IF A BANKRUPTCY PETITION WERE FILED BY OR AGAINST US, YOU MAY RECEIVE A LESSER
AMOUNT FOR YOUR CLAIM THAN YOU WOULD BE ENTITLED TO RECEIVE UNDER THE INDENTURE
GOVERNING THE 9.920% NOTES, AND YOU MAY REALIZE TAXABLE GAIN OR LOSS UPON
PAYMENT OF YOUR CLAIM.
If a bankruptcy petition were filed by or against us under the U.S.
Bankruptcy Code after the issuance of the 9.920% notes, the claim by a holder of
such notes for the principal amount of such notes may be limited to an amount
equal to the sum of:
(1) the initial offering price for such notes; and
(2) that portion of the original issue discount that does not constitute
"unmatured interest" for purposes of the U.S. Bankruptcy Code.
Any original issue discount that was not amortized as of the date of the
bankruptcy filing would constitute unmatured interest. Accordingly, holders of
9.920% notes under these circumstances may receive a lesser amount than they
would be entitled to receive under the terms of the indenture governing the
9.920% notes, even if sufficient funds are available. In addition, to the extent
that the U.S. Bankruptcy Code differs from the Internal Revenue Code in
determining the method of amortization of original issue discount, a holder of
9.920% notes may realize taxable gain or loss upon payment of that holder's
claim in bankruptcy.
IF WE DO NOT FULFILL OUR OBLIGATIONS TO YOU UNDER THE NOTES, YOU WILL NOT HAVE
ANY RECOURSE AGAINST OUR EQUITY HOLDERS OR THEIR AFFILIATES.
The notes will be issued solely by Charter Holdings and Charter Capital.
None of our equity holders, directors, officers, employees or affiliates,
including Paul G. Allen, will be an obligor or guarantor under the notes.
Furthermore, the indentures governing the notes expressly provide that these
parties will not have any liability for our obligations under the notes or the
indentures. By accepting the notes, you waive and release all such liability as
consideration for issuance of the notes. Consequently, if we do not fulfill our
obligations to you under the notes, you will have no recourse against any of
Additionally, our equity holders, including Mr. Allen, will be free to
manage other entities, including other cable companies. If we do not fulfill our
obligations to you under the notes, you will have no recourse against those
other entities or their assets as well.