SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
X Annual Report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
for the fiscal year ended March 31, 1995
Transition report pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934 for the transaction
period from to
.
Commission File Number: 0-16014
ADELPHIA COMMUNICATIONS CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 23-2417713
(State or other jurisdiction of incorporation or
organization) (I.R.S. Employer Identification No.)
5 West Third Street P.O. Box 472 Coudersport,
Pennsylvania 16915
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: 814-274-9830
Securities registered pursuant to Section 12(b) of the Act: None.
Securities registered pursuant to Section 12(g) of the Act:
Class A Common Stock, $.01 par value.
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and 2) has been subject to such filing
requirements for the past 90 days.
Yes X No
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein,
and will not be contained, to the best of registrant's
knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K.
Aggregate market value of outstanding Class A Common Stock $.01
par value, held by non-affiliates of the Registrant at June 26,
1995 was $76,870,845 based on the closing sale price as
computed by the NASDAQ National Market System as of that date.
For purposes of this calculation only, affiliates are deemed to
be directors and executive officers of the Registrant.
Number of outstanding shares of Class A Common Stock, $.01 par
value, at June 26, 1995 was 15,364,009.
Number of outstanding shares of Class B Common Stock, $.01 par
value, at June 26, 1995 was 10,944,476.
Documents Incorporated by Reference
Portions of the Proxy Statement for the 1995 Annual Meeting of
Stockholders are incorporated by reference into Part III hereof.
PART I
ITEM 1. BUSINESS (Dollars in thousands)
Introduction
Adelphia Communications Corporation ("Adelphia" and, collectively with
its subsidiaries, the "Company") is the seventh largest cable television
operator in the United States. As of March 31, 1995, cable systems owned or
managed by the Company (the "Systems") in the aggregate passed 2,268,501
homes and served 1,579,437 basic subscribers who subscribed for 794,624
premium service units.
The Company's owned cable systems (the "Company Systems") are located
in ten states and are organized into seven regional clusters: Western New
York, Virginia, Western Pennsylvania, New England, Eastern Pennsylvania,
Ohio and Coastal New Jersey. The Company Systems are located primarily in
suburban areas of large and medium-sized cities within the 50 largest
television markets ("areas of dominant influence" or "ADIs," as measured by
The Arbitron Company). At March 31, 1995, the Company Systems passed
1,340,808 homes and served 975,066 basic subscribers.
The Company owns a 50% voting interest and non-voting preferred
limited partnership interests entitling the Company to a 16.5% priority
return in Olympus Communications, L.P. ("Olympus"). Olympus is a joint
venture which owns cable systems (the "Olympus Systems") primarily located
in some of the fastest growing areas of Florida. The Olympus Systems in
Florida form a substantial part of an eighth regional cluster, Southeastern
Florida. The Company is the managing general partner of Olympus. As of March
31, 1995, the Olympus Systems passed 512,052 homes and served 306,317 basic
subscribers. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations - Olympus."
The Company also provides, for a fee, management and consulting
services to certain partnerships (the "Managed Partnerships"). John J. Rigas
and certain members of his immediate family, including entities they own or
control (collectively, the "Rigas Family") control or have substantial
ownership interests in the Managed Partnerships. As of March 31, 1995, cable
systems (the "Managed Systems") owned by the Managed Partnerships passed
415,641 homes and served 298,054 basic subscribers.
Unless otherwise stated, the information contained in this Annual
Report on Form 10-K is as of March 31, 1995.
Cable Television
Cable television systems receive a variety of television, radio and
data signals transmitted to receiving sites ("headends") by way of off-air
antennas, microwave relay systems and satellite earth stations. Signals are
then modulated, amplified and distributed primarily through coaxial and
fiber optic cable to subscribers, who pay fees for the service. Cable
television systems are generally constructed and operated pursuant to
non-exclusive franchises awarded by state or local government authorities
for specified periods of time.
Cable television systems typically offer subscribers a package of
basic video services consisting of local and distant television broadcast
signals, satellite-delivered non-broadcast channels (which offer programming
such as news, sports, family entertainment, music, weather, shopping, etc.)
and public, governmental and educational access channels. Cable television
systems may also offer certain non-video services, such as digital radio,
data transmission and telephony.
In addition, premium service channels, which provide movies, live and
taped concerts, sports events and other programming, are offered for an
extra monthly charge. At March 31, 1995, over 97% of subscribers of the
Company Systems were also offered pay-per-view programming, which allows the
subscriber to order special events or movies and to pay on a per event
basis. Local, regional and national advertising time is sold in the majority
of the Systems, with commercial advertisements inserted on certain
satellite-delivered non-broadcast channels.
John J. Rigas, the Chairman, President, Chief Executive Officer and
majority stockholder of Adelphia, is a pioneer in the cable television
industry, having built his first system in 1952 in Coudersport,
Pennsylvania. Adelphia was incorporated in Delaware on July 1, 1986 for the
purpose of reorganizing five cable television companies, then principally
owned by the Rigas Family, into a holding company structure in connection
with the initial public offering of its Class A Common Stock, $.01 par
value, and 13% Senior Subordinated Notes due 1996. Prior to 1982, the
Company grew principally by obtaining municipal cable television franchises
to construct new cable television systems. Since 1982, the Company has grown
principally by acquiring and developing existing cable systems. The
Company's business comprises one segment, the ownership, operation and
management of cable television systems. The Company did not have any foreign
operations or foreign sales in the year ended March 31, 1995.
Operating Strategy
The Company's strategy has been to provide superior customer service
while maximizing operating efficiencies. By acquiring and developing systems
in geographic proximity, the Company has been able to realize significant
operating efficiencies through the consolidation of many managerial,
administrative and technical functions. The Systems have consolidated
virtually all of their administrative operations, including customer
service, service call dispatching, marketing, human resources, advertising
sales and government relations into regional offices. Each regional office
has a related technical center which contains the facilities necessary for
the Systems' technical functions, including construction, installations and
system maintenance and monitoring. Consolidating customer service functions
into regional offices allows the Company to provide customer service through
better training and staffing of customer service representatives, and by
providing more advanced telecommunications and computer equipment and
software to its customer service representatives than would otherwise be
economically feasible in smaller systems.
The Company considers technological innovation to be an important
component of cost-effective improvement of its product and customer
satisfaction. Through the use of fiber optic cable and other technological
improvements, the Company has increased system reliability, channel capacity
and its ability to deliver advanced cable television services. These
improvements have enhanced customer service, reduced operating expenses and
allowed the Company to introduce additional services, such as
impulse-ordered pay-per-view programming, which expand customer choices and
increase Company revenues. The Company has developed new cable construction
architecture which allows it to readily deploy fiber optic cable in its
systems. The Company has replaced approximately 24% of the total installed
trunk cable for the Systems with fiber optic cable and has used fiber optic
cable in all of its rebuilding projects and principally all of the Systems'
line extensions. In addition, the Company has installed over 690 miles of
fiber optic plant for point-to-point applications such as connecting or
eliminating headends or microwave link sites. Management believes that the
Company is among the leaders of the cable industry in the deployment of
fiber optic cable.
Development of the Systems
The Company has focused on acquiring and developing systems in markets
which have favorable historical growth trends. The Company believes that the
strong household growth trends in its Systems' market areas are a key factor
in positioning itself for future growth in basic subscribers.
Since 1982, the Company has grown principally by acquiring new cable
systems and by developing existing cable systems. On June 16, 1994,
Adelphia invested $34,000 for a majority equity position in TMC Holdings
Corporation ("THC"), the parent of Tele-Media Company of Western
Connecticut. THC owns cable television systems serving approximately 43,000
subscribers in Western Connecticut. On June 30, 1994, Adelphia acquired
from Olympus 85% of the common stock of Northeast Cable, Inc. ("Northeast
Cable") for a purchase price of $31,875. Northeast Cable owns cable
television systems serving approximately 36,500 subscribers in Eastern
Pennsylvania. On January 10, 1995, Adelphia issued 399,087 shares of Class
A Common Stock in connection with the merger of a wholly-owned subsidiary of
Adelphia into Oxford Cablevision, Inc. ("Oxford"), one of the Benjamin Terry
family (the "Terry Family") cable systems. Oxford serves approximately
4,200 subscribers located in the North Carolina counties of Granville and
Warren. On January 31, 1995, the Company acquired Tele-Media of Martha's
Vineyard, L.P. for $11,775, a cable system serving approximately 7,000
subscribers in Martha's Vineyard, Massachusetts. On February 28, 1995, ACP
Holdings, Inc., a wholly owned subsidiary and managing general partner of
Olympus, certain shareholders of Adelphia, Olympus and various Telesat
Entities ("Telesat"), wholly-owned subsidiaries of FP&L Group, Inc., entered
into an investment agreement whereby Telesat agreed to contribute to Olympus
substantially all of the assets associated with certain cable television
systems, serving approximately 50,000 subscribers in southern Florida, in
exchange for general and limited partner interests and newly issued
preferred limited partner interests in Olympus.
The Company will continue to evaluate new opportunities that allow for
the expansion of its business through the acquisition of additional cable
television systems in geographic proximity to its existing regional market
areas or in locations that can serve as the basis for new market areas,
either directly or indirectly through joint ventures, where appropriate.
The following table indicates the growth of the Company Systems and
Olympus Systems by summarizing the number of homes passed by cable and the
number of basic subscribers for each of the five years in the period ended
March 31, 1995. The table also indicates the numerical growth in subscribers
attributable to acquisitions and the numerical and percentage growth
attributable to internal growth. For the period April 1, 1990 through March
31, 1995, 67% of aggregate internal basic subscriber growth for both the
Company Systems and the Olympus Systems was derived from internal growth in
homes passed, while the remaining 33% of such aggregate growth was derived
from penetration increases.
<TABLE>
Year Ended March 31,
1991 1992 1993 1994 1995
<S> <C> <C> <C> <C> <C>
Company Systems (a):
Homes Passed (b)
Beginning of Period.......... 1,075,137 1,117,401 1,145,308 1,172,755 1,207,425
Internal Growth (c).......... 42,264 27,907 20,507 10,623 39,012
% Internal Growth............ 3.9% 2.5% 1.8% 0.9% 3.2%
Acquired Homes Passed........ -- -- 6,940 24,047 94,371
End of Period................ 1,117,401 1,145,308 1,172,755 1,207,425 1,340,808
Basic Subscribers (d)
Beginning of Period.......... 764,651 800,551 825,553 852,335 888,167
Internal Growth (c).......... 35,900 25,002 21,216 17,355 31,651
% Internal Growth............ 4.7% 3.1% 2.6% 2.0% 3.6%
Acquired Subscribers......... -- -- 5,566 18,477 55,248
End of Period................ 800,551 825,553 852,335 888,167 975,066
Basic Penetration (e)........ 71.6% 72.1% 72.7% 73.6% 72.7%
Year Ended March 31,
1991 1992 1993 1994 1995
Olympus Systems (a):
Homes Passed (b)
Beginning of Period.......... 356,781 391,342 408,616 386,971 406,753
Internal Growth (c).......... 34,561 17,274 (21,645) 19,782 11,911
% Internal Growth............ 9.7% 4.4% (5.3%) 5.1% 2.9%
Acquired Homes Passed........ -- -- -- -- 93,388
End of Period................ 391,342 408,616 386,971 406,753 512,052
Basic Subscribers (d)
Beginning of Period.......... 202,082 224,488 237,766 211,025 239,357
Internal Growth (c).......... 22,406 13,278 (26,741) 28,332 19,198
% Internal Growth............ 11.1% 5.9% (11.2%) 13.4% 8.0%
Acquired Subscribers......... -- -- -- -- 47,762
End of Period................ 224,488 237,766 211,025 239,357 306,317
Basic Penetration (e)........ 57.4% 58.2% 54.5% 58.8% 59.8%
</TABLE>
(a) Data included for the South Dade System at March 31, 1993, 1994 and 1995
reflects actual homes passed and basic subscribers. At July 31, 1992, prior
to Hurricane Andrew, the South Dade system had 157,992 homes passed by cable
and 71,193 basic subscribers, respectively. At March 31, 1993, 1994 and
1995, the South Dade system served 40,999, 65,398 and 74,601 basic
subscribers, respectively. See "Management's Discussion and Analysis -
Olympus."
Data for the Northeast System is included under Company Systems and excluded
from the Olympus Systems for all periods presented.
(b) A home is deemed to be "passed" by cable if it can be connected to the
distribution system without any further extension of the cable distribution
plant.
(c) The number of additional homes passed or additional basic subscribers
not attributable to acquisitions of new cable systems.
(d) A home with one or more television sets connected to a cable system is
counted as one basic subscriber. Bulk accounts (such as motels or
apartments) are included on a "subscriber equivalent" basis in which the
total monthly bill for the account is divided by the basic monthly charge
for a single outlet in the area.
(e) Basic subscribers as a percentage of homes passed by cable.
Market Areas
The Systems are "clustered" in eight market areas in the eastern
portion of the United States as follows:
MARKET AREA LOCATION OF SYSTEMS
Southeastern Florida Portions of southern Dade, Citrus, Orange,
Hillsborough, Palm Beach, Martin and St. Lucie Counties
and Hilton Head, South Carolina
Western New York Suburbs of Buffalo and the adjacent Niagara Falls
area, and Syracuse and adjacent communities
Virginia Winchester, Charlottesville, Staunton, Richland,
Martinsville and surrounding communities in
Virginia, and
South Boston and Elizabeth City, North Carolina
Western Pennsylvania Suburbs of Pittsburgh and several small communities
in
western Pennsylvania
MARKET AREA LOCATION OF SYSTEMS
New England Cape Cod communities, South Shore communities (the
area
between Boston and Cape Cod, Massachusetts),
Martha's Vineyard, Massachusetts; and
Bennington, Burlington, Rutland and Montpelier,
Vermont and surrounding communities in
Vermont and New York, and
Seymour, Connecticut
Eastern Pennsylvania Suburbs of Philadelphia and suburbs of Scranton
Ohio Suburbs of Cleveland and the city of Mansfield and
surrounding communities, Mt Vernon and portions of
Kalamazoo County, Michigan
Coastal New Jersey Ocean County, New Jersey
The following table summarizes by market area the homes passed by cable,
basic subscribers and premium service units for the Systems as of March 31,
1995.
<TABLE>
HOMES BASIC BASIC PREMIUM PREMIUM
PASSED SUBSCRIBERS PENETRATION UNITS PENETRATION
<S> <C> <C> <C> <C> <C>
COMPANY SYSTEMS:
Western New York........ 293,070 210,869 71.95% 113,585 53.87%
New England............. 250,884 181,194 72.22% 111,987 61.81%
Virginia................ 224,209 165,761 73.93% 74,832 45.14%
Ohio.................... 164,561 118,146 71.79% 63,002 53.33%
Western Pennsylvania.... 162,115 115,685 71.36% 48,958 42.32%
Coastal New Jersey...... 123,757 96,228 77.76% 49,303 51.24%
Eastern Pennsylvania.... 122,212 87,183 71.34% 59,443 68.18%
TOTAL................... 1,340,808 975,066 72.72% 521,110 53.44%
OLYMPUS SYSTEMS:
Southeastern Florida.... 512,052 306,317 59.82% 145,758 47.58%
MANAGED SYSTEMS:
Southeastern Florida.... 172,654 135,446 78.45% 35,369 26.11%
Virginia................ 105,325 71,157 67.56% 32,212 45.27%
Western New York........ 68,822 42,924 62.37% 29,460 68.63%
Western Pennsylvania.... 34,611 25,489 73.64% 8,487 33.30%
Eastern Pennsylvania.... 34,229 23,038 67.31% 22,228 96.48%
TOTAL................. 415,641 298,054 71.71% 127,756 42.86%
TOTAL SYSTEMS:
Southeastern Florida.... 684,706 441,763 64.52% 181,127 41.00%
Western New York........ 361,892 253,793 70.13% 143,045 56.36%
Virginia................ 329,534 236,918 71.89% 107,044 45.18%
New England............. 250,884 181,194 72.22% 111,987 61.81%
Western Pennsylvania.... 196,726 141,174 71.76% 57,445 40.69%
Ohio.................... 164,561 118,146 71.79% 63,002 53.33%
Eastern Pennsylvania.... 156,441 110,221 70.46% 81,671 74.10%
Coastal New Jersey...... 123,757 96,228 77.76% 49,303 51.24%
TOTAL................. 2,268,501 1,579,437 69.62% 794,624 50.31%
</TABLE>
Financial Information
The financial data regarding the Company's revenues, results of
operations and identifiable assets for each of the Company's last three
fiscal years is set forth in, and incorporated herein by reference to, Item
8, Financial Statements and Supplementary Data of this Form 10-K.
Technological Developments
The Company has made a substantial commitment to the technological
development of the Company Systems and has actively sought to upgrade the
technical capabilities of its cable plant in order to increase channel
capacity for the delivery of additional programming and new services. All of
the Company Systems have a minimum of 35-channel capacity. By expanding
channel capacity, the Company expects that it will be able to provide
subscribers with a wider range of telecommunication services.
Over 97% of the subscribers to the Company Systems are served by
systems with "addressable capable" technology, which permits the cable
operator to remotely activate the cable television services to be delivered
to subscribers who are equipped with addressable converters. With
addressable converters, the Company can immediately add to or reduce the
services provided to a subscriber from the Company's headend site, without
the need to dispatch a service technician to the subscriber's home.
Addressable technology has allowed the Company to offer pay-per-view
programming. This technology has assisted the Company in reducing pay
service theft and, by allowing the Company to automatically cut off a
subscriber's service, has been effective in collecting delinquent subscriber
payments.
<TABLE>
The following table indicates the deployment of fiber optic cable and
channel capacities for the Systems as of March 31, 1995:
Systems Channel
Fiber Fiber Capacity As a
Plant Route Strand Fiber % of Plant Miles
Miles Miles Miles Nodes lt53 54-77 gt78
<S> <C> <C> <C> <C> <C> <C> <C>
COMPANY SYSTEMS:
Western New York............ 2,749 348 8,608 376 25.8% 30.9% 43.3%
Virginia.................... 4,579 263 5,016 122 31.8% 45.6% 22.6%
Western Pennsylvania........ 2,071 165 2,595 92 1.9% 66.8% 31.3%
New England................. 3,111 313 8,485 43 36.8% 44.5% 18.7%
Eastern Pennsylvania........ 1,624 218 4,986 192 47.8% 9.8% 42.4%
Ohio........................ 2,719 343 5,947 230 35.5% 18.2% 46.3%
Coastal New Jersey.......... 1,449 225 4,552 260 18.5% 8.0% 73.5%
TOTAL..................... 18,302 1,875 40,189 1,315 29.3% 35.4% 35.3%
OLYMPUS SYSTEMS:
Southeastern Florida........ 5,238 215 6,516 92 0.8% 84.0% 15.2%
MANAGED SYSTEMS:
Western New York............ 314 83 2,281 164 -- -- 100.0%
Virginia.................... 856 77 1,112 27 65.4% 0.8% 33.8%
Western Pennsylvania........ 668 27 718 23 31.2% 24.6% 44.2%
Eastern Pennsylvania........ 421 -- -- -- 19.6% 42.8% 37.6%
Southeastern Florida........ 1,243 23 350 4 35.8% 60.0% 4.2%
TOTAL..................... 3,502 210 4,461 218 37.0% 31.3% 31.7%
TOTAL SYSTEMS:
Western New York............ 3,063 431 10,889 540 23.1% 27.7% 49.2%
Virginia.................... 5,435 340 6,128 149 37.1% 38.5% 24.4%
Western Pennsylvania........ 2,739 192 3,313 115 9.1% 56.5% 34.4%
New England................. 3,111 313 8,485 43 36.8% 44.5% 18.7%
Eastern Pennsylvania........ 2,045 218 4,986 192 42.0% 16.6% 41.4%
Ohio........................ 2,719 343 5,947 230 35.5% 18.2% 46.3%
Coastal New Jersey.......... 1,449 225 4,552 260 18.5% 8.0% 73.5%
Southeastern Florida........ 6,481 238 6,866 96 7.5% 79.4% 13.1%
TOTAL..................... 27,042 2,300 51,166 1,625 24.7% 44.3% 31.0%
</TABLE>
In all of
its recent system upgrades, the Company has utilized fiber optic cable as an
alternative to the coaxial cable that historically has been used to
distribute cable signals to the subscriber's home. Fiber optic cable is
capable of carrying hundreds of video, data and voice channels. The Company
has developed an innovative "fiber-to-feeder" network design, consisting of
a combination of fiber optic trunk and certain other distribution plant,
which has proven to be economical for the construction, rebuilding,
extension and upgrading of the Systems.
The Company expects that the continued use of
the fiber-to-feeder network design strategy will give the Company the
flexibility to exploit the expanded delivery capacity of fiber optic cable
in a cost-effective manner. The construction of fiber-to-feeder networks
will also position the Company to take advantage of alternative
communications delivery systems made possible by fiber optic technology
(such as mobile personal communications service ("PCS") and "alternate
access" voice and data communications that bypass local exchange telephone
carriers), to utilize the expanded bandwidth potential of digital
compression technology and to meet the anticipated transmission requirements
for high-definition television and digital television.
The Company is currently offering alternate
access telecommunications services through a subsidiary, Hyperion
Telecommunications, Inc. ("Hyperion"). Competitive access carriers can
provide businesses and other large telecommunications consumers with local
telecommunications services and access to long-distance service carriers via
competitive networks that bypass the local telephone company. Hyperion's
networks are constructed exclusively with fiber optics plant designed to
provide increased quality service and data integrity compared to the
existing local telephone company's network. As of March 31, 1995, Hyperion
leased 460 route miles of fiber optic plant from Adelphia (which is included
in fiber miles reflected in the preceding table) and 780 route miles from
others. These competitive access networks also can complement existing
networks by providing redundant telecommunications service backup and route
diversity for their customers.
Adelphia is a 49.9% owner of Page Call, Inc.
which was a successful bidder in November 1994 on three regional narrowband
PCS licenses, covering 62% of the country's population. Page Call, Inc.
intends to use its narrowband PCS licenses as the basis for a planned
nationwide paging service and expects to market its paging services to
consumers through a series of marketing affiliation agreements with cable
television operators.
In addition to the activities described above,
the Company has made a substantial commitment to technological development
as a member of Cable Television Laboratories, Inc., a not-for-profit
research and development company serving the cable industry. The Company has
also joined other industry members in a partnership venture in Digital Cable
Radio, a satellite-delivered, multichannel music service featuring "compact
disc" quality sound, which is marketed as a premium service.
Subscriber Services and Rates
The Company's revenues are derived principally
from monthly subscription fees
for basic, satellite and premium services. Rates to subscribers vary from
market to market and in accordance with the type of service selected.
Although services vary from system to system because of differences in
channel capacity and viewer interests, each of the Systems typically offers
a basic service package ranging from $8.00 to $12.00 per month. As described
herein, the Systems currently offer certain satellite services through
CableSelect, at monthly per channel rates ranging from $.10 to $1.25 per
channel, and in discounted packages. The Systems' monthly rates for premium
services range from $7.00 to $13.00 per service. An installation fee, which
the Company may wholly or partially waive during a promotional period, is
usually charged to new subscribers. Subscribers are free to terminate cable
service at any time without charge, but often are charged a fee for
reconnection or change of service.
The Cable Communications Policy Act of 1984
(the "1984 Cable Act," as amended by the 1992 Cable Act), deregulated basic
service rates for systems in communities meeting the FCC's definition of
effective competition. Pursuant to the FCC's definition of effective
competition adopted following enactment of the 1984 Cable Act, substantially
all of the Company's franchises were rate deregulated. However, in June
1991, the FCC amended its effective competition standard, which increased
the number of cable systems which could be subject to local rate regulation.
The 1992 Cable Act contains a new definition of effective competition under
which nearly all cable systems in the United States are subject to
regulation of basic service rates. Additionally, the legislation (i)
eliminated the 5% annual basic rate increase allowed by the 1984 Cable Act
without local approval; (ii) allows the FCC to adjudicate the reasonableness
of rates for non-basic service tiers other than premium services for cable
systems not subject to effective competition in response to complaints filed
by franchising authorities and/or cable subscribers; (iii) prohibits cable
systems from requiring subscribers to purchase service tiers above basic
service in order to purchase premium services if the system is technically
capable of doing so; (iv) allows the FCC to impose restrictions on the
retiering and rearrangement of cable services under certain circumstances;
and (v) permits the FCC and franchising authorities more latitude in
controlling rates and rejecting rate increase requests. See "Legislation and
Regulation".
For a discussion of the changes in the
Company's method of offering services to its subscribers implemented in
September 1993 and recent FCC rate regulation and related developments, see
"Legislation and Regulation" and "Management's Discussion and Analysis of
Financial Condition and Results of Operations - Regulatory and Competitive
Matters."
Franchises
The 1984 Cable Act provides that cable
operators may not offer cable service to a particular community without a
franchise unless such operator was lawfully providing service to the
community on July 1, 1984 and the franchising authority does not require a
franchise. The Company Systems and the Olympus Systems operate pursuant to
franchises or other authorizations issued by governmental authorities,
substantially all of which are nonexclusive. Such franchises or
authorizations awarded by a governmental authority generally are not
transferable without the consent of the authority. Additionally, the 1992
Cable Act prohibits cable operators from selling or otherwise transferring
the ownership of any cable system within 36 months after acquisition or
initial construction, subject to certain limited exceptions. As of March 31,
1995, the Company held 439 franchises and Olympus held 82 franchises. Most
of these franchises can be terminated prior to their stated expiration by
the relevant governmental authority, after due process, for breach of
material provisions of the franchise.
Under the terms of most of the Company's
franchises, a franchise fee (ranging up to 5% of the gross revenues of the
cable system) is payable to the governmental
authority. For the past three years, franchise fee payments made by the
Company have averaged approximately 2.6% of gross system revenues.
The franchises issued by the governmental
authorities are subject to periodic renewal. In renewal hearings, the
authorities generally consider, among other things, whether the franchise
holder has provided adequate service and complied with the franchise terms.
In connection with a renewal, the authority may impose different and more
stringent terms, the impact of which cannot be predicted. To date, all of
the Company's material franchises have been renewed or extended, at or
effective upon their stated expiration, generally on modified terms. Such
modified terms have not been materially adverse to the Company.
The Company believes that all of its material
franchises are in good standing. From time to time, the Company notifies the
franchising authorities of the Company's intent to seek renewal of the
franchise in accordance with the procedures set forth in the 1984 Cable Act.
The 1984 Cable Act process requires that the governmental authority consider
the franchise holder's renewal proposal on its own merits in light of the
franchise holder's past performance and the community's needs and interests,
without regard to the presence of competing applications. See "Legislation
and Regulation." The 1992 Cable Act alters the administrative process by
which operators utilize their 1984 Cable Act franchise renewal rights. Such
changes could make it easier in some instances for a franchising authority
to deny renewal of a franchise.
Competition
Although the Company and the cable television
industry have historically faced modest competition, the competitive
landscape is changing, and competition will increase. The Company believes
that the increase in competition within its communities will occur gradually
over a period of time.
At the present time, cable television systems
compete with other communications and entertainment media, including off-air
television broadcast signals which a viewer is able to receive directly
using the viewer's own television set and antenna. The extent to which a
cable system competes with over-the-air broadcasting depends upon the
quality and quantity of the broadcast signals available by direct antenna
reception compared to the quality and quantity of such signals and
alternative services offered by a cable system. In many areas, television
signals which constitute a substantial part of basic service can be received
by viewers who use their own antennas. Local television reception for
residents of apartment buildings or other multi-unit dwelling complexes may
be aided by use of private master antenna services. Cable systems also face
competition from alternative methods of distributing and receiving
television signals and from other sources of entertainment such as live
sporting events, movie theaters and home video products, including videotape
recorders and cassette players. In recent years, the FCC has adopted
policies providing for authorization of new technologies and more favorable
operating environment for certain existing technologies that provide, or may
provide, substantial additional competition for cable television systems.
The extent to which cable television service is competitive depends in
significant part upon the cable televisions system's ability to provide an
even greater variety of programming than that available off-air or through
competitive alternative delivery sources. In addition, certain provisions
of the 1992 Cable Act are expected to increase competition significantly in
the cable industry. See "Legislation and Regulation."
The 1992 Cable Act prohibits the award of
exclusive franchises, prohibits franchising authorities from unreasonably
refusing to award additional franchises and permits them to operate cable
systems themselves without franchises.
Individuals presently have the option to
purchase earth stations, which allow the direct reception of satellite-
delivered program services formerly available only to cable television
subscribers. Most satellite-distributed program signals are being
electronically scrambled to permit reception only with authorized decoding
equipment, generally at a cost to the viewer. From time to time,
legislation has been introduced in Congress which, if enacted into law,
would prohibit the scrambling of certain satellite-distributed programs or
would make satellite services available to private earth stations on terms
comparable to those offered to cable systems. Broadcast television signals
are being made available to owners of earth stations under the Satellite
Home View Copyright Act of 1988, which became effective January 1, 1989 for
a six-year period. This Act establishes a statutory compulsory license for
certain transmissions made by satellite owners to home satellite dishes for
which carriers are required to pay a royalty fee to the Copyright Office.
This Act has been extended by Congress until December 31, 1999. The 1992
Cable Act enhances the right of cable competitors to purchase nonbroadcast
satellite-delivered programming. See "Legislation and Regulation - Federal
Regulation."
In late 1993, the first satellite providing
high-power, direct broadcast satellite ("DBS") television service was
launched, and this service became available to consumers during 1994. This
technology has the capability of providing more than 100 channels of
programming over a single DBS satellite. This capacity can be further
increased by providing service from multiple satellites. DBS service can be
received virtually anywhere in the United States through the installation of
a small rooftop or side-mounted antenna, and it is more accessible than
cable television service where cable plant has not been constructed or where
it is not cost effective to construct cable television facilities. DBS
service is being heavily marketed on a nation-wide basis. The extent to
which DBS systems will be competitive with cable television systems will
depend upon, among other things, the availability of reception equipment,
and whether equipment and service can be made available to consumers at
reasonable prices.
Multi-channel multipoint distribution systems
("MMDS") deliver programming services over microwave channels licensed by
the FCC which are received by subscribers with special antennas. MMDS
systems are less capital intensive, are not required to obtain local
franchises or to pay franchise fees and are subject to fewer regulatory
requirements than cable television systems. To date, the ability of these
so-called "wireless" cable services to compete with cable television systems
has been limited by channel capacity constraints and the need for
unobstructed line-of-sight over-the-air transmission. Although relatively
few MMDS systems in the United States are currently in operation or under
construction, virtually all markets have been licensed or tentatively
licensed. The FCC has taken a series of actions intended to facilitate the
development of MMDS and other wireless cable systems as alternative means of
distributing video programming, including reallocating certain frequencies
to these services and expanding the permissible use and eligibility
requirements for certain channels reserved for educational purposes. The
FCC's actions enable a single entity to develop an MMDS system with a
potential of up to 35 channels that could compete effectively with cable
television. MMDS systems qualify for the statutory compulsory copyright
licenses for the retransmission of television and radio broadcast stations.
FCC rules and the 1992 Cable Act prohibit the common ownership of cable
systems and MMDS facilities serving the same area.
Additional competition may come from private
cable television systems servicing condominiums, apartment complexes and
certain other multiple unit residential developments. The operators of
these private systems, known as satellite master antenna television
("SMATV") systems, often enter into exclusive agreements with apartment
building owners or homeowners' associations which preclude franchised cable
television operators from serving residents of such private complexes.
Although a number of states have enacted laws to afford operators of
franchised cable television systems access to such private complexes, the
U.S. Supreme Court has held that cable companies cannot have such access
without compensating the property owner. The access status of several
statutes have been challenged successfully in the courts, and other such
laws are under attack. However, the 1984 Cable Act gives franchised cable
operators the right to use existing compatible easements within their
franchise areas upon nondiscriminatory terms and conditions. Accordingly,
where there are pre-existing compatible easements, cable operators may not
be unfairly denied access or discriminated against with respect to the terms
and conditions of access to those easements. There have been conflicting
judicial decisions interpreting the scope of the access right granted by the
1984 Cable Act, particularly with respect to easements located entirely on
private property.
Due to the widespread availability of
reasonably-priced earth stations, SMATV systems can offer both improved
reception of local television stations and many of the same satellite-
delivered program services which are offered by franchised cable television
systems. Further, while a franchised cable television system typically is
obligated to extend service to all areas of a community regardless of
population density or economic risk, the SMATV system may confine its
operation to small areas that are easy to serve and more likely to be
profitable. The FCC recently issued a clarification of its rules
interpreting the 1984 Cable Act which has the effect of making it easier for
SMATV systems to interconnect non-commonly owned buildings without having to
comply with certain local, state and federal regulatory requirements that
are imposed upon cable systems providing similar services. The Supreme
Court has upheld this decision. However, a SMATV system is subject to the
1984 Cable Act's franchise requirement if it uses physically closed
transmission paths such as wires or cable to interconnect separately owned
and managed buildings if its lines use or cross any public right-of-way. In
a separate proceeding, the FCC has amended its rules to increase the number
of microwave frequencies a SMATV operator may use to interconnect several
buildings. The FCC's actions will make it easier for SMATV operators to
compete with cable systems for subscribers located in multiple unit
dwellings while allowing them to remain exempt from many burdensome
government regulations which apply to cable systems. In some cases, SMATV
operators may be able to charge a lower price than could a cable system
providing comparable services and the FCC's new regulations implementing the
1992 Cable Act limit a cable operator's ability to reduce its rates to meet
this competition. Furthermore, the U.S. Copyright Office has tentatively
concluded that SMATV systems are "cable systems" for purposes of qualifying
for the compulsory copyright license established for cable systems by
federal law. This decision may help make SMATV systems more competitive
with traditional cable systems. See "Legislation and Regulation - Federal
Regulation - Copyright." The 1992 Cable Act prohibits the common ownership
of cable systems and SMATV facilities serving the same area. However, a
cable operator can purchase a SMATV system serving the same area and
technically integrate it into the cable system.
The FCC has authorized a new interactive
television service which will permit non-video transmission of information
between an individual's home and entertainment and information service
providers. This service will provide an alternative means for DBS systems
and other video programming distributors, including television stations, to
initiate the new interactive television services. This service may also be
used as well by the cable television industry.
The FCC also has initiated a new rulemaking
proceeding looking toward the allocation of frequencies in the 28 Ghz range
for a new multi-channel wireless video service which could make 98 video
channels available in a single market. It cannot be predicted at this time
whether competitors will emerge utilizing such frequencies or whether such
competition would have a material impact on the operations of cable
television systems.
In the past, federal cross-ownership
restrictions have limited entry into the cable television business by
potentially strong competitors such as telephone companies. Proposals
recently adopted by the FCC, pending litigation and legislation, could make
it possible for companies with considerable resources and consequently a
potentially greater willingness or ability to overbuild, to enter the
business. The FCC recently amended its rules to permit local telephone
companies to offer "video dialtone" service for video programmers, including
channel capacity for the carriage of video programming and certain non-
common carrier activities such as video processing, billing and collection
and joint marketing agreements. Furthermore, several federal district and
two circuit courts have struck down as unconstitutional the provision in the
1984 Cable Act which prevents local telephone companies from offering video
programming on a non-common carrier basis directly to subscribers in their
local telephone service areas. Moreover, this cross-ownership restriction
does not apply in communities with a population of less than 2,500 persons.
Even in the absence of further changes in the cross-ownership restrictions,
the expansion of telephone companies' fiber optic systems may facilitate
entry by other video service providers in competition with cable systems.
See "Legislation and Regulation - Federal Regulation."
FCC rules permit local telephone companies to
offer "video dialtone" service for video programmers, including channel
capacity for the carriage of video programming and certain non-common
carrier activities such as video processing, billing and collection and
joint marketing agreements. On December 15, 1992, New Jersey Bell Telephone
Company filed an application with the FCC to operate a "video dialtone"
service in portions of Dover County, New Jersey, in which the Company serves
approximately 20,000 subscribers. The FCC approved the application on July
18, 1994. The Company has appealed this decision to the U.S. Court of
Appeals for the District of Columbia. This case is presently pending.
A number of telephone companies have filed suit
seeking to void as unconstitutional the provisions in the 1984 Cable Act
that prohibit telephone companies from owning cable television systems in
their telephone service areas. The U.S. Courts of Appeal for the Fourth and
Ninth Circuits have struck down the cross-ownership ban on First Amendment
grounds. Several federal district courts have also struck down the cross-
ownership ban on the same grounds. In addition, legislation which would
alter or eliminate the cross-ownership ban is under active consideration in
Congress.
Advances in communications technology, as well
as changes in the marketplace and the regulatory and legislative
environment, are constantly occurring. Thus, it is not possible to predict
the effect that ongoing or future developments might have on the cable
industry. The ability of cable systems to compete with present, emerging
and future distribution media will depend to a great extent on obtaining
attractive programming. The availability and exclusive use of a sufficient
amount of quality programming may in turn be affected by developments in
regulation or copyright law. See "Legislation and Regulation."
The cable television industry competes with
radio, television and print media for advertising revenues. As the cable
television industry continues to develop programming designed specifically
for distribution by cable, advertising revenues may increase. Premium
programming provided by cable systems is subject to the same competitive
factors which exist for other programming discussed above. The continued
profitability of premium services may depend largely upon the continued
availability of attractive programming at competitive prices.
Employees
At June 12, 1995, there were 2,564 full-time
employees of the Company, of which 103 employees were covered by collective
bargaining agreements at three locations. The Company considers its
relations with its employees to be good.
LEGISLATION AND REGULATION
The cable television industry is regulated by
the FCC, some state governments and most local governments. In addition,
various legislative and regulatory proposals under consideration from time
to time by Congress and various federal agencies may materially affect the
cable television industry. The following is a
summary of federal laws and regulations affecting the growth and operation
of the cable television industry and a description of certain state and
local laws.
Cable Communications Policy Act of 1984
The 1984 Cable Act became effective on December
29, 1984. This federal statute, which amended the Communications Act of 1934
(the "Communications Act"), created uniform national standards and
guidelines for the regulation of cable television systems. Violations by a
cable television system operator of provisions of the Communications Act, as
well as of FCC regulations, can subject the operator to substantial monetary
penalties and other sanctions. Among other things, the 1984 Cable Act
affirmed the right of franchising authorities (state or local, depending on
the practice in individual states) to award one or more franchises within
their jurisdictions. It also prohibited non-grandfathered cable television
systems from operating without a franchise in such jurisdictions. In
connection with new franchises, the 1984 Cable Act provides that in granting
or renewing franchises, franchising authorities may establish requirements
for cable-related facilities and equipment, but may not establish or enforce
requirements for video programming or information services other than in
broad categories. The 1984 Cable Act grandfathered, for the remaining term
of existing franchises, many but not all of the provisions in existing
franchises which would not be permitted in franchises entered into or
renewed after the effective date of the 1984 Cable Act.
Cable Television Consumer Protection and Competition Act of 1992 (the "1992
Cable Act")
On October 5, 1992, Congress enacted the 1992
Cable Act. This legislation effected significant changes to the legislative
and regulatory environment in which the cable industry operates. It amends
the 1984 Cable Act in many respects. The 1992 Cable Act became effective on
December 4, 1992, although certain provisions, most notably those dealing
with rate regulation and retransmission consent, became effective at later
dates. The legislation also required the FCC to initiate a number of
rulemaking proceedings to implement various provisions of the statute. The
1992 Cable Act allows for a greater degree of regulation on the cable
industry with respect to, among other things: (i) cable system rates for
both basic and certain nonbasic services; (ii) programming access and
exclusivity arrangements; (iii) access to cable channels by unaffiliated
programming services; (iv) leased access terms and conditions; (v)
horizontal and vertical ownership of cable systems; (vi) customer service
requirements; (vii) franchise renewals; (viii) television broadcast signal
carriage and retransmission consent; (ix) technical standards; (x)
subscriber privacy; (xi) consumer protection issues; (xii) cable equipment
compatibility; (xiii) obscene or indecent programming; and (xiv) requiring
subscribers to subscribe to tiers of service other than basic service as a
condition of purchasing premium services. Additionally, the legislation
encourages competition with existing cable systems by: allowing
municipalities to own and operate their own cable systems without having to
obtain a franchise; preventing franchising authorities from granting
exclusive franchises or unreasonably refusing to award additional franchises
covering an existing cable system's service area; and prohibiting the common
ownership of cable systems and co-located MMDS or SMATV systems. The 1992
Cable Act also precludes video programmers affiliated with cable television
companies from favoring cable operators over competitors and requires such
programmers to sell their programming to other multichannel video
distributors. This provision may limit the ability of cable program
suppliers to offer exclusive programming arrangements to cable television
companies. A number of provisions in the 1992 Cable Act relating to, among
other things, rate regulation, have had a negative impact on the cable
industry and the Company's business.
Various cable operators have filed actions in
the United States District Court in the District of Columbia challenging the
constitutionality of several sections of the 1992 Cable Act. Pursuant to
special jurisdictional provisions in the 1992 Cable Act, a challenge to the
must-carry provisions of the Act was heard by a three-judge panel of the
District Court. On April 8, 1993, the three-judge court granted a summary
judgment for the government upholding the constitutional validity of the
must-carry provisions of the 1992 Cable Act. That decision was appealed
directly to the U.S. Supreme Court. The plaintiffs in that case
unsuccessfully sought an injunction pending appeal of the District Court's
decision. On June 27, 1994, the Supreme Court vacated the District Court
decision and remanded the case for further proceedings. Thus, the
constitutionality of the must carry provision has yet to be finally decided.
The cable operators' constitutional challenge
to the balance of the 1992 Cable Act provisions was heard by a single judge
of the District Court. On September 16, 1993, the court rendered its
decision upholding the constitutionality of all but three provisions of the
statute (multiple ownership limits for cable operators, advance notice of
free previews for certain programming services, and channel set-asides for
DBS operators). This decision has been appealed to the U.S. Court of Appeals
for the District of Columbia Circuit.
Appeals were also filed in the U.S. Court of
Appeals for the District of Columbia Circuit from the FCC's rate regulation
rulemaking decisions. On June 6, 1995, the court upheld all aspects of the
FCC's rate regulations except for certain minor matters.
Federal Regulation
The FCC, the principal federal regulatory
agency with jurisdiction over cable television, has promulgated regulations
covering such areas as the registration of cable systems, cross-ownership
between cable systems and other communications businesses, carriage of
television broadcast programming, consumer education and lockbox
enforcement, origination cablecasting and sponsorship identification,
children's programming, the regulation of basic cable service rates in areas
where cable systems are not subject to effective competition, signal leakage
and frequency use, technical performance, maintenance of various records,
equal employment opportunity, and antenna structure notification, marking
and lighting. The FCC has the authority to enforce these regulations through
the imposition of substantial fines, the issuance of cease and desist orders
and/or the imposition of other administrative sanctions, such as the
revocation of FCC licenses needed to operate certain transmission facilities
often used in connection with cable operations. Furthermore, the 1992 Cable
Act required the FCC to adopt implementing regulations covering, among other
things, cable rates, signal carriage, consumer protection and customer
service, leased access, indecent programming, programmer access to cable
television systems, programming agreements, technical standards, consumer
electronics equipment compatibility, ownership of home wiring, program
exclusivity, equal employment opportunity, and various aspects of direct
broadcast satellite system ownership and operation. A brief summary of the
most material federal regulations as adopted to date follows.
Rate Regulation. The 1984 Cable Act codified
existing FCC preemption of rate regulation for premium channels and optional
nonbasic program tiers. The 1984 Cable Act also deregulated basic cable
rates for cable television systems determined by the FCC to be subject to
effective competition. The 1992 Cable Act substantially changed the
statutory and FCC rate regulation standards. The 1992 Cable Act replaced the
FCC's old standard for determining effective competition, under which most
cable systems were not subject to local rate regulation, with a statutory
provision that has resulted in nearly all cable television systems becoming
subject to local rate regulation of basic service. Additionally, the
legislation eliminated the 5% annual rate increase for basic service
previously allowed by the 1984 Cable Act without local approval; required
the FCC to adopt a formula, for franchising authorities to enforce, to
assure that basic cable rates are reasonable; allows the FCC to review rates
for nonbasic service tiers (other than per-channel or per-program services)
in response to complaints filed by franchising authorities and/or cable
customers; prohibits cable television systems from requiring customers to
purchase service tiers above basic service in order to purchase premium
services if the system is technically capable of doing so; required the FCC
to adopt regulations to establish, on the basis of actual costs, the price
for installation of cable service, remote controls, converter boxes and
additional outlets; and allows the FCC to impose restrictions on the
retiering and rearrangement of cable services under certain limited
circumstances. The FCC adopted rules designed to implement these rate
regulation provisions on April 1, 1993, and then significantly amended them
on February 22, 1994, and November 10, 1994.
The FCC's regulations set standards for the
regulation of basic and nonbasic cable service rates (other than per-channel
or per-program services). The FCC initially ordered an interim 120-day
freeze on these rates effective April 5, 1993, a freeze which was extended
several times and finally expired on May 15, 1994. The FCC's original rules
became effective on September 1, 1993. The amendments thereto became
effective on May 15, 1994 and January 1, 1995, respectively. The rate
regulations adopt a benchmark price cap system for measuring the
reasonableness of existing basic and nonbasic service rates, and a formula
for evaluating future rate increases. Alternatively, cable operators have
the opportunity to make cost-of-service showings which, in some cases, may
justify rates above the applicable benchmarks. The FCC has adopted interim
rules to be utilized in such cost-of-service showings. The rules also
require that charges for cable-related equipment (e.g., converter boxes and
remote control devices) and installation services be unbundled from the
provision of cable service and based upon actual costs plus a reasonable
profit. Local franchising authorities and/or the FCC are empowered to order
a reduction of existing rates which exceed the benchmark level for either
basic and/or nonbasic cable services and associated equipment, and refunds
could be required, measured from the date of a complaint to the FCC
challenging an existing nonbasic cable service rate or from September 1,
1993, for existing basic cable service rates under the original rate
regulations and from May 15, 1994, under the amended rate regulations. The
retroactive refund period for basic cable service rates is limited to one
year. In general, the reductions for basic and nonbasic cable service rates
under the original rate regulations were to be to the greater of the
applicable benchmark level or the rates in force as of September 30, 1992,
minus 10 percent, adjusted forward for inflation. The amended regulations
require an aggregate reduction of up to 17 percent, adjusted forward for
inflation and certain other factors, from the rates in force as of September
30, 1992. The regulations also provide that future rate increases may not
exceed an inflation-indexed amount, plus increases in certain costs beyond
the cable operator's control, such as taxes, franchise fees and increased
programming costs. Cost-based adjustments to these capped rates can also be
made in the event a cable operator adds or deletes programming channels.
The November 10, 1994 amendments incorporated an alternative method for
adjusting the rate charged for a regulated nonbasic service tier when new
services are added. This method will allow cable operators to increase
rates by as much as $1.50 over a two year period to reflect the addition of
up to seven new channels of service on regulated non basic tiers. In
addition, new product tiers consisting of services new to the cable system
can be created free of rate regulation as long as certain conditions are met
such as not moving services from the existing tiers to the new tier. A
significant number of franchising authorities have become certified by the
FCC to regulate the rates charged by the Company for basic cable service and
for associated equipment. Subscribers in some of the Company's cable
systems have sought FCC review regarding the rates charged for non-basic
cable service. The Company's ability to implement rate increases consistent
with its past practices will likely be limited by the regulations that the
FCC has adopted.
Commencing in August 1993, in accordance with
the 1992 Cable Act, the Company repackaged certain existing cable services
and twice adjusted the basic service rates and related equipment and
installation charges in substantially all of its
Systems so as to bring these rates and charges into compliance with the then
applicable benchmark or equipment and installation cost levels.
Effective September 1, 1993, the Company also
implemented a program in substantially all of its Systems under which a
number of the Company's satellite-delivered and premium services were
offered individually on a per channel (i.e., a la carte) basis, or as a
group at a discounted price. A la carte services were not subject to the
FCC's rate regulations under the rules originally issued to implement the
1992 Cable Act. The FCC, in its reconsideration of the original rate
regulations, stated that it was going to review the regulatory treatment of
such a la carte packages on an ad hoc basis. A la carte packages which are
determined to be evasions of rate regulation rather than true enhancements
of subscriber choice will be treated as regulated tiers, and therefore,
subject to rate regulations. One of Olympus' Systems, along with numerous
other cable operators, received a specific inquiry from the FCC regarding
its implementation of this new method of offering cable services. The FCC's
Cable Services Bureau has ruled that this system, and all other systems
which moved more than six existing services to an a la carte tier, have
engaged in an evasion of rate regulation and ordered this package to be
treated as a regulated tier. The Company has appealed this decision to the
full FCC. The November 10, 1994 amendments stated that, prospectively, any
new a la carte package created after this date will be treated as a
regulated tier, except for packages involving traditional premium services
(e.g., HBO). Because of these developments and other factors, including the
decisions of subscribers, the Company is currently unable to determine the
effect that this a la carte method of offering cable services will have on
its business and results of operations in future periods. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations -
Regulatory and Competitive Matters".
The FCC has adopted regulations pursuant to the
1992 Cable Act which require cable systems to permit customers to purchase
video programming on a per channel or a per program basis without the
necessity of subscribing to any tier of service, other than the basic
service tier, unless the cable system is technically incapable of doing so.
Generally, this exemption from compliance with the statute for cable systems
that do not have such technical capability is available until a cable system
obtains the capability, but not later than December, 2002.
Carriage of Broadcast Television Signals. The
1992 Cable Act contains new mandatory carriage requirements. These new rules
allow commercial television
broadcast stations which are "local" to a cable system (i.e., the system is
located in the station's Area of Dominant Influence), to elect every three
years whether to require the cable system to carry the station, subject to
certain exceptions, or whether the cable system will have to negotiate for
"retransmission consent" to carry the station. The first such election was
made on June 17, 1993. Local, non-commercial television stations are also
given mandatory carriage rights, subject to certain exceptions, within the
larger of (i) a 50 mile radius from the station's city of license or (ii)
the station's Grade B contour (a measure of signal strength). Unlike
commercial stations, noncommercial stations are not given the option to
negotiate retransmission consent for the carriage of their signal. In
addition, cable systems will have to obtain retransmission consent for the
carriage of all "distant" commercial broadcast stations, except for certain
"superstations," i.e., commercial satellite-delivered independent stations
such as WTBS. The 1992 Cable Act also eliminated, effective December 4,
1992, the FCC's regulations requiring the provision of input selector
switches. The statutory must-carry provisions for non-commercial stations
became effective on December 4, 1992. Must-carry rules for both commercial
and non-commercial stations and retransmission consent rules for commercial
stations were adopted by the FCC on March 11, 1993. The must-carry
requirement for commercial stations went into effect on June 2, 1993, and
any stations for which retransmission consent had not been obtained (other
than must-carry stations, non-commercial stations and superstations) had to
be dropped as of October 6, 1993. A number of stations previously carried by
the Company's cable television systems elected retransmission consent. The
Company has thus far been able to reach agreements with broadcasters who
elected retransmission consent or to negotiate extensions to the October 6,
1993 deadline and has therefore not been required to pay cash compensation
to broadcasters for retransmission consent or been required by broadcasters
to remove broadcast stations from the cable television channel line-ups. The
Company has, however, agreed to carry some services (e.g., ESPN2 and a new
service by FOX) in specified markets pursuant to retransmission consent
arrangements which it believes are comparable to those entered into by most
other large cable operators.
Nonduplication of Network Programming. Cable
systems that have 1,000 or more subscribers must, upon the appropriate
request of a local television station, delete the simultaneous or
nonsimultaneous network programming of a distant station when such
programming has also been contracted for by the local station on an
exclusive basis.
Deletion of Syndicated Programming. FCC
regulations enable television broadcast stations that have obtained
exclusive distribution rights for syndicated programming in their market to
require a cable system to delete or "black out" such programming from other
television stations which are carried by the cable system. The extent of
such deletions will vary from market to market and cannot be predicted with
certainty. However, it is possible that such deletions could be substantial
and could lead the cable operator to drop a distant signal in its entirety.
The FCC also has commenced a proceeding to determine whether to relax or
abolish the geographic limitations on program exclusivity contained in its
rules, which would allow parties to set the geographic scope of exclusive
distribution rights entirely by contract, and to determine whether such
exclusivity rights should be extended to noncommercial educational stations.
It is possible that the outcome of these proceedings will increase the
amount of programming that cable operators are requested to black out.
Finally, the FCC has declined to impose equivalent syndicated exclusivity
rules on satellite carriers who provide services to the owners of home
satellite dishes similar to those provided by cable systems.
Franchise Fees. Although franchising
authorities may impose franchise fees under the 1984 Cable Act, such
payments cannot exceed 5% of a cable system's annual gross revenues. In
those communities in which franchise fees are required, the Company
currently pays franchise fees ranging up to 5% of gross revenues.
Franchising authorities are also empowered in awarding new franchises or
renewing existing franchises to require cable operators to provide
cable-related facilities and equipment and to enforce compliance with
voluntary commitments. In the case of franchises in effect prior to the
effective date of the 1984 Cable Act, franchising authorities may enforce
requirements contained in the franchise relating to facilities, equipment
and services, whether or not cable-related. The 1984 Cable Act, under
certain limited circumstances, permits a cable operator to obtain
modifications of franchise obligations.
Renewal of Franchises. The 1984 Cable Act
established renewal procedures and criteria designed to protect incumbent
franchises against arbitrary denials of renewal. While these formal
procedures are not mandatory unless timely invoked by either the cable
operator or the franchising authority, they can provide substantial
protection to incumbent franchisees. Even after the formal renewal
procedures are invoked, franchising authorities and cable operators remain
free to negotiate a renewal outside the formal process. Nevertheless,
renewal is by no means assured, as the franchisee must meet certain
statutory standards. Even if a franchise is renewed, a franchising authority
may impose new and more onerous requirements such as upgrading facilities
and equipment, although the municipality must take into account the cost of
meeting such requirements.
The 1992 Cable Act makes several changes to the
process under which a cable operator seeks to enforce its renewal rights
which could make it easier in some cases for a franchising authority to deny
renewal. While a cable operator must still submit its request to commence
renewal proceedings within thirty to thirty-six months prior to franchise
expiration to invoke the formal renewal process, the request must be in
writing and the franchising authority must commence renewal proceedings not
later than six months after receipt of such notice. The four-month period
for the franchising authority to grant or deny the renewal now runs from the
submission of the renewal proposal, not the completion of the public
proceeding. Franchising authorities may consider the "level" of programming
service provided by a cable operator in deciding whether to renew. For
alleged franchise violations occurring after December 29, 1984, franchising
authorities are no longer precluded from denying renewal based on failure to
comply substantially with the material terms of the franchise where the
franchising authority has "effectively acquiesced" to such past violations.
Rather, the franchising authority is estopped if, after giving the cable
operator notice and opportunity to cure, it fails to respond to a written
notice from the cable operator of its failure or inability to cure. Courts
may not reverse a renewal denial based on procedural regulations found to be
"harmless error."
Channel Set-Asides. The 1984 Cable Act permits
local franchising authorities to require cable operators to set aside
certain channels for public, educational and governmental access
programming. The Company believes that none of the Systems' franchises
contain unusually onerous access requirements. The 1984 Cable Act further
requires cable systems with thirty-six or more activated channels to
designate a portion of their channel capacity for commercial leased access
by unaffiliated third parties. While the 1984 Cable Act presently allows
cable operators substantial latitude in setting leased access rates, the
1992 Cable Act requires leased access rates to be set according to a formula
determined by the FCC. It is possible that such leased access will result in
competition to services offered by the Company on the other channels of its
cable systems.
Competing Franchises. Questions concerning the
ability of municipalities to award a single cable television franchise and
to impose certain franchise restrictions upon cable television companies
have been considered in several recent federal appellate and district court
decisions. These decisions have been somewhat inconsistent and, until the
U.S. Supreme Court rules definitively on the scope of cable television's
First Amendment protections, the legality of the franchising process and of
various specific franchise requirements is likely to be in a state of flux.
It is not possible at the present time to predict the constitutionally
permissible bounds of cable franchising and particular franchise
requirements. However, the 1992 Cable Act, among other things, prohibits
franchising authorities from unreasonably refusing to grant franchises to
competing cable systems and permits franchising authorities to operate their
own cable systems without franchises.
Ownership. The 1984 Cable Act codified existing
FCC crossownership regulations, which, in part, prohibit local exchange
telephone companies ("LECs"), including the Bell Operating Companies
("BOCs"), from providing video programming directly to subscribers within
their local exchange telephone service areas, except in rural areas or by
specific waiver of FCC rules. The Fourth and Ninth Circuit Courts of Appeal
and several district courts have struck down the 1984 Cable Act's
cable/telco cross-ownership prohibition as facially invalid and inconsistent
with the First Amendment. Similar litigation has been commenced in several
other district courts. The FCC has asked the Supreme Court to review the
circuit court decisions. The Company cannot predict the outcome of this
litigation, but believes that the provision of video programming by
telephone companies with considerable financial resources in competition
with the Company's existing operations could have an adverse effect on the
Company's financial condition and results of operation; the magnitude of any
such effect is not known or estimable. Separately, as part of a
comprehensive proceeding examining whether and under what circumstances
telephone companies should be allowed to provide cable television services,
including video programming to their customers, the FCC has concluded that
neither the 1984 Cable Act nor its rules apply to prohibit the interexchange
carriers (i.e., long distance telephone companies such as AT&T) from
providing such services to their customers. Additionally, the FCC has also
concluded, as part of its "video dialtone" decision, that where a LEC makes
its facilities available on a common carrier basis for the provision of
video programming to the public, the 1984 Cable Act does not require either
the LEC or its programmer customers to obtain a franchise to provide such
service. Because cable operators are required to bear the costs of complying
with local franchise requirements, the FCC's decision could place cable
operators at a competitive disadvantage vis-a-vis local telephone companies
seeking to offer competing services on a common carrier basis. Various
parties have sought judicial review of the FCC's conclusion that neither a
LEC or its programmer customers would be required to obtain a local
franchise. This appeal is currently pending.
As part of the same proceeding, the FCC
recommended that Congress amend the 1984 Cable Act to allow LECs to provide
their own video programming services over their facilities in competition
with their customers' services. The FCC also decided to loosen ownership and
affiliation restrictions currently applicable to telephone companies, and
has proposed to increase the numerical limit on the population of areas
qualifying as "rural" and in which LECs can provide cable service without
FCC waiver.
The BOCs have been released by the United
States District Court for the District of Columbia from restrictions on
their ability to provide information services, including broadband video
programming, which had been imposed as part of the 1984 AT&T divestiture
decree. They are, of course, still subject to the 1984 Cable Act cross-
ownership restriction discussed above.
The telephone industry has continued to lobby
Congress for legislation that will permit LECs to provide video programming
directly to consumers within their service areas. There are currently bills
pending in both houses of Congress that would permit the LECs to provide
cable television service over their own facilities conditioned on
establishing a video programming affiliate that will maintain separate
records to prevent cross-subsidization. These bills, among other provisions,
would also prohibit telephone companies from purchasing existing cable
television systems within their telephone service areas. The outcome of
these FCC, legislative or court proceedings and proposals or the effect of
such outcome on cable system operations cannot be predicted; however,
adoption of such proposals could intensify the competition which the Systems
might face from LECs in the areas in which the Systems operate.
The 1984 Cable Act and the FCC's rules also
prohibit the common ownership, operation, control or interest in a cable
system and a local television broadcast station whose predicted grade B
contour (a measure of significant signal strength as defined by the FCC's
rules) covers any portion of the community served by the cable system. As
part of a wide ranging inquiry on competition in the video marketplace, the
FCC has solicited comments to determine whether the policy prohibiting the
common ownership or control of co-located broadcast and cable facilities
continues to service the public interest. Common ownership or control has
historically also been prohibited by the FCC (but not by the 1984 Cable Act)
between a cable system and a national television network, although the FCC
has recently adopted an order which substantially relaxes the network/cable
cross-ownership prohibitions subject to certain national and local ownership
caps. In addition, the FCC's rules prohibit common ownership, affiliation,
control or interest in cable systems and MMDS facilities having overlapping
service areas, except in very limited circumstances. The 1992 Cable Act
codified this restriction and also extended it to co-located SMATV systems.
Permitted arrangements in effect as of October 5, 1992, were grandfathered.
The FCC also allows cable operators to purchase co-located SMATV systems so
long as they are then integrated into the cable system. Thus, the FCC's
cross-ownership rules could preclude the Company, its general partners, the
officers, directors of its general partners or holders of a cognizable
equity interest in the Company (as defined by the FCC) from serving
simultaneously as general partners, the officers or directors of, or from
holding a substantial ownership interest in, these other businesses. The
1992 Cable Act permits states or local franchising authorities to adopt
certain additional restrictions on the ownership of cable systems.
Pursuant to the 1992 Cable Act, the FCC has
imposed limits on the number of cable systems which a single cable operator
can own. In general, no cable operator can have an attributable interest in
cable systems which pass more than 30 percent of all homes nationwide.
Attributable interests for these purposes include voting interests of 5% or
more (unless there is another single holder of more than 50% of the voting
stock), officerships, directorships and general partnership interests. The
FCC has stayed the effectiveness of these rules pending the outcome of the
appeal from the U.S. District Court decision holding the multiple ownership
limit provision of the 1992 Cable Act unconstitutional.
The FCC has also adopted rules which limit the
number of channels on a cable system which can be occupied by programming in
which the cable system's owner has an attributable interest. The limit is
40% of all activated channels.
EEO. The 1984 Cable Act includes provisions to
ensure that minorities and women are provided equal employment opportunities
within the cable television industry. The statute requires the FCC to adopt
reporting and certification rules that apply to all cable system operators
with more than five full-time employees. Pursuant to the requirements of the
1992 Cable Act, the FCC has imposed more detailed annual EEO reporting
requirements on cable operators and has expanded those requirements to all
multichannel video service distributors. Failure to comply with the EEO
requirements can result in the imposition of fines and/or other
administrative sanctions, or may, in certain circumstances, be cited by a
franchising authority as a reason for denying a franchisee's renewal
request.
Privacy. The 1984 Cable Act imposes a number of
restrictions on the manner in which cable system operators can collect and
disclose data about individual system subscribers. The statute also requires
that the system operator periodically provide all subscribers with written
information about its policies regarding the collection and handling of data
about subscribers, their privacy rights under federal law and their
enforcement rights. In the event that a cable operator is found to have
violated the subscriber privacy provisions of the 1984 Cable Act, it could
be required to pay damages, attorney's fees and other costs. Under the 1992
Cable Act, the privacy requirements are strengthened to require that cable
operators take such actions as are necessary to prevent unauthorized access
to personally identifiable information.
Anti-Trafficking. The 1992 Cable Act precludes
cable operators from selling or otherwise transferring ownership of a cable
system within 36 months after acquisition or initial construction, except
for: resales required by the terms of a contract covering the acquisition of
multiple systems; tax free sales; governmentally required divestitures; or
internal transfers to a commonly controlled entity. The anti-trafficking
restriction applies to systems acquired prior to the effective date of the
new law (i.e., December 4, 1992) as well as subsequent acquisitions. The FCC
may waive the foregoing restrictions where generally consistent with the
public interest, unless the franchising authority has refused to grant any
required approval. The 1992 Cable Act also requires franchising authorities
to act on any franchise transfer request submitted after
December 4, 1992 within 120 days after receipt of all information required
by FCC
regulations and by the franchising authority. Approval is deemed to be
granted if the franchising authority fails to act within such period.
Registration Procedure and Reporting
Requirements. Prior to commencing operation in a particular community, all
cable television systems must file a registration statement with the FCC
listing the broadcast signals they will carry and certain other information.
Additionally, cable operators periodically are required to file various
informational reports with the FCC. Cable operators who operate in certain
frequency bands are required on an annual basis to file the results of their
periodic cumulative leakage testing measurements. Operators who fail to make
this filing or who exceed the FCC's allowable cumulative leakage index risk
being prohibited from operating in those frequency bands in addition to
other sanctions.
Technical Requirements. Historically, the FCC
has imposed technical standards applicable to the cable channels on which
broadcast stations are carried, and has prohibited franchising authorities
from adopting standards which were in conflict with or more restrictive than
those established by the FCC. The FCC has recently revised such standards
and made them applicable to all classes of channels which carry downstream
NTSC video programming. Local franchising authorities are permitted to
enforce the FCC's new technical standards. The FCC also has adopted
additional standards applicable to cable television systems using
frequencies in the 108-137 Mhz and 225-400 Mhz bands in order to prevent
harmful interference with aeronautical navigation and safety radio services,
and has also established limits on cable system signal leakage. Periodic
testing by cable operators for compliance with these technical standards and
signal leakage limits is required. The Company believes that the Systems are
in compliance with these standards in all material respects. The 1992 Cable
Act requires the FCC to update periodically its technical standards to take
into account changes in technology and to entertain waiver requests from
franchising authorities who would seek to impose more stringent technical
standards upon their franchised cable systems. The FCC has adopted
regulations to implement the requirements of the 1992 Cable Act designed to
improve the compatibility of cable systems and consumer electronics
equipment. These regulations, inter alia, generally prohibit cable
operators from scrambling their basic service tier and from changing the
infrared codes used in their existing customer premises equipment. This
latter requirement could make it more difficult or costly for cable
operators to upgrade their customer premises equipment and the FCC has been
asked to reconsider its regulations. It is also anticipated that the FCC
will seek comment on additional proposed regulations designed to promote
equipment compatibility, including imposing further restrictions on the use
of scrambling by cable operators. Such proposals, if ultimately adopted,
could increase the capital and operating costs of providing cable service as
well as limit the ability of cable operators to offer new unregulated
services such as video on demand and multi-channel pay-per-view.
Pole Attachments. The FCC currently regulates
the rates and conditions imposed by certain public utilities for use of
their poles, unless under the Federal Pole Attachments Act state public
service commissions are able to demonstrate that they regulate rates, terms
and conditions of the cable television pole attachments. A number of states
(including Massachusetts, Michigan, New Jersey, New York, Ohio and Vermont)
and the District of Columbia have certified to the FCC that they regulate
the rates, terms and conditions for pole attachments. In the absence of
state regulation, the FCC administers such pole attachment rates through use
of a formula which it has devised and from time to time revises.
Other Matters. FCC regulation also includes
matters regarding a cable system's carriage of local sports programming;
restrictions on origination and cablecasting by cable system operators;
application of the fairness doctrine and rules governing political
broadcasts; customer service; home wiring; and limitations on advertising
contained in nonbroadcast children's programming.
Copyright. Cable television systems are subject
to federal copyright licensing covering carriage of broadcast signals. In
exchange for making semi-annual payments to a federal copyright royalty pool
and meeting certain other obligations, cable operators obtain a statutory
license to retransmit broadcast signals. The amount of this royalty payment
varies, depending on the amount of system revenues from certain sources, the
number of distant signals carried, and the location of the cable system with
respect to over-the-air television stations. Originally, the Federal
Copyright Royalty Tribunal was empowered to make and, in fact, did make
several adjustments in copyright royalty rates. This tribunal was
eliminated by Congress in 1993. Any future adjustment to the copyright
royalty rates will be done through an arbitration process to be supervised
by the U.S. Copyright office. Present rates remain in place until 1995
barring any changes in the FCC's signal carriage, syndicated exclusivity or
sports blackout rules. Cable operators are liable for interest on underpaid
and late paid royalty fees, but are not entitled to receive interest on
refunds due to overpayment of royalty fees.
The Copyright Office has commenced a proceeding
aimed at examining its policies governing the consolidated reporting of
commonly owned and contiguous cable systems. The present policies governing
the consolidated reporting of certain cable systems have often led to
substantial increases in the amount of copyright fees owed by the systems
affected. These situations have most frequently arisen in the context of
cable system mergers and acquisitions. While it is not possible to predict
the outcome of this proceeding, any changes adopted by the Copyright Office
in its current policies may have the effect of reducing the copyright impact
of certain transactions involving cable company mergers and cable system
acquisitions.
Various bills have been introduced into
Congress over the past several years that would eliminate or modify the
cable television compulsory license. The FCC has recommended to Congress
that it repeal the cable industry's compulsory copyright license. The FCC
determined that the statutory compulsory copyright license for local and
distant broadcast signals no longer serves the public interest and that
private negotiations between the applicable parties would better serve the
public. Without the compulsory license, cable operators might need to
negotiate rights from the copyright owners for each program carried on each
broadcast station in the channel lineup. Such negotiated agreements could
increase the cost to cable operators of carrying broadcast signals. The 1992
Cable Act's retransmission consent provisions expressly provide that
retransmission consent agreements between television broadcast stations and
cable operators do not obviate the need for cable operators to obtain a
copyright license for the programming carried on each broadcaster's signal.
Copyrighted music performed in programming
supplied to cable television systems by pay cable networks (such as HBO) and
basic cable networks (such as USA Network) has generally been licensed by
the networks through private agreements with the American Society of
Composers and Publishers ("ASCAP") and BMI, Inc. ("BMI"), the two major
performing rights organizations in the United States. As a result of
extensive litigation, ASCAP and BMI are both now required to offer "through
to the viewer" licenses to the cable networks which would cover the
retransmission of the cable networks' programming by cable systems to their
subscribers.
State and Local Regulation
Because a cable television system uses local
streets and rights-of-way, cable television systems are subject to state and
local regulation, typically imposed through the franchising process. State
and/or local officials are usually involved in franchise selection, system
design and construction, safety, service rates, consumer relations, billing
practices and community related programming and services.
Cable television systems generally are operated
pursuant to nonexclusive franchises, permits or licenses granted by a
municipality or other state or local government entity. Franchises generally
are granted for fixed terms and in many cases are terminable if the
franchise operator fails to comply with material provisions. Although the
1984 Cable Act provides for certain procedural protections, there can be no
assurance that renewals will be granted or that renewals will be made on
similar terms and conditions. Franchises usually call for the payment of
fees, often based on a percentage of the system's gross subscriber revenues,
to the granting authority. Upon receipt of a franchise, the cable system
owner usually is subject to a broad range of obligations to the issuing
authority directly affecting the business of the system. The terms and
conditions of franchises vary materially from jurisdiction to jurisdiction,
and even from city to city within the same state, historically ranging from
reasonable to highly restrictive or burdensome. The 1984 Cable Act places
certain limitations on a franchising authority's ability to control the
operation of a cable system operator and the courts have from time to time
reviewed the constitutionality of several general franchise requirements,
including franchise fees and access channel requirements, often with
inconsistent results. On the other hand, the 1992 Cable Act prohibits
exclusive franchises, and allows franchising authorities to exercise greater
control over the operation of franchised cable systems, especially in the
area of customer service and rate regulation. The 1992 Cable Act also allows
franchising authorities to operate their own multichannel video distribution
system without having to obtain a franchise and permits states or local
franchising authorities to adopt certain restrictions on the ownership of
cable systems. Moreover, franchising authorities are immunized from monetary
damage awards arising from regulation of cable systems or decisions made on
franchise grants, renewals, transfers and amendments.
The specific terms and conditions of a
franchise and the laws and regulations under which it was granted directly
affect the profitability of the cable television system. Cable franchises
generally contain provisions governing charges for basic cable television
services, fees to be paid to the franchising authority, length of the
franchise term, renewal, sale or transfer of the franchise, territory of the
franchise, design and technical performance of the system, use and occupancy
of public streets and number and types of cable services provided.
Various proposals have been introduced at the
state and local levels with regard to the regulation of cable television
systems, and a number of states have adopted legislation subjecting cable
television systems to the jurisdiction of centralized state governmental
agencies, some of which impose regulation of a character similar to that of
a public utility. Attempts in other states to regulate cable television
systems are continuing and can be expected to increase. Such proposals and
legislation may be preempted by federal statute and/or FCC regulation. To
date, the states in which the Company operates that have enacted such state
level regulation are New York, New Jersey, Massachusetts and Vermont. The
Company cannot predict whether other states in which it currently operates,
or in which it may acquire systems, will engage in such regulation in the
future.
The foregoing does not purport to describe all
present and proposed federal, state and local regulations and legislation
relating to the cable television industry. Other existing federal
regulations, copyright licensing and, in many jurisdictions, state and local
franchise requirements currently are the subject of a variety of judicial
proceedings, legislative hearings and administrative and legislative
proposals which could change, in varying degrees, the manner in which cable
television systems operate. Neither the outcome of these proceedings nor
their impact upon the cable television industry or the Systems can be
predicted at this time.
ITEM 2. PROPERTIES
The Company's principal physical assets consist
of cable television operating plant and equipment, including signal
receiving, encoding and decoding devices, headends and distribution systems
and subscriber house drop equipment for each of its cable television
systems. The signal receiving apparatus typically includes a tower, antenna,
ancillary electronic equipment and earth stations for reception of satellite
signals. Headends, consisting of associated electronic equipment necessary
for the reception, amplification and modulation of signals, are located near
the receiving devices. The Company's distribution system consists primarily
of coaxial and fiber optic cables and related electronic equipment.
Subscriber devices consist of decoding converters. The physical components
of cable television systems require maintenance and periodic upgrading to
keep pace with technological advances.
The Company's cables and related equipment are
generally attached to utility poles under pole rental agreements with local
public utilities, although in some areas the distribution cable is buried in
underground ducts or trenches. See "Legislation and Regulation-Federal
Regulation."
The Company owns or leases parcels of real
property for signal reception sites (antenna towers and headends), microwave
facilities and business offices in each of its market areas, and owns most
of its service vehicles. The Company also leases certain cable, operating
and support equipment from a corporation owned by members of the Rigas
Family. All leasing transactions between the Company and its officers,
directors or principal stockholders, or any of their affiliates, are, in the
opinion of management, on terms no less favorable to the Company than could
be obtained from unaffiliated third parties.
Substantially all of the assets of Adelphia's
subsidiaries are subject to encumbrances as collateral in connection with
the Company's credit arrangements, either directly with a security interest
or indirectly through a pledge of the stock in the respective subsidiaries.
See Note 3 to the Adelphia Communications Corporation Consolidated Financial
Statements. The Company believes that its properties, both owned and leased,
are in good operating condition and are suitable and adequate for the
Company's business operations.
ITEM 3. LEGAL PROCEEDINGS
There are no material pending legal
proceedings, other than routine litigation incidental to the business, to
which the Company or any of its subsidiaries is a part of or to which any of
their property is subject.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of security
holders during the fourth quarter of the fiscal year 1995.
Executive Officers of the Registrant
The executive officers of the Company, first
elected to hold their respective positions on July 1, 1986 following the
reorganization of the Company as a holding company, serve at the discretion
of the Board of Directors. The executive officers of the Company are:
NAME AGE POSITION
John J. Rigas 70 Chairman, Chief Executive Officer,
President and Director
Michael J. Rigas 41 Senior Vice President, Operations and
Director
Timothy J. Rigas 39 Senior Vice President, Chief Financial
Chief Accounting Officer,
Treasurer and Director
James P. Rigas 37 Vice President, Strategic Planning
and Director
Daniel R. Milliard 47 Vice President, Secretary and
Director
John J. Rigas is the founder, Chairman,
President and Chief Executive Officer of Adelphia and is President of its
subsidiaries. Mr. Rigas has served as President or general partner of most
of the constituent entities which became wholly-owned subsidiaries of
Adelphia upon its formation in 1986, as well as the cable television
operating companies acquired by the Company which were wholly or partially
owned by members of the Rigas Family. Mr. Rigas has owned and operated cable
television systems since 1952. Among his business and community service
activities, Mr. Rigas is Chairman of the Board of Directors of Citizens
Bancorp., Inc., Coudersport, Pennsylvania, and a member of the Board of
Directors of Charles Cole Memorial Hospital. He is a director of the
National Cable Television Association and a past President of the
Pennsylvania Cable Television Association. He is also a member of the Board
of Directors of C-SPAN and the Cable Advertising Bureau, and is a Trustee of
St. Bonaventure University. He graduated from Rensselaer Polytechnic
Institute with a B.S. in Management Engineering in 1950.
John J. Rigas is the father of Michael J.
Rigas, Timothy J. Rigas and James P. Rigas, each of whom currently serves as
a director and executive officer of the Company.
Michael J. Rigas is Senior Vice President,
Operations of Adelphia and is a Vice President of its subsidiaries. Since
1981, Mr. Rigas has served as a Vice President, general partner or other
officer of the constituent entities which became wholly-owned subsidiaries
of Adelphia upon its formation in 1986, as well as the cable television
operating companies acquired by the Company which were wholly or partially
owned by members of the Rigas Family. From 1979 to 1981, he worked for
Webster, Chamberlain & Bean, a Washington, D.C. law firm. Mr. Rigas
graduated from Harvard University (magna cum laude) in 1976 and received his
Juris Doctor degree from Harvard Law School in 1979.
Timothy J. Rigas is Senior Vice President,
Chief Financial Officer, Chief Accounting Officer and Treasurer of Adelphia
and its subsidiaries. Since 1979, Mr. Rigas has served as Vice President,
general partner or other officer of the constituent entities which became
wholly-owned subsidiaries of Adelphia upon its formation in 1986, as well as
the cable television operating companies acquired by the Company which were
wholly or partially owned by members of the Rigas Family. Mr. Rigas
graduated from the University of Pennsylvania, Wharton School, with a B.S.
degree in Economics (cum laude) in 1978.
James P. Rigas is Vice President, Strategic
Planning of Adelphia and is a Vice President of its subsidiaries. Since
February 1986, Mr. Rigas has served as a Vice President or other officer of
the constituent entities which became wholly-owned subsidiaries of Adelphia
upon its formation in 1986, as well as the cable television operating
companies acquired by the Company which were wholly or partially owned by
members of the Rigas Family. Mr. Rigas graduated from Harvard University
(magna cum laude) in 1980 and received a Juris Doctor degree and an M.A.
degree in Economics from Stanford University in 1984. From June 1984 to
February 1986, he was a consultant with Bain & Co., a management consulting
firm.
Daniel R. Milliard is Vice President and
Secretary of Adelphia and its subsidiaries, and also serves as President of
a subsidiary, Hyperion Telecommunications, Inc. From 1986 to 1992, Mr.
Milliard served as Vice President, Secretary and/or General Counsel of
Adelphia and the constituent entities which became wholly-owned subsidiaries
of Adelphia as well as the cable television operating companies acquired by
the Company which were wholly or partially owned by members of the Rigas
Family. He served as outside general counsel to the Company's predecessors
from 1979 to 1982. Mr. Milliard graduated from American University in 1970
with a Bachelor of Science degree in Business Administration. He received an
M.A. degree in Business from Central Missouri State University in 1971,
where he was an Instructor in the Department of Finance, School of Business
and Economics, from 1971-1973, and received a Juris Doctor degree from the
University of Tulsa School of Law in 1976. He is a Director of Citizens
Bancorp., Inc. in Coudersport, Pennsylvania and President of the Board of
Directors of Charles Cole Memorial Hospital.
Other Principal Employees
Orby G. Kelley, 63, joined the Company in 1986
as Vice President of Human Resources. Since 1981, Mr. Kelley served as Vice
President Human Resources-- Columbus Operations for Warner Amex Cable
Communications, Inc. Prior to that time he served in a similar capacity for
Colony Communications, Inc. and Landmark Communications, Inc. Mr. Kelley
received his B.A. degree from Old Dominion University in 1958 and his M.B.A.
from California Western University in 1980.
Daniel Liberatore, 44, has been Vice President
of Engineering since 1986. He is responsible for technical operations,
engineering and related supervisory and management functions for the Company
Systems. Mr. Liberatore received a B.S. degree in Electrical Engineering
from West Virginia University and served as director of engineering for
Warner Amex Cable Communications, Inc. from June 1982 until joining the
Company. From December 1980 to June 1982, Mr. Liberatore served as a Project
Administrator for Warner Amex Cable Communications, Inc.
James R. Brown, 32, joined the Company in 1984
and currently holds the position of Vice President of Finance. Mr. Brown
graduated with a B.S. degree in
Industrial and Management Engineering from Rensselaer Polytechnic Institute
in 1984.
Randall D. Fisher, 43, joined the Company in
1991 and is Vice President, General Counsel and Assistant Corporate
Secretary. Previously Mr. Fisher was in private practice with the
Washington, D.C. law firm of Baraff, Koerner, Olender & Hochberg, P.C. Mr.
Fisher earned his J.D. from Texas Tech University. He received a Masters
Degree in Public Administration from Midwestern University in Wichita Falls,
Texas, and a B.A. degree in Journalism from the University of Texas at
Austin.
Larry Brett, 42, joined the Company in May 1995
and currently holds the position of Corporate Director of Operations for the
Florida cluster. Mr. Brett was employed by TeleCable Corporation, a cable
television operator, from 1979 to 1995 and last served as Vice President,
Regional Operations, from 1982 to 1995. Mr. Brett received a B.B.A. degree
in finance and economics from Emory University in 1974 and an M.B.A. degree
from the University of Virginia's Darden School in 1979.
Colin H. Higgin, 34, joined the Company in
November 1992 as Deputy General Counsel and Assistant Secretary. Mr. Higgin
was an associate at Proskauer Rose Goetz & Mendelsohn from 1991 to 1992 and
Latham & Watkins from 1987 to 1991. Mr. Higgin graduated from the University
of Pennsylvania, Wharton School, with a B.S. degree in Economics in 1983 and
received his J.D. from Indiana University in 1987.
William C. Kent, 44, joined the Company in
August 1994 as Corporate Director of Operations for the New England, Ohio
and Virginia clusters. From 1993 to 1994, Mr. Kent served as a consultant
to the Multi-Media Services Group of Southern New England Telephone. From
1991 to 1992, he served as Director of Operations for the Providence, Rhode
Island cable system for Times Mirror. Mr. Kent was also employed by Viacom,
Inc., a worldwide entertainment and media concern, for seven years and last
served as General Manager of a cable system. He received a B.A. degree in
English from Wittenberg University in 1973 and an M.B.A. degree from
Cleveland State University in 1981.
Kathleen S. Mitchell, 47, joined the Company in
1989 and has held senior accounting and financial management positions.
From 1979 to 1988, Ms. Mitchell was employed by American Television and
Communications, Inc. Ms. Mitchell received her B.A. degree from Mount
Holyoke College in 1969 and her M.B.A. degree from the University of
Colorado in 1976.
Michael C. Mulcahey, CPA, 37, has been the
Director of Investor Relations since joining the Company in 1991. From 1987
to 1991, Mr. Mulcahey held accounting and tax positions with the Syracuse
office of Coopers & Lybrand. Mr. Mulcahey received his B.A. in Political
Science from State University of New York at Buffalo in 1980 and his M.B.A.
from Eastern Washington University in 1985.
James M. Kane, CPA, 32, joined the Company in
April 1992 and currently holds the position of Director of Finance. From
1989 to 1992, Mr. Kane served in accounting and consulting positions with
Price Waterhouse in Pittsburgh. From 1984 to 1987, Mr. Kane served in
accounting positions with Coopers & Lybrand in Pittsburgh. Mr. Kane received
his B.S. degree in Accounting from Pennsylvania State University in 1984 and
his M.B.A. from Carnegie Mellon's Graduate School of Industrial
Administration in 1989.
Robert G. Wahl, 53, joined the Company in May
1990 and was appointed to his present position of Corporate Director of
Operations for the Western New York, Eastern Pennsylvania, Western
Pennsylvania and New Jersey clusters in June 1994. From 1990 to 1994, Mr.
Wahl served as General Manager of the Company's Northeast system and, from
1992 to 1994, he also acted as Pittsburgh Regional Manager. Prior to his
employment with the Company, he served as Manager of the Horvitz Newspapers,
Inc., in Troy, New York. Mr. Wahl graduated from John Carroll University in
Cleveland with a B.S. degree in Business Administration in 1963.
LeMoyne T. Zacherl, 42, joined the Company in
November 1993 as Vice President Financial Operations and Administration.
Since 1987, Mr. Zacherl was a Corporate Controller and member of senior
management for Irvin Feld and Kenneth Feld Productions, Inc., a worldwide
entertainment conglomerate. From 1975 to 1987, Mr. Zacherl was with Coopers
& Lybrand and served in both the Pittsburgh, PA and Washington, D.C.
offices.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS
The Company's Class A Common Stock is listed
for trading on the National Association of Securities Dealers Automated
Quotations System National Market System (NASDAQ-NMS). Adelphia's NASDAQ-
NMS symbol is "ADLAC."
The following table sets forth the range of
high and low closing bid prices
of the Class A Common Stock on NASDAQ/NMS. Such bid prices represent
inter-dealer quotations, without retail mark-up, mark-down or commission,
and may not necessarily represent actual transactions.
<TABLE>
CLASS A COMMON STOCK
HIGH LOW
QUARTER ENDED:
<S> <C> <C>
June 30, 1993.................................. $ 18 $ 11 1/2
September 30, 1993............................. $ 20 5/8 $ 14
December 31, 1993.............................. $ 26 1/2 $ 16 3/4
March 31, 1994................................. $ 23 1/2 $ 12 3/4
June 30, 1994.................................. $ 14 1/2 $ 10
September 30, 1994............................. $ 15 1/2 $ 11 1/2
December 31, 1994.............................. $ 13 1/4 $ 8 1/4
March 31, 1995................................. $ 11 1/2 $ 8 3/4
</TABLE>
As of June 26, 1995, there were approximately
147 holders of record of Adelphia's Class A Common Stock. As of June 26,
1995, three record holders were registered clearing agencies holding Class A
Common Stock on behalf of participants in such clearing agencies.
No established public trading market exists for
Adelphia's Class B Common Stock. As of the date hereof, the Class B Common
Stock was held of record by seven persons, principally members of the Rigas
Family, including a Pennsylvania general partnership all of whose partners
are members of the Rigas Family. The Class B Common Stock is convertible
into shares of Class A Common Stock on a one-to-one basis. As of June 26,
1995 the Rigas Family owned 99.1% of the outstanding Class B Common Stock.
Adelphia has never paid a cash dividend on its
common stock and anticipates that for the foreseeable future any earnings
will be retained for use in its business. The ability of Adelphia to pay
cash dividends on its common stock is limited by the provisions of its
indentures. See "Management's Discussion and Analysis of Financial Condition
and Results of Operations - Liquidity and Capital Resources".
ITEM 6. SELECTED CONSOLIDATED FINANCIAL DATA (Dollars in thousands, except
per share amounts)
The selected consolidated financial data as of
and for each of the five years in the period ended March 31, 1995 have been
derived from the audited consolidated financial statements of the Company.
<TABLE>
YEAR ENDED MARCH 31,
1991 1992 1993 1994 1995
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenues..................$ 248,586 $ 273,630 $ 305,222 $ 319,045 $ 361,505
Direct Operating and
Programming Expenses.. 66,007 74,787 82,377 90,547 106,993
Selling, General and
Administrative Expenses 41,421 44,427 49,468 52,801 63,487
Operating Income before
Depreciation and
Amortization......... 141,158 154,416 173,377 175,697 191,025
Depreciation and
Amortization......... 79,427 84,817 90,406 89,402 97,602
Operating Income..... 61,731 69,599 82,971 86,295 93,423
Interest Income from
Affiliates......... 1,596 3,085 5,216 9,188 11,112
Other Income (Expense). 1,750 968 1,447 (299) 1,453
Priority Investment In-
come (a).............. 19,175 22,300 22,300 22,300 22,300
Cash Interest Expense.. (132,025) (129,237) (164,695) (180,456) (180,942)
Noncash Interest
Expense............... (31,612) (35,602) (164) (1,680) (14,756)
Equity in Loss of
Joint Ventures........ (61,975) (52,718) (46,841) (30,054) (44,349)
Loss before Income
Taxes, Extraordinary
Loss and Cumulative
Effect of Change in
Accounting
Principle(b).......... (141,360) (121,605) (99,766) (94,706) (111,759)
Income Tax Expense..... -- -- (3,143) (2,742) 5,475
Loss before Extra-
ordinary Loss and
Cumulative Effect of
Change in Accounting
Principle............. (141,360) (121,605) (102,909) (97,448) (106,284)
Extraordinary Loss (b). -- -- (14,386) (752) --
Cumulative Effect of
Change in Accounting
for Income Taxes (b).. -- -- (59,500) (89,660) --
Net Loss............... $(141,360) $(121,605) $(176,795) $(187,860) $ (106,284)
Loss per Weighted Average
Share of Common Stock
before Extraordinary
Loss and Cumulative
Effect of Change in
Accounting Principle.. $ (10.03) $ (8.80) $ (6.80) $ (5.66) $ (4.32)
Net Loss per Weighted
Average Share of
Common Stock........... $ (10.23) $ (8.80) $ (11.68) $ (10.91) $ (4.32)
Cash Dividends Declared
per Common Share...... -- -- -- -- --
YEAR ENDED MARCH 31,
1991 1992 1993 1994 1995
BALANCE SHEET DATA:
Cash and Cash
Equivalents........... $ 18,592 $ 11,173 $ 38,671 $ 74,075 $ 5,054
Investment in and
Amounts Due from
Olympus (a)........... 79,030 64,972 7,692 9,977 11,943
Total Assets........... 981,960 925,791 949,593 1,073,846 1,267,291
Total Debt............. 1,495,025 1,554,270 1,731,099 1,793,711 2,021,610
Debt Net of Cash (c)... 1,476,433 1,543,097 1,692,428 1,719,636 2,016,565
Stockholders' Equity
(Deficiency).......... (591,939) (713,544) (868,614) (918,064) (1,011,575)
OTHER DATA:
EBITDA (d)........... $ 163,679 $ 180,769 $ 202,340 $ 207,936 $ 225,890
</TABLE>
(a) On February 28, 1995, Olympus entered into a Liquidation Agreement
with the Gans Family ("Gans"), an Olympus limited partner, pursuant to which
the Gans Limited Partner Interests in Olympus were liquidated.
Concurrently, with the closing of the Liquidation Agreement, ACP Holdings,
Inc., a wholly-owned subsidiary of the Company and managing general partner
of Olympus, certain shareholders of Adelphia, Olympus and various Telesat
Entities ("Telesat"), wholly-owned subsidiaries of FP & L Group, Inc.
("FPL"), entered into an Investment Agreement, whereby Telesat contributed
to Olympus substantially all of the assets associated with certain cable
television systems, serving approximately 50,000 subscribers in southern
Florida, in exchange for general and limited partner interests and newly
issued preferred limited partner interests ("PLP interests") in Olympus. At
that time, Adelphia converted certain amounts owed to the Company by Olympus
for advances, PLP interests and unpaid priority return on the PLP interests,
to capital contributions. The Company's return on its priority investment
in Olympus is based on a 16.5% return on its nonvoting PLP interests,
although the Company recognizes priority investment income only to the
extent received. At March 31, 1995 $2,997 accumulated priority return
remained unpaid. Investment in and amounts due from Olympus at March 31,
1995 are comprised of the following:
Gross Investment in PLP Interests and General Partner's
Equity.................................................$ 298,402
Excess of Ascribed Value of Contributed
Property over Historical Cost.......................... (98,303)
Cumulative Equity in Net Loss of Olympus............... (318,707)
Additional investment in Olympus....................... 69,920
Investments in Olympus................................. (48,688)
Amounts due from Olympus............................... 60,631
Total.................................................. $ 11,943
(b) "Extraordinary loss" relates to loss on the early retirement of debt.
"Cumulative Effect of Change in Accounting Principle" refers to a change in
accounting principle for Olympus and the Company. Effective January 1, 1993
and April 1, 1993, respectively, Olympus and the Company adopted the
provisions of Statement of Financial Accounting Standards ("SFAS") No. 109,
"Accounting for Income Taxes", which requires an asset and liability
approach for financial accounting and reporting for income taxes. SFAS No.
109 resulted in the cumulative recognition of an additional liability by
Olympus and the Company of $59,500 and $89,660,respectively.
(c) Represents total debt less cash and cash equivalents.
(d) Earnings before interest, income taxes, depreciation and amortization,
equity in net loss of Olympus, other noncash charges, extraordinary loss and
cumulative effect of change in accounting principle ("EBITDA"). EBITDA and
similar measurements of cash flow are commonly used in the cable television
industry to analyze and compare cable television companies on the basis of
operating performance, leverage and liquidity. While EBITDA is not an
alternative indicator of operating performance to operating income as
defined by generally accepted accounting principles, the Company's
management believes EBITDA is a meaningful measure of performance as
substantially all of the Company's financing agreements contain financial
covenants based on EBITDA.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (Dollars in thousands)
Results of Operations
General
Adelphia Communications Corporation ("Adelphia" or the "Company")
earned substantially all of its revenues in each of the last three fiscal
years from monthly subscriber fees for basic, satellite, premium and
ancillary services (such as installations and equipment rentals), local and
national advertising sales, pay-per-view programming, home shopping networks
and competitive access telecommunications services. Certain changes in the
way the Company offers and charges for subscriber services were implemented
as of September 1, 1993 under the 1992 Cable Act and under the Company's
revised method of offering certain services. See "Regulatory and
Competitive Matters" below.
The high level of depreciation and amortization associated with the
significant number of acquisitions in recent years, the recent upgrading and
expansion of systems and interest costs associated with financing activities
will continue to have a negative impact on the reported results of
operations. Also, significant charges for depreciation, amortization and
interest are expected to be incurred in the future by the Olympus joint
venture, which will also adversely impact Adelphia's future results of
operations. Adelphia expects to report net losses for the next several
years.
The Company currently offers competitive access telecommunications
services through a subsidiary, Hyperion Telecommunications, Inc.
("Hyperion"). Since Hyperion's formation in October 1992, it has formed
operating companies or entered into joint venture partnerships to develop
and operate competitive access networks in twelve select metropolitan areas.
The investment in Hyperion has resulted in a reduction in the Company's
operating income before depreciation and amortization for fiscal years 1993,
1994 and 1995 of $900, $1,459 and $1,837, respectively. Included in these
amounts are the equity in net loss of Hyperion's joint venture partnerships,
which amounted to $0, $387 and $963 for the fiscal years 1993, 1994 and
1995, respectively.
The following table is derived from Adelphia Communications Corporation
Consolidated Financial Statements for the years presented that are included
in this Annual Report on Form 10-K and sets forth the historical percentage
relationship of the components of operating income contained in such
financial statements for the years indicated.
PERCENTAGE OF REVENUES
FOR YEAR ENDED MARCH 31,
1993 1994 1995
Revenues....................... 100.0% 100.0% 100.0%
Operating expenses:
Direct operating and
programming................... 27.0 28.4 29.6
Selling, general and
administrative................ 16.2 16.5 17.6
Operating income before
depreciation and amortization. 56.8 55.1 52.8
Depreciation and amortization.. 29.6 28.0 27.0
Operating income............... 27.2% 27.1% 25.8%
COMPARISON OF THE YEARS MARCH 31, 1993, 1994 AND 1995
Revenues. Revenues increased approximately 4.5% for the year ended March
31, 1994 compared with fiscal 1993. The majority of the increase was
attributable to basic subscriber growth and rate increases, with the
remainder primarily attributable to the expansion of advertising sales and
services. Revenues increased approximately 13.3% for the year ended March
31, 1995 compared with fiscal 1994. The increase was attributable to the
following:
Acquisitions......................................................... 87%
Basic subscriber growth.............................................. 10%
Rate increases....................................................... 0%
Advertising sales and other services................................. 3%
100%
Revenues for the year ended March 31, 1994 and 1995 fully reflected the
repackaging and adjustment of equipment and installation charges, effective
in July 1993, and rates for basic services and certain other satellite
programming services under CableSelect, the Company's method of offering
services that was implemented effective September 1, 1993. In addition,
fiscal 1994 and 1995 revenues were subject to the FCC rate freeze.
Increases in total revenues for fiscal year 1994 are partially offset by a
lower premium penetration rate, which caused premium service revenues to
remain relatively constant compared to the respective prior year.
Direct Operating and Programming Expenses. Direct operating and
programming expenses, which are mainly basic and premium programming costs
and technical expenses, increased 9.9% for the year ended March 31, 1994
compared with the prior year primarily due to increased costs of providing
programming to subscribers and incremental costs associated with increased
subscribers and revenues. Direct operating and programming expenses
increased 18.2% for the year ended March 31, 1995 compared with fiscal 1994
primarily due to the increased operating expenses from acquired systems,
increased programming costs and incremental costs associated with increased
subscribers.
Selling, General and Administrative Expenses. These expenses, which are
mainly comprised of costs related to system offices, customer service
representatives and sales and administrative employees, increased 6.7% and
20.2% the years ended March 31, 1994 and 1995, respectively, compared with
the respective prior years. The increases were primarily due to incremental
costs associated with acquisitions, subscriber growth and implementation of
the 1992 Cable Act and regulations thereunder. As a percentage of revenues,
such expenses remained relatively constant for fiscal 1994 compared with the
prior year. Selling, general and administrative expenses increased as a
percentage of revenues for fiscal 1995, as compared with fiscal 1994
primarily due to wage and benefit increases without a corresponding increase
in revenues as a result of the rate freeze enacted by the 1992 Cable Act.
Operating Income Before Depreciation and Amortization. Operating income
before depreciation and amortization was $173,377, $175,697 and $191,025 for
the years ended March 31, 1993, 1994 and 1995, respectively, representing
operating margins of 56.8%, 55.1% and 52.8%, respectively. The increases in
operating income before depreciation and amortization for the years ended
March 31, 1994 and 1995 were due primarily to the impact of acquisitions,
offset by cost increases at a rate greater than increases in revenue due
largely to the above noted rate freeze.
Depreciation and Amortization, Depreciation and amortization expense
was higher for the years ended March 31, 1994 and 1995, compared with the
respective prior year, primarily due to increased depreciation and
amortization related to acquisitions consummated during fiscal 1994 and 1995
and capital expenditures made during fiscal 1993 and 1994.
Priority Investment Income. Priority investment income is comprised of
payments received from Olympus of accrued priority return on the Company's
investment in PLP Interests in Olympus. The Company recognizes priority
investment income only to the extent received. Priority investment income
remained unchanged for the years ended March 31, 1993, 1994 and 1995.
EBITDA. EBITDA (earnings before interest, income taxes, depreciation and
amortization, equity in net loss of joint ventures, other non-cash charges,
extraordinary loss and cumulative effect of change in accounting principle)
amounted to $202,340, $207,936 and $225,890 for the years ended March 31,
1993, 1994 and 1995, respectively. The increase of 2.8% for the year ended
March 31, 1994 compared with fiscal 1993 is primarily due to increased
revenues, partially offset by increased operating expenses. The increase of
8.6% for the year ended March 31, 1995 compared with fiscal 1994 is
primarily due to the acquisition of cable systems during fiscal 1995.
Increased revenues and operating expenses during fiscal 1995 compared with
the prior year primarily reflect the impact of acquisitions consummated
during fiscal 1995. While EBITDA is not an alternative to operating income
as defined by generally accepted accounting principles, the Company's
management believes EBITDA is a meaningful measure of performance as
substantially all of the Company's financing agreements contain financial
covenants based on EBITDA.
Interest Expense. Interest expense increased approximately 10.5% and
7.4% for the years ended March 31, 1994 and 1995, respectively, compared
with the respective prior year. Approximately 56% of the increase for
fiscal 1995 was due to additional interest cost associated with incremental
debt related to acquisitions. Interest expense increased during fiscal 1994
compared with the prior year due primarily to higher levels of debt
outstanding and the refinancing of short-term floating rate debt with long-
term fixed rate debt during fiscal 1993 and 1994. In the 18 months ending
March 31, 1994, the Company issued debt securities in four separate
transactions (see "Financing Activities"). Each issue of these securities
requires repayment of principal at maturity, the earliest of which is in
July 2000. The interest rate on these securities ranged from 9 1/2% to 11
7/8%. Some of the proceeds from the securities were used to repay bank debt
which had weighted average interest rates of 6.36% and 6.35% at March 31,
1993 and 1994, respectively. Interest expense includes $164, $1,680 and
$14,756 for the years ended March 31, 1993, 1994 and 1995, respectively, of
non-cash accretion of original issue discount and non-cash interest expense.
Equity in Loss of Joint Ventures. The equity in loss of joint ventures
represents primarily the Company's pro rata share of Olympus' losses and the
accretion requirements of Olympus' redeemable limited partner interests. The
decrease in fiscal 1994, compared with the prior year, is primarily
attributable to a decrease in the loss of Olympus during such period, as
compared with fiscal 1993, which operations were adversely impacted by
Hurricane Andrew. The increase in fiscal 1995, compared with the prior
year, is primarily attributable to the impact of the sale by Olympus of
Northeast and lower business interruption revenue.
Net Loss. The Company reported net losses of $176,795, $187,860, and
$106,284 for the years ended March 31, 1993, 1994 and 1995, respectively.
Included in net loss for fiscal 1993 is the cumulative effect of change in
accounting for income taxes by Olympus of $59,500 and the extraordinary loss
for the early extinguishment of debt of $14,386. Net loss for fiscal 1994
included the cumulative effect of the change in accounting of income taxes
by the Company of $89,660. In addition to the effect of these items, net
loss decreased by $5,461 from fiscal 1993 to 1994 and increased by $8,836
for fiscal 1994 to fiscal 1995. The decrease in net loss in fiscal 1994
when compared with the prior year was due primarily to the significant
decrease in the equity in net losses of joint ventures (primarily Olympus),
and higher operating income, offset by higher interest expense. The
increase in net loss in fiscal 1995 when compared with fiscal 1994 was
primarily due to an increase in the equity in net loss of joint venture
(primarily Olympus) and higher non-cash interest expense, partially offset
by higher operating income.
Liquidity and Capital Resources
The cable television business is capital intensive and typically
requires continual financing for the construction, modernization,
maintenance, expansion and acquisition of cable systems. During the three
fiscal years in the period ended March 31, 1995, the Company committed
substantial capital resources for these purposes and for investments in
Olympus and other affiliates and entities. These expenditures were funded
through long-term borrowings and, to a lesser extent, internally generated
funds. The Company's ability to generate cash to meet its future needs will
depend generally on its results of operations and the continued availability
of external financing.
Capital Expenditures. The Company has developed an innovative
fiber-to-feeder network architecture which is designed to increase channel
capacity and minimize future capital expenditures, while positioning the
Company to take advantage of future opportunities. Management believes its
capital expenditures program has resulted in higher levels of channel
capacity and addressability in comparison to other cable television
operators.
Capital expenditures for the years ended March 31, 1993, 1994 and 1995,
were $70,975, $75,894 and $92,082, respectively. The increase in capital
expenditures for fiscal 1993, 1994 and 1995, compared to each prior year,
was primarily due to the acceleration of the rebuilding of plant using
fiber-to-feeder technology, and expenditures related to faster than
expected growth of the Company's competitive access telecommunications
subsidiary, Hyperion Telecommunications, Inc. Management expects capital
expenditures for fiscal 1996 to be approximately equal to fiscal 1995.
Financing Activities. The Company's financing strategy has been to
maintain its public long-term debt at the parent holding company level while
the Company's consolidated subsidiaries have their own senior and
subordinated credit arrangements with banks and insurance companies. The
Company's ability to generate cash adequate to meet its future needs will
depend generally on its results of operations and the continued availability
of external financing. During the three-year period ended March 31, 1995,
the Company funded its working capital requirements, capital expenditures,
investments in Olympus and other affiliates and entities and the redemption
of the 16.5% Senior Discount Notes and 13% Senior Subordinated Notes through
long-term borrowings primarily from banks and insurance companies,
short-term borrowings, internally generated funds and the issuance of parent
company public debt and equity. The Company generally has funded the
principal and interest obligations on its long-term borrowings from banks
and insurance companies by refinancing the principal with new loans or
through the issuance of parent company debt securities, and by paying the
interest out of internally generated funds. Adelphia has funded the interest
obligations on its public borrowings from internally generated funds.
Most of Adelphia's directly-owned subsidiaries have their own senior
credit agreements with banks and/or insurance companies. Typically,
borrowings under these agreements are collateralized by the stock in and, in
some cases, by the assets of the borrowing subsidiary and its subsidiaries
and, in some cases, are guaranteed by such subsidiary's subsidiaries. At
March 31, 1995, an aggregate of $942,350 in borrowings was outstanding under
these agreements. These agreements contain certain provisions which, among
other things, provide for limitations on borrowings of and investments by
the borrowing subsidiaries, transactions between the borrowing subsidiaries
and Adelphia and its other subsidiaries and affiliates, and the payment of
dividends and fees by the borrowing subsidiaries. Several of these
agreements also contain certain cross-default provisions relating to
Adelphia or other subsidiaries. These agreements also require the
maintenance of certain financial ratios by the borrowing subsidiaries. In
addition, at March 31, 1995, an aggregate of $144,000 in subordinated and
unsecured borrowings by Adelphia's subsidiaries was outstanding under credit
agreements containing limitations and restrictions similar to those
mentioned above. See Note 3 to the Adelphia Communications Corporation
Consolidated Financial Statements. The Company is in compliance with the
financial covenants and related financial ratio requirements contained in
its various credit agreements, based on operating results for the period
ended March 31, 1995.
At March 31, 1995, Adelphia's subsidiaries had an aggregate of $117,000
in unused credit lines with banks, part of which is subject to achieving
certain levels of operating performance. In addition, the Company had an
aggregate $5,045 in cash and cash equivalents at March 31, 1995 which
combined with the Company's unused credit lines with banks aggregated to
$122,045. The Company has the ability to pay interest on its 9 1/2% PIK
Notes by issuing additional notes totalling approximately $66,630 in lieu of
cash interest payments through February 15, 1999. Based upon the results of
operations of subsidiaries for the quarter ended March 31, 1995,
approximately $141,000 of available assets could have been transferred to
Adelphia at March 31, 1995, under the most restrictive covenants of the
subsidiaries' credit agreements. The subsidiaries also have the ability to
sell, dividend or distribute certain assets to other subsidiaries or
Adelphia, which would have the net effect of increasing availability. At
March 31, 1995, the Company's unused credit lines were provided by reducing
revolving credit facilities whose revolver periods expire on April 1, 1995
through September 30, 2003. The Company's scheduled maturities of debt are
currently expected to total $114,921 for fiscal 1996.
At March 31, 1995, the Company's total outstanding debt aggregated
$2,021,610 which included $935,260 of parent debt and $1,086,350 of
subsidiary debt. Bank debt interest rates are based upon one or more of the
following rates at the option of ACC: prime rate plus 0% to 1.5%;
certificate of deposit rate plus 1.25% to 2.75%; or Eurodollar (or London
Interbank Offered) rate plus 1% to 2.5%. The Company's weighted average
interest rate of notes payable to banks and institutions was approximately
9.33% at March 31, 1995, compared to 8.91% at March 31, 1994. At March 31,
1995, approximately 55% of such debt was subject to fixed interest rates for
at least one year under the terms of such debt or applicable interest rate
swap agreements. Approximately 76% of the Company's total indebtedness is
at fixed interest rates as of March 31, 1995. Adelphia has entered into
interest rate swap agreements to mitigate its exposure to interest rate
fluctuations by attempting to achieve an appropriate balance between its
fixed and variable rate debt.
On May 14, 1992, Adelphia completed offerings of $400,000 aggregate
principal amount of unsecured 12 1/2% Senior Notes Due 2002 and of 1,500,000
shares of its Class A Common Stock. The shares of Class A Common Stock were
sold at a public offering price of $15.00 per share, including 750,000 of
such shares which were purchased at the public offering price by certain
members of the Rigas Family. The net proceeds from these offerings were
approximately $389,000 for the offering of the 12 1/2% Notes and $21,700 for
the offering of the Class A Common Stock. On July 1, 1992, $260,000 of such
net proceeds was used for the redemption of all outstanding 16 1/2% Senior
Discount Notes at 104% of par.
On September 10, 1992, Adelphia completed an offering of $125,000
aggregate principal amount of 11 7/8% Senior Debentures Due 2004. The net
proceeds from this offering were approximately $120,600.
On March 11, 1993, Adelphia completed the placement of $130,000
aggregate principal amount of 9 7/8% Senior Debentures Due 2005. The net
proceeds from this placement were approximately $125,307.
On July 28, 1993, Adelphia completed the placement of $110,000 aggregate
principal amount of 10 1/4% Senior Notes Due 2000, Series A. The net
proceeds from this placement were approximately $106,961.
On January 14, 1994, Adelphia completed a public offering of 9,132,604
shares of Class A Common Stock (the "Stock Offering"). Of the 9,132,604
shares of Class A Common Stock sold in the Stock Offering, 3,300,000 shares
were sold to the public at $18.00 per share and 5,832,604 shares were sold
directly by Adelphia to partnerships controlled by members of the Rigas
Family, at the public offering price less the underwriting discount.
Highland Holdings and Syracuse Hilton Head
Holdings, L.P., which purchased 4,374,453 and 1,458,151 of such 5,832,604
shares, respectively, hold and control the Managed Systems.
On February 22, 1994, the Company issued, in a private placement,
$150,000 aggregate principal amount of 9 1/2% Senior Pay-In-Kind ("PIK")
Notes Due 2004, Series A. The net proceeds from the 9 1/2% Notes of
approximately $147,000 were used to repay outstanding bank debt of
subsidiaries in order to extend the scheduled maturities of the Company's
long-term debt. The Company has the ability to pay interest on its 9 1/2 %
PIK Notes by issuing additional notes totalling approximately $66,630 in
lieu of cash interest payments through February 15, 1999.
In May 1994, Adelphia purchased on the open market $10,000 of its 10
1/4% Senior Notes due in 2000 at a price of 94.5% of face value plus accrued
interest.
On February 28, 1995, as a part of the Telesat Investment Agreement,
FP&L Group Inc. purchased 1,000,000 shares of newly issued Class A Common
Stock for $15,000.
On March 15, 1995, certain subsidiaries of the Company entered into a
$200,000 revolving credit facility, maturing September 30, 2003. Initial
borrowings under the revolving credit facility were used to repay existing
indebtedness of the Borrowers. The maximum available under the agreement is
reduced on June 30, 1997 by the lesser of $25,000 or 50% of the unused and
available commitment. Thereafter, the credit facility provides for
mandatory reductions in the revolving loan commitment, in increasing
quarterly amounts, commencing June 30, 1997 through September 30, 2003.
Acquisitions. On March 10, 1994, the Company purchased a 75% equity
interest in Three Rivers Cable Associates, L.P. ("TR") for $6,000. TR
serves approximately 15,000 subscribers in Ohio and approximately 3,000
subscribers in Pennsylvania, which are contiguous with existing Company
owned systems. Adelphia has also committed to provide a fully
collateralized $18,000 line of credit, similar to that which would be
available to TR had it borrowed such monies from a commercial bank. At
March 31, 1995, there were outstanding borrowings of $14,859 under this
agreement.
On March 31, 1994, Adelphia acquired from Olympus the rights to provide
alternate access in its respective franchise areas and an investment in the
Sunshine Network, L.P. for a purchase price of $15,500. The purchase price
of the assets resulted in a reduction of amounts due Adelphia of $15,500.
Also, on March 31, 1994, Adelphia acquired from certain Managed Partnerships
the rights to provide alternate access in their respective franchise areas
for a purchase price of $14,000. Additionally, on March 31, 1994, Adelphia
purchased real property from Dorellenic and Island Partners, L.P.,
partnerships owned by certain executive officers of the Company, for a total
of $14,312.
On April 12, 1994, Adelphia purchased for $15,000 (i) convertible
preferred units in Niagara Frontier Hockey, L.P., (the "Sabres Partnership")
which owns the Buffalo Sabres National Hockey League Franchise, convertible
to a 34% equity interest and (ii) warrants allowing Adelphia to increase its
interest to 40%. Adelphia believes this investment will be competitively
advantageous in the Buffalo cable television market. The Sabres Partnership
will control, through a wholly-owned subsidiary, the Crossroads Arena, a new
sports and entertainment facility expected to be completed in late 1996.
Adelphia's convertible preferred units will earn a 4% cumulative preferred
return beginning after the first National Hockey League game is played at
the Crossroads Arena.
On May 12, 1994, Adelphia invested $3,000 for a 20% interest in
SuperCable ALK International, a cable operator in Caracas, Venezuela. In
April 1994, Adelphia invested $4,200 in Commonwealth Security Systems, Inc.
in exchange for an 8.75% $4,200 convertible note and warrants. The note is
convertible into a 33% fully-diluted common equity interest on demand. The
warrants entitle Adelphia to acquire up to a 40% fully diluted common equity
interest for an additional $670.
On June 16, 1994, Adelphia invested $34,000 in TMC Holdings Corporation
("THC"), the parent of Tele-Media Company of Western Connecticut. THC owns
cable television systems serving approximately 43,000 subscribers in Western
Connecticut. The investment in THC provides Adelphia with a $30,000
preferred equity interest in THC and a 75% non-voting common equity
interest, with a liquidation preference to the remaining 25% common stock
ownership interest in THC. Adelphia has the right to convert such interest
to a 75% voting common equity interest, with a liquidation preference to the
remaining shareholders' 25% common stock ownership interest, on demand
subject to certain regulatory approvals. The acquisition of THC was
accounted for using the purchase method of accounting. The consolidated
statements of operations and cash flows include the operations of the
acquired system from June 16, 1994. Debt assumed, included in notes payable
of subsidiaries to banks and institutions, was $52,000 at closing.
On June 30, 1994, Adelphia acquired from Olympus 85% of the common stock
of Northeast Cable, Inc. ("Northeast") for a purchase price of $31,875.
Northeast owns cable television systems serving approximately 36,500
subscribers in eastern Pennsylvania. Of the purchase price, $16,000 was
paid in cash and the remainder resulted in a decrease in Adelphia's
receivable from Olympus. The acquisition of Northeast was accounted for
using the purchase method of accounting. The consolidated statements of
operations and cash flows include the operations of the acquired system
since June 30, 1994. Debt assumed, included in notes payable of
subsidiaries to banks and institutions, was $42,300 at closing.
On November 8, 1994, Page Call, Inc., a company 49.9% owned by Adelphia,
was a successful bidder for three regional narrowband PCS licenses,
covering 62% of the country's population. Page Call, Inc., was recently
established to develop a nationwide paging service. Page Call, Inc.'s
aggregate final bid for the three licenses was $52,900, an amount reduced to
$31,800 due to its "designated entity" status.
On December 27, 1994, Adelphia exchanged its existing investment in TMIP
with a Managed System for a note in the amount of $13,000.
On January 10, 1995, Adelphia issued 399,087 shares of Class A Common
Stock in connection with the merger of a wholly-owned subsidiary of Adelphia
into Oxford Cablevision, Inc. ("Oxford"), one of the Terry Family cable
systems. Oxford serves approximately 4,200 subscribers located in the North
Carolina counties of Granville and Warren. The acquisition of Oxford was
accounted for using the purchase method of accounting. The consolidated
statements of operations and cash flows include the operations of the
acquired systems since January 10, 1995. Adelphia assigned the rights to
purchase the stock of the other Terry Family cable systems to a Managed
System.
On January 31, 1995, Adelphia acquired Tele-Media Company of Martha's
Vineyard, L.P. ("Martha's Vineyard") for $11,775, a cable system serving
approximately 7,000 subscribers located in Martha's Vineyard, Massachusetts.
This system is part of Adelphia's New England cluster. The acquisition of
Martha's Vineyard was accounted for using the purchase method of accounting.
The consolidated statements of operations and cash flows include the
operations of the acquired system since January 31, 1995.
On June 12, 1995, Adelphia announced the signing of definitive
agreements for the purchase of all of the cable systems of Eastern Telecom
Corporation, Robinson Cable TV, Inc. and First Carolina Cable TV, L.P.
These systems together serve approximately 58,000 subscribers and are being
purchased for an aggregate price of $92,000.
On June 28, 1995, Adelphia and other relevant parties terminated their
previously announced November 1994 letter of intent to increase by $63,000
to $75,000 the overall investment of Adelphia and the companies it manages
(the "Adelphia Group") in cable systems held by Tele-Media Investment
Partnership, L.P. and certain other Tele-Media controlled entities
(collectively, "Tele-Media"). The Adelphia Group will continue to hold its
existing investments in and recent acquisitions of Tele-Media cable systems,
some of which are held by Adelphia as described herein.
