<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
- --- EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1996
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
- --- EXCHANGE ACT OF 1934
For the transition period from ____ to ____
COMMISSION FILE NUMBERS: 333-9535 AND 333-9535-01
FRONTIERVISION OPERATING PARTNERS, L.P.
FRONTIERVISION CAPITAL CORPORATION*
(Exact names of Registrants as specified in their charters)
DELAWARE 84-1316775
DELAWARE 84-1353734
(State or other jurisdiction (IRS Employer Identification Number)
of incorporation or organization)
1777 SOUTH HARRISON STREET, SUITE P-200, DENVER, COLORADO 80210
(Address of principal executive offices) (Zip Code)
(303) 757-1588
(Registrants' telephone number, including area code)
Indicate by check mark whether the Registrants (1) have filed all reports
required by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during
the previous 12 months (or for such shorter period that the Registrants were
required to file such reports), and (2) have been subject to such filing
requirements for the past 90 days:
Yes No X
------- -------
Number of shares of common stock of FrontierVision Capital Corporation
outstanding as of November 15, 1996: 100.
* FrontierVision Capital Corporation meets the conditions set forth in General
Instruction H(1)(a) and (b) to the Form 10-Q and is therefore filing with the
reduced disclosure format.
1
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FRONTIERVISION OPERATING PARTNERS, L.P.
FRONTIERVISION CAPITAL CORPORATION
FORM 10-Q
FOR THE QUARTER ENDED SEPTEMBER 30, 1996
INDEX
<TABLE>
<CAPTION>
PAGE
----
PART I. FINANCIAL INFORMATION
<S> <C> <C>
ITEM 1. FINANCIAL STATEMENTS OF FRONTIERVISION OPERATING PARTNERS, L.P. ............. 3
NOTES TO FINANCIAL STATEMENTS ............................................... 7
FINANCIAL STATEMENTS OF FRONTIERVISION CAPITAL CORPORATION .................. 12
NOTE TO BALANCE SHEET ....................................................... 13
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS............................ 14
PART II. OTHER INFORMATION ........................................................... 18
</TABLE>
2
<PAGE> 3
PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
FRONTIERVISION OPERATING PARTNERS, L.P.
BALANCE SHEETS
In Thousands
<TABLE>
<CAPTION>
AS OF AS OF
SEPTEMBER 30, DECEMBER 31,
1996 1995
------------- ------------
Unaudited
<S> <C> <C>
ASSETS
Cash and cash equivalents $ 5,045 $ 2,650
Accounts receivable, net of allowance for doubtful accounts of $56 and $40 2,145 358
Receivable from seller 80 1,667
Prepaid expenses and other 879 201
Investment in cable television systems, net:
Property and equipment 123,550 42,917
Franchise costs 92,139 50,184
Covenant not to compete 14,389 --
Subscriber lists 51,397 29,000
Goodwill 12,047 4,094
----------- ----------
Total investment in cable television systems, net 293,522 126,195
----------- ----------
Deferred financing costs, net 5,388 2,853
Earnest money deposits 8,285 9,502
Other, net 326 86
----------- ----------
Total assets $ 315,670 $ 143,512
=========== ==========
LIABILITIES AND PARTNERS' CAPITAL
Accounts payable $ 1,236 $ 1,606
Accrued liabilities 4,223 1,558
Subscriber prepayments and deposits 360 362
Accrued interest payable 1,621 420
Debt 208,128 93,159
----------- ----------
Total liabilities 215,568 97,105
----------- ----------
Partners' capital:
FrontierVision Partners, L.P. 100,002 46,361
FrontierVision Operating Partners, Inc. 100 46
----------- ----------
Total partners' capital 100,102 46,407
----------- ----------
Total liabilities and partners' capital $ 315,670 $ 143,512
=========== ==========
</TABLE>
See accompanying notes to financial statements.
3
<PAGE> 4
FRONTIERVISION OPERATING PARTNERS, L.P.
STATEMENTS OF OPERATIONS (UNAUDITED)
In Thousands
<TABLE>
<CAPTION>
FOR THE PERIOD
FROM INCEPTION
(APRIL 17, 1995
FOR THE THREE FOR THE THREE FOR THE NINE -- SEE NOTE 1)
MONTHS ENDED MONTHS ENDED MONTHS ENDED THROUGH
SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30,
1996 1995 1996 1995
------------- ------------- ------------- ---------------
<S> <C> <C> <C> <C>
REVENUES $ 18,668 $ -- $ 46,207 $ --
EXPENSES:
Operating expenses 9,989 -- 23,657 --
Corporate administrative expenses 706 -- 1,971 --
Depreciation and amortization 8,791 43 22,386 43
Pre-acquisition expenses -- 287 -- 418
------------- ------------- --------------- -------------
Total expenses 19,486 330 48,014 461
------------- ------------- --------------- -------------
OPERATING INCOME (LOSS) (818) (330) (1,807) (461)
INTEREST EXPENSE, net (4,313) (90) (11,617) (100)
GAIN (LOSS) ON SALE OF ASSETS (99) -- (99) --
------------- ------------- --------------- -------------
NET LOSS $ (5,230) $ (420) $ (13,523) $ (561)
============= ============= =============== =============
</TABLE>
See accompanying notes to financial statements.
4
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FRONTIERVISION OPERATING PARTNERS, L.P.
STATEMENTS OF PARTNERS' CAPITAL
In Thousands
<TABLE>
<CAPTION>
FRONTIERVISION
FRONTIERVISION OPERATING
PARTNERS, L.P. PARTNERS, INC.
(GENERAL PARTNER) (LIMITED PARTNER) TOTAL
----------------- ----------------- --------------
<S> <C> <C> <C>
BALANCE, AT INCEPTION
(April 17, 1995) $ -- $ -- $ --
Capital contributions 49,061 49 49,110
Net loss (2,700) (3) (2,703)
----------- ----------- -----------
BALANCE, DECEMBER 31, 1995 46,361 46 46,407
Capital contributions (Unaudited) 67,151 67 67,218
Net loss (Unaudited) (13,510) (13) (13,523)
----------- ----------- -----------
BALANCE, SEPTEMBER 30, 1996
(Unaudited) $ 100,002 $ 100 $ 100,102
=========== =========== ===========
</TABLE>
See accompanying notes to financial statements.
5
<PAGE> 6
FRONTIERVISION OPERATING PARTNERS, L.P.
STATEMENTS OF CASH FLOWS (UNAUDITED)
In Thousands
<TABLE>
<CAPTION>
FOR THE PERIOD
FROM INCEPTION
FOR THE NINE (APRIL 17, 1995 --
MONTHS ENDED SEE NOTE 1) THROUGH
SEPTEMBER 30, SEPTEMBER 30,
1996 1995
------------- -------------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ ($13,523) $ (561)
Adjustments to reconcile net loss to net
cash flows from operating activities:
Depreciation and amortization 22,386 43
Net loss on disposal of assets 99 --
Changes in operating assets and liabilities, net of
effect of acquisitions:
Accounts receivable 1,313 --
Prepaid expenses and other (515) --
Accounts payable and accrued liabilities (814) --
Subscriber prepayments and deposits (3) --
Accrued interest payable 1,202 100
----------- ------------
Total adjustments 23,668 143
----------- ------------
Net cash flows from operating activities 10,145 (418)
----------- ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Cash paid for capital expenditures (5,791) --
Earnest money deposits (8,285) --
Proceeds from disposition of cable television systems,
including purchased intangibles 15,993 --
Cash paid in acquisition of cable television systems,
including purchased intangibles (188,116) --
----------- ------------
Net cash flows from investing activities (186,199) --
----------- ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Debt borrowings 114,969 --
Increase in deferred financing fees (3,738) --
Partner capital contributions 67,218 418
----------- ------------
Net cash flows from financing activities 178,449 418
----------- ------------
NET INCREASE IN CASH AND CASH EQUIVALENTS 2,395 --
----------- ------------
CASH AND CASH EQUIVALENTS, at beginning of
period 2,650 --
----------- -----------
CASH AND CASH EQUIVALENTS, end of period $ 5,045 $ --
=========== ============
</TABLE>
See accompanying notes to financial statements.
6
<PAGE> 7
FRONTIERVISION OPERATING PARTNERS, L.P.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
Amounts In Thousands
(1) STATEMENT OF ACCOUNTING PRESENTATIONS AND OTHER INFORMATION
FrontierVision Operating Partners, L.P. (the "Partnership") is a Delaware
limited partnership formed on July 14, 1995 for the purpose of acquiring and
operating cable television systems. As of September 30, 1996, the Partnership
owned and operated cable television systems in Maine, Ohio, Kentucky, Virginia,
Tennessee and New Hampshire. The Partnership was initially capitalized in
November 1995 with approximately $38 from its sole limited partner,
FrontierVision Operating Partners, Inc. ("FVOP Inc."), a Delaware corporation,
and approximately $38,300 from its sole general partner, FrontierVision
Partners, L.P. ("FVP"), a Delaware limited partnership. FVOP Inc. is a wholly
owned subsidiary of FVP. During the period from January 1, 1996 to September
30, 1996, the Partnership received additional capital contributions of
approximately $67,200 from its partners.
The attached interim financial statements are presented in accordance with the
requirements of Form 10-Q and consequently do not include all the disclosures
required by generally accepted accounting principles. It is suggested that the
accompanying financial statements be read in conjunction with the Partnership's
Registration Statement on Form S-1 (Registration No. 333-9535) for additional
disclosures, including a summary of the Partnership's accounting policies. The
results for the nine-month period ended September 30, 1996 are not necessarily
indicative of the results for the entire 1996 fiscal year.
The accompanying financial statements and the following notes, insofar as they
are applicable to the three months and the nine months ended September 30,
1996, and the three months ended September 30, 1995, and the period from
inception through September 30, 1995, are not audited. In management's opinion,
all adjustments considered necessary for a fair presentation of the attached
financial statements are included and all such adjustments are of a normal and
recurring nature. Interim results are not necessarily indicative of results for
a full year.
(2) SUPPLEMENTAL CASH FLOW STATEMENT INFORMATION
Cash paid for interest for the nine months ended September 30, 1996 was
$10,442.
Cash paid for acquisitions is as follows:
<TABLE>
<CAPTION>
SEPTEMBER 30, SEPTEMBER 30,
1996 1995
------------- -------------
<S> <C> <C>
Recorded value of assets acquired $201,278 $ --
Liabilities assumed (3,224) --
Earnest money Deposits Applied (9,938) --
-------- -------
Cash paid for acquisitions $188,116 $ --
======== =======
</TABLE>
7
<PAGE> 8
FRONTIERVISION OPERATING PARTNERS, L.P.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
Amounts In Thousands
(3) ACQUISITIONS AND DISPOSITIONS
The Partnership has completed several acquisitions and selected dispositions
from its inception through October 1996. All of the acquisitions have been
accounted for using the purchase method of accounting, and, accordingly, the
purchase price has been allocated to the assets purchased and liabilities
assumed based upon fair values at the respective dates of acquisition.
On November 9, 1995, the Partnership purchased certain cable television system
assets, primarily in Maine and Ohio, from United Video Cablevision, Inc.
("UVC") for approximately $113,485 in cash plus a note payable to the seller of
$7,200 and the assumption of certain liabilities of the acquired business.
On November 21, 1995, the Partnership acquired certain cable television assets
located in Maine from Longfellow Cable Company, Inc. and two of its affiliates
for a cash purchase price of approximately $6,100 and the assumption of certain
related liabilities.
On February 1, 1996, the Partnership acquired certain cable television assets,
primarily in Virginia and Tennessee, from C4 Media Cable Southeast L.P. ("C4")
for a cash purchase price of approximately $47,600 and the assumption of
certain related liabilities. As of December 31, 1995, the Partnership had
advanced $2,502 as an earnest money deposit related to this transaction.
On March 29, 1996, the Partnership acquired certain cable television assets
located in Maine from Americable International Maine, Inc. for a cash purchase
price of approximately $4,700 and the assumption of certain related liabilities.
On April 9, 1996, the Partnership acquired certain cable television system
assets, primarily in Ohio, from affiliates of Cox Communications, Inc. ("Cox")
for a cash purchase price of approximately $136,200 and the assumption of
certain related liabilities. As of December 31, 1995, the Partnership had
advanced $7,000 as an earnest money deposit related to this transaction.
On July 24, 1996, the Partnership sold certain cable television system assets
located primarily in Chatsworth, Georgia to an affiliate of Helicon Partners
for a sales price of approximately $8,700 (subject to adjustment).
On August 29, 1996, the Partnership acquired certain cable television system
assets located in Maine and New Hampshire from Phoenix Grassroots Cable
Systems, L.L.C. ("Grassroots") for a cash purchase price of approximately
$9,300 and the assumption of certain related liabilities.
On September 30, 1996, the Partnership sold certain cable television system
assets located in Virginia to Shenandoah Cable Television Company, an affiliate
of Shenandoah Telephone Company, for a sales price of approximately $7,900
(subject to adjustment).
On October 7, 1996, the Partnership acquired certain cable television assets,
primarily in Kentucky and Ohio, from Triax Southeast Associates, L.P.
("Triax"), for approximately $85,000 in cash and the assumption of certain
related liabilities. As of September 30, 1996, the Partnership had advanced
$3,000 as an earnest money deposit related to this transaction.
On October 9, 1996, the Partnership acquired certain cable television assets,
primarily in Kentucky and Ohio, from American Cable Entertainment of
Kentucky-Indiana, Inc. ("ACE") for approximately $146,000 and the assumption of
certain liabilities. As of September 30, 1996, the Partnership had advanced
$5,110 as an earnest money deposit related to this transaction.
On October 31, 1996, the Partnership acquired certain cable television assets,
located in Ohio and Pennsylvania, from SRW, Inc.'s Penn/Ohio Cablevision, L.P.
("Penn/Ohio") for a cash purchase price of approximately $3,800 and the
assumption of certain related liabilities. As of September 30, 1996, the
Partnership had advanced $75 as an earnest money deposit related to this
transaction.
8
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FRONTIERVISION OPERATING PARTNERS, L.P.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
Amounts In Thousands
(3) ACQUISITIONS AND DISPOSITIONS (CONTINUED)
The Partnership has reported the operating results of its acquired cable
systems from the date of their respective acquisition and has reported the
operating results of its disposed cable systems up to the respective disposal
date. Unaudited pro forma summarized operating results of the Partnership,
assuming only that the UVC, C4, Cox, Triax and ACE acquisitions had
been consummated on January 1, 1995, are as follows:
<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30, 1996
-------------------------------------------------------------------------
SUBTOTAL
HISTORICAL PRO FORMA OTHER PRO FORMA
RESULTS ACQUISITIONS (a) RESULTS ACQUISITIONS (b) RESULTS
----------- ---------------- ----------- ---------------- -----------
<S> <C> <C> <C> <C> <C>
Revenues $ 46,207 $ 7,640 $ 53,847 $ 37,432 $ 91,279
Operating, selling, general and
administrative expenses (25,628) (4,217) (29,845) (19,409) (49,254)
Depreciation and amortization (22,386) (4,384) (26,770) (18,570) (45,340)
---------- --------------- ---------- --------------- ----------
Operating income (loss) (1,807) (961) (2,768) (547) (3,315)
Interest and other expenses (11,716) (6,316) (18,032) (16,749) (34,781)
---------- --------------- ---------- --------------- ----------
Net loss $ (13,523) $ (7,277) $ (20,800) $ (17,296) $ (38,096)
========== =============== ========== =============== ==========
</TABLE>
<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30, 1995
-------------------------------------------------------------------------
SUBTOTAL
HISTORICAL PRO FORMA OTHER PRO FORMA
RESULTS ACQUISITIONS (a) RESULTS ACQUISITIONS (b) RESULTS
----------- ---------------- ----------- ---------------- -----------
<S> <C> <C> <C> <C> <C>
Revenues $ -- $ $ 48,693 $ 48,693 $ 33,912 $ 82,605
Operating, selling, general and
administrative expenses -- (27,070) (27,070) (18,745) (45,815)
Depreciation and amortization (43) (22,264) (22,307) (19,151) (41,458)
---------- --------------- ---------- --------------- ----------
Operating income (loss) (43) (641) (684) (3,984) (4,668)
Interest and other expenses (518) (17,097) (17,615) (13,727) (31,342)
---------- --------------- ---------- --------------- ----------
Net loss $ (561) $ (17,738) $ (18,299) $ (17,711) $ (36,010)
========== =============== ========== =============== ==========
</TABLE>
(a) Represents acquisitions consummated on or before September 30, 1996
(UVC, C4 and Cox).
(b) Represents acquisitions consummated subsequent to September 30,
1996 (Triax and ACE).
The pro forma financial information presented above is not necessarily
indicative of the operating results that would have occurred had the UVC, C4,
Cox, Triax and ACE acquisitions actually been consummated on January 1, 1995.
Furthermore, the above pro forma financial information does not include the
effect of certain acquisitions and dispositions of cable systems because these
transactions were not material on an individual or aggregated basis.
(4) COMMITMENTS
The Partnership has commitments for annual pole rentals to various utilities of
approximately $2,115 and $1,077 as of September 30, 1996 and December 31, 1995,
respectively. These agreements are subject to termination rights by both
parties.
The Partnership leases the land upon which certain of its towers and antennae
are constructed. The annual rental commitments under these leases amount to
approximately $105 and $59 as of September 30, 1996 and December 31, 1995,
respectively.
The Partnership leases office space and its commitments under these leases are
approximately $290 per year.
9
<PAGE> 10
FRONTIERVISION OPERATING PARTNERS, L.P.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
Amounts In Thousands
(5) DEBT
The Partnership's debt was comprised of the following:
<TABLE>
<CAPTION>
AS OF AS OF
SEPTEMBER 30, DECEMBER 31,
1996 1995
------------- ------------
Unaudited
<S> <C> <C>
Bank Credit Facility --
Revolving credit loan, due June 30, 2004, interest based on
various floating rate options (8.69% on $50,000 and
8.50% on $5,900 at December 31, 1995), payable monthly $ 10,850 $ 55,900
Term loans, due June 30, 2004, interest based on various
floating rate options (8.69% at December 31, 1995),
payable monthly 190,000 30,000
Subordinated promissory note to UVC, due December 31,
2004, with interest as described below 7,200 7,200
Capital lease obligations, monthly payments of $2, including
interest at 9%, due November 1998 78 59
------------- ------------
Total debt $ 208,128 $ 93,159
============= ============
</TABLE>
As of December 31, 1995, the Partnership had entered into a credit agreement
(the "Senior Credit Facility") with a maximum availability of $130,000 of which
$30,000 was available in term loans and $100,000 was available as a revolving
line of credit. The Partnership had drawn $30,000 in term loans and $55,900
under the revolver as of December 31, 1995. On April 9, 1996, the Partnership
entered into an Amended and Restated Credit Facility increasing the available
Senior Debt by $135,000, for total availability of $265,000. Under the Amended
and Restated Credit Facility, the Partnership has $100,000 available under the
Facility A Term Loan, $75,000 available under the Revolving Credit Loan and
$90,000 available under the Facility B Term Loan. The Facility A Term Loan and
the Revolving Credit Loan both mature on June 30, 2004. Escalating principal
payments are due quarterly beginning September 30, 1998 under the Facility A
Term Loan with quarterly principal reductions of the Revolving Credit Loan also
beginning September 30, 1998. The Facility B Term Loan matures June 30, 2005
with 91% of the principal being repaid in the last four quarters of the term of
the facility. On September 30, 1996, the Partnership amended the Amended and
Restated Credit Facility primarily to allow for the issuance of $200,000 of the
Notes (see Note 6).
Under the terms of the Amended and Restated Credit Facility, the Partnership has
a mandatory prepayment obligation upon any sale of new partnership interests and
the sale of any of its operating systems. Further, beginning with the year ended
December 31, 1998, the Partnership is required to make prepayments equal to 50%
of its excess cash flow, as defined in the credit agreement.
The Amended and Restated Credit Facility also requires the Partnership to
maintain compliance with various financial covenants including, but not limited
to, covenants relating to total indebtedness, debt ratio, interest coverage
ratio, fixed charges ratio, and capital expenditures. As of September 30, 1996,
the Partnership was in compliance with financial covenants of the Amended and
Restated Credit Facility.
In connection with the term loans and revolving credit loan, the Partnership
entered into interest rate protection agreements totaling $110,000 and maturing
on November 15, 1999. Under the terms of the agreements, the Partnership's
average fixed rate is 5.59% payable on the settlement date every three-months.
In turn, on the settlement date the Partnership receives an interest payment
based upon various available floating rate options on the same $110,000 notional
amount. Through the nine-month period ended September 30, 1996, the Partnership
has realized a reduction in interest expense of approximately $67 as a result of
these interest rate protection agreements.
10
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FRONTIERVISION OPERATING PARTNERS, L.P.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
Amounts In Thousands
(5) DEBT (CONTINUED)
The subordinated promissory note to UVC bears interest at 9% for the first
three years. At the end of each subsequent year, the annual interest rate
increases 2% per year. Under the terms of the subordinated promissory note, the
Partnership may issue additional subordinated promissory notes rather than
making cash interest payments. In this event, the subordinated promissory note
bears interest at 11.5%. Further, in the event the Partnership's leverage ratio
exceeds certain specified amounts, the interest rate also increases by 2%.
Under the terms of the subordinated promissory note, the Partnership can prepay
the balance at any time.
The debt of the Partnership matures as follows:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31 --
--------------------------
<S> <C>
1996...................... $ 8
1997...................... 33
1998...................... 4,035
1999...................... 10,221
2000...................... 14,652
Thereafter................ 179,179
--------
$208,128
========
</TABLE>
(6) OFFERING AND RIGHTS OFFERING
In September 1996, FVP, the sole general partner and the owner, directly and
indirectly, of the Partnership, consummated a $76,000 equity offering (the
"Rights Offering"). The net proceeds of the Rights Offering will be contributed
as equity to the Partnership over time to fund future acquisitions. On October
7, 1996, the Partnership received substantially all of a $40,000 equity
contribution pursuant to the Rights Offering.
On October 7, 1996, the Partnership issued, pursuant to a public offering (the
"Offering"), $200,000 aggregate principal amount of 11% Senior Subordinated
Notes due 2006 (the "Notes"). Net proceeds from the Offering of $193,000,
after costs of approximately $7,000, were received by the Partnership on
October 7, 1996.
In connection with the anticipated issuance of the Notes, the Partnership
entered into interest rate protection agreements totaling $140,000 and maturing
on September 30, 1996, whereby the Partnership reduced its interest rate
exposure in anticipation of issuing the Notes. The Partnership's average rate
fixed by the agreements was 6.91% on the $140,000 notional amount. The
Partnership settled $40,000 of the $140,000 on September 23, 1996 and settled
$60,000 on September 30, 1996. The remaining $40,000 plus an additional $20,000
was converted into an interest rate protection agreement on October 7, 1996 at a
fixed rate of 6.51%. The financial statement impact of these arrangements will
be recognized as a component of interest expense over the term of the Notes.
The Notes are unsecured subordinated obligations of the Partnership (co-issued
by FrontierVision Capital Corporation) that mature on October 15, 2006.
Interest accrues at 11% per annum from the date of issuance, and is payable
each April 15 and October 15, commencing April 15, 1997.
On October 7, 1996, the Partnership entered into an interest rate protection
agreement for $82,500 in connection with its Amended and Restated Credit
Facility. The notional amount of this agreement consisted of a conversion of an
existing interest rate protection agreement of $22,500, a $40,000 conversion of
another agreement, and an additional $20,000. As of October 7, 1996, the
Partnership had interest rate protection agreements totaling $170,000 with a
weighted average fixed rate of 5.93%.
11
<PAGE> 12
PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
FRONTIERVISION CAPITAL CORPORATION
BALANCE SHEET
<TABLE>
<S> <C> <C>
SEPTEMBER 30, JULY 26,
1996 1996
------------- --------
Unaudited
Asset -- Receivable from affiliate for issuance of common stock -- collected
subsequent to balance sheet date ........... $ 100 $ 100
======== ========
Equity -- Common stock, par value $0.01; 1,000 shares authorized; 100 shares
issued and outstanding.................................................... $ 100 $ 100
======== ========
</TABLE>
See note to the balance sheet.
12
<PAGE> 13
FRONTIERVISION CAPITAL CORPORATION
NOTE TO THE BALANCE SHEET
FrontierVision Capital Corporation ("Capital"), a Delaware corporation, is
a wholly owned subsidiary of the Partnership, and was organized on July 26,
1996 for the sole purpose of acting as co-issuer with the Partnership of $200
million aggregate principal amount of the Notes. Capital has nominal assets
and does not conduct any operations.
13
<PAGE> 14
PART I. FINANCIAL INFORMATION
ITEM 2. - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
INTRODUCTION
FrontierVision Operating Partners, L.P. (the "Partnership") commenced
operations in November 1995 with the acquisition of certain cable television
systems from United Video Cablevision, Inc. ("UVC") and certain other cable
systems from Longfellow Cable Company, Inc. ("Longfellow"). During the first
three quarters of 1996, the Partnership has continued to grow through
acquisitions. The Partnership acquired certain cable television systems from
C4 Media Cable Southeast, Limited Partnership ("C4") on February 1, 1996, from
Americable International Maine, Inc. ("Americable") on March 29, 1996, from
affiliates of Cox Communications Inc.("Cox") on April 9, 1996, and from Phoenix
Grassroots Cable Systems, L.L.C. on August 29, 1996. The Partnership paid
consideration of approximately $324.6 million through September 30, 1996 for
the acquisitions of these systems serving, as of the respective acquisition
date, approximately 222,600 basic subscribers. In addition, the Partnership
consummated the sale of systems serving approximately 10,800 basic subscribers
located in Chatsworth, Georgia and Woodstock and New Market, Virginia during
the third quarter of 1996 for aggregate consideration of approximately $16.6
million (subject to adjustment). The Partnership has operated its cable
television systems for a limited period of time and had no operations prior to
November 1995. All acquisitions have been accounted for under the purchase
method of accounting and, therefore, the Partnership's historical results of
operations include the results of operations for each acquired system
subsequent to its respective acquisition date.
During October 1996, the Partnership completed the acquisitions of additional
cable television systems from American Cable Entertainment of Kentucky-Indiana,
Inc. (the "ACE Systems"), Triax Southeast Associates, L.P. (the "Triax Systems")
and Penn/Ohio Cablevision, L.P. (the "Penn/Ohio Systems") for aggregate
consideration of approximately $234.8 million. In the aggregate, and as of the
respective acquisition dates, these systems passed approximately 191,100 homes
and served approximately 139,800 basic subscribers. These pending acquisitions
as of September 30, 1996 are not included in the discussion of results of
operations below.
The following discussion includes forward looking statements regarding the
operations of the Partnership which involve uncertainties. Actual results may
differ from these forward looking comments because of such uncertainties.
RESULTS OF OPERATIONS
As of September 30, 1996, the Partnership owned cable television systems which
passed approximately 303,700 homes and served approximately 215,300 basic
subscribers. If the acquisition of the cable television systems from ACE,
Triax and Penn/Ohio had been consummated as of September 30, 1996, the
Partnership's systems would have passed approximately 494,800 homes and served
approximately 355,100 basic subscribers.
As a result of the Partnership's limited operating history and the expected
effect of the purchase of the systems from ACE, Triax and Penn/Ohio, the
Partnership believes that its results of operations for the three months ended
September 30, 1996 and for the nine months ended September 30, 1996 are not
indicative of the Partnership's results of operations in the future.
14
<PAGE> 15
The following table sets forth, for the periods indicated, certain statements
of operations and other data of the Partnership expressed in dollar amounts
(in thousands) and as a percentage of revenue.
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, 1996 SEPTEMBER 30, 1996
----------------------- -------------------------
Amount % of Revenue Amount % of Revenue
--------- ------------ ------------ -----------
<S> <C> <C> <C> <C>
Revenue $ 18,668 100.0 % $ 46,207 100.0 %
Expenses
Operating expenses 9,989 53.5 23,657 51.2
Corporate expenses 706 3.8 1,971 4.3
Depreciation expenses 8,791 47.1 22,386 48.4
-------- ----------- ----------- -----------
Total expenses 19,486 104.4 48,014 103.9
-------- ----------- ----------- -----------
Operating income (loss) (818) (4.4) (1,807) (3.9)
Interest expense, net (4,313) (23.1) (11,617) (25.1)
Gain (loss) on sale of assets (99) (0.5) (99) (0.2)
-------- ----------- ----------- -----------
Net loss $ (5,230) (28.0) % $ (13,523) (29.2) %
======== =========== =========== ===========
Other Data:
EBITDA (a) $ 7,973 42.7 % $ 20,579 44.5 %
</TABLE>
(a) EBITDA is defined as net income before interest, taxes, depreciation and
amortization. The Partnership believes that EBITDA is a meaningful measure of
performance because it is commonly used in the cable television industry to
analyze and compare cable television companies on the basis of operating
performance, leverage and liquidity. In addition, the Partnership's senior
bank indebtedness and the senior subordinated note indenture contain certain
covenants, compliance with which is measured by computations substantially
similar to those used in determining EBITDA. However, EBITDA is not intended
to be a performance measure that should be regarded as an alternative to either
operating income or net income as an indicator of operating performance or to
cash flows as a measure of liquidity, as determined in accordance with
generally accepted accounting principles.
The Partnership generated revenue in the amount of $18,668 for the three months
ended September 30, 1996, and $46,207 for the nine months then ended. Operating
and corporate expenses totaled $10,695 for the quarter ended September 30, 1996,
and $25,628 for the nine months then ended. EBITDA of $7,793 for the three
months ended and of $20,579 for the nine months ended September 30, 1996
represent operating margins of approximately 42.7% and 44.5%, respectively. The
increase in operating expenses to approximately 53.5% of revenue for the quarter
ended September 30, 1996 is primarily attributable to expenses incurred in
anticipation of the acquisition of systems from ACE and Triax. Such costs
included the hiring of personnel primarily in customer service, marketing, sales
and regional management functions. These increased operating costs were
partially offset by efficiencies made by the Partnership with respect to
corporate expenses which, for the quarter ended September 30, 1996, were 3.8% of
revenue and for the nine months ended September 30, 1996 were 4.3% of revenue.
The average of average monthly revenues per subscriber increased for the quarter
ended September 30, 1996, by approximately 2.4% as compared to such monthly
revenue per subscriber averages for the nine months ended September 30, 1996.
Such marginal increase partially offset the effect on EBITDA of the increased
operating expenses. Although there can be no assurance, the Partnership
believes that EBITDA will increase with the realization of additional revenue
attributable to the ACE, Triax and Penn/Ohio system subscribers, with increased
marketing activities and expense control programs and with ongoing service rate
increases.
Interest expense was $4,313 for the three months and $11,617 for the nine-
months ended September 30, 1996, which as a percentage of revenue was 23.1% for
the quarter and 25.1% for the nine month period ended September 30, 1996. The
decrease in the cost of capital relative to the Partnership's revenue
represents both fluctuating interest rates as well as the impact of
revenue increases and internal subscriber growth.
15
<PAGE> 16
Gain (loss) on sale of assets represents the Partnership's net loss realized
upon the disposition of the Chatsworth, Georgia and Woodstock and New Market,
Virginia cable systems in the third quarter of 1996 and is subject to
post-closing adjustments. The disposition of the systems represents another
step in the Partnership's strategic plan of concentrating geographic clusters.
The Partnership is continuing its strategy of consolidating headends and
regionalizing its customer service, local advertising and marketing and sales
functions. Towards that end, the Partnership hired several management-level
personnel during the third quarter of 1996; marketing and sales managers with
experience in cable television and radio were employed in the Maine,
Ohio/Kentucky and Southeast operating regions, the corporate and regional
engineering staff was augmented with experienced personnel charged with
implementing the Partnership's headend consolidation program and individuals in
charge of coordinating public and government relations were hired in both the
Maine and Ohio/Kentucky operating regions.
The Partnership is in the process of completing the consolidation of certain
headends as well as in completing certain line extensions. As of September 30,
1996, the Partnership had numerous line extension projects in various stages of
completion in each of its operating regions. When complete, the various
extensions will pass approximately 2,770 homes from approximately 101 miles of
new plant. Although there can be no assurance, the Partnership anticipates
completion of a significant number of the projects by the end of 1996.
The Partnership has an average channel capacity of approximately 49 channels in
its currently owned systems and currently has additional channel capacity
available in most of its systems. Such excess channel capacity allows the
Partnership to selectively amend channel lineups and launch new services in a
continuing effort to offer customers numerous programming choices and maximize
revenue. The Partnership's initial activities in this area were concentrated in
the Maine operating region, where in May and June of 1996 the Partnership
introduced between three and seven new programming channels to approximately 89%
of its subscribers. The new services were accompanied by a rate increase
averaging approximately 10% as well as an increased direct mail and
telemarketing effort. The effect of the activity was an increase in the number
of monthly basic subscribers of approximately 1.6% and in the number of pay
units of approximately 9.7%. Such new subscribers helped generate incremental
monthly revenue of approximately $80 in the Maine operating region, a 5.0%
monthly revenue increase. Although there can be no assurance of the long-term
effect of these activities, the Partnership is continuing the process of
attempting to maximize revenue through the launch of similar marketing
activities in its other operating regions.
LIQUIDITY AND CAPITAL RESOURCES
The cable television business generally requires substantial capital for the
construction, expansion and maintenance of the delivery system. In addition,
the Partnership has pursued, and intends to pursue in the future, a business
strategy which includes selective acquisitions. The Partnership has financed
these expenditures to date through a combination of cash from operations,
indebtedness from outside sources and equity capital from its partners. In the
future, the Partnership intends to finance such expenditures though a
combination of these sources.
As of September 30, 1996, the Partnership had approximately $200.9 million of
indebtedness outstanding under a senior credit facility (the "Senior Credit
Facility") which bears interest at rates of 2.75% to 3.25% above LIBOR. In
addition, as of such date, the Partnership had received approximately $116.2
million of equity contributions from its partners. Such equity contributions
and senior debt, along with cash flow generated from operations, has been
sufficient to finance capital improvement projects as well as acquisitions.
The Partnership has adequately serviced its debt load in accordance
with the provisions of the Senior Credit Facility from EBITDA of $20.6 million
generated by the Partnership for the nine-month period ended September 30,
1996.
On September 30, 1996, the Partnership amended the Senior Credit Facility
primarily to allow the issuance of $200 million aggregate principal amount of
senior subordinated notes due 2006 (the "Notes"). The Notes bear interest at
11%, with interest payments due semiannually commencing on April 15, 1997. The
Notes mature on October 15, 2006. The public offering of the Notes was
consummated on October 7, 1996 and the net proceeds of $193 million received by
the Partnership
16
<PAGE> 17
was fully expended in the acquisition of cable systems from Triax and ACE on
October 7 and 9, 1996, respectively. The Notes are general unsecured obligations
of the Partnership and rank subordinate in right of payment to all existing and
any future senior indebtedness. In anticipation of the issuance of the Notes,
the Partnership entered into various interest rate protection agreements whereby
the interest rate exposure related to $140,000 of the Notes, when issued, was
hedged. A substantial portion of this hedge position was settled between
September 23, 1996 and the issuance of the Notes because favorable market
conditions allowed the issuance of the Notes at rates less than anticipated.
The financial statement effect of these agreements will be to increase the
effective interest rate which the Partnership incurs over the life of the Notes.
In addition, subsequent to September 30, 1996, the Partnership received
additional equity contributions of approximately $40 million funded from a $76
million rights offering (the "Rights Offering") conducted by the Partnership's
general partner, FrontierVision Partners, L.P. ("FVP"), among its existing
equity owners. As of November 15, 1996, the Partnership has available for use
an additional $36 million in equity commitments from the Rights Offering. The
size of the equity commitments to be made available to the Partnership through
the Rights Offering may be reduced if no later than six months after the closing
of the Rights Offering, FVP and FVP's advisory committee (the "Advisory
Committee") determine that the remaining equity commitments exceed the
Partnership's projected requirements. Such remaining equity commitments will
expire on June 30, 1997, subject to election by FVP and approval by the Advisory
Committee to extend the commitment period to June 30, 1998.
In connection with the acquisition of cable systems from UVC, the Partnership
issued a subordinated note in the aggregate principal amount of $7.2 million
(the "UVC Note"). It is anticipated that UVC will convert $5 million aggregate
principal amount of the UVC Note into limited partnership interests of the
Partnership and the balance of the UVC Note will be repaid. As of November 15,
1996, the note had not yet been converted. Although there can be no assurance,
the Partnership expects that the note will be converted during the fourth
quarter of 1996.
The Partnership had capital expenditures of $5.8 million during the nine months
ended September 30, 1996, primarily consisting of expenditures for the
construction, expansion and maintenance of the delivery system; additional costs
were incurred related to the expansion of customer service facilities. Including
the capital expenditures expected for the cable systems acquired from ACE, Triax
and Penn/Ohio, but excluding any expenditures related to the acquisition of
additional cable systems, the Partnership expects to spend approximately $49.9
million over the next two years for capital improvement related projects, of
which approximately 17% relates to the maintenance of existing plant. The
remaining capital expenditures will consist primarily of installation of fiber
optic cable and microwave links which will allow for the anticipated reduction
in the number of headends, the introduction of analog and digital converter
boxes which will allow the Partnership to more effectively market premium and
pay-per-view services, and the continued deployment of coaxial cable to
build-out existing systems. Capital expended during the nine months ended
September 30, 1996 represents the first phase of the Company's strategic capital
improvement plan.
17
<PAGE> 18
PART II. OTHER INFORMATION
Items 1 through 5.
None.
Item 6
(a) Exhibits
*3.1 --Agreement of Limited Partnership for FrontierVision Operating
Partners, L.P.
*3.2 --Certificate of Limited Partnership for FrontierVision Operating
Partners, L.P.
*3.9 --Certificate of Incorporation for FrontierVision Capital
Corporation.
*3.10 --Bylaws for FrontierVision Capital Corporation.
4.1 --Indenture dated as of October 7, 1996, among FrontierVision
Operating Partners, L.P., FrontierVision Capital Corporation
and Colorado National Bank, as Trustee.
10.15 --Consent and Amendment No. 2 to Senior Credit Facility.
27.1 --Financial Data Schedule as of and for the period ended September
30, 1996 and Amended Financial Data Schedule as of and for the
period ended December 31, 1995, June 30, 1996, and June 30, 1995.
-----------------
* Incorporated by reference to the corresponding exhibit of the
Registration Statement on Form S-1 (333-9535).
(b) Reports on Form 8-K
A Form 8-K was filed on October 22, 1996 relating to the consummation of
the Triax and the ACE acquisitions.
A Form 8-K was filed on October 29, 1996 relating to the dismissal of
Arthur Andersen LLP and the hiring of KPMG Peat Marwick, LLP as the
independent public accountants.
