The revolving facility amortizes beginning in 2004 and ending in May 2008.
The term loan A and term loan B facilities amortize beginning in 2003 and ending
in May 2008 and November 2008, respectively. The obligations under these
facilities are guaranteed by the subsidiaries of CC VI Operating and CC VI
Holdings, LLC, CC VI Operating's parent and a subsidiary of Charter
Communications Holding Company. The obligations under these credit facilities
are secured by pledges of the ownership interests and inter-company obligations
of CC VI Operating and its subsidiaries, but are not secured by other assets of
CC VI Operating or its subsidiaries.
In addition to the foregoing, these credit facilities will permit a
supplemental credit facility in the maximum amount of $300 million. This
facility may be in the form of an additional term loan or an aggregate increase
in the amount of the term loan A or the revolving facility. Upon the
effectiveness of the CC VI Operating credit facilities, this supplemental
facility will be available, subject to the borrower's ability to obtain
additional commitments from lenders. The amortization of the additional term
loans under the supplemental credit facility prior to May 2009 shall be limited
to 1% per annum of the aggregate principal amount of such additional term loans.
The CC VI Operating credit facilities also contain provisions requiring
mandatory loan prepayments under specific circumstances, including when
significant amounts of assets are sold and the proceeds are not promptly
reinvested in assets useful in the business of CC VI Operating.
These credit facilities provide CC VI Operating with the following two
interest rate options, to which a margin is added:
- a base rate option, generally the prime rate of interest; and
- an interest rate option rate based on the interbank Eurodollar rate.
Interest rates for the CC VI Operating credit facilities, as well as a fee
payable on unborrowed amounts available under these facilities, will depend upon
performance measured by a leverage ratio, which is the ratio of indebtedness to
annualized operating cash flow. Annualized operating cash flow is defined as the
immediately preceding quarter's operating cash flow, before management fees,
multiplied by four. This leverage ratio is based on the debt of CC VI Operating
and its subsidiaries. The interest rate margins for the CC VI Operating credit
facilities are as follows:
- with respect to the revolving loan facility and term loan A, the margin
ranges from 1.0% to 2.25% for Eurodollar loans and from 0.0% to 1.25% for
base rate loans; and
- with respect to term loan B, the margin ranges from 2.50% to 3.00% for
Eurodollar loans and from 1.50% to 2.00% for base rate loans.
The CC VI Operating credit facilities contain representations and
warranties, affirmative and negative covenants, information requirements, events
of default and financial covenants. The events of default for the CC VI
Operating credit facilities will include a cross-default provision covering
defaults on material debt of CC VI Operating, CC VI Holdings and specified
subsidiaries. The financial covenants, which are generally