Olympus. During the years ended March 31, 1993 and 1994 the Company made
advances of $49,061 and $16,554, respectively, to Olympus. Such advances
provided funds for capital expenditures, the repayment of debt and working
capital. In addition, the Company's investment in Olympus increased by
$15,400 in fiscal 1994 in connection with the purchase by the Company from
Olympus of rights to provide alternate access services in Olympus' franchise
areas and an investment in an unaffiliated partnership. During each of the
years ended March 31, 1993, 1994 and 1995, the Company received priority
investment income from Olympus of $22,300.
On February 28, 1995, Olympus entered into a Liquidation Agreement with
the Gans Family ("Gans"), an Olympus limited partner. Concurrently, with the
closing of the Liquidation Agreement, ACP Holdings, Inc., a wholly-owned
subsidiary of the Company and managing general partner of Olympus, certain
shareholders of Adelphia, Olympus and various Telesat Entities ("Telesat"),
wholly-owned subsidiaries of Florida Power and Light Company ("FPL"),
entered into an Investment Agreement, whereby Telesat contributed to Olympus
substantially all of the assets associated with certain cable television
systems, serving approximately 50,000 subscribers in southern Florida, in
exchange for general and limited partner interests and newly issued
preferred limited partner interests ("PLP interests") in Olympus. At that
time, Adelphia converted certain amounts owed the Company by Olympus for
advances, PLP interests and unpaid priority return on the PLP interests, to
capital contributions. This transaction, net of advances made to Olympus
during the year ended March 31, 1995, resulted in a net reduction of the
amount due from Olympus for advances of $25,307. After this transaction
Adelphia's ownership in Olympus is 50% voting interest, with FPL as its only
other partner in Olympus.
Managed Partnerships. On September 29, 1993, the Board of Directors of
the Company authorized the Company to make loans in the future to Highland
Video Associates, L.P. ("Highland") and Syracuse Hilton Head Holdings, L.P.
("SHHH") up to an amount of $25,000 for each. During the years ended March
31, 1994 and 1995, the Company made advances in the net amount of $7,828 and
$10,028, respectively, to these and other related parties, primarily for
capital expenditures and working capital purposes.
On October 6, 1993, Adelphia purchased the 14% preferred Class B Limited
Partnership Interest in SHHH for $18,338 from Robin Media Group, an
unrelated party. SHHH is a joint venture of the Rigas Family and Tele-
Communications, Inc., whose interests in SHHH are junior to Adelphia's.
During the year ended March 31, 1994, the Company made loans in the net
amount of $15,000 to SHHH, to facilitate the acquisition of cable television
systems serving Palm Beach County, Florida from unrelated parties. During
fiscal 1995, the Company sold its investment in TMIP to SHHH for $13,000.
On January 31, 1995, a wholly owned subsidiary of Adelphia received a
$20,000 preferred investment from SHHH to facilitate the acquisition of
cable properties from Tele-Media of Delaware.
Resources. The Company plans to continue to explore and consider new
commitments, arrangements or transactions to refinance existing debt,
increase the Company's liquidity or decrease the Company's leverage. These
could include, among other things, the future issuance by Adelphia of public
or private equity or debt and the negotiation of new or amended credit
facilities. These could also include entering into acquisitions, joint
ventures or other investment or financing activities, although no assurance
can be given that any such transactions will be consummated. The Company's
ability to borrow under current credit facilities and to enter into
refinancings and new financings is limited by covenants contained in
Adelphia's indentures and its subsidiaries' credit agreements, including
covenants under which the ability to incur indebtedness is in part a
function of applicable ratios of total debt to cash flow.
During the year ended March 31, 1995, the increase in capital
expenditures and accounts payable was primarily attributed to the companies
acquired and an increase in the level of expenditures for new technology and
rebuild activity. The increase in accrued interest and other liabilities
resulted from the timing of the payment of interest due on the Company's
indebtedness. Deferred taxes increased as of March 31, 1995 compared with
the balance as of March 31, 1994 primarily due to the impact of acquired
companies.
The Company believes that cash and cash equivalents, internally
generated funds, borrowings under existing credit facilities, and future
financing sources will be sufficient to meet its short-term and long-term
liquidity and capital requirements. Although in the past the Company has
been able to refinance its indebtedness or obtain new financing, there can
be no assurance that the Company will be able to do so in the future or that
the terms of such financings would be favorable.
Management believes that the telecommunications industry, including the
cable television and telephone industries, is in a period of consolidation
characterized by mergers, joint ventures, acquisitions, sales of all or part
of cable companies or their assets, and other partnering and investment
transactions of various structures and sizes involving cable or other
telecommunications companies. The Company continues to evaluate new
opportunities that allow for the expansion of its business through the
acquisition of additional cable television systems in geographic proximity
to its existing regional markets or in locations that can serve as a basis
for new market areas. The Company, like other cable television companies,
has participated from time to time and is participating in preliminary
discussions with third parties regarding a variety of potential
transactions, and the Company has considered and expects to continue to
consider and explore potential transactions of various types with other
cable and telecommunications companies. However, except as otherwise stated
herein, the Company has not reached any agreements, in principal or
otherwise, with respect to any material transaction and no assurances can be
given as to whether any such transaction may be consummated or, if so, when.
Recent Accounting Pronouncements. Statement of Financial Accounting
Standards ("SFAS") No. 109, "Accounting for Income Taxes," requires an asset
and liability approach for financial accounting and reporting for income
taxes. Effective January 1, 1993 and April 1, 1993, respectively, Olympus
and the Company adopted the provisions of SFAS No. 109. The adoption of SFAS
No. 109 resulted in the cumulative recognition of an additional liability by
Olympus and the Company of $59,500 and $89,660, respectively.
SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and
for Long-Lived Assets to Be Disposed Of," establishes accounting standards
for assessing the impairment of long-lived assets, certain identifiable
intangibles, and goodwill related to those assets to be held and used and
for long-lived assets and certain identifiable intangibles to be disposed
of. SFAS No. 121 is effective for financial statements for fiscal years
beginning after December 15, 1995 although earlier application is
encouraged. Effective January 1, 1994 and April 1, 1994, respectively, both
Olympus and the Company early-adopted the provisions of SFAS No. 121. The
adoption of SFAS No. 121 did not materially affect the financial statements
of Olympus or the Company.
Inflation
In the three fiscal years ended March 31, 1995, inflation did not have a
significant effect on the Company. Periods of high inflation could have an
adverse effect to the extent that increased borrowing costs for
floating-rate debt may not be offset by increases in subscriber rates. At
March 31, 1995, after giving effect to interest rate hedging agreements,
approximately $484,250 of the Company's total debt was subject to floating
interest rates.
Olympus
The Company serves as the managing general partner of Olympus and, as of
December 31, 1994, held $10,000 of voting general partnership interests
representing, in the aggregate, 50% of the voting interests of Olympus. The
Company also held, as of December 31, 1994, $276,101 aggregate principal
amount of nonvoting PLP Interests in Olympus, which entitle the Company to a
16.5% per annum priority return, and nonvoting special limited partnership
interests. The remaining equity in Olympus consists of voting limited
partnership interests held by unaffiliated third parties. At December 31,
1992, these interests included $10,000 of redeemable limited partnership
interests held by certain members of the Joseph Gans family ("Gans"). On
January 3, 1993, Olympus redeemed certain other limited partner interests
for $9,795 and the Company converted $6,500 of its voting general
partnership interests to nonvoting PLP Interests, thereby maintaining 50% of
the outstanding general partner and limited partner voting units of Olympus.
On February 28, 1995, Olympus entered into a Liquidation Agreement with
Gans. Under this Liquidation Agreement, Gans agreed to exchange their
redeemable limited partner interests in Olympus for the remaining 15% of the
common stock of Northeast held by Olympus. Concurrently with the closing of
the Liquidation Agreement, ACP Holdings, Inc. ("ACP"), a wholly-owned
subsidiary of the Company and managing general partner of Olympus, certain
shareholders of Adelphia, Olympus and various Telesat entities entered into
an Investment Agreement whereby Telesat contributed to Olympus substantially
all of the assets associated with certain cable television systems, serving
approximately 50,000 subscribers in southern Florida, in exchange for a
general and limited partner interests and newly issued preferred limited
partner interests ("PLP interests") in Olympus. As a result of the Telesat
Investment Agreement, Telesat contributed its Florida cable systems and
$20,000 and, in exchange, received $112,500 of 16.5% preferred limited
partnership interests. Prior to the Telesat Investment Agreement, Olympus
had obligations to Adelphia for intercompany advances, PLP interests and
priority return on PLP interests. In conjunction with the Telesat
Investment Agreement, Adelphia converted a portion of the intercompany
advances, a portion of the existing PLP interests and all of the existing
accrued priority return on the PLP interests, to capital contributions.
The Olympus limited partnership agreement requires approval by the
holders of 85% of the voting interests for, among other things, significant
acquisitions and dispositions of assets, and the issuance of certain
partnership interests, and also requires approval by the holders of 75% of
the voting interests for, among other things, material amendments to the
Olympus partnership agreement, certain financings and refinancings, certain
issuances of PLP interests, certain transactions with related parties and
the adoption of annual budgets.
On August 24, 1992 service in Olympus' South Dade system in the southern
portion of Florida's Dade County was interrupted by Hurricane Andrew. Other
Olympus subscribers were unaffected by the storm. Prior to the hurricane, as
of July 31, 1992, the South Dade system passed 157,922 homes and served
71,193 basic subscribers. The rebuilding of the cable plant has been
completed with state-of-the-art fiber to feeder technology which has an 80
channel capacity. At March 31, 1995 the South Dade System served 74,601
basic subscribers.
On April 3, 1995, Olympus acquired all of the cable and security systems
of WB Cable Associates, Ltd. ("WB Cable") serving approximately 44,000
subscribers for a purchase price of $82,000. WB Cable provides cable
services from one headend and security monitoring services from one location
in West Boca Raton, Florida. Of the purchase price, $77,000 was paid in
cash and $5,000 was paid in Adelphia Class A Common Stock. The acquisition,
was accounted for under the purchase method of accounting, was financed
principally through borrowings under the ACP credit agreement.
On June 12, 1995, Olympus announced the signing of a definitive
agreement for the purchase of all of the southeast Florida cable systems of
the Leadership cable division of Fairbanks Communications, Inc. which serves
approximately 50,000 subscribers for a purchase price of $94,000.
The following table is derived from the Olympus Communications, L.P.
Consolidated Financial Statements included in this Form 10-K.
SUPPLEMENTAL FINANCIAL DATA FOR OLYMPUS
YEAR ENDED
DECEMBER 31,
1992 1993 1994
STATEMENT OF OPERATIONS DATA:
Revenues................................... $ 86,255 $ 89,099 $ 93,421
Business Interruption Revenue.............. 7,146 9,547 1,037
Total...................................... 93,401 98,646 94,458
Operating Income Before
Depreciation and
Amortization.............................. 47,280 55,195 47,079
Depreciation and
Amortization.............................. 39,407 37,240 36,703
Operating Income........................... 7,873 17,955 10,376
Interest Expense........................... (30,272) (29,470) (32,262)
Net Loss................................... (16,617) (70,744) (21,025)
BALANCE SHEET DATA:
Total Assets............................... $ 467,279 $ 458,663 $ 375,985
Total Long-Term Debt....................... 362,428 368,263 314,069
PLP Interests.............................. 269,601 276,101 276,101
OTHER FINANCIAL DATA:
Capital Expenditures....................... $ 26,827 $ 23,164 $ 23,916
Operating Margin (a)....................... 50.6% 56.0% 49.8%
(a) Percentage representing operating income before depreciation and
amortization divided by total revenues.
Comparison of Years Ended December 31, 1992, 1993 and 1994
Revenues. Total revenues for the year ended December 31, 1993 increased
5.6% over the prior year. Total revenues for the year ended December 31,
1994 declined 4.2% from the prior year. The 1993 increase in revenues as
compared with 1992 was primarily attributable to basic subscriber growth and
rate increases, which were partially offset by the effects of Hurricane
Andrew on the South Dade System, net of business interruption insurance
proceeds. See Note 3 to the Olympus Communications, L.P. Consolidated
Financial Statements. The 1994 decrease as compared with 1993 was due to
the sale of Northeast in June 1994, partially offset by the positive impact
of the South Dade rebuild from the effects of Hurricane Andrew and
subscriber growth.
Operating Income Before Depreciation and Amortization. For the year
ended December 31, 1993, operating income before depreciation and
amortization increased 16.7% as compared with the prior year. This increase
was primarily attributable to higher levels of total revenues, including
business interruption revenue related to the effects of Hurricane Andrew,
that were not offset by corresponding increases in operating expenses. For
the year ended December 31, 1994, operating income before depreciation and
amortization decreased 14.7% as compared with the prior year. The decrease
was due to increased operating costs with no corresponding increase in rates
due to the FCC rate freeze, the impact of the sale of Northeast and the
decline in business interruption insurance revenue.
Operating Income. For the year ended December 31, 1993, operating income
increased by $10,082 to $17,955. This increase was primarily due to the
increase in total revenues, including business interruption revenue, and
relatively constant depreciation and amortization and operating expenses.
For the year ended December 31, 1994, operating income decreased by $7,579
to $10,376. The decrease was due to reduced business interruption insurance
revenue in the current year, the above noted FCC rate freeze impact and the
effect of the Northeast sale.
Interest Expense. For the year ended December 31, 1993, interest expense
decreased 2.6% primarily due to reduced interest rates. For the year ended
December 31, 1994, interest expense increased 9.5% primarily due to higher
average rates outstanding on debt offset somewhat by the reduction of debt
from the sale of Northeast.
Net Loss. Olympus reported net losses of $16,617, $70,744 and $21,025
for the years ended December 31, 1992, 1993 and 1994, respectively. The
increase in 1993 was mainly due to the cumulative effect of a change in
accounting for income taxes of $59,500 resulting from the adoption of SFAS
No. 109 by Olympus, partially offset by increased operating income. The
decrease in net loss in 1994 was attributable to the absence in 1994 of the
impact of the change in accounting for income taxes, offset by lower
operating income for the period.
Regulatory and Competitive Matters
The cable television operations of the Company may be adversely affected
by changes and developments in governmental regulation, competitive forces
and technology. The cable television industry and the Company are subject
to extensive regulation at the federal, state and local levels. Many
aspects of such regulation are currently the subject of judicial proceedings
and administrative or legislative proceedings or proposals. On October 5,
1992, Congress passed the 1992 Cable Act, which significantly expands the
scope of regulation of certain subscriber rates and a number of other
matters in the cable industry, such as mandatory carriage of local broadcast
stations and retransmission consent, and which will increase the
administrative costs of complying with such regulations. The FCC has
adopted rate regulations that establish, on a system-by-system basis,
maximum allowable rates for (i) basic and cable programming services (other
than programming offered on a per-channel or per-program basis), based upon
a benchmark methodology, and (ii) associated equipment and installation
services based upon cost plus a reasonable profit. Under the FCC rules,
franchising authorities are authorized to regulate rates for basic services
and associated equipment and installation services, and the FCC will
regulate rates for regulated cable programming services in response to
complaints filed with the agency. The original rate regulations became
effective on September 1, 1993. Amendments to the rate regulations became
effective May 15, 1994. Further amendments were adopted on November 10,
1994. The FCC ordered an interim rate freeze effective April 5, 1993 which
was extended through May 15, 1994.
The original rate regulations required a reduction of existing rates
charged for basic services and regulated cable programming services to the
greater of (i) the applicable benchmark level or (ii) the rates in force as
of September 30,
1992, reduced by 10%, adjusted forward for inflation. The amended
regulations generally require a reduction of up to 17 percent from the
rates for regulated services in force as of September 30, 1992, adjusted
forward for inflation and
certain other factors. Rate reductions are not required to the extent that
a cable operator at its option elects to use an alternative cost-of-service
methodology and shows that rates for basic and cable programming services
are reasonable. The FCC has adopted interim rules to govern cost-of-service
showings by cable operators. Refunds with interest will be required to be
paid by cable operators who are required to reduce regulated rates after
September 1, 1993, calculated retroactively from the date of a local
franchising authority's decision with regard to basic rates, and from the
date a complaint is filed with the FCC with regard to the rates charged for
regulated programming services. The FCC has reserved the right to reduce or
increase the benchmarks it has established. The rate regulations will also
limit future increases in regulated rates to an inflation indexed amount
plus increases in certain costs such as taxes, franchise fees, costs
associated with specific franchise requirements and increased programming
costs. Cost-based adjustments to these capped rates can also be made in the
event a cable operator adds or deletes channels. On November 10, 1994, the
FCC adopted an alternative method for adjusting the rates charged for a
cable programming services tier when new services are added. This will
allow cable operators to increase rates by as much as $1.50 over a two year
period to reflect the addition of up to six new channels of service on cable
programming service tiers. In addition, a new programming tier can be
created, the rate for which would not be regulated as long as certain
conditions are met, such as not moving services from existing tiers to the
new one. Because of the limitation on rate increases for regulated services,
future revenue growth from cable services will rely to a much greater extent
than has been true in the past on increased revenues from unregulated
services and new subscribers than from increases in previously unregulated
rates.
The FCC has adopted regulations implementing virtually all of the
requirements of the 1992 Cable Act. As noted above, amendments to the rate
regulations were recently announced and the FCC is also likely to continue
to modify, clarify or refine the rate regulations. In addition, litigation
has been instituted challenging various portions of the 1992 Cable Act and
the rulemaking proceedings including the rate regulations. The Company
cannot predict the effect or outcome of future rulemaking proceedings,
changes to the rate regulations, or litigation. Further, because the FCC
has only issued its interim rules and has not adopted final cost-of-service
rules, the Company has not determined to what extent it will be able to
utilize cost-of-service showings to justify rates.
Effective as of September 1, 1993, in accordance with the 1992 Cable
Act, the Company adjusted the basic service rates and related equipment and
installation rates in all of its systems in order for such rates to be in
compliance with the applicable benchmark or equipment and installation cost
levels. The Company also implemented a program in all of its systems called
"CableSelect" under which most of the Company's satellite-delivered
programming services are now offered individually on a per channel basis, or
as a group at a price of approximately 15% to 20% below the sum of the per
channel prices of all such services. For subscribers who elect to customize
their channel lineup, the Company will provide, for a monthly rental fee, an
electronic device located on the cable line outside the home, enabling a
subscriber's television to receive only those channels selected by the
subscriber. These basic service rate adjustments and the CableSelect
program have also been implemented in all systems managed by the Company.
The Company believes CableSelect provides increased programming choices to
the Company's subscribers while providing flexibility to the Company to
respond to future changes in areas such as customer demand and programming.
A letter of inquiry, one of at least 63 sent by the FCC to numerous
cable operators, was received by an Olympus System regarding the
implementation of this new method of offering services. Olympus responded
in writing to the FCC's inquiry. On November 18, 1994, the Cable Services
Bureau of the FCC issued a decision holding that the "CableSelect" program
was an evasion of the rate regulations and ordered this package to be
treated as a regulated tier. This decision, and all other letter of inquiry
decisions, were principally decided on the number of programming services
moved from regulated tiers to a la carte packages. Adelphia has appealed
this decision to the full Commission. The Company cannot predict the
outcome or effect of this proceeding.
On November 10, 1994 the FCC ruled that, prospectively, any a la carte
package will be treated as a regulated tier, except for packages involving
premium services. The Company is currently unable to predict the effect
that the amended regulations, future FCC treatment of "a la carte" packages
or other future FCC rulemaking
proceedings will have on its business and results of operations in future
periods. No assurance can be given at this time that such matters will not
have a material negative financial impact on the Company's business and
results of operations in the future. Also, no assurance can be given as to
what other future actions Congress, the FCC or other regulatory authorities
may take or the effects thereof on the Company.
Cable television companies operate under franchises granted by local
authorities which are subject to renewal and renegotiation from time to
time. Because such franchises are generally non-exclusive, there is a
potential for competition with the Systems from other operators of cable
television systems, including public systems operated by municipal
franchising authorities themselves, and from other distribution systems
capable of delivering television programming to homes. The 1992 Cable Act
contains provisions which encourage competition from such other sources.
Additionally, recent court and administrative decisions have removed certain
of the restrictions that have limited entry into the cable television
business by potential competitors such as telephone companies, and proposals
now under consideration by the FCC, and which are being and from time to
time have been considered by Congress, could result in the elimination of
other such restrictions. The Company cannot predict the extent to which
competition will materialize from other cable television operators, other
distribution systems for delivering television programming to the home, or
other potential competitors, or, if such competition materializes, the
extent of its effect on the Company.
FCC rules permit local telephone companies to offer "video dialtone"
service for video programmers, including channel capacity for the carriage
of video programming and certain non-common carrier activities such as video
processing, billing and collection and joint marketing agreements. On
December 15, 1992, New Jersey Bell Telephone Company filed an application
with the FCC to operate a "video dialtone" service in portions of Dover
County, New Jersey, in which the Company serves approximately 20,000
subscribers. The FCC approved the application on July 18, 1994. The
Company has appealed this decision to the U.S. Court of Appeals for the
District of Columbia. This case is presently pending.
A number of telephone companies have filed suit seeking to void as
unconstitutional the provisions in the 1984 Cable Act that prohibit
telephone companies from owning cable television systems in their telephone
service areas. The U.S. Courts of Appeal for the Fourth and Ninth Circuits
have struck down the cross-ownership ban on first amendment grounds. Several
federal district courts have also struck down the cross-ownership ban on the
same grounds. In addition, legislation which would alter or eliminate the
cross-ownership ban is under active consideration in Congress.
Direct broadcast satellite ("DBS") service became available to consumers
during 1994. A single DBS satellite can provide more than 100 channels of
programming. DBS service can be received virtually anywhere in the United
States through the installation of a small outdoor antenna. DBS service is
being heavily marketed on a nation-wide basis. The extent to which DBS will
be competitive with cable systems will depend on the continued availability
of reception equipment and programming at reasonable prices to the consumer.
The Company cannot predict the ultimate outcome of the video dialtone
proceeding or the cross-ownership ban litigation. However, the Company
believes that the provision of video programming by telephone companies in
competition with the Company's existing operations could have an adverse
effect on the Company's financial condition and results of operations. At
this time, the impact of any such effect is not known or estimable. See
Item 1 - "Business Competition" and "Legislation and Regulation".
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The consolidated financial statements and related notes thereto and
independent auditors report follow.
ADELPHIA COMMUNICATIONS CORPORATION AND SUBSIDIARIES
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
ADELPHIA COMMUNICATIONS CORPORATION AND SUBSIDIARIES
Independent Auditors' Report..............................................
Consolidated Balance Sheets, March 31, 1994 and 1995......................
Consolidated Statements of Operations,
Years Ended March 31, 1993, 1994 and 1995...............................
Consolidated Statements of Stockholders' Equity (Deficiency),
Years Ended March 31, 1993, 1994 and 1995...............................
Consolidated Statements of Cash Flows,
Years Ended March 31, 1993, 1994 and 1995...............................
Notes to Consolidated Financial Statements................................
OLYMPUS COMMUNICATIONS, L.P. AND SUBSIDIARIES
Independent Auditors' Report..............................................
Consolidated Balance Sheets, December 31, 1993 and 1994...................
Consolidated Statements of Operations,
Years Ended December 31, 1992, 1993, and 1994...........................
Consolidated Statements of General Partner's Equity (Deficiency),
Years Ended December 31, 1992, 1993 and 1994............................
Consolidated Statements of Cash Flows,
Years Ended December 31, 1992, 1993 and 1994............................
Notes to Consolidated Financial Statements................................
INDEPENDENT AUDITORS' REPORT
Adelphia Communications Corporation:
We have audited the accompanying consolidated balance sheets of Adelphia
Communications Corporation and subsidiaries as of March 31, 1994 and 1995,
and the related consolidated statements of operations, stockholders' equity
(deficiency) and cash flows for each of the three years in the period ended
March 31, 1995. Our audits also included the financial statement schedules
listed in the Index at Item 14. These financial statements and financial
statement schedules are the responsibility of the Company's management. Our
responsibility is to express an opinion on the financial statements and
financial statement schedules based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, such consolidated financial statements present fairly, in
all material respects, the financial position of Adelphia Communications
Corporation and subsidiaries at March 31, 1994 and 1995, and the results of
their operations and their cash flows for each of the three years in the
period ended March 31, 1995 in conformity with generally accepted accounting
principles. Also, in our opinion, such financial statement schedules, when
considered in relation to the basic consolidated financial statements taken
as a whole, present fairly in all material respects the information set
forth therein.
As discussed in Note 7 to the consolidated financial statements, effective
April 1, 1993, the Company changed its method of accounting for income
taxes. Also, as discussed in Note 2 to the consolidated financial
statements, as of January 1, 1993, an unconsolidated subsidiary accounted
for on the equity method changed its method of accounting for income taxes.
DELOITTE & TOUCHE LLP
Pittsburgh, Pennsylvania
June 28, 1995
<TABLE>
ADELPHIA COMMUNICATIONS CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except per share amounts)
March 31,
1994 1995
ASSETS:
<S> <C> <C>
Cable television systems, at cost, net of
accumulated depreciation and amortization:
Property, plant and equipment.......................... $ 446,290 $ 518,405
Intangible assets...................................... 417,788 546,116
Total.......................................... 864,078 1,064,521
Cash and cash equivalents................................ 74,075 5,045
Investments.............................................. 23,922 48,968
Preferred equity investment in Managed Partnership....... 18,338 18,338
Subscriber receivables - net............................. 18,021 20,433
Prepaid expenses and other assets - net.................. 38,772 48,352
Related party investments and receivables - net.......... 36,640 61,634
Total.......................................... $1,073,846 $1,267,291
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY):
Notes payable of subsidiaries to banks and institutions.. $ 870,875 $1,086,350
12 1/2% Senior Notes due 2002............................ 400,000 400,000
10 1/4% Senior Notes due 2000 ........................... 108,765 99,011
11 7/8% Senior Debentures due 2004 ...................... 124,442 124,470
9 7/8% Senior Debentures due 2005 ....................... 127,882 127,994
9 1/2% Senior Pay-In-Kind Notes due 2004................. 150,000 164,370
Other debt............................................... 11,747 19,415
Accounts payable......................................... 27,016 42,872
Subscriber advance payments and deposits................. 13,385 16,494
Accrued interest and other liabilities................... 66,077 87,751
Deferred income taxes.................................... 91,721 110,139
Total liabilities.............................. 1,991,910 2,278,866
Commitments and contingencies (Note 4)
Stockholders' equity (deficiency):
Class A Common Stock, $.01 par value, 50,000,000 shares
authorized, 13,507,604 and 14,906,691 shares
outstanding, respectively.............................. 135 149
Class B Common Stock, $.01 par value, 25,000,000 shares
authorized, 10,944,476 shares outstanding.............. 109 109
Additional paid-in capital.............................. 198,431 211,190
Accumulated deficit..................................... (1,116,739) (1,223,023)
Total stockholders' equity (deficiency)........ (918,064) (1,011,575)
Total.......................................... $1,073,846 $1,267,291
</TABLE>
See notes to consolidated financial statements.
<TABLE>
ADELPHIA COMMUNICATIONS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share amounts)
Year Ended March 31,
1993 1994 1995
<S> <C> <C> <C>
Revenues.................................. $ 305,222 $ 319,045 $ 361,505
Operating expenses:
Direct operating and programming......... 82,377 90,547 106,993
Selling, general and administrative...... 49,468 52,801 63,487
Depreciation and amortization............ 90,406 89,402 97,602
Total........................... 222,251 232,750 268,082
Operating income.......................... 82,971 86,295 93,423
Other income (expense):
Interest income from affiliates.......... 5,216 9,188 11,112
Other income (expense)................... 1,447 (299) 1,453
Priority investment income from Olympus.. 22,300 22,300 22,300
Interest expense......................... (164,859) (182,136) (195,698)
Equity in loss of joint
ventures before cumulative effect of
change in accounting principle.......... (46,841) (30,054) (44,349)
Total........................... (182,737) (181,001) (205,182)
Loss before income taxes, extraordinary
loss and cumulative effect of change
in accounting principle.................. (99,766) (94,706) (111,759)
Income tax (expense) benefit.............. (3,143) (2,742) 5,475
Loss before extraordinary loss and
cumulative effect of change in
accounting principle..................... (102,909) (97,448) (106,284)
Extraordinary loss on early retirement of
debt..................................... (14,386) (752) --
Cumulative effect of change in accounting
for income taxes......................... -- (89,660) --
Cumulative effect of Olympus change in
accounting for income taxes.............. (59,500) -- --
Net loss.................................. $ (176,795) $ (187,860) $ (106,284)
Loss per weighted average share of common
stock before extraordinary loss and
cumulative effect of change in
accounting principle..................... $ (6.80) $ (5.66) $ (4.32)
Extraordinary loss per weighted average
share of common stock on early retirement
of debt.................................. (.95) (.04) --
Cumulative effect per weighted average
share of common stock of change in
accounting for income taxes.............. -- (5.21) --
Cumulative effect per weighted average
share of common stock of Olympus change
in accounting for income taxes........... (3.93) -- --
Net loss per weighted average share of
common stock............................. $ (11.68) $ (10.91) $ (4.32)
Weighted average shares of common stock
outstanding.............................. 15,138,654 17,221,059 24,628,316
</TABLE>
See notes to consolidated financial statements.
<TABLE>
ADELPHIA COMMUNICATIONS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIENCY)
(Dollars in thousands)
Class A Class B Additional Stockholders'
Common Common Paid-in Accumulated Equity
Stock Stock Capital Deficit (Deficiency)
<S> <C> <C> <C> <C> <C>
Balance, March 31, 1992... $ 29 $ 109 $ 38,402 $ (752,084) $ (713,544)
Issuance of Class A Common
Stock on May 14, 1992.... 15 -- 21,710 -- 21,725
Net loss.................. -- -- -- (176,795) (176,795)
Balance, March 31, 1993... 44 109 60,112 (928,879) (868,614)
Issuance of Class A Common
Stock on January 14, 1994 91 -- 155,872 -- 155,963
Excess of purchase price
of acquired assets over
predecessor owner book
value.................... -- -- (17,553) -- (17,553)
Net loss.................. -- -- -- (187,860) (187,860)
Balance, March 31, 1994... 135 109 198,431 (1,116,739) (918,064)
Issuance of Class A Common
Stock on January 10, 1995 4 -- 3,588 -- 3,592
Issuance of Class A Common
Stock on February 28, 1995 10 -- 14,851 -- 14,861
Excess of purchase price
of acquired assets over
predecessor owner book
value.................... -- -- (5,680) -- (5,680)
Net loss.................. -- -- -- (106,284) (106,284)
Balance, March 31, 1995... $ 149 $ 109 $ 211,190 $(1,223,023) $(1,011,575)
</TABLE>
See notes to consolidated financial statements.
<TABLE>
ADELPHIA COMMUNICATIONS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
Year Ended March 31,
1993 1994 1995
<S> <C> <C> <C>
Cash flows from operating activities:
Net loss................................. $ (176,795) $ (187,860) $ (106,284)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation........................... 54,129 56,370 66,064
Amortization........................... 36,277 33,032 31,538
Noncash interest expense............... 164 1,680 14,756
Equity in loss of joint ventures
before cumulative effect of accounting
change................................ 46,841 30,054 44,349
Extraordinary loss on debt retirement.. 14,386 752 --
Costs associated with debt financing... (17,791) (4,961) (2,759)
Redemption premium on debt retirement.. (10,000) -- --
Loss on disposal of property........... -- 1,051 --
Cumulative effect of accounting change. 59,500 89,660 --
Increase (decrease) in deferred income
taxes, net of effects of acquisitions. -- 2,061 (5,975)
Changes in operating assets and
liabilities net of effects of
acquisitions:
Subscriber receivables.............. (2,596) (155) (478)
Prepaid expenses and other assets... (4,883) (16,288) (21,152)
Accounts payable.................... (9,900) 5,871 14,789
Subscriber advance payments ........ 223 (1,134) 699
Accrued interest and other
liabilities........................ 11,720 11,858 10,630
Net cash provided by operating activities. 1,275 21,991 46,177
Cash flows from investing activities:
Cable television systems acquired........ (14,501) (21,681) (70,256)
Expenditures for property, plant and
equipment............................... (70,975) (75,894) (92,082)
Investments in other joint ventures...... (14,989) (8,890) (38,891)
Preferred equity investment in Managed
Partnership............................. -- (18,338) --
Amounts invested in and advanced to
Olympus and related parties............. (62,960) (45,285) (46,046)
Alternate access rights acquired......... -- (27,000) --
Net cash used for investing activities.... (163,425) (197,088) (247,275)
Cash flows from financing activities:
Proceeds from debt....................... 1,277,847 744,770 155,314
Repayments of debt....................... (1,109,924) (690,232) (38,107)
Issuance of Class A Common Stock......... 21,725 155,963 14,861
Net cash provided by financing activities. 189,648 210,501 132,068
Increase (decrease) in cash and cash
equivalents.............................. 27,498 35,404 (69,030)
Cash and cash equivalents, beginning of
year..................................... 11,173 38,671 74,075
Cash and cash equivalents, end of year.... $ 38,671 $ 74,075 $ 5,045
Supplemental disclosure of cash flow
activity - Cash payments for interest.... $ 151,653 $ 178,840 $ 193,206
</TABLE>
See notes to consolidated financial statements.
ADELPHIA COMMUNICATIONS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands)
1. The Company and Summary of Significant Accounting Policies:
The Company and Basis for Consolidation
Adelphia Communications Corporation and subsidiaries ("ACC") owns, operates
and manages cable television systems. ACC's operations consist primarily of
selling video programming which is distributed to subscribers for a monthly
fee through a network of fiber optic and coaxial cables. These services are
offered in the respective franchise areas under the name Adelphia Cable
Communications.
The consolidated financial statements include the accounts of ACC and its
more than 50% owned subsidiaries. All significant intercompany accounts and
transactions have been eliminated in consolidation.
During the year ended March 31, 1995, ACC consummated several acquisitions,
each of which was accounted for using the purchase method. Accordingly, the
financial results of each acquisition have been included in the consolidated
results of ACC effective with the date acquired. A description of the
acquisitions is provided below.
On June 16, 1994, ACC invested $34,000 in TMC Holdings Corporation ("THC"),
the parent of Tele-Media Company of Western Connecticut. THC owns cable
television systems serving approximately 43,000 subscribers in western
Connecticut. The investment in THC provides ACC with a $30,000 preferred
equity interest in THC and a 75% non-voting common equity interest, with a
liquidation preference to the remaining 25% common stock ownership interest
in THC. ACC has the right to convert such interest to a 75% voting common
equity interest, with a liquidation preference to the remaining
shareholders' 25% common stock ownership interest, on demand subject to
certain regulatory approvals. Debt assumed, included in notes payable of
subsidiaries to banks and institutions, was $52,000 at closing.
On June 30, 1994, ACC acquired from Olympus 85% of the common stock of
Northeast Cable, Inc. ("Northeast") for a purchase price of $31,875.
Northeast owns cable television systems serving approximately 36,500
subscribers in eastern Pennsylvania. Of the purchase price, $16,000 was
paid in cash and the remainder resulted in a decrease in ACC's receivable
from Olympus. Debt assumed, included in notes payable of subsidiaries to
banks and institutions, was $42,300 at closing.
On January 10, 1995, ACC issued 399,087 shares of Class A Common Stock in
connection with the merger of a wholly-owned subsidiary of Adelphia into
Oxford Cablevision, Inc. ("Oxford"), one of the Terry Family cable systems.
Oxford serves approximately 4,200 subscribers located in the North Carolina
counties of Granville and Warren.
On January 31, 1995, ACC acquired a majority equity position in Tele-Media
Company of Martha's Vineyard, L.P. for $11,775, a cable system serving
approximately 7,000 subscribers located in Martha's Vineyard, Massachusetts.
This system will become part of ACC's New England cluster.
Investment in Olympus Joint Venture Partnership
The investment in the Olympus joint venture partnership comprises both
limited and general partner interests. The general partner interest
represents a 50% voting interest in Olympus Communications, L.P. ("Olympus")
and is being accounted for using the equity method. Under this method,
ACC's investment, initially recorded at the historical cost of contributed
property, is adjusted for subsequent capital contributions and its share of
the losses of the partnership as well as its share of the accretion
requirements of the partnership's interests. The limited partner interest
represents a preferred interest ("PLP interests") entitled to a 16.5%
annual return. The PLP interests are nonvoting, are
ADELPHIA COMMUNICATIONS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands)
(Continued)
1. The Company and Summary of Significant Accounting Policies, continued:
senior to claims of certain other partner interests, and provide for an
annual priority return of 16.5%. Olympus is not required to pay the entire
16.5% return currently and priority return on PLP interests is recognized as
income by ACC when received. Correspondingly, equity in net loss of Olympus
excludes accumulated unpaid priority return. (See Note 2)
Subscriber Revenues
Subscriber revenues are recorded in the month the service is provided.
Property, Plant and Equipment
Property, plant and equipment are comprised of the following:
March 31,
1994 1995
Operating plant and equipment........................$ 673,451 $ 786,917
Real estate and improvements......................... 41,150 46,453
Support equipment.................................... 25,132 28,242
Construction in progress............................. 48,118 77,026
787,851 938,638
Accumulated depreciation............................. (341,561) (420,233)
$ 446,290 $ 518,405
Depreciation is computed on the straight-line method using estimated useful
lives of 5 to 12 years for operating plant and equipment and 3 to 20 years
for support equipment and buildings. Additions to property, plant and
equipment are recorded at cost which includes amounts for material,
applicable labor and overhead, and interest. Capitalized interest amounted
to $1,009, $1,345 and $1,736 for the years ended March 31, 1993, 1994 and
1995, respectively.
Intangible Assets
Intangible assets, net of accumulated amortization, are comprised of the
following:
March 31,
1994 1995
Purchased franchises.....................................$368,938 $493,249
Purchased subscriber lists............................... 4,365 567
Goodwill................................................. 41,691 38,805
Non-compete agreements................................... 2,794 13,495
$417,788 $546,116
A portion of the aggregate purchase price of cable television systems
acquired has been allocated to purchased franchises, purchased subscriber
lists, goodwill and non-compete agreements. Purchased franchises and
goodwill are amortized on the straight-line method over 40 years. Purchased
subscriber lists are amortized on the straight-line method over periods
which range from 5 to 10 years. Non-compete agreements are amortized on the
straight-line method over their contractual lives which range from 4 to 12
years. Accumulated amortization of intangible assets amounted to $76,812
and $107,914 at March 31, 1994 and 1995, respectively.
ADELPHIA COMMUNICATIONS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands)
(Continued)
1. The Company and Summary of Significant Accounting Policies, continued:
Cash and Cash Equivalents
ACC considers all highly liquid investments with original maturities of
three months or less to be cash equivalents. Interest on liquid investments
was $1,076, $2,020, and $1,230 for the years ended March 31, 1993, 1994, and
1995, respectively.
Investments
The equity method of accounting is generally used to account for investments
in affiliates which are greater than 20% but not more than 50% owned. Under
this method, ACC's initial investment is recorded at cost and subsequently
adjusted for the amount of its equity in the net income or losses of its
affiliates. Dividends or other distributions are recorded as a reduction of
ACC's investment. Investments in affiliates accounted for using the equity
method generally reflect ACC's equity in their underlying assets.
Investments in entities in which ACC's ownership is less than 20% and
investments greater than 20% in which ACC does not influence the operating
or financial decisions of the entity are accounted for using the cost
method. Under the cost method, ACC's initial investment is recorded at cost
and subsequently adjusted for the amount of its equity in net income or
losses of the investee only to the extent distributed by the investee as
dividends or other distributions. Dividends received in excess of earnings
subsequent to the date the investment was made are recorded as reductions of
the cost of the investment.
The balance of ACC's investments is as follows:
March 31,
1994 1995
Investments accounted for using the equity method:
Gross investment:
Alternate access ventures............................$ 9,068 $12,840
Page Call, Inc....................................... -- 6,915
Other................................................ -- 2,847
Cumulative equity in net losses.......................... (494) (1,458)
Total.......................................... 8,574 21,144
Investments accounted for using the cost method:
Tele-Media Investment Partnership, L.P. (see Note 2)..... 13,000 --
Niagara Frontier Hockey, L.P............................. -- 15,000
Alternate access ventures................................ 1,379 2,924
Commonwealth Security, Inc............................... -- 4,200
SuperCable............................................... -- 3,000
Other.................................................... 969 2,700
Total.......................................... 15,348 27,824
Total investments........................................$23,922 $48,968
On April 12, 1994, ACC purchased (i) convertible preferred units in Niagara
Frontier Hockey, L.P., (the "Sabres Partnership") which owns the Buffalo
Sabres National Hockey League Franchise, convertible to a 34% equity
interest and (ii) warrants allowing ACC to increase its interest to 40% for
$15,000. ACC believes this investment will be competitively advantageous in
the Buffalo cable television market. The Sabres Partnership will control,
through a wholly-owned subsidiary, the Crossroads Arena, a new sports and
entertainment facility expected to be completed
ADELPHIA COMMUNICATIONS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands)
(Continued)
1. The Company and Summary of Significant Accounting Policies, continued:
in late 1996. ACC's convertible preferred units will earn a 4% cumulative
preferred return beginning after the first National Hockey League game is
played at the Crossroads Arena.
Subscriber Receivables
An allowance for doubtful accounts of $3,603 and $3,503 has been deducted
from subscriber receivables at March 31, 1994 and 1995, respectively.
Amortization of Other Assets and Debt Discounts
Deferred debt financing costs, included in prepaid expenses and other
assets, and debt discounts, a reduction of the carrying amount of the debt,
are amortized over the term of the related debt. The unamortized amounts
included in prepaid expenses and other assets were $22,328 and $23,355 at
March 31, 1994 and 1995, respectively.
Asset Impairments
In March 1995, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards ("SFAS") No. 121 "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed
of." In accordance with SFAS No. 121, ACC periodically reviews the carrying
value of its long-lived assets, identifiable intangibles and goodwill in
relation to historical financial results, current business conditions and
trends (including the impact of existing legislation and regulation) to
identify potential situations in which the carrying value of assets may not
be recoverable. If a review indicates that the carrying value of such
assets may not be recoverable, the carrying value of such assets in excess
of their fair value would be recorded as a reduction of the assets cost as
if a permanent impairment has occurred. The adoption of SFAS No. 121 did
not materially affect the financial statements of ACC.
Noncash Financing and Investing Activities
Capital leases entered into during years ended March 31, 1993 and 1994
totaled $8,742 and $7,186, respectively. There were no material capital
leases entered into during fiscal 1995. Reference is made to Notes 1, 2 and
9 for descriptions of additional non-cash financing and investing
activities.
Reclassification
Certain 1993 and 1994 amounts have been reclassified for comparability with
the 1995 presentation.
2. Related Party Investments and Receivables:
The following table summarizes the investments in and receivables from
Olympus and related parties:
March 31,
1994 1995
Investment in Olympus..................................$(75,961) $(48,688)
Amounts due from Olympus............................... 85,938 60,631
Amounts due from other related parties - net........... 26,663 49,691
$ 36,640 $ 61,634
Amounts due from other related parties - net represent advances to (from)
Managed Partnerships (see Note 9), the Rigas family (principal shareholders
and officers of ACC) and Rigas family controlled entities. No related party
advances are collateralized.
ADELPHIA COMMUNICATIONS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands)
(Continued)
2. Related Party Investments and Receivables, continued:
During the year ended March 31, 1993, concurrent with Olympus's redemption
of $6,500 in limited partner interests, ACC converted 6.5 general partner
units to PLP interests, thereby maintaining 50% of the outstanding general
partner and limited partner voting units of Olympus.
On February 28, 1995, ACP Holdings, Inc., a wholly-owned subsidiary of ACC,
and the managing general partner of Olympus, certain shareholders of ACC,
Olympus and various Telesat Entities ("Telesat"), wholly-owned subsidiaries
of FP & L Group, Inc., entered into an investment agreement whereby Telesat
contributed to Olympus substantially all of the assets associated with
certain cable television systems, serving approximately 50,000 subscribers
in southern Florida, in exchange for general and limited partner interests
and newly issued preferred limited partner interests in Olympus. Prior to
the Telesat Investment Agreement, Olympus had obligations to ACC for
intercompany advances, preferred limited partner ("PLP") interests, and
priority return on PLP interests. In conjunction with the Telesat
Investment Agreement, ACC converted a portion of the intercompany advances,
a portion of the existing PLP interests and all of the existing accrued
priority return on the PLP interests, to capital contributions. At March
31, 1993, 1994 and 1995, ACC owned $276,101, $276,101 and $225,000 in
Olympus PLP Interests, respectively.
On March 31, 1994, ACC acquired from Olympus the rights to provide alternate
access in its respective franchise areas and an investment in an
unaffiliated partnership for a purchase price of $15,500. The purchase
price of the assets resulted in a corresponding reduction of amounts due
ACC. The $15,400 excess of the purchase price over Olympus' book value has
been recorded by ACC as an additional investment in Olympus.
The major components of the financial position of Olympus as of March 31,
1994 and 1995, and December 31, 1993 and 1994, and the results of operations
for the three months ended March 31, 1994 and 1995, and the years ended
December 31, 1993 and 1994 were as follows:
<TABLE>
March 31, December 31,
1994 1995 1993 1994
(Unaudited)
<S> <C> <C> <C> <C>
Balance Sheet Data
Property, plant and equipment - net. $ 165,455 $ 181,705 $ 163,689 $ 154,298
Total assets........................ 445,623 425,813 458,663 375,985
Notes payable to banks.............. 367,100 298,309 368,000 314,010
Total liabilities................... 621,794 411,299 629,677 588,104
PLP Interests....................... 276,101 337,500 276,101 276,101
Redeemable limited partner interests 5,000 -- 5,000 5,885
General partners' equity
(deficiency)....................... (457,274) (342,991) (452,115) (494,105)
Income Statement Data
Revenues............................ $ 25,450 $ 23,920 $ 98,646 $ 94,458
Operating income.................... 3,480 3,449 17,955 10,376
Loss before cumulative effect
of change in accounting principle.. (5,751) (5,497) (11,244) (21,025)
Cumulative effect of change in
accounting for income taxes........ -- -- (59,500) --
Net loss............................ (5,751) (5,497) (70,744) (21,025)
Net loss of general partners after
priority return and accretion
requirements....................... (20,608) (22,224) (123,460) (83,833)
</TABLE>
ADELPHIA COMMUNICATIONS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands)
(Continued)
2. Related Party Investments and Receivables, continued:
The following reconciles ACC's investment in Olympus to the related equity
accounts of Olympus:
March 31,
1994 1995
Investment in Olympus joint venture partnership......$ (75,961) $ (48,688)
Accumulated unpaid priority return requirements...... (105,212) (2,997)
Other................................................ -- 12,793
Olympus' combined PLP Interests and general partners'
equity (deficiency)................................ $(181,173) $ (38,892)
Effective January 1, 1993, Olympus adopted SFAS No. 109, "Accounting for
Income Taxes" which requires an asset and liability approach for financial
accounting and reporting for income taxes. SFAS No. 109 resulted in the
cumulative recognition of an additional liability of approximately $59,500
on January 1, 1993. Olympus did not restate prior years' financial
statements to reflect the provisions of SFAS No. 109.
On October 6, 1993, ACC purchased the preferred Class B Limited Partnership
Interest in Syracuse Hilton Head Holdings, L.P. ("SHHH"), for a price of
$18,338 from Robin Media Group, an unrelated party. SHHH is a joint venture
of the Rigas Family and Tele-Communications, Inc. ("TCI") and owns systems
managed by ACC. The Class B Limited Partnership Interest has a preferred
return of 14% annually which is payable on a current basis at the option of
SHHH, and is senior in priority to the partnership interests of the Rigas
family and TCI. Priority return on the preferred Class B Limited Partner
Interest in SHHH totaled $1,213 and $2,654 and is included in revenue for
the years ended March 31, 1994 and 1995, respectively. SHHH is obligated to
redeem the Class B Limited Partnership Interest between June 11, 1996 and
December 31, 1996.
In September 1993, the Board of Directors of ACC authorized ACC to make
loans in the future to two Managed Partnerships up to an amount of $25,000
for each. During the year ended March 31, 1994, ACC made loans in the net
amount of $15,000 to SHHH, to facilitate the acquisition of cable television
systems serving Palm Beach County, Florida from unrelated parties. During
fiscal year 1995, ACC sold its investment in TMIP to SHHH for $13,000. On
January 31, 1995, a wholly owned subsidiary of ACC received a $20,000
preferred investment from SHHH to facilitate the acquisition of cable
properties from Tele-Media Company of Delaware.
ADELPHIA COMMUNICATIONS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands)
(Continued)
3. Debt:
Notes Payable of Subsidiaries to Banks and Institutions
Notes payable of subsidiaries to banks and institutions are comprised of the
following:
March 31,
1994 1995
Credit agreements with banks payable through 2003
(weighted average interest rate 6.35% and 8.16% at
March 31, 1994 and 1995, respectively)...............$ 354,375 $ 584,250
10.66% Senior Secured Notes due 1996 through 1999...... 250,000 250,000
9.95% Senior Secured Notes due through 1997............ 16,000 9,600
10.80% Senior Secured Notes due 1996 through 2000. ..... 45,000 45,000
10.50% Senior Secured Notes due 1997 through 2001. ..... 16,000 16,000
9.73% Senior Secured Notes due 1998 through 2001.. ..... 37,500 37,500
10.25% Senior Subordinated Notes due 1996 through 1998. 80,000 72,000
11.85% Senior Subordinated Notes due 1998 through 2000. 60,000 60,000
11.13% Senior Subordinated Notes due 1999 through 2002. 12,000 12,000
$ 870,875 $1,086,350
The amount of borrowings available to ACC under its revolving credit
agreements is generally based upon the subsidiaries achieving certain levels
of operating performance. ACC had commitments from banks for additional
borrowings of up to $117,000 at March 31, 1995, which expire through 2003.
At the expiration of the commitments, all outstanding borrowings are
convertible into term loans. ACC pays commitment fees of up to .5% of
unused principal.
Borrowings under most of these credit arrangements of subsidiaries are
collateralized by a pledge of the stock in their respective subsidiaries,
and, in some cases, by assets. These agreements stipulate, among other
things, limitations on additional borrowings, investments, transactions with
affiliates and other subsidiaries, and the payment of dividends and fees by
the subsidiaries. They also require maintenance of certain financial ratios
by the subsidiaries. Several of the subsidiaries' agreements, along with
the notes of the parent company, contain cross default provisions. At March
31, 1995, approximately $141,000 of the net assets of subsidiaries would be
permitted to be transferred to the parent company in the form of dividends,
priority return and loans without the prior approval of the lenders based
upon the results of operations of such subsidiaries for the quarter ended
March 31, 1995. The subsidiaries are permitted to pay fees to the parent
company or other subsidiaries. Such fees are limited to a percentage of the
subsidiaries' revenues.
Bank debt interest rates are based upon one or more of the following rates
at the option of ACC: prime rate plus 0% to 1.5%; certificate of deposit
rate plus 1.25% to 2.75%; or LIBOR rate plus 1% to 2.5%. At March 31, 1994
and 1995, the weighted average interest rate on notes payable to banks and
institutions was 8.91% and 9.33%, respectively. The rates on 55% of ACC's
notes payable to banks and institutions were fixed for at least one year
through the terms of the notes or interest rate swap agreements.
On March 15, 1995, certain subsidiaries of the Company (collectively, the
"Borrowers") entered into a $200,000 revolving credit facility, maturing
September 30, 2003. Interest rates charged are based upon one or more of
the following rates
ADELPHIA COMMUNICATIONS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands)
(Continued)
3. Debt, continued:
at the option of the Borrowers: the greater of the prime rate or the Federal
funds rate plus 0% to .875%, certificate of deposit rate plus 1.125% to
2.125%, or LIBOR plus .875% to 1.875%. Interest on outstanding borrowings
is generally payable on
a quarterly basis. Initial borrowings under the revolving credit facility
were used to repay existing indebtedness of the Borrowers. The Borrowers
pay a commitment fee of .375% of unused commitments during the term of the
agreement. The maximum available under this credit facility is reduced on
June 30, 1997 by the lesser of $25,000 or 50% of the unused and available
commitment. Thereafter, the credit facility provides for mandatory
reductions in the revolving loan commitment, in increasing quarterly
amounts, commencing June 30, 1997 through September 30, 1997.
ACC has entered into fixed and floating interest rate swap agreements with
banks, Olympus and the Managed Partnerships (see Note 9) to mitigate its
exposure to interest rate fluctuations by attempting to achieve an
appropriate balance between its fixed and variable rate debt. At March 31,
1995, ACC had an aggregate notional principal amount of $802,000 outstanding
under such agreements, which expire from 1996 through 2000. These
agreements provide for a weighted average interest rate of 7.88% at March
31, 1995. ACC is exposed to credit loss in the event of nonperformance by
the counterparties, although it does not expect any such nonperformance.
Net settlement amounts under these swap agreements are recorded as
adjustments to interest expense during the period incurred.
12 1/2% Senior Notes due 2002
On May 14, 1992, ACC issued at face value to the public $400,000 aggregate
principal amount of unsecured 12 1/2% Senior Notes due May 15, 2002.
Interest is due on the notes semi-annually. The notes, which are
effectively subordinated to all liabilities of the subsidiaries, contain
restrictions on, among other things, the incurrence of indebtedness, mergers
and sale of assets, certain restricted payments by ACC, investments in
affiliates and certain other affiliate transactions. The notes further
require that ACC maintain a debt to annualized operating cash flow ratio of
not greater than 8.75 to 1.00, based on the latest fiscal quarter, exclusive
of the incurrence of $50,000 in additional indebtedness which is not subject
to the required ratio. ACC may redeem the notes in whole or in part on or
after May 15, 1997, at 106% of principal, declining to 100% of principal on
or after May 15, 1999.
10 1/4% Senior Notes due 2000
On July 28, 1993, ACC issued $110,000 aggregate principal amount of
unsecured 10 1/4% Senior Notes due July 2000. Interest is due on the notes
semi-annually. The notes which are effectively subordinated to all
liabilities of the subsidiaries, contain restrictions and covenants similar
to the restrictions on the 12 1/2% Senior Notes. The notes are not callable
prior to the maturity date of July 15, 2000. During fiscal 1995 $10,000 of
notes were retired through open market purchases.
16 1/2% Senior Discount Notes due 1999
On July 1, 1992, ACC redeemed all of the 16 1/2% Senior Discount Notes, at
104% of principal. The $10,000 redemption premium together with $4,386 in
unamortized deferred financing costs comprise the extraordinary loss on
early retirement of debt recognized on ACC's consolidated financial
statements for the year ended March 31, 1993.
ADELPHIA COMMUNICATIONS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands)
(Continued)
3. Debt, continued:
11 7/8% Senior Debentures due 2004
On September 10, 1992, ACC issued to the public $125,000 aggregate principal
amount of unsecured 11 7/8% Senior Debentures due September 2004. Interest
is due on the
debentures semi-annually. The debentures, which are effectively
subordinated to all liabilities of the subsidiaries, contain restrictions
and covenants similar to the restrictions on the 12 1/2% Senior Notes. ACC
may redeem the debentures in whole
or in part on or after September 15, 1999, at 104.5% of principal, declining
to 100% of principal on or after September 15, 2002.
9 7/8% Senior Debentures due 2005
On March 11, 1993, ACC issued 9 7/8% Senior Debentures due March 2005 in the
aggregate principal amount of $130,000. Interest on the debentures is
payable semi-annually. The debentures, which are effectively subordinated
to all liabilities of the subsidiaries, contain restrictions and covenants
similar to the restrictions on
the 12 1/2% Senior Notes. The debentures are not redeemable prior to the
maturity date of March 1, 2005.
9 1/2% Senior Pay-In-Kind Notes due 2004
On February 15, 1994, ACC issued $150,000 aggregate principal amount of
unsecured 9 1/2% Senior Pay-In-Kind Notes due February 2004. On or prior to
February 1999, all interest on the notes, which is due semi-annually, may at
the option of ACC be paid in cash or through the issuance of additional
notes valued at 100% of their principal amount. The notes will bear cash
interest from February 1999 through maturity. The notes which are
effectively subordinate to all liabilities of the subsidiaries contain
restrictions and covenants similar to the 12 1/2% Senior Notes. ACC may
redeem the notes in whole or in part on or after February 15, 1999, at
103.56% of principal, declining to 100% of principal on or after February
15, 2002.
13% Senior Subordinated Notes due 1996
On February 14, 1994, ACC redeemed all of the 13% Senior Subordinated Notes
for 100% of the $100,000 aggregate principal amount.
Maturities of Debt
Maturities of debt for the five years after March 31, 1995 are as follows:
1996...................................................... $ 114,921
1997...................................................... 216,099
1998...................................................... 274,701
1999...................................................... 264,427
2000...................................................... 113,014
Management intends to fund its requirements for maturities of debt through
borrowings under new and existing credit arrangements and internally
generated funds. Changing conditions in the financial markets may have an
impact on how ACC will refinance its debt in the future.
ADELPHIA COMMUNICATIONS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands)
(Continued)
4. Commitments and Contingencies:
ACC rents office and studio space, tower sites, and space on utility poles
under
leases with terms which are generally less than one year or under agreements
that are generally cancelable on short notice. Total rental expense under
all operating
leases aggregated $4,090, $3,988 and $4,356 for the years ended March 31,
1993, 1994 and 1995, respectively.
In connection with certain obligations under franchise agreements, ACC
obtains surety bonds guaranteeing performance to municipalities and public
utilities. Payment is required only in the event of nonperformance. ACC
has fulfilled all of its obligations such that no payments under surety
bonds have been required.
As of July 1, 1993, ACC adopted a program to self insure for casualty and
business interruption insurance. This program is part of an agreement
between ACC and each of its subsidiaries in which ACC will provide insurance
for casualty and business
interruption claims of up to $10,000 and $20,000 per claim, respectively,
for each subsidiary of ACC. These risks were previously insured by outside
parties with nominal deductible amounts.
ACC's cable television operations may be adversely affected by changes and
developments in governmental regulation, competitive forces and technology.
The cable television industry and ACC are subject to extensive regulation at
the federal, state and local levels. Many aspects of such regulation are
currently the subject of judicial proceedings and administrative or
legislative proceedings or proposals. On October 5, 1992, Congress passed
the 1992 Cable Act, which significantly expands the scope of regulation of
certain subscriber rates and a number of other matters in the cable
industry, such as mandatory carriage of local broadcast stations and
retransmission consent, and which will increase the administrative costs of
complying with such regulations. The FCC has adopted rate regulations that
establish, on a system-by-system basis, maximum allowable rates for (i)
basic and cable programming services (other than programming offered on a
per-channel or per-program basis), based upon a benchmark methodology, and
(ii) associated equipment and installation services based upon cost plus a
reasonable profit. Under the FCC rules, franchising authorities are
authorized to regulate rates for basic services and associated equipment and
installation services, and the FCC will regulate rates for regulated cable
programming services in response to complaints filed with the agency. The
original rate regulations became effective on September 1, 1993. Amendments
to the rate regulations became effective May 15, 1994. Further amendments
were adopted on November 10, 1994. The FCC ordered an interim rate freeze
effective April 5, 1993 which was extended through May 15, 1994.
The FCC had adopted regulations implementing virtually all of the
requirements of the 1992 Cable Act. The FCC is also likely to continue to
modify, clarify or refine the rate regulations. In addition, litigation has
been instituted challenging various portions of the 1992 Cable Act and the
rulemaking proceedings including the
rate regulations. ACC cannot predict the effect or outcome of the future
rulemaking proceedings, changes to the rate regulations, or litigation.
Further, because the FCC has only issued its interim rules and has not
adopted final cost-of-service rules, ACC has not determined to what extent
it will be able to utilize cost-of-service showings to justify rates.
Effective September 1, 1993, as a result of the 1992 Cable Act, ACC
repackaged certain existing cable services by adjusting rates for basic
service and introducing a new method of offering certain cable services.
ACC adjusted the basic service rates and related equipment and installation
rates in all of its systems in order for such rates to be in compliance with
the applicable benchmark or equipment and installation cost levels. The
amended rules may require further adjustments to ACC's rates. ACC also
implemented a program in all of its systems called
ADELPHIA COMMUNICATIONS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands)
(Continued)
4. Commitments and Contingencies, continued:
"CableSelect" under which most of ACC's satellite-delivered programming
services are now offered individually on a per channel basis, or as a group
at a price of approximately 15% to 20% below the sum of the per channel
prices of all such services. For subscribers who elect to customize their
channel lineup, ACC will provide, for a monthly rental fee, an electronic
device located on the cable line outside the home, enabling a subscriber's
television to receive only those channels selected by the subscriber. These
basic service rate adjustments and the CableSelect program have also been
implemented in all systems managed by ACC. ACC believes CableSelect
provides increased programming choices to its subscribers while providing
flexibility to ACC to respond to future changes in areas such as customer
demand and programming.
On November 10, 1994 the FCC ruled that, prospectively, any "a la carte"
package will be treated as a regulated tier, except for packages involving
premium services. ACC is currently unable to predict the effect that the
amended regulations, future FCC treatment of "a la carte" packages or other
future FCC rulemaking proceedings will have on its business and results of
operations in future periods. No assurance can be given at this time that
such matters will not have a material negative
financial impact on ACC's business and results of operations in the future.
Also,
no assurance can be given as to what other future actions Congress, the FCC
or other regulatory authorities may take or the effects thereof on ACC.
A letter of inquiry, one of at least 63 sent by the FCC to numerous cable
operators, was received by ACC regarding the implementation of this new
method of offering services. ACC responded in writing to the FCC's inquiry.
On November 18, 1994, the Cable Services Bureau of the FCC issued a decision
holding that the "CableSelect" program was an evasion of the rate
regulations and ordered this package to be treated as a regulated tier.
This decision, and all other letters of inquiry decisions, were principally
decided on the number of programming services moved from regulated tiers to
"a la carte" packages. ACC has appealed this decision to the full
Commission. ACC cannot predict the outcome or effect of this proceeding.
5. Stockholders' Equity (Deficiency):
ACC has no convertible securities or other common stock equivalent
securities outstanding.
Public Offering of Class A Common Stock on May 14, 1992
On May 14, 1992, ACC sold to the public 1,500,000 shares of Class A Common
Stock for $15.00 per share. The net proceeds of the sale, after offering
costs, aggregated $21,725.
Public Offering of Class A Common Stock on January 14, 1994
On January 14, 1994, ACC sold 9,132,604 shares of Class A Common Stock. Of
the 9,132,604 shares, 3,300,000 shares were sold to the public at $18.00 per
share, with an underwriting discount of $.855 per share. Partnerships
controlled by the family
of John J. Rigas, President and Chief Executive Officer of ACC, purchased
the other 5,832,604 shares at the public offering price less the
underwriting discount. Net proceeds to ACC after offering expenses
aggregated $155,963.
Stock Issued During Fiscal 1995
On January 10, 1995, ACC issued 399,087 shares of Class A Common Stock in
connection with the acquisition of Oxford (see Note 1). On February 28,
1995, 1,000,000 shares of Class A Common Stock were sold to FP & L Group,
Inc. for $15.00 per share.
ADELPHIA COMMUNICATIONS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands)
(Continued)
5. Stockholders' Equity (Deficiency), continued:
Preferred Stock
The Certificate of Incorporation of ACC authorizes 5,000,000 shares of
Preferred Stock, $.01 par value. None have been issued.
Common Stock
The Certificate of Incorporation of ACC authorizes two classes of common
stock, Class A and Class B. Holders of Class A Common Stock and Class B
Common Stock vote as a single class on all matters submitted to a vote of
the stockholders, with each
share of Class A Common Stock entitled to one vote and each share of Class B
Common Stock entitled to ten votes, except (i) for the election of directors
and (ii) as otherwise provided by law. In the annual election of directors,
the holders of Class A Common Stock voting as a separate class, are entitled
to elect one of ACC's directors. In addition, each share of Class B Common
Stock is automatically convertible into a share of Class A Common Stock upon
transfer, subject to certain
limited exceptions. In the event a cash dividend is paid, the holders of
Class A Common Stock will be paid 105% of the amount payable per share for
each share of Class B Common Stock.
Upon liquidation, dissolution or winding up of ACC, the holders of Class A
Common Stock are entitled to a preference of $1.00 per share. After such
amount is paid, holders of Class B Common Stock are entitled to receive
$1.00 per share. Any remaining amount would then be shared ratably by both
classes.
Restricted Stock Bonus Plan
ACC has reserved 500,000 shares of Class A Common Stock for issuance to
officers and other key employees at the discretion of the Compensation
Committee of the Board of Directors. The bonus shares will be awarded
without any cash payment by the recipient unless otherwise determined by the
Compensation Committee. Shares awarded under the plan vest over a five year
period. No awards have been made under the plan.
Stock Option Plan
ACC has a stock option plan, which provides for the granting of options to
purchase up to 200,000 shares of ACC's Class A Common Stock to officers and
other key employees of the Company and its subsidiaries. Options may be
granted at an exercise price equal to the fair market value of the shares on
the date of grant. The plan permits the granting of tax-qualified incentive
stock options, in addition to non-qualified stock options. Options
outstanding under the plan may be exercised by paying the exercise price per
share through various alternative settlement methods. No stock options have
been granted under the plan.
6. Employee Benefit Plans:
ACC has a savings plan (401(k)) which provides that eligible full-time
employees may contribute from 2% to 20% of their pre-tax compensation. ACC
makes matching contributions not exceeding 1.5% of each participant's pre-
tax compensation. ACC's matching contributions amounted to $241, $305 and
$343 for the years ended March 31, 1993, 1994 and 1995, respectively.
ADELPHIA COMMUNICATIONS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands)
(Continued)
7. Taxes on Income:
ACC and its corporate subsidiaries file a consolidated federal income tax
return, which includes its share of the subsidiary partnerships and joint
venture partnership results. At March 31, 1995, ACC had net operating loss
carryforwards for federal income tax purposes of approximately $1,000,000
expiring through 2010. Depreciation and amortization expense differs for
tax and financial statement purposes due to the use of prescribed periods
rather than useful lives for tax purposes and also as a result of
differences between tax basis and book basis of certain acquisitions.
ACC adopted SFAS No. 109, "Accounting for Income Taxes," effective April 1,
1993. Under SFAS No. 109, deferred tax assets and liabilities are
recognized for differences between the financial statement amounts of assets
and liabilities and their respective tax bases. The cumulative effect of
adopting SFAS No. 109 at April 1, 1993 was to increase the net loss by
$89,660 for the year ended March 31, 1994. The effect of adopting SFAS No.
109 on loss before extraordinary loss and cumulative effect of a change in
accounting principle was not significant for the year ended March 31, 1994.
As a result of applying SFAS No. 109, $110,498 of previously unrecorded
deferred tax benefits from operating loss carryforwards incurred by ACC were
recognized at April 1, 1993 as part of the cumulative effect of adopting the
statement. Under prior accounting, a portion of these benefits would have
been recognized as a reduction of income tax expense from continuing
operations in the year ended March 31, 1994.
The tax effects of significant items comprising ACC's net deferred tax
liability are as follows:
<TABLE>
April 1, March 31,
1993 1994 1995
<S> <C> <C> <C>
Deferred tax liabilities:
Differences between book and tax basis of
property, plant and equipment and intangible
assets........................................ $ 192,444 $ 210,816 $ 232,639
Other.......................................... 8,401 9,703 11,783
Total................................ 200,845 220,519 244,422
Deferred tax assets:
Reserves not currently deductible.............. 687 15,576 12,326
Operating loss carryforwards................... 307,001 337,924 381,377
307,688 353,500 393,703
Valuation allowance............................ (196,503) (224,702) (259,420)
Total................................ 111,185 128,798 134,283
Net deferred tax liability..................... $ 89,660 $ 91,721 $ 110,139
</TABLE>
The net change in the valuation allowance for the years ended March 31, 1994
and 1995 was an increase of $28,199 and $34,718, respectively.
ADELPHIA COMMUNICATIONS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands)
(Continued)
7. Taxes on Income, continued:
Income tax (expense) benefit for the years ended March 31, 1993, 1994 and
1995 is as follows:
March 31,
1993 1994 1995
Current............................. $ (3,143) $ (681) $ (500)
Deferred............................. -- (2,061) 5,975
Total................................$ (3,143) $ (2,742) $ 5,475
A reconciliation of the statutory federal income tax rate and ACC's
effective income tax rate is as follows:
March 31,
1994 1995
Statutory federal income tax rate......... 35.0% 35.0%
Change in valuation allowance............. (29.8) (31.1)
State taxes, net of federal benefit....... (2.4) 3.7
Other..................................... (5.7) (2.7)
Income tax (expense) benefit.............. (2.9%) 4.9%
8. Disclosures about Fair Value of Financial Instruments:
Included in ACC's financial instrument portfolio are cash, notes payable,
debentures and interest rate swaps. The carrying values of notes payable
approximate their fair values at March 31, 1995. The fair value of the
debentures totaled $938,589 at March 31, 1994, which exceeded the carrying
value by approximately $27,500. The fair market value of debentures at
March 31, 1995 totaled $820,378 which exceeded the carrying value by
$95,468. At March 31, 1995, ACC would have been required to pay
approximately $6,929 to settle its interest rate swap agreements,
representing the excess carrying cost over fair value of these agreements.
The fair values of the debt and interest rate swaps were based upon quoted
market prices of similar instruments or on rates available to ACC for
instruments of the same remaining maturities.
9. Related Party Transactions:
ACC currently manages cable television systems which are principally owned
by Olympus and limited partnerships of which certain of ACC's principal
shareholders who are executive officers have equity interests (the "Managed
Partnerships").
ACC has agreements with Olympus and the Managed Partnerships which provide
for the payment of fees to ACC. The aggregate fee revenues from Olympus and
the Managed Partnerships amounted to $4,659, $2,946 and $7,293 for the years
ended March 31, 1993, 1994 and 1995, respectively. In addition, ACC was
reimbursed by Olympus and Managed Partnerships for allocated corporate costs
of $4,521, $4,021 and $4,521 for the years ended March 31, 1993, 1994 and
1995, respectively, which have been recorded as a reduction of selling,
general and administrative expense.
ACC leases from a partnership and a corporation owned by principal
shareholders who are executive officers support equipment under agreements
which have been accounted for as capital leases. These obligations, which
are included in other debt, amounted to $1,415 and $933 at March 31, 1994
and 1995, respectively. ACC also leases from this partnership certain
buildings under operating leases. Rent expense under these operating leases
aggregated $715, $391 and $97 for the years ended March 31, 1993, 1994 and
1995, respectively.
ADELPHIA COMMUNICATIONS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands)
(Continued)
9. Related Party Transactions, continued:
Net settlement amounts under interest rate swap agreements with Olympus and
the Managed Partnerships recorded as adjustments to interest expense during
the period incurred, decreased ACC's interest expense by $1,698, $1,920 and
$173 for the years ended March 31, 1993, 1994 and 1995, respectively.
On March 31, 1994, ACC acquired from certain Managed Partnerships the rights
to provide alternate access in their respective franchise areas for a
purchase price of $14,000. Additionally, on March 31, 1994, ACC purchased
real property from certain partnerships owned by principal shareholders who
are certain executive officers for a total of $14,312. The purchase of the
assets resulted in a reduction of amounts due ACC of $28,312. Since these
asset purchases are transactions among entities under common control, they
have been recorded by ACC based upon the predecessor owners' book value.
The $17,553 excess of the purchase price of these assets over the
predecessor owners' book value has been recorded as a direct charge to ACC's
additional paid-in capital.
10. Quarterly Financial Data (Unaudited):
The following tables summarize the financial results of ACC for each of the
quarters in the years ended March 31, 1994 and 1995:
<TABLE>
Three Months Ended,
June 30 Sept. 30 Dec. 31 March 31
<S> <C> <C> <C> <C>
Year Ended March 31, 1994:
Revenues..................... $ 79,658 $ 79,388 $ 79,945 $ 80,054
Operating expenses:
Direct operating and
programming................ 22,332 22,363 22,675 23,177
Selling, general and
administrative............. 12,817 12,577 12,758 14,649
Depreciation and
amortization............... 21,695 23,621 22,200 21,886
Total........................ 56,844 58,561 57,633 59,712
Operating income............. 22,814 20,827 22,312 20,342
Other income (expense):
Interest income from
affiliates................. 1,435 1,629 1,565 4,559
Other income (expense)...... -- 283 287 (869)
Priority investment income.. 5,575 5,575 5,575 5,575
Interest expense............ (44,035) (46,096) (46,626) (45,379)
Equity in loss of
joint ventures............. (9,947) (5,374) (8,087) (6,646)
Total........................ (46,972) (43,983) (47,286) (42,760)
Loss before income taxes,
extraordinary loss and
cumulative effect of change
in accounting principle..... (24,158) (23,156) (24,974) (22,418)
Income tax expense........... (1,130) (660) (811) (141)
ADELPHIA COMMUNICATIONS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands)
(Continued)
10. Quarterly Financial Data (Unaudited), continued:
Three Months Ended,
June 30 Sept. 30 Dec. 31 March 31
Year Ended March 31, 1994:
Loss before extraordinary loss
and cumulative effect
of change in accounting
principle................... (25,288) (23,816) (25,785) (22,559)
Extraordinary loss on early
retirement of debt.......... -- -- -- (752)
Cumulative effect of change
in accounting for income
taxes....................... (89,660) -- -- --
Net loss..................... $ (114,948) $ (23,816) $ (25,785) $ (23,311)
Loss per weighted average
share of common stock before
extraordinary loss and
cumulative effect of change
in accounting principle..... $ (1.65) $ (1.55) $ (1.68) $ (.98)
Extraordinary loss per weighted
average share on early
retirement of debt.......... -- -- -- (.03)
Cumulative effect per weighted
average share of change
in accounting for income
taxes....................... (5.85) -- -- --
Net loss per weighted average
share of common stock....... $ (7.50) $ (1.55) $ (1.68) $ (1.01)
Weighted average shares of
common stock outstanding.... 15,319,476 15,319,476 15,319,476 23,031,453
Year Ended March 31, 1995:
Revenues..................... $ 84,020 $ 90,795 $ 92,737 $ 93,953
Operating expenses:
Direct operating and
programming................ 24,896 26,632 27,644 27,821
Selling, general and
administrative............. 14,693 15,117 16,409 17,268
Depreciation and
amortization............... 21,489 25,267 26,043 24,803
Total........................ 61,078 67,016 70,096 69,892
Operating income............. 22,942 23,779 22,641 24,061
ADELPHIA COMMUNICATIONS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands)
(Continued)
10. Quarterly Financial Data (Unaudited), continued:
Three Months Ended,
June 30 Sept. 30 Dec. 31 March 31
Year Ended March 31, 1995:
Other income (expense):
Interest income from
affiliates................. 2,369 2,386 2,912 3,445
Other income................ 593 270 76 514
Priority investment income.. 5,575 5,575 5,575 5,575
Interest expense............ (46,913) (48,412) (49,668) (50,705)
Equity in loss of
joint ventures............. (12,634) (8,984) (8,744) (13,987)
Total........................ (51,010) (49,165) (49,849) (55,158)
Loss before income taxes..... (28,068) (25,386) (27,208) (31,097)
Income tax benefit (expense). (1,223) 1,119 (1,214) 6,793
Net loss..................... $ (29,291) $ (24,267) $ (28,422) $ (24,304)
Net loss per weighted average
share of common stock....... $ (1.20) $ (.99) $ (1.16) $ (.97)
Weighted average shares of
common stock outstanding.... 24,452,080 24,452,080 24,452,080 25,174,845
</TABLE>
11. Subsequent Events
On June 12, 1995, ACC announced the signing of definitive agreements for the
purchase of all of the cable systems of Eastern Telecom Corporation,
Robinson Cable TV, Inc. and First Carolina Cable TV, L.P. These systems
together serve approximately 58,000 subscribers and are being purchased for
an aggregate price of $92,000. The acquisitions, which will be accounted
for under the purchase method of accounting, are expected to close in the
third quarter of fiscal 1996.
On June 28, 1995, Adelphia and other relevant parties terminated their
previously announced November 1994 letter of intent to increase by $63,000
to $75,000 the overall investment of Adelphia and the companies it manages
(the "Adelphia Group") in cable systems held by Tele-Media Investment
Partnership, L.P. and certain other Tele-Media controlled entities
(collectively, "Tele-Media"). The Adelphia Group will continue to hold its
existing investments in and recent acquisitions of Tele-Media cable systems.
INDEPENDENT AUDITORS' REPORT
Olympus Communications, L.P.:
We have audited the accompanying consolidated balance sheets of Olympus
Communications, L.P. and subsidiaries as of December 31, 1993 and 1994, and
the related consolidated statements of operations, general partner's equity
(deficiency), and cash flows for each of the three years in the period ended
December 31, 1994. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, such consolidated financial statements present fairly, in
all material respects, the financial position of Olympus Communications,
L.P. and subsidiaries at December 31, 1993 and 1994, and the results of
their operations and their cash flows for each of the three years in the
period ended December 31, 1994, in conformity with generally accepted
accounting principles.
As discussed in Note 9 to the consolidated financial statements, effective
January 1, 1993, the Partnership changed its method of accounting for income
taxes.
DELOITTE & TOUCHE LLP
Pittsburgh, Pennsylvania
April 13, 1995 (June 8, 1995 as
to Notes 4 and 12)
<TABLE>
OLYMPUS COMMUNICATIONS, L.P. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
December 31,
1993 1994
<S> <C> <C>
ASSETS:
Cable television systems, at cost, net of accumulated
depreciation and amortization:
Property, plant and equipment - net...................... $ 163,689 $ 154,298
Intangible assets - net.................................. 273,489 210,928
Total............................................ 437,178 365,226
Cash and cash equivalents.................................. 11,371 425
Subscriber receivables - net............................... 6,294 5,419
Prepaid expenses and other assets - net.................... 3,820 3,784
Investment in Northeast Cable, Inc......................... -- 1,131
Total............................................ $ 458,663 $ 375,985
LIABILITIES AND PARTNERS' EQUITY (DEFICIENCY):
Notes payable to banks..................................... $ 368,000 $ 314,010
Other debt................................................. 263 59
Accounts payable........................................... 6,236 9,984
Subscriber advance payments and deposits................... 3,251 2,717
Accrued interest and other liabilities..................... 7,907 10,219
Accrued priority return on redeemable preferred limited
partner interests......................................... 95,930 135,553
Deferred business interruption proceeds.................... 1,037 --
Due to affiliates - net.................................... 87,553 75,861
Deferred income taxes...................................... 59,500 39,701
Total............................................ 629,677 588,104
Commitments and contingencies (Note 7)
16.5% redeemable preferred limited partner interests....... 276,101 276,101
Redeemable limited partner interests....................... 5,000 5,885
General partner's equity (deficiency)...................... (452,115) (494,105)
Total............................................ $ 458,663 $ 375,985
</TABLE>
See notes to consolidated financial statements.
OLYMPUS COMMUNICATIONS, L.P. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands)
<TABLE>
Year Ended December 31,
1992 1993 1994
<S> <C> <C> <C>
Revenues......................................... $ 86,255 $ 89,099 $ 93,421
Business interruption revenue.................... 7,146 9,547 1,037
Total.................................. 93,401 98,646 94,458
Operating expenses:
Direct operating and programming................ 22,473 22,078 22,369
Selling, general and administrative............. 18,817 16,692 18,708
Depreciation and amortization................... 39,407 37,240 36,703
Management fees to Managing Affiliate........... 4,831 4,681 6,302
Total.................................. 85,528 80,691 84,082
Operating income................................. 7,873 17,955 10,376
Interest expense................................. (25,775) (24,515) (22,889)
Interest expense - affiliates.................... (4,497) (4,955) (9,373)
Priority return to an affiliate.................. 5,247 -- --
Other income..................................... 535 271 585
Loss before income tax benefit and cumulative
effect of change in accounting principle........ (16,617) (11,244) (21,301)
Income tax benefit............................... -- -- 276
Loss before cumulative effect of change in
accounting principle............................ (16,617) (11,244) (21,025)
Cumulative effect of change in accounting
for income taxes................................ -- (59,500) --
Net loss............................... (16,617) (70,744) (21,025)
Priority return on redeemable preferred
limited partner interests....................... (52,135) (57,436) (61,923)
Net loss allocated to redeemable limited
partners........................................ 8,309 9,720 5,000
Accretion requirements of redeemable
limited partners................................ (12,924) (5,000) (5,885)
Net loss of general partner after
priority return and accretion
requirements.................................... $ (73,367) $(123,460) $(83,833)
Net loss per general partner unit
after priority return and
accretion requirements.......................... $ (4,446) $ (12,346) $ (8,383)
</TABLE>
See notes to consolidated financial statements.
<TABLE>
OLYMPUS COMMUNICATIONS, L.P. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF GENERAL PARTNER'S EQUITY (DEFICIENCY)
(Dollars in thousands)
<S> <C>
General
Partner
Balance, December 31, 1991............................................$(248,688)
Net loss of general partner after priority return and accretion
requirements......................................................... (73,367)
Balance, December 31, 1992............................................ (322,055)
Conversion of general partnership interests to preferred limited
partnership interests................................................ (6,500)
Net loss of general partner after priority return and accretion
requirements......................................................... (123,460)
Capital distribution.................................................. (100)
Balance, December 31, 1993............................................ (452,115)
Excess of sale price over carrying value of subsidiary sold to
affiliate............................................................ 26,548
Proceeds from sale of alternate access rights to affiliate............ 13,000
Excess of sale price over carrying value of investment sold
to affiliate......................................................... 2,395
Net loss of general partner after priority return and accretion
requirements......................................................... (83,833)
Capital distribution.................................................. (100)
Balance, December 31, 1994............................................$(494,105)
</TABLE>
See notes to consolidated financial statements.
<TABLE>
OLYMPUS COMMUNICATIONS, L.P. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
Year Ended
December 31,
1992 1993 1994
<S> <C> <C> <C>
Cash flows from operating activities:
Net loss.......................................... $(16,617) $(70,744) $(21,025)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation.................................... 16,907 17,229 19,132
Amortization.................................... 22,500 20,011 17,571
Gain on property damage related to hurricane.... (535) -- --
Cumulative effect of change in accounting
for income taxes............................... -- 59,500 --
Costs associated with debt financing............ (969) -- --
Changes in operating assets and liabilities, net
of effects of acquisitions and divestitures:
Subscriber receivables - net.................. 498 (890) 398
Prepaid expenses and other assets - net....... (58) (251) (2,722)
Accounts payable.............................. (13) (1,585) 4,590
Subscriber advance payments and deposits...... (59) (884) 368
Accrued interest and other liabilities........ (10,245) (494) 3,333
Deferred business interruption proceeds......... 6,279 (5,240) (1,037)
Deferred taxes.................................. -- -- (323)
Net cash provided by operating activities.......... 17,688 16,652 20,285
Cash flows from investment activities:
Expenditures for property, plant and equipment.... (26,827) (23,164) (23,916)
Insurance proceeds for property damage related
to hurricane..................................... 6,800 -- --
Proceeds from sale of subsidiary to affiliate..... -- -- 27,818
Proceeds from sale of investment to affiliate..... -- -- 2,500
Proceeds from sale of alternate access rights
to affiliate..................................... -- -- 13,000
Proceeds from repayment of note receivable from
affiliated partnership........................... 10,157 -- --
Purchase of limited partner equity interests...... -- (9,795) --
Net cash (used for) provided by investment
activities........................................ (9,870) (32,959) 19,402
Cash flows from financing activities:
Proceeds from debt................................ 59,956 13,000 --
Repayments of debt................................ (90,314) (7,165) (11,871)
Payments of priority return....................... (22,300) (22,300) (22,300)
Amounts advanced from (to) affiliates............. 48,119 37,193 (16,362)
Capital distribution.............................. -- (100) (100)
Net cash (used for) provided by financing
activities........................................ (4,539) 20,628 (50,633)
Increase (decrease) in cash and cash equivalents... 3,279 4,321 (10,946)
Cash and cash equivalents, beginning of year....... 3,771 7,050 11,371
Cash and cash equivalents, end of year............. $ 7,050 $ 11,371 $ 425
Supplemental disclosure of cash flow activity -
Cash payments for interest........................ $ 32,387 $ 30,117 $ 31,377
</TABLE>
See notes to consolidated financial statements.
OLYMPUS COMMUNICATIONS, L.P. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands)
1. The Partnership and Basis of Presentation:
Olympus Communications, L.P. and Subsidiaries ("Olympus") is a joint venture
limited partnership formed under the laws of Delaware with 50% of the
outstanding voting interests controlled by Adelphia Communications
Corporation ("ACC"). Olympus' operations consist primarily of selling
video programming which is distributed to subscribers for a monthly fee
through a network of fiber optic and coaxial cables.
The consolidated financial statements include the accounts of Olympus and
its subsidiaries. All significant intercompany accounts and transactions
have been eliminated.
On June 30, 1994, ACC acquired from Olympus 85% of the common stock of
Northeast Cable, Inc. ("Northeast") for a purchase price of $31,875.
Northeast owns cable television systems serving approximately 36,500
subscribers in eastern Pennsylvania. Of the purchase price, $16,000 was
paid in cash and the remainder resulted in a decrease in Olympus' existing
amount payable to ACC. The consolidated statements of operations and cash
flows for Olympus include the operations of Northeast for the six months
ended June 30, 1994.
On February 28, 1995, Olympus entered into a Liquidation Agreement with the
Gans Family ("Gans"), an Olympus limited partner. Under this Liquidation
Agreement, Gans agreed to exchange their redeemable limited partner
interests in Olympus for the remaining 15% of the common stock of Northeast
held by Olympus. Concurrently with the closing of the Liquidation
Agreement, ACP Holdings, Inc., a wholly owned subsidiary of ACC and managing
general partner of Olympus, certain shareholders of ACC, Olympus and various
Telesat Entities ("Telesat"), wholly-owned subsidiaries of FP&L Group, Inc.,
entered into an investment agreement whereby Telesat contributed to Olympus
substantially all of the assets associated with certain cable television
systems, serving approximately 50,000 subscribers in southern Florida, in
exchange for general and limited partner interests and newly issued
preferred limited partner interests in Olympus (see Note 12).
The following unaudited pro forma consolidated statement of operations has
been prepared assuming that the sale of the Northeast cable system had
occurred on January 1, 1994. The effects of the sale of Northeast on the
consolidated balance sheet are included in the accompanying consolidated
balance sheet as of December 31, 1994. The pro forma data are not
necessarily indicative of the results that actually would have occurred if
Northeast had been sold on January 1, 1994, or what may be achieved in the
future.
OLYMPUS COMMUNICATIONS, L.P. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands)
1. The Partnership and Basis of Presentation, continued:
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
Year Ended December 31, 1994
(Dollars in thousands)
(UNAUDITED)
<TABLE>
As Pro Forma Pro Forma
Reported Adjustments (Unaudited)
<S> <C> <C> <C>
Revenues................................. $ 94,458 $ (5,831)(a) $ 88,627
Operating expenses:
Direct operating and programming....... 22,369 (1,729)(a) 20,640
Selling, general and administrative.... 18,708 (372)(a) 18,336
Depreciation and amortization.......... 36,703 (2,393)(a) 34,310
Management fees to Managing Affiliate.. 6,302 (284)(a) 6,018
Total.......................... 84,082 (4,778) 79,304
Operating income......................... 10,376 (1,053) 9,323
Interest expense......................... (32,262) 1,386 (a) (30,876)
Other income............................. 585 -- 585
Loss before income tax benefit........... (21,301) 333 (20,968)
Income tax benefit....................... 276 23 (a) 299
Net loss....................... (21,025) 356 (20,669)
Priority return on redeemable preferred
limited partner interests............... (61,923) -- (61,923)
Net loss allocated to redeemable limited
partners................................ 5,000 -- 5,000
Accretion requirements of redeemable
limited partners........................ (5,885) -- (5,885)
Net loss of general partner
after priority return and
accretion requirements.................. $(83,833) $ 356 $ (83,477)
Net loss per general partner
unit after priority return and
accretion requirements.................. $ (8,383) $ 36 $ (8,348)
(a) Pro forma adjustments reflect the elimination of the operations of the
Northeast cable systems for the six months ended June 30, 1994.
</TABLE>
OLYMPUS COMMUNICATIONS, L.P. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands)
(Continued)
2. Summary of Significant Accounting Policies:
Subscriber Receivables
Subscriber revenues are recorded in the month the service is provided.
An allowance for doubtful accounts of $2,598 and $1,660 is recorded as a
reduction of subscriber receivables at December 31, 1993 and 1994,
respectively.
Programming Expense
Prior to July 1, 1992, ACC charged programming expense to affiliates
(including Olympus) based on the number of subscribers to each programming
service in the affiliate. Effective July 1, 1992, programming expense
charged by ACC to affiliates is based on cost reductions under programming
contracts from incremental subscribers, as well as the number of
subscribers. The effect of this change was to decrease programming expense
by $814 and $2,888 and $3,250 for the years ended December 31, 1992, 1993
and 1994, respectively.
Property, Plant and Equipment
Property, plant and equipment are comprised of the following:
December 31,
1993 1994
Operating plant and equipment................... $197,604 $201,921
Real estate and improvements..................... 4,158 3,690
Support equipment................................ 3,440 3,513
Construction in progress......................... 15,258 14,302
220,460 223,426
Accumulated depreciation......................... (56,771) (69,128)
$163,689 $154,298
Depreciation is computed on the straight-line method using estimated useful
lives of 5 to 12 years for operating plant and equipment and 3 to 20 years
for support equipment and buildings. Additions to property, plant and
equipment are recorded at cost which includes amounts for material,
applicable labor, and interest. Olympus capitalized interest amounting to
$436 and $391 for 1993 and 1994, respectively.
Intangible Assets
Intangible assets, net of accumulated amortization, are comprised of the
following:
December 31,
1993 1994
Purchased franchises..............................$248,647 $206,441
Goodwill.......................................... 4,568 4,429
Non-compete agreements............................. 20,211 33
Purchased subscriber lists........................ 63 25
$273,489 $210,928
A portion of the aggregate purchase price of cable television systems
acquired has been allocated to purchased franchises, purchased subscriber
lists, non-compete agreements and goodwill. Purchased franchises and
goodwill are amortized on the straight-line method over periods, which range
from 34 to 40 years. Purchased subscriber lists are amortized on the
straight-line method over the average periods
OLYMPUS COMMUNICATIONS, L.P. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands)
(Continued)
2. Summary of Significant Accounting Policies, continued:
Intangible Assets, continued
that the listed subscribers are expected to receive service from the date of
acquisition, which is 7 years. The non-compete agreements are amortized
over their contractual lives, which range from 2 to 5 years. Accumulated
amortization of intangible assets amounted to $81,668 and $76,642 at
December 31, 1993 and 1994, respectively.
Amortization of Other Assets
Deferred debt financing costs are amortized over the term of the related
debt. The unamortized amount included in prepaid expenses and other assets
was $2,426 and $1,457 at December 31, 1993 and 1994, respectively.
Asset Impairments
In March 1995, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards ("SFAS") No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed
Of." In accordance with SFAS No. 121, Olympus periodically reviews the
carrying value of its long-lived assets, identifiable intangibles and
goodwill in relation to historical financial results, current business
conditions and trends (including the impact of existing legislation and
regulation) to identify potential situations in which the carrying value of
assets may not be recoverable. If a review indicates that the carrying
value of such assets may not be recoverable, the carrying value of such
assets in excess of their fair value would be recorded as a reduction of the
assets cost as if a permanent impairment has occurred. The adoption of SFAS
No. 121 did not materially affect the financial statements of Olympus.
Net Loss Per General Partner Unit After Priority Return and Accretion
Requirements
Net loss per general partner unit after priority return and accretion
requirements is based upon the weighted average number of general partner
units outstanding of 10.0 for 1993 and 1994.
Cash and Cash Equivalents
Olympus considers all highly liquid investments with original maturities of
three months or less to be cash equivalents.
3. Business Interruption and Property Damage Related to Hurricane:
On August 24, 1992, service in Olympus' South Dade system was interrupted by
Hurricane Andrew. The hurricane damaged property with a net book value of
approximately $6,265. Olympus maintained insurance for property loss and
for business interruption and transmission lines. Olympus received total
net proceeds from the insurance carriers of which $20,225 and $4,305 were
received in the years ended December 31, 1992 and 1993, respectively. There
were no net proceeds received in 1994. Of the total insurance proceeds
received, $7,146, $9,547, and $1,037 were allocated to business interruption
in 1992, 1993 and 1994, respectively. Allocation of the business
interruption proceeds between years was based upon estimated revenues lost
as a result of the hurricane.
OLYMPUS COMMUNICATIONS, L.P. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands)
(Continued)
4. Debt:
Notes Payable to Banks
Notes payable to banks of Olympus' subsidiaries are comprised of the
following:
<TABLE>
December 31,
1993 1994
<S> <C> <C>
Revolving credit agreement with banks, converted into
term notes with quarterly principal installments
increasing from 1% to 5.25% due March 31, 1993 through
1999 -- Adelphia Cable Partners, L.P. ("ACP")........... $323,900 $314,010
$45,000 revolving credit agreement with banks
convertible into term notes with the first quarterly
installment of 2% due September 30, 1993 and due through
1999 -- Northeast Cable, Inc............................ 44,100 --
$368,000 $314,010
</TABLE>
Notes payable to banks are comprised of borrowings under a $350,000 credit
agreement between ACP and several banks, which was refinanced on May 12,
1995 as discussed below. The ACP revolving credit agreement converted to a
term note on December 30, 1992. Simultaneous with the conversion, ACP
prepaid $25,000 of principal through March 31, 1994. Additional quarterly
installments will be due through December 31, 1999. Borrowings under the
ACP credit arrangement are collateralized by a pledge of the stock or
partnership interests of the subsidiaries. The agreement stipulates, among
other things, limitations on additional borrowings, investments,
transactions with affiliates, payment of dividends, distributions and fees,
and requires the maintenance of certain financial ratios. The indebtedness
under these agreements is non-recourse to Olympus and ACC.
Interest rates charged for the ACP bank debt are based upon one or more of
the following options: prime rate plus 0% to 1.50%, certificate of deposit
rate plus
.88% to 2.63%, or Eurodollar rate plus .75% to 2.50%. The weighted average
interest rate on notes payable of ACP to the banks, including the effect of
interest rate hedging arrangements, was 8.90% at December 31, 1994.
Interest on outstanding borrowings is generally payable on a quarterly
basis.
As a result of the sale of 85% of the common stock of Northeast on June 30,
1994 (see Note 1), the $44,100 of notes payable to banks of Northeast is no
longer an obligation of Olympus.
Olympus has entered into interest rate swap agreements with banks and ACC to
reduce the impact of changes in interest rates on its floating rate bank
debt and its redeemable preferred limited partner interests. At December
31, 1994, Olympus had an aggregate notional principal amount of $255,000
outstanding under such agreements, which expire from 1995 through 2000.
These agreements provide for a weighted average rate of 8.90%, at December
31, 1994. Olympus is exposed to credit loss in the event of nonperformance
by the bank and ACC. Olympus does not expect any such nonperformance. Net
settlement amounts under these swap agreements are recorded as adjustments
to interest expense during the period incurred.
Prior to March 31, 1992, Olympus, ACC and an affiliated partnership
consummated a series of transactions which resulted in the repayment of
amounts owed to Olympus by the affiliate, the release of the affiliate from
the guarantee and the cancellation of the rights of the affiliate and ACC to
contribute assets to Olympus in return for PLP Interest and the related
return thereon, through an amendment to
the Olympus partnership agreement. As a condition of the release of the
affiliate's guarantee, ACP repaid $24,000 of its bank debt through funds
provided by Olympus.
OLYMPUS COMMUNICATIONS, L.P. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands)
(Continued)
4. Debt, continued:
Notes Payable to Banks, continued
Olympus obtained these funds through the repayment of the term note plus
interest from the affiliate and advances from affiliates of ACC. In
connection with the amendment, as of March 31, 1992, Olympus reversed $5,674
of the net priority return amounts previously accrued under the guarantee
arrangement.
Refinancing
On May 12, 1995, ACP and an affiliate, West Boca Acquisition, L.P.
(collectively, the "Borrowers") entered into a $475,000 revolving credit
facility with several banks, maturing December 31, 2003. Interest rates
charged are based upon one or more of the following options: prime rate
plus 0% to .75%, the Federal Funds rate plus .5% to 1.25%, or Eurodollar
rate plus .625% to 1.75%.
Initial borrowings under the revolving credit facility were used to repay
the Borrowers' existing notes payable to banks and accrued interest.
Borrowings under this credit arrangement are collateralized by substantially
all of the assets of the Borrowers. The agreement limits, among other
things, additional borrowings, investments, transactions with affiliates,
payment of distributions and fees, and requires the maintenance of certain
financial ratios by the Borrowers. The agreement also provides that
advances and contributions from affiliates may be returned to the affiliate
to the extent contributed or advanced from the closing date of the loan.
The amount of actual borrowings available under the facility is based upon
achieving certain levels of operating performance. The Borrowers will pay
commitment fees at the annual rate of .375% on unused principal. The credit
facility provides for mandatory reductions in the revolving loan commitment,
in increasing quarterly amounts, commencing June 30, 1997 through December
31, 2003. On the dates of such mandatory commitment reductions, the
Borrowers are obligated to repay outstanding loans in excess of the
remaining total commitment.
The following table sets forth the maximum principal outstanding under this
revolving credit agreement at December 31 of each of the next five years:
December 31, 1995 $475,000
December 31, 1996 475,000
December 31, 1997 446,500
December 31, 1998 394,250
December 31, 1999 337,250
Other Debt
Other debt, with interest at 9.0% to 11.3%, consists of purchase money
indebtedness and capital leases incurred in connection with the acquisition
of, and are collateralized by, certain equipment.
5. 16.5% Redeemable PLP Interests and Special Limited Partner Interests:
The PLP Interests issued to ACC are nonvoting, senior to claims represented
by other partner interests, provide for a priority return of 16.5% per annum
(payable quarterly), and are to be repaid by 2004. In the event that any
priority return is not paid when due, such unpaid amounts will accrue
additional return at a rate of 18.5% per annum. The unpaid priority return
amounted to $95,930 and $135,553 at
OLYMPUS COMMUNICATIONS, L.P. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands)
(Continued)
5. 16.5% Redeemable PLP Interests and Special Limited Partner Interests,
continued:
December 31, 1993 and 1994, respectively. As a result of the February 28,
1995 investment agreement among ACC, Olympus and Telesat (see Notes 1 and
12), the unpaid priority return was eliminated.
The following summarizes the PLP Interests of ACC during the three years
ended December 31, 1994:
<TABLE>
<S> <C>
Balance, December 31, 1992........................................$269,601
Conversion of general partnership interests to preferred limited
partnership interests............................................ 6,500
Balance, December 31, 1993 and 1994...............................$276,101
</TABLE>
Special limited partner interests were issued to ACC in connection with the
issuance of PLP Interests and general partner interests, without any
contribution of assets by ACC. These interests provide for special
allocations of Olympus' income (see Note 6).
6. Redeemable Limited Partner Interests and General Partner's Equity
(Deficiency):
The general partner and limited partners of Olympus will generally share in
future net income and losses of Olympus based upon their respective
percentage ownership of partnership voting units except for certain special
allocation provisions set forth in the Olympus partnership agreement. As
specified in the partnership agreement, after the holders of the PLP
Interests have received a return of their capital plus 16.5% per annum
priority return, distributions by Olympus will be made in the following
order: (i) to partners holding voting units (other than ACC) until each
partner receives an 18% compounded return on its investment; (ii) to ACC
until it receives an 18% compounded return on its investment in the voting
units; (iii) to ACC as managing general partner, to the special limited
partners and to the partners holding voting units until each partner holding
voting units receives a 24%
compounded return on its investment; and (iv) to ACC as managing general
partner, to the special limited partners and to the partners holding voting
units.
The $16,500 in redeemable limited partner units issued to unrelated parties
in connection with the 1990 cable television system acquisitions represent
voting
partnership interests which are subject to certain put and call rights. In
the
event that any such redemption or purchase of limited partner units results
in ACC owning more than 50% of the Partnership's voting interests, ACC will
be required under the Partnership Agreement to reduce its voting interests
so as to maintain its voting interest at or below 50%. ACC may at its
option convert voting partner units to PLP Interests or senior debt in order
to maintain its voting interest at or below 50%.
After giving notice to Olympus in July 1992, the holder of the $6,500 in
limited partner interests exercised its right to require Olympus to redeem
its units on or before January 30, 1993. On January 3, 1993, Olympus
acquired the redeemable limited partner units from the holder for $9,795.
Concurrently, ACC converted 6.5 general partner units to PLP interests,
thereby maintaining its 50% partnership voting interest.
The holders (Gans) of redeemable limited partner units can, at various dates
through January 1996, require Olympus to redeem all of its units at the fair
market value of the units on the exercise date. In the event that Olympus
does not
OLYMPUS COMMUNICATIONS, L.P. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands)
(Continued)
6. Redeemable Limited Partner Interests and General Partner's Equity
(Deficiency),
continued:
make the required purchase or if such purchase would cause Olympus, ACC or
any affiliate of ACC to be in default of the provisions of their respective
loan agreements, then Olympus may sell the assets and liquidate the
partnership. At various dates through January 1996, ACC may purchase the
limited partner units at their fair market value at the exercise date.
For financial reporting purposes, the $9,900 redemption price on the $6,500
in limited partner units was being accreted using the interest method. Such
accretion was charged proportionately to the remaining limited and general
partners' capital accounts. The carrying value of the limited partner units
were adjusted as the fair market value of the units changed. The difference
between the carrying value and the fair market value was accreted ratably
through January 1993 as a charge to the general partners' capital account.
As a result of the Liquidation Agreement entered into on February 28, 1995
between Gans and Olympus, Gans exchanged their redeemable limited
partnership interest in Olympus for 15% of the common stock of Northeast
(see Notes 1 and 12).
The following summarizes activity related to the redeemable limited partners
for the three years ended December 31, 1994:
Balance, December 31, 1991........................................$ 14,900
Net loss allocated to redeemable limited partners............. (8,309)
Accretion requirements to redeemable limited partners......... 12,924
Balance, December 31, 1992......................................... 19,515
Redemption of limited partnership interests on January 3, 1993. (9,795)
Net loss allocated to redeemable limited partners.............. (9,720)
Accretion requirements to redeemable limited partners......... 5,000
Balance, December 31, 1993........................................ 5,000
Net loss allocated to redeemable limited partners............ (5,000)
Accretion requirements to redeemable limited partners........ 5,885
Balance, December 31, 1994........................................$ 5,885
7. Commitments and Contingencies:
Olympus rents office space, tower sites, and space on utility poles under
leases with terms which are generally less than one year or under agreements
that are generally cancelable on short notice. Total rental expense under
all operating leases aggregated $1,008, $1,148 and $1,036 for 1992, 1993 and
1994, respectively.
In connection with certain obligations under existing franchise agreements,
Olympus obtains surety bonds guaranteeing performance to municipalities and
public utilities. Payment is required only in the event of nonperformance.
Olympus has fulfilled all of its obligations such that no payments under
surety bonds have been required.
As of July 1, 1993, Olympus adopted a program to self insure for casualty
and business interruption insurance. This program is part of an aggregate
agreement
OLYMPUS COMMUNICATIONS, L.P. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands)
(Continued)
7. Commitments and Contingencies, continued:
between Olympus and its subsidiaries in which Olympus will provide insurance
for casualty and business interruption claims of up to $10,000 and $20,000
per claim, respectively, for each subsidiary. These risks were previously
insured by outside parties with nominal deductible amounts.
Olympus' cable television operations may be adversely affected by changes
and developments in governmental regulation, competitive forces and
technology. The cable television industry and Olympus are subject to
extensive regulation at the federal, state and local levels. Many aspects
of such regulation are currently the subject of judicial proceedings and
administrative or legislative proceedings or proposals. On October 5, 1992,
Congress passed the 1992 Cable Act, which significantly expands the scope of
regulation of certain subscriber rates and a number of other matters in the
cable industry, such as mandatory carriage of local broadcast stations and
retransmission consent, and which will increase the administrative costs of
complying with such regulations. The FCC has adopted rate regulations that
establish, on a system-by-system basis, maximum allowable rates for (i)
basic and cable programming services (other than programming offered on a
per-channel or per-program basis), based upon a benchmark methodology, and
(ii) associated equipment and installation services based upon cost plus a
reasonable profit. Under the FCC rules, franchising authorities are
authorized to regulate rates for basic services and associated equipment and
installation services, and the FCC will regulate rates for regulated cable
programming services in response to complaints filed with the agency. The
original rate regulations became effective on September 1, 1993. Amendments
to the rate regulations became effective May 15, 1994. Further amendments
were adopted on November 10, 1994. The FCC ordered an interim rate freeze
effective April 5, 1993 which was extended through May 15, 1994.
The FCC had adopted regulations implementing virtually all of the
requirements of the 1992 Cable Act. The FCC is also likely to continue to
modify, clarify or refine the rate regulations. In addition, litigation has
been instituted challenging various portions of the 1992 Cable Act and the
rulemaking proceedings including the
rate regulations. Olympus cannot predict the effect or outcome of the
future rulemaking proceedings, changes to the rate regulations, or
litigation. Further, because the FCC has only issued its interim rules and
has not adopted final cost-of-service rules, Olympus has not determined to
what extent it will be able to utilize cost-of-service showings to justify
rates.
Effective September 1, 1993, as a result of the 1992 Cable Act, Olympus
repackaged certain existing cable services by adjusting rates for basic
service and introducing a new method of offering certain cable services.
Olympus adjusted the basic service rates and related equipment and
installation rates in all of its systems in order for such rates to be in
compliance with the applicable benchmark or equipment and installation cost
levels. The amended rules may require further adjustments to Olympus'
rates. Olympus also implemented a program in all of its
systems called "CableSelect" under which most of Olympus' satellite-
delivered programming services are now offered individually on a per channel
basis, or as a group at a price of approximately 15% to 20% below the sum of
the per channel prices of all such services. For subscribers who elect to
customize their channel lineup, Olympus will provide, for a monthly rental
fee, an electronic device located on the cable line outside the home,
enabling a subscriber's television to receive only those channels selected
by the subscriber. These basic service rate adjustments and the CableSelect
program have also been implemented in all systems managed by Olympus.
Olympus believes CableSelect provides increased programming choices to its
subscribers while providing flexibility to Olympus to respond to future
changes in areas such as customer demand and programming.
OLYMPUS COMMUNICATIONS, L.P. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands)
(Continued)
7. Commitments and Contingencies, continued:
On November 10, 1994 the FCC ruled that, prospectively, any "a la carte"
package will be treated as a regulated tier, except for packages involving
premium services. Olympus is currently unable to predict the effect that
the amended regulations, future FCC treatment of "a la carte" packages or
other future FCC rulemaking proceedings will have on its business and
results of operations in future periods. No assurance can be given at this
time that such matters will not have a material negative financial impact on
Olympus' business and results of operations in the future. Also, no
assurance can be given as to what other future actions Congress, the FCC or
other regulatory authorities may take or the effects thereof on Olympus.
A letter of inquiry, one of at least 63 sent by the FCC to numerous cable
operators, was received by Olympus regarding the implementation of this new
method of offering services. Olympus responded in writing to the FCC's
inquiry. On November 18, 1994, the Cable Services Bureau of the FCC issued
a decision holding that the "CableSelect" program was an evasion of the rate
regulations and ordered this package to be treated as a regulated tier.
This decision, and all other letters of inquiry decisions, were principally
decided on the number of programming services moved from regulated tiers to
"a la carte" packages. Olympus has appealed this decision to the full
Commission. Olympus cannot predict the outcome or effect of this
proceeding.
8. Employee Benefit Plans:
Olympus participates in an ACC savings plan (401(k)) which provides that
eligible full-time employees may contribute from 2% to 20% of their pre-tax
compensation. Olympus matches contributions not exceeding 1.5% of each
participant's pre-tax compensation. During 1992, 1993 and 1994, no
significant matching contributions were made by Olympus.
9. Taxes on Income:
Wholly-owned subsidiaries of Olympus are corporations that file separate
federal and state income tax returns. At December 31, 1994, these
subsidiaries had net operating loss carryforwards for federal income tax
purposes of approximately $172,600 expiring through 2009.
Olympus adopted SFAS No. 109, "Accounting for Income Taxes," effective
January 1, 1993. This Statement supersedes Accounting Principles Board
Opinion No. 11, "Accounting for Income Taxes," which Olympus had followed
previously and under which Olympus recorded no deferred tax liability. The
cumulative effect of adopting SFAS No. 109 at January 1, 1993 was to
increase the net loss by $59,500 for the year ended December 31, 1993. As a
result of applying SFAS No. 109, $47,130 of previously unrecorded deferred
tax assets generated from previous operating loss carryforwards incurred by
Olympus and $86,000 in deferred tax liabilities from differences between the
book and tax basis of property were recognized at January 1, 1993 as part of
the cumulative effect of adopting the Statement. Under prior accounting, a
portion of these benefits would have been recognized as a reduction of
income tax expense from continuing operations in the year ended December 31,
1993.
Deferred income taxes reflect the net tax effects of: (a) temporary
differences between the carrying amounts of assets and liabilities for
financial reporting purposes and the amounts used for income tax purposes,
and (b) operating loss and tax credit carryforwards. The tax effects of
significant items comprising Olympus' net deferred tax liability as of
December 31, 1993 and 1994 are as follows:
OLYMPUS COMMUNICATIONS, L.P. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands)
(Continued)
9. Taxes on Income, continued:
<TABLE>
December 31,
1993 1994
<S> <C> <C>
Deferred tax liabilities:
Differences between book and tax basis of property
plant and equipment and intangible assets............. $106,309 $ 89,738
Deferred tax assets:
Operating loss carryforwards.......................... 58,034 66,598
Other................................................. 380 358
Valuation allowance................................... (11,605) (16,919)
Subtotal........................................... 46,809 50,037
Net deferred tax liability.............................. $ 59,500 $ 39,701
</TABLE>
The net change in the valuation allowance in 1994 was an increase of $5,314.
The provision for income taxes for years ended December 31, 1992, 1993 and
1994 is as follows:
<TABLE>
Year Ended December 31,
1992 1993 1994
<S> <C> <C> <C>
Federal:
Current......................................... $ -- $ -- $ --
Deferred........................................ -- -- 234
State:
Current......................................... -- -- --
Deferred........................................ -- -- 42
$ -- $ -- $ 276
</TABLE>
Reconciliations between the statutory federal income tax rate and Olympus'
effective income tax rate as a percentage of loss before income tax benefit
and cumulative effect of change in accounting principle are as follows:
Year Ended
December 31,
1993 1994
Statutory federal income tax
(benefit) rate......................................... (35%) (35%)
Change in valuation allowance........................... 16% 25%
Operating losses passed through to partners............. 19% 9%
Effective income tax benefit rate....................... 0% 1%
10. Disclosures about Fair Value of Financial Instruments:
Included in Olympus' financial instrument portfolio are cash, notes payable,
interest rate swaps, and redeemable limited partner interests (including
redeemable preferred limited partner interests and the accrued priority
return thereon). The carrying values of the notes payable and redeemable
limited partnership interests approximate their fair values at December 31,
1994. At December 31, 1994, Olympus would have been required to pay
approximately $3,455 to settle its interest rate swap agreements,
representing the excess of carrying cost over fair value of these
agreements. The fair values of the debt and interest rate swaps were based
upon quoted market prices of similar instruments or on rates available to
Olympus for instruments of the same remaining maturities.
OLYMPUS COMMUNICATIONS, L.P. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands)
(Continued)
10. Disclosures about Fair Value of Financial Instruments, continued:
The aggregate of the redeemable limited partner and the redeemable preferred
limited partner interests (collectively the "Aggregate Redeemable Partner
Interests") had carrying values totalling $417,539 at December 31, 1994.
The Aggregate Redeemable Partner Interests had an estimated fair value
ranging from $250,000 to $350,000 at December 31, 1994. The fair value of
the Aggregate Redeemable Partner Interests was based upon an investment bank
market research report, computed using multiples of estimated cash flows.
Considerable judgment is necessary to develop the estimates of fair value.
Accordingly, the estimates presented herein are not necessarily indicative
of the amounts that a holder could realize in a current market exchange.
The use of different market assumptions and/or estimation methodologies may
have a material effect on the estimated fair value amounts.
11. Transactions with Related Parties:
Olympus has an agreement with a subsidiary of ACC (Managing Affiliate) which
provides for payment of management fees by Olympus equal to 5% of Olympus'
gross revenues. The amount and payment of these fees is subject to the
restrictions contained in the credit agreements. Olympus also reimburses
ACC for direct operating costs, which amounted to $1,245, $600 and $1,477
for 1992, 1993 and 1994, respectively. In 1992 Olympus assigned to ACC $750
of insurance proceeds for assistance provided with respect to the hurricane
and the resulting insurance claims (see Note 3).
At December 31, 1991, Olympus held a 16.5% term note from an affiliated
partnership of certain executive officers of ACC in the amount of $10,157.
This note was repaid on March 27, 1992. Interest income from this
affiliated partnership on the term note and other receivables amounted to
$597 for 1992, which is included in revenues.
Olympus has periodically received funds from and advanced funds to ACC and
other affiliates. Olympus was charged $4,497, $4,955 and $9,373 of interest
on such net payables for 1992, 1993 and 1994, respectively.
Net settlement amounts under interest rate swap agreements with ACC are
recorded as adjustments to interest expense during the period incurred. The
effect of the interest rate swaps was to increase interest expense by $1,434
and $651 in 1992 and 1993, respectively.
Olympus entered into an agreement with an affiliated partnership to provide
for the payment of management fees to Olympus equal to 5% of the affiliated
partnership's revenues. Such fees amounted to $397 and $1,356 for 1993 and
1994, respectively, which are included in revenues.
On March 31, 1994, Olympus sold to ACC, rights to provide alternate access
in its franchised areas and an investment in an unaffiliated partnership for
a purchase price of $15,500. The sale resulted in the reduction of a
payable to ACC of $15,500. Due to the common control of these entities, the
excess of the sale price over Olympus' carrying value has been credited
directly in general partner's equity (deficiency).
On June 30, 1994, Olympus sold to ACC 85% of the common stock of Northeast
Cable, Inc., a wholly-owned subsidiary, for a selling price of $31,875.
Northeast owned cable television systems serving approximately 36,500
subscribers in eastern Pennsylvania. ACC paid $16,000 in cash and the
remainder resulted in a decrease of ACC's existing receivable from Olympus.
Due to the common control of these entities, the excess of the sale price
over Olympus' carrying value has been credited directly in general partner's
equity (deficiency).
OLYMPUS COMMUNICATIONS, L.P. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands)
(Continued)
11. Transactions with Related Parties, continued:
During 1994, Olympus entered into an agreement with an affiliate to provide
the affiliate with alternate access rights to certain cable systems.
Revenue generated from this agreement amounted to $162 for the year ended
December 31, 1994.
12. Subsequent Events:
On February 28, 1995, Olympus entered into both the Gans Liquidation
Agreement and the Telesat Investment Agreement (see Note 1). As a result of
the Gans Liquidation Agreement, Gans agreed to exchange their redeemable
limited partnership interests in Olympus for 15% of the common stock of
Northeast.
As a result of the Telesat Investment Agreement, Telesat contributed certain
Florida cable systems serving approximately 50,000 subscribers. In
exchange, Telesat received general and limited partner interests and
$112,500 of 16.5% preferred limited partner interests and
loaned Olympus $20,000.
Prior to the Telesat Investment Agreement, Olympus had obligations to ACC
for intercompany advances, preferred limited partner ("PLP") interests, and
priority return on PLP interests. In conjunction with the Telesat
Investment Agreement, ACC contributed a portion of the intercompany
advances, a portion of the existing PLP interests and all of the existing
accrued priority return on the PLP interests, to capital contributions.
On April 3, 1995, Olympus purchased all of the cable and security systems of
WB Cable Associates, Ltd., ("WB Cable") serving approximately 44,000
subscribers for a purchase price of $82,000. WB Cable provides cable
service from one headend and security monitoring services from one location
in West Boca Raton, Florida. Of the purchase price, $77,000 was paid in
cash and $5,000 was paid in ACC Class A Common Stock. The acquisition,
which will be accounted for under the purchase method of accounting, was
financed principally through additional borrowings under the ACP credit
agreement (see Note 4).
