Charter 2009 Annual Report Download - page 46

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• investments 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;
• For Charter Operating:
• investments aggregating up to $750 million at any time outstanding;
• investments aggregating up to 100% of new cash equity proceeds received by CCO Holdings 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 permitted 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 generally not otherwise sell assets or, in the case of restricted
subsidiaries, 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 arrangements 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.
Affiliate Transactions
The indentures also restrict the ability of the note issuers and their restricted subsidiaries to enter into certain
transactions with affiliates involving consideration in excess of $15 million without a determination by the board of
directors of the applicable note issuer that the transaction complies with this covenant, or transactions with affiliates
involving over $50 million without receiving an opinion as to the fairness to the holders of such transaction from a
financial point of view issued by an accounting, appraisal or investment banking firm of national standing.