18
<PAGE> 19
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrants have duly caused this report to be signed on their behalf by the
undersigned thereunto duly authorized.
FRONTIERVISION OPERATING PARTNERS, L.P.
By: FrontierVision Partners, L.P.,
its general partner,
By: FVP GP, L.P., its general partner
By: FrontierVision Inc., its general partner
By: /s/ JAMES W. MCHOSE
------------------------------------------
James W. McHose
Vice President and Treasurer
Date: November 18, 1996 By: /s/ JAMES W. MCHOSE
------------------------------------------
James W. McHose
Vice President and Treasurer
By: /s/ JAMES W. MCHOSE
------------------------------------------
James W. McHose
Vice President and Treasurer
(Principal Accounting Officer)
FRONTIERVISION CAPITAL CORP.
Date: November 18, 1996 By: /s/ JAMES W. MCHOSE
-------------------------------------
James W. McHose
Vice President and Treasurer
By: /s/ JAMES W. MCHOSE
-------------------------------------
James W. McHose
Vice President and Treasurer
(Principal Accounting Officer)
19
<PAGE> 20
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<S> <C>
*3.1 - Agreement of Limited Partnership for FrontierVision Operating
Partners, L.P.
*3.2 - Certificate of Limited Partnership for FrontierVision
Operating Partners, L.P.
*3.9 - Certificate of Incorporation for FrontierVision Capital
Corporation.
*3.10 - Bylaws for FrontierVision Capital Corporation.
4.1 - Indenture dated as of October 7, 1996, among FrontierVision
Operating Partners, L.P., FrontierVision Capital Corporation
and Colorado National Bank, as Trustee.
10.15 - Consent and Amendment No. 2 to Senior Credit Facility.
27.1 - Financial Data Schedule as of and for the period ended
September 30, 1996 and Amended Financial Data Schedule as of
and for the period ended December 31, 1995, June 30, 1996, and
June 30, 1995.
</TABLE>
- ------------------------
* Incorporated by reference to the corresponding exhibit of the Registration
Statement on Form S-1 (333-9535).
<PAGE> 1
================================================================================
INDENTURE
Dated as of October 7, 1996
Among
FRONTIERVISION OPERATING PARTNERS, L.P.
and
FRONTIERVISION CAPITAL CORPORATION, as Issuers,
and
COLORADO NATIONAL BANK, as Trustee
--------------------
$200,000,000
11% Senior Subordinated Notes due 2006
================================================================================
<PAGE> 2
CROSS-REFERENCE TABLE
<TABLE>
<CAPTION>
Indenture
Trust Indenture Act Section Section
- --------------------------- ---------
<S> <C> <C>
Section 310(a)(1) . . . . . . . . . . . . . 7.10
(a)(2) . . . . . . . . . . . . . 7.10
(a)(3) . . . . . . . . . . . . . N.A.
(a)(4) . . . . . . . . . . . . . N.A.
(a)(5) . . . . . . . . . . . . . N.A.
(b) . . . . . . . . . . . . . . . 7.08; 7.10; 13.02
(c) . . . . . . . . . . . . . . . N.A.
Section 311(a) . . . . . . . . . . . . . . . 7.11
(b) . . . . . . . . . . . . . . . 7.11
(c) . . . . . . . . . . . . . . . N.A.
Section 312(a) . . . . . . . . . . . . . . . 2.05
(b) . . . . . . . . . . . . . . . 13.03
(c) . . . . . . . . . . . . . . . 13.03
Section 313(a) . . . . . . . . . . . . . . . 7.06
(b)(1) . . . . . . . . . . . . . N.A.
(b)(2) . . . . . . . . . . . . . 7.06
(c) . . . . . . . . . . . . . . . 7.06; 13.02
(d) . . . . . . . . . . . . . . . 7.06
Section 314(a) . . . . . . . . . . . . . . . 4.11; 4.12; 13.02
(b) . . . . . . . . . . . . . . . N.A.
(c)(1) . . . . . . . . . . . . . 13.04
(c)(2) . . . . . . . . . . . . . 13.04
(c)(3) . . . . . . . . . . . . . N.A.
(d) . . . . . . . . . . . . . . . N.A.
(e) . . . . . . . . . . . . . . . 13.05
(f) . . . . . . . . . . . . . . . N.A.
Section 315(a) . . . . . . . . . . . . . . . 7.01(b)
(b) . . . . . . . . . . . . . . . 7.05; 13.02
(c) . . . . . . . . . . . . . . . 7.01(a)
(d) . . . . . . . . . . . . . . . 7.01(c)
(e) . . . . . . . . . . . . . . . 6.11
Section 316(a)(last sentence) . . . . . . . 2.09
(a)(1)(A) . . . . . . . . . . . . 6.05
(a)(1)(B) . . . . . . . . . . . . 6.04
(a)(2) . . . . . . . . . . . . . N.A.
(b) . . . . . . . . . . . . . . . 6.07
(c) . . . . . . . . . . . . . . . 10.04
Section 317(a)(1) . . . . . . . . . . . . . 6.08
(a)(2) . . . . . . . . . . . . . 6.09
(b) . . . . . . . . . . . . . . . 2.04
Section 318(a) . . . . . . . . . . . . . . . 13.01
- --------------------
</TABLE>
N.A. means Not Applicable.
NOTE: This Cross-Reference Table shall not, for any purpose, be deemed to be a
part of the Indenture.
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.02. Other Definitions . . . . . . . . . . . . . . . . . . . 25
SECTION 1.03. Incorporation by Reference of Trust
Indenture Act . . . . . . . . . . . . . . . . . . . . . 26
SECTION 1.04. Rules of Construction . . . . . . . . . . . . . . . . . 26
ARTICLE TWO
THE SECURITIES
SECTION 2.01. Form and Dating . . . . . . . . . . . . . . . . . . . . 27
SECTION 2.02. Execution and Authentication . . . . . . . . . . . . . . 27
SECTION 2.03. Registrar; Paying Agent; Depository . . . . . . . . . . 28
SECTION 2.04. Paying Agent To Hold Money in Trust . . . . . . . . . . 29
SECTION 2.05. Securityholder Lists . . . . . . . . . . . . . . . . . . 29
SECTION 2.06. Transfer and Exchange . . . . . . . . . . . . . . . . . 29
SECTION 2.07. Replacement Securities . . . . . . . . . . . . . . . . . 30
SECTION 2.08. Outstanding Securities . . . . . . . . . . . . . . . . . 30
SECTION 2.09. Treasury Securities . . . . . . . . . . . . . . . . . . 31
SECTION 2.10. Temporary Securities . . . . . . . . . . . . . . . . . . 31
SECTION 2.11. Cancellation . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 2.12. Defaulted Interest . . . . . . . . . . . . . . . . . . . 32
SECTION 2.13. Book-Entry Provisions for Global
Securities . . . . . . . . . . . . . . . . . . . . . . 32
ARTICLE THREE
REDEMPTION
SECTION 3.01. Notices to Trustee . . . . . . . . . . . . . . . . . . . 34
SECTION 3.02. Selection of Securities To Be Redeemed . . . . . . . . . 34
SECTION 3.03. Notice of Redemption . . . . . . . . . . . . . . . . . . 34
SECTION 3.04. Effect of Notice of Redemption . . . . . . . . . . . . . 35
SECTION 3.05. Deposit of Redemption Price . . . . . . . . . . . . . . 35
SECTION 3.06. Securities Redeemed in Part . . . . . . . . . . . . . . 36
ARTICLE FOUR
COVENANTS
SECTION 4.01. Payment of Securities . . . . . . . . . . . . . . . . . 36
SECTION 4.02. Maintenance of Office or Agency . . . . . . . . . . . . 37
SECTION 4.03. Limitation on Transactions with
Affiliates and Related Persons . . . . . . . . . . . . 37
</TABLE>
-i-
<PAGE> 4
<TABLE>
<CAPTION>
Page
----
<S> <C>
SECTION 4.04. Limitation on Indebtedness . . . . . . . . . . . . . . . 38
SECTION 4.05. Disposition of Proceeds of Asset Sales . . . . . . . . . 41
SECTION 4.06. Limitation on Restricted Payments . . . . . . . . . . . 44
SECTION 4.07. Corporate Existence . . . . . . . . . . . . . . . . . . 47
SECTION 4.08. Payment of Taxes and Other Claims . . . . . . . . . . . 48
SECTION 4.09. Notice of Defaults . . . . . . . . . . . . . . . . . . . 48
SECTION 4.10. Maintenance of Properties . . . . . . . . . . . . . . . 48
SECTION 4.11. Compliance Certificate . . . . . . . . . . . . . . . . . 49
SECTION 4.12. Provision of Financial Information . . . . . . . . . . . 49
SECTION 4.13. Waiver of Stay, Extension or Usury Laws . . . . . . . . 50
SECTION 4.14. Change of Control . . . . . . . . . . . . . . . . . . . 50
SECTION 4.15. Limitation on Senior Subordinated
Indebtedness . . . . . . . . . . . . . . . . . . . . . 51
SECTION 4.16. Limitations on Dividends and Other Payment
Restrictions Affecting Restricted
Subsidiaries . . . . . . . . . . . . . . . . . . . . . 52
SECTION 4.17. Designation of Unrestricted Subsidiaries . . . . . . . . 53
SECTION 4.18. Limitation on Liens . . . . . . . . . . . . . . . . . . 54
SECTION 4.19. Limitation on Guarantees of Indebtedness
by Restricted Subsidiaries . . . . . . . . . . . . . . 54
SECTION 4.20. Limitation on Conduct of Business of
Capital . . . . . . . . . . . . . . . . . . . . . . . . 55
ARTICLE FIVE
MERGERS; SUCCESSOR CORPORATION
SECTION 5.01. Merger, Sale of Assets, etc. . . . . . . . . . . . . . . 56
SECTION 5.02. Successor Corporation Substituted . . . . . . . . . . . 57
ARTICLE SIX
DEFAULT AND REMEDIES
SECTION 6.01. Events of Default . . . . . . . . . . . . . . . . . . . 58
SECTION 6.02. Acceleration . . . . . . . . . . . . . . . . . . . . . . 60
SECTION 6.03. Other Remedies . . . . . . . . . . . . . . . . . . . . . 61
SECTION 6.04. Waiver of Past Default . . . . . . . . . . . . . . . . . 61
SECTION 6.05. Control by Majority . . . . . . . . . . . . . . . . . . 62
SECTION 6.06. Limitation on Suits . . . . . . . . . . . . . . . . . . 63
SECTION 6.07. Rights of Holders To Receive Payment . . . . . . . . . . 63
SECTION 6.08. Collection Suit by Trustee . . . . . . . . . . . . . . . 63
SECTION 6.09. Trustee May File Proofs of Claim . . . . . . . . . . . . 64
SECTION 6.10. Priorities . . . . . . . . . . . . . . . . . . . . . . . 64
SECTION 6.11. Undertaking for Costs . . . . . . . . . . . . . . . . . 65
</TABLE>
-ii-
<PAGE> 5
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE SEVEN
TRUSTEE
SECTION 7.01. Duties of Trustee . . . . . . . . . . . . . . . . . . . 65
SECTION 7.02. Rights of Trustee . . . . . . . . . . . . . . . . . . . 66
SECTION 7.03. Individual Rights of Trustee . . . . . . . . . . . . . . 67
SECTION 7.04. Trustee's Disclaimer . . . . . . . . . . . . . . . . . . 68
SECTION 7.05. Notice of Defaults . . . . . . . . . . . . . . . . . . . 68
SECTION 7.06. Reports by Trustee to Holders . . . . . . . . . . . . . 68
SECTION 7.07. Compensation and Indemnity . . . . . . . . . . . . . . . 69
SECTION 7.08. Replacement of Trustee . . . . . . . . . . . . . . . . . 70
SECTION 7.09. Successor Trustee by Merger, etc. . . . . . . . . . . . 71
SECTION 7.10. Eligibility; Disqualification . . . . . . . . . . . . . 71
SECTION 7.11. Preferential Collection of Claims Against
Company . . . . . . . . . . . . . . . . . . . . . . . . 72
ARTICLE EIGHT
SUBORDINATION OF SECURITIES
SECTION 8.01. Securities Subordinated to Senior
Indebtedness . . . . . . . . . . . . . . . . . . . . . 72
SECTION 8.02. No Payment on Securities in Certain
Circumstances . . . . . . . . . . . . . . . . . . . . . 72
SECTION 8.03. Payment Over of Proceeds upon Dissolution,
etc. . . . . . . . . . . . . . . . . . . . . . . . . . 74
SECTION 8.04. Subrogation . . . . . . . . . . . . . . . . . . . . . . 75
SECTION 8.05. Obligations of Issuers Unconditional . . . . . . . . . . 76
SECTION 8.06. Notice to Trustee . . . . . . . . . . . . . . . . . . . 77
SECTION 8.07. Reliance on Judicial Order or Certificate
of Liquidating Agent . . . . . . . . . . . . . . . . . 78
SECTION 8.08. Trustee's Relation to Senior Indebtedness . . . . . . . 78
SECTION 8.09. Subordination Rights Not Impaired by Acts
or Omissions of the Issuers or Holders
of Senior Indebtedness . . . . . . . . . . . . . . . . 78
SECTION 8.10. Securityholders Authorize Trustee To
Effectuate Subordination of Securities . . . . . . . . 79
SECTION 8.11. This Article Not To Prevent Events of
Default . . . . . . . . . . . . . . . . . . . . . . . . 79
SECTION 8.12. Trustee's Compensation Not Prejudiced . . . . . . . . . 79
SECTION 8.13. No Waiver of Subordination Provisions . . . . . . . . . 79
SECTION 8.14. Subordination Provisions Not Applicable to
Money Held in Trust for Securityholders;
Payments May Be Paid Prior to
Dissolution . . . . . . . . . . . . . . . . . . . . . . 80
SECTION 8.15. Acceleration of Securities . . . . . . . . . . . . . . . 80
</TABLE>
-iii-
<PAGE> 6
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE NINE
DISCHARGE OF INDENTURE
SECTION 9.01. Termination of Issuers' Obligations . . . . . . . . . . 81
SECTION 9.02. Application of Trust Money . . . . . . . . . . . . . . . 82
SECTION 9.03. Repayment to Issuers . . . . . . . . . . . . . . . . . . 83
SECTION 9.04. Reinstatement . . . . . . . . . . . . . . . . . . . . . 83
ARTICLE TEN
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 10.01. Without Consent of Holders . . . . . . . . . . . . . . . 84
SECTION 10.02. With Consent of Holders . . . . . . . . . . . . . . . . 85
SECTION 10.03. Compliance with Trust Indenture Act . . . . . . . . . . 87
SECTION 10.04. Effect of Consents . . . . . . . . . . . . . . . . . . . 87
SECTION 10.05. Notation on or Exchange of Securities . . . . . . . . . 87
SECTION 10.06. Trustee To Sign Amendments, etc. . . . . . . . . . . . . 88
ARTICLE ELEVEN
SUBSIDIARY GUARANTEE
SECTION 11.01. Unconditional Guarantee . . . . . . . . . . . . . . . . 88
SECTION 11.02. Severability . . . . . . . . . . . . . . . . . . . . . . 89
SECTION 11.03. Release of a Guarantor . . . . . . . . . . . . . . . . . 89
SECTION 11.04. Limitation of Subsidiary Guarantor's
Liability . . . . . . . . . . . . . . . . . . . . . . . 90
SECTION 11.05. Contribution . . . . . . . . . . . . . . . . . . . . . . 91
SECTION 11.06. Execution of Subsidiary Guarantee . . . . . . . . . . . 91
SECTION 11.07. Additional Subsidiary Guarantors . . . . . . . . . . . . 92
SECTION 11.08. Subordination of Subrogation and Other
Rights . . . . . . . . . . . . . . . . . . . . . . . . 92
ARTICLE TWELVE
SUBORDINATION OF GUARANTEE
SECTION 12.01. Guarantee Obligations Subordinated to
Subsidiary Guarantor Senior Debt . . . . . . . . . . . 92
SECTION 12.02. No Payment on Subsidiary Guarantees in
Certain Circumstances . . . . . . . . . . . . . . . . . 93
SECTION 12.03. Payment Over of Proceeds upon Dissolution,
etc. . . . . . . . . . . . . . . . . . . . . . . . . . 94
SECTION 12.04. Subrogation . . . . . . . . . . . . . . . . . . . . . . 96
SECTION 12.05. Obligations of Subsidiary Guarantors
Unconditional . . . . . . . . . . . . . . . . . . . . . 97
SECTION 12.06. Notice to Trustee . . . . . . . . . . . . . . . . . . . 98
</TABLE>
-iv-
<PAGE> 7
<TABLE>
<CAPTION>
Page
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<S> <C>
SECTION 12.07. Reliance on Judicial Order or Certificate
of Liquidating Agent . . . . . . . . . . . . . . . . . 99
SECTION 12.08. Trustee's Relation to Guarantor Senior
Indebtedness . . . . . . . . . . . . . . . . . . . . . 99
SECTION 12.09. Subordination Rights Not Impaired by Acts
or Omissions of the Subsidiary Guarantors
or Holders of Guarantor Senior
Indebtedness . . . . . . . . . . . . . . . . . . . . . 100
SECTION 12.10. Securityholders Authorize Trustee To
Effectuate Subordination of Guarantee . . . . . . . . . 100
SECTION 12.11. This Article Not To Prevent Events of
Default . . . . . . . . . . . . . . . . . . . . . . . . 100
SECTION 12.12. Trustee's Compensation Not Prejudiced . . . . . . . . . 100
SECTION 12.13. No Waiver of Subsidiary Guarantee
Subordination Provisions . . . . . . . . . . . . . . . 101
SECTION 12.14. Payments May Be Paid Prior to Dissolution . . . . . . . 101
ARTICLE THIRTEEN
MISCELLANEOUS
SECTION 13.01. Trust Indenture Act Controls . . . . . . . . . . . . . . 101
SECTION 13.02. Notices . . . . . . . . . . . . . . . . . . . . . . . . 102
SECTION 13.03. Communications by Holders with Other
Holders . . . . . . . . . . . . . . . . . . . . . . . . 103
SECTION 13.04. Certificate and Opinion as to Conditions
Precedent . . . . . . . . . . . . . . . . . . . . . . . 103
SECTION 13.05. Statements Required in Certificate or
Opinion . . . . . . . . . . . . . . . . . . . . . . . . 104
SECTION 13.06. Rules by Trustee, Paying Agent, Registrar . . . . . . . 104
SECTION 13.07. Governing Law . . . . . . . . . . . . . . . . . . . . . 104
SECTION 13.08. No Recourse Against Others . . . . . . . . . . . . . . . 105
SECTION 13.09. Successors . . . . . . . . . . . . . . . . . . . . . . . 105
SECTION 13.10. Counterpart Originals . . . . . . . . . . . . . . . . . 105
SECTION 13.11. Severability . . . . . . . . . . . . . . . . . . . . . . 105
SECTION 13.12. No Adverse Interpretation of Other
Agreements . . . . . . . . . . . . . . . . . . . . . . 105
SECTION 13.13. Legal Holidays . . . . . . . . . . . . . . . . . . . . . 105
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106
EXHIBIT A - Form of Security . . . . . . . . . . . . . . . . . . . . . . A-1
EXHIBIT B - Form of Subsidiary Guarantee . . . . . . . . . . . . . . . . B-1
EXHIBIT C - Form of Book Entry Legend and
Schedule for Exchanges of Global
Security . . . . . . . . . . . . . . . . . . . . . . . . . C-1
</TABLE>
- ---------------
NOTE: This Table of Contents shall not, for any purpose, be deemed to be a
part of the Indenture.
-v-
<PAGE> 8
INDENTURE dated as of October 7, 1996, among FRONTIERVISION
OPERATING PARTNERS, L.P., a Delaware limited partnership (the "Company"),
FRONTIERVISION CAPITAL CORPORATION, a Delaware corporation ("Capital" and
together with the Company, the "Issuers"), and COLORADO NATIONAL BANK, as
trustee.
Each party hereto agrees as follows for the benefit of each other
party and for the equal and ratable benefit of the Holders of the 11% Senior
Subordinated Notes due 2006 of the Issuers:
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions.
"Acquired Indebtedness" means Indebtedness of a Person (a)
assumed in connection with an Asset Acquisition from such Person or (b)
existing at the time such Person becomes a Restricted Subsidiary.
"Acquired Person" means, with respect to any specified Person,
any other Person which merges with or into or becomes a Subsidiary of such
specified Person.
"Advisory Committee" means the Advisory Committee of the General
Partner established pursuant to the provisions of Article VI of the First
Amended and Restated Agreement of Limited Partnership of the General Partner,
as amended to the date of issuance of the Securities.
"Affiliate" means, with respect to any specified Person, any
other Person directly or indirectly controlling or controlled by or under
direct or indirect common control with such specified Person. For purposes of
this definition, "control" when used with respect to any Person means the power
to direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Agent" means any Registrar, Paying Agent or co-Registrar. See
Section 2.03.
"Asset Acquisition" means (i) any capital contribution (by means
of transfers of cash or other property to others or payments for property or
services for the account or use of
<PAGE> 9
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others, or otherwise) by the Company or any Restricted Subsidiary to any other
Person, or any acquisition or purchase of Equity Interests of any other Person
by the Company or any Restricted Subsidiary, in either case pursuant to which
such Person shall become a Restricted Subsidiary or shall be consolidated,
merged with or into the Company or any Restricted Subsidiary or (ii) any
acquisition by the Company or any Restricted Subsidiary of the assets of any
Person which constitute substantially all of an operating unit or line of
business of such Person or which is otherwise outside of the ordinary course of
business.
"Asset Sale" means any direct or indirect sale, conveyance,
transfer, lease (that has the effect of a disposition) or other disposition
(including, without limitation, any merger, consolidation or sale-leaseback
transaction) to any Person other than the Company or a Wholly Owned Restricted
Subsidiary, in one transaction or a series of related transactions, of (i) any
Equity Interest of any Restricted Subsidiary, (ii) any material license,
franchise or other authorization of the Company or any Restricted Subsidiary,
(iii) any assets of the Company or any Restricted Subsidiary which constitute
substantially all of an operating unit or line of business of the Company or
any Restricted Subsidiary or (iv) any other property or asset of the Company or
any Restricted Subsidiary outside of the ordinary course of business. For the
purposes of this definition, the term "Asset Sale" shall not include (i) any
transaction consummated in compliance with Section 5.01 and the creation of any
Lien not prohibited by Section 4.18, (ii) sales of property or equipment that
has become worn out, obsolete or damaged or otherwise unsuitable for use in
connection with the business of the Company or any Restricted Subsidiary, as
the case may be, and (iii) any transaction consummated in compliance with
Section 4.06. In addition, solely for purposes of Section 4.05, any sale,
conveyance, transfer, lease or other disposition of any property or asset,
whether in one transaction or a series of related transactions, involving
assets with a Fair Market Value not in excess of $500,000 individually or $1.0
million in any fiscal year shall be deemed not to be an Asset Sale.
"Board of Directors" means (i) in the case of a Person that is a
partnership, the board of directors of such Person's corporate general partner
(or if such general partner is itself a partnership, the board of directors of
such general partner's corporate general partner), (ii) in the case of a Person
that is a corporation, the board of directors of such Person and (iii) in the
case of any other Person, the board of directors, management committee or
similar governing body or any authorized committee
<PAGE> 10
-3-
thereof responsible for the management of the business and affairs of such
Person. By way of illustration, as of the date of this Indenture, any
reference herein to the Board of Directors of any of the Company, FVP or FVP or
FVP GP means the board of directors of FV Inc.
"Board Resolution" means, with respect to any Person, a duly
adopted resolution of the Board of Directors of such Person.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday
and Friday that is not a day on which banking institutions in the City of New
York are authorized or obligated by law, resolution or executive order to
close.
"Capitalized Lease Obligation" means, with respect to any Person
for any period, an obligation of such Person to pay rent or other amounts under
a lease that is required to be capitalized for financial reporting purposes in
accordance with GAAP; and the amount of such obligation shall be the
capitalized amount shown on the balance sheet of such Person as determined in
accordance with GAAP.
"Cash Equivalents" means (i) any security, maturing not more than
six months after the date of acquisition, issued by the United States of
America, or an instrumentality or agency thereof and guaranteed fully as to
principal, premium, if any, and interest by the United States of America, (ii)
any certificate of deposit, time deposit, money market account or bankers'
acceptance maturing not more than six months after the date of acquisition
issued by any commercial banking institution that is a member of the Federal
Reserve System and that has combined capital and surplus and undivided profits
of not less than $500.0 million, whose debt has a rating, at the time as of
which any investment therein is made, of "P-1" (or higher) according to Moody's
Investors Service, Inc. or any successor rating agency, or "A-1" (or higher)
according to Standard & Poor's Rating Services, a division of the McGraw-Hill
Companies, Inc., or any successor rating agency and (iii) commercial paper
maturing not more than three months after the date of acquisition issued by any
corporation (other than an Affiliate of the Company) organized and existing
under the laws of the United States of America with a rating, at the time as of
which any investment therein is made, of "P-1" (or higher) according to Moody's
Investors Service, Inc. or any successor rating agency, or "A-1" (or higher)
according to Standard & Poor's Rating Services, a division of the McGraw-Hill
Companies, Inc., or any successor rating agency.
<PAGE> 11
-4-
"Change of Control" means the occurrence of any of the following
events: (a) any "person" or "group" (as such terms are used in Sections 13(d)
and 14(d) of the Exchange Act), other than the Permitted Holders, is or becomes
the "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the Exchange
Act, except that a Person shall be deemed to have "beneficial ownership" of all
securities that such Person has the right to acquire, whether such right is
exercisable immediately or only after the passage of time), directly or
indirectly, of 50% or more of the total voting power of the outstanding Voting
Equity Interests of the Company, the General Partner, FVP GP or FV Inc., as the
case may be; (b) the Company, the General Partner, FVP GP or FV Inc., as the
case may be, consolidates with, or merges with or into, another Person or
sells, assigns, conveys, transfers, leases or otherwise disposes of all or
substantially all of its assets to any Person, or any Person consolidates with,
or merges with or into, the Company, the General Partner, FVP GP or FV Inc., as
the case may be, in any such event pursuant to a transaction in which the
outstanding Voting Equity Interests of the Company, the General Partner, FVP GP
or FV Inc., as the case may be, are converted into or exchanged for cash,
securities or other property, other than any such transaction where the
outstanding Voting Equity Interests of the Company, the General Partner, FVP GP
or FV Inc., as the case may be, are converted into or exchanged for Voting
Equity Interests (other than Disqualified Equity Interests) of the surviving or
transferee Person and, immediately after such transaction, the Permitted
Holders or the holders of the Voting Equity Interests of the Company, the
General Partner, FVP GP or FV Inc., as the case may be, immediately prior
thereto own, directly or indirectly, more than 50% of the total voting power of
the outstanding Voting Equity Interests of the surviving or transferee Person;
(c) during any consecutive two-year period, individuals who at the beginning of
such period constituted the Board of Directors of the Company, the General
Partner, FVP GP or FV Inc., as the case may be (together with any new directors
whose election to such Board of Directors was approved by the Permitted Holders
or by a vote of at least a majority of the directors then still in office who
were either directors at the beginning of such period or whose election or
nomination for election was previously so approved), cease for any reason
(other than by action of the Permitted Holders) to constitute a majority of the
Board of Directors of the Company, the General Partner, FVP GP or FV Inc., as
the case may be, then in office in any such case in connection with any actual
or threatened solicitation to which Rule 14a-11 of Regulation 14A promulgated
under the Exchange Act applies or other actual or threatened solicitation of
proxies or consents; (d) any Person or Persons, other than Permitted Holders,
is or
<PAGE> 12
-5-
becomes entitled to appoint or designate more than 25% of the members of the
Advisory Committee; or (e) the admission of any Person as a general partner of
the Company, the General Partner or FVP GP, as the case may be, after which the
General Partner, FVP GP or FV Inc., as the case may be, does not have the sole
power to take all of the actions it is entitled or required to take under the
limited partnership agreement of the Company, the General Partner or FVP GP, as
the case may be, as in effect on the Issue Date; provided, however, that a
Change of Control will be deemed not to have occurred in any of the foregoing
circumstances (i) with respect to FV Inc. (either in its own capacity or in its
capacity as a direct or indirect corporate general partner of any other
Person), (ii) with respect to or as a result of the conversion of the general
partnership interest of FVP GP in the General Partner into a limited
partnership interest, or (iii) with respect to the events in clause (e) if the
change, event or condition giving rise thereto has been approved by the
Permitted Holders holding a majority in interest of the total outstanding
Equity Interests of the General Partner held by the Permitted Holders.
"Company" means the Person named as the "Company" in the first
paragraph of this Indenture until a successor shall have become such pursuant
to the applicable provisions of this Indenture, and thereafter "Company" shall
mean such successor.
"Consolidated Income Tax Expense" means, with respect to the
Company for any period, the provision for federal, state, local and foreign
income taxes payable by the Company and the Restricted Subsidiaries for such
period as determined on a consolidated basis in accordance with GAAP.
"Consolidated Interest Expense" means, with respect to the
Company for any period, without duplication, the sum of (i) the interest
expense of the Company and the Restricted Subsidiaries for such period as
determined on a consolidated basis in accordance with GAAP, including, without
limitation, (a) any amortization of debt discount, (b) the net cost under
Interest Rate Protection Obligations (including any amortization of discounts),
(c) the interest portion of any deferred payment obligation, (d) all
commissions, discounts and other fees and charges owed with respect to letters
of credit and bankers' acceptance financing and (e) all capitalized interest
and all accrued interest, (ii) the interest component of Capitalized Lease
Obligations paid, accrued and/or scheduled to be paid or accrued by the Company
and the Restricted Subsidiaries during such period as determined on a
consolidated basis in accordance with GAAP and (iii) dividends and
distributions in respect of
<PAGE> 13
-6-
Disqualified Equity Interests actually paid in cash by the Company during such
period as determined on a consolidated basis in accordance with GAAP.
"Consolidated Net Income" means, with respect to any period, the
net income of the Company and the Restricted Subsidiaries for such period
determined on a consolidated basis in accordance with GAAP, adjusted, to the
extent included in calculating such net income, by excluding, without
duplication, (i) all extraordinary gains or losses and all gains and losses
from the sales or other dispositions of assets out of the ordinary course of
business (net of taxes, fees and expenses relating to the transaction giving
rise thereto) for such period, (ii) that portion of such net income derived
from or in respect of investments in Persons other than Restricted
Subsidiaries, except to the extent actually received in cash by the Company or
any Restricted Subsidiary (subject, in the case of any Restricted Subsidiary,
to the provisions of clause (v) of this definition), (iii) the portion of such
net income (or loss) allocable to minority interests in unconsolidated Persons
for such period, except to the extent actually received in cash by the Company
or any Restricted Subsidiary (subject, in the case of any Restricted
Subsidiary, to the provisions of clause (v) of this definition), (iv) net
income (or loss) of any other Person combined with the Company or any
Restricted Subsidiary on a "pooling of interests" basis attributable to any
period prior to the date of combination and (v) the net income of any
Restricted Subsidiary to the extent that the declaration of dividends or
similar distributions by that Restricted Subsidiary of that income is not at
the time (regardless of any waiver) permitted, directly or indirectly, by
operation of the terms of its charter or any agreement, instrument, judgment,
decree, order, statute, rule or governmental regulations applicable to that
Restricted Subsidiary or its Equity Interest holders.
"Consolidated Net Worth" with respect to any Person means the
equity of the holders of Qualified Equity Interests of such Person and its
Restricted Subsidiaries, as reflected in a balance sheet of such Person
determined on a consolidated basis and in accordance with GAAP.
"Consolidated Operating Cash Flow" means, with respect to any
period, Consolidated Net Income for such period increased (without duplication)
by the sum of (i) Consolidated Income Tax Expense accrued according to GAAP for
such period to the extent deducted in determining Consolidated Net Income for
such period; (ii) Consolidated Interest Expense (other than dividends on
Preferred Equity Interests) for such period to the extent
<PAGE> 14
-7-
deducted in determining Consolidated Net Income for such period; and
(iii) depreciation, amortization and any other non-cash items for such period
to the extent deducted in determining Consolidated Net Income for such period
(other than any non-cash item which requires the accrual of, or a reserve for,
cash charges for any future period) of the Company and the Restricted
Subsidiaries, including, without limitation, amortization of capitalized debt
issuance costs for such period, all of the foregoing determined on a
consolidated basis in accordance with GAAP minus non-cash items to the extent
they increase Consolidated Net Income (including the partial or entire reversal
of reserves taken in prior periods) for such period.
"Corporate Trust Office of the Trustee" shall be at the address
of the Trustee specified in Section 13.02 or such other address as the Trustee
may give notice to the Issuers.
"Cumulative Available Cash Flow" means, as at any date of
determination, the positive cumulative Consolidated Operating Cash Flow
realized during the period commencing on the Issue Date and ending on the last
day of the most recent fiscal quarter immediately preceding the date of
determination for which consolidated financial information of the Company is
available or, if such cumulative Consolidated Operating Cash Flow for such
period is negative, the negative amount by which cumulative Consolidated
Operating Cash Flow is less than zero.
"Debt to Operating Cash Flow Ratio" means the ratio of (i) the
Total Consolidated Indebtedness as of the date of calculation (the
"Determination Date") to (ii) four times the Consolidated Operating Cash Flow
for the latest fiscal quarter for which financial information is available
immediately preceding such Determination Date (the "Measurement Period"). For
purposes of calculating Consolidated Operating Cash Flow for the Measurement
Period immediately prior to the relevant Determination Date, (I) any Person
that is a Restricted Subsidiary on the Determination Date (or would become a
Restricted Subsidiary on such Determination Date in connection with the
transaction that requires the determination of such Consolidated Operating Cash
Flow) will be deemed to have been a Restricted Subsidiary at all times during
such Measurement Period, (II) any Person that is not a Restricted Subsidiary on
such Determination Date (or would cease to be a Restricted Subsidiary on such
Determination Date in connection with the transaction that requires the
determination of such Consolidated Operating Cash Flow) will be deemed not to
have been a Restricted Subsidiary at any time during such Measurement Period,
and (III) if the Company or any Restricted Subsidiary shall have in
<PAGE> 15
-8-
any manner (x) acquired (including through an Asset Acquisition or the
commencement of activities constituting such operating business) or (y)
disposed of (including by way of an Asset Sale or the termination or
discontinuance of activities constituting such operating business) any
operating business during such Measurement Period or after the end of such
period and on or prior to such Determination Date, such calculation will be
made on a pro forma basis in accordance with GAAP as if, in the case of an
Asset Acquisition or the commencement of activities constituting such operating
business, all such transactions had been consummated on the first day of such
Measurement Period and, in the case of an Asset Sale or termination or
discontinuance of activities constituting such operating business, all such
transactions had been consummated prior to the first day of such Measurement
Period; provided, however, that such pro forma adjustment shall not give effect
to the Operating Cash Flow of any Acquired Person to the extent that such
Person's net income would be excluded pursuant to clause (v) of the definition
of Consolidated Net Income.
"Default" means any event that is or with the passing of time or
giving of notice or both would be an Event of Default.
"Depository" means, with respect to Securities issued in the form
of one or more Global Securities, DTC or another Person designated as
Depository by the Issuers, which Person must be a clearing agency registered
under Section 17A of the Exchange Act.
"Designated Guarantor Senior Indebtedness" means, with respect to
any Subsidiary Guarantor, (i) any Indebtedness of such Subsidiary Guarantor
outstanding under the Senior Credit Facility and (ii) any other Guarantor
Senior Indebtedness of such Subsidiary Guarantor which, at the time of
determination, has an aggregate principal amount outstanding, together with any
commitments to lend additional amounts, of at least $25.0 million.
"Designated Senior Indebtedness" means (i) any Indebtedness
outstanding under the Senior Credit Facility and (ii) any other Senior
Indebtedness which, at the time of determination, has an aggregate principal
amount outstanding, together with any commitments to lend additional amounts,
of at least $25.0 million.
"Designation" has the meaning set forth in Section 4.17.
<PAGE> 16
-9-
"Designation Amount" has the meaning set forth in Section 4.17.
"Disposition" means, with respect to any Person, any merger,
consolidation or other business combination involving such Person (whether or
not such Person is the Surviving Person) or the sale, assignment, transfer,
lease, conveyance or other disposition of all or substantially all of such
Person's assets.
"Disqualified Equity Interest" means any Equity Interest which,
by its terms (or by the terms of any security into which it is convertible or
for which it is exchangeable at the option of the holder thereof), or upon the
happening of any event, matures or is mandatorily redeemable, pursuant to a
sinking fund obligation or otherwise, or redeemable, at the option of the
holder thereof, in whole or in part, or exchangeable into Indebtedness on or
prior to the earlier of the maturity date of the Securities or the date on
which no Securities remain outstanding.
"DTC" means The Depository Trust Company.
"Equity Interest" in any Person means any and all shares,
interests, rights to purchase, warrants, options, participations or other
equivalents of or interests in (however designated) corporate stock or other
equity participations, including partnership interests, whether general or
limited, in such Person, including any Preferred Equity Interests.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated by the Commission
thereunder.
"Expiration Date" has the meaning set forth in the definition of
"Offer to Purchase" below.
"Fair Market Value" means, with respect to any asset, the price
(after taking into account any liabilities relating to such assets) which could
be negotiated in an arm's-length free market transaction, for cash, between a
willing seller and a willing and able buyer, neither of which is under pressure
or compulsion to complete the transaction; provided, however, that the Fair
Market Value of any such asset or assets shall be determined by the Board of
Directors of FV Inc., acting in good faith, and shall be evidenced by
resolutions of the Board of Directors of FV Inc. delivered to the Trustee.
<PAGE> 17
-10-
"FV Inc." means FrontierVision Inc., a Delaware corporation.
"FVP GP" means FVP GP, L.P., a Delaware limited partnership.
"GAAP" means, at any date of determination, generally accepted
accounting principles in effect in the United States which are applicable at
the date of determination and which are consistently applied for all applicable
periods.
"General Partner" means FrontierVision Partners, L.P., a Delaware
limited partnership.
"Global Security" means a Security evidencing all or part of the
Securities issued to the Depository in accordance with Section 2.13 and bearing
the legend described in Exhibit C.
"guarantee" means, as applied to any obligation, (i) a guarantee
(other than by endorsement of negotiable instruments for collection in the
ordinary course of business), direct or indirect, in any manner, of any part or
all of such obligation and (ii) an agreement, direct or indirect, contingent or
otherwise, the practical effect of which is to assure in any way the payment or
performance (or payment of damages in the event of non-performance) of all or
any part of such obligation, including, without limiting the foregoing, the
payment of amounts drawn down by letters of credit. A guarantee shall include,
without limitation, any agreement to maintain or preserve any other person's
financial condition or to cause any other Person to achieve certain levels of
operating results.