On June 8, 1995, Olympus entered into a definitive agreement for the
purchase of all the southeast Florida cable and electronic security
monitoring systems of the Leadership Cable division of Fairbanks
Communications, Inc. ("Leadership Cable") serving approximately 50,000
subscribers for a purchase price of approximately $94 million. Leadership
Cable provides cable service and security monitoring services in and around
West Palm Beach, Florida. The acquisition, which will be accounted for
under the purchase method of accounting, is expected to close in the fourth
quarter of 1995.
The following unaudited pro forma balance sheet, assumes that all
transactions except Leadership Cable, which has not closed, had occurred on
December 31, 1994. The unaudited pro forma statement of operations has been
prepared assuming that the purchase of the Telesat and WB Cable systems and
the sale of Northeast (see Note 1) had occurred on January 1, 1994. The pro
forma data are not necessarily indicative of the results that actually would
have occurred if the purchase of Telesat and WB Cable occurred on January 1,
1994 or what may be achieved in the future.
<TABLE>
PRO FORMA BALANCE SHEET
DECEMBER 31, 1994
(Dollars in thousands)
(UNAUDITED)
Gans Telesat ACC WB Cable
As Pro Forma Pro Forma Pro Forma Pro Forma
Reported Adjustments Adjustments Adjustments Adjustments Pro Forma
ASSETS:
<S> <C> <C> <C> <C> <C> <C>
Cable television systems, at cost,
net of accumulated depreciation
and amortization:
Property, plant and
equipment - net................... $ 154,298 $ -- $ 30,527 (b) $ -- $ 31,178 (j) $ 216,003
Intangible assets - net............ 210,928 -- 1,444 (b) -- 42,065 (j) 254,437
Total.................... 365,226 -- 31,971 -- 73,243 470,440
Cash and cash equivalents.......... 425 -- 20,000 (c) -- 9,944 (j) 30,369
Subscriber receivables - net....... 5,419 -- 1,482 (b) -- 431 (j) 7,332
Prepaid expenses and other
assets - net...................... 3,784 -- 761 (b) -- 687 (j) 5,232
Investment in Northeast ........... 1,131 (1,131)(a) -- -- -- --
Total.................... $ 375,985 $ (1,131) $ 54,214 $ 0 $ 84,305 $ 513,373
LIABILITIES AND PARTNERS' EQUITY:
Notes payable to banks............. $ 314,010 $ -- $ -- $ -- $ 82,000 (j) $ 396,010
Accounts payable................... 9,984 -- 307 (b) -- 355 (j) 10,646
Subscriber advance payments and
deposits.......................... 2,717 -- 1,277 (b) -- 433 (j) 4,427
Accrued interest and other
liabilities....................... 10,278 -- 477 (b) -- 1,517 (j) 12,272
Accrued priority return on
redeemable preferred limited
partner interests................ 135,553 -- -- (135,553)(f) -- --
Due to affiliates - net............ 75,861 -- 20,000 (c) (35,861)(g) -- 60,000
Deferred income taxes.............. 39,701 -- -- -- -- 39,701
Total.................... 588,104 -- 22,061 (171,414) 84,305 523,056
16.5% redeemable preferred limited
partner interests................. 276,101 -- 112,500 (d) (51,101)(h) -- 337,500
Redeemable limited partner
interests......................... 5,885 (5,885)(a) -- -- -- --
General partners' equity
(deficiency)...................... (494,105) 4,754 (a) (80,347)(e) 222,515 (i) -- (347,183)
Total.................... $ 375,985 $ (1,131) $ 54,214 $ 0 $ 84,305 $ 513,373
</TABLE>
(a) Exchange of the Gans redeemable limited partner interests for Olympus'
investment in Northeast.
(b) Historical cost basis of the assets of the cable systems contributed by
Telesat.
(c) Loan made by Telesat to Olympus. Under certain circumstances all or a
portion of this loan will be converted to equity.
(d) Telesat's 16.5% redeemable preferred limited partner interest.
(e) Net assets of Telesat at acquisition date of $32,153 offset by the
equity allocated to the 16.5% redeemable limited partner interests.
(f) Conversion of the accrued priority return to general partner's equity.
(g) Conversion of a portion of the affiliate payables to general partner's
equity.
(h) Conversion of a portion of the preferred limited partner units to
general partner's equity.
(i) Total effect of the items described in (f), (g), and (h).
(j) Acquisition of the assets of WB Cable Associates, Ltd.
PRO FORMA STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1994
(Dollars in thousands)
(UNAUDITED)
<TABLE>
Pro Forma Pro Forma
(See Note 1) Adjustments Proforma
<S> <C> <C> <C>
Revenues................................. $ 88,627 $ 28,774 (a) $117,401
Operating expenses:
Direct operating and programming........ 20,640 13,372 (a) 34,012
Selling, general and administrative..... 18,336 5,019 (a) 23,355
Depreciation and amortization........... 34,310 8,800 (a) 43,110
Management fees to Managing
Affiliate.............................. 6,018 300 (a) 6,318
Total.......................... 79,304 27,491 106,795
Operating income......................... 9,323 1,283 10,606
Interest expense......................... (30,876) (7,298)(a) (38,174)
Other income............................. 585 30 (a) 615
Loss before income tax benefit........... (20,968) (5,985) (26,953)
Income tax benefit....................... 299 (103)(a) 196
Net loss ...................... (20,669) (6,088) (26,757)
Priority return on redeemable
preferred limited partner interests..... (61,923) 6,235 (b) (55,688)
Net loss allocated to redeemable
limited partners........................ 5,000 (5,000)(c) --
Accretion requirements of redeemable
limited partners........................ (5,885) 5,885 (d) --
Net (loss) income of general
partner after priority return
and accretion requirements.... $(83,477) $ 1,032 $(82,445)
Net (loss) income per general
partner unit after priority
return and accretion
requirements.................. $ (8,348) $ 103 $ (8,245)
</TABLE>
(a) Reflects the operations for Telesat and WB Cable for the year ended
December 31, 1994.
(b) Represents the difference between the priority return calculated under
the previous equity structure and the 16.5% return on the pro forma $337,500
in redeemable preferred limited partner interests.
(c) Elimination of the net loss allocated to Gans.
(d) Elimination of the accretion requirements of Gans.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
Not applicable.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information set forth above in Part I under the caption "Executive
Officers of the Registrant" is incorporated herein by reference. The other
information required by this item is incorporated herein by reference to the
information set forth under the caption "Election of Directors - Description
of Board of Directors"; the information set forth under the caption
"Election of Directors - Nominee for Election by Holders of Class A Common
Stock"; the information set forth under the caption "Election of Directors -
Nominees for Election by Holders of Class A Common Stock and Class B Common
Stock"; and the information under the caption "Certain Transactions -
Certain Reports," in the Company's definitive proxy statement for the 1995
Annual Meeting of Stockholders filed pursuant to Regulation 14A of the
Securities Exchange Act of 1934, as amended, or by reference to a filing
amending this Annual Report on Form 10-K.
ITEM 11. EXECUTIVE COMPENSATION
The information required by this item is incorporated herein by
reference to the information set forth under the caption "Executive
Compensation" in the Company's definitive proxy statement for the 1995
Annual Meeting of Stockholders filed pursuant to Regulation 14A of the
Securities Exchange Act of 1934, as amended, or by reference to a filing
amending this Annual Report on Form 10-K.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information required by this item is incorporated herein by
reference to the information set forth under the caption "Principal
Stockholders" in the Company's definitive proxy statement for the 1995
Annual Meeting of Stockholders filed pursuant to Regulation 14A of the
Securities Exchange Act of 1934, as amended, or by reference to a filing
amending this Annual Report of Form 10-K.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information required by this item is incorporated herein by
reference to the information set forth under the caption "Certain
Transactions" in the Company's definitive proxy statement for the 1995
Annual Meeting of Stockholders filed
pursuant to Regulation 14A of the Securities Exchange Act of 1934, as
amended, or by reference to a filing amending this Annual Report on Form 10-
K.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
Financial Statements, schedules and exhibits not listed have been
omitted where the required information is included in the consolidated
financial statements or notes thereto, or is not applicable or required.
(a)(1)A listing of the consolidated financial statements, notes and
independent auditors' report required by Item 8 are listed on page 46 of
this Annual Report on Form 10-K.
(2)Financial Statement Schedules:
The following are included in this Report:
Schedule I -- Condensed Financial Information of the Registrant
Schedule II -- Valuation and Qualifying Accounts
(3)Exhibits
Exhibit No.
<PAGE>
Reference 3.01 Certificate of Incorporation
of Adelphia Communications
Corporation<PAGE>
Incorporated herein by reference is
Exhibit 3.01 to Registration
Statement No. 33-6974 on Form S-1.
<PAGE>
3.02 Bylaws of Adelphia
Communications Corporation, as
amended<PAGE>
Incorporated herein by reference is
Exhibit 3.02 to Registrant's Annual
Report on Form 10-K for the fiscal
year ended March 31, 1994.
<PAGE>
4.01 First Supplemental Indenture,
dated as of May 4, 1994, with
respect to Registrant's 91/2%
Senior Pay-In-Kind Notes Due
2004
4.02 Indenture, dated as of
February 22, 1994, with
respect to Registrant's 91/2%
Senior Pay-In-Kind Notes Due
2004
4.03 Indenture, dated as of July
28, 1993, with respect to
Registrant's 101/4% Senior
Notes Due 2000
4.04 Amended and Restated
Indenture, dated as of May 11,
1993, with respect to
Registrant's 9-7/8% Senior
Debentures Due 2005
<PAGE>
Incorporated herein by reference is
Exhibit 4.01 to Registrant's Current
Report on Form 8-K dated May 5,
1994.
Incorporated herein by reference is
Exhibit 4.05 to Registration
Statement No. 33-52513 on Form S-4.
Incorporated herein by reference is
Exhibit 4.01 to Registrant's
Quarterly Report on Form 10-Q for
the quarter ended June 30, 1993.
Incorporated herein by reference is
Exhibit 4.01 to Registrant's Annual
Report on Form 10-K for the fiscal
year ended March 31, 1993.<PAGE>
4.05 Indenture, dated as of
September 2, 1992, with
respect to the Registrant's
11-7/8% Senior Debentures Due
2004
4.06 Indenture, dated as of May 7,
1992, with respect to the
Registrant's 12-1/2% Senior
Notes Due 2002<PAGE>
Incorporated herein by reference is
Exhibit 4.03 to Registration
Statement No. 33-52630 on Form S-1.
Incorporated herein by reference is
Exhibit 4.03 to Registrant's Annual
Report on Form 10-K for the fiscal
year ended March 31, 1992.<PAGE>
10.01 Class B Common Stockholders
Agreement
10.02 Joinder to Class B Common
Stockholders Agreement<PAGE>
Incorporated herein by reference is
Exhibit 10.01 to Registration
Statement No. 33-6974 on Form S-1.
Incorporated herein by reference is
Exhibit 10.02 to Registrant's Annual
Report on Form 10-K for the fiscal
year ended March 31, 1994.
<PAGE>
10.03 Registration Rights Agreement
and Amendment to Registration
Rights Agreement<PAGE>
Incorporated herein by reference are
Exhibit 10.02 to Registration
Statement No. 33-6974 on Form S-1
and Exhibit 10.35 to Registration
Statement No. 33-25121 on Form S-1.<PAGE>
10.04 Management Agreement--Highland
Video Associates, L.P.<PAGE>
Incorporated herein by reference is
Exhibit 10.06 to Registrant's Annual
Report on Form 10-K for the fiscal
year ended March 31, 1990.<PAGE>
10.05 Management Agreement--
Montgomery Cablevision
Associates, L.P.<PAGE>
Incorporated herein by reference is
Exhibit 10.08 to Registration
Statement No. 33-6974 on Form S-1.<PAGE>
10.06 Management Agreement--Adelphia
Cablevision Associates of
Radnor, L.P.<PAGE>
Incorporated herein by reference is
Exhibit 10.09 to Registration
Statement No. 33-6974 on Form S-1.
<PAGE>
10.07 Form of Agreement Regarding
Management Services for
Olympus Communications, L.P.
<PAGE>
Incorporated herein by reference is
Exhibit 10.06 to Registrant's Annual
Report on Form 10-K for the fiscal
year ended March 31, 1991.<PAGE>
10.08* Stock Option Plan of 1986, as
amended<PAGE>
Incorporated herein by reference is
Exhibit 10.07 to Registration
Statement No. 33-46551 on Form S-1.<PAGE>
10.09* Restricted Stock Bonus Plan,
as amended<PAGE>
Incorporated herein by reference is
Exhibit 10.08 to Registration
Statement No. 33-46551 on Form S-1.<PAGE>
10.10 Business Opportunity Agreement
<PAGE>
Incorporated herein by reference is
Exhibit 10.13 to Registration
Statement No. 33-3674 on Form S-1.
<PAGE>
10.11* Employment Agreement between
the Company and John J. Rigas<PAGE>
Incorporated herein by reference is
Exhibit 10.14 to Registration
Statement No. 33-6974 on Form S-1.<PAGE>
10.12* Employment Agreement between
the Company and Daniel R.
Milliard<PAGE>
Incorporated herein by reference is
Exhibit 10.15 to Registration
Statement No. 33-6974 on Form S-1.<PAGE>
10.13* Employment Agreement between
the Company and Timothy J.
Rigas<PAGE>
Incorporated herein by reference is
Exhibit 10.16 to Registration
Statement No. 33-6974 on Form S-1.<PAGE>
10.14* Employment Agreement between
the Company and Michael J.
Rigas<PAGE>
Incorporated herein by reference is
Exhibit 10.17 to Registration
Statement No. 33-6974 on Form S-1.<PAGE>
10.15* Employment Agreement between
the Company and James P.
Rigas<PAGE>
Incorporated herein by reference is
Exhibit 10.18 to Registration
Statement No. 33-6974 on Form S-1.
<PAGE>
<PAGE>
10.16 Agreement Regarding Management
Fees relating to the
subsidiaries of Chauncey
Communications Corporation
<PAGE>
Incorporated herein by reference is
Exhibit 10.16 of Registrant's Annual
Report on Form 10-K for the fiscal
year ended March 31, 1991.<PAGE>
10.17 Loan Agreement among Chelsea
Communications, Inc. and The
Toronto-Dominion Bank Trust
Company and NCNB Texas
National Bank, as Agents, and
the Banks named therein, dated
as of September 25, 1989<PAGE>
Incorporated herein by reference is
Exhibit 10.01 of Registrant's
Quarterly Report on Form 10-Q for
the quarter ended September 30,
1989.<PAGE>
<PAGE>
10.18 Agreement Regarding Management
Fees relating to subsidiaries
of Chelsea Communications,
Inc.<PAGE>
Incorporated herein by reference is
Exhibit 10.31 of Registrant's Annual
Report on Form 10-K for the fiscal
year ended March 31, 1990.<PAGE>
10.19 Form of Note Agreement, dated
as of August 1, 1990, relating
to the 10.66% Senior Secured
Notes due August 1, 1998 of
Chauncey Communications
Corporation<PAGE>
Incorporated herein by reference is
Exhibit 10.01 of Registrant's
Quarterly Report on Form 10-Q for
the quarter ended June 30, 1990.<PAGE>
10.20 Amendatory Agreement regarding
Chauncey Communications
Corporation 10.66% Senior
Secured Note Agreement, dated
as of August 6, 1991<PAGE>
Incorporated herein by reference is
Exhibit 10.02 of Registrant's
Quarterly Report on Form 10-Q for
the quarter ended September 30,
1991.<PAGE>
10.21 $50,000 Term Note and Pledge
Agreement between Adelphia
Communications Corporation as
lender and Daniel R. Milliard,
dated October 1, 1988<PAGE>
Incorporated herein by reference is
Exhibit 10.03 of Registrant's
Quarterly Report on Form 10-Q for
the quarter ended September 30,
1991.<PAGE>
10.22 $205,000 Revolving Term Note
and Pledge Agreement among
Adelphia Communications
Corporation as lender,
Daniel R. Milliard and David
Acker<PAGE>
Incorporated herein by reference is
Exhibit 10.04 of Registrant's
Quarterly Report on Form 10-Q for
the quarter ended September 30,
1991.<PAGE>
10.23 First Amendment to Loan
Agreement among Chelsea
Communications, Inc. and The
Toronto-Dominion Bank Trust
Company and NCNB Texas
National Bank, as Agents, and
the Banks named therein, dated
as of August 10, 1992<PAGE>
Incorporated herein by reference is
Exhibit 10.39 to Registration
Statement No. 33-52630 on Form S-1.<PAGE>
10.24Purchase Agreement relating to
101/4% Senior Notes Due 2000, Series
A and B, by and between Adelphia
Communications Corporation and the
Purchaser, dated July 20, 1993<PAGE>
Incorporated herein by reference is
Exhibit 10.01 to Registrant's
Quarterly Report on Form 10-Q for
the quarter ended June 30, 1993.
<PAGE>
10.25 Registration Rights Agreement
relating to 101/4% Senior
Notes Due 2000, Series A and
B, by and between Adelphia
Communications Corporation and
the Purchaser, dated July 28,
1993
10.26 Agreement for the Purchase of
Class A Common Stock by the
Rigas family, dated January 7,
1994
10.27 Underwriting Agreement between
the Company and Salomon
Brothers, Inc., dated January
7, 1994
10.28 Registration Agreement between
the Company and Salomon
Brothers, Inc., dated January
7, 1994
10.29 Second Amendment to Loan
Agreement between Chelsea
Communications, Inc. and The
Toronto-Dominion Bank Trust
Company and NationsBank of
Texas, N.A, as Agents, dated
December 31, 1993
10.30 Purchase Agreement relating to
91/2% Senior Pay-In-Kind Notes
Due 2004, Series A, by and
between Adelphia
Communications Corporation and
the Purchaser, dated February
14, 1994
10.31 Registration Rights Agreement
relating to 91/2% Senior Pay-
In-Kind Notes Due 2004, Series
A, by and between Adelphia
Communications Corporation and
the Purchaser, dated February
22, 1994.
10.32 Olympus Communications, L.P.
Second Amended and Restated
Limited Partnership Agreement,
dated as of February 28, 1995.
10.33 Credit, Security and Guaranty
Agreement among UCA Corp. and
certain of its Affiliates and
First Union National Bank of
North Carolina as
Administrative Agent, dated as
of March 15, 1995.
10.34 Revolving Credit Facility
among Adelphia Cable partners,
L.P., Southwest Florida Cable,
Inc., West Boca Acquisition
Limited Partnership and
Toronto-Dominion (Texas),
Inc., as Administrative Agent,
date May 12, 1995.
21.01 List of Subsidiaries of
Adelphia Communications
Corporation<PAGE>
Incorporated herein by reference is
Exhibit 10.02 to Registrant's
Quarterly Report on Form 10-Q for
the quarter ended June 30, 1993.
Incorporated herein by reference is
Exhibit 10.01 to Registrant's
Quarterly Report on Form 10-Q for
the quarter ended December 31, 1993.
Incorporated herein by reference is
Exhibit 10.01 to Registrant's
Current Report on Form 8-K dated
January 14, 1994.
Incorporated herein by reference is
Exhibit 10.02 to Registrant's
Current Report on Form 8-K dated
January 14, 1994.
Incorporated herein by reference is
Exhibit 10.03 to Registrant's
Current Report on Form 8-K dated
January 14, 1994.
Incorporated herein by reference is
Exhibit 10.01 to Registration
Statement No. 33-52513.
Incorporated herein by reference is
Exhibit 10.02 to Registration
Statement No. 33-52513.
Filed herewith.
Filed herewith.
Filed herewith.
Filed herewith.
<PAGE>
<PAGE>
23.01 Independent Auditors Consent
27.01 Financial Data Schedule<PAGE>
Filed herewith
Filed herewith<PAGE>
<PAGE>
The Registrant will furnish to the Commission upon request copies of
instruments not filed herewith which authorize the issuance of long-term
obligations of Registrant not in excess of 10% of the Registrant's total
assets on a consolidated basis.
(b)The Registrant filed the following Reports on Form 8-K during the three
(3) months ended March 31, 1995.
Date of Report Item Reported Financial Statements
Filed
February 28, 1995 Items 5, 7 None
(c)The Company hereby files as exhibits to this Form 10-K the exhibits set
forth in Item 14(a)(3) hereof which are not incorporated by reference.
(d)The Company hereby files as financial statement schedules to this Form
10-K the financial statement schedules set forth in Item 14(a)(2) hereof.
_________________________
* Denotes management contracts and compensatory plans and arrangements
required to be identified by Item 14(a)(3).
SCHEDULE
I
Page 1 of
4
ADELPHIA COMMUNICATIONS CORPORATION AND SUBSIDIARIES
Condensed Information as to the
Financial Position of the Registrant
(Dollars in thousands)
<TABLE>
March 31,
1994 1995
<S> <C> <C>
ASSETS:
Investments in cable television subsidiaries.............$ 50,126 $ 218,708
Property and equipment - net............................. 21,297 27,540
Cash and cash equivalents................................ 80 80
Other assets - net....................................... 21,582 68,692
Notes and receivables from cable television subsidiaries
and related parties - net............................... 295,862 43,033
Total..........................................$ 388,947 $ 358,053
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY):
Losses and distributions in excess of investments in
and net advances to cable television subsidiaries....... $237,006 $ 275,044
Other debt............................................... 6,931 9,476
Unsecured notes payable to cable television
subsidiaries............................................ 128,382 128,382
12 1/2% Senior Notes due 2002............................ 400,000 400,000
10 1/4% Senior Notes due 2000 (face amount ($110,000).... 108,765 99,011
11 7/8% Senior Debentures due 2004 (face amount $125,000) 124,442 124,470
9 7/8% Senior Debentures due 2005 (face amount $130,000). 127,882 127,994
9 1/2% Pay-In-Kind Notes due 2004........................ 150,000 164,370
Accrued interest and other liabilities................... 23,603 40,881
Total liabilities.............................. 1,307,011 1,369,628
Stockholders' equity (deficiency) (see consolidated
financial statements for detail)........................ (918,064) (1,011,575)
Total..........................................$ 388,947 $ 358,053
</TABLE>
See notes to condensed financial information of the Registrant.
SCHEDULE I
Page 2
of 4
ADELPHIA COMMUNICATIONS CORPORATION AND SUBSIDIARIES
Condensed Information as to the
Operations of the Registrant
(Dollars in thousands)
<TABLE>
Year Ended March 31,
1993 1994 1995
<S> <C> <C> <C>
INCOME:
Income from subsidiaries and affiliates.........$ 46,666 $ 53,004 $ 72,413
EXPENSES:
Operating expenses and fees to subsidiaries..... 1,811 2,710 1,044
Depreciation and amortization................... 2,321 3,610 5,179
Interest expense to subsidiaries and
affiliates..................................... 25,813 5,893 4,371
Interest expense to others...................... 68,759 88,724 103,367
Total........................................... 98,704 100,937 113,961
Loss before equity in loss of
subsidiaries................................... (52,038) (47,933) (41,548)
Equity in net loss of subsidiaries before
cumulative effect.............................. ( 50,871) (49,515) (64,736)
Loss before extraordinary loss and cumulative
effect of change in accounting principle....... (102,909) (97,448) (106,284)
Extraordinary loss on early retirement of debt.. (14,386) (752) --
Cumulative effect of change in accounting for
income taxes................................... -- (89,660) --
Cumulative effect of Olympus change in
accounting for income taxes.................... (59,500) -- --
Net Loss........................................$(176,795) $(187,860) $(106,284)
</TABLE>
See notes to condensed financial information of the Registrant. SCHEDULE I
Page 3 of 4
ADELPHIA COMMUNICATIONS CORPORATION AND SUBSIDIARIES
Condensed Information as to the
Cash Flows of the Registrant
(Dollars in thousands)
<TABLE>
Year Ended March 31,
1993 1994 1995
<S> <C> <C> <C>
Cash flows from operating activities:
Net loss.................................. $(176,795) $(187,860) $(106,284)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Equity in loss of subsidiaries............... 50,871 49,515 64,736
Cumulative effect of accounting change....... 59,500 89,660 --
Extraordinary loss on debt retirement........ 14,386 752 --
Depreciation and amortization ............... 2,321 3,396 5,179
Noncash interest expense..................... 164 363 14,756
Redemption premium on debt retirement........ (10,000) -- --
Loss on disposal of property................. -- 214 --
Changes in operating assets and liabilities
excluding the effects of business
acquisitions:
Other assets............................... (18,335) (6,877) (52,096)
Accrued interest and other liabilities..... 15,009 4,956 12,523
Net cash used for operating activities.......... (62,879) (45,881) (61,186)
Cash flows from investing activities:
Investments in and advances to subsidiaries.... (135,921) (72,642) (53,087)
Dividends received from subsidiaries........... 16,150 -- --
Amounts advanced to related parties............ (93,477) (182,900) 108,772
Expenditures for property and equipment........ (2,184) (11,772) (447)
Net cash used for investing activities.......... (215,432) (267,314) 55,238
Cash flows from financing activities:
Proceeds from debt............................. 652,181 258,674 3,300
Repayments of debt............................. (251,692) (101,450) (12,213)
(Advances to) repayments of amounts due from
consolidated subsidiaries..................... (143,823) -- --
Issuance of Class A Common Stock............... 21,725 155,963 14,861
Net cash provided by financing activities....... 278,391 313,187 5,948
Increase (decrease) in cash and cash
equivalents.................................... 80 <8> --
Cash and cash equivalents, beginning of year.... 8 88 80
Cash and cash equivalents, end of year.......... $ 88 $ 80 $ 80
Supplemental disclosure of cash flow activity-
Cash payments for interest..................... $ 53,262 $ 84,904 $ 103,454
</TABLE>
See notes to condensed financial information of the Registrant.
SCHEDULE I
Page 4
of 4
ADELPHIA COMMUNICATIONS CORPORATION AND SUBSIDIARIES
Notes to Condensed Financial Information of the Registrant
(Dollars in thousands)
1. Notes Payable to Subsidiaries:
Adelphia Communications Corporation ("ACC") has partially funded its
acquisitions and capital needs through borrowings and advances from
subsidiaries. ACC had issued to certain of its subsidiaries unsecured
demand notes payable in the principal amount of $128,382 at March 31, 1994
and 1995. The notes, which have been eliminated in consolidation, provide
for interest at rates ranging from 4.83% to 16.5%, are due upon demand five
years after March 31, 1995, and provide that non-payment of principal or
interest is not an event of default.
SCHEDULE II
ADELPHIA COMMUNICATIONS CORPORATION AND SUBSIDIARIES
VALUATION AND QUALIFYING ACCOUNTS
(Dollars in thousands)
<TABLE>
Balance Charged
at to Costs Balance
Beginning and Deductions- at End
of Period Expenses Write-Offs of Period
Year Ended March 31, 1993
<S> <C> <C> <C> <C>
Allowance for Doubtful Accounts...... $ 1,964 $ 3,024 $ 2,972 $ 2,016
Year Ended March 31, 1994
Allowance for Doubtful Accounts...... $ 2,016 $ 3,975 $ 2,388 $ 3,603
Year Ended March 31, 1995
Allowance for Doubtful Accounts...... $ 3,603 $ 3,846 $ 3,946 $ 3,503
</TABLE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
ADELPHIA COMMUNICATIONS CORPORATION
June 29, 1995 By: /s/ John J. Rigas
John J. Rigas,
Chairman, President and
Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
June 29, 1995 /s/ John J. Rigas
John J. Rigas,
Director
June 29, 1995 /s/ Timothy J. Rigas
Timothy J. Rigas,
Senior Vice President,
Chief Financial Officer,
Treasurer, Director and
Chief Accounting Officer
June 29, 1995 /s/ Michael J. Rigas
Michael J. Rigas,
Senior Vice President
and Director
June 29, 1995 /s/ James P. Rigas
James P. Rigas,
Vice President and
Director
June 29, 1995 /s/ Daniel R. Milliard
Daniel R. Milliard,
Vice President, Secretary
and Director
June 29, 1995 /s/ Perry S. Patterson
Perry S. Patterson,
Director
June 29, 1995 /s/ Pete J. Metros
Pete J. Metros,
Director
ADELPHIA CABLE PARTNERS, L.P.
SOUTHEAST FLORIDA CABLE, INC.
WEST BOCA ACQUISITION LIMITED PARTNERSHIP
$475,000,000
REVOLVING CREDIT FACILITY
THE LENDERS FROM TIME TO TIME PARTIES HERETO
TORONTO DOMINION (TEXAS), INC.
NATIONSBANK OF TEXAS, N.A.
THE BANK OF NOVA SCOTIA
SOCIETE GENERALE
Managing Agents
NATIONSBANK OF TEXAS, N.A.
Documentation Agent
TORONTO-DOMINION SECURITIES (USA), INC.
Syndication Agent
CHEMICAL BANK, CIBC INC.,
CREDIT LYONNAIS CAYMAN ISLAND BRANCH
AND FIRST UNION NATIONAL BANK OF NORTH CAROLINA
as Agents
COMPAGNIE FINANCIERE DE CIC ET DE L'UNION EUROPEENNE,
FLEET BANK AND LTCB TRUST COMPANY,
as Co-Agents
THE BANK OF NOVA SCOTIA
Co-Administrative Agent
and
TORONTO DOMINION (TEXAS), INC.
Administrative Agent
May 12, 1995
TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Defined Terms. . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Other Definitional Provisions. . . . . . . . . . . . . . . . . 27
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS. . . . . . . . . . . . . . . 27
2.1 Revolving Credit Commitments . . . . . . . . . . . . . . . . . 27
2.2 Making the Loans . . . . . . . . . . . . . . . . . . . . . . . 28
2.3 Commitment Fee . . . . . . . . . . . . . . . . . . . . . . . . 29
2.4 Reduction of Total Commitment. . . . . . . . . . . . . . . . . 29
2.5 Repayment of Loans . . . . . . . . . . . . . . . . . . . . . . 29
2.6 Optional and Mandatory Prepayments . . . . . . . . . . . . . . 30
2.7 Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
2.8 Voluntary Interest Rate Conversion . . . . . . . . . . . . . . 31
2.9 Determination of Interest Rate . . . . . . . . . . . . . . . . 31
2.10 Inability to Determine Interest Rate . . . . . . . . . . . . . 32
2.11 Pro Rata Treatment and Payments. . . . . . . . . . . . . . . . 32
2.12 Illegality . . . . . . . . . . . . . . . . . . . . . . . . . . 32
2.13 Governmental Requirements. . . . . . . . . . . . . . . . . . . 33
2.14 Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
2.15 Indemnity. . . . . . . . . . . . . . . . . . . . . . . . . . . 35
2.16 Change of Lending Office; Substitution of Lender . . . . . . . 36
2.17 Use of Net Proceeds. . . . . . . . . . . . . . . . . . . . . . 36
SECTION 3. REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . 37
3.1 Financial Condition. . . . . . . . . . . . . . . . . . . . . . 37
3.2 Existence; Compliance with Law . . . . . . . . . . . . . . . . 38
3.3 Power; Authorization; Enforceable Obligations. . . . . . . . . 38
3.4 No Legal Bar . . . . . . . . . . . . . . . . . . . . . . . . . 38
3.5 No Material Litigation . . . . . . . . . . . . . . . . . . . . 39
3.6 No Default . . . . . . . . . . . . . . . . . . . . . . . . . . 39
3.7 Ownership of Property; Liens . . . . . . . . . . . . . . . . . 39
3.8 Intellectual Property. . . . . . . . . . . . . . . . . . . . . 39
3.9 No Burdensome Restrictions . . . . . . . . . . . . . . . . . . 39
3.10 Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
3.11 Federal Regulations. . . . . . . . . . . . . . . . . . . . . . 40
3.12 ERISA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
3.13 Government Regulation. . . . . . . . . . . . . . . . . . . . . 41
3.14 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . 41
3.15 General Partners' Existence; Compliance with Law . . . . . . . 41
3.16 General Partners' Power: Authorization; Enforceable Obligations 41
3.17 Accuracy of Information. . . . . . . . . . . . . . . . . . . . 41
3.18 Purpose of Loans . . . . . . . . . . . . . . . . . . . . . . . 42
3.19 Environmental Matters. . . . . . . . . . . . . . . . . . . . . 42
3.20 Solvency . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
3.21 Franchises; FCC and Copyright Matters. . . . . . . . . . . . . 43
SECTION 4. CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . . . . . 45
4.1 Conditions to Initial Loans. . . . . . . . . . . . . . . . . . 45
4.2 Conditions to Each Loan. . . . . . . . . . . . . . . . . . . . 50
4.3 Conditions to Conversions. . . . . . . . . . . . . . . . . . . 50
4.4 Satisfaction of Conditions . . . . . . . . . . . . . . . . . . 51
SECTION 5. AFFIRMATIVE COVENANTS. . . . . . . . . . . . . . . . . . . . 51
5.1 Financial Statements . . . . . . . . . . . . . . . . . . . . . 51
5.2 Certificates; Other Information. . . . . . . . . . . . . . . . 52
5.3 Payment of Obligations . . . . . . . . . . . . . . . . . . . . 53
5.4 Conduct of Business and Maintenance of Existence . . . . . . . 53
5.5 Maintenance of Property; Insurance; Insurance and Condemnation
Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
5.6 Inspection of Property; Books and Records; Discussions . . . . 53
5.7 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
5.8 Environmental Laws . . . . . . . . . . . . . . . . . . . . . . 55
5.9 Pledge of After Acquired Property. . . . . . . . . . . . . . . 55
5.10 Pledge During Event of Default . . . . . . . . . . . . . . . . 56
5.11 Interest Rate Protection . . . . . . . . . . . . . . . . . . . 56
SECTION 6. NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . 56
6.1 Financial Condition Covenants. . . . . . . . . . . . . . . . . 56
6.2 Limitation on Indebtedness . . . . . . . . . . . . . . . . . . 57
6.3 Limitation on Liens. . . . . . . . . . . . . . . . . . . . . . 58
6.4 Limitation on Fundamental Changes. . . . . . . . . . . . . . . 58
6.5 Limitation on Sale of Assets . . . . . . . . . . . . . . . . . 59
6.6 Limitation on Restricted Payments. . . . . . . . . . . . . . . 60
6.7 Limitation on Investments. . . . . . . . . . . . . . . . . . . 61
6.8 Limitation on Modifications of Certain Agreements; Replacement of
General Partners . . . . . . . . . . . . . . . . . . . . . . . 62
6.9 Limitation on Transactions with Affiliates . . . . . . . . . . 63
6.10 Limitation on Sales and Leasebacks . . . . . . . . . . . . . . 63
6.11 Limitation on Changes in Fiscal Year . . . . . . . . . . . . . 63
6.12 Limitation on Negative Pledge Clauses. . . . . . . . . . . . . 63
6.13 Limitation on Lines of Business; Activities of Unrestricted
Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . 63
6.14 Limitation on Interest Rate Protection Agreements. . . . . . . 63
6.15 Limitation on Management Fees. . . . . . . . . . . . . . . . . 64
SECTION 7. EVENTS OF DEFAULT. . . . . . . . . . . . . . . . . . . . . . 64
7.1 Events of Default; Remedies. . . . . . . . . . . . . . . . . . 64
SECTION 8. THE ADMINISTRATIVE AGENT . . . . . . . . . . . . . . . . . . 68
8.1 Appointment. . . . . . . . . . . . . . . . . . . . . . . . . . 68
8.2 Delegation of Duties . . . . . . . . . . . . . . . . . . . . . 68
8.3 Exculpatory Provisions . . . . . . . . . . . . . . . . . . . . 68
8.4 Reliance by Administrative Agent . . . . . . . . . . . . . . . 68
8.5 Notice of Default. . . . . . . . . . . . . . . . . . . . . . . 69
8.6 Non-Reliance on the Agents and Other Lenders . . . . . . . . . 69
8.7 Indemnification. . . . . . . . . . . . . . . . . . . . . . . . 70
8.8 An Agent in Its Individual Capacity. . . . . . . . . . . . . . 70
8.9 Successor Administrative Agent . . . . . . . . . . . . . . . . 70
SECTION 9. MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . 70
9.1 Amendments and Waivers . . . . . . . . . . . . . . . . . . . . 70
9.2 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
9.3 No Waiver; Cumulative Remedies . . . . . . . . . . . . . . . . 72
9.4 Survival of Representations and Warranties . . . . . . . . . . 73
9.5 Payment of Expenses and Taxes. . . . . . . . . . . . . . . . . 73
9.6 Successors and Assigns; Participations and Assignments . . . . 74
9.7 Adjustments; Set-off . . . . . . . . . . . . . . . . . . . . . 76
9.8 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . 77
9.9 Severability; Limitation on Agreements . . . . . . . . . . . . 77
9.10 Integration. . . . . . . . . . . . . . . . . . . . . . . . . . 78
9.11 GOVERNING LAW. . . . . . . . . . . . . . . . . . . . . . . . . 78
9.12 Submission To Jurisdiction: Waivers. . . . . . . . . . . . . . 78
9.13 Acknowledgments. . . . . . . . . . . . . . . . . . . . . . . . 78
9.14 WAIVER OF JURY TRIAL . . . . . . . . . . . . . . . . . . . . . 79
9.15 Authority of Managing General Partner. . . . . . . . . . . . . 79
9.16 Release. . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
9.17 Nonrecourse . . . . . . . . . . . . . . . . . . . . . . . . . 79
ANNEXES
Annex A Lender Information
EXHIBITS
Exhibit A Form of Affiliate Subordination Agreement
Exhibit B Form of Assignment and Acceptance Agreement
Exhibit C Form of Borrower Assignment of Partnership Interests
Exhibit D Form of Compliance Certificate
Exhibit E Form of Guaranty Agreement
Exhibit F Form of Intercompany Note
Exhibit G Form of Management Subordination Agreement
Exhibit H Form of Note
Exhibit I Form of Note Pledge Agreement
Exhibit J Form of Parent Assignment of Partnership Interests
Exhibit K Form of Security Agreement
Exhibit L Form of Stock Pledge Agreement
Exhibit M Form of Subsidiary Assignment of Partnership Interests
Exhibit 2.2 Form of Notice of Borrowing
Exhibit 2.8 Form of Notice of Conversion
Exhibit 4.1(d) Form of Borrowing Certificate
Exhibit 4.1(p)(i) Form of Opinion of Counsel to the Borrowers
Exhibit 4.1(p)(ii) Form of Opinion of Deputy General Counsel to the
Borrowers
Exhibit 4.1(p)(iii) Form of Opinion of Special FCC Counsel to the Borrowers
SCHEDULES
Schedule 2.4 Total Commitment Reduction Schedule
Schedule 3.3 Necessary Consents
Schedule 3.5 Certain Litigation
Schedule 3.7 Real and Leasehold Property Interests
Schedule 3.14 Subsidiaries
Schedule 3.19 Environmental Matters
Schedule 3.21 Systems and Franchises
Schedule 6.2(d) Existing Indebtedness
Schedule 6.2(f) Existing Affiliate Subordinated Indebtedness
Schedule 6.7(f) Loans to Officers
Schedule 6.7(h) Investments in Subsidiaries
REVOLVING CREDIT AGREEMENT
Dated as of May 12, 1995
ADELPHIA CABLE PARTNERS, L.P., a Delaware limited partnership,
SOUTHEAST FLORIDA CABLE, INC., a Florida corporation, WEST BOCA ACQUISITION
LIMITED PARTNERSHIP, a Delaware limited partnership, the LENDERS listed on the
signature pages hereof and any Lender hereafter becoming a party hereto in
accordance with the provisions hereof, TORONTO DOMINION (TEXAS), INC.,
NATIONSBANK OF TEXAS, N.A., THE BANK OF NOVA SCOTIA and SOCIETE GENERALE, as
Managing Agents, NATIONSBANK OF TEXAS, N.A., as Documentation Agent, TORONTO-
DOMINION SECURITIES (USA), INC., as Syndication Agent, CHEMICAL BANK, CIBC
INC., CREDIT LYONNAIS CAYMAN ISLAND BRANCH and FIRST UNION NATIONAL BANK OF
NORTH CAROLINA, as Agents, COMPAGNIE FINANCIERE DE CIC ET DE L'UNION
EUROPEENNE, FLEET BANK and LTCB TRUST COMPANY, as Co-Agents,THE BANK OF NOVA
SCOTIA, as Co-Administrative Agent, and TORONTO DOMINION (TEXAS), INC., as
Administrative Agent, agree as follows:
W I T N E S S E T H
SECTION
1. DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the following terms
have the following meanings:
"ACC" means Adelphia Communications Corporation, a Delaware
corporation.
"ACC Change of Control" means the failure of the Rigas Family to
own, directly or indirectly, Capital Securities of ACC having under
ordinary circumstances (not dependent on any contingency) voting power to
elect at least a majority of the directors of ACC.
"ACP" means Adelphia Cable Partners, L.P., a Delaware limited
partnership.
"ACP General Partners" means Olympus and ACP Holdings, each in its
capacity as a general partner of ACP pursuant to the ACP Partnership
Agreement and any successor to either thereof in such capacity to the
extent permitted by subsection 6.8.
"ACP Holdings" means ACP Holdings, Inc., a Delaware corporation.
"ACP Partnership Agreement" means the Limited Partnership Agreement,
dated December 19, 1989, of ACP, as amended, supplemented and otherwise
modified from time to time to the extent permitted by subsection 6.8.
"ACP/Southeast Loan Agreement" means the $350,000,000 Loan
Agreement, dated as of December 19, 1989, among Adelphia Cable Partners,
L.P., CCTC Acquisition, Inc. and Southeast Florida Cable, Inc., as
Borrowers, the Banks parties thereto from time to time, and The Toronto-
Dominion Bank Trust Company, as Agent, and the other loan documents
executed in connection therewith, each as amended, supplemented and
otherwise modified to the date of this Agreement.
"Acquisition" means, as to any Person, subject to subsection 6.13,
(a) any acquisition by such Person of the Capital Securities of any other
Person, provided that such other Person shall, as a result of such
acquisition, become a Subsidiary of such Person and the accounts of which
shall be consolidated with such Person in accordance with GAAP or (b) any
acquisition by such Person of substantially all the assets of any other
Person; provided, however, (i) no Restricted Investment shall be or
qualify as an Acquisition under this Agreement and (ii) the cost or
purchase price of any such Acquisition shall not exceed the fair market
value of such Capital Securities or such assets, as the case may be. For
purposes of this definition, "fair market value" means the price at which
in a comparable transaction, after arm's-length negotiations during which
neither party was under any compulsion to act, a willing seller would sell
and a willing buyer would buy the subject Capital Securities or assets,
as the case may be.
"Active Plant" means a coaxial or fiber optic television cable,
together with all amplifiers and electronics, which has been connected to
a Head End and has been energized and which is capable of carrying
television signals to subscribers with only the addition of a drop line
from such television cable to the Homes of such subscribers.
"Adjusted Eurodollar Rate" means, for any day in an Interest Period
for any Eurodollar Loan, an interest rate per annum equal to the sum of
(a) the quotient, expressed as a percentage (rounded upward to the nearest
1/100th of 1%), resulting from the division of (i) the Eurodollar Rate for
such Interest Period by (ii) the percentage equal to 100% minus the
Eurodollar Rate Reserve Percentage in effect on such day and (b) the
Applicable Margin in effect on such day.
"Adjustment Date" means, for the purposes of determining the
Applicable Margin from time to time, the second Business Day after the
Administrative Agent receives both (a) the Financial Statements as of the
end of such fiscal quarter required by subsection 5.1 and (b) the related
Compliance Certificate required by subsection 5.2(b).
"Administrative Agent" means Toronto Dominion (Texas), Inc. in its
capacity as Administrative Agent for the Lenders pursuant to this
Agreement and any successor Administrative Agent appointed pursuant to
subsection 8.9.
"Administrative Agent's Office" means the office of Toronto Dominion
(Texas), Inc. specified in subsection 9.2 or such other office as Toronto
Dominion (Texas), Inc. shall specify in a notice to the Borrowers in
accordance with subsection 9.2.
"Affiliate" means, as to any Person, any other Person that, directly
or indirectly through one or more intermediaries or otherwise, (a) owns
beneficially 5% or more of the Capital Securities of such Person or
(b) controls, is controlled by, or is under common control with, such
Person. As used in this definition, "control" of a Person means the
possession, directly or indirectly, of the power either to (a) vote 5% or
more of the Capital Securities having ordinary voting power for the
election of directors of such Person or (b) direct or cause the direction
of the management and policies of such Person, whether through ownership
of Capital Securities, by contract or otherwise. All references to an
"Affiliate" or "Affiliates" of any Borrower or any Restricted Subsidiary
shall include ACC, Olympus, the Unrestricted Subsidiaries and Key Biscayne
Cablevision, a Restricted Subsidiary of ACP, but shall exclude the
Borrowers and the other Restricted Subsidiaries.
"Affiliate Pledgors" means Olympus, ACP Holdings and Dorellenic and
any Borrower's other Affiliates delivering any Parent Assignment of
Partnership Interests or any Affiliate Subordination Agreement in
connection with this Agreement.
"Affiliate Subordination Agreement" means a Subordination Agreement
in the form of Exhibit A, as amended, supplemented and otherwise modified
from time to time.
"Affiliate Subordinated Indebtedness" means any unsecured
Indebtedness of any Borrower or any Restricted Subsidiary to any Affiliate
which is subordinate to the Obligations pursuant to an Affiliate
Subordination Agreement executed and delivered by the holder of such
Indebtedness to the Administrative Agent that is in full force and effect
and not being contested by any Person.
"Agents" means the Administrative Agent, the Co-Administrative
Agent, the Managing Agents, NationsBank of Texas, N.A., in its capacity
as Documentation Agent in connection with this Agreement, Toronto-Dominion
Securities (USA), Inc., in its capacity as Syndication Agent in connection
with this Agreement, Chemical Bank, CIBC Inc., Credit Lyonnais Cayman
Island Branch and First Union National Bank of North Carolina, each in its
capacity as an Agent in connection with this Agreement, and the Co-Agents.
"Agreement" means this Revolving Credit Agreement, including all
attached Annexes, Schedules and Exhibits, each as amended, supplemented
and otherwise modified from time to time.
"Annualized Operating Cash Flow" means, for any fiscal quarter of
the Borrowers, an amount equal to Operating Cash Flow for such fiscal
quarter, multiplied by four.
"Annualized Operating Cash Flow to Pro Forma Debt Service Ratio"
means, at the date of any determination, the ratio of (a) Annualized
Operating Cash Flow for any fiscal quarter to (b) Pro Forma Debt Service.
"Applicable Lending Office" means, with respect to each Lender, such
Lender's Eurodollar Lending Office in the case of Eurodollar Loans and all
amounts payable in respect thereof and such Lender's Domestic Lending
Office in the case of Base Rate Loans, all amounts payable in respect
thereof and all other amounts payable to such Lender pursuant to this
Agreement or any other Loan Document.
"Applicable Margin" means (a) for the period from the Closing Date
until the first Adjustment Date after the Closing Date, with respect to
the Base Rate, 0.500% per annum, and, with respect to the Adjusted
Eurodollar Rate, 1.500% per annum and (b) for any subsequent period from
and including any Adjustment Date, beginning with the first Adjustment
Date after the Closing Date, to the next Adjustment Date to occur, if the
Senior Funded Debt to Annualized Operating Cash Flow Ratio on the first
day of such period is within a range set forth in column A below, the per
annum percentage equal to the percentage set forth for that range in
column B below, with respect to the Base Rate, and column C below, with
respect to the Adjusted Eurodollar Rate:
A B C
Less than
or Equal to: But Greater than:
6.25 to 1.00 5.75 to 1.00 0.750% 1.750%
5.75 to 1.00 5.25 to 1.00 0.500% 1.500%
5.25 to 1.00 4.75 to 1.00 0.250% 1.250%
4.75 to 1.00 4.25 to 1.00 0.000% 1.000%
4.25 to 1.00 3.75 to 1.00 0.000% 0.750%
3.75 to 1.00 0.000% 0.625%
provided, if the Financial Statements and the related Compliance
Certificate for any fiscal quarter required by subsections 5.1 and 5.2(b)
are not delivered to the Administrative Agent on or before the date when
due and the Applicable Margin indicated by the Senior Funded Debt to
Operating Cash Flow Ratio for such fiscal quarter is increased for the
subsequent period from that previously in effect, the Applicable Margin
during the period from the date on which such Financial Statements and
related Compliance Certificate are due until the date on which the same
are received by the Administrative Agent shall be the Applicable Margin
as so increased.
"Asset Sale" means, as to any Person, the sale, lease (as lessor),
assignment, transfer or other disposition for value by such Person to any
other Person, whether in a single transaction or a series of related
transactions and whether by merger, consolidation or otherwise, of any
assets of such Person outside the ordinary course of business of such
Person, including, without limitation, any such sale, lease (as lessor),
assignment, transfer or other disposition of a System or a Franchise owned
or operated by any Borrower or any Restricted Subsidiary. In addition,
if any property or asset of any Borrower or any Restricted Subsidiary is
taken pursuant to condemnation proceedings or by eminent domain or is lost
or damaged as a result of any casualty, such taking, loss or damage shall
constitute an Asset Sale.
"Assignment and Acceptance Agreement" means an Assignment and
Acceptance Agreement in the form of Exhibit B.
"Available Capital Contributions" means, as to any Borrower and its
Restricted Subsidiaries at the time of any determination, the excess of
(a) the aggregate amount of Capital Contributions made to such Borrower
and its Restricted Subsidiaries subsequent to the Closing Date over (b)
the sum of (i) the aggregate amount of Management Fees paid subsequent to
the Closing Date pursuant to subsection 6.15(a)(ii) and (b), and (ii) the
aggregate amount of Restricted Payments made by such Borrower and its
Restricted Subsidiaries subsequent to the Closing Date pursuant to
subsection 6.6(a)(iii)(B), and (iii) the aggregate amount of Restricted
Investments made by such Borrower and its Restricted Subsidiaries
subsequent to the Closing Date pursuant to clause (ii) of subsection
6.7(c), and (iv) the aggregate amount of Capital Expenditures made by such
Borrower and its Restricted Subsidiaries subsequent to the Closing Date
which were funded solely with the proceeds of any such Capital
Contribution.
"Available Commitment" means, as to any Lender at the time of any
determination, an amount equal to the excess, if any, of (a) the amount
of such Lender's Commitment at such time over (b) the aggregate principal
amount of all Loans made by such Lender outstanding at such time.
"Base Rate" means, for any day, a rate of interest per annum equal
to (a) the higher of (i) the TD Prime Rate in effect on such day and
(ii) the sum of (A) the Federal Funds Rate in effect on such day, and
(B) 1/2 of 1%, plus (b) the Applicable Margin in effect on such day.
"Base Rate Loan" means any Loan that bears interest computed on the
basis of the Base Rate.
"Basic Subscriber" means all of the following to the extent they
receive basic cable television service provided by the Systems owned or
operated by any Borrower or any Restricted Subsidiary: (a) private
residential customer accounts which are not more than sixty days past due
(including those of employees of such Borrower and its Subsidiaries and
Affiliates and regardless of whether the service is provided in single
family homes or in individually billed units in multi-unit buildings, but
excluding "second connects" or "additional outlets" as such terms are
commonly understood in the cable television industry), each of which shall
be counted as one basic Subscriber; and (b) commercial and bulk-billed
accounts which are not more than sixty days past due, such as hotels,
motels, apartment houses and multifamily homes, provided that the number
of Basic Subscribers serviced by each commercial or bulk-billed account
shall be determined as the quotient of the monthly basic service revenue
derived from such commercial or bulk-billed account (excluding any charges
for taxes or other nonrecurring items) divided by the predominant monthly
fees and charges derived from the provision of "basic service" as that
term is commonly understood in the cable television industry (excluding
any charges for additional outlets and installation fees and revenues
derived from the rental of converters, remote control devices and other
like charges for equipment).
"Benefitted Lender" has the meaning specified in subsection 9.7(a).
"Board of Governors" means the Board of Governors of the Federal
Reserve System or any Governmental Authority which succeeds to the powers
and functions thereof.
"Borrower" means ACP, Southeast or West Boca.
"Borrower Assignment of Partnership Interests" means a Borrower
Assignment of Partnership Interests in the form of Exhibit C, as amended,
supplemented and otherwise modified from time to time.
"Borrower Change of Control" means the failure of Olympus to
(a) own, directly or indirectly, 99.90% of the Capital Securities of any
Borrower and (b) possess, directly or indirectly, the power to direct or
cause the direction of the management and policies of any Borrower,
whether through ownership of Capital Securities of such Borrower, by
contract or otherwise.
"Borrowing" means one or more borrowings by any Borrower on the same
day under and pursuant to this Agreement, each of which consists of Loans
of the same Type.
"Business" has the meaning specified in subsection 3.19.
"Business Day" means a day of the year on which banks are not
authorized or required to be closed in New York City and Houston, Texas
and, if the applicable Business Day relates to any Eurodollar Loans, on
which dealings are carried on between banks in the London interbank
market.
"Cable Act" means the Cable Communications Policy Act of 1984 and
the Cable Television Consumer Protection Act of 1992.
"Calculation Date" has the meaning specified in the definition of
Pro Forma Debt Service.
"Capital Contribution" means, as to any Borrower or any Restricted
Subsidiary, (a) any cash capital contribution to such Borrower or such
Restricted Subsidiary by any of its Affiliates, including, without
limitation, as a result of the purchase of the Capital Securities of such
Borrower or such Restricted Subsidiary by such Affiliate or (b) any loan
or advance made in cash to such Borrower or such Restricted Subsidiary by
any such Affiliate that constitutes Affiliate Subordinated Indebtedness.
"Capital Expenditures" means for any period, the aggregate amount
paid or accrued by the Borrowers and the Restricted Subsidiaries for the
rental, lease, purchase (including by means of the acquisition of the
Capital Securities of a Person), construction or use of any property
during such period, the value or cost of which, in accordance with GAAP
as in effect on the date of this Agreement, would appear on the
consolidated and combined balance sheet of the Borrowers and the
Restricted Subsidiaries in the category of property, plant, or equipment
at the end of such period.
"Capital Lease" means a lease of (or other agreement conveying the
right to use) real or personal property that is required to be classified
and accounted for as a capital lease under GAAP as in effect on the date
of this Agreement and, for purposes of this Agreement, the amount of any
Capital Lease obligation at any date shall be the capitalized amount
thereof at such date as determined in accordance with GAAP in effect on
the date of this Agreement.
"Capital Security" means (a) any share, membership, partnership or
other percentage interest, unit of participation or other equivalent
(however designated) of a corporate equity security or other equity
interest in a Person and (b) any debt security or other evidence of
Indebtedness which is convertible into or exchangeable for, or any option,
warrant or other right to acquire, any Capital Security of any type
referred to in clause (a) of this definition.
"Cash Balance" means, at any date of determination, the aggregate
amount of cash and Cash Equivalents of the Borrowers and the Restricted
Subsidiaries at such date, as determined on a consolidated and combined
basis in accordance with GAAP.
"Cash Equivalents" means, at the time of purchase or other
acquisition by any Borrower or any Restricted Subsidiary, (a) obligations
issued or directly and fully guaranteed or insured by the United States
of America or any agency or instrumentality thereof with a remaining
maturity not exceeding one year, (b) time deposits and certificates of
deposit having maturities of not more than one year of any Lender or of
any domestic commercial bank which has a certificate of deposit rating
equal to one of the two highest ratings by S&P or Moody's, (c) repurchase
obligations with a term of not more than seven days for underlying
securities of the types described in clauses (a) and (b) entered into with
any domestic commercial bank meeting the qualifications specified in
clause (b) above, (d) commercial paper with maturities of not more than
270 days and a published rating of not less than A-1 by S&P (or the
equivalent rating then in effect) or P-1 by Moody's (or the equivalent
rating then in effect) and (e) debt securities with a remaining maturity
not exceeding one year issued by any Person organized under the laws of
any state of the United States of America or of the District of Columbia,
which securities are rated within the two highest rating categories by S&P
or Moody's.
"CATV System" means any System that is a community antenna
television system as such term is commonly understood in the cable
television industry.
"Charter Documents" means, with respect to any Person, (a) the
articles or certificate of formation, incorporation or organization (or
the equivalent organizational documents) of such Person, (b) the bylaws,
partnership agreement, limited liability company agreement or regulations
(or the equivalent governing documents) of such Person and (c) each
document setting forth the designation, amount and relative rights,
limitations and preferences of any class or series of such Person's
Capital Securities or of any rights in respect of such Person's Capital
Securities.
"Closing Date" means the first date on which a Loan is made to any
Borrower under this Agreement.
"Co-Administrative Agent" means The Bank of Nova Scotia, in its
capacity as Co-Administrative Agent in connection with this Agreement.
"Co-Agents" means Compagnie Financiere De CIC Et De L'Union
Europeenne, Fleet Bank and LTCB Trust Company, each in its capacity as a
Co-Agent in connection with this Agreement.
"Code" means the Internal Revenue Code of 1986.
"Collateral" means all property and assets of the Loan Parties and
Affiliate Pledgors, now owned or hereinafter acquired, on which a Lien is
purported to be created pursuant to any Security Document.
"Commitment" means, with respect to each Lender, the agreement of
such Lender to make Loans to any Borrower subject to the terms and
conditions of this Agreement in an amount equal to such Lender's
Commitment Percentage of the Total Commitment, as the same is reduced or
increased from time to time pursuant to subsection 2.4 or pursuant to
assignments in accordance with subsection 9.6(c).
"Commitment Percentage" means, with respect to each Lender, at any
time, the percentage set forth opposite such Lender's name on Annex A or,
in the case of a Lender that becomes a Lender pursuant to an assignment,
the amount set forth in the applicable Assignment and Acceptance
Agreement, as such percentage may be reduced or increased from time to
time pursuant to assignments in accordance with subsection 9.6(c).
"Commitment Period" means the period from and including the date
hereof to but not including the Termination Date or such earlier date on
which the Total Commitment shall terminate as provided herein.
"Commonly Controlled Entity" means an entity, whether or not
incorporated, which is under common control with any Borrower within the
meaning of Section 4001 of ERISA or is part of a group which includes any
Borrower and which is treated as a single employer under Section 414 of
the Code.
"Communications Act" means the Communications Act of 1934.
"Compliance Certificate" means a certificate of the Managing General
Partner in the form of Exhibit D, or in such other form as the
Administrative Agent may reasonably request.
"Contractual Obligation" means, as to any Person, any provision of
any Capital Security issued by such Person or of any agreement, instrument
or other undertaking to which such Person is a party or by which it or any
of its assets is bound.
"Convert," "Conversion" or "Converted" each refers to a conversion
of Loans of any Type into Loans of another Type and includes the
continuation of Eurodollar Loans as Eurodollar Loans having a new Interest
Period.
"Copyright Act" means Title 17 of the United States Code.
"Default" means any of the events specified in Section 7, whether
or not any requirement for the giving of notice, the lapse of time, or
both, or any other condition, has been satisfied.
"Default Period" has the meaning specified in subsection 6.15.
"Default Rate" means the Base Rate, plus 2.0%.
"Dollars" and "$" means dollars in lawful currency of the United
States of America.
"Domestic Lending Office" means, with respect to each Lender, (a)
the branch or office of such Lender set forth below such Lender's name
under the heading "Domestic Lending Office" on Annex A or, in the case of
a Lender that becomes a Lender pursuant to an assignment, the branch or
office of such Lender set forth under the heading "Domestic Lending
Office" in the Assignment and Acceptance Agreement giving effect to such
assignment or (b) such other branch or office of such Lender designated
by such Lender to the Agent and the Borrowers from time to time as the
branch or office at which its Base Rate Loans are to be made or
maintained.
"Dorellenic" means Dorellenic Cable Partners, a Pennsylvania general
partnership.
"Eligible Assignee" means at any time any Lender, bank, finance
company, insurance company, savings and loan association, savings bank,
other financial institution or fund that (a) is regularly engaged in
making or purchasing loans or (b) if not regularly engaged in making
commercial loans, is a "qualified institutional buyer" or an "accredited
investor" (as defined in Rule 144A and Regulation D, respectively, under
the Securities Act of 1933).
"Environmental Laws" means any and all Governmental Requirements
regulating, relating to or imposing liability or standards of conduct
concerning protection of human health or the environment.
"ERISA" means the Employee Retirement Income Security Act of 1974.
"Eurocurrency Liabilities" has the meaning specified in Regulation D
of the Board of Governors.
"Eurodollar Lending Office" means, with respect to each Lender, (a)
the branch or office of such Lender set forth below such Lender's name
under the heading "Eurodollar Lending Office" on Annex A or, in the case
of a Lender that becomes a Lender pursuant to an assignment, the branch
or office of such Lender set forth under the heading "Eurodollar Lending
Office" in the Assignment and Acceptance Agreement giving effect to such
assignment or (b) such other branch or office of such Lender designated
by such Lender to the Agent and the Borrowers from time to time as the
branch or office at which its Eurodollar Rate Loans are to be made or
maintained.
"Eurodollar Loans" means any Loan that bears interest computed on
the basis of the Eurodollar Rate.
"Eurodollar Rate" means, for any Interest Period for each Eurodollar
Loan comprising part of the same Borrowing or Conversion, the average
(rounded upward to the nearest 1/16th of 1%) determined by the
Administrative Agent of the interest rates per annum at which deposits in
United States Dollars are offered to The Toronto-Dominion Bank, New York
Branch, in the London interbank market at approximately 11:00 A.M. (London
time) two Business Days prior to the first day of such Interest Period,
which deposits are for a period equal to such Interest Period and in an
amount substantially equal to the Eurodollar Loan that the Administrative
Agent would make or Convert, as the case may be, in its capacity as a
Lender as a part of such Borrowing or Conversion.
"Eurodollar Rate Reserve Percentage" means for any day in an
Interest Period for any Eurodollar Loan, the reserve percentage applicable
on that day under regulations issued from time to time by the Board of
Governors for determining the maximum reserve requirement (including,
without limitation, any emergency, supplemental or other marginal reserve
requirement) for a member bank of the Federal Reserve System with respect
to liabilities or assets consisting of or including Eurocurrency
Liabilities having a term equal to such Interest Period.
"Event of Default" means any of the events specified in Section 7,
provided that any requirement for the giving of notice, the lapse of time,
or both, or any other condition, has been satisfied.
"Excess Cash Balance" means, at any date of determination, the
excess, if any, of the Cash Balance at such date over $1,000,000.
"FCC" means the Federal Communications Commission or any
Governmental Authority which succeeds to the powers and functions thereof.
"FCC License" means any license or permit issued by the FCC,
including, without limitation, any license issued for the operation of a
CATV System, a SMATV System, a community antenna relay system, microwave
system or an earth station.
"Federal Funds Rate" means, for each day, the rate per annum
(rounded upwards to the nearest 1/16th of 1%) equal to the weighted
average of the rates on overnight federal funds transactions with members
of the Federal Reserve System arranged by federal funds brokers, as
published for such day (or, if such day is not a Business Day, for the
next succeeding Business Day) by the Federal Reserve Bank of New York or,
if such rate is not so published for any day that is a Business Day, the
average of the quotations for such day received by the Administrative
Agent from three federal funds brokers of recognized standing selected by
it.
"Fee Letters" means (a) the letter agreement from the Borrowers to
the Administrative Agent concerning certain fees payable by the Borrowers
in connection with this Agreement and (b) the letter agreement from the
Borrowers to the Documentation Agent concerning certain fees payable by
the Borrowers in connection with this Agreement, as the same may be
amended, supplemented and otherwise modified from time to time.
"Financial Statement Adjustments" means, at any time, in the case
of the Financial Statements (other than the Initial Financial Statements)
then or theretofore delivered to the Lenders pursuant to subsections
5.1(a) and 5.1(b), such cumulative pro forma adjustments to such Financial
Statements as are necessary at such time to restate such Financial
Statements to be in accordance with GAAP as in effect on the date of this
Agreement and as applied in the preparation of such Financial Statements
on a basis consistent with the basis on which GAAP as so in effect was
applied in the preparation of the Initial Financial Statements.
"Financial Statements" means the Initial Financial Statements and
the financial statements of the Borrowers and the Restricted Subsidiaries
required to be delivered to the Lenders by subsections 5.1(a) and 5.1(b).
"Fixed Charges" means, for any period, without duplication, (a) the
sum of (i) Interest Expense for such period, (ii) commitment fees in
respect of any Indebtedness payable by the Borrowers and the Restricted
Subsidiaries during such period, (iii) Capital Expenditures of the
Borrowers and the Restricted Subsidiaries during such period, (iv)
Management Fees paid by the Borrowers and the Restricted Subsidiaries
during such period and (v) the excess, if any, of the aggregate amount of
Loans outstanding at the beginning of such period over the Total
Commitment which, as at the beginning of such period, are scheduled to be
in effect at the end of such period in accordance with the provisions of
this Agreement, all as determined on a consolidated and combined basis in
accordance with GAAP, less (b) the sum of (i) Management Fees paid by the
Borrowers and the Restricted Subsidiaries during such period pursuant to
subsection 6.15(a)(ii) or 6.15(b) and are set forth on the Compliance
Certificate delivered with respect to such period and (ii) the aggregate
amount of Capital Expenditures made by the Borrowers and the Restricted
Subsidiaries during such period to the extent such Capital Expenditures
were funded with the proceeds of any Capital Contribution made to any
Borrower or any of its Restricted Subsidiaries as set forth on the
Compliance Certificate delivered with respect to such period.
"Fixed Charges Annualized Operating Cash Flow" means (a) for the
first fiscal quarter of the Borrowers ending after the date of this
Agreement, an amount equal to Operating Cash Flow for such fiscal quarter,
(b) for the second fiscal quarter of the Borrowers ending after the date
of this Agreement, an amount equal to Operating Cash Flow for such fiscal
quarter, multiplied by two, (c) for the third fiscal quarter of the
Borrowers ending after the date of this Agreement, an amount equal to
Operating Cash Flow for such fiscal quarter, multiplied by three and (d)
for any fiscal quarter of the Borrowers ending thereafter, an amount equal
to Operating Cash Flow for such fiscal quarter, multiplied by four.
"Fixed Charges Annualized Operating Cash Flow to Fixed Charges
Ratio" means, at the date of any determination, the ratio of (a) Fixed
Charges Annualized Operating Cash for any fiscal quarter to (b) Fixed
Charges. For purposes of this ratio, Fixed Charges shall be determined
as follows: (i) for the first fiscal quarter of the Borrowers ending
after the date of this Agreement, an amount equal to the Fixed Charges for
such fiscal quarter; (ii) for the second fiscal quarter of the Borrowers
ending after the date of this Agreement, an amount equal to the Fixed
Charges for such fiscal quarter and the immediately preceding fiscal
quarter; (iii) for the third fiscal quarter of the Borrowers ending after
the date of this Agreement, an amount equal to the Fixed Charges for such
fiscal quarter and the immediately preceding two fiscal quarters; and (iv)
for any fiscal quarter of the Borrowers ending thereafter, an amount equal
to the Fixed Charges for such quarter and the immediately preceding three
fiscal quarters.
"Franchise" means a franchise, license (including, without
limitation, any FCC License) or other authorization or right to construct,
own, operate, promote and/or otherwise exploit any cable television system
or the reception and transmission of signals by microwave granted by the
FCC or any state, county, city, town, village or other local Governmental
Authority.
"GAAP" means generally accepted accounting principles and practices
as in effect from time to time and concurred in by the independent
certified accountants certifying the Financial Statements required by
subsection 5.1(a), applied on a basis consistent (except for changes
concurred in by such independent certified public accountants) with the
most recent audited Financial Statements delivered to the Lenders, except
as otherwise specifically provided herein.
"General Partners" means the collective reference to (a) the ACP
General Partners, (b) the West Boca General Partner, (c) each general
partner of any Restricted Subsidiary which is a partnership (other than
Vince Laurendi with respect to ACP's Restricted Subsidiary, Key Biscayne
Cablevision) and (d) each general partner of any Loan Party formed or
acquired after the Closing Date which is a partnership and, in each case,
including any successor to any thereof to the extent permitted by
subsection 6.8.
"Governmental Approval" means any authorization, consent, approval,
permit, franchise, certificate, license, implementing order or exemption
of, or registration or filing with, any Governmental Authority.
"Governmental Authority" means any nation or government, any state
or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions
of or pertaining to government.
"Governmental Requirement" means any law, statute, code, ordinance,
order, rule, regulation, judgment, decree, injunction, writ, edict, award,
authorization or other requirement of any Governmental Authority or any
obligation included in any certificate, franchise, permit or license
issued by any Governmental Authority or resulting from binding
arbitration, including, without limitation, any requirement under common
law.
"Guarantor" means each Restricted Subsidiary and any other Person
delivering a Guaranty Agreement in connection with this Agreement.
"Guaranty" means, for any Person, without duplication, any
liability, contingent or otherwise, of such Person guaranteeing or
otherwise becoming liable for any obligation of any other Person (the
"primary obligor") in any manner, whether directly or indirectly, and
including, without limitation, any liability of such Person, direct or
indirect, (a) to purchase or pay (or advance or supply funds for the
purchase or payment of) such obligation or to purchase (or to advance or
supply funds for the purchase of) any security for the payment of such
obligation, (b) to purchase property, securities or services for the
purpose of assuring the owner of such obligation of the payment of such
obligation or (c) to maintain working capital, equity capital or other
financial statement condition or liquidity of the primary obligor so as
to enable the primary obligor to pay such obligation; provided that the
term "Guaranty" does not include endorsements for collection or deposit
in the ordinary course of the endorser's business. The amount of any
liability assumed or acquired by the guaranteeing Person shall be the
lower of (x) an amount equal to the stated or determinable amount of the
primary obligation in respect of which such Guaranty is made and (y) the
maximum amount for which such guaranteeing Person may be liable pursuant
to the terms of the Guaranty, unless such primary obligation and the
maximum amount for which such guaranteeing Person may be liable are not
stated or determinable, in which case the amount of such liability,
assumed or acquired by the guaranteeing Person shall be such guaranteeing
Person's maximum reasonably anticipated liability in respect thereof as
determined by such guaranteeing Person in good faith.
"Guaranty Agreement" means the Guaranty Agreement in the form of
Exhibit E, as amended, supplemented and otherwise modified from time to
time.
"Head End" means the site and related facilities and equipment used
as the head end for a System, including the antenna site, the tower and
the antenna, the microwave communications equipment, the earth station and
the head end facilities.
"Highest Lawful Rate" means, with respect to each Agent and each
Lender, the maximum nonusurious interest rate, if any, that at any time
or from time to time may be contracted for, taken, reserved, charged or
received with respect to any Note or on other amounts, if any, due to such
Agent or such Lender pursuant to this Agreement or any other Loan Document
under Governmental Requirements applicable to such Agent or such Lender,
as the case may be, which are presently in effect or which may hereafter
be in effect.
"Home" means a single residential dwelling or commercial building
which can be connected by a single drop line. In the case of multiple
residential dwellings, such as apartment houses and multi-family homes,
which do not obtain reduced bulk service rates, each separate dwelling
unit shall be counted as one Home. The number of Homes in a multiple
residential dwelling which does obtain a reduced bulk service rate shall
be the number of Basic Subscribers for such multiple residential dwelling.
"Home Passed" means a Home which can be connected by a single drop
line from Active Plant.
"Indebtedness" of any Person means, without duplication, (a) any
liability of such Person (i) for borrowed money or arising out of any
extension of credit to or for the account of such Person (including,
without limitation, reimbursement or payment obligations with respect to
surety bonds, letters of credit, banker's acceptances and similar
instruments), for the deferred purchase price of property or services or
arising under conditional sale or other title retention agreements, other
than trade payables arising in the ordinary course of business, (ii)
evidenced by notes, bonds, debentures or similar instruments or (iii) in
respect of Capital Leases, (b) any liability secured by any Lien on any
property or assets (or any revenues, income or profits therefrom) of such
Person, whether or not such Person has assumed such liability or otherwise
become liable for the payment thereof, or (c) any liability of others of
the type described in the preceding clause (a) or (b) in respect of which
such Person has incurred, assumed or acquired a liability by means of a
Guaranty.
"Indemnified Person" means, at any time, any Person that is, or at
such time was, an Agent, a Lender, an Affiliate of an Agent or a Lender
or a director, officer, employee or agent of any such Person.
"Initial Financial Statements" means (a) the audited consolidated
and combined balance sheet of ACP and its Restricted Subsidiaries as at
December 31, 1993 and the related consolidated and combined statements of
income and cash flows for such Borrower's fiscal year ended on such date
and (b) the unaudited consolidated balance sheet of West Boca and its
Restricted Subsidiaries as at December 31, 1994 and the related unaudited
consolidated statements of income and cash flows for such Borrower's
fiscal year ended on such date, copies of which have been made available
to the Agents and the Lenders identified on the signature pages hereof
prior to the date of this Agreement.
"Insolvency" means with respect to any Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of Section 4245
of ERISA.
"Insolvent" means pertaining to a condition of Insolvency.
"Intellectual Property" has the meaning specified in subsection 3.8.
"Intercompany Note" means a promissory note of a Restricted
Subsidiary in the form of Exhibit F.
"Interest Expense" means, for any period, the aggregate interest
expense of the Borrowers and the Restricted Subsidiaries with respect to
(a) Indebtedness, other than Affiliate Subordinated Indebtedness, during
such period, other than any interest expense not payable in cash during
such period, and (b) Affiliate Subordinated Indebtedness paid in cash
during such period, in each case as determined on a consolidated and
combined basis in accordance with GAAP as in effect on the date of this
Agreement.
"Interest Payment Date" means the last day of March, June, September
and December of each year.
"Interest Period" means, for each Eurodollar Loan, the period (a)
commencing (i) for each such Loan comprising part of the same Borrowing,
on the date such Loan is made, and (ii) for each such Loan into which any
Loan has been Converted, the date of that Conversion and (b) ending on the
last day of the period selected by the Borrowers pursuant to the
provisions below. The duration of each such Interest Period shall be one,
two, three, six or twelve months (if available), as the Managing General
Partner may, upon notice received by the Administrative Agent not later
than 12:00 Noon (New York City time) on the third Business Day prior to
the first day of such Interest Period, select; provided, however, that:
(a) Interest Periods commencing on the same date for Loans
comprising part of the same Borrowing shall be of the same
duration;
(b) whenever the last day of any Interest Period would otherwise
occur on a day other than a Business Day, the last day of such
Interest Period shall be extended to occur on the next succeeding
Business Day, provided, that if such extension would cause the last
day of such Interest Period to occur in the next succeeding
calendar month, the last day of such Interest Period shall occur on
the next preceding Business Day;
(c) the Managing General Partner may not select any Interest
Period which ends after any date on which the Total Commitment is
schedule to reduce pursuant to subsection 2.4(a) unless, after
giving effect to such selection, the aggregate unpaid principal
amount of Base Rate Loans and Eurodollar Loans having Interest
Periods which end on or prior to such reduction date shall be at
least equal to the principal amount of the Loans required to be
prepaid pursuant to subsection 2.6(c) as a result of such
reduction; and
(d) no more than ten Interest Periods may be outstanding at any
time.
"Interest Rate Protection Agreement" means, for any Person, any
interest rate swap, reverse swap, cap or collar agreement or similar
arrangement providing for protection against interest rate or currency
exchange rate risks or the exchange of nominal interest obligations,
either generally or under specific contingencies between such Person and
any other Person.
"Interim Computation Date" has the meaning specified in
subsection 6.5(a).
"Investment" means, as to any Person, (a) any direct or indirect
purchase or other acquisition by such Person of the Capital Securities,
bonds, notes, debentures, or other securities or obligations of, or any
other interest in, any other Person, or any assets constituting a business
unit of any other Person, (b) any direct or indirect loan, advance,
extension of credit or capital contribution by such Person to any other
Person or (c) any joint venture or similar arrangement by such Person with
any other Person, including, without limitation, (i) all Acquisitions and
(ii) all Indebtedness and accounts receivable owed to such Person by such
other Person (including, any such Indebtedness or accounts receivable
which do not arise out of sales to or services for such other Person in
the ordinary course of business).
"Lender" means at any time any Person then having any or all of the
rights or obligations of a Lender and which (a) is identified as a Lender
on the signature pages hereof or (b) has been assigned such rights or
obligations pursuant to any Assignment and Acceptance Agreement.
"Lien" means, with respect to any property or asset (or any
revenues, income or profits therefrom) of any Person (in each case whether
the same is consensual or nonconsensual or arises by contract, operation
of law, legal process or otherwise), (a) any mortgage, lien, security
interest, pledge, attachment, levy or other charge or encumbrance of any
kind thereupon or in respect thereof or (b) any other arrangement under
which the same is transferred, sequestered or otherwise identified with
the intention of subjecting the same to, or making the same available for,
the payment or performance of any liability in priority to the payment of
the ordinary, unsecured creditors of such Person. For the purposes of
this Agreement, a Person shall be deemed to own subject to a Lien any
asset that it has acquired or holds subject to the interest of a vendor
or lessor under any conditional sale agreement, Capital Lease or other
title retention agreement relating to such asset.
"Litigation" means any case, proceeding, claim, grievance, lawsuit
or investigation conducted by or pending before any Governmental Authority
or any arbitration proceeding.
"Loan Documents" means this Agreement, the Notes, the Fee Letters,
the Guaranty Agreement, the Security Documents, the Subordination
Agreements and all other written agreements, documents, instruments and
certificates now or hereafter executed or delivered by any Borrower, any
Subsidiary or any Affiliate of any Borrower to or for the benefit of any
Agent or any Lender pursuant to or in connection with any of the
foregoing, and any and all amendments, modifications, supplements,
renewals, extensions, increases, restatements, rearrangements and
substitutions from time to time of all or any part of the foregoing.
"Loan Parties" means the Borrowers and each Subsidiary of the
Borrowers which is a party to any Loan Document.
"Loan Percentage" means, as to any Lender at the time of any
determination, the percentage which the aggregate principal amount of such
Lender's Loans outstanding at such time represents of the aggregate
principal amount of all Loans of all Lenders outstanding at such time.
"Loans" has the meaning specified in subsection 2.1.
"Management Agreements" means the Management Services Agreement for
Managed Systems, dated as of April 3, 1995, between Olympus and West Boca,
the Management Services Agreement, dated as of December 20, 1989, between
Olympus and Southeast, the Management Services Agreement, dated as of
December 19, 1989, between Olympus and ACP and the Management Services
Agreement, dated as of December 19, 1989, between Olympus and Key Biscayne
Cablevision, a Pennsylvania general partnership and Restricted Subsidiary
of ACP, each as amended, supplemented and otherwise modified to the date
of this Agreement and from time to time thereafter to the extent permitted
by subsection 6.8.
"Management Fees" means amounts payable by any Borrower or any
Restricted Subsidiary to any Manager pursuant to a Management Agreement
on account of compensation, fees, salary or otherwise, for providing
management or supervisory services to such Borrower or such Restricted
Subsidiary.
"Manager" means ACC or any Affiliate of ACC or any other Person
approved by the Managing Agents and the Required Lenders (which approval
will not be unreasonably withheld) which has delivered to the
Administrative Agent a certified copy of a duly executed and delivered
Management Agreement and a duly executed Management Subordination
Agreement which is in full force and effect and not being contested by any
Person.
"Management Subordination Agreement" means a Management
Subordination Agreement in the form of Exhibit G, as amended, supplemented
and otherwise modified from time to time.
"Managing Agents" means Toronto Dominion (Texas), Inc., NationsBank
of Texas, N.A., The Bank of Nova Scotia and Societe Generale, each in its
capacity as a Managing Agent in connection with this Agreement.
"Managing General Partner" means, with respect to ACP, Southeast and
West Boca, Olympus and any successor thereto in such capacity to the
extent permitted by subsection 6.8.
"Material Adverse Effect" means a material adverse effect on (a) the
business, operations, properties or assets, liabilities, condition
(financial or otherwise), results of operations or prospects of the
Borrowers and the Restricted Subsidiaries considered as a whole, (b) the
ability of the Borrowers, considered as a whole, to perform their payment
and other obligations under the Loan Documents or (c) the validity or
enforceability of this Agreement or any other Loan Document or the rights
or remedies of the Administrative Agent or the Lenders hereunder or
thereunder.
"Materials of Environmental Concern" means any gasoline or petroleum
(including crude oil or any fraction thereof) or petroleum products or any
hazardous or toxic substances, materials or wastes, defined or regulated
as such in or under any Environmental Law, including, without limitation,
asbestos, polychlorinated biphenyls and urea-formaldehyde insulation.
"Moody's" means Moody's Investors Service, Inc.
"Multiemployer Plan" means a Plan which is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
"Net Income" means, for any period, the aggregate net income (or net
loss) of the Borrowers and the Restricted Subsidiaries for such period as
determined on a consolidated and combined basis in accordance with GAAP
as in effect on the date of this Agreement.
"Net Proceeds" means, with respect to any Asset Sale by any Borrower
or any of its Restricted Subsidiaries the Net Proceeds (as determined in
accordance with this definition) of which exceed $1,000,000, whether in
a single transaction or series of related transactions, 100% of the gross
cash proceeds (including any cash payments received by way of deferred
payment of principal pursuant to a note or installment receivable or
purchase price adjustment receivable or otherwise, but only as and when
received) of such Asset Sale net of (a) reasonable and customary amounts
of attorneys' fees, accountants' fees, investment banking fees, survey
costs, title insurance premiums, and related search and recording charges,
transfer taxes, deed or mortgage recording taxes, required debt payments
(other than pursuant hereto), other customary expenses and brokerage,
consultant and other customary fees actually incurred in connection
therewith (other than such amounts payable to Affiliates) and (b) taxes
paid or payable as a result thereof. In addition, the proceeds of any
award or compensation for any property or assets of any Borrower or any
Restricted Subsidiary taken by condemnation or eminent domain and the
proceeds of any insurance award with respect to the loss or damage of any
property as and when received by any Borrower or any Restricted Subsidiary.
"Non-Excluded Taxes" has the meaning specified in subsection 2.14.
"Note" means a promissory note of the Borrowers payable to the order
of a Lender in the form of Exhibit H.
"Note Pledge Agreement" means a Note Pledge Agreement in the form
of Exhibit I, as amended, supplemented and otherwise modified from time
to time.
"Notice of Borrowing" has the meaning specified in subsection 2.2.
"Notice of Conversion" has the meaning specified in subsection 2.8.
"Obligations" means all unpaid principal of and accrued and unpaid
interest on (including, without limitation, interest accruing at the then
applicable rate provided herein after the maturity of the Loans and
interest accruing at the then applicable rate provided herein after the
filing of any petition in bankruptcy, or the commencement of any
insolvency, reorganization or like proceeding, relating to any Borrower,
whether or not a claim for post-filing or post-petition interest is
allowed in such proceeding), the Loans and all other obligations and
liabilities of any Borrower to any Agent or any Lender, whether direct or
indirect, absolute or contingent, due or to become due, now existing or
hereafter incurred, which may arise under, out of, or in connection with,
this Agreement, any Note, any other Loan Document or any Interest Rate
Protection Agreement entered into by any Borrower with any Lender or any
other document made, delivered or given in connection therewith, whether
on account of principal, interest, reimbursement obligations, fees,
indemnities, costs, expenses or otherwise (including, without limitation,
all reasonable fees and disbursements of counsel to any Agent or any
Lender that are required to be paid by the Borrowers pursuant to the terms
of this Agreement, any other Loan Document or any Interest Rate Protection
Agreement entered into by any Borrower with any Lender).
"Olympus" means Olympus Communications, L.P., a Delaware limited
partnership.
"Olympus Change of Control" means the failure of ACC and the Telesat
Owner, collectively, to own, directly or indirectly, (a) 100% of the
Capital Securities of Olympus having under ordinary circumstances (not
dependent on any contingency) voting power and (b) 66 % or more of the
equity Capital Securities of Olympus.
"Operating Cash Flow" means, for any period, (a) the sum of (i) Net
Income for such period and (ii) to the extent deducted in determining such
Net Income, (A) interest expense, (B) Management Fees, (C) income taxes,
(D) depreciation, (E) amortization and (F) all other non-cash expenses of
the Borrowers and the Restricted Subsidiaries, as determined on a
consolidated and combined basis in accordance with GAAP as in effect on
the date of this Agreement, less (b) to the extent included in determining
such Net Income, all non-cash income and non-cash gains and all fees,
interest income, dividends and distributions received from Affiliates to
the extent such fees, interest income, dividends and distributions (i)
were not paid in cash or (ii) if paid in cash, exceed 10% of Operating
Cash Flow for such period (before giving effect to such payment); provided
that, if any Borrower or any of its Restricted Subsidiaries shall have
made one or more Acquisitions during such period, Operating Cash Flow for
such period shall be adjusted on a pro forma basis to give effect to all
such Acquisitions as if they had occurred at the beginning of such period;
and provided further, that if any Borrower or any of its Restricted
Subsidiaries shall have effected one or more Asset Sales during such
period, Operating Cash Flow for such period shall be adjusted on a pro
forma basis to give effect to all such Asset Sales as if they had occurred
at the beginning of such period.
"Operating Cash Flow to Interest Expense Ratio" means, at the date
of any determination, the ratio of (a) Operating Cash Flow for any fiscal
quarter to (b) Interest Expense for such fiscal quarter.
"Parent Assignment of Partnership Interests" means a Parent
Assignment of Partnership Interests in the form of Exhibit J, as amended,
supplemented and otherwise modified from time to time.
"Participant" has the meaning specified in subsection 9.6(b).
"Partnership Agreements" means the ACP Partnership Agreement and the
West Boca Partnership Agreement.
"Partnership Assignment Agreements" means each Borrower Assignment
of Partnership Interests, each Parent Assignment of Partnership Interests,
each Subsidiary Assignment of Partnership Interests and each other
agreement executed and delivered by any Person pursuant to this Agreement
assigning, pledging and transferring to the Administrative Agent all or
any portion of the partnership interests of such Person in any Borrower
or any Restricted Subsidiary of such Borrower, as the same may be amended,
supplemented and modified from time to time.
"Pay Subscriber" has the meaning generally ascribed to such term in
the cable television industry.
"PBGC" means the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA.
"Permitted Intercompany Indebtedness" means Indebtedness of (a) any
Borrower owing to any other Borrower or (b) any Restricted Subsidiary
owing to any Borrower owning, directly or indirectly, Capital Securities
of such Restricted Subsidiary, which Indebtedness is evidenced by a
promissory note of such Restricted Subsidiary pledged to the
Administrative Agent pursuant to a Note Pledge Agreement that is in full
force and effect and not being contested by any Person.
"Permitted Liens" means, as applied to the property or assets (or
any revenues, income or profits therefrom), (a) Liens for taxes,
assessments and other governmental charges or levies not yet due or which
(if foreclosure, distraint, sale or other similar proceedings have not
commenced or, if commenced, have been stayed) are being contested in good
faith and by appropriate proceedings and adequate reserves for which are
maintained on the books of such Person in conformity with GAAP;
(b) carriers', warehousemen's, mechanics', materialmen's, repairmen's or
other like Liens arising in the ordinary course of business which are not
overdue for a period of more than sixty days or which (if foreclosure,
distraint, sale or other similar proceedings have not commenced or, if
commenced, have been stayed) are being contested in good faith by
appropriate proceedings and adequate reserves for which are maintained on
the books of such Person in accordance with GAAP; (c) pledges or deposits
in connection with workers' compensation, unemployment insurance and other
social security legislation (other than pursuant to ERISA or Section
412(n) of the Code); (d) deposits to secure the performance of bids, trade
contracts (other than for borrowed money), operating leases (as lessee
thereunder), statutory obligations, surety and appeal bonds, performance
bonds and other obligations of a like nature incurred in the ordinary
course of business; (e) easements, rights-of-way, restrictions and other
similar encumbrances incurred in the ordinary course of business which,
in the aggregate, are not substantial in amount and which do not in any
case materially detract from the value of the property subject thereto or
materially interfere with the ordinary conduct of the business of any
Borrower or any Restricted Subsidiary; (f) any interest or title of a
lessor of assets being leased by any Person pursuant to any Capital Lease
permitted by subsection 6.2(c) or 6.2(d); (g) Liens under Pole Rental
Leases on cables and other property affixed to transmission poles;
(h) Liens securing Indebtedness of the Borrowers and the Restricted
Subsidiaries permitted by subsection 6.2(c) or 6.2(d) incurred to finance
the acquisition of fixed or capital assets, provided that (i) such Liens
shall be created substantially simultaneously with the acquisition of such
fixed or capital assets, (ii) such Liens do not at any time encumber any
property other than the property financed by such Indebtedness, (iii) the
amount of Indebtedness secured thereby is not increased and (iv) the
principal amount of Indebtedness secured by any such Lien shall at no time
exceed 100% of the original purchase price of such property at the time
it was acquired; and (i) Liens created pursuant to the Security Documents.
"Person" means any individual, sole proprietorship, partnership,
corporation, business trust, joint stock company, mutual company, limited
liability company, business trust, trust, estate, unincorporated
association, joint venture, union, employee organization, Governmental
Authority or other entity of whatever nature.
"Plan" means any employee benefit plan which is covered by ERISA and
in respect of which any Borrower or a Commonly Controlled Entity is (or,
if such plan were terminated at such time, would under Section 4069 of
ERISA be deemed to be) an "employer" as defined in Section 3(5) of ERISA.
"Pole Rental Leases" means leases under which any Borrower or any
of its Restricted Subsidiaries has the right to use telephone or utility
poles, conduits or trenches for the purpose of supporting or housing
cables of any System owned or operated by any Borrower or any of its
Restricted Subsidiaries.
"Pro Forma Debt Service" means, at any date of determination, the
sum of all pro forma Interest Expense, commitment fees and principal
payments, including the current maturities thereof, due in respect of
Indebtedness, other than Affiliate Subordinated Indebtedness, during the
four fiscal quarters of Borrowers next succeeding such date of
determination; provided that (i) pro forma Interest Expense with respect
to outstanding Loans and commitment fees pursuant to subsection 2.3 shall
be determined (A) assuming that, with respect to each fiscal quarter
comprising a portion of such period, Loans in an aggregate principal
amount equal to the lesser of (I) the aggregate amount of Loans
outstanding on such date of determination and (II) the Total Commitment
which, as at such date, is scheduled to be in effect at the beginning of
such quarter in accordance with the provisions of this Agreement will be
in effect during such quarter and (B) assuming that (I) all Eurodollar
Loans outstanding on such date of determination shall bear interest until
the end of the then current Interest Period with respect thereto at the
rate applicable thereto on such date of determination and shall bear
interest from and after the end of such then current Interest Period with
respect thereto, at the three-month Adjusted Eurodollar Rate in effect on
the date of calculation on which Pro Forma Debt Service is being
calculated (the "Calculation Date") and (II) all Base Rate Loans shall
bear interest during such period at the Base Rate in effect on such
Calculation Date (provided that (x) if the aggregate principal amount of
Loans to be outstanding is ever determined pursuant to clause (i)(A)(II)
of this provision, the Loans shall be deemed repaid in the following
order, first, Base Rate Loans and, second, Eurodollar Loans and (y) the
interest rate applicable to all Loans shall be calculated after giving
effect to any Interest Rate Protection Agreement in effect with respect
to such Loans), (ii) pro forma principal payments with respect to Loans
outstanding under this Agreement shall be equal to the excess of the
aggregate amount of Loans outstanding on such date of determination over
the Total Commitment scheduled to be in effect at the end of such period
in accordance with the provisions of this Agreement, (iii) pro forma
Interest Expense with respect to all other Senior Funded Debt shall be
determined based upon the applicable interest rate in effect on such date
of determination assuming that the principal amount of such Indebtedness
on such date of determination remains outstanding throughout such period,
adjusted to give effect to any scheduled principal payments during such
period and after giving effect to any Interest Rate Protection Agreement
in effect with respect to such Senior Funded Debt and (iv) pro forma
principal payments with respect to all such other Senior Funded Debt shall
be equal to the excess of the principal amount of such Senior Debt on such
date of determination over the principal amount of such Senior Debt
scheduled to be outstanding at the end of such period.
"Properties" has the meaning specified in subsection 3.19.
"Refinancing" means the payment of the outstanding Indebtedness,
together with all accrued interest and fees thereon and other amounts due
thereunder, of (i) ACP and Southeast under the ACP/Southeast Loan
Agreement, (ii) West Boca under the West Boca Bridge Loan Agreement and
(iii) ACP and Southeast owing in respect of certain Affiliate Subordinated
Indebtedness.
"Register" has the meaning specified in subsection 9.6(d).
"Regulations G and U" means Regulations G and U of the Board of
Governors.
"Reorganization" means, with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of
Section 4241 of ERISA.
"Reportable Event" means any of the events set forth in Section
4043(b) or (c) of ERISA, other than those events described in Section
4043(b) as to which notice is waived by applicable PBGC regulation or
those events described in Section 4043(c) as to which the thirty-day
notice period is waived under subsection .13, .14, .16, .18, .19 or .20
of PBGC Reg. 2615.
"Required Lenders" means, at the time of any determination, Lenders
the Loan Percentages of which aggregate at least 66 % or, if no Loans are
then outstanding, Lenders the Commitment Percentages of which aggregate
at least 66 %.
"Responsible Officer" means, with respect to any Loan Party or
Affiliate Pledgor, (a) if such Loan Party or Affiliate Pledgor is a
partnership, such senior personnel of the general partner of such
partnership, including, without limitation, the Chief Executive Officer,
the President, any Vice President and Colin H. Higgin or, with respect to
financial matters, the Chief Financial Officer, as may be duly authorized
and designated in writing by such general partner to the Administrative
Agent to execute the Loan Documents to which the Loan Party or Affiliate
Pledgor of which it is the general partner is a party and any other
documents, agreements or instruments to be delivered by such Loan Party
or Affiliate Pledgor thereunder and (b) if such Loan Party or Affiliate
Pledgor is a corporation, such senior personnel of such Loan Party or
Affiliate Pledgor, including, without limitation, the Chief Executive
Officer, the President, any Vice President and Colin H. Higgin or, with
respect to financial matters, the Chief Financial Officer, as may be duly
authorized and designated in writing by such Loan Party or Affiliate
Pledgor to the Administrative Agent to execute the Loan Documents to which
such Loan Party or Affiliate Pledgor is a party and any other documents,
agreements or instruments to be delivered by such Loan Party or Affiliate
Pledgor thereunder.
"Restricted Investments" means, as to any Person, any Investment by
such Person in any of its Affiliates or Unrestricted Subsidiaries.
"Restricted Payments" has the meaning specified in subsection 6.6.
"Restricted Subsidiary" means Key Biscayne Cablevision, a
Pennsylvania general partnership, Cable Sentry Corporation, a Florida
corporation, any other Subsidiary of any Borrower that is not an
Unrestricted Subsidiary and any Unrestricted Subsidiary of any Borrower
which the Managing General Partner hereafter designates as a Restricted
Subsidiary and as to which the applicable Borrower complies with the
provisions of subsection 5.9 relating to "new Restricted Subsidiaries."
"Rigas Family" means John J. Rigas, Timothy J. Rigas, James P.
Rigas, Ellen K. Rigas, Michael J. Rigas and their respective spouses and
children and trusts, partnerships, corporations and other entities
controlled by one or more of such Persons; provided that neither ACC nor
any of its Subsidiaries shall be deemed to be a part of the Rigas Family.
For purposes of this definition, the term "controlled" means the
ownership, directly or indirectly, of equity securities or other ownership
interests in a Person by another Person or Persons, which represent more
than 50% of the voting power in such Person.
"Security Agreement" means a Security Agreement in the form of
Exhibit K, as amended, supplemented and otherwise from time to time.
"Security Documents" means each Partnership Assignment Agreement,
each Stock Pledge Agreement, each Security Agreement, each Note Pledge -
Agreement and all other security documents hereafter delivered to the
Administrative Agent granting a Lien on any asset or assets of any Person
to secure the Obligations hereunder and under any of the other Loan
Documents or to secure any guaranty of the Obligations, including, without
limitation, any such security document delivered pursuant to subsection
5.9 or 5.10.
"Senior Funded Debt" means, at any date of determination, (a) the
Loans and all other Indebtedness of the Borrowers and the Restricted
Subsidiaries on such date which (i) purports to be secured by a first Lien
on any assets of any Borrower or any Restricted Subsidiary or (ii) is not
subordinated to the Obligations and any other Indebtedness of such
Borrower or such Restricted Subsidiary, less (b) the Excess Cash Balance
at such date.
"Senior Funded Debt to Annualized Operating Cash Flow Ratio" means,
at the time of any determination, without duplication of amounts, the
ratio of (a) the aggregate amount outstanding at such time of all
obligations of the Borrowers and the Restricted Subsidiaries in respect
of the principal amount of all Senior Funded Debt to (b) Annualized
Operating Cash Flow for the most recently ended fiscal quarter.
"Single Employer Plan" means any Plan which is covered by Title IV
of ERISA, but which is not a Multiemployer Plan.
"SMATV System" means any System that is a satellite master antenna
television system as such term is commonly understood in the cable
television industry.
"Solvent" means when used with respect to any Person, means that,
as of any date of determination, (a) the amount of the "present fair
saleable value" of the assets of such Person will, as of such date, exceed
the amount that will be required to pay all "liabilities of such Person,
contingent or otherwise", as of such date (as such quoted terms are
determined in accordance with applicable federal and state laws governing
determinations of the insolvency of debtors) as such debts become absolute
and matured, (b) such Person will not have, as of such date, an
unreasonably small amount of capital with which to conduct its business
and (c) such Person will be able to pay its debts as they mature, taking
into account the timing of and amounts of cash to be received by such
Person and the timing of and amounts of cash to be payable on or in
respect of indebtedness of such Person; in each case after giving effect
to (A) as of the Closing Date, the making of the Loans to be made on the
Closing Date and to the application of the proceeds of such Loans and (B)
on any date after the Closing Date, the making of any Loan to be made on
such date, and to the application of the proceeds of such Loan. For
purposes of this definition, (i) "debt" means liability on a "claim", and
(ii) "claim" means any (x) right to payment, whether or not such a right
is reduced to judgment, liquidated, unliquidated, fixed, contingent,
matured, unmatured, disputed, undisputed, legal, equitable, secured or
unsecured or (y) right to an equitable remedy for breach of performance
if such breach gives rise to a right to payment, whether or not such right
to an equitable remedy is reduced to judgment, fixed, contingent, matured
or unmatured, disputed, undisputed, secured or unsecured.
"Southeast" means Southeast Florida Cable, Inc., a Florida
corporation.
"S&P" means Standard & Poor's Rating Group.
"Stock Pledge Agreement" means a Stock Pledge Agreement in the form
of Exhibit L, as amended, supplemented and otherwise modified from time
to time.
"Subordination Agreements" means each Affiliate Subordination
Agreement and each Management Subordination Agreement.
"Subsidiary" means, as to any Person, (a) a corporation of which
shares of stock having ordinary voting power (other than stock having such
voting power only by reason of the happening of a contingency) sufficient
to elect a majority of the board of directors of such corporation is at
the time directly or indirectly through one or more intermediaries, or
both, owned, or the management of which is controlled, by such Person, or
(b) a partnership, joint venture or other entity of which ownership,
equity or similar interests having the power to direct or cause the
direction of management and policies, or the power to elect the managing
general partner (or the equivalent), of such partnership, joint venture
or other entity, as the case may be, is at the time directly or indirectly
through one or more intermediaries, or both, owned, or the management of
which is controlled by, such Person. Unless otherwise qualified, all
references to a "Subsidiary" or to "Subsidiaries" in this Agreement shall
refer to a Subsidiary or Subsidiaries of any Borrower.
"Subsidiary Assignment of Partnership Interests" means a Subsidiary
Assignment of Partnership Interests in the form of Exhibit M, as amended,
supplemented and otherwise modified from time to time.
"System" means as to any Person, assets constituting a CATV System
or SMATV System (including, without limitation, all related licenses,
franchises and permits issued under federal or local laws from time to
time, and all Pole Rental Leases, utility easements and other property
services provided pursuant to, and all interest of such Person to receive
payments from, or pursuant to, said licenses, franchises and permits)
owned and operated by such Person and serving subscribers within a
geographical area covered by one or more Franchises from the same Head End
facility or by two or more related Head End facilities.
"System Cash Flow Percentage" has the meaning specified in
subsection 6.5(a).
"TD Prime Rate" means the fluctuating prime commercial lending rate
of interest adopted by The Toronto-Dominion Bank, New York Branch, as its
reference rate for the determination of interest rates for loans of
varying maturities in Dollars to residents of the United States of America
of varying degrees of creditworthiness and being quoted at such time by
such bank as its "prime rate." The TD Prime Rate shall be adjusted
automatically, without notice, on the effective date of any change in such
prime commercial lending rate. The TD Prime Rate is not necessarily the
lowest rate of interest of The Toronto-Dominion Bank, New York Branch.
"Telesat" means Telesat Cablevision, Inc., a Florida corporation.
"Telesat Owner" means the indirect holders on the date hereof of the
Capital Securities of Telesat identified in the Ownership Certificate
delivered to the Administrative Agent and the Lenders pursuant to
subsection 4.1(a)(x).
"Termination Date" means the earlier of (a) December 31, 2003 and
(b) any date on which the Loans become due and payable in full, whether
by acceleration or otherwise.
"Total Commitment" means $475,000,000, as such amount is or may be
reduced from time to time pursuant to this Agreement.
"Transferee" has the meaning specified in subsection 9.6(f).
"Trigger Date" means the earlier of (a) the date the Loans and all
other Obligations owing under this Agreement shall have become or declared
to be due and payable and (b) the date on which the Required Lenders shall
have notified the Administrative Agent after the occurrence of an Event
of Default that amounts are to be shared pursuant to subsection 7.2.
"Type" refers to a Base Rate Loan or a Eurodollar Loan.
"Unrestricted Subsidiary" means Palm Beach Group Cable Joint
Venture, a Florida joint venture, Palm Beach Group Cable, Inc., a Florida
corporation, and any Subsidiary of any Borrower formed or acquired after
the Closing Date and designated by a resolution of the Managing General
Partner on behalf of ACP or West Boca, as the case may be, as an
Unrestricted Subsidiary; provided that (a) if such Subsidiary is a
partnership, such Subsidiary may be an Unrestricted Subsidiary only if no
Borrower or any Restricted Subsidiary is a general partner of such
Subsidiary and (b) such Subsidiary shall only be an Unrestricted
Subsidiary for so long as such Subsidiary engages solely in the business
of acquiring, owning or disposing of publicly traded marketable securities
and FCC Licenses (other than FCC Licenses used in connection with the
ownership or operation of the Systems of any Borrower and its
Subsidiaries).
"WB Cable Associates" means WB Cable Associates, Ltd., a Florida
limited partnership.
"West Boca" means West Boca Acquisition Limited Partnership, a
Delaware limited partnership.
"West Boca Bridge Loan Agreement" means the $65,000,000 Credit
Agreement, dated as of April 3, 1995, among West Boca, as Borrower,
various financial institutions, as lenders, Societe Generale, as Agent,
and Toronto Dominion (Texas), Inc., as Co-Agent.
"West Boca General Partner" means Olympus in its capacity as the
general partner of West Boca and any successor thereto to the extent
permitted by subsection 6.8.
"West Boca Partnership Agreement" means the Limited Partnership
Agreement, dated as of April 3, 1995, of West Boca, as amended,
supplemented and otherwise modified from time to time to the extent
permitted by subsection 6.8.
1.2 Other Definitional Provisions. (a) Unless otherwise specified
therein, all terms defined in this Agreement shall have the same defined
meanings when used in any Note or any other Loan Document.
(b) As used herein and in any certificate or other document made
or delivered pursuant hereto, accounting terms relating to the Borrowers and
the Subsidiaries not defined in subsection 1.1 and accounting terms partly
defined in subsection 1.1, to the extent not defined, shall have the respective
meanings given to them under GAAP. Without limiting any other provision of
this Agreement, to the extent that any entity which is a Restricted Subsidiary
under this Agreement would not be included in the financial statements of any
Borrower as prepared on a consolidated basis in accordance with GAAP, such
financial statements shall be prepared so as to include such Restricted
Subsidiary on a combined basis in accordance with GAAP. Without limiting any
other provision of this Agreement, to the extent that any such Restricted
Subsidiary is included in the Financial Statements on a combined basis, all
financial terms defined herein shall also include the accounts of such
Restricted Subsidiary on a combined basis in accordance with GAAP.
(c) When used in this Agreement, the words "hereof," "herein" and
"hereunder" and words of similar import shall refer to this Agreement as a
whole and not to any particular provision of this Agreement, and the words
Section, subsection, Annex, Schedule and Exhibit refer to Sections and
subsections of, and Annexes, Schedules and Exhibits to, this Agreement unless
otherwise specified.
(d) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
(e) Except as otherwise specified herein, all references herein
to any Governmental Requirement defined or referred to herein shall be deemed
references to such Governmental Requirement or any successor Governmental
Requirement, as the same may have been or may be amended and supplemented from
time to time, and any rules or regulations promulgated thereunder from time to
time as the same may have or may be amended and supplemented from time to time.
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS
2.1 Revolving Credit Commitments. Subject to the terms and
conditions hereof, each Lender severally agrees to make revolving credit loans
("Loans") to the Borrowers from time to time during the Commitment Period in
an aggregate principal amount not to exceed at any time outstanding the amount
of such Lender's Commitment. Each Borrowing (a) shall consist of Loans of the
same Type made on the same day by the Lenders ratably according to their
respective Commitment Percentages, (b) consisting of Base Rate Loans shall be
in an aggregate amount not less than $3,000,000 or an integral multiple of
$1,000,000 in excess thereof (or, if the aggregate amount of the Available
Commitments on the date of such Borrowing is less than $1,000,000, such lesser
amount) and (c) consisting of Eurodollar Loans shall be in aggregate amount not
less than $5,000,000 or an integral multiple of $1,000,000 in excess thereof.
Within the foregoing limits and subject, without limitation, to subsections
2.17 and 4.2(e), the Borrowers may borrow, prepay and reborrow Loans in
accordance with the provisions hereof. The principal amount outstanding of all
Loans of all Lenders shall mature and be due and payable, together with all
accrued and unpaid interest thereon, on the Termination Date.
2.2 Making the Loans. (a) Each Borrowing shall be made by
telephonic notice to be followed by written confirmation given by the Managing
General Partner on behalf of any Borrower to the Administrative Agent not later
than 12:00 Noon (New York City time) on (i) one Business Day prior to the date
of the Borrowing in the case of a Borrowing consisting of Base Rate Loans and
(ii) the third Business Day prior to the date of the Borrowing in the case of
a Borrowing consisting of Eurodollar Loans. Each such notice of a Borrowing
(a "Notice of Borrowing") shall be in the form of Exhibit 2.2 and shall
identify the Borrower and specify (A) the date of such Borrowing, (B) the
number of Borrowings and the Type and aggregate principal amount of Loans
comprising each Borrowing, and (C) in the case of a Borrowing consisting of
Eurodollar Loans, the initial Interest Period for such Loans. Each Notice of
Borrowing shall be irrevocable and binding on the Borrowers. In the case of
a Borrowing, the proceeds of which will be used in whole or in part to reinvest
Net Proceeds of any Asset Sale, such Notice of Borrowing shall be accompanied
by the certificate required by subsection 2.17(b). The Administrative Agent
shall promptly deliver a copy of each Notice of Borrowing to the Lenders.
(b) Each Lender shall, before 12:00 Noon (New York City time) on
the date of such Borrowing, make available for the account of its Applicable
Lending Office to the Administrative Agent at the Administrative Agent's
Office, in immediately available funds, such Lender's Commitment Percentage of
such Borrowing. After the Administrative Agent's receipt of such funds and,
upon fulfillment of the applicable conditions set forth in Section 4, the
Administrative Agent shall make such funds available to the applicable
Borrower's account at the Administrative Agent's Office or as otherwise
designated in the Notice of Borrowing.
(c) Unless the Administrative Agent has received notice from a
Lender prior to 11:00 A.M. (New York City time) on the date of any Borrowing
that such Lender will not make available to the Administrative Agent such
Lender's Commitment Percentage of such Borrowing, the Administrative Agent may
assume such Lender has made such portion available to the Administrative Agent
on the date of such Borrowing in accordance with subsection 2.2(b) and the
Administrative Agent in its sole discretion may, in reliance on such
assumption, make available to the applicable Borrower on such date a
corresponding amount on behalf of such Lender. If and to the extent that such
Lender shall not have so made its Commitment Percentage available to the
Administrative Agent, the Borrowers jointly and severally agree and such Lender
agrees to repay to the Administrative Agent forthwith on demand such
corresponding amount, together with interest thereon for each day from the date
such amount is made available to such Borrower until the date such amount is
repaid to the Administrative Agent, at (i) in the case of the Borrowers, the
interest rate applicable at the time to the Loans comprising such Borrowing and
(ii) in the case of such Lender, the Federal Funds Rate until, and including,
the third Business Day after demand is made and thereafter at the Base Rate.
If such Lender shall repay to the Administrative Agent such corresponding
amount, such amount so repaid shall constitute such Lender's Loan as part of
such Borrowing for purposes of this Agreement. If the Borrowers shall repay
to the Administrative Agent such corresponding amount, no Borrower shall have
any liability with respect to losses, costs or expenses otherwise compensable
under subsection 2.15 in connection therewith.
(d) The agreements of the Lenders to make Loans to the Borrowers
pursuant to this Agreement are several, and not joint or joint and several, and
the failure of any Lender to make the Loan to be made by it as part of any
Borrowing shall not relieve any other Lender of its obligation, if any,
hereunder to make its Loan on the date of such Borrowing, but no Lender shall
be responsible for the failure of any other Lender to make the Loan to be made
by such other Lender on the date of any Borrowing.
2.3 Commitment Fee. The Borrowers jointly and severally agree to
pay to the Administrative Agent for the account of each Lender's Domestic
Lending Office a commitment fee during the Commitment Period, computed at the
rate of 3/8ths of 1% per annum on the average daily amount of the Available
Commitment of such Lender during the period for which payment is made,
calculated on the basis of a 360-day year for the actual number of days
elapsed, payable quarterly in arrears on each Interest Payment Date and on the
Termination Date.
2.4 Reduction of Total Commitment. (a) The Total Commitment shall
be reduced automatically and permanently on each reduction date set forth on
Schedule 2.4 by the amount set forth opposite such date on Schedule 2.4.
(b) The Total Commitment shall reduce under the circumstances, in
the amounts and on the dates specified in subsection 2.17. Any such reduction
of the Total Commitment pursuant to this subsection 2.4(b) shall reduce on a
pro rata basis the reductions of the Total Commitment scheduled to occur
pursuant to subsection 2.4(a) after the date of such reduction.
(c) The Borrowers shall have the right, on not less than five
Business Days' notice by the Managing General Partner to the Administrative
Agent, to terminate the Commitments or from time to time to reduce the Total
Commitment. Any such partial reduction shall be in an amount equal to
$5,000,000 or an integral multiple of $1,000,000 in excess thereof and shall
be permanent. Any reduction of the Total Commitment pursuant to this
subsection 2.4(c) shall reduce on a pro rata basis the reductions of the Total
Commitment scheduled to occur pursuant to subsection 2.4(a) after the date of
such reduction. The Administrative Agent shall promptly deliver a copy of such
notice to the Lenders.
2.5 Repayment of Loans. The Borrowers hereby jointly and
severally and unconditionally promise to pay, or prepay as the case may be, to
the Administrative Agent, for the account of the Applicable Lending Office of
each Lender, the principal amount of the Loans made by such Lender on the date
the same become due and payable pursuant to and in accordance with this
Agreement. Subject to subsection 2.6(a), payments and prepayments of Loans
shall be applied by the Administrative Agent first to pay Base Rate Loans and
then to pay Eurodollar Loans in the order that the Interest Periods for such
Loans end. All amounts shall be paid on the date specified therefor, whether
or not such payment would require a prepayment of any Eurodollar Loans prior
to the last day of the applicable Interest Periods therefor or would result in
losses, costs or expenses compensable under subsection 2.15.
2.6 Optional and Mandatory Prepayments. (a) Subject to subsection
2.15, the Borrowers may at any time, and from time to time, prepay, without
premium or penalty, the Loans, in whole or ratably in part, together with
accrued and unpaid interest to the date of such repayment on the principal
amount prepaid, by the Managing General Partner giving the Administrative Agent
notice (i) at least three Business Days prior to the prepayment of any
Eurodollar Loans and (ii) at least one Business Day prior to the prepayment of
any Base Rate Loans, in each case specifying the Type of Loans to be prepaid,
the date and amount of such prepayment. Such notice shall be irrevocable and
the payment amount specified in such notice shall be due and payable on the
prepayment date specified in such notice, together with accrued and unpaid
interest on the amount prepaid and any amounts compensable pursuant to
subsection 2.15. Partial prepayments of Loans shall be in an aggregate
principal amount of $5,000,000 or an integral multiple of $1,000,000 in excess
thereof. The Administrative Agent shall promptly deliver a copy of such notice
to the Lenders.
(b) The Borrowers hereby, jointly and severally, agree, without
notice or demand, immediately upon receipt by or on behalf of any Borrower or
any Restricted Subsidiary of any Net Proceeds of any Asset Sale, to pay to the
Administrative Agent for the ratable account of the Lenders an amount equal to
such Net Proceeds.
(c) If at any time the aggregate outstanding principal amount of
the Loans exceeds the Total Commitment then in effect, the Borrowers jointly
and severally agree, without notice or demand, to pay to the Administrative
Agent for the ratable account of the Lenders the amount of such excess,
together with accrued and unpaid interest to the date of such prepayment on the
principal amount prepaid.
2.7 Interest. Each Loan shall bear interest at the rates set
forth below, and the Borrowers jointly and severally agree to pay interest on
the unpaid principal amount of each Loan made by each Lender from the date of
such Loan until such principal amount shall be paid in full, at the times and
at the rates per annum set forth below:
(a) During such periods as such Loan is a Base Rate Loan, at a
rate per annum equal at all times to the lesser of (i) the Highest Lawful Rate
and (ii) the Base Rate in effect from time to time, calculated on the basis of
a 365 or 366-day year, as the case may be, for the actual number of days
elapsed, payable in arrears on (A) each Interest Payment Date, (B) the date
such Loan shall be Converted and (C) the Termination Date.
(b) During such periods as such Loan is a Eurodollar Loan, a rate
per annum equal at all times during each Interest Period for such Loan to the
lesser of (i) the Highest Lawful Rate and (ii) the Adjusted Eurodollar Rate for
such Interest Period, calculated on the basis of a 360-day year for the actual
number of days elapsed, payable in arrears on (A) the last day of such Interest
Period and, in the case of a Eurodollar Loan having an Interest Period longer
than three months, on the three-month anniversary of the first day of such
Interest Period and (B) the Termination Date.
(c) After the occurrence of any Event of Default, at the option
of the Required Lenders, to the extent permitted by applicable law, the
outstanding Obligations shall bear interest at a rate per annum equal to the
lesser of (i) the Highest Lawful Rate and (ii) the Default Rate. Such interest
shall be payable on demand and accrue until the earliest of (A) the waiver of
such Event of Default by the requisite number of Lenders or the cure of such
Event of Default to the satisfaction of the requisite number of Lenders, (B)
agreement by the requisite number of Lenders to rescind the charging of
interest at the Default Rate and (C) payment in full of the Obligations and the
termination of the Total Commitment.
2.8 Voluntary Interest Rate Conversion. Subject to the terms and
conditions hereof, the Borrowers may on any Business Day, on telephonic notice
to be followed by written confirmation ("Notice of Conversion"), given by the
Managing General Partner to the Administrative Agent not later than 12:00 Noon
(New York City time) (a) on the third Business Day prior to the date of the
proposed Conversion of Loans into Eurodollar Loans or (b) on one Business Day
prior to the date of the proposed Conversion of Eurodollar Loans into Base Rate
Loans, Convert Loans of one Type into Loans of another Type or Convert
Eurodollar Loans into Eurodollar Loans having a different Interest Period;
provided, however, that any Conversion of any Eurodollar Loans into Base Rate
Loans and of any Eurodollar Loans into Eurodollar Loans having a different
Interest Period shall be made only on the last day of an Interest Period for
such Eurodollar Loans. Each such Notice of Conversion shall specify therein
the requested (i) date of such Conversion, (ii) the amount of the Loans to be
Converted and (iii) if such Conversion is into Loans constituting Eurodollar
Loans or Eurodollar Loans having a different Interest Period, the duration of
the Interest Period for such Loans. Each Notice of Conversion shall be
irrevocable and binding on the Borrowers. The Administrative Agent shall
promptly deliver a copy of each Notice of Conversion to each Lender. Each
Conversion shall be in an aggregate amount not less than $5,000,000 or an
integral multiple of $1,000,000 in excess thereof.
