes due 2008 were issued by
obligations of Charter Operating or any subsidiary of Charter Renaissance Media (Louisiana) LLC, Renaissance Media (Ten-
Operating with respect to the Charter Operating credit facilities nessee) LLC and Renaissance Media Holdings Capital Corpora-
and the related obligations. The collateral currently consists of tion, with Renaissance Media Group LLC as guarantor and the
the capital stock of Charter Operating held by CCO Holdings, United States Trust Company of New York as trustee. Renais-
all of the intercompany obligations owing to CCO Holdings by sance Media Group LLC, which is the direct or indirect parent
Charter Operating or any subsidiary of Charter Operating, and company of these issuers, is a subsidiary of Charter Operating.
substantially all of Charter Operating’s and the guarantors’ assets The Renaissance 10% notes and the Renaissance guarantee are
(other than the assets of CCO Holdings) in which security unsecured, unsubordinated debt of the issuers and the guarantor,
interests may be perfected under the Uniform Commercial Code respectively. In October 1998, the issuers of the Renaissance
by filing a financing statement (including capital stock and notes exchanged $163 million of the original issued and
intercompany obligations), including, but not limited to: outstanding Renaissance notes for an equivalent value of new
Renaissance notes. The form and terms of the new Renaissance
(with certain exceptions, all capital stock (limited in the case notes are the same in all material respects as the form and terms
of capital stock of foreign subsidiaries, if any, to 66% of the of the original Renaissance notes except that the issuance of the
capital stock of first tier foreign Subsidiaries) held by new Renaissance notes was registered under the Securities Act.
Charter Operating or any guarantor; and Interest on the Renaissance notes is payable semi-annually
(with certain exceptions, all intercompany obligations owing in arrears in cash at a rate of 10% per year. The Renaissance
to Charter Operating or any guarantor. notes are redeemable at the option of the issuers thereof, in
whole or in part, initially at 105% of their principal amount at
In March 2005, CC V Holdings, LLC redeemed in full the
maturity, plus accrued interest, declining to 100% of the
notes outstanding under the CC V indenture. Following that
principal amount at maturity, plus accrued interest, on or after
redemption CC V Holdings, LLC and its subsidiaries guaranteed
April 15, 2006.
the Charter Operating credit facilities and the related obligations
Our acquisition of Renaissance triggered change of control
and secured those guarantees with first-priority liens, and
provisions of the Renaissance notes that required us to offer to
guaranteed the notes and secured the Charter Operating senior
purchase the Renaissance notes at a purchase price equal to
second lien notes with second-priority liens, on substantially all
101% of their accreted value on the date of the purchase, plus
of their assets in which security interests may be perfected
accrued interest, if any. In May 1999, we made an offer to
under the Uniform Commercial Code by filing a financing
repurchase the Renaissance notes, and holders of Renaissance
statement (including capital stock and intercompany
obligations).
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