"Guarantor Senior Indebtedness" means, with respect to any
Subsidiary Guarantor, at any date, (i) all Obligations of such Subsidiary
Guarantor under the Senior Credit Facility, (ii) all Interest Rate Protection
Obligations of such Subsidiary Guarantor, (iii) all Obligations of such
Subsidiary Guarantor under stand-by letters of credit and (iv) all other
Indebtedness of such Subsidiary Guarantor for borrowed money, including
principal, premium, if any, and interest (including Post-Petition Interest) on
such Indebtedness, unless the instrument under which such Indebtedness of such
Subsidiary Guarantor for money borrowed is Incurred expressly provides that
such Indebtedness for money borrowed is not senior or superior in right of
payment to such Subsidiary Guarantor's Subsidiary Guarantee, and all renewals,
extensions, modifications, amendments or refinancings thereof. Notwithstanding
the foregoing, Guarantor Senior Indebtedness shall not include (i) to the
extent that it may constitute
<PAGE> 18
-11-
Indebtedness, any Obligation for federal, state, local or other taxes, (ii) any
Indebtedness among or between such Subsidiary Guarantor and the Company or any
Subsidiary of such Subsidiary Guarantor or the Company, (iii) to the extent
that it may constitute Indebtedness, any Obligation in respect of any trade
payable Incurred for the purchase of goods or materials, or for services
obtained, in the ordinary course of business, (iv) that portion of any
Indebtedness that is Incurred in violation of this Indenture; provided,
however, that such Indebtedness shall be deemed not to have been Incurred in
violation of this Indenture for purposes of this clause (iv) if (I) the
holder(s) of such Indebtedness or their representative or such Subsidiary
Guarantor shall have furnished to the Trustee an opinion of independent legal
counsel, unqualified in all material respects, addressed to the Trustee (which
legal counsel may, as to matters of fact, rely upon an officers' certificate of
such Subsidiary Guarantor) to the effect that the Incurrence of such
Indebtedness does not violate the provisions of this Indenture or (II) in the
case of any Obligations under the Senior Credit Facility, the holder(s) of such
Obligations or their agent or representative shall have received a
representation from such Subsidiary Guarantor to the effect that the Incurrence
of such Indebtedness does not violate the provisions of this Indenture, (v)
Indebtedness evidenced by the Subsidiary Guarantee, (vi) Indebtedness of such
Subsidiary Guarantor that is expressly subordinate or junior in right of
payment to any other Indebtedness of such Subsidiary Guarantor, (vii) to the
extent that it may constitute Indebtedness, any obligation owing under leases
(other than Capitalized Lease Obligations) or management agreements and (viii)
any obligation that by operation of law is subordinate to any general unsecured
obligations of such Subsidiary Guarantor.
"Holder" or "Securityholder" means the Person in whose name a
Security is registered on the books of the Registrar or any co-Registrar.
"Incur" means, with respect to any Indebtedness or other
obligation of any Person, to create, issue, incur (including by conversion,
exchange or otherwise), assume, guarantee or otherwise become liable in respect
of such Indebtedness or other obligation or the recording, as required pursuant
to GAAP or otherwise, of any such Indebtedness or other obligation on the
balance sheet of such Person (and "Incurrence," "Incurred" and "Incurring"
shall have meanings correlative to the foregoing). Indebtedness of any Person
or any of its Subsidiaries existing at the time such Person becomes a
Restricted Subsidiary (or is merged into or consolidates with the Company or
any Restricted Subsidiary), whether or not such
<PAGE> 19
-12-
Indebtedness was incurred in connection with, or in contemplation of, such
Person becoming a Restricted Subsidiary (or being merged into or consolidated
with the Company or any Restricted Subsidiary), shall be deemed Incurred at the
time any such Person becomes a Restricted Subsidiary or merges into or
consolidates with the Company or any Restricted Subsidiary.
"Indebtedness" means (without duplication), with respect to any
Person, whether recourse is to all or a portion of the assets of such Person
and whether or not contingent, (i) every obligation of such Person for money
borrowed, (ii) every obligation of such Person evidenced by bonds, debentures,
notes or other similar instruments, including obligations incurred in
connection with the acquisition of property, assets or businesses, (iii) every
reimbursement obligation of such Person with respect to letters of credit,
bankers' acceptances or similar facilities issued for the account of such
Person, (iv) every obligation of such Person issued or assumed as the deferred
purchase price of property or services (but excluding trade accounts payable
incurred in the ordinary course of business and payable in accordance with
industry practices, or other accrued liabilities arising in the ordinary course
of business which are not overdue or which are being contested in good faith),
(v) every Capital Lease Obligation of such Person, (vi) every net obligation
under interest rate swap or similar agreements or foreign currency hedge,
exchange or similar agreements of such Person, (vii) every obligation of the
type referred to in clauses (i) through (vi) of another Person and all
dividends of another Person the payment of which, in either case, such Person
has guaranteed or is responsible or liable for, directly or indirectly, as
obligor, guarantor or otherwise, and (viii) any and all deferrals, renewals,
extensions and refundings of, or amendments, modifications or supplements to,
any liability of the kind described in any of the preceding clauses (i) through
(vii) above. Indebtedness (i) shall never be calculated taking into account
any cash and cash equivalents held by such Person, (ii) shall not include
obligations of any Person (x) arising from the honoring by a bank or other
financial institution of a check, draft or similar instrument inadvertently
drawn against insufficient funds in the ordinary course of business, provided
that such obligations are extinguished within two Business Days of their
incurrence unless covered by an overdraft line, (y) resulting from the
endorsement of negotiable instruments for collection in the ordinary course of
business and consistent with past business practices and (z) under stand-by
letters of credit to the extent collateralized by cash or Cash Equivalents,
(iii) which provides that an amount less than the principal amount thereof
shall be due upon any declaration of acceleration thereof
<PAGE> 20
-13-
shall be deemed to be incurred or outstanding in an amount equal to the
accreted value thereof at the date of determination, (iv) shall include the
liquidation preference and any mandatory redemption payment obligations in
respect of any Disqualified Equity Interests of the Company or any Restricted
Subsidiary and (v) shall not include obligations under performance bonds,
performance guarantees, surety bonds and appeal bonds, letters of credit or
similar obligations, incurred in the ordinary course of business, including in
connection with the requirements of cable television franchising authorities,
and otherwise consistent with industry practice.
"Indenture" means this Indenture as amended or supplemented from
time to time.
"Independent Financial Advisor" means a nationally recognized
investment banking firm (i) which does not, and whose directors, officers and
employees or Affiliates do not, have a direct or indirect financial interest in
the Company and (ii) which, in the judgment of the Board of Directors of FV
Inc., is otherwise independent and qualified to perform the task for which it
is to be engaged.
"Insolvency or Liquidation Proceeding" means, with respect to any
Person, any liquidation, dissolution or winding up of such Person, or any
bankruptcy, reorganization, insolvency, receivership or similar proceeding with
respect to such Person, whether voluntary or involuntary.
"Interest Payment Date" means the stated maturity of an
installment of interest on the Securities.
"Interest Rate Protection Obligations" means, with respect to any
Person, the Obligations of such Person under (i) interest rate swap agreements,
interest rate cap agreements and interest rate collar agreements, and (ii)
other agreements or arrangements designed to protect such Person against
fluctuations in interest rates.
"Investment" means, with respect to any Person, any advance,
loan, account receivable (other than an account receivable arising in the
ordinary course of business), or other extension of credit (including, without
limitation, by means of any guarantee) or any capital contribution to (by means
of transfers of property to others, payments for property or services for the
account or use of others, or otherwise) or any purchase or ownership of any
stocks, bonds, notes, debentures or other securities of, any other Person.
<PAGE> 21
-14-
"Issue Date" means the original issue date of the Securities,
October 7, 1996.
"Issuer Request" or "Issuer Order" means a written request or
order signed in the name of each of the Issuers by its respective Chairman of
the Board of Directors, Vice Chairman of the Board of Directors, President or a
Vice President, and by its respective Treasurer, an Assistant Treasurer,
Secretary or an Assistant Secretary, and delivered to the Trustee.
"Lien" means any lien, mortgage, charge, security interest,
hypothecation, assignment for security or encumbrances of any kind (including
any conditional sale or capital lease or other title retention agreement, any
lease in the nature thereof, and any agreement to give any security interest).
"Maturity Date" means the date, which is set forth on the face of
the Securities, on which the Securities will mature.
"Net Cash Proceeds" means the aggregate proceeds in the form of
cash or Cash Equivalents received by the Company or any Restricted Subsidiary
in respect of any Asset Sale, including all cash or Cash Equivalents received
upon any sale, liquidation or other exchange of proceeds of Asset Sales
received in a form other than cash or Cash Equivalents, net of (i) the direct
costs relating to such Asset Sale (including, without limitation, legal,
accounting and investment banking fees, and sales commissions) and any
relocation expenses incurred as a result thereof, (ii) taxes paid or payable as
a result thereof (after taking into account any available tax credits or
deductions and any tax sharing arrangements), (iii) amounts required to be
applied to the repayment of Indebtedness secured by a Lien on the asset or
assets that were the subject of such Asset Sale, (iv) amounts deemed, in good
faith, appropriate by the Board of Directors of FV Inc. to be provided as a
reserve, in accordance with GAAP, against any liabilities associated with such
assets which are the subject of such Asset Sale (provided that the amount of
any such reserves shall be deemed to constitute Net Cash Proceeds at the time
such reserves shall have been released or are not otherwise required to be
retained as a reserve) and (v) with respect to Asset Sales by Subsidiaries, the
portion of such cash payments attributable to Persons holding a minority
interest in such Subsidiary.
"Obligations" means any principal, interest (including, without
limitation, Post-Petition Interest), penalties, fees, indemnifications,
reimbursement obligations, damages and other
<PAGE> 22
-15-
liabilities payable under the documentation governing any Indebtedness.
"Offer" has the meaning set forth in the definition of "Offer to
Purchase" below.
"Offer to Purchase" means a written offer (the "Offer") sent by
or on behalf of the Company by first-class mail, postage prepaid, to each
holder at his address appearing in the register for the Securities on the date
of the Offer offering to purchase up to the principal amount of Securities
specified in such Offer at the purchase price specified in such Offer (as
determined pursuant to this Indenture). Unless otherwise required by
applicable law, the Offer shall specify an expiration date (the "Expiration
Date") of the Offer to Purchase, which shall be not less than 20 Business Days
nor more than 60 days after the date of such Offer, and a settlement date (the
"Purchase Date") for purchase of Securities to occur no later than five
Business Days after the Expiration Date. The Company shall notify the Trustee
at least 15 Business Days (or such shorter period as is acceptable to the
Trustee) prior to the mailing of the Offer of the Company's obligation to make
an Offer to Purchase, and the Offer shall be mailed by the Company or, at the
Company's request, by the Trustee in the name and at the expense of the
Company. The Offer shall contain all the information required by applicable
law to be included therein. The Offer shall contain all instructions and
materials necessary to enable such holders to tender Securities pursuant to the
Offer to Purchase. The Offer shall also state:
(1) the Section of this Indenture pursuant to which the Offer to Purchase is
being made;
(2) the Expiration Date and the Purchase Date;
(3) the aggregate principal amount of the outstanding Securities offered to
be purchased by the Company pursuant to the Offer to Purchase
(including, if less than 100%, the manner by which such amount has been
determined pursuant to the Section of this Indenture requiring the Offer
to Purchase) (the "Purchase Amount");
(4) the purchase price to be paid by the Company for each $1,000 aggregate
principal amount of Securities accepted for payment (as specified
pursuant to this Indenture) (the "Purchase Price");
<PAGE> 23
-16-
(5) that the holder may tender all or any portion of the Securities
registered in the name of such holder and that any portion of a Security
tendered must be tendered in an integral multiple of $1,000 principal
amount;
(6) the place or places where Securities are to be surrendered for tender
pursuant to the Offer to Purchase;
(7) that interest on any Security not tendered or tendered but not purchased
by the Company pursuant to the Offer to Purchase will continue to
accrue;
(8) that on the Purchase Date the Purchase Price will become due and payable
upon each Security being accepted for payment pursuant to the Offer to
Purchase and that interest thereon shall cease to accrue on and after
the Purchase Date;
(9) that each holder electing to tender all or any portion of a Security
pursuant to the Offer to Purchase will be required to surrender such
Security at the place or places specified in the Offer prior to the
close of business on the Expiration Date (such Security being, if the
Company or the Trustee so requires, duly endorsed by, or accompanied by
a written instrument of transfer in form satisfactory to the Company and
the Trustee duly executed by, the holder thereof or his attorney duly
authorized in writing);
(10) that holders will be entitled to withdraw all or any portion of
Securities tendered if the Company (or its Paying Agent) receives, not
later than the close of business on the fifth Business Day next
preceding the Expiration Date, a telegram, telex, facsimile transmission
or letter setting forth the name of the holder, the principal amount of
the Security the holder tendered, the certificate number of the Security
the holder tendered and a statement that such holder is withdrawing all
or a portion of his tender;
(11) that (a) if Securities in an aggregate principal amount less than or
equal to the Purchase Amount are duly tendered and not withdrawn
pursuant to the Offer to Purchase, the Company shall purchase all such
Securities and (b) if Securities in an aggregate principal amount in
excess of the Purchase Amount are tendered and not withdrawn pursuant to
the Offer to Purchase, the Company shall purchase Securities having an
aggregate principal amount equal to the Purchase Amount on a pro rata
basis (with such adjustments as may be deemed appropriate so that only
Securities in denominations of
<PAGE> 24
-17-
$1,000 or integral multiples thereof shall be purchased); and
(12) that in the case of any holder whose Security is purchased only in part,
the Company shall execute and the Trustee shall authenticate and deliver
to the holder of such Security without service charge, a new Security or
Securities, of any authorized denomination as requested by such holder,
in an aggregate principal amount equal to and in exchange for the
unpurchased portion of the Security so tendered.
An Offer to Purchase shall be governed by and effected in accordance with the
provisions above pertaining to any Offer.
"Officer" means, with respect to any Person, the Chairman of the
Board of Directors, the President, any Vice President, the Chief Financial
Officer, the Treasurer, or the Secretary of such Person.
"Officers' Certificate" means a certificate signed by two
Officers or by an Officer and an Assistant Treasurer or Assistant Secretary of
each of FV Inc. and Capital complying with Sections 13.04 and 13.05; provided,
however, that when the terms of this Indenture require the delivery of an
Officers' Certificate of the Company only, such Officers' Certificate shall
mean a certificate signed by two Officers or by an Officer and an Assistant
Treasurer or Assistant Secretary of FV Inc. complying with Sections 13.04 and
13.05.
"Opinion of Counsel" means a written opinion from legal counsel
who is reasonably acceptable to the Trustee. The counsel may be an employee of
or counsel to the Issuers or the Trustee.
"Permitted Holders" means any of (a) the General Partner, FVP GP
or FV Inc. for so long as a majority of the voting power of the Voting Equity
Interests of such Person is beneficially owned by any of the Persons listed in
the other clauses of this definition, (b) James C. Vaughn, the President and
Chief Executive Officer of FV Inc. on the Issue Date, (c) John S. Koo, the
Senior Vice President and Chief Financial Officer of FV Inc. on the Issue Date,
(d) any of J.P. Morgan Investment Corporation, a Delaware corporation, Olympus
Cable, Inc., a Delaware corporation, First Union Capital Partners, Inc., a
Virginia corporation, and 1818 II Cable Corp., a Delaware corporation, (e) any
Person controlling, controlled by or under common control with any other Person
described in clauses (a) - (d) of this definition and (f) (i) the spouse or
children of any
<PAGE> 25
-18-
Person named in clause (b) or (c) of this definition and any trust for the
benefit of any such Persons or their respective spouses or children; provided,
however, that with respect to any such trust, such Persons have the sole right
to direct and control such trust and any Voting Equity Interest owned by such
trust, and (ii) any such Person's estate, executor, administrator and heirs.
"Permitted Investments" means (a) Cash Equivalents; (b)
Investments in prepaid expenses, negotiable instruments held for collection and
lease, utility and workers' compensation, performance and other similar
deposits; (c) loans and advances to employees made in the ordinary course of
business not to exceed $1 million in the aggregate at any one time outstanding;
(d) Interest Rate Protection Obligations; (e) bonds, notes, debentures or other
securities received as a result of Asset Sales permitted under Section 4.05 not
to exceed 25% of the total consideration for such Asset Sales; (f) transactions
with officers, directors and employees of the Company, the General Partner, FVP
GP, FV Inc. or any Restricted Subsidiary entered into in ordinary course of
business (including compensation or employee benefit arrangements with any such
director or employee) and consistent with past business practices; (g)
Investments existing as of the Issue Date and any amendment, extension, renewal
or modification thereof to the extent that any such amendment, extension,
renewal or modification does not require the Company or any Restricted
Subsidiary to make any additional cash or non-cash payments or provide
additional services in connection therewith; (h) any Investment for which the
sole consideration provided is Qualified Equity Interests of the Company; and
(i) any Investment consisting of a guarantee by a Restricted Subsidiary of
Senior Indebtedness or any guarantee permitted under clause (e) of Section
4.04.
"Permitted Junior Securities" means any securities of the Company
or any other Person that are (i) equity securities without special covenants or
(ii) subordinated in right of payment to all Senior Indebtedness or Guarantor
Senior Indebtedness, as the case may be, that may at the time be outstanding,
to substantially the same extent as, or to a greater extent than, the
Securities are subordinated as provided in this Indenture, in any event
pursuant to a court order so providing and as to which (a) the rate of interest
on such securities shall not exceed the effective rate of interest on the
Securities on the date of this Indenture, (b) such securities shall not be
entitled to the benefits of covenants or defaults materially more beneficial to
the holders of such securities than those in effect with respect to the
Securities on the date of this Indenture and
<PAGE> 26
-19-
(c) such securities shall not provide for amortization (including sinking fund
and mandatory prepayment provisions) commencing prior to the date six months
following the final scheduled maturity date of the Senior Indebtedness or
Guarantor Senior Indebtedness, as the case may be (as modified by the plan of
reorganization of readjustment pursuant to which such securities are issued).
"Permitted Liens" means (a) Liens on property of a Person
existing at the time such Person is merged into or consolidated with the
Company or any Restricted Subsidiary; provided, however, that such Liens were
in existence prior to the contemplation of such merger or consolidation and do
not secure any property or assets of the Company or any Restricted Subsidiary
other than the property or assets subject to the Liens prior to such merger or
consolidation; (b) Liens imposed by law such as carriers', warehousemen's and
mechanics' Liens and other similar Liens arising in the ordinary course of
business which secure payment of obligations not more than sixty (60) days past
due or which are being contested in good faith and by appropriate proceedings;
(c) Liens existing on the Issue Date; (d) Liens securing only the Securities;
(e) Liens in favor of the Company or any Restricted Subsidiary; (f) Liens for
taxes, assessments or governmental charges or claims that are not yet
delinquent or that are being contested in good faith by appropriate proceedings
promptly instituted and diligently concluded; provided, however, that any
reserve or other appropriate provision as shall be required in conformity with
GAAP shall have been made therefor; (g) easements, reservation of rights of
way, restrictions and other similar easements, licenses, restrictions on the
use of properties, or minor imperfections of title that in the aggregate are
not material in amount and do not in any case materially detract from the
properties subject thereto or interfere with the ordinary conduct of the
business of the Company and the Restricted Subsidiaries; (h) Liens resulting
from the deposit of cash or securities in connection with contracts, tenders or
expropriation proceedings, or to secure workers' compensation, surety or appeal
bonds, costs of litigation when required by law and public and statutory
obligations or obligations under franchise arrangements entered into in the
ordinary course of business; (i) Liens securing Indebtedness consisting of
Capitalized Lease Obligations, Purchase Money Indebtedness, mortgage
financings, industrial revenue bonds or other monetary obligations, in each
case incurred solely for the purpose of financing all or any part of the
purchase price or cost of construction or installation of assets used in the
business of the Company or the Restricted Subsidiaries, or repairs, additions
or improvements to such assets, provided, however, that (I) such
<PAGE> 27
-20-
Liens secure Indebtedness in an amount not in excess of the original purchase
price or the original cost of any such assets or repair, addition or
improvement thereto (plus an amount equal to the reasonable fees and expenses
in connection with the incurrence of such Indebtedness), (II) such Liens do not
extend to any other assets of the Company or the Restricted Subsidiaries (and,
in the case of repair, addition or improvements to any such assets, such Lien
extends only to the assets (and improvements thereto or thereon) repaired,
added to or improved), (III) the Incurrence of such Indebtedness is permitted
by Section 4.04 and (IV) such Liens attach within 90 days of such purchase,
construction, installation, repair, addition or improvement; (j) Liens to
secure any refinancings, renewals, extensions, modifications or replacements
(collectively, "refinancing") (or successive refinancings), in whole or in
part, of any Indebtedness secured by Liens referred to in the clauses above so
long as such Lien does not extend to any other property (other than
improvements thereto); and (k) Liens securing letters of credit entered into in
the ordinary course of business and consistent with past business practice.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, limited liability company, limited
liability limited partnership, trust, unincorporated organization or government
or any agency or political subdivision thereof.
"Post-Petition Interest" means, with respect to any Indebtedness
of any Person, all interest accrued or accruing on such Indebtedness after the
commencement of any Insolvency or Liquidation Proceeding against such Person in
accordance with and at the contract rate (including, without limitation, any
rate applicable upon default) specified in the agreement or instrument
creating, evidencing or governing such Indebtedness, whether or not, pursuant
to applicable law or otherwise, the claim for such interest is allowed as a
claim in such Insolvency or Liquidation Proceeding.
"Preferred Equity Interest," in any Person, means an Equity
Interest of any class or classes (however designated) which is preferred as to
the payment of dividends or distributions, or as to the distribution of assets
upon any voluntary or involuntary liquidation or dissolution of such Person,
over Equity Interests of any other class in such Person.
"principal" of a debt security means the principal of the
security plus, when appropriate, the premium, if any, on the security.
<PAGE> 28
-21-
"Public Equity Offering" means, with respect to any Person, a
public offering by such Person of some or all of its Qualified Equity
Interests, the net proceeds of which (after deducting any underwriting
discounts and commissions) exceed $25.0 million.
"Purchase Amount" has the meaning set forth in the definition of
"Offer to Purchase" above.
"Purchase Date" has the meaning set forth in the definition of
"Offer to Purchase" above.
"Purchase Money Indebtedness" means Indebtedness of the Company
or any Restricted Subsidiary Incurred for the purpose of financing all or any
part of the purchase price or the cost of construction or improvement of any
property, provided that the aggregate principal amount of such Indebtedness
does not exceed the lesser of the Fair Market Value of such property or such
purchase price or cost.
"Purchase Price" has the meaning set forth in the definition of
"Offer to Purchase" above.
"Qualified Equity Interest" in any Person means any Equity
Interest in such Person other than any Disqualified Equity Interest.
"redemption date," when used with respect to any Security to be
redeemed, means the date fixed for such redemption pursuant to this Indenture.
"redemption price," when used with respect to any Security to be
redeemed, means the price fixed for such redemption pursuant to this Indenture
as set forth in the form of Security annexed as Exhibit A.
"Restricted Investment" means any Investment other than a
Permitted Investment.
"Restricted Subsidiary" means any Subsidiary of the Company that
has not been designated by the Board of Directors of FV Inc., by a resolution
of the Board of Directors of FV Inc. delivered to the Trustee, as an
Unrestricted Subsidiary pursuant to Section 4.17. Any such designation may be
revoked by a resolution of the Board of Directors of FV Inc. delivered to the
Trustee, subject to the provisions of such covenant.
"SEC" means the Securities and Exchange Commission.
<PAGE> 29
-22-
"Securities" means the 11% Senior Subordinated Notes due 2006, as
amended or supplemented from time to time pursuant to the terms of this
Indenture, that are issued under this Indenture.
"Securities Custodian" means Colorado National Bank, as custodian
with respect to the Securities in global form, or any successor entity thereto.
"Senior Credit Facility" means the Amended and Restated Credit
Agreement, dated as of April 9, 1996, between the Company, the lenders named
therein, The Chase Manhattan Bank, as Administrative Agent, J.P. Morgan
Securities Inc., as Syndication Agent, and CIBC Inc., as Managing Agent,
including any deferrals, renewals, extensions, replacements, refinancings or
refundings thereof, or amendments, modifications or supplements thereto and any
agreement providing therefor, whether by or with the same or any other lender,
creditor, group of lenders or group of creditors, and including related notes,
guarantee and security agreements and other instruments and agreements executed
in connection therewith.
"Senior Indebtedness" means, at any date, (i) all Obligations of
the Company under the Senior Credit Facility, (ii) all Interest Rate Protection
Obligations of the Company, (iii) all Obligations of the Company under stand-by
letters of credit and (iv) all other Indebtedness of the Company for borrowed
money, including principal, premium, if any, and interest (including Post-
Petition Interest) on such Indebtedness, unless the instrument under which such
Indebtedness of the Company for money borrowed is Incurred expressly provides
that such Indebtedness for money borrowed is not senior or superior in right of
payment to the Securities, and all renewals, extensions, modifications,
amendments or refinancings thereof. Notwithstanding the foregoing, Senior
Indebtedness shall not include (i) to the extent that it may constitute
Indebtedness, any Obligation for federal, state, local or other taxes, (ii) any
Indebtedness among or between the Company and any Subsidiary of the Company,
(iii) to the extent that it may constitute Indebtedness, any Obligation in
respect of any trade payable Incurred for the purchase of goods or materials,
or for services obtained, in the ordinary course of business, (iv) that portion
of any Indebtedness that is Incurred in violation of this Indenture; provided,
however, that such Indebtedness shall be deemed not to have been Incurred in
violation of this Indenture for purposes of this clause (iv) if (I) the
holder(s) of such Indebtedness or their representative or the Company shall
have furnished to the Trustee an opinion of independent legal counsel,
<PAGE> 30
-23-
unqualified in all material respects, addressed to the Trustee (which legal
counsel may, as to matters of fact, rely upon an Officers' Certificate of the
Company) to the effect that the Incurrence of such Indebtedness does not
violate the provisions of this Indenture or (II) in the case of any Obligations
under the Senior Credit Facility, the holder(s) of such Obligations or their
agent or representative shall have received a representation from the Company
to the effect that the Incurrence of such Indebtedness does not violate the
provisions of this Indenture, (v) Indebtedness evidenced by the Securities,
(vi) Indebtedness of the Company that is expressly subordinate or junior in
right of payment to any other Indebtedness of the Company, (vii) to the extent
that it may constitute Indebtedness, any obligation owing under leases (other
than Capitalized Lease Obligations) or management agreements and (viii) any
obligation that by operation of law is subordinate to any general unsecured
obligations of the Company.
"Significant Restricted Subsidiary" means, at any date of
determination, (a) any Restricted Subsidiary that, together with its
Subsidiaries that constitute Restricted Subsidiaries (i) for the most recent
fiscal year of the Company accounted for more than 10.0% of the consolidated
revenues of the Company and the Restricted Subsidiaries or (ii) as of the end
of such fiscal year, owned more than 10.0% of the consolidated assets of the
Company and the Restricted Subsidiaries, all as set forth on the consolidated
financial statements of the Company and the Restricted Subsidiaries for such
year prepared in conformity with GAAP, and (b) any Restricted Subsidiary which,
when aggregated with all other Restricted Subsidiaries that are not otherwise
Significant Restricted Subsidiaries and as to which any event described in
clause (8) of Section 6.01 has occurred, would constitute a Significant
Restricted Subsidiary under clause (a) of this definition.
"Stated Maturity", when used with respect to any Security or any
installment of interest thereon, means the date specified in such Security as
the fixed date on which the principal of such Security or such installment of
interest is due and payable.
"Strategic Equity Investment" means the issuance and sale of
Qualified Equity Interests of the Company for net proceeds to the Company of at
least $25.0 million to a Person engaged primarily in the cable television,
wireless cable television, telephone, or interactive television business.
<PAGE> 31
-24-
"Subordinated Indebtedness" means any Indebtedness of the Company
which is expressly subordinated in right of payment to the Securities.
"Subsidiary" means, with respect to any Person, (i) any
corporation of which the outstanding Voting Equity Interests having at least a
majority of the votes entitled to be cast in the election of directors shall at
the time be owned, directly or indirectly, by such Person, or (ii) any other
Person of which at least a majority of Voting Equity Interests are at the time,
directly or indirectly, owned by such first named Person.
"Subsidiary Guarantee" has the meaning set forth in Section 4.19.
"Subsidiary Guarantor" means any Subsidiary of the Company that
enters into a Subsidiary Guarantee.
"Surviving Person" means, with respect to any Person involved in
or that makes any Disposition, the Person formed by or surviving such
Disposition or the Person to which such Disposition is made.
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code
Sections 77aaa-77bbbb) as in effect on the date of this Indenture, except as
provided in Section 10.03.
"Total Consolidated Indebtedness" means, as at any date of
determination, an amount equal to the aggregate amount of all Indebtedness and
Disqualified Equity Interests of the Company and the Restricted Subsidiaries
outstanding as of such date of determination.
"Trustee" means the party named as such in this Indenture until a
successor replaces it in accordance with the provisions of this Indenture and
thereafter means such successor.
"Trust Officer" means any officer within the corporate trust
department (or any successor group of the Trustee) including any vice
president, assistant vice president, assistant secretary or any other officer
or assistant officer of the Trustee customarily performing functions similar to
those performed by the persons who at that time shall be such officers, and
also means, with respect to a particular corporate trust matter, any other
officer to whom such trust matter is referred because of his knowledge of and
familiarity with the particular subject.
<PAGE> 32
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"Unrestricted Subsidiary" means any Subsidiary of the Company
designated as such pursuant to Section 4.17. Any such designation may be
revoked by a resolution of the Board of Directors of the Company delivered to
the Trustee, subject to the provisions of Section 4.17.
"Voting Equity Interests" means Equity Interests in a corporation
or other Person with voting power under ordinary circumstances entitling the
holders thereof to elect the Board of Directors or other governing body of such
corporation or Person.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (i) the sum
of the products obtained by multiplying (a) the amount of each then remaining
installment, sinking fund, serial maturity or other required scheduled payment
of principal, including payment of final maturity, in respect thereof, by (b)
the number of years (calculated to the nearest one-twelfth) that will elapse
between such date and the making of such payment, by (ii) the then outstanding
aggregate principal amount of such Indebtedness.
"Wholly Owned Restricted Subsidiary" means any Restricted
Subsidiary all of the outstanding Voting Equity Interests (other than
directors' qualifying shares) of which are owned, directly or indirectly, by
the Company.
SECTION 1.02. Other Definitions.
<TABLE>
<CAPTION>
Term Defined in Section
---- ------------------
<S> <C>
"Affiliate Transaction" 4.03
"Bankruptcy Law" 6.01
"Custodian" 6.01
"Event of Default" 6.01
"Funding Guarantor" 11.05
"Guarantor Blockage Period" 12.02(a)
"Guarantor Payment Blockage Notice" 12.02(a)
"Other Indebtedness" 4.19
"Participants" 2.13
"Paying Agent" 2.03
"Payment Blockage Notice" 8.02(a)
"Payment Blockage Period" 8.02(a)
"Permitted Indebtedness" 4.04
"Physical Securities" 2.13
"Registrar" 2.03
"Required Filing Date" 4.12
"Restricted Payment" 4.06
"Revocation" 4.17
"United States Government Obligation" 9.01
"Unutilized Net Cash Proceeds" 4.05
</TABLE>
<PAGE> 33
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SECTION 1.03. Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following meanings:
"Commission" means the SEC.
"indenture securities" means the Securities.
"indenture security holder" means a Securityholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" or "obligors" on the indenture securities means the
Issuers or any other obligor on the Securities.
All other TIA terms used in this Indenture that are defined by
the TIA, defined by TIA reference to another statute or defined by Commission
rule and not otherwise defined herein have the meanings assigned to them
therein.
SECTION 1.04. Rules of Construction.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with generally accepted accounting
principles in effect from time to time, and any other reference in this
Indenture to "generally accepted accounting principles" refers to GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and words in the
plural include the singular;
<PAGE> 34
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(5) provisions apply to successive events and transactions;
and
(6) "herein," "hereof" and other words of similar import refer
to this Indenture as a whole and not to any particular Article, Section
or other subdivision.
ARTICLE TWO
THE SECURITIES
SECTION 2.01. Form and Dating.
The Securities and the Trustee's certificates of authentication
shall be substantially in the form of Exhibit A. The Securities may have
notations, legends or endorsements required by law, stock exchange rule or
usage. Any notations, legends or endorsements not contained in the form of
Security contained in Exhibit A shall be delivered in writing to the Trustee.
The Issuers shall approve the form of the Securities and any notation, legend
or endorsement on them. Each Security shall be dated the date of its
authentication.
The terms and provisions contained in the form of the Securities,
annexed hereto as Exhibit A, shall constitute, and are hereby expressly made, a
part of this Indenture.
SECTION 2.02. Execution and Authentication.
Two Officers shall sign the Securities for each of the Issuers by
facsimile signature.
If an Officer whose signature is on a Security no longer holds
that office at the time the Trustee authenticates the Security, the Security
shall be valid nevertheless.
A Security shall not be valid until the Trustee manually signs
the certificate of authentication on the Security. The signature shall be
conclusive evidence that the Security has been authenticated under this
Indenture.
The Trustee shall authenticate Securities for original issue in
the aggregate principal amount of up to $200,000,000, upon a written order
signed by two Officers or by an Officer and an Assistant Treasurer or Assistant
Secretary of each of the Issuers. The order shall specify the amount of
Securities to be authenticated and the date on which the original issue of
Securities is to be authenticated. The aggregate principal
<PAGE> 35
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amount of Securities outstanding at any time may not exceed $200,000,000 except
as provided in Section 2.07.
The Securities shall initially be issued in the form of one or
more permanent Global Securities, substantially in the form set forth in
Exhibit A. Global Securities shall be registered in the name of a nominee of
the Depository and deposited with the Trustee, at its principal operations
office in St. Paul, Minnesota, in its capacity as Securities Custodian, duly
executed by the Company and authenticated by the Trustee as hereinafter
provided. Each Global Security shall evidence such of the outstanding
Securities as shall be specified therein and each shall provide that it shall
evidence the aggregate principal amount of outstanding Securities from time to
time endorsed thereon, and that the aggregate principal amount of outstanding
Securities represented thereby may from time to time be reduced or increased,
as applicable, to reflect exchanges, redemptions, and other similar
transactions. Any endorsement of a Global Security to reflect the amount of
any increase or decrease in the amount of outstanding Securities represented
thereby shall be made by the Trustee or the Securities Custodian, at the
direction of the Trustee, in accordance with instructions given by the Holder
thereof.
The Securities shall be issuable only in registered form without
coupons and only in denominations of $1,000 and any integral multiple thereof.
SECTION 2.03. Registrar; Paying Agent; Depository.
The Issuers shall maintain an office or agency where Securities
may be presented for registration of transfer or for exchange ("Registrar") and
an office or agency where Securities may be presented for payment ("Paying
Agent"). The Issuers may have one or more co-Registrars and one or more
additional paying agents. The term "Paying Agent" includes any additional
paying agent.
The Issuers shall enter into an appropriate agency agreement with
any Agent not a party to this Indenture. The agreement shall implement the
provisions of this Indenture that relate to such Agent and shall, if required,
incorporate the provisions of the TIA. The Issuers shall notify the Trustee of
the name and address of any such Agent. If the Issuers fail to maintain a
Registrar or Paying Agent, the Trustee shall act as such and shall be entitled
to appropriate compensation in accordance with the provisions of Section 7.07.
<PAGE> 36
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The Issuers initially appoint the Trustee as Registrar and Paying
Agent. The Issuers shall give written notice to the Trustee in the event that
either of the Issuers decides to act as Registrar or Paying Agent.
The Issuers initially appoint DTC to act as Depository with
respect to any Global Securities and initially appoint the Trustee to act as
Securities Custodian with respect to any Global Securities.
SECTION 2.04. Paying Agent To Hold Money in Trust.
The Issuers shall require each Paying Agent to agree in writing
to hold in trust for the benefit of Securityholders or the Trustee all money
held by the Paying Agent for the payment of principal of or interest on the
Securities (whether such money has been paid to it by the Issuers or any other
obligor on the Securities), and the Issuers and the Paying Agent shall each
notify the Trustee of any default by either of the Issuers (or any other
obligor on the Securities) in making any such payment. If either of the
Issuers or a Subsidiary of either of the Issuers acts as Paying Agent, it shall
segregate the money and hold it as a separate trust fund. The Issuers at any
time may require a Paying Agent to pay all money held by it to the Trustee and
account for any funds disbursed and the Trustee may at any time during the
continuance of any payment default, upon written request to a Paying Agent,
require such Paying Agent to pay all money held by it to the Trustee and to
account for any funds disbursed. Upon making such payment the Paying Agent
shall have no further liability for the money delivered to the Trustee.
SECTION 2.05. Securityholder Lists.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Securityholders. If the Trustee is not the Registrar, the Issuers shall
furnish to the Trustee at least five Business Days before each Interest Payment
Date and at such other times as the Trustee may request in writing a list in
such form and as of such date as the Trustee may reasonably require of the
names and addresses of Securityholders.
SECTION 2.06. Transfer and Exchange.
Subject to the provisions of Section 2.13, when Securities are
presented to the Registrar or a co-Registrar with a request to register the
transfer or to exchange them for an equal principal amount of Securities of
other authorized
<PAGE> 37
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denominations, the Registrar shall register the transfer or make the exchange
as requested if its requirements for such transactions are met. To permit
registrations of transfers and exchanges, the Issuers shall execute and the
Trustee shall authenticate Securities. The date of any Security issued
pursuant to this Section 2.06 shall be the date of such transfer or exchange.
No service charge shall be made to the Securityholder for any registration of
transfer or exchange, but the Issuers may require from the Securityholder
payment of a sum sufficient to cover any transfer tax or similar governmental
charge payable in connection therewith (other than any such transfer taxes or
similar governmental charge payable upon exchanges pursuant to an Offer to
Purchase or Section 2.10, 3.06 or 10.05, in which event the Issuers shall be
responsible for the payment of such taxes).
Any Holder of the Global Security shall, by acceptance of such
Global Security, agree that transfers of beneficial interests in such Global
Security may be effected only through a book-entry system (as described in
Section 2.13) maintained by the Depository (or its agent), and that ownership
of a beneficial interest in the Global Security shall be required to be
reflected in a book entry.
SECTION 2.07. Replacement Securities.