2.9 Determination of Interest Rate. (a) The rate of interest for
each Eurodollar Loan specified in a Notice of Borrowing or a Notice of
Conversion shall be determined by the Administrative Agent two Business Days
before the first day of the Interest Period applicable for such Loan. The
Administrative Agent shall give prompt notice to the Borrowers and the Lenders
of the interest rate determined by the Administrative Agent for purposes of
subsection 2.7(b) and each such determination by the Administrative Agent shall
be conclusive, absent manifest error.
(b) If the Managing General Partner shall fail to deliver to the
Administrative Agent a Notice of Conversion in accordance with subsection 2.8
to select the duration of any Interest Period for any outstanding Eurodollar
Loan prior to the last day of the Interest Period applicable to such Loan, such
Loan will, automatically on the last day of the then existing Interest Period
therefor, Convert into a Base Rate Loan.
2.10 Inability to Determine Interest Rate. If prior to the first
day of any Interest Period:
(a) the Administrative Agent shall have determined (which
determination shall be conclusive and binding upon the Borrowers) that, by
reason of circumstances affecting the relevant market, adequate and reasonable
means do not exist for ascertaining the Adjusted Eurodollar Rate for such
Interest Period, or
(b) the Administrative Agent shall have received notice from the
Required Lenders that the Adjusted Eurodollar Rate determined or to be
determined for such Interest Period will not adequately and fairly reflect the
cost to such Lenders (as conclusively certified by such Lenders) of making or
maintaining their affected Loans during such Interest Period,
then the Administrative Agent shall give notice thereof to the Borrowers and
the Lenders as soon as practicable thereafter. If such notice is given, then
(i) any Eurodollar Loans requested to be made on the first day of such Interest
Period shall be made as Base Rate Loans, (ii) any Loans that were to have been
Converted on the first day of such Interest Period to Eurodollar Loans shall
continue as Base Rate Loans and (iii) any outstanding Eurodollar Loans shall
be Converted, on the respective last days of the then current Interest Periods
with respect to such Loans, to Base Rate Loans. Until such notice has been
withdrawn by the Administrative Agent, no further Eurodollar Loans shall be
made nor shall any Borrower have the right to Convert Loans into Eurodollar
Loans.
2.11 Pro Rata Treatment and Payments. Each Borrowing by any
Borrower from the Lenders hereunder, each payment by the Borrowers on account
of any commitment fee hereunder and any reduction of the Total Commitment shall
be made pro rata according to the respective Commitment Percentages of the
Lenders. Each payment (including each prepayment) by the Borrowers on account
of principal of and interest on the Loans shall be made pro rata according to
the respective Loan Percentages then held by the Lenders. All payments
(including prepayments) to be made by the Borrowers hereunder, whether on
account of principal, interest, fees or any other Obligation, shall be made
without set-off, counterclaim or other deduction whatsoever and shall be made
prior to 12:00 Noon (New York City time) on the date due to the Administrative
Agent, for the account of the respective Applicable Lending Offices of the
Lenders, at the Administrative Agent's Office, in Dollars and in immediately
available funds. The Administrative Agent shall distribute such payments to
the Lenders promptly upon receipt in like funds as received. If any payment
hereunder becomes due and payable on a day other than a Business Day, such
payment shall be extended to the next succeeding Business Day, and, with
respect to payments of principal, interest thereon shall be payable at the then
applicable rate during such extension.
2.12 Illegality. Notwithstanding any other provision herein, if
the adoption of or any change in any Governmental Requirement or in the
interpretation or application thereof shall make it unlawful for any Lender to
make or maintain Eurodollar Loans as contemplated by this Agreement, (a) the
commitment of such Lender hereunder to make or Convert into Eurodollar Loans
shall forthwith be cancelled and (b) such Lender's Loans then outstanding as
Eurodollar Loans, if any, shall be Converted automatically to Base Rate Loans
on the respective last days of the then current Interest Periods with respect
to such Loans or within such earlier period as is required by such Governmental
Requirement. If any such Conversion of Eurodollar Loans into Base Rate Loans
occurs on a day which is not the last day of the then current Interest Period
with respect thereto, the Borrowers jointly and severally agree to pay to such
Lender such amounts, if any, as may be required pursuant to subsection 2.15.
Each Lender will promptly notify the Borrowers of any event occurring after the
date of this Agreement which makes it unlawful for such Lender to make or
maintain Eurodollar Loans.
2.13 Governmental Requirements. (a) If the adoption of or any
change in any Governmental Requirement or in the interpretation or application
thereof or compliance by any Lender with any request or directive (whether or
not having the force of law) from any central bank or other Governmental
Authority made subsequent to the date hereof:
(i) shall subject any Lender to any tax of any kind
whatsoever with respect to this Agreement, any Note or any Eurodollar Loan made
by it, or change the basis of taxation of payments to such Lender in respect
thereof (except for Non-Excluded Taxes covered by subsection 2.14 and changes
in tax on the overall net income of such Lender);
(ii) shall impose, modify or hold applicable any reserve,
special deposit, compulsory loan or similar requirement against assets held by,
deposits or other liabilities in or for the account of, advances, loans or
other extensions of credit by, or any other acquisition of funds by, any office
of such Lender which is not otherwise included in the determination of the
Eurodollar Rate hereunder; or
(iii) shall impose on such Lender any other condition with
respect to any Eurodollar Loan;
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender deems to be material, of making, Converting or
maintaining Eurodollar Loans or to reduce any amount receivable hereunder in
respect thereof, such Lender shall give prompt notice thereof to the Borrowers
and then, in any such case, the Borrowers jointly and severally agree to
promptly pay such Lender such additional amount or amounts as will compensate
such Lender for such increased cost or reduced amount receivable. If the
Borrowers should receive any such notice from any Lender, subject to subsection
2.15, by telephonic notice, followed by written confirmation by the Managing
General Partner to the Administrative Agent and such Lender, the Borrowers may
Convert the affected Eurodollar Loans of such Lender to Base Rate Loans
notwithstanding such Conversion would occur on a date other than the last day
of the Interest Period for such Loans.
(b) If any Lender shall have determined that the adoption of or
any change in any Governmental Requirement regarding capital adequacy, or in
the interpretation or application thereof, or compliance by such Lender, or any
corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) from any Governmental
Authority made subsequent to the date hereof shall have the effect of reducing
the rate of return on such Lender's or such corporation's capital, as a
consequence of its obligations hereunder (including in respect of its
Commitment or any Loans made by it), to a level below that which such Lender
or such corporation could have achieved but for such adoption, change or
compliance (taking into consideration such Lender's or such corporation's
policies with respect to capital adequacy) by an amount deemed by such Lender
to be material, such Lender shall give prompt notice thereof to the Borrowers
and then, from time to time, the Borrowers jointly and severally agree to pay
promptly to such Lender such additional amount or amounts as will compensate
such Lender for such reduction.
(c) If any Lender becomes entitled to claim any additional amounts
pursuant to this subsection 2.13, it shall notify the Borrowers promptly (with
a copy to the Administrative Agent) of the event by reason of which it has
become so entitled. A certificate as to any additional amounts payable
pursuant to this subsection 2.13 submitted by such Lender to the Borrowers
(with a copy to the Administrative Agent) shall be conclusive in the absence
of manifest error. The agreements in this subsection 2.13 shall survive the
termination of this Agreement and the payment of the Obligations.
2.14 Taxes. (a) All payments made by the Borrowers under this
Agreement, any Notes and any other Loan Documents shall be made free and clear
of, and without deduction or withholding for or on account of, any present or
future income, stamp or other taxes, levies, imposts, duties, charges, fees,
deductions or withholdings, now or hereafter imposed, levied, collected,
withheld or assessed by any Governmental Authority, excluding net income taxes
and franchise taxes (imposed in lieu of net income taxes) imposed on the
Administrative Agent or any Lender as a result of a present or former
connection between the Administrative Agent or such Lender and the jurisdiction
of the Governmental Authority imposing such tax or any political subdivision
or taxing authority thereof or therein (other than any such connection arising
solely from the Administrative Agent or such Lender having executed, delivered
or performed its obligations or received a payment under, or enforced, this
Agreement or any Note). If any such non-excluded taxes, levies, imposts,
duties, charges, fees, deductions or withholdings ("Non-Excluded Taxes") are
required to be withheld from any amounts payable to the Administrative Agent
or any Lender hereunder or under any Note, the amounts so payable to the
Administrative Agent or such Lender shall be increased to the extent necessary
to yield to the Administrative Agent or such Lender (after payment of all Non--
Excluded Taxes) interest or any such other amounts payable hereunder at the
rates or in the amounts specified in this Agreement; provided, however, that
the Borrowers shall not be required to increase any such amounts payable to any
Lender that is not organized under the laws of the United States of America or
a state thereof if such Lender fails to comply with the requirements of
paragraph (b) of this subsection 2.14. Whenever any Non-Excluded Taxes are
payable by the Borrowers, each Lender affected thereby shall give prompt notice
to the Borrowers of such circumstance and as promptly as possible thereafter
the Borrowers shall send to the Administrative Agent for its own account or for
the account of such Lender, as the case may be, a certified copy of an original
official receipt received by the Borrowers showing payment thereof. If the
Borrowers fail to pay any Non-Excluded Taxes when due to the appropriate taxing
authority or fail to remit to the Administrative Agent the required receipts
or other required documentary evidence, the Borrowers shall jointly and
severally indemnify the Administrative Agent and the Lenders for any
incremental taxes, interest or penalties that may become payable by the
Administrative Agent or any Lender as a result of any such failure. The
agreements in this subsection 2.14 shall survive the termination of this
Agreement and the payment of the Obligations.
(b) Each Lender that is not incorporated under the laws of the
United States of America or a state thereof shall:
(i) deliver to the Borrowers and the Administrative Agent
(A) two duly completed copies of United States Internal Revenue Service Form
1001 or 4224, or successor applicable form, as the case may be, and (B) an
Internal Revenue Service Form W-8 or W-9, or successor applicable form, as the
case may be;
(ii) deliver to the Borrowers and the Administrative Agent
two further copies of any such form or certification on or before the date that
any such form or certification expires or becomes obsolete and after the
occurrence of any event requiring a change in the most recent form previously
delivered by it to the Borrowers; and
(iii) obtain such extensions of time for filing and complete
such forms or certifications as may reasonably be requested by the Borrowers
or the Administrative Agent;
unless in any such case an event (including, without limitation, any change in
treaty, law or regulation) has occurred prior to the date on which any such
delivery would otherwise be required which renders all such forms inapplicable
or which would prevent such Lender from duly completing and delivering any such
form with respect to it and such Lender so advises the Borrowers and the
Administrative Agent. Such Lender shall certify (i) in the case of a Form 1001
or 4224, that it is entitled to receive payments under this Agreement without
deduction or withholding of any United States federal income taxes and (ii) in
the case of a Form W-8 or W-9, that it is entitled to an exemption from United
States backup withholding tax. Each Person that shall become a Lender or a
Participant pursuant to subsection 9.6 shall, upon the effectiveness of the
related transfer, be required to provide all of the forms and statements
required pursuant to this subsection 2.14; provided that in the case of a
Participant such Participant shall furnish all such required forms and
statements to the Lender from which the related participation shall have been
purchased.
2.15 Indemnity. The Borrowers shall jointly and severally
indemnify each Lender and hold each Lender harmless from any loss or expense
which such Lender may sustain or incur as a consequence of (a) default by any
Borrower in making a Borrowing of or a Conversion into Eurodollar Loans after
the Managing General Partner has given a notice requesting the same in
accordance with the provisions of this Agreement, (b) default by the Borrowers
in making any prepayment after the Managing General Partner has given a notice
thereof in accordance with the provisions of this Agreement, (c) any prepayment
of any Eurodollar Loan on a day which is not the last day of the Interest
Period for such Loan or (d) any Conversion of a Eurodollar Loan to a Base Rate
Loan on any day other than the last day of the Interest Period therefor. Such
indemnification may include an amount equal to the excess, if any, of (i) the
amount of interest which would have accrued on the amount so prepaid, or not
so borrowed or Converted, or so Converted, for the period from the date of such
prepayment or of such failure to borrow or Convert or such Conversion to the
last day of such Interest Period (or, in the case of a failure to borrow or
Convert, the Interest Period that would have commenced on the date of such
failure) in each case at the applicable rate of interest for such Loans
provided for herein over (ii) the amount of interest (as reasonably determined
by such Lender) which would have accrued to such Lender on such amount by
placing such amount on deposit for a comparable period with leading banks in
the London interbank market. This covenant shall survive the termination of
this Agreement and the payment of the Obligations.
2.16 Change of Lending Office; Substitution of Lender. (a) Each
Lender agrees that if it makes any demand for payment under subsection 2.13 or
2.14(a), or if any adoption or change of the type described in subsection 2.12
shall occur with respect to it, it will use reasonable efforts (consistent with
its internal policy and legal and regulatory restrictions and so long as such
efforts would not be disadvantageous to it, as determined in its sole
discretion) to designate a different lending office if the making of such a
designation would reduce or obviate the need for the Borrowers to make payments
under subsection 2.13 or 2.14(a), or would eliminate or reduce the effect of
any adoption or change described in subsection 2.12.
(b) If (i) the obligation of any Lender to make or Convert Loans
into Eurodollar Loans has been suspended pursuant to subsection 2.12, (ii) any
Lender has demanded compensation under subsection 2.13 or (iii) any Lender has
notified the Borrower that it is not capable of receiving payments without
deduction or withholding pursuant to subsection 2.14, the Borrowers may replace
such Lender by the Managing General Partner designating in a notice given to
the Administrative Agent an Eligible Assignee to replace such Lender, which
Eligible Assignee, if not already a Lender, shall be subject to the approval
of the Administrative Agent, which approval shall not be unreasonably withheld.
If the Borrowers so designate an Eligible Assignee, then the Administrative
Agent shall give notice thereof to the Lender to be replaced, and thereupon,
such Lender shall promptly consummate an assignment of such Lender's
Commitment, Loans, Notes and other rights and obligations hereunder relative
to the Commitment of such Lender to such Eligible Assignee in accordance with
subsection 9.6. Notwithstanding anything to the contrary contained in
subsection 9.6(e) or in the Assignment and Acceptance Agreement, in connection
with any assignment pursuant to this subsection 2.16(b), the Borrowers jointly
and severally agree to pay to the Administrative Agent the $3,000 processing
fee provided for in subsection 9.6(e) and in paragraph numbered 4 of the
Assignment and Acceptance Agreement and jointly and severally agree to pay to
the Administrative Agent for the account of the assigning Lender all interest
and fees accrued and unpaid to the Effective Date of, and as such term is
defined in, the Assignment and Acceptance Agreement and all other Obligations
(other than principal on the Loans) then owing to such assigning Lender.
2.17 Use of Net Proceeds. (a) So long as no Default or Event of
Default exists or would exist as a result thereof and subject to the terms and
conditions hereof, the selling Borrower, on its own behalf or on behalf of any
of its selling Restricted Subsidiaries, as the case may be, may exercise its
right to borrow under subsection 2.1 an amount equal to the Net Proceeds
received by such Borrower or such Restricted Subsidiary from any voluntary
Asset Sale to make Acquisitions permitted by subsection 6.7(b) and, in the case
of any Net Proceeds arising out of a taking by condemnation or eminent domain
or a loss or damage pursuant to any casualty, any Borrower suffering such
taking or casualty, on its own behalf or on behalf of any of its Restricted
Subsidiaries suffering such taking or casualty, may exercise its rights to
borrow under subsection 2.1 an amount equal to such Net Proceeds received by
such Borrower or such Restricted Subsidiary to replace, restore or repair any
property or asset so taken or destroyed or damaged, including, without
limitation, to make Acquisitions permitted by subsection 6.7(b); provided, that
an amount equal to such Net Proceeds previously has been paid to the
Administrative Agent pursuant to subsection 2.6(b) and any such Acquisitions
or replacements, restorations or repairs occurs on or before twelve months
after the date on which the Net Proceeds from such Asset Sale are received from
time to time by such Borrower or such Restricted Subsidiary. Such Borrower
shall exercise such right to borrow by the Managing General Partner giving
notice to the Administrative Agent, in the case of a voluntary Asset Sale, on
or before the date such Asset Sale is consummated and, in the case of an
involuntary Asset Sale, within thirty days after such taking or casualty, which
notice shall state (i) the amount of the Net Proceeds of such Asset Sale
received and to be received by such Borrower or its Restricted Subsidiary and
the amount which the Managing General Partner expects to reinvest or to use to
replace, restore or repair taken or destroyed or damaged property or assets and
(ii) that no Default or Event of Default exists. The Administrative Agent will
promptly give a copy of such notice to the Lenders. In the event no such right
is timely exercised by the Managing General Partner or the Managing General
Partner exercises such right only as to a portion of such Net Proceeds, the
Total Commitment shall reduce permanently on the earlier of (i) the date on
which such notice is received by the Administrative Agent and (ii) the date on
which such notice is due, by the amount of such Net Proceeds that the Managing
General Partner elects not to reinvest or is hereby deemed to have elected not
to reinvest by failure to give timely notice.
(b) Together with its Notice of Borrowing in connection with any
Borrowing all or any portion of the proceeds of which will be used as a
reinvestment of Net Proceeds, the Managing General Partner shall deliver to the
Administrative Agent a certificate executed and delivered by a Responsible
Officer, certifying the amount of such Net Proceeds to be reinvested and
specifying in reasonable detail satisfactory to the Administrative Agent the
intended use of the proceeds of such Borrowing. On the date which is twelve
months after the date of receipt by any Borrower or any of its Restricted
Subsidiaries of any Net Proceeds, the Managing General Partner shall deliver
a certificate executed and delivered by a Responsible Officer, certifying (i)
the aggregate amount and use of such Net Proceeds actually reinvested in
accordance with this subsection 2.17 and (ii) the reduction, if any, in the
Total Commitment required by subsection 2.17(c).
(c) On the last day of the twelve-month period referred to in
subsection 2.17(b) applicable to any Net Proceeds or, at the option of the
Required Lenders, upon the occurrence of an Event of Default, the Total
Commitment shall be permanently reduced by an amount equal to such Net Proceeds
which have not been reinvested in accordance with this subsection 2.17.
SECTION 3. REPRESENTATIONS AND WARRANTIES
To induce the Agents and the Lenders to enter into this Agreement
and to make the Loans, the Borrowers hereby jointly and severally represent and
warrant to the Administrative Agent and each Lender that:
3.1 Financial Condition. (a) The Initial Financial Statements and
the other Financial Statements (including in each case the related schedules
and notes) delivered pursuant to subsection 5.1 present fairly, in all material
respects, the consolidated and combined financial position of the Borrowers and
the Restricted Subsidiaries at the respective dates of the balance sheets
included therein and the consolidated and combined results of their operations
and their consolidated and combined cash flows for the respective periods set
forth therein and have been prepared in accordance with GAAP consistently
applied throughout the periods involved (subject, in the case of interim
Financial Statements, to normal year-end adjustments). As of the date of any
balance sheet included in such Financial Statements, no Borrower or any
Restricted Subsidiary then had any outstanding Indebtedness to any Person or
any material, individually or in the aggregate, obligations pursuant to any
Guaranty, contingent liability or liability for taxes, or any long-term lease
or unusual forward or long-term commitment (including, without limitation, any
Interest Rate Protection Agreement or foreign currency swap or exchange
transaction), or any material, individually or in the aggregate, unrealized or
anticipated loss, not reflected in accordance with GAAP on such balance sheet
or in the notes related thereto in the Financial Statements.
(b) Since December 31, 1994, no change has occurred in the
business, operations, properties, liabilities, condition (financial or
otherwise), results of operations or prospects of any Borrower or any
Restricted Subsidiary that could reasonably be expected, either alone or
together with all other such changes affecting all or any of the Borrowers and
the Restricted Subsidiaries, to have a Material Adverse Effect.
3.2 Existence; Compliance with Law. Each Loan Party (a) is duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, (b) has the corporate or partnership, as the
case may be, power and authority, and the legal right, to own and operate its
property, to lease the property it operates as lessee and to conduct the
business in which it is currently engaged and in which it proposes to be
engaged after the Closing Date, (c) is duly qualified as a foreign entity or
business, as the case may be, and in good standing under the laws of each
jurisdiction where its ownership, lease or operation of property or the conduct
of its business requires such qualification and (d) possesses, and is in
compliance with, all Governmental Approvals and Governmental Requirements
except to the extent that the failure to possess or comply with any
Governmental Approval or Governmental Requirement could not reasonably be
expected, either alone or together with all such failures by the Borrowers and
the Restricted Subsidiaries, to have a Material Adverse Effect.
3.3 Power; Authorization; Enforceable Obligations. Each Loan
Party has the corporate or partnership, as the case may be, power and
authority, and the legal right, to make, deliver and perform the Loan Documents
to which it is a party and (in the case of each Borrower) to borrow hereunder
and has taken all necessary corporate or partnership, as the case may be,
action to authorize the borrowings on the terms and conditions of this
Agreement and the Notes and to authorize the execution, delivery and
performance of the Loan Documents to which it is a party. Except as set forth
on Schedule 3.3, no consent or authorization of, filing with, notice to or
other act by or in respect of, any Governmental Authority or any other Person
is required in connection with the borrowings hereunder or with the execution,
delivery, performance, validity or enforceability of the Loan Documents. This
Agreement has been, and each other Loan Document to which it is a party will
be, duly executed and delivered on behalf of each Loan Party party thereto.
This Agreement constitutes, and each other Loan Document when executed and
delivered will constitute, a legal, valid and binding obligation of each Loan
Party party thereto enforceable against such Loan Party in accordance with its
terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally and by general equitable principles
(whether enforcement is sought by proceedings in equity or at law).
3.4 No Legal Bar. The execution, delivery and performance of the
Loan Documents, the borrowings hereunder and the use of the proceeds thereof
will not violate any Governmental Requirement, Contractual Obligation or
Charter Document of any Loan Party and will not result in, or require, the
creation or imposition of any Lien on any of its properties or assets (or any
revenues, income or profits therefrom) pursuant to any such Governmental
Requirement or Contractual Obligation.
3.5 No Material Litigation. Except as set forth on Schedule 3.5,
no Litigation is pending or, to the knowledge of any Borrower, threatened to
which any Loan Party is or may become a party (a) with respect to any of the
Loan Documents or any of the transactions contemplated hereby or thereby,
(b) with respect to any Franchises or other Governmental Approvals necessary
for the conduct of such Loan Party's business or (c) which could reasonably be
expected to have a Material Adverse Effect.
3.6 No Default. No Loan Party is in default under or with respect
to any of its Contractual Obligations in any respect which could reasonably be
expected to have a Material Adverse Effect. No Default or Event of Default has
occurred and is continuing.
3.7 Ownership of Property; Liens. Each Loan Party has good record
and marketable title in fee simple to, or a valid leasehold interest in, all
its real property, and good title to or a valid leasehold interest in, all its
other property, and none of such property is subject to any Lien, other than
Permitted Liens. Schedule 3.7 sets forth a complete and correct list of all
such real property and leasehold interests owned by the Loan Parties as of the
date of this Agreement.
3.8 Intellectual Property. Each Loan Party owns, or is licensed
to use, all trademarks, tradenames, copyrights, technology, know-how and
processes necessary for the conduct of its business as currently conducted,
except for those which the failure to own or hold a license to use could not
reasonably be expected to have a Material Adverse Effect (the "Intellectual
Property"). No claim has been asserted and is pending by any Person
challenging or questioning the use of any such Intellectual Property or the
validity or effectiveness of any such Intellectual Property, nor does any
Borrower know of any valid basis for any such claim. The use of such
Intellectual Property by the Loan Parties does not infringe on the rights of
any Person, except for such claims and infringements that, in the aggregate,
could not reasonably be expected to have a Material Adverse Effect.
3.9 No Burdensome Restrictions. No Governmental Requirement or
Contractual Obligation of any Loan Party could reasonably be expected to have
a Material Adverse Effect.
3.10 Taxes. Each Loan Party has filed or caused to be filed all
tax returns which, to the knowledge of the Borrowers, are required to be filed
and has paid all taxes shown to be due and payable on said returns or on any
assessments made against it or any of its property or assets (or any revenues,
income or profits therefrom) and all other taxes, fees or other charges imposed
on it or any of its property or assets (or any revenues, income or profits
therefrom) by any Governmental Authority (other than any the amount or validity
of which are currently being contested in good faith by appropriate proceedings
and with respect to which reserves in conformity with GAAP have been provided
on the books of such Loan Party); no tax Lien has been filed, and, to the
knowledge of the Borrowers, no claim is being asserted, with respect to any
such tax, fee or other charge.
3.11 Federal Regulations. No part of the proceeds of any Loans
will be used for "purchasing" or "carrying" any "margin stock" within the
respective meanings of each of the quoted terms under Regulation G or
Regulation U of the Board of Governors. If requested by any Lender or the
Administrative Agent, each Borrower will furnish to the Administrative Agent
and each Lender a statement to the foregoing effect in conformity with the
requirements of FR Form G-1 or FR Form U-1 referred to in said Regulation G or
Regulation U, as the case may be.
3.12 ERISA. (a) Neither a Reportable Event nor an "accumulated
funding deficiency" (within the meaning of Section 412 of the Code or Section
302 of ERISA) has occurred during the five-year period prior to the date on
which this representation is made or deemed made with respect to any Plan, and
each Plan has complied in all material respects with the applicable provisions
of ERISA and the Code. No termination of a Single Employer Plan has occurred,
and no Lien in favor of the PBGC or a Plan has arisen, during such five-year
period. The present value of all accrued benefits under each Single Employer
Plan (based on those assumptions used to fund such Plans) did not, as of the
last annual valuation date prior to the date on which this representation is
made or deemed made, exceed the value of the assets of such Plan allocable to
such accrued benefits. No Borrower or any Commonly Controlled Entity has had
a complete or partial withdrawal from any Multiemployer Plan, and no Borrower
or any Commonly Controlled Entity would become subject to any liability under
ERISA if such Borrower or any such Commonly Controlled Entity were to withdraw
completely from all Multiemployer Plans as of the valuation date most closely
preceding the date on which this representation is made or deemed made. No
such Multiemployer Plan is in Reorganization or Insolvent. No Borrower or any
Commonly Controlled Entity has any liability, individually or in the aggregate,
to the PBGC (other than required insurance premiums, all of which that have
become due have been paid) or any Plan that has not been satisfied in full and
no event or condition has occurred, or is reasonably expected to occur, which
presents a material risk of termination of any Plan under circumstances which
could result in a material liability to any Borrower or any Commonly Controlled
Entity.
(b) In each case, assuming that the provisions of PL 103-465, the
General Agreement on Tariffs and Trade ("GATT"), were currently in effect, (i)
no Plan established or maintained by any Borrower or any Commonly Controlled
Entity would have a "liquidity shortfall" within the meaning of Section
302(c)(5) of ERISA, (ii) the liabilities of any such Plan, determined on each
of an ongoing and a termination basis, would not be increased, (iii) no
additional PBGC premiums relating to any such Plan would be required, (iv) the
minimum contribution obligations with respect to any such Plan would not be
increased solely by reason of the application of the provisions of GATT, (v)
no Lien upon any property or assets of an Borrower or any Restricted Subsidiary
(or upon any revenues, income or profits of any Borrower or any Subsidiary
therefrom) would be imposed with respect to obligations and responsibilities
to any such Plan and (vi) no notice to participants with respect to the level
of funding in any such Plan would be required.
3.13 Government Regulation. No Borrower or any Subsidiary is
(a) an "investment company" or a company "controlled by" an "investment
company," as such terms are defined in the Investment Company Act of 1940,
(b) a "holding company" or a "subsidiary" or "affiliate" of any Person that is
a "holding company," other than a Person that is a "holding company" exempt
from the provisions of the Public Utility Holding Company Act of 1935
("PUHCA"), and the rules thereunder, except Section 9(a)(2) of the PUHCA, as
such terms are defined in such act, or (c) subject to any Governmental
Requirement that regulates or otherwise limits its ability to issue promissory
notes or securities (other than the Securities Act of 1933, the Trust Indenture
Act of 1939 and state "blue sky" laws) or (in the case of any Loan Party) to
perform its obligations under the Loan Documents.
3.14 Subsidiaries. Schedule 3.14 sets forth a complete and correct
list of all the Subsidiaries at the date of this Agreement and of all the
issued and outstanding Capital Securities, and the owners thereof, of each
Borrower and each such Subsidiary on the date of this Agreement.
3.15 General Partners' Existence; Compliance with Law. Each
General Partner (a) is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization, (b) has the corporate
or partnership, as the case may be, power and authority and the legal right to
own and operate its property, to lease the property it operates and to conduct
the business in which it is currently engaged and in which it proposes to be
engaged after the Closing Date, (c) is duly qualified as a foreign entity or
business, as the case may be, and in good standing under the laws of each
jurisdiction where its ownership, lease or operation of property or the conduct
of its business requires such qualification and (d) possesses, and is in
compliance with, all Governmental Approvals and Governmental Requirements
except to the extent that the failure to possess or comply with any
Governmental Approval or Governmental Requirement could not reasonably be
expected, either alone or together with all such failures by all or any of the
General Partners, to have a Material Adverse Effect.
3.16 General Partners' Power: Authorization; Enforceable
Obligations. Each General Partner has the corporate or partnership, as the
case may be, power and authority and the legal right to make, deliver and
perform on behalf of the Loan Party of which it is a general partner, and
thereby legally bind such Loan Party to perform, (a) in the case of such Loan
Party which is a Borrower, this Agreement, and has taken all necessary action
to authorize the borrowings by such Borrower on the terms and conditions of
this Agreement and the Notes and (b) in the case of each such Loan Party
(including such Borrower), the Loan Documents to which it is a party and has
taken all necessary action to authorize the execution and delivery on behalf
of such Loan Party of, and thereby legally bind such Loan Party to perform,
this Agreement, the Notes and the other Loan Documents to which such Loan Party
is a party. This Agreement has been, and each of the other Loan Documents will
be, duly executed and delivered by each General Partner on behalf of each Loan
Party of which it is a general partner which is a party thereto.
3.17 Accuracy of Information. (a) All factual information
heretofore or contemporaneously furnished by or on behalf of any Loan Party or
any of its Affiliates to any Agent or any Lender for purposes of, or in
connection with, this Agreement or any transaction contemplated hereby is, and
all other such factual information hereafter furnished by or on behalf of any
Loan Party or any of its Affiliates to any Agent or any Lender pursuant to or
in connection with this Agreement, any Loan Document or the transactions
contemplated hereby or thereby will be, true and accurate in all material
respects on the date as of which such information is dated or certified and not
incomplete by omitting to state any material fact necessary to make such
information not misleading at such time.
(b) All financial budgets and projections that have been or are
hereafter from time to time prepared by or on behalf of the Borrowers and made
available to any Agent or any Lender pursuant to or in connection with this
Agreement, any other Loan Document or the transactions contemplated hereby or
thereby have been and will be prepared and furnished in good faith and were and
will be based on facts and assumptions that are believed by the management of
the Borrowers to be reasonable in light of the then current and foreseeable
business conditions of the Borrowers and the Restricted Subsidiaries and
represented and will represent the Borrowers' management's good faith estimate
of the consolidated and combined projected financial performance of the
Borrowers and the Restricted Subsidiaries based on the information available
to the Responsible Officers at the time so furnished.
3.18 Purpose of Loans. The proceeds of the Loans shall be used by
the Borrowers (a) for the Refinancing (i) in the case of ACP and Southeast, to
repay outstanding Indebtedness, and accrued and unpaid interest and fees
thereon to the Closing Date, in an aggregate principal amount not to exceed
$297,000,000, and (ii) in the case of West Boca, to repay outstanding
Indebtedness, and accrued and unpaid interest and fees thereon to the Closing
Date in an aggregate principal amount not to exceed $84,000,000, and (b) for
working capital and general corporate purposes.
3.19 Environmental Matters. Except as set forth on Schedule 3.19:
(a) The facilities and properties owned, leased or operated by any
Borrower or any Restricted Subsidiary (the "Properties") do not contain, and,
to the best knowledge of the Borrowers, have not previously contained, any
Materials of Environmental Concern in amounts or concentrations which (i)
constitute or constituted a material violation of, or (ii) could reasonably be
expected to give rise to any material liability under, any Environmental Law.
(b) To the best knowledge of the Borrowers, the Properties and all
operations at the Properties are in compliance, and have in the last five years
been in compliance, in all material respects with all applicable Environmental
Laws, and there is no contamination at, under or about the Properties or
violation of any Environmental Law with respect to the Properties or the
business operated by any Borrower or any Restricted Subsidiary (the "Business")
which could materially interfere with the continued operation of the Properties
or materially impair the fair saleable value thereof.
(c) No Borrower or any Restricted Subsidiary has received any
notice of violation, alleged violation, non-compliance, liability or potential
liability regarding environmental matters or compliance with Environmental Laws
with regard to any of the Properties or the Business, nor does any Borrower
have knowledge or reason to believe that any such notice will be received or
is being threatened except insofar as such notice or threatened notice, or any
aggregation thereof, does not involve a matter or matters that could reasonably
be expected to have a Material Adverse Effect.
(d) To the best knowledge of the Borrowers, Materials of
Environmental Concern have not been transported or disposed of from the
Properties in violation of, or in a manner or to a location which could
reasonably be expected to give rise to liability under, any Environmental Law,
nor have any Materials of Environmental Concern been generated, treated, stored
or disposed of at, on or under any of the Properties in violation of, or in a
manner that could reasonably be expected to give rise to liability under, any
applicable Environmental Law, except insofar as any such violation or liability
referred to in this paragraph, or any aggregation thereof, could not reasonably
be expected to have a Material Adverse Effect.
(e) No Litigation is pending or, to the knowledge of any Borrower,
threatened, under any Environmental Law to which any Borrower or any Restricted
Subsidiary is or, to the knowledge of any Borrower, will be named as a party
with respect to the Properties or the Business, nor are there any consent
decrees or other decrees, consent orders, administrative orders or other
orders, or other administrative or judicial requirements outstanding under any
Environmental Law with respect to the Properties or the Business except insofar
as such proceeding, action, decree, order or other requirement, or any
aggregation thereof, could not reasonably be expected to have a Material
Adverse Effect.
(f) To the best knowledge of the Borrowers, there has been no
release or threat of release of Materials of Environmental Concern at or from
the Properties, or arising from or related to the operations of any Borrower
or any Restricted Subsidiary in connection with the Properties or otherwise in
connection with the Business, in violation of or in amounts or in a manner that
could reasonably give rise to liability under Environmental Laws except insofar
as any such violation or liability referred to in this paragraph, or any
aggregation thereof, could not reasonably be expected to have a Material
Adverse Effect.
3.20 Solvency. As of the Closing Date each Loan Party is Solvent
and on each date on which a Loan is made (after giving effect to the
transactions being consummated on such day) will be Solvent.
3.21 Franchises; FCC and Copyright Matters. (a) Schedule 3.21 sets
forth all of the Systems owned or operated, and all of the Franchises held by,
the Loan Parties and correctly sets forth the issuer of and the termination
date, if any, of each such Franchise, provided, however, that if any Loan Party
acquires any System or Franchise after the Closing Date, the Borrowers shall
provide a notice to the Administrative Agent containing information of the type
contained in Schedule 3.21 with respect to each such System or Franchise, and
such notice shall be deemed incorporated in such Schedule, and provided,
further, that nothing contained in this subsection shall be deemed to
constitute consent to an Acquisition or Investment otherwise prohibited by the
terms of this Agreement. The Administrative Agent shall promptly deliver a
copy of each such notice to the Lenders.
(b) All of the following are true, correct and complete statements
with respect to each Loan Party, except for facts or circumstances which could
not reasonably be expected, either alone or together with all such facts and
circumstances affecting all or any of the Loan Parties, to have a Material
Adverse Effect:
(i) Each Franchise listed in Schedule 3.21 was duly and
validly issued by the issuer thereof pursuant to procedures which complied with
all requirements of applicable law.
(ii) Each Loan Party has the right to use all Franchises and
all other material licenses (including, without limitation, all cable
television or broadcast licenses), copyrights, permits, authorizations and
other rights, including, without limitation, agreements with public utilities
and microwave transmission companies, Pole Rental Leases and utility easements,
as are necessary or desirable for the conduct of the business of such Loan
Party.
(iii) Each such Franchise or other license or right held by
any Loan Party is in full force and effect, and such Loan Party is
substantially in compliance with the terms thereof with no known conflict with
the valid rights of others.
(iv) No event has occurred which permits, or after notice or
lapse of time or both would permit, the revocation or termination of any such
Franchise or other license or right.
(v) Each Loan Party has duly filed, in a timely manner, all
cable television registration statements and other filings which are required
to be filed by it under the Communications Act or the Cable Act and is in
compliance with the Communications Act and the Cable Act, including, without
limitation, the rules and regulations of the FCC relating to the carriage of
television signals.
(vi) Each Loan Party has submitted all requisite notices
under the Copyright Act and the rules and regulations of the U.S. Copyright
Office for the carriage of all broadcast stations as currently carried.
(vii) Each Loan Party has duly filed, in a timely manner, with
the Copyright Office all required documents, instruments and statements of
account (other than any such documents or instruments with respect to which
counsel for such Loan Party shall have advised such Loan Party that the failure
to make a filing in a timely manner is unlikely to result in the U.S. Copyright
Office or any other Person imposing sanctions upon or bringing legal
proceedings against such Loan Party), has remitted payments of all required
royalty fees and has obtained the compulsory license provided for in Section
Ill of the Copyright Act for the carriage of broadcast signals, which license
is currently valid and in full force and effect.
(viii) No Loan Party is liable to any Person for
copyright infringement under the Copyright Act as a result of its business
operations.
(ix) No consents or authorizations of, filings with, notices
to or other acts by or in respect of, any Governmental Authority or any other
Person are required in order to operate the Systems owned or operated by any
Loan Party or to permit such Loan Party to carry on the business of such
Systems as presently conducted, including, without limitation, West Boca has
obtained all such consents and authorizations of, made all such filings with,
and given all such notices to, all applicable Governmental Authorities that are
required in respect of its acquisition of the assets of the CATV System
operated in Palm Beach County, Florida from WB Cable Associates and other
necessary Governmental Approvals associated with such acquisition.
SECTION 4. CONDITIONS PRECEDENT
4.1 Conditions to Initial Loans. The agreement of each Lender to
make the initial Loan requested to be made by it is subject to the
satisfaction, immediately prior to or concurrently with the making of such Loan
on the Closing Date, of the following conditions precedent:
(a) Loan Documents. The Administrative Agent shall receive each
of the following, in sufficient number for each Lender, except where otherwise
noted, and in form and substance satisfactory to the Lenders:
(i) this Agreement, duly executed and delivered on behalf
of each Borrower by one or more Responsible Officers as required by such
Borrower's Charter Documents;
(ii) a Note, dated the Closing Date, duly executed and
delivered on behalf of each Borrower by one or more Responsible Officers as
required by such Borrower's Charter Documents;
(iii) a Guaranty Agreement, dated the Closing Date, duly
executed and delivered on behalf of each Restricted Subsidiary by one or more
Responsible Officers of such Restricted Subsidiary as required by such
Restricted Subsidiary's Charter Documents;
(iv) (A) a Borrower Assignment of Partnership Interests, duly
executed and delivered on behalf of ACP by one or more Responsible Officers as
required by its Charter Documents and (B) a Parent Assignment of Partnership
Interests from each of Olympus, Dorellenic and ACP Holdings, duly executed on
behalf of such Person by one or more Responsible Officers as required by its
Charter Documents;
(v) a Stock Pledge Agreement, dated the Closing Date, from
each of ACP and West Boca, duly executed and delivered on behalf of such Person
by one or more Responsible Officers as required by its Charter Documents;
(vi) a Note Pledge Agreement, dated the Closing Date, from
each Borrower, duly executed and delivered on behalf of such Person by one or
more Responsible Officers as required by its Charter Documents;
(vii) a Management Subordination Agreement, dated the Closing
Date, duly executed and delivered on behalf of Olympus by a Responsible Officer
as required by its Charter Documents;
(viii) a Security Agreement, dated the Closing Date, from each
of ACC and Olympus, duly executed and delivered on behalf of such Person by a
Responsible Officer as required by its Charter Documents, assigning to the
Administrative Agent for the benefit of the Lenders the Franchises held by ACC
and Olympus relating to the Systems owned and operated by West Boca;
(ix) an Ownership Certificate, duly executed on behalf of
Telesat by the Secretary or Assistant Secretary, certifying as to the ownership
of Telesat's Capital Securities as of the Closing Date, in form and substance
satisfactory to the Administrative Agent;
(x) an amendment to each Management Agreement in form and
substance reasonably satisfactory to the Administrative Agent, amending among
other things, the term and the payment provisions thereof to conform to the
requirements of this Agreement and the Management Subordination Agreement
relating thereto;
(xi) a letter agreement from Olympus providing for a cost-
sharing agreement and other agreements the Administrative Agent may reasonably
request, in form and substance reasonably satisfactory to the Administrative
Agent, with respect to the FCC Licenses to be held by Olympus relating to the
Systems owned and operated by West Boca;
(xii) an Affiliate Subordination Agreement from each holder
of Affiliate Subordinated Indebtedness outstanding on the Closing Date after
giving effect to the Loans made to the Borrowers on such date; and
(xiii) a letter agreement from the Borrowers to the
Administrative Agent concerning the insurance required by subsection 5.5.
(b) Refinancing. The Administrative Agent shall have received
evidence satisfactory to it that:
(i) the Refinancing Indebtedness has been paid or otherwise
discharged in full, which Indebtedness, together with accrued and unpaid
interest and fees thereon, in an aggregate principal amount (A) not to exceed
$297,000,000 with respect to ACP and Southeast, (B) not to exceed $84,000,000
with respect to West Boca, may be paid contemporaneously from the proceeds of
the Loans; and (C) not to exceed $10,000,000 with respect to certain Affiliate
Subordinated Indebtedness, may be paid contemporaneously from the proceeds of
the Loans; and
(ii) the ACP/Southeast Credit Agreement and the West Boca
Bridge Loan Agreement shall be terminated concurrently with the funding of the
Loans, together with executed copies of all payout or assignment letters, Lien
releases or assignments, termination or assignment statements, satisfactions,
agreements, certificates and other documents entered into in connection with
the Refinancing, all of which payout letters, lien releases or assignments,
termination or assignment statements, satisfactions, agreements, certificates
and other documents shall be in form and substance reasonably satisfactory to
the Administrative Agent.
(c) Related Agreements. The Administrative Agent shall have
received a copy of each Management Agreement, duly certified as of the Closing
Date by a Responsible Officer of the Borrower or Restricted Subsidiary party
thereto.
(d) Borrowing Certificate. The Administrative Agent shall have
received, with a counterpart for each Lender, a certificate of the Borrowers,
dated the Closing Date, substantially in the form of Exhibit 4.1(d), with
appropriate insertions and attachments, reasonably satisfactory in form and
substance to the Administrative Agent, executed on behalf of each Borrower by
a Responsible Officer.
(e) Compliance Certificate. The Administrative Agent shall have
received, with a counterpart for each Lender, a certificate of the Managing
General Partner, dated the Closing Date and executed on behalf of the Managing
General Partner by a Responsible Officer, demonstrating in a manner reasonably
satisfactory to the Administrative Agent pro forma compliance with the
financial covenants set forth in subsection 6.1 as of the Closing Date.
(f) Corporate Proceedings of the Loan Parties. The Administrative
Agent shall have received, with a counterpart for each Lender, a copy of the
resolutions, in form and substance reasonably satisfactory to the
Administrative Agent, of the Board of Directors of each Loan Party that is a
corporation authorizing (i) the execution, delivery and performance of each
Loan Document to which such Loan Party is a party, (ii) the granting by such
Loan Party of the Liens created pursuant to the Security Documents to which it
is a party and (iii) in the case of Southeast, the borrowings contemplated
hereunder, certified by a Responsible Officer as of the Closing Date, which
certificate shall be in form and substance reasonably satisfactory to the
Administrative Agent and shall state that the resolutions thereby certified
have not been amended, modified, revoked or rescinded.
(g) Loan Party Incumbency Certificates. The Administrative Agent
shall have received, with a counterpart for each Lender, a certificate of each
Loan Party that is a corporation, dated the Closing Date, as to the incumbency
and signature of the officers of such Loan Party executing any Loan Document
on behalf of such Loan Party which certificate shall be in form and substance
reasonably satisfactory to the Administrative Agent, executed by the President
or any Vice President and the Secretary or any Assistant Secretary of such Loan
Party.
(h) Partnership Proceedings of the Loan Parties. The
Administrative Agent shall have received, with a counterpart for each Lender,
a copy of any consent or approval of the partners required under the Charter
Documents of each Loan Party that is a partnership in connection with (i) the
execution, delivery and performance of each Loan Document to which it is a
party, (ii) the granting of the Liens created pursuant to the Security
Documents to which it is a party and (iii) in the case of ACP and West Boca,
the borrowings contemplated hereunder, certified on behalf of such Loan Party
by a Responsible Officer, which certificate shall be in form and substance
reasonably satisfactory to the Administrative Agent and shall state that the
consent or approval thereby certified have not been amended, modified, revoked
or rescinded.
(i) Corporate and Partnership Documents of Loan Parties. The
Administrative Agent shall have received, with a counterpart for each Lender,
true and complete copies of the Charter Documents of each Loan Party, certified
as of the Closing Date as complete and correct copies thereof by a Responsible
Officer.
(j) Corporate Proceedings of the Affiliate Pledgors and the
Corporate General Partners Thereof. The Administrative Agent shall have
received, with a counterpart for each Lender, a copy of the resolutions of the
Board of Directors of each Affiliate Pledgor that is a corporation and of each
corporate managing general partner of each Affiliate Pledgor that is a
partnership, which resolutions shall be in form and substance reasonably
satisfactory to the Administrative Agent authorizing (i) the execution,
delivery and performance of each Security Document to which such Affiliate
Pledgor is a party and (ii) the granting by such Affiliate Pledgor of the Liens
created pursuant to the Security Documents to which such Affiliate Pledgor is
a party, certified by a Responsible Officer of such Affiliate Pledgor (if such
Affiliate Pledgor is a corporation) or a Responsible Officer of such corporate
managing general partner of such Affiliate Pledgor (if such Affiliate Pledgor
is a partnership) as of the Closing Date, which certificate shall be in form
and substance reasonably satisfactory to the Administrative Agent and shall
state that the resolutions thereby certified have not been amended, modified,
revoked or rescinded.
(k) Affiliate Pledgor Incumbency Certificates. The Administrative
Agent shall have received, with a counterpart for each Lender, a certificate
of each Affiliate Pledgor that is a corporation and of the corporate managing
general partner of each Affiliate Pledgor that is a partnership, dated the
Closing Date, as to the incumbency and signature of the officers of such
Affiliate Pledgor (if such Affiliate Pledgor is a corporation) or such
corporate general partner of such Affiliate Pledgor (if such Affiliate Pledgor
is a partnership) executing any Security Document on behalf of such Affiliate
Pledgor, which certificate shall be in form and substance reasonably
satisfactory to the Administrative Agent, executed by a Responsible Officer of
such Affiliate Pledgor (if such Affiliate Pledgor is a corporation) or such
corporate general partner of such Affiliate Pledgor (if such Affiliate Pledgor
is a partnership).
(l) Partnership Proceedings of the Affiliate Pledgors. The
Administrative Agent shall have received, with a counterpart for each Lender,
a copy of any consent or approval of the partners required under the Charter
Documents of any Affiliate Pledgor that is a partnership in connection with (i)
the execution, delivery and performance of each Security Document to which it
is a party or (ii) the granting of the Liens created pursuant to the Security
Documents to which it is a party, certified on behalf of such Affiliate Pledgor
by a Responsible Officer of each managing general partner of such Affiliate
Pledgor, which certificate shall be in form and substance reasonably
satisfactory to the Administrative Agent and shall state that the consent or
approval thereby certified has not been amended, modified, revoked or
rescinded.
(m) Corporate and Partnership Documents of the Affiliate Pledgors.
The Administrative Agent shall have received, with a counterpart for each
Lender, true and complete copies of the Charter Documents of each Affiliate
Pledgor, certified as of the Closing Date as complete and correct copies
thereof by a Responsible Officer of such Affiliate Pledgor (if such Affiliate
Pledgor is a corporation) or by a Responsible Officer of each managing general
partner of such Affiliate Pledgor (if such Affiliate Pledgor is a partnership).
(n) Consents, Licenses and Approvals. The Administrative Agent
shall have received, with a counterpart for each Lender, a certificate of each
Borrower executed and delivered on behalf of such Borrower by a Responsible
Officer (i) attaching copies of all consents, authorizations, filings and
notices referred to in subsection 3.3, if any, and (ii) stating that such
consents, authorizations, filings and notices are in full force and effect, and
each such consent, authorization, filing and notice shall be in form and
substance reasonably satisfactory to the Administrative Agent.
(o) Fees. The Administrative Agent and the Documentation Agent
shall have received the fees to be received on the Closing Date referred to in
the Fee Letters.
(p) Legal Opinions. The Administrative Agent shall have received,
with a counterpart for each Lender, the following executed legal opinions:
(i) the executed legal opinion of Buchanan Ingersoll
Professional Corporation, counsel to the Borrowers and the other Loan Parties,
substantially in the form of Exhibit 4.1(p)(i);
(ii) the executed legal opinion of Colin H. Higgin, Esq.,
Deputy General Counsel of the Borrowers, substantially in the form of Exhibit
4.1(p)(ii); and
(iii) the executed legal opinion of Fleischman & Walsh,
special counsel to the Borrowers and the other Loan Parties with respect to FCC
matters, substantially in the form of Exhibit 4.1(p)(iii).
Each such legal opinion shall cover such other matters incident to the
transactions contemplated by this Agreement as the Administrative Agent may
reasonably require.
(q) Actions to Perfect Liens. The Administrative Agent shall have
received evidence in form and substance satisfactory to it that all filings,
recordings, registrations and other actions, including, without limitation, the
filing of duly executed financing statements on form UCC-1 and the delivery of
any notices required pursuant to Article 8 of the Uniform Commercial Code,
necessary or, in the opinion of the Administrative Agent, desirable to perfect
the Liens created by the Security Documents shall have been completed (or
arrangements satisfactory to the Administrative Agent for the prompt completion
thereof after the Closing Date).
(r) Lien Searches. The Administrative Agent shall have received
the results of a recent search by a Person satisfactory to the Administrative
Agent, of the Uniform Commercial Code, judgment and tax lien filings which may
have been filed with respect to personal property of any Loan Party, and the
results of such search shall be satisfactory to the Administrative Agent.
(s) Insurance. The Administrative Agent shall have received
certificates of insurance and other evidence in form and substance satisfactory
to it that all of the requirements of subsection 5.5 shall have been satisfied.
(t) Transaction Statements; Pledged Stock; Stock Powers;
Acknowledgment and Consents. The Administrative Agent shall have received (i)
such executed copies of the Transaction Statements and Notices, in the forms
attached to each Assignment of Partnership Interests as Exhibit A and Exhibit
B, respectively, as are requested by the Administrative Agent, (ii) the
certificates representing the Capital Securities pledged pursuant to each Stock
Pledge Agreement, together with an undated stock power for each such
certificate executed in blank by the appropriate Responsible Officer and
(iii) Acknowledgment and Consents in the form attached to the Stock Pledge
Agreements, executed by the appropriate Responsible Officers.
4.2 Conditions to Each Loan. The agreement of each Lender to make
any Loan requested to be made by it on any date (including, without limitation,
its initial Loan) is subject to the satisfaction of the following conditions
precedent:
(a) Notice of Borrowing. The Administrative Agent has received
a Notice of Borrowing with respect to such Loan in accordance with subsection
2.2(a), together with the certificate required by subsection 2.17(b), if
applicable.
(b) Representations and Warranties. Each of the representations
and warranties made by the Loan Parties and the Affiliate Pledgors in or
pursuant to any Loan Document shall be true and correct in all material
respects on and as of such date as if made on and as of such date.
(c) No Default. No Default or Event of Default shall have
occurred and be continuing on such date or after giving effect to the Loans
requested to be made on such date.
(d) Governmental Requirements. Such Loan will not contravene any
Governmental Requirement applicable to such Lender.
(e) Leverage. On such date and after giving effect to the Loans
requested to be made on such date, the Senior Funded Debt to Annualized
Operating Cash Flow Ratio on such date shall not be greater than the Senior
Funded Debt to Annualized Operating Cash Flow Ratio applicable pursuant to
subsection 6.1 to the most recently ended fiscal quarter of the Borrowers for
which the Financial Statements and Compliance Certificate required by
subsections 5.1 and 5.2(b) have been delivered.
(f) Additional Matters. All corporate and other proceedings, and
all documents, instruments and other legal matters in connection with the
transactions contemplated by this Agreement and the other Loan Documents shall
be satisfactory in form and substance to the Administrative Agent, and the
Administrative Agent shall have received such other documents and legal
opinions in respect of any aspect or consequence of the transactions
contemplated hereby or thereby as it shall reasonably request.
4.3 Conditions to Conversions. The agreement of each Lender to
Convert any Loan to a Eurodollar Loan on any date pursuant to a Notice of
Conversion is subject to the satisfaction of the following conditions
precedent:
(a) Notice of Conversion. The Administrative Agent has received
a Notice of Conversion in accordance with subsection 2.8.
(b) Representations and Warranties. Each of the representations
and warranties made by the Loan Parties and the Affiliate Pledgors in or
pursuant to any Loan Document shall be true and correct in all material
respects on and as of such date as if made on and as of such date.
(c) No Default. No Default or Event of Default shall have
occurred and be continuing on such date.
(d) Governmental Requirements. Such Conversion will not
contravene any Governmental Requirement applicable to such Lender.
4.4 Satisfaction of Conditions. Each Borrowing by any Borrower
hereunder and each Conversion of any Loan pursuant to subsection 2.8 shall
constitute a joint and several representation and warranty by the Borrowers as
of the date thereof that the conditions contained in subsection 4.2 or 4.3, as
the case may be, have been satisfied.
SECTION 5. AFFIRMATIVE COVENANTS
The Borrowers hereby agree that, so long as the Commitments remain
in effect and until payment in full of the Loans and all other Obligations that
have become due when the Loans have been paid in full, each Borrower shall and
(except in the case of delivery of financial information and reports) shall
cause each of its Restricted Subsidiaries to:
5.1 Financial Statements. Furnish to each Lender:
(a) as soon as available, but in any event within 120 days after
the end of each fiscal year of the Borrowers, a copy of the consolidated and
combined balance sheet of the Borrowers and the Restricted Subsidiaries as at
the end of such year and the related consolidated and combined statements of
income and retained earnings and of cash flows of the Borrowers and the
Restricted Subsidiaries for such year, setting forth in each case in
comparative form the figures for the previous year, reported on without
qualification as to the Borrowers being a going concern or as to the scope of
the audit by Deloitte & Touche or other independent certified public
accountants of nationally recognized standing and with respect to which
Deloitte & Touche or such other accountants have not issued an adverse opinion
or a disclaimer of opinion; and
(b) as soon as available, but in any event not later than ninety
days after the end of each of the first three fiscal quarters of the Borrowers,
the unaudited consolidated and combined balance sheet of the Borrowers and the
Restricted Subsidiaries as at the end of such quarter and the related unaudited
consolidated and combined statements of income and retained earnings and of
cash flows of the Borrowers and the Restricted Subsidiaries for such quarter
and the portion of the fiscal year through the end of such quarter, setting
forth in each case in comparative form the figures for the previous year,
certified by a Responsible Officer of the Managing General Partner as being
fairly stated in all material respects (subject to normal year-end audit
adjustments);
all such Financial Statements shall be complete and correct in all material
respects and shall be prepared in reasonable detail and in accordance with GAAP
applied consistently throughout the periods reflected therein and with prior
periods, except as approved by such accountants or Officer, as the case may be,
and disclosed therein. If any such change has occurred, the Compliance
Certificate shall include the applicable Financial Statement Adjustments.
5.2 Certificates; Other Information. Furnish to each Lender:
(a) concurrently with the delivery of the Financial Statements
referred to in subsection 5.1(a), a certificate of the independent certified
public accountants reporting on such Financial Statements stating that in
making the examination necessary therefor no knowledge was obtained of any
Default or Event of Default, except as specified in such certificate;
(b) concurrently with the delivery of the Financial Statements
referred to in subsections 5.1(a) and 5.1(b), a Compliance Certificate of the
Borrowers executed and delivered on behalf of the Borrowers by a Responsible
Officer of the Managing General Partner (i) stating that, to the best of such
Officer's knowledge, after due inquiry, the Borrowers during such period have
observed or performed all of their covenants and other agreements, and
satisfied every condition, contained in this Agreement and the other Loan
Documents to be observed, performed or satisfied by them or any of them, and
that such Officer has obtained no knowledge, after due inquiry, of the
occurrence of any Default or Event of Default except as specified in such
certificate (if a Default or Event of Default has occurred, such Officer shall
further state in reasonable detail the duration of such Default or Event of
Default and what action any Borrower has taken, is taking or proposes to take
with respect thereto) and (ii) setting forth in reasonable detail the
calculations required to determine compliance with subsections 6.1, 6.5(a), 6.6
and 6.15, including any necessary Financial Statement Adjustments;
(c) as soon as available and in any event within thirty days after
the end of each fiscal quarter of the Borrowers, an operating report in such
form as is agreed between the Borrowers and the Administrative Agent, including
the number of Basic Subscribers, Pay Subscribers (and the services provided to
such Pay Subscribers) and Homes Passed for each Borrower and its Restricted
Subsidiaries for each principal geographic area of service as of the first and
last day of such fiscal quarter;
(d) within five days after the same are sent, copies of all
financial statements and reports which any Borrower or ACC sends to its
partners or stockholders, as the case may be, and within five days after the
same are filed, copies of all financial statements and reports which any
Borrower or ACC may make to, or file with, the Securities and Exchange
Commission or any successor or analogous Governmental Authority;
(e) within ten Business Days after the end of each fiscal year of
the Borrowers, evidence in form and substance satisfactory to the
Administrative Agent that the Borrowers are in compliance with subsection 5.5;
and
(f) promptly, such additional financial and other information as
any Lender may from time to time reasonably request.
5.3 Payment of Obligations. (a) File or cause to be filed all tax
returns which are required to be filed and pay and discharge or cause to be
paid and discharged promptly when due all taxes, assessments and other charges
imposed on it or its revenue, income, profits or capital or in respect of any
of its properties or assets by any Governmental Authority before the same shall
become delinquent or in default and (b) pay, discharge or otherwise satisfy at
or before maturity or before they become delinquent, as the case may be, all
its other obligations of whatever nature, in each case except where (a) the
amount or validity thereof is currently being contested in good faith by
appropriate proceedings, (b) no Lien has attached with respect thereto (other
than a Permitted Lien with respect to which no foreclosure, distraint, sale or
other similar proceedings have been commenced or, if commenced, have been
stayed) and (c) reserves in conformity with GAAP with respect thereto have been
provided on the books of such Borrower or its Restricted Subsidiaries, as the
case may be.
5.4 Conduct of Business and Maintenance of Existence. Continue
to engage in business of the same general type as now conducted by it and
preserve, renew and keep in full force and effect its corporate or partnership
existence and take all reasonable action to maintain all rights, privileges,
Franchises and other material licenses and Governmental Approvals and material
rights necessary or desirable in the normal conduct of its business, except as
otherwise permitted by subsection 6.4; comply with all Contractual Obligations
and Governmental Requirements except to the extent that failure to comply
therewith could not, in the aggregate, be reasonably expected to have a
Material Adverse Effect.
5.5 Maintenance of Property; Insurance; Insurance and Condemnation
Proceeds. Maintain and preserve all of its properties, owned or leased, that
are necessary or useful in the conduct of its business in good repair, working
order and condition, ordinary wear and tear excepted; except as otherwise
contemplated in subsection 4.1(a)(xiii), maintain with financially sound and
reputable insurance companies insurance on all its property in at least such
amounts and against at least such risks (including public liability, product
liability and business interruption) as the Managing Agents shall approve from
time to time. Immediately upon receipt thereof by or on behalf of any Borrower
or any Restricted Subsidiary, pay or cause to be paid to the Administrative
Agent at the Administrative Agent's Office, any and all Net Proceeds arising
out of any condemnation or eminent domain proceeding or casualty, which Net
Proceeds shall be applied by the Administrative Agent as a prepayment of the
Loans pursuant to subsection 2.6(b).
5.6 Inspection of Property; Books and Records; Discussions. (a)
Keep proper books of records and account in which full, true and correct
entries in conformity with GAAP and all Governmental Requirements shall be made
of all dealings and transactions in relation to its business and activities;
and (b) permit representatives (whether or not officers or employees) of any
Lender, from time to time during such Borrower's normal daytime business hours,
as often as may be reasonably requested and upon reasonable notice to (i) visit
any of the premises or property of such Borrower or such Restricted Subsidiary,
(ii) inspect, and verify the amount, character and condition of, any of the
properties or assets of such Borrower or such Restricted Subsidiary, (iii)
review and make extracts from the books and records of such Borrower or such
Restricted Subsidiary and (iv) discuss the affairs, finances and accounts of
such Borrower or such Restricted Subsidiary with (A) its officers and
employees, (B) its independent public accountants (and the Borrowers hereby
authorize such accountants to discuss the finances and affairs of the Borrowers
and the Restricted Subsidiaries), (C) the Manager and (D) the General Partners;
provided, that in the case of any discussions pursuant to clause (b)(iv)(B),
a representative of the Borrowers designated by a Responsible Officer may be
present.
5.7 Notices. Promptly (but in no event later than five days, or
thirty days with respect to subsection 5.7(d)), after any Borrower or any
Restricted Subsidiary knows or has reason to know thereof) give notice to the
Administrative Agent and each Lender of:
(a) the occurrence of any Default or Event of Default, specifying
the nature and duration thereof and what action any Borrower has taken, is
taking or proposes to take with respect thereto;
(b) any default under any Contractual Obligation or Governmental
Approval of such Borrower or any of its Restricted Subsidiaries which, together
with all other such defaults of the Borrowers and the Restricted Subsidiaries,
could reasonably be expected to have a Material Adverse Effect;
(c)(i) any Litigation affecting such Borrower or any of its
Restricted Subsidiaries (A) in which the amount involved is $1,500,000 or more
and not covered by insurance or with respect to which any insurer has reserved
its rights or (B) in which injunctive or similar relief is sought, including,
without limitation, any Litigation which seeks (or reasonably may be expected
to seek) to rescind, revoke, terminate, cancel, withdraw, suspend, modify or
change adversely or withhold any Franchise or other Governmental Approval and
(ii) any Litigation between such Borrower or any of its Restricted Subsidiaries
and any Governmental Authority, which, together with all such Litigation of the
Borrowers and the Restricted Subsidiaries, if adversely determined could
reasonably be expected to have a Material Adverse Effect;
(d) any of the following events: (i) the occurrence or expected
occurrence of any Reportable Event with respect to any Plan, a failure to make
any required contribution to a Plan, the creation of any Lien in favor of the
PBGC or a Plan or any withdrawal from, or the termination, Reorganization or
Insolvency of, any Multiemployer Plan or (ii) the institution of proceedings
or the taking of any other action by the PBGC or any Borrower or any Commonly
Controlled Entity or any Multiemployer Plan with respect to the withdrawal
from, or the terminating, Reorganization or Insolvency of, any Plan;
(e) any condemnation or eminent domain proceeding or any casualty
that could reasonably be expected to result in a taking or loss or damage in
excess of $1,000,000; and
(f) any development or event which could reasonably be expected
to have a Material Adverse Effect.
Each notice pursuant to this subsection 5.7 shall be accompanied by a statement
of such Borrower executed and delivered on behalf of such Borrower by a
Responsible Officer setting forth details of the occurrence referred to therein
and stating what action such Borrower proposes to take with respect thereto.
5.8 Environmental Laws. (a) Comply with, and ensure compliance
in all material respects by all tenants and subtenants, if any, with, all
applicable Environmental Laws and obtain and comply in all material respects
with and maintain, and ensure that all tenants and subtenants obtain and comply
in all material respects with and maintain, any and all licenses, approvals,
notifications, registrations or permits required by applicable Environmental
Laws.
(b) Conduct and complete all investigations, studies, sampling and
testing, and all remedial, removal and other actions required under
Environmental Laws and promptly comply in all material respects with all lawful
orders and directives of all Governmental Authorities regarding Environmental
Laws.
5.9 Pledge of After Acquired Property. (a) If at any time
following the Closing Date any Borrower or any of its Restricted Subsidiaries
shall acquire at any time property or assets of any nature whatsoever which is
intended by the terms of the applicable Security Document to be but is not
subject to the Lien created by the Security Documents, as soon as possible and
in no event later than thirty days after the relevant acquisition date and, to
the extent permitted by applicable law, grant to the Administrative Agent, for
the ratable benefit of the Lenders, a first priority Lien on such property as
collateral security for the Obligations pursuant to documentation in form and
substance reasonably satisfactory to the Administrative Agent.
(b) Each Borrower shall cause each new Restricted Subsidiary of
such Borrower created, acquired or designated as such by the Managing General
Partner after the date hereof, immediately upon such creation, acquisition or
designation, to execute a supplement to the Guaranty Agreement in the form
attached thereto and such other Loan Documents as the Administrative Agent
shall request. Such Borrower shall execute and deliver or, as the case may be,
shall cause the appropriate Restricted Subsidiary and any other Person holding
any of the Capital Securities of such new Restricted Subsidiary to execute and
deliver such Security Documents (including, without limitation, where
applicable, a Subsidiary Assignment of Partnership Interests) or supplements
to Security Documents and such other Loan Documents as the Administrative Agent
shall request to effect a first priority perfected Lien in favor of the
Administrative Agent for the benefit of the Lenders in and to 100% of the
issued and outstanding Capital Securities of such new Restricted Subsidiary.
If such new Restricted Subsidiary is a corporation, such Borrower or such
Restricted Subsidiary and any such other Persons which hold the Capital
Securities of such new Restricted Subsidiary shall deliver to the
Administrative Agent the stock certificates evidencing such Capital Securities,
together with undated stock powers for each such certificate, duly executed in
blank.
(c) In furtherance of the obligations of the Borrowers set forth
in subsections 5.9(a) and 5.9(b), each such Borrower shall, and shall cause
each other appropriate Person to, (i) execute, acknowledge and deliver, and
thereafter register, file or record in the respective offices of the
appropriate Governmental Authorities, such financing statements, documents and
instruments and (ii) take all such actions reasonably deemed by the
Administrative Agent to be necessary or desirable to ensure the creation,
priority and perfection of the Liens contemplated by this subsection 5.9.
5.10 Pledge During Event of Default. At any time after the
occurrence and during the continuance of an Event of Default, upon the request
of the Administrative Agent or the Required Lenders, promptly deliver such
security agreements, mortgages, pledges, guarantees and other security
documents as the Administrative Agent or the Required Lenders, as the case may
be, may reasonably request to grant to the Administrative Agent, for the
ratable benefit of the Lenders, to the extent permitted by applicable law, a
fully perfected first Lien on all right, title and interest of any Loan Party
in any unencumbered property of any Loan Party of any nature whatsoever, as
collateral security for the Obligations, pursuant to documentation reasonably
satisfactory to the Administrative Agent and take all such actions (including
obtaining releases of existing Liens) and deliver all such other documents
(including legal opinions, title insurance, consents and corporate documents)
as the Administrative Agent shall reasonably require to ensure the priority and
perfection of such Lien.
5.11 Interest Rate Protection. Within ninety days following the
Closing Date, enter into one or more Interest Rate Protection Agreements with
a party, and on terms, acceptable to the Managing Agents providing to the
Borrowers interest rate protection with respect to not less than the greater
of (a) 40% of the Total Commitment on the Closing Date and (b) 50% of the
maximum aggregate amount of Loans outstanding at any time during the ninety-day
period after the Closing Date, and having an expiry date no earlier than the
third anniversary of the Closing Date.
SECTION 6. NEGATIVE COVENANTS
The Borrowers hereby jointly and severally agree that, so long as
any of the Commitments remain in effect and until payment in full of the Loans
and all other Obligations that have become due when the Loans have been paid
in full, no Borrower shall, or shall permit any of its Restricted Subsidiaries
to, directly or indirectly:
6.1 Financial Condition Covenants.
(a) Senior Leverage Ratio. Permit at any time the Senior Funded
Debt to Annualized Operating Cash Flow Ratio to be greater than the ratio set
forth below opposite the period in which shall occur the last day of the most
recently ended fiscal quarter of the Borrowers:
Period Ratio
Closing Date through December 31, 1995 6.25 to 1.00
January 1, 1996 through June 30, 1996 6.00 to 1.00
July 1, 1996 through March 31, 1997 5.75 to 1.00
April 1, 1997 through September 30, 1997 5.50 to 1.00
October 1, 1997 through March 31, 1998 5.25 to 1.00
April 1, 1998 through September 30, 1998 5.00 to 1.00
October 1, 1998 through March 31, 1999 4.75 to 1.00
April 1, 1999 through March 31, 2000 4.50 to 1.00
Thereafter 4.00 to 1.00
(b) Interest Coverage. Permit the Operating Cash Flow to Interest
Expense Ratio for any fiscal quarter to be less than the ratio set forth below
opposite the period in which shall occur the last day of such fiscal quarter:
Period Ratio
April 1 1995 through December 31, 1995 1.625 to 1.00
January 1, 1996 through December 31, 1996 1.750 to 1.00
Thereafter 2.000 to 1.00
(c) Fixed Charge Coverage. Permit the Fixed Charges Annualized
Operating Cash Flow to Fixed Charges Ratio at the end of any fiscal quarter to
be less than 1.00 to 1.00.
(d) Pro Forma Debt Service. Permit the Annualized Operating Cash
Flow to Pro Forma Debt Service Ratio at the end of any fiscal quarter to be
less than 1.10 to 1.00.
6.2 Limitation on Indebtedness. Create, incur, assume or suffer
to exist any Indebtedness, except:
(a) Indebtedness of any Borrower under this Agreement and
Indebtedness evidenced by any Guaranty Agreement;
(b) Permitted Intercompany Indebtedness;
(c) obligations of the Borrowers and the Restricted Subsidiaries,
in an aggregate amount, together with the aggregate amount of obligations
permitted by subsection 6.2(d), not to exceed $25,000,000 at any time
outstanding in respect of Capital Leases and Indebtedness consisting of secured
purchase money Indebtedness incurred by any Borrower or any Restricted
Subsidiary in the ordinary course of business;
(d) obligations of the Borrowers and the Restricted Subsidiaries
in respect of Capital Leases and Indebtedness consisting of secured purchase
money Indebtedness incurred in the ordinary courses of business outstanding on
the date hereof and listed on Schedule 6.2(d) and any refundings, refinancings
or extensions thereof that do not increase the principal amount or shorten the
maturity date thereof;
(e) obligations of the Borrowers and the Restricted Subsidiaries
in respect of deferred Management Fees which are subordinated to the
Obligations pursuant to a Management Subordination Agreement that is in full
force and effect and not being contested by any Person;
(f) Affiliate Subordinated Indebtedness, together with Affiliate
Subordinated Indebtedness outstanding on the date hereof and listed on Schedule
6.2(f), bearing simple interest at a rate per annum not to exceed 12% and in
an aggregate principal amount, together with all accrued and unpaid interest
thereon, not to exceed $70,000,000 at any time outstanding;
(g) subject to subsections 6.7(a) and 6.7(b), obligations of any
Borrower or any Restricted Subsidiary in respect of Indebtedness of a Person
which becomes a Restricted Subsidiary after the date hereof, provided that
(i) such Indebtedness existed at the time such Person became a Restricted
Subsidiary, was not created in anticipation thereof and is unsecured except for
Permitted Liens and (ii) immediately after giving effect to such Acquisition
no Default or Event of Default shall exist; and
(h) additional Indebtedness of the Borrowers and the Restricted
Subsidiaries, other than pursuant to any Guaranty, in an aggregate principal
amount not to exceed $1,000,000 at any time outstanding.
6.3 Limitation on Liens. Create, incur, assume or suffer to exist
any Lien upon any of its property or assets (or any revenues, income or profits
therefrom), whether now owned or hereafter acquired, except for Permitted
Liens.
6.4 Limitation on Fundamental Changes. Enter into any merger,
consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution), or convey, sell, lease, assign,
transfer or otherwise dispose of, all or substantially all of its property,
business or assets, or make any material change in its present method of
conducting business, except:
(a) any Restricted Subsidiary of any Borrower may be merged or
consolidated with or into such Borrower (provided that such Borrower shall be
the continuing or surviving Person) or with or into any one or more wholly-
owned Restricted Subsidiaries of such Borrower (provided that the wholly-owned
Restricted Subsidiary or Restricted Subsidiaries shall be the continuing or
surviving Person or Persons);
(b) any Restricted Subsidiary of any Borrower may sell, lease,
transfer or otherwise dispose of any or all of its assets (upon voluntary
liquidation or otherwise) to such Borrower or any wholly-owned Restricted
Subsidiary of such Borrower;
(c) any Borrower may be merged or consolidated with or into any
other Borrower or any wholly-owned Restricted Subsidiary of any Borrower
(provided that in the case of a merger or consolidation with any such
Restricted Subsidiary, the Borrower is the surviving Person) and any Borrower
may sell, lease, assign, transfer or otherwise dispose of any or all of its
assets (upon voluntary liquidation or otherwise) to any other Borrower or any
wholly-owned Restricted Subsidiary of any Borrower; and
(d) as permitted by subsection 6.5(a).
6.5 Limitation on Sale of Assets. Convey, sell, lease, assign,
transfer or otherwise dispose of any of its property, business or assets
(including, without limitation, receivables and leasehold interests), whether
now owned or hereafter acquired, or, in the case of any Restricted Subsidiary,
issue or sell any shares of such Restricted Subsidiary's Capital Securities to
any Person other than the Borrower owning the Capital Securities of such
Restricted Subsidiary on the date hereof or any wholly-owned Restricted
Subsidiary of such Borrower, except:
(a) voluntary Asset Sales; provided that (i) the Systems sold by
the Borrowers and the Restricted Subsidiaries in any single Asset Sale or
series of related Asset Sales, after giving effect to any such Asset Sale or
Asset Sales, shall have contributed less than 15% of Operating Cash Flow for
the most recent period of four consecutive fiscal quarters ended prior to the
date of such Asset Sale or Asset Sales (the percentage of Operating Cash Flow
contributed by a System is referred to as the "System Cash Flow Percentage")
and (ii) the System Cash Flow Percentage of all Systems sold by the Borrowers
and the Restricted Subsidiaries subsequent to the date of this Agreement, after
giving affect to any such Asset Sale or Asset Sales, shall not exceed 25% in
the aggregate; provided further, that if Operating Cash Flow is calculated as
of any date (an "Interim Computation Date") that is prior to the date upon
which the Lenders shall have received Financial Statements and the related
Compliance Certificates required by subsections 5.1 and 5.2(b) for four
complete fiscal quarters commencing subsequent to the date of this Agreement,
Operating Cash Flow for the period ended on such Interim Computation Date shall
mean for an Interim Computation Date ended on (A) the last day of the first
complete fiscal quarter after the date of this Agreement, the Operating Cash
Flow of the Borrowers for such fiscal quarter, (B) the last day of the second
complete fiscal quarter ending after the date of this Agreement, the Operating
Cash Flow of the Borrowers for such two fiscal quarters and (C) the last day
of the third complete fiscal quarter ending after the date of this Agreement,
the Operating Cash Flow of the Borrowers for such three fiscal quarters;
provided further, that the selling Borrower, or the Borrower owning, directly
or indirectly, Capital Securities of a selling Restricted Subsidiary, shall,
at least fifteen Business Days prior to effecting any such Asset Sale or Asset
Sales, deliver to the Administrative Agent and the Lenders a certificate of
such Borrower, executed and delivered on behalf of such Borrower by a
Responsible Officer, demonstrating to the satisfaction of the Administrative
Agent pro forma compliance with the financial covenants set forth in
subsection 6.1 after giving effect to such Asset Sale or Asset Sales; and
provided further, that all Net Proceeds of such Asset Sale or Asset Sales shall
be paid to the Administrative Agent as and when received by any Borrower or any
of its Restricted Subsidiaries to be applied toward the prepayment of the Loans
pursuant to subsection 2.6(b);
(b) the sale or other disposition of obsolete or worn out
equipment or equipment no longer used or useful in the business of any Borrower
or any Restricted Subsidiary, in each case, in the ordinary course of business;
(c) the sale of inventory in the ordinary course of business;
(d) the sale or discount without recourse of accounts receivable
arising in the ordinary course of business in connection with the compromise
or collection thereof;
(e) as permitted by subsection 6.4(b); and
(f) as approved by the Required Lenders.
6.6 Limitation on Restricted Payments. Declare or pay any
dividend on, or make any payment on account of, or set apart assets for a
sinking or other analogous fund for, the purchase, redemption, defeasance,
retirement or other acquisition of, any shares of any class of Capital
Securities of any Borrower or any of its Restricted Subsidiaries or any
warrants or options to purchase any such Capital Securities, whether now or
hereafter outstanding, or make any other distribution in respect thereof,
either directly or indirectly, whether in cash or property or in obligations
of any Borrower or any Restricted Subsidiary or make any payment on or in
respect of any Affiliate Subordinated Indebtedness (such declarations,
payments, setting apart, purchases, redemptions, defeasances, retirements,
acquisitions and distributions being herein called "Restricted Payments"),
except that:
(a) the Borrowers may, after delivery of the most recent Financial
Statements and Compliance Certificate required by subsections 5.1 and 5.2(b),
make a Restricted Payment to an Affiliate (other than any payment or other
distribution on account of any principal of any Affiliate Subordinated
Indebtedness) if (i) no Default or Event of Default exists or would exist as
a result thereof, (ii) such Restricted Payment is not prohibited by the terms
of any Affiliate Subordination Agreement, (iii) (A) the Senior Funded Debt to
Annualized Operating Cash Flow Ratio for the two then most recently ended
fiscal quarters of the Borrower for which Financial Statements and related
Compliance Certificates have been delivered pursuant to subsections 5.1 and
5.2(b) (I) immediately prior to making such Restricted Payment is less than
4.50 to 1 for each such fiscal quarter and (II) after giving pro forma effect
to such Restricted Payment (assuming that Senior Funded Debt increases by the
amount of such Restricted Payment as of the last day of each such fiscal
quarter) is less than 4.50 to 1 for each such fiscal quarter or (B) after
giving effect to such Restricted Payment, the Available Capital Contributions
shall be greater than or equal to zero and (iv) any such Restricted Payment
permitted by clause (iii)(A) is made on or before the forty-fifth day after
receipt by the Administrative Agent and the Lenders of such most recent
Financial Statements and Compliance Certificate;
(b) Southeast and any Restricted Subsidiary may make Restricted
Payments to any Borrower owning, directly or indirectly, Capital Securities of
Southeast or such Restricted Subsidiary, as the case may be, provided that no
other Person, other than a Restricted Subsidiary owning, directly or
indirectly, Capital Securities of such Restricted Subsidiary, receives or is
entitled to receive all or any portion of such Restricted Payment or any other
amount in connection with or as a result of such Restricted Payment; and
(c) any Restricted Subsidiary may make a Restricted Payment to a
Person other than a Borrower owning, directly or indirectly, Capital Securities
of such Restricted Subsidiary or another Restricted Subsidiary of such Borrower
only if such Restricted Payment is made on a date on which, and in an amount
which, any Borrower would have been able to make a Restricted Payment pursuant
to subsection 6.6(a). For all purposes of this Agreement any Restricted Payment
made by a Restricted Subsidiary pursuant to this subsection 6.6(c) shall be
deemed to have been a Restricted Payment made by a Borrower.
6.7 Limitation on Investments. Make any Investment in any Person,
including, without limitation, any Restricted Investment, except:
(a) So long as no Default exists or would result therefrom, (i)
Acquisitions by any Borrower or any Restricted Subsidiary of such Borrower, the
cost or purchase price of which is paid from Available Capital Contributions,
and (ii) other Acquisitions by any Borrower or any wholly-owned Restricted
Subsidiary of such Borrower; provided that the aggregate cost or purchase price
(including any Indebtedness of the type permitted by subsection 6.2(g) which
is acquired or assumed in connection with such Acquisition) of all such other
Acquisitions by the Borrowers and the Restricted Subsidiaries does not exceed
$80,000,000; provided further, that (i) if as a result of such Acquisition any
Borrower or any Restricted Subsidiary assumes or acquires any Indebtedness of
the type permitted by subsection 6.2(g) or if the cost or purchase price
(including any Indebtedness of the type permitted by subsection 6.2(g) which
is acquired or assumed in connection with such Acquisition) of any single
Acquisition equals or exceeds $15,000,000, the acquiring Borrower, or the
Borrower owning, directly or indirectly, Capital Securities of an acquiring
Restricted Subsidiary, shall, at least seven Business Days prior to effecting
such Investment, deliver to the Administrative Agent and the Lenders a
certificate of such Borrower, executed and delivered on behalf of such Borrower
by a Responsible Officer stating that no Default or Event of Default exists or
will exist after giving effect to such Acquisition and demonstrating to the
satisfaction of the Administrative Agent pro forma compliance with the
financial covenants set forth in subsection 6.1 after giving effect to such
Acquisition, (ii) such Borrower shall have furnished the Administrative Agent
and the Lenders with copies of such documents with respect to the Acquisition
as the Administrative Agent or any Lender may reasonably request, (iii) such
Borrower shall comply, and shall cause each of its Restricted Subsidiaries to
comply, with the provisions of subsection 5.9 with respect to any assets or
Capital Securities acquired as a result of such Acquisition and (iv) after
giving effect to such Acquisition, such Borrower and its Restricted
Subsidiaries shall be in compliance with subsection 6.13;
(b) So long as no Default or Event of Default exists or would
result therefrom, Acquisitions by any Borrower or any Restricted Subsidiary,
the cost or purchase price of which is paid in whole or in part from the Net
Proceeds of any Asset Sale received by such Borrower or Restricted Subsidiary
which the Managing General Partner has caused to be applied toward the
prepayment of the Loans in accordance with subsection 2.6(b) and has elected
to reinvest pursuant to subsection 2.17; provided, that (i) the acquiring
Borrower or the Borrower owning, directly or indirectly, Capital Securities of
an acquiring Restricted Subsidiary, shall, at least seven Business Days prior
to making such Acquisition, deliver to the Administrative Agent and the Lenders
a certificate of such Borrower, executed and delivered on behalf of such
Borrower by a Responsible Officer, stating (A) that no Default or Event of
Default exists or will exist after giving effect to such Acquisition and (B)
the amount of the Net Proceeds required to consummate such Acquisition and
demonstrating to the satisfaction of the Administrative Agent pro forma
compliance with the financial covenants set forth in subsection 6.1 after
giving effect to such Acquisition and (iii) any such Acquisitions are
consummated within the twelve month period provided for in subsection 2.17.
(c) Restricted Investments, after delivery of the most recent
Financial Statements and Compliance Certificate required by subsections 5.1 and
5.2(b), if no Default exists or would exist as a result thereof and (i) the
Senior Funded Debt to Annualized Operating Cash Flow Ratio for the two then
most recently ended fiscal quarters of the Borrowers for which Financial
Statements and the related Compliance Certificates have been delivered pursuant
to subsections 5.1 and 5.2(b) (A) immediately prior to making such Restricted
Investment is less than 4.50 to 1 for each such fiscal quarter, and (B) after
giving pro forma effect to such Restricted Investment (assuming that Senior
Funded Debt increases by the amount of such Restricted Investment as of the
last day of each such fiscal quarter), is less than 4.50 to 1 for each such
fiscal quarter or (ii) if such Restricted Investment is not made pursuant to
clause (i) above, after giving effect to such Restricted Investment, the
Available Capital Contributions shall be greater than or equal to zero;
provided, however, any Restricted Investments permitted by clause (i) above
shall be made only on or before the forty-fifth day after receipt by the
Administrative Agent and the Lenders of such most recent Financial Statements
and Compliance Certificates;
(d) extensions of trade credit in the ordinary course of business;
(e) Investments in Cash Equivalents;
(f) loans to officers of any Borrower listed on Schedule 6.7(f)
in aggregate principal amounts outstanding not to exceed the respective amounts
set forth for such officers on such Schedule;
(g) loans and advances to employees of ACP, Southeast or West Boca
or any of their respective Restricted Subsidiaries for travel, entertainment
and relocation expenses in the ordinary course of business in an aggregate
amount for the Borrowers and all the Restricted Subsidiaries not to exceed
$250,000 at any time outstanding;
(h) Investments by any Borrower in its Subsidiaries and by its
Subsidiaries in other Subsidiaries of such Borrower existing on the date hereof
listed on Schedule 6.7(h) and not otherwise listed on Schedule 3.14; provided
that on and after the date of this Agreement all such Investments which
constitute loans or advances shall be evidenced by an Intercompany Note; and
(i) So long as no Default or Event of Default exists or would
result therefrom, (i) Investments after the date hereof by any Borrower in its
Restricted Subsidiaries and by any Borrower in any other Borrower, in each
case, that constitute Permitted Intercompany Indebtedness and (ii) other
Investments by any Borrower in its Restricted Subsidiaries and other
Investments by any Borrower in any other Borrower; provided that, with respect
to the Investments permitted by clause (ii), all the Capital Securities of each
such Restricted Subsidiary (including any such Capital Securities owned by
Persons other than such Borrower and its other Restricted Subsidiaries) have
been pledged to the Administrative Agent as collateral security for the
Obligations on terms and conditions reasonably satisfactory to the
Administrative Agent.
6.8 Limitation on Modifications of Certain Agreements; Replacement
of General Partners. (a) Amend, modify or change, or consent or agree to any
amendment, modification or change to any of the terms of (i) Charter Document
or any Management Agreement or (b) change or replace any General Partner, or
add any additional general partner, without the prior written consent of the
Managing Agents (which shall not be unreasonably withheld).
6.9 Limitation on Transactions with Affiliates. Enter into any
transaction, including, without limitation, any purchase, sale, lease or
exchange of property or the rendering of any service, with any Affiliate unless
such transaction is (a) otherwise permitted under this Agreement, (b) in the
ordinary course of such Borrower's or such Restricted Subsidiary's business and
(c) upon fair and reasonable terms no less favorable to such Borrower or such
Restricted Subsidiary, as the case may be, than it would obtain in a comparable
arm's length transaction with a Person which is not an Affiliate; provided,
however, the Management Agreements and Management Fees accrued or paid pursuant
to subsection 6.15 shall not violate this subsection 6.9.
6.10 Limitation on Sales and Leasebacks. Enter into any
arrangement with any Person providing for the leasing by any Borrower or any
Restricted Subsidiary of real or personal property which has been or is to be
sold or transferred by such Borrower or such Restricted Subsidiary to such
Person or to any other Person to whom funds have been or are to be advanced by
such Person on the security of such property or rental obligations of such
Borrower or such Restricted Subsidiary.
6.11 Limitation on Changes in Fiscal Year. Permit the fiscal year
of any Borrower or any Restricted Subsidiary to end on a day other than
December 31.
6.12 Limitation on Negative Pledge Clauses. Enter into any
agreement with any Person, other than (a) this Agreement and (b) any Capital
Lease or any agreement evidencing or creating any purchase money Indebtedness
permitted by this Agreement (in which case, any prohibition or limitation shall
only be effective against the assets financed thereby), which prohibits or
limits the ability of any Borrower or any Restricted Subsidiary to create,
incur, assume or suffer to exist any Lien upon any of its property or assets
(or any revenues, income or profits therefrom), whether now owned or hereafter
acquired.
6.13 Limitation on Lines of Business; Activities of Unrestricted
Subsidiaries. (a) Enter into any business, either directly or through any
Restricted Subsidiary, except for those businesses in which such Borrower and
its Restricted Subsidiaries are engaged on the date of this Agreement, or which
are directly related thereto, and in which other Persons in the cable industry
are engaged.
(b) Permit any Subsidiary designated as an Unrestricted Subsidiary
after the date of this Agreement to engage in any business other than the
business of acquiring, owning or disposing of publicly traded marketable
securities or FCC Licenses (other than FCC Licenses used in connection with the
ownership or operation of the Systems of any Borrower and its Subsidiaries).
6.14 Limitation on Interest Rate Protection Agreements. Enter into
any Interest Rate Protection Agreements other than Interest Rate Protection
Agreements required by subsection 5.11, provided that (a) the aggregate
notional amount of all such Interest Rate Protection Agreements shall not
exceed at any time the Total Commitment and (b) such Interest Rate Protection
Agreements shall, except as provided in the Security Documents, be unsecured.
6.15 Limitation on Management Fees. Make any payment on account
of Management Fees, except, (a) if no Default or Event of Default exists at the
time of any such payment or would exist as a result thereof and such payment
is not prohibited by any Management Subordination Agreement, any Borrower and
its Restricted Subsidiaries may, after receipt by the Administrative Agent and
the Lenders of the most recent Financial Statements and Compliance Certificate
required by subsections 5.1 and 5.2(b), (i) on or before the forty-fifth day
after the receipt by the Administrative Agent and the Lenders of such most
recent Financial Statements and Compliance Certificate, pay Management Fees in
arrears with respect to such fiscal quarter in an aggregate amount not to
exceed 5% of the gross revenues from such fiscal quarter of such Borrower and
its Restricted Subsidiaries on a consolidated and combined basis in accordance
with GAAP as in effect on the date of this Agreement and (ii) pay Management
Fees (including any previously accrued but unpaid Management Fees), provided
that, after giving effect to such payment, the Available Capital Contributions
as of the last day of the fiscal quarter to which such Financial Statements
relate shall be greater than or equal to zero and (b) after the occurrence and
during the continuation of an Event of Default (such period, a "Default
Period") if such payment is not prohibited by any Management Subordination
Agreement, pay Management Fees during the Default Period with the net proceeds
of any sale of Capital Securities of the type described in clause (a) of the
definition of "Capital Securities" to any Affiliate of such Borrower during the
Default Period, provided that, prior to making any such payment, such Borrower
shall have given at least ten days' prior written notice to the Administrative
Agent and shall have delivered evidence reasonably satisfactory to it as to the
sale of such Capital Securities and the net proceeds received in respect
thereof.
SECTION 7. EVENTS OF DEFAULT
7.1 Events of Default; Remedies. If any of the following events
shall occur and be continuing:
(a) The Borrowers fail to pay any principal of any Loan when due
in accordance with the terms hereof; or the Borrowers fail to pay any interest
on any Loan, or any other Obligation payable hereunder or under any other Loan
Document (other than principal under any Note), in each case within three
Business Days after any such interest or Obligation becomes due in accordance
with the terms hereof or thereof;
(b) Any representation or warranty made or deemed made by any
Borrower or any other Loan Party or any Affiliate Pledgor herein or in any
other Loan Document or which is contained in any certificate, document or
financial or other statement furnished by it at any time under or in connection
with this Agreement or any such other Loan Document proves to have been
incorrect in any material respect on or as of the date made or deemed made;
(c) Any Borrower or any other Loan Party or any Affiliate Pledgor
defaults in the observance or performance of subsection 5.7(a) or any agreement
contained in Section 6 or fails to give the Administrative Agent thirty days'
prior notice of (i) a change in the location of its chief executive office or
principal place of business from that specified in any Security Document or the
removal of its books and records from such location or (ii) a change of name,
identity or structure to such an extent that any financing statement filed by
the Administrative Agent in connection with any Security Document would become
misleading;
(d) Any Borrower or any other Loan Party or any Affiliate Pledgor
defaults in the observance or performance of any other agreement contained in
this Agreement or any other Loan Document (other than as provided in paragraphs
(a) through (c) of this Section), and such default shall continue unremedied
for a period of thirty days;
(e) Any Borrower or any of its Restricted Subsidiaries (i)
defaults in any payment of principal of or interest on any Indebtedness (other
than the Loans) beyond the period of grace if any, provided in the instrument
or agreement under which such Indebtedness was created, if the aggregate amount
of the Indebtedness in respect of which such default or defaults shall have
occurred is at least $7,500,000; or (ii) (A) defaults in the observance or
performance of any other agreement or condition relating to any such
Indebtedness or contained in any instrument or agreement evidencing, securing
or relating thereto, or any other event shall occur or condition exist, the
effect of which default or other event or condition is to cause, or to permit
the holder or holders of such Indebtedness (or a trustee or agent on behalf of
such holder or holders or beneficiary or beneficiaries) to cause, such
Indebtedness to become due prior to its stated maturity or, with respect to any
such Indebtedness pursuant to a Guaranty, such Guaranty obligation to become
payable or (B) any event occurs which gives rise to the right of the holder of
any such Indebtedness to require such Borrower or such Restricted Subsidiary
to purchase or to offer to purchase any such Indebtedness;
(f) (i) Any Borrower or any of its Subsidiaries or any of ACC, ACP
Holdings or Olympus commences any case, proceeding or other action (A) under
any existing or future law of any jurisdiction, domestic or foreign, relating
to bankruptcy, insolvency, reorganization or relief of debtors, seeking to have
an order for relief entered with respect to it, or seeking to adjudicate it a
bankrupt or insolvent, or seeking reorganization, arrangement, adjustment,
winding-up, liquidation, dissolution, composition or other relief with respect
to it or its debts, or (B) seeking appointment of a receiver, trustee,
custodian, conservator or other similar official for it or for all or any
substantial part of its assets, or any such Person shall make a general
assignment for the benefit of its creditors; or (ii) there is commenced against
any such Person any case, proceeding or other action of a nature referred to
in clause (i) above which (A) results in the entry of an order for relief or
any such adjudication or appointment or (B) remains undismissed, undischarged
or unbonded for a period of sixty days; or (iii) there is commenced against any
such Person any case, proceeding or other action seeking issuance of a warrant
of attachment, execution, distraint or similar process against all or any
substantial part of its assets which results in the entry of an order for any
such relief which shall not have been vacated, discharged, or stayed or bonded
pending appeal within sixty days from the entry thereof; or (iv) any such
Person takes any action in furtherance of, or indicating its consent to,
approval of, or acquiescence in, any of the acts set forth in clause (i), (ii),
or (iii) above; or (v) any such Person shall generally not, or shall be unable
to, or shall admit in writing its inability to, pay its debts as they become
due;
(g) (i) Any Person engages in any "prohibited transaction" (as
defined in Section 406 of ERISA or Section 4975 of the Code) involving any
Plan, (ii) any "accumulated funding deficiency" (as defined in Section 302 of
ERISA), whether or not waived, exists with respect to any Plan or any Lien in
favor of the PBGC or a Plan shall arise on the assets of any Borrower or any
Commonly Controlled Entity, (iii) a Reportable Event occurs with respect to,
or proceedings are commenced to have a trustee appointed, or a trustee shall
be appointed, to administer or to terminate, any Single Employer Plan, which
Reportable Event or commencement of proceedings or appointment of a trustee is,
in the reasonable opinion of the Required Lenders, likely to result in the
termination of such Plan for purposes of Title IV of ERISA, (iv) any Single
Employer Plan shall terminate for purposes of Title IV of ERISA, (v) any
Borrower or any Commonly Controlled Entity incurs, or in the reasonable opinion
of the Required Lenders is likely to incur, any liability in connection with
a withdrawal from, or the Insolvency or Reorganization of, a Multiemployer Plan
or (vi) any other event or condition occurs or exists with respect to a Plan;
and in each case in clauses (i) through (vi) above, such event or condition,
together with all other such events or conditions, if any, could reasonably be
expected to have a Material Adverse Effect;
(h) One or more judgments or decrees are entered against any
Borrower or any of its Restricted Subsidiaries involving, individually or in
the aggregate for all Borrowers and Restricted Subsidiaries, a liability (not
paid or fully covered by insurance) of $3,000,000 or more, and all such
judgments or decrees shall not have been vacated, discharged, stayed or bonded
pending appeal within thirty days from the entry thereof;
(i) (i) Any Security Document or Subordination Agreement ceases,
for any reason, to be in full force and effect, or any Borrower or any other
Loan Party or any Affiliate Pledgor or any Manager which is a party to any
Security Document or Subordination Agreement shall so assert or (ii) the Lien
created by any Security Document shall cease to be enforceable and of the same
effect and priority purported to be created thereby;
(j) Any Guaranty Agreement ceases, for any reason, to be in full
force and effect or any Guarantor shall so assert;
(k) Any acceleration of the maturity of any Indebtedness of
Olympus which is outstanding in a principal amount of at least $7,500,000 in
the aggregate shall occur, or any failure of Olympus to pay any such
Indebtedness at final maturity;
(l) Any Borrower Change of Control, any Olympus Change of Control
or any ACC Change of Control occurs; or
(m) the Manager ceases to manage and supervise the businesses of
any Borrower or any of its Restricted Subsidiaries pursuant to the Management
Agreements and substantially in the manner and to the extent the Manager has
managed and supervised the businesses of such Borrower immediately prior to the
Closing Date.
then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) of this Section with respect to any
Borrower, automatically the Commitments shall immediately terminate and the
Loans hereunder (with accrued and unpaid interest thereon) and all other
amounts owing under this Agreement shall immediately become due and payable,
and (B) if such event is any other Event of Default, either or both of the
following actions may be taken: (i) with the consent of the Required Lenders,
the Administrative Agent may, or upon the request of the Required Lenders, the
Administrative Agent shall, by notice to the Borrowers, declare the Commitments
to be terminated forthwith, whereupon the Commitments shall immediately
terminate; and (ii) with the consent of the Required Lenders, the
Administrative Agent may, or upon the request of the Required Lenders, the
Administrative Agent shall, by notice to the Borrowers, declare the Loans
hereunder (with accrued and unpaid interest thereon) and all other amounts
owing under this Agreement to be due and payable forthwith, whereupon the same
shall immediately become due and payable. Except as expressly provided above
in this Section, presentment, demand, protest and all other notices of any kind
are hereby expressly waived.
7.2 Application of Proceeds. Notwithstanding subsection 2.11,
from and after the Trigger Date, all payments in respect of the Obligations and
all proceeds of any Collateral received by the Administrative Agent shall be
applied by the Administrative Agent to the Obligations, as follows: (a) first,
to pay interest on and the principal of any portion of any Loan which the
Administrative Agent has advanced on behalf of any Lender for which the
Administrative Agent has not then been reimbursed by any Lender or any
Borrower; (b) second, to the reasonable out-of-pocket costs and expenses of the
Administrative Agent in connection with the retaking, holding, preparing for
sale or lease, selling or leasing or other disposition of any Collateral,
including, without limitation, all court costs and the reasonable fees and
expenses of its agents and legal counsel; (c) third, to the payment in full of
the Obligations or in the event that such proceeds are insufficient to pay in
full the Obligations, equally and ratably, in accordance with each Lender s
respective amounts owing to it under or pursuant to this Agreement (including,
without limitation and without duplication, amounts owing to any Lender in its
capacity as an Agent under this Agreement pursuant to this Agreement or any
other Loan Document), or under or pursuant to any Interest Rate Protection
Agreement (as to each Lender, applied first to fees and expense reimbursements
then due to such Lender, then to interest due to such Lender, then to pay or
prepay principal of the Loans or owing to, or to reduce the credit exposure of,
such Lender under such Interest Rate Protection Agreement, as the case may be);
(d) fourth, to any Persons entitled to such amounts pursuant to Section 9-
504(a)(c) of the Uniform Commercial Code; and (e) fifth, to the Borrowers, or
their respective successors and assigns, or as a court of competent
jurisdiction may direct, of any surplus then remaining. For purposes of this
Agreement, the credit exposure at any time of any Lender under an Interest
Rate Protection Agreement to which such Lender is a party shall be determined
at such time in accordance with the customary methods of calculating credit
exposure under similar arrangements by the counterparty to such arrangements,
taking into account potential interest rate movements and the respective
termination provisions and notional principal amount and term of such Interest
Rate Protection Agreement. The Borrowers shall remain jointly and severally
liable to the Agents and the Lenders for any deficiency. If the Administrative
Agent has funds available to apply to a portion of, but not all of, one of the
amounts described in clauses (a) through (c) above, then the Administrative
Agent shall apply such funds to the applicable parties in proportion to the
amounts to which such parties would have been entitled if the entire amount
described in any such clause had been available.
SECTION 8. THE ADMINISTRATIVE AGENT
8.1 Appointment. Each Lender hereby irrevocably designates and
appoints the Administrative Agent as the agent of such Lender under this
Agreement and the other Loan Documents, and each such Lender irrevocably
authorizes the Administrative Agent, in such capacity, to take such action on
its behalf under the provisions of this Agreement and the other Loan Documents
and to exercise such powers and perform such duties as are expressly delegated
to the Administrative Agent by the terms of this Agreement and the other Loan
Documents, together with such other powers as are reasonably incidental
thereto. Notwithstanding any provision to the contrary elsewhere in this
Agreement, the Administrative Agent shall not have any duties or
responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against the
Administrative Agent. No Agent, in its capacity as an Agent hereunder, other
than the Administrative Agent, has any duties or responsibilities hereunder or
under any other Loan Document.
8.2 Delegation of Duties. The Administrative Agent may execute
any of its duties under this Agreement and the other Loan Documents by or
through agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties.
8.3 Exculpatory Provisions. Neither the Administrative Agent nor
any of its officers, directors, employees, agents, attorneys-in-fact or
Affiliates shall be (a) liable for any action lawfully taken or omitted to be
taken by it or such Person under or in connection with this Agreement or any
other Loan Document (except for its or such Person's own gross negligence or
willful misconduct) or (b) responsible in any manner to any of the Lenders for
any recitals, statements, representations or warranties made by any Borrower
or any officer or representative thereof contained in this Agreement or any
other Loan Document or in any certificate, report, statement or other document
referred to or provided for in, or received by the Administrative Agent under
or in connection with, this Agreement or any other Loan Document or for the
value, validity, effectiveness, genuineness, enforceability or sufficiency of
this Agreement or any other Loan Document or for any failure of any Borrower
to perform its obligations hereunder or thereunder. The Administrative Agent
shall not be under any obligation to any Lender to ascertain or to inquire as
to the observance or performance of any of the agreements contained in, or
conditions of, this Agreement or any other Loan Document, or to inspect the
properties, books or records of any Borrower.
8.4 Reliance by Administrative Agent. The Administrative Agent
shall be entitled to rely, and shall be fully protected in relying, upon any
Note, writing, resolution, notice, consent, certificate, affidavit, letter,
telecopy, telex or teletype message, statement, order or other document or
conversation reasonably believed by it to be genuine and correct and to have
been signed, sent or made by the proper Person or Persons and upon advice and
statements of legal counsel (including, without limitation, counsel to any
Borrower), independent accountants and other experts selected by the
Administrative Agent. The Administrative Agent may deem and treat the payee
of any Note as the owner thereof for all purposes unless a written notice of
assignment, negotiation or transfer thereof shall have been filed with the
Administrative Agent. The Administrative Agent shall be fully justified in
failing or refusing to take any action under this Agreement or any other Loan
Document unless it shall first receive such advice or concurrence of the
Required Lenders as it deems appropriate or it shall first be indemnified to
its satisfaction by the Lenders against any and all liability and expense which
may be incurred by it by reason of taking or continuing to take any such
action. The Administrative Agent shall in all cases be fully protected in
acting, or in refraining from acting, under this Agreement and the other Loan
Documents in accordance with a request of the Required Lenders, and such
request and any action taken or failure to act pursuant thereto shall be
binding upon all the Lenders and all future holders of the Loans.
8.5 Notice of Default. The Administrative Agent shall not be
deemed to have knowledge or notice of the occurrence of any Default or Event
of Default hereunder unless the Administrative Agent has received notice from
a Lender or any Borrower referring to this Agreement, describing such Default
or Event of Default and stating that such notice is a "notice of default". In
the event that the Administrative Agent receives such a notice, the
Administrative Agent shall give prompt notice thereof to the Lenders. The
Administrative Agent shall take such action with respect to such Default or
Event of Default as shall be directed by the Required Lenders; provided that
(a) unless and until the Administrative Agent shall have received such
directions, the Administrative Agent may (but shall not be obligated to) take
such action, or refrain from taking such action, with respect to such Default
or Event of Default as it shall deem advisable in the best interests of the
Lenders and (b) no such direction could reasonably be expected to result in
liability to the Administrative Agent, or in a violation of applicable law or
any Loan Document.
8.6 Non-Reliance on the Agents and Other Lenders. Each Lender
expressly acknowledges that no Agent or any of its officers, directors,
employees, agents, attorneys-in-fact or Affiliates has made any representations
or warranties to it and that no act by any Agent hereinafter taken, including
any review of the affairs of any Borrower, shall be deemed to constitute any
representation or warranty by such Agent to any Lender. Each Lender represents
to such Agent that it has, independently and without reliance upon any Agent
or any other Lender, and based on such documents and information as it has
deemed appropriate, made its own appraisal of and investigation into the
business, operations, property, financial and other condition and
creditworthiness of the Borrowers and made its own decision to make its Loans
hereunder and enter into this Agreement. Each Lender also represents that it
will, independently and without reliance upon the Administrative Agent or any
other Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit analysis, appraisals
and decisions in taking or not taking action under this Agreement and the other
Loan Documents, and to make such investigation as it deems necessary to inform
itself as to the business, operations, property, financial and other condition
and creditworthiness of the Borrowers. Except for notices, reports and other
documents expressly required to be furnished to the Lenders by the
Administrative Agent hereunder, the Administrative Agent shall not have any
duty or responsibility to provide any Lender with any credit or other
information concerning the business, operations, property, condition (financial
or otherwise), prospects or creditworthiness of any Borrower which may come
into the possession of the Administrative Agent or any of its officers,
directors, employees, agents, attorneys-in-fact or Affiliates.
8.7 Indemnification. The Lenders agree to indemnify each Agent
in its agency capacity (to the extent not reimbursed by any Borrower and
without limiting the obligation of any Borrower to do so), ratably according
to their respective Commitment Percentages in effect on the date on which
indemnification is sought (or, if indemnification is sought after the date upon
which the Total Commitment shall have terminated and the Loans shall have been
paid in full, ratably in accordance with their Commitment Percentages
immediately prior to such date), from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind whatsoever which may at any time
(including, without limitation, at any time following the payment of the Loans)
be imposed on, incurred by or asserted against any Agent in any way relating
to or arising out of, the Commitments, this Agreement, any of the other Loan
Documents or any documents contemplated by or referred to herein or therein or
the transactions contemplated hereby or thereby or any action taken or omitted
to be taken by any Agent under or in connection with any of the foregoing,
provided that no Lender shall be liable for the payment of any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements resulting solely from such Agent's
gross negligence or willful misconduct. The agreements in this subsection 8.7
shall survive the payment of the Loans and all other amounts payable hereunder.
8.8 An Agent in Its Individual Capacity. Each Agent and its
Affiliates may make loans to, accept deposits from and generally engage in any
kind of business with any Borrower and its Subsidiaries as though such Agent
were not an Agent hereunder or under the other Loan Documents. With respect
to the Loans made by it, such Agent shall have the same rights and powers under
this Agreement and the other Loan Documents as any Lender and may exercise the
same as though it were not an Agent, and the terms "Lender" and "Lenders" shall
include such Agent in its individual capacity.
8.9 Successor Administrative Agent. The Administrative Agent may
resign as Administrative Agent upon thirty days' notice to the Lenders. If the
Administrative Agent shall resign as Administrative Agent under this Agreement
and the other Loan Documents, then the Required Lenders shall appoint from
among the Lenders a successor administrative agent for the Lenders, which
successor administrative agent shall be approved by the Borrowers, whereupon
such successor administrative agent shall succeed to the rights, powers and
duties of the Administrative Agent, and the term "Administrative Agent" shall
mean such successor administrative agent effective upon such appointment and
approval, and the former Administrative Agent's rights, powers and duties as
Administrative Agent shall be terminated, without any other or further act or
deed on the part of such former Administrative Agent or any of the parties to
this Agreement or any holders of the Loans. After any retiring Administrative
Agent's resignation as Administrative Agent, the provisions of this Section 8
shall inure to its benefit as to any actions taken or omitted to be taken by
it while it was Administrative Agent under this Agreement and the other Loan
Documents.
SECTION 9. MISCELLANEOUS
9.1 Amendments and Waivers. Neither this Agreement nor any other
Loan Document, nor any terms hereof or thereof may be amended, supplemented or
modified except in accordance with the provisions of this subsection 9.1. The
Required Lenders may, or, with the written consent of the Required Lenders, the
Administrative Agent may, from time to time, (a) enter into with the Borrowers
written amendments, supplements or modifications hereto and to the other Loan
Documents for the purpose of adding any provisions to this Agreement or the
other Loan Documents or changing in any manner the rights of the Lenders or of
the Borrowers hereunder or thereunder or (b) waive, on such terms and
conditions as the Required Lenders or the Administrative Agent, as the case may
be, may specify in such instrument, any of the requirements of this Agreement
or the other Loan Documents or any Default or Event of Default and its
consequences; provided, however, that no such waiver and no such amendment,
supplement or modification shall (i) reduce the amount or extend the scheduled
date of maturity of any Loan or Commitment or of any installment or reduction
thereof, or reduce the stated rate of any interest or fee payable hereunder or
extend the scheduled date of any payment thereof or increase the amount or
extend the expiration date of any Lender's Commitment, in each case without the
consent of each Lender, or (ii) amend, modify or waive subsection 2.4(a), any
provision of this subsection 9.1 or change the requirement specified in any
provision herein for any consent or approval or any percentage specified in the
definition of Required Lenders, or consent to the assignment or transfer by any
Loan Party or Affiliate Pledgor of any of its rights and obligations under this
Agreement and the other Loan Documents or, subject to subsection 9.16, release
any of the Collateral or reduce or limit the obligations of any Guarantor under
any Guaranty Agreement or, subject to subsection 9.16, release any Guarantor
under any Guaranty Agreement or waive any Default or Event of Default under
subsection 7(a) or amend or modify the subordination provisions contained in
any Subordination Agreement, in each case without the written consent of all
the Lenders, or (iii) amend, modify or waive any provision of Section 8 without
the written consent of the then Administrative Agent or any other Agent
affected thereby. Any such waiver and any such amendment, supplement or
modification shall apply equally to each of the Lenders and shall be binding
upon the Borrowers, the Lenders, the Administrative Agent and the other Agents
and all future holders of the Loans. In the case of any waiver, the Borrowers,
the Lenders and the Agents shall be restored to their former positions and
rights hereunder and under the other Loan Documents, and any Default or Event
of Default waived shall be deemed to be cured and not continuing; no such
waiver shall extend to any subsequent or other Default or Event of Default or
impair any right consequent thereon.
9.2 Notices. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
facsimile transmission), and, unless otherwise expressly provided herein, shall
be deemed to have been duly given or made when delivered, or three days after
being deposited in the mail, postage prepaid, or one Business Day after being
sent by priority overnight mail with a nationally recognized overnight delivery
carrier, or, in the case of telecopy notice, when received, addressed as
follows in the case of the Borrowers and the Administrative Agent, and as set
forth in Annex A in the case of the other parties hereto, or to such other
address as may be hereafter notified by the respective parties hereto:
The Borrowers: c/o Olympus Communications, L.P.
Managing General Partner
5 West Third Street
Coudersport, Pennsylvania 16915
Attention: Colin H. Higgin, Esq.
Telephone: (814) 274-9830
Telecopy: (814) 274-8631
with a copy to: Buchanan Ingersoll
Professional Corporation
58th Floor, 600 Grant Street
Pittsburgh, Pennsylvania 15219
Attention: Paula Zawadzki
Telephone: (412) 562-8911
Telecopy: (412) 562-9316
The Administrative
Agent: Toronto Dominion (Texas), Inc.
909 Fannin, Suite 1700
Houston, TX 77010
Attention: Sophia Sgrabi
Telephone: (713) 653-8325
Telecopy: (713) 951-9921
with a copy to: The Toronto-Dominion Bank
31 West 52nd Street
New York, NY 10019
Attention: Jessica Laxman
Telephone: (212) 468-0719
Telecopy: (212) 262-1928
provided that any notice, request or demand to or upon the Administrative Agent
or the Lenders pursuant to subsection 2.2, 2.4, 2.6 or 2.8 shall not be
effective until received.
9.3 No Waiver; Cumulative Remedies. No failure to exercise and
no delay in exercising, on the part of the Administrative Agent or any Lender,
any right, remedy, power or privilege hereunder or under the other Loan
Documents shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, remedy, power
or privilege. The rights, remedies, powers and privileges herein provided are
cumulative and not exclusive of any rights, remedies, powers and privileges
provided by any Governmental Requirement.
9.4 Survival of Representations and Warranties. All
representations and warranties made hereunder, in the other Loan Documents and
in any document, certificate or statement delivered pursuant hereto or in
connection herewith shall survive the execution and delivery of this Agreement
and the making of the Loans hereunder.
9.5 Payment of Expenses and Taxes. The Borrowers jointly and
severally agree (a) to pay or reimburse each of the Administrative Agent and
the Documentation Agent for all its reasonable out-of-pocket costs and expenses
incurred in connection with the development, preparation and execution of, and
any amendment, supplement or modification to, this Agreement and the other Loan
Documents and to pay or reimburse each of the Administrative Agent and the
Documentation Agent for all its reasonable out-of-pocket costs and expenses
incurred in connection with any other documents prepared in connection herewith
or therewith, and the consummation and administration of the transactions
contemplated hereby and thereby, including in all such cases, without
limitation, the reasonable fees and disbursements of counsel to the
Administrative Agent and the Documentation Agent, (b) to pay or reimburse each
of the Lenders and the Administrative Agent for all its reasonable costs and
expenses incurred in connection with the enforcement or preservation of any
rights under this Agreement, the other Loan Documents and any such other
documents, including, without limitation, the reasonable fees and disbursements
of counsel (including the allocated fees and expenses of in-house counsel) to
each Lender and of counsel to the Administrative Agent, (c) to pay, indemnify,
and hold each Lender and the Administrative Agent harmless from any and all
recording and filing fees and any and all liabilities with respect to, or
resulting from any delay in paying, stamp, excise and other taxes, if any,
which may be payable or determined to be payable in connection with the
execution and delivery of, or consummation or administration of any of the
transactions contemplated by, or any amendment, supplement or modification of,
or any waiver or consent under or in respect of, this Agreement, the other Loan
Documents and any such other documents, (d) (i) to pay, indemnify, and hold the
Lenders and the Agents, and their respective directors, officers, employees and
agents, harmless from and against any and all other liabilities, obligations,
losses, damages, claims, penalties, actions, judgments, suits, proceedings,
costs, expenses or disbursements of any kind or nature whatsoever which may be
imposed on, incurred by or asserted against such Person (including, without
limitation, the reasonable fees charged and disbursements made by counsel to
such Person, whether or not suit is brought) or to which such Person may become
subject arising out of or in connection with or in any way relating to or
resulting from any actual or threatened Litigation relating to this Agreement
(including the use of the proceeds of the Loans), the other Loan Documents or
any transaction contemplated by any of the foregoing, whether or not such
Person is a party thereto, whether direct or indirect, whether based on any
federal, state or local law or regulation, securities or commercial law or
regulation or under common law or in equity or on contract, tort or otherwise,
including, without limitation, any of the foregoing relating to the violation
of, noncompliance with or liability under, any Environmental Law applicable to
the operations of any Borrower, any of its Subsidiaries or any of the
Properties, and (ii) to reimburse each such Person, on demand, for all
reasonable out-of-pocket costs and expenses (including, without limitation, the
reasonable fees and disbursements of counsel) incurred in connection with any
of the foregoing, including, without limitation, costs and expenses incurred
in connection with investigating, defending or participating in any legal
proceeding relating to any of the foregoing (all the foregoing in this clause
(d), collectively, the "indemnified liabilities"); provided that no Borrower
shall have any obligation hereunder to any such Person with respect to
indemnified liabilities arising from (i) the gross negligence or willful
misconduct of such Person or (ii) legal proceedings commenced against such
Agent or any such Lender by any security holder or creditor thereof arising out
of and based upon rights afforded any such security holder or creditor solely
in its capacity as such. No Borrower shall make any claim against any such
Person for any special, indirect or punitive damages in respect of any breach
or wrongful conduct (whether the claim therefor is based on contract, tort or
duty imposed by law) in connection with, arising out of or in any way related
to the transactions contemplated by, and the relationship established by the
Loan Documents, or any act, omission or event occurring in connection
therewith. The agreements in this subsection 9.5 shall survive repayment of
the Loans and all other amounts payable hereunder.
