Charter 2007 Annual Report Download - page 65

kother investments aggregating up to $50 million since
March 1999; and
kinvestments aggregating up to 100% of new cash equity
proceeds received by Charter Holdings since March 1999
and not allocated to the debt incurrence or restricted
payments covenant;
kFor CIH:
kinvestments aggregating up to $750 million at any time
outstanding;
kinvestments aggregating up to 100% of new cash equity
proceeds received by CIH since March 1999 and not
allocated to the debt incurrence or restricted payments
covenant (as if CIH had been in existence at all times
during such periods);
kFor CCH I:
kinvestments aggregating up to $750 million at any time
outstanding;
kinvestments aggregating up to 100% of new cash equity
proceeds received by CCH I since September 28, 2005 to
the extent the proceeds have not been allocated to the
restricted payments covenant;
kFor CCH II:
kinvestments aggregating up to $750 million at any time
outstanding;
kinvestments aggregating up to 100% of new cash equity
proceeds received by CCH II since September 23, 2003 to
the extent the proceeds have not been allocated to the
restricted payments covenant;
kFor CCO Holdings:
kinvestments aggregating up to $750 million at any time
outstanding;
kinvestments aggregating up to 100% of new cash equity
proceeds received by CCO Holdings since November 10,
2003 to the extent the proceeds have not been allocated
to the restricted payments covenant;
kFor Charter Operating:
kinvestments aggregating up to $750 million at any time
outstanding;
kinvestments aggregating up to 100% of new cash equity
proceeds received by Charter Operating since April 27,
2004 to the extent the proceeds have not been allocated
to the restricted payments covenant.
Restrictions on Liens
Charter Operating and its restricted subsidiaries are not permit-
ted to grant liens senior to the liens securing the Charter
Operating notes, other than permitted liens, on their assets to
secure indebtedness or other obligations, if, after giving effect to
such incurrence, the senior secured leverage ratio (generally, the
ratio of obligations secured by first priority liens to four times
EBITDA, as defined, for the most recent fiscal quarter for which
internal financial reports are available) would exceed 3.75 to 1.0.
The restrictions on liens for each of the other note issuers only
applies to liens on assets of the issuers themselves and does not
restrict liens on assets of subsidiaries. With respect to all of the
note issuers, permitted liens include liens securing indebtedness
and other obligations under credit facilities (subject to specified
limitations in the case of Charter Operating), liens securing the
purchase price of financed new assets, liens securing indebtedness
of up to $50 million and other specified liens.
Restrictions on the Sale of Assets; Mergers
The note issuers are generally not permitted to sell all or
substantially all of their assets or merge with or into other
companies unless their leverage ratio after any such transaction
would be no greater than their leverage ratio immediately prior
to the transaction, or unless after giving effect to the transaction,
leverage would be below the applicable leverage ratio for the
applicable issuer, no default exists, and the surviving entity is a
U.S. entity that assumes the applicable notes.
The note issuers and their restricted subsidiaries may gener-
ally not otherwise sell assets or, in the case of restricted subsid-
iaries, issue equity interests, in excess of $100 million unless they
receive consideration at least equal to the fair market value of the
assets or equity interests, consisting of at least 75% in cash,
assumption of liabilities, securities converted into cash within
60 days, or productive assets. The note issuers and their
restricted subsidiaries are then required within 365 days after any
asset sale either to use or commit to use the net cash proceeds
over a specified threshold to acquire assets used or useful in their
businesses or use the net cash proceeds to repay specified debt,
or to offer to repurchase the issuer’s notes with any remaining
proceeds.
Restrictions on Sale and Leaseback Transactions
The note issuers and their restricted subsidiaries may generally
not engage in sale and leaseback transactions unless, at the time
of the transaction, the applicable issuer could have incurred
secured indebtedness under its leverage ratio test in an amount
equal to the present value of the net rental payments to be made
under the lease, and the sale of the assets and application of
proceeds is permitted by the covenant restricting asset sales.
Prohibitions on Restricting Dividends
The note issuers’ restricted subsidiaries may generally not enter
into arrangements involving restrictions on their ability to make
dividends or distributions or transfer assets to the applicable note
issuer unless those restrictions with respect to financing arrange-
ments are on terms that are no more restrictive than those
governing the credit facilities existing when they entered into the
applicable indentures or are not materially more restrictive than
customary terms in comparable financings and will not materially
impair the applicable note issuers’ ability to make payments on
the notes.
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CHARTER COMMUNICATIONS, INC. 2007 FORM 10-K