If a mutilated Security is surrendered to the Trustee or if the
Holder of a Security claims that the Security has been lost, destroyed or
wrongfully taken, the Issuers shall issue and the Trustee shall authenticate a
replacement Security if the Trustee's requirements are met. An indemnity bond
in an amount sufficient in the judgment of the Issuers and the Trustee to
protect the Issuers, the Trustee or any Agent from any loss which any of them
may suffer if a Security is replaced may be required by the Trustee or the
Issuers. The Issuers and the Trustee each may charge such Holder for its
expenses in replacing such Security.
Every replacement Security is an additional obligation of the
Issuers.
SECTION 2.08. Outstanding Securities.
Securities outstanding at any time are all Securities that have
been authenticated by the Trustee except for those canceled by it, those
delivered to it for cancellation and those described in this Section as not
outstanding. Except as provided in paragraph 5(b) of the Securities, a
Security does not cease to
<PAGE> 38
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be outstanding because either of the Issuers or an Affiliate of either of the
Issuers holds the Security.
If a Security is replaced pursuant to Section 2.07, it ceases to
be outstanding unless the Trustee receives proof satisfactory to it that the
replaced Security is held by a bona fide purchaser.
If the Paying Agent (other than either of the Issuers, a
Subsidiary of either of the Issuers or an Affiliate of either of the Issuers)
holds on a redemption date or Maturity Date money sufficient to pay the
principal of, and interest on Securities payable on that date, then on and
after that date such Securities cease to be outstanding and interest on them
ceases to accrue.
SECTION 2.09. Treasury Securities.
In determining whether the Holders of the required principal
amount of Securities have concurred in any direction, waiver or consent,
Securities owned by either of the Issuers, any Subsidiary Guarantor or any of
their respective Affiliates shall be disregarded, except that for the purposes
of determining whether the Trustee shall be protected in relying on any such
direction, waiver or consent, only Securities that the Trustee actually knows
are so owned shall be so disregarded.
SECTION 2.10. Temporary Securities.
Until definitive Securities are ready for delivery, the Issuers
may prepare and the Trustee shall authenticate temporary Securities. Temporary
Securities shall be substantially in the form of definitive Securities but may
have variations that the Issuers consider appropriate for temporary Securities.
Without unreasonable delay, the Issuers shall prepare and the Trustee shall
authenticate definitive Securities in exchange for temporary Securities. Until
such exchange, temporary Securities shall be entitled to the same rights,
benefits and privileges as definitive Securities.
SECTION 2.11. Cancellation.
The Issuers at any time may deliver Securities to the Trustee for
cancellation. The Registrar and the Paying Agent shall forward to the Trustee
any Securities surrendered to them for transfer, exchange or payment. The
Trustee and no one else shall cancel all Securities surrendered for transfer,
exchange, payment or cancellation. Except as provided in Section 2.07, the
Issuers may not issue new Securities to replace, or reissue or
<PAGE> 39
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resell, Securities which the Issuers have redeemed, paid, purchased on the open
market or otherwise, or otherwise acquired or have been delivered to the
Trustee for cancellation. The Trustee (subject to the record-retention
requirements of the Exchange Act) may, but shall not be required to destroy
canceled Securities.
SECTION 2.12. Defaulted Interest.
If the Issuers default in a payment of interest on the
Securities, they shall pay the defaulted interest, plus any interest payable on
the defaulted interest pursuant to Section 4.01 hereof, to the persons who are
Securityholders on a subsequent special record date, and such term, as used in
this Section 2.12 with respect to the payment of any defaulted interest, shall
mean the fifteenth day next preceding the date fixed by the Issuers for the
payment of defaulted interest, whether or not such day is a Business Day. At
least 15 days before such special record date, the Issuers shall mail to each
Securityholder and to the Trustee a notice that states such special record
date, the payment date and the amount of defaulted interest to be paid.
SECTION 2.13. Book-Entry Provisions for Global Securities.
(a) The Global Securities initially shall (i) be registered in
the name of the Depository or the nominee of such Depository, (ii) be delivered
to the Trustee as custodian for such Depository and (iii) bear legends as set
forth in Exhibit C.
Members of, or participants in, the Depository ("Participants")
shall have no rights under this Indenture with respect to any Global Security
held on their behalf by the Depository, or the Trustee as its custodian, or
under the Global Security, and the Depository may be treated by the Issuers,
the Trustee and any agent of the Issuers or the Trustee as the absolute owner
of the Global Security for all purposes whatsoever. Notwithstanding the
foregoing, nothing herein shall prevent the Issuers, the Trustee or any agent
of the Issuers or the Trustee from giving effect to any written certification,
proxy or other authorization furnished by the Depository or impair, as between
the Depository and its Participants, the operation of customary practices
governing the exercise of the rights of a Holder of any Security.
(b) Transfers of Global Securities shall be limited to
transfers in whole, but not in part, to the Depository, its successors or their
respective nominees. Interests of beneficial
<PAGE> 40
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owners in the Global Securities may be transferred or exchanged for
certificated Securities ("Physical Securities") in accordance with the rules
and procedures of the Depository. In addition, Physical Securities shall be
transferred to all beneficial owners in exchange for their beneficial interests
in Global Securities if (i) the Depository notifies the Issuers that it is
unwilling or unable to continue as Depository for any Global Security and a
successor depositary is not appointed by the Issuers within 30 days of such
notice or (ii) an Event of Default has occurred and is continuing and the
Registrar has received a request from the Depository to issue Physical
Securities.
(c) In connection with any transfer or exchange of a portion
of the beneficial interest in any Global Security to beneficial owners pursuant
to paragraph (b), the Registrar shall (if one or more Physical Securities are
to be issued) reflect on its books and records the date and a decrease in the
principal amount of the Global Security in an amount equal to the principal
amount of the beneficial interest in the Global Security to be transferred or
exchanged, and the Issuers shall execute (and any Subsidiary Guarantor shall
execute the Subsidiary Guarantee endorsed thereon), and the Trustee, pursuant
to instructions set forth in an Officers' Certificate from each of the Issuers,
shall authenticate and deliver, one or more Physical Securities of like tenor
and amount.
(d) In connection with the transfer or exchange of Global
Securities as an entirety to beneficial owners pursuant to paragraph (b), the
Global Securities shall be deemed to be surrendered to the Trustee for
cancellation, and the Issuers shall execute (and any Subsidiary Guarantor shall
execute the Subsidiary Guarantee endorsed thereon), and the Trustee, pursuant
to instructions set forth in an Officers' Certificate from each of the Issuers,
shall authenticate and deliver, to each beneficial owner identified by the
Depository in exchange for its beneficial interest in the Global Securities, an
equal aggregate principal amount of Physical Securities of authorized
denominations.
(e) The Holder of any Global Security may grant proxies and
otherwise authorize any person, including Participants and persons that may
hold interests through Participants, to take any action which a Holder is
entitled to take under this Indenture or the Securities.
<PAGE> 41
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ARTICLE THREE
REDEMPTION
SECTION 3.01. Notices to Trustee.
If the Issuers are to effect the redemption of any Securities
pursuant to paragraph 5 of the Securities at the applicable redemption price
set forth therein, they shall notify the Trustee in writing of the redemption
date and the principal amount of Securities to be redeemed.
The Issuers shall give the notice provided for in this Section
3.01 at least 45 days before the redemption date (unless a shorter notice shall
be agreed to by the Trustee in writing), together with an Officers' Certificate
stating that such redemption will comply with the conditions contained herein.
SECTION 3.02. Selection of Securities To Be Redeemed.
If less than all of the Securities are to be redeemed pursuant to
paragraph 5 thereof, the Trustee shall select the Securities to be redeemed pro
rata or by lot or in such other manner as the Trustee shall deem appropriate
and fair. The Trustee shall make the selection from the Securities then
outstanding, subject to redemption and not previously called for redemption.
The Trustee may select for redemption portions (equal to $1,000 or any integral
multiple thereof) of the principal of Securities that have denominations larger
than $1,000. Provisions of this Indenture that apply to Securities called for
redemption also apply to portions of Securities called for redemption.
SECTION 3.03. Notice of Redemption.
At least 30 days but not more than 60 days before a redemption
date, the Issuers shall mail a notice of redemption by first-class mail to each
Holder whose Securities are to be redeemed at such Holder's registered address.
The notice shall identify the Securities to be redeemed and shall
state:
(1) the redemption date;
(2) the redemption price;
(3) the CUSIP number;
<PAGE> 42
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(4) the name and address of the Paying Agent to which the
Securities are to be surrendered for redemption;
(5) that Securities called for redemption must be surrendered
to the Paying Agent to collect the redemption price;
(6) that, unless the Issuers default in making the redemption
payment, interest on Securities called for redemption ceases to accrue
on and after the redemption date and the only remaining right of the
Holders is to receive payment of the redemption price upon surrender of
such Securities to the Paying Agent; and
(7) if any Security is being redeemed in part, the portion of
the principal amount of such Security to be redeemed and that, after the
redemption date, upon surrender of such Security, a new Security or
Securities in principal amount equal to the unredeemed portion thereof
will be issued.
At the Issuers' request, the Trustee shall give the notice of
redemption on behalf of the Issuers, in the Issuers' name and at the Issuers'
expense.
SECTION 3.04. Effect of Notice of Redemption.
Once a notice of redemption is mailed, Securities called for
redemption become due and payable on the redemption date and at the redemption
price. Upon surrender to the Paying Agent, such Securities shall be paid at
the redemption price, plus accrued interest thereon to the redemption date, but
interest installments whose maturity is on or prior to such redemption date
shall be payable to the Holders of record at the close of business on the
relevant record dates referred to in the Securities. The Trustee shall not be
required to (i) issue, authenticate, register the transfer of or exchange any
Security during a period beginning 15 days before the date a notice of
redemption is mailed and ending at the close of business on the date the
redemption notice is mailed, or (ii) register the transfer or exchange of any
Security so selected for redemption in whole or in part, except the unredeemed
portion of any Security being redeemed in part.
SECTION 3.05. Deposit of Redemption Price.
At least one Business Day before the redemption date, the Issuers
shall deposit with the Paying Agent (or if either of
<PAGE> 43
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the Issuers is the Paying Agent, such Issuer shall, on or before the redemption
date, segregate and hold in trust) money sufficient to pay the redemption price
of and accrued and unpaid interest on all Securities to be redeemed on that
date other than Securities or portions thereof called for redemption on that
date which have been delivered by the Issuers to the Trustee for cancellation.
SECTION 3.06. Securities Redeemed in Part.
Upon surrender of a Security that is redeemed in part, the
Trustee shall authenticate for the Holder a new Security equal in principal
amount to the unredeemed portion of the Security surrendered.
ARTICLE FOUR
COVENANTS
SECTION 4.01. Payment of Securities.
The Issuers shall pay the principal of and interest on the
Securities in the manner provided in the Securities. An installment of
principal or interest shall be considered paid on the date due if the Trustee
or Paying Agent (other than the Issuers, a Subsidiary or an Affiliate of the
Issuers) holds on that date money designated for and sufficient to pay the
installment in full and is not prohibited from paying such money to the Holders
of the Securities pursuant to the terms of this Indenture.
The Issuers shall pay interest on overdue principal at the same
rate per annum borne by the Securities. The Issuers shall pay interest on
overdue installments of interest at the same rate per annum borne by the
Securities, to the extent lawful.
Payments of the principal of and interest on any Global
Securities will be made to the Depository or its nominee, as the case may be,
as the registered owner thereof. None of the Issuers, the Trustee nor any
Paying Agent will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests in any Global Securities or for maintaining, supervising or reviewing
any records relating to such beneficial ownership interest.
<PAGE> 44
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SECTION 4.02. Maintenance of Office or Agency.
The Issuers shall maintain in the Borough of Manhattan, The City
of New York, an office or agency where Securities may be surrendered for
registration of transfer or exchange or for presentation for payment and where
notices and demands to or upon the Issuers in respect of the Securities and
this Indenture may be served. The Issuers shall give prompt written notice to
the Trustee of the location, and any change in the location, of such office or
agency. If at any time the Issuers shall fail to maintain any such required
office or agency or shall fail to furnish the Trustee with the address thereof,
such presentations, surrenders, notices and demands may be made or served at
the address of the Trustee set forth in Section 13.02.
The Issuers may also from time to time designate one or more
other offices or agencies where the Securities may be presented or surrendered
for any or all such purposes and may from time to time rescind such
designations; provided that no such designation or rescission shall in any
manner relieve the Issuers of their obligation to maintain an office or agency
in the Borough of Manhattan, The City of New York, for such purposes. The
Issuers shall give prompt written notice to the Trustee of any such designation
or rescission and of any change in the location of any such other office or
agency.
SECTION 4.03. Limitation on Transactions with Affiliates and Related Persons.
The Company will not, and will not permit, cause or suffer any
Restricted Subsidiary to, directly or indirectly, conduct any business or enter
into any transaction (or series of related transactions) with or for the
benefit of any of their respective Affiliates or any beneficial holder of 10%
or more of the Equity Interests of the Company or any officer, director or
employee of the Company or any Restricted Subsidiary (each an "Affiliate
Transaction"), unless (a) such Affiliate Transaction is on terms which are no
less favorable to the Company or such Restricted Subsidiary, as the case may
be, than would be available in a comparable transaction with an unaffiliated
third party, (b) if such Affiliate Transaction (or series of related Affiliate
Transactions) involves aggregate payments or other consideration having a Fair
Market Value in excess of $5.0 million, a majority of the disinterested members
of the Board of Directors of FV Inc. shall have approved such transaction and
determined that such transaction complies with the foregoing provisions and (c)
if such Affiliate Transaction (or series of related Affiliate Transactions)
involves aggregate payments or
<PAGE> 45
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other consideration having a Fair Market Value of $25.0 million or more, the
Company shall have obtained a written opinion from an Independent Financial
Advisor stating that the terms of such Affiliate Transaction are fair to the
Company or the Restricted Subsidiary, as the case may be, from a financial
point of view.
Notwithstanding the foregoing, the restrictions set forth in this
Section 4.03 shall not apply to (i) transactions with or among the Company and
the Wholly Owned Restricted Subsidiaries, (ii) customary directors' fees,
indemnification and similar arrangements, consulting fees, employee salaries,
bonuses or employment agreements, compensation or employee benefit arrangements
and incentive arrangements with any officer, director or employee of the
Company entered into in the ordinary course of business (including customary
benefits thereunder) and payments under any indemnification arrangements
permitted by applicable law, (iii) the Agreement of Limited Partnership of the
Company as in effect on the Issue Date, including any amendment or extension
thereof that does not otherwise violate any other covenant set forth in this
Indenture, and any transactions undertaken pursuant to any other contractual
obligations in existence on the Issue Date (as in effect on the Issue Date),
(iv) the issue and sale by the Company to its partners or stockholders of
Qualified Equity Interests, (v) any Restricted Payments made in compliance with
Section 4.06 (including without limitation the making of any payments or
distributions permitted to be made in accordance with clauses (i) through (vi)
of the penultimate paragraph of Section 4.06), (vi) loans and advances to
officers, directors and employees of the Company and the Restricted
Subsidiaries for travel, entertainment, moving and other relocation expenses,
in each case made in the ordinary course of business and consistent with past
business practices, (vii) customary commercial banking, investment banking,
underwriting, placement agent or financial advisory fees paid in connection
with services rendered to the Company and its Subsidiaries in the ordinary
course, (viii) the Incurrence of intercompany Indebtedness permitted pursuant
to clause (d) under the definition of "Permitted Indebtedness" set forth in
Section 4.04, (ix) the pledge of Equity Interests of Unrestricted Subsidiaries
to support the Indebtedness thereof and (x) the Senior Credit Facility.
SECTION 4.04. Limitation on Indebtedness.
The Company will not, and will not permit any Restricted
Subsidiary to, directly or indirectly, Incur any Indebtedness (including
Acquired Indebtedness) or issue any Disqualified Equity Interests except for
Permitted Indebtedness;
<PAGE> 46
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provided, however, that the Company or any Restricted Subsidiary may Incur
Indebtedness and the Company or any Restricted Subsidiary may issue
Disqualified Equity Interests if, at the time of and immediately after giving
pro forma effect to such Incurrence of Indebtedness or issuance of Disqualified
Equity Interests and the application of the proceeds therefrom, the Debt to
Operating Cash Flow Ratio would be less than or equal to (i) 7.0 to 1.0 if the
date of such Incurrence is on or before December 31, 1997 and (ii) 6.75 to 1.0
thereafter.
The foregoing limitations will not apply to the Incurrence of any
of the following (collectively, "Permitted Indebtedness"), each of which shall
be given independent effect:
(a) Indebtedness under the Securities and this Indenture;
(b) Indebtedness and Disqualified Equity Interests of the
Company and the Restricted Subsidiaries outstanding on the Issue Date;
(c) Indebtedness under the Senior Credit Facility in an
aggregate principal amount at any one time outstanding not to exceed the
sum of (A) $265.0 million, which amount shall be reduced by (x) any
permanent reduction of commitments thereunder and (y) any other
repayment accompanied by a permanent reduction of commitments thereunder
(other than in connection with any refinancing thereof), plus (B) any
amounts outstanding under the Senior Credit Facility that utilize
subparagraph (i) of this paragraph of Section 4.04;
(d) (x) Indebtedness of any Restricted Subsidiary owed to and
held by the Company or any Wholly Owned Restricted Subsidiary and (y)
Indebtedness of the Company owed to and held by any Wholly Owned
Restricted Subsidiary which is unsecured and subordinated in right of
payment to the payment and performance of the Issuers' obligations under
any Senior Indebtedness, this Indenture and the Securities; provided,
however, that an Incurrence of Indebtedness that is not permitted by
this clause (d) shall be deemed to have occurred upon (i) any sale or
other disposition of any Indebtedness of the Company or a Wholly Owned
Restricted Subsidiary referred to in this clause (d) to a Person (other
than the Company or a Wholly Owned Restricted Subsidiary), (ii) any sale
or other disposition of Equity Interests of a Wholly Owned Restricted
Subsidiary which holds Indebtedness of the Company or another Wholly
Owned Restricted Subsidiary
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such that such Wholly Owned Restricted Subsidiary ceases to be a Wholly
Owned Restricted Subsidiary or (iii) designation of a Wholly Owned
Restricted Subsidiary which holds Indebtedness of the Company as an
Unrestricted Subsidiary;
(e) guarantees by any Restricted Subsidiary of Indebtedness of
the Company;
(f) Interest Rate Protection Obligations of the Company or any
Restricted Subsidiary relating to Indebtedness of the Company or such
Restricted Subsidiary, as the case may be (which Indebtedness (i) bears
interest at fluctuating interest rates and (ii) is otherwise permitted
to be Incurred under this Section 4.04); provided, however, that the
notional principal amount of such Interest Rate Protection Obligations
does not exceed the principal amount of the Indebtedness to which such
Interest Rate Protection Obligations relate;
(g) Purchase Money Indebtedness and Capitalized Lease
Obligations of the Company or any Restricted Subsidiary which do not
exceed $5.0 million in the aggregate at any one time outstanding;
(h) Indebtedness or Disqualified Equity Interests of the
Company or any Restricted Subsidiary to the extent representing a
replacement, renewal, refinancing or extension (collectively, a
"refinancing") of outstanding Indebtedness or Disqualified Equity
Interests of the Company or any Restricted Subsidiary Incurred in
compliance with the Debt to Operating Cash Flow Ratio of the first
paragraph of this Section 4.04 or clause (a) or (b) of this paragraph of
this Section 4.04; provided, however, that (i) Indebtedness or
Disqualified Equity Interests of the Company may not be refinanced under
this clause (h) with Indebtedness or Disqualified Equity Interests of
any Restricted Subsidiary, (ii) any such refinancing shall not exceed
the sum of the principal amount (or, if such Indebtedness or
Disqualified Equity Interests provide for a lesser amount to be due and
payable upon a declaration of acceleration thereof at the time of such
refinancing, an amount no greater than such lesser amount) of the
Indebtedness or Disqualified Equity Interests being refinanced plus the
amount of accrued interest or dividends thereon and the amount of any
reasonably determined prepayment premium necessary to accomplish such
refinancing and such reasonable fees and expenses incurred in connection
therewith, (iii) Indebtedness representing a refinancing of Indebtedness
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other than Senior Indebtedness shall have a Weighted Average Life to
Maturity equal to or greater than the Weighted Average Life to Maturity
of the Indebtedness being refinanced, and (iv) Indebtedness that is pari
passu with the Securities may only be refinanced with Indebtedness that
is made pari passu with or subordinate in right of payment to the
Securities and Subordinated Indebtedness or Disqualified Equity
Interests may only be refinanced with Subordinated Indebtedness or
Disqualified Equity Interests; and
(i) in addition to the items referred to in clauses (a)
through (h) above, Indebtedness of the Company (including any
Indebtedness under the Senior Credit Facility that utilizes this
subparagraph (i)) having an aggregate principal amount not to exceed
$20.0 million at any time outstanding.
SECTION 4.05. Disposition of Proceeds of Asset Sales.
(a) The Company will not, and will not permit any Restricted
Subsidiary to, directly or indirectly, make any Asset Sale, unless (i) the
Company or such Restricted Subsidiary, as the case may be, receives
consideration at the time of such Asset Sale at least equal to the Fair Market
Value of the assets sold or otherwise disposed of and (ii) either (A) at least
75% of such consideration consists of cash or Cash Equivalents or (B) at least
75% of such consideration consists of (x) properties and capital assets
(including franchises and licenses required to own or operate such properties)
to be used in the same lines of business being conducted by the Company or any
Restricted Subsidiary at such time or (y) Equity Interests in one or more
Persons which thereby become Wholly Owned Restricted Subsidiaries whose assets
consist primarily of such properties and capital assets. The amount of any (i)
liabilities of the Company or any Restricted Subsidiary that are actually
assumed by the transferee in such Asset Sale and from which the Company and the
Restricted Subsidiaries are fully released shall be deemed to be cash for
purposes of determining the percentage of cash consideration received by the
Company or the Restricted Subsidiaries and (ii) notes or other similar
obligations received by the Company or the Restricted Subsidiaries from such
transferee that are immediately converted (or are converted within thirty days
of the related Asset Sale) by the Company or the Restricted Subsidiaries into
cash shall be deemed to be cash, in an amount equal to the net cash proceeds
realized upon such conversion, for purposes of determining the percentage of
cash consideration received by the Company or the Restricted Subsidiaries.
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The Company or such Restricted Subsidiary, as the case may be,
may (i) apply the Net Cash Proceeds of any Asset Sale within 365 days of
receipt thereof to repay Senior Indebtedness and permanently reduce any related
commitment; provided, however, that if Indebtedness under the revolving credit
portion of the Senior Credit Facility is repaid, the Company need not reduce
the commitments for such revolving credit portion, or (ii) commit in writing to
acquire, construct or improve properties and capital assets (including
franchises and licenses required to own or operate any such assets or
properties) to be used in the same line of business being conducted by the
Company or any Restricted Subsidiary at such time and so apply such Net Cash
Proceeds within 365 days of the receipt thereof.
To the extent all or part of the Net Cash Proceeds of any Asset
Sale are not so applied within 365 days of such Asset Sale (such Net Cash
Proceeds, the "Unutilized Net Cash Proceeds"), the Company shall, within 30
days of such 365th day, make an Offer to Purchase from all Holders of
Securities up to a maximum principal amount (expressed as a multiple of $1,000)
of Securities equal to such Unutilized Net Cash Proceeds, at a purchase price
in cash equal to 100% of the principal amount thereof, plus accrued and unpaid
interest thereon, if any, to the date of purchase; provided, however, that the
Offer to Purchase may be deferred until there are aggregate Unutilized Net Cash
Proceeds equal to or in excess of $5.0 million, at which time the entire amount
of such Unutilized Net Cash Proceeds, and not just the amount in excess of $5.0
million, shall be applied as required pursuant to this paragraph. In the event
that any other Indebtedness of the Company which ranks pari passu with the
Securities requires the repayment or prepayment thereof, or an offer to
purchase to be made to repurchase such Indebtedness, upon the consummation of
any Asset Sale, the Company may apply the Unutilized Net Cash Proceeds
otherwise required to be applied to an Offer to Purchase to repay, prepay or
offer to purchase such other Indebtedness and to an Offer to Purchase pro rata
based upon the aggregate principal amount of the Securities then outstanding
and the aggregate principal amount (or accreted amount, if less) of such other
Indebtedness then outstanding. The Offer to Purchase shall remain open for a
period of 20 Business Days or such longer period as may be required by law. To
the extent the aggregate amount of Securities tendered pursuant to the Offer to
Purchase exceeds the Unutilized Net Cash Proceeds, Securities shall be
purchased among Holders on a proportionate basis (based on the relative
aggregate principal amounts validly tendered for purchase by Holders thereof).
To the extent the Unutilized Net Cash Proceeds exceed the aggregate amount of
Securities tendered by the Holders of the Securities
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pursuant to the Offer to Purchase, the Company may retain and utilize any
portion of the Unutilized Net Cash Proceeds not applied to repurchase the
Securities for any purpose consistent with the other terms of this Indenture.
In the event that the Company makes an Offer to Purchase the
Securities, the Company shall comply with any applicable securities laws and
regulations, including any applicable requirements of Section 14(e) of, and
Rule 14e-1 under, the Exchange Act and any violation of the provisions of this
Indenture relating to such Offer to Purchase occurring as a result of such
compliance shall not be deemed an Event of Default or an event that with the
passing of time or giving of notice, or both, would constitute an Event of
Default.
(b) The Company will mail the Offer for an Offer to Purchase
required pursuant to Section 4.05(a) not more than 395 days after consummation
of the Asset Sale resulting in the Offer to Purchase. Each Holder shall be
entitled to tender all or any portion of the Securities owned by such Holder
pursuant to the Offer to Purchase, subject to the requirement that any portion
of a Security tendered must be tendered in an integral multiple of $1,000
principal amount and subject to any proration of the Offer among tendering
Holders if the aggregate amount of Securities tendered exceeds the Unutilized
Net Cash Proceeds.
(c) Not later than the date of the Offer with respect to an
Offer to Purchase pursuant to this Section 4.05, the Company shall deliver to
the Trustee an Officers' Certificate as to the Purchase Amount.
On or prior to the Purchase Date specified in the Offer to
Purchase, the Company shall (i) accept for payment (on a pro rata basis, if
necessary) Securities or portions thereof validly tendered pursuant to such
Offer, (ii) deposit with the Paying Agent (or, if the Company is acting as its
own Paying Agent, segregate and hold in trust as provided in Section 2.04)
money sufficient to pay the Purchase Price of all Securities or portions
thereof so accepted and (iii) deliver or cause to be delivered to the Trustee
for cancellation all Securities so accepted together with an Officers'
Certificate stating the Securities or portions thereof accepted for payment by
the Company. The Paying Agent (or the Company, if so acting) shall promptly
mail or deliver to Holders of Securities so accepted payment in an amount equal
to the Purchase Price for such Securities, and the Trustee shall promptly
authenticate and mail or deliver to each Holder a new Security or Securities
equal in principal amount to any unpurchased portion of the Security
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surrendered as requested by the Holder. Any Security not accepted for payment
shall be promptly mailed or delivered by the Company to the Holder thereof.
The Company shall publicly announce the results of the Offer on or as soon as
practicable after the Purchase Date.
SECTION 4.06. Limitation on Restricted Payments.
The Company will not, and will not permit any Restricted
Subsidiary to, directly or indirectly,
(i) declare or pay any dividend or any other distribution on
any Equity Interests of the Company or any Restricted Subsidiary or make
any payment or distribution to the direct or indirect holders (in their
capacities as such) of Equity Interests of the Company or any Restricted
Subsidiary (other than payments or distributions made to the Company or
a Wholly Owned Restricted Subsidiary and dividends or distributions
payable solely in Qualified Equity Interests of the Company or in
options, warrants or other rights to purchase Qualified Equity Interests
of the Company);
(ii) purchase, redeem or otherwise acquire or retire for value
any Equity Interests of the Company or any Restricted Subsidiary (other
than any such Equity Interests owned by the Company or a Wholly Owned
Restricted Subsidiary);
(iii) purchase, redeem, defease or retire for value more than
one year prior to the stated maturity thereof any Subordinated
Indebtedness (other than any Subordinated Indebtedness held by a Wholly
Owned Restricted Subsidiary); or
(iv) make any Investment (other than Permitted Investments) in
any Person (other than in the Company, a Wholly Owned Restricted
Subsidiary or a Person that becomes a Wholly Owned Restricted
Subsidiary, or is merged with or into or consolidated with the Company
or a Wholly Owned Restricted Subsidiary (provided the Company or a
Wholly Owned Restricted Subsidiary is the survivor), as a result of or
in connection with such Investment)
(such payments or any other actions (other than Permitted Investments)
described in (i), (ii), (iii) and (iv) collectively, "Restricted Payments"),
unless
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(a) no Default or Event of Default shall have occurred and be
continuing at the time or after giving effect to such Restricted
Payment;
(b) immediately after giving effect to such Restricted
Payment, the Company would be able to Incur $1.00 of Indebtedness (other
than Permitted Indebtedness) under the Debt to Operating Cash Flow Ratio
of the first paragraph of Section 4.04; and
(c) immediately after giving effect to such Restricted
Payment, the aggregate amount of all Restricted Payments declared or
made on or after the Issue Date does not exceed an amount equal to the
sum of (1) the difference between (x) the Cumulative Available Cash Flow
determined at the time of such Restricted Payment and (y) 140% of
cumulative Consolidated Interest Expense of the Company determined for
the period commencing on the Issue Date and ending on the last day of
the latest fiscal quarter for which consolidated financial statements of
the Company are available preceding the date of such Restricted Payment,
plus (2) the aggregate net proceeds (with the value of any non-cash
proceeds to be the Fair Market Value thereof as determined by an
Independent Financial Advisor) received by the Company either (x) as
capital contributions to the Company after the Issue Date or (y) from
the issue and sale (other than to a Restricted Subsidiary) of its
Qualified Equity Interests after the Issue Date (excluding the net
proceeds from any issuance and sale of Qualified Equity Interests
financed, directly or indirectly, using funds borrowed from the Company
or any Restricted Subsidiary until and to the extent such borrowing is
repaid), plus (3) the principal amount (or accrued or accreted amount,
if less) of any Indebtedness of the Company or any Restricted Subsidiary
Incurred after the Issue Date which has been converted into or exchanged
for Qualified Equity Interests of the Company, plus (4) in the case of
the disposition or repayment of any Investment constituting a Restricted
Payment made after the Issue Date, an amount (to the extent not included
in the computation of Cumulative Available Cash Flow) equal to the
lesser of: (i) the return of capital with respect to such Investment
and (ii) the amount of such Investment which was treated as a Restricted
Payment, in either case, less the cost of the disposition of such
Investment, plus (5) the Company's proportionate interest in the lesser
of the Fair Market Value or the net worth of any Unrestricted Subsidiary
that has been redesignated as a Restricted Subsidiary after the Issue
Date in accordance with Section 4.17 not to exceed in
<PAGE> 53
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any case the Designation Amount with respect to such Restricted
Subsidiary upon its Designation, minus (6) the Designation Amount with
respect to any Subsidiary of the Company which has been designated as an
Unrestricted Subsidiary after the Issue Date in accordance with Section
4.17.
The foregoing provisions will not prevent (i) the payment of any dividend or
distribution on, or redemption of, Equity Interests within 60 days after the
date of declaration of such dividend or distribution or the giving of formal
notice of such redemption, if at the date of such declaration or giving of
formal notice such payment or redemption would comply with the provisions of
this Indenture; (ii) so long as no Default or Event of Default shall have
occurred and be continuing, the retirement of any Equity Interests of the
Company in exchange for, or out of the net cash proceeds of the substantially
concurrent issue and sale (other than to a Restricted Subsidiary) of, Qualified
Equity Interests of the Company; provided, however, that any such net cash
proceeds and the value of any Equity Interests issued in exchange for such
retired Equity Interests are excluded from clause (c)(2) of the preceding
paragraph (and were not included therein at any time); (iii) so long as no
Default or Event of Default shall have occurred and be continuing, the
purchase, redemption, retirement or other acquisition of Subordinated
Indebtedness made in exchange for, or out of the net cash proceeds of, a
substantially concurrent issue and sale (other than to a Restricted Subsidiary)
of (x) Qualified Equity Interests of the Company; provided, however, that any
such net cash proceeds and the value of any Equity Interests issued in exchange
for Subordinated Indebtedness are excluded from clauses (c)(2) and (c)(3) of
the preceding paragraph (and were not included therein at any time) or (y)
other Subordinated Indebtedness having no stated maturity for the payment of
principal thereof prior to the final stated maturity of the Securities; (iv)
the payment of any dividend or distribution on Equity Interests of the Company
or any Restricted Subsidiary to the extent necessary to permit the direct or
indirect beneficial owners of such Equity Interests to pay federal and state
income tax liabilities arising from income of the Company or such Restricted
Subsidiary and attributable to them solely as a result of the Company or such
Restricted Subsidiary (and any intermediate entity through which such holder
owns such Equity Interests) being a partnership or similar pass-through entity
for federal income tax purposes; (v) so long as no Default or Event of Default
has occurred and is continuing, any Investment made out of the net cash
proceeds of the substantially concurrent issue and sale (other than to a
Restricted Subsidiary) of
<PAGE> 54
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Qualified Equity Interests of the Company; provided, however, that any such net
cash proceeds are excluded from clause (c)(2) of the preceding paragraph (and
were not included therein at any time); or (vi) the purchase, redemption or
other acquisition, cancellation or retirement for value of Equity Interests, or
options, warrants, equity appreciation rights or other rights to purchase or
acquire Equity Interests, of the Company or any Restricted Subsidiary, or
similar securities, held by officers or employees or former officers or
employees of the Company or any Restricted Subsidiary (or their estates or
beneficiaries under their estates), upon death, disability, retirement or
termination of employment, not to exceed $1.0 million in any calendar year.
In determining the amount of Restricted Payments permissible
under this Section 4.06, amounts expended pursuant to clauses (i) and (vi) of
the immediately preceding paragraph shall be included as Restricted Payments
and amounts expended pursuant to clauses (ii) through (v) shall be excluded.
The amount of any non-cash Restricted Payment shall be deemed to be equal to
the Fair Market Value thereof at the date of the making of such Restricted
Payment.
SECTION 4.07. Corporate Existence.
Subject to Article Five, the Issuers shall do or shall cause to
be done all things necessary to preserve and keep in full force and effect
their respective corporate or partnership existence, as the case may be, and
the corporate, partnership or other existence of each of the Restricted
Subsidiaries in accordance with the respective organizational documents of each
such Restricted Subsidiary and the rights (charter and statutory), licenses and
franchises of the Issuers and the Restricted Subsidiaries; provided, however,
that the Issuers shall not be required to preserve any such right, license or
franchise, or the corporate or partnership existence of any Restricted
Subsidiary, if the Board of Directors of FV Inc. shall determine that the
preservation thereof is no longer desirable in the conduct of the business of
the Issuers and the Restricted Subsidiaries, taken as a whole, and that the
loss thereof is not, and will not be, adverse in any material respect to the
Holders; provided, further, however, that a determination of the Board of
Directors of FV Inc. shall not be required in the event of a merger of one or
more Wholly Owned Restricted Subsidiaries of the Company with or into another
Wholly Owned Restricted Subsidiary of the Company or another Person, if the
surviving Person is a Wholly Owned Restricted Subsidiary of the Company
organized under the laws of the United States or a State thereof or of the
District of Columbia.
<PAGE> 55
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SECTION 4.08. Payment of Taxes and Other Claims.
The Issuers shall pay or discharge or cause to be paid or
discharged, before the same shall become delinquent, (1) all material taxes,
assessments and governmental charges levied or imposed upon either of the
Issuers or any of their Restricted Subsidiaries or upon the income, profits or
property of either of the Issuers or any of their Restricted Subsidiaries and
(2) all lawful claims for labor, materials and supplies which, in each case, if
unpaid, might by law become a material liability, or Lien (other than a
Permitted Lien) upon the property, of either Issuer or any of their Restricted
Subsidiaries; provided, however, that the Issuers shall not be required to pay
or discharge or cause to be paid or discharged any such tax, assessment, charge
or claim whose amount, applicability or validity is being contested in good
faith by appropriate proceedings and for which appropriate reserves or other
provision has been made.
SECTION 4.09. Notice of Defaults.
(1) In the event that any Indebtedness of either of the
Issuers or any of their Restricted Subsidiaries is declared due and payable
before its maturity because of the occurrence of any default (or any event
which, with notice or lapse of time, or both, would constitute such a default)
under such Indebtedness, the Issuers shall promptly give written notice to the
Trustee of such declaration, the status of such default or event and what
action the Issuers are taking or propose to take with respect thereto.
(2) Upon becoming aware of any Default or Event of Default,
the Issuers shall promptly deliver an Officers' Certificate to the Trustee
specifying the Default or Event of Default.
SECTION 4.10. Maintenance of Properties.
The Company shall cause all material properties owned by or
leased to it or any of its Restricted Subsidiaries and used or useful in the
conduct of its business or the business of any of its Restricted Subsidiaries
to be maintained and kept in normal condition, repair and working order and
supplied with all necessary equipment and shall cause to be made all necessary
repairs, renewals, replacements, betterments and improvements thereof, all as
in the judgment of the Company may be necessary, so that the business carried
on in connection therewith may be properly and advantageously conducted at all
times; provided,
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however, that nothing in this Section shall prevent the Company or any of its
Restricted Subsidiaries from discontinuing the use, operation or maintenance of
any of such properties, or disposing of any of them, if such discontinuance or
disposal is, in the judgment of the Board of Directors of FV Inc. or of the
board of directors of the Restricted Subsidiary concerned, or of an officer (or
other agent employed by the Company or of any of its Restricted Subsidiaries)
of the Company or such Restricted Subsidiary having responsibility for any such
property, desirable in the conduct of the business of the Company or any of its
Restricted Subsidiaries, and if such discontinuance or disposal is not adverse
in any material respect to the Holders.
SECTION 4.11. Compliance Certificate.
The Issuers shall deliver to the Trustee within 100 days after
the close of each fiscal year a certificate signed by the principal executive
officer, principal financial officer or principal accounting officer of each of
the Issuers stating that a review of the activities of the Issuers has been
made under the supervision of the signing officers with a view to determining
whether a Default or Event of Default has occurred and whether or not the
signers know of any Default or Event of Default that occurred during such
fiscal year. If they do know of such a Default or Event of Default, the
certificate shall describe all such Defaults or Events of Default, their status
and the action the Issuers are taking or propose to take with respect thereto.
The first certificate to be delivered by the Issuers pursuant to this Section
4.11 shall be for the fiscal year ending December 31, 1996.
SECTION 4.12. Provision of Financial Information.