9.6 Successors and Assigns; Participations and Assignments. (a)
This Agreement shall be binding upon and inure to the benefit of the Borrowers,
the Lenders, the Agents and their respective successors and assigns, except
that no Borrower may assign or transfer any of its rights or obligations under
this Agreement without the prior written consent of each Lender. Any purported
transfer by any Borrower in contravention of the foregoing shall be null and
void.
(b) Any Lender may, in the ordinary course of its commercial
banking business and in accordance with applicable law, at any time sell to one
or more banks or other Persons ("Participants") participating interests in any
Loan owing to such Lender, any Commitment of such Lender or any other interest
of such Lender hereunder and under the other Loan Documents. In the event of
any such sale by a Lender of a participating interest to a Participant, such
Lender's obligations under this Agreement to the other parties to this
Agreement shall remain unchanged, such Lender shall remain solely responsible
for the performance thereof, such Lender shall remain the holder of any such
Loan for all purposes under this Agreement and the other Loan Documents, and
the Borrowers and the Administrative Agent shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under this Agreement and the other Loan Documents. The Borrowers
agree that if amounts outstanding under this Agreement are due or unpaid, or
shall have been declared or shall have become due and payable upon the
occurrence of an Event of Default, each Participant shall, to the maximum
extent permitted by applicable law, be deemed to have the right of set-off in
respect of its participating interest in amounts owing under this Agreement to
the same extent as if the amount of its participating interest were owing
directly to it as a Lender under this Agreement; provided that, in purchasing
such participating interest, such Participant shall be deemed to have agreed
to share with the Lenders the proceeds thereof as provided in subsection 9.7(a)
as fully as if it were a Lender hereunder. The Borrowers also agree that each
Participant shall be entitled to the benefits of subsections 2.13, 2.14 and
2.15 with respect to its participation in the Commitments and the Loans
outstanding from time to time as if it were a Lender; provided that, in the
case of subsection 2.14, such Participant shall have complied with the
requirements of said subsection; and provided, further, that no Participant
shall be entitled to receive any greater amount pursuant to any such subsection
than the transferor Lender would have been entitled to receive in respect of
the amount of the participation transferred by such transferor Lender to such
Participant had no such transfer occurred.
(c) Any Lender may, in the ordinary course of its commercial
banking business and in accordance with applicable law, at any time and from
time to time assign to any Lender or any affiliate thereof or, with the consent
of the Administrative Agent (which in each case shall not be unreasonably
withheld), to any other Eligible Assignee all or any part of its rights and
obligations under this Agreement and the other Loan Documents pursuant to an
Assignment and Acceptance Agreement executed by such Eligible Assignee, such
assigning Lender (and, in the case of an Eligible Assignee that is not then a
Lender or an affiliate thereof, by the Borrowers and the Administrative Agent)
and delivered to the Administrative Agent for its acceptance and recording in
the Register; provided that, in the case of any such assignment to an Eligible
Assignee that is not a Lender or an Affiliate of a Lender, the sum of the
aggregate principal amount of the Loans and the aggregate amount of the
Available Commitment being assigned and, if such assignment is of less than all
of the rights and obligations of the assigning Lender, the sum of the aggregate
principal amount of the Loans and the aggregate amount of the Available
Commitment remaining with the assigning Lender are each not less than
$10,000,000. Upon such execution, delivery, acceptance and recording, from and
after the effective date determined pursuant to such Assignment and Acceptance
Agreement, (i) the Eligible Assignee thereunder shall be a party hereto and,
to the extent provided in such Assignment and Acceptance Agreement, have the
rights and obligations of a Lender hereunder with a Commitment as set forth
therein, and (ii) the assigning Lender thereunder shall, to the extent provided
in such Assignment and Acceptance Agreement, be released from its obligations
under this Agreement (and, in the case of an Assignment and Acceptance covering
all or the remaining portion of an assigning Lender's rights and obligations
under this Agreement, such assigning Lender shall cease to be a party hereto).
Notwithstanding any provision of this subsection 9.6(c) and subsection 9.6(e),
the consent of the Borrowers shall not be required, and, unless requested by
the Eligible Assignee or the assigning Lender, new Notes shall not be required
to be executed and delivered by the Borrowers, for any assignment which occurs
at any time when any of the events described in Section 7(f) shall have
occurred and be continuing. Each Lender party to this Agreement on the Closing
Date hereby represents, and each Person that becomes a Lender pursuant to any
Assignment and Acceptance Agreement will represent, that it is in fact,
otherwise than by reason of being a Lender, an Eligible Assignee and will make
or acquire Loans hereunder for its own account in the ordinary course of its
business.
(d) The Administrative Agent, on behalf of the Borrowers, shall
maintain at the address of the Administrative Agent referred to in subsection
9.2 a copy of each Assignment and Acceptance delivered to it and a register
(the "Register") for the recordation of the names and addresses of the Lenders
and the Commitment of, and principal amount of the Loans owing to, each Lender
from time to time. The entries in the Register shall be conclusive, in the
absence of manifest error, and the Borrower, the Administrative Agent and the
Lenders may (and, in the case of any Loan or other obligation hereunder not
evidenced by a Note, shall) treat each Person whose name is recorded in the
Register as the owner of a Loan or other obligation hereunder as the owner
thereof for all purposes of this Agreement and the other Loan Documents,
notwithstanding any notice to the contrary. Any assignment of any Loan or
other obligation hereunder not evidenced by a Note shall be effective only upon
appropriate entries with respect thereto being made in the Register. The
Register shall be available for inspection by any Borrower or any Lender at any
reasonable time and from time to time upon reasonable prior notice.
(e) Upon its receipt of an Assignment and Acceptance Agreement
executed by an assigning Lender and an Eligible Assignee (and, in the case of
an Eligible Assignee that is not then a Lender or an affiliate thereof, by the
Borrowers and the Administrative Agent) together with payment to the
Administrative Agent of a registration and processing fee of $3,000, the
Administrative Agent shall (i) within five Business Days after receipt thereof
accept such Assignment and Acceptance Agreement and (ii) on the effective date
determined pursuant thereto record the information contained therein in the
Register and give notice of such acceptance and recordation to the Lenders and
the Borrowers.
(f) The Borrowers authorize each Lender to disclose to any
Participant or Eligible Assignee (each, a "Transferee") and any prospective
Transferee any and all financial information in such Lender's possession
concerning any Borrower and its Subsidiaries and Affiliates which has been
delivered to such Lender by or on behalf of such Borrower pursuant to this
Agreement or which has been delivered to such Lender by or on behalf of such
Borrower in connection with such Lender's credit evaluation of such Borrower
and its Affiliates prior to becoming a party to this Agreement.
(g) For avoidance of doubt, the parties to this Agreement
acknowledge that the provisions of this subsection 9.6 concerning assignments
of Loans and Notes relate only to absolute assignments and that such provisions
do not prohibit assignments creating security interests, including, without
limitation, any pledge or assignment by a Lender of any Loan or Note to any
Federal Reserve Bank in accordance with applicable law.
9.7 Adjustments; Set-off. (a) If any Lender (a "Benefitted
Lender") shall at any time receive any payment of all or part of its Loans, or
interest thereon, or receive any collateral in respect thereof (whether
voluntarily or involuntarily, by set-off, pursuant to events or proceedings of
the nature referred to in Section 7(f), or otherwise), in a greater proportion
than any such payment to, or collateral received by, any other Lender, if any,
in respect of such other Lender's Loans, or interest thereon, such Benefitted
Lender shall purchase for cash from the other Lenders a participating interest
in such portion of each such other Lender's Loan, or shall provide such other
Lenders with the benefits of any such collateral, or the proceeds thereof, as
shall be necessary to cause such Benefitted Lender to share the excess payment
or benefits of such collateral or proceeds ratably with each of the Lenders;
provided, however, that if all or any portion of such excess payment or
benefits is thereafter recovered from such Benefitted Lender, such purchase
shall be rescinded, and the purchase price and benefits returned, to the extent
of such recovery, but without interest.
(b) In addition to any rights and remedies of the Lenders provided
by law, each Lender shall have the right, after the occurrence of an Event of
Default and until such Event of Default has been cured to the satisfaction of
or waived by the requisite Lenders, without prior notice to any Borrower, any
such notice being expressly waived by each Borrower to the extent permitted by
applicable law, upon any amount becoming due and payable by the Borrowers
hereunder (whether at the stated maturity, by acceleration or otherwise) to
set-off and appropriate and apply against such amount any and all deposits
(general or special, time or demand, provisional or final), in any currency,
and any other credits, indebtedness or claims, in any currency, in each case
whether direct or indirect, absolute or contingent, matured or unmatured, at
any time held or owing by such Lender or any branch or agency thereof to or for
the credit or the account of any Borrower. Each Lender agrees promptly to
notify such Borrower and the Administrative Agent after any such set-off and
application made by such Lender, provided that the failure to give such notice
shall not affect the validity of such set-off and application.
9.8 Counterparts. This Agreement may be executed by one or more
of the parties to this Agreement on any number of separate counterparts
(including by telecopy transmission), and all of said counterparts taken
together shall be deemed to constitute one and the same instrument.
9.9 Severability; Limitation on Agreements. (a) Any provision of
this Agreement which is prohibited or unenforceable in any jurisdiction shall,
as to such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate
or render unenforceable such provision in any other jurisdiction.
(b) It is the express intent of the parties to this Agreement that
the Borrowers not pay and no Agents or Lenders charge or receive, directly or
indirectly in any manner whatsoever, interest in excess of that which may
legally be paid to such Agent or Lender under applicable Governmental
Requirements. In no event shall the amount of interest due or payable
hereunder to any Agent or any Lender or under any Lender's Note or other Loan
Document exceed the Highest Lawful Rate. In the event any payment of interest
in excess of the Highest Lawful Rate is inadvertently made by any Borrower or
inadvertently received by any Lender or any Agent, then such excess shall be
applied to the reduction of the principal amount owing on account of such
Lender's Note or the amounts owing on other Obligations of the Borrowers to
such Agent or such Lender under any Loan Document and not to the payment of
interest; provided, however, if such excessive interest exceeds the unpaid
principal balance of any Note and the amounts owing on other obligations of the
Borrowers to such Agent or such Lender under any Loan Document, as the case may
be, such excess shall be refunded to the Borrowers. All sums paid or agreed
to be paid to any Agent or any Lender in connection with the use, forbearance
or detention of the Loans made under this Agreement shall, to the extent
permitted by applicable law, be amortized, prorated, allocated and spread
throughout the full term of the Loans until payment in full of the principal
thereof (including the period of any renewal or extension thereof) so that the
interest on account of the Loans shall not exceed the Highest Lawful Rate.
Notwithstanding anything to the contrary contained in any Loan Document, it is
understood and agreed that if at any time the rate of interest which accrues
on the outstanding principal balance of any Note shall exceed the Highest
Lawful Rate, the rate of interest which accrues on the outstanding principal
balance of such Note shall be limited to the Highest Lawful Rate, but any
subsequent reductions in the rate of interest which accrues on the outstanding
principal balance of such Note shall not reduce the rate of interest which
accrues on the outstanding principal balance of such Note below the Highest
Lawful Rate until the total amount of interest accrued on the outstanding
principal balance of such Note equals the amount of interest which would have
accrued if such interest rate had at all times been in effect. The terms and
provisions of this subsection 9.9(b) shall control and supersede every other
provision of the Loan Documents.
9.10 Integration. This Agreement and the other Loan Documents
represent the final agreement of the Borrowers, the Agents and the Lenders as
of the date hereof with respect to the subject matter hereof, and there are no
promises, undertakings, representations or warranties by any Agent or any
Lender relative to the subject matter hereof not expressly set forth or
referred to herein or in the other Loan Documents.
9.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS
OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED
IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO
ITS CONFLICT OF LAW PRINCIPLES.
9.12 Submission To Jurisdiction: Waivers. Each Borrower hereby
irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to which it
is a party, or for recognition and enforcement of any judgement in respect
thereof, to the non-exclusive general jurisdiction of the Courts of the State
of New York, the courts of the United States of America for the Southern
District of New York, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought in
such courts and waives any objection that it may now or hereafter have to the
venue of any such action or proceeding in any such court or that such action
or proceeding was brought in an inconvenient court and agrees not to plead or
claim the same;
(c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or certified
mail (or any substantially similar form of mail), postage prepaid, to the
Borrowers at their respective addresses set forth in subsection 9.2 or at such
other address of which the Administrative Agent shall have been notified
pursuant thereto;
(d) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit the
right to sue in any other jurisdiction; and
(e) waives, to the maximum extent permitted by applicable
Governmental Requirements any right it may have to claim or recover in any
legal action or proceeding referred to in this subsection any special,
exemplary or punitive damages.
9.13 Acknowledgments. Each Borrower hereby acknowledges that:
(a) it has been advised by counsel in the negotiation, execution
and delivery of this Agreement and the other Loan Documents;
(b) no Agent or any Lender has any fiduciary relationship with or
duty to the Borrower arising out of or in connection with this Agreement or any
of the other Loan Documents, and the relationship between the Agents and
Lenders, on one hand, and the Borrowers, on the other hand, in connection
herewith or therewith is solely that of debtor and creditor;
(c) no joint venture is created hereby or by the other Loan
Documents or otherwise exists by virtue of the transactions contemplated hereby
among the Agents, among the Lenders, among the Borrowers and the Lender or
among the Borrowers and the Agents; and
(d) the obligations of the Borrowers to make payment in full of
all Obligations owing hereunder from time to time pursuant to and in accordance
with the terms of this Agreement are joint and several, and the failure of any
Borrower to make any payment (or any prepayment) on any Obligation as and when
the same is due pursuant to and in accordance with this Agreement shall not
relieve any other Borrower of its obligation hereunder to make such payment (or
prepayment) on the date when due.
9.14 WAIVER OF JURY TRIAL. EACH BORROWER, EACH AGENT AND EACH
LENDER HEREBY, KNOWINGLY AND INTENTIONALLY, IRREVOCABLY AND UNCONDITIONALLY,
WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
9.15 Authority of Managing General Partner. The Managing General
Partner shall have the right to execute and deliver documents on behalf of any
Borrower under this Agreement and take any other action on behalf of any
Borrower under this Agreement until, subject to subsection 6.8, a new general
partner is admitted under the ACP Partnership Agreement or West Boca
Partnership Agreement, as the case may be, and the Administrative Agent and the
Lenders shall be under no obligation to make any inquiry respecting such
authority.
9.16 Release. The Administrative Agent is hereby authorized by the
Lenders to, and shall, release Liens, any party to a Guaranty Agreement and any
other guarantees and take such other actions as any Borrower may reasonably
request in connection with any Asset Sale involving any asset subject to any
such Lien or any other disposition of property or assets permitted under this
Agreement.
9.17 Nonrecourse. The Agents and the Lenders acknowledge and agree
that all Obligations of the Borrowers and their respective Subsidiaries under
this Agreement and under the other Loan Documents shall be without recourse to
ACC, Olympus, all of the partners of Olympus, ACP Holdings, the general
partners of Key Biscayne Cablevision (other than ACP) and Dorellenic.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed and delivered by their proper and duly authorized officers
as of the day and year first above written.
ADELPHIA CABLE PARTNERS, L.P.
By: Olympus Communications, L.P.,
Managing General Partner
By: ACP Holdings, Inc.,
Managing General Partner
By:
Name:
Title:
SOUTHEAST FLORIDA CABLE, INC.
By:
Name:
Title:
WEST BOCA ACQUISITION
LIMITED PARTNERSHIP
By: Olympus Communications, L.P.,
Managing General Partner
By: ACP Holdings, Inc.,
Managing General Partner
By:
Name:
Title:
TORONTO DOMINION (TEXAS), INC., as
a Managing Agent, as Administrative
Agent and as a Lender
By:
Name:
Title:
NATIONSBANK OF TEXAS, N.A., as a Managing
Agent, as Documentation Agent and as a Lender
By:
Name:
Title:
THE BANK OF NOVA SCOTIA, as a Managing Agent,
as Co-Administrative Agent and as a Lender
By:
Name:
Title:
SOCIETE GENERALE, as a Managing Agent
and as a Lender
By:
Name:
Title:
TORONTO-DOMINION SECURITIES (USA), INC.,
as Syndication Agent
By:
Name:
Title:
CHEMICAL BANK, as an Agent and as a Lender
By:
Name:
Title:
CIBC INC., as an Agent and as a Lender
By:
Name:
Title:
CREDIT LYONNAIS CAYMAN ISLAND BRANCH,
as an Agent and as a Lender
By:
Name:
Title:
FIRST UNION NATIONAL BANK OF NORTH CAROLINA, as
an Agent and as a Lender
By:
Name:
Title:
COMPAGNIE FINANCIERE DE CIC ET DE L'UNION
EUROPEENNE, as a Co-Agent and as a Lender
By:
Name:
Title:
FLEET BANK, as a Co-Agent and as a Lender
By:
Name:
Title:
By:
Name:
Title:
LTCB TRUST COMPANY, as a Co-Agent and as a Lender
By:
Name:
Title:
OTHER LENDERS:
BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION
By:
Name:
Title:
BANK OF MONTREAL
By:
Name:
Title
THE BANK OF NEW YORK
By:
Name:
Title:
THE FUJI BANK, LIMITED, NEW YORK BRANCH
By:
Name:
Title:
THE SUMITOMO TRUST AND BANKING CO., LTD.
By:
Name:
Title:
ABN AMRO BANK, N.V.
By:
Name:
Title:
NATIONAL BANK OF CANADA
By:
Name:
Title:
THE NIPPON CREDIT BANK, LTD.
By:
Name:
Title:
PNC BANK, NATIONAL ASSOCIATION
By:
Name:
Title:
THE SUMITOMO BANK, LTD.
By:
Name:
Title:
This space is intentionally left blank.
Schedule 2.4 - Total Commitment Reduction Schedule
Reduction Reduction Reduction Remaining Total
Date Percentage Amount Commitment
06/30/97 2.0% $ 9,500 $465,500
09/30/97 2.0% $ 9,500 $456,000
12/31/97 2.0% $ 9,500 $446,500
03/31/98 2.0% $ 9,500 $437,000
06/30/98 3.0% $14,250 $422,750
09/30/98 3.0% $14,250 $408,500
12/31/98 3.0% $14,250 $394,250
03/31/99 3.0% $14,250 $380,000
06/30/99 3.0% $14,250 $365,750
09/30/99 3.0% $14,250 $351,500
12/31/99 3.0% $14,250 $337,250
03/31/00 3.0% $14,250 $323,000
06/30/00 3.0% $14,250 $308,750
09/30/00 4.0% $19,000 $289,750
12/31/00 4.0% $19,000 $270,750
03/31/01 4.0% $19,000 $251,750
06/30/01 4.0% $19,000 $232,750
09/30/01 4.5% $21,375 $211,375
12/31/01 4.5% $21,375 $190,000
03/31/02 5.0% $23,750 $166,250
06/30/02 5.0% $23,750 $142,500
09/30/02 5.0% $23,750 $118,750
12/31/02 5.0% $23,750 $ 95,000
03/31/03 5.0% $23,750 $ 71,250
06/30/03 5.0% $23,750 $ 47,500
09/30/03 5.0% $23,750 $ 23,750
12/31/03 5.0% $23,750 $ 0
SCHEDULE 3.3 - NECESSARY CONSENTS
ADELPHIA CABLE PARTNERS, L.P.,
SOUTHEAST FLORIDA CABLE, INC., AND
WEST BOCA ACQUISITION LIMITED PARTNERSHIP
$475,000,000 REVOLVING CREDIT FACILITY
WITH
TORONTO-DOMINION (TEXAS), INC.,
NATIONSBANK OF TEXAS, N.A.,
THE BANK OF NOVA SCOTIA,
SOCIETE GENERALE AND
TORONTO-DOMINION SECURITIES (USA), INC.
Consents
1. Consents of Cable GP, Inc. and Cable LP III, Inc., which have
been obtained.
2. Consents of Governmental Authorities, the FCC and other
persons will need to be obtained, as set forth in the
Security Documents, prior to the enforcement by the
Administrative Agents, on behalf of the Lenders, of the
respective security interests thereunder.
3. Authorization of ACC in connection with the delivery by Key
Biscayne Cablevision of a Guaranty Agreement, which
authorization has been obtained.
SCHEDULE 3.5 - LITIGATION
ADELPHIA CABLE PARTNERS, L.P.,
SOUTHEAST FLORIDA CABLE, INC., AND
WEST BOCA ACQUISITION LIMITED PARTNERSHIP
$475,000,000 REVOLVING CREDIT FACILITY
WITH
TORONTO-DOMINION (TEXAS), INC.,
NATIONSBANK OF TEXAS, N.A.,
THE BANK OF NOVA SCOTIA,
SOCIETE GENERALE AND
TORONTO-DOMINION SECURITIES (USA), INC.
The Cable Television Consumer Protection and Competition Act of
1992 (the "1992 Cable Act") provides that municipal franchising
authorities have the jurisdiction to regulate the rates that a
cable operator may charge for basic tier services and equipment.
The following franchising authorities have exercised their
jurisdiction with regard to cable systems operated by ACP,
Southeast and West Boca, and their respective Subsidiaries,
serving the following municipalities:
City of Florida City
Village of Key Biscayne
City of Boca Raton
City of Boynton Beach
City of Fort Pierce
City of Palm Beach Gardens
City of Port St. Lucie
City of Riviera Beach
City of Stuart
County of Martin
County of St. Lucie
Town of Highland Beach
Town of Juno Beach
Town of Jupiter
Town of Jupiter Inlet Colony
Town of Jupiter Island
Town of Ocean Breeze Park
Town of Sewall's Point
Village of Golf
Village of Tequesta
City of Homestead
County of Metropolitan Dade
City of Greenacres City
County of Palm Beach
Town of Lake Park
Town of Palm Beach Shores
Village of North Palm Beach
Village of Palm Springs
Village of Royal Palm Beach
There have been no material adverse determinations by any of the
franchising authorities. The 1992 Cable Act also provides that
the FCC has the jurisdiction to regulate the rates that a cable
operator may charge for certain non-basic tier services and
equipment, upon the filing by a cable system subscriber of an
appropriate complaint with the FCC. A limited number of
subscribers served by the Borrowers and their Subsidiaries have
filed complaints with the FCC. As of this date, the FCC has not
ruled on these complaints. However, the FCC's Cable Services
Bureau has found that ACP's cable system serving South Dade County
may be liable for refunds, because the system marketed certain
services as "a la carte," unregulated services that the Bureau has
determined were, in fact, regulated services. At least some of
the cable systems operated by the
SCHEDULE 3.5 - LITIGATION (Continued)
ADELPHIA CABLE PARTNERS, L.P.,
SOUTHEAST FLORIDA CABLE, INC., AND
WEST BOCA ACQUISITION LIMITED PARTNERSHIP
$475,000,000 REVOLVING CREDIT FACILITY
WITH
TORONTO-DOMINION (TEXAS), INC.,
NATIONSBANK OF TEXAS, N.A.,
THE BANK OF NOVA SCOTIA,
SOCIETE GENERALE AND
TORONTO-DOMINION SECURITIES (USA), INC.
Borrowers and their Subsidiaries have offered services in a
manner similar or identical to the manner employed in South Dade
County. ACP has appealed the Bureau's decision to the full
Commission, which presently is considering the matter; in any
event, however, ACP does not believe that it will be liable for
any refunds. ACP has submitted materials to the FCC that
justify, on a cost of service basis, ACP's current rates.
SCHEDULE 3.7 - REAL AND LEASEHOLD PROPERTY INTERESTS
ADELPHIA CABLE PARTNERS, L.P.,
SOUTHEAST FLORIDA CABLE, INC., AND
WEST BOCA ACQUISITION LIMITED PARTNERSHIP
$475,000,000 REVOLVING CREDIT FACILITY
WITH
TORONTO-DOMINION (TEXAS), INC.,
NATIONSBANK OF TEXAS, N.A.,
THE BANK OF NOVA SCOTIA,
SOCIETE GENERALE AND
TORONTO-DOMINION SECURITIES (USA), INC.
1. Owned Real Property of the Loan Parties
Use of the
Location Real Property
Britt Road, Office/Headend/
Stuart, Warehouse/Technical Center
FL
Elan at Calusa Condo VI, Office
Unit A202,
Kendall, FL
Ironwood Road, Office/Warehouse/
Palm Beach Gardens, FL Technical Center
Hagan Ranch Road, Property
Palm Beach County, FL
Lake Park, Headend
Palm Beach County, FL
Glades Road, Headend
Palm Beach County, FL
SCHEDULE 3.7 - REAL AND LEASEHOLD PROPERTY INTERESTS (Continued)
ADELPHIA CABLE PARTNERS, L.P.,
SOUTHEAST FLORIDA CABLE, INC., AND
WEST BOCA ACQUISITION LIMITED PARTNERSHIP
$475,000,000 REVOLVING CREDIT FACILITY
WITH
TORONTO-DOMINION (TEXAS), INC.,
NATIONSBANK OF TEXAS, N.A.,
THE BANK OF NOVA SCOTIA,
SOCIETE GENERALE AND
TORONTO-DOMINION SECURITIES (USA), INC.
2. Leasehold Interests of the Loan Parties
Use of the
Location Real Property
Sand-N-C, FL Headend
West of Town water tower, Headend
Highland Beach, FL
Village of Golf, FL Headend
5371 10th Avenue North, Headend
Lake Worth, FL
4201 Oak Circle, Office
Highland Beach, FL
Concord Sq., Office
Suite 11,
Stuart, FL
Cobblestone Country Club, Headend
Stuart, FL
281 SW Port St.,
Lucie, Victoria Office
Square, Port St.
Lucie, FL
2129 Congress Ave., Office
Riviera Beach, FL
Forest Glen, FL Headend
Barclay Club, SMATV
South Palm Beach, FL
Palm Chase, FL Headend
177 Commodore Dr., Unused Tower Site
Jupiter, FL
7190 U.S. Highway One, Headend
Stuart, FL
SCHEDULE 3.7 - REAL AND LEASEHOLD PROPERTY INTERESTS (Continued)
ADELPHIA CABLE PARTNERS, L.P.,
SOUTHEAST FLORIDA CABLE, INC., AND
WEST BOCA ACQUISITION LIMITED PARTNERSHIP
$475,000,000 REVOLVING CREDIT FACILITY
WITH
TORONTO-DOMINION (TEXAS), INC.,
NATIONSBANK OF TEXAS, N.A.,
THE BANK OF NOVA SCOTIA,
SOCIETE GENERALE AND
TORONTO-DOMINION SECURITIES (USA), INC.
2. Leasehold Interests of the Loan Parties (Continued)
Use of the
Location Real Property
Indiantown, FL Headend
Martin County, FL
23123 S.R. 7, Office
Boca Raton,
Palm Beach County, FL
210 Seaview Dr., Headend
Key Biscayne, FL
971 Crandon Blvd., Headend/Office
Key Biscayne, FL
Gator Trace, Fort Pierce, Headend
St. Lucie County, FL
Moon River, SMATV/Headend
Indian River County, FL
Lake in the Woods, SMATV/Headend
Indian River County, FL
5400 NW 22nd Ave., Office
Miami, FL
7788 Central Industrial Dr., Warehouse
Riviera Beach, FL
SCHEDULE 3.14 - CAPITAL SECURITIES OF BORROWERS AND SUBSIDIARIES
ADELPHIA CABLE PARTNERS, L.P.,
SOUTHEAST FLORIDA CABLE, INC., AND
WEST BOCA ACQUISITION LIMITED PARTNERSHIP
$475,000,000 REVOLVING CREDIT FACILITY
WITH
TORONTO-DOMINION (TEXAS), INC.,
NATIONSBANK OF TEXAS, N.A.,
THE BANK OF NOVA SCOTIA,
SOCIETE GENERALE AND
TORONTO-DOMINION SECURITIES (USA), INC.
1. Subsidiaries of Adelphia Cable Partners, L.P.
Southeast Florida Cable, Inc.
Key Biscayne Cablevision
Palm Beach Group Cable, Inc.
Palm Beach Group Cable Joint Venture
Subsidiaries of Southeast Florida Cable, Inc.
Palm Beach Group Cable, Inc.
Palm Beach Group Cable Joint Venture
Subsidiaries of West Boca Acquisition Limited Partnership
Cable Sentry Corporation
2. Ownership of Capital Securities of Borrowers and Subsidiaries
Amount and Type
of Issued and
Outstanding
Subsidiary or Borrower Capital Securities Issued To/Owned
By
Adelphia Cable .01% General ACP Holdings,
Inc.
Partners, L.P. Partner Interest
Adelphia Cable 99.98% Managing Olympus Communi-
Partners, L.P. General Partner cations, L.P.
Interest
Adelphia Cable .01% Limited Dorellenic Cable
Partners, L.P. Partner Interest Partners
Southeast Florida 10 shares of Adelphia Cable
Cable, Inc. common stock Partners, L.P.
West Boca Acquisition 99.9% General Olympus Communi-
Limited Partnership Partner Interest cations, L.P.
West Boca Acquisition .1% Limited Dorellenic Cable
Limited Partnership Partner Interest Partners
Key Biscayne Cablevision 50% General
Adelphia Cable
Partner Interest Partners, L.P.
SCHEDULE 3.14 - CAPITAL SECURITIES OF BORROWERS AND SUBSIDIARIES
(Continued)
ADELPHIA CABLE PARTNERS, L.P.,
SOUTHEAST FLORIDA CABLE, INC., AND
WEST BOCA ACQUISITION LIMITED PARTNERSHIP
$475,000,000 REVOLVING CREDIT FACILITY
WITH
TORONTO-DOMINION (TEXAS), INC.,
NATIONSBANK OF TEXAS, N.A.,
THE BANK OF NOVA SCOTIA,
SOCIETE GENERALE AND
TORONTO-DOMINION SECURITIES (USA), INC.
2. Ownership of Capital Securities of Borrowers and Subsidiaries
(Continued)
Amount and Type
of Issued and
Outstanding
Subsidiary or Borrower Capital Securities Issued To/Owned
By
Key Biscayne Cablevision 50% General Vince
Laurendi
Partner Interest
Palm Beach Group Cable, 1,000 shares of Southeast Florida
Inc. common stock Cable, Inc.
Palm Beach Group Cable 50% General Palm Beach Group
Joint Venture Partner Interest Cable, Inc.
Palm Beach Group Cable 50% General IBIS Communica-
Joint Venture Partner Interest tion Company
Cable Sentry Corporation 500 shares of West
Boca
common stock Acquisition
Limited
Partnership
SCHEDULE 3.19 - ENVIRONMENTAL MATTERS
ADELPHIA CABLE PARTNERS, L.P.,
SOUTHEAST FLORIDA CABLE, INC., AND
WEST BOCA ACQUISITION LIMITED PARTNERSHIP
$475,000,000 REVOLVING CREDIT FACILITY
WITH
TORONTO-DOMINION (TEXAS), INC.,
NATIONSBANK OF TEXAS, N.A.,
THE BANK OF NOVA SCOTIA,
SOCIETE GENERALE AND
TORONTO-DOMINION SECURITIES (USA), INC.
NONE
SCHEDULE 3.21 - CATV SYSTEMS, SMATV SYSTEMS AND FCC LICENSES
ADELPHIA CABLE PARTNERS, L.P.,
SOUTHEAST FLORIDA CABLE, INC., AND
WEST BOCA ACQUISITION LIMITED PARTNERSHIP
$475,000,000
REVOLVING CREDIT FACILITY
WITH
TORONTO-DOMINION (TEXAS), INC.,
NATIONSBANK OF TEXAS, N.A.,
THE BANK OF NOVA SCOTIA,
SOCIETE GENERALE AND
TORONTO-DOMINION SECURITIES (USA), INC.
1. CATV SYSTEMS
CATV Systems are operated in the following communities pursuant
to the following Franchises.
A. Southeast Florida Cable, Inc.
Franchisor Expiration Date
City of Boynton Beach May 2003
City of Fort Pierce January 2000
City of Greenacres City March 1995*
City of Palm Beach Gardens October 1997
City of Port St. Lucie March 1995*
City of Riviera Beach May 1995*
City of Stuart January 1996
County of Martin October 1998
County of Palm Beach October 2006
County of St. Lucie Perpetual
Town of Highland Beach March 1996
Town of Juno Beach September 1999
Town of Jupiter March 1995*
Town of Jupiter Inlet Colony December 1999
Town of Jupiter Island May 1998
Town of Lake Park June 1995*
Town of Ocean Breeze Park July 1996
Town of Palm Beach Shores November 1999
Town of Sewall's Point December 1999
Village of Golf June 2002
Village of North Palm Beach March 1995*
Village of Palm Springs March 2001
Village of Royal Palm Beach March 1995*
Village of Tequesta October 1999
B. Adelphia Cable Partners, L.P.
Franchisor Expiration Date
City of Florida City March 1995*
City of Homestead February 2003
County of Dade March 2001
Village of Key Biscayne March 2001
_________________
* Franchise is being renegotiated.
SCHEDULE 3.21 - CATV SYSTEMS, SMATV SYSTEMS AND FCC LICENSES
(Continued)
ADELPHIA CABLE PARTNERS, L.P.,
SOUTHEAST FLORIDA CABLE, INC., AND
WEST BOCA ACQUISITION LIMITED PARTNERSHIP
$475,000,000 REVOLVING CREDIT FACILITY
WITH
TORONTO-DOMINION (TEXAS), INC.,
NATIONSBANK OF TEXAS, N.A.,
THE BANK OF NOVA SCOTIA,
SOCIETE GENERALE AND
TORONTO-DOMINION SECURITIES (USA), INC.
1. CATV SYSTEMS (continued)
C. West Boca Acquisition Limited Partnership
Franchisor Expiration Date
City of Boca Raton* April 1999
County of Palm Beach** November 1998
* ACC is the current grantee of such Franchise.
** Olympus is the current grantee of such Franchise.
2. SMATV SYSTEMS
Within the communities served by them, the Borrowers and their
Subsidiaries operate SMATV Systems pursuant to numerous
agreements with various homeowners' associations, multiple
dwelling units and other persons. Copies are available from
the Borrowers and their Subsidiaries.
3. FCC LICENSES
Call Sign
Type of and
Licensee License Location Expiration
Date
Adelphia CARS WHZ594/ 7/01/97
Cable Redlands, FL
Partners, L.P.
Adelphia TVRO E930116/ 12/28/02
Cable Forest Glenn,
Partners, L.P. FL
Adelphia TVRO E950095/ 11/23/04
Cable Miami, FL
Partners, L.P.
Adelphia Business KNBQ811/ 11/14/99
Cable Radio Miami, FL
Partners, L.P.
SCHEDULE 3.21 - CATV SYSTEMS, SMATV SYSTEMS AND FCC LICENSES
(Continued)
ADELPHIA CABLE PARTNERS, L.P.,
SOUTHEAST FLORIDA CABLE, INC., AND
WEST BOCA ACQUISITION LIMITED PARTNERSHIP
$475,000,000 REVOLVING CREDIT FACILITY
WITH
TORONTO-DOMINION (TEXAS), INC.,
NATIONSBANK OF TEXAS, N.A.,
THE BANK OF NOVA SCOTIA,
SOCIETE GENERALE AND
TORONTO-DOMINION SECURITIES (USA), INC.
3. FCC LICENSES (continued)
Call Sign
Type of and
Licensee License Location Expiration
Date
Adelphia Business WNJP519/ 7/16/97
Cable Radio Miami, FL
Partners, L.P.
Cable Sentry Business WNQ0866/ 10/17/99*
Corp. Radio Boca Raton, FL
Key Biscayne TVRO E7027/ 9/27/95
Cablevision Key Biscayne,
FL
Southeast CARS WBY27/ 2/01/99
Florida Stuart, FL
Cable, Inc.
Southeast TVRO E5611/ 5/13/03
Florida DelRay Beach,
Cable, Inc. FL
Southeast TVRO E9195/ 7/26/95**
Florida Highland Beach,
Cable, Inc. FL
Southeast TVRO WX26/ 11/26/99
Florida Greenacres, FL
Cable, Inc.
Southeast TVRO WM59/ 1/08/02
Florida Lake Park, FL
Cable, Inc.
Southeast TVRO WJ23/ 8/14/01
Florida Stuart, FL
Cable, Inc.
Southeast TVRO E2391/ 9/15/00
Florida Indiantown, FL
Cable, Inc.
________________
* Transfer to Olympus pending; Operating pursuant to a
conditional temporary authorization of the FCC.
** Renewal Application sent to FCC.
SCHEDULE 3.21 - CATV SYSTEMS, SMATV SYSTEMS AND FCC LICENSES
(Continued)
ADELPHIA CABLE PARTNERS, L.P.,
SOUTHEAST FLORIDA CABLE, INC., AND
WEST BOCA ACQUISITION LIMITED PARTNERSHIP
$475,000,000 REVOLVING CREDIT FACILITY
WITH
TORONTO-DOMINION (TEXAS), INC.,
NATIONSBANK OF TEXAS, N.A.,
THE BANK OF NOVA SCOTIA,
SOCIETE GENERALE AND
TORONTO-DOMINION SECURITIES (USA), INC.
3. FCC LICENSES (continued)
Call Sign
Type of and
Licensee License Location Expiration
Date
Southeast TVRO E930117/ 12/28/02
Florida Gator Trace, FL
Cable, Inc.
Southeast TVRO E930155/ 1/19/03
Florida Sand-N-C, FL
Cable, Inc.
Southeast TVRO E930156/ 1/19/03
Florida Palm Chase, FL
Cable, Inc.
Southeast Business WNJV713/ 1/22/97
Florida Radio Riviera Beach,
Cable, Inc. FL
Southeast Business WMVT625/ 8/06/97
Florida Radio Martin, FL
Cable, Inc.
WB Cable Business WSQ484 6/08/97*
Associates, Radio Boca Raton, FL
Ltd.
________________
* Transfer to Olympus pending; Operating pursuant to a
conditional temporary authorization of the FCC.
SCHEDULE 6.2(d) - CAPITAL LEASE OBLIGATIONS
AND PURCHASE MONEY FINANCING
ADELPHIA CABLE PARTNERS, L.P.,
SOUTHEAST FLORIDA CABLE, INC., AND
WEST BOCA ACQUISITION LIMITED PARTNERSHIP
$475,000,000 REVOLVING CREDIT FACILITY
WITH
TORONTO-DOMINION (TEXAS), INC.,
NATIONSBANK OF TEXAS, N.A.,
THE BANK OF NOVA SCOTIA,
SOCIETE GENERALE AND
TORONTO-DOMINION SECURITIES (USA), INC.
1. Indebtedness in connection with lease of computer equipment
leased from U.S. Computer Systems (d/b/a CableLease).
2. Indebtedness in connection with lease of an OCE-Bruning plain
paper copier model 9036 with sheet feeder and stand leased
from OCE-Bruning, Inc.
3. Indebtedness in connection with lease of a Xerox 5065 OCT
Copier leased from Xerox Corporation.
SCHEDULE 6.2(f) - AFFILIATE SUBORDINATED INDEBTEDNESS
ADELPHIA CABLE PARTNERS, L.P.,
SOUTHEAST FLORIDA CABLE, INC., AND
WEST BOCA ACQUISITION LIMITED PARTNERSHIP
$475,000,000 REVOLVING CREDIT FACILITY
WITH
TORONTO-DOMINION (TEXAS), INC.,
NATIONSBANK OF TEXAS, N.A.,
THE BANK OF NOVA SCOTIA,
SOCIETE GENERALE AND
TORONTO-DOMINION SECURITIES (USA), INC.
1. Indebtedness of $1.5 million payable to Hilton Head
Communications, L.P.
2. Indebtedness of $15.7 million payable to Olympus.
SCHEDULE 6.7(f) - LOANS TO OFFICERS OF BORROWERS
ADELPHIA CABLE PARTNERS, L.P.,
SOUTHEAST FLORIDA CABLE, INC., AND
WEST BOCA ACQUISITION LIMITED PARTNERSHIP
$475,000,000 REVOLVING CREDIT FACILITY
WITH
TORONTO-DOMINION (TEXAS), INC.,
NATIONSBANK OF TEXAS, N.A.,
THE BANK OF NOVA SCOTIA,
SOCIETE GENERALE AND
TORONTO-DOMINION SECURITIES (USA), INC.
Adelphia Cable Partners, L.P.
Officer Loan Amount
None
Southeast Florida Cable, Inc.
Officer Loan Amount
None
West Boca Acquisition Limited Partnership
Officer Loan Amount
None
SCHEDULE 6.7(h) - INVESTMENTS IN SUBSIDIARIES
ADELPHIA CABLE PARTNERS, L.P.,
SOUTHEAST FLORIDA CABLE, INC., AND
WEST BOCA ACQUISITION LIMITED PARTNERSHIP
$475,000,000 REVOLVING CREDIT FACILITY
WITH
TORONTO-DOMINION (TEXAS), INC.,
NATIONSBANK OF TEXAS, N.A.,
THE BANK OF NOVA SCOTIA,
SOCIETE GENERALE AND
TORONTO-DOMINION SECURITIES (USA), INC.
1. Demand Note of Cable Sentry Corporation payable to West Boca.
2. Demand Note of Key Biscayne Cablevision payable to ACP.
EXHIBIT A
AFFILIATE SUBORDINATION AGREEMENT
AFFILIATE SUBORDINATION AGREEMENT dated as of May 12,
1995 (as amended, supplemented and otherwise modified from time to
time, this "Agreement"), among Adelphia Cable Partners, L.P., a
Delaware limited partnership, Southeast Florida Cable, Inc., a
Florida corporation, and West Boca Acquisition Limited
Partnership, a Delaware limited partnership (the "Borrowers"),
each Restricted Subsidiary of each Borrower from time to time
party hereto (together with the Borrowers, the "Affiliate
Borrowers"), each Affiliate of each Borrower and its Restricted
Subsidiaries from time to time party hereto (collectively, the
"Subordinated Affiliate Lenders"), and TORONTO DOMINION (TEXAS),
INC., as Administrative Agent (in such capacity, the
"Administrative Agent") for the Lenders from time to time parties
to the Revolving Credit Agreement, dated as of May 12, 1995, among
the Borrowers, such Lenders, the Agents identified therein and
Toronto Dominion (Texas), Inc., as Administrative Agent (as
amended, supplemented and otherwise modified from time to time,
the "Credit Agreement").
W I T N E S S E T H
WHEREAS, pursuant to the Credit Agreement, the Lenders
have severally agreed to make Loans to the Borrowers upon the
terms and subject to the conditions set forth therein; and
WHEREAS, pursuant to subsection 6.2(f) of the Credit
Agreement, the Affiliate Borrowers may borrow up to an aggregate
amount of $70,000,000 (including principal and accrued and unpaid
interest thereon) at any time outstanding from the Subordinated
Affiliate Lenders; and
WHEREAS, it is a condition precedent to the right of the
Affiliate Borrowers to borrow from the Subordinated Affiliate
Lenders that (i) each Restricted Subsidiary which makes any such
borrowing shall be or become a party to this Agreement in the
manner provided for herein and (ii) each Affiliate from which any
such borrowing is made shall have become a party to this Agreement
in the manner provided for herein;
NOW, THEREFORE, in consideration of the premises and to
induce the Agents and the Lenders to permit such borrowings, each
Affiliate Borrower and each Subordinated Affiliate Lender hereby
agrees with the Administrative Agent, for the benefit of the
Lenders and the other Agents, as follows:
1. Definitions. (a) Unless otherwise defined herein, terms
defined in the Credit Agreement and used herein shall have the
meanings given to them in the Credit Agreement. For purposes of
this Agreement, the term "Lender" shall include any Affiliate of
any Lender which has entered into an Interest Rate Protection
Agreement with any Borrower, and the term "Loan Documents" shall
include any Interest Rate Protection Agreement between any Lender
(including any such Affiliate of a Lender) and any Borrower.
(b) For purposes of
this Agreement, the following terms shall have the following
meanings:
"Obligations": the Obligations (as defined in the
Credit Agreement), and all renewals, refundings,
restructurings and other refinancings thereof, including
increases in the amount thereof.
"Reorganization": with respect to any Affiliate
Borrower, any distribution of the assets of such Affiliate
Borrower upon any voluntary or involuntary dissolution,
winding-up, total or partial liquidation or reorganization,
or bankruptcy, insolvency, receivership or other statutory or
common law proceedings or arrangements involving such
Affiliate Borrower or the readjustment of its liabilities or
any assignment for the benefit of creditors or any
marshalling of its assets or liabilities.
"Senior Indebtedness": (a) the Obligations, and (b) all
renewals, refundings, restructurings and other refinancings
thereof, including increases in the amount thereof.
"Subordinated Indebtedness": the principal of, and
interest on, all loans and other extensions of credit from
time to time made by the Subordinated Affiliate Lenders to
any Affiliate Borrower and any and all other amounts payable
in connection therewith, whether on account of fees,
indemnities, costs, expenses or otherwise.
(c) The words
"hereof," "herein" and "hereunder" and words of similar import
when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement, and
section and paragraph references are to this Agreement unless
otherwise specified.
(d) The meanings
given to terms defined herein shall be equally applicable to both
the singular and plural forms of such terms.
2. Agreement to
Subordinate. Each Affiliate Borrower, for itself and its
successors and assigns, covenants and agrees, and each of the
Subordinated Affiliate Lenders, as a holder of Subordinated
Indebtedness, hereby agrees, for itself and its successors and
assigns, that the payment of the Subordinated Indebtedness is and
shall be expressly "subordinate and junior in right of payment"
(as such phrase is defined in Section 3) to the prior payment in
full of all Senior Indebtedness to the extent and in the manner
hereinafter set forth.
3. Meaning of
Subordinate and Junior in Right of Payment. (a) "Subordinate and
junior in right of payment" shall mean that no part of the
Subordinated Indebtedness shall have any claim to the assets of
any Affiliate Borrower on a parity with or prior to the claim of
the Senior Indebtedness, whether such claim be made in connection
with a Reorganization or otherwise. Unless and until the Senior
Indebtedness shall have been paid in full in cash, and the
Commitments shall have been terminated, no Subordinated Affiliate
Lender will take, retain, permit to exist, demand or receive from
any Affiliate Borrower, and no Affiliate Borrower will make, give
or permit, directly or indirectly, by set-off, redemption,
purchase or in any other manner, (i) any payment of the whole or
any part of the Subordinated Indebtedness, (ii) any security or
collateral for the whole or any part of the Subordinated
Indebtedness or (iii) any guaranty of the whole or any part of the
Subordinated Indebtedness; provided, that the Affiliate Borrowers
may make and the Subordinated Affiliate Lenders may receive
scheduled payments on account of interest on the Subordinated
Indebtedness in accordance with the terms thereof so long as
(i) no Default or Event of Default shall have occurred and then be
continuing or would occur as a result of, or after giving effect
to, any such payment, (ii) rate of interest applicable to such
Subordinated Indebtedness does not exceed 12% per annum and
(iii) no such payment would violate Section 5 hereof or
subsection 6.6 of the Credit Agreement. Each Affiliate Borrower
expressly agrees that it will not make any payment of any of the
Subordinated Indebtedness, or take any other action, in
contravention of the provisions of the Credit Agreement or this
Agreement.
(b) For purposes of
this Agreement, the Senior Indebtedness shall not be deemed to
have been paid in full until and unless the Lenders and the Agents
shall have indefeasibly received payment in full of the principal
of, interest on and costs and expenses and any and all other
amounts then payable in connection with the Senior Indebtedness in
cash and the Commitments shall have been terminated. The
subordination provisions in this Agreement are for the benefit of
and shall be enforceable directly by the Lenders and the Agents
and each Lender and each Agent shall be deemed to have acquired
such Senior Indebtedness in reliance upon this Agreement. The
Administrative Agent shall have the right to act on behalf of the
Lenders and the other Agents pursuant to this Agreement in
enforcing the rights of the Lenders and the other Agents, and in
receiving payments and other distributions to be made, under this
Agreement.
(c) In the event
that notwithstanding the provisions of paragraph (a) of this
Section 3, any Subordinated Affiliate Lender shall have received
any payment or distribution with respect to the Subordinated
Indebtedness contrary to the foregoing provisions of such
paragraph, then and in any such event such payment or distribution
shall be held in trust for the benefit of, and shall be
immediately paid or delivered by such Subordinated Affiliate
Lender to the Administrative Agent to be used to prepay Loans
outstanding under the Credit Agreement.
4. Limitations on
Subordinated Indebtedness. The Subordinated Affiliate Lenders
agree that the Subordinated Indebtedness shall be unsecured, and
that, so long as any of the Senior Indebtedness shall remain
unpaid in cash or the Commitments shall not have been terminated,
if at any time any Subordinated Affiliate Lender shall be in
possession of any Collateral, such Subordinated Affiliate Lender
shall promptly deliver such Collateral to the Administrative Agent
and until such delivery shall hold such Collateral in trust for
the Lenders and the Agents. Until such time as the Senior
Indebtedness has been paid in full in cash and the Commitments
shall have been terminated, the Subordinated Affiliate Lenders
agree not to exercise any of their respective rights under any
document, instrument or agreement, or to accelerate or collect the
obligations of any of the Affiliated Borrowers, or to realize upon
any of the Collateral or any other assets of any of the Affiliated
Borrowers or to attach, levy upon or execute against any of the
Collateral or any other assets of any of the Affiliated Borrowers,
provided however, that the Subordinated Affiliate Lenders shall be
entitled to the payments provided for in Section 3 so long as the
conditions to such payments set forth in Section 3 have been
satisfied.
5. Subordinated
Indebtedness Subordinated to Prior Payment of All Senior
Indebtedness on Reorganization; Sale of the Affiliate Borrowers;
etc. Upon any payment or distribution of all or any of the
assets or securities of any Affiliate Borrower of any kind or
character, whether in cash, property or securities, whether made
pursuant to a Reorganization relative to such Affiliate Borrower
or any of its properties, or a distribution of proceeds of or upon
sale of all or any part of such Affiliate Borrower or any of its
subsidiaries or any of their respective assets, other than as
permitted by subsection 6.5 of the Credit Agreement and exclusive
of the payments permitted to be made to the Subordinated Affiliate
Lenders as provided in Section 3, then in such event:
(a) the Lenders and
the Agents shall be entitled to receive payment in full in
cash as provided herein of all amounts due or to become due
on or in respect of all Senior Indebtedness, before any
payment is made on account of or applied to the Subordinated
Indebtedness;
(b) any payment or
distribution of assets of such Affiliate Borrower of any kind
or character, whether in cash, property or securities
(including any payment or other distribution that may be
payable by reason of the payment of any other Indebtedness of
such Affiliate Borrower being subordinated to the payment of
Subordinated Indebtedness), to which the holders of
Subordinated Indebtedness would be entitled except for the
provisions of this Agreement, shall be paid or delivered by
any debtor, custodian, receiver, trustee in bankruptcy,
liquidating trustee, agent or other person making such
payment or distribution, directly to the Administrative Agent
for the benefit of the Lenders and the Agents, for
application to the payment or prepayment of all such Senior
Indebtedness remaining unpaid to the extent necessary to pay
all such Senior Indebtedness in full in cash, after giving
effect to any concurrent payment or distribution to the
Lenders or the Agents; and
(c) in the event
that, notwithstanding the foregoing provisions of this
Section 5, any holder of Subordinated Indebtedness shall have
received any payment or distribution with respect to
Subordinated Indebtedness contrary to the foregoing
provisions of this Section 5, then and in such event such
payment or distribution shall be held in trust for the
benefit of, and shall be immediately paid or delivered by
such holder of Subordinated Indebtedness to the
Administrative Agent for the benefit of the Lenders and the
Agents for application to the payment or prepayment of all
Senior Indebtedness remaining unpaid, to the extent necessary
to pay all such Senior Indebtedness in full, after giving
effect to any concurrent payment or distribution to the
Lenders or the Agents.
In the event of a Reorganization, if any Subordinated
Affiliate Lender has not filed any claim, proof of claim or other
instrument of similar character with respect to the Subordinated
Indebtedness of such Subordinated Affiliate Lender within 20 days
before the expiration of the time to file the same, the
Administrative Agent, any other Agent or any Lender may, as an
attorney-in-fact for such Subordinated Affiliate Lender, file, any
claim, proof of claim or other instrument of similar character on
behalf of such Subordinated Affiliate Lender, and such
Subordinated Affiliate Lender hereby appoints the Administrative
Agent, any such other Agent and any such Lender as an attorney-in-
fact for such Subordinated Affiliate Lender, to so file any claim,
proof of claim or such other instrument of similar character.
Each Subordinated Affiliate Lender ratifies all that the
Administrative Agent, any such other Agent and any such Lender,
as said attorney-in-fact, shall lawfully do or cause to be done by
virtue hereof and not in contravention of the terms hereof. The
power of attorney granted in this Section 5 is a power coupled
with an interest and shall be irrevocable.
Upon any distribution of assets of any Affiliate
Borrower referred to in this Agreement, the Subordinated Affiliate
Lenders shall be entitled to rely upon any order or decree made by
any court of competent jurisdiction in which a Reorganization is
pending for the purpose of ascertaining the identity of the
Lenders and the Agents, the amount of Senior Indebtedness, the
amount or amounts paid or distributed thereon and all other facts
pertinent thereto or to this Agreement. Nothing in the foregoing
sentence shall limit the right of the Lenders and the Agents to
receive payment in full of the Senior Indebtedness in accordance
with this Agreement.
6. Holders of
Subordinated Indebtedness to be Subrogated to Rights of Holders of
Senior Indebtedness. Subject to the payment in full in cash of
all Senior Indebtedness, the holders of Subordinated Indebtedness
shall be subrogated to the rights of the Lenders and the Agents to
receive payments or distributions of assets of the Affiliate
Borrowers made on account of the Senior Indebtedness until all
amounts payable in respect of the Subordinated Indebtedness shall
be paid in full, and for purposes of such subrogation, no payment
or distribution to the Lenders and the Agents of assets, whether
in cash, property or securities, distributable to the Lenders and
the Agents under the provisions hereof to which the holders of the
Subordinated Indebtedness would be entitled except for the
provisions of this Agreement, and no payment pursuant to the
provisions of this Agreement to the Lenders and the Agents by the
holders of the Subordinated Indebtedness shall, as between the
relevant Affiliate Borrower, its creditors other than the Lenders
and the Agents, and the holders of the Subordinated Indebtedness,
be deemed to be a payment by such Affiliate Borrower to or on
account of such Senior Indebtedness, it being understood that the
provisions of this Agreement are, and are intended, solely for the
purpose of defining the relative rights of the holders of the
Subordinated Indebtedness, on the one hand, and the Lenders and
the Agents, on the other hand.
7. Obligations of
the Affiliate Borrowers Unconditional. (a) Nothing contained in
this Agreement is intended to or shall relieve the obligations of
the Affiliate Borrowers to the Lenders or the Agents or the
holders of Subordinated Indebtedness to pay any amount in respect
of the Senior Indebtedness or such Subordinated Indebtedness, as
the case may be, as and when such amount shall become due and
payable in accordance with the terms thereof, or to affect the
relative rights of the Lenders or the Agents or the holders of
Subordinated Indebtedness, on the one hand, and the other
creditors of the Affiliate Borrowers, on the other hand. All
rights and interests of the Lenders and the Agents hereunder, and
all agreements and obligations of the Affiliate Borrowers and the
Subordinated Affiliate Lenders, shall remain in full force and
effect irrespective of, and each Affiliate Borrower and each
Subordinated Affiliate Lender hereby irrevocably waives any
defenses it may now or hereafter have in any way relating to:
i) any lack of
validity or enforceability of any Loan Document or any other
agreement or instrument relating thereto;
ii) any change in
the amount, time, manner or place of payment of, or in any
other term of, all or any of the Senior Indebtedness, or any
amendment or waiver of or any consent to departure from any
provision of the Credit Agreement or any other Loan Document;
iii) any exchange,
release or nonperfection of any security interest in any
collateral, or any release or amendment or waiver of or
consent to departure from any guarantee, for all or any of
the Senior Indebtedness; or
iv) any other
circumstances which might otherwise constitute a defense
available to, or a discharge of, the Affiliate Borrowers in
respect of the Senior Indebtedness, or of the Affiliate
Borrowers or the Subordinated Affiliate Lenders in respect of
this Agreement.
(b) Nothing
contained in this Agreement shall affect the obligation of the
Affiliate Borrowers to make, or prevent the Affiliate Borrowers
from making, at any time, payment of any amount in respect of the
Senior Indebtedness. Nothing contained in this Agreement shall,
except as set forth in Sections 3, 4 and 5, affect the obligation
of the Affiliate Borrowers to make, or prevent the Affiliate
Borrowers from making, at any time, payment of any amount in
respect of Subordinated Indebtedness.
8. No Other
Beneficiaries of Subordination. This Agreement and the
subordination provisions contained herein are intended only for
the benefit of the holders of Senior Indebtedness and no other
creditor of any Affiliate Borrower. No Affiliate Borrower will
publish or give to any creditor or prospective creditor of such
Affiliate Borrower any copy, statement or summary (or acquiesce in
the publication or giving of any such copy, statement or summary)
as to the subordination of the rights of the holders of
Subordinated Indebtedness without also stating or causing to be
stated (in a conspicuous manner in the case of any document) that
such subordination is solely for the benefit of the holders of
Senior Indebtedness and not for the benefit of any other creditor
of such Affiliate Borrower or such Affiliate Borrower, provided,
however, that nothing contained in this Section 8 is intended to
restrict the right or obligation of any Affiliate Borrower to make
filings or registrations pursuant to any Governmental Requirement.
9. Rights of
Holders of Senior Indebtedness Not to be Impaired. No right of
any present or future holder of any Senior Indebtedness to enforce
subordination as herein provided shall at any time in any way be
prejudiced or impaired by any act or omission in good faith by any
such holder, or by any noncompliance by any Affiliate Borrower
with the terms and provisions and covenants herein regardless of
any knowledge thereof any such holder of Senior Indebtedness may
have or otherwise be charged with.
10. Legend. The
Affiliate Borrowers and the Subordinated Affiliate Lenders shall
cause each note representing or evidencing Subordinated
Indebtedness to have affixed upon it a legend, including in
connection with the issuance of any new or replacement note with
respect to the transfer of such note or the reduction of the
principal amount thereof, which reads substantially as follows:
"This instrument is subject to the Affiliate
Subordination Agreement, dated as of May 12, 1995, among
Adelphia Cable Partners, L.P., a Delaware limited
partnership, Southeast Florida Cable, Inc., a Florida
corporation, and West Boca Acquisition Limited
Partnership, a Delaware limited partnership (the
"Borrowers"), each subsidiary of each Borrower from time
to time party thereto, each affiliate of each Borrower
and its subsidiaries from time to time party thereto,
and Toronto Dominion (Texas), Inc., as Administrative
Agent (in such capacity, the "Administrative Agent"),
for the Lenders from time to time parties to the
Revolving Credit Agreement, dated as of May 12, 1995,
among the Borrowers, such Lenders, the Agents identified
therein and Toronto Dominion (Texas), Inc., as
Administrative Agent."
11. Representations
and Warranties. Each Subordinated Affiliate Lender hereby
represents and warrants that:
i) such
Subordinated Affiliate Lender has the power and authority and
the legal right to execute and deliver, and to perform its
obligations under, this Agreement, and has taken all
necessary action to authorize the execution, delivery and
performance of this Agreement;
ii) this Agreement
constitutes a legal, valid and binding obligation of such
Subordinated Affiliate Lender enforceable in accordance with
its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium
or similar laws affecting the enforcement of creditors'
rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law);
iii) the execution,
delivery and performance of this Agreement will not violate
any provision of any Governmental Requirement or Contractual
Obligation of such Subordinated Affiliate Lender;
iv) no consent or
authorization of, filing with, or other act by or in respect
of, any arbitrator or Governmental Authority and no consent
of any other Person (including, without limitation, any
partner, stockholder or creditor of such Subordinated
Affiliate Lender) is required in connection with the
execution, delivery, performance, validity or enforceability
of this Agreement;
v) no Litigation is
pending or, to the knowledge of such Subordinated Affiliate
Lender, threatened by or against such Subordinated Affiliate
Lender with respect to this Agreement;
vi) the agreements
governing the Subordinated Indebtedness of such Subordinated
Affiliate Lender do not and will not contain (A) any default
which is triggered by (I) a default under any other
agreements to which any Affiliate Borrower is a party or
(II) any other Indebtedness of any Affiliate Borrower being
declared due and payable prior to its stated maturity, or the
ability of the holder of any other Indebtedness of any
Affiliate Borrower to declare such Indebtedness due and
payable prior to its stated maturity or (B) without limiting
clause (A) above, any covenants or events of default which
are more restrictive than those contained in the Credit
Agreement; and
vii) such
Subordinated Affiliate Lender is an Affiliate of the
Borrower.
12. Successors;
Continuing Effect. This Agreement is being entered into for the
benefit of, and shall be binding upon, the Lenders, the Agents and
the Subordinated Affiliate Lenders, and their respective
successors and assigns, including subsequent holders of Senior
Indebtedness and the Subordinated Indebtedness, and the term
"holders of Senior Indebtedness" shall include any such subsequent
or additional holder of Senior Indebtedness, and the term
"Subordinated Affiliate Lenders" shall include any such subsequent
or additional holder of Subordinated Affiliate Indebtedness,
wherever the context permits, provided that no Subordinated
Affiliate Lender shall transfer or assign any of its rights with
respect to Subordinated Indebtedness to any Person other than
another Affiliate of any Borrower which has executed a Supplement
in the form of Exhibit B hereto agreeing to be bound by the terms
of this Agreement.
13. Further
Assurances. Each Affiliate Borrower and each Subordinated
Affiliate Lender will, at their own expense and at any time and
from time to time, promptly execute and deliver all further
instruments and documents, and take all further action, that the
Administrative Agent may reasonably request, in order to perfect
or otherwise protect any right or interest granted or purported to
be granted hereby or to enable the Administrative Agent, the
Lenders and the other Agents to exercise and enforce their rights
and remedies hereunder.
14. Expenses. Each
of the Borrowers jointly and severally agree to pay to the
Administrative Agent, upon demand, the amount of any and all
reasonable expenses, including, without limitation, the reasonable
fees and expenses of counsel for the Administrative Agent, which
the Agents and the Lenders may incur in connection with the
exercise or enforcement of any of their rights or interests vis-a-
vis the Subordinated Affiliate Lenders.
15. Notices;
Amendments; etc. (a) All notices, requests and demands to or upon
the Administrative Agent, any Affiliate Borrower or any
Subordinated Affiliate Lender to be effective shall be in writing
(including by facsimile or telecopy transmission) and shall be
deemed to have been duly given or made (1) when delivered by hand
or (2) three days after being deposited in the mail, postage
prepaid or (3) one Business Day after being sent by priority
overnight mail with a nationally recognized overnight delivery
carrier or (4) if by telecopy or facsimile, when received:
i) if to the
Administrative Agent or any Borrower, at its address or
transmission number for notices provided in subsection 9.2 of
the Credit Agreement;
ii) if to any Lender
or to any Agent other than the Administrative Agent, at its
address or transmission number for notices provided in
Annex A to the Credit Agreement, as supplemented from time to
time pursuant to assignments in accordance with
subsection 9.6 of the Credit Agreement; and
iii) if to any other
Affiliate Borrower or any Subordinated Affiliate Lender, at
its address or transmission number for notices set forth
under its signature below.
The Administrative Agent, each Lender, each other Agent,
each Affiliate Borrower and each Subordinated Affiliate Lender may
change its address and transmission numbers for notices by notice
in the manner provided in this Section.
(b)Subject to
subsection 9.1
of the Credit
Agreement, this Agreement may be
amended and the terms hereof may be waived only with the written
consent of the Administrative Agent, each Affiliate Borrower and
the holders of a majority of the principal amount of the
Subordinated Indebtedness then outstanding; provided that any
provision of this Agreement may be waived by the Administrative
Agent in a letter or agreement executed by the Administrative
Agent or by facsimile transmission from the Administrative Agent.
Any such amendment or waiver shall be binding upon the Lenders,
the Agents, the Affiliate Borrowers and all the holders of
Subordinated Indebtedness.
16. Severability.
Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction, shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or invalidity
without invalidating the remaining portions hereof or thereof or
affecting the validity or enforceability of such provision
in any other jurisdiction.
17. Submission to
Jurisdiction. Each Affiliate Borrower and each Subordinated
Affiliate Lender hereby irrevocably and unconditionally:
(a) submits for
itself and its property in any legal action or proceeding
relating to this Agreement and the other Loan Documents to
which it is a party, or for recognition and enforcement of
any judgment in respect thereof, to the non-exclusive general
jurisdiction of the Courts of the State of New York, the
courts of the United States of America for the Southern
District of New York, and appellate courts from any thereof;
(b) consents that
any such action or proceeding may be brought in such courts
and waives any objection that it may now or hereafter have to
the venue of any such action or proceeding in any such court
or that such action or proceeding was brought in an
inconvenient court and agrees not to plead or claim the same;
(c) agrees that
service of process in any such action or proceeding may be
effected by mailing a copy thereof by registered or certified
mail (or any substantially similar form of mail), postage
prepaid, to it at its address set forth under its signature
below or at such other address of which the Administrative
Agent shall have been notified pursuant to Section 15;
(d) agrees that
nothing herein shall affect the right to effect service of
process in any other manner permitted by law or shall limit
the right to sue in any other jurisdiction; and
(e) waives, to the
maximum extent not prohibited by law, any right it may have
to claim or recover in any legal action or proceeding
referred to in this subsection any special, exemplary or
punitive damages.
18. WAIVER OF JURY
TRIAL. EACH AFFILIATE BORROWER, EACH SUBORDINATED AFFILIATE
LENDER AND THE ADMINISTRATIVE AGENT HEREBY KNOWINGLY AND
INTENTIONALLY, IRREVOCABLY AND UNCONDITIONALLY, WAIVE TRIAL BY
JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT
OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
19. GOVERNING LAW.
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING
EFFECT TO ITS CONFLICT OF LAW PRINCIPLES.
20. Counterparts.
This Agreement may be executed by one or more of the parties
hereto on any number of counterparts (including by telecopy
transmission), and all such counterparts taken together shall
constitute one and the same instrument.
21. Integration.
This Agreement and the other Loan Documents represent the final
agreement of the parties hereto with respect to the subject matter
hereof, and there are no promises, undertakings, representations
or warranties by any Agent or any Lender relative to the subject
matter hereof not expressly set forth or referred to herein or in
the other Loan Documents.
22. Addition of
Affiliate Borrowers and Subordinated Affiliate Lenders. Any
Restricted Subsidiary of any Borrower may become an "Affiliate
Borrower" under this Agreement by executing and delivering to the
Administrative Agent a Supplement to this Agreement in the form
attached hereto as Exhibit A. Any Affiliate of any Borrower may
become an "Subordinated Affiliate Lender" under this Agreement by
executing and delivering to the Administrative Agent a Supplement
to this Agreement in the form attached hereto as Exhibit B.
[Remainder of page intentionally left blank.]
IN WITNESS WHEREOF, the undersigned have caused this
Affiliate Subordination Agreement to be duly executed and
delivered by their duly authorized officers on the date and year
first above written.
ADELPHIA
CABLE PARTNERS, L.P.
By:OLYMPUS COMMUNICATIONS, L.P.,
Managing General Partner
By: ACP HOLDINGS, INC.,
Managing General Partner
By:
Name:
Title:
SOUTHEAST FLORIDA CABLE, INC.
By:
Name:
Title:
WEST BOCA ACQUISITION LIMITED
PARTNERSHIP
By: OLYMPUS COMMUNICATIONS, L.P.,
Managing General Partner
By:ACP HOLDINGS, INC.,
Managing General Partner
By:
Name:
Title:
TORONTO DOMINION (TEXAS), INC.,
as Administrative Agent
By:
Name:
Title:
[AFFILIATE BORROWERS and SUBORDINATED AFFILIATE LENDERS (along
with addresses and telecopy numbers)]
EXHIBIT A
SUPPLEMENT TO
AFFILIATE SUBORDINATION AGREEMENT
SUPPLEMENT, dated as of , 19__, to the Affiliate
Subordination Agreement, dated as of May 12, 1995 (as amended, supplemented
and otherwise modified from time to time, the "Agreement"), among Adelphia
Cable Partners, L.P., a Delaware limited partnership, Southeast Florida
Cable, Inc., a Florida corporation, and West Boca Cable Acquisition Limited
Partnership, a Delaware limited partnership (the "Borrowers"), each
Restricted Subsidiary of each Borrower from time to time party thereto
(together with the Borrowers, the "Affiliate Borrowers"), each Affiliate of
each Borrower and its Restricted Subsidiaries from time to time party
thereto (collectively, the "Subordinated Affiliate Lenders"), and Toronto
Dominion (Texas), Inc., as Administrative Agent (in such capacity, the
"Administrative Agent") for the Lenders from time to time parties to the
Revolving Credit Agreement, dated as of May 12, 1995, among the Borrowers,
such Lenders, the Agents identified therein and Toronto Dominion (Texas),
Inc., as Administrative Agent (as amended, supplemented and otherwise
modified from time to time, the "Credit Agreement").
W I T N E S S E T H
WHEREAS, pursuant to the Credit Agreement, the Lenders have
severally agreed to make Loans (as defined in the Credit Agreement) to the
Borrowers upon the terms and subject to the conditions set forth therein;
and
WHEREAS, pursuant to subsection 6.2(f) of the Credit Agreement,
the Affiliate Borrowers may borrow up to an aggregate amount of $70,000,000
(including principal and accrued and unpaid interest thereon) at any one
time outstanding from the Subordinated Affiliate Lenders;
WHEREAS, it is a condition precedent to the right of the
Affiliate Borrowers to borrow from the Subordinated Affiliate Lenders that
(i) each Restricted Subsidiary which makes any such borrowing shall be or
become a party to the Agreement in the manner provided for therein and
(ii) each Affiliate from which any such borrowing is made shall have become
a party to the Agreement in the manner provided for therein; and
WHEREAS, the undersigned wishes to become an "Affiliate
Borrower" under the Agreement; and
WHEREAS, the Agreement provides that any Restricted Subsidiary
of any Borrower may become an Affiliate Borrower under the Agreement by
executing and delivering to the Administrative Agent a supplement in
substantially the form of this Supplement;
NOW, THEREFORE, the undersigned hereby agrees as follows:
The undersigned agrees to be bound by all of the provisions of
the Agreement applicable to an Affiliate Borrower thereunder and
agrees that it shall, on the date this Supplement is accepted by the
Administrative Agent, become an Affiliate Borrower, for all purposes
of the Agreement to the same extent as if originally a party thereto
with the representations and warranties contained therein being deemed
to be made by the undersigned as of the date hereof.
Unless otherwise defined herein, capitalized terms which are
defined in the Agreement are used herein as so defined.
IN WITNESS WHEREOF, the undersigned has caused this Supplement
to be executed and delivered by a duly authorized officer on the date first
above written.
[NAME OF RESTRICTED SUBSIDIARY]
By:
Name:
Title:
Address for notices:
Telecopy:
ACKNOWLEDGED AND ACCEPTED
this day of , 19___
TORONTO DOMINION (TEXAS), INC.,
as Administrative Agent
By:
Name:
Title:
EXHIBIT B
SUPPLEMENT TO
AFFILIATE SUBORDINATION AGREEMENT
SUPPLEMENT, dated as of , 19__, to the Affiliate
Subordination Agreement, dated as of May 12, 1995 (as amended, supplemented
and otherwise modified from time to time, the "Agreement"), among Adelphia
Cable Partners, L.P., a Delaware limited partnership, Southeast Florida
Cable, Inc., a Florida corporation, and West Boca Cable Acquisition Limited
Partnership, a Delaware limited partnership (the "Borrowers"), each
Restricted Subsidiary of each Borrower from time to time party thereto
(together with the Borrowers, the "Affiliate Borrowers"), each Affiliate of
each Borrower and its Restricted Subsidiaries from time to time party
thereto (collectively, the "Subordinated Affiliate Lenders"), and Toronto
Dominion (Texas), Inc., as Administrative Agent (in such capacity, the
"Administrative Agent") for the Lenders from time to time parties to the
Revolving Credit Agreement, dated as of May 12, 1995, among the Borrowers,
such Lenders, the Agents identified therein and Toronto Dominion (Texas),
Inc., as Administrative Agent (as amended, supplemented and otherwise
modified from time to time, the "Credit Agreement").
W I T N E S S E T H
WHEREAS, pursuant to the Credit Agreement, the Lenders have
severally agreed to make Loans (as defined in the Credit Agreement) to the
Borrowers upon the terms and subject to the conditions set forth therein;
and
WHEREAS, pursuant to subsection 6.2(f) of the Credit Agreement,
the Affiliate Borrowers may borrow up to an aggregate amount of $70,000,000
(including principal and accrued and unpaid interest thereon) at any one
time outstanding from the Subordinated Affiliate Lenders;
WHEREAS, it is a condition precedent to the right of the
Affiliate Borrowers to borrow from the Subordinated Affiliate Lenders that
(i) each Restricted Subsidiary which makes any such borrowing shall be or
become a party to the Agreement in the manner provided for therein and
(ii) each Affiliate from which any such borrowing is made shall have become
a party to the Agreement in the manner provided for therein; and
WHEREAS, the undersigned wishes to become a "Subordinated
Affiliate Lender" under the Agreement; and
WHEREAS, the Agreement provides that any Affiliate of any
Borrower may become an Subordinated Affiliate Lender under the Agreement by
executing and delivering to the Administrative Agent a supplement in
substantially the form of this Supplement;
NOW, THEREFORE, the undersigned hereby agrees as follows:
The undersigned agrees to be bound by all of the provisions of
the Agreement applicable to a Subordinated Affiliate Lender thereunder
and agrees that it shall, on the date this Supplement is accepted by
the Administrative Agent, become a Subordinated Affiliate Lender, for
all purposes of the Agreement to the same extent as if originally a
party thereto with the representations and warranties contained
therein being deemed to be made by the undersigned as of the date
hereof.
Unless otherwise defined herein, capitalized terms which are
defined in the Agreement are used herein as so defined.
IN WITNESS WHEREOF, the undersigned has caused this Supplement
to be executed and delivered by a duly authorized officer on the date first
above written.
[NAME OF AFFILIATE]
BY:
Name:
Title:
Address
for notices:
Telecopy
:
ACKNOWLEDGED AND ACCEPTED
this day of , 19___
TORONTO DOMINION (TEXAS), INC.,
as Administrative Agent
By:
Name:
Title:
EXHIBIT B
ASSIGNMENT AND ACCEPTANCE AGREEMENT
Reference is made to the Revolving Credit Agreement, dated as of
May ___, 1995, among Adelphia Cable Partners, L.P., a Delaware limited
partnership, Southeast Florida Cable, Inc., a Florida corporation, and West
Boca Acquisition Limited Partnership, a Delaware limited partnership, as
Borrowers, the Lenders parties thereto, the Agents identified therein and
Toronto Dominion (Texas), Inc., as Administrative Agent (as amended,
supplemented and otherwise modified from time to time, the "Credit
Agreement"). Capitalized terms used herein and not otherwise defined have
the meanings assigned to them in the Credit Agreement.
_______________________ (the "Assigner") and _________________
(the "Assignee") agree as follows:
I. The Assignor hereby irrevocably sells and assigns to the Assignee
without recourse to the Assignor, and the Assignee hereby irrevocably
purchases and assumes from the Assignor without recourse to the Assignor, as
of the Effective Date (as defined below), a ___% interest (the "Assigned
Interest") in and to the Assignor's rights and obligations under the Credit
Agreement with respect to the revolving credit facility contained in the
Credit Agreement as set forth on Schedule 1 (the "Assigned Facility").
II. The Assignor (a)
makes no representation or warranty and assumes no responsibility with
respect to any statements, warranties or representations made in or in
connection with the Credit Agreement or with respect to the execution,
legality, validity, enforceability, genuineness, sufficiency or value of the
Credit Agreement, any other Loan Document or any other instrument or
document furnished pursuant thereto, other than that the Assignor has not
created any adverse claim upon the interest being assigned by it hereunder
and that such interest is free and clear of any such adverse claim; (b)
makes no representation or warranty and assumes no responsibility with
respect to the financial condition of any Borrower, any of its Subsidiaries
or any other obligor or the performance or observance by any Borrower, any
of its Subsidiaries or any other obligor of any of their respective
obligations under the Credit Agreement or any other Loan Document or any
other instrument or document furnished pursuant hereto or thereto; and (c)
attaches any Note held by it evidencing the Assigned Facility and (i)
requests that the Administrative Agent, upon request by the Assignee,
exchange the attached Notes for a new Note or Notes payable to the Assignee
and (ii) if the Assignor has retained any interest in the Assigned Facility,
requests that the Administrative Agent exchange the attached Notes for a new
Note or Notes payable to the Assignor, in each case in amounts which reflect
the assignment being made hereby (and after giving effect to any other
assignments which have become effective on the Effective Date).
III. The Assignee (a)
represents and warrants that it is (i) an Eligible Assignee and will make or
acquire Loans under the Credit Agreement for its own account in the ordinary
course of business and (ii) legally authorized to enter into this Assignment
and Acceptance Agreement; (b) confirms that it has received a copy of the
Credit Agreement, together with copies of the most recent audited and
interim Financial Statements delivered pursuant to subsections 3.1 and 5.1
thereof and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Assignment and Acceptance Agreement; (c) agrees that it will, independently
and without reliance upon the Assignor, the Administrative Agent, any other
Agent or any other Lender and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit
decisions in taking or not taking action under the Credit Agreement, the
other Loan Documents or any other instrument or document furnished pursuant
hereto or thereto; (d) appoints and authorizes the Administrative Agent to
take such action as administrative agent on its behalf and to exercise such
powers and discretion under the Credit Agreement, the other Loan Documents
or any other instrument or document furnished pursuant hereto or thereto as
are delegated to the Administrative Agent by the terms thereof, together
with such powers as are incidental thereto; and (e) agrees that it will be
bound by the provisions of the Credit Agreement and will perform in
accordance with its terms all the obligations which by the terms of the
Credit Agreement are required to be performed by it as a Lender including,
if it is organized under the laws of a jurisdiction outside the United
States, its obligation pursuant to subsection 2.14(b) of the Credit
Agreement.
IV. The effective
date of this Assignment and Acceptance Agreement shall be _____________,
199__ (the "Effective Date"). Following the execution of this Assignment
and Acceptance Agreement, it will be delivered to the Administrative Agent
for acceptance by it and recording by the Administrative Agent pursuant to
the Credit Agreement, effective as of the Effective Date (which shall not,
unless otherwise agreed to by the Administrative Agent, be earlier than five
Business Days after the date of such acceptance and recording by the
Administrative Agent), together with the $3,000 processing fee required by
subsection 9.6(e) of the Credit Agreement.
V. Upon such
acceptance and recording, from and after the Effective Date, the
Administrative Agent shall make all payments in respect of the Assigned
Interest (including payments of principal, interest, fees and other amounts)
to the Assignee whether such amounts have accrued prior to the Effective
Date or accrue subsequent to the Effective Date. The Assignor and the
Assignee shall make all appropriate adjustments in payments by the
Administrative Agent for periods prior to the Effective Date or with respect
to the making of this assignment directly between themselves.
VI. From and after
the Effective Date, (a) the Assignee shall be a party to the Credit
Agreement and, to the extent provided in this Assignment and Acceptance
Agreement, have the rights and obligations of a Lender thereunder and under
the other Loan Documents and shall be bound by the provisions thereof and
(b) the Assignor shall, to the extent provided in this Assignment and
Acceptance Agreement, relinquish its rights and be released from its
obligations under the Credit Agreement.
VII. THIS ASSIGNMENT
AND ACCEPTANCE AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ITS
CONFLICT OF LAWS PRINCIPLES.
IN WITNESS WHEREOF, the parties hereto have caused this Assignment and
Acceptance Agreement to be executed as of the date first above written by
their respective duly authorized officers on Schedule 1 hereto.
Schedule 1
To Assignment and Acceptance Agreement
Relating to the Revolving Credit Agreement,
Dated as of
May ___, 1995,
Among
Adelphia Cable Partners, L.P.,
Southeast Florida Cable, Inc. and
West Boca Acquisition Limited Partnership,
The Lenders Named Therein,
The Agents Named Therein
and
Toronto Dominion (Texas), Inc.,
as Administrative Agent
Name of Assignor:
Name of Assignee:
Effective Date of Assignment:
Credit Principal Commitment
Facility Assigned Amount Assigned Percentage Assigned(1)
(1)Calculate the Commitment Percentage that is assigned to at least 15
decimal places and show percentage of the aggregate commitments of all
Lenders
Revolving Credit
Facility $_______________ _______________%
[Name of Assignee] [Name of Assignor]
By By
Name: Name:
Title: Title:
The Domestic Lending Office, the Eurodollar Lending Office and the Notice
Address for purposes of subsection 9.2 of the Credit Agreement for the
Assignee are as set forth below:
Domestic Lending Office:
Attention:
Telephone:
Telecopier:
Eurodollar Lending Office:
Attention:
Telephone:
Telecopier:
Notice Address:
Attention:
Telephone:
Telecopier:
Assignee is a non-resident alien, foreign corporation or other foreign
entity:
_______No _______Yes
if yes, forms 4224 or 1001 and W-8 attached
Assignee is a United States Person:
_______No _______Yes
if yes, form W-9 attached
Accepted:
TORONTO DOMINION (TEXAS), INC.,
as Administrative Agent
By
Name:
Title:
Consented To: Consented To:
ADELPHIA CABLE PARTNERS, L.P. SOUTHEAST FLORIDA CABLE, INC.
By: OLYMPUS COMMUNICATIONS, L.P.,
Managing General Partner
By:
By: ACP HOLDINGS, INC., Name:
Managing General Partner Title:
By
Name:
Title:
Consented To:
WEST BOCA ACQUISITION LIMITED
PARTNERSHIP
By: OLYMPUS COMMUNICATIONS, L.P.,
Managing General Partner
By: ACP HOLDINGS, INC.,
Managing General Partner
By
Name:
Title:
EXHIBIT C
BORROWER ASSIGNMENT OF PARTNERSHIP INTERESTS
BORROWER ASSIGNMENT OF PARTNERSHIP INTERESTS, dated as of May 12,
1995, made by , a
(the "Pledgor"), in favor of TORONTO
DOMINION (TEXAS), INC., as Administrative Agent (in such capacity, the
"Administrative Agent") for the Lenders from time to time parties to the
Revolving Credit Agreement, dated as of May 12, 1995, among Adelphia Cable
Partners, L.P., a Delaware limited partnership, Southeast Florida Cable,
Inc., a Florida corporation, and West Boca Acquisition Limited Partnership,
a Delaware limited partnership, as Borrowers, such Lenders, the Agents
identified therein and Toronto Dominion (Texas), Inc., as Administrative
Agent (as amended, supplemented and otherwise modified from time to time,
the "Credit Agreement ).
W I T N E S S E T H
WHEREAS, pursuant to the Credit Agreement, the Lenders have
severally agreed to make Loans to the Borrowers upon the terms and subject
to the conditions set forth therein; and
WHEREAS, it is a condition precedent to the effectiveness of the
Credit Agreement and the obligations of the Lenders to make their respective
Loans to the Borrowers under the Credit Agreement that the Pledgor shall
have executed and delivered this Borrower Assignment of Partnership
Interests to the Administrative Agent for the benefit of the Lenders and the
Agents;
NOW, THEREFORE, in consideration of the premises and for other
good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the Pledgor hereby agrees with the Administrative
Agent, for the benefit of the Lenders and the Agents, as follows:
Defined Terms. Unless otherwise defined herein, terms
which are defined in the Credit Agreement and used herein are so used as so
defined. For purposes of this Borrower Assignment of Partnership Interests,
the term "Lender" shall include any Affiliate of any Lender which has
entered into an Interest Rate Protection Agreement with any Borrower, and
the term "Loan Documents" shall include any Interest Rate Protection
Agreement between any Lender (including any such Affiliate of a Lender) and
any Borrower.
The following terms defined in Article 9 of the Uniform
Commercial Code as from time to time in effect in the State of New York are
used herein as so defined: Accounts, Proceeds, Instrument and Chattel Paper;
and the following terms have the following meanings:
"Agreement": this Borrower Assignment of Partnership Interests, as the
same may be amended, supplemented and otherwise modified from time to time.
"Code": the Uniform Commercial Code as from time to time in effect in
the State of New York.
"Collateral Account": any account established to hold money
Proceeds, maintained under the sole dominion and control of the
Administrative Agent, subject to withdrawal by the Administrative Agent
for the account of the Lenders and the Agents as provided herein.
"General Intangibles": as defined in Section 9-106 of the Code
and shall include, without limitation, the partnership interests listed
on Schedule 1 to this Agreement and all rights of the Pledgor to
receive, directly or indirectly, moneys or any other rights or benefits
therefrom.
Obligations : the Obligations (as defined in the Credit
Agreement), and all renewals, refundings, restructurings and other
refinancings thereof, including increases in the amount thereof.
"Partnership Agreement": the [Limited] Partnership Agreement of
_________________________, dated as ________________, 19_____, between
the Pledgor and _____________________, as the same may be amended,
supplemented and otherwise modified from time to time to the extent
permitted by subsection 6.8 of the Credit Agreement.
"Partnership Interests": as defined in Section 2 of this
Agreement.
"Partnership": _____________________________, a
_______________________ partnership.
"Pledged Collateral": as defined in Section 2 of this Agreement.
The words "hereof," "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this
Agreement, and section and paragraph references are to this Agreement
unless otherwise specified.
The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
Grant of Security Interest. As collateral security for the
prompt and complete payment and performance when due (whether at the stated
maturity, by acceleration or otherwise) of the Obligations, now existing or
hereafter arising, the Pledgor hereby pledges, assigns and transfers to the
Administrative Agent for the benefit of the Lenders and the Agents, and
grants to the Administrative Agent for the benefit of the Lenders and the
Agents, a continuing first priority security interest in, any and all of the
following property now owned or at any time hereafter acquired by the
Pledgor, or in which the Pledgor may acquire any right, title or interest
(collectively, the "Pledged Collateral"):
any and all of its partnership interests in the Partnership
as set forth in Schedule 1 attached hereto, including, without
limitation, all its rights, title and interest to participate in the
operation or management of the Partnership and all its rights to
properties, assets, partnership interests and distributions, including,
without limitation, distributions of profits, surplus or other
compensation by way of income or liquidating distributions, in cash or
in kind, under the Partnership Agreement in respect of such partnership
interests (collectively, the "Partnership Interests");
all Accounts and other rights to payment and distributions
of any kind arising out of the Partnership Agreement in respect of the
Pledgor's Partnership Interests;
all General Intangibles arising out of or constituted by the
Partnership Agreement in respect of the Pledgor's Partnership
Interests; and
to the extent not otherwise included, all Proceeds of any
and all of the foregoing.
This Agreement shall create a continuing security interest in the
Pledged Collateral which shall remain in effect until all the Obligations,
now existing or hereafter arising, shall have been paid in full, the
Commitments shall have been terminated and the Credit Agreement and the
Security Documents shall no longer be in effect.
Rights of Administrative Agent; Limitations on
Administrative Agent's Obligations.
Pledgor Remains Liable. Anything herein to the contrary
notwithstanding, the Pledgor shall remain liable under the Partnership
Agreement to observe and perform all the conditions and obligations to be
observed and performed by it thereunder, all in accordance with and pursuant
to the terms and provisions thereof. The Administrative Agent shall not
have any obligation or liability by reason of or arising out of this
Agreement or the receipt by the Administrative Agent of any payment relating
to any Pledged Collateral pursuant hereto, nor shall the Administrative
Agent be obligated in any manner to perform any of the obligations of the
Pledgor under or pursuant to the Partnership Agreement or any Account or
General Intangible related thereto, to make any payment, to make any inquiry
as to the nature or the sufficiency of any payment received by it or as to
the sufficiency of any performance by any party under any thereof, to
present or file any claim, to take any action to enforce any performance or
to collect the payment of any amounts which may have been assigned to it or
to which it may be entitled at any time or times.
Proceeds. The Administrative Agent hereby authorizes the
Pledgor, until the occurrence of an Event of Default and until such Event of
Default shall be waived in writing or cured, (i) to collect the Accounts and
payments and distributions of any kind in respect of the Pledgor's
Partnership Interests, and (ii) to retain the Proceeds of such Accounts and
other payments and distributions. From and after the occurrence of an Event
of Default and during the continuance thereof, the Administrative Agent
shall have the right, but not the obligation, to collect and retain the
Accounts and other payments and distributions of any kind in respect of the
Pledgor's Partnership Interests, as provided in Section 6. If required by
the Administrative Agent at any time after the occurrence and during the
continuance of an Event of Default, the Accounts and other rights to payment
and distributions of any kind in respect of the Pledgor's Partnership
Interests and any Proceeds of such Accounts and other rights to payment and
distributions, when and if collected by the Pledgor, shall be forthwith
deposited by the Pledgor in the exact form received, duly endorsed by the
Pledgor to the Administrative Agent if required, in a Collateral Account
and, until so turned over, shall be held by the Pledgor in trust for the
Administrative Agent, for the benefit of the Lenders and the Agents,
segregated from other funds of the Pledgor.
Representations and Warranties. The Pledgor hereby
represents and warrants that:
Title; No Other Liens. Except for (i) the Lien granted to
the Administrative Agent pursuant to this Agreement and Permitted
Liens, and (ii) the right, if any, of Vincent Laurendi pursuant to
Section 9.3 of the Partnership Agreement under certain circumstances to
purchase the Partnership Interests for an amount not to exceed the
amount of the Obligations, the Pledgor owns each item of the Pledged
Collateral free and clear of any and all Liens or claims of others. No
security agreement or financing statement with respect to all or any
part of the Pledged Collateral is on file or of record in any public
office, except (i) such as may have been filed in favor of the
Administrative Agent pursuant to this Agreement or the other Security
Documents, and (ii) financing statements of record relating to the
senior indebtedness that is the subject of the Refinancing.
Perfected First Priority Liens. Upon giving of appropriate
notices pursuant to Article 8 of the Code in the form of Exhibits A and
B to this Agreement with respect to each Partnership Interest and upon
the filing of UCC-1 financing statements required to perfect the
security interest granted hereunder in Accounts and other rights to
payment and distributions of any kind and General Intangibles arising
out of the Partnership Agreement in respect of the Pledgor's
Partnership Interests under the Uniform Commercial Code in effect in
each relevant jurisdiction, the Liens granted pursuant to this
Agreement shall constitute perfected first priority Liens on the
Pledged Collateral in favor of the Administrative Agent and shall be
enforceable as such against all creditors of and purchasers from the
Pledgor, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors' rights generally, and by
general equitable principles (whether enforcement is sought by
proceedings in equity or at law), and subject to the right, if any, of
Vincent Laurendi pursuant to Section 9.3 of the Partnership Agreement
under certain circumstances to purchase the Pledgor's Partnership
Interests for an amount not to exceed the amount of the Obligations.
Chief Executive Office. The Pledgor's chief executive office
and principal place of business, and the place where the Pledgor keeps
its books and records, is located at 5 West Third Street, Coudersport,
Pennsylvania 16915.
Covenants. The Pledgor covenants and agrees with the
Administrative Agent that until the Obligations are paid in full and the
Commitments are terminated:
Further Documentation; Pledge of Instruments. At any time
and from time to time, upon the written request of the Administrative
Agent, and at the sole expense of the Pledgor, the Pledgor will
promptly and duly execute and deliver such further instruments and
documents and take such further action as the Administrative Agent may
reasonably request for the purpose of obtaining or preserving the full
benefits of this Agreement and of the rights and powers herein granted,
including, without limitation, the filing of any financing or
continuation statements under the Uniform Commercial Code in effect in
any jurisdiction with respect to the Liens created hereby. The Pledgor
also hereby authorizes the Administrative Agent to file any such
financing or continuation statement without the signature of the
Pledgor to the extent permitted by applicable law. The Pledgor and the
Administrative Agent agree that a carbon, photographic or other
reproduction of this Agreement or a financing statement is sufficient
as a financing statement. If any amount payable under or in connection
with any of the Pledged Collateral shall be or become evidenced by any
promissory note, other Instrument or Chattel Paper, such note,
Instrument or Chattel Paper shall be immediately delivered to the
Administrative Agent after the occurrence and during the continuance of
an Event of Default, duly endorsed in a manner satisfactory to the
Administrative Agent, to be held as Pledged Collateral pursuant to this
Agreement.
Indemnification. The Pledgor will pay, and save the
Administrative Agent, each Lender and each of the other Agents harmless
from, any and all liabilities, reasonable costs and expenses
(including, without limitation, legal fees and expenses) (i) with
respect to, or resulting from, any delay in paying any and all excise,
sales or other taxes which may be payable or determined to be payable
with respect to any of the Pledged Collateral, (ii) with respect to, or
resulting from, any delay in complying with any Governmental
Requirement applicable to any of the Pledged Collateral or (iii) in
connection with the grant and perfection of the security interest
contemplated by this Agreement, except for any such liabilities which
result from the gross negligence or willful misconduct of the
Administrative Agent, such Lender or such other Agent, as the case may
be.
Maintenance of Records. The Pledgor will keep and maintain
at its own cost and expense satisfactory and complete records of the
Pledged Collateral, including, without limitation, a record of all
payments received and all credits granted.
Limitation on Liens on Pledged Collateral. The Pledgor will
not create, incur or permit to exist, will defend the Pledged
Collateral against, and will take such other action as is necessary to
remove, any Lien or claim on or to the Pledged Collateral, other than
the Liens created hereby and Permitted Liens, and will defend the
right, title and interest of the Administrative Agent in and to any of
the Pledged Collateral against the claims and demands of all Persons
whomsoever.
Further Identification of Pledged Collateral. The Pledgor
will furnish to the Administrative Agent from time to time statements
and schedules further identifying and describing the Pledged Collateral
and such other reports in connection with the Pledged Collateral as the
Administrative Agent may reasonably request, all in reasonable detail.
Changes in Locations, Name, etc. The Pledgor will not,
unless it shall give 30 days' written notice to such effect to the
Administrative Agent and any filings required under the Uniform
Commercial Code in effect in any affected jurisdictions to maintain the
perfected security interest granted pursuant to this Agreement shall
have been made, (i) change the location of its chief executive office
or principal place of business from that specified in Section 4(c) or
remove its books and records from such location or (ii) change its
name, identity or structure to such an extent that any financing
statement filed by the Administrative Agent in connection with this
Agreement would become seriously misleading.
Administrative Agent's Appointment as Attorney-in-Fact.
Powers. The Pledgor hereby irrevocably constitutes and
appoints the Administrative Agent and any officer or agent thereof, to
the extent permitted under applicable law, with full power of
substitution, as its true and lawful attorney-in-fact with full
irrevocable power and authority in the place and stead of the Pledgor
and in the name of the Pledgor or in its own name from time to time in
the Administrative Agent's discretion, for the purpose of carrying out
the terms of this Agreement, to take any and all appropriate action and
to execute any and all documents and instruments which may be necessary
or desirable to accomplish the purposes of this Agreement, and, without
limiting the generality of the foregoing, the Pledgor hereby gives the
Administrative Agent the power and right, on behalf of the Pledgor,
without notice to or assent by the Pledgor, to do the following:
upon the occurrence and during the continuance of an Event
of Default, to exercise all partnership rights, powers and privileges
with respect to the Partnership Interests to the same extent as a
partner under the Partnership Agreement;
upon the occurrence and during the continuance of an Event
of Default, in the name of the Pledgor or its own name, or otherwise,
to take possession of and endorse and collect any checks, drafts,
notes, acceptances or other instruments for the payment of moneys due
under (i) any Account, Instrument or General Intangible owing to the
Pledgor as a partner under the Partnership Agreement or (ii) for the
payment of any other moneys due to the Pledgor as a partner under the
Partnership Agreement and to file any claim or to take any other action
or proceeding in any court of law or equity or otherwise deemed
appropriate by the Administrative Agent for the purpose of collecting
any and all such moneys due under any Account, Instrument, General
Intangible or such Partnership Agreement whenever payable;
to pay or discharge taxes and Liens levied or placed on the
Pledged Collateral; and
upon the occurrence and during the continuance of an Event
of Default, (a) to direct any party liable for any payment under any of
the Pledged Collateral to make payment of any and all moneys due or to
become due thereunder directly to the Administrative Agent or as the
Administrative Agent shall direct; (b) to ask for or demand, collect,
receive payment of and receipt for, any and all moneys, claims and
other amounts due or to become due at any time in respect of or arising
out of the Pledged Collateral; (c) to sign and endorse any invoices,
freight or express bills, bills of lading, storage or warehouse
receipts, drafts against debtors, assignments, verifications, notices
and other documents in connection with any of the Pledged Collateral;
(d) to commence and prosecute any suits, actions or proceedings at law
or in equity in any court of competent jurisdiction to collect the
Pledged Collateral or any part thereof and to enforce any other right
in respect of the Pledged Collateral; (e) to defend any suit, action or
proceeding brought against the Pledgor with respect to the Pledged
Collateral; (f) to settle, compromise or adjust any suit, action or
proceeding described in clause (e) above and, in connection therewith,
to give such discharges or releases as the Administrative Agent may
deem appropriate; and (g) generally, to sell, transfer, pledge and make
any agreement with respect to or otherwise deal with any of the Pledged
Collateral as fully and completely as though the Administrative Agent
were the absolute owner thereof for all purposes, and to do, at the
Administrative Agent's option and the Pledgor's expense, at any time,
or from time to time, all reasonable acts and things which the
Administrative Agent deems necessary to protect, preserve or realize
upon the Pledged Collateral and the Administrative Agent's Liens
thereon and to effect the intent of this Agreement, all as fully and
effectively as the Pledgor might do.
The Pledgor hereby ratifies all that said attorneys shall
lawfully do or cause to be done by virtue hereof and not in contravention of
the terms hereof. This power of attorney is a power coupled with an
interest and shall be irrevocable.
Other Powers. The Pledgor also authorizes the
Administrative Agent, at any time and from time to time, to execute, in
connection with the sale provided for in Section 8 hereof, any endorsements,
assignments or other instruments of conveyance or transfer with respect to
the Pledged Collateral.
No Duty on Administrative Agent's Part. The powers
conferred on the Administrative Agent hereunder are solely to protect the
Administrative Agent's interests in the Pledged Collateral and shall not
impose any duty upon it to exercise any such powers. The Administrative
Agent shall be accountable only for amounts that it actually receives as a
result of the exercise of such powers, and neither it nor any of its
officers, directors, employees or agents shall be responsible to the Pledgor
for any act or failure to act hereunder, except for its or their gross
negligence or willful misconduct.
Performance by Administrative Agent of Pledgor's
Obligations; Rights of Pledgor Prior to Event of Default. If the Pledgor
fails to perform or comply with any of its agreements contained herein and
the Administrative Agent, as provided for by the terms of this Agreement,
shall itself perform or comply, or otherwise cause performance or
compliance, with such agreement, the reasonable expenses of the
Administrative Agent incurred in connection with such performance or
compliance, together with interest thereon at the Default Rate shall be
payable by the Pledgor to the Administrative Agent on demand and shall
constitute Obligations secured hereby.
Unless an Event of Default shall have occurred and be
continuing, the Pledgor shall be entitled to receive all distributions made
pursuant to the Partnership Agreement and exercise all voting rights and
take all action it is authorized to take thereunder, provided that no
distribution shall be made which is prohibited by the Credit Agreement, the
Partnership Agreement or any of the other documents executed in connection
with the transactions contemplated hereby; and, provided further, that no
vote or other action taken shall impair any of the Pledged Collateral
provided to the Administrative Agent pursuant to this Agreement.
Remedies; Rights Upon Default. If an Event of Default
shall occur and be continuing, the Administrative Agent (i) will give notice
of such Event of Default to Vincent Laurendi, and (ii) may exercise in
addition to all other rights and remedies granted to it in this Agreement
and in any other instrument or agreement securing, evidencing or relating to
the Obligations, all rights and remedies of a secured party under the Code;
provided, however, that any failure of the Administrative Agent to give any
such notice to Vincent Laurendi shall not, as between the Administrative
Agent, the other Agents and the Lenders, on the one hand, and the Pledgor,
on the other hand, abrogate or diminish the obligations of the Pledgor
hereunder or impair the security interest created hereby. Without limiting
the generality of the foregoing, the Administrative Agent, without demand of
performance or other demand, presentment, protest, advertisement or notice
of any kind (except the notice specified below of time and place of public
or private sale) to or upon the Pledgor or any other Person (all and each of
which demands, presentment, protest, advertisements and notices are hereby
waived), may in such circumstances forthwith collect, receive, appropriate
and realize upon the Pledged Collateral, or any part thereof, and/or may
forthwith sell, lease, assign, give option or options to purchase, or
otherwise dispose of and deliver said Pledged Collateral or any part thereof
(or contract to do any of the foregoing), in one or more parcels at public
or private sale or sales, at any exchange, broker's board or office of the
Administrative Agent or elsewhere upon such terms and conditions as it may
deem advisable and at such prices as it may deem best, for cash or on credit
or for future delivery without assumption of any credit risk. The
Administrative Agent, any Lender and any other Agent, shall have the right
upon any such public sale or sales, and, to the extent permitted by law,
upon any such private sale or sales, to purchase the whole or any part of
said Pledged Collateral so sold, free of any right or equity of redemption
in the Pledgor, which right or equity of redemption is hereby waived or
released. The Pledgor further agrees, at the Administrative Agent's
request, to assemble the Pledged Collateral and make it available to the
Administrative Agent at places which the Administrative Agent shall
reasonably select, whether at the Pledgor's premises or elsewhere. The
Administrative Agent shall apply the net proceeds of any such collection,
recovery, receipt, appropriation, realization or sale, after deducting all
reasonable costs and expenses of every kind incurred therein or incidental
to the care or safekeeping of any of the Pledged Collateral or in any way
relating to the Pledged Collateral or the rights of the Administrative Agent
hereunder, including, without limitation, reasonable attorneys' fees and
disbursements, to the payment in whole or in part of the Obligations as
provided in the Credit Agreement, and only after such application and
payment in full of the Obligations and after the payment by the
Administrative Agent of any other amount required by any provision of law,
including, without limitation, Section 9-504(1)(c) of the Code, need the
Administrative Agent account for the surplus, if any, to the Pledgor. To
the extent permitted by applicable law, the Pledgor waives all claims,
damages, and demands against the Administrative Agent arising out of the
repossession, retention or sale of the Pledged Collateral. If any notice of
a proposed sale or disposition of Pledged Collateral shall be required by
law, such notice shall be deemed reasonably and properly given if given
(effective upon dispatch) in any manner provided in the Credit Agreement at
least 20 days before such sale or disposition.
If an Event of Default shall occur and be continuing, the
Administrative Agent may (but need not), upon notice to the Pledgor,
exercise all voting and other rights of the Pledgor as a limited or general,
as the case may be, partner of the Partnership and exercise all other rights
as a limited or general, as the case may be, partner provided under the
Partnership Agreement in respect of the Partnership Interests and the
Administrative Agent shall receive all permitted distributions, if any, made
for the account of the Pledgor as a limited or general, as the case may be,
partner under the Partnership Agreement.
Limitation on Administrative Agent's Duties in Respect of
Pledged Collateral. The Administrative Agent's sole duty with respect to
the custody, safekeeping and physical preservation of any Pledged Collateral
in its possession, under Section 9-207 of the Code or otherwise, shall be to
deal with it in the same manner as the Administrative Agent deals with
similar property for its own account. Neither the Administrative Agent nor
any of its directors, officers, employees or agents shall be liable for
failure to demand, collect or realize upon all or any part of the Pledged
Collateral or for any delay in doing so or shall be under any obligation to
sell or otherwise dispose of any Pledged Collateral upon the request of the
Pledgor or otherwise.
Powers Coupled with an Interest. All authorizations and
agencies herein contained with respect to the Pledged Collateral are
irrevocable and powers coupled with an interest.
Notices. Notices hereunder shall be given in accordance with
subsection 9.2 of the Credit Agreement.
Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and
any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other jurisdiction.
Section Headings. The section headings used in this
Agreement are for convenience of reference only and are not to affect the
construction hereof or be taken into consideration in the interpretation
hereof.
No Waiver; Cumulative Remedies. The Administrative Agent
shall not by any act (except pursuant to the execution of a written
instrument pursuant to Section 15 hereof), delay, indulgence, omission or
otherwise be deemed to have waived any right or remedy hereunder or to have
acquiesced in any Default or Event of Default or in any breach of any of the
terms and conditions hereof. No failure to exercise, nor any delay in
exercising, on the part of the Administrative Agent, any Lender or any other
Agent, any right, power or privilege hereunder shall operate as a waiver
thereof. No single or partial exercise of any right, power or privilege
hereunder shall preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. A waiver by the
Administrative Agent, any Lender or any other Agent of any right or remedy
hereunder on any one occasion shall not be construed as a bar to any right
or remedy which the Administrative Agent, any Lender or any other Agent
would otherwise have on any future occasion. The rights and remedies herein
provided are cumulative, may be exercised singly or concurrently and are not
exclusive of any rights or remedies provided by law.
Waivers and Amendments; Successors and Assigns. None of the
terms or provisions of this Agreement may be waived, amended, supplemented
or otherwise modified except by a written instrument executed by the Pledgor
and the Administrative Agent; provided that any provision of this Agreement
may be waived by the Administrative Agent in a letter or agreement executed
by the Administrative Agent or by facsimile transmission from the
Administrative Agent. This Agreement shall be binding upon the successors
and assigns of the Pledgor and shall inure to the benefit of the
Administrative Agent, for the benefit of the Lenders and the Agents, and the
successors and assigns of the Administrative Agent, the Lenders and the
other Agents.
FCC Approval. Notwithstanding anything to the contrary
contained herein or in the other Loan Documents, the Administrative Agent
will not take any action (including the exercise of voting rights by the
Administrative Agent with respect to the Partnership Interests) pursuant to
this Agreement, the Credit Agreement or any other Loan Document that would
constitute or result in any assignment of any FCC License or Franchise or
any change of control of any Loan Party without first obtaining the prior
approval of the FCC or other federal, state or local Governmental Authority,
if, under the existing law, such assignment of any FCC License or Franchise
or change of control would require the prior approval of the FCC or other
federal, state or local Governmental Authority. Prior to the exercise by
the Administrative Agent of any power, right, privilege or remedy pursuant
to this Agreement which requires any consent, approval, recording,
qualification or authorization of any federal, state, or local Governmental
Authority or instrumentality, the Pledgor will execute and deliver, or will
cause the execution and delivery of, all applications, certificates,
instruments and other documents and papers that the Administrative Agent may
be required to obtain for such governmental consent, approval, recording,
qualification or authorization. Without limiting the generality of the
foregoing, the Pledgor will use its best efforts upon the reasonable request
of the Administrative Agent to obtain from the appropriate governmental
authorities the necessary consents and approvals, if any (i) for the
granting to the Administrative Agent pursuant hereto of the security
interests provided for in this Agreement to the extent, if any, such
security interests may be granted under existing statutes or regulations and
(ii) for the assignment or transfer of such authorizations, licenses and
permits to the Administrative Agent or its designee upon or following the
occurrence and continuance of an Event of Default.
Authority of Administrative Agent. The Pledgor acknowledges
that the rights and responsibilities of the Administrative Agent under this
Agreement with respect to any action taken by the Administrative Agent or
the exercise or nonexercise by the Administrative Agent of any option,
voting right, request, judgment or other right or remedy provided for herein
or resulting or arising out of this Agreement shall, as between the
Administrative Agent and the Lenders and the other Agents, be governed by
the above provisions of the Credit Agreement and by such other agreements
with respect thereto as may exist from time to time among them, but, as
between the Administrative Agent and the Pledgor, the Administrative Agent
shall be conclusively presumed to be acting as agent for the Lenders and the
other Agents with full and valid authority so to act or refrain from acting,
and neither the Pledgor nor the Partnership shall be under any obligation,
or entitlement, to make any inquiry respecting such authority.
GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PLEDGOR HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK, WITHOUT
GIVING EFFECT TO ITS CONFLICT OF LAW PRINCIPLES.
Submission To Jurisdiction; Waivers. The Pledgor hereby
irrevocably and unconditionally:
submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to which
it is a party, or for recognition and enforcement of any judgment in respect
thereof, to the non-exclusive general jurisdiction of the Courts of the
State of New York, the courts of the United States of America for the
Southern District of New York, and appellate courts from any thereof;
consents that any such action or proceeding may be brought
in such courts and waives any objection that it may now or hereafter have to
the venue of any such action or proceeding in any such court or that such
action or proceeding was brought in an inconvenient court and agrees not to
plead or claim the same;
agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage prepaid,
to the Pledgor at its address set forth in subsection 9.2 of the Credit
Agreement or at such other address of which the Administrative Agent shall
have been notified pursuant thereto;
agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit the
right to sue in any other jurisdiction; and
waives, to the maximum extent not prohibited by law, any
right it may have to claim or recover in any legal action or proceeding
referred to in this subsection any special, exemplary or punitive damages.
WAIVER OF JURY TRIAL. THE PLEDGOR HEREBY KNOWINGLY AND
INTENTIONALLY, IRREVOCABLY AND UNCONDITIONALLY, WAIVES TRIAL BY JURY IN ANY
LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
Counterparts. This Agreement may be executed by the Pledgor
on any number of separate counterparts (including by telecopy transmission),
and all of said counterparts taken together shall be deemed to constitute
one and the same instrument.
Integration. This Agreement and the other Loan Documents
represent the final agreement of the parties hereto and thereto,
respectively, with respect to the subject matter hereof, and there are no
promises, undertakings, representations or warranties by any Agent or any
Lender relative to the subject matter hereof not expressly set forth or
referred to herein or in the other Loan Documents.
[Remainder of page intentionally left blank.]
IN WITNESS WHEREOF, the Pledgor has caused this Borrower
Assignment of Partnership Interests to be duly executed and delivered as of
the date first above written.
[NAME OF PLEDGOR]
[By: ,
Managing General Partner](2)
By:
Name:
Title:
Schedules
Schedule 1 - Description of Partnership Interests
Exhibits
Exhibit A - Transaction Statement
Exhibit B - Registration Notice
(2) If Pledgor is a partnership
SCHEDULE 1
DESCRIPTION OF PARTNERSHIP INTERESTS
All limited and general partnership interests in the Partnership held
by the Pledgor from time to time, including, without limitation:
EXHIBIT A
Transaction Statement
, 199__
To: [Name of Pledgor]
c/o Olympus Communications, L.P.
5 West Third Street
Coudersport, PA 16915
Attention:
and
Toronto Dominion (Texas), Inc., as Administrative Agent
909 Fannin, Suite 1700
Houston, TX 77010
Attention:
This statement is to advise you that a pledge of the following
uncertificated securities has been registered in the name of Toronto
Dominion (Texas), Inc., as Administrative Agent:
Uncertificated Security: All partnership interests of [Name
of Pledgor], in , L.P.
Registered Owner:
[Name of Pledgor]
5 West Third Street
Coudersport, PA 16915
Attention:
Taxpayer Identification Number:
Registered Pledgee:
Toronto Dominion (Texas), Inc., as Administrative Agent
909 Fannin, Suite 1700
Houston, TX 77010
Attention:
Taxpayer Identification Number:
There are no liens or restrictions of
, L.P., and no adverse claims to which the
uncertificated security is or may be subject known to
_________________, L.P.
The pledge was registered on , 199__.
THIS STATEMENT IS MERELY A RECORD OF THE RIGHTS OF THE ADDRESSEES
AS OF THE TIME OF ITS ISSUANCE. DELIVERY OF THIS STATEMENT, OF ITSELF,
CONFERS NO RIGHTS ON THE RECIPIENT. THIS STATEMENT IS NEITHER A NEGOTIABLE
INSTRUMENT NOR A SECURITY.
Very truly yours,
[NAME OF PARTNERSHIP]
By: [NAME OF GENERAL PARTNER],
Managing General Partner
By:
Name:
Title:
EXHIBIT B
, 199__
To: [ADDRESS]
You are hereby instructed to register the pledge of the following
uncertificated security as follows:
All partnership interests of the undersigned in
, L.P.
Pledgor Pledgee
[Name of Pledgor] Toronto Dominion (Texas),
Inc.,
c/o Olympus Communications, L.P. as Administrative Agent
5 West Third Street 909 Fannin, Suite 1700
Coudersport, PA 16915 Houston, TX 77010
Attention: Attention:
Very truly yours,
[NAME OF PLEDGOR]
[By: ,
Managing General Partner]
By:
Name:
Title:
(3) If Pledgor is a partnership
EXHIBIT E
GUARANTY AGREEMENT
GUARANTY AGREEMENT, dated as of May 12, 1995, made by each of
the partnerships and/or corporations that are signatories hereto (the
"Guarantors"), in favor of TORONTO DOMINION (TEXAS), INC., as Administrative
Agent (in such capacity, the "Administrative Agent") for the Lenders from
time to time parties to the Revolving Credit Agreement, dated as of May 12,
1995, among Adelphia Cable Partners, L.P., a Delaware limited partnership,
Southeast Florida Cable, Inc., a Florida corporation, and West Boca
Acquisition Limited Partnership, a Delaware limited partnership, as
Borrowers, such Lenders, the Agents identified therein, and Toronto Dominion
(Texas), Inc., as Administrative Agent (as amended, supplemented and
otherwise modified from time to time, the "Credit Agreement").
W I T N E S S E T H:
WHEREAS, pursuant to the Credit Agreement, the Lenders have
severally agreed to make Loans to the Borrowers upon the terms and subject
to the conditions set forth therein;
WHEREAS, the Borrowers are members of an affiliated group of
corporations and partnerships that include each Guarantor;
WHEREAS, the Borrowers and the Guarantors are engaged in related
businesses, and each Guarantor will derive substantial direct and indirect
benefit from the making of the Loans;
WHEREAS, the proceeds of the Loans may be used in part to enable
the Borrowers to make valuable transfers to the Guarantors in connection
with the operation of their respective businesses;
WHEREAS, it is a condition precedent to the effectiveness of the
Credit Agreement and the obligation of the Lenders to make their respective
Loans to the Borrowers under the Credit Agreement that each of the
Guarantors shall have executed and delivered this Guaranty Agreement to the
Administrative Agent for the benefit of the Lenders and the Agents and the
Agents.
NOW, THEREFORE, in consideration of the premises and to induce
the Administrative Agent, the Lenders and the other Agents to enter into the
Credit Agreement and to induce the Lenders to make their respective loans to
the Borrowers under the Credit Agreement, the Guarantors hereby agree with
the Administrative Agent, for the benefit of the Lenders and the other
Agents, as follows:
Defined Terms. Unless otherwise defined herein, terms defined in
the Credit Agreement and used herein shall have the meanings given to them
in the Credit Agreement. For purposes of this Guaranty Agreement, the term
"Lender" shall include any Affiliate of any Lender which has entered into an
Interest Rate Protection Agreement with any Borrower and the term "Loan
Documents" shall include any Interest Rate Protection Agreement between any
Lender (including any such Affiliate of a Lender) and any Borrower.
As used herein, "Guaranty Agreement" means this Guaranty
Agreement, as amended, supplemented and otherwise modified from time to
time.
