Charter 2006 Annual Report Download - page 68

CHARTER COMMUNICATIONS, INC. 2006 FORM 10-K
(For CIH: liens include liens securing indebtedness and other obligations
under credit facilities (subject to specified limitations in the
(investments aggregating up to $750 million at any time case of Charter Operating), liens securing the purchase price of
outstanding; financed new assets, liens securing indebtedness of up to
(investments aggregating up to 100% of new cash equity $50 million and other specified liens.
proceeds received by CIH since March 1999 and not Restrictions on the Sale of Assets; Mergers
allocated to the debt incurrence or restricted payments The note issuers are generally not permitted to sell all or
covenant (as if CIH had been in existence at all times substantially all of their assets or merge with or into other
during such periods); companies unless their leverage ratio after any such transaction
(For CCH I: would be no greater than their leverage ratio immediately prior
to the transaction, or unless after giving effect to the transaction,
(investments aggregating up to $750 million at any time
leverage would be below the applicable leverage ratio for the
outstanding;
applicable issuer, no default exists, and the surviving entity is a
(investments aggregating up to 100% of new cash equity U.S. entity that assumes the applicable notes.
proceeds received by CCH I since September 28, 2005 to The note issuers and their restricted subsidiaries may
the extent the proceeds have not been allocated to the generally not otherwise sell assets or, in the case of restricted
restricted payments covenant; subsidiaries, issue equity interests, in excess of $100 million
(For CCH II: unless they receive consideration at least equal to the fair market
value of the assets or equity interests, consisting of at least 75%
(investments aggregating up to $750 million at any time in cash, assumption of liabilities, securities converted into cash
outstanding; within 60 days or productive assets. The note issuers and their
(investments aggregating up to 100% of new cash equity restricted subsidiaries are then required within 365 days after
proceeds received by CCH II since September 23, 2003 any asset sale either to use or commit to use the net cash
to the extent the proceeds have not been allocated to the proceeds over a specified threshold to acquire assets used or
restricted payments covenant; useful in their businesses or use the net cash proceeds to repay
specified debt, or to offer to repurchase the issuer’s notes with
(For CCO Holdings: any remaining proceeds.
(investments aggregating up to $750 million at any time
Restrictions on Sale and Leaseback Transactions
outstanding;
The note issuers and their restricted subsidiaries may generally
(investments aggregating up to 100% of new cash equity not engage in sale and leaseback transactions unless, at the time
proceeds received by CCO Holdings since November 10, of the transaction, the applicable issuer could have incurred
2003 to the extent the proceeds have not been allocated secured indebtedness under its leverage ratio test in an amount
to the restricted payments covenant; equal to the present value of the net rental payments to be
(For Charter Operating: made under the lease, and the sale of the assets and application
of proceeds is permitted by the covenant restricting asset sales.
(investments aggregating up to $750 million at any time
outstanding; Prohibitions on Restricting Dividends
The note issuers’ restricted subsidiaries may generally not enter
(investments aggregating up to 100% of new cash equity into arrangements involving restrictions on their ability to make
proceeds received by CCO Holdings since April 27, 2004 dividends or distributions or transfer assets to the applicable
to the extent the proceeds have not been allocated to the note issuer unless those restrictions with respect to financing
restricted payments covenant. arrangements are on terms that are no more restrictive than
those governing the credit facilities existing when they entered
Restrictions on Liens
into the applicable indentures or are not materially more
Charter Operating and its restricted subsidiaries are not restrictive than customary terms in comparable financings and
permitted to grant liens senior to the liens securing the will not materially impair the applicable note issuers’ ability to
Charter Operating notes, other than permitted liens, on their make payments on the notes.
assets to secure indebtedness or other obligations, if, after
giving effect to such incurrence, the senior secured leverage Affiliate Transactions
ratio (generally, the ratio of obligations secured by first priority The indentures also restrict the ability of the note issuers and
liens to four times EBITDA, as defined, for the most recent their restricted subsidiaries to enter into certain transactions with
fiscal quarter for which internal financial reports are available) affiliates involving consideration in excess of $15 million without a
would exceed 3.75 to 1.0. The restrictions on liens for each of determination by the board of directors of the applicable note
the other note issuers only applies to liens on assets of the issuer that the transaction complies with this covenant, or
issuers themselves and does not restrict liens on assets of transactions with affiliates involving over $50 million without
subsidiaries. With respect to all of the note issuers, permitted receiving an opinion as to the fairness to the holders of such
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