Whether or not the Issuers are subject to Section 13(a) or 15(d)
of the Exchange Act, or any successor provision thereto, the Issuers shall file
with the SEC the annual reports, quarterly reports and other documents which
the Issuers would have been required to file with the SEC pursuant to such
Section 13(a) or 15(d) or any successor provision thereto if the Issuers were
so required, such documents to be filed with the Commission on or prior to the
respective dates (the "Required Filing Dates") by which the Issuers would have
been required so to file such documents if the Issuers were so required. The
Issuers shall also in any event (a) within 15 days of each Required Filing Date
(whether or not permitted or required to file with the SEC) (i) transmit by
mail to all holders of Securities, as their names and addresses appear in the
note register, without cost to such holders, and (ii) file with the Trustee,
copies of the annual
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reports, quarterly reports and other documents which the Issuers are required
to file with the SEC pursuant to the preceding sentence or, if such filing is
not so permitted, information and data of a similar nature, and (b) if,
notwithstanding the preceding sentence, filing such documents by the Issuers
with the SEC is not permitted under the Exchange Act, promptly upon written
request supply copies of such documents to any prospective Holder. The Issuers
shall not be obligated to file any such reports with the SEC if the SEC does
not permit such filings for all companies similarly situated other than due to
any action or inaction by the Issuers. The Issuers will also comply with
Section 314(a) of the TIA.
SECTION 4.13. Waiver of Stay, Extension or Usury Laws.
Each of the Issuers and the Subsidiary Guarantors covenants (to
the extent that it may lawfully do so) that it shall not at any time insist
upon, plead, or in any manner whatsoever claim or take the benefit or advantage
of, any stay or extension law or any usury law or other law, which would
prohibit or forgive either of the Issuers or such Subsidiary Guarantor from
paying all or any portion of the principal of and/or interest on the Securities
as contemplated herein, wherever enacted, now or at any time hereafter in
force, or which may affect the covenants or the performance of this Indenture;
and (to the extent that it may lawfully do so) each of the Issuers and the
Subsidiary Guarantors hereby expressly waives all benefit or advantage of any
such law, and covenants that it shall not hinder, delay or impede the execution
of any power herein granted to the Trustee, but shall suffer and permit the
execution of every such power as though no such law had been enacted.
SECTION 4.14. Change of Control.
(a) The Company shall, within 30 days following the date of
consummation of a transaction resulting in a Change of Control, commence an
Offer to Purchase all outstanding Securities at a purchase price in cash equal
to 101% of their principal amount plus accrued and unpaid interest to the
Purchase Date. Such Offer to Purchase will be consummated not earlier than 20
Business Days and not later than 65 days after the commencement thereof. Each
Holder shall be entitled to tender all or any portion of the Securities owned
by such Holder pursuant to the Offer to Purchase, subject to the requirement
that any portion of a Security tendered must bear an integral multiple of
$1,000 principal amount.
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(b) On or prior to the Purchase Date specified in the Offer to
Purchase, the Company shall (i) accept for payment all Securities or portions
thereof validly tendered pursuant to the Offer, (ii) deposit with the Paying
Agent (or, if the Company is acting as its own Paying Agent, segregate and hold
in trust as provided in Section 2.04) money sufficient to pay the Purchase
Price of all Securities or portions thereof so accepted and (iii) deliver or
cause to be delivered to the Trustee for cancellation all Securities so
accepted together with an Officers' Certificate stating the Securities or
portions thereof accepted for payment by the Company. The Paying Agent (or the
Company, if so acting) shall promptly mail or deliver to Holders of Securities
so accepted payment in an amount equal to the Purchase Price for such
Securities, and the Trustee shall promptly authenticate and mail or deliver to
each Holder a new Security or Securities equal in principal amount to any
unpurchased portion of the Security surrendered as requested by the Holder.
Any Security not accepted for payment shall be promptly mailed or delivered by
the Company to the Holder thereof. The Company shall publicly announce the
results of the Offer on or as soon as practicable after the Purchase Date.
In the event that the Company makes an Offer to Purchase the
Securities, the Company shall comply with any applicable securities laws and
regulations, including any applicable requirements of Section 14(e) of, and
Rule 14e-1 under, the Exchange Act and any violation of the provisions of this
Indenture relating to such Offer to Purchase occurring as a result of such
compliance shall not be deemed an Event of Default or an event that with the
passing of time or giving of notice, or both, would constitute an Event of
Default.
SECTION 4.15. Limitation on Senior Subordinated Indebtedness.
(a) The Issuers shall not, directly or indirectly, Incur any
Indebtedness that by its terms would expressly rank senior in right of payment
to the Securities and expressly rank subordinate in right of payment to any
Senior Indebtedness.
(b) The Company shall not permit any Subsidiary Guarantor to
and no Subsidiary Guarantor will, directly or indirectly, Incur any
Indebtedness that by its terms would expressly rank senior in right of payment
to the Subsidiary Guarantee of such Subsidiary Guarantor and expressly rank
subordinate in right of payment to any Guarantor Senior Indebtedness of such
Subsidiary Guarantor.
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SECTION 4.16. Limitations on Dividends and Other Payment Restrictions Affecting
Restricted Subsidiaries.
The Company will not, and will not permit any Restricted
Subsidiary to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any encumbrance or restriction on the ability of any
Restricted Subsidiary to (a) pay dividends or make any other distributions to
the Company or any other Restricted Subsidiary on its Equity Interests or with
respect to any other interest or participation in, or measured by, its profits,
or pay any Indebtedness owed to the Company or any other Restricted Subsidiary,
(b) make loans or advances to, or guarantee any Indebtedness or other
obligations of, the Company or any other Restricted Subsidiary or (c) transfer
any of its properties or assets to the Company or any other Restricted
Subsidiary, except for such encumbrances or restrictions existing under or by
reason of (i) the Senior Credit Facility or other agreements of the Company or
the Restricted Subsidiaries outstanding on the Issue Date, in each case as in
effect on the Issue Date, and any amendments, restatements, renewals,
replacements or refinancings (collectively, a "refinancing") thereof; provided,
however, that such refinancings are no more restrictive in the aggregate with
respect to such encumbrances or restrictions than those contained in the Senior
Credit Facility on the Issue Date, (ii) applicable law, (iii) any instrument
governing Indebtedness or Equity Interests of an Acquired Person acquired by
the Company or any Restricted Subsidiary as in effect at the time of such
acquisition (except to the extent such Indebtedness was incurred by such
Acquired Person in connection with, as a result of or in contemplation of such
acquisition); provided, however, that such encumbrances and restrictions are
not applicable to the Company or any Restricted Subsidiary, or the properties
or assets of the Company or any Restricted Subsidiary, other than the Acquired
Person, (iv) customary non-assignment provisions in leases or cable television
franchises entered into in the ordinary course of business and consistent with
past practices, (v) Purchase Money Indebtedness for property acquired in the
ordinary course of business that only imposes encumbrances and restrictions on
the property so acquired, (vi) any agreement for the sale or disposition of the
Equity Interests or assets of any Restricted Subsidiary; provided, however,
that such encumbrances and restrictions described in this clause (vi) are only
applicable to such Restricted Subsidiary or assets, as applicable, and any such
sale or disposition is made in compliance with Section 4.05 to the extent
applicable thereto, (vii) refinancing Indebtedness permitted under clause (h)
of Section 4.04; provided, however, that the encumbrances and restrictions
contained in the
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agreements governing such Indebtedness are no more restrictive in the aggregate
than those contained in the agreements governing the Indebtedness being
refinanced immediately prior to such refinancing, (viii) this Indenture or (ix)
any such encumbrance or restriction existing under any other agreement,
instrument or document hereafter in effect; provided, however, that the terms
and conditions of any such encumbrance or restriction are not more restrictive
than those contained in the Senior Credit Facility as in effect on the Issue
Date.
SECTION 4.17. Designation of Unrestricted Subsidiaries.
The Company may designate any Subsidiary of the Company as an
"Unrestricted Subsidiary" under this Indenture (a "Designation") only if:
(a) no Default or Event of Default shall have occurred and be
continuing at the time of or after giving effect to such Designation;
(b) at the time of and after giving effect to such
Designation, the Company could Incur $1.00 of additional Indebtedness
under the Debt to Operating Cash Flow Ratio of the first paragraph of
Section 4.04; and
(c) the Company would be permitted to make an Investment
(other than a Permitted Investment) at the time of Designation (assuming
the effectiveness of such Designation) pursuant to the first paragraph
of Section 4.06 in an amount (the "Designation Amount") equal to the
Company's proportionate interest in the Fair Market Value of such
Subsidiary on such date.
Neither the Company nor any Restricted Subsidiary shall at any
time (x) provide credit support for, subject any of its property or assets
(other than the Equity Interests of any Unrestricted Subsidiary) to the
satisfaction of, or guarantee, any Indebtedness of any Unrestricted Subsidiary
(including any undertaking, agreement or instrument evidencing such
Indebtedness), (y) be directly or indirectly liable for any Indebtedness of any
Unrestricted Subsidiary or (z) be directly or indirectly liable for any
Indebtedness which provides that the holder thereof may (upon notice, lapse of
time or both) declare a default thereon or cause the payment thereof to be
accelerated or payable prior to its final scheduled maturity upon the
occurrence of a default with respect to any Indebtedness of any Unrestricted
Subsidiary, except, in the case of clause (x) or (y), to the extent otherwise
permitted under the terms of this Indenture,
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including, without limitation, pursuant to Sections 4.04 and 4.06.
The Company may revoke any Designation of a Subsidiary as an
Unrestricted Subsidiary (a "Revocation") if:
(a) no Default or Event of Default shall have occurred and be
continuing at the time of and after giving effect to such Revocation;
and
(b) all Liens and Indebtedness of such Unrestricted Subsidiary
outstanding immediately following such Revocation would, if Incurred at
such time, have been permitted to be Incurred for all purposes of this
Indenture.
All Designations and Revocations must be evidenced by resolutions
of the Board of Directors of FV Inc., on behalf of the Company, delivered to
the Trustee certifying compliance with the foregoing provisions.
SECTION 4.18. Limitation on Liens.
The Company will not, and will not permit any Restricted
Subsidiary to, directly or indirectly, Incur any Liens of any kind against or
upon any of their respective properties or assets now owned or hereafter
acquired, or any proceeds therefrom or any income or profits therefrom, to
secure any Indebtedness unless contemporaneously therewith effective provision
is made to secure the Securities equally and ratably with such Indebtedness
with a Lien on the same properties and assets securing Indebtedness for so long
as such Indebtedness is secured by such Lien, except for (i) Liens securing
Senior Indebtedness or any guarantee of Senior Indebtedness by any Restricted
Subsidiary and (ii) Permitted Liens.
SECTION 4.19. Limitation on Guarantees of Indebtedness by Restricted
Subsidiaries.
In the event that any Restricted Subsidiary (other than a
Subsidiary Guarantor), directly or indirectly, guarantees any Indebtedness of
the Company other than the Securities (the "Other Indebtedness"), the Company
shall cause such Restricted Subsidiary to concurrently guarantee (a "Subsidiary
Guarantee") the Company's Obligations under this Indenture and the Securities
to the same extent that such Restricted Subsidiary guaranteed the Company's
Obligations under the Other Indebtedness (including waiver of subrogation, if
any); provided, however, that if such Other Indebtedness is (i) Senior
Indebtedness, the Subsidiary
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Guarantee shall be subordinated in right of payment to all Guarantor Senior
Indebtedness (which shall include such guarantee of such Other Indebtedness)
pursuant to the subordination provisions of Article Twelve, (ii) Senior
Subordinated Indebtedness, the Subsidiary Guarantee shall be pari passu in
right of payment with the guarantee of the Other Indebtedness, or (iii)
Subordinated Indebtedness, the Subsidiary Guarantee shall be senior in right of
payment to the guarantee of the Other Indebtedness (which guarantee of such
Subordinated Indebtedness shall provide that such guarantee is subordinated to
the Subsidiary Guarantees to the same extent and in the same manner as the
Securities are subordinated to Senior Indebtedness); provided, further,
however, that each Subsidiary issuing a Subsidiary Guarantee will be
automatically and unconditionally released and discharged from its obligations
under such Subsidiary Guarantee upon the release or discharge of the guarantee
of the Other Indebtedness that resulted in the creation of such Subsidiary
Guarantee, except a discharge or release by, or as a result of, any payment
under the guarantee of such Other Indebtedness by such Subsidiary Guarantor.
The Company shall cause each Restricted Subsidiary issuing a Subsidiary
Guarantee to (i) execute and deliver to the Trustee a supplemental indenture in
form reasonably satisfactory to the Trustee pursuant to which such Restricted
Subsidiary shall unconditionally guarantee all of the Company's obligations
under the Securities and this Indenture on the terms set forth in Article
Eleven and Article Twelve, (ii) execute and deliver a Subsidiary Guarantee
substantially in the form of Exhibit B hereto and (iii) deliver to the Trustee
an opinion of counsel that such supplemental indenture has been duly
authorized, executed and delivered by such Restricted Subsidiary and
constitutes a legal, valid, binding and enforceable obligation of such
Restricted Subsidiary (which opinion may be subject to customary assumptions
and qualifications). Thereafter, such Restricted Subsidiary shall (unless
released in accordance with the terms of this Indenture) be a Subsidiary
Guarantor for all purposes of this Indenture.
SECTION 4.20. Limitation on Conduct of Business of Capital.
Capital will not own any operating assets or other properties or
conduct any business other than to serve as an Issuer and an obligor on the
Securities and as a guarantor of Obligations under the Senior Credit Facility.
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ARTICLE FIVE
MERGERS; SUCCESSOR CORPORATION
SECTION 5.01. Merger, Sale of Assets, etc.
(a) The Issuers will not consolidate with or merge with or
into (whether or not such Issuer is the Surviving Person) any other entity and
the Issuers will not and will not permit any of their respective Restricted
Subsidiaries to sell, convey, assign, transfer, lease or otherwise dispose of
all or substantially all of such Issuer's properties and assets (determined, in
the case of the Company, on a consolidated basis for the Company and the
Restricted Subsidiaries) to any entity in a single transaction or series of
related transactions, unless: (i) either (x) such Issuer shall be the
Surviving Person or (y) the Surviving Person (if other than such Issuer) shall
be, in the case of Capital, a corporation or, in any other case, a corporation,
partnership, limited liability company, limited liability limited partnership
or trust organized and validly existing under the laws of the United States of
America or any State thereof or the District of Columbia, and shall, in any
such case, expressly assume by a supplemental indenture, the due and punctual
payment of the principal of, premium, if any, and interest on all the
Securities and the performance and observance of every covenant of this
Indenture to be performed or observed on the part of the Issuers; (ii)
immediately thereafter, no Default or Event of Default shall have occurred and
be continuing; (iii) immediately after giving effect to any such transaction
involving the Incurrence by the Company or any Restricted Subsidiary, directly
or indirectly, of additional Indebtedness (and treating any Indebtedness not
previously an obligation of the Company or any Restricted Subsidiary in
connection with or as a result of such transaction as having been Incurred at
the time of such transaction), the Surviving Person could Incur, on a pro forma
basis after giving effect to such transaction as if it had occurred at the
beginning of the latest fiscal quarter for which consolidated financial
statements of the Company are available, at least $1.00 of additional
Indebtedness (other than Permitted Indebtedness) under the Debt to Operating
Cash Flow Ratio of the first paragraph of Section 4.04; and (iv) immediately
thereafter the Surviving Person shall have a Consolidated Net Worth equal to or
greater than the Consolidated Net Worth of such Issuer immediately prior to
such transaction.
(b) Subject to the requirements of the immediately preceding
paragraph, in the event of a sale of all or substantially all of the assets of
any Subsidiary Guarantor or
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all of the Equity Interests of any Subsidiary Guarantor, by way of merger,
consolidation or otherwise, then the Surviving Person of any such merger or
consolidation, or such Subsidiary Guarantor, if all of its Equity Interests are
sold, shall be released and relieved of any and all obligations under the
Subsidiary Guarantee of such Subsidiary Guarantor if (i) the Person or entity
surviving such merger or consolidation or acquiring the Equity Interests of
such Subsidiary Guarantor is not a Restricted Subsidiary, and (ii) the Net Cash
Proceeds from such sale are used after such sale in a manner that complies with
the provisions of Section 4.05. Except as provided in the preceding sentence,
no Subsidiary Guarantor shall consolidate with or merge with or into another
Person, whether or not such Person is affiliated with such Subsidiary Guarantor
and whether or not such Subsidiary Guarantor is the Surviving Person, unless
(i) the Surviving Person is a corporation, partnership, limited liability
company, limited liability limited partnership or trust organized or existing
under the laws of the United States, any State thereof or the District of
Columbia, (ii) the Surviving Person (if other than such Subsidiary Guarantor)
assumes all the obligations of such Subsidiary Guarantor under the Securities
and this Indenture pursuant to a supplemental indenture in a form reasonably
satisfactory to the Trustee, (iii) at the time of and immediately after such
Disposition, no Default or Event of Default shall have occurred and be
continuing, and (iv) the Surviving Person will have Consolidated Net Worth
(immediately after giving pro forma effect to the Disposition) equal to or
greater than the Consolidated Net Worth of such Subsidiary Guarantor
immediately preceding the transaction; provided, however, that clause (iv) of
this paragraph shall not be a condition to a merger or consolidation of a
Subsidiary Guarantor if such merger or consolidation only involves the Company
and/or one or more Wholly Owned Restricted Subsidiaries.
SECTION 5.02. Successor Corporation Substituted.
In the event of any transaction (other than a lease) described in
and complying with the conditions listed in Section 5.01 in which an Issuer or
any Subsidiary Guarantor is not the Surviving Person and the Surviving Person
is to assume all the Obligations of such Issuer or any such Subsidiary
Guarantor under the Securities and this Indenture pursuant to a supplemental
indenture, such Surviving Person shall succeed to, and be substituted for, and
may exercise every right and power of, such Issuer or such Subsidiary
Guarantor, as the case may be, and such Issuer or such Subsidiary Guarantor, as
the case may be, shall be discharged from its Obligations under this Indenture,
the Securities or its Subsidiary Guarantee, as the case may be.
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ARTICLE SIX
DEFAULT AND REMEDIES
SECTION 6.01. Events of Default.
Each of the following shall be an "Event of Default":
(1) failure to pay interest on any Securities when the same
becomes due and payable and such Default continues for a period of 30
days, whether or not such payment is prohibited by Article Eight hereof;
(2) failure to pay the principal of any Securities when the
same becomes due and payable at maturity, upon redemption or otherwise,
whether or not such payment is prohibited by Article Eight hereof;
(3) failure to perform or comply with any of the provisions of
Section 4.05, 4.14 or 5.01;
(4) failure to observe or perform any other covenant, warranty
or agreement contained in the Securities or this Indenture, and the
Default continues for the period and after the notice specified in the
last paragraph of this Section 6.01;
(5) a default or defaults under the terms of one or more
instruments evidencing or securing Indebtedness of the Company or any
Restricted Subsidiary having an outstanding principal amount of $10
million or more individually or in the aggregate that has resulted in
the acceleration of the payment of such Indebtedness or the failure to
pay principal when due at the stated maturity of any such Indebtedness;
(6) there shall have been any final judgment or judgments (not
subject to appeal) against the Company or any Restricted Subsidiary in
an amount of $10 million or more (net of any amounts covered by
reputable and creditworthy insurance companies) which remains
undischarged or unstayed for a period of 60 days after the date on which
the right to appeal has expired;
(7) any holder or holders of at least $10 million in aggregate
principal amount of Indebtedness of the Company or any Restricted
Subsidiary, after a default under such Indebtedness, shall notify the
Trustee of the intended sale or disposition of any assets of the Company
or any
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Restricted Subsidiary with an aggregate Fair Market Value (as determined
in good faith by the Board of Directors of FV Inc.) of at least $2
million that have been pledged to or for the benefit of such holder or
holders to secure such Indebtedness or shall commence proceedings, or
take any action (including by way of setoff), to retain in satisfaction
of such Indebtedness or to collect on, seize, dispose of or apply in
satisfaction of such Indebtedness, such assets of the Company or any
Restricted Subsidiary (including funds on deposit or held pursuant to
lock-box and other similar arrangements) which continues for five
Business Days after notice has been given to the Company and the
representative of such Indebtedness and Indebtedness under the Senior
Credit Facility;
(8) either of the Issuers or any Significant Restricted
Subsidiary pursuant to or within the meaning of any Bankruptcy Law:
(A) commences a voluntary case or proceeding,
(B) consents to the entry of an order for relief
against it in an involuntary case or proceeding,
(C) consents to the appointment of a Custodian of it or
for all or substantially all of its property, or
(D) makes a general assignment for the benefit of its
creditors;
(9) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:
(A) is for relief against either of the Issuers or any
Significant Restricted Subsidiary in an involuntary case or
proceeding,
(B) appoints a Custodian of either of the Issuers or
any Significant Restricted Subsidiary or for all or substantially
all of its property, or
(C) orders the liquidation of either of the Issuers or
any Significant Restricted Subsidiary,
and in each case the order or decree remains unstayed and in effect for 60
consecutive days; provided, however, that if the entry of such order or decree
is appealed and dismissed on appeal
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then the Event of Default hereunder by reason of the entry of such order or
decree shall be deemed to have been cured; or
(10) other than as provided in or pursuant to any Subsidiary
Guarantee or this Indenture, such Subsidiary Guarantee ceases to be in
full force and effect or is declared null and void and unenforceable or
found to be invalid or any Subsidiary Guarantor denies its liability
under its Subsidiary Guarantee (other than by reason of a release of
such Subsidiary Guarantor from its Subsidiary Guarantee in accordance
with the terms of this Indenture and such Subsidiary Guarantee).
The term "Bankruptcy Law" means Title 11, U.S. Code or any
similar Federal, state or foreign law for the relief of debtors. The term
"Custodian" means any receiver, trustee, assignee, liquidator, sequestrator or
similar official under any Bankruptcy Law.
A Default under clause (4) is not an Event of Default until the
Trustee notifies the Issuers, or the Holders of at least 25% in aggregate
principal amount of the outstanding Securities notify the Issuers and the
Trustee, of the Default in writing and the Issuers do not cure the Default
within 30 days after receipt of the notice. The notice must specify the
Default, demand that it be remedied and state that the notice is a "Notice of
Default." Such notice shall be given by the Trustee if so requested by the
Holders of at least 25% in aggregate principal amount of the Securities then
outstanding. When a Default is cured, it ceases.
SECTION 6.02. Acceleration.
If an Event of Default with respect to the Securities (other than
an Event of Default specified in clause (8) or (9) of Section 6.01 with respect
to either of the Issuers) occurs and is continuing, the Trustee or the Holders
of at least 25% in aggregate principal amount of the outstanding Securities by
notice in writing to the Issuers (and to the Trustee if given by the Holders)
may declare the unpaid principal of and accrued and unpaid interest to the date
of acceleration on all the outstanding Securities to be due and payable
immediately and, upon any such declaration, such principal amount and accrued
and unpaid interest shall become immediately due and payable; provided,
however, that so long as the Senior Credit Facility shall be in full force and
effect, if an Event of Default shall have occurred and be continuing (other
than as specified in clause (8) or (9) of Section 6.01), the Securities shall
not
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become due and payable until the earlier to occur of (x) five Business Days
following delivery of a written notice of such acceleration of the Securities
to the agent under the Senior Credit Facility and (y) the acceleration of any
Indebtedness under the Senior Credit Facility.
If an Event of Default specified in clause (8) or (9) of Section
6.01 with respect to either of the Issuers occurs all unpaid principal of and
accrued and unpaid interest on the outstanding Securities shall ipso facto
become immediately due and payable without any declaration or other act on the
part of the Trustee or any Holder thereof.
After a declaration of acceleration, but before a judgment or
decree of the money due in respect of the Securities has been obtained, the
Holders of not less than a majority in aggregate principal amount of the
Securities then outstanding by written notice to the Trustee may rescind an
acceleration and its consequences if all existing Events of Default (other than
the nonpayment of principal of and interest on the Securities which has become
due solely by virtue of such acceleration) have been cured or waived and if the
rescission would not conflict with any judgment or decree. No such rescission
shall affect any subsequent Default or impair any right consequent thereto.
SECTION 6.03. Other Remedies.
If an Event of Default occurs and is continuing, the Trustee may
pursue any available remedy by proceeding at law or in equity to collect the
payment of principal of or interest on the Securities or to enforce the
performance of any provision of the Securities or this Indenture.
The Trustee may maintain a proceeding even if it does not possess
any of the Securities or does not produce any of them in the proceeding. A
delay or omission by the Trustee or any Securityholder in exercising any right
or remedy maturing upon an Event of Default shall not impair the right or
remedy or constitute a waiver of or acquiescence in the Event of Default. No
remedy is exclusive of any other remedy. All available remedies are cumulative
to the extent permitted by law.
SECTION 6.04. Waiver of Past Default.
Subject to Sections 2.09, 6.07 and 10.02, prior to the
declaration of acceleration of the Securities, the Holders of not less than a
majority in aggregate principal amount of the then outstanding Securities, on
behalf of all the Holders, by written
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notice to the Trustee may waive an existing Default or Event of Default and its
consequences, except a Default in the payment of principal of or interest on
any Security as specified in clauses (1) and (2) of Section 6.01 or a Default
in respect of any term or provision of this Indenture that may not be amended
or modified without the consent of each Holder affected as provided in Section
10.02. The Issuers shall deliver to the Trustee an Officers' Certificate
stating that the requisite percentage of Holders have consented to such waiver
and attaching copies of such consents. In case of any such waiver, the
Issuers, the Trustee and the Holders shall be restored to their former
positions and rights hereunder and under the Securities, respectively. This
paragraph of this Section 6.04 shall be in lieu of Section 316(a)(1)(B) of the
TIA and such Section 316(a)(1)(B) of the TIA is hereby expressly excluded from
this Indenture and the Securities, as permitted by the TIA.
Upon any such waiver, such Default shall cease to exist and be
deemed to have been cured and not to have occurred, and any Event of Default
arising therefrom shall be deemed to have been cured and not to have occurred
for every purpose of this Indenture and the Securities, but no such waiver
shall extend to any subsequent or other Default or Event of Default or impair
any right consequent thereon.
SECTION 6.05. Control by Majority.
Subject to Section 2.09, the Holders of a majority in principal
amount of the then outstanding Securities may direct the time, method and place
of conducting any proceeding for any remedy available to the Trustee or
exercising any trust or power conferred on it. However, the Trustee may refuse
to follow any direction that conflicts with law or this Indenture, that the
Trustee determines may be unduly prejudicial to the rights of another
Securityholder, or that may involve the Trustee in personal liability;
provided, however, that the Trustee may take any other action deemed proper by
the Trustee which is not inconsistent with such direction. In the event the
Trustee takes any action or follows any direction pursuant to this Indenture,
the Trustee shall be entitled to indemnification satisfactory to it in its sole
discretion against any loss or expense caused by taking such action or
following such direction. This Section 6.05 shall be in lieu of Section
316(a)(1)(A) of the TIA, and such Section 316(a)(1)(A) of the TIA is hereby
expressly excluded from this Indenture and the Securities, as permitted by the
TIA.
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SECTION 6.06. Limitation on Suits.
A Securityholder may not pursue any remedy with respect to this
Indenture or the Securities unless:
(1) the Holder gives to the Trustee written notice of a
continuing Event of Default;
(2) the Holders of at least 25% in aggregate principal amount
of the then outstanding Securities make a written request to the Trustee
to pursue a remedy;
(3) such Holder or Holders offer and, if requested, provide to
the Trustee indemnity satisfactory to the Trustee against any loss,
liability or expense;
(4) the Trustee does not comply with the request within 60
days after receipt of the request and the offer and, if requested, the
provision of indemnity; and
(5) during such 60-day period the Holders of a majority in
principal amount of the then outstanding Securities (excluding
Affiliates of either of the Issuers) do not give the Trustee a direction
which, in the opinion of the Trustee, is inconsistent with the request.
A Securityholder may not use this Indenture to prejudice the
rights of another Securityholder or to obtain a preference or priority over
such other Securityholder.
SECTION 6.07. Rights of Holders To Receive Payment.
Notwithstanding any other provision of this Indenture, the right
of any Holder to receive payment of principal of and interest on the Security,
on or after the respective due dates expressed in the Security (subject to
Articles Eight and Twelve), or to bring suit for the enforcement of any such
payment on or after such respective dates, shall not be impaired or affected
without the consent of the Holder.
SECTION 6.08. Collection Suit by Trustee.
If an Event of Default in payment of interest or principal
specified in Section 6.01(1) or (2) occurs and is continuing, the Trustee may
recover judgment in its own name and as trustee of an express trust against the
Issuers or any other obligor on the Securities for the whole amount of
principal and accrued interest remaining unpaid, together with interest overdue
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on principal and to the extent that payment of such interest is lawful,
interest on overdue installments of interest, in each case at the rate per
annum borne by the Securities and such further amount as shall be sufficient to
cover the reasonable costs and expenses of collection, including the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel.
SECTION 6.09. Trustee May File Proofs of Claim.
The Trustee may file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Securityholders allowed in any judicial proceedings relative to the Issuers (or
any other obligor upon the Securities), their creditors or its property and
shall be entitled and empowered to collect and receive any monies or other
property payable or deliverable on any such claims and to distribute the same,
and any Custodian in any such judicial proceedings is hereby authorized by each
Securityholder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the
Securityholders, to pay to the Trustee any amount due to it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agent
and counsel, and any other amounts due the Trustee under Section 7.07. Nothing
herein contained shall be deemed to authorize the Trustee to authorize or
consent to or accept or adopt on behalf of any Securityholder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof, or to authorize the Trustee to vote in
respect of the claim of any Securityholder in any such proceeding.
SECTION 6.10. Priorities.
If the Trustee collects any money or property pursuant to this
Article Six, it shall pay out the money or property in the following order:
First: to the Trustee for amounts due under Section 7.07;
Second: to Holders for amounts due and unpaid on the Securities
for principal and interest, ratably, without preference or priority of
any kind, according to the amounts
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due and payable on the Securities for principal and interest,
respectively; and
Third: to the Issuers.
The Trustee, upon prior written notice to the Issuers, may fix a
record date and payment date for any payment to Securityholders pursuant to
this Section 6.10.
SECTION 6.11. Undertaking for Costs.
All parties to this Indenture agree, and each holder of any
Security by his acceptance thereof shall be deemed to have agreed, that in any
suit for the enforcement of any right or remedy under this Indenture or in any
suit against the Trustee for any action taken or omitted by it as Trustee, a
court in its discretion may require the filing by any party litigant in the
suit of an undertaking to pay the costs of the suit, and the court in its
discretion may assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in the suit, having due regard to the merits and
good faith of the claims or defenses made by the party litigant. This Section
6.11 shall not apply to a suit by the Trustee, a suit by a Holder or group of
Holders of more than 10% in aggregate principal amount of the outstanding
Securities, or to any suit instituted by any Holder for the enforcement or the
payment of the principal or interest on any Securities on or after the
respective due dates expressed in the Security.
ARTICLE SEVEN
TRUSTEE
SECTION 7.01. Duties of Trustee.
(a) If a Default has occurred and is continuing, the Trustee
shall exercise such of the rights and powers vested in it by this Indenture and
use the same degree of care and skill in their exercise as a prudent man would
exercise or use under the circumstances in the conduct of his own affairs.
(b) Except during the continuance of a Default:
(1) The Trustee shall not be liable except for the performance
of such duties as are specifically set forth herein; and
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(2) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon certificates or opinions
conforming to the requirements of this Indenture; however, the Trustee
shall examine the certificates and opinions to determine whether or not
they conform to the requirements of this Indenture.
(c) The Trustee shall not be relieved from liability for its
own negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(1) This paragraph does not limit the effect of paragraph (b)
of this Section 7.01;
(2) The Trustee shall not be liable with respect to any action
it takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05.
(d) No provision of this Indenture shall require the Trustee
to expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties hereunder or to take or omit to take any
action under this Indenture or take any action at the request or direction of
Holders if it shall have reasonable grounds for believing that repayment of
such funds is not assured to it or it does not receive an indemnity reasonably
satisfactory to it against such risk, liability, loss, fee or expense which
might be incurred by it in compliance with such request or direction.
(e) Every provision of this Indenture that in any way relates
to the Trustee is subject to paragraphs (a), (b), (c) and (d) of this Section
7.01.
(f) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree with the Issuers. Money held in
trust by the Trustee need not be segregated from other funds except to the
extent required by law.
SECTION 7.02. Rights of Trustee.
Subject to Section 7.01:
(a) The Trustee may rely on any document believed by it to be
genuine and to have been signed or presented by the proper person. The
Trustee need not investigate any fact or matter stated in the document.
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(b) The Trustee shall not be liable for any action it takes or
omits to take in good faith in reliance on an Officers' Certificate or
Opinion of Counsel.
(c) The Trustee may consult with counsel and the advice or
opinion of such counsel as to matters of law shall be full and complete
authorization and protection from liability in respect of any action
taken, omitted or suffered by it hereunder in good faith and in
accordance with the advice or opinion of such counsel.
(d) Any request or direction of the Issuers mentioned herein
shall be sufficiently evidenced by an Issuer Request or Issuer Order and
any resolution of the Board of Directors may be sufficiently evidenced
by a Board Resolution.
(e) The Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the request or
direction of any of the Securityholders pursuant to this Indenture,
unless such Securityholders shall have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities which
might be incurred by it in compliance with such request or direction.
(f) The Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of indebtedness or
other paper or document, but the Trustee, in its discretion, may make
such further inquiry or investigation into such facts or matters as it
may see fit, and, if the Trustee shall determine to make such further
inquiry or investigation, it shall be entitled to examine the books,
records and premises of the Issuers, personally or by agent or attorney.
SECTION 7.03. Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become
the owner or pledgee of Securities and may otherwise deal with the Issuers or
their Affiliates with the same rights it would have if it were not Trustee.
Any Agent may do the same with like rights. However, the Trustee is subject to
Sections 7.10 and 7.11.
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SECTION 7.04. Trustee's Disclaimer.
The Trustee shall not be responsible for and makes no
representation as to the validity or adequacy of this Indenture or the
Securities, it shall not be accountable for the Issuers' use of the proceeds
from the Securities, and it shall not be responsible for any statement of the
Issuers in this Indenture or any document issued in connection with the sale of
Securities or any statement in the Securities other than the Trustee's
certificate of authentication.
SECTION 7.05. Notice of Defaults.
If a Default or an Event of Default occurs and is continuing and
the Trustee knows of such Defaults or Events of Default, the Trustee shall mail
to each Securityholder notice of the Default or Event of Default within 30 days
after the occurrence thereof. Except in the case of a Default or an Event of
Default in payment of principal of or interest on any Security or a Default or
Event of Default in complying with Section 5.01, the Trustee may withhold the
notice if and so long as a committee of its Trust Officers in good faith
determines that withholding the notice is in the interest of Securityholders.
This Section 7.05 shall be in lieu of the proviso to Section 315(b) of the TIA
and such proviso to Section 315(b) of the TIA is hereby expressly excluded
from this Indenture and the Securities, as permitted by the TIA.
SECTION 7.06. Reports by Trustee to Holders.
If required by TIA Section 313(a), within 60 days after each
June 15 beginning with the June 15 following the date of this Indenture, the
Trustee shall mail to each Securityholder a report dated as of such June 15
that complies with TIA Section 313(a); provided, however, that, if no event
under TIA Section 313(a) has occurred in a 12 month period, no such report
need be transmitted. The Trustee also shall comply with TIA Section 313(b),
(c) and (d).
A copy of each such report at the time of its mailing to
Securityholders shall be filed with the SEC and each stock exchange, if any, on
which the Securities are listed.
The Issuers shall promptly notify the Trustee in writing if the
Securities become listed on any stock exchange or of any delisting thereof.
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SECTION 7.07. Compensation and Indemnity.
The Issuers shall pay to the Trustee from time to time such
compensation as the Issuers and the Trustee shall from time to time agree in
writing for its services. The Trustee's compensation shall not be limited by
any law on compensation of a trustee of an express trust. The Issuers shall
reimburse the Trustee upon request for all reasonable disbursements, expenses
and advances incurred or made by the Trustee in accordance with any provision
of this Indenture (including reasonable fees, disbursements and expenses of its
agents and counsel) incurred or made by it in addition to the compensation for
its services except any such disbursements, expenses and advances as may be
attributable to the Trustee's negligence or bad faith. Such expenses shall
include the reasonable compensation, disbursements and expenses of the
Trustee's agents, accountants, experts and counsel and any taxes or other
expenses incurred by a trust created pursuant to Section 9.01 hereof.
The Issuers shall indemnify the Trustee for, and hold it harmless
against any and all loss, damage, claims, liability or expense, including taxes
(other than franchise taxes imposed on the Trustee and taxes based upon,
measured by or determined by the income of the Trustee), arising out of or in
connection with the acceptance or administration of the trust or trusts
hereunder, including the costs and expenses of defending itself against any
claim or liability in connection with the exercise or performance of any of its
powers or duties hereunder, except to the extent that such loss, damage, claim,
liability or expense is due to its own negligence or bad faith. The Trustee
shall notify the Issuers promptly of any claim asserted against the Trustee for
which it may seek indemnity. However, the failure by the Trustee to so notify
the Issuers promptly shall not relieve the Issuers of their obligations
hereunder except to the extent that the Issuers are materially prejudiced
thereby. The Issuers shall defend the claim and the Trustee shall cooperate in
the defense (and may employ its own counsel) at the Issuers' expense; provided,
however, that the Issuers' reimbursement obligation with respect to counsel
employed by the Trustee will be limited to the reasonable fees of such counsel.
The Issuers need not pay for any settlement made without their written consent,
which consent shall not be unreasonably withheld. The Issuers need not
reimburse any expense or indemnify against any loss or liability incurred by
the Trustee as a result of the violation of this Indenture by the Trustee.
To secure the Issuers' payment obligations in this Section 7.07,
the Trustee shall have a Lien prior to the
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Securities against all money or property held or collected by the Trustee, in
its capacity as Trustee, except money or property held in trust to pay
principal of or interest on particular Securities.
When the Trustee incurs expenses or renders services after an
Event of Default specified in Section 6.01(8) or (9) occurs, the expenses
(including the reasonable fees and expenses of its agents and counsel) and the
compensation for the services shall be preferred over the status of the Holders
in a proceeding under any Bankruptcy Law and are intended to constitute
expenses of administration under any Bankruptcy Law. The Issuers' obligations
under this Section 7.07 and any claim arising hereunder shall survive the
resignation or removal of any Trustee, the discharge of the Issuers'
obligations pursuant to Article Eight and any rejection or termination under
any Bankruptcy Law.
SECTION 7.08. Replacement of Trustee.