As used herein, "Obligations" means the Obligations (as
defined in the Credit Agreement), and all renewals, refundings,
restructurings and other refinancings thereof, including increases in the
amount thereof.
The words "hereof," "herein" and "hereunder" and words of
similar import when used in this Guaranty Agreement shall refer to this
Guaranty Agreement as a whole and not to any particular provision of this
Guaranty Agreement, and section and paragraph references are to this
Guaranty Agreement unless otherwise specified.
The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such terms.
Guarantee. Subject to the provisions of
paragraph 2(b), each of the Guarantors hereby, jointly and severally,
unconditionally and irrevocably, guarantees to the Administrative Agent, for
the benefit of the Lenders, the Agents and their respective successors,
endorsees, transferees and assigns, the prompt and complete payment and
performance by the Borrowers when due (whether at the stated maturity, by
acceleration or otherwise) of the Obligations.
Anything herein or in any other Loan Document to the
contrary notwithstanding, the maximum liability of each Guarantor hereunder
and under the other Loan Documents shall in no event exceed the amount which
can be guaranteed by such Guarantor under applicable federal and state laws
relating to the insolvency of debtors.
Each Guarantor further agrees to pay any and all
reasonable expenses (including, without limitation, all reasonable fees and
disbursements of counsel) which may be paid or incurred by any Agent or any
Lender in enforcing, or obtaining advice of counsel in respect of, any
rights with respect to, or collecting, any or all of the Obligations and/or
enforcing any rights with respect to, or collecting against, such Guarantor
under this Guaranty Agreement. This Guaranty Agreement shall remain in full
force and effect until the Obligations are paid in full and the Commitments
are terminated, notwithstanding that from time to time prior thereto the
Borrowers may be free from any Obligations.
Each Guarantor agrees that the Obligations may at any time
and from time to time exceed the amount of the liability of such Guarantor
hereunder without impairing this Guaranty Agreement or affecting the rights
and remedies of any Agent or any Lender hereunder.
No payment or payments made by any Borrower, any of the
Guarantors, any other guarantor or any other Person or received or collected
by any Agent or any Lender from any Borrower, any of the Guarantors, any
other guarantor or any other Person by virtue of any action or proceeding or
any set-off or appropriation or application at any time or from time to time
in reduction of or in payment of the Obligations shall be deemed to modify,
reduce, release or otherwise affect the liability of any Guarantor hereunder
which shall, notwithstanding any such payment or payments other than
payments made by such Guarantor in respect of the Obligations or payments
received or collected from such Guarantor in respect of the Obligations,
remain liable for the Obligations up to the maximum liability of such
Guarantor hereunder until the Obligations are paid in full and the
Commitments are terminated.
Each Guarantor agrees that whenever, at any time, or from
time to time, it shall make any payment to any Agent or any Lender on
account of its liability hereunder, it will notify the Administrative Agent
in writing that such payment is made under this Guaranty Agreement for such
purpose.
Right of Contribution. Each Guarantor shall be entitled
to seek and receive contribution from and against any other Guarantor
hereunder or at law. Each Guarantor reserves its right of contribution
which shall be subject to the terms and conditions of Section 5 hereof. The
provisions of this Section shall in no respect limit the obligations and
liabilities of any Guarantor to the Agents and the Lenders, and each
Guarantor shall remain liable to the Agents and the Lenders for the full
amount guaranteed by such Guarantor hereunder.
Right of Set-off. Upon the occurrence and during the
continuance of any Event of Default, each Guarantor hereby irrevocably
authorizes each Lender and each Agent at any time and from time to time
without notice to such Guarantor or any other Guarantor, any such notice
being expressly waived by each Guarantor, to set-off and appropriate and
apply any and all deposits (general or special, time or demand, provisional
or final), in any currency, and any other credits, indebtedness or claims,
in any currency, in each case whether direct or indirect, absolute or
contingent, matured or unmatured at any time held or owing by such Lender or
such Agent to or for the credit or the account of such Guarantor, or any
part thereof in such amounts as such Lender may elect, against and on
account of the obligations and liabilities of such Guarantor to such Lender
or such Agent hereunder and claims of every nature and description of such
Lender or such Agent against such Guarantor, in any currency, whether
arising hereunder, under the Credit Agreement, any Note, any Loan Documents,
any Interest Rate Protection Agreement entered into by any Borrower with any
Lender or otherwise, as such Lender or such Agent may elect, whether or not
the Administrative Agent or any Lender has made any demand for payment and
although such obligations, liabilities and claims may be contingent or
unmatured. The Administrative Agent and each Lender and each other Agent
shall notify such Guarantor promptly of any such set-off and the application
made by the Administrative Agent or such Lender, provided that the failure
to give such notice shall not affect the validity of such set-off and
application. The rights of the Administrative Agent and each Lender and
each other Agent under this Section are in addition to other rights and
remedies (including, without limitation, other rights of set-off) which the
Administrative Agent or such Lender or such Agent may have.
Subrogation. No Guarantor will exercise any rights which
it may acquire by way of subrogation under this Guaranty Agreement, by any
payment made hereunder or otherwise, nor shall any Guarantor seek or be
entitled to seek any contribution or reimbursement from the Borrowers or any
other Guarantor in respect of payments made by such Guarantor hereunder,
until all amounts owing to the Agents and the Lenders by the Borrowers on
account of the Obligations are paid in full and the Commitments are
terminated. If any amounts shall be paid to any Guarantor on account of
such subrogation rights at any time when all of the Obligations shall not
have been paid in full, such amount shall be held by such Guarantor in trust
for the Administrative Agent, the Lenders and the other Agents, segregated
from other funds of such Guarantor, and shall, forthwith upon receipt by
such Guarantor, be turned over to the Administrative Agent in the exact form
received by such Guarantor (duly endorsed by such Guarantor to the
Administrative Agent, if required), to be applied against the Obligations,
whether matured or unmatured, as provided in the Credit Agreement.
Amendments, etc. with Respect to the Obligations; Waiver
of Rights. Each Guarantor shall remain obligated hereunder notwithstanding
that, without any reservation of rights against any Guarantor and without
notice to or further assent by any Guarantor, any demand for payment of any
of the Obligations made by the Administrative Agent, any other Agent or any
Lender may be rescinded by such party and any of the Obligations continued,
and the Obligations, or the liability of any other party upon or for any
part thereof, or any collateral security or guarantee therefor or right of
offset with respect thereto, may, from time to time, in whole or in part, be
renewed, extended, amended, modified, accelerated, compromised, waived,
surrendered or released, and the Credit Agreement, any other Loan Documents
or any Interest Rate Protection Agreement entered into by any Borrower with
any Lender and any other documents executed and delivered in connection
therewith may be amended modified, supplemented or terminated, in whole or
in part, from time to time, and any collateral security, guarantee or right
of offset at any time existing for the payment of the Obligations may be
sold, exchanged, waived, surrendered or released. No Agent or Lender shall
have any obligation to protect, secure, perfect or insure any Lien at any
time held by it as security for the Obligations or for this Guaranty
Agreement or any property subject thereto. When making any demand hereunder
against any of the Guarantors, any Agent or any Lender may, but shall be
under no obligation to, make a similar demand on the Borrowers or any other
Guarantor or guarantor, and any failure by any Agent or any Lender to make
any such demand or to collect any payments from the Borrowers or any such
other Guarantor or guarantor or any release of the Borrowers or such other
Guarantor or guarantor shall not relieve any of the Guarantors in respect of
which a demand or collection is not made or any of the Guarantors not so
released of their several obligations or liabilities hereunder, and shall
not impair or affect the rights and remedies, express or implied, or as a
matter of law, of any Agent or any Lender against any of the Guarantors.
For the purposes hereof, "demand" shall include the commencement and
continuance of any legal proceedings.
Guaranty Agreement Absolute and Unconditional. Each
Guarantor waives any and all notice of the creation, renewal, extension or
accrual of any of the Obligations and notice of or proof of reliance by any
Agent or any Lender upon this Guaranty Agreement or acceptance of this
Guaranty Agreement, and the Obligations, and any of them, shall conclusively
be deemed to have been created, contracted or incurred, or renewed,
extended, amended or waived, in reliance upon this Guaranty Agreement; and
all dealings between any Borrower and any of the Guarantors, on the one
hand, and the Agents and the Lenders, on the other hand, likewise shall be
conclusively presumed to have been had or consummated in reliance upon this
Guaranty Agreement. Each Guarantor waives diligence, presentment, protest,
demand for payment and notice of default or nonpayment to or upon the
Borrowers or any of the Guarantors with respect to the Obligations. Each
Guarantor understands and agrees that this Guaranty Agreement shall be
construed as a continuing, absolute and unconditional guarantee of payment
without regard to, and hereby irrevocably waives any defenses it may now or
hereafter have in any way relating to, the following: (a) the validity,
regularity or enforceability of the Credit Agreement, any Note, any other
Loan Document or any Interest Rate Protection Agreement entered into by any
Borrower with any Lender, any of the Obligations or any other collateral
security therefor or guarantee or right of offset with respect thereto at
any time or from time to time held by any Agent or any Lender (b) any
defense, set-off or counterclaim (other than a defense of payment or
performance) which may at any time be available to or be asserted by the
Borrowers against any Agent or any Lender, or (c) any other circumstance
whatsoever (with or without notice to or knowledge of the Borrowers or such
Guarantor) which constitutes, or might be construed to constitute, an
equitable or legal discharge of the Borrowers for the Obligations, or of
such Guarantor under this Guaranty Agreement, in bankruptcy or in any other
instance. When pursuing its rights and remedies hereunder against any
Guarantor, any Agent and any Lender may, but shall be under no obligation
to, pursue such rights and remedies as it may have against the Borrowers or
any other Person or against any collateral security or guarantee for the
Obligations or any right of offset with respect thereto, and any failure by
any Agent or any Lender to pursue such other rights or remedies or to
collect any payments from the Borrowers or any such other Person or to
realize upon any such collateral security or guarantee or to exercise any
such right of offset, or any release of the Borrowers or any such other
Person or any such collateral security, guarantee or right of offset, shall
not relieve such Guarantor of any liability hereunder, and shall not impair
or affect the rights and remedies, whether express, implied or available as
a matter of law, of the Agents and the Lenders against such Guarantor. This
Guaranty Agreement shall remain in full force and effect and be binding in
accordance with and to the extent of its terms upon each Guarantor and the
successors and assigns thereof, and shall inure to the benefit of the Agents
and the Lenders, and their respective successors, endorsees, transferees and
assigns, until all the Obligations and the obligations of each Guarantor
under this Guaranty Agreement shall have been satisfied by payment in full
and the Commitments shall be terminated, notwithstanding that from time to
time during the term of the Credit Agreement the Borrowers may be free from
any Obligations.
Reinstatement. This Guaranty Agreement shall continue to
be effective, or be reinstated, as the case may be, if at any time payment,
or any part thereof, of any of the Obligations is rescinded or must
otherwise be restored or returned by any Agent or any Lender upon the
insolvency, bankruptcy, dissolution, liquidation or reorganization of any
Borrower or any Guarantor, or upon or as a result of the appointment of a
receiver, intervenor or conservator of, or trustee or similar officer for,
any Borrower or any Guarantor or any substantial part of its property, or
otherwise, all as though such payments had not been made.
Payments. Each Guarantor hereby guarantees that payments
hereunder will be paid to the Administrative Agent without set-off or
counterclaim in Dollars and immediately available funds at the office of the
Administrative Agent located at 909 Fannin, Suite 1700, Houston, Texas
77010.
Representations and Warranties. Each Guarantor hereby
represents and warrants that:
such Guarantor is duly organized, validly existing and (if
such Guarantor is a corporation) in good standing under the laws of
the jurisdiction of its organization and has the power and authority
and the legal right to own and operate property, to lease the property
such Guarantor operates and to conduct the business in which such
Guarantor is currently engaged;
such Guarantor has the power and authority and the legal
right to execute and deliver, and to perform its obligations under,
this Guaranty Agreement and the other Loan Documents to which it is a
party, and has taken all necessary action to authorize the execution,
delivery and performance of this Guaranty Agreement and each of the
other Loan Documents to which it is a party;
this Guaranty Agreement and each of the other Loan
Documents to which it is a party constitutes a legal, valid and
binding obligation of such Guarantor enforceable in accordance with
its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors' rights generally and general
equitable principles (whether enforcement is sought by proceedings in
equity or at law);
the execution, delivery and performance of this Guaranty
Agreement and the other Loan Documents to which it is a party will not
violate any provision of any Governmental Requirement or Contractual
Obligation of such Guarantor and will not result in or require the
creation or imposition of any Lien on any of the properties or
revenues of such Guarantor pursuant to any Governmental Requirement or
Contractual Obligation of the Guarantor;
no consent or authorization of, filing with, or other act
by or in respect of, any arbitrator or Governmental Authority and no
consent of any other Person (including, without limitation, any
partner, stockholder or creditor of such Guarantor) is required in
connection with the execution, delivery, performance, validity or
enforceability of this Guaranty Agreement or any other Loan Document
to which it is a party;
no litigation, investigation or proceeding of or before
any arbitrator or Governmental Authority is pending or, to the
knowledge of such Guarantor, threatened by or against such Guarantor
or against any of such Guarantor's properties or revenues (1) with
respect to this Guaranty Agreement or any other Loan Document to which
it is a party or any of the transactions contemplated hereby or
thereby or (2) which could reasonably be expected to have a Material
Adverse Effect;
such Guarantor has good record and marketable title in fee
simple to, or a valid leasehold interest in, all its real property,
and good title to, or a valid leasehold interest in, all its other
property, and none of such property is subject to any Lien of any
nature whatsoever except as permitted under the Credit Agreement;
that the representation contained in subsection 3.1 of the
Credit Agreement, insofar as such representation applies to such
Guarantor, is true and correct; and
such Guarantor has neither received nor is aware of any
notice of a Lien on or other rights with respect to any partnership
interest in such Guarantor other than Permitted Liens and rights
created by Charter Documents.
Each Guarantor agrees that the foregoing representations and
warranties shall be deemed to have been made by such Guarantor on the date
of each borrowing by the Borrowers under the Credit Agreement on and as of
such date of borrowing as though made hereunder on and as of such date.
Covenants. Each Guarantor hereby covenants and agrees
with each Agent and each Lender that, from and after the date of this
Guaranty Agreement until the Obligations are paid in full and the
Commitments are terminated, such Guarantor shall not take, and shall refrain
from taking, any action that would result in a violation of any of the
covenants of the Borrowers contained in Sections 5 and 6 of the Credit
Agreement.
Authority of Administrative Agent. Each Guarantor
acknowledges that the rights and responsibilities of the Administrative
Agent under this Guaranty Agreement with respect to any action taken by the
Administrative Agent or the exercise or non-exercise by the Administrative
Agent of any option, right, request, judgment or other right or remedy
provided for herein or resulting or arising out of this Guaranty Agreement
shall, as among the Administrative Agent and the Lenders and the other
Agents, be governed by the Credit Agreement and by such other agreements
with respect thereto as may exist from time to time among them, but, as
between the Administrative Agent and such Guarantor, the Administrative
Agent shall be conclusively presumed to be acting as agent for the Lenders
and the Agents with full and valid authority so to act or refrain from
acting, and no Guarantor shall be under any obligation, or entitlement, to
make any inquiry respecting such authority.
Notices. All notices, requests and demands to or upon any
Agent, any Lender or any Guarantor to be effective shall be in writing
(including by facsimile or telecopy transmission) and shall be deemed to
have been duly given or made (1) when delivered by hand or (2) three days
after being deposited in the mail, postage prepaid or (3) one Business Day
after being sent by priority overnight mail with a nationally recognized
overnight delivery carrier or (4) if by telecopy or facsimile, when
received:
if to the Administrative Agent, at its address or
transmission number for notices provided in subsection 9.2 of the
Credit Agreement;
if to any Lender or any Agent other than the Administrative
Agent, at its address or transmission number for notices provided in
Annex A to the Credit Agreement, as supplemented from time to time in
connection with assignments pursuant to subsection 9.6 of the Credit
Agreement; and
if to any Guarantor, at its address or transmission number
for notices set forth under its signature below.
Each Agent, each Lender and each Guarantor may change its
address and transmission numbers for notices by notice in the manner
provided in this Section.
Counterparts. This Guaranty Agreement may be executed by
one or more of the Guarantors on any number of separate counterparts
(including by facsimile transmission), and all of said counterparts taken
together shall be deemed to constitute one and the same instrument. A set
of the counterparts of this Guaranty Agreement signed by all the Guarantors
shall be lodged with the Administrative Agent.
Severability. Any provision of this Guaranty Agreement
which is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and
any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other jurisdiction.
Integration. This Guaranty Agreement represents the
agreement of each Guarantor with respect to the subject matter hereof and
there are no promises or representations by any Agent or any Lender relative
to the subject matter hereof not reflected herein.
Amendments in Writing; No Waiver; Cumulative Remedies.
None of the terms or provisions of this Guaranty Agreement may be waived,
amended, supplemented or otherwise modified except by a written instrument
executed by each Guarantor and the Administrative Agent, provided that any
provision of this Guaranty Agreement may be waived by the Administrative
Agent, the Lenders and the other Agents in a letter or agreement executed by
the Administrative Agent or by telecopy or facsimile transmission from the
Administrative Agent.
No Agent or Lender shall by any act (except by a written
instrument pursuant to paragraph 17(a) hereof), delay, indulgence, omission
or otherwise be deemed to have waived any right or remedy hereunder or to
have acquiesced in any Default or Event of Default or in any breach of any
of the terms and conditions hereof. No failure to exercise, nor any delay
in exercising, on the part of any Agent or any Lender, any right, power or
privilege hereunder shall operate as a waiver thereof. No single or partial
exercise of any right, power or privilege hereunder shall preclude any other
or further exercise thereof or the exercise of any other right, power or
privilege. A waiver by any Agent or any Lender of any right or remedy
hereunder on any one occasion shall not be construed as a bar to any right
or remedy which such Agent or such Lender would otherwise have on any future
occasion.
The rights and remedies herein provided are cumulative,
may be exercised singly or concurrently and are not exclusive of any other
rights or remedies provided by law.
Section Headings. The section headings used in this
Guaranty Agreement are for convenience of reference only and are not to
affect the construction hereof or be taken into consideration in the
interpretation hereof.
Successors and Assigns. This Guaranty Agreement shall be
binding upon the successors and assigns of each Guarantor and shall inure to
the benefit of the Agents and the Lenders and their successors and assigns,
provided that no Guarantor may assign any of its rights or obligations under
this Guaranty Agreement without the prior written consent of the
Administrative Agent and any such purported assignment shall be null and
void.
Submission To Jurisdiction; Waivers. Each Guarantor
hereby irrevocably and unconditionally:
submits for itself and its property in any legal action or
proceeding relating to this Guaranty Agreement and the other Loan
Documents to which it is a party, or for recognition and enforcement
of any judgment in respect thereof, to the nonexclusive general
jurisdiction of the courts of the State of New York, the courts of the
United States of America for the Southern District of New York, and
appellate courts from any thereof;
consents that any such action or proceeding may be brought
in such courts and waives any objection that it may now or hereafter
have to the venue of any such action or proceeding in any such court
or that such action or proceeding was brought in an inconvenient court
and agrees not to plead or claim the same;
agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage
prepaid, to such Guarantor at its address set forth under its
signature below or at such other address of which the Administrative
Agent shall have been notified pursuant Section 13;
agrees that nothing herein shall affect the right to
effect service or process in any other manner permitted by law or
shall limit the right to sue in any other jurisdiction; and
waives, to the maximum extent not prohibited by law, any
right it may have to claim or recover in any legal action or
proceeding referred to in this subsection any special, exemplary or
punitive damages.
WAIVERS OF JURY TRIAL. EACH GUARANTOR HEREBY KNOWINGLY
AND INTENTIONALLY, IRREVOCABLY AND UNCONDITIONALLY, WAIVES TRIAL BY JURY IN
ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS GUARANTY AGREEMENT OR ANY
OTHER LOAN DOCUMENT TO WHICH IT IS A PARTY AND FOR ANY COUNTERCLAIM THEREIN.
GOVERNING LAW. THIS GUARANTY AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK, WITHOUT
GIVING EFFECT TO ITS CONFLICT OF LAW PRINCIPLES.
Additional Guarantors. Any Person that becomes a
Restricted Subsidiary subsequent to the Closing Date and was not a
Guarantor under this Guaranty Agreement at the time of the initial
execution hereof shall become a Guarantor hereunder by executing and
delivering to the Administrative Agent a Supplement in the form attached
hereto as Exhibit A. Any such Restricted Subsidiary shall thereafter be
deemed a Guarantor for all purposes under this Guaranty Agreement.
[Remainder of page intentionally left blank]
IN WITNESS WHEREOF, each of the undersigned has caused this
Guaranty Agreement to be duly executed and delivered by its duly authorized
officer as of the day and year first above written.
CABLE SENTRY CORPORATION
By:
Name:
Title:
Address for Notices:
c/o Olympus Communications, L.P.
5 West Third Street
Coudersport, PA 16915
Telecopy:
IN WITNESS WHEREOF, each of the undersigned has caused this
Guaranty Agreement to be duly executed and delivered by its duly authorized
officer as of the day and year first above written.
KEY BISCAYNE CABLEVISION
By: ADELPHIA CABLE PARTNERS, L.P.,
General Partner
By: OLYMPUS COMMUNICATIONS, L.P.,
Managing General Partner
By: ACP HOLDINGS, INC.,
Managing General Partner
By:
Name:
Title:
Address for Notices:
c/o Olympus Communications, L.P.
5 West Third Street
Coudersport, PA 16915
Telecopy:
EXHIBIT A
ADDITIONAL SUBSIDIARIES SUPPLEMENT
SUPPLEMENT, dated to the Guaranty Agreement,
dated as of May 12, 1995 (as amended, supplemented and otherwise modified,
the "Guaranty Agreement"), made by certain subsidiaries of Adelphia Cable
Partners, L.P., a Delaware limited partnership ( ACP ), Southeast Florida
Cable, Inc., a Florida corporation ( Southeast ), and West Boca Acquisition
Limited Partnership, a Delaware limited partnership ("West Boca"; together
with ACP and Southeast, the "Borrowers"), from time to time parties thereto
(collectively, the "Guarantors").
W I T N E S S E T H:
WHEREAS, the Guaranty Agreement provides that any Restricted
Subsidiary of any Borrower, although not a Guarantor thereunder at the time
of the initial execution thereof, may become a Guarantor under the Guaranty
Agreement upon the delivery to the Administrative Agent of a supplement in
substantially the form of this Supplement; and
WHEREAS, the undersigned was not a Restricted Subsidiary on the
Closing Date and, therefore, was not a party to the Guaranty Agreement but
now desires to become a Guarantor thereunder;
NOW, THEREFORE, the undersigned hereby agrees as follows:
The undersigned agrees to be bound by all of the provisions of
the Guaranty Agreement applicable to a Guarantor thereunder and agrees
that it shall, on the date this Supplement is accepted by the
Administrative Agent, become a Guarantor, for all purposes of the
Guaranty Agreement to the same extent as if originally a party thereto
with the representations and warranties contained therein being deemed
to be made by the undersigned as of the date hereof.
Unless otherwise defined herein, capitalized terms which are
defined in the Credit Agreement are used herein as so defined.
IN WITNESS WHEREOF, the undersigned has caused this Supplement
to be executed and delivered by a duly authorized officer on the date first
above written.
[NAME OF SUBSIDIARY]
By:
Name:
Title:
EXHIBIT F
Form of Intercompany Note
THIS PROMISSORY NOTE HAS BEEN PLEDGED PURSUANT TO A NOTE PLEDGE
AGREEMENT, DATED AS OF THE DATE HEREOF, MADE BY
IN FAVOR OF TORONTO DOMINION (TEXAS), INC., AS ADMINISTRATIVE
AGENT, TO SECURE THE PAYMENT OF CERTAIN OBLIGATIONS DESCRIBED THEREIN.
DEMAND NOTE
$ Coudersport, Pennsylvania
, 19
FOR VALUE RECEIVED, the undersigned, , a
(the "Borrower"), hereby unconditionally promises to
pay to the order of , a
(the "Lender") at its office located at 5 West Third Street,
Coudersport, PA 16915, in lawful money of the United States of America and
in immediately available funds, when due, the principal amount of (a)
Dollars ($ ), or, if less, (b) the unpaid principal
amount of all loans made by the Lender to the Borrower evidenced by this
Note. Prior to the Termination Date, the Borrower may from time to time
borrow from the Lender at the discretion of the Lender an aggregate amount
not to exceed at any time outstanding Dollars
($ ). Within the foregoing limits, the Borrower may borrow,
prepay and reborrow hereunder in accordance with the terms of this Note.
The principal amount hereof, together with all accrued and unpaid interest
thereon, shall be due and payable on the earlier of (i) on demand and (ii)
180 days following the Termination Date. The Borrower further agrees to pay
interest in like money at such office on the unpaid principal amount hereof
from time to time outstanding at the rates and on the dates specified in the
Credit Agreement (as hereinafter defined). Notwithstanding anything to the
apparent contrary herein, this note is a demand note, due and payable on the
demand of the holder.
The holder of this Note is authorized to endorse on the schedules
annexed hereto and made a part hereof or on a continuation thereof which
shall be attached hereto and made a part hereof, the dates and amounts of
the loans and the dates and amounts of repayment thereof. Each such
endorsement shall constitute prima facie evidence of the accuracy of the
information endorsed. The failure to make any such endorsement (or any
error therein) shall not affect the obligations of the Borrower in respect
of such loans or this Note.
Defined terms used in this Note, unless otherwise defined herein,
shall have the meanings as set forth in that certain Revolving Credit
Agreement dated as of the date hereof by and among Adelphia Cable
Partners, L.P., Southeast Florida Cable, Inc. and West Boca Acquisition
Limited Partnership, as borrowers, Toronto Dominion (Texas), Inc. and The
Bank of Nova Scotia, as Administrative Agents, and the lenders party thereto
(as the same may hereinafter be modified, amended, supplemented or restated,
the "Credit Agreement").
This Note is one of the notes pledged to the Administrative Agent
pursuant to that certain Note Pledge Agreement dated as of the date hereof
by and between the Lender and the Administrative Agent as security for the
Obligations.
All parties now and hereafter liable with respect to this Note,
whether maker, principal, surety, guarantor, endorser or otherwise, hereby
waive presentment, demand, protest and all other notices of any kind.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE COMMONWEALTH OF PENNSYLVANIA.
[Borrower]
By:
Name:
Title:
Pay to the order of
Toronto Dominion (Texas),
Inc., as Administrative Agent
[Lender]
By:_____________________
Dated:__________________
EXHIBIT G
MANAGEMENT SUBORDINATION AGREEMENT
MANAGEMENT SUBORDINATION AGREEMENT dated as of May 12, 1995 (as
amended, supplemented and otherwise modified from time to time, this
"Agreement"), among ADELPHIA CABLE PARTNERS, L.P., a Delaware limited
partnership ("ACP"), SOUTHEAST FLORIDA CABLE, INC., a Florida corporation
("Southeast"), and WEST BOCA ACQUISITION LIMITED PARTNERSHIP, a Delaware
limited partnership ("West Boca"; together with ACP and Southeast, the
"Borrowers"), each subsidiary of any Borrower party hereto (together with
the Borrowers, the "Companies"), OLYMPUS COMMUNICATIONS, L.P., a Delaware
limited partnership ("Olympus"; or, the "Manager"), and TORONTO DOMINION
(TEXAS), INC., as Administrative Agent (in such capacity, the
"Administrative Agent") for the Lenders from time to time parties to the
Revolving Credit Agreement dated as of May 12, 1995, among the Borrowers,
such Lenders, the Agents identified therein and Toronto Dominion (Texas),
Inc., as Administrative Agent (as amended, supplemented and otherwise
modified from time to time, the "Credit Agreement").
W I T N E S S E T H
WHEREAS, pursuant to the Credit Agreement, the Lenders have
severally agreed to make Loans to the Borrowers upon the terms and subject
to the conditions set forth therein;
WHEREAS, pursuant to that certain Management Services Agreement for
Managed Systems, dated as of April ___, 1995, between Olympus and West Boca,
as the same may be amended, supplemented and otherwise modified from time to
time to the extent permitted by subsection 6.8 of the Credit Agreement (the
"West Boca Management Agreement"), that certain Southeast Florida Cable,
Inc. Management Services Agreement, dated as of December 20, 1989, between
Olympus and Southeast, as the same may be amended, supplemented and
otherwise modified from time to time to the extent permitted by
subsection 6.8 of the Credit Agreement (the "Southeast Management
Agreement"), that certain Adelphia Cable Partners, L.P. Management Services
Agreement, dated as of December 19, 1989, between Olympus and ACP as the
same may be amended, supplemented and otherwise modified from time to time
to the extent permitted by subsection 6.8 of the Credit Agreement (the "ACP
Management Agreement"), and that certain Key Biscayne Cablevision Management
Services Agreement, dated as of December 19, 1989, by and between Olympus
and Key Biscayne Cablevision, a Pennsylvania general partnership as the same
may be amended, supplemented and otherwise modified from time to time to the
extent permitted by subsection 6.8 of the Credit Agreement (the "Key
Biscayne Management Agreement"; together with the West Boca Management
Agreement, the Southeast Management Agreement and the ACP Management
Agreement, the "Management Agreements"), the Manager has agreed to render
management, supervisory and other services to the Companies, and the
Companies have agreed to pay Management Fees (as defined in the Credit
Agreement) as provided in the Management Agreement to the Manager; and
WHEREAS, it is a condition precedent to the effectiveness of the
Credit Agreement and the obligations of the Lenders to make their respective
Loans to the Borrowers under the Credit Agreement that the Manager shall
have agreed to subordinate its rights to receive payment of Management Fees
under each Management Agreement as hereinafter provided.
NOW, THEREFORE, in consideration of the premises and to induce the
Agents and the Lenders to enter into the Credit Agreement and to induce the
Lenders to make their respective Loans to the Borrowers, each Company and
the Manager hereby agree with the Administrative Agent, for the benefit of
the Lenders and the Agents, as follows:
Definitions. Unless otherwise defined herein, terms defined in the
Credit Agreement and used herein shall have the meanings given to them in
the Credit Agreement. For purposes of this Agreement, the term "Lender"
shall include any Affiliate of any Lender which has entered into an Interest
Rate Protection Agreement with any Borrower, and the term "Loan Documents"
shall include any Interest Rate Protection Agreement between any Lender
(including such an Affiliate of a Lender) and any Borrower.
For purposes of this Agreement, the following terms shall have
the following meanings:
"Obligations": the Obligations (as defined in the Credit
Agreement), and all renewals, refundings, restructurings and other
refinancings thereof, including increases in the amount thereof.
"Reorganization": with respect to any Company, any distribution of
the assets of such Company upon any voluntary or involuntary
dissolution, winding-up, total or partial liquidation or reorganization,
or bankruptcy, insolvency, receivership or other statutory or common law
proceedings or arrangements involving such Company or the readjustment
of its liabilities or any assignment for the benefit of creditors or any
marshalling of its assets or liabilities.
"Senior Indebtedness": (a) the Obligations, and (b) all renewals,
refundings, restructurings and other refinancings thereof, including
increases in the amount thereof.
"Subordinated Indebtedness": Management Fees and similar fees
(howsoever designated) from time to time payable under the Management
Agreements and any and all other amounts payable in connection
therewith, other than reimbursement for out-of-pocket expenses.
The words "hereof," "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as
a whole and not to any particular provision of this Agreement, and section
and paragraph references are to this Agreement unless otherwise specified.
The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
Agreement to Subordinate. Each Company, for itself and its
successors and assigns, covenants and agrees, and the Manager, as a holder
of Subordinated Indebtedness, for itself and its successors and assigns,
hereby agrees, that the payment of the Subordinated Indebtedness is and
shall be expressly "subordinate and junior in right of payment" (as such
phrase is defined in Section 3) to the prior payment in full of all Senior
Indebtedness to the extent and in the manner hereinafter set forth.
Meaning of Subordinate and Junior in Right of Payment.
"Subordinate and junior in right of payment" shall mean that no part of the
Subordinated Indebtedness shall have any claim to the assets of any Company
on a parity with or prior to the claim of the Senior Indebtedness, whether
such claim is made in connection with a Reorganization or otherwise. Unless
and until the Senior Indebtedness shall have been paid in full in cash and
the Commitments shall have been terminated, the Manager will not take,
retain, demand or receive from any Company, and no Company will make, give
or permit, directly or indirectly, by set-off, redemption, purchase or in
any other manner, (i) any payment of the whole or any part of the
Subordinated Indebtedness, (ii) any security or collateral for the whole or
any part of the Subordinated Indebtedness or (iii) any guaranty of the whole
or any part of the Subordinated Indebtedness; provided, that, subject to
Section 5 below, each Company may make and the Manager may receive
Management Fees permitted to be paid pursuant to subsection 6.15 of the
Credit Agreement. Each Company expressly agrees that it will not make any
payment of any of the Subordinated Indebtedness, or take any other action,
in contravention of the provisions of this Agreement.
For purposes of this Agreement, the Senior Indebtedness shall
not be deemed to have been paid in full until and unless the Lenders and the
Agents shall have indefeasibly received payment in full of the principal of,
interest on and costs and expenses and all other amounts then payable in
connection with the Senior Indebtedness in cash. The subordination
provisions in this Agreement are for the benefit of and shall be enforceable
directly by the Lenders and the Agents and each Lender and each Agent shall
be deemed to have acquired such Senior Indebtedness in reliance upon this
Agreement. The Administrative Agent shall have the right to act on behalf
of the Lenders and the other Agents pursuant to this Agreement in enforcing
the rights of the Lenders and the other Agents, and in receiving payments
and other distributions to be made, under this Agreement.
In the event that, notwithstanding the provisions of paragraph
(a) of this Section 3, the Manager shall have received any payment or
distribution with respect to the Subordinated Indebtedness contrary to the
foregoing provisions of such paragraph, then and in any such event such
payment or distribution shall be held in trust for the benefit of, and shall
be immediately paid or delivered by the Manager to the Administrative Agent
to be used to prepay Loans and other Obligations outstanding under the
Credit Agreement.
Limitations on Subordinated Indebtedness. The Manager agrees
that the Subordinated Indebtedness shall be unsecured, and that, so long as
any of the Senior Indebtedness shall remain unpaid in cash or the
Commitments shall not have been terminated, if at any time the Manager shall
be in possession of any Collateral, the Manager shall promptly deliver such
Collateral to the Administrative Agent and until such delivery hold such
Collateral in trust for the Lenders and the Agents. Until such time as the
Senior Indebtedness has been paid in full in cash and the Commitments shall
have been terminated, the Manager agrees not to exercise any of its rights
under any document, instrument or agreement, or to accelerate or collect the
obligations of any of the Companies, or to realize upon any of the
Collateral or any other assets of any of the Companies or to attach, levy
upon or execute against any of the Collateral or any of the other assets of
any of the Companies, provided, however, that the Manager shall be entitled
to the payments provided for in Section 3 so long as the conditions to such
payments set forth in Section 3 have been satisfied.
Subordinated Indebtedness Subordinated to Prior Payment of
All Senior Indebtedness on Reorganization; Sale of any Company; etc. Upon
any payment or distribution of all or any of the assets or securities of any
Company of any kind or character, whether in cash, property or securities,
whether made pursuant to a Reorganization relative to such Company or any of
its properties, or a distribution of proceeds of or upon sale of all or any
part of such Company or any of its subsidiaries or any of their respective
assets, but exclusive of the payments permitted to be made to the Managers
as provided in Section 3, then in such event:
the Lenders and the Agents shall be entitled to receive
payment in full in cash as provided herein of all amounts due or to
become due on or in respect of all Senior Indebtedness, before any
payment is made on account of or applied to the Subordinated
Indebtedness;
any payment or distribution of assets of such Company of any
kind or character, whether in cash, property or securities (including
any payment or other distribution that may be payable by reason of the
payment of any other Indebtedness of such Company being subordinated to
the payment of Subordinated Indebtedness), to which the holders of
Subordinated Indebtedness would be entitled except for the provisions of
this Agreement, shall be paid or delivered by any debtor, custodian,
receiver, trustee in bankruptcy, liquidating trustee, agent or other
person making such payment or distribution, directly to the
Administrative Agent for the benefit of the Lenders and the Agents, for
application to the payment or prepayment of all such Senior Indebtedness
remaining unpaid to the extent necessary to pay all such Senior
Indebtedness in full in cash, after giving effect to any concurrent
payment or distribution to the Lenders or the Agents; and
in the event that, notwithstanding the foregoing provisions
of this Section 5, the Manager shall have received any payment or
distribution with respect to Subordinated Indebtedness contrary to the
foregoing provisions of this Section 5, then and in such event such
payment or distribution shall be held in trust for the benefit of, and
shall be immediately paid or delivered by such holder of Subordinated
Indebtedness to the Administrative Agent for the benefit of the Lenders
and the Agents for application to the payment or prepayment of all
Senior Indebtedness remaining unpaid, to the extent necessary to pay all
such Senior Indebtedness in full after giving effect to any concurrent
payment or distribution to the Lenders or the Agents.
In the event of a Reorganization, if the Manager has not filed any
claim, proof of claim or other instrument of similar character with respect
to the Subordinated Indebtedness within 20 days before the expiration of the
time to file the same, the Administrative Agent, any other Agent or any
Lender may, as an attorney-in-fact for the Manager, file any claim, proof of
claim or other instrument of similar character on behalf of the Manager, and
the Manager hereby appoints the Administrative Agent, any such other Agent
and any such Lender as an attorney-in-fact for the Manager, to so file any
claim, proof of claim or such other instrument of similar character. The
Manager ratifies all that the Administrative Agent, any such other Agent and
any such Lender, as said attorney-in-fact, shall lawfully do or cause to be
done by virtue hereof and not in contravention of the terms hereof. The
power of attorney granted in this Section 5 is a power coupled with an
interest and shall be irrevocable.
Upon any distribution of assets of any Company referred to in this
Agreement, the Manager shall be entitled to rely upon any order or decree
made by any court of competent jurisdiction in which a Reorganization is
pending for the purpose of ascertaining the identity of the Lenders and the
Agents, the amount of Senior Indebtedness, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to this
Agreement. Nothing in the foregoing sentence shall limit the right of the
Lenders and the Agents to receive payment in full of the Senior Indebtedness
in accordance with this Agreement.
Manager to be Subrogated to Rights of Holders of Senior
Indebtedness. Subject to the payment in full in cash of all Senior
Indebtedness, the Manager shall be subrogated to the rights of the Lenders
and the Agents to receive payments or distributions of assets of the
Borrower made on account of the Senior Indebtedness until all amounts
payable in respect of the Subordinated Indebtedness shall be paid in full,
and for purposes of such subrogation, no payment or distribution to the
Lenders and the Agents of assets, whether in cash, property or securities,
distributable to the Lenders and the Agents under the provisions hereof to
which the Manager would be entitled except for the provisions of this
Agreement, and no payment pursuant to the provisions of this Agreement to
the Lenders or the Agents by the Manager shall, as between the relevant
Company, its creditors other than the Lenders, the Agents and the Manager,
be deemed to be a payment by such Company to or on account of such Senior
Indebtedness, it being understood that the provisions of this Agreement are,
and are intended, solely for the purpose of defining the relative rights of
the Manager, on the one hand, and the Lenders and the Agents, on the other
hand.
Obligations of Each Company Unconditional. Nothing
contained in this Agreement is intended to or shall relieve the obligations
of any Company to the Lenders, the Agents or the Manager to pay any amount
in respect of the Senior Indebtedness or the Subordinated Indebtedness, as
the case may be, as and when such amount shall become due and payable in
accordance with the terms thereof, or to affect the relative rights of the
Lenders, the Agents or the Managers, on the one hand, and the other
creditors of such Company, on the other hand. All rights and interests of
the Lenders and the Agents hereunder, and all agreements and obligations of
each Company and the Manager, shall remain in full force and effect
irrespective of, and each Company and the Manager hereby irrevocably waives
any defenses it may now or hereafter have in any way relating to:
any lack of validity or enforceability of any Loan Document
or any other agreement or instrument relating thereto;
any change in the time, manner or place of payment of, or in
any other term of, all or any of the Senior Indebtedness, or any
amendment or waiver of or any consent to departure from any provision of
the Credit Agreement or any other Loan Document;
any exchange, release or nonperfection of any security
interest in any collateral, or any release or amendment or waiver of or
consent to departure from any guarantee, for all or any of the Senior
Indebtedness; or
any other circumstances which might otherwise constitute a
defense available to, or a discharge of, any Company in respect of the
Senior Indebtedness, or of any Company or the Manager in respect of this
Agreement.
Nothing contained in this Agreement shall affect the
obligation of any Company to make, or prevent any Company from making, at
any time, payment of any amount in respect of the Senior Indebtedness.
Nothing contained in this Agreement shall, except as set forth in Sections
3, 4 and 5, affect the obligation of any Company to make, or prevent any
Company from making, at any time, payment of any amount in respect of
Subordinated Indebtedness.
No Other Beneficiaries of Subordination. This Agreement and
the subordination provisions contained herein are intended only for the
benefit of the holders of Senior Indebtedness and no other creditor of any
Company. No Company will publish or give to any creditor or prospective
creditor of such Company any copy, statement or summary (or acquiesce in the
publication or giving of any such copy, statement or summary) as to the
subordination of the rights of the Manager without also stating or causing
to be stated (in a conspicuous manner in the case of any document) that such
subordination is solely for the benefit of the holders of Senior
Indebtedness and not for the benefit of any other creditor of such Company
or such Company, provided, however, that nothing contained in this Section 8
is intended to restrict the right or obligation of any Company to make
filings or registrations pursuant to any Governmental Requirements.
Rights of Holders of Senior Indebtedness Not to be Impaired.
No right of any present or future holder of any Senior Indebtedness to
enforce subordination as herein provided shall at any time in any way be
prejudiced or impaired by any act or omission in good faith by any such
holder, or by any noncompliance by any Company with the terms and provisions
and covenants herein regardless of any knowledge thereof any such holder of
Senior Indebtedness may have or otherwise be charged with.
Legend. Each Company and the Manager shall cause each note
issued by or to it representing or evidencing Subordinated Indebtedness to
have affixed upon it a legend, including in connection with the issuance of
any new or replacement note with respect to the transfer of such note or the
reduction of the principal amount thereof, which reads substantially as
follows:
"This instrument is subject to the Management Subordination
Agreement, dated as of May 12, 1995, among Adelphia Cable Partners,
L.P., a Delaware limited partnership, Southeast Florida Cable, Inc., a
Florida corporation, and West Boca Acquisition Limited Partnership, a
Delaware limited partnership (the "Borrowers"), each subsidiary of any
Borrower party thereto, and Toronto-Dominion (Texas), Inc., as
Administrative Agent (in such capacity, the "Administrative Agent") for
the Lenders from time to time parties to the Revolving Credit Agreement
dated as of May 12, 1995, among the Borrowers, such Lenders, the Agents
identified therein and Toronto Dominion (Texas), Inc., as Administrative
Agent (as amended, supplemented and otherwise modified from time to
time, the "Credit Agreement")."
Representations and Warranties. The Manager hereby
represents and warrants that:
it has the power and authority and the legal right to execute
and deliver, and to perform its obligations under, this Agreement, and
has taken all necessary action to authorize the execution, delivery and
performance of this Agreement;
this Agreement constitutes a legal, valid and binding
obligation of the Manager enforceable in accordance with its terms,
except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally and by general equitable
principles (whether enforcement is sought by proceeding in equity or at
law);
the execution, delivery and performance of this Agreement
will not violate any provision of any Governmental Requirement or any of
its Contractual Obligations;
no consent or authorization of, filing with, or other act by
or in respect of, any arbitrator or Governmental Authority and no
consent of any other Person (including, without limitation, any partner,
stockholder or creditor of the Manager), is required in connection with
the execution, delivery, performance, validity or enforceability of this
Agreement, other than those identified on Schedule 1 hereto, which have
been obtained; and
no Litigation is pending or, to its knowledge, threatened by
or against the Manager, with respect to this Agreement.
Successors; Continuing Effect. This Agreement is being
entered into for the benefit of, and shall be binding upon, the Lenders, the
Agents and the Manager, and their respective successors and assigns,
including subsequent holders of Senior Indebtedness, and the term "holders
of Senior Indebtedness" shall include any such subsequent or additional
holder of Senior Indebtedness, wherever the context permits, provided that
the Manager shall not transfer or assign any of its rights with respect to
Subordinated Indebtedness to any Person other than one of its Affiliates
which has become a Manager hereunder in accordance with Section 21 and which
has executed a Supplement in the form of Exhibit A hereto agreeing to be
bound by the terms of this Agreement.
Further Assurances. Each Company and the Manager will, at
their own expense and at any time and from time to time, promptly execute
and deliver all further instruments and documents, and take all further
action, that the Administrative Agent may reasonably request, in order to
perfect or otherwise protect any right or interest granted or purported to
be granted hereby or to enable the Agents and the Lenders to exercise and
enforce their rights and remedies hereunder.
Expenses. Each Company jointly and severally agrees to pay
to the Administrative Agent, upon demand, the amount of any and all
reasonable expenses, including, without limitation, the reasonable fees and
expenses of counsel for the Administrative Agent, which the Administrative
Agent and the Lenders may incur in connection with the exercise or
enforcement of any of their rights or interests vis-a-vis such Company or
the Manager.
Notices; Amendments; etc. All notices, requests and
demands to or upon the Administrative Agent, any Lender, any other Agent,
any Company or the Manager to be effective shall be in writing (including by
facsimile or telecopy transmission) and shall be deemed to have been duly
given or made (1) when delivered by hand or (2) three days after being
deposited in the mail, postage prepaid or (3) one Business Day after being
sent by priority overnight mail with a nationally recognized overnight
delivery carrier or (4) if by telecopy or facsimile, when received:
if to the Administrative Agent or any Borrower, at its address
or transmission number for notices provided in subsection 9.2 of the
Credit Agreement;
if to any Lender or to any Agent other than the Administrative
Agent, at its address or transmission number for notices provided in
Annex A to the Credit Agreement, as supplemented from time to time in
connection with assignments pursuant to subsection 9.6 of the Credit
Agreement;
if to any Company (other than the Borrowers), at its address
or transmission number for notices provided in the Guaranty Agreement;
and
if to the Manager, at its address or transmission number for
notices set forth under its signature below.
The Administrative Agent, each Lender, each other Agent each
Company and the Manager may change their addresses and transmission numbers
for notices by notice in the manner provided in this Section.
This Agreement may be amended and the terms hereof may be
waived only with the written consent of the Administrative Agent, each
Company and the Manager. Any such amendment or waiver shall be binding upon
the Lenders, the Agents, each Company and the Manager.
Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction, shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or invalidity
without invalidating the remaining portions hereof or thereof or affecting
the validity or enforceability of such provision in any other jurisdiction.
Submission to Jurisdiction. Each Company and the Manager
hereby irrevocably and unconditionally:
submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to
which it is a party or for recognition and enforcement of any judgment
in respect thereof, to the non-exclusive general jurisdiction of the
Courts of the State of New York, the courts of the United States of
America for the Southern District of New York, and appellate courts from
any thereof;
consents that any such action or proceeding may be brought in
such courts, and waives any objection that it may now or hereafter have
to the venue of any such action or proceeding in any such court or that
such action or proceeding was brought in an inconvenient court and
agrees not to plead or claim the same;
agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage
prepaid, to it at its address set forth in Section 15 or at such other
address of which the Administrative Agent shall have been notified
pursuant thereto;
agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit
the right to sue in any other jurisdiction; and
waives, to the maximum extent not prohibited by law, any right
it may have to claim or recover in any legal action or proceeding
referred to in this subsection any special, exemplary or punitive
damages.
WAIVER OF JURY TRIAL. EACH COMPANY, THE MANAGER AND THE
ADMINISTRATIVE AGENT HEREBY KNOWINGLY AND INTENTIONALLY, IRREVOCABLY AND
UNCONDITIONALLY, WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING
RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY
COUNTERCLAIM THEREIN.
GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS
OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT
TO ITS CONFLICT OF LAW PRINCIPLES.
Counterparts. This Agreement may be executed by one or more
of the parties hereto any number of counterparts (including by telecopy
transmission), and each such counterpart shall be deemed to be an original
instrument, but all such counterparts taken together shall constitute one
and the same instrument.
Integration. This Agreement and the other Loan Documents
represent the final agreement of the parties hereto with respect to the
subject matter hereof, and there are no promises, undertakings,
representations or warranties by any Agent or any Lender relative to the
subject matter hereof not expressly set forth or referred to herein or in
the other Loan Documents.
Replacement Managers. Any Affiliate of the Manager may, with
the approval of the Required Lenders, become a "Manager" under this
Agreement by executing and delivering to the Administrative Agent a
Supplement to this Agreement in the form attached hereto as Exhibit A. Any
such Affiliate shall thereafter be deemed to be a "Manager" for all purposes
under this Agreement.
[Remainder of page intentionally left blank.]
IN WITNESS WHEREOF, the undersigned have caused this Management
Subordination Agreement to be duly executed and delivered by their duly
authorized officers on the date and year first above written.
ADELPHIA CABLE PARTNERS, L.P.
By: OLYMPUS COMMUNICATIONS, L.P.,
Managing General Partner
By: ACP HOLDINGS, INC.,
Managing General Partner
By:
Name:
Title:
SOUTHEAST FLORIDA CABLE, INC.
By:
Name:
Title:
WEST BOCA ACQUISITION
LIMITED PARTNERSHIP
By: OLYMPUS COMMUNICATIONS, L.P.,
Managing General Partner
By: ACP HOLDINGS, INC.,
Managing General Partner
By:
Name:
Title:
TORONTO DOMINION (TEXAS), INC.,
as Administrative Agent
By:
Name:
Title:
OLYMPUS COMMUNICATIONS, L.P.
By: ACP HOLDINGS, INC.,
Managing General Partner
By:
Name:
Title:
Address for Notices:
5 West Third Street
Coudersport, PA 16915
Telecopy:
KEY BISCAYNE CABLEVISION
By: ADELPHIA CABLE PARTNERS, L.P.,
General Partner
By: OLYMPUS COMMUNICATIONS,
L.P., Managing General
Partner
By: ACP HOLDINGS, INC.,
Managing General Partner
By:
Name:
Title:
SCHEDULE 1
CONSENTS, AUTHORIZATIONS OR FILINGS REQUIRED
EXHIBIT A
SUPPLEMENT TO
MANAGEMENT SUBORDINATION AGREEMENT
SUPPLEMENT, dated as of , 199__, to the
Management Subordination Agreement, dated as of May 12, 1995 (as amended,
supplemented and otherwise modified from time to time, this "Agreement"),
among ADELPHIA CABLE PARTNERS, L.P., a Delaware limited partnership ("ACP"),
SOUTHEAST FLORIDA CABLE, INC., a Florida corporation ("Southeast"), and WEST
BOCA ACQUISITION LIMITED PARTNERSHIP, a Delaware limited partnership ("West
Boca"; together with ACP and Southeast, the "Borrowers"), each subsidiary of
any Borrower party hereto (together with the Borrowers, the "Companies"),
OLYMPUS COMMUNICATIONS, L.P., a Delaware limited partnership ("Olympus"; or,
the "Manager"), and TORONTO DOMINION (TEXAS), INC., as Administrative Agent
(in such capacity, the "Administrative Agent") for the Lenders from time to
time parties to the Revolving Credit Agreement dated as of May 12, 1995,
among the Borrowers, such Lenders, the Agents identified therein and Toronto
Dominion (Texas), Inc., as Administrative Agent (as amended, supplemented
and otherwise modified from time to time, the "Credit Agreement").
W I T N E S S E T H
WHEREAS, pursuant to the Credit Agreement, the Lenders have
severally agreed to make Loans (as defined in the Credit Agreement) to the
Borrowers upon the terms and subject to the conditions set forth therein;
and
WHEREAS, (the "New
Manager") wishes to become a "Manager" under the
Management Agreement (as defined in the Credit Agreement); and
WHEREAS, it is a condition precedent to the New Manager becoming a
"Manager" under the Management Agreement that
it shall have executed and delivered this Supplement;
NOW, THEREFORE, the undersigned hereby agrees as follows:
The undersigned agrees to be bound by all of the provisions of the
Agreement applicable to a Manager thereunder and agrees that it shall,
on the date this Supplement is accepted by the Administrative Agent,
become a Manager, for all purposes of the Agreement to the same extent
as if originally a party thereto with the representations and warranties
contained therein being deemed to be made by the undersigned as of the
date hereof.
Unless otherwise defined herein, capitalized terms which are
defined in the Agreement are used herein as so defined.
IN WITNESS WHEREOF, the undersigned has caused this Supplement to
be executed and delivered by a duly authorized officer on the date first
above written.
[INSERT NAME OF NEW MANAGER]
By:
Name:
Title:
Address for notices:
Telecopy:
ACKNOWLEDGED AND ACCEPTED
this day of 199__
TORONTO DOMINION (TEXAS), INC.,
as Administrative Agent
By:
Name:
Title:
EXHIBIT H
REVOLVING CREDIT NOTE
$__________________ May ____, 1995
FOR VALUE RECEIVED, the undersigned, ADELPHIA CABLE PARTNERS, L.P.,
a Delaware limited partnership, SOUTHEAST FLORIDA CABLE, INC., a Florida
corporation, and WEST BOCA ACQUISITION LIMITED PARTNERSHIP, a Delaware
limited partnership (each a "Borrower" and, collectively, the "Borrowers"),
hereby, jointly and severally, unconditionally promise to pay to the order
of _________________________ (the "Lender"), in lawful money of the United
States of America and in immediately available funds, on the Termination
Date the principal amount of (a) _________________________ DOLLARS
($____________), or, if less, (b) the aggregate unpaid principal amount
of all Loans made by the Lender to the Borrowers pursuant to subsection 2.1
of the Credit Agreement (as defined below). The Borrowers further, jointly
and severally, unconditionally agree to pay interest in like money on the
unpaid principal amount hereof from time to time outstanding at the rates
and on the dates specified in subsection 2.7 of such Credit Agreement.
The holder of this Note is authorized to endorse on the schedules
annexed hereto and made a part hereof or on a continuation thereof which
shall be attached hereto and made a part hereof the date, Type and amount of
each Loan made pursuant to the Credit Agreement and the date and amount of
each payment or prepayment of principal thereof, each Conversion of all or a
portion thereof to another Type and, in the case of Eurodollar Loans, to
Eurodollar Loans having a new Interest Period and, further in the case of
Eurodollar Loans, the length of each Interest Period and the applicable
Eurodollar Rate with respect thereto. Each such endorsement shall
constitute prima facie evidence of the accuracy of the information endorsed.
The failure to make any such endorsement (or any error therein) shall not
affect the obligations of any Borrower in respect of such Loans or under
this Note, the Credit Agreement or any other Loan Document.
This Note (a) is one of the Notes referred to in the Revolving
Credit Agreement dated as of May ____, 1995 (as amended, supplemented and
otherwise modified from time to time, the "Credit Agreement"), among the
Borrowers, the Lender, the other Lenders from time to time parties thereto,
the Agents identified therein and Toronto Dominion (Texas), Inc., as
Administrative Agent, (b) is subject to the provisions of the Credit
Agreement and (c) is subject to optional and mandatory prepayment in whole
or in part as provided in the Credit Agreement. This Note is secured and
guaranteed as provided in the Loan Documents. Reference is hereby made to
the Loan Documents for a description of the nature and extent of the
security and the guarantees, the terms and conditions upon which the
security interests and each guaranty were granted and the rights of the
holder of this Note in respect thereof.
Upon the occurrence of any one or more of the Events of Default,
all amounts then remaining unpaid on this Note shall become, or may be
declared to be, immediately due and payable, all as provided in the Credit
Agreement. The Borrowers jointly and severally promise to pay all costs and
expenses of the Lender incurred in collecting the Borrowers' obligations
hereunder or in enforcing or attempting to enforce the Lender's rights
hereunder, including, without limitation, reasonable attorneys' fees and
disbursements, whether or not an action is filed in connection herewith.
All parties now and hereafter liable with respect to this Note,
whether as maker, principal, surety, guarantor, endorser or otherwise,
hereby waive presentment, demand for payment, dishonor, notice of dishonor,
protest, notice of protest and any other notice or formality of any kind, to
the fullest extent permitted by applicable Governmental Requirements.
The joint and several obligations of the Borrowers hereunder shall
not be subject to any reduction, limitation, impairment or termination for
any reason, including, without limitation, any claim of waiver, release,
surrender, alteration or compromise, or be subject to any defense or set-
off, counterclaim, recoupment or termination whatsoever by reason of the
invalidity, illegality or unenforceability of this Note, the Obligations,
any other Loan Document or otherwise.
Capitalized terms used herein and not otherwise defined have the
meanings assigned to them in the Credit Agreement.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO
ITS CONFLICT OF LAW PRINCIPLES.
[Remainder of page intentionally left blank]
ADELPHIA CABLE PARTNERS, L.P.
By: OLYMPUS COMMUNICATIONS, L.P.,
Managing General Partner
By: ACP HOLDINGS, INC.,
Managing General Partner
By:
Name:
Title:
SOUTHEAST FLORIDA CABLE, INC.
By:
Name:
Title:
WEST BOCA ACQUISITION LIMITED
PARTNERSHIP
By: OLYMPUS COMMUNICATIONS, L.P.,
Managing General Partner
By: ACP HOLDINGS, INC.,
Managing General Partner
By:
Name:
Title:
Schedule A
manto Revolving Credit Note
LOANS, CONVERSIONS AND REPAYMENTS OF BR LOANS
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Amount of BR
Amount of Loans Unpaid
Amount Principal of Converted to Principal
Amount of BR Converted to BR Loans Eurodollar Balance of Notation
Date Loans BR Loans Repaid Loans BR Loans Made By
</TABLE>
Schedule B
to Revolving Credit Note
LOANS, CONVERSIONS AND REPAYMENTS OF EURODOLLAR LOANS
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
Amount
Converted Interest Amount of Amount of Unpaid
to or Period and Principal Eurodollar Principal
Continued Eurodoallar of Loans Balance
Amount of as Rate with Eurodollar Converted of
Eurodollar Eurodollar Respect Loans to BR Eurodollar Notation
Date Loans Loans Thereto Repaid Loans Loans Made By
</TABLE>
EXHIBIT I
NOTE PLEDGE AGREEMENT
NOTE PLEDGE AGREEMENT, dated as of May 12, 1995, made
by _______________, a ___________________ (the "Pledgor") in
favor of TORONTO DOMINION (TEXAS), INC., as Administrative Agent
(in such capacity, the "Administrative Agent") for the Lenders
from time to time parties to the Revolving Credit Agreement,
dated as of May 12, 1995, among Adelphia Cable Partners, L.P., a
Delaware limited partnership, Southeast Florida Cable, Inc., a
Florida corporation, and West Boca Acquisition Limited
Partnership, a Delaware limited partnership, as Borrowers, such
Lenders, the Agents identified therein and Toronto Dominion
(Texas), Inc., as Administrative Agent (as amended, supplemented
and otherwise modified from time to time, the "Credit
Agreement")
W I T N E S S E T H:
WHEREAS, pursuant to the Credit Agreement, the Lenders
have severally agreed to make Loans to the Borrowers upon the
terms and subject to the conditions set forth therein;
WHEREAS, a portion of the proceeds of the Loans may be
used by the Pledgor to make intercompany loans and advances to
the makers of the Pledged Notes (as hereinafter defined) in
connection with the operation of their respective businesses;
and
WHEREAS, it is a condition precedent to the obligation
of the Lenders to make their respective Loans to the Borrowers
under the Credit Agreement that the Pledgor shall have executed
and delivered this Note Pledge Agreement to the Administrative
Agent for the benefit of the Lenders and the Agents.
NOW, THEREFORE, in consideration of the premises and
to induce the Administrative Agent, the Lenders and the Agents
to enter into the Credit Agreement and to induce the Lenders to
make their respective Loans under the Credit Agreement, the
Pledgor hereby agrees with the Administrative Agent, for the
benefit of the Lenders and the Agents, as follows:
Defined Terms. Unless otherwise defined herein, terms
defined in the Credit Agreement and used herein shall have the
meanings given to them in the Credit Agreement. For purposes of
this Note Pledge Agreement, the term "Lender" shall include any
Affiliate of any Lender which has entered into an Interest Rate
Protection Agreement with any Borrower and the term "Loan
Document" shall include any Interest Rate Protection Agreement
between any Lender (including any such Affiliate of a Lender)
and any Borrower.
The following terms shall have the following
meanings:
"Agreement": this Note Pledge Agreement, as the same
may be amended, modified and otherwise supplemented from
time to time.
"Code": the Uniform Commercial Code from time to time
in effect in the State of New York.
"Collateral": the collective reference to the Pledged
Notes, the interest of the Pledgor under any and all
documents and instruments that from time to time secure or
guarantee payment of the Pledged Notes pledged by the
Pledgor pursuant to this Agreement and in any and all
collateral from time to time subject to any such documents
or instruments and all Proceeds thereof.
"Collateral Account": any account established to hold
money Proceeds, maintained under the sole dominion and
control of the Administrative Agent, subject to withdrawal
by the Administrative Agent for the account of the Lenders
and the Agents as provided in Section 7(a).
"Obligations": the Obligations (as defined in the
Credit Agreement), and all renewals, refundings,
restructurings and other refinancings thereof, including
increases in the amount thereof.
"Pledged Notes": the notes described on Schedule 1
attached hereto.
"Proceeds": all "proceeds" (as such term is defined
in Section 9-306(1) of the Code) of the Pledged Notes and,
in any event, including, without limitation, principal,
interest and other income from the Pledged Notes and all
collections thereon and any money or property realized or
collected in connection with any collateral security or
guarantee with respect to the Pledged Notes.
The words "hereof," "herein" and "hereunder" and
words of similar import when used in this Agreement shall refer
to this Agreement as a whole and not to any particular provision
of this Agreement, and section and paragraph references are to
this Agreement unless otherwise specified.
The meanings given to terms defined herein shall
be equally applicable to both the singular and plural forms of
such terms.
Pledge; Grant of Security Interest. The Pledgor
hereby delivers to the Administrative Agent, for the benefit of
the Lenders and the other Agents, the Pledged Notes and hereby
grants to the Administrative Agent, for the benefit of the
Lenders and the other Agents, a first priority security interest
in the Collateral, as collateral security for the prompt and
complete payment and performance when due (whether at the stated
maturity, by acceleration or otherwise) of the Obligations.
Endorsement; Acknowledgment and Consent; Legend.
Concurrently with the delivery of each Pledged Note to the
Administrative Agent pursuant to Section 2 of this Agreement:
such Pledged Note shall be endorsed by the
Pledgor as follows:
Pay to the order of Toronto Dominion (Texas), Inc., as
Administrative Agent
[NAME OF PLEDGOR]
[By:
General Partner](4)
By:
Name:
Title:
Dated: _________________, 19__.
The Pledgor shall execute and deliver and shall
cause the maker of each Pledged Note to execute and deliver to
the Administrative Agent an Acknowledgment and Consent,
substantially in the form of Exhibit A to this Agreement.
(4) If Pledgor is a partnership
The Pledgor shall cause each Pledged Note to bear
upon its face the following legend: "THIS PROMISSORY NOTE HAS
BEEN PLEDGED PURSUANT TO A NOTE PLEDGE AGREEMENT, DATED AS OF
MAY 12, 1995, MADE BY [NAME OF PLEDGOR], IN FAVOR OF TORONTO
DOMINION (TEXAS), INC., AS ADMINISTRATIVE AGENT, TO SECURE THE
PAYMENT OF CERTAIN OBLIGATIONS DESCRIBED THEREIN."
Payments Under the Pledged Notes. Unless an
Event of Default shall have occurred and be continuing, the
Pledgor shall be permitted to receive and retain all payments of
principal and interest under the Pledged Notes, as such payments
become due. If an Event of Default shall occur and be
continuing, and the Administrative Agent shall have given notice
to the Pledgor of the Administrative Agent's intent to exercise
its rights pursuant to Section 7 below, all payments of
principal and interest under the Pledged Notes shall be paid to
the Administrative Agent, who shall hold the same as Collateral
hereunder. If after receipt of said notice the Pledgor shall
receive any such payments, the Pledgor shall hold the same in
trust for the Administrative Agent, the Lenders and the other
Agents, segregated from other funds of the Pledgor, and deliver
the same forthwith to the Administrative Agent in the exact form
received, duly endorsed by the Pledgor to the Administrative
Agent, if required.
Subject to subsection 6(k), all Proceeds realized
by the Pledgor in connection with a default under any Pledged
Note and acceleration of the maturity thereof shall be paid to
the Administrative Agent, who shall hold such payments as
Collateral hereunder. If the Pledgor shall receive any such
payments, the Pledgor shall hold the same in trust for the
Administrative Agent, the Lenders and the other Agents,
segregated from other funds of the Pledgor, and deliver the same
forthwith to the Administrative Agent in the exact form
received, duly endorsed by the Pledgor to the Administrative
Agent, if required.
All money Proceeds received by the Administrative
Agent hereunder shall be held by the Administrative Agent for
the benefit of the Lenders and the other Agents in a Collateral
Account. All Proceeds while held by the Administrative Agent in
a Collateral Account (or by the Pledgor in trust for the
Administrative Agent, the Lenders and the other Agents) shall
continue to be held as collateral security for all the
Obligations and shall not constitute payment thereof until
applied as provided in Section 7(a).
Representations and Warranties. The Pledgor
represents and warrants that:
Upon delivery to the Administrative Agent of the
Pledged Notes, the security interest created pursuant to
this Agreement will constitute a valid, perfected first
priority security interest in the Collateral, enforceable
in accordance with its terms against all creditors of the
Pledgor and any Persons purporting to purchase any
Collateral from the Pledgor, except in each case as
enforceability may be limited by applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization,
moratorium or similar laws affecting the enforcement
creditors' rights generally, and by general equitable
principles (whether enforcement is sought by proceedings in
equity or at law).
The Pledgor is the record and beneficial owner
of, and has good and marketable title to, the Pledged Notes
, free of any and all Liens or options in favor of, or
claims of, any other Person, except the security interest
created by this Agreement.
Each Pledged Note is the legal, valid and
enforceable obligation of the maker thereof, except as
enforceability may be limited by applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization,
moratorium or similar laws or affecting creditors' rights
generally, and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).
None of the Pledged Notes is subject to any defense or any
right of counterclaim or offset whatsoever.
There exists no default under any Pledged Note.
Covenants. The Pledgor covenants and agrees with
the Administrative Agent, the Lenders and the other Agents that,
from and after the date of this Agreement until this Agreement
is terminated and the security interests created hereby are
released:
The Pledgor will not take or omit to take any
action, the taking or the omission of which would result in
an alteration or impairment of the Collateral or the
security intended to be provided by this Agreement.
The Pledgor will not enter into any agreement
amending or supplementing the Collateral.
The Pledgor will not waive or release any
obligation of any party in respect of the Collateral.
Subject to subsection 6(k), and unless directed
otherwise by the Administrative Agent, the Pledgor will
exercise promptly and diligently each and every right which
it may have under the Collateral (except the right to
release or cancel any rights in respect of the Collateral).
The Pledgor will not take or omit to take any
action or suffer or permit any action to be omitted or
taken, the taking or omission of which would result in any
defense or any right of counterclaim or offset against sums
payable under the Collateral.
The Pledgor will give the Administrative Agent
copies of all notices (including notices of default) given
or received with respect to the Collateral, promptly after
giving or receiving such notices.
The Pledgor shall maintain the security interest
created by this Agreement as a first priority, perfected
security interest and shall defend such security interest
against claims and demands of all Persons whomsoever. At
any time and from time to time, upon the written request of
the Administrative Agent, and at the sole expense of the
Pledgor, the Pledgor will promptly and duly execute and
deliver such further instruments and documents and take
such further actions as the Administrative Agent reasonably
may request for the purposes of obtaining or preserving the
full benefits of this Agreement and of the rights and
powers herein granted. If any amount payable under or in
connection with any of the Collateral shall be or become
evidenced by any promissory note or other instrument, such
note or instrument shall be immediately delivered to the
Administrative Agent, duly endorsed in a manner
satisfactory to the Administrative Agent, to be held as
Collateral under this Agreement.
The Pledgor shall pay, and save the
Administrative Agent, the Lenders and the other Agents
harmless from, any and all liabilities with respect to, or
resulting from any delay in paying, any and all stamp,
excise, sales or other taxes and any and all recording and
filing fees which may be payable or determined to be
payable with respect to any of the Collateral or in
connection with any of the transactions contemplated by
this Agreement, except for any such liabilities which
result from the gross negligence or willful misconduct of
the Administrative Agent, any Lender or any other Agent.
The Pledgor shall not assign, transfer, pledge or
otherwise encumber any of its right, title or interest
under, in or to the Collateral except for the Lien provided
by this Agreement.
The Pledgor shall not, without the prior written
consent of the Administrative Agent, sell, assign,
transfer, exchange, or otherwise dispose of, or grant any
option with respect to, the Collateral.
The Pledgor shall not, without the prior written
consent of the Administrative Agent, demand payment or
otherwise accelerate payment on the Pledged Notes.
Remedies. If an Event of Default shall have
occurred and be continuing, at any time at the Administrative
Agent's election, the Administrative Agent (i) may apply all or
any part of Proceeds held in any Collateral Account in payment
of the Obligations as provided in the Credit Agreement, and
(ii) may demand payment on any Pledged Note from the maker of
such Pledged Note.
If an Event of Default shall occur and be
continuing, the Administrative Agent, on behalf of the Lenders
and the other Agents, may exercise, in addition to all other
rights and remedies granted in this Agreement and in any other
instrument or agreement securing, evidencing or relating to the
Obligations, all rights and remedies of a secured party under
the Code. Without limiting the generality of the foregoing, the
Administrative Agent, without demand of performance or other
demand, presentment, protest, advertisement or notice of any
kind (except any notice required by law referred to below) to or
upon the Pledgor, the maker of any Pledged Note or any other
Person (all and each of which demands, defenses, advertisements
and notices are hereby waived), may in such circumstances
forthwith collect, receive, appropriate and realize upon the
Collateral, or any part thereof, and/or may forthwith sell,
assign, give option or options to purchase or otherwise dispose
of and deliver the Collateral or any part thereof (or contract
to do any of the foregoing), in one or more parcels at public or
private sale or sales, at any exchange, broker's board or office
of the Administrative Agent or any Lender or elsewhere upon such
terms and conditions as it may deem advisable and at such prices
as it may deem best, for cash or on credit or for future
delivery without assumption of any credit risk. The
Administrative Agent, any Lender, or any other Agent shall have
the right upon any such public sale or sales, and, to the extent
permitted by law, upon any such private sale or sales, to
purchase the whole or any part of the Collateral so sold, free
of any right or equity of redemption in the Pledgor, which right
or equity is hereby waived or released. The Administrative
Agent shall apply any Proceeds from time to time held by it and
the net proceeds of any such collection, recovery, receipt,
appropriation, realization or sale, after deducting all
reasonable costs and expenses of every kind incurred in respect
thereof or incidental to the care or safekeeping of any of the
Collateral or in any way relating to the Collateral or the
rights of the Administrative Agent, the Lenders and the other
Agents hereunder, including, without limitation, reasonable
attorneys' fees and disbursements of counsel, to the payment in
whole or in part of the Obligations as provided in the Credit
Agreement, and only after such application and after the payment
by the Administrative Agent of any other amount required by any
provision of law, including, without limitation, Section 9-
504(1)(c) of the Code, need the Administrative Agent account for
the surplus, if any, to the Pledgor. To the extent permitted by
applicable law, the Pledgor waives all claims, damages and
demands it may acquire against the Administrative Agent, any
Lender or any other Agent arising out of the exercise by them of
any rights hereunder. If any notice of a proposed sale or other
disposition of Collateral shall be required by law, such notice
shall be deemed reasonable and proper if given at least 20
days before such sale or other disposition. The Pledgor shall
remain liable for any deficiency if the proceeds of any sale or
other disposition of Collateral are insufficient to pay the
Obligations and the fees and disbursements of any attorneys
employed by the Administrative Agent, any Lender or any other
Agent to collect such deficiency.
Administrative Agent's Appointment as Attorney-
in-Fact. The Pledgor hereby irrevocably constitutes and
appoints the Administrative Agent and any officer or agent of
the Administrative Agent, with full power of substitution, as
its true and lawful attorney-in-fact with full irrevocable power
and authority in the place and stead of the Pledgor and in the
name of the Pledgor, or in the Administrative Agent's own name,
from time to time in the Administrative Agent's discretion, for
the purpose of carrying out the terms of this Agreement, to take
any and all appropriate action and to execute any and all
documents and instruments which may be necessary or desirable to
accomplish the purposes of this Agreement, including, without
limitation, any financing statements, endorsements, assignments
or other instruments of transfer.
The Pledgor hereby ratifies all that said
attorneys shall lawfully do or cause to be done pursuant to the
power of attorney granted in Section 8(a) and not in
contravention of the terms hereof.
All powers, authorizations and agencies contained
in this Agreement are coupled with an interest and are
irrevocable until this Agreement is terminated and the security
interests created hereby are released.
Duty of Administrative Agent. The Administrative
Agent's sole duty with respect to the custody, safekeeping and
physical preservation of the Collateral in its possession, under
Section 9-207 of the Code or otherwise, shall be to deal with it
in the same manner as the Administrative Agent deals with
similar securities and property for its own account, except that
the Administrative Agent shall have no obligation to invest
funds held in any Collateral Account and may hold the same as
demand deposits. Neither the Administrative Agent, any Lender,
any other Agent nor any of their respective directors, officers,
employees or agents shall be liable for failure to demand,
collect or realize upon any of the Collateral or for any delay
in doing so or shall be under any obligation to sell or
otherwise dispose of any Collateral upon the request of the
Pledgor or any other Person or to take any other action
whatsoever with regard to the Collateral or any part thereof.
Execution of Financing Statements. Pursuant to
Section 9-402 of the Code, the Pledgor authorizes the
Administrative Agent to file financing statements with respect
to the Collateral without the signature of the Pledgor in such
form and in such filing offices as the Administrative Agent
reasonably determines appropriate to perfect the security
interests of the Administrative Agent under this Agreement. A
carbon, photographic or other reproduction of this Agreement
shall be sufficient as a financing statement for filing in any
jurisdiction.
Authority of Administrative Agent. The Pledgor
acknowledges that the rights and responsibilities of the
Administrative Agent under this Agreement with respect to any
action taken by the Administrative Agent or the exercise or non-
exercise by the Administrative Agent of any option, voting
right, request, judgment or other right or remedy provided for
herein or resulting or arising out of this Agreement shall, as
between the Administrative Agent and the Lenders and the other
Agents, be governed by the Credit Agreement and by such other
agreements with respect thereto as may exist from time to time
among them, but, as between the Administrative Agent and the
Pledgor, the Administrative Agent shall be conclusively presumed
to be acting as agent for the Lenders and the other Agents with
full and valid authority so to act or refrain from acting, and
neither the Pledgor nor any maker of any Pledged Note shall be
under any obligation, or entitlement, to make any inquiry
respecting such authority.
Notices. All notices, requests and demands under
this Agreement shall be given or made in accordance with
subsection 9.2 of the Credit Agreement.
Return of Documents; Cooperation. When this
Agreement is terminated and the security interests created
hereby are released, the Administrative Agent shall (1) return
to the Pledgor the Pledged Notes, (2) execute and deliver to the
Pledgor such documents of assignment as are reasonably necessary
to terminate the Administrative Agent's security interest in the
Collateral and to advise the makers of the Pledged Notes of the
termination of the Administrative Agent's rights and security
interest hereunder and (3) return to the Pledgor the documents
delivered to the Administrative Agent as provided in subsection
3(b).
Upon the occurrence of a default or event of
default under any Pledged Note, the Administrative Agent shall
cooperate reasonably with the Pledgor, at the expense of the
Pledgor, in the exercise of the Pledgor's rights and remedies
under such Pledged Note and any document or instrument securing
or supporting the same.
Severability. Any provision of this Agreement
which is prohibited or unenforceable in any jurisdiction shall,
as to such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
Amendments in Writing; No Waiver; Cumulative
Remedies. None of the terms or provisions of this Agreement
may be waived, amended, supplemented or otherwise modified
except by a written instrument executed by the Pledgor and the
Administrative Agent, provided that any provision of this
Agreement may be waived by the Administrative Agent in a letter
or agreement executed by the Administrative Agent or by telex or
facsimile transmission from the Administrative Agent.
Neither the Administrative Agent, any Lender nor
any other Agent shall by any act (except by a written instrument
pursuant to Section 15(a) hereof), delay, indulgence, omission
or otherwise be deemed to have waived any right or remedy
hereunder or to have acquiesced in any Default or Event of
Default or in any breach of any of the terms and conditions
hereof. No failure to exercise, nor any delay in exercising, on
the part of the Administrative Agent, any Lender, or any other
Agent, any right, power or privilege hereunder shall operate as
a waiver thereof. No single or partial exercise of any right,
power or privilege hereunder shall preclude any other or further
exercise thereof or the exercise of any other right, power or
privilege. A waiver by the Administrative Agent, any Lender or
any other Agent of any right or remedy hereunder on any one
occasion shall not be construed as a bar to any right or remedy
which the Administrative Agent, such Lender or such other Agent
would otherwise have on any future occasion.
The rights and remedies herein provided are
cumulative, may be exercised singly or concurrently and are not
exclusive of any other rights or remedies provided by law.
Section Headings. The section headings used in
this Agreement are for convenience of reference only and are not
to affect the construction hereof or be taken into consideration
in the interpretation hereof.
Successors and Assigns. This Agreement shall be
binding upon the successors and assigns of the Pledgor and shall
inure to the benefit of the Administrative Agent, the Lenders
and the other Agents and their successors and assigns, provided
that the Pledgor may not assign any of its rights or obligations
under this Agreement without the prior written consent of the
Administrative Agent.
GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED
BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF
THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ITS CONFLICT OF
LAW PRINCIPLES.
Submission To Jurisdiction; Waivers. The Pledgor
hereby irrevocably and unconditionally:
submits for itself and its property in any legal
action or proceeding relating to this Agreement and the other
Loan Documents to which it is a party, or for recognition and
enforcement of any judgement in respect thereof, to the non-
exclusive general jurisdiction of the Courts of the State of New
York, the courts of the United States of America for the
Southern District of New York, and appellate courts from any
thereof;
consents that any such action or proceeding may
be brought in such courts and waives any objection that it may
now or hereafter have to the venue of any such action or
proceeding in any such court or that such action or proceeding
was brought in an inconvenient court and agrees not to plead or
claim the same;
agrees that service of process in any such action
or proceeding may be effected by mailing a copy thereof by
registered or certified mail (or any substantially similar form
of mail), postage prepaid, to the Pledgor at its address set
forth in subsection 9.2 of the Credit Agreement or at such other
address of which the Administrative Agent shall have been
notified pursuant thereto;
agrees that nothing herein shall affect the right
to effect service of process in any other manner permitted by
law or shall limit the right to sue in any other jurisdiction;
and
waives, to the maximum extent not prohibited by
law, any right it may have to claim or recover in any legal
action or proceeding referred to in this subsection any special,
exemplary or punitive damages.
WAIVER OF JURY TRIAL. THE PLEDGOR HEREBY
KNOWINGLY AND INTENTIONALLY, IRREVOCABLY AND UNCONDITIONALLY,
WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING
TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY
COUNTERCLAIM THEREIN.
Counterparts. This Agreement may be executed by
the Pledgor on any number of separate counterparts (including by
telecopy transmission), and all of said counterparts taken
together shall be deemed to constitute one and the same
instrument.
Integration. This Agreement and the other Loan
Documents represent the final agreement of the parties hereto
and thereto, respectively, with respect to the subject matter
hereof, and there are no promises, undertakings, representations
or warranties by any Agent or any Lender relative to the subject
matter hereof not expressly set forth or referred to herein or
in the other Loan Documents.
[Remainder of page intentionally left blank]
IN WITNESS WHEREOF, the undersigned has caused this
Note Pledge Agreement to be duly executed and delivered as of
the date first above written.
[NAME OF PLEDGOR]
[By: ,
Managing General Partner](5)
By:
Name:
Title:
(5) If Pledgor is a Partnership
SCHEDULE 1
to Note Pledge Agreement
THE PLEDGED NOTES
Description of Collateral Stated
Pledged Notes Security Guarantees Principal Amount
EXHIBIT A
TO NOTE PLEDGE AGREEMENT
________________, 199__
TO: [Maker of Pledged Note]
Reference is hereby made to the Promissory Note dated
________________, 19__ (the "Note"), made by you to the order of
________________________________ (the "Pledgor") in the original
principal amount of $_______________. By a Note Pledge
Agreement, dated as of May 12, 1995 (the "Pledge Agreement";
unless otherwise defined herein, terms defined in the Pledge
Agreement are used herein as defined therein), the Pledgor has
pledged the Note to Toronto Dominion (Texas), Inc., as
Administrative Agent (in such capacity, the "Administrative
Agent") for the Lenders from time to time parties to the Credit
Agreement referred to in the Pledge Agreement, to secure payment
and performance of the Obligations.
You are hereby irrevocably directed, upon receipt of
notice from the Administrative Agent that an Event of Default
has occurred and is continuing under the Credit Agreement, to
make any and all payments becoming due under the Note directly
to the Administrative Agent, without set-off or counterclaim, as
provided in the Note at the Administrative Agent's office
located at 909 Fannin, Suite 1700, Houston, Texas 77010.
The instructions contained herein are irrevocable and
may not be amended, revoked or otherwise modified without the
prior written consent of the Administrative Agent.
[NAME OF PLEDGOR] TORONTO DOMINION (TEXAS), INC.
[By: ,
Managing General Partner](6)
By: By:
Name: Name:
Title: Title:
(6) If Pledgor is a partnership
ACKNOWLEDGMENT AND CONSENT
The undersigned hereby acknowledges receipt of a copy
of the Pledge Agreement described in the foregoing letter and
agrees for the benefit of the Administrative Agent, the Lenders
and the other Agents to be bound by the terms of the Pledge
Agreement and to comply with the terms of the foregoing letter.
To the best knowledge of the undersigned, no representation or
warranty of the Pledgor in the Pledge Agreement is incomplete or
incorrect. The undersigned agrees to notify the Administrative
Agent promptly in writing upon knowing or having reason to know
of the occurrence of any of the covenant defaults in Section 6
of the Pledge Agreement.
[NAME OF MAKER]
By:
Name:
Title:
EXHIBIT J
PARENT ASSIGNMENT OF PARTNERSHIP INTERESTS
PARENT ASSIGNMENT OF PARTNERSHIP INTERESTS, dated as
of May 12, 1995, made by ________________________, a
________________ (the "Pledgor"), in favor of TORONTO DOMINION
(TEXAS), INC., as Administrative Agent (in such capacity, the
"Administrative Agent") for the Lenders from time to time
parties to the Revolving Credit Agreement dated as of May 12,
1995, among Adelphia Cable Partners, L.P., a Delaware limited
partnership, Southeast Florida Cable, Inc., a Florida
corporation, and West Boca Acquisition Limited Partnership, a
Delaware limited partnership, as Borrowers, such Lenders, the
Agents identified therein and Toronto Dominion (Texas), Inc., as
Administrative Agent (as amended, supplemented and otherwise
modified from time to time, the "Credit Agreement").
W I T N E S S E T H
WHEREAS, pursuant to the Credit Agreement, the Lenders
have severally agreed to make Loans to the Borrowers upon the
terms and subject to the conditions set forth therein;
WHEREAS, the Pledgor owns the Capital Securities (as
defined in the Credit Agreement) of [name of relevant
Borrower(s)] described on Schedule 1 hereto; and
WHEREAS, it is a condition precedent to the
effectiveness of the Credit Agreement and the obligations of the
Lenders to make their respective Loans to the Borrowers under
the Credit Agreement that the Pledgor shall have executed and
delivered this Parent Assignment of Partnership Interests to the
Administrative Agent for the benefit of the Lenders and the
Agents;
NOW, THEREFORE, in consideration of the premises and
for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the Pledgor hereby
agrees with the Administrative Agent, for the benefit of the
Lenders and the Agents, as follows:
Defined Terms. Unless otherwise defined herein, terms
which are defined in the Credit Agreement and used herein are so
used as so defined. For purposes of this Agreement, the term
"Lender" shall include any Affiliate of any Lender which has
entered into an Interest Rate Protection Agreement with any
Borrower and the term "Loan Documents" shall include any
Interest Rate Protection Agreement between any Lender (including
any such Affiliate of a Lender) and any Borrower.
The following terms defined in Article 9 of the
Uniform Commercial Code as from time to time in effect in the
State of New York are used herein as so defined: Accounts,
Proceeds, Instrument and Chattel Paper; and the following terms
have the following meanings:
"Agreement": this Parent Assignment of Partnership
Interests, as the same may be amended, supplemented and
otherwise modified from time to time.
"Code": the Uniform Commercial Code as from time to
time in effect in the State of New York.
"Collateral Account": any account established to hold
money Proceeds, maintained under the sole dominion and
control of the Administrative Agent, subject to withdrawal
by the Administrative Agent for the account of the Lenders
and the Agents as provided herein.
"General Intangibles": as defined in Section 9-106 of
the Code and shall include, without limitation, the
partnership interests listed on Schedule 1 to this
Agreement and all rights of the Pledgor to receive,
directly or indirectly, moneys or any other rights or
benefits therefrom.
Obligations : the Obligations (as defined in the
Credit Agreement), and all renewals, refundings,
restructurings and other refinancings thereof, including
increases in the amount thereof.
"Partnership Agreement": the [Limited] Partnership
Agreement of _____________, dated as of ________________,
19__, between the Pledgor and __________________, as the
same may be amended, supplemented and otherwise modified
from time to time.(7)
"Partnership Interests": as defined in Section 2 of
this Agreement.
(7) If more than one partnership agrrement is involved, define
each such partnership agrrement separely in this subsection and
replace this definition with the following: "Partnership
Agreements": the collective
reference to [names of partnership agreements]
"Partnership": [name of Partnership].
"Pledged Collateral": as defined in Section 2 of this
Agreement.
The words "hereof," "herein" and "hereunder" and
words of similar import when used in this Agreement shall refer
to this Agreement as a whole and not to any particular provision
of this Agreement, and section and paragraph references are to
this Agreement unless otherwise specified.
The meaning given to terms defined herein shall
be equally applicable to both the singular nd plural forms of
such terms.
Grant of Security Interest; Non-Recourse. As
collateral security for the prompt and complete payment and
performance when due (whether at the stated maturity, by
acceleration or otherwise) of the Obligations, now existing or
hereafter arising, the Pledgor hereby pledges, assigns and
transfers to the Administrative Agent for the benefit of the
Lenders and the Agents, and grants to the Administrative Agent
for the benefit of the Lenders and the Agents, a continuing
first priority security interest in, any and all of the
following property now owned or at any time hereafter acquired
by the Pledgor, or in which the Pledgor may acquire any right,
title or interest (collectively, the "Pledged Collateral"):
any and all of its partnership interests in the
Partnership[s] as set forth in Schedule 1 attached hereto,
including, without limitation, all its rights, title and
interest to participate in the operation or management of
the Partnership[s] and all its rights to properties,
assets, partnership interests and distributions, including,
without limitation, distributions of profits, surplus or
any other compensation by way of income or liquidating
distributions, in cash or in kind, under the Partnership
Agreement[s] in respect of such partnership interests
(collectively, the "Partnership Interests");
all Accounts and other rights to payment and
distributions of any kind arising out of [the][any]
Partnership Agreement in respect of the Pledgor's
Partnership Interests;
all General Intangibles arising out of or
constituted by the Partnership Agreement[s] in respect of
the Pledgor's Partnership Interests; and
to the extent not otherwise included, all
Proceeds of any and all of the foregoing.
This Agreement shall create a continuing security
interest in the Pledged Collateral which shall remain in effect
until all the Obligations, now existing or hereafter arising,
shall have been paid in full, the Commitments shall have been
terminated and the Credit Agreement and the Security Documents
shall no longer be in effect.
The Pledgor shall have no personal liability for
payment of the Obligations, and in any action or suit to collect
the Obligations the Administrative Agent and the Lenders shall
not seek any in personam judgment against the Pledgor or any
judgment for a deficiency but shall look solely to the security
interests granted hereunder in the collateral described herein
for payment of the Obligations. Nothing contained in this
Section shall be construed to impair the validity of the
Obligations or this Agreement or affect or impair in any way the
right of the Administrative Agent and the Lenders to exercise
their rights and remedies under the Credit Agreement, any Notes
and any other Loan Documents in accordance with their terms.
Without limiting the generality of the foregoing and
notwithstanding any other provision of this Agreement, recourse
under this Agreement on the rights of the Agents and the Lenders
provided in this Agreement shall be limited to the Pledged
Collateral and there shall not be any recourse to any other
assets of the Pledgor.
Rights of Administrative Agent; Limitations on
Administrative Agent's Obligations.
Pledgor Remains Liable. Anything herein to the
contrary notwithstanding, the Pledgor shall remain liable under
the Partnership Agreement[s] to observe and perform all the
conditions and obligations to be observed and performed by it
thereunder, all in accordance with and pursuant to the terms and
provisions thereof. The Administrative Agent shall not have any
obligation or liability by reason of or arising out of this
Agreement or the receipt by the Administrative Agent of any
payment relating to any Pledged Collateral pursuant hereto, nor
shall the Administrative Agent be obligated in any manner to
perform any of the obligations of the Pledgor under or pursuant
to [any][the] Partnership Agreement or any Account or General
Intangible related thereto, to make any payment, to make any
inquiry as to the nature or the sufficiency of any payment
received by it or as to the sufficiency of any performance by
any party under any thereof, to present or file any claim, to
take any action to enforce any performance or to collect the
payment of any amounts which may have been assigned to it or to
which it may be entitled at any time or times.
Proceeds. The Administrative Agent hereby
authorizes the Pledgor, until the occurrence of an Event of
Default and until such Event of Default shall be waived in
writing or cured, (i) to collect the Accounts and payments and
distributions in respect of the Pledgor's Partnership Interests
and (ii) to retain the Proceeds of such Accounts and other
payments and distributions. From and after the occurrence of an
Event of Default and during the continuance thereof, the
Administrative Agent shall have the right, but not the
obligation, to collect and retain the Accounts and other
payments and distributions of any kind in respect of the
Pledgor's Partnership Interests, as provided in Section 6. If
required by the Administrative Agent at any time after the
occurrence and during the continuance of an Event of Default,
the Accounts and other rights to payment and distributions of
any kind in respect of the Pledgor's Partnership Interests and
any Proceeds of such Accounts and other rights to payment and
distributions, when and if collected by the Pledgor, shall be
forthwith deposited by the Pledgor in the exact form received,
duly endorsed by the Pledgor to the Administrative Agent if
required, in a Collateral Account and, until so turned over,
shall be held by the Pledgor in trust for the Administrative
Agent, for the benefit of the Lenders and the Agents, segregated
from other funds of the Pledgor.
Representations and Warranties. The Pledgor
hereby represents and warrants that:
Title; No Other Liens. Except for the Lien
granted to the Administrative Agent pursuant to this
Agreement and Permitted Liens, the Pledgor owns each item
of the Pledged Collateral free and clear of any and all
Liens or claims of others. No security agreement or
financing statement with respect to all or any part of the
Pledged Collateral is on file or of record in any public
office, except such as may have been filed in favor of the
Administrative Agent pursuant to this Agreement or the
other Security Documents.
Perfected First Priority Liens. Upon giving of
appropriate notices pursuant to Article 8 of the Code in
the form of Exhibits A and B to this Agreement with respect
to each Partnership Interest and upon the filing of UCC-1
financing statements required to perfect the security
interest granted hereunder in Accounts and other rights to
payment and distributions of any kind and General
Intangibles arising out of the Partnership Agreement[s] in
respect of the Pledgor's Partnership Interests under the
Uniform Commercial Code in effect in each relevant
jurisdiction, the Liens granted pursuant to this Agreement
shall constitute perfected first priority Liens on the
Pledged Collateral in favor of the Administrative Agent and
shall be enforceable as such against all creditors of and
purchasers from the Pledgor, except as enforceability may
be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally, and by general
equitable principles (whether enforcement is sought by
proceedings in equity or at law).
Chief Executive Office. The Pledgor's chief
executive office and principal place of business, and the
place where the Pledgor keeps its books and records, is
located at 5 West Third Street, Coudersport,
Pennsylvania 16915.
Covenants. The Pledgor covenants and agrees with
the Administrative Agent that until the Obligations are paid in
full and the Commitments are terminated:
Further Documentation; Pledge of Instruments. At
any time and from time to time, upon the written request of
the Administrative Agent, and at the sole expense of the
Pledgor, the Pledgor will promptly and duly execute and
deliver such further instruments and documents and take
such further action as the Administrative Agent may
reasonably request for the purpose of obtaining or
preserving the full benefits of this Agreement and of the
rights and powers herein granted, including, without
limitation, the filing of any financing or continuation
statements under the Uniform Commercial Code in effect in
any jurisdiction with respect to the Liens created hereby.
The Pledgor also hereby authorizes the Administrative Agent
to file any such financing or continuation statement
without the signature of the Pledgor to the extent
permitted by applicable law. The Pledgor and the
Administrative Agent agree that a carbon, photographic or
other reproduction of this Agreement or a financing
statement is sufficient as a financing statement. If any
amount payable under or in connection with any of the
Pledged Collateral shall be or become evidenced by any
promissory note, other Instrument or Chattel Paper, such
note, Instrument or Chattel Paper shall be immediately
delivered to the Administrative Agent after the occurrence
and during the continuance of an Event of Default, duly
endorsed in a manner satisfactory to the Administrative
Agent, to be held as Pledged Collateral pursuant to this
Agreement.
Indemnification. The Pledgor will pay, and save
the Administrative Agent, each Lender and each of the other
Agents harmless from, any and all liabilities, reasonable
costs and expenses (including, without limitation, legal
fees and expenses) (i) with respect to, or resulting from,
any delay in paying, any and all excise, sales or other
taxes which may be payable or determined to be payable with
respect to any of the Pledged Collateral, (ii) with respect
to, or resulting from, any delay in complying with any
Governmental Requirement applicable to any of the Pledged
Collateral or (iii) in connection with the grant and
perfection of the security interest contemplated by this
Agreement, except for any such liabilities which result
from the gross negligence or willful misconduct of the
Administrative Agent, such Lender or such other Agent, as
the case may be.
Maintenance of Records. The Pledgor will keep
and maintain at its own cost and expense satisfactory and
complete records of the Pledged Collateral, including,
without limitation, a record of all payments received and
all credits granted.
Limitation on Liens on Pledged Collateral. The
Pledgor will not create, incur or permit to exist, will
defend the Pledged collateral against, and will take such
other action as is necessary to remove, any Lien or claim
on or to the Pledged Collateral, other than the Liens
created hereby and Permitted Liens, and will defend the
right, title and interest of the Administrative Agent in
and to any of the Pledged Collateral against the claims and
demands of all Persons whomsoever.
Further Identification of Pledged Collateral.
The Pledgor will furnish to the Administrative Agent from
time to time statements and schedules further identifying
and describing the Pledged Collateral and such other
reports in connection with the Pledged Collateral as the
Administrative Agent may reasonably request, all in
reasonable detail.
Changes in Locations, Name, etc. The Pledgor
will not, unless it shall give 30 days' written notice to
such effect to the Administrative Agent and any filings
required under the Uniform Commercial Code in effect in any
affected jurisdictions to maintain the perfected security
interest granted pursuant to this Agreement shall have been
made, (i) change the location of its chief executive office
or principal place of business from that specified in
Section 4(c) or remove its books and records from such
location or (ii) change its name, identity or structure to
such an extent that any financing statement filed by the
Administrative Agent in connection with this Agreement
would become seriously misleading.
Administrative Agent's Appointment as Attorney-
in-Fact.
Powers. The Pledgor hereby irrevocably
constitutes and appoints the Administrative Agent and any
officer or agent thereof, to the extent permitted under
applicable law, with full power of substitution, as its true and
lawful attorney-in-fact with full irrevocable power and
authority in the place and stead of the Pledgor and in the name
of the Pledgor or in its own name, from time to time in the
Administrative Agent's discretion, for the purpose of carrying
out the terms of this Agreement, to take any and all appropriate
action and to execute any and all documents and instruments
which may be necessary or desirable to accomplish the purposes
of this Agreement, and, without limiting the generality of the
foregoing, the Pledgor hereby gives the Administrative Agent the
power and right, on behalf of the Pledgor, without notice to or
assent by the Pledgor, to do the following:
upon the occurrence and during the continuance of
an Event of Default, to exercise all partnership rights,
powers and privileges with respect to the Partnership
Interests to the same extent as a partner under the
Partnership Agreement[s];
upon the occurrence and during the continuance of
an Event of Default, in the name of the Pledgor or its own
name, or otherwise, to take possession of and endorse and
collect any checks, drafts, notes, acceptances or other
instruments for the payment of moneys due under (i) any
Account, Instrument or General Intangible owing to the
Pledgor as a partner under [the][any] Partnership Agreement
or (ii) for the payment of any other moneys due to the
Pledgor as a partner under [the][any] Partnership Agreement
and to file any claim or to take any other action or
proceeding in any court of law or equity or otherwise
deemed appropriate by the Administrative Agent for the
purpose of collecting any and all such moneys due under any
Account, Instrument, General Intangible or such Partnership
Agreement whenever payable;
to pay or discharge taxes and Liens levied or
placed on the Pledged Collateral; and
upon the occurrence and during the continuance of
an Event of Default, (a) to direct any party liable for any
payment under any of the Pledged Collateral to make payment
of any and all moneys due or to become due thereunder
directly to the Administrative Agent or as the
Administrative Agent shall direct; (b) to ask for or
demand, collect, receive payment of and receipt for, any
and all moneys, claims and other amounts due or to become
due at any time in respect of or arising out of the Pledged
Collateral; (c) to sign and endorse any invoices, freight
or express bills, bills of lading, storage or warehouse
receipts, drafts against debtors, assignments,
verifications, notices and other documents in connection
with any of the Pledged Collateral; (d) to commence and
prosecute any suits, actions or proceedings at law or in
equity in any court of competent jurisdiction to collect
the Pledged Collateral or any part thereof and to enforce
any other right in respect of the Pledged Collateral; (e)
to defend any suit, action or proceeding brought against
the Pledgor with respect to the Pledged Collateral; (f) to
settle, compromise or adjust any suit, action or proceeding
described in clause (e) above and, in connection therewith,
to give such discharges or releases as the Administrative
Agent may deem appropriate; and (g) generally, to sell,
transfer, pledge and make any agreement with respect to or
otherwise deal with any of the Pledged Collateral as fully
and completely as though the Administrative Agent were the
absolute owner thereof for all purposes, and to do, at the
Administrative Agent's option and the Pledgor's expense, at
any time, or from time to time, all acts and things which
the Administrative Agent deems necessary to protect,
preserve or realize upon the Pledged Collateral and the
Administrative Agent's Liens thereon and to effect the
intent of this Agreement, all as fully and effectively as
the Pledgor might do.
The Pledgor hereby ratifies all that said attorneys shall
lawfully do or cause to be done by virtue hereof and not in
contravention of the terms hereof. This power of attorney is a
power coupled with an interest and shall be irrevocable.
Other Powers. The Pledgor also authorizes the
Administrative Agent, at any time and from time to time, to
execute, in connection with the sale provided for in Section 8
hereof, any endorsements, assignments or other instruments of
conveyance or transfer with respect to the Pledged Collateral.
No Duty on Administrative Agent's Part. The
powers conferred on the Administrative Agent hereunder are
solely to protect the Administrative Agent's interests in the
Pledged Collateral and shall not impose any duty upon it to
exercise any such powers. The Administrative Agent shall be
accountable only for amounts that it actually receives as a
result of the exercise of such powers, and neither it nor any of
its officers, directors, employees or agents shall be
responsible to the Pledgor for any act or failure to act
hereunder, except for its or their gross negligence or willful
misconduct.
Performance by Administrative Agent of Pledgor's
Obligations; Rights of Pledgor Prior to Event of Default. If
the Pledgor fails to perform or comply with any of its
agreements contained herein and the Administrative Agent, as
provided for by the terms of this Agreement, shall itself
perform or comply, or otherwise cause performance or compliance,
with such agreement, the reasonable expenses of the
Administrative Agent incurred in connection with such
performance or compliance, together with interest thereon at the
Default Rate, shall be payable by the Pledgor to the
Administrative Agent on demand and shall constitute Obligations
secured hereby.
Unless an Event of Default shall have occurred
and be continuing, the Pledgor shall be entitled to receive all
distributions made pursuant to the Partnership Agreement[s] and
exercise all voting rights and take all action it is authorized
to take thereunder, provided that no distribution shall be made
which is prohibited by the Credit Agreement, the [relevant]
Partnership Agreement or any of the other documents executed in
connection with the transactions contemplated hereby; and,
provided further, that no vote or other action taken shall
impair any of the Pledged Collateral provided to the
Administrative Agent pursuant to this Agreement.
Remedies; Rights Upon Default. If an Event of
Default shall occur and be continuing, the Administrative Agent
may exercise in addition to all other rights and remedies
granted to it in this Agreement and in any other instrument or
agreement securing, evidencing or relating to the Obligations,
all rights and remedies of a secured party under the Code.
Without limiting the generality of the foregoing, the
Administrative Agent, without demand of performance or other
demand, presentment, protest, advertisement or notice of any
kind (except the notice specified below of time and place of
public or private sale) to or upon the Pledgor or any other
Person (all and each of which demands, presentment, protest,
advertisements and notices are hereby waived), may in such
circumstances forthwith collect, receive, appropriate and
realize upon the Pledged Collateral, or any part thereof, and/or
may forthwith sell, lease, assign, give option or options to
purchase, or otherwise dispose of and deliver said Pledged
Collateral or any part thereof (or contract to do any of the
foregoing), in one or more parcels at public or private sale or
sales, at any exchange, broker's board or office of the
Administrative Agent or elsewhere upon such terms and conditions
as it may deem advisable and at such prices as it may deem best,
for cash or on credit or for future delivery without assumption
of any credit risk. The Administrative Agent, any Lender and
any other Agent shall have the right upon any such public sale
or sales, and, to the extent permitted by law, upon any such
private sale or sales, to purchase the whole or any part of said
Pledged Collateral so sold, free of any right or equity of
redemption in the Pledgor, which right or equity of redemption
is hereby waived or released. The Pledgor further agrees, at
the Administrative Agent's request, to assemble the Pledged
Collateral and make it available to the Administrative Agent at
places which the Administrative Agent shall reasonably select,
whether at the Pledgor's premises or elsewhere. The
Administrative Agent shall apply the net proceeds of any such
collection, recovery, receipt, appropriation, realization or
sale, after deducting all reasonable costs and expenses of every
kind incurred therein or incidental to the care or safekeeping
of any of the Pledged Collateral or in any way relating to the
Pledged Collateral or the rights of the Administrative Agent
hereunder, including, without limitation, reasonable attorneys'
fees and disbursements, to the payment in whole or in part of
the Obligations as provided in the Credit Agreement, and only
after such application and payment in full of the Obligations
and after the payment by the Administrative Agent of any other
amount required by any provision of law, including, without
limitation, Section 9-504(1)(c) of the Code, need the
Administrative Agent account for the surplus, if any, to the
Pledgor. To the extent permitted by applicable law, the Pledgor
waives all claims, damages, and demands against the
Administrative Agent arising out of the repossession, retention
or sale of the Pledged Collateral. If any notice of a proposed
sale or disposition of Pledged Collateral shall be required by
law, such notice shall be deemed reasonably and properly given
if given (effective upon dispatch) in any manner provided in the
Credit Agreement at least 20 days before such sale or
disposition.
If an Event of Default shall occur and be
continuing, the Administrative Agent may (but need not), upon
notice to the Pledgor, exercise all voting and other rights of
the Pledgor as a limited or general partner, as the case may be,
of the Partnerships and exercise all other rights as a limited
or general partner, as the case may be, provided under the
Partnership Agreement[s] in respect of the Partnership Interests
and the Administrative Agent shall receive all permitted
distributions, if any, made for the account of the Pledgor as a
limited or general partner, as the case may be, under the
Partnership Agreement[s].
Limitation on Administrative Agent's Duties in
Respect of Pledged Collateral. The Administrative Agent's sole
duty with respect to the custody, safekeeping and physical
preservation of any Pledged Collateral in its possession, under
Section 9-207 of the Code or otherwise, shall be to deal with it
in the same manner as the Administrative Agent deals with
similar property for its own account. Neither the
Administrative Agent nor any of its directors, officers,
employees or agents shall be liable for failure to demand,
collect or realize upon all or any part of the Pledged
Collateral or for any delay in doing so or shall be under any
obligation to sell or otherwise dispose of any Pledged
Collateral upon the request of the Pledgor or otherwise.
Powers Coupled with an Interest. All
authorizations and agencies herein contained with respect to the
Pledged Collateral are irrevocable and powers coupled with an
interest.
Notices. All notices, requests and demands to or
upon the Administrative Agent, any Lender or the Pledgor to be
effective shall be in writing (including by facsimile or
telecopy transmission) and shall be deemed to have been duly
given or made (i) when delivered by hand or (ii) three days
after being deposited in the mail, postage prepaid or (3) one
Business Day after being sent by priority overnight mail with a
nationally recognized overnight delivery carrier or (4) if by
telecopy or facsimile, when received:
if to the Administrative Agent or any Lender, at
its address or transmission number for notices provided in
subsection 9.2 of the Credit Agreement;
if to any Agent other than the Administrative
Agent or any Lender, at its address or transmission number
for notices provided in Annex A to the Credit Agreement, as
supplemented from time to time in connection with
assignments pursuant to subsection 9.6 of the Credit
Agreement; and
if to the Pledgor, at its address or transmission
number for notices set forth under its signature below.
The Administrative Agent, each Lender and the Pledgor
may change its address and transmission numbers for notices by
notice in the manner provided in this Section.
Severability. Any provision of this Agreement
which is prohibited or unenforceable in any jurisdiction shall,
as to such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
No Waiver; Cumulative Remedies. The
Administrative Agent shall not by any act (except pursuant to
the execution of a written instrument pursuant to Section 14
hereof), delay, indulgence, omission or otherwise be deemed to
have waived any right or remedy hereunder or to have acquiesced
in any Default or Event of Default or in any breach of any of
the terms and conditions hereof. No failure to exercise, nor
any delay in exercising, on the part of the Administrative
Agent, any Lender or any other Agent, any right, power or
privilege hereunder shall operate as a waiver thereof. No
single or partial exercise of any right, power or privilege
hereunder shall preclude any other or further exercise thereof
or the exercise of any other right, power or privilege. A
waiver by the Administrative Agent, any Lender or any other
Agent of any right or remedy hereunder on any one occasion shall
not be construed as a bar to any right or remedy which the
Administrative Agent, any Lender or any other Agent would
otherwise have on any future occasion. The rights and remedies
herein provided are cumulative, may be exercised singly or
concurrently and are not exclusive of any rights or remedies
provided by law.
Waivers and Amendments; Successors and Assigns.
None of the terms, or provisions of this Agreement may be
waived, amended, supplemented or otherwise modified except by a
written instrument executed by the Pledgor and the
Administrative Agent; provided that any provision of this
Agreement may be waived by the Administrative Agent in a letter
or agreement executed by the Administrative Agent or by
facsimile or telecopy transmission from the Administrative
Agent. This Agreement shall be binding upon the successors and
assigns of the Pledgor and shall inure to the benefit of the
Administrative Agent, for the benefit of the Lenders and the
Agents, and the successors and assigns of the Administrative
Agent, the Lenders and the other Agents, provided that the
Pledgor may not assign its rights or obligations under this
Agreement without the prior written consent of the
Administrative Agent and any such purported assignment shall be
null and void.
FCC Approval. Notwithstanding anything to the
contrary contained herein or in the other Loan Documents, the
Administrative Agent will not take any action (including the
exercise of voting rights by the Administrative Agent with
respect to the Partnership Interests) pursuant to this
Agreement, the Credit Agreement or any other Loan Document that
would constitute or result in any assignment of any FCC License
or Franchise or any change of control of any Loan Party without
first obtaining the prior approval of the FCC or other federal,
state or local Governmental Authority, if, under the existing
law, such assignment of any FCC License or Franchise or change
of control would require the prior approval of the FCC or other
federal, state or local Governmental Authority. Prior to the
exercise by the Administrative Agent of any power, right,
privilege or remedy pursuant to this Agreement which requires
any consent, approval, recording, qualification or authorization
of any federal, state or local Governmental Authority or
instrumentality, the Pledgor will execute and deliver, or will
cause the execution and delivery of, all applications,
certificates, instruments and other documents and papers that
the Administrative Agent may be required to obtain for such
governmental consent, approval, recording, qualification or
authorization. Without limiting the generality of the
foregoing, the Pledgor will use its best efforts upon the
reasonable request of the Administrative Agent to obtain from
the appropriate governmental authorities the necessary consents
and approvals, if any (i) for the granting to the Administrative
Agent pursuant hereto of the security interests provided for in
this Agreement to the extent, if any, such security interests
may be granted under existing statutes or regulations and (ii)
for the assignment or transfer of such authorizations, licenses
and permits to the Administrative Agent or its designee upon or
following the occurrence and continuance of an Event of Default.
Section Headings. The section headings used in
this Agreement are for convenience of reference only and are not
to affect the construction hereof or be taken into consideration
in the interpretation hereof.
Authority of Administrative Agent. The Pledgor
acknowledges that the rights and responsibilities of the
Administrative Agent under this Agreement with respect to any
action taken by the Administrative Agent or the exercise or
nonexercise by the Administrative Agent of any option, voting
right, request, judgment or other right or remedy provided for
herein or resulting or arising out of this Agreement shall, as
between the Administrative Agent and the Lenders and the other
Agents, be governed by the Credit Agreement and by such other
agreements with respect thereto as may exist from time to time
among them, but, as between the Administrative Agent and the
Pledgor, the Administrative Agent shall conclusively presumed to
be acting as agent for the Lenders and the other Agents with
full and valid authority so to act or refrain from acting, and
neither the Pledgor nor [the] [any] Partnership shall be under
any obligation, or entitlement, to make any inquiry respecting
such authority.
GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PLEDGOR HEREUNDER SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE
STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ITS CONFLICT OF LAW
PRINCIPLES.
Submission To Jurisdiction; Waivers. The Pledgor
hereby irrevocably and unconditionally:
submits for itself and its property in any legal
action or proceeding relating to this Agreement and the
other Loan Documents to which it is a party, or for
recognition and enforcement of any judgment in respect
thereof, to the nonexclusive general jurisdiction of the
courts of the State of New York, the courts of the United
States of America for the Southern District of New York,
and appellate courts from any thereof;
consents that any such action or proceeding may
be brought in such courts and waives any objection that it
may now or hereafter have to the venue of any such action
or proceeding in any such court or that such action or
proceeding was brought in an inconvenient court and agrees
not to plead or claim the same;
agrees that service of process in any such action
or proceeding may be effected by mailing a copy thereof by
registered or certified mail (or any substantially similar
form of mail), postage prepaid, to the Pledgor at its
address set forth under its signature below or at such
other address of which the Administrative Agent shall have
been notified pursuant Section 11;
agrees that nothing herein shall affect the right
to effect service or process in any other manner permitted
by law or shall limit the right to sue in any other
jurisdiction; and
waives, to the maximum extent not prohibited by
law, any right it may have to claim or recover in any legal
action or proceeding referred to in this subsection any
special, exemplary or punitive damages.
WAIVER OF JURY TRIAL. THE PLEDGOR HEREBY
KNOWINGLY AND INTENTIONALLY, IRREVOCABLY AND UNCONDITIONALLY,
WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING
TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY
COUNTERCLAIM THEREIN.
Counterparts. This Agreement may be executed by
the Pledgor on any number of separate counterparts (including by
telecopy transmission) and all of said counterparts taken
together shall be deemed to constitute one and the same
instrument.
Integration. This Agreement and the other Loan
Documents represent the final agreement of the parties hereto
and thereto, respectively, with respect to the subject matter
hereof, and there are no promises, undertakings, representations
or warranties by any Agent or any Lender relative to the subject
matter hereof not expressly set forth or referred to herein or
in the other Loan Documents.
[Remainder of page intentionally left blank]
IN WITNESS WHEREOF, the Pledgor has caused this Parent
Assignment of Partnership Interests to be duly executed and
delivered as of the date first above written.
[NAME OF PLEDGOR]
[By: ,
Managing General Partner](8)
By:
Name:
Title:
Address for Notices:
c/o Olympus Communications,
L.P.
5 West Third Street
Coudersport, PA 16915
Telecopy:
Schedules
Schedule 1 - Description of Partnership Interests
Exhibits
Exhibit A - Transaction Statement
Exhibit B - Registration Notice
(8) If Pledgor is a partnership
SCHEDULE 1
DESCRIPTION OF PARTNERSHIP INTERESTS
All limited and general partnership interests in the
Partnership[s] held by the Pledgor from time to time
including, without limitation:
EXHIBIT A
Transaction Statement
, 199__
To: [Name of Pledgor]
c/o Olympus Communications, L.P.
5 West Third Street
Coudersport, PA 16915
Attention:
and
Toronto Dominion (Texas), Inc., as Administrative
Agent
909 Fannin, Suite 1700
Houston, TX 77010
Attention:
This statement is to advise you that a pledge of the
following uncertificated securities has been registered in the
name of Toronto Dominion (Texas), Inc., as Administrative Agent:
Uncertificated Security: All partnership
interests of [Name of Pledgor] in ,
L.P.
Registered Owner:
[Name of Pledgor]
c/o Olympus Communications, L.P.
5 West Third Street
Coudersport, PA 16915
Attention:
Taxpayer Identification Number:
Registered Pledgee:
Toronto Dominion (Texas), Inc., as Administrative
Agent
909 Fannin, Suite 1700
Houston, TX 77010
Attention:
Taxpayer Identification Number:
There are no liens or restrictions of
____________, L.P., and no adverse claims to
which the uncertificated security is or may be
subject known to _______________________, L.P.
The pledge was registered on _______________,
199__.
THIS STATEMENT IS MERELY A RECORD OF THE RIGHTS OF THE
ADDRESSEES AS OF THE TIME OF ITS ISSUANCE. DELIVERY OF THIS
STATEMENT, OF ITSELF, CONFERS NO RIGHTS ON THE RECIPIENT. THIS
STATEMENT IS NEITHER A NEGOTIABLE INSTRUMENT NOR A SECURITY.
Very truly yours,
[NAME OF PARTNERSHIP]
By: [NAME OF GENERAL PARTNER]
Managing General Partner
By:
Name:
Title:
EXHIBIT B
, 199__
To: [ADDRESS]
You are hereby instructed to register the pledge of
the following uncertificated security as follows:
All partnership interests of the undersigned in
_____________________, L.P.
Pledgor Pledgee
[Name of Pledgor] Toronto Dominion (Texas),
Inc.
c/o Olympus Communications, L.P. as Administrative Agent
5 West Third Street 909 Fannin, Suite 1700
Coudersport, PA 16915 Houston, TX 75201
Attention: Attention:
Very truly yours,
[NAME OF PLEDGOR]
[By: ,
Managing General Partner](9)
(9) If Pledgor is a partnership
By:
Name:
Title:
EXHIBIT K
SECURITY AGREEMENT
SECURITY AGREEMENT, dated as of May 12, 1995, made by
________________________, a ____________________ (the
"Grantor"), in favor of TORONTO DOMINION (TEXAS), INC., as
Administrative Agent (in such capacity, the "Administrative
Agent") for the Lenders from time to time parties to the
Revolving Credit Agreement, dated as of May 12, 1995, among
Adelphia Cable Partners, L.P., a Delaware limited partnership,
Southeast Florida Cable, Inc., a Florida corporation, and West
Boca Acquisition Limited Partnership, a Delaware limited
partnership, as Borrowers, such Lenders, the Agents identified
therein and Toronto Dominion (Texas), Inc., as the
Administrative Agent (as amended, supplemented and otherwise
modified from time to time, the "Credit Agreement").
W I T N E S S E T H:
WHEREAS, pursuant to the Credit Agreement, the Lenders
have severally agreed to make Loans to the Borrowers upon the
terms and subject to the conditions set forth therein; and
WHEREAS, it is a condition precedent to the
effectiveness of the Credit Agreement and the obligations of the
Lenders to make their respective Loans to the Borrowers under
the Credit Agreement that the Grantor shall have executed and
delivered this Security Agreement to the Administrative Agent
for the ratable benefit of the Lenders;
WHEREAS, the Grantor, directly or indirectly, owns
Capital Securities of each of the Borrowers; and
WHEREAS, the Grantor will derive substantial direct
and indirect benefit from the making of the Loans;
NOW, THEREFORE, in consideration of the premises and
to induce the Administrative Agent, the Lenders and the other
Agents to enter into the Credit Agreement and to induce the
Lenders to make their respective Loans to the Borrowers, the
Grantor hereby agrees with the Administrative Agent, for the
benefit of the Lenders and the Agents, as follows:
Defined Terms.
Definitions. Unless otherwise defined herein,
terms defined in the Credit Agreement and used herein shall have
the meanings given to them in the Credit Agreement, and the
following terms which are defined in the Uniform Commercial Code
as from time to time in effect in the State of New York are used
herein as so defined: Chattel Paper, Farm Products, Instruments,
and Proceeds. For purposes of this Security Agreement, the term
"Lender" shall include any Affiliate of any Lender which has
entered into an Interest Rate Protection Agreement with any
Borrower, and the term "Loan Documents" shall include any
Interest Rate Protection Agreement between any Lender (including
any such Affiliate of a Lender) and any Borrower.
The following terms shall have the following
meanings:
"Agreement": this Security Agreement, as the same may
be amended, supplemented and otherwise modified from time
to time.
"Code": the Uniform Commercial Code as from time to
time in effect in the State of New York.
"Collateral": as defined in Section 2 of this
Agreement.
"Collateral Account": any collateral account
established by the Administrative Agent as provided in
subsection 6.2.
"Obligations": the Obligations (as defined in the
Credit Agreement), and all renewals, refundings, restructurings
and other refinancings thereof, including increases in the
amount thereof.
Other Definitional Provisions. The words
"hereof," "herein" and "hereunder" and words of similar import
when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement, and
section and paragraph references are to this Agreement unless
otherwise specified.
The meanings given to terms defined herein shall
be equally applicable to both the singular and plural forms of
such terms.
Grant of Security Interest. As collateral
security for the prompt and complete payment and performance
when due (whether at the stated maturity, by acceleration or
otherwise) of the Obligations, the Grantor hereby grants to the
Administrative Agent, for the benefit of the Lenders and the
Agents, a security interest in all of the following property now
owned or at any time hereafter acquired by the Grantor or in
which the Grantor now has or at any time in the future may
acquire any right, title or interest (collectively, the
"Collateral"):
to the extent permitted by applicable law [add
for ACC: "and the provisions of the Franchise"],
the Franchise[s] described on Schedule 1 hereto;
all books, records, ledgercards, files,
correspondence, computer programs, tapes, disks,
and related data processing software (owned by
the Grantor or in which it has an interest) that
at any time evidence or contain information
relating to any Collateral or are otherwise
necessary or helpful in the collection thereof or
realization thereupon; and
to the extent not otherwise included, all
Proceeds and products of any and all of the
foregoing.
This Agreement shall create a continuing security
interest in the Collateral which shall remain in effect for so
long as any of the Commitments remain in effect and until
payment in full of the Loans and all other Obligations that have
become due when the Loans have been paid in full.
Notwithstanding any other provisions of this
Agreement, the Grantor shall have no personal liability for
payment of the Obligations, and in any action or suit to collect
the Obligations the Administrative Agent, the other Agents and
the Lenders shall not seek any in personam judgment against the
Pledgor or any judgment for a deficiency but shall look solely
to the security interests granted hereunder in the collateral
described herein for payment of the Obligations. Nothing
contained in this Section shall be construed to impair the
validity of the Obligations or this Agreement or affect or
impair in any way the right of the Administrative Agent, Lenders
and the other Agents to exercise their rights and remedies under
the Credit Agreement, any Notes and any other Loan Documents in
accordance with their terms. Without limiting the generality of
the foregoing, recourse under this Agreement on the rights of
the Agents, Lenders and the other Agents provided in this
Agreement shall be limited to the Pledged Collateral and there
shall not be any recourse to any other assets of the Pledgor.
Provisions Relating to Franchises.
Grantor Remains Liable under Franchises.
Anything herein to the contrary notwithstanding, the Grantor
shall remain liable under [each of the Franchises] [the
Franchise] to observe and perform all the conditions and
obligations to be observed and performed by it thereunder, all
in accordance with and pursuant to the terms and provisions of
[each] [the] Franchise. Neither the Administrative Agent nor
any Lender or any other Agent shall have any obligation or
liability under [any] [the] Franchise by reason of or arising
out of this Agreement or the receipt by the Administrative
Agent, any Lender or any other Agent of any payment relating to
such Franchise pursuant hereto, nor shall the Administrative
Agent, any Lender or any other Agent be obligated in any manner
to perform any of the obligations of the Grantor under or
pursuant to [any] [the] Franchise, to make any payment, to make
any inquiry as to the sufficiency of any performance by any
party under [any] [the] Franchise, to present or file any claim,
to take any action to enforce any performance or to collect the
payment of any amounts which may have been assigned to it or to
which it may be entitled at any time or times.
Communication With Contracting Parties. At any
time after the occurrence and during the continuation of an
Event of Default, the Administrative Agent in its own name or in
the name of others may communicate with parties to the
Franchise[s] to verify with them to the Administrative Agent's
satisfaction the existence and terms of [any] [the] Franchise.
Representations and Warranties. The Grantor
hereby represents and warrants that:
Title; No Other Liens. Except for Permitted
Liens, including the Lien pursuant to this Agreement, the
Grantor owns each item of the Collateral free and clear of any
and all Liens or claims of others. No security agreement or
financing statement with respect to all or any part of the
Collateral is on file or of record in any public office, except
such as have been filed in favor of the Administrative Agent
pursuant to this Agreement and no other public notice of any
Lien with respect to all or any part of the Collateral is on
file or of record in any public office except with respect to
Permitted Liens.
Perfected First Priority Liens. The security
interests granted pursuant to this Agreement (a) upon completion
of the filings and other actions specified on Schedule 2
attached hereto, and possession of such Collateral with respect
to which perfection is acquired by possession, will constitute
perfected security interests in the Collateral in favor of the
Administrative Agent, for the benefit of the Lenders and the
Agents, (b) are prior to all other Liens on the Collateral in
existence on the date hereof except for Permitted Liens and (c)
are enforceable as such against all creditors of and purchasers
from the Grantor.
Chief Executive Office. The Grantor's chief
executive office and chief place of business, and the place
where it keeps its books and records, is located at 5 West Third
Street, Coudersport, Pennsylvania 16915.
Farm Products. None of the Collateral
constitutes, or is the Proceeds of, Farm Products.
Franchises. Subject to Section 17, no consent
of any party is required, or purports to be required, in
connection with the execution, delivery and performance of this
Agreement, which have not been obtained.
[Each] [The] Franchise is in full force and
effect and constitutes a valid and legally enforceable
obligation of the parties thereto, except as enforceability may
be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors' rights generally
and by general equitable principles (whether considered in a
proceeding in equity or at law).
Neither the Grantor nor (to the best of the
Grantor's knowledge) any other party to [any] [the] Franchise is
in default in any material respect in the performance or
observance of any of the terms thereof.
The Grantor has fully performed in all material
respects all its obligations under [each] [the] Franchise.
The right, title and interest of the Grantor in,
to and under [each] [the] Franchise are not subject to any
defense, offset, counterclaim or claim which would materially
adversely affect the value of such Franchise as Collateral, nor
have any of the foregoing been asserted or alleged against the
Grantor as to [any] [the] Franchise.
The Grantor has delivered to the Administrative
Agent a complete and correct copy of [each] [the] Franchise,
including all amendments, supplements and other modifications
thereto.
All of the following are true, correct and
complete statements with respect to the Grantor, except for
facts or circumstances which could not reasonably be expected,
either alone or together with all such facts and circumstances
affecting all or any of the Loan Parties, to have a Material
Adverse Effect:
[Each] [The] Franchise was duly and validly
issued by the issuer thereof pursuant to procedures which
complied with all requirements of applicable law.
The Grantor has the right to use the
Franchise[s] as is necessary or desirable for the conduct of the
business of Grantor.
[Each] [The] Franchise is in full force and
effect, and such Loan Party is substantially in compliance with
the terms thereof with no known conflict with the valid rights
of others.
No event has occurred which permits, or
after notice or lapse of time or both would permit, the
revocation or termination of [any] [the] Franchise.
The Grantor has duly filed, in a timely
manner, all cable television registration statements and other
filings which are required to be filed by it under the
Communications Act or the Cable Act and is in compliance with
the Communications Act and the Cable Act, including, without
limitation, the rules and regulations of the FCC relating to the
carriage of television signals.
The Grantor has submitted all requisite
notices under the Copyright Act and the rules and regulations of
the U.S. Copyright Office for the carriage of all broadcast
stations as currently carried.
The Grantor has duly filed, in a timely
manner, with the Copyright Office all required documents,
instruments and statements of account (other than any such
documents or instruments with respect to which counsel for the
Grantor shall have advised the Grantor that the failure to make
a filing in a timely manner is unlikely to result in the U.S.
Copyright Office or any other Person imposing sanctions upon or
bringing legal proceedings against the Grantor), has remitted
payments of all required royalty fees and has obtained the
compulsory license provided for in Section Ill of the Copyright
Act for the carriage of broadcast signals, which license is
currently valid and in full force and effect.
The Grantor is not liable to any Person for
copyright infringement under the Copyright Act as a result of
its business operations.
No consents or authorizations of, filings
with, notices to or other acts by or in respect of, any
Governmental Authority or any other Person are required in order
to operate the Systems owned or operated by the Grantor within
the geographical area covered by any Franchise or to permit the
Grantor to carry on the business of such Systems as presently
conducted.
[Add for ACC: " Pursuant to the Management Services
Agreement for Managed Systems dated as of April 3, 1995, by and
between Olympus and West Boca, and the Subcontract Agreement
Regarding Managed Services, dated as of April 3, 1995, by and
between Grantor and Olympus, West Boca has full power and
authority to operate its Systems under and pursuant to the
Franchises and no consents or authorizations of, or filings
with, notices to or other acts by or in respect of, any
Governmental Authority or any other Person are required in order
for West Boca to operate its Systems."]
Covenants. The Grantor covenants and agrees with
the Administrative Agent, the Lenders and the other Agents that,
from and after the date of this Agreement until payment in full
of the Obligations and termination of the Commitments:
Delivery of Instruments and Chattel Paper. If
any amount payable under or in connection with any of the
Collateral shall be or become evidenced by any Instrument or
Chattel Paper, such Instrument or Chattel Paper shall be
immediately delivered to the Administrative Agent, duly endorsed
in a manner satisfactory to the Administrative Agent, to be held
as Collateral pursuant to this Agreement.
Marking of Records. The Grantor will mark its
books and records pertaining to the Collateral to evidence this
Agreement and the security interests created hereby.
Maintenance of Perfected Security Interest;
Further Documentation. The Grantor shall maintain the security
interest created by this Agreement as a perfected security
interest subject only to the Permitted Liens and shall defend
such security interest against claims and demands of all Persons
whomsoever.
At any time and from time to time, upon the
written request of the Administrative Agent, and at the sole
expense of the Grantor, the Grantor will promptly and duly
execute and deliver such further instruments and documents and
take such further action (including without limitation all
actions required under the Federal Assignment of Claims Act or
any similar state statute) as the Administrative Agent may
reasonably request for the purpose of obtaining or preserving
the full benefits of this Agreement and of the rights and powers
herein granted, including, without limitation, the filing of any
financing or continuation statements under the Uniform
Commercial Code in effect in any jurisdiction with respect to
the security interests created hereby.
Changes in Locations, Name, etc. The Grantor
will not:
change the location of its chief executive office
and chief place of business or the location at which it
maintains its books and records from that specified in
subsection 4.3, unless it shall have given the
Administrative Agent at least 30 days' prior written notice
of such change and any filings required under the Uniform
Commercial Code in effect in the affected jurisdiction to
maintain the perfected security interest granted pursuant
to this Agreement shall have been made; or
change its name, identity or structure to such an
extent that any financing statement filed by the
Administrative Agent in connection with this Agreement
would become seriously misleading, unless it shall have
given the Administrative Agent at least 30 days' prior
written notice of such change.
Further Identification of Collateral. The
Grantor will furnish to the Administrative Agent, the Lenders
and the other Agents from time to time statements and schedules
further identifying and describing the Collateral and such other
reports in connection with the Collateral as the Administrative
Agent may reasonably request, all in reasonable detail.
Indemnification. The Grantor agrees to pay, and
to save the Administrative Agent, the Lenders and the other
Agents harmless from, any and all liabilities, reasonable costs
and expenses (including, without limitation, reasonable legal
fees and expenses) (1) with respect to, or resulting from any
delay in paying, any and all excise, sales or other taxes which
may be payable or determined to be payable with respect to any
of the Collateral, (2) with respect to, or resulting from, any
delay in complying with any Governmental Requirement applicable
to any of the Collateral and (3) in connection with any of the
transactions contemplated by this Agreement, except for any such
liabilities which result from the gross negligence or willful
misconduct of the Administrative Agent, any Lender or any other
Agent.
Covenants Relating to Franchises. The Grantor
will perform and comply in all material respects with all its
obligations under the Franchises and all its other
Contractual Obligations relating to the Franchises.
The Grantor will not amend, modify, terminate or
waive any provision of [any] [the] Franchise in any manner which
could reasonably be expected to materially adversely affect the
value of such Franchise to West Boca as Collateral.
The Grantor will not fail to exercise promptly
and diligently each and every material right which it may have
under [each] [the] Franchise (other than any right of
termination).
The Grantor will not fail to deliver to the
Administrative Agent a copy of each material demand, notice or
document received by it or West Boca relating in any way to
[any] [the] Franchise.
In any suit, proceeding or action brought by the
Administrative Agent, any Lender or any other Agent to enforce
any provisions of [any] [the] Franchise, the Grantor will save,
indemnify and keep the Administrative Agent, such Lender and
such other Agents harmless from and against all expense, loss or
damage suffered by reason of any defense, setoff, counterclaim,
recoupment or reduction or liability whatsoever of the obligor
thereunder, arising out of a breach by the Grantor of any
obligation thereunder or arising out of any other agreement,
indebtedness or liability at any time owing to or in favor of
such obligor or its successors from the Grantor, except for any
such expense, loss or damage which results from the gross
negligence or willful misconduct of the Administrative Agent,
such Lender or any other Agent.
Remedies.
Proceeds to be Turned Over to Administrative
Agent. If an Event of Default shall occur and be continuing all
Proceeds received by the Grantor consisting of cash, checks and
other near-cash items shall be held by the Grantor in trust for
the Administrative Agent, the Lenders and the other Agents,
segregated from other funds of the Grantor, and shall, forthwith
upon receipt by the Grantor, be turned over to the
Administrative Agent in the exact form received by the Grantor
(duly endorsed by the Grantor to the Administrative Agent, if
required) and held by the Administrative Agent in a Collateral
Account maintained under the sole dominion and control of the
Administrative Agent. All Proceeds while held by the
Administrative Agent in a Collateral Account (or by the Grantor
in trust for the Administrative Agent and the Lenders) shall
continue to be held as collateral security for all the
Obligations and shall not constitute payment thereof until
applied as provided in subsection 6.2.
Application of Proceeds. At such intervals as
may be agreed upon by the Grantor and the Administrative Agent,
or, if an Event of Default shall have occurred and be
continuing, at any time at the Administrative Agent's election,
the Administrative Agent may apply all or any part of Proceeds
held in any Collateral Account in payment of Obligations as
provided in the Credit Agreement, and, subject to subsection 9.1
of the Credit Agreement any part of such funds which the
Administrative Agent elects not so to apply and deems not
required as collateral security for the Obligations shall be
paid over from time to time by the Administrative Agent to the
Grantor or to whomsoever may be lawfully entitled to receive the
same. Any balance of such Proceeds remaining after the
Obligations shall have been paid in full and the Commitments
shall have been terminated shall be paid over to the Grantor or
to whomsoever may be lawfully entitled to receive the same.
Code Remedies. If an Event of Default shall
occur and be continuing, the Administrative Agent, on behalf of
the Lenders and the Agents may exercise, in addition to all
other rights and remedies granted to them in this Agreement and
in any other instrument or agreement securing, evidencing or
relating to the Obligations, all rights and remedies of a
secured party under the Code. Without limiting the generality
of the foregoing, the Administrative Agent, without presentment,
demand for payment, dishonor, notice of dishonor, protest,
notice of protest or notice or formality of any kind (except any
notice required by law referred to below) to or upon the Grantor
or any other Person (all and each of which demands, defenses,
advertisements and notices are hereby waived), may in such
circumstances forthwith collect, receive, appropriate and
realize upon the Collateral, or any part thereof, and/or may
forthwith sell, lease, assign, give option or options to
purchase, or otherwise dispose of and deliver the Collateral or
any part thereof (or contract to do any of the foregoing), in
one or more parcels at public or private sale or sales, at any
exchange, broker's board or office of the Administrative Agent,
any Lender or any other Agents or elsewhere upon such terms and
conditions as it may deem advisable and at such prices as it may
deem best, for cash or on credit or for future delivery without
assumption of any credit risk. The Administrative Agent, any
Lender or any other Agents shall have the right upon any such
public sale or sales, and, to the extent permitted by law, upon
any such private sale or sales, to purchase the whole or any
part of the Collateral so sold, free of any right or equity of
redemption in the Grantor, which right or equity is hereby
waived or released. The Grantor further agrees, at the
Administrative Agent's request, to assemble the Collateral and
make it available to the Administrative Agent at places which
the Administrative Agent shall reasonably select, whether at the
Grantor's premises or elsewhere. The Administrative Agent shall
apply the net proceeds of any such collection, recovery,
receipt, appropriation, realization or sale, after deducting all
reasonable costs and expenses of every kind incurred therein or
incidental to the care or safekeeping of any of the Collateral
or in any way relating to the Collateral or the rights of the
Administrative Agent, the Lenders and the other Agents
hereunder, including, without limitation, reasonable attorneys'
fees and disbursements, to the payment in whole or in part of
the Obligations, in accordance with the Credit Agreement, and
only after such application and after the payment by the
Administrative Agent of any other amount required by any
provision of law, including, without limitation, Section 9-
- - -504(1)(c) of the Code, need the Administrative Agent account
for the surplus, if any, to the Grantor. To the extent
permitted by applicable Governmental Requirements, the Grantor
waives all claims, damages and demands it may acquire against
the Administrative Agent, any Lender and any other Agent arising
out of the exercise by them of any rights hereunder. If any
notice of a proposed sale or other disposition of Collateral
shall be required by applicable Governmental Requirements, such
notice shall be deemed reasonable and proper if received by the
Grantor at least 20 days before such sale or other disposition.
Administrative Agent's Appointment as Attorney-
in-Fact; Administrative Agent's Performance of Grantor's
Obligations.
Powers. The Grantor hereby irrevocably
constitutes and appoints the Administrative Agent and any
officer or agent thereof, with full power of substitution, as
its true and lawful attorney-in-fact with full irrevocable power
and authority in the place and stead of the Grantor and in the
name of the Grantor or in its own name, from time to time in the
Administrative Agent's discretion, for the purpose of carrying
out the terms of this Agreement, to take any and all appropriate
action and to execute any and all documents and instruments
which may be necessary or desirable to secure the Obligations
and grant security interests in the Collateral as contemplated
by this Agreement, and, without limiting the generality of the
foregoing, the Grantor hereby gives the Administrative Agent the
power and right, on behalf of the Grantor, without notice to or
assent by the Grantor, to do the following:
at any time after occurrence and during the
continuance of an Event of Default, to pay or discharge
taxes and Liens levied or placed on or threatened against
the Collateral, to effect any repairs or any insurance
called for by the terms of this Agreement and to pay all or
any part of the premiums therefor and the costs thereof;
to execute, in connection with the sale provided
for in Section 6.3 hereof, any endorsements, assignments or
other instruments of conveyance or transfer with respect to
the Collateral; and
upon the occurrence and during the continuance of
any Event of Default, (1) to direct any party liable for
any payment under any of the Collateral to make payment of
any and all moneys due or to become due thereunder directly
to the Administrative Agent or as the Administrative Agent
shall direct; (2) to ask or demand for, collect, receive
payment of and receipt for, any and all moneys, claims and
other amounts due or to become due at any time in respect
of or arising out of any Collateral; (3) to sign and
endorse any invoices, freight or express bills, bills of
lading, storage or warehouse receipts, drafts against
debtors, assignments, verifications, notices and other
documents in connection with any of the Collateral; (4) to
commence and prosecute any suits, actions or proceedings at
law or in equity in any court of competent jurisdiction to
collect the Collateral or any thereof and to enforce any
other right in respect of any Collateral; (5) to defend any
suit, action or proceeding brought against the Grantor with
respect to any Collateral; (6) to settle, compromise or
adjust any such suit, action or proceeding and, in
connection therewith, to give such discharges or releases
as the Administrative Agent may deem appropriate; and
(7) generally, to sell, transfer, pledge and make any
agreement with respect to or otherwise deal with any of the
Collateral as fully and completely as though the
Administrative Agent were the absolute owner thereof for
all purposes, and to do, at the Administrative Agent's
option and the Grantor's expense, at any time, or from time
to time, all reasonable acts and things which the
Administrative Agent deems necessary to protect, preserve
or realize upon the Collateral and the Agents' and the
Lenders' security interests therein and to effect the
intent of this Agreement, all as fully and effectively as
the Grantor might do.
The Administrative Agent agrees that, except upon the occurrence
and during the continuation of an Event of Default, it will
forbear from exercising the power of attorney or any rights
granted to the Administrative Agent pursuant to this
subsection 7.1.
Performance by Administrative Agent of Grantor's
Obligations. If the Grantor fails to perform or comply with any
of its agreements contained herein, the Administrative Agent, at
its option, but without any obligation so to do, may perform or
comply, or otherwise cause performance or compliance, with such
agreement.
Grantor's Reimbursement Obligation. The
reasonable expenses of the Administrative Agent incurred in
connection with actions undertaken as provided in this Section,
together with interest thereon at the Default Rate from the date
of payment by the Administrative Agent to the date reimbursed by
the Grantor, shall be jointly and severally payable by the
Grantor and the Borrowers to the Administrative Agent on demand.
Ratification; Power Coupled With An Interest.
The Grantor hereby ratifies all that said attorneys shall
lawfully do or cause to be done by virtue hereof. All powers,
authorizations and agencies contained in this Agreement are
coupled with an interest and are irrevocable until this
Agreement is terminated and the security interests created
hereby are released.
Duty of Administrative Agent. The Administrative
Agent's sole duty with respect to the custody, safekeeping and
physical preservation of the Collateral in its possession, under
Section 9-207 of the Code or otherwise, shall be to deal with it
in the same manner as the Administrative Agent deals with
similar property for its own account. Neither the
Administrative Agent, any Lender, any other Agent nor any of
their respective directors, officers, employees or agents shall
be liable for failure to demand, collect or realize upon any of
the Collateral or for any delay in doing so or shall be under
any obligation to sell or otherwise dispose of any Collateral
upon the request of the Grantor or any other Person or to take
any other action whatsoever with regard to the Collateral or any
part thereof. The powers conferred on the Administrative Agent,
the Lenders and the other Agents hereunder are solely to protect
the Agents' and the Lenders' interests in the Collateral and
shall not impose any duty upon the Administrative Agent, any
other Agent or any Lender to exercise any such powers. The
Administrative Agent, the Lenders and the other Agents shall be
accountable only for amounts that they actually receive as a
result of the exercise of such powers, and neither they nor any
of their officers, directors, employees or agents shall be
responsible to the Grantor for any act or failure to act
hereunder, except for their own gross negligence or willful
misconduct.
Execution of Financing Statements. Pursuant to
Section 9-402 of the Code, the Grantor authorizes the
Administrative Agent to file financing statements with respect
to the Collateral without the signature of the Grantor in such
form and in such filing offices as the Administrative Agent
reasonably determines appropriate to perfect the security
interests of the Administrative Agent under this Agreement. A
carbon, photographic or other reproduction of this Agreement
shall be sufficient as a financing statement for filing in any
jurisdiction.
Authority of Administrative Agent. The Grantor
acknowledges that the rights and responsibilities of the
Administrative Agent under this Agreement with respect to any
action taken by the Administrative Agent or the exercise or non-
exercise by the Administrative Agent of any option, voting
right, request, judgment or other right or remedy provided for
herein or resulting or arising out of this Agreement shall, as
between the Administrative Agent, the Lenders and the other
Agents, be governed by the Credit Agreement and by such other
agreements with respect thereto as may exist from time to time
among them, but, as between the Administrative Agent and the
Grantor, the Administrative Agent shall be conclusively presumed
to be acting as agent for the Lenders and the Agents with full
and valid authority so to act or refrain from acting, and the
Grantor shall be under no obligation, or entitlement, to make
any inquiry respecting such authority.
Notices. All notices, requests and demands to or
upon the Administrative Agent, any Lender, any other Agent or
the Grantor, to be effective, shall be in writing (including by
facsimile transmission) and shall be deemed to have been duly
given or made (1) when delivered by hand or (2) three days after
being deposited in the mail, postage prepaid, (3) or one
Business Day after being sent by priority overnight mail with a
nationally recognized overnight delivery carrier or (4) if by
facsimile, when received:
if to the Administrative Agent, at its
address or transmission number for notices provided in
subsection 9.2 of the Credit Agreement;
if to any Lender or any Agent other than the
Administrative Agent, at its address or transmission
number for notices provided in Annex A to the Credit
Agreement, as supplemented from time to time in
connection with assignments pursuant to subsection 9.6
of the Credit Agreement; and
if to the Grantor, at its address or
transmission number for notices set forth under its
signature below.
The Administrative Agent, each other Agent, each
Lender and the Grantor may change its address and transmission
numbers for notices by notice in the manner provided in this
Section.
Severability. Any provision of this Agreement
which is prohibited or unenforceable in any jurisdiction shall,
as to such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
Amendments in Writing; No Waiver; Cumulative
Remedies.
Amendments in Writing. None of the terms or
provisions of this Agreement may be waived, amended,
supplemented or otherwise modified except by a written
instrument executed by the Grantor and the Administrative Agent;
provided that any provision of this Agreement may be waived by
the Administrative Agent in a letter or agreement executed by
the Administrative Agent or by facsimile transmission from the
Administrative Agent.
No Waiver by Course of Conduct. Neither the
Administrative Agent nor any Lender or any other Agent shall by
any act (except by a written instrument pursuant to
subsection 13.1 hereof), delay, indulgence, omission or
otherwise be deemed to have waived any right or remedy hereunder
or to have acquiesced in any Default or Event of Default or in
any breach of any of the terms and conditions hereof. No
failure to exercise, nor any delay in exercising, on the part of
the Administrative Agent, any Lender or any other Agent, any
right, power or privilege hereunder shall operate as a waiver
thereof. No single or partial exercise of any right, power or
privilege hereunder shall preclude any other or further exercise
thereof or the exercise of any other right, power or privilege.
A waiver by the Administrative Agent, any Lender or any other
Agent of any right or remedy hereunder on any one occasion shall
not be construed as a bar to any right or remedy which the
Administrative Agent, such Lender or such other Agent would
otherwise have on any future occasion.
Remedies Cumulative. The rights and remedies
herein provided are cumulative, may be exercised singly or
concurrently and are not exclusive of any other rights or
remedies provided by law.
Section Headings. The section and subsection
headings used in this Agreement are for convenience of reference
only and are not to affect the construction hereof or be taken
into consideration in the interpretation hereof.
Successors and Assigns. This Agreement shall be
binding upon the successors and assigns of the Grantor and shall
inure to the benefit of the Agents and the Lenders and their
successors and assigns provided that the Grantor may not assign
its rights or obligations under this Agreement without the prior
written consent of the Agent and such purported assignment shall
be null and void.
GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE
STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ITS CONFLICT OF LAW
PRINCIPLES.
FCC Approval. Notwithstanding anything to the
contrary contained herein or in the other Loan Documents, the
Administrative Agent will not take any action pursuant to this
Agreement, the Credit Agreement or any other Loan Document that
would constitute or result in any assignment of any FCC License
or Franchise or any change of control of any Loan Party without
first obtaining the prior approval of the FCC or other federal,
state or local Governmental Authority, if, under the existing
law, such assignment of any FCC License or Franchise or change
of control would require the prior approval of the FCC or other
federal, state or local Governmental Authority. Prior to the
exercise by the Administrative Agent of any power, right,
privilege or remedy pursuant to this Agreement which requires
any consent, approval, recording, qualification or authorization
of any federal, state or local Governmental Authority or
instrumentality, the Grantor will execute and deliver, or will
cause the execution and delivery of, all applications,
certificates, instruments and other documents and papers that
the Administrative Agent may be required to obtain for such
governmental consent, approval, recording, qualification or
authorization without limiting the generality of the foregoing,
the Grantor will use its best efforts upon the reasonable
request of the Administrative Agent to obtain from the
appropriate governmental authorities the necessary consents and
approvals, if any (i) for the granting to the Administrative
Agent pursuant hereto of the security interests provided for in
this Agreement to the extent, if any, such security interests
may be granted under existing statutes or regulations and (ii)
for the assignment or transfer of such authorizations, licenses
and permits to the Administrative Agent or its designee upon or
following the occurrence or during the continuance of an Event
of Default.
Submission To Jurisdiction; Waivers. The Grantor
hereby irrevocably and unconditionally:
submits for itself and its property in any legal
action or proceeding relating to this Agreement and the other
Loan Documents to which it is a party, or for recognition and
enforcement of any judgement in respect thereof, to the non-
exclusive general jurisdiction of the Courts of the State of New
York, the courts of the United States of America for the
Southern District of New York, and appellate courts from any
thereof;
consents that any such action or proceeding may
be brought in such courts and waives any objection that it may
now or hereafter have to the venue of any such action or
proceeding in any such court or that such action or proceeding
was brought in an inconvenient court and agrees not to plead or
claim the same;
agrees that service of process in any such action
or proceeding may be effected by mailing a copy thereof by
registered or certified mail (or any substantially similar form
of mail), postage prepaid, to the Grantor at its address set
forth under its signature below hereof or at such other address
of which the Administrative Agent shall have been notified
pursuant to Section 11;
agrees that nothing herein shall affect the right
to effect service of process in any other manner permitted by
law or shall limit the right to sue in any other jurisdiction;
and
waives, to the maximum extent not prohibited by
law, any right it may have to claim or recover in any legal
action or proceeding referred to in this subsection any special,
exemplary or punitive damages.
WAIVER OF JURY TRIAL. THE GRANTOR HEREBY
KNOWINGLY AND INTENTIONALLY, IRREVOCABLY AND UNCONDITIONALLY,
WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING
TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY
COUNTERCLAIM THEREIN.
Counterparts. This Agreement may be executed by
the Grantor on any number of separate counterparts (including by
telecopy transmission) and all of said counterparts taken
together shall be deemed to constitute one and the same
instrument.
Integration. This Agreement and the other Loan
Documents represent the final agreement of the parties hereto
and thereto, respectively, with respect to the subject matter
hereof, and there are no promises, undertakings, representations
or warranties by any Agent or any Lender relative to the subject
matter hereof not expressly set forth or referred to herein or
in the other Loan Documents.
[Remainder of page intentionally left blank.]
IN WITNESS WHEREOF, the undersigned has caused this
Security Agreement to be duly executed and delivered as of the
date first above written.
[NAME OF GRANTOR]
[By: _____________________,
Managing
General Partner]
By:
Name:
Title:
(10) If Grantor is a partnership
Schedules:
Schedule 1 Description of Pledged Franchise[s]
Schedule 2 Filings and Other Actions Required to Perfect
Security Interests
Schedule 1
DESCRIPTION OF PLEDGED FRANCHISE[S]
Schedule 2
FILINGS AND OTHER ACTIONS
REQUIRED TO PERFECT SECURITY INTERESTS
Uniform Commercial Code Filings
[List each office where a financing statement is to be filed]
Other Actions
[Describe other actions to be taken]
EXHIBIT L
STOCK PLEDGE AGREEMENT
STOCK PLEDGE AGREEMENT, dated as of May 12, 1995, by
_________________, a ____________________ (the "Pledgor"), in
favor of TORONTO DOMINION (TEXAS), INC., as Administrative Agent
(in such capacity, the "Administrative Agent") for the Lenders
from time to time parties to the Revolving Credit Agreement,
dated as of May 12, 1995, among Adelphia Cable Partners, L.P., a
Delaware limited partnership, Southeast Florida Cable, Inc., a
Florida corporation, and West Boca Acquisition Limited
Partnership, a Delaware limited partnership, as Borrowers, such
Lenders, the Agents identified therein and Toronto Dominion
(Texas), Inc., as the Administrative Agent (as amended,
supplemented and otherwise modified from time to time, the
"Credit Agreement").
W I T N E S S E T H:
WHEREAS, pursuant to the Credit Agreement, the Lenders
have severally agreed to make Loans to the Borrowers upon the
terms and subject to the conditions set forth therein;
WHEREAS, the Pledgor is the legal and beneficial owner
of the shares of Pledged Stock (as hereinafter defined) issued
by the Issuers (as hereinafter defined); and
WHEREAS, it is a condition precedent to the obligation
of the Lenders to make their respective Loans to the Borrowers
under the Credit Agreement that the Pledgor shall have executed
and delivered this Stock Pledge Agreement to the Administrative
Agent for the benefit of the Lenders and the Agents.
NOW, THEREFORE, in consideration of the premises and
to induce the Agents and the Lenders to enter into the Credit
Agreement and to induce the Lenders to make their respective
Loans under the Credit Agreement, the Pledgor hereby agrees with
the Administrative Agent, for the benefit of the Lenders and the
Agents, as follows:
Defined Terms. Unless otherwise defined herein, terms
defined in the Credit Agreement and used herein shall have the
meanings given to them in the Credit Agreement. For purposes of
this Stock Pledge Agreement, the term "Lender" shall include any
Affiliate of any Lender which has entered into an Interest Rate
Protection Agreement with any Borrower and the term "Loan
Agreements" shall include any Interest Rate Protection Agreement
between any Lender (including any such Affiliate of a Lender)
and any Borrower.
The following terms shall have the following
meanings:
"Agreement": this Stock Pledge Agreement, as the same
may be amended, modified and otherwise supplemented from
time to time.
"Code": the Uniform Commercial Code from time to time
in effect in the State of New York.
"Collateral": the Pledged Stock and all Proceeds.
"Collateral Account": any account established to hold
money Proceeds, maintained under the sole dominion and
control of the Administrative Agent, subject to withdrawal
by the Administrative Agent for the account of the Lenders
as provided in Section 8(a).
"Issuers": the collective reference to the companies
identified on Schedule 1 attached hereto as the issuers of
the Pledged Stock; individually, each an "Issuer."
"Obligations": the Obligations (as defined in the
Credit Agreement), and all renewals, refundings,
restructurings and other refinancings thereof, including
increases in the amount thereof.
"Pledged Stock": the shares of capital stock listed
on Schedule 1 hereto, together with all stock certificates,
options, warrants or rights of any nature whatsoever, and
any stock or other securities or other property that may be
issued or granted by any Issuer to the Pledgor in respect
of such shares while this Agreement is in effect.
"Proceeds": all "proceeds" as such term is defined in
Section 9-306(1) of the Uniform Commercial Code in effect
in the State of New York on the date hereof and, in any
event, shall include, without limitation, all dividends,
cash, notes, securities or other property from time to time
acquired, receivable or otherwise distributed in respect
of, or in exchange for, the Pledged Stock, collections
thereon or distributions with respect thereto.
"Securities Act": the Securities Act of 1933, as
amended.
The words "hereof," "herein" and "hereunder" and
words of similar import when used in this Agreement shall refer
to this Agreement as a whole and not to any particular provision
of this Agreement, and section and paragraph references are to
this Agreement unless otherwise specified.
The meanings given to terms defined herein shall
be equally applicable to both the singular and plural forms of
such terms.
Pledge; Grant of Security Interest. The Pledgor
hereby delivers to the Administrative Agent, for the benefit of
the Lenders and the Agents, all the Pledged Stock and hereby
grants to the Administrative Agent, for the benefit of the
Lenders and the Agents, a first priority security interest in
the Collateral, as collateral security for the prompt and
complete payment and performance when due (whether at the stated
maturity, by acceleration or otherwise) of the Obligations.
Stock Powers. Concurrently with the delivery to
the Administrative Agent of each certificate representing one or
more shares of Pledged Stock, the Pledgor shall deliver an
undated stock power covering such certificate, duly executed in
blank by the Pledgor.
Representations and Warranties. The Pledgor
represents and warrants that:
The shares of Pledged Stock constitute all the
issued and outstanding shares of all classes of Capital
Securities of each Issuer.
All the shares of the Pledged Stock have been
duly and validly issued and are fully paid and
nonassessable.
The Pledgor is the record and beneficial owner
of, and has good and marketable title to, the Pledged
Stock, free of any and all Liens or options in favor of, or
claims of, any other Person, except the security interests
created by this Agreement.
Upon delivery to the Administrative Agent of the
stock certificates evidencing the Pledged Stock, the
security interest created by this Agreement will constitute
a valid, perfected first priority security interest in the
Collateral, enforceable in accordance with its terms
against all creditors of the Pledgor and any Persons
purporting to purchase any Collateral from the Pledgor,
except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditors' rights
generally, and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).
All Capital Securities of each Issuer are in
certificated form.
Covenants. The Pledgor covenants and agrees with
the Administrative Agent and the Lenders that, from and after
the date of this Agreement until this Agreement is terminated
and the security interests created hereby are released:
If the Pledgor shall, as a result of its
ownership of the Pledged Stock, become entitled to receive
or shall receive any stock certificate (including, without
limitation, any certificate representing a stock dividend
or a distribution in connection with any reclassification,
increase or reduction of capital or any certificate issued
in connection with any reorganization), option or rights,
whether in addition to, in substitution of, as a conversion
of, or in exchange for any shares of the Pledged Stock, or
otherwise in respect thereof, the Pledgor shall accept the
same as the agent of the Administrative Agent, the Lenders
and the other Agents, hold the same in trust for the
Administrative Agent, the Lenders and the other Agents and
deliver the same forthwith to the Administrative Agent in
the exact form received, duly endorsed by the Pledgor to
the Administrative Agent, if required, together with an
undated stock power covering such certificate duly executed
in blank by the Pledgor and with, if the Administrative
Agent so requests, to be held by the Administrative Agent,
subject to the terms hereof, as additional collateral
security for the Obligations. Except in connection with
any transaction permitted under of the Credit Agreement,
any sums paid upon or in respect of the Pledged Stock upon
the liquidation or dissolution of any Issuer shall be paid
over to the Administrative Agent to be held by it hereunder
as additional collateral security for the Obligations, and
in case any distribution of capital shall be made on or in
respect of the Pledged Stock or any property shall be
distributed upon or with respect to the Pledged Stock
pursuant to the recapitalization or reclassification of the
capital of the Issuer or pursuant to the reorganization
thereof, the property so distributed shall be delivered to
the Administrative Agent to be held by it hereunder as
additional collateral security for the Obligations.
Subject to the provisions of the Credit Agreement, if any
sums of money or property so paid or distributed in respect
of the Pledged Stock shall be received by the Pledgor, the
Pledgor shall, until such money or property is paid or
delivered to the Administrative Agent, hold such money or
property in trust for the Lenders and the Agents,
segregated from other funds of the Pledgor, as additional
collateral security for the Obligations. Sums of money or
property paid or distributed to the Pledgor in respect of
the Pledged Stock in accordance with the terms of the
Credit Agreement may be retained by the Pledgor.
Except in connection with any transaction
permitted under the Credit Agreement, without the prior
written consent of the Administrative Agent, the Pledgor
will not (1) vote to enable, or take any other action to
permit, any Issuer to issue any stock or other equity
securities of any nature, in certificated form or
otherwise, or to issue any other securities convertible
into or granting the right to purchase or exchange for any
stock or other equity securities of any nature of any
Issuer, (2) sell, assign, transfer, exchange, or otherwise
dispose of, or grant any option with respect to, the
Collateral, (3) create, incur or permit to exist any Lien
or option in favor of, or any claim of any Person with
respect to, any of the Collateral, or any interest therein,
except for the security interests created by this Agreement
or (4) enter into any agreement or undertaking restricting
the right or ability of the Pledgor or the Administrative
Agent to sell, assign or transfer any of the Collateral
from and after the date hereof.
The Pledgor shall maintain the security interest
created by this Agreement as a first priority perfected
security interest and shall defend such security interest
against claims and demands of all Persons whomsoever. At
any time and from time to time, upon the written request of
the Administrative Agent, and at the sole expense of the
Pledgor, the Pledgor will promptly and duly execute and
deliver such further instruments and documents and take
such further actions as the Administrative Agent may
reasonably request for the purposes of obtaining or
preserving the full benefits of this Agreement and of the
rights and powers herein granted. If any amount payable
under or in connection with any of the Collateral shall be
or become evidenced by any promissory note, other
instrument or chattel paper, such note, instrument or
chattel paper shall be immediately delivered to the
Administrative Agent, duly endorsed in a manner
satisfactory to the Administrative Agent, to be held as
Collateral pursuant to this Agreement.
The Pledgor shall pay, and save the
Administrative Agent, the Lenders and the other Agents
harmless from, any and all liabilities with respect to, or
resulting from any delay in paying, any and all stamp,
excise, sales or other taxes which may be payable or
determined to be payable with respect to any of the
Collateral or in connection with any of the transactions
contemplated by this Agreement, except for any such
liabilities which result from the gross negligence or
willful misconduct of the Administrative Agent, any Lender
or any other Agent.
Cash Dividends; Voting Rights. Unless an Event
of Default shall have occurred and be continuing and the
Administrative Agent shall have given notice to the Pledgor of
the Administrative Agent's intent to exercise its corresponding
rights pursuant to Section 7(b) below, the Pledgor shall be
permitted to receive all cash dividends paid in the normal
course of business of the Issuers and consistent with past
practice, to the extent permitted in the Credit Agreement, in
respect of the Pledged Stock and to exercise all voting and
corporate rights with respect to the Pledged Stock; provided,
however, that no vote shall be cast or corporate right exercised
or other action taken which, in the Administrative Agent's
reasonable judgment, would impair the Collateral or which would
be inconsistent with or result in any violation of any provision
of the Credit Agreement, this Agreement or any other Loan
Document.
Rights of the Lenders and the Administrative
Agent. All money Proceeds received by the Administrative
Agent hereunder shall be held by the Administrative Agent for
the benefit of the Lenders in a Collateral Account. All
Proceeds while held by the Administrative Agent in a Collateral
Account (or by the Pledgor in trust for the Administrative Agent
and the Lenders) shall continue to be held as collateral
security for all the Obligations and shall not constitute
payment thereof until applied as provided in Section 8(a).
If an Event of Default shall occur and be
continuing and the Administrative Agent shall give notice of its
intent to exercise such rights to the Pledgor, (1) the
Administrative Agent shall have the right to receive any and all
cash dividends paid in respect of the Pledged Stock and make
application thereof to the Obligations in such order as the
Administrative Agent may determine, and (2) upon the request of
the Administrative Agent, all shares of the Pledged Stock shall
be registered in the name of the Administrative Agent or its
nominee, and the Administrative Agent or its nominee may
thereafter exercise (A) all voting, corporate and other rights
pertaining to such shares of the Pledged Stock at any meeting of
shareholders of any Issuer or otherwise and (B) any and all
rights of conversion, exchange, subscription and any other
rights, privileges or options pertaining to such shares of the
Pledged Stock as if it were the absolute owner thereof
(including, without limitation, the right to exchange at its
discretion any and all of the Pledged Stock upon the merger,
consolidation, reorganization, recapitalization or other
fundamental change in the corporate structure of any Issuer, or
upon the exercise by the Pledgor or the Administrative Agent of
any right, privilege or option pertaining to such shares of the
Pledged Stock, and in connection therewith, the right to deposit
and deliver any and all of the Pledged Stock with any committee,
depositary, transfer agent, registrar or other designated agency
upon such terms and conditions as the Administrative Agent may
determine), all without liability except to account for property
actually received by it, but the Administrative Agent shall have
no duty to the Pledgor to exercise any such right, privilege or
option and shall not be responsible for any failure to do so or
delay in so doing.
Remedies. If an Event of Default shall have
occurred and be continuing, at any time at the Administrative
Agent's election, the Administrative Agent may apply all or any
part of Proceeds held in any Collateral Account in payment of
the Obligations as provided in the Credit Agreement.
If an Event of Default shall have occurred and be
continuing, the Administrative Agent, on behalf of the Lenders
and the other Agents, may exercise, in addition to all other
rights and remedies granted in this Agreement and in any other
instrument or agreement securing, evidencing or relating to the
Obligations, all rights and remedies of a secured party under
the Code. Without limiting the generality of the foregoing, the
Administrative Agent, without demand of performance or other
demand, presentment, protest, advertisement or notice of any
kind (except any notice required by law referred to below) to or
upon the Pledgor or any other Person (all and each of which
demands, defenses, advertisements and notices are hereby
waived), may in such circumstances forthwith collect, receive,
appropriate and realize upon the Collateral, or any part
thereof, and/or may forthwith sell, assign, give option or
options to purchase or otherwise dispose of and deliver the
Collateral or any part thereof (or contract to do any of the
foregoing), in one or more parcels at public or private sale or
sales, in the over-the-counter market, at any exchange, broker's
board or office of the Administrative Agent, any Lender or any
other Agent or elsewhere upon such terms and conditions as it
may deem advisable and at such prices as it may deem best, for
cash or on credit or for future delivery without assumption of
any credit risk. The Administrative Agent, any Lender or any
other Agent shall have the right upon any such public sale or
sales, and, to the extent permitted by law, upon any such
private sale or sales, to purchase the whole or any part of the
Collateral so sold, free of any right or equity of redemption in
the Pledgor, which right or equity of redemption is hereby
waived or released. The Administrative Agent shall apply any
Proceeds from time to time held by it and the net proceeds of
any such collection, recovery, receipt, appropriation,
realization or sale, after deducting all reasonable costs and
expenses of every kind incurred in respect thereof or incidental
to the care or safekeeping of any of the Collateral or in any
way relating to the Collateral or the rights of the
Administrative Agent, the Lenders and the other Agents
hereunder, including, without limitation, reasonable attorneys'
fees and disbursements, to the payment in whole or in part of
the Obligations as provided in the Credit Agreement, and only
after such application and after the payment by the
Administrative Agent of any other amount required by any
provision of law, including, without limitation, Section 9-
504(1)(c) of the Code, need the Administrative Agent account for
the surplus, if any, to the Pledgor. To the extent permitted by
applicable law, the Pledgor waives all claims, damages and
demands it may acquire against the Administrative Agent, any
Lender or any other Agent arising out of the exercise by them of
any rights hereunder. If any notice of a proposed sale or other
disposition of Collateral shall be required by law, such notice
shall be deemed reasonable and proper if given at least 20 days
before such sale or other disposition.
The Pledgor waives and agrees not to assert any
rights or privileges which it may acquire under Section 9-112 of
the Code. The Pledgor shall remain liable for any deficiency if
the proceeds of any sale or other disposition of Collateral are
insufficient to pay the Obligations and the fees and
disbursements of any attorneys employed by the Administrative
Agent, any Lender or any other Agent to collect such deficiency.
Registration Rights; Private Sales. If the
Administrative Agent shall determine to exercise its right to
sell any or all of the Pledged Stock pursuant to Section 8
hereof, and if in the opinion of the Administrative Agent it is
necessary or advisable to have the Pledged Stock, or that
portion thereof to be sold, registered under the provisions of
the Securities Act, the Pledgor will use its best efforts to
cause the Issuer thereof (1) to execute and deliver, and cause
the directors and officers of such Issuer to execute and
deliver, all such instruments and documents, and do or cause to
be done all such other acts as may be, in the opinion of the
Administrative Agent, necessary or advisable to register the
Pledged Stock, or that portion thereof to be sold, under the
provisions of the Securities Act, (2) to use its best efforts to
cause the registration statement relating thereto to become
effective and to remain effective for a period of one year from
the date of the first public offering of the Pledged Stock, or
that portion thereof to be sold, and (3) to make all amendments
thereto and/or to the related prospectus which, in the opinion
of the Administrative Agent, are necessary or advisable, all in
conformity with the requirements of the Securities Act and the
rules and regulations of the Securities and Exchange Commission
applicable thereto. The Pledgor agrees to use its best efforts
to cause such Issuer to comply with the provisions of the
securities or "Blue Sky" laws of any and all jurisdictions which
the Administrative Agent shall designate and to make available
to its security holders, as soon as practicable, an earnings
statement (which need not be audited) which will satisfy the
provisions of Section 11(a) of the Securities Act.
The Pledgor recognizes that the Administrative
Agent may be unable to effect a public sale of any or all the
Pledged Stock, by reason of certain prohibitions contained in
the Securities Act and applicable state securities laws or
otherwise, and may be compelled to resort to one or more private
sales thereof to a restricted group of purchasers which will be
obliged to agree, among other things, to acquire such securities
for their own account for investment and not with a view to the
distribution or resale thereof. The Pledgor acknowledges and
agrees that any such private sale may result in prices and other
terms less favorable than if such sale were a public sale and,
notwithstanding such circumstances, agrees that any such private
sale shall be deemed to have been made in a commercially
reasonable manner. The Administrative Agent shall be under no
obligation to delay a sale of any of the Pledged Stock for the
period of time necessary to permit the Issuer thereof to
register such securities for public sale under the Securities
Act, or under applicable state securities laws, even if such
Issuer would agree to do so.
The Pledgor further agrees to use its best
efforts to do or cause to be done all such other acts as may be
necessary to make such sale or sales of all or any portion of
the Pledged Stock pursuant to this Section valid and binding and
in compliance with any and all other applicable Governmental
Requirements. The Pledgor further agrees that a breach of any
of the covenants contained in this Section will cause
irreparable injury to the Administrative Agent, the Lenders and
the other Agents, that the Administrative Agent, the Lenders and
the other Agents have no adequate remedy at law in respect of
such breach and, as a consequence, that each and every covenant
contained in this Section shall be specifically enforceable
against the Pledgor, and the Pledgor hereby waives and agrees
not to assert any defenses against an action for specific
performance of such covenants except for a defense that no Event
of Default has occurred under the Credit Agreement.
Irrevocable Authorization and Instruction to
Issuer. The Pledgor hereby authorizes and instructs each Issuer
to comply with any instruction received by it from the
Administrative Agent in writing that (a) states that an Event of
Default has occurred and (b) is otherwise in accordance with the
terms of this Agreement, without any other or further
instructions from the Pledgor, and the Pledgor agrees that each
Issuer shall be fully protected in so complying.
Administrative Agent's Appointment as Attorney-
in-Fact. The Pledgor hereby irrevocably constitutes and
appoints the Administrative Agent and any officer or agent of
the Administrative Agent, with full power of substitution, as
its true and lawful attorney-in-fact with full irrevocable power
and authority in the place and stead of the Pledgor and in the
name of the Pledgor or in the Administrative Agent's own name,
from time to time in the Administrative Agent's discretion, for
the purpose of carrying out the terms of this Agreement, to take
any and all appropriate action and to execute any and all
documents and instruments which may be necessary or desirable to
accomplish the purposes of this Agreement, including, without
limitation, any financing statements, endorsements, assignments
or other instruments of transfer.
The Pledgor hereby ratifies all that said
attorneys shall lawfully do or cause to be done pursuant to the
power of attorney granted in Section 11(a) and not in
contravention of the terms hereof. All powers, authorizations
and agencies contained in this Agreement are coupled with an
interest and are irrevocable until this Agreement is terminated
and the security interests created hereby are released.
Duty of Administrative Agent. The Administrative
Agent's sole duty with respect to the custody, safekeeping and
physical preservation of the Collateral in its possession, under
Section 9-207 of the Code or otherwise, shall be to deal with it
in the same manner as the Administrative Agent deals with
similar securities and property for its own account, except that
the Administrative Agent shall have no obligation to invest
funds held in any Collateral Account and may hold the same as
demand deposits. Neither the Administrative Agent, any Lender,
any other Agent nor any of their respective directors, officers,
employees or agents shall be liable for failure to demand,
collect or realize upon any of the Collateral or for any delay
in doing so or shall be under any obligation to sell or
otherwise dispose of any Collateral upon the request of the
Pledgor or any other Person or to take any other action
whatsoever with regard to the Collateral or any part thereof.
Execution of Financing Statements. Pursuant to
Section 9-402 of the Code, the Pledgor authorizes the
Administrative Agent to file financing statements with respect
to the Collateral without the signature of the Pledgor in such
form and in such filing offices as the Administrative Agent
reasonably determines appropriate to perfect the security
interests of the Administrative Agent under this Agreement. A
carbon, photographic or other reproduction of this Agreement
shall be sufficient as a financing statement for filing in any
jurisdiction.
Authority of Administrative Agent. The Pledgor
acknowledges that the rights and responsibilities of the
Administrative Agent under this Agreement with respect to any
action taken by the Administrative Agent or the exercise or non-
exercise by the Administrative Agent of any option, voting
right, request, judgment or other right or remedy provided for
herein or resulting or arising out of this Agreement shall, as
between the Administrative Agent and the Lenders and the other
Agents, be governed by the Credit Agreement and by such other
agreements with respect thereto as may exist from time to time
among them, but, as between the Administrative Agent and the
Pledgor, the Administrative Agent shall be conclusively presumed
to be acting as agent for the Lenders and the other Agents with
full and valid authority so to act or refrain from acting, and
neither the Pledgor nor any Issuer shall be under any
obligation, or entitlement, to make any inquiry respecting such
authority.
Notices. All notices shall be given or made in
accordance with subsection 9.2 of the Credit Agreement.
Severability. Any provision of this Agreement
which is prohibited or unenforceable in any jurisdiction shall,
as to such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
Amendments in Writing; No Waiver; Cumulative
Remedies. None of the terms or provisions of this Agreement
may be waived, amended, supplemented or otherwise modified
except by a written instrument executed by the Pledgor and the
Administrative Agent, provided that any provision of this
Agreement may be waived by the Administrative Agent, the Lenders
and the other Agents in a letter or agreement executed by the
Administrative Agent or by facsimile transmission from the
Administrative Agent.
Neither the Administrative Agent nor any Lender
or any other Agent shall by any act (except by a written
instrument pursuant to Section 17(a) hereof), delay, indulgence,
omission or otherwise be deemed to have waived any right or
remedy hereunder or to have acquiesced in any Default or Event
of Default or in any breach of any of the terms and conditions
hereof. No failure to exercise, nor any delay in exercising, on
the part of the Administrative Agent, any Lender or any other
Agent, any right, power or privilege hereunder shall operate as
a waiver thereof. No single or partial exercise of any right,
power or privilege hereunder shall preclude any other or further
exercise thereof or the exercise of any other right, power or
privilege. A waiver by the Administrative Agent, any Lender or
any other Agent of any right or remedy hereunder on any one
occasion shall not be construed as a bar to any right or remedy
which the Administrative Agent, such Lender or such other Agent
would otherwise have on any future occasion.
The rights and remedies herein provided are
cumulative, may be exercised singly or concurrently and are not
exclusive of any other rights or remedies provided by law.
Section Headings. The section headings used in
this Agreement are for convenience of reference only and are not
to affect the construction hereof or be taken into consideration
in the interpretation hereof.
Successors and Assigns. This Agreement shall be
binding upon the successors and assigns of the Pledgor and shall
inure to the benefit of the Administrative Agent, the Lenders
and the other Agents and their successors and assigns, provided
that the Pledgor may not assign any of its rights or obligations
under this Agreement without the prior written consent of the
Administrative Agent and any such purported assignment shall be
null and void.
FCC Approval. Notwithstanding anything to the
contrary contained herein or in the other Loan Documents, the
Administrative Agent will not take any action (including the
exercise of voting rights by the Administrative Agent with
respect to the Pledged Stock) pursuant to this Agreement, the
Credit Agreement or any other Loan Document that would
constitute or result in any assignment of any FCC License or
Franchise or any change of control of any Loan Party without
first obtaining the prior approval of the FCC or other federal,
state or local Governmental Authority, if, under the existing
law, such assignment of any FCC License or Franchise or change
of control would require the prior approval of the FCC or other
federal, state or local Governmental Authority. Prior to the
exercise by the Administrative Agent of any power, right,
privilege or remedy pursuant to this Agreement which requires
any consent, approval, recording, qualification or authorization
of any federal, state or local Governmental Authority or
instrumentality, the Pledgor will execute and deliver, or will
cause the execution and delivery of, all applications,
certificates, instruments and other documents and papers that
the Administrative Agent may be required to obtain for such
governmental consent, approval, recording, qualification or
authorization. Without limiting the generality of the
foregoing, the Pledgor will use its best efforts upon the
reasonable request of the Administrative Agent to obtain from
the appropriate governmental authorities the necessary consents
and approvals, if any (i) for the granting to the Administrative
Agent pursuant hereto of the security interests provided for in
this Agreement to the extent, if any, such security interests
may be granted under existing statutes or regulations and (ii)
for the assignment or transfer of such authorizations, licenses
and permits to the Administrative Agent or its designee upon or
following the occurrence and continuance of an Event of Default.
GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE
STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ITS CONFLICT OF LAW
PRINCIPLES.
Submission To Jurisdiction; Waivers. The Pledgor
hereby irrevocably and unconditionally:
submits for itself and its property in any legal
action or proceeding relating to this Agreement and the other
Loan Documents to which it is a party, or for recognition and
enforcement of any judgment in respect thereof, to the non-
exclusive general jurisdiction of the Courts of the State of New
York, the courts of the United States of America for the
Southern District of New York, and appellate courts from any
thereof;
consents that any such action or proceeding may
be brought in such courts and waives any objection that it may
now or hereafter have to the venue of any such action or
proceeding in any such court or that such action or proceeding
was brought in an inconvenient court and agrees not to plead or
claim the same;
agrees that service of process in any such action
or proceeding may be effected by mailing a copy thereof by
registered or certified mail (or any substantially similar form
of mail), postage prepaid, to the Pledgor at its address set
forth in subsection 9.2 of the Credit Agreement or at such other
address of which the Administrative Agent shall have been
notified pursuant thereto;
agrees that nothing herein shall affect the right
to effect service of process in any other manner permitted by
law or shall limit the right to sue in any other jurisdiction;
and
waives, to the maximum extent not prohibited by
law, any right it may have to claim or recover in any legal
action or proceeding referred to in this subsection any special,
exemplary or punitive damages.
WAIVER OF JURY TRIAL. THE PLEDGOR HEREBY
KNOWINGLY AND INTENTIONALLY, IRREVOCABLY AND UNCONDITIONALLY
WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING
TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY
COUNTERCLAIM THEREIN.
Counterparts. This Agreement may be executed by
the Pledgor on any number of separate counterparts (including by
telecopy transmission) and all of said counterparts taken
together shall be deemed to constitute one and the same
instrument.
Integration. This Agreement and the other Loan
Documents represent the final agreement of the parties hereto
and thereto, respectively, with respect to the subject matter
hereof, and there are no promises, undertakings, representations
or warranties by any Agent or any Lender relative to the subject
matter hereof not expressly set forth or referred to herein or
in the other Loan Documents.
[Remainder of page intentionally left blank]
IN WITNESS WHEREOF, the undersigned has caused this
Stock Pledge Agreement to be duly executed and delivered as of
the date first above written.
[NAME OF PLEDGOR]
[By:
Managing General Partner](11)
By:
Title:
(11) If Pledgor is a partnership
Schedules:
Schedule 1 - Description of Pledged Stock
ACKNOWLEDGEMENT AND CONSENT
The undersigned hereby acknowledges receipt of a copy
of the Stock Pledge Agreement dated May 12, 1995 (the "Pledge
Agreement"), made by ________________, a _________________, for
the benefit of Toronto Dominion (Texas), Inc., as Administrative
Agent (in such capacity, the "Administrative Agent"). The
undersigned agrees for the benefit of the Administrative Agent,
the Lenders and the other Agents as follows:
1. The undersigned will be bound by the terms of the
Pledge Agreement and will comply with such terms insofar as such
terms are applicable to the undersigned.
2. The undersigned, upon knowing or having reason to
know thereof, will notify the Administrative Agent promptly in
writing of the occurrence of any of the covenant defaults
described in Section 5(a) of the Pledge Agreement.
3. The terms of Section 9 of the Pledge Agreement
shall apply to it, mutatis mutandis, with respect to all actions
that may be required of it under or pursuant to or arising out
of Section 9 of the Pledge Agreement.
[NAME OF ISSUER]
By:
Name:
Title:
Address for Notices:
Telecopy:
SCHEDULE 1
TO PLEDGE AGREEMENT
DESCRIPTION OF PLEDGED STOCK
Class of Stock
Issuer Stock(12) Certificate No. No. of Shares
(12)Stock is assumed to be common stock unless otherwise
included
EXHIBIT M
SUBSIDIARY ASSIGNMENT OF PARTNERSHIP INTERESTS
SUBSIDIARY ASSIGNMENT OF PARTNERSHIP INTERESTS, dated
as of ____________, made by _________________________, a
_________________ (the "Pledgor"), in favor of TORONTO DOMINION
(TEXAS), INC., as Administrative Agent (in such capacity, the
"Administrative Agent") for the Lenders from time to time
parties to the Revolving Credit Agreement, dated as of May 12,
1995, among Adelphia Cable Partners, L.P., a Delaware limited
partnership, Southeast Florida Cable, Inc., a Florida
corporation, and West Boca Acquisition Limited Partnership, a
Delaware limited partnership, as Borrowers, such Lenders, the
Agents identified therein and Toronto Dominion (Texas), Inc., as
Administrative Agent (as amended, supplemented and otherwise
modified from time to time, the "Credit Agreement").
W I T N E S S E T H
WHEREAS, pursuant to the Credit Agreement, the Lenders
have severally agreed to make Loans to the Borrowers upon the
terms and subject to the conditions set forth therein;
WHEREAS, it is a condition precedent to the obligation
of the Lenders to make their respective Loans to the Borrowers
that the Pledgor guarantee payment and performance of the
Borrowers' obligations under the Credit Agreement, the Notes and
the other Loan Documents;
WHEREAS, in satisfaction of such condition, the
Pledgor has entered into a Guaranty Agreement of even date
herewith (as amended, supplemented and otherwise modified from
time to time, the "Guaranty") for the benefit of the Lenders and
the Agents; and
WHEREAS, it is a further condition precedent to the
obligation of the Lenders to make their respective Loans to the
Borrowers under the Credit Agreement that the Pledgor shall have
executed and delivered this Subsidiary Assignment of Partnership
Interests to secure, among other things, payment and performance
of the Borrowers' obligations under the Credit Agreement and
payment and performance of the Pledgor's obligations under the
Guaranty.
NOW, THEREFORE, in consideration of the premises and
for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the Pledgor hereby
agrees with the Administrative Agent, for the benefit of the
Lenders and the other Agents, as follows:
Defined Terms. Unless otherwise defined
herein, terms which are defined in the Credit Agreement and used
herein are so used as so defined. For purposes of this
Assignment of Partnership Interests, the term "Lender" shall
include any Affiliate of any Lender which has entered into an
Interest Rate Protection Agreement with any Borrower and the
term "Loan Documents" shall include any Interest Rate Protection
Agreement between any Lender (including any such Affiliates of a
Lender) and any Borrower.
The following terms defined in Article 9 of the
Uniform Commercial Code as from time to time in effect in the
State of New York are used herein as so defined: Accounts,
Proceeds, Instrument and Chattel Paper; and the following terms
have the following meanings:
"Agreement": this Subsidiary Assignment of Partnership
Interests, as the same may be amended, supplemented and
otherwise modified from time to time.
"Code": the Uniform Commercial Code as from time to
time in effect in the State of New York.
"Collateral Account": any account established to hold
money Proceeds, maintained under the sole dominion and
control of the Administrative Agent, subject to withdrawal by
the Administrative Agent for the account of the Lenders and
the Agents as provided herein.
"General Intangibles": as defined in Section 9-106 of
the Code and shall include, without limitation, the
partnership interests listed on Schedule 1 to this Agreement
and all rights of the Pledgor to receive, directly or
indirectly, moneys or any other rights or benefits therefrom.
"Partnership": [Name of partnership]
"Partnership Agreement": the [Limited] Partnership
Agreement of __________________, dated as of ________________
__, 199_, between the Pledgor and ________________, as the
same may be amended, supplemented and otherwise modified from
time to time.
"Partnership Interests": as defined in Section 2 of
this Agreement.
"Pledged Collateral": as defined in Section 2 of this
Agreement.
"Secured Obligations": the collective reference to
(a) the Obligations (as defined in the Credit Agreement), and
all renewals, refundings, restructurings and other
refinancings thereof, including increases in the amount
thereof, (b) all obligations and liabilities of the Pledgor
which may arise under or in connection with the Guaranty, and
(c) all other obligations and liabilities of the Pledgor
which may arise under or in connection with any other Loan
Document to which the Pledgor is a party, whether on account
of reimbursement obligations, fees, indemnities, costs,
expenses or otherwise (including, without limitation, all
fees and disbursements of counsel to the Administrative Agent
or to the Lenders that are required to be paid by the Pledgor
pursuant to the terms of this Agreement or any other Loan
Document to which the Pledgor is a party).
The words "hereof," "herein" and "hereunder" and
words of similar import when used in this Agreement shall
refer to this Agreement as a whole and not to any particular
provision of this Agreement, and section and paragraph
references are to this Agreement unless otherwise specified.
The meanings given to terms defined herein shall
be equally applicable to both the singular and plural forms of
such terms.
Grant of Security Interest. As collateral
security for the prompt and complete payment and performance
when due (whether at the stated maturity, by acceleration or
otherwise) of the Secured Obligations, now existing or hereafter
arising, the Pledgor hereby pledges, assigns and transfers to
the Administrative Agent for the benefit of the Lenders and the
Agents, and grants to the Administrative Agent for the benefit
of the Lenders and the Agents, a continuing first priority
security interest in, any and all of the following property now
owned or at any time hereafter acquired by the Pledgor, or in
which the Pledgor may acquire any right, title or interest
(collectively, the "Pledged Collateral"):
any and all of its partnership interests in each
Partnership as set forth in Schedule 1 attached hereto,
including, without limitation, all its rights, title and
interest to participate in the operation or management of
such Partnership and all its rights to properties, assets,
partnership interests and distributions, including, without
limitation, distributions of profits, surplus or other
compensation by way of income or liquidating distributions,
in cash or in kind, under such Partnership Agreement in
respect of such limited partnership interests (collectively,
or such limited partnership interest or any part thereof, the
"Partnership Interests");
all Accounts and other rights to payment and
distributions of any kind arising out of the Partnership
Agreement in respect of the Pledgor's Partnership Interests;
all General Intangibles arising out of or
constituted by the Partnership Agreement in respect of the
Pledgor's Partnership Interests; and
to the extent not otherwise included, all
Proceeds of any and all of the foregoing.
This Agreement shall create a continuing security
interest in the Pledged Collateral which shall remain in effect
until all the Secured Obligations, now existing or hereafter
arising, shall have been paid in full, the Commitments shall
have been terminated and the Credit Agreement and the Security
Documents shall no longer be in effect.
Rights of Administrative Agent; Limitations on
Administrative Agent's Obligations.
Pledgor Remains Liable. Anything herein to the
contrary notwithstanding, the Pledgor shall remain liable under
the Partnership Agreement to observe and perform all the
conditions and obligations to be observed and performed by it
thereunder, all in accordance with and pursuant to the terms and
provisions thereof. The Administrative Agent shall not have any
obligation or liability by reason of or arising out of this
Agreement or the receipt by the Administrative Agent of any
payment relating to any Pledged Collateral pursuant hereto, nor
shall the Administrative Agent be obligated in any manner to
perform any of the obligations of the Pledgor under or pursuant
to the Partnership Agreement or any Account or General
Intangible related thereto, to make any payment, to make any
inquiry as to the nature or the sufficiency of any payment
received by it or as to the sufficiency of any performance by
any party under any thereof, to present or file any claim, to
take any action to enforce any performance or to collect the
payment of any amounts which may have been assigned to it or to
which it may be entitled at any time or times.
Proceeds. The Administrative Agent hereby
authorizes the Pledgor, until the occurrence of an Event of
Default and until such Event of Default shall be waived in
writing or cured, (i) to collect the Accounts and payments and
distributions of any kind in respect of the Pledgor's
Partnership Interests, and (ii) to retain the Proceeds of such
Accounts and other payments and distributions. From and after
the occurrence of an Event of Default and during the continuance
thereof, the Administrative Agent shall have the right, but not
the obligation, to collect and retain the Accounts and other
payments and distributions of any kind in respect of the
Pledgor's Partnership Interests, as provided in Section 6. If
required by the Administrative Agent at any time after the
occurrence and during the continuance of an Event of Default,
the Accounts and other rights to payment and distributions of
any kind in respect of the Pledgor's Partnership Interests and
any Proceeds of such Accounts and other rights to payment and
distributions, when and if collected by the Pledgor, shall be
forthwith deposited by the Pledgor in the exact form received,
duly endorsed by the Pledgor to the Administrative Agent if
required, in a Collateral Account and, until so turned over,
shall be held by the Pledgor in trust for the Administrative
Agent, for the benefit of the Lenders and the Agents, segregated
from other funds of the Pledgor.
Representations and Warranties. The Pledgor
hereby represents and warrants that:
Title; No Other Liens. Except for the Lien
granted to the Administrative Agent pursuant to this
Agreement and Permitted Liens, the Pledgor owns each item of
the Pledged Collateral free and clear of any and all Liens or
claims of others. No security agreement or financing
statement with respect to all or any part of the Pledged
Collateral is on file or of record in any public office,
except such as may have been filed in favor of the
Administrative Agent pursuant to this Agreement or the other
Security Documents.
Perfected First Priority Liens. Upon giving of
appropriate notices pursuant to Article 8 of the Code and in
the form of Exhibits A and B to this Agreement with respect
to each [limited] [general] partnership interest and upon the
filing of UCC-1 financing statements required to perfect the
security interest granted hereunder in Accounts and other
rights to payment and distributions of any kind and General
Intangibles arising out of the Partnership Agreement in
respect of the Pledgor's Partnership Interests under the
Uniform Commercial Code in effect in each relevant
jurisdiction, the Liens granted pursuant to this Agreement
shall constitute perfected first priority Liens on the
Pledged Collateral in favor of the Administrative Agent and
shall be enforceable as such against all creditors of and
purchasers from the Pledgor, except as enforceability may be
limited by applicable bankruptcy, insolvency, moratorium or
similar laws affecting the enforcement of creditors' rights
generally, and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).
Chief Executive Office. The Pledgor's chief
executive office and principal place of business, and the
place where the Pledgor keeps its books and records, is
located at 5 West Third Street, Coudersport, Pennsylvania
16915.
Covenants. The Pledgor covenants and agrees with
the Administrative Agent that until the Secured Obligations are
paid in full and the Commitments are terminated:
Further Documentation; Pledge of Instruments. At
any time and from time to time, upon the written request of
the Administrative Agent, and at the sole expense of the
Pledgor, the Pledgor will promptly and duly execute and
deliver such further instruments and documents and take such
further action as the Administrative Agent may reasonably
request for the purpose of obtaining or preserving the full
benefits of this Agreement and of the rights and powers
herein granted, including, without limitation, the filing of
any financing or continuation statements under the Uniform
Commercial Code in effect in any jurisdiction with respect to
the Liens created hereby. The Pledgor also hereby authorizes
the Administrative Agent to file any such financing or
continuation statement without the signature of the Pledgor
to the extent permitted by applicable law. The Pledgor and
the Administrative Agent agree that a carbon, photographic or
other reproduction of this Agreement or a financing statement
is sufficient as a financing statement. If any amount
payable under or in connection with any of the Pledged
Collateral shall be or become evidenced by any promissory
note, other Instrument or Chattel Paper, such note,
Instrument or Chattel Paper shall be immediately delivered to
the Administrative Agent after the occurrence and during the
continuance of an Event of Default, duly endorsed in a manner
satisfactory to the Administrative Agent, to be held as
Pledged Collateral pursuant to this Agreement.
Indemnification. The Pledgor will pay, and save
the Administrative Agent, each Lender and each of the other
Agents, harmless from, any and all liabilities, reasonable
costs and expenses (including, without limitation, legal fees
and expenses) (i) with respect to, or resulting from, any
delay in paying, any and all excise, sales or other taxes
which may be payable or determined to be payable with respect
to any of the Pledged Collateral, (ii) with respect to, or
resulting from, any delay in complying with any Governmental
Requirement applicable to any of the Pledged Collateral or
(iii) in connection with the grant and perfection of the
security interest contemplated by this Agreement, except for
any such liabilities which results from the gross negligence
or willful misconduct of the Administrative Agent, such
Lender or such other Agent, as the case may be.
Maintenance of Records. The Pledgor will keep
and maintain at its own cost and expense satisfactory and
complete records of the Pledged Collateral, including,
without limitation, a record of all payments received and all
credits granted.
Limitation on Liens on Pledged Collateral. The
Pledgor will not create, incur or permit to exist, will
defend the Pledged Collateral against, and will take such
other action as is necessary to remove, any Lien or claim on
or to the Pledged Collateral, other than the Liens created
hereby and Permitted Liens, and will defend the right, title
and interest of the Administrative Agent in and to any of the
Pledged Collateral against the claims and demands of all
Persons whomsoever.
Further Identification of Pledged Collateral.
The Pledgor will furnish to the Administrative Agent from
time to time statements and schedules further identifying and
describing the Pledged Collateral and such other reports in
connection with the Pledged Collateral as the Administrative
Agent may reasonably request, all in reasonable detail.
Changes in Locations, Name, etc. The Pledgor
will not, unless it shall give 30 days' written notice to
such effect to the Administrative Agent and any filings
required under the Uniform Commercial Code in effect in any
affected jurisdictions to maintain the perfected security
interest granted pursuant to this Agreement shall have been
made, (i) change the location of its chief executive office
or principal place of business from that specified in Section
4(c) or remove its books and records from such location or
(ii) change its name, identity or structure to such an extent
that any financing statement filed by the Administrative
Agent in connection with this Agreement would become
seriously misleading.
Administrative Agent's Appointment as Attorney-
in-Fact.
Powers. The Pledgor hereby irrevocably
constitutes and appoints the Administrative Agent and any
officer or agent thereof, to the extent permitted under
applicable law, with full power of substitution, as its true and
lawful attorney-in-fact with full irrevocable power and
authority in the place and stead of the Pledgor and in the name
of the Pledgor or in its own name, from time to time in the
Administrative Agent's discretion, for the purpose of carrying
out the terms of this Agreement, to take any and all appropriate
action and to execute any and all documents and instruments
which may be necessary or desirable to secure the Secured
Obligations and grant interests in the Pledged Collateral as
contemplated by this Agreement, and, without limiting the
generality of the foregoing, the Pledgor hereby gives the
Administrative Agent the power and right, on behalf of the
Pledgor, without notice to or assent by the Pledgor, to do the
following:
upon the occurrence and during the continuance of
an Event of Default, to exercise all partnership rights,
powers and privileges with respect to the Partnership
Interests to the same extent as a limited partner under the
Partnership Agreement;
upon the occurrence and during the continuance of
an Event of Default, in the name of the Pledgor or its own
name, or otherwise, to take possession of and endorse and
collect any checks, drafts, notes, acceptances or other
instruments for the payment of moneys due under (i) any
Account, Instrument or General Intangible owing to the
Pledgor as a [limited] [general] partner under the
Partnership Agreement or (ii) for the payment of any other
moneys due to the Pledgor as a limited partner under the
Partnership Agreement and to file any claim or to take any
other action or proceeding in any court of law or equity or
otherwise deemed appropriate by the Administrative Agent for
the purpose of collecting any and all such moneys due under
any Account, Instrument, General Intangible or the
Partnership Agreement whenever payable;
to pay or discharge taxes and Liens levied or
placed on the Pledged Collateral; and
upon the occurrence and during the continuance of
an Event of Default, (a) to direct any party liable for any
payment under any of the Pledged Collateral to make payment
of any and all moneys due or to become due thereunder
directly to the Administrative Agent or as the Administrative
Agent shall direct; (b) to ask for or demand, collect,
receive payment of and receipt for, any and all moneys,
claims and other amounts due or to become due at any time in
respect of or arising out of the Pledged Collateral; (c) to
sign and endorse any invoices, freight or express bills,
bills of lading, storage or warehouse receipts, drafts
against debtors, assignments, verifications, notices and
other documents in connection with any of the Pledged
Collateral; (d) to commence and prosecute any suits, actions
or proceedings at law or in equity in any court of competent
jurisdiction to collect the Pledged Collateral or any part
thereof and to enforce any other right in respect of the
Pledged Collateral; (e) to defend any suit, action or
proceeding brought against the Pledgor with respect to the
Pledged Collateral; (f) to settle, compromise or adjust any
suit, action or proceeding described in clause (e) above and,
in connection therewith, to give such discharges or releases
as the Administrative Agent may deem appropriate; and (g)
generally, to sell, transfer, pledge and make any agreement
with respect to or otherwise deal with any of the Pledged
Collateral as fully and completely as though the
Administrative Agent were the absolute owner thereof for all
purposes, and to do, at the Administrative Agent's option and
the Pledgor's expense, at any time, or from time to time, all
reasonable acts and things which the Administrative Agent
deems necessary to protect, preserve or realize upon the
Pledged Collateral and the Administrative Agent's Liens
thereon and to effect the intent of this Agreement, all as
fully and effectively as the Pledgor might do.
The Pledgor hereby ratifies all that said attorneys shall
lawfully do or cause to be done by virtue hereof and not in
contravention of the terms hereof. This power of attorney is a
power coupled with an interest and shall be irrevocable.
Other Powers. The Pledgor also authorizes the
Administrative Agent, at any time and from time to time, to
execute, in connection with the sale provided for in Section 8
hereof, any endorsements, assignments or other instruments of
conveyance or transfer with respect to the Pledged Collateral.
No Duty on Administrative Agent's Part. The
powers conferred on the Administrative Agent hereunder are
solely to protect the Administrative Agent's interests in the
Pledged Collateral and shall not impose any duty upon it to
exercise any such powers. The Administrative Agent shall be
accountable only for amounts that it actually receives as a
result of the exercise of such powers, and neither it nor any of
its officers, directors, employees or agents shall be
responsible to the Pledgor for any act or failure to act
hereunder, except for its or their gross negligence or willful
misconduct.
Performance by Administrative Agent of Pledgor's
Obligations; Rights of Pledgor Prior to Event of Default. If
the Pledgor fails to perform or comply with any of its
agreements contained herein and the Administrative Agent, as
provided for by the terms of this Agreement, shall itself
perform or comply, or otherwise cause performance or compliance,
with such agreement, the reasonable expenses of the
Administrative Agent incurred in connection with such
performance or compliance, together with interest thereon at the
Default Rate, shall be payable by the Pledgor to the
Administrative Agent on demand and shall constitute Secured
Obligations secured hereby.
Unless an Event of Default shall have occurred
and be continuing, the Pledgor shall be entitled to receive all
distributions made pursuant to the Partnership Agreement and
exercise all voting rights and take all action it is authorized
to take thereunder, provided that no distribution shall be made
which is prohibited by the Credit Agreement, the Partnership
Agreement or any of the other documents executed in connection
with the transactions contemplated hereby; and, provided
further, that no vote or other action taken shall impair any of
the Pledged Collateral provided to the Administrative Agent
pursuant to this Agreement.
Remedies; Rights Upon Default. If an Event of
Default shall occur and be continuing, the Administrative Agent
may exercise in addition to all other rights and remedies
granted to it in this Agreement and in any other instrument or
agreement securing, evidencing or relating to the Secured
Obligations, all rights and remedies of a secured party under
the Code. Without limiting the generality of the foregoing, the
Administrative Agent, without demand of performance or other
demand, presentment, protest, advertisement or notice of any
kind (except the notice specified below of time and place of
public or private sale) to or upon the Pledgor or any other
Person (all and each of which demands, presentment, protest,
advertisements and notices are hereby waived), may in such
circumstances forthwith collect, receive, appropriate and
realize upon the Pledged Collateral, or any part thereof, and/or
may forthwith sell, lease, assign, give option or options to
purchase, or otherwise dispose of and deliver said Pledged
Collateral or any part thereof (or contract to do any of the
foregoing), in one or more parcels at public or private sale or
sales, at any exchange, broker's board or office of the
Administrative Agent or elsewhere upon such terms and conditions
as it may deem advisable and at such prices as it may deem best,
for cash or on credit or for future delivery without assumption
of any credit risk. The Administrative Agent, any Lender and
any other Agent shall have the right upon any such public sale
or sales, and, to the extent permitted by law, upon any such
private sale or sales, to purchase the whole or any part of said
Pledged Collateral so sold, free of any right or equity of
redemption in the Pledgor, which right or equity of redemption
is hereby waived or released. The Pledgor further agrees, at
the Administrative Agent's request, to assemble the Pledged
Collateral and make it available to the Administrative Agent at
places which the Administrative Agent shall reasonably select,
whether at the Pledgor's premises or elsewhere. The
Administrative Agent shall apply the net proceeds of any such
collection, recovery, receipt, appropriation, realization or
sale, after deducting all reasonable costs and expenses of every
kind incurred therein or incidental to the care or safekeeping
of any of the Pledged Collateral or in any way relating to the
Pledged Collateral or the rights of the Administrative Agent
hereunder, including, without limitation, reasonable attorneys'
fees and disbursements, to the payment in whole or in part of
the Secured Obligations as provided in the Credit Agreement and
only after such application and payment in full of the Secured
Obligations and after the payment by the Administrative Agent of
any other amount required by any provision of law, including,
without limitation, Section 9-504(1)(c) of the Code, need the
Administrative Agent account for the surplus, if any, to the
Pledgor. To the extent permitted by applicable law, the Pledgor
waives all claims, damages, and demands against the
Administrative Agent arising out of the repossession, retention
or sale of the Pledged Collateral. If any notice of a proposed
sale, or disposition of Pledged Collateral shall be required by
law, such notice shall be deemed reasonably and properly given
if given (effective upon dispatch) in any manner provided in the
Credit Agreement at least 20 days before such sale or
disposition.
If an Event of Default shall occur and be
continuing, the Administrative Agent may (but need not), upon
notice to the Pledgor, exercise all voting and other rights of
the Pledgor as a limited or general, as the case may be, partner
of the Partnership and exercise all other rights as a limited or
general, as the case may be, partner provided under the
Partnership Agreement in respect of the Partnership Interests
and the Administrative Agent shall receive all permitted
distributions, if any, made for the account of the Pledgor as a
limited or general, as the case may be, partner under the
Partnership Agreement.
Limitation on Administrative Agent's Duties in
Respect of Pledged Collateral. The Administrative Agent's sole
duty with respect to the custody, safekeeping and physical
preservation of any Pledged Collateral in its possession, under
Section 9-207 of the Code or otherwise, shall be to deal with it
in the same manner as the Administrative Agent deals with
similar property for its own account. Neither the
Administrative Agent nor any of its directors, officers,
employees or agents shall be liable for failure to demand,
collect or realize upon all or any part of the Pledged
Collateral or for any delay in doing so or shall be under any
obligation to sell or otherwise dispose of any Pledged
Collateral upon the request of the Pledgor or otherwise.
Powers Coupled with an Interest. All
authorizations and agencies herein contained with respect to the
Pledged Collateral are irrevocable and powers coupled with an
interest.
Notices. All notices, requests and demands to or
upon the Administrative Agent, any Lender or the Pledgor to be
effective shall be in writing (including by facsimile or
telecopy transmission) and shall be deemed to have been duly
given or made (i) when delivered by hand or (ii) three days
after being deposited in the mail, postage prepaid or (iii) one
Business Day after being sent by priority overnight mail with a
nationally recognized overnight delivery carrier or (iv) if by
telecopy when received:
if to the Administrative Agent or any Lender, at
its address or transmission number for notices provided in
subsection 9.2 of the Credit Agreement;
if to any Agent other than the Administrative
Agent or any Lender, at its address or transmission number
for notices provided in Annex A to the Credit Agreement, as
supplemented from time to time in connection with assignments
pursuant to subsection 9.6 of the Credit Agreement; and
if to the Pledgor, at its address or transmission
number for notices set forth under its signature below.
The Administrative Agent, each Lender, each other
Agent and the Pledgor may change its address and transmission
numbers for notices by notice in the manner provided in this
Section.
Severability. Any provision of this Agreement
which is prohibited or unenforceable in any jurisdiction shall,
as to such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
Section Headings. The section headings used in
this Agreement are for convenience of reference only and are not
to affect the construction hereof or be taken into consideration
in the interpretation hereof.
No Waiver; Cumulative Remedies. The
Administrative Agent shall not by any act (except pursuant to
the execution of a written instrument pursuant to Section 15
hereof), delay, indulgence, omission or otherwise be deemed to
have waived any right or remedy hereunder or to have acquiesced
in any Default or Event of Default or in any breach of any of
the terms and conditions hereof. No failure to exercise, nor
any delay in exercising, on the part of the Administrative
Agent, any Lender or any other Agent, any right, power or
privilege hereunder shall operate as a waiver thereof. No
single or partial exercise of any right, power or privilege
hereunder shall preclude any other or further exercise thereof
or the exercise of any other right, power or privilege. A
waiver by the Administrative Agent, any Lender or any other
Agent of any right or remedy hereunder on any one occasion shall
not be construed as a bar to any right or remedy which the
Administrative Agent, any Lender or any other Agent would
otherwise have on any future occasion. The rights and remedies
herein provided are cumulative, may be exercised singly or
concurrently and are not exclusive of any rights or remedies
provided by law.
Waivers and Amendments; Successors and Assigns.
None of the terms or provisions of this Agreement may be waived,
amended, supplemented or otherwise modified except by a written
instrument executed by the Pledgor and the Administrative Agent,
provided that any provision of this Agreement may be waived by
the Administrative Agent and the Lenders in a letter or
agreement executed by the Administrative Agent or by telecopy or
facsimile transmission from the Administrative Agent. This
Agreement shall be binding upon the successors and assigns of
the Pledgor and shall inure to the benefit of the Administrative
Agent, for the benefit of the Lenders and the Agents, and the
successors and assigns of the Administrative Agent, the Lenders
and the other Agents, provided that the Pledgor may not assign
its rights or obligations under this Agreement without the prior
written consent of the Administrative Agent and any such
purported assignment shall be null and void.
FCC Approval. Notwithstanding anything to the
contrary contained herein or in the other Loan Documents, the
Administrative Agent will not take any action (including the
exercise of voting rights by the Administrative Agent with
respect to the Partnership Interests) pursuant to this
Agreement, the Credit Agreement or any other Loan Document that
would constitute or result in any assignment of any FCC License
or Franchise or any change of control of any Loan Party without
first obtaining the prior approval of the FCC or other federal,
state or local Governmental Authority, if, under the existing
law, such assignment of any FCC License or Franchise or change
of control would require the prior approval of the FCC or other
federal, state or local Governmental Authority. Prior to the
exercise by the Administrative Agent of any power, right,
privilege or remedy pursuant to this Agreement which requires
any consent, approval, recording, qualification or authorization
of federal, state or local any Governmental Authority or
instrumentality, the Pledgor will execute and deliver, or will
cause the execution and delivery of, all applications,
certificates, instruments and other documents and papers that
the Administrative Agent may be required to obtain for such
governmental consent, approval, recording, qualification or
authorization. Without limiting the generality of the
foregoing, the Pledgor will use its best efforts upon the
reasonable request of the Administrative Agent to obtain from
the appropriate governmental authorities the necessary consents
and approvals, if any (i) for the granting to the Administrative
Agent pursuant hereto of the security interests provided for in
this Agreement to the extent, if any, such security interests
may be granted under existing statutes or regulations and (ii)
for the assignment or transfer of such authorizations, licenses
and permits to the Administrative Agent or its designee upon or
following the occurrence and continuance of an Event of Default.
Authority of Administrative Agent. The Pledgor
acknowledges that the rights and responsibilities of the
Administrative Agent under this Agreement with respect to any
action taken by the Administrative Agent or the exercise or non-
exercise by the Administrative Agent of any option, voting
right, request, judgment or other right or remedy provided for
herein or resulting or arising out of this Agreement shall, as
between the Administrative Agent and the Lenders and the other
Agents, be governed by the Credit Agreement and by such other
agreements with respect thereto as may exist from time to time
among them, but, as between the Administrative Agent and the
Pledgor, the Administrative Agent shall be conclusively presumed
to be acting as agent for the Lenders and the other Agents with
full and valid authority so to act or refrain from acting, and
neither the Pledgor nor the Partnership shall be under any
obligation, or entitlement, to make any inquiry respecting such
authority.
GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PLEDGOR HEREUNDER SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE
STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ITS CONFLICT OF LAW
PRINCIPLES.
Submission To Jurisdiction: Waivers. The Pledgor
hereby irrevocably and unconditionally:
submits for itself and its property in any legal
action or proceeding relating to this Agreement and the other
Loan Documents to which it is a party, or for recognition and
enforcement of any judgement in respect thereof, to the non-
exclusive general jurisdiction of the Courts of the State of New
York, the courts of the United States of America for the
Southern District of New York, and appellate courts from any
thereof;
consents that any such action or proceeding may
be brought in such courts and waives any objection that it may
now or hereafter have to the venue of any such action or
proceeding in any such court or that such action or proceeding
was brought in an inconvenient court and agrees not to plead or
claim the same;
agrees that service of process in any such action
or proceeding may be effected by mailing a copy thereof by
registered or certified mail (or any substantially similar form
of mail), postage prepaid, to the Pledgor at its address set
forth under its signature below or at such other address of
which the Administrative Agent shall have been notified pursuant
to Section 11;
agrees that nothing herein shall affect the right
to effect service of process in any other manner permitted by
law or shall limit the right to sue in any other jurisdiction;
and
waives, to the maximum extent not prohibited by
law, any right it may have to claim or recover in any legal
action or proceeding referred to in this subsection any special,
exemplary or punitive damages.
WAIVER OF JURY TRIAL. THE PLEDGOR HEREBY
KNOWINGLY AND INTENTIONALLY, IRREVOCABLY AND UNCONDITIONALLY,
WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING
TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY
COUNTERCLAIM THEREIN.
Counterparts. This Agreement may be executed by
the Pledgor on any number of separate counterparts (including by
telecopy transmission), and all of said counterparts taken
together shall be deemed to constitute one and the same
instrument.
Integration. This Agreement and the other Loan
Documents represent the final agreement of the parties hereto
and thereto, respectively, with respect to the subject matter
hereof, and there are no promises, undertakings, representations
or warranties by any Agent or any Lender relative to the subject
matter hereof not expressly set forth or referred to herein or
in the other Loan Documents.
IN WITNESS WHEREOF, the Pledgor has caused this
Subsidiary Assignment of Partnership Interests to be duly
executed and delivered as of the date first above written.
[NAME OF PLEDGOR]
[By: ,
Managing General Partner](13)
By:
Name:
Title:
Address for Notices:
c/o Olympus Communications,
L.P.
5 West Third Street
Coudersport, PA 16915
Telecopy:
Schedules
Schedule 1 - Description of Partnership Interests
Exhibits
Exhibit A - Transaction Statement
Exhibit B - Registration Notice
SCHEDULE 1
DESCRIPTION OF PARTNERSHIP INTERESTS
(13) If Pledgor is a partnership
All limited and general partnership interests in the
Partnership held by the Pledgor from time to time,
including, without limitation:
EXHIBIT A
Transaction Statement
____________ __, 199__
To: [Name of Pledgor]
c/o Olympus Communications, L.P.
5 West Third Street
Coudersport, PA 16915
Attention:
and
Toronto Dominion (Texas), Inc.,
as Administrative Agent
909 Fannin, Suite 1700
Houston, TX 77010
Attention:
This statement is to advise you that a pledge of the
following uncertificated securities has been registered in the
name of Toronto Dominion (Texas), Inc., as Administrative Agent:
Uncertificated Security: All [limited] [general]
partnership interests of [Name of Pledgor], in
_________________________, L.P.
Registered owner:
[Name of Pledgor]
c/o Olympus Communications, L.P.
5 West Third Street
Coudersport, PA 16915
Attention:
Taxpayer Identification Number:
Registered Pledgee:
Toronto Dominion (Texas), Inc.,
as Administrative Agent
909 Fannin, Suite 1700
Houston, TX 77010
Attention:
Taxpayer Identification Number:
There are no liens or restrictions of
______________________, L.P., and no adverse
claims to which the uncertificated security is or
may be subject known to
__________________________, L.P.
The pledge was registered on _____________ __,
199__.
THIS STATEMENT IS MERELY A RECORD OF THE RIGHTS OF THE
ADDRESSEES AS OF THE TIME OF ITS ISSUANCE. DELIVERY OF THIS
STATEMENT, OF ITSELF, CONFERS NO RIGHTS ON THE RECIPIENT. THIS
STATEMENT IS NEITHER A NEGOTIABLE INSTRUMENT NOR A SECURITY.
Very truly yours,
[NAME OF PARTNERSHIP]
By: [NAME OF GENERAL PARTNER],
Managing General Partner
By:
Name:
Title:
EXHIBIT B
______________ __, 199__
To: [ADDRESS]
You are hereby instructed to register the pledge of
the following uncertificated security as follows:
All [limited] [general] partnership interests of the
undersigned in ______________________________, L.P.
Pledgor Pledgee
[Name of Pledgor] Toronto Dominion (Texas),
Inc.,
c/o Olympus Communications, L.P. as Administrative Agent
5 West Third Street 909 Fannin, Suite 1700
Coudersport, PA 16915 Houston, TX 77010
Attention: Attention:
Very truly yours,
[NAME OF PARTNERSHIP]
By: [NAME OF GENERAL
PARTNER],
Managing General Partner
By:
Name:
Title:
EXHIBIT 2.2
Toronto Dominion (Texas), Inc.
909 Fannin, Suite 1700
Houston, TX 77010
Attention:__________________
Telecopier:_________________
Date:
Notice of Borrowing
Reference is made to the Revolving Credit Agreement, dated
as of May ___, 1995, among Adelphia Cable Partners, L.P., a
Delaware limited partnership, Southeast Florida Cable, Inc., a
Florida corporation, and West Boca Acquisition Limited
Partnership, a Delaware limited partnership, as Borrowers, the
Lenders parties thereto, the Agents identified therein and
Toronto Dominion (Texas), Inc., as Administrative Agent (as
amended, supplemented and otherwise modified from time to time,
the "Credit Agreement"). Capitalized terms used but not
otherwise defined herein have the meanings assigned to them in
the Credit Agreement. The undersigned hereby gives notice
pursuant to and in accordance with Section 2.2(a) of the Credit
Agreement of its request to have the following Loans made to it
on [insert requested date of Borrowing]:
Number of
Borrowings Type of Loan1 Interest Period2
Amount
(1)
(2)
(3)
The undersigned Responsible Officer represents and warrants
that (a) the Borrowing requested hereby complies with the
requirements of Section 2.2 of the Credit Agreement and (b)
except to the extent set forth on Annex A hereto,3 (i) each
representation and warranty of the Borrowers set forth in
Section 3 of the Credit Agreement is true and correct in all
material respects as of the date hereof and will be true and
correct as of the time the Loans are made, in each case, unless
made as of a specific date as set forth therein and both prior
to and after giving effect to the Loans and the application of
the proceeds thereof, and (ii) no Default exists as of the date
hereof or would result from the making of the Loans or from the
application of the proceeds thereof if the Loans were made on
the date hereof and no Default will exist at the time the Loans
are made or will result from the making of the Loans or from the
application of the proceeds thereof.
OLYMPUS COMMUNICATIONS, L.P.,
Managing General Partner
By: ACP Holdings, Inc.,
Managing General Partner
By:
Name:
Title:
1 Specify Base Rate Loans or Eurodollar Loans for each
Borrowing.
2 Specify the duration of the Interest Period in the case
of Eurodollar Loans of the same Borrowing (e.g., one-month
Eurodollar Rate).
3 If the representation and warranty in either clause
(b)(i) or (b)(ii) would be incorrect, include the material
in brackets and set forth the reasons such representation
and warranty would be incorrect on an attachment labeled
Annex A.
EXHIBIT 2.8
Toronto Dominion (Texas), Inc.
909 Fannin, Suite 1700
Houston, TX 77010
Attention:
Telecopier:
Date:
Notice of Conversion
Reference is made to the Revolving Credit Agreement, dated
as of May ___, 1995, among Adelphia Cable Partners, L.P., a
Delaware limited partnership, Southeast Florida Cable, Inc., a
Florida corporation, and West Boca Acquisition Limited
Partnership, a Delaware limited partnership, as Borrowers, the
Lenders parties thereto, the Agents identified therein and
Toronto Dominion (Texas), Inc., as Administrative Agent (as
amended, supplemented and otherwise modified from time to time,
the "Credit Agreement"). Capitalized terms used but not
otherwise defined herein have the meanings assigned to them in
the Credit Agreement. The undersigned hereby gives notice
pursuant to and in accordance with Section 2.6 of the Credit
Agreement of its desire to Convert the following Loans specified
below into the Type and in the amounts specified below on
[insert date of Conversion]:
Loans to be
Converted Converted Loans
Last day
of
Current New
Type of Interest Date of Interest
Loan(1) Period(2) Amount Conversion Period Amount
The undersigned Responsible Officer represents and warrants
that (a) the Conversion requested hereby complies with the
requirements of Section 2.06 of the Credit Agreement and (b)
except to the extent set forth on Annex A hereto,Footnote 3, (i)
each representation and warranty of the Borrowers set forth in
Section 3 of the Credit Agreement is true and correct in all
material respects as of the date hereof and will be true and
correct as of the time of the Conversion, in each case, unless
made as of a specific date as set forth therein and both prior
to and after giving effect to the Conversion, and (ii) no
Default exists as of the date hereof and no Default will exist
at the time of the Conversion.
OLYMPUS COMMUNICATIONS, L.P.,
Managing General Partner
By: ACP Holdings, Inc.,
Managing General Partner
By:
Name:
Title:
(1) Specify Base Rate Loans or Eurodollar Loans.
(2) Inapplicable if Type of Loans to be Converted are Base
Rate Loans.
(3) If the representation and warranty in either clause
(b)(i) or (b)(ii) would be incorrect, include the material
in the brackets and set forth the reasons such
representation and warranty would be incorrect on an
attachment labeled Annex A.
EXHIBIT 4.1(d)
BORROWING CERTIFICATE
Pursuant to subsection 4.1(d) of the Revolving Credit
Agreement, dated as of May ___, 1995, among Adelphia Cable
Partners, L.P., a Delaware limited partnership, Southeast
Florida Cable, Inc., a Florida corporation, and West Boca
Acquisition Limited Partnership, a Delaware limited partnership,
as Borrowers, the Lenders parties thereto, the Agents identified
therein and Toronto Dominion (Texas), Inc., as Administrative
Agent (as amended, supplemented and otherwise modified from time
to time, the "Credit Agreement"), the undersigned,
[________________________] and[_______________________] of and
on behalf of the [name of Borrower] (the "Borrower"), hereby
certify as follows:
The representations and warranties of the Borrower set
forth in the Credit Agreement, the Security Documents and each
of the other Loan Documents or which are contained in any
certificate, document or financial or other statement furnished
pursuant to or in connection with the Credit Agreement, the
Security Documents or any of the other Loan Documents are true
and correct in all material respects on and as of the date
hereof with the same effect as if made on the date hereof,
except for representations and warranties expressly stated to
relate to a specific earlier date, in which case such
representations and warranties are true and correct as of such
earlier date;
No Default or Event of Default has occurred and
is continuing as of the date hereof or will occur after
giving effect to the making of the Loans requested to be
made on the date hereof and the consummation of each of the
transactions contemplated by the Loan Documents;
There are no liquidation or dissolution
proceedings pending or to my knowledge threatened against
the Borrower or any of its Subsidiaries, nor has any other
event occurred affecting or threatening the [corporate]
existence of the Borrower or any of its Subsidiaries;
The Borrower is a [limited partnership]
[corporation] duly organized and validly existing under the
laws of [Delaware] [Florida];
Unless otherwise defined herein, capitalized terms
which are defined in the Credit Agreement are used herein as so
defined.
[Remainder of page intentionally left blank.]
IN WITNESS WHEREOF, the undersigned have set our names
and affixed the corporate seal unto this Borrowing Certificate.
[NAME OF BORROWER] [NAME OF BORROWER]
[By: , [By: ,
its General Partner] its General
Partner]
By: By:
Name: Name:
Title: [Senior] Vice President Title:
[Assistant] Secretary
Date: _______________, 19___ (CORPORATE
SEAL)
May 12, 1995
Toronto Dominion (Texas), Inc.,
as Administrative Agent
909 Fanin, Suite 1700
Houston, TX 77010
And each of the other Agents and Lenders named in Annex A
to the Credit Agreement referred to below
Ladies and Gentlemen:
I am deputy general counsel of Adelphia Cable Partners,
L.P., a Delaware limited partnership ("ACP"), Southeast Florida
Cable, Inc., a Florida corporation ("Southeast") and West Boca
Acquisition Limited Partnership, a Delaware limited partnership
("West Boca"; and together with ACP and Southeast the
"Borrowers"), which have executed and delivered that certain
Revolving Credit Agreement (the "Agreement") dated as of May 12,
1995, by and among the Borrowers, the Lenders and Agents named
on the signature pages thereof (the "Lenders") and Toronto
Dominion (Texas), Inc., as Administrative Agent. All
capitalized terms used and not otherwise defined in this opinion
shall have the respective meanings ascribed to them in the
Agreement. This opinion is furnished to you pursuant to Section
4.1(p)(ii) of the Agreement.
In connection therewith, I have examined executed copies of
the following documents (collectively, the "Loan Documents"):
the Agreement;
the Notes;
the Borrower Assignment of Partnership Interests by
ACP regarding its partnership interests in Key
Biscayne Cablevision ("Key Biscayne");
the Parent Assignment of Partnership Interests by ACP
Holdings, Inc. ("ACP Holdings") regarding its
partnership interests in ACP;
the Parent Assignment of Partnership Interests by
Olympus regarding its partnership interests in ACP and
West Boca;
6. the Parent Assignment of Partnership Interests by
Dorellenic Cable Partners ("Dorellenic") regarding its
partnership interests in ACP and West Boca;
7. the Stock Pledge Agreement of ACP;
8. the Stock Pledge Agreement of West Boca;
9. the Note Pledge Agreements of ACP and West Boca;
10. the Security Agreement of Olympus;
11. the Security Agreement of ACC;
12. the Guaranty Agreement of Cable Sentry Corporation
("Cable Sentry");
13. the Guaranty Agreement of Key Biscayne; and
14. the Management Subordination Agreement;
15. the Affiliate Subordination Agreement(s).
The Loan Documents numbered 3 through 11 above are
hereafter referred to as the "Security Documents". The
Borrowers, ACP Holdings, Olympus, Dorellenic, ACC, Cable Sentry
and Key Biscayne shall hereinafter collectively be referred to
as the "Loan Parties."
I have also examined originals, photocopies of originals or
certified copies of certain records of the Borrowers and the
other Loan Parties, and all such agreements, communications and
other instruments, certificates of public officials, certain
other certificates and such other documents, records and
instruments as I have deemed relevant and necessary as a basis
for our opinion herein. I have also reviewed such matters of
law and conducted such searches of public records as I have
considered relevant for the purposes of this opinion.
In the examination of such documents and with the exception
of the documents executed in connection with the Agreement, I
have assumed the genuineness of all signatures and the
authenticity of all documents submitted to me as originals and
the conformity to the original documents of all documents
submitted to me as certified or photostatic copies, and I have
relied upon the aforesaid documents with respect to the accuracy
of material factual matters contained therein. As to any facts
relevant to my opinion which were not independently established,
I have relied upon information given to me by officers of the
Borrowers.
I have also assumed, without verification, for purposes of
this opinion, the due authorization, execution and delivery of
the Agreement and the other Loan Documents by the Lenders and
the Administrative Agent, and that the Loan Documents constitute
or will constitute legal, valid and binding obligations of the
Lenders and the Administrative Agent, enforceable against each
of them in accordance with their terms.
Based upon and subject to the foregoing and the
qualifications set forth below, I am of the opinion that:
1. ACP, Olympus and West Boca are each limited
partnerships, duly organized, validly existing and in good
standing under the laws of the State of Delaware. Dorellenic
and Key Biscayne are each general partnerships validly existing
under the laws of the Commonwealth of Pennsylvania. ACP
Holdings is a corporation, duly organized, validly existing and
in good standing under the laws of the State of Delaware. Cable
Sentryand Southeast are each corporations, duly organized,
validly existing and in good standing under the laws of the
State of Florida. Each of the Loan Parties has the corporate or
partnership power and authority, as the case may be, to own,
lease property held under lease, operate its property and to
conduct the business in which it is currently engaged. Each of
the Borrowers is duly qualified as a foreign limited partnership
or foreign corporation, as the case may be, under the laws of
each jurisdiction where its ownership, lease or operation of
property or the conduct of its business requires such
qualification, except where the failure to so qualify and/or be
in good standing would not have a Material Adverse Effect. The
opinions set forth in this Paragraph 1 with respect to the good
standing of (i) ACP, ACP Holdings, Olympus and West Boca are
based solely upon the Certificates of the Delaware Secretary of
State and (ii) Cable Sentry and Southeast are based solely upon
Certificates of the Florida Secretary of State, in each case
delivered to the Administrative Agent in connection with the
Agreement.
2. Each Loan Document has been duly executed and
delivered by each Loan Party which is a party thereto and
constitutes a legal, valid and binding obligation of each Loan
Party which is a party thereto, enforceable against such Loan
Party in accordance with its terms, subject to the
qualifications following the last numbered paragraph hereof.
3. No consent of, approval of or registration with or
notice to any governmental body or authority of the United
States of America, Commonwealth of Pennsylvania, State of
Florida or State of Delaware or any other Person which has not
been obtained is required for the due execution, delivery and
performance of the Loan Documents by the Loan Parties.
4. The execution, delivery and performance by the Loan
Parties of the respective Loan Documents to which each of them
is a party do not contravene or conflict with, or create a Lien
(except as contemplated by the Security Documents) under any
applicable law or regulation of the Commonwealth of
Pennsylvania, the United States of America, State of Florida and
the State of Delaware and will not violate any provision of any
Contractual Obligation of any of the Loan Parties.
5. The Loan Parties (other than ACC) and ACC, only with
respect to the Franchise granted by the City of Boca Raton,
Florida to operate a cable television franchise (the "Boca Raton
Franchise"), have duly and timely filed all cable television
registration statements or any other filings under the
Communications Act of 1934 and the Cable Communications Policy
Act of 1984, each as amended (the "Acts"), and possess and are
in compliance with, all Governmental Approvals and Governmental
Requirements except to the extent that the failure to possess or
comply with any Governmental Approval or Governmental
Requirement could not reasonably be expected to have a Material
Adverse Effect. Without limiting the foregoing, each of the
Franchises of the Borrowers and their Restricted Subsidiaries,
the Franchise granted by Palm Beach County, Florida to Olympus
to operate a cable television franchise and the Boca Raton
Franchise was duly and validly issued and is validly existing
and in full force and effect.
6. The execution, delivery and performance by the Loan
Parties of the Loan Documents do not require the approval of, or
any notice to or filing with, the FCC (other than those which
have been obtained or made), will not result in any violation of
the rules and regulations of the FCC, and will not cause any
forfeiture or impairment of any FCC License.
7. To the best of my knowledge, the Loan Parties other
than ACC and ACC, with respect to the Boca Raton Franchise, are
in all material respects in compliance with the provisions of
Section 111 of Title 17 of the United States Code.
8. I call your attention to Schedule 3.5 to the
Agreement. To my knowledge and except as may be set forth on
said Schedule, there is no pending or threatened Litigation
affecting the Loan Parties which if adversely determined could
reasonably be expected to have a Material Adverse Effect.
The opinions set forth above are subject to the following
qualifications:
A. My opinions are subject to the effect of any
applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting creditors' rights generally and to the
effect of general principles of equity, including, without
limitation, concepts of materiality, reasonableness, good faith
and fair dealing (regardless of whether considered in a
proceeding in equity or at law).
B. I express no opinion concerning the enforceability of
(i) waivers of any constitutional right or statutory or common
law rights which can not be waived, or (ii) indemnification
provisions to the extent such provisions are deemed to violate
public policy.
C. I express no opinion as to the title of the applicable
Loan Parties to any item of Collateral.
D. I express no opinion with respect to any
authorization, consent or approval of, or other action by, or
notice to or filing with the FCC or other Governmental Authority
which may be required in connection with the exercise by the
Administrative Agent or any of the Lenders of any remedies under
any of the Loan Documents except that under the Communications
Act as now in effect, the sale or other disposition of pledged
collateral and the exercise of certain other rights and remedies
conferred upon you by any agreement or by applicable law which
might constitute an assignment or a transfer of control of any
future FCC License acquired by an applicable Loan Party requires
for its consummation the prior consent of the FCC granted upon
an appropriate application therefor.
In addition to the qualifications set forth above, the
foregoing opinions are subject to the following qualifications:
(a) My opinion as to the enforceability of the Loan
Documents is subject to general principles of equity
(regardless of whether such enforceability is
considered in a proceeding in equity or at law or in a
bankruptcy proceeding) and assumes that you will act
with commercial reasonableness in exercising your
rights and remedies thereunder, including without
limitation, the right to demand payment on the Notes;
(b) I express no opinion on the validity, binding effect
or enforceability under certain circumstances of
provisions of the Loan Documents (i) which waive any
rights afforded to any party thereto under any statute
or constitutional provision which provides that such
rights may not be waived, (ii) that purport to prevent
oral modification or waiversor (iii) that broadly
purport to ratify unknown actions of the
Administrative Agent or Lenders prior to said actions
having been taken that waive special, exemplary or
punitive damages;
(c) I express no opinion on the enforceability of any
provisions in the Agreement or any other Loan Document
which provide for specific performance;
(d) I express no opinion on the enforceability of any
provisions in the Loan Documents relating to conflicts
of law, consent to jurisdiction, choice of forum or
choice of law;
(e) I express no opinion on the enforceability of setoff
rights set forth in the Loan Documents against assets
in or against which another party has a perfected
security interest or other lien;
(f) The provisions regarding the remedies available to you
on default as set forth in the Security Documents are
subject to certain procedural requirements and
applicable constitutional, legislative, judicial and
administrative provisions, statutes, regulations,
decisions, rulings and other laws, which are not
reflected in the Security Documents. These procedural
requirements and other laws affect and may restrict
rights and remedies stated to be available to you, but
such procedural requirements would not, in my view,
deprive you of the economic and substantive and legal
benefit of the rights provided thereby;
(g) I have not addressed, and I express no opinion on, the
possible effect of the application of Section 548 of
the Federal Bankruptcy Code or any state uniform
fraudulent transfer law or similar statute, or the
doctrine of equitable subordination. The inherent
factual nature of the application of these statutes
makes them inappropriate subject matter for legal
opinions;
(h) My opinion is subject to judicial decisions which
indicate that public policy may render unenforceable
provisions respecting payment of unreasonable costs
and expenses of enforcement, including, without
limitation, attorneys' fees;
(i) I express no opinion on the enforceability of any
provision in the Loan Documents that purport to
(i) preclude the modification of the Loan Documents
through conduct, custom, or course of performance,
action or dealing, or (ii) waive or limit lender
liability for negligent acts or omissions,
(iii) appoint any Lender or Administrative Agent
attorney-in-fact for any person or entity;
(j) I express no opinion as to the effect on the
enforceability of the Loan Documents of any agreement
by and among the Lenders or the Lenders and the
Administrative Agent which imposes limitations on the
rights and benefits of individual Lenders under the
Loan Documents;
I render no opinion as to the laws of any states or
jurisdictions other than the laws of the Commonwealth of
Pennsylvania and the United States of America, the corporation
and partnership laws of the State of Delaware, and with respect
to paragraphs 3 through 5, the law of the State of Florida
applicable to regulation of CATV and SMATV Systems. This
opinion includes matters governed by, or any approvals or
authorizations required to be obtained under, the Communications
Act or the Cable Act as now in effect.
This opinion is being furnished to you solely in connection
with the above transaction and may not be used or relied upon
for any other purpose whatsoever or by any person other than the
named addressees of this opinion. You may provide a copy of
this opinion to any assignee of a Lender or any Participant
provided, however, that no assignee or Participant shall be
entitled to rely in any manner on this opinion.
Very truly yours,
Colin Higgin
Deputy General Counsel
May 12, 1995
Toronto Dominion (Texas), Inc.,
as Administrative Agent
909 Fanin, Suite 1700
Houston, TX 77010
And each of the other Agents and Lenders named in Annex A
to the Credit Agreement referred to below
Ladies and Gentlemen:
We have acted as special counsel to Adelphia Cable
Partners, L.P., a Delaware limited partnership ("ACP"),
Southeast Florida Cable, Inc., a Florida corporation
("Southeast") and West Boca Acquisition Limited Partnership, a
Delaware limited partnership ("West Boca"; and together with ACP
and Southeast the "Borrowers"), in connection with the execution
and delivery of that certain Revolving Credit Agreement (the
"Agreement") dated as of May 12, 1995, by and among the
Borrowers, the Lenders and Agents named on the signature pages
thereof (the "Lenders") and Toronto Dominion (Texas), Inc. as
Administrative Agent. All capitalized terms used and not
otherwise defined in this opinion shall have the respective
meanings ascribed to them in the Agreement. This opinion is
furnished to you at the request and upon the instructions of the
Borrowers pursuant to Section 4.1 (p)(i) of the Agreement and
with the understanding that you are relying on this opinion in
entering into the Agreement.
In so acting as counsel, we have examined executed copies
of the following documents (collectively, the "Loan Documents"):
the Agreement;
the Notes;
the Borrower Assignment of Partnership Interests by
ACP regarding its partnership interests in Key
Biscayne Cablevision ("Key Biscayne");
the Parent Assignment of Partnership Interests by ACP
Holdings, Inc. ("ACP Holdings") regarding its
partnership interests in ACP;
the Parent Assignment of Partnership Interests by
Olympus regarding its partnership interests in ACP and
West Boca;
6. the Parent Assignment of Partnership Interests by
Dorellenic Cable Partners ("Dorellenic") regarding its
partnership interests in ACP and West Boca;
7. the Stock Pledge Agreement of ACP;
8. the Stock Pledge Agreement of West Boca;
9. the Note Pledge Agreements of ACP and West Boca;
10. the Security Agreement of Olympus;
11. the Security Agreement of ACC;
12. the Guaranty Agreement of Cable Sentry Corporation
("Cable Sentry");
13. the Guaranty Agreement of Key Biscayne;
14. the Management Subordination Agreement; and
15. the Affiliate Subordination Agreement(s).
The Loan Documents numbered 3 through 11 above are
hereafter referred to as the "Security Documents." The
Borrowers, ACP Holdings, Olympus, Dorellenic, ACC, Cable Sentry
and Key Biscayne shall hereinafter collectively be referred to
as the "Loan Parties."
We have examined unfiled copies of the financing statements
listed on Schedule 1 (collectively, the "Financing Statements")
naming the relevant Loan Parties listed on Schedule 1 as Debtor
and the Administrative Agent as Secured Party and describing the
Collateral in which a Lien is purported to be created pursuant
to the relevant Loan Documents. We understand the Financing
Statements will be filed in the filing offices listed on
Schedule 1 (the "Filing Offices").
