Charter 2006 Annual Report Download - page 61

CHARTER COMMUNICATIONS, INC. 2006 FORM 10-K
(a revolving credit facility (the ‘‘R/T Facility’’) of $350.0 mil- development, or circumstance that has had or could reasonably
lion, that converts to term loans no later than April 2007, be expected to have a material adverse effect on our business.
repayable on the same terms as the term facility described The events of default under the Charter Operating credit
above. facilities include, among other things:
(the failure to make payments when due or within the
Amounts outstanding under the Charter Operating credit
applicable grace period,
facilities bear interest, at Charter Operating’s election, at a base
rate or the Eurodollar rate, as defined, plus a margin for (the failure to comply with specified covenants, including
Eurodollar loans of up to 3.00% for the revolving credit facility but not limited to a covenant to deliver audited financial
and R/T Facility (until converted to term loans), up to 2.625% statements with an unqualified opinion from our indepen-
for the term facility and R/T Facility loans after converting to dent auditors,
term loans, and for base rate loans of up to 2.00% for the
(the failure to pay or the occurrence of events that cause or
revolving credit facility and R/T Facility (until converted to permit the acceleration of other indebtedness owing by
term loans), and up to 1.625% for the term facility and R/T CCO Holdings, Charter Operating, or Charter Operating’s
Facility loans after converting to term loans. A quarterly subsidiaries in amounts in excess of $50 million in aggregate
commitment fee of up to .75% is payable on the average daily principal amount,
unborrowed balance of the revolving credit facility and, until
converted into term loans, the R/T Facility. (the failure to pay or the occurrence of events that result in
The obligations of Charter Operating under the Charter the acceleration of other indebtedness owing by certain of
Operating credit facilities (the ‘‘Obligations’’) are guaranteed by CCO Holdings’ direct and indirect parent companies in
Charter Operating’s immediate parent company, CCO Holdings, amounts in excess of $200 million in aggregate principal
and the subsidiaries of Charter Operating, except for certain amount,
subsidiaries, including immaterial subsidiaries and subsidiaries (Paul Allen and/or certain of his family members and/or
precluded from guaranteeing by reason of the provisions of their exclusively owned entities (collectively, the ‘‘Paul Allen
other indebtedness to which they are subject (the ‘‘non- Group’’) ceasing to have the power, directly or indirectly,
guarantor subsidiaries’’). The Obligations are also secured by to vote at least 35% of the ordinary voting power of
(i) a lien on substantially all of the assets of Charter Operating Charter Operating,
and its subsidiaries (other than assets of the non-guarantor
subsidiaries), and (ii) a pledge by CCO Holdings of the equity (the consummation of any transaction resulting in any
interests owned by it in Charter Operating, as well as person or group (other than the Paul Allen Group) having
intercompany obligations owing to it by Charter Operating. power, directly or indirectly, to vote more than 35% of the
ordinary voting power of Charter Operating, unless the
Charter Operating Credit Facilities — Restrictive Covenants Paul Allen Group holds a greater share of ordinary voting
The Charter Operating credit facilities contain representations power of Charter Operating,
and warranties, and affirmative and negative covenants custom-
(certain of Charter Operating’s indirect or direct parent
ary for financings of this type. The financial covenants measure
companies and Charter Operating and its subsidiaries
performance against standards set for leverage and interest
having indebtedness in excess of $500 million aggregate
coverage to be tested as of the end of each quarter. The
principal amount which remains undefeased three months
maximum allowable leverage ratio is 4.25 to 1.0 until maturity.
prior to the final maturity of such indebtedness, and
Additionally, the Charter Operating credit facilities contain
provisions requiring mandatory loan prepayments under specific (Charter Operating ceasing to be a wholly-owned direct
circumstances, including in connection with certain sales of subsidiary of CCO Holdings, except in certain very limited
assets, so long as the proceeds have not been reinvested in the circumstances.
business.
The Charter Operating credit facilities permit Charter OUTSTANDING NOTES
Operating and its subsidiaries to make distributions to pay Charter Communications, Inc. 5.875% Convertible Senior Notes due 2009
interest on the Charter convertible notes, the CCHC notes, the In November 2004, Charter issued 5.875% convertible senior
Charter Holdings notes, the CIH notes, the CCH I notes, the notes due 2009 with a total original principal amount of
CCH II notes, the CCO Holdings notes, and the Charter $862.5 million. The 5.875% convertible senior notes are
Operating second-lien notes, provided that, among other things, unsecured (except with respect to the collateral as described
no default has occurred and is continuing under the Charter below) and rank equally with our existing and future
Operating credit facilities. Conditions to future borrowings unsubordinated and unsecured indebtedness (except with respect
include absence of a default or an event of default under the to the collateral described below), but are structurally subordi-
Charter Operating credit facilities, and the continued accuracy in nated to all existing and future indebtedness and other liabilities
all material respects of the representations and warranties, of our subsidiaries. Interest is payable semi-annually in arrears.
including the absence since December 31, 2005 of any event,
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