The Trustee may resign at any time by so notifying the Issuers in
writing. The Holders of a majority in principal amount of the then outstanding
Securities may remove the Trustee by so notifying the Trustee and the Issuers
in writing and may appoint a successor Trustee with the Issuers' consent. The
Issuers may remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged a bankrupt or an insolvent under
any Bankruptcy Law;
(3) a custodian or other public officer takes charge of the
Trustee or its property; or
(4) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in
the office of Trustee for any reason (the Trustee in such event being referred
to herein as the retiring Trustee), the Issuers shall promptly appoint a
successor Trustee. Within one year after the successor Trustee takes office,
the Holders of a majority in principal amount of the Securities may appoint a
successor Trustee to replace the successor Trustee appointed by the Issuers.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Issuers.
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As promptly as practicable after that, the retiring Trustee shall transfer,
after payment of all sums then owing to the Trustee pursuant to Section 7.07,
all property held by it as Trustee to the successor Trustee, subject to the
Lien provided in Section 7.07, the resignation or removal of the retiring
Trustee shall become effective, and the successor Trustee shall have the
rights, powers and duties of the Trustee under this Indenture. A successor
Trustee shall mail notice of its succession to each Securityholder.
If a successor Trustee does not take office within 60 days after
the retiring Trustee resigns or is removed, the retiring Trustee, the Issuers
or the Holders of at least 10% in principal amount of the then outstanding
Securities may petition any court of competent jurisdiction for the appointment
of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any
Securityholder may petition any court of competent jurisdiction for the removal
of the Trustee and the appointment of a successor Trustee.
Notwithstanding replacement of the Trustee pursuant to this
Section 7.08, the Issuers' obligations under Section 7.07 shall continue for
the benefit of the retiring Trustee.
SECTION 7.09. Successor Trustee by Merger, etc.
If the Trustee consolidates with, merges or converts into, or
transfers all or substantially all of its corporate trust business to, another
corporation or banking corporation, the resulting, surviving or transferee
corporation or banking corporation without any further act shall be the
successor Trustee, provided such corporation shall be otherwise qualified and
eligible under this Article Seven.
SECTION 7.10. Eligibility; Disqualification.
This Indenture shall always have a Trustee which shall be
eligible to act as Trustee under TIA Sections 310(a)(1) and 310(a)(2). The
Trustee shall have a combined capital and surplus of at least $50,000,000 as
set forth in its most recent published annual report of condition. If the
Trustee has or shall acquire any "conflicting interest" within the meaning of
TIA Section 310(b), the Trustee and the Issuers shall comply with the
provisions of TIA Section 310(b). If at any time the Trustee shall cease to
be eligible in accordance with the provisions of this Section, the
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Trustee shall resign immediately in the manner and with the effect hereinbefore
specified in this Article Seven.
SECTION 7.11. Preferential Collection of Claims Against Company.
The Trustee shall comply with TIA Section 311(a), excluding any
creditor relationship listed in TIA Section 311(b). A Trustee who has
resigned or been removed shall be subject to TIA Section 311(a) to the extent
indicated therein.
ARTICLE EIGHT
SUBORDINATION OF SECURITIES
SECTION 8.01. Securities Subordinated to Senior Indebtedness.
The Issuers covenant and agree, and the Trustee and each Holder
of the Securities by his acceptance thereof likewise covenant and agree, that
all Securities shall be issued subject to the provisions of this Article; and
each person holding any Security, whether upon original issue or upon transfer,
assignment or exchange thereof, accepts and agrees that all payments of the
principal of and interest on the Securities by the Issuers shall, to the extent
and in the manner set forth in this Article, be subordinated and junior in
right of payment to the prior payment in full in cash of all amounts payable
under Senior Indebtedness.
SECTION 8.02. No Payment on Securities in Certain Circumstances.
(a) No direct or indirect payment (including any payment made
to Securityholders under the terms of Indebtedness subordinated to the
Securities, but excluding any payment or distribution of Permitted Junior
Securities) by or on behalf of the Issuers of principal of or interest on the
Securities, whether pursuant to the terms of the Securities, upon acceleration
or otherwise, shall be made if, at the time of such payment, there exists a
default in the payment of all or any portion of the Obligations on any
Designated Senior Indebtedness, whether at maturity, on account of mandatory
redemption or prepayment, acceleration or otherwise, and such default shall not
have been cured or waived or the benefits of this sentence waived by or on
behalf of the holders of such Designated Senior Indebtedness. In addition,
during the continuance of any non-payment default or non-payment event of
default with respect to any Designated Senior Indebtedness pursuant to which
the
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maturity thereof may be immediately accelerated, and upon receipt by the
Trustee of written notice (a "Payment Blockage Notice") from the holder or
holders of such Designated Senior Indebtedness or the trustee or agent acting
on behalf of such Designated Senior Indebtedness, then, unless and until such
default or event of default has been cured or waived or has ceased to exist or
such Designated Senior Indebtedness has been discharged or repaid in full, no
direct or indirect payment (including any payment made to Securityholders under
the terms of Indebtedness subordinated to the Securities, but excluding any
payment or distribution of Permitted Junior Securities) shall be made by or on
behalf of the Issuers of principal of or interest on the Securities, except
from those funds held in trust for the benefit of the Holders of any Securities
pursuant to Article Nine, to such Holders, during a period (a "Payment Blockage
Period") commencing on the date of receipt of such notice by the Trustee and
ending 179 days thereafter.
Notwithstanding anything herein or in the Securities to the
contrary, in no event shall a Payment Blockage Period extend beyond 179 days
from the date the Payment Blockage Notice in respect thereof was given. Not
more than one Payment Blockage Period may be commenced with respect to the
Securities during any period of 360 consecutive days. No default or event of
default that existed or was continuing on the date of commencement of any
Payment Blockage Period with respect to the Designated Senior Indebtedness
initiating such Payment Blockage Period (to the extent the holder of Designated
Senior Indebtedness, or trustee or agent, giving notice commencing such Payment
Blockage Period had knowledge of such existing or continuing default or event
of default) may be, or be made, the basis for the commencement of any other
Payment Blockage Period by the holder or holders of such Designated Senior
Indebtedness or the trustee or agent acting on behalf of such Designated Senior
Indebtedness, whether or not within a period of 360 consecutive days, unless
such default or event of default has been cured or waived for a period of not
less than 90 consecutive days.
(b) In the event that, notwithstanding the foregoing, any
payment shall be received by the Trustee or any Holder when such payment is
prohibited by Section 8.02(a), such payment shall be held in trust for the
benefit of, and shall be paid over or delivered to, the holders of Designated
Senior Indebtedness or their respective agents or representatives, or to the
trustee or trustees under any indenture pursuant to which any of such
Designated Senior Indebtedness may have been issued, as their respective
interests may appear, but only to the extent that, upon notice from the Trustee
to the holders of Designated Senior
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Indebtedness that such prohibited payment has been made, the holders of the
Designated Senior Indebtedness (or their representative or representatives or a
trustee) notify the Trustee in writing of the amounts then due and owing on the
Designated Senior Indebtedness, if any, and only the amounts specified in such
notice to the Trustee shall be paid to the holders of Designated Senior
Indebtedness.
SECTION 8.03. Payment Over of Proceeds upon Dissolution, etc.
(a) Upon any payment or distribution of assets or securities
of either of the Issuers of any kind or character, whether in cash, property or
securities (including any payment made to Securityholders under the terms of
Indebtedness subordinated to the Securities, but excluding any payment or
distribution of Permitted Junior Securities), upon any dissolution or
winding-up or total liquidation or reorganization of either of the Issuers,
whether voluntary or involuntary or in bankruptcy, insolvency, receivership or
other proceedings, all Senior Indebtedness shall first be paid in full in cash
before the Holders of the Securities or the Trustee on behalf of such Holders
shall be entitled to receive any payment by the Issuers of the principal of or
interest on the Securities, or any payment to acquire any of the Securities for
cash, property or securities, or any distribution with respect to the
Securities of any cash, property or securities. Before any payment may be made
by, or on behalf of, the Issuers of the principal of or interest on the
Securities upon any such dissolution or winding-up or liquidation or
reorganization, any payment or distribution of assets or securities of either
of the Issuers of any kind or character, whether in cash, property or
securities (including any payment made to Securityholders under the terms of
Indebtedness subordinated to the Securities, but excluding any payment or
distribution of Permitted Junior Securities), to which the Holders of the
Securities or the Trustee on their behalf would be entitled, but for the
subordination provisions of this Indenture, shall be made by the Issuers or by
any receiver, trustee in bankruptcy, liquidating trustee, agent or other Person
making such payment or distribution, directly to the holders of the Senior
Indebtedness (pro rata to such holders on the basis of the respective amounts
of Senior Indebtedness held by such holders) or their agents or representatives
or to the trustee or trustees under any indenture pursuant to which any of such
Senior Indebtedness may have been issued, as their respective interests may
appear, to the extent necessary to pay all such Senior Indebtedness in full in
cash after giving effect to any concurrent payment, distribution or provision
therefor to or for the holders of such Senior Indebtedness.
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(b) In the event that, notwithstanding the foregoing provision
prohibiting such payment or distribution, any payment or distribution of assets
or securities of either of the Issuers of any kind or character, whether in
cash, property or securities, shall be received by the Trustee or any Holder of
Securities at a time when such payment or distribution is prohibited by Section
8.03(a) and before all Obligations in respect of Senior Indebtedness are paid
in full in cash, such payment or distribution shall be received and held in
trust for the benefit of, and shall be paid over or delivered to, the holders
of Senior Indebtedness (pro rata to such holders on the basis of the respective
amounts of Senior Indebtedness held by such holders) or their respective
agents, representatives, or to the trustee or trustees under any indenture
pursuant to which any of such Senior Indebtedness may have been issued, as
their respective interests may appear, for application to the payment of Senior
Indebtedness remaining unpaid until all such Senior Indebtedness has been paid
in full in cash after giving effect to any concurrent payment or distribution
to or for the holders of such Senior Indebtedness.
The consolidation of either of the Issuers with, or the merger of
either of the Issuers with or into, another corporation or the liquidation or
dissolution of either of the Issuers following the conveyance or transfer of
its property as an entirety, or substantially as an entirety, to another
corporation upon the terms and conditions provided in Article Five shall not be
deemed a dissolution, winding-up, liquidation or reorganization for the
purposes of this Section if such other corporation shall, as a part of such
consolidation, merger, conveyance or transfer, comply with the conditions
stated in Article Five.
SECTION 8.04. Subrogation.
Upon the payment in full in cash of all Senior Indebtedness, the
Holders of the Securities shall be subrogated to the rights of the holders of
Senior Indebtedness to receive payments or distributions of cash, property or
securities of the Issuers made on such Senior Indebtedness until the principal
of and interest on the Securities shall be paid in full; and, for the purposes
of such subrogation, no payments or distributions to the holders of the Senior
Indebtedness of any cash, property or securities to which the Holders of the
Securities or the Trustee on their behalf would be entitled except for the
provisions of this Article, and no payment over pursuant to the provisions of
this Article to the holders of Senior Indebtedness by Holders of the Securities
or the Trustee on their behalf shall, as between
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the Issuers, their creditors other than holders of Senior Indebtedness, and the
Holders of the Securities, be deemed to be a payment by the Issuers to or on
account of the Senior Indebtedness. It is understood that the provisions of
this Article are, and are intended, solely for the purpose of defining the
relative rights of the Holders of the Securities, on the one hand, and the
holders of the Senior Indebtedness, on the other hand.
If any payment or distribution to which the Holders of the
Securities would otherwise have been entitled but for the provisions of this
Article shall have been applied, pursuant to the provisions of this Article, to
the payment of all amounts payable under Senior Indebtedness, then and in such
case, the Holders of the Securities shall be entitled to receive from the
holders of such Senior Indebtedness any payments or distributions received by
such holders of Senior Indebtedness in excess of the amount required to make
payment in full in cash of such Senior Indebtedness.
SECTION 8.05. Obligations of Issuers Unconditional.
Nothing contained in this Article or elsewhere in this Indenture
or in the Securities is intended to or shall impair, as among the Issuers and
the Holders of the Securities, the obligation of the Issuers, which is absolute
and unconditional, to pay to the Holders of the Securities the principal of and
interest on the Securities as and when the same shall become due and payable in
accordance with their terms, or is intended to or shall affect the relative
rights of the Holders of the Securities and creditors of the Issuers other than
the holders of the Senior Indebtedness, nor shall anything herein or therein
prevent the Holder of any Security or the Trustee on their behalf from
exercising all remedies otherwise permitted by applicable law upon default
under this Indenture, subject to the rights, if any, under this Article of the
holders of the Senior Indebtedness in respect of cash, property or securities
of the Issuers received upon the exercise of any such remedy.
Without limiting the generality of the foregoing, nothing
contained in this Article shall restrict the right of the Trustee or the
Holders of Securities to take any action to declare the Securities to be due
and payable prior to their stated maturity pursuant to Section 6.02 or to
pursue any rights or remedies hereunder; provided, however, that all Senior
Indebtedness then due and payable shall first be paid in full in cash before
the Holders of the Securities or the Trustee are
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entitled to receive any direct or indirect payment from the Issuers of
principal of or interest on the Securities.
SECTION 8.06. Notice to Trustee.
The Issuers shall give prompt written notice to the Trustee of
any fact known to the Issuers which would prohibit the making of any payment to
or by the Trustee in respect of the Securities pursuant to the provisions of
this Article. The Trustee shall not be charged with knowledge of the existence
of any default or event of default with respect to any Senior Indebtedness or
of any other facts which would prohibit the making of any payment to or by the
Trustee unless and until the Trustee shall have received notice in writing at
its Corporate Trust Office to that effect signed by an Officer of each of FV
Inc. and Capital, or by a holder of Senior Indebtedness or trustee or agent
therefor; and prior to the receipt of any such written notice, the Trustee
shall, subject to Article Seven, be entitled to assume that no such facts
exist; provided that if the Trustee shall not have received the notice provided
for in this Section at least one Business Day prior to the date upon which by
the terms of this Indenture any moneys shall become payable for any purpose
(including, without limitation, the payment of the principal of or interest on
any Security), then, regardless of anything herein to the contrary, the Trustee
shall have full power and authority to receive any moneys from the Issuers and
to apply the same to the purpose for which they were received, and shall not be
affected by any notice to the contrary which may be received by it on or after
such prior date. Nothing contained in this Section 8.06 shall limit the right
of the holders of Senior Indebtedness to recover payments as contemplated by
Section 8.03. The Trustee shall be entitled to rely on the delivery to it of a
written notice by a Person representing himself or itself to be a holder of any
Senior Indebtedness (or a trustee on behalf of, or other representative of,
such holder) to establish that such notice has been given by a holder of such
Senior Indebtedness or a trustee or representative on behalf of any such
holder.
In the event that the Trustee determines in good faith that any
evidence is required with respect to the right of any Person as a holder of
Senior Indebtedness to participate in any payment or distribution pursuant to
this Article, the Trustee may request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of Senior Indebtedness
held by such Person, the extent to which such Person is entitled to participate
in such payment or distribution and any other facts pertinent to the rights of
such Person under this Article, and if such evidence is not furnished, the
Trustee may
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defer any payment to such Person pending judicial determination as to the right
of such Person to receive such payment.
SECTION 8.07. Reliance on Judicial Order or Certificate of Liquidating Agent.
Upon any payment or distribution of assets or securities referred
to in this Article, the Trustee and the Holders of the Securities shall be
entitled to rely upon any order or decree made by any court of competent
jurisdiction in which bankruptcy, dissolution, winding-up, liquidation or
reorganization proceedings are pending, or upon a certificate of the receiver,
trustee in bankruptcy, liquidating trustee, agent or other person making such
payment or distribution, delivered to the Trustee or to the Holders of the
Securities for the purpose of ascertaining the persons entitled to participate
in such distribution, the holders of the Senior Indebtedness and other
indebtedness of the Issuers, the amount thereof or payable thereon, the amount
or amounts paid or distributed thereon and all other facts pertinent thereto or
to this Article.
SECTION 8.08. Trustee's Relation to Senior Indebtedness.
The Trustee and any Paying Agent shall be entitled to all the
rights set forth in this Article with respect to any Senior Indebtedness which
may at any time be held by it in its individual or any other capacity to the
same extent as any other holder of Senior Indebtedness, and nothing in this
Indenture shall deprive the Trustee or any Paying Agent of any of its rights as
such holder.
With respect to the holders of Senior Indebtedness, the Trustee
undertakes to perform or to observe only such of its covenants and obligations
as are specifically set forth in this Article, and no implied covenants or
obligations with respect to the holders of Senior Indebtedness shall be read
into this Indenture against the Trustee. The Trustee shall not be deemed to
owe any fiduciary duty to the holders of Senior Indebtedness (except as
provided in Section 8.03(b)).
SECTION 8.09. Subordination Rights Not Impaired by Acts or Omissions of the
Issuers or Holders of Senior Indebtedness.
No right of any present or future holders of any Senior
Indebtedness to enforce subordination as provided herein shall at any time in
any way be prejudiced or impaired by any act or failure to act on the part of
the Issuers or by any act or
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failure to act, in good faith, by any such holder, or by any noncompliance by
the Issuers with the terms of this Indenture, regardless of any knowledge
thereof which any such holder may have or otherwise be charged with. The
provisions of this Article are intended to be for the benefit of, and shall be
enforceable directly by, the holders of Senior Indebtedness.
SECTION 8.10. Securityholders Authorize Trustee To Effectuate Subordination of
Securities.
Each Holder of Securities by his acceptance of such Securities
authorizes and expressly directs the Trustee on his behalf to take such action
as may be necessary or appropriate to effectuate the subordination provided in
this Article, and appoints the Trustee his attorney-in-fact for such purposes,
including, in the event of any dissolution, winding up, liquidation or
reorganization of either of the Issuers (whether in bankruptcy, insolvency,
receivership, reorganization or similar proceedings or upon an assignment for
the benefit of creditors or otherwise) tending towards liquidation of the
business and assets of either of the Issuers, the filing of a claim for the
unpaid balance of its or his Securities in the form required in those
proceedings.
SECTION 8.11. This Article Not To Prevent Events of Default.
The failure to make a payment on account of principal of or
interest on the Securities by reason of any provision of this Article shall not
be construed as preventing the occurrence of an Event of Default specified in
clause (1) or (2) of Section 6.01.
SECTION 8.12. Trustee's Compensation Not Prejudiced.
Nothing in this Article shall apply to amounts due to the Trustee
pursuant to other sections in this Indenture.
SECTION 8.13. No Waiver of Subordination Provisions.
Without in any way limiting the generality of Section 8.09, the
holders of Senior Indebtedness may, at any time and from time to time, without
the consent of or notice to the Trustee or the Holders of the Securities,
without incurring responsibility to the Holders of the Securities and without
impairing or releasing the subordination provided in this Article or the
obligations hereunder of the Holders of the Securities to the holders of Senior
Indebtedness, do any one or more of the following: (a) change the manner,
place or terms of payment or
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extend the time of payment of, or renew or alter, Senior Indebtedness or any
instrument evidencing the same or any agreement under which Senior Indebtedness
is outstanding or secured; (b) sell, exchange, release or otherwise deal with
any property pledged, mortgaged or otherwise securing Senior Indebtedness; (c)
release any Person liable in any manner for the collection of Senior
Indebtedness and (d) exercise or refrain from exercising any rights against the
Issuers and any other Person.
SECTION 8.14. Subordination Provisions Not Applicable to Money Held in Trust
for Securityholders; Payments May Be Paid Prior to Dissolution.
All money and United States Government Obligations deposited in
trust with the Trustee pursuant to and in accordance with Article Nine shall be
for the sole benefit of the Holders and shall not be subject to this Article
Eight.
Nothing contained in this Article or elsewhere in this Indenture
shall prevent (i) the Issuers, except under the conditions described in Section
8.02, from making payments of principal of and interest on the Securities, or
from depositing with the Trustee any moneys for such payments or from effecting
a termination of the Issuers' and the Subsidiary Guarantors' obligations under
the Securities and this Indenture as provided in Article Nine, or (ii) the
application by the Trustee of any moneys deposited with it for the purpose of
making such payments of principal of and interest on the Securities, to the
holders entitled thereto unless at least two Business Days prior to the date
upon which such payment becomes due and payable, the Trustee shall have
received the written notice provided for in Section 8.02(b) or in Section 8.06.
The Issuers shall give prompt written notice to the Trustee of any dissolution,
winding-up, liquidation or reorganization of either of the Issuers.
SECTION 8.15. Acceleration of Securities.
Without prejudice to Section 6.02, if payment of the Securities
is accelerated because of an Event of Default, the Issuers shall promptly
notify holders of the Senior Indebtedness of the acceleration.
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ARTICLE NINE
DISCHARGE OF INDENTURE
SECTION 9.01. Termination of Issuers' Obligations.
Subject to the provisions of Article Eight, the Issuers may
terminate their and the Subsidiary Guarantors' substantive obligations in
respect of the Securities by delivering all outstanding Securities to the
Trustee for cancellation and paying all sums payable by them on account of
principal of and interest on all Securities or otherwise. In addition to the
foregoing, the Issuers may, provided that no Default or Event of Default has
occurred and is continuing or would arise therefrom (or, with respect to a
Default or Event of Default specified in Section 6.01(8) or (9), any time on or
prior to the 91st calendar day after the date of such deposit (it being
understood that this condition shall not be deemed satisfied until after such
91st day)) and provided that no default under any Senior Indebtedness would
result therefrom, terminate their and the Subsidiary Guarantors' substantive
obligations in respect of the Securities (except for their obligations to pay
the principal of and interest on the Securities and the Subsidiary Guarantors'
guarantee thereof) by (i) depositing with the Trustee, under the terms of an
irrevocable trust agreement, money or direct non-callable obligations of the
United States of America for the payment of which the full faith and credit of
the United States is pledged ("United States Government Obligations")
sufficient (without reinvestment) to pay all remaining Indebtedness on the
Securities, (ii) delivering to the Trustee either an Opinion of Counsel or a
ruling directed to the Trustee from the Internal Revenue Service to the effect
that the Holders of the Securities will not recognize income, gain or loss for
federal income tax purposes solely as a result of such deposit and termination
of obligations, (iii) delivering to the Trustee an Opinion of Counsel to the
effect that the Issuers' exercise of their option under this paragraph will not
result in any of the Issuers, the Trustee or the trust created by the Issuers'
deposit of funds pursuant to this provision becoming or being deemed to be an
"investment company" under the Investment Company Act of 1940, as amended, and
(iv) delivering to the Trustee an Officers' Certificate and an Opinion of
Counsel each stating compliance with all conditions precedent provided for
herein. In addition, subject to the provisions of Article Eight with respect
to the creation of the defeasance trust provided for in the following clause
(i), the Issuers may, provided that no Default or Event of Default has occurred
and is continuing or would arise therefrom (or, with respect to a Default or
Event of Default specified in
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Section 6.01(8) or (9), any time on or prior to the 91st calendar day after the
date of such deposit (it being understood that this condition shall not be
deemed satisfied until after such 91st day)) and provided that no default under
any Senior Indebtedness would result therefrom, terminate all of their and the
Subsidiary Guarantors' substantive obligations in respect of the Securities
(including their obligations to pay the principal of and interest on the
Securities and the Subsidiary Guarantors' guarantee thereof) by (i) depositing
with the Trustee, under the terms of an irrevocable trust agreement, money or
United States Government Obligations sufficient (without reinvestment) to pay
all remaining indebtedness on the Securities, (ii) delivering to the Trustee
either a ruling directed to the Trustee from the Internal Revenue Service to
the effect that the Holders of the Securities will not recognize income, gain
or loss for federal income tax purposes solely as a result of such deposit and
termination of obligations or an Opinion of Counsel based upon such a ruling
addressed to the Trustee or a change in the applicable Federal tax law since
the date of this Indenture to such effect, (iii) delivering to the Trustee an
Opinion of Counsel to the effect that the Issuers' exercise of their option
under this paragraph will not result in any of the Issuers, the Trustee or the
trust created by the Issuers' deposit of funds pursuant to this provision
becoming or being deemed to be an "investment company" under the Investment
Company Act of 1940, as amended, and (iv) delivering to the Trustee an
Officers' Certificate and an Opinion of Counsel each stating compliance with
all conditions precedent provided for herein.
Notwithstanding the foregoing paragraph, the Issuers' obligations
in Sections 2.03, 2.05, 2.06, 2.07, 4.01 (but not with respect to termination
of substantive obligations pursuant to the third sentence of the foregoing
paragraph), 4.02, 7.07, 7.08, 9.03 and 9.04 shall survive until the Securities
are no longer outstanding. Thereafter the Issuers' obligations in Sections
7.07, 9.03 and 9.04 shall survive.
After such delivery or irrevocable deposit and delivery of an
Officers' Certificate and Opinion of Counsel, the Trustee upon request shall
acknowledge in writing the discharge of the Issuers' and the Subsidiary
Guarantors' obligations under the Securities and this Indenture except for
those surviving obligations specified above.
SECTION 9.02. Application of Trust Money.
The Trustee shall hold in trust money or United States Government
Obligations deposited with it pursuant to Section
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9.01, and shall apply the deposited money and the money from United States
Government Obligations in accordance with this Indenture solely to the payment
of principal of and interest on the Securities.
SECTION 9.03. Repayment to Issuers.
Subject to Sections 7.07 and 9.01, the Trustee shall promptly pay
to the Issuers upon written request any excess money held by it at any time.
The Trustee shall pay to the Issuers upon written request any money held by it
for the payment of principal or interest that remains unclaimed for two years;
provided, however, that the Trustee before being required to make any payment
may at the expense of the Issuers cause to be published once in a newspaper of
general circulation in The City of New York or mail to each Holder entitled to
such money notice that such money remains unclaimed and that, after a date
specified therein which shall be at least 30 days from the date of such
publication or mailing, any unclaimed balance of such money then remaining
shall be repaid to the Issuers. After payment to the Issuers, Securityholders
entitled to money must look to the Issuers for payment as general creditors
unless an applicable abandoned property law designates another person and all
liability of the Trustee or Paying Agent with respect to such money shall
thereupon cease.
SECTION 9.04. Reinstatement.
If the Trustee is unable to apply any money or United States
Government Obligations in accordance with Section 9.01 by reason of any legal
proceeding or by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application, the
Issuers' and the Subsidiary Guarantors' obligations under this Indenture and
the Securities shall be revived and reinstated as though no deposit had
occurred pursuant to Section 9.01 until such time as the Trustee is permitted
to apply all such money or United States Government Obligations in accordance
with Section 9.01; provided, however, that if the Issuers have made any payment
of interest on or principal of any Securities because of the reinstatement of
their obligations, the Issuers shall be subrogated to the rights of the Holders
of such Securities to receive such payment from the money or United States
Government Obligations held by the Trustee.
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ARTICLE TEN
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 10.01. Without Consent of Holders.
The Issuers and the Subsidiary Guarantors, when authorized by a
resolution of their respective Boards of Directors (which, in the case of the
Company, shall mean the Board of Directors of FV Inc. for so long as the
Company remains a partnership), and the Trustee may amend or supplement this
Indenture or the Securities without notice to or consent of any Securityholder:
(i) to cure any ambiguity, defect or inconsistency; provided,
however, that such amendment or supplement does not materially and
adversely affect the rights of any Holder under this Indenture or the
Securities;
(ii) to effect the assumption by a successor Person of all
obligations of either of the Issuers under the Securities and this
Indenture in connection with any transaction complying with Article Five
of this Indenture;
(iii) to provide for uncertificated Securities in addition to or
in place of certificated Securities;
(iv) to comply with any requirements of the SEC in order to
effect or maintain the qualification of this Indenture under the TIA;
(v) to make any change that would provide any additional
benefit or rights to the Holders;
(vi) to make any other change that does not materially and
adversely affect the rights of any Holder under this Indenture or the
Securities;
(vii) to evidence the succession of another Person to any
Subsidiary Guarantor and the assumption by any such successor of the
covenants of such Subsidiary Guarantor herein and in the Subsidiary
Guarantee;
(viii) to add to the covenants of the Issuers or the Subsidiary
Guarantors for the benefit of the Holders, or to surrender any right or
power herein conferred upon the Issuers or any Subsidiary Guarantor;
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(ix) to secure the Securities pursuant to the requirements of
Section 4.18 or otherwise; or
(x) to reflect the release of a Subsidiary Guarantor from its
obligations with respect to its Subsidiary Guarantee in accordance with
the provisions of Section 11.03 and to add a Guarantor pursuant to the
requirements of Sections 4.19 and 11.07;
provided, however, that the Issuers have delivered to the Trustee an Opinion of
Counsel stating that such amendment or supplement complies with the provisions
of this Section 10.01.
SECTION 10.02. With Consent of Holders.
Subject to Section 6.07, the Issuers and the Subsidiary
Guarantors, when authorized by a resolution of their respective Boards of
Directors, and the Trustee may amend or supplement this Indenture or the
Securities with the written consent of the Holders of at least a majority in
aggregate principal amount of the then outstanding Securities. Subject to
Section 6.07, the Holders of a majority in aggregate principal amount of the
then outstanding Securities, on behalf of all Holders, may waive compliance by
the Issuers or any Subsidiary Guarantor with any provision of this Indenture or
the Securities. However, without the consent of each Securityholder affected,
an amendment, supplement or waiver, including a waiver pursuant to Section
6.04, may not:
(1) change the Stated Maturity of the principal of or any
installment of interest on any Security or alter the optional redemption
or repurchase provisions of any Security or this Indenture in a manner
adverse to the holders of the Securities;
(2) reduce the principal amount of any Security;
(3) reduce the rate or extend the time for payment of interest
on any Security;
(4) change the place or currency of payment of the principal
of or interest on any Security;
(5) modify any provisions of Section 6.04 (other than to add
sections of this Indenture or the Securities subject thereto) or 6.07 or
this Section 10.02 (other than to add sections of this Indenture or the
Securities which may not
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be amended, supplemented or waived without the consent of each
Securityholder affected);
(6) reduce the percentage of the principal amount of
outstanding Securities necessary for amendment to or waiver of
compliance with any provision of this Indenture or the Securities or for
waiver of any Default;
(7) waive a default in the payment of the principal of,
interest on, or redemption payment with respect to, any Security (except
a recision of acceleration of the Securities by the Holders as provided
in Section 6.02 and a waiver of the payment of default that resulted
from such acceleration);
(8) modify the ranking or priority of the Securities or the
Subsidiary Guarantee of any Subsidiary Guarantor, or modify the
definition of Senior Indebtedness or Guarantor Senior Indebtedness, or
amend or modify any of the provisions of Article Eight or Article Twelve
in any manner adverse to the Holders;
(9) release any Subsidiary Guarantor from any of its
obligations under its Subsidiary Guarantee or this Indenture otherwise
than in accordance with this Indenture; or
(10) modify the provisions relating to any Offer to Purchase
required pursuant to Section 4.05 or 4.14 in a manner materially adverse
to the Holders.
An amendment under this Section 10.02 may not make any change
under Article Eight, Article Nine, Article Eleven or Article Twelve hereof that
adversely affects in any material respect the rights of any holder of Senior
Indebtedness then outstanding unless the holders of such Senior Indebtedness
(or any agent or representative thereof authorized to give a consent) shall
have consented to such change. No amendment or other change to Article Eight
or Article Twelve shall be effective without the consent of the holders of all
Designated Senior Indebtedness (or any agent or representative thereof
authorized to give such consent).
It shall not be necessary for the consent of the Holders under
this Section to approve the particular form of any proposed amendment,
supplement or waiver, but it shall be sufficient if such consent approves the
substance thereof.
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After an amendment, supplement or waiver under this Section
becomes effective, the Issuers shall mail to the Holders affected thereby a
notice briefly describing the amendment, supplement or waiver. Any failure of
the Issuers to mail such notice, or any defect therein, shall not, however, in
any way impair or affect the validity of any such supplemental indenture.
SECTION 10.03. Compliance with Trust Indenture Act.
Every amendment to or supplement of this Indenture or the
Securities shall comply with the TIA as then in effect.
SECTION 10.04. Effect of Consents.
Until an amendment or waiver becomes effective, a consent to it
by a Holder is a continuing consent by the Holder and every subsequent Holder
of that Security or portion of that Security that evidences the same debt as
the consenting Holder's Security, even if notation of the consent is not made
on any Security.
The Issuers may, but shall not be obligated to, fix a record date
for the purpose of determining the Holders entitled to consent to any
amendment, supplement or waiver. If a record date is fixed, then those persons
who were Holders at such record date (or their duly designated proxies), and
only those persons, shall be entitled to consent to such amendment, supplement
or waiver whether or not such persons continue to be Holders after such record
date. No such consent shall be valid or effective for more than 90 days after
such record date.
After an amendment, supplement or waiver becomes effective, it
shall bind every Securityholder, unless it makes a change described in any of
clauses (1) through (10) of Section 10.02. In that case the amendment,
supplement or waiver shall bind each Holder of a Security who has consented to
it and every subsequent Holder of a Security or portion of a Security that
evidences the same debt as the consenting Holder's Security.
SECTION 10.05. Notation on or Exchange of Securities.
If an amendment, supplement or waiver changes the terms of a
Security, the Trustee may require the Holder of the Security to deliver it to
the Trustee. The Trustee may place an appropriate notation on the Security
about the changed terms and return it to the Holder. Alternatively, if the
Issuers or the Trustee so determines, the Issuers in exchange for the Security
shall issue and the Trustee shall authenticate a new Security
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that reflects the changed terms. Failure to make the appropriate notation or
issue a new Security shall not affect the validity and effect of such
amendment, supplement or waiver.
SECTION 10.06. Trustee To Sign Amendments, etc.
The Trustee shall be entitled to receive, and shall be fully
protected in relying upon, an Opinion of Counsel stating that the execution of
any amendment, supplement or waiver authorized pursuant to this Article Ten is
authorized or permitted by this Indenture and that such amendment, supplement
or waiver constitutes the legal, valid and binding obligation of the Issuers
and the Subsidiary Guarantors, enforceable in accordance with its terms
(subject to customary exceptions). The Trustee may, but shall not (except to
the extent required in the case of a supplemental indenture entered into
pursuant to Section 10.01(iv)) be obligated to, execute any such amendment,
supplement or waiver which affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise. In signing any amendment,
supplement or waiver, the Trustee shall be entitled to receive an indemnity
reasonably satisfactory to it.
ARTICLE ELEVEN
SUBSIDIARY GUARANTEE
SECTION 11.01. Unconditional Guarantee.
Each Subsidiary Guarantor hereby unconditionally, jointly and
severally, guarantees to each Holder of a Security authenticated and delivered
by the Trustee and to the Trustee and its successors and assigns that: the
principal of and interest on the Securities will be promptly paid in full when
due, subject to any applicable grace period, whether at maturity, by
acceleration or otherwise, and interest on the overdue principal and interest
on any overdue interest on the Securities and all other obligations of the
Company to the Holders or the Trustee hereunder or under the Securities will be
promptly paid in full or performed, all in accordance with the terms hereof and
thereof; subject, however, to the limitations set forth in Section 11.04. Each
Subsidiary Guarantor hereby agrees that its obligations hereunder shall be
unconditional, irrespective of the validity, regularity or enforceability of
the Securities or this Indenture, the absence of any action to enforce the
same, any waiver or consent by any Holder of the Securities with respect to any
provisions hereof or thereof, the recovery of any judgment against the Company,
any action to enforce the same or any other circumstance which might otherwise
constitute a legal or
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equitable discharge or defense of a guarantor. Each Subsidiary Guarantor
hereby waives diligence, presentment, demand of payment, filing of claims with
a court in the event of insolvency or bankruptcy of the Company, any right to
require a proceeding first against the Company, protest, notice and all demands
whatsoever and covenants that the Subsidiary Guarantee will not be discharged
except by complete performance of the obligations contained in the Securities,
this Indenture, and this Subsidiary Guarantee. If any Holder or the Trustee is
required by any court or otherwise to return to the Company, any Subsidiary
Guarantor, or any custodian, trustee, liquidator or other similar official
acting in relation to the Company or any Subsidiary Guarantor, any amount paid
by the Company or any Subsidiary Guarantor to the Trustee or such Holder, this
Subsidiary Guarantee, to the extent theretofore discharged, shall be reinstated
in full force and effect. Each Subsidiary Guarantor further agrees that, as
between each Subsidiary Guarantor, on the one hand, and the Holders and the
Trustee, on the other hand, (x) the maturity of the obligations guaranteed
hereby may be accelerated as provided in Article Six for the purpose of this
Subsidiary Guarantee, notwithstanding any stay, injunction or other prohibition
preventing such acceleration in respect of the obligations guaranteed hereby,
and (y) in the event of any acceleration of such obligations as provided in
Article Six, such obligations (whether or not due and payable) shall forthwith
become due and payable by each Subsidiary Guarantor for the purpose of this
Subsidiary Guarantee.
SECTION 11.02. Severability.
In case any provision of this Subsidiary Guarantee shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
SECTION 11.03. Release of a Guarantor.
(a) In the event that each holder of Other Indebtedness which
resulted in the creation of a Subsidiary Guarantee unconditionally releases a
Subsidiary Guarantor of all of its obligations under its guarantee of such
Other Indebtedness pursuant to a written agreement in form and substance
satisfactory to the Trustee (other than a release resulting from payment under
such guarantee) such Subsidiary Guarantor shall be automatically and
unconditionally released from all obligations under its Subsidiary Guarantee.
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(b) Additionally, if the Securities are defeased in accordance
with the terms of this Indenture, or if all or substantially all of the assets
of any Subsidiary Guarantor or all of the Equity Interests of any Subsidiary
Guarantor is sold (including by issuance or otherwise) by the Company or any of
its Subsidiaries in a transaction constituting an Asset Sale and if (x) the Net
Cash Proceeds from such Asset Sale are used in accordance with Section 4.05 or
(y) the Company delivers to the Trustee an Officers' Certificate covenanting
that the Net Cash Proceeds from such Asset Sale shall be used in accordance
with Section 4.05 and within the time limits specified by such Section 4.05,
then such Subsidiary Guarantor (in the event of a sale or other disposition of
all of the Equity Interests of such Subsidiary Guarantor) or the corporation
acquiring such assets (in the event of a sale or other disposition of all or
substantially all of the assets of such Subsidiary Guarantor), shall be deemed
released from all obligations under this Article Eleven without any further
action required on the part of the Trustee or any Holder.
(c) The Trustee shall, at the sole cost and expense of the
Company, upon receipt of a request by the Company accompanied by an Officers'
Certificate certifying as to the compliance with this Section and, with respect
to clause (b) of this Section 11.03, upon receipt at the reasonable request of
the Trustee of an Opinion of Counsel that the provisions of this Section 11.03
have been complied with, deliver an appropriate instrument evidencing such
release. Any Subsidiary Guarantor not so released remains liable for the full
amount of principal of and interest on the Securities and the other obligations
of the Company hereunder as provided in this Article Eleven.
SECTION 11.04. Limitation of Subsidiary Guarantor's Liability.