We have examined the reports listed on Schedule 2 which
have been made by Prentice Hall Legal & Financial Services for
the dates noted as to UCC financing statements (collectively,
the "UCC Search Report").
We have also examined originals, photocopies of originals
or certified copies of the Charter Documents and certain other
records of the Borrowers and the other Loan Parties, and all
such agreements, written communications and other instruments,
certificates of public officials and of officers of the
Borrowers and the other Loan Parties or their general partners,
certain other certificates and such other documents, records and
instruments as we have deemed relevant and necessary as a basis
for our opinion herein. We have also reviewed such matters of
law and conducted such searches of public records as we have
considered relevant for the purposes of this opinion.
In the examination of such documents, we have assumed the
genuineness of all signatures and the authenticity of all
documents submitted to us as originals and the conformity to the
original documents of all documents submitted to us as certified
or photostatic copies, and we have relied upon the aforesaid
documents with respect to the accuracy of material factual
matters contained therein. Other than as we hereinafter opine
in opinion number 2 hereof, we have also assumed that in
connection with the execution, delivery and performance of the
Loan Documents, all consents of, approvals of, registrations
with and notices to any Person, including without limitation,
all actions required by any Governmental Authority to be taken
by any Loan Party have been taken or obtained. As to any facts
relevant to our opinion, we have relied upon certificates given
to us by officers of the Loan Parties and representations made
by the Loan Parties in the Loan Documents. Although we have
made no independent examination of the factual matters set forth
in the aforesaid certificates or representations for the purpose
of rendering this opinion, in the course of our representation
of the Loan Parties, nothing has come to our attention which
causes us to believe that such certificates and representations
are not correct in any material respect.
We have also assumed, without verification, for purposes of
this opinion, the due authorization, execution and delivery of
the Agreement, the other Loan Documents and the Financing
Statements by the Lenders and the Administrative Agent, that the
Loan Documents constitute legal, valid and binding obligations
of the Lenders and the Administrative Agent, enforceable against
each of them in accordance with their terms, and that value has
been given by the Lenders to each of the Loan Parties.
We have made no independent investigation and render no
opinion as to matters relating to or arising under the
Communications Act of 1934, as amended, and the rules and
regulations of the Federal Communications Commission thereunder,
or as to matters relating to or arising under the licensing and
other requirements under the Copyright Act, 17 U.S.C. Section
101, et. seq. and understand that you will rely on the opinions
to you dated the date hereof of Fleischman & Walsh,
communications and copyright counsel for the Loan Parties, and
Colin Higgin, Deputy General Counsel of the Loan Parties with
respect to such matters.
Based upon and subject to the foregoing and the
qualifications set forth below, we are of the opinion that:
1. ACP, Olympus and West Boca are each limited
partnerships, duly organized, validly existing and in good
standing under the laws of the State of Delaware. Dorellenic
and Key Biscayne are each general partnerships validly existing
under the laws of the Commonwealth of Pennsylvania. Each of ACP
Holdings and ACC is a corporation, duly organized, validly
existing and in good standing under the laws of the State of
Delaware. Cable Sentry and Southeast are each corporations,
duly organized, validly existing and in good standing under the
laws of the State of Florida. Each of the Loan Parties has the
corporate or partnership power and authority, as the case may
be, to own, lease property held under lease and operate its
property and to conduct the business in which it is currently
engaged. The opinions set forth in this Paragraph 1 with
respect to the good standing of (i) ACP, ACP Holdings, ACC,
Olympus and West Boca are based solely upon the Certificates of
the Delaware Secretary of State and (ii) Cable Sentry and
Southeast are based solely upon Certificates of the Florida
Secretary of State, in each case dated within 30 days of this
opinion and delivered to the Administrative Agent in connection
with the Agreement.
2. Each Loan Party has the corporate or partnership power
and authority, as the case may be, to execute, deliver and
perform each Loan Document to which it is a party and, in the
case of the Borrowers, to borrow under the Agreement, and in the
case of the Borrowers and other Loan Parties party to the
respective Security Documents, to grant the liens provided for
therein. Each Loan Party has taken all necessary corporate or
partnership action, as the case may be, to authorize the
execution, delivery and performance of each Loan Document to
which it is a party and (i) in the case of the Borrowers, to
authorize the borrowings on the terms and conditions of the
Agreement and the Notes and (ii) in the case of each Loan Party
other than Cable Sentry and Key Biscayne, grant the security
interests contemplated by the Security Documents to which it is
a party. Except for the filing of the Financing Statements at
the offices described on Schedule 1 attached hereto, no filing
or notice with any Governmental Authority or any other person is
required in connection with the perfection of the security
interests in the Collateral in which a security interest can be
perfected by filing a financing statement pursuant to Article 9
of the Uniform Commercial Code, as in effect in the State of
Florida and the Commonwealth of Pennsylvania ("UCC").
3. Each Loan Document constitutes a legal, valid and
binding obligation of each Loan Party which is a party thereto,
enforceable against such Loan Party in accordance with its
terms.
4. The execution and delivery of the Loan Documents, the
performance by each Loan Party of its obligations thereunder,
the consummation of the transactions contemplated thereby, the
compliance by each Loan Party with any of the provisions
thereof, the borrowings under the Agreement and the use of
proceeds thereof, all as provided therein, (a) will not violate
any certificate of limited partnership, partnership agreement,
certificate of incorporation, articles of incorporation or
bylaws of any of the Loan Parties, as the case may be, or any
laws, rules or regulations, applicable to the Loan Parties under
federal, Pennsylvania or Florida law or the corporate or
partnership laws of the State of Delaware, and (b) will not
result in, or require, the creation or imposition of any Lien on
any of its or their respective properties or revenues, except
for the security interests created pursuant to the Security
Documents.
5. Litigation Searches have been conducted by Prentice
Hall Legal & Financial Services against certain of the Loan
Parties as set forth on Schedule 3. While we do not generally
represent the Loan Parties in all of their litigation matters,
to our knowledge no Litigation is pending by or against (i) any
Borrower or Subsidiary, or (ii) ACC, ACP Holdings, Olympus, or
Dorellenic with respect to the collateral pledged to the Lenders
under the Security Documents to which such Loan Parties are a
party thereto, which in the case of either (i) or (ii) above
could reasonably be expected to have a Material Adverse Effect,
other than as set forth on Schedule 3.5 to the Agreement and
Schedule 3 hereto.
6. No Borrower or any Subsidiary is an "investment
company," or a company "controlled by" an "investment company,"
as such terms are defined in the Investment Company Act of 1940,
as amended. No Borrower or any Subsidiary is a "holding
company," or a "subsidiary" or an "affiliate" of any Person that
is a "holding company" other than a Person that is a "holding
company" exempt from the provisions of the Public Utility
Holding Company Act of 1935, as amended ("PUHCA") and the rules
thereunder, except Section 9(a)(2) of the PUHCA, as such terms
are defined in such Act. No Borrower or any Subsidiary is
subject to any Governmental Requirement that regulates in any
material way its ability to issue promissory notes or securities
(other than the Securities Act of 1933, the Trust Indenture Act
of 1939 and state "blue sky" laws). The transactions
contemplated by the Agreement, including, without limitation,
the use of the proceeds of the Loans, and the execution,
delivery and performance of the Loan Documents, will not violate
or result in a violation of Regulation G or U of the Board of
Governors of the Federal Reserve System.
7. Schedule 4 attached hereto sets forth, as of the date
hereof, the owners of record of the partnership interests or
capital stock, as the case may be, of each Borrower and its
Restricted Subsidiaries and the percentage owned by each of such
owners. The opinions set forth in this Paragraph 7 are limited
to our knowledge, including our review of the respective
partnership agreements, stock books, minute books, certificate
of incorporation, articles of incorporation and bylaws of each
Borrower and its Restricted Subsidiaries and the certificates of
each Borrower and its Restricted Subsidiaries provided to us in
connection with our delivery of this Opinion and the knowledge
of each Borrower and its Restricted Subsidiaries that we have
gained in connection with our representation of them in
connection with the transaction contemplated by the Loan
Documents.
8. As collateral security for the payment of the
Obligations, the provisions of the Security Documents create in
favor of the Administrative Agent a security interest in all
right, title and interest of the Loan Parties in those items and
types of Collateral listed therein (the "Collateral") in which
such Loan Parties have rights and in which a security interest
may be created under Article 8 or 9 of the UCC. The Financing
Statements, when filed in the filing offices indicated on
Schedule 1, together with, in the case of any partnership
interest assignments, the registration with the issuing
partnership of a Loan Party's assignment of any partnership
interests therein, or in the case of any stock pledges or note
pledges, possession by the Administrative Agent of the stock or
notes that are pledged, perfects the security interests created
by the Security Documents in all right, title and interest of
the Loan Parties party thereto in those items and types of
Collateral listed therein in which a security interest may be
perfected by the filing of a financing statement or the
registering of a pledge under the UCC or the taking of
possession of the pledged stock certificates or notes. We
express no opinion as to the existence of, or as to the title of
the Loan Parties to, any item of Collateral referred to above.
9. Assuming the possession of the shares of capital stock
described in Opinion 8 above, the security interests in the
shares of capital stock listed on Schedule 1 to the Stock Pledge
Agreements of ACP and West Boca will constitute first priority
security interests; provided, however, we express no opinion as
to the priority of the security interest in such shares of
capital stock as against (i) any claim or lien in favor of the
United States or any agency or instrumentality thereof; (ii) any
claim or lien in favor of any state or any governmental
subdivision thereof; or (iii) any person claiming a security
interest under the 21-day exception provisions of Section
9-304(4)(5)(6) of the UCC.
10. To the extent that Pennsylvania law were to be applied
to the transactions contemplated by the Loan Documents, the
interest, fees and other charges payable by the Borrowers under
the Loan Documents do not violate the terms or provisions of any
usury law of the Commonwealth of Pennsylvania or any other
Pennsylvania law or provision governing the payment of interest.
We call your attention to the provisions of Section 911(b) of
the Crimes Code in effect in the Commonwealth of Pennsylvania
which prohibit the use or investment of income derived from a
pattern of "racketeering activity" in the establishment or
operation of any enterprise. "Racketeering activity," as
defined in the Crimes Code, includes the collection of money or
other property in full or partial satisfaction of a debt at a
rate of interest exceeding 25% per annum where not otherwise
authorized by law. Your attention is also called to the
provisions of Section 4806.1 of the former Penal Code of the
Commonwealth making "criminal usury" -- defined as the charging,
taking or receiving of any money, things in action or other
property as interest on a loan at a rate exceeding 35% per annum
when not otherwise authorized by law -- a felony. It is unclear
whether this provision was repealed by the Crimes Code. See 1
Pa. C.S. 1952; 46 P.S. 572 (repealed) and Commonwealth v.
Flashburg, 237 Pa. Super. 424, 352 A.2d 185 (1976).
Accordingly, our opinion is qualified to the extent, if any,
that the statutes referenced in this subparagraph (m) may be
applicable to this transaction. Also, to the extent that
Florida law were to apply to the transactions contemplated by
the Loan Documents, the provisions of the Loan Documents
pertaining to the payment of interest on the Loan do not violate
the usury laws of the State of Florida, assuming that the
effective interest rate thereunder (taking into account all
sums, however labelled, that are reserved, charged or taken for
the use of money) will not at any time exceed twenty-five
percent (25%) per annum, calculated on the basis of a year of
365 days (or 366 days, as applicable).
11. With respect to the governing law provision of each of
the Loan Documents pursuant to which the respective Loan Parties
thereto agree that such documents shall be governed by and
construed in accordance with the laws of the State of New York,
without regard to the principles of conflict of laws of such
state, we believe that, in any action or proceeding between the
respective parties to such documents brought in a state or
federal court located in the Commonwealth of Pennsylvania or the
State of Florida, such court should, if properly presented with
the issue, honor the intent of the parties as to their selection
of governing law or apply Section 187 of the Restatement
(Second) of Conflict of Laws (subject to the exceptions and
qualifications stated therein, and in the various comments and
illustrations thereto). Therefore, it is our opinion that such
court should honor the parties' choice of New York law, as
specified in each Loan Document, based upon subparagraph (a)
below, subject to the further analysis set forth in subparagraph
(b) below:
(a) We believe that the State of New
York has a sufficiently substantial
relationship to the respective parties to the
Loan Documents which specify that they are
governed by New York law, and to the
transactions contemplated thereby, because
(i) two of the Managing Agents are located in
the State of New York, (ii) the Syndication
Agent and several of the Co-Agents are
located in the State of New York, (iii)
several of the Lenders have places of
business in the State of New York and (iv)
the Loan Documents were partially negotiated
in the State of New York. The parties have
evidenced an intent to have New York law
govern upon the terms of the Loan Documents.
(b) We are not sufficiently
knowledgeable with respect to New York law to
anticipate whether any provisions thereof
might violate any fundamental policy of the
Commonwealth of Pennsylvania or the State of
Florida for purposes of application of
Section 187 (2)(b) or other choice of law
principle in the relevant state. However, we
are not aware of any Pennsylvania or Florida
case law holding that application of New York
law to any transaction similar to those
contemplated by the Loan Documents would be
contrary to any fundamental policy of the
Commonwealth of Pennsylvania or the State of
Florida.
Notwithstanding the foregoing, we note that Pennsylvania or
Florida law may apply with respect to (i) the determination of
whether property constitutes tangible personal property to the
extent such tangible personal property is located in the
Commonwealth of Pennsylvania or the State of Florida, (ii) the
creation, validity, perfection and priority of liens and
security interests against, or the transfer of interests in or
title to, tangible personal property located in the Commonwealth
of Pennsylvania or the State of Florida and (iii) the
enforcement of remedies against tangible personal property
located in the Commonwealth of Pennsylvania or the State of
Florida, and (iv) procedural (as opposed to substantive) laws.
The opinions expressed in paragraph 8 are subject to
the following qualifications:
(a) in the case of any Collateral with respect to which
perfection of the security interests therein is
accomplished by filing financing statements, Article 9
of the UCC requires the filing of continuation
statements within the period of six months prior to
the expiration of five years from the date of filing
of the original financing statements, in order to
maintain the effectiveness of such filings;
(b) in the case of items of Collateral in which the Loan
Parties acquire ownership rights after the date
hereof, Section 552 of Title 11 of the United States
Code ("Bankruptcy Code") limits the extent to which
property acquired by a debtor after the commencement
of a case under the federal Bankruptcy Code may be
subject to a security interest arising from a security
agreement entered into by such Loan Party before the
commencement of such case;
(c) we have assumed that on the date hereof (i) the Loan
Parties' chief executive office is at 5 West Third
Street, Coudersport, Pennsylvania 16915, and (ii) all
of the Loan Parties' tangible personal property
located in the Commonwealth of Pennsylvania and the
State of Florida is located at the locations set forth
on Schedule 5 hereto, and that the locations referred
to in (i) and (ii) above constitute all of the Loan
Parties' places of business and that after the date
hereof the Borrower and the Loan Parties will have no
other places of business.
(d) the perfection of the security interests will be
terminated as to any Collateral acquired by a Loan
Party more than four months after the Loan Party so
changes its name, identity or corporate structure as
to make the Financing Statements seriously misleading,
until new appropriate financing statements indicating
the new name, identity or corporate structure of the
Loan Party are properly filed, and such perfection
will not relate back to the date of filing the
Financing Statements unless the new financing
statements are filed before the expiration of such
four months;
In addition, the opinions in paragraph 8 are subject to the
qualification that we express no opinion as to:
(a) other than as set forth in paragraph 9, the priority
of security interests in the Collateral;
(b) the rights of any Loan Party in any Collateral;
(c) the validity and perfection of security interests as
they relate to any interest in or claim in or under
any policy of insurance, except insurance payable as
"proceeds" (as such term is defined in UCC Section
9-306(1));
(d) the perfection of security interests in any Collateral
consisting of "proceeds" (as such term is defined in
UCC Section 9-306(1)) to the extent such perfection is
limited as set forth in UCC Section 9-306;
(e) the enforceability of any provisions of the Security
Documents which purport to grant or waive any rights,
remedies or powers with respect to the disposition of
Collateral or other property to the extent such rights
or powers are not specifically set forth in and
permitted by UCC Sections 9-501 through 9-507;
(f) whether security interests may be subject to
marshalling;
(g) the perfection of any security interest in (A) common
law or federal or state registered trademarks or
service marks, goodwill associated with the same,
trade secrets, patents or any applications for the
registration of any trademark or service mark or the
grant of any patent, or (B) any registered or
unregistered copyright;
(h) whether the security interests are enforceable with
respect to Obligations created under documents we have
not reviewed, including without limitation, the
Interest Rate Protection Agreements.
In giving this opinion, we are not passing on any
matters of the laws of any jurisdiction other than the federal
laws of the United States of America, the laws of the
Commonwealth of Pennsylvania and the State of Florida and the
corporate and partnership laws of the State of Delaware, without
regard to conflict or choice of law matters (other than as set
forth in paragraph 11), in each case as they currently exist
and, solely with respect to the opinions expressed in paragraphs
2 and 8, the UCC as it is currently in effect in Florida and
Pennsylvania. Other than as set forth in paragraph 11, we
express no opinion on the enforceability of any provisions in
the Agreement or Loan Documents relating to conflicts of law,
consent to jurisdiction, choice of forum or choice of law. We
express no opinion with regard to the effect of any other laws
on the transactions contemplated by the documents referred to
above.
In addition to the qualifications set forth above, the
foregoing opinions are subject to the following qualifications:
(a) The enforceability of rights and remedies provided in
the Loan Documents are subject to and may be limited
by any applicable bankruptcy, reorganization,
insolvency, moratorium, fraudulent conveyancing or
similar laws affecting generally the enforcement of
creditors' rights from time to time in effect;
(b) Our opinion as to the enforceability of the Loan
Documents is subject to general principles of equity
(regardless of whether such enforceability is
considered in a proceeding in equity or at law or in a
bankruptcy proceeding) and assumes that you will act
in good faith, and with fair dealing and commercial
reasonableness in exercising your rights and remedies
thereunder, including without limitation, the right to
demand payment on the Notes of each of the Borrowers;
(c) We express no opinion on the validity, binding effect
or enforceability under certain circumstances of
provisions of the Loan Documents (i) which waive any
rights afforded to any party thereto under any statute
or constitutional provision which provides that such
rights may not be so waived, (ii) that purport to
prevent oral modification or waivers, (iii) that
broadly purport to ratify unknown actions of the
Administrative Agent or Lenders or any of them prior
to said actions having been taken, or (iv) that waive
special, exemplary or punitive damages;
(d) We express no opinion on the enforceability of any
provisions in the Agreement or any other Loan Document
which provide for specific performance.
(e) We express no opinion on the enforceability of setoff
rights set forth in the Loan Documents against assets
in or against which another party has a perfected
security interest or other lien;
(f) The provisions regarding the remedies available to you
on default as set forth in the Security Documents are
subject to certain procedural requirements and
applicable constitutional, legislative, judicial and
administrative provisions, statutes, regulations,
decisions, rulings and other laws, which are not
reflected in the Security Documents. These procedural
requirements and other laws affect and may restrict
rights and remedies stated to be available to you, but
such procedural requirements would not, in our view,
deprive you of the economic and substantive and legal
benefit of the rights provided thereby;
(g) We have not addressed, and we express no opinion on,
the possible effect of the application of Section 548
of the Bankruptcy Code or any state uniform fraudulent
transfer law or similar statute, or the doctrine of
equitable subordination. The inherent factual nature
of the application of these statutes makes them
inappropriate subject matter for legal opinions;
(h) We express no opinion as to the compliance by the
Borrowers or the other Loan Parties with applicable
local or municipal laws, including without limitation,
regulations, rules, orders and ordinances, and
environmental, zoning, subdivision, land use,
building, planning, energy or conservation laws,
regulations, rules or orders;
(i) Our opinion is subject to judicial decisions which
indicate that public policy may render unenforceable
provisions respecting payment of unreasonable costs
and expenses of enforcement, including, without
limitation, attorneys' fees;
(j) We express no opinion on the enforceability of any
provision in the Loan Documents that purport to
(i) preclude the modification of the Loan Documents
through conduct, custom, or course of performance,
action or dealing or (ii) waive or limit lender
liability for negligent acts or omissions, or (iii)
appoint any Lender or Administrative Agent attorney-
in-fact for any person or entity;,
(k) We express no opinion as to the effect on the
enforceability of the Loan Documents of any agreement
by and among the Lenders or the Lenders and the
Administrative Agent which imposes limitations on the
rights and benefits of individual Lenders under the
Loan Documents;
(l) We express no opinion as to financial statements
(including any schedules and notes thereto) or any
other financial, accounting or statistical data or
calculations or tests directly or indirectly included
or referenced in, delivered pursuant to or related to
the Loan Documents or any other document; and
Unless the context indicates otherwise, the phrase "to
our knowledge" as used herein with respect to the existence or
absence of facts means that no information has come to the
attention of the attorneys of this Firm who within the last
twelve months have provided substantive legal advice to the Loan
Parties which would give us actual knowledge of the existence or
absence of such facts.
We have not undertaken any independent investigation
(other than obtaining certain certificates from authorized
representatives of the Loan Parties) to determine the existence
or absence of such facts, and any limited inquiry undertaken by
us (including obtaining the aforementioned certificates) during
the preparation of this opinion should not be regarded as such
an investigation.
We advise you that the sale or other disposition of
any of the partnership interests, stock or other rights or
property pledged pursuant to the Security Documents or other
items of security granted to the Lenders under the Loan
Documents or other instruments referred to therein or the
exercise of certain other rights and remedies conferred upon the
Administrative Agent or the Lenders by the Security Documents or
by applicable law might constitute a transfer of an FCC license,
or a transfer of "control" of the holder of an FCC license,
requiring for its consummation or exercise the consent of the
FCC granted upon appropriate application therefor, or might
constitute a transfer of a Franchise or similar right or a
transfer of "control" of a holder of such a Franchise or similar
right in violation of the provisions thereof and applicable law,
requiring for its consummation or exercise appropriate consent
upon appropriate application. We express no opinion as to the
laws, regulations, rules or ordinances of the United States of
America or any state or any municipality of any state relating
to any governmental authorization to transfer, own or operate,
or to any governmental regulation of, cable television systems
or related regulatory matters.
We advise you that Chapter 201.08(1) of Florida
Statutes imposes a documentary stamp tax on, among other
documents, promissory notes and written obligations to pay
money, made, executed, delivered, sold, transferred or assigned
in Florida and on, among other documents, mortgages, trust
deeds, security agreements or other evidences of indebtedness
filed or recorded in Florida. It is our understanding that any
notes or obligations to pay money are not being made, executed,
delivered, sold, transferred or assigned in Florida and are
consequently not subject to this documentary stamp tax.
Rule 12B-4.053(33) of the Florida Administrative Code provides
that the filing or recording in Florida of a UCC Financing
Statement is not taxable under Chapter 201.08(1) of Florida
Statutes unless the notes, security agreement or other
obligatory document is also filed or recorded. A notation
relative to stamp tax is required on the UCC Financing Statement
whether tax is due or not and the notation should state that
proper stamp taxes have been paid or that tax is not required.
The Financing Statements to be filed in the State of Florida are
so marked to conform to such statute.
We also call your attention to the fact that no
opinion is expressed as to whether the rights and remedies
granted to the Lenders, or the waiver by any Loan Party of
certain of their respective rights and remedies in those
provisions of the applicable Loan Document which commence with,
or are limited or modified by, the words "if permitted by law,"
or "to the extent such rights are assignable," or other similar
language, are, in fact, rights and remedies which are permitted
to be granted or waived under applicable law or the provisions
of applicable agreements.
This opinion is issued as of the date hereof and is
necessarily limited to the laws now in effect and the facts and
circumstances known to the undersigned on the date hereof. We
are not assuming any obligation to review or update this opinion
should applicable law or the existing facts or circumstances
change. Our advice is provided herein solely for your
information and benefit and this opinion does not extend to and
may not be quoted in whole or in part or otherwise referred to
or relied upon by any other party other than the named
addressees of this opinion for any purpose without our express
written consent. You may provide a copy of this opinion to any
assignee of a Lender or any Participant provided however that no
such assignee or Participant shall be entitled to rely in any
manner on this opinion.
Very truly yours,
BUCHANAN INGERSOLL
PROFESSIONAL CORPORATION
By:_____________________
Annex A
List of Lenders
Schedule 1
Financing Statement Filing Offices
Schedule 2
UCC Search Results
Schedule 3
Litigation; Disputes
Schedule 4
Ownership of Borrowers and Restricted Subsidiaries
Schedule 5
Location of Borrowers'
Tangible Personal Property
THE LIMITED PARTNER INTERESTS ISSUED PURSUANT TO THIS SECOND AMENDED AND
RESTATED LIMITED PARTNERSHIP AGREEMENT HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 OR UNDER ANY STATE SECURITIES LAWS (THE "ACTS") AND
MAY NOT BE SOLD OR OTHERWISE TRANSFERRED EXCEPT (1) IN ACCORDANCE WITH THE
TERMS OF THIS SECOND AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT AND
(2) PURSUANT TO A REGISTRATION STATEMENT EFFECTIVE UNDER THE ACTS OR AN
OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE MANAGING GENERAL PARTNER
THAT THE TRANSFER OF THE LIMITED PARTNER INTERESTS IS EXEMPT FROM THE
REGISTRATION REQUIREMENTS OF THE ACTS.
OLYMPUS COMMUNICATIONS, L.P.
SECOND AMENDED AND RESTATED
LIMITED PARTNERSHIP AGREEMENT
THIS SECOND AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT
made as of the 28th day of February, 1995, by and among ACP Holdings, Inc.,
a Delaware corporation ("ACP Holdings"), as the managing general partner
(the "Managing General Partner"), ACP Holdings, Inc., as a preferred limited
partner (a "Preferred Limited Partner"), Cable GP, Inc. a Florida
corporation ("Cable GP"), as the general partner (the "General Partner"),
Cable LP III, Inc., a Florida corporation ("Cable LP III"), as the limited
partner (the "Limited Partner"), Cable LP III, Inc., as a senior limited
partner (the "Senior Limited Partner") and Cable LP III, Inc., as a
preferred limited partner (a "Preferred Limited Partner" and together with
the other Preferred Limited Partner, the "Preferred Limited Partners").
WITNESSETH:
WHEREAS, Olympus Communications, L.P., a Delaware limited
partnership (the "Partnership") was formed as a limited partnership under
the Delaware Revised Uniform Limited Partnership Act (the "Partnership Act")
on October 27, 1989;
WHEREAS, ACP Holdings, Inc. has served as the Managing General
Partner, a Preferred Limited Partner and a Special Limited Partner of the
Partnership, having been a party to and entered into a Limited Partnership
Agreement of the Partnership as of December 19, 1989; and a First Amended
and Restated Limited Partnership Agreement of the Partnership as of
January 30, 1990 as amended by a First Amendment thereto dated as of
June 13, 1990, a Second Amendment thereto dated as of March 18, 1992 and a
Third Amendment thereto dated as of April 29, 1992 (collectively as amended,
the "First Agreement"); and
WHEREAS, each of the parties set forth on Exhibit A hereto (the
"Withdrawing Limited Partners") is withdrawing from the Partnership as a
Limited Partner, the Managing General Partner is withdrawing from the
Partnership as a Special Limited Partner, Cable GP desires to acquire
General Partner Interests and Cable LP III desires to acquire Limited
Partner, Senior Limited Partner and Preferred Limited Partner Interests in
the Partnership; and
WHEREAS, the parties hereto wish to amend and restate the First
Agreement for the purpose, among others, of admitting Cable GP as a General
Partner and Cable LP III as a Limited Partner, Preferred Limited Partner and
Senior Limited Partner to the Partnership and reflecting the capital
contributions made or to be made on the date hereof by the Managing General
Partner, the General Partner, the Limited Partner, the Senior Limited
Partner and the Preferred Limited Partners pursuant to the terms hereof; and
WHEREAS, Cable LP III and Cable GP are direct or indirect
wholly-owned subsidiaries of Telesat Cablevision, Inc., a Florida
corporation ("Telesat"), all of which are parties to that certain Investment
Agreement ("Investment Agreement") dated as of even date herewith along with
the Partnership, ACP Holdings, Adelphia Communications Corporation, and
certain shareholders of Adelphia named therein, pursuant to which this
Agreement is being executed and the transactions set forth herein are being
consummated; and
WHEREAS, the Partnership intends to, directly or indirectly,
acquire, own, develop, operate, manage, maintain and invest in CATV Systems
and other businesses and enterprises in the cable, communications and
telecommunications industries generally.
NOW, THEREFORE, in consideration of the mutual covenants
contained herein, the parties hereto, intending to be legally bound hereby,
do covenant and agree to be bound by the terms of this Agreement.
ARTICLE 1
DEFINITIONS
1.1 Definitions. As used herein the following terms shall have the
following meanings:
ACP - Adelphia Cable Partners, L.P., a Delaware limited
partnership.
ACP Holdings - ACP Holdings, Inc., a Delaware corporation.
Adelphia - Adelphia Communications Corporation, a Delaware
corporation.
Adjusted Capital Account Deficit - With respect to any Partner,
the deficit balance, if any, in such Partner's Capital Account
as of the end of the relevant fiscal year, after giving effect
to the following adjustments: (i) credit to such Capital
Account any amounts which such Partner is obligated to restore
or is deemed to be obligated to restore pursuant to Sections
1.704-2(g)(1) and 1.704-2(i)(5) of the Treasury Regulations as
the same may be amended from time to time and (ii) debit to such
Capital Account the items described in Sections 1.704-
1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5) and 1.704-
1(b)(2)(ii)(d)(6) of the Treasury Regulations. The foregoing
definition of Adjusted Capital Account Deficit is intended to
comply with the provisions of Section 1.704-1(b)(2)(ii)(d) of
the Treasury Regulations and shall be interpreted consistently
therewith.
Adjusted Capital Contribution - As of any day, a Partner's
Capital Contributions reduced by the amount of cash and the
Gross Asset Value of any Partnership Property distributed to
such Partner pursuant to Sections 7.3(a), 7.3(b), 7.3(c), 7.3(d)
and 7(e) hereof (other than distributions of the Senior Priority
Return, Special Priority Return or Priority Return) and the
amount of any liabilities of such Partner assumed by the
Partnership or which are secured by any property contributed by
such Partner to the Partnership. In the event any Person
transfers all or any portion of his Units or Interest in the
Partnership in accordance with the terms of this Agreement, his
transferee shall succeed to the Adjusted Capital Contribution of
the transferor to the extent it relates to the transferred Units
or Interest.
Affiliate(s) - Any Person who is in the Immediate Family of the
Person in question, any Person who is an officer, director or
holder of 10% or more of the outstanding equity of any Partner
or any Person who is in the Immediate Family of any of the
foregoing, or any Person who, directly or indirectly, controls,
is controlled by or is under common control with the Person in
question.
Agreement - This Second Amended and Restated Limited Partnership
Agreement, as originally executed and as amended from time to
time, as the context requires. Words such as "herein,"
"hereinafter," "hereof," "hereby" and "hereunder" when used with
reference to this Agreement, refer to this Agreement as a whole,
unless the context otherwise requires.
Capital Account(s) - The individual account(s) maintained by the
Partnership with respect to each Partner as provided in Section
3.8 of this Agreement.
Capital Contribution(s) - The amount of cash or the agreed value
of the property or services contributed by each Partner to the
Partnership as provided in Article 3 and Section 9.4 of this
Agreement.
Cash Flow - means, for any period for which the amount thereof
is to be determined, net income of the Partnership and its
Direct Affiliates for such period plus interest expenses,
management fees, depreciation, amortization, any rate refunds
for prior periods, income taxes and other non-cash expenses to
the extent deducted in arriving at net income, all determined in
accordance with generally accepted accounting principles. Cash
Flow will be determined without taking into account any
extraordinary items.
CATV - Community antenna television and satellite master antenna
television.
CATV Systems - The CATV and other telecommunications systems
which have been or will be, directly or indirectly, acquired,
owned, developed, maintained or operated by the Partnership or
its Direct Affiliates, including any expansions or extensions
thereof, and including any other plant, equipment or usage
thereof for telephone, electronic security monitoring, personal
communications and other telecommunications applications and
purposes.
Certificate - The Limited Partnership Certificate filed as
provided in Section 2.5 hereof, as amended from time to time.
Code - Internal Revenue Code of 1986, as amended from time to
time.
control - , including any correlative terms such as,
controlling, controlled by, or under common control with, means
the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of a
Person, whether through ownership of voting securities, by
contract or otherwise.
Depreciation - For each fiscal year or other period, an amount
equal to the depreciation, amortization, or other cost recovery
deduction allowable with respect to an asset for such year or
other period, except that if the Gross Asset Value of an asset
differs from its adjusted basis for Federal income tax purposes
at the beginning of such year or other period, as required by
Regulations Section 1.704-1(b)(2)(iv)(g)(3), Depreciation shall
be an amount which bears the same ratio to such beginning Gross
Asset Value as the Federal income tax depreciation,
amortization, or other cost recovery deduction for such year or
other period bears to such beginning adjusted tax basis;
provided, however, that if the Federal income tax depreciation,
amortization, or other cost recovery deduction for such year is
zero, Depreciation shall be determined with reference to such
beginning Gross Asset Value using any reasonable method selected
by the Managing General Partner.
Direct Affiliate - Shall include ACP and any other entity as to
which the Partnership owns, directly or indirectly, more than
50% of the equity interests of such entity. The Managing
General Partner hereby represents and warrants that as of the
date hereof, the Direct Affiliates of the Partnership wherein
the Partnership owns less than 98% of the equity interests are
Key Biscayne Cablevision, a Pennsylvania general partnership,
and Palm Beach Group Cable Joint Venture, a Florida general
partnership.
General Partner - Cable GP, Inc., a Florida corporation, and any
other Person admitted as a General Partner pursuant to Article
10.
Gross Asset Value - With respect to any asset, the asset's
adjusted basis for Federal income tax purposes, except as
follows:
(i) The initial Gross Asset Value of any assets contributed
by a Partner to the Partnership shall be the gross fair market
value of such asset, as determined by the contributing Partner
and the Partnership;
(ii) The Gross Asset Values of all Partnership assets shall be
adjusted to equal their respective gross fair market values, as
reasonably determined by the Managing General Partner after
consultation with the other Partners, as of the following times:
(a) the acquisition of an additional Interest in the
Partnership by any new or existing Partner in exchange for more
than a de minimis Capital Contribution;
(b) the distribution by the Partnership to a Partner of
more than a de minimis amount of Partnership Property other than
money, as consideration for an Interest in the Partnership; and
(c) the liquidation of the Partnership for Federal
income tax purposes within the meaning of Treasury Regulations
Section 1.704-1(b)(2)(ii)(g); provided, however, that the
adjustments pursuant to clauses (a) and (b) above shall be made
only if the Managing General Partner reasonably determines that
such adjustments are necessary or appropriate to reflect the
relative economic interests of the Partners in the Partnership;
(iii) The Gross Asset Values of Partnership assets shall be
increased (or decreased) to reflect any adjustments to the
adjusted basis of such assets pursuant to Code Section 734(b) or
Code Section 743(b), but only to the extent that such
adjustments are taken into account in determining Capital
Accounts pursuant to Treasury Regulations Section 1.704-
1(b)(2)(iv)(m) and Section 7.7(B) hereof; provided, however,
that Gross Asset Values shall not be adjusted pursuant to this
clause (iii) to the extent the Managing General Partner
determines that an adjustment pursuant to clause (ii) hereof is
reasonably necessary or appropriate in connection with a
transaction that would otherwise result in an adjustment
pursuant to this clause (iii);
(iv) The Gross Asset Value of any Partnership asset
distributed to any Partner shall be the gross fair market value
of such asset on the date of distribution; and
(v) If the Gross Asset Value of an asset has been determined
pursuant to Subparagraphs (i), (ii) or (iii) hereof, such Gross
Asset Value shall thereafter be adjusted by the Depreciation
taken into account with respect to such asset for purposes of
computing Profits and Losses.
Immediate Family - The spouse, child, grandchild, grandparent,
lineal descendant or ancestor, mother, father, sister, brother,
niece or nephew, (whether natural or adopted) of a specified
Person or any spouse of the foregoing.
Indebtedness - All notes, drafts or other obligations for money
borrowed, and trade debt.
Interest - A Partner's share of the allocations and
distributions of the Partnership as provided in Articles 7 and 9
and such Partner's other rights, obligations, duties and
privileges under the Agreement or under applicable law,
including without limitation Units, if applicable.
Limited Partner - Cable LP III, Inc., a Florida corporation, and
any other Person admitted as a Limited Partner pursuant to
Article 10.
Majority-in-Interest (or Other Specified Percentage in Interest)
- The Partners whose aggregate Voting Percentages exceed 75% (or
other specified percentage).
Managing General Partner - ACP Holdings, Inc., a Delaware
corporation, and any other Person admitted as a Managing General
Partner pursuant to Article 10 or Section 11.5.
Net Cash from Operations - The gross cash proceeds from
Partnership operations less the portion thereof used to pay or
establish reserves for all Partnership expenses, debt payments,
capital improvements, replacements, and contingencies, all as
reasonably determined by the Managing General Partner. Net Cash
from Operations shall not be reduced by depreciation,
amortization, cost recovery deductions, or similar allowances,
but shall be increased by any reductions of reserves previously
established.
Net Cash from Sales or Refinancings - The net cash proceeds from
all sales and other dispositions (other than in the ordinary
course of business) and all refinancings of Partnership
Property, less any portion thereof used to establish reserves,
all as reasonably determined by the Managing General Partner.
Net Cash from Sales or Refinancings shall include all principal
and interest payments with respect to any note or other
obligation received by the Partnership in connection with sales
and other dispositions (other than in the ordinary course of
business) of Partnership Property.
Nonrecourse Deductions has the meaning set forth in Section
1.704-2(b)(1) of the Treasury Regulations.
Partner(s) - The Managing General Partner, the General Partner,
the Limited Partner, the Senior Limited Partner, the Preferred
Limited Partners, the Special Limited Partners (if any), and any
additional Partner admitted to the Partnership pursuant to this
Agreement.
Partnership - Olympus Communications, L.P., a Delaware limited
partnership.
Partnership Minimum Gain has the meaning set forth in Treasury
Regulations Sections 1.704-2(b)(2) and 1.704-2(d).
Partnership Property - All real and personal property acquired
by the Partnership and any improvements and additions thereto,
and shall include both tangible and intangible property.
Person - An individual, a partnership, a corporation, a business
trust, a joint stock company, a trust, an unincorporated
association, a joint venture, a governmental authority or any
other entity of whatever nature.
PLP Percentage Interest - As to each Preferred Limited Partner,
the percentage determined by dividing such Preferred Limited
Partner's Adjusted Capital Contributions to the Partnership by
the total Adjusted Capital Contributions of all of the Preferred
Limited Partners to the Partnership; the PLP Percentage
Interests of each Preferred Limited Partner shall be reflected
on Exhibit C hereto, as amended and supplemented from time to
time.
Preferred Limited Partners - ACP Holdings, Inc., Cable LP III,
Inc. and any other Person admitted as a Preferred Limited
Partner pursuant to Article 10.
Priority Return - Means a sum equivalent to 16.5% per annum
(computed on the basis of a year of 360 days and actual days
elapsed) of a Preferred Limited Partner's Adjusted Capital
Contribution from time to time during the period to which the
Priority Return relates, which shall commence to accrue on and
upon a Preferred Limited Partner's Capital Contribution and
which shall be payable on March 31, June 30, September 30 and
December 31.
<PAGE>
Profits and Losses - For each fiscal year or other period, an
amount equal to the Partnership's taxable income or loss for
such year or period, determined in accordance with Code Section
703(a) (for these purposes, all items of income, gain, loss, or
deduction required to be stated separately pursuant to Code
Section 703(a)(1) shall be included in taxable income or loss),
with the following adjustments:
(i) Any income of the Partnership that is exempt from
Federal income tax and not otherwise taken into account in
computing Profits or Losses pursuant to the foregoing shall be
added to such taxable income or loss;
(ii) Any expenditures of the Partnership described in
Code Section 705(a)(2)(B) or that are treated as Code Section
705(a)(2)(B) expenditures pursuant to Treasury Regulations
Section 1.704-1(b)(2)(iv)(i) and not otherwise taken into
account in computing Profits or Losses pursuant to the foregoing
shall be subtracted from such taxable income or loss;
(iii) In the event the Gross Asset Value of any
Partnership asset is adjusted pursuant to clause (ii) of the
definition of Gross Asset Value, such adjustment shall be taken
into account as gain or loss from the disposition of such asset
for purposes of computing Profits or Losses;
(iv) Gain or loss resulting from any disposition of
Partnership Property with respect to which gain or loss is
recognized for Federal income tax purposes shall be computed by
reference to the Gross Asset Value of the property disposed of,
notwithstanding that the adjusted tax basis of such property
differs from its Gross Asset Value;
(v) In lieu of the depreciation, amortization, and other
cost recovery deductions taken into account in computing such
taxable income or loss, there shall be taken into account
Depreciation for such fiscal year or other period, computed in
accordance with this Section 1.1; and
(vi) Notwithstanding any other provision of this Section
1.1, any items which are specifically allocated pursuant to
Sections 7.4, 7.5 and 7.6 hereof shall not be taken into account
in computing Profits or Losses.
Reserves - With respect to any fiscal period, funds set aside or
amounts allocated during such period to reserves which shall be
maintained in amounts deemed sufficient by the Managing General
Partner for operating expenses or in liquidation and the winding
up of the Partnership's affairs.
Rigas Family - means John J. Rigas, Doris N. Rigas, Timothy J.
Rigas, Michael J. Rigas, James P. Rigas, Ellen K. Rigas, any of
the Immediate Family of any of them, any of the respective
estates or lineal descendants of any such Person, any trust
created for the benefit of any such Persons (so long as one or
more of the foregoing Persons is the controlling trustee) and,
while and to the extent they are serving in such capacity, the
executors, administrators or personal representatives of such
Persons, and any corporation, partnership or other Person owned
or controlled directly or indirectly by one or more members of
the Rigas Family.
Securities Act - The Securities Act of 1933, as amended, which
contains, among other things, the Federal requirements for a
limited, private placement offering of securities in Section
4(2) and in Regulation D promulgated pursuant to Sections 3(b)
and 4(2) thereof.
Senior Debt - The debt obligations that may be issued by the
Partnership or its Direct Affiliates to a Partner or its
Affiliates, subject to Sections 3.11 and 4.3(S) hereof and
otherwise in accordance with this Agreement.
Senior Limited Partner - Cable LP III, Inc. and any Person
admitted as a Senior Limited Partner pursuant to Article 10.
Senior Priority Return - means a sum equivalent to 16.5% per
annum (computed on the basis of a year of 360 days and actual
days elapsed), of a Senior Limited Partner's Adjusted Capital
Contribution from time to time during the period to which the
Senior Priority Return relates, commencing on and upon a Senior
Limited Partner's Capital Contribution, and payable on March 31,
June 30, September 30 and December 31, commencing on such
payment date immediately following such Capital Contribution.
Service - Internal Revenue Service.
<PAGE>
Special Limited Partner - Any Person admitted as a Special
Limited Partner pursuant to Section 3.6 or Article 10.
Special Priority Return - means a sum equivalent to 16.5% per
annum (computed on the basis of a year of 360 days and actual
days elapsed), of a Special Limited Partner's Adjusted Capital
Contribution from time to time during the period to which the
Special Priority Return relates, commencing on and upon a
Special Limited Partner's Capital Contribution, and payable on
March 31, June 30, September 30 and December 31, commencing on
such payment date immediately following such Capital
Contribution, provided that any Special Priority Return amount
that is not paid on the date provided herein shall thereafter
accrue Special Priority Return amounts at a rate of 18.5% per
annum.
Super Majority-in-Interest - The Partners whose aggregate Voting
Percentages exceed 85%.
Unit - An interest in the Partnership as a Managing General
Partner, General Partner or Limited Partner which shall
represent a Capital Contribution to the Partnership of $1,000.
A Capital Contribution of such a Partner in excess of an even
multiple of $1,000 shall be represented as a fraction of a Unit
as appropriate. Units shall mean all of the Units of the
Partnership then outstanding. Exhibit D attached hereto, as
amended and supplemented from time to time, shall reflect the
number of Units held by each Partner. The Senior Limited
Partner, Preferred Limited Partners and the Special Limited
Partners shall not hold Units in such capacities.
Voting Percentage - That percentage determined by dividing the
Units of a Partner by the total Units of all the Partners then
outstanding.
ARTICLE 2
THE PARTNERSHIP
2.1 Name. The name of the Partnership shall be Olympus
Communications, L.P.; provided, however, that the business of
the Partnership may be conducted from time to time under any
other name designated by the Managing General Partner; provided
that the Managing General Partner files the necessary fictitious
name affidavit or other certificates required by the applicable
jurisdiction.
2.2 Offices. The executive office of the Partnership shall be
located at P.O. Box 472, 5 West Third Street, Coudersport,
Pennsylvania 16915. The Partnership shall maintain such other
offices, including one or more business offices for the CATV
Systems, as the Managing General Partner shall determine.
2.3 Purposes. The purpose of the Partnership shall be generally to
engage in the media, telecommunications, and communications
businesses including, without limitation, the competitive
access/alternate access business, electronic security
monitoring, the acquisition, directly or indirectly, of CATV
Systems, debt or equity interests in entities that own or
operate CATV Systems or are otherwise engaged in the media,
telecommunications or communications business, to engage in the
business of owning, operating, developing, maintaining,
managing, promoting, selling and disposing of CATV Systems, to
engage in the business of owning, selling and disposing of debt
or equity interests in entities that own or operate CATV Systems
or are otherwise engaged in the media, telecommunications or
communications business, and any other activity necessary,
appropriate, desirable or incidental thereto or related
generally to the media, telecommunications or communications
businesses, subject to obtaining Partner consents, if any,
required under the terms of this Agreement prior to engaging in
any such activities. It shall be an objective and the intent of
the Partnership and the Partners, through themselves and through
the Partnership and their respective parent entities and
Affiliates, to seek, explore, identify and promote areas of
potential further joint venturing, cooperation, investment,
strategic alliance and enterprise among the Partners with
respect to the media, telecommunications and communications
businesses, including without limitation potential areas such as
personal communication services, alternate access and other
telephone services, and fiber optics applications generally,
subject to obtaining Partner consents, if any, required under
the terms of this Agreement.
2.4 Authority of the Partnership. In order to carry out its
purposes, and not in limitation thereof, the Partnership is
empowered and authorized to do any and all acts proper or
otherwise reasonably necessary, appropriate, advisable,
incidental to, or convenient for the furtherance and
accomplishment of its purposes, including, but not limited to,
the following, subject to obtaining Partner consents, if any,
required under the terms of this Agreement:
(A) Acquire, construct, operate, maintain, improve, extend,
expand, buy, own, sell, convey, assign, mortgage, pledge,
hypothecate or otherwise encumber, refinance, rent or
lease, all whether directly or indirectly, all or any
portion of the CATV Systems, other real or tangible or
intangible personal property or any interest therein;
(B) Acquire and hold ownership interests in other legal
entities that directly or indirectly own CATV Systems;
(C) Engage in any kind of activity, and engage in, perform and
carry out contracts and agreements of any kind necessary
to, in connection with, or incidental to, accomplishing
the purposes of the Partnership;
(D) Borrow money and issue evidences of indebtedness in
furtherance of the Partnership business, refinance
indebtedness, guarantee the obligations of other Persons
and secure any such indebtedness or guarantees by
mortgage, security interest, hypothecation, or other lien;
(E) Maintain and operate the Partnership's assets;
(F) Negotiate for and conclude agreements for the acquisition,
construction, expansion, improvement, management,
operation, sale, exchange, or other disposition of all or
any part of the assets of the Partnership;
(G) Hire and compensate employees, agents, independent
contractors, attorneys, and accountants; and
(H) Bring and defend actions in law or in equity.
2.5 Execution and Filing of the Certificate. The Limited
Partnership Certificate dated October 25, 1989, was filed in the
office of the Secretary of State of Delaware on October 27,
1989, and was amended by that Amended Limited Partnership
Certificate dated October 29, 1992 and filed in the office of
the Secretary of State of Delaware on November 4, 1992.
Whenever it shall become necessary or appropriate to amend or
restate the Certificate, the Managing General Partner shall
timely file an amended or restated Certificate, and the Managing
General Partner shall do and continue to do all other things as
may be required or advisable to maintain the Partnership as a
limited partnership existing pursuant to the laws of the State
of Delaware and as provided herein. Each Partner hereby
authorizes the Managing General Partner, by its duly authorized
officers, to execute the Certificate and any such amendments
thereto on his/its behalf as his/its attorney-in-fact and to
file or record the Certificate and such other documents as may
be reasonably required or advisable with respect thereto. The
Managing General Partner shall promptly provide to the General
Partner and Limited Partner copies of the Certificate and any
amendments thereto.
2.6 Other Qualifications. The Partners agree that the Partnership
shall exist under the laws of the State of Delaware and, to the
extent that the business of the Partnership is conducted in any
jurisdiction other than Delaware, the Managing General Partner
shall cause the Partnership to qualify to do business under the
laws of such other jurisdiction to the extent necessary or
desirable to do business in such jurisdiction and/or to promote
the limitation of liability for the Limited Partner, the
Preferred Limited Partners and any Special Limited Partners in
such jurisdiction, including, without limitation, pursuant to
Section 6.1(C). Each Partner hereby authorizes the Managing
General Partner, by its duly authorized officers, to execute on
his/its behalf any document and to take any other action which
may be necessary or desirable in order to permit the Partnership
to do business (or facilitate the doing of business) in any such
jurisdiction and to secure the limitation of liability for the
Limited Partner, the Preferred Limited Partners and the Special
Limited Partners.
ARTICLE 3
CAPITALIZATION
3.1 Capital Contribution of the Managing General Partner. The
Managing General Partner shall make or shall have made a Capital
Contribution to the Partnership as set forth and described on
Exhibit B hereto. It is the intent of all parties hereto that
at all times the Managing General Partner will own at least 50%
of the total Units in the Partnership.
3.2 Capital Contributions of the General Partner. The General
Partner shall make a Capital Contribution to the Partnership as
set forth and described on Exhibit B hereto.
3.3 Capital Contribution of the Limited Partner. The Limited
Partner shall make a Capital Contribution to the Partnership as
set forth and described on Exhibit B hereto.
3.4 Capital Contribution of the Preferred Limited Partners. The
Preferred Limited Partners each shall make or shall have made a
Capital Contribution to the Partnership as set forth and
described on Exhibit B hereto.
3.5 Capital Contribution of a Special Limited Partner. A Special
Limited Partner's capital contribution made pursuant to and as
set forth in Section 3.7, if any, shall be set forth and
described on Exhibit B hereto.
3.6 Capital Contributions of the Senior Limited Partner. The Senior
Limited Partner shall make a Capital Contribution to the
Partnership as set forth and described on Exhibit B hereto.
3.7 Additional Capital Contributions.
(A) Except as provided in Section 9.4 (relating to a deficit
repayment obligation) and this Section 3.7, the Partners
will not be required or permitted to make additional
Capital Contributions to the Partnership without the
consent of a Majority-in-Interest required by Section
4.7(F). The Preferred Limited Partners may make optional
additional Capital Contributions to the Partnership, as
set forth in Section 3.7(C) below, at such times, on such
terms and, subject to the limitations of Section 3.7(E),
in such amounts as the Managing General Partner determines
are necessary:
(1) To provide adequate funds for the operation of the
business or for working capital purposes of the
Partnership;
(2) To satisfy the obligations of the Partnership or its
Direct Affiliates under any loan to the Partnership
or its Direct Affiliates by a lender which is not a
Partner or an Affiliate of a Partner, or otherwise
to meet the liquidity needs of the Partnership or
its Direct Affiliates including but not limited to
capital expenditures in the ordinary course;
(3) Without limiting (1) or (2) above, to the extent
necessary to pay any obligation (including
obligations resulting from the occurrence of any
unforeseen event or circumstance) of the Partnership
or its Direct Affiliates, or to prevent an impending
default or violation of law by the Partnership or
its Direct Affiliates, if the Managing General
Partner reasonably determines that the failure to
pay could have a material adverse effect on the
financial condition, prospects or operations of the
Partnership or its Direct Affiliates;
provided that, even if any or all of the foregoing conditions
shall exist, the Managing General Partner shall not be obligated
to make a Capital Call.
(B) Upon a determination that additional Capital Contributions
are so required, the Managing General Partner will cause a
written notice (the "Capital Call") to be delivered to
each of the Preferred Limited Partners setting forth the
amount of the requested additional Capital Contributions
and a reasonable description of the reasons therefor under
Section 3.7(A)(1), (2) or (3). This notice will, with
respect to the requested additional Capital Contributions,
set forth each Partner's respective PLP Percentage
Interest in the Partnership immediately prior to such
Capital Call, the terms of payment, the contribution date
("Contribution Date") upon which the contribution is due
and payable, and a description of the purposes for which
the additional Capital Contributions will be used.
(C) The Capital Call shall proceed as follows:
(1) Each of the two Preferred Limited Partners (as
described in Section 3.7(C)(1)(e) below) shall be
given the opportunity, but shall not be obligated,
to contribute its pro-rata portion (based upon its
PLP Percentage Interest) of the required additional
Capital Contribution within fifteen (15) business
days of the Capital Call (each such pro-rated amount
to be subject to the limitations of Section 3.7(E)).
As between the two Preferred Limited Partners, if
one (a "Greater Purchaser") contributes more than
its pro-rata portion (based upon its PLP Percentage
Interest) of all actual contributions made by the
two Preferred Limited Partners with respect to such
Capital Call for additional Capital Contributions,
(a) the Greater Purchaser shall have purchased
additional Preferred Limited Partner
Interests in an amount equal to the product
of (i) a fraction, the numerator of which is
its PLP Percentage Interest and the
denominator of which is the PLP Percentage
Interests of the other Preferred Limited
Partner (the "Lesser Purchaser"), multiplied
by (ii) the total amount of contributions by
the Lesser Purchaser;
(b) the Greater Purchaser shall have purchased
additional Special Limited Partner Interests
in an amount equal to the difference between
(i) the total additional Capital
Contributions of the Greater Purchaser with
respect to the Capital Call less (ii) the
portion thereof determined to have been
contributed in exchange for Preferred Limited
Partner Interests pursuant to
Section 3.7(C)(1)(a);
(c) the Lesser Purchaser shall have purchased
additional Preferred Limited Partner
Interests in the amount of and in exchange
for its additional Capital Contribution with
respect to the Capital Call;
(d) the Greater Purchaser shall have the
opportunity, but not the obligation, to
purchase additional Special Limited Partner
Interests in an aggregate amount equal to the
remaining capital required by the Capital
Call but not contributed pursuant
to Sections 3.7(C)(1)(a), (b) and (c), within
fifteen (15) days after the Contribution
Date; and
(e) for purposes of this Section 3.7(C), (i) the
aggregate of all Preferred Limited Partner
Interests originally held by ACP Holdings on
the date of original execution of this
Agreement or otherwise acquired by ACP
Holdings or direct or indirect assignees of
ACP Holdings pursuant to the terms hereof
shall be deemed to be held by one Preferred
Limited Partner (the "ACP Preferred Limited
Partner") and (ii) the aggregate of all
Preferred Limited Partner Interests
originally held by Cable LP III, Inc. on the
date of original execution of this Agreement
or otherwise acquired by Cable LP III, Inc.
or direct or indirect assignees of Cable LP
III, Inc. ("Telesat Transferees") pursuant to
the terms hereof shall be deemed to be held
by the other Preferred Limited Partner (the
"Telesat Preferred Limited Partner").
(2) The rights of the ACP Preferred Limited Partner or
the Telesat Preferred Limited Partner, as the case
may be, to make additional Capital Contributions
pursuant to this Section 3.7 may be assigned to any
other direct or indirect wholly-owned subsidiary of
Adelphia or Telesat, respectively.
(D) Exhibits B and C to this Agreement will be updated to
reflect the additional Capital Contributions made pursuant
to this Section 3.7.
(E) The amount of any Capital Call that the Managing General
Partner is authorized to make to either Preferred Limited
Partner described in Section 3.7(C)(1)(e) shall not exceed
the respective Capital Call Basket for such Preferred
Limited Partner immediately before such Capital Call is
made. The "Capital Call Basket" for each of the two
respective Preferred Limited Partners described in Section
3.7(C)(1)(e) shall be
(a) the sum of (x) the aggregate amount of all
distributions made to such Preferred Limited Partner
pursuant to Section 7.3 hereof (which does not
include the distribution pursuant to Section
1.06(b)(2) of the Investment Agreement) with respect
to its Preferred Limited Partner Interests plus (y)
the aggregate amount of all interest paid to such
Preferred Limited Partner or its Affiliates with
respect to Senior Debt, plus (z) in the case of the
Telesat Preferred Limited Partner, the aggregate
amount of Senior Priority Return paid to the Senior
Limited Partners in each case within the prior
twelve-month period (which period shall in no event
begin earlier than the date of this Agreement);
minus (b) the aggregate amount of all additional Capital
Contributions made by such Preferred Limited Partner in
exchange for additional Preferred Limited Partner
Interests issued to such Preferred Limited Partner
pursuant to Section 3.7(C) within the prior twelve-month
period (which period shall in no event begin earlier than
the date of this Agreement).
3.8 Capital Accounts.
(A) A separate Capital Account shall be established and
maintained for each Partner in accordance with Code
Section 704 and Treasury Regulation Section 1.704-1(b) and
the following provisions:
(i) Generally, the Capital Account of a Partner shall
consist of the Partner's initial Capital Contribution increased
by: (1) any additional Capital Contributions in cash; (2) the
fair market value of any Capital Contribution of property in
kind (net of liabilities securing such contributed property that
the Partnership is considered to assume or take subject to,
under Section 752 of the Code); and (3) such Partner's share of
Partnership Profits (or items thereof), including income and
gain exempt from tax, and decreased by (1) distributions in cash
to such Partner; (2) the fair market value of property
distributed in kind to such Partner (net of liabilities securing
such distributed property that such Partner is considered to
assume or take subject to, under Section 752 of the Code); (3)
such Partner's share of Partnership Losses; and (4) such
Partner's share of expenditures of the Partnership described or
treated as described in Section 705(a)(2)(B) of the Code
including but not limited to syndication costs.
(ii) In the event any Interest in the Partnership is
transferred in accordance with Article 10 of this Agreement, the
transferee shall succeed to the Capital Account of the
transferor to the extent it relates to the transferred Interest.
(iii) In the event the Gross Asset Values of Partnership
assets are adjusted pursuant to Section 1.1 hereof, the Capital
Accounts of all Partners shall be adjusted simultaneously to
reflect the aggregate net adjustment as if the Partnership
recognized gain or loss equal to the amount of such aggregate
net adjustment.
(iv) The foregoing provisions and other provisions of
this Agreement relating to the maintenance of Capital Accounts
are intended to comply with Treasury Regulation Section 1.704-
1(b) and shall be interpreted and applied in a manner consistent
with such Regulations. In the event the Managing General
Partner shall reasonably determine that it is prudent to modify
the manner in which the Capital Accounts, or any debits or
credits thereto are computed in order to comply with such
Regulations, the Managing General Partner may make such
modification, provided that it would not have a material effect
on the amounts distributable to any Partner pursuant to Articles
7 and 9 hereof and provided written notice thereof is promptly
given to all Partners. The Managing General Partner also shall
make any appropriate modifications in the event unanticipated
events might otherwise cause this Agreement not to comply with
Treasury Regulation Section 1.704-1(b).
3.9 No Return of or Interest on Capital; No Partition. All Capital
Contributions shall be expended by the Managing General Partner
in furtherance of the business of the Partnership and in
accordance with the Budgets. Except as specifically provided in
this Agreement, no Partner shall be entitled to withdraw any
amount from his Capital Account, demand a return of any amount
of his Capital Contribution or be paid interest on his Capital
Contribution or his Capital Account. Each Partner waives his
right to partition Partnership Property. The foregoing shall
not constitute a waiver of any Partner's rights upon dissolution
of the Partnership. Except as provided in Section 9.4, the
Managing General Partner will have no personal liability for the
repayment of the Capital Contributions or Capital Account of any
Partner.
3.10 Third Party Beneficiaries. The rights of the Partners to make
additional Capital Contributions under the terms of this
Agreement are not to be construed as conferring any rights or
benefits on any third party, including, but not limited to, the
holder of any obligation or indebtedness of the Partnership or
any obligation secured by a mortgage, deed of trust, or other
encumbrance upon Partnership assets.
3.11 Senior Debt. Each Partner acknowledges that the Senior Debt is
and is intended to be a valid debt instrument of the Partnership
enforceable against it by the holder of the Senior Debt in
accordance with its terms and that the loan proceeds are not
part of the Partnership's equity capital for any purpose; and
each Partner hereby waives (i) any right to assert a contrary
position in any legal or equitable proceeding or otherwise, and
(ii) any right to seek or benefit from equitable subordination
of the Senior Debt to the claims of any Partner vis a vis the
Partnership and/or any other Partner. Each Partner agrees that
for all purposes (including without limitation, construing
and/or giving effect to the provisions of this Agreement)
concerning the relative rights and obligations (i) among
themselves as Partners and (ii) between each of them and the
Partnership, the Senior Debt shall be treated as if the matters
acknowledged in the preceding sentence were true, even if a
court or other authority of competent jurisdiction were to
determine the Senior Debt or any provision thereof to be
unenforceable, recharacterize the loan proceeds of the Senior
Debt as equity or otherwise fail or refuse to give effect to all
of the provisions of the Senior Debt as written, including
without limitation through application of the doctrine of
equitable subordination. Until all interest currently due and
payable on the Senior Debt has been paid in full in accordance
with its terms as written, each Partner (i) agrees that under no
circumstance shall any Partner be entitled to receive any
distribution of money or property of any kind in respect of such
Partner's Interest as a Partner in the Partnership to which it
is entitled under the terms of this Agreement and applicable
law, nor shall the Partnership have any obligation or right to
make any such distribution, and (ii) hereby waives any right of
setoff it might otherwise have with respect to any obligation it
may at any time owe to the Partnership, provided that clause (i)
immediately above shall not apply with respect to the
distribution to Cable LP III pursuant to Section 1.06(b)(2) of
the Investment Agreement, which may be made regardless of any
outstanding interest due on the Senior Debt. The amounts of
Senior Debt held by the Partners as of the date of this
Agreement is set forth on Exhibit F hereto.
ARTICLE 4
MANAGEMENT OF THE PARTNERSHIP
4.1 Rights and Duties of Partners, Control. The General Partner and
the Limited Partner shall take no part in the control,
direction, or operation of the affairs of the Partnership other
than to exercise the rights specifically provided in this
Agreement and by law, nor shall any of them have the power to
act for or bind the Partnership. No prior consent or approval
of the General Partner or the Limited Partner shall be required
in respect of any act or transaction to be taken by the Managing
General Partner or the Partnership unless otherwise specifically
provided in this Agreement. The Preferred Limited Partners, the
Senior Limited Partners and the Special Limited Partners shall
take no part in the control, direction or operation of the
affairs of the Partnership and shall have no right to vote on,
consent or approve any matters relating to the Partnership
except as expressly provided in Section 12.6 or elsewhere
herein.
4.2 Fiduciary Duties of the Managing General Partner. The Managing
General Partner shall have fiduciary responsibility for, among
other things, the safekeeping and use of all funds and assets of
the Partnership.
4.3 Power of the Managing General Partner. Except as otherwise
provided in this Agreement and subject to the provisions of
Sections 4.4, 4.7 and 4.8, the Managing General Partner shall
have the complete and exclusive right, power and authority to
manage and control all of the business, affairs, assets and
properties of the Partnership and its Direct Affiliates and is
authorized and empowered to carry out and implement any and all
of the purposes of the Partnership subject to the terms of this
Agreement. The Managing General Partner shall be required to
devote to the conduct of the business of the Partnership such
time and attention as is reasonably necessary or desirable.
Without limiting the generality of this Section 4.3, but
expressly subject to the limitations specifically set forth in
this Agreement, the Managing General Partner is authorized and
directed on behalf of the Partnership to do any and all acts
necessary, appropriate, proper, advisable, incidental to, or
convenient for the furtherance and accomplishment of the
purposes of the Partnership, including but not limited to the
following (which may be carried out or accomplished through, in
or by the Partnership or any of its Direct Affiliates):
(A) Expend the capital and revenues of the Partnership in
furtherance of Partnership business and exercise the
authority of the Partnership as provided in Section 2.4;
(B) Directly or indirectly acquire and convey real property
and tangible and intangible personal property and
interests therein including, without limitation,
partnership interests in limited or general partnerships,
stock and other equity interests in corporations, notes,
debentures and other debt obligations, franchises, pole
attachment agreements, leases, easements, rights of way,
and the sale and leasing back of any such real and
personal property;
(C) Open, maintain, and close bank accounts, and draw checks
and other orders for the deposit and payment of money;
(D) Incur indebtedness as may be reasonably necessary or
appropriate in connection with the business of the
Partnership; refinance all or substantially all of the
indebtedness of the Partnership or any CATV System
(whether in the same or a greater or lesser amount or with
the same or a different lender and at a greater or lesser
interest rate); make, issue, accept, endorse, and execute
promissory notes, drafts, bills of exchange, loan
agreements, and other instruments and evidences of
indebtedness, and secure the payment thereof by mortgage,
hypothecation, pledge, or other assignment, or granting of
security interests in all or any part of the properties
then owned or thereafter acquired by the Partnership;
(E) Grant any mortgage, encumbrance, pledge, hypothecation, or
other security device in Partnership property; obtain
secondary or other financing, and prepay in whole or in
part any indebtedness; increase, modify, consolidate, or
extend any loan or any mortgage, encumbrance, pledge,
hypothecation, or other security device given as security
therefor;
(F) Execute and deliver deeds, deeds of trust, notes, leases,
subleases, mortgages, bills of sale, financing statements,
security agreements and any and all other instruments
reasonably necessary or incidental to the conduct of the
business of the Partnership, including, without
limitation, such instruments and documents as may be
requested by any lending institution;
(G) Make investments in interest-bearing and non-interest
bearing bank deposits, money market funds, and other
prudent short-term investments (excluding investments in
Adelphia or Affiliates of Adelphia) pending expenditure or
distribution of the Partnership's funds, or make such
investments in order to provide a source from which to
meet Partnership contingencies;
(H) Subject to Section 4.4, enter into agreements and
contracts with third parties, terminate such agreements,
and institute, defend, and settle litigation arising
therefrom and give receipts, releases and discharges with
respect to all of the foregoing and any matters incident
thereto;
(I) Maintain, at the expense of the Partnership, adequate
records and accounts of all operations and expenditures
which are to be true and complete in all material
respects;
(J) Purchase, at the expense of the Partnership, liability,
casualty, fire, and such other insurance and bonds to
protect the Partnership's properties and business and to
protect the Partners as would normally be carried by an
experienced and prudent entity in the business in which
the Partnership is engaged, which insurance shall be
endorsed to be primary to any insurance carried by the
Partners individually;
(K) Sell, lease, trade, exchange, or otherwise dispose of all
or any portion of the assets of the Partnership;
(L) Employ, at the expense of the Partnership, investment
advisors, consultants, accountants, attorneys, brokers,
engineers, escrow agents, and other agents or employees
and terminate such employment; provided, any such Persons
may also serve or have served in similar capacities for
any of the Partners or their Affiliates;
(M) Subject to Section 8.6, determine the accounting methods
and conventions to be used in the preparation of all tax
returns and make such elections as it deems reasonably
appropriate under the Code and tax laws of the states and
other jurisdictions as to the treatment of items of
income, gain, loss, deduction, and credit of the
Partnership, or any other method or procedure related to
the preparation of tax returns, provided, however, that
any such tax elections shall be made with the objective of
maximizing current tax benefits to the Partnership;
(N) To the extent funds of the Partnership are sufficient
therefor, the Managing General Partner may maintain a
reserve for operating expenses in such amount or amounts
as may reasonably be deemed necessary by the Managing
General Partner for the proper conduct of the ongoing
operation and business of the Partnership. In addition,
to the extent of available funds, the Managing General
Partner may maintain a replacement reserve account in an
amount deemed reasonable by the Managing General Partner
for the purpose of improvement and replacement of and
additions to fixtures and equipment as well as capital
improvements to the CATV Systems. To the extent it may
deem reasonably necessary or advisable, the Managing
General Partner shall be entitled to spend funds deposited
in the replacement reserve account, as well as any other
funds of the Partnership, for the acquisition,
construction, repair, replacement, maintenance, and/or
improvement of the CATV Systems;
(O) Determine if the Partnership has any cash available for
distribution to the Partners and, if any, to make cash
distributions as provided in Article 7 hereof (subject to
any contractual or other restrictions applicable to the
Partnership);
(P) Prepare or cause to be prepared in conformity with good
business practice and applicable legal requirements all
reports that are to be furnished to the Partners or that
are required by taxing bodies or other governmental
authorities or agencies or by applicable law, including
financial statements and reports as provided in Article 8
hereof;
(Q) Enter into, make and perform such contracts, agreements
and other undertakings as may be deemed necessary or
advisable for the conduct of the business of the
Partnership, and to do any act or to execute any document
on behalf of the Partnership as the Managing General
Partner, in its sole discretion, may deem reasonably
necessary, convenient, incidental or appropriate to the
furtherance of the business of the Partnership;
(R) Exercise the power of attorney as provided in Section 12.2
hereof and on behalf of each General Partner, Limited
Partner, Preferred Limited Partner and Special Limited
Partner;
(S) Other than the Senior Debt described on Exhibit F, make
loans to the Partnership or a Direct Affiliate, in its
sole discretion in an aggregate amount outstanding at any
time of up to $5,000,000 of Senior Debt; provided that the
Managing General Partner shall offer to Telesat in writing
the opportunity to make or take a portion of any such loan
on the basis of the aggregate PLP Percentage Interest held
by the Telesat Preferred Limited Partners, or in such
greater amount as the Managing General Partner shall
offer, which offer shall be made no later than seven (7)
business days after such loan has been made and which
offer Telesat shall respond to in writing within fifteen
(15) business days as to such proportionate amount or
greater amount, if any, as it may determine, or shall be
deemed to have declined such offer if no such response is
received by the Managing General Partner within such
fifteen (15) business day period;
(T) Take all actions as it may deem reasonably necessary or
appropriate with respect to the registration and
qualification or exemption therefrom of the offer and sale
of Interests in the Partnership, make appropriate filings
under applicable Federal and state securities laws, admit
or reject any Limited or General Partner's subscription on
behalf of the Partnership, and incur and pay legal,
accounting, consulting, and other fees in connection
therewith;
(U) Subject to Section 17.05 of the Investment Agreement,
reimburse the Managing General Partner and its Affiliates
for all costs and expenses reasonably incurred by the
Managing General Partner or such Affiliates with respect
to the organization and operation (including without
limitation expenses and costs related to financings and
acquisitions) of the Partnership as amended hereby;
(V) Enter into management agreements providing for an
aggregate amount of management fees of up to five percent
of the gross revenues of the Partnership and its Direct
Affiliates, including management agreements with one or
more Partners and their Affiliates, provided that in any
fiscal year the Partnership shall be authorized to accrue
or pay management fees to parties other than the
Partnership or its Direct Affiliates only in an amount up
to the amount of management fees earned by the Partnership
and its Direct Affiliates for providing management
services to parties other than the Partnership or its
Direct Affiliates; and
(W) Take all actions reasonably necessary or appropriate with
respect to the consummation of the transactions
contemplated by the agreements described or referenced in
Sections 1.06, 1.08, and 3.02 of the Investment Agreement.
(X) Subject to compliance with Section 4.7(E), take all
actions reasonably necessary or appropriate in order to
consummate the Refinancing of the bank indebtedness of the
Partnership and its Direct Affiliates as such term is
defined and described in Section 3.01 of the Investment
Agreement.
4.4 Partners and Their Affiliates Dealing with the Partnership.
(A) Subject to Section 4.7, the fact that any Partner,
including the Managing General Partner, or any Affiliate
of Adelphia or the Managing General Partner, or any
officer or director of any of the foregoing, is employed
by, or is directly or indirectly interested in or
affiliated or connected with an enterprise engaged by the
Managing General Partner to sell or lease property,
perform or provide services or make loans to the
Partnership shall not prohibit the Managing General
Partner from employing such enterprise or from otherwise
dealing with it on behalf of the Partnership; provided,
however, that, subject to Section 4.7(H), the Managing
General Partner or any of its or Adelphia's Affiliates may
contract or otherwise deal with the Partnership for the
provision or sale of goods, services (including, without
limitation, pay satellite and programming services), loans
or leases of real or personal property to the Partnership,
only if the Managing General Partner reasonably determines
that the compensation agreed to be paid for such property,
services, loans or leases is on terms at least as
favorable to the Partnership as those available from
unrelated parties for comparable property, services, loans
or leases, subject further, if applicable, to the
provisions of Section 4.4(B) hereof. The Partnership and
any Partners as such shall not have any right in or to any
income or profits derived from any such employment or
other dealing by any such enterprise.
(B) The Partnership (including Direct Affiliates) shall
receive the benefits (on an average cost basis) of any
programming or purchasing agreements available to Adelphia
or an Affiliate of Adelphia which benefits Adelphia or
such Affiliate is permitted to pass through to the
Partnership pursuant to the applicable programming or
purchasing agreements but which benefits are not available
to the Partnership from a Person other than Adelphia or an
Affiliate of Adelphia (and the Managing General Partner
shall use commercially reasonable efforts to permit such
pass through), provided that Adelphia or such Affiliate,
to provide such benefit, shall be required to provide such
programming or purchasing availability to the Partnership
or its Direct Affiliates at the average cost thereof to
Adelphia or such Affiliate and provided further that the
Partnership shall remit promptly to Adelphia or its
Affiliates, and make them whole with respect to, any
discounts or benefits provided to the Partnership which
shall subsequently be determined not to be permitted to be
passed through to the Partnership pursuant to the
applicable programming or purchasing agreement. In
addition, the Partnership shall pay, on a quarterly basis
to Adelphia, an amount representing an allocation of the
corporate overhead of Adelphia and its subsidiaries with
respect to the Partnership for such period, which
allocation shall be prepared pursuant to the methodology
set forth in Exhibit E to this Agreement. Except as
otherwise expressly provided in this Section 4.4(B), any
products or services provided to the Partnership by a
Partner or its Affiliate shall be provided at the cost
thereof to such Partner or its Affiliate.
(C) The Partnership shall not contract with or enter into any
arrangement with an electric utility or other producer or
provider of electric power that is not an Affiliate of the
General Partner (an "Unaffiliated Utility") with respect
to the use of the CATV Assets by such Unaffiliated Utility
(other than for the provision of electric power to the
CATV Assets in the ordinary course) (a "Utility
Agreement") without first offering the reasonable
opportunity for such Utility Agreement to the General
Partner and its Affiliates in accordance with this Section
4.4(C). Prior to entering into a Utility Agreement with
an Unaffiliated Utility, the Partnership shall first
negotiate in good faith with the electric utility
Affiliate or other Affiliate of the General Partner (the
"Utility Affiliate") for purposes of executing a Utility
Agreement. The Managing General Partner shall negotiate
the terms of any Utility Agreement with a Utility
Affiliate on behalf of the Partnership, and no prior
consent of the Partners shall be required for the
Partnership to enter into a Utility Agreement with a
Utility Affiliate.
4.5 Other Activities.
(A) Except for the provisions of Section 4.5(B) hereof,
nothing in this Agreement shall be construed to prohibit
any Partner or Affiliate of a Partner from engaging in or
possessing an interest in other business ventures or
activities of any nature and description, independently or
with others, and the Partners, subject to Section 4.5(B),
hereby waive all fiduciary, statutory and other rights to
the contrary. Such other ventures or activities may
include limited partnerships or other business entities
engaged in any and all aspects of the CATV industry
including, but not limited to, the acquisition,
construction, ownership, operation and management of CATV
Systems, and may involve businesses which are competitive
with the Partnership's business. Neither the Partnership
nor the Partners, by virtue of this Agreement or their
Interests in the Partnership, shall have any right in or
to such other ventures including any opportunities
developed by, or the income or profits derived from, such
other ventures.
(B) Any of the Partners or any of their Affiliates (which term
shall exclude, for purposes of this Section 4.5(B),
directors and officers of corporate Affiliates of Telesat
other than the Limited Partner and the General Partner),
acting directly or indirectly (a "Purchaser") may acquire
a direct or indirect interest or participation (except for
the acquisition of the direct or indirect beneficial
ownership as a passive investor of up to one percent (1%)
of the outstanding equity interests in any publicly-traded
Person, which are expressly permitted under Section
4.5(A)) in any CATV system within the state of Florida or
in any CATV system outside the state of Florida within one
hundred (100) miles of any of the head-end sites of any of
the CATV Systems of the Partnership only if such Purchaser
has first offered in writing to the Partnership the
opportunity to acquire such interest or participation upon
the terms and conditions set forth therein and any of the
following conditions has been met: (i) whether or not
approval is required by Section 4.7, the approval of a
Majority-in-Interest for the Partnership to acquire such
interest or participation shall be required, and such
approval shall not have been obtained within sixty (60)
days following the notice to the General Partner and
Limited Partner of the opportunity to make such
acquisition, which notice shall contain a statement of the
material terms of the proposed acquisition and shall
include material information reasonably necessary for
evaluation of such acquisition and a statement to the
effect that if a Majority-in-Interest does not consent in
writing within sixty (60) days following such notice, then
the Purchaser shall be deemed to be authorized to proceed
with such acquisition on the terms and conditions proposed
by the Purchaser; or (ii) the consent of a Majority-in-
Interest has been obtained for the Partnership to make
such acquisition, but within ninety (90) days of the date
of such consent, the Managing General Partner shall have
determined with the consent of a Majority-in-Interest that
reasonably acceptable financing is not available to the
Partnership in order to consummate such acquisition; or
(iii) the Partnership shall have failed to consummate the
acquisition within 180 days from the date of delivery of
the consent of a Majority-in-Interest to the Managing
General Partner, provided, however, such 180-day period
shall be extended if the Partnership and all other parties
to such acquisition and its related financing and
regulatory transactions are diligently working toward
consummating such transactions. If, for any reason set
forth in subparagraphs (i), (ii), or (iii) hereof, the
Partnership fails to consummate such acquisition, the
Partnership shall, upon demand of the Purchaser, assign to
the Managing General Partner or its designee, in the case
where the Purchaser is the Managing General Partner or its
Affiliate, or assign to the General Partner or its
designee, in the case where the Purchaser is the General
Partner or its Affiliate, without consideration, all
rights that the Partnership may have had to make such
acquisition. Further, the provisions of this Section
4.5(B) shall be subject to existing agreements with
respect to properties or options on properties held by
Tele-Media Investment Partnership, L.P. and its
Affiliates.
4.6 Holding of Property. Property owned by the Partnership shall be
held in the name of the Partnership or in nominee name.
4.7 Majority-in-Interest Approval of Certain Matters.
Notwithstanding anything else to the contrary in this Agreement,
neither the Partnership nor the Managing General Partner shall
take, or cause or permit any of the Direct Affiliates to take,
any of the following actions without the written approval of a
Majority-in-Interest:
(A) Amend this Agreement (including without limitation
amending Section 2.3) except as otherwise provided in
Section 12.6;
(B) Approve the election of any additional or substitute
Managing General Partner (which is not an Approved
Adelphia Transferee) as provided in Section 11.5;
(C) Dissolve or liquidate;
(D) Incorporate;
(E) Subject to the limitations of Section 4.3(S), enter into
any financings or refinancings of Indebtedness unless
(i) the purpose of such financing is to consummate a
direct or indirect acquisition of assets as to which
consent has been obtained (including, without limitation,
any acquisitions referred to in Section 4.3(W) hereof) or
is not required pursuant to Section 4.8(C) hereof,
(ii) the financing or refinancing is entered into in the
ordinary course of business of the Partnership or any of
its Direct Affiliates, including, but not limited to,
trade debt or financings for Partnership or Direct
Affiliate capital expenditures to be made in the ordinary
course of business in any such case pursuant to a Budget,
or (iii) the principal amount of such financing or
refinancing or Senior Debt issued pursuant to Section
4.3(S), together with all other financings or refinancings
entered into in the same Fiscal Year (and for which
approval by a Majority-in-Interest has not been obtained),
does not exceed $5,000,000 in the aggregate;
(F) Issue Preferred or Special Limited Partner Interests in
the Partnership except as provided for in Section 3.7;
(G) Adopt or amend any annual operating budget or capital
budget (in each case, together with any amendments thereto
approved by a Majority-in-Interest, a "Budget"), each of
which shall be prepared on the basis of a March 31 year,
provided that any required approval by the General Partner
or Limited Partner shall not be unreasonably withheld, and
provided further that:
(i) for the budget year ended March 31, 1996, the
Managing General Partner shall operate the business
of the Partnership in the ordinary course of
business consistent with past practice until a
Majority-in-Interest shall approve an operating and
capital budget for such period, for which purpose
the Partners holding Units agree to use
commercially reasonable efforts to do so within 90
days of the execution hereof;
(ii) the Managing General Partner, in the absence of and
pending approval thereof by a Majority-in-Interest,
shall be automatically and expressly authorized,
for a one-year period thereafter, to operate the
business of the Partnership on the basis of a
capital budget and/or an operating budget based on
the historical financial results of the Partnership
for the preceding budget year plus (or minus) a
percentage adjustment equal to the percentage
increase (or decrease, as the case may be) in
subscriber growth over the past budget year,
multiplied by one plus the percentage increase, if
any, in the Consumer Price Index for Southern
Florida for the preceding Budget year;
(iii) total expenditures for a capital budget or
operating budget approved pursuant to the first
paragraph of this Section 4.7(G) not in excess of
105% of each such Budget in any one year shall be
deemed not to be a Budget amendment unless approved
by a Majority-in-Interest; provided that
notwithstanding anything set forth in this Section,
the Managing General Partner shall have the right
to make Emergency Expenditures (as hereinafter
defined);
(iv) the Managing General Partner agrees to provide to
the General Partner and Limited Partner (x) by
December 31 of each year a working estimate for
operating and capital budgets pro forma for the
twelve months ended December 31 and (y) no less
than 30 days prior to the end of each Fiscal Year,
draft Budgets for the upcoming Fiscal Year, and;
(v) in the event of any emergency involving the
preservation of any material assets of the
Partnership, danger to life or property, or a
service or repair required to be performed on the
CATV Systems or any component thereof on an
emergency or expedited basis, the Managing General
Partner shall have the right to perform or cause to
be performed such acts, repairs and maintenance and
to incur such reasonable costs and expenses on
behalf of the Partnership (the "Emergency
Expenditures") as in its good faith discretion may
be required without the approval of the Majority-
in-Interest and irrespective of whether or not such
costs and expenses were provided for in a Budget,
provided that the Managing General Partner shall
contact the other Partners as soon as practicable
to (i) describe, in writing, the details thereof,
the expenses associated therewith and the impact on
the Budget, and (ii) prepare a revised Budget,
subject to the rights of the Majority-in-Interest
under this Section;
(H) Enter into transactions with Partners or Affiliates of
Partners, (i) except as set forth in Sections 4.3(U), (V)
and (W) and Sections 4.4(B) and (C); (ii) except as
permitted by Section 4.3(S); and (iii) except for
transactions in the ordinary course of business (other
than loans and acquisitions and sales of CATV subscribers)
that, together with all other such transactions entered
into in the same Fiscal Year (and for which approval by a
Majority-in-Interest has not been obtained), do not
involve an amount in excess of $100,000.
(I) Change or reorganize the Partnership into any other legal
form of organization;
(J) Lend Partnership funds to any Person or cause the
Partnership to act as a guarantor, endorser or surety
(except as permitted pursuant to Section 4.7(E));
(K) Knowingly or willingly do any act (except an act expressly
required by this Agreement) which would cause the
Partnership to become an association taxable as a
corporation;
(L) Admit any new partner to the Partnership, whether by
issuance of a new interest in the Partnership or by
transferring all or any part of Partner's Interest, except
as otherwise provided in Article 10 or 11;
(M) Select a new independent certified public accountant for
the Partnership; or
(N) Acquire a new Direct Affiliate of which the Partnership
owns, directly or indirectly, less than 95% of the equity
interests.
4.8 Super Majority-in-Interest Approval of Certain Matters.
Notwithstanding anything else to the contrary in this Agreement,
neither the Partnership nor the Managing General Partner shall
take, or cause or permit any of its Direct Affiliates to take,
any of the following actions without the written approval of a
Super Majority-in-Interest:
(A) File or consent to the filing of a petition under any
Federal or state bankruptcy, insolvency or reorganization
act or execute or deliver any general assignment for the
benefit of the creditors of the Partnership;
(B) Sell, trade, exchange or otherwise dispose of assets
except for (i) transactions in the ordinary course of
business and (ii) transactions which, together with all
sales, trades, exchanges or other dispositions in the same
Fiscal Year (and for which approval by a Super Majority-
in-Interest has not been obtained) do not involve more
than 5,000 CATV subscribers;
(C) Purchase or otherwise acquire from a third-party owner,
directly or indirectly, any CATV Systems or subscribers
except for (i) line or plant extensions or the execution
of new or amended bulk service agreements, (ii)
transactions which, together with all purchases or other
acquisitions in the same Fiscal Year (and for which
approval by a Super Majority-in-Interest has not been
obtained) do not involve more than 5,000 CATV subscribers,
and (iii) transactions expressly authorized in Section
4.3(W);
(D) Call for additional Capital Contributions from the
Partners except as otherwise provided in Section 3.7; or
(E) Issue Units in the Partnership or issue General Partner,
Limited Partner or Managing General Partner Interests.
4.9 Offer to Purchase Partners' Interests. Each General Partner,
Senior Limited Partner, Special Limited Partner, Preferred
Limited Partner and Limited Partner agrees that if the Managing
General Partner and a Super Majority-in-Interest of the Partners
agree to accept an offer to purchase all of the Partnership
Interests of the Partners, each Partner shall sell his
Partnership Interest pursuant to such offer regardless of
whether it individually agreed to accept such offer.
4.10 Operating Committee. The Managing General Partner shall
organize an operating committee (the "Operating Committee")
consisting of a minimum of two and a maximum of four Persons,
such number to be an even number as determined, from time to
time, by the Managing General Partner. The Managing General
Partner shall appoint one-half of the Persons on the Operating
Committee which Persons may be officers, directors or employees
of, or otherwise affiliated with, the Managing General Partner
or Adelphia. The other Persons on the Operating Committee shall
be selected by the Partners (other than the Managing General
Partner) holding more than 50% of the outstanding Units,
excluding Units held by the Managing General Partner. Persons
appointed to the Operating Committee shall be appointed for a
one-year term and may be reappointed for any number of
additional one-year terms. The Operating Committee shall meet
quarterly (in person or by conference call) to review and
discuss the business and operations of the Partnership. In
addition, the Operating Committee shall (i) review and evaluate
historical operating performance of the Partnership to budget,
and (ii) review and evaluate historical performance by the
manager of the CATV Systems under applicable management
agreements. Except as provided in this Section 4.10, neither
the Operating Committee nor its members are authorized to take
any action on behalf of the Partnership and, except as expressly
set forth herein, the provisions of this Section 4.10 are not
intended to modify, change or limit the rights and powers of the
Managing General Partner and the other Partners as provided for
in this Agreement.
ARTICLE 5
EXCULPATION AND INDEMNIFICATION
5.1 Exculpation. No Partner, or any officer, director, employee, or
agent of any Partner of the Partnership, shall be liable to the
Partnership or to any other Partner for losses or liabilities
arising from any act performed or failure to act in the conduct
of the affairs of the Partnership including the conduct of any
employee or agent of such Person, except losses or liabilities
which arise from the willful misconduct, gross negligence,
breach of fiduciary duty or fraud by such Partner, or officer,
director, employee, or agent of a Partner or the Partnership.
5.2 Partnership Indemnification of the Partners
(A) The Partnership shall indemnify and hold harmless each of
the Partners and each of their partners, officers,
directors, employees, shareholders, Affiliates, and
agents, against any and all damages, losses, fines, costs,
and expenses (including reasonable attorney's fees and
disbursements), resulting from or relating in any way to
any claim or demand made or threatened, or any action,
proceeding, or investigation commenced or threatened,
arising out of, or in any way relating to any action taken
or omitted to have been taken (or alleged to have been
taken or omitted to have been taken) in connection with
the organization, business or other affairs of the
Partnership (including any amounts paid or property
transferred, and all costs and expenses, including
reasonable attorney's fees and disbursements, incurred in
connection with any settlement of any such claim, action,
proceeding, or investigation); provided, however, that
such indemnification shall be made only if such action or
omission is not determined to constitute willful
misconduct, gross negligence, breach of fiduciary duty or
fraud of such Person.
(B) For the purposes of Section 5.2(A) hereof, the
determination that the action or omission of any Person
constitutes willful misconduct, gross negligence, breach
of fiduciary duty or fraud shall be made by a court of
competent jurisdiction or other body before which the
relevant action, proceeding, or investigation is pending.
If the parties cannot secure a determination of the court
or other body, such determination shall be made by
independent legal counsel in a written legal opinion to
the Partnership.
(C) Costs and expenses incurred in defending or responding to
any pending or threatened civil or criminal action,
proceeding, or investigation shall be advanced by the
Partnership to the Person who is the subject thereof in
advance of the final disposition of such action,
proceeding, or investigation, upon receipt of an
undertaking by the Person seeking such advance to repay
such amount if it shall ultimately be determined that he
is not entitled to be indemnified pursuant to this Section
5.2.
ARTICLE 6
RIGHTS, OBLIGATIONS AND REPRESENTATIONS OF
LIMITED PARTNERS
6.1 Liability of Partners.
(A) No Limited Partner (in such capacity) shall have any
personal liability with respect to the debts, liabilities
or obligations of the Partnership except to the extent
that it expressly and voluntarily assumes in writing any
obligations of the Partnership, it being agreed that
nothing in this Agreement shall be deemed to constitute
such express and voluntary assumption; and
(B) No Limited Partner shall be personally liable or
obligated, except as otherwise required by law, either (1)
to pay to the Partnership, any other Partner or any
creditor of the Partnership any deficiency in its Capital
Account, or (2) to return to the Partnership or to pay any
creditor or any other Partner the amount of any return of
its Capital Contribution to it or other distribution made
to it.
(C) The Managing General Partner shall within sixty (60) days
of the execution of this Agreement review the availability
to the Partnership of registration and designation as a
limited liability limited partnership under Delaware law
and in each jurisdiction in which the Partnership does
business which now or hereafter enacts limited liability
partnership legislation, and shall take commercially
reasonable efforts to effect such registration and
designation if in its good faith judgment there is no
material adverse effect thereof to the Partnership, the
Direct Affiliates or the Managing General Partner.
6.2 Representations of Telesat. The Telesat Partners and the Senior
Limited Partner each hereby represents and warrants to the
Partnership and to the Managing General Partner as follows:
(A) It is a corporation duly organized, validly existing, and
in good standing under the laws of the state of its
domicile; the execution and delivery of this Agreement
does not, and the consummation of the transactions
contemplated hereby will not, violate any provision of its
articles of incorporation or bylaws or of any agreement,
instrument, order, judgment, or decree to which it is a
party or by which it is bound which would have a material
adverse effect on the Partnership or the Telesat Partners,
the Senior Limited Partner or the Managing General
Partner's participation in the Partnership; and it has
full power and authority to execute and deliver this
Agreement, to purchase and own its Interest, to become a
General Partner, Limited Partner, Senior Limited Partner
or Preferred Limited Partner, as the case may be, and to
perform its obligations under this Agreement; and the
Person signing this Agreement and any other instrument or
document executed and delivered herewith on behalf of such
entity has full power and authority to do so.
(B) It is acquiring its Interests or Units hereunder solely
for its own account, for investment purposes only and not
with a view to or any intention of transferring,
reselling, or otherwise distributing its Interests or
Units except as set forth in this Agreement, and it
understands that, in reliance upon the foregoing
representation and warranty, the offer and sale of the
Interests is not registered under the Securities Act and
may not be registered under certain states' securities
laws.
(C) It understands that (i) transfer of its Interests or Units
is subject to the restrictions contained in this Agreement
and, (ii) except as otherwise provided in Article 10
hereof, the Interests or Units may not be resold unless
they are registered under the Securities Act and any
applicable state securities law or unless counsel
reasonably satisfactory to the Managing General Partner
has delivered a written legal opinion to the Partnership
that an exemption from such registration is available.
(D) It and its advisors have had access to all documents and
information that it and/or they deem relevant and material
to the acquisition of Interests and Units as a General
Partner, Limited Partner, Senior Limited Partner or
Preferred Limited Partner, as the case may be.
(E) It and its advisors have had the opportunity to ask
questions and receive answers from the Managing General
Partner or its Affiliates relating to the CATV Systems,
the Partnership, and any other matter pertaining to an
investment in the Partnership.
(F) It has such knowledge and experience in financial and
business matters generally and the CATV industry
specifically that it is capable of evaluating the merits
and risks of investing in the Partnership.
(G) It understands that the foregoing representations and
warranties are made as an inducement to the Managing
General Partner to admit it as a General Partner, Senior
Limited Partner, Limited Partner or Preferred Limited
Partner, as the case may be, to the Partnership and will
be relied upon by the Managing General Partner and the
Partnership as the basis for claiming exemptions from the
registration requirements of Federal and state securities
laws for the offer and sale of the Interests.
(H) It is an "accredited investor" (as such term is defined
and used in Rule 501 of Regulation D under the Securities
Act).
6.3 Indemnification of Managing General Partner and Partnership for
Breach of Representations and Warranties.
(A) The Telesat Partners agree to indemnify and hold harmless
the Partnership, the Managing General Partner and its
directors, officers, employees and agents and any other
Person who controls any thereof, within the meaning of
Section 15 of the Securities Act, against any and all
loss, liability, claim, damage and expense whatsoever
(including, but not limited to, any and all expenses
reasonably incurred in investigating, preparing or
defending against any litigation commenced or threatened
or any claim whatsoever) arising out of or based upon any
false representations or warranty contained in Section 6.2
hereof in connection with the transactions whereby the
Telesat Partners acquired Interests hereunder.
(B) The representations and warranties in Section 6.2 hereof
shall survive for the longer of two years or any statute
of limitations for a corresponding securities law.
6.4 Voting Rights. No Limited Partner or General Partner shall have
the right to vote on any Partnership matter except as
specifically provided in this Agreement. The Managing General
Partner shall notify the Limited Partner and General Partner of
record on the day (the "Notice Date") on which such notice is
mailed, sent or transmitted of the matter or matters to be voted
upon or consented to and the date on which the votes or consents
will be counted. Each Partner who is entitled to vote or
consent shall vote or consent by a signed written consent or a
signed writing directing the manner in which he/it desires that
his/its vote be cast, which writing must be received by the
Managing General Partner prior to the time at which the votes or
consents of the Limited Partner or General Partner are counted.
Any Limited Partner or General Partner that fails to respond to
the notice of the Managing General Partner within thirty (30)
days after the delivery thereof, or within such longer period
herein or therein provided with respect to voting on, consenting
to or approving such matter, shall be deemed to have elected not
to consent to or approve any such matters proposed by the
Managing General Partner. Only the votes or consents of
Partners holding Interests in the Partnership on the Notice Date
shall be counted. The Managing General Partner shall provide
written notice to all other Partners of the outcome of any
Partnership vote within thirty (30) days of the date on which
the votes or consents are counted and finally tabulated.
ARTICLE 7
ALLOCATIONS OF PROFITS AND LOSSES;
CASH FLOW DISTRIBUTIONS
7.1 Profits. After giving effect to the allocations set forth in
Sections 7.4, 7.5 and, 7.6 hereof, Profits for any fiscal year
shall be allocated among the Partners holding Units as follows:
(a) two-thirds (2/3) pro rata to the Managing General Partner
and any Partner holding Units acquired directly or indirectly
from the Managing General Partner, and (b) one-third (1/3) pro
rata to the Partners holding Units (other than the Managing
General Partner and any Partner holding Units acquired directly
or indirectly from the Managing General Partner).
7.2 Losses. After giving effect to the special allocations set
forth in Sections 7.4, 7.5 and 7.6 hereof, Losses shall be
allocated among the Partners holding Units as follows: (a) two-
thirds (2/3) pro rata to the Managing General Partner and any
Partner holding Units acquired directly or indirectly from the
Managing General Partner, and (b) one-third (1/3) pro rata to
the Partners holding Units (other than the Managing General
Partner and any Partner holding Units acquired directly or
indirectly from the Managing General Partner). To the extent
that Losses allocated to any Partner would cause such Partner to
have an Adjusted Capital Account Deficit at the end of any
taxable year, such Losses shall not be allocated to such Partner
but shall be allocated instead to such other Partner or Partners
to whom such allocations would not cause an Adjusted Capital
Account Deficit.
7.3 Distributions. All distributions of Net Cash from Operations
and Net Cash from Sales or Refinancings (other than
distributions in liquidation which shall be made in accordance
with Section 9.5 hereof), shall be made in the following order
and priority:
(a) First, to each Senior Limited Partner pro rata in
proportion to its accrued but unpaid Senior Priority
Return until the Senior Limited Partner has received, on a
cumulative basis pursuant to this Section 7.3(a), an
amount equal to the Senior Priority Return and then,
except to the extent the Managing General Partner in its
sole discretion elects to first distribute accrued but
unpaid Special Priority Return pursuant to Section 7.3(b)
or to then distribute accrued but unpaid Priority Return
pursuant to Section 7.3(c) (if all accrued Special
Priority Return has been paid at such time), in an amount
equal to the Adjusted Capital Contributions of such Senior
Limited Partner; provided, that the Partners intend that
before any such distributions are made pursuant to
Sections 7.3(b) or 7.3(c), the aggregate Adjusted Capital
Contributions of the Senior Limited Partners shall be
equal to no more than one-half of the then outstanding
portion of the principal balance of the Senior Debt that
was outstanding immediately after the execution of this
Agreement as set forth on Exhibit F;
(b) Second, to each Special Limited Partner pro rata in
proportion to its accrued but unpaid Special Priority
Return until the Special Limited Partner has received, on
a cumulative basis pursuant to this Section 7.3(b), an
amount equal to the Special Priority Return and then,
except to the extent the Managing General Partner in its
sole discretion elects to first distribute accrued but
unpaid Priority Return pursuant to Section 7.3(c), in an
amount equal to the Adjusted Capital Contributions of such
Special Limited Partner;
(c) Third, to each Preferred Limited Partner pro rata in
proportion to its accrued but unpaid Priority Return until
the Preferred Limited Partner has received, on a
cumulative basis pursuant to this Section 7.3(c), an
amount equal to the Priority Return and then in an amount
equal to the Adjusted Capital Contributions of such
Preferred Limited Partner;
(d) Fourth, 99% of any remaining amount shall be distributed
two-thirds (2/3) to the Managing General Partner and any
Partner holding Units acquired directly or indirectly from
the Managing General Partner, pro rata, and one-third
(1/3) to the Partners holding Units (other than the
Managing General Partner and any Partner holding Units
acquired directly or indirectly from the Managing General
Partner), pro rata; and
(e) Thereafter, pro rata to all Partners holding Units.
7.4 Senior Priority Return, Special Priority Return and Priority
Return Allocations. All or a portion of items of Partnership
income and gain shall be specifically allocated to the Senior
Limited Partners, Special Limited Partners and the Preferred
Limited Partners in proportion to the cumulative distributions
of the Senior Priority Return, Special Priority Return and
Priority Return each Senior Limited Partner, Special Limited
Partner and Preferred Limited Partner has received pursuant to
Sections 7.3(a), 7.3(b), 7.3(c), 9.5(B), 9.5(C) or 9.5(D) hereof
from the date of original execution of this Second Amended and
Restated Agreement to a date 30 days after the end of each
fiscal year until the aggregate amounts allocated to each Senior
Limited Partner, Special Limited Partner and Preferred Limited
Partner pursuant to this Section 7.4 for such fiscal year and
all previous fiscal years are equal to the cumulative amount of
such Senior Priority Return, Special Priority Return and
Priority Return distributions to each such Senior Limited
Partner, Special Limited Partner and Preferred Limited Partner,
respectively.
7.5 Special Allocations. The following special allocations shall be
made in the following order:
(A) Minimum Gain Chargeback. Notwithstanding any other
provision of this Article 7, if there is a net decrease in
Partnership Minimum Gain during any Partnership Fiscal
Year, each Partner shall be specially allocated items of
Partnership income and gain for such year (and, if
necessary, subsequent years) in accordance with Treasury
Regulation Section 1.704-2(f). Allocations pursuant to
the previous sentence shall be made in proportion to the
respective amounts required to be allocated to each
Partner pursuant thereto. The items to be so allocated
shall be determined in accordance with Section 1.704-2(f)
of the Treasury Regulations. This Section 7.5(A) is
intended to comply with the minimum gain chargeback
requirement in such Section of the Regulations and shall
be interpreted consistently therewith. To the extent
permitted by such Section of the Regulations and for
purposes of this Section 7.5(A) only, each Partner's
Adjusted Capital Account Deficit shall be determined prior
to any other allocations pursuant to this Article 7 with
respect to such Fiscal Year.
(B) Qualified Income Offset. In the event any Partner who is
not obligated (or treated as obligated) to restore a
deficit balance in its Capital Account unexpectedly
receives any adjustments, allocations, or distributions
described in Regulations Section 1.704-1(b)(2)(ii)(d)(4),
1.704-1(b)(2)(ii)(d)(5), or 1.704-1(b)(2)(ii)(d)(6), items
of Partnership income and gain shall be specially
allocated to each such Partner in an amount and manner
sufficient to eliminate, to the extent required by the
Regulations, the Adjusted Capital Account Deficit of such
Partner as quickly as possible, provided that an
allocation pursuant to this Section 7.5(B) shall be made
if and only to the extent that such Partner would have an
Adjusted Capital Account Deficit after all other
allocations provided for in this Article 7 have been
tentatively made as if this Section 7.5(B) were not in the
Agreement.
(C) Gross Income Allocation. In the event any Partner has a
deficit Capital Account at the end of any Partnership
Fiscal Year that is in excess of the sum of (i) the amount
such Partner is obligated to restore, (ii) the amount such
Partner is deemed to be obligated to restore pursuant to
Sections 1.704-2(g)(i) and 1.704-2(i)(5) of the Treasury
Regulations, each such Partner shall be specially
allocated items of Partnership income and gain in the
amount of such excess as quickly as possible, provided
that an allocation pursuant to this Section 7.5(C) shall
be made if and only to the extent that such Partner would
have a deficit Capital Account in excess of such sum after
all other allocations provided for in this Article 7 have
been tentatively made as if Section 7.5(B) hereof and this
Section 7.5(C) were not in the Agreement.
(D) Imputed Interest Expense. To the extent that the
Partnership has imputed interest expense pursuant to Code
Section 7872 with respect to any below market loan made to
the Partnership by any Partner, such imputed interest
expense shall be specially allocated to the lending
Partner.
7.6 Curative Allocations. Any special allocations pursuant to
Section 7.5 shall be taken into account in computing subsequent
allocations pursuant to this Article 7, so that the net amounts
of any items so allocated and the Profits, Losses and all other
items allocated to each Partner pursuant to this Article 7
shall, to the extent possible, be equal to the net amount that
would have been allocated to each Partner pursuant to the
provisions of this Article 7 if such special allocations had not
occurred.
7.7 Tax Allocations: Code Section 704(c).
(A) In accordance with Code Section 704(c) and the Regulations
thereunder, income, gain, loss, and deduction with respect
to any property contributed to the capital of the
Partnership shall, solely for tax purposes, be allocated
among the Partners so as to take account of any variation
between the adjusted basis of such property to the
Partnership for Federal income tax purposes and its
initial Gross Asset Value (as defined herein).
(B) In the event the Gross Asset Value of any Partnership
asset is adjusted pursuant to clause (ii) of the
definition of Gross Asset Value contained herein,
subsequent allocations of income, gain, loss, and
deduction with respect to such asset shall take account of
any variation between the adjusted basis of such asset for
Federal income tax purposes and its Gross Asset Value in
the same manner as under Code Section 704(c) and the
Regulations thereunder.
(C) Any elections or other decisions relating to allocations
pursuant to this Section 7.7 shall be made by the Managing
General Partner in any manner that reasonably reflects the
purpose and intention of this Agreement. Allocations
pursuant to this Section 7.7 are solely for purposes of
Federal, state, and local taxes and shall not affect, or
in any way be taken into account in computing, any
Partner's Capital Account or share of Profits, Losses,
other items, or distributions pursuant to any provision of
this Agreement.
7.8 Miscellaneous.
(A) In any year in which a Partner sells, assigns or transfers
all or any portion of an Interest to any Person pursuant
to the terms of Article 10 hereof, the share of all
Profits and Losses allocated under Sections 7.1, 7.2, 7.4
and 7.5 which are attributable to the Interest sold,
assigned or transferred, shall, to the extent permitted
under the Code, be divided between the assignor and the
assignee on the basis of the number of days in such year
before, and the number of days on and after, the
assumption by the assignee of obligations under this
Agreement, as provided in Article 10.
(B) To the extent an adjustment to the adjusted tax basis of
any Partnership asset pursuant to Code Section 734(b) or
Code Section 743(b) is required, pursuant to Regulations
Section 1.704-1(b)(2)(iv)(m), to be taken into account in
determining Capital Accounts, the amount of such
adjustment to the Capital Accounts shall be treated as an
item of gain (if the adjustment increases the basis of the
asset) or loss (if the adjustment decreases such basis)
and such gain or loss shall be specially allocated to the
Partners in a manner consistent with the manner in which
their Capital Accounts are required to be adjusted
pursuant to such Section of the Regulations.
(C) Except as otherwise provided in this Agreement, all items
of Partnership income, gain, loss, deduction, and any
other allocations not otherwise provided for shall be
divided among the Partners in the same proportions as they
share Profits or Losses, as the case may be, for the year.
(D) The Partners recognize and acknowledge that the Managing
General Partner has made certain tax elections and
decisions subsequent to the formation of the Partnership
but prior to the date of execution of this Agreement.
ARTICLE 8
ACCOUNTING AND TAX MATTERS
8.1 Books and Records. The Managing General Partner shall keep, or
cause to be kept, complete and accurate books of account of the
Partnership's affairs in accordance with generally accepted
accounting principles. The Partnership shall file its tax
returns using the accrual method of accounting. Said books of
account, together with all correspondence, papers, and other
documents, shall be open for examination and copying by any
Partner at the executive office of the Partnership during
reasonable business hours. To the extent reasonably requested
by a Partner, the Managing General Partner shall obtain and make
available to any Partner the books, records and other relevant
information with respect to (i) transactions reported upon
pursuant to Section 8.3(F) or (ii) the payment of the corporate
overhead allocation described in Section 4.4(B), for examination
and copying during reasonable business hours, provided that the
requesting Partner or Partners shall pay all expenses (including
without limitation those of the Partnership, the Managing
General Partner, the requesting Partners and any of their
respective Affiliates) in connection with such request.
8.2 Fiscal Year. The fiscal year ("Fiscal Year") and the taxable
year ("Tax Year") of the Partnership shall be determined by the
Managing General Partner in accordance with the provisions of
the Code. As of the time immediately prior to the date hereof,
the Fiscal Year ends December 31 and the Tax Year ends
December 31.
8.3 Tax and Financial Reports.
(A) Within 120 days after the end of each fiscal year, the
Managing General Partner shall cause to be prepared and
shall furnish to the General Partner and the Limited
Partner a report with respect to the previous fiscal year
containing financial statements of the Partnership, which
shall be prepared and certified by an independent
certified public accountant, including a balance sheet, a
statement of income, a statement of the Partners' equity
in the Partnership, and a statement of changes in cash
flow, together with all appropriate notes.
(B) Not later than 90 days after the end of each tax year of
the Partnership, each Partner shall be provided with an
information letter with respect to his distributive share
of income, gain, deduction, losses and credits, as the
case may be, for income tax reporting purposes for the
previous fiscal year, together with any other information
concerning the Partnership necessary for the preparation
of a Partner's income tax return, including Form K-1 for
each Partner.
(C) The Partnership shall provide to the Partners quarterly
unaudited financial statements, no later than 60 days
following the end of each quarter, and annual unaudited
financial statements, no later than 75 days after the end
of the fiscal year.
(D) The Managing General Partner shall prepare or cause to be
prepared all Federal, state, and local tax returns of the
Partnership for each year for which such returns are
required to be filed. The Tax Matters Partner designated
in Section 8.5 shall promptly notify all other Partners of
any Partnership audits by the Service or any state or
local taxing authority.
(E) The Managing General Partner shall prepare or cause to be
prepared all reports, audits, and statements required in
connection with the indebtedness of the Partnership and
shall provide the General Partner and the Limited Partner
with copies of interim financial statements prepared in
connection with such indebtedness.
(F) At the time the annual financial reports are provided to
the Partners pursuant to Section 8.3(A) hereof, the
Managing General Partner will provide each Partner with a
report describing transactions between the Partnership or
any of its Direct Affiliates and an Affiliate of the
Partnership occurring during such fiscal year; provided,
that any transaction pursuant to management agreements
entered into in accordance with Section 4.3(V) hereof and
any matters involving the allocation of corporate overhead
pursuant to Section 4.4 hereof shall not be required to be
reported hereunder.
8.4 Partnership's Accountant. The Partnership's accountant shall be
such firm of independent certified public accountants as the
Managing General Partner may select from time to time, subject
to receiving the approval required by Section 4.7.
8.5 Tax Matters Partner. The Managing General Partner is hereby
designated as the "Tax Matters Partner" in accordance with
Section 6231(a)(7) of the Code. Subject to the terms and
conditions set forth below, the Tax Matters Partner is
authorized to take such actions and to execute and file all
statements and forms on behalf of the Partnership which may be
permitted or required by the applicable provisions of the Code
or Treasury Regulations issued thereunder, and the Partners will
take all other action that may be necessary or appropriate to
effect the designation of the Managing General Partner as the
Tax Matters Partner. The Tax Matters Partner is authorized to
represent the Partnership, at the Partnership's expense, in
connection with all examinations of the Partnership's affairs by
tax authorities, including resulting judicial and administrative
proceedings and to expend Partnership funds for professional
services and costs associated therewith. All reasonable
expenses incurred by the Tax Matters Partner in its capacity as
such shall be expenses of the Partnership and shall be paid by
or reimbursed to the Tax Matters Partner from Partnership funds.
The designation as Tax Matters Partner is subject to the
following terms and conditions:
(A) The Tax Matters Partner shall keep the other Partners
fully and timely informed of all administrative and
judicial proceedings for the adjustment of "partnership
items" (as defined in Section 6231(a)(3) of the Code and
any comparable provision of state or local law)
("Partnership Item") at the Partnership level and shall,
without limitation, forward to each Partner any agent's
reports and notices of conferences and all other
correspondence pertaining to the progress of any audit
being conducted by any federal, state or local taxing
authority.
(B) Each of the Partners (including the Tax Matters Partner)
agrees that it will not enter into a settlement agreement
with the Internal Revenue Service (or any state or local
taxing authority) with respect to the determination of any
Partnership Item that has the effect of binding another
Partner without first obtaining the written consent of
such other Partner.
(C) Any Partner who enters into a settlement agreement with
any taxing authority with respect to any Partnership Item
shall notify the Tax Matters Partner of the agreement and
its terms within thirty (30) days from the date of such
agreement, and the Tax Matters Partner shall notify the
other Partners promptly in writing of the settlement
within thirty (30) days of receipt of notification by the
Partner entering into the settlement.
(D) If notice of an administrative proceeding under Section
6223 of the Code (or any comparable provision of state or
local law) is received by a Partner, the Partner shall
notify in writing the Tax Matters Partner of the treatment
of any Partnership Item on the Partner's income tax return
which is or may be inconsistent with the treatment of that
item on the Partnership return.
(E) If a notice of a final partnership administrative
determination is mailed to the Tax Matters Partner, the
Tax Matters Partner shall promptly notify in writing each
of the other Partners of said event and provide them with
a copy of said notice. The Tax Matters Partner shall not,
in its capacity as such, file a petition for a
readjustment of any Partnership Item set forth in said
notice in any of the courts described in Section 6226 of
the Code unless requested to do so by a vote of a majority
of the Unit holders of the Partners having an interest in
the outcome (as defined in Section 6226(d) of the Code).
(F) The Tax Matters Partner shall not extend the statute of
limitations for assessment of tax deficiencies against any
Partner with respect to adjustments to the Partnership's
federal, state or local tax returns without the consent of
all Partners.
The designation of the Tax Matters Partner made in this Section
8.5 is hereby expressly consented to by each Partner as an
express condition to becoming a Partner.
8.6 Federal Income Tax Elections. In the event of a distribution of
property to a Partner or the transfer of an Interest in the
Partnership by sale, exchange, or upon the death of a Partner,
the Managing General Partner may, in its discretion, cause the
Partnership to file an election under Section 754 of the Code in
accordance with the Regulations promulgated thereunder to adjust
the basis of Partnership Property in the manner provided in
Sections 734 and 743 of the Code. All other elections required
or permitted to be made by the Partnership under the Code shall
be made by the Managing General Partner in such manner as in its
reasonable judgment will be most advantageous to the
Partnership, which in general shall be to maximize current tax
benefits to the Partnership. At the request of the transferee
of an Interest who is admitted as a substituted Limited or
General Partner, and with the consent of the Managing General
Partner which consent shall not be unreasonably withheld, the
Managing General Partner shall make an election under Section
754 of the Code and the Managing General Partner shall be
absolved from all liability for any and all consequences to any
previously admitted or subsequently admitted Partners resulting
from making or failing to make such election. Upon request,
each of the Partners will supply the information reasonably
necessary to give proper effect to any such election. The
substituted Limited or General Partner who requests such Section
754 election shall pay the accounting expenses incurred by the
Partnership as a result of such election with respect to the tax
year in which the substituted Limited or General Partner
acquired the Interest.
8.7 Banking. One or more Partnership bank accounts and safe deposit
boxes may be established by the Managing General Partner. The
Partnership funds shall not be commingled with any funds of the
Managing General Partner or its Affiliates. The Managing
General Partner may designate the Persons authorized to sign
checks on and withdraw funds from such bank accounts and to have
access to such safe deposit boxes, and may place such
limitations and restrictions on such authority as the Managing
General Partner deems advisable.
ARTICLE 9
TERM AND DISSOLUTION
9.1 Term. The term of the Partnership shall continue until
December 31, 2019, unless sooner terminated pursuant to the
provisions of this Agreement.
9.2 Dissolution. The Partnership shall be dissolved and shall
terminate and wind-up its affairs upon the first to occur of the
following:
(A) The determination by the Managing General Partner that the
Partnership should be dissolved and the concurrence in
that determination by the General Partner and the Limited
Partner in accordance with Section 4.7;
(B) The entry of a final judgment, order, or decree of a court
of competent jurisdiction adjudicating the Partnership to
be a bankrupt, and the expiration of the period, if any,
allowed by applicable law in which to appeal therefrom;
(C) Except as otherwise provided in Section 11.3 hereof, the
dissolution, removal, resignation, final adjudication of
bankruptcy, incompetence, or death of the sole remaining
Managing General Partner;
(D) The sale or other disposition of all or substantially all
Partnership assets; or
(E) The expiration of the term of the Partnership as provided
in Section 9.1 hereof.
9.3 Actions, Death, etc., of General Partner, Senior Limited
Partner, Special Limited Partner, Preferred Limited Partner or
Limited Partner. No action of or event affecting a General
Partner, Senior Limited Partner, Special Limited Partner,
Preferred Limited Partner or Limited Partner shall dissolve or
terminate the Partnership. Upon the death or dissolution of
such Partner, the Partnership Interest of such Partner and all
rights and obligations under this Agreement shall descend to and
vest in the heirs, legatees, or legal representatives,
successors or assigns of such Partner and each such Person shall
have the status of an assignee of the transferor but shall not
be a General Partner, Senior Limited Partner, Special Limited
Partner, Preferred Limited Partner or Limited Partner, as the
case may be, unless admitted as a substituted General Partner,
Senior Limited Partner, Special Limited Partner, Preferred
Limