Charter 2010 Annual Report Download - page 73

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of such incurrence. If those conditions are met, restricted payments
may be made in a total amount of up to the following amounts for
the applicable issuer as indicated below:
CCH II: the sum of 100% of CCH II’s Consolidated EBITDA,
as defined, minus 1.3 times its Consolidated Interest Expense, as
defined, cumulatively from October 1, 2009 plus 100% of new
cash and appraised non-cash equity proceeds received by CCH
II and not allocated to certain investments, cumulatively from
November 30, 2009;
CCO Holdings: the sum of 100% of CCO Holdings’
Consolidated EBITDA, as defined, minus 1.3 times its
Consolidated Interest Expense, as defined, cumulatively from
April 1, 2010, plus 100% of new cash and appraised non-cash
equity proceeds received by CCO Holdings and not allocated to
certain investments, cumulatively from the issue date, plus $2
billion; and
Charter Operating: the sum of 100% of Charter Operating’s
Consolidated EBITDA, as defined, minus 1.3 times its
Consolidated Interest Expense, as defined, plus 100% of new
cash and appraised non-cash equity proceeds received by
Charter Operating and not allocated to certain investments,
cumulatively from April 1, 2004, plus $100 million.
In addition, each of the note issuers may make distributions or
restricted payments, so long as no default exists or would be caused
by transactions among other distributions or restricted payments:
to repurchase management equity interests in amounts not to
exceed $10 million per fiscal year;
regardless of the existence of any default, to pay pass-through
tax liabilities in respect of ownership of equity interests in the
applicable issuer or its restricted subsidiaries; or
to make other specified restricted payments including merger
fees up to 1.25% of the transaction value, repurchases using
concurrent new issuances, and certain dividends on existing
subsidiary preferred equity interests.
Charter Operating and its restricted subsidiaries may make
distributions or restricted payments: (i) so long as certain defaults
do not exist and even if the applicable leverage test referred to above
is not met, to enable certain of its parents to pay interest on certain
of their indebtedness or (ii) so long as the applicable issuer could
incur $1.00 of indebtedness under the applicable leverage ratio
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test referred to above, to enable certain of its parents to purchase,
redeem or refinance certain indebtedness. CCO Holdings may
make distributions or restricted payments even if the applicable
leverage test referred to above is not met to enable any parent to pay
interest on, or to purchase, redeem, repay or prepay certain of their
indebtedness.
Restrictions on Investments
Each of the note issuers and their respective restricted subsidiaries
may not make investments except (i) permitted investments or (ii) if,
after giving effect to the transaction, their leverage would be above
the applicable leverage ratio.
Permitted investments include, among others:
investments in and generally among restricted subsidiaries or by
restricted subsidiaries in the applicable issuer;
For CCH II:
investments aggregating up to $650 million at any time
outstanding;
investments aggregating up to 100% of new cash equity
proceeds received by CCH II since November 30, 2009
to the extent the proceeds have not been allocated to the
restricted payments covenant;
For CCO Holdings:
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 the issue date
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.
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