Each Subsidiary Guarantor, and by its acceptance hereof each
Holder and the Trustee, hereby confirms that it is the intention of all such
parties that the guarantee by such Subsidiary Guarantor pursuant to its
Subsidiary Guarantee not constitute a fraudulent transfer or conveyance for
purposes of title 11 of the United States Code, as amended, the Uniform
Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar
U.S. Federal or state or other applicable law or that the obligations of such
Subsidiary Guarantor under Section 11.01 would otherwise be held or determined
to be void, invalid or unenforceable on account of the amount of its liability
under said Section 11.01. To effectuate the foregoing intention, the Holders
and such Subsidiary Guarantor hereby irrevocably agree that the obligations of
such Subsidiary Guarantor under the
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Subsidiary Guarantee shall be limited to the maximum amount as will, after
giving effect to all other contingent and fixed liabilities of such Subsidiary
Guarantor and after giving effect to any collections from or payments made by
or on behalf of any other Subsidiary Guarantor in respect of the obligations of
such other Subsidiary Guarantor under its Subsidiary Guarantee or pursuant to
Section 11.05, result in the obligations of such Subsidiary Guarantor under the
Subsidiary Guarantee not constituting such fraudulent transfer or conveyance
and not being held or determined to be void, invalid or unenforceable.
SECTION 11.05. Contribution.
In order to provide for just and equitable contribution among the
Subsidiary Guarantors, the Subsidiary Guarantors agree, inter se, that in the
event any payment or distribution is made by any Subsidiary Guarantor (a
"Funding Guarantor") under the Subsidiary Guarantee, such Funding Guarantor
shall be entitled to a contribution from all other Subsidiary Guarantors in a
pro rata amount, based on the net assets of each Subsidiary Guarantor
(including the Funding Guarantor), determined in accordance with GAAP, subject
to Section 11.04, for all payments, damages and expenses incurred by that
Funding Guarantor in discharging the Company's obligations with respect to the
Securities or any other Subsidiary Guarantor's obligations with respect to the
Subsidiary Guarantee.
SECTION 11.06. Execution of Subsidiary Guarantee.
To further evidence their Subsidiary Guarantee to the Holders,
the Subsidiary Guarantors hereby agree to execute the Subsidiary Guarantee in
substantially the form set forth in Exhibit B to be endorsed on each Security
authenticated and delivered by the Trustee after such Subsidiary Guarantee is
executed. Each Guarantor hereby agrees that its Subsidiary Guarantee set forth
in Section 11.01 shall remain in full force and effect notwithstanding any
failure to endorse on any particular Security a notation of such Subsidiary
Guarantee. Each such Subsidiary Guarantee shall be signed on behalf of each
Subsidiary Guarantor by its Chairman of the Board of Directors, its President
or one of its Vice Presidents prior to the authentication of the Security on
which it is endorsed, and the delivery of such Security by the Trustee, after
the authentication thereof hereunder, shall constitute due delivery of such
Subsidiary Guarantee on behalf of such Subsidiary Guarantor. Such signature
upon the Subsidiary Guarantee may be the manual or facsimile signature of such
officer and may be imprinted or otherwise reproduced on the Subsidiary
Guarantee,
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and in case such officer who shall have signed the Subsidiary Guarantee shall
cease to be such officer before the Security on which such Subsidiary Guarantee
is endorsed shall have been authenticated and delivered by the Trustee or
disposed of by the Company, such Security nevertheless may be authenticated and
delivered or disposed of as though the Person who signed the Subsidiary
Guarantee had not ceased to be such officer of the Subsidiary Guarantor.
SECTION 11.07. Additional Subsidiary Guarantors.
Any Restricted Subsidiary of the Company which is required
pursuant to Section 4.19 to become a Subsidiary Guarantor shall execute and
deliver to the Trustee (a) a supplemental indenture in form and substance
reasonably satisfactory to the Trustee which subjects such Restricted
Subsidiary to the provisions of this Indenture as a Subsidiary Guarantor, and
(b) an Opinion of Counsel to the effect that such supplemental indenture has
been duly authorized and executed by such Restricted Subsidiary and constitutes
the legal, valid, binding and enforceable obligation of such Restricted
Subsidiary (subject to such customary exceptions concerning fraudulent
conveyance laws, creditors' rights and equitable principles).
SECTION 11.08. Subordination of Subrogation and Other Rights.
Each Subsidiary Guarantor hereby agrees that any claim against
the Company that arises from the payment, performance or enforcement of such
Subsidiary Guarantor's obligations under its Subsidiary Guarantee or this
Indenture, including, without limitation, any right of subrogation, shall be
subject and subordinate to, and no payment with respect to any such claim of
such Subsidiary Guarantor shall be made before, the payment in full in cash of
all outstanding Securities in accordance with the provisions provided therefor
in this Indenture.
ARTICLE TWELVE
SUBORDINATION OF GUARANTEE
SECTION 12.01. Guarantee Obligations Subordinated to Subsidiary Guarantor
Senior Debt.
Each Subsidiary Guarantor covenants and agrees, and the Trustee
and each Holder of the Securities by his acceptance thereof likewise covenant
and agree, that the Subsidiary Guarantees shall be issued subject to the
provisions of this Article; and each person holding any Security, whether upon
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original issue or upon transfer, assignment or exchange thereof, accepts and
agrees that all payments of the principal of and interest on the Securities
pursuant to the Subsidiary Guarantee made by or on behalf of any Subsidiary
Guarantor shall, to the extent and in the manner set forth in this Article, be
subordinated and junior in right of payment to the prior payment in full in
cash of all amounts payable under Guarantor Senior Indebtedness of such
Subsidiary Guarantor.
SECTION 12.02. No Payment on Subsidiary Guarantees in Certain Circumstances.
(a) No direct or indirect payment (including any payment made
to Securityholders under the terms of Indebtedness subordinated to the
Securities, but excluding any payment or distribution of Permitted Junior
Securities) by or on behalf of any Subsidiary Guarantor of principal of or
interest on the Securities pursuant to such Subsidiary Guarantor's Subsidiary
Guarantee, whether pursuant to the terms of the Securities, upon acceleration
or otherwise, shall be made if, at the time of such payment, there exists a
default in the payment of all or any portion of the Obligations on any
Designated Guarantor Senior Indebtedness of such Subsidiary Guarantor, and such
default shall not have been cured or waived or the benefits of this sentence
waived by or on behalf of the holders of such Designated Guarantor Senior
Indebtedness. In addition, during the continuance of any non-payment default
or event of default with respect to any Designated Guarantor Senior
Indebtedness pursuant to which the maturity thereof may be immediately
accelerated, and upon receipt by the Trustee of written notice (the "Guarantor
Payment Blockage Notice") from the holder or holders of such Designated
Guarantor Senior Indebtedness or the trustee or agent acting on behalf of such
Designated Guarantor Senior Indebtedness, then, unless and until such default
or event of default has been cured or waived or has ceased to exist or such
Designated Guarantor Senior Indebtedness has been discharged or paid in full,
no direct or indirect payment (including any payment made to Securityholders
under the terms of Indebtedness subordinated to the Securities, but excluding
any payment or distribution of Permitted Junior Securities) shall be made by or
on behalf of such Subsidiary Guarantor of principal or interest on the
Securities, except from those funds held in trust for the benefit of the
Holders of any Securities pursuant to Article Nine, to such Holders, during a
period (a "Guarantor Blockage Period") commencing on the date of receipt of
such notice by the Trustee and ending 179 days thereafter.
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Notwithstanding anything herein or in the Securities to the
contrary, in no event shall a Guarantor Blockage Period extend beyond 179 days
from the date the Guarantor Payment Blockage Notice was given. Not more than
one Guarantor Blockage Period may be commenced with respect to any Subsidiary
Guarantor during any period of 360 consecutive days. No default or event of
default that existed or was continuing on the date of commencement of any other
Guarantor Blockage Period with respect to the Designated Guarantor Senior
Indebtedness initiating such Guarantor Payment Blockage Period (to the extent
the holder of Designated Guarantor Senior Indebtedness, or trustee or agent,
giving notice commencing such Guarantor Payment Blockage Period had knowledge
of such existing or continuing default or event of default) may be, or be made,
the basis for the commencement of any other Guarantor Blockage Period by the
holder or holders of such Designated Guarantor Senior Indebtedness or the
trustee or agent acting on behalf of such Designated Guarantor Senior
Indebtedness, whether or not within a period of 360 consecutive days, unless
such default or event of default has been cured or waived for a period of not
less than 90 consecutive days.
(b) In the event that, notwithstanding the foregoing, any
payment shall be received by the Trustee or any Holder when such payment is
prohibited by Section 12.02(a), such payment shall be held in trust for the
benefit of, and shall be paid over or delivered to, the holders of such
Designated Guarantor Senior Indebtedness or their respective agents or
representatives, or to the trustee or trustees under any indenture pursuant to
which any of such Designated Guarantor Senior Indebtedness may have been
issued, as their respective interests may appear, but only to the extent that,
upon notice from the Trustee to the holders of such Designated Guarantor Senior
Indebtedness that such prohibited payment has been made, the holders of such
Designated Guarantor Senior Indebtedness (or their agent, representative or
representatives or a trustee) notify the Trustee in writing of the amounts then
due and owing on such Designated Guarantor Senior Indebtedness, if any, and
only the amounts specified in such notice to the Trustee shall be paid to the
holders of such Designated Guarantor Senior Indebtedness.
SECTION 12.03. Payment Over of Proceeds upon Dissolution, etc.
(a) Upon any payment or distribution of assets or securities
of any Subsidiary Guarantor of any kind or character, whether in cash, property
or securities (including any payment made to Securityholders under the terms of
Indebtedness subordinated to the Securities, but excluding any payment or
distribution of Permitted Junior Securities), upon any
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dissolution or winding-up or total liquidation or reorganization of such
Subsidiary Guarantor, whether voluntary or involuntary or in bankruptcy,
insolvency, receivership or other proceedings, all amounts due or to become due
with respect to all Guarantor Senior Indebtedness of such Subsidiary Guarantor
shall first be paid in full in cash before the Holders of the Securities or the
Trustee on behalf of such Holders shall be entitled to receive any payment by
such Subsidiary Guarantor of the principal of or interest on the Securities
pursuant to such Subsidiary Guarantor's Subsidiary Guarantee, or any payment to
acquire any of the Securities for cash, property or securities, or any
distribution with respect to the Securities of any cash, property or
securities. Before any payment may be made by, or on behalf of, any Subsidiary
Guarantor of the principal of or interest on the Securities upon any such
dissolution or winding-up or liquidation or reorganization, any payment or
distribution of assets or securities of such Subsidiary Guarantor of any kind
or character, whether in cash, property or securities, to which the Holders of
the Securities or the Trustee on their behalf would be entitled, but for the
subordination provisions of this Indenture, shall be made by such Subsidiary
Guarantor or by any receiver, trustee in bankruptcy, liquidating trustee, agent
or other Person making such payment or distribution, directly to the holders of
the Guarantor Senior Indebtedness of such Subsidiary Guarantor (pro rata to
such holders on the basis of the respective amounts of such Guarantor Senior
Indebtedness held by such holders) or their agents or representatives or to the
trustee or trustees under any indenture pursuant to which any of such Guarantor
Senior Indebtedness may have been issued, as their respective interests may
appear, to the extent necessary to pay all such Guarantor Senior Indebtedness
in full in cash after giving effect to any concurrent payment, distribution or
provision therefor to or for the holders of such Guarantor Senior Indebtedness.
(b) In the event that, notwithstanding the foregoing provision
prohibiting such payment or distribution, any payment or distribution of assets
or securities of any Subsidiary Guarantor of any kind or character, whether in
cash, property or securities, shall be received by the Trustee or any Holder of
Securities at a time when such payment or distribution is prohibited by Section
12.03(a) and before all obligations in respect of the Guarantor Senior
Indebtedness of such Subsidiary Guarantor are paid in full in cash, such
payment or distribution shall be received and held in trust for the benefit of,
and shall be paid over or delivered to, the holders of such Guarantor Senior
Indebtedness (pro rata to such holders on the basis of the respective amounts
of such Guarantor Senior Indebtedness held by such holders) or their respective
agents, representatives, or to
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the trustee or trustees under any indenture pursuant to which any of such
Guarantor Senior Indebtedness may have been issued, as their respective
interests may appear, for application to the payment of such Guarantor Senior
Indebtedness remaining unpaid until all such Guarantor Senior Indebtedness has
been paid in full in cash after giving effect to any concurrent payment or
distribution to or for the holders of such Guarantor Senior Indebtedness.
The consolidation of any Subsidiary Guarantor with, or the merger
of any Subsidiary Guarantor with or into, another corporation or the
liquidation or dissolution of any Subsidiary Guarantor following the conveyance
or transfer of its property as an entirety, or substantially as an entirety, to
another corporation upon the terms and conditions provided in Article Five
shall not be deemed a dissolution, winding-up, liquidation or reorganization
for the purposes of this Section if such other corporation shall, as a part of
such consolidation, merger, conveyance or transfer, comply with the conditions
stated in Article Five.
SECTION 12.04. Subrogation.
Upon the payment in full in cash of all Guarantor Senior
Indebtedness of a Subsidiary Guarantor, the Holders of the Securities shall be
subrogated to the rights of the holders of such Guarantor Senior Indebtedness
to receive payments or distributions of cash, property or securities of such
Subsidiary Guarantor made on such Guarantor Senior Indebtedness until the
principal of and interest on the Securities shall be paid in full; and, for the
purposes of such subrogation, no payments or distributions to the holders of
such Guarantor Senior Indebtedness of any cash, property or securities to which
the Holders of the Securities or the Trustee on their behalf would be entitled
except for the provisions of this Article, and no payment over pursuant to the
provisions of this Article to the holders of such Guarantor Senior Indebtedness
by Holders of the Securities or the Trustee on their behalf shall, as between
such Subsidiary Guarantor, its creditors other than holders of such Guarantor
Senior Indebtedness, and the Holders of the Securities, be deemed to be a
payment by such Subsidiary Guarantor to or on account of such Guarantor Senior
Indebtedness. It is understood that the provisions of this Article are and are
intended solely for the purpose of defining the relative rights of the Holders
of the Securities, on the one hand, and the holders of Guarantor Senior
Indebtedness of each Subsidiary Guarantor, on the other hand.
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If any payment or distribution to which the Holders of the
Securities would otherwise have been entitled but for the provisions of this
Article shall have been applied, pursuant to the provisions of this Article, to
the payment of all amounts payable under Guarantor Senior Indebtedness, then
and in such case, the Holders of the Securities shall be entitled to receive
from the holders of such Guarantor Senior Indebtedness any payments or
distributions received by such holders of Guarantor Senior Indebtedness in
excess of the amount required to make payment in full in cash of such Guarantor
Senior Indebtedness.
SECTION 12.05. Obligations of Subsidiary Guarantors Unconditional.
Nothing contained in this Article or elsewhere in this Indenture
or in the Securities or the Subsidiary Guarantee is intended to or shall
impair, as among the Subsidiary Guarantors and the Holders of the Securities,
the obligation of each Subsidiary Guarantor, which is absolute and
unconditional, to pay to the Holders of the Securities the principal of and
interest on the Securities as and when the same shall become due and payable in
accordance with the terms of the Subsidiary Guarantee, or is intended to or
shall affect the relative rights of the Holders of the Securities and creditors
of any Subsidiary Guarantor other than the holders of Guarantor Senior
Indebtedness, nor shall anything herein or therein prevent the Holder of any
Security or the Trustee on their behalf from exercising all remedies otherwise
permitted by applicable law upon default under this Indenture, subject to the
rights, if any, under this Article of the holders of Guarantor Senior
Indebtedness in respect of cash, property or securities of any Subsidiary
Guarantor received upon the exercise of any such remedy.
Without limiting the generality of the foregoing, nothing
contained in this Article shall restrict the right of the Trustee or the
Holders of Securities to take any action to declare the Securities to be due
and payable prior to their stated maturity pursuant to Section 6.02 or to
pursue any rights or remedies hereunder; provided, however, that all Guarantor
Senior Indebtedness of any Subsidiary Guarantor then due and payable shall
first be paid in full in cash before the Holders of the Securities or the
Trustee are entitled to receive any direct or indirect payment from such
Subsidiary Guarantor of principal of or interest on the Securities pursuant to
such Subsidiary Guarantor's Subsidiary Guarantee.
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SECTION 12.06. Notice to Trustee.
Each Subsidiary Guarantor shall give prompt written notice to the
Trustee of any fact known to such Subsidiary Guarantor which would prohibit the
making of any payment to or by the Trustee in respect of the Securities
pursuant to the provisions of this Article. The Trustee shall not be charged
with knowledge of the existence of any default or event of default with respect
to any Guarantor Senior Indebtedness or of any other facts which would prohibit
the making of any payment to or by the Trustee unless and until the Trustee
shall have received notice in writing at its Corporate Trust Office to that
effect signed by an Officer of such Subsidiary Guarantor, or by a holder of
Guarantor Senior Indebtedness or trustee or agent therefor; and prior to the
receipt of any such written notice, the Trustee shall, subject to Article
Seven, be entitled to assume that no such facts exist; provided that if the
Trustee shall not have received the notice provided for in this Section at
least one Business Day prior to the date upon which by the terms of this
Indenture any moneys shall become payable for any purpose (including, without
limitation, the payment of the principal of or interest on any Security), then,
regardless of anything herein to the contrary, the Trustee shall have full
power and authority to receive any moneys from any Subsidiary Guarantor and to
apply the same to the purpose for which they were received, and shall not be
affected by any notice to the contrary which may be received by it on or after
such prior date. Nothing contained in this Section 12.06 shall limit the right
of the holders of Guarantor Senior Indebtedness to recover payments as
contemplated by Section 12.03. The Trustee shall be entitled to rely on the
delivery to it of a written notice by a Person representing himself or itself
to be a holder of any Guarantor Senior Indebtedness (or a trustee on behalf of,
or other representative of, such holder) to establish that such notice has been
given by a holder of such Guarantor Senior Indebtedness or a trustee or
representative on behalf of any such holder.
In the event that the Trustee determines in good faith that any
evidence is required with respect to the right of any Person as a holder of
Guarantor Senior Indebtedness to participate in any payment or distribution
pursuant to this Article, the Trustee may request such Person to furnish
evidence to the reasonable satisfaction of the Trustee as to the amount of
Guarantor Senior Indebtedness held by such Person, the extent to which such
Person is entitled to participate in such payment or distribution and any other
facts pertinent to the rights of such Person under this Article, and if such
evidence is not furnished, the Trustee may defer any payment to such Person
pending judicial
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determination as to the right of such Person to receive such payment.
SECTION 12.07. Reliance on Judicial Order or Certificate of Liquidating Agent.
Upon any payment or distribution of assets or securities of a
Subsidiary Guarantor referred to in this Article, the Trustee and the Holders
of the Securities shall be entitled to rely upon any order or decree made by
any court of competent jurisdiction in which bankruptcy, dissolution,
winding-up, liquidation or reorganization proceedings are pending, or upon a
certificate of the receiver, trustee in bankruptcy, liquidating trustee, agent
or other person making such payment or distribution, delivered to the Trustee
or to the Holders of the Securities for the purpose of ascertaining the persons
entitled to participate in such distribution, the holders of Guarantor Senior
Indebtedness of such Subsidiary Guarantor and other indebtedness of such
Subsidiary Guarantor, the amount thereof or payable thereon, the amount or
amounts paid or distributed thereon and all other facts pertinent thereto or to
this Article.
SECTION 12.08. Trustee's Relation to Guarantor Senior Indebtedness.
The Trustee and any Paying Agent shall be entitled to all the
rights set forth in this Article with respect to any Guarantor Senior
Indebtedness which may at any time be held by it in its individual or any other
capacity to the same extent as any other holder of Guarantor Senior
Indebtedness, and nothing in this Indenture shall deprive the Trustee or any
Paying Agent of any of its rights as such holder.
With respect to the holders of Guarantor Senior Indebtedness, the
Trustee undertakes to perform or to observe only such of its covenants and
obligations as are specifically set forth in this Article, and no implied
covenants or obligations with respect to the holders of Guarantor Senior
Indebtedness shall be read into this Indenture against the Trustee. The
Trustee shall not be deemed to owe any fiduciary duty to the holders of
Guarantor Senior Indebtedness (except as provided in Section 12.03(b)).
<PAGE> 107
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SECTION 12.09.Subordination Rights Not Impaired by Acts or Omissions of the
Subsidiary Guarantors or Holders of Guarantor Senior
Indebtedness.
No right of any present or future holders of any Guarantor Senior
Indebtedness to enforce subordination as provided herein shall at any time in
any way be prejudiced or impaired by any act or failure to act on the part of
any Subsidiary Guarantor or by any act or failure to act, in good faith, by any
such holder, or by any noncompliance by any Subsidiary Guarantor with the terms
of this Indenture, regardless of any knowledge thereof which any such holder
may have or otherwise be charged with. The provisions of this Article are
intended to be for the benefit of, and shall be enforceable directly by, the
holders of Guarantor Senior Indebtedness.
SECTION 12.10. Securityholders Authorize Trustee To Effectuate Subordination of
Guarantee.
Each Holder of Securities by his acceptance of such Securities
authorizes and expressly directs the Trustee on his behalf to take such action
as may be necessary or appropriate to effectuate the subordination provided in
this Article, and appoints the Trustee his attorney-in-fact for such purposes,
including, in the event of any dissolution, winding up, liquidation or
reorganization of any Subsidiary Guarantor (whether in bankruptcy, insolvency,
receivership, reorganization or similar proceedings or upon an assignment for
the benefit of creditors or otherwise) tending towards liquidation of the
business and assets of such Subsidiary Guarantor, the filing of a claim for the
unpaid balance of its or his Securities in the form required in those
proceedings.
SECTION 12.11. This Article Not To Prevent Events of Default.
The failure to make a payment on account of principal of or
interest on the Securities by reason of any provision of this Article shall not
be construed as preventing the occurrence of an Event of Default specified in
clauses (1) or (2) of Section 6.01.
SECTION 12.12. Trustee's Compensation Not Prejudiced.
Nothing in this Article shall apply to amounts due to the Trustee
pursuant to other sections in this Indenture.
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SECTION 12.13. No Waiver of Subsidiary Guarantee Subordination Provisions.
Without in any way limiting the generality of Section 12.09, the
holders of Guarantor Senior Indebtedness may, at any time and from time to
time, without the consent of or notice to the Trustee or the Holders of the
Securities, without incurring responsibility to the Holders of the Securities
and without impairing or releasing the subordination provided in this Article
or the obligations hereunder of the Holders of the Securities to the holders of
Guarantor Senior Indebtedness, do any one or more of the following: (a) change
the manner, place or terms of payment or extend the time of payment of, or
renew or alter, Guarantor Senior Indebtedness or any instrument evidencing the
same or any agreement under which Guarantor Senior Indebtedness is outstanding
or secured; (b) sell, exchange, release or otherwise deal with any property
pledged, mortgaged or otherwise securing Guarantor Senior Indebtedness; (c)
release any Person liable in any manner for the collection of Guarantor Senior
Indebtedness and (d) exercise or refrain from exercising any rights against any
Subsidiary Guarantor and any other Person.
SECTION 12.14. Payments May Be Paid Prior to Dissolution.
Nothing contained in this Article or elsewhere in this Indenture
shall prevent (i) a Subsidiary Guarantor, except under the conditions described
in Section 12.02, from making payments of principal of and interest on the
Securities, or from depositing with the Trustee any moneys for such payments,
or (ii) the application by the Trustee of any moneys deposited with it for the
purpose of making such payments of principal of and interest on the Securities,
to the holders entitled thereto unless at least two Business Days prior to the
date upon which such payment becomes due and payable, the Trustee shall have
received the written notice provided for in Section 12.02(b) or in Section
12.06. A Subsidiary Guarantor shall give prompt written notice to the Trustee
of any dissolution, winding-up, liquidation or reorganization of such
Subsidiary Guarantor.
ARTICLE THIRTEEN
MISCELLANEOUS
SECTION 13.01. Trust Indenture Act Controls.
This Indenture is subject to the provisions of the TIA that are
required to be a part of this Indenture, and shall, to the extent applicable,
be governed by such provisions. If any
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provision of this Indenture modifies any TIA provision that may be so modified,
such TIA provision shall be deemed to apply to this Indenture as so modified.
If any provision of this Indenture excludes any TIA provision that may be so
excluded, such TIA provision shall be excluded from this Indenture.
The provisions of TIA Sections 310 through 317 that impose
duties on any Person (including the provisions automatically deemed included
unless expressly excluded by this Indenture) are a part of and govern this
Indenture, whether or not physically contained herein.
SECTION 13.02. Notices.
Any notice or communication required or permitted to be given
under this Indenture shall be sufficiently given if in writing and delivered in
person, by facsimile and confirmed by overnight courier, or mailed by
first-class mail addressed as follows:
if to the Issuers:
FrontierVision Operating Partners, L.P.
1777 South Harrison Street, Suite P-200
Denver, Colorado 80210
Attention: Mr. John S. Koo, Senior Vice
President and Chief Financial Officer
Facsimile: (303) 757-6115
Telephone: (303) 757-1588
with a copy to:
Dow, Lohnes & Albertson, PLLC
1200 New Hampshire Avenue, N.W.
Washington, D.C. 20036
Attention: Leonard J. Baxt, Esq.
Facsimile: (202) 776-2222
Telephone: (202) 776-2000
<PAGE> 110
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if to the Trustee:
Colorado National Bank
950 17th Street, Suite 2410
Denver, Colorado 80202
Attention: Gretchen L. Middents
Facsimile: (303) 585-6865
Telephone: (303) 585-4596
The Issuers or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.
Any notice or communication mailed, first class, postage prepaid,
to a Securityholder, including any notice delivered in connection with TIA
Section 310(b), TIA Section 313(c), TIA Section 314(a) and TIA Section
315(b), shall be mailed to him at his address as set forth on the registration
books of the Registrar and shall be sufficiently given to him if so mailed
within the time prescribed. To the extent required by the TIA, any notice or
communication shall also be mailed to any Person described in TIA Section
313(c).
Failure to mail a notice or communication to a Securityholder or
any defect in it shall not affect its sufficiency with respect to other
Securityholders. Except for a notice to the Trustee, which is deemed given
only when received, if a notice or communication is mailed in the manner
provided above, it is duly given, whether or not the addressee receives it.
SECTION 13.03. Communications by Holders with Other Holders.
Securityholders may communicate pursuant to TIA Section 312(b)
with other Securityholders with respect to their rights under this Indenture or
the Securities. The Issuers, the Trustee, the Registrar and any other person
shall have the protection of TIA Section 312(c).
SECTION 13.04. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Issuers to the Trustee to
take or refrain from taking any action under this Indenture, the Issuers shall
furnish to the Trustee at the request of the Trustee:
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(1) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of the signers,
all conditions precedent, if any, provided for in this Indenture
relating to the proposed action have been complied with; and
(2) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of such
counsel, all such conditions precedent have been complied with.
SECTION 13.05. Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(1) a statement that the person making such certificate or
opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of such person, he has
made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(4) a statement as to whether or not, in the opinion of such
person, such condition or covenant has been complied with; provided,
however, that with respect to matters of fact an Opinion of Counsel may
rely on an Officers' Certificate or certificates of public officials.
SECTION 13.06. Rules by Trustee, Paying Agent, Registrar.
The Trustee may make reasonable rules for action by or at a
meeting of Securityholders. The Paying Agent or Registrar may make reasonable
rules for its functions.
SECTION 13.07. Governing Law.
The laws of the State of New York shall govern this Indenture,
the Securities and the Subsidiary Guarantee without regard to principles of
conflicts of law.
<PAGE> 112
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SECTION 13.08. No Recourse Against Others.
A director, officer, employee, incorporator, limited or general
partner or stockholder, as such, of the Issuers or any Subsidiary Guarantor
shall not have any liability for any obligations of the Issuers or any
Subsidiary Guarantor under the Securities, any Subsidiary Guarantee or this
Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation. Each Securityholder by accepting a Security
waives and releases all such liability.
SECTION 13.09. Successors.
All agreements of the Issuers in this Indenture and the
Securities shall bind their successors. All agreements of each Subsidiary
Guarantor in this Indenture and Securities shall bind its successor. All
agreements of the Trustee in this Indenture shall bind its successor.
SECTION 13.10. Counterpart Originals.
The parties may sign any number of counterparts of this
Indenture. Each signed counterpart shall be an original, but all of them
together represent the same agreement.
SECTION 13.11. Severability.
In case any provision in this Indenture, in the Securities or in
the Subsidiary Guarantee shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby, and a Holder shall have no claim
therefor against any party hereto.
SECTION 13.12. No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another indenture,
loan or debt agreement of either of the Issuers or a Subsidiary of either of
Issuers. Any such indenture, loan or debt agreement may not be used to
interpret this Indenture.
SECTION 13.13. Legal Holidays.
If a payment date occurs on a day that is not a Business Day at a
place of payment, payment may be made at that place on the next succeeding day
that is a Business Day, and no interest shall accrue for the intervening
period.
[Signature Pages Follow]
<PAGE> 113
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SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this Indenture
to be duly executed as of the date first written above.
FRONTIERVISION OPERATING
PARTNERS, L.P.
By: FrontierVision Partners, L.P.,
its general partner
By: FVP GP, L.P.,
its general partner
By: FrontierVision Inc.,
its general partner
By: /s/ James C. Vaughn
-------------------------------------
Name: James C. Vaughn
Title: President and Chief
Executive Officer
FRONTIERVISION CAPITAL CORPORATION
By: /s/ James C. Vaughn
-------------------------------------
Name: James C. Vaughn
Title: President and Chief
Executive Officer
<PAGE> 114
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COLORADO NATIONAL BANK, as Trustee
By: /s/ Gretchen L. Middents
-------------------------------------
Name: Gretchen L. Middents
Title: Assistant Vice President
<PAGE> 115
[FORM OF SECURITY]
(Face of Security)
EXHIBIT A
CUSIP No. 35921L AA 3
FRONTIERVISION OPERATING PARTNERS, L.P.
FRONTIERVISION CAPITAL CORPORATION
11% SENIOR SUBORDINATED NOTE DUE 2006
No. 1 $200,000,000
FrontierVision Operating Partners, L.P. and FrontierVision Capital
Corporation hereby jointly and severally promise to pay to CEDE & CO. or
registered assigns the principal sum of TWO HUNDRED MILLION DOLLARS on the
Maturity Date of October 15, 2006.
Interest Payment Dates: April 15 and October 15, commencing April 15, 1997
Record Dates: April 1 and October 1
Reference is hereby made to the further provisions on this Security set forth
on the reverse hereof, which further provisions shall for all purposes have the
same effect as if set forth at this place.
IN WITNESS WHEREOF, FrontierVision Operating Partners, L.P. and
FrontierVision Capital Corporation have caused this instrument to be signed
manually or by facsimile by each of their respective duly authorized officers.
Dated: October 7, 1996
FRONTIERVISION OPERATING
PARTNERS, L.P.
By: FrontierVision Partners, L.P.,
its general partner
By: FVP GP, L.P.,
its general partner
By: FrontierVision Inc.,
its general partner
By:
-----------------------------------------------
Name: James C. Vaughn
Title: President and Chief Executive Officer
By:
-----------------------------------------------
Name: James W. McHose
Title: Vice President and Treasurer
FRONTIERVISION CAPITAL CORPORATION
By:
-----------------------------------------------
Name: James C. Vaughn
Title: President and Chief Executive Officer
By:
-----------------------------------------------
Name: James W. McHose
Title: Vice President and Treasurer
<PAGE> 116
A-2
Certificate of Authentication:
This is one of the 11% Senior Subordinated Notes due 2006
referred to in the within-mentioned Indenture.
COLORADO NATIONAL BANK, as Trustee
By Dated: October 7, 1996
--------------------------
Authorized Signatory
<PAGE> 117
A-3
(Reverse Of Security)
FRONTIERVISION OPERATING PARTNERS, L.P.
FRONTIERVISION CAPITAL CORPORATION
11% Senior Subordinated Note due 2006
1. Interest.
FrontierVision Operating Partners, L.P., a Delaware limited
partnership (the "Company"), and FrontierVision Capital Corporation, a Delaware
corporation ("Capital" and together with the Company, the "Issuers"), jointly
and severally promise to pay interest at the rate of 11% per annum on the
principal amount of this Security semiannually commencing on April 15, 1997,
until the principal hereof is paid or made available for payment. Interest on
the Securities will accrue from and including the most recent date to which
interest has been paid or, if no interest has been paid, from and including
October 7, 1996, through but excluding the date on which interest is paid. If
an Interest Payment Date falls on a day that is not a Business Day, the
interest payment to be made on such Interest Payment Date will be made on the
next succeeding Business Day with the same force and effect as if made on such
Interest Payment Date, and no additional interest will accrue as a result of
such delayed payment. Interest will be computed on the basis of a 360-day year
of twelve 30-day months.
2. Method of Payment.
The interest payable on the Securities, and punctually paid or
duly provided for, on any Interest Payment Date will, as provided in the
Indenture, be paid to the Person in whose name this Security is registered at
the close of business on the regular record date, which shall be the April 1 or
October 1 (whether or not a Business Day) next preceding such Interest Payment
Date. Any such interest not so punctually paid or duly provided for, and any
interest payable on such defaulted interest (to the extent lawful), will
forthwith cease to be payable to the Holder on such regular record date and
shall be paid to the person in whose name this Security is registered at the
close of business on a special record date for the payment of such defaulted
interest to be fixed by the Issuers, notice of which shall be given to Holders
not less than 15 days prior to such special record date. Payment of the
principal of and interest on this Security will be made at the agency of the
Issuers maintained for that purpose in New York, New York and at any
<PAGE> 118
A-4
other office or agency maintained by the Issuers for such purpose, in such coin
or currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts; provided, however, that at the
option of the Issuers payment of interest may be made by check mailed to the
address of the person entitled thereto as such address shall appear in the
Security register.
3. Paying Agent and Registrar.
Initially, Colorado National Bank (the "Trustee") will act as
Paying Agent and Registrar. The Issuers may change any Paying Agent, Registrar
or co-Registrar without notice to the Holders of Securities. The Issuers or
any of their Subsidiaries may act as Registrar, co-Registrar or, except in
certain circumstances specified in the Indenture, Paying Agent.
4. Indenture.
This Security is one of a duly authorized issue of Securities of
the Issuers, designated as their 11% Senior Subordinated Notes due 2006 (the
"Securities"), limited in aggregate principal amount to $200,000,000 (except
for Securities issued in substitution for destroyed, lost or stolen Securities)
issuable under an indenture dated as of October 7, 1996 (the "Indenture"),
among the Issuers and the Trustee. The terms of the Securities include those
stated in the Indenture and those required to be made part of the Indenture
by the Trust Indenture Act of 1939 (the "Act") (15 U.S. Code Sections
77aaa-77bbbb) as in effect on the date of the Indenture and the date the
Indenture is qualified under the Act. The Securities are subject to all such
terms, and Holders of Securities are referred to the Indenture and the Act for
a statement of them. Each Securityholder, by accepting a Security, agrees to
be bound by all of the terms and provisions of the Indenture, as the same may
be amended from time to time.
The Securities are subordinated in right of payment to all Senior
Indebtedness of the Issuers to the extent and in the manner provided in the
Indenture. Each Holder of a Security, by accepting a Security, agrees to such
subordination, authorizes the Trustee to give effect to such subordination and
appoints the Trustee as attorney-in-fact for such purpose.
Capitalized terms contained in this Security to the extent not
defined herein shall have the meanings assigned to them in the Indenture.
<PAGE> 119
A-5
5. Optional Redemption.
(a) The Securities are not redeemable prior to October 15,
2001, except as provided in clause (b) below of this paragraph 5. On and after
such date, the Securities may be redeemed at any time, in whole or in part, at
the option of the Issuers, at redemption prices (expressed as percentages of
the principal amount) set forth below, if redeemed during the 12-month period
beginning October 15 of the year indicated below, in each case together with
interest accrued and unpaid to but excluding the date fixed for redemption:
<TABLE>
<CAPTION>
Year Percentage
---- ----------
<S> <C>
2001 . . . . . . . . . . . . . . . . . 105.50%
2002 . . . . . . . . . . . . . . . . . 103.67%
2003 . . . . . . . . . . . . . . . . . 101.83%
2004 and thereafter . . . . . . . . . . 100.00%
</TABLE>
(b) At any time prior to October 15, 1999, the Issuers may
redeem up to 35% of the principal amount of the Securities with the net cash
proceeds received by the Company from one or more Public Equity Offerings or
Strategic Equity Investments, at a redemption price (expressed as a percentage
of the principal amount) of 111% of the principal amount thereof, plus accrued
and unpaid interest to the date fixed for redemption; provided, however, that
at least 65% in aggregate principal amount of the Securities originally issued
remains outstanding immediately after any such redemption (excluding any
Securities owned by the Issuers or any of their Affiliates). Notice of
redemption pursuant to this paragraph must be mailed to Holders of Securities
not later than 60 days following consummation of such Public Equity Offering.
6. Notice of Redemption.
Notice of redemption will be mailed by first-class mail at least
30 days but not more than 60 days before the redemption date to each Holder of
Securities to be redeemed at his registered address. Securities in
denominations larger than $1,000 may be redeemed in part. On and after the
redemption date, interest ceases to accrue on those Securities or portion of
them called for redemption.
<PAGE> 120
A-6
7. Purchase upon Occurrence of a Change of Control.
Within 30 days of the occurrence of a Change of Control, the
Company will offer to purchase the Securities, in whole and not in part, at a
purchase price equal to 101% of the principal amount thereof plus any accrued
and unpaid interest thereon.
8. Denominations; Transfer; Exchange.
The Securities are in registered form without coupons in
denominations of $1,000 and integral multiples of $1,000. A Holder may
transfer or exchange Securities in accordance with the Indenture. The
Registrar may require a Holder, among other things, to furnish appropriate
endorsements and transfer documents and to pay any taxes and fees required by
law or permitted by the Indenture. The Registrar need not transfer or exchange
any Securities selected for redemption.
9. Persons Deemed Owners.
The registered Holder of a Security may be treated as the owner
of it for all purposes.
10. Unclaimed Funds.
If funds for the payment of principal or interest remain
unclaimed for two years, the Trustee or Paying Agent will repay the funds to
the Issuers at their request. After such repayment Holders of Securities
entitled to such funds must look to the Issuers for payment unless an abandoned
property law designates another person.
11. Discharge Prior to Redemption or Maturity.
The Indenture will be discharged and canceled except for certain
Sections thereof, subject to the terms of the Indenture, upon the payment of
all the Securities or upon the irrevocable deposit with the Trustee of funds or
United States Government Obligations sufficient for such payment or redemption.
12. Amendment; Supplement; Waiver.
Subject to certain exceptions, the Indenture or the Securities
may be amended or supplemented with the consent of the Holders of at least a
majority in principal amount of the outstanding Securities, and any past
default or compliance with
<PAGE> 121
A-7
any provision may be waived with the consent of the Holders of a majority in
principal amount of the outstanding Securities. Without notice to or the
consent of any Holder, the Issuers, any Subsidiary Guarantors and the Trustee
may amend or supplement the Indenture or the Securities to cure any ambiguity,
defect or inconsistency, or to make any change that does not materially and
adversely affect the rights of any Holder of Securities.
13. Restrictive Covenants.
The Securities are general unsecured senior subordinated
obligations of the Issuers limited to the aggregate principal amount of
$200,000,000. The Indenture restricts, among other things, the ability of the
Company or any of its Restricted Subsidiaries to permit any Liens to be imposed
on their assets, to make certain payments and investments, limits the
Indebtedness which the Company and its Restricted Subsidiaries may incur and
limits the terms on which the Company and its Restricted Subsidiaries may
engage in Asset Sales. The Company is also obligated under certain
circumstances to make an offer to purchase Securities with the net cash
proceeds of certain Asset Sales. The Issuers must report annually to the
Trustee on compliance with certain covenants in the Indenture.
14. Successor Corporation.
Pursuant to the Indenture, the ability of the Issuers to
consolidate with, merge with or into or transfer their assets to another person
is conditioned upon certain requirements, including certain financial
requirements applicable to the surviving Person.
15. Defaults and Remedies.
If an Event of Default shall occur and be continuing, the
principal of all of the outstanding Securities, plus all accrued and unpaid
interest, if any, to the date the Securities become due and payable, may be
declared due and payable in the manner and with the effect provided in the
Indenture.
16. Trustee Dealings with Issuers.
The Trustee in its individual or any other capacity, may become
the owner or pledgee of Securities and make loans to, accept deposits from, and
perform services for either of the Issuers or their Affiliates, and may
otherwise deal with the Issuers or their Affiliates, as if it were not Trustee.
<PAGE> 122
A-8
17. No Recourse Against Others.
A director, officer, employee, incorporator, limited or general
partner or stockholder, as such, of either of the Issuers or any Subsidiary
Guarantor shall not have any liability for any obligations of the Issuers or
any Subsidiary Guarantor under the Securities, any Subsidiary Guarantee or the
Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation. Each Holder of a Security by accepting a
Security waives and releases all such liability. The waiver and release are
part of the consideration for the issue of the Securities.
18. Authentication.
This Security shall not be valid until the Trustee signs the
certificate of authentication on the other side of this Security.
19. Abbreviations.
Customary abbreviations may be used in the name of a
Securityholder or an assignee, such as TEN COM (= tenants in common), TEN ENT
(= tenants by the entireties), JT TEN (= joint tenants with right of
survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (=
Uniform Gifts to Minors Act).
20. CUSIP Numbers.
Pursuant to a recommendation promulgated by the Committee on
Uniform Security Identification Procedures, the Issuers have caused CUSIP
numbers to be printed on the Securities and have directed the Trustee to use
CUSIP numbers in notices of redemption as a convenience to Securityholders. No
representation is made as to the accuracy of such numbers either as printed on
the Securities or as contained in any notice of redemption and reliance may be
placed only on the other identification numbers placed thereon.
21. Governing Law.
The laws of the State of New York shall govern the Indenture,
this Security and any Subsidiary Guarantee without regard to principles of
conflicts of law.
<PAGE> 123
A-9
22. Subsidiary Guarantees.
This Security may after the date hereof be entitled to certain
Subsidiary Guarantees made for the benefit of the Holders. Reference is hereby
made to the Indenture for the terms of any Subsidiary Guarantee (including any
terms of subordination of such Subsidiary Guarantee that may apply).
The Issuers will furnish to any Holder of record of Securities
upon written request and without charge a copy of the Indenture.
<PAGE> 124
A-10
ASSIGNMENT FORM
If you the Holder want to assign this Security, fill in the form
below and have your signature guaranteed:
I or we assign and transfer this Security to:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Print or type name, address and zip code and
social security or tax ID number of assignee)
and irrevocably appoint ,
-------------------------------------------------------
agent to transfer this Security on the books of the Issuers. The agent may
substitute another to act for him.
Dated: Signed:
------------------ -------------------------------------
(Sign exactly as your name appears on
the other side of this Security)
Signature Guarantee:*
---------------------------------------------------------
- ---------------
* Signature must be guaranteed by a member of the Medallion Signature Program.
<PAGE> 125
A-11
OPTION OF HOLDER TO ELECT PURCHASE
If you the Holder want to elect to have this Security purchased by the Company,
check the box: [ ]
If you want to elect to have only part of this Security purchased by the
Company, state the amount: $
-----------
Dated: Your signature:
----------- -------------------------------------
(Sign exactly as your name appears on
the other side of this Security)
Signature Guarantee:*
---------------------------------------------------------
- ---------------
* Signature must be guaranteed by a member of the Medallion Signature Program.
<PAGE> 126
EXHIBIT B
[FORM OF SUBSIDIARY GUARANTEE]
SENIOR SUBORDINATED GUARANTEE
The Subsidiary Guarantors (as defined in the Indenture referred
to in the Security upon which this notation is endorsed) hereby, jointly and
severally, unconditionally guarantee on a senior subordinated basis (such
guarantee by each Subsidiary Guarantor being referred to herein as the
"Subsidiary Guarantee") the due and punctual payment of the principal of,
premium, if any, and interest on the Securities, whether at maturity, by
acceleration or otherwise, the due and punctual payment of interest on the
overdue principal, premium and interest, if any, on the Securities, and the due
and punctual performance of all other obligations of the Issuers to the Holders
or the Trustee, all in accordance with the terms set forth in Article Eleven of
the Indenture.
The obligations of each Subsidiary Guarantor to the Holders of
Securities and to the Trustee pursuant to the Subsidiary Guarantee and the
Indenture are expressly set forth, and are expressly subordinated and subject
in right of payment to the prior payment in full of all Guarantor Senior
Indebtedness of such Subsidiary Guarantor, to the extent and in the manner
provided, in Article Twelve of the Indenture, and reference is hereby made to
such Indenture for the precise terms of the Subsidiary Guarantee therein made.
This Subsidiary Guarantee shall be governed by and construed in
accordance with the laws of the State of New York without regard to principles
of conflicts of law.
This Subsidiary Guarantee is subject to release upon the terms
set forth in the Indenture.
[Subsidiary Guarantor]
By:
---------------------------------
Name:
Title:
<PAGE> 127
EXHIBIT C
FORM OF LEGEND FOR BOOK-ENTRY SECURITIES
Any Global Security authenticated and delivered hereunder shall
bear a legend in substantially the following form:
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE
INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A
DEPOSITORY OR A NOMINEE OF A DEPOSITORY OR A SUCCESSOR DEPOSITORY. THIS
SECURITY IS NOT EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A
PERSON OTHER THAN THE DEPOSITORY OR ITS NOMINEE EXCEPT IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO TRANSFER OF THIS
SECURITY (OTHER THAN A TRANSFER OF THIS SECURITY AS A WHOLE BY THE
DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY A NOMINEE OF THE
DEPOSITORY TO THE DEPOSITORY OR ANOTHER NOMINEE OF THE DEPOSITORY) MAY
BE REGISTERED EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE
INDENTURE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION
("DTC"), TO THE ISSUERS OR THEIR AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO.
OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE
OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE
BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF,
CEDE & CO., HAS AN INTEREST HEREIN.
<PAGE> 128
SCHEDULE OF EXCHANGES
The following exchanges of a part of this Global Security for
Physical Securities have been made:
<TABLE>
<CAPTION>
Principal Amount Signature of
Amount of Amount of of this Global authorized
decrease in increase Security officer of
Principal Amount in Principal following such Trustee or
Date of of this Global Amount of this decrease Securities
Exchange Security Global Security (or increase) Custodian
- -------- ---------------- --------------- ---------------- ------------
<S> <C> <C> <C> <C>
</TABLE>
<PAGE> 1
[EXECUTION COUNTERPART]
CONSENT AND AMENDMENT NO. 2
CONSENT AND AMENDMENT NO. 2 dated as of September 30, 1996
between FRONTIERVISION OPERATING PARTNERS, L.P., a limited partnership duly
organized and validly existing under the laws of the State of Delaware (the
"Company"), each of the lenders that is a signatory hereto identified under the
caption "Lenders" on the signature pages hereto and THE CHASE MANHATTAN BANK,
as administrative agent for said lenders (in such capacity, the "Administrative
Agent").
The Company, certain Lenders, the Administrative Agent, J.P.
Morgan Securities Inc., as Syndication Agent, and CIBC Inc., as Managing Agent,
are parties to an Amended and Restated Credit Agreement dated as of April 9,
1996 (as heretofore amended, the "Credit Agreement"), providing, subject to the
terms and conditions thereof, for loans to be made by said Lenders to the
Company in an aggregate principal or face amount not exceeding $265,000,000.
The Company has requested that the Credit Agreement be modified
in certain respects and, accordingly, the parties hereto hereby agree as
follows:
Section 1. Definitions. Except as otherwise defined in this
Consent and Amendment No. 2, terms defined in the Credit Agreement are used
herein as defined therein.
Section 2. Amendment. Subject to the satisfaction of the
conditions precedent specified in Section 5 below, but effective as of the date
hereof, the Credit Agreement is hereby amended as follows:
A. General. References in the Credit Agreement to "this
Agreement" (and indirect references such as "hereunder", "hereby", "herein" and
"hereof") shall be deemed to be references to the Credit Agreement as amended
hereby.
B. Definitions. Section 1.01 of the Credit Agreement is hereby
amended by adding the following new definitions (to the extent such definitions
are not presently set forth in said Section 1.01) and amending in their
entirety the following definitions (to the extent such definitions are
presently set forth in said Section 1.01), as follows:
"ACE Acquisition" shall mean the proposed acquisition by the
Company of CATV Systems in Kentucky and Indiana from American Cable
Entertainment of Kentucky-Indiana, Inc. pursuant to the ACE Acquisition
Agreement.
"ACE Acquisition Agreement" shall mean the Asset Purchase
Agreement dated as of July 15, 1996 between the Company and American Cable
Entertainment of Kentucky-Indiana, Inc., as
Consent and Amendment No. 2
<PAGE> 2
- 2 -
the same shall, subject to Section 8.18 hereof, be modified and supplemented
and in effect from time to time.
"Basic Documents" shall mean, collectively, the Loan Documents,
the Cox Acquisition Agreement, the Triax Acquisition Agreement and the ACE
Acquisition Agreement.
"Change of Control" shall mean that the Company or FrontierVision
Capital shall be required pursuant to the provisions of the Senior Subordinated
Debt Documents (or any other agreement or instrument relating to or providing
for any other Subordinated Indebtedness) to redeem or repurchase, or make an
offer to redeem or repurchase, all or any portion of the Senior Subordinated
Debt (or such Subordinated Indebtedness, as the case may be) as a result of a
change of control (however defined).
"FrontierVision Capital" shall mean FrontierVision Capital
Corporation, a Delaware corporation and a Wholly Owned Subsidiary of the
Company.
"New Acquisition" shall mean the Phoenix Grassroots Acquisition,
the Triax Acquisition, the ACE Acquisition and the Penn/Ohio Acquisition.
"Penn/Ohio Acquisition" shall mean the proposed acquisition by
the Company of CATV Systems in Ohio and Pennsylvania from Penn/Ohio
Cablevision, L.P., pursuant to the Penn/Ohio Acquisition Agreement.
"Penn/Ohio Acquisition Agreement" shall mean the Purchase
Agreement dated as of August 6, 1996 between Penn/Ohio Cablevision, L.P., and
the Company, as the same shall, subject to Section 8.18 hereof, be modified and
supplemented and in effect from time to time.
"Phoenix Grassroots Acquisition" shall mean the acquisition by
the Company of CATV Systems in Maine and New Hampshire from Phoenix Grassroots
Cable Systems, L.L.C., pursuant to the Phoenix Grassroots Acquisition
Agreement.
"Phoenix Grassroots Acquisition Agreement" shall mean the Asset
Purchase Agreement dated July 19, 1996 between Phoenix Grassroots Cable
Systems, L.L.C. and the Company, as the same shall, subject to Section 8.18
hereof, be modified and supplemented and in effect from time to time.
"Reserved Proceeds" shall mean, with respect to any Debt
Issuance, the Net Available Proceeds thereof which are not simultaneously with,
or within five Business Days of, the occurrence thereof used to make a
Subsequent Acquisition, to refinance outstanding Subordinated Indebtedness, to
make payments
Consent and Amendment No. 2
<PAGE> 3
- 3 -
in respect of the UVC Notes as contemplated by the last sentence of the first
paragraph of Section 8.09 hereof or deposited in a Reserved Proceeds Account in
accordance with Section 2.09(e)(ii) hereof.
"Reserved Proceeds Account" shall mean (a) the Collateral Account
or (b) an escrow account established on such terms and conditions, and with an
escrow agent, as shall be acceptable to the Administrative Agent and the
Majority Lenders.
"Reserved Proceeds Account Agent" shall mean (a) if the Reserved
Proceeds Account is the Collateral Account, the Administrative Agent, and (b)
if the Reserved Proceeds Account is an escrow account, the escrow agent in
respect thereof.
"Senior Subordinated Debt" shall mean the Indebtedness of the
Company and FrontierVision Capital in respect of the senior subordinated notes
of the Company and FrontierVision Capital due 2006 issued pursuant to Senior
Subordinated Debt Indenture.
"Senior Subordinated Debt Documents" shall mean the Senior
Subordinated Debt Indenture, the securities or other instruments evidencing the
Senior Subordinated Debt and all other documents, instruments and agreements
executed and delivered in connection with the original issuance of the Senior
Subordinated Debt, in each case, as the same shall, subject to Section 8.18
hereof, be modified and supplemented and in effect from time to time.
"Senior Subordinated Debt Indenture" shall mean the Indenture to
be dated as of a date on or around October 1, 1996 among the Company and
FrontierVision Capital, as Issuers, and Colorado National Bank, as Trustee, as
the same shall, subject to Section 8.18 hereof, be modified and supplemented
and in effect from time to time.
"Specified Acquisitions" shall mean (a) acquisitions of CATV
Systems in exchange for other CATV Systems and (b) New Acquisitions.
"Subsequent Acquisition" shall mean any acquisition permitted
under Section 8.05(b)(iv) hereof (including, without limitation, the New
Acquisitions).
"Subsequent Acquisition Agreement" shall mean the Phoenix
Grassroots Acquisition Agreement, the Triax Acquisition Agreement, the ACE
Acquisition Agreement, the Penn/Ohio Acquisition Agreement and each other
agreement pursuant to which a Subsequent Acquisition shall be consummated, as
the same shall, subject to Section 8.18 hereof, be modified and supplemented
and in effect from time to time.
Consent and Amendment No. 2
<PAGE> 4
- 4 -
"Triax" shall mean, collectively, Triax Southeast Associates,
L.P. and Triax Southeast General Partner, L.P.
"Triax Acquisition" shall mean the proposed acquisition by the
Company of CATV Systems in Kentucky, Maryland, North Carolina, Ohio,
Pennsylvania, Virginia and West Virginia from Triax pursuant to the Triax
Acquisition Agreement.
"Triax Acquisition Agreement" shall mean the Asset Purchase
Agreement dated May 16, 1996 between Triax and the Company, as the same shall,
subject to Section 8.18 hereof, be modified and supplemented and in effect from
time to time.
C. EBITDA Definition.
(1) The third sentence in the definition of "EBITDA" in Section
1.01 of the Credit Agreement is hereby amended by deleting the "and" at the end
of paragraph (D) thereof, by substituting a semicolon for the period at the end
of paragraph (E) thereof and by adding the following paragraphs (F), (G), (H)
and (I) thereto:
"(F) for periods prior to the date of the Phoenix Grassroots
Acquisition, EBITDA for each day during such period attributable to the
CATV Systems acquired pursuant to the Phoenix Grassroots Acquisition
shall be deemed to be equal to $4,197 (determined by the Company as
provided in Schedule XI hereto); and
(G) for periods prior to the date of the Triax Acquisition,
EBITDA for each day during such period attributable to the CATV Systems
acquired pursuant to the Triax Acquisition shall be deemed to be equal
to $27,847 (determined by the Company as provided in Schedule XI
hereto);
(H) for periods prior to the date of the ACE Acquisition, EBITDA
for each day during such period attributable to the CATV Systems
acquired pursuant to the ACE Acquisition shall be deemed to be equal to
$37,814 (determined by the Company as provided in Schedule XI hereto);
and
(I) for periods prior to the date of the Penn/Ohio Acquisition,
EBITDA for each day during such period attributable to the CATV Systems
acquired pursuant to the Penn/Ohio Acquisition shall be deemed to be
equal to $1,441 (determined by the Company as provided in Schedule XI
hereto)."
(2) The definition of "EBITDA" in Section 1.01 of the Credit
Agreement is hereby further amended by deleting the clause
Consent and Amendment No. 2
<PAGE> 5
- 5 -
reading "(but excluding the CATV Systems acquired pursuant to the Initial
Acquisitions and the Cox Acquisition)" in the fourth sentence thereof and
inserting "(but excluding the CATV Systems acquired pursuant to the Initial
Acquisitions, the Cox Acquisition and the New Acquisitions)" in its place.
D. Prepayments.
(1) Section 2.09(d) of the Credit Agreement is hereby amended by
deleting the reference in paragraph (z) of the penultimate sentence thereof to
"$10,000,000" and inserting "$75,000,000" in its place.
(2) Section 2.09(e) of the Credit Agreement is hereby amended to
read in its entirety as follows:
"(e) Subordinated Indebtedness. Without limiting the obligation
of the Company to obtain the approval of the Majority Lenders to the
terms of Permitted Subordinated Indebtedness to the extent required by
Section 8.13 hereof, upon any Debt Issuance:
(i) the Company shall prepay the Loans and the
Commitments shall be subject to automatic reduction on the date
of such issuance in an amount equal to the Unused Proceeds
thereof, such prepayment and reduction to be effected in the
manner and to the extent specified in paragraph (g) of this
Section 2.09; and
(ii) the Company shall deposit the Reserved Proceeds
thereof into a Reserved Proceeds Account to be held therein
pending application of such Reserved Proceeds to make one or more
Subsequent Acquisitions, to refinance outstanding Subordinated
Indebtedness or to make payments in respect of the UVC Notes as
contemplated by the last sentence of the first paragraph of
Section 8.09 hereof (and the relevant Reserved Proceeds Account
Agent need not release such Reserved Proceeds except upon
presentation of evidence satisfactory to it that such Reserved
Proceeds are to be so applied in compliance with the provisions
of this Agreement), provided that if such Reserved Proceeds are
not in fact so applied within 180 days of such Debt Issuance,
such Reserved Proceeds shall forthwith be applied to the
prepayment of Loans and reductions of Commitments as provided
above (it being understood that, in the event Reserved Proceeds
from more than one Debt Issuance are paid into a Reserved
Proceeds Account, such Reserved Proceeds shall be deemed to be
released in the same order in which such Debt Issuances
occurred).
Consent and Amendment No. 2
<PAGE> 6
- 6 -
Nothing in this paragraph (e) shall be deemed to obligate the
Administrative Agent or the Majority Lenders to release, or to agree to
release, from a Reserved Proceeds Account of any of such proceeds to or
for the benefit of the Company for purposes as aforesaid upon the
occurrence and during the continuance of any Event of Default."
(3) Section 2.09 of the Credit Agreement is hereby further
amended by redesignating paragraph (f) thereof as paragraph (g) thereof. In
addition, each reference in Sections 2.03(b), 2.03(c) and Section 2.09 of the
Credit Agreement to Section 2.09(f) thereof is hereby changed to be a reference
to Section 2.09(g) thereof.
(4) Section 2.09 of the Credit Agreement is hereby further
amended by adding a new paragraph (f) thereof reading in its entirety as
follows:
"(f) Change of Control. If any Change of Control shall occur,
then, concurrently with the occurrence of the event giving rise to such
Change of Control, the Company shall prepay the Loans in full and the
Commitments shall be automatically reduced to zero."
E. Subsequent Acquisitions. Section 8.05(b)(iv) of the Credit
Agreement is hereby amended by amending paragraph (A) thereof to read in its
entirety as follows:
"(A) (1) the aggregate Purchase Price of all such
acquisitions (other than CATV Systems acquired pursuant to
Specified Acquisitions) shall not exceed $75,000,000 and the
aggregate Purchase Price of any individual such acquisition
(other than a CATV System acquired pursuant to Specified
Acquisitions) shall not exceed $10,000,000;
(2) the Purchase Price of CATV Systems acquired pursuant
to a New Acquisition shall not exceed the amount specified in the
relevant Acquisition Agreement; and
(3) the aggregate Purchase Price of all such CATV Systems
acquired in exchange for other CATV Systems shall not exceed
$75,000,000 and the aggregate Purchase Price of any individual
such CATV System acquired in exchange for one or more other CATV
Systems shall not exceed $10,000,000;
it being understood that, if an acquisition involves an exchange of CATV
Systems and the aggregate Purchase Price for such acquisition includes
cash and/or cash equivalents, then the portion of such aggregate
Purchase Price so
Consent and Amendment No. 2
<PAGE> 7
- 7 -
constituting cash and cash equivalents shall be deemed to be applied to
reduce the then-unused portion of the amounts specified in clause (1) of
this Section 8.05(b)(iv)(A), and the remainder of such aggregate
Purchase Price shall be deemed to be applied to reduce the then-unused
portion of the amounts specified in clause (3) of this Section
8.05(b)(iv)(A);".
F. Dispositions.
(1) Section 8.05(c) of the Credit Agreement is hereby amended by
amending paragraphs (iv) and (v) thereof to read in their entirety as follows:
"(iv) dispositions of one or more CATV Systems (whether for cash
or for Disposition Investments, but excluding dispositions in exchange
for other CATV Systems), so long as the aggregate fair market value of
the CATV Systems disposed of in any single transaction shall not exceed
$10,000,000 and the fair market value of the CATV Systems disposed of in
all such dispositions shall not exceed $75,000,000,
(v) dispositions of one or more CATV Systems in exchange for
other CATV Systems, so long as the aggregate fair market value of the
CATV Systems disposed of in any single such exchange shall not exceed
$10,000,000 and the fair market value of the CATV Systems disposed of in
all such exchanges shall not exceed $75,000,000, and".
(2) Section 8.05(c)(vi) of the Credit Agreement is hereby
amended by deleting the reference therein to "December 31, 1996" and inserting
"June 30, 1997" in its place.
G. Indebtedness.
(1) Section 8.07(d) of the Credit Agreement is hereby amended to
read in its entirety as follows:
"(d) (i) Indebtedness of the Company and FrontierVision Capital
in respect of the Senior Subordinated Debt in an aggregate original
principal amount not exceeding $200,000,000, and (ii) subordinated
Guarantees of such Indebtedness by Subsidiaries of the Company pursuant
to the Senior Subordinated Debt Documents;".
(2) Section 8.07(f) of the Credit Agreement is hereby amended by
deleting the reference therein to "$20,000,000" and inserting "$25,000,000" in
its place.
H. Investments. Section 8.08 of the Credit Agreement is hereby
amended by deleting the "and" at the end of
Consent and Amendment No. 2
<PAGE> 8
- 8 -
paragraph (h) thereof, by substituting a semicolon for the period at the end
of paragraph (i) thereof and by adding the following paragraph (j) thereto:
"(j) the Guarantees referred to in Section 8.07(d) hereof."
I. Certain Financial Covenants. Section 8.10 of the Credit
Agreement is hereby amended to read in its entirety as follows:
"8.10 Certain Financial Covenants.
(a) Senior Debt Ratio. The Company will not permit the Senior
Debt Ratio (determined in accordance with Section 8.10(e) hereof) to
exceed the following respective ratios at any time during the following
respective periods:
<TABLE>
<CAPTION>
Period Ratio
------ -----
<S> <C>
From the date on which the
Senior Subordinated Debt is
issued through and including
June 30, 1997 3.75 to 1
From July 1, 1997
through and including
December 31, 1997 3.50 to 1
From January 1, 1998
through and including
June 30, 1998 3.25 to 1
From July 1, 1998
through and including
December 31, 1998 3.00 to 1
From January 1, 1999
through and including
December 31, 1999 2.50 to 1
From January 1, 2000
through and including
December 31, 2000 2.00 to 1
From January 1, 2001 and at
all times thereafter 1.50 to 1
</TABLE>
(b) Total Debt Ratio. The Company will not permit the Debt
Ratio (determined in accordance with Section 8.10(e) hereof) to exceed
the following respective ratios at any time during the following
respective periods:
Consent and Amendment No. 2
<PAGE> 9
- 9 -
<TABLE>
<CAPTION>
Period Ratio
------ -----
<S> <C>
From the Effective Date
through and including
June 30, 1997 7.00 to 1
From July 1, 1997
through and including
December 31, 1997 6.25 to 1
From January 1, 1998
through and including
June 30, 1998 6.00 to 1
From July 1, 1998
through and including
December 31, 1998 5.50 to 1
From January 1, 1999
through and including
December 31, 1999 4.75 to 1
From January 1, 2000
through and including
December 31, 2000 4.00 to 1
From January 1, 2001 and at
all times thereafter 3.50 to 1
</TABLE>
(c) Interest Coverage Ratio. The Company will not permit the
Interest Coverage Ratio (determined in accordance with Section 8.10(e)
hereof) to be less than the following respective amounts at any time
during the following respective periods:
<TABLE>
<CAPTION>
Period Amount
------ ------
<S> <C>
From the Effective Date
through and including
June 30, 1997 1.25
From July 1, 1997
through and including
December 31, 1998 1.50
From January 1, 1999
through and including
December 31, 1999 1.75
From January 1, 2000
through and including
December 31, 2000 2.00
From January 1, 2001
and at all times thereafter 2.25
</TABLE>
Consent and Amendment No. 2
<PAGE> 10
- 10 -
(d) Fixed Charges Ratio. The Company will not permit the Fixed
Charges Ratio (determined in accordance with Section 8.10(e) hereof) to
be less than 1.00 to 1 at December 31, 1997 or less than 1.05 to 1 at
any time thereafter.
(e) Computations of Ratios. Solely for purposes of computing
the Senior Debt Ratio, Debt Ratio, Interest Coverage Ratio and Fixed
Charges Ratio for purposes of this Section 8.10:
(i) Indebtedness shall be deemed to exclude obligations
in respect of undrawn letters of credit, performance bonds and
similar instruments issued or accepted by banks and other
financial institutions in the ordinary course of business of the
Company and its Subsidiaries;
(ii) at any time when Reserved Proceeds of a Debt
Issuance are on deposit in a Reserved Proceeds Account, the
amount of Subordinated Indebtedness outstanding at such time
shall be deemed to be net of the amount of such Reserved Proceeds
so on deposit at such time; and
(iii) during any period when Reserved Proceeds of a Debt
Issuance are on deposit in a Reserved Proceeds Account, the
amount of Interest Expense in respect of Subordinated
Indebtedness for such period shall be deemed to be net of
interest payable to the Company on such Reserved Proceeds so on
deposit during such period."
J. Capital Expenditures. Section 8.11 of the Credit Agreement
is hereby amended by deleting the schedule set forth in paragraph (a) thereof
and substituting the following therefor:
<TABLE>
<CAPTION>
"Period Amount ($)
------ ----------
<S> <C>
From the Effective Date
to and including
December 31, 1996 4,000,000
Fiscal year ending
December 31, 1997 26,000,000
Fiscal year ending
December 31, 1998 25,000,000
</TABLE>
Consent and Amendment No. 2
<PAGE> 11
- 11 -
<TABLE>
<S> <C>
Fiscal year ending
December 31, 1999 21,000,000
Fiscal year ending
December 31, 2000 20,000,000
Fiscal year ending
December 31, 2001 15,000,000
Each fiscal year
thereafter 12,000,000"
</TABLE>
K. UVC Notes. Section 8.13(b) of the Credit Agreement is hereby
amended by adding the following sentence at the end thereof:
"It is understood and agreed that the limited partnership
interests of the Company received by UVC in exchange for the UVC Notes
in a transaction complying with the requirements of this Section 8.13(b)
will not constitute Indebtedness of the Company for any purpose hereof."
L. Indenture Restrictions; FrontierVision Capital. Section 8.17
of the Credit Agreement is hereby amended:
(1) by deleting the words "The Company will not" in paragraph
(c) thereof and inserting the words "Other than the Senior Subordinated
Debt Documents, the Company will not" in its place; and
(2) by adding the following paragraph (d) thereto:
"(d) FrontierVision Capital. FrontierVision Capital will own no
Property, will have no Indebtedness (other than its Guarantee of
Indebtedness hereunder and Indebtedness in respect of the Senior
Subordinated Debt), will have no operations (other than de minimis
operations incidental to its activities in connection with the
foregoing) and, in furtherance of the foregoing, will not make any
expenditures or incur any liabilities other than those consistent with
and reasonably necessary in the conduct of its business as contemplated
by this Section 8.17(d)."
M. Modifications of Certain Documents. Section 8.18 of the
Credit Agreement is hereby amended by amending paragraphs (i) and (ii) thereof
to read in their entirety as follows:
"(i) any Senior Subordinated Debt Document or any other
agreement, instrument or other document evidencing or relating to
Subordinated Indebtedness (other than the cancellation of UVC Notes in
accordance with Section 8.13(b)(1) hereof),
Consent and Amendment No. 2
<PAGE> 12
- 12 -
(ii) any Initial Acquisition Agreement, the Cox Acquisition
Agreement, the Triax Acquisition Agreement or the ACE Acquisition
Agreement either to increase the aggregate consideration payable by the
Company thereunder or any other provision of such Agreements (or of any
agreement executed in connection therewith) to the extent the same would
materially adversely affect the Lenders or the Administrative Agent (or
the rights of the Lenders or the Administrative Agent under any of the
Loan Documents), or".
N. Schedule XI. The Credit Agreement is hereby amended by
adding Schedule XI hereto as Schedule XI thereto.
Section 3. Consents. Subject to the satisfaction of the
conditions precedent set forth in Section 5 hereof, but effective as of the
date hereof:
A. Creation of FrontierVision Capital. Subject to Section
8.17(a) of the Credit Agreement, each of the Lenders hereby consents to the
creation of FrontierVision Capital as a Wholly Owned Subsidiary of the Company.
B. Senior Subordinated Debt. Each of the Lenders hereby
consents to incurrence of the Senior Subordinated Debt on the terms and
conditions set forth in the Credit Agreement (as amended hereby) and in the
Prospectus relating to the issuance of the Senior Subordinated Debt heretofore
delivered to the Lenders, provided that each payment date for the notes issued
under the Senior Subordinated Debt Indenture shall be not earlier than 15 days,
and not later than 30 days, after a Quarterly Date.
C. Triax and ACE Acquisitions. Each of the Lenders hereby
agrees that, for purposes of Section 2.09 of the Credit Agreement, the Net
Available Proceeds of Equity Issuances referred to in paragraphs (b)(iii) and
(b)(iv) thereof may be applied within 180 days of such Equity Issuances to the
Triax Acquisition and the ACE Acquisition.
Section 4. Representations and Warranties. The Company
represents and warrants to the Lenders that, both before and after giving
effect to each of the amendments set forth in Section 2 hereof and the consents
set forth in Section 3 hereof:
(a) no Default has occurred and is continuing; and
(b) the representations and warranties made by the Company in
Section 7 of the Credit Agreement, and by each Obligor in each of the
other Loan Documents to which it is a party, are true and complete on
and as of the date hereof with the same force and effect as if made on
and as of such date (or, if any such representation or warranty is
expressly stated to have been made as of a specific date, as
Consent and Amendment No. 2
<PAGE> 13
- 13 -
of such specific date) and as if each reference in the Credit Agreement
to "this Agreement" or "the Credit Agreement" included reference to this
Consent and Amendment No. 2.
Section 5. Conditions Precedent. As provided in Sections 2 and
3 hereof, the amendments to the Credit Agreement set forth in said Section 2
and the consents set forth in said Section 3 shall each become effective, as of
the date hereof, upon the satisfaction of the condition precedent that the
Administrative Agent shall have notified the Company that the Administrative
Agent has received the following (each in form and substance satisfactory to
it):
A. Execution and Delivery, Etc. This Consent and Amendment No.
2, duly executed by the Company, Lenders constituting the Majority
Lenders and the Administrative Agent.
B. Fees and Expenses. Payment of such fees and expenses that
the Company shall have agreed to pay in connection with the transactions
contemplated hereby.
C. Other Documents. Such other documents as the Administrative
Agent or any Lender or special New York counsel to Chase may reasonably
request.
Section 6. Miscellaneous. Except as herein provided, the Credit
Agreement shall remain unchanged and in full force and effect. This Consent
and Amendment No. 2 may be executed in any number of counterparts, all of which
taken together shall constitute one and the same amendatory instrument and any
of the parties hereto may execute this Consent and Amendment No. 2 by signing
any such counterpart. This Consent and Amendment No. 2 shall be governed by,
and construed in accordance with, the law of the State of New York.
Consent and Amendment No. 2
<PAGE> 14
- 14 -
IN WITNESS WHEREOF, the parties hereto have caused this Consent
and Amendment No. 2 to be duly executed and delivered as of the day and year
first above written.
FRONTIERVISION OPERATING
PARTNERS, L.P.
By: Frontiervision Partners, L.P., as
general partner of FrontierVision
Operating Partners, L.P.
By: FVP GP, L.P., as general partner
of FrontierVision Partners, L.P.
By: FrontierVision Inc., as general
partner of FVP GP, L.P.
By
--------------------------------
Title:
Consent and Amendment No. 2
<PAGE> 15
- 15 -
LENDERS
-------
THE CHASE MANHATTAN BANK MORGAN GUARANTY TRUST COMPANY OF
NEW YORK
By By
--------------------------- --------------------------
Title: Title:
CIBC INC. FIRST NATIONAL BANK OF CHICAGO
By By
--------------------------- ---------------------------
Title: Title:
UNION BANK, a division of Union BANK OF MONTREAL
Bank of California, N.A.
By
---------------------------
By Title:
---------------------------
Title:
FLEET NATIONAL BANK VAN KAMPEN AMERICAN CAPITAL PRIME
RATE INCOME TRUST
By
---------------------------
Title: By
---------------------------
Title:
CHL HIGH YIELD LOAN PORTFOLIO, a THE LONG-TERM CREDIT BANK OF
unit of The Chase Manhattan Bank JAPAN, LTD., LOS ANGELES AGENCY
By By
--------------------------- ---------------------------
Title: Title:
PILGRIM PRIME RATE TRUST BANQUE FRANCAIS DU COMMERCE
EXTERIEUR
By By
--------------------------- ---------------------------
Title: Title:
By
---------------------------
Title:
Consent and Amendment No. 2
<PAGE> 16
- 16 -
MERRILL LYNCH SENIOR FLOATING RATE PROTECTIVE LIFE INSURANCE COMPANY
FUND, INC.
By By
--------------------------- ---------------------------
Title: Title:
CITIZEN'S BANK INDOSUEZ CAPITAL FUNDING II,
LIMITED
By By
--------------------------- ---------------------------
Title: Title:
MERRILL LYNCH PRIME RATE PORTFOLIO COOPERATIEVE CENTRALE RAIFFEISEN-
BOERENLEENBANK B.A., "RABOBANK
NEDERLAND", NEW YORK BRANCH
By
---------------------------
Title: By
---------------------------
Title:
Consent and Amendment No. 2
<PAGE> 17
- 17 -
THE ADMINISTRATIVE AGENT
------------------------
THE CHASE MANHATTAN BANK, as
Administrative Agent
By
-----------------------------------
Title:
Consent and Amendment No. 2
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM BALANCE
SHEETS AND STATEMENTS OF OPERATIONS AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS CONTAINED IN THE AMENDMENT NO.2 TO FORM
S-1
</LEGEND>
<CIK> 0001019504
<NAME> FRONTIERVISION OPERATING PARTNERS LP
<MULTIPLIER> 1,000
<S> <C> <C> <C> <C> <C>
<PERIOD-TYPE> 12-MOS 6-MOS 6-MOS 9-MOS 3-MOS
<FISCAL-YEAR-END> DEC-31-1995 DEC-31-1996 DEC-31-1995 DEC-31-1996 DEC-31-1996
<PERIOD-START> JUL-14-1995 JAN-01-1996 JAN-01-1995 JAN-01-1996 JUL-01-1996
<PERIOD-END> DEC-31-1995 JUN-30-1996 JUN-30-1995 SEP-30-1996 SEP-30-1996
<CASH> 2,650 1,409 0 5,045 5,045
<SECURITIES> 0 0 0 0 0
<RECEIVABLES> 2,065 3,441 0 2,281 2,281
<ALLOWANCES> (40) (42) 0 (56) (56)
<INVENTORY> 0 0 0 0 0
<CURRENT-ASSETS> 4,876 5,712 0 8,149 8,149
<PP&E> 42,917<F1> 120,403<F1> 0<F1> 123,550<F1> 123,550<F1>
<DEPRECIATION> 0 0 0 0 0
<TOTAL-ASSETS> 143,512 320,511 0 315,670 315,670
<CURRENT-LIABILITIES> 3,965 9,263 0 7,459 7,459
<BONDS> 93,140 217,267 0 208,109 208,109
0 0 0 0 0
0 0 0 0 0
<COMMON> 0 0 0 0 0
<OTHER-SE> 46,407 93,981 0 100,102 100,102
<TOTAL-LIABILITY-AND-EQUITY> 143,512 320,511 0 315,670 315,670
<SALES> 0 0 0 0 0
<TOTAL-REVENUES> 4,369 27,539 0 46,207 18,668
<CGS> 0 0 0 0 0
<TOTAL-COSTS> 2,311 13,668 0 23,657 9,989
<OTHER-EXPENSES> 127 1,265 0 1,971 706
<LOSS-PROVISION> 0 0 0 0 0
<INTEREST-EXPENSE> 1,386 7,304 10 11,617 4,313
<INCOME-PRETAX> (2,703) (8,293) (141) (13,523) (5,230)
<INCOME-TAX> 0 0 0 0 0
<INCOME-CONTINUING> (2,703) (8,293) (141) (13,523) (5,230)
<DISCONTINUED> 0 0 0 0 0
<EXTRAORDINARY> 0 0 0 0 0
<CHANGES> 0 0 0 0 0
<NET-INCOME> (2,703) (8,293) (141) (13,523) (5,230)
<EPS-PRIMARY> 0 0 0 0 0
<EPS-DILUTED> 0 0 0 0 0
<FN>
<F1>PP&E IS SHOWN NET OF ACCUMULATED DEPRECIATION.
</FN>
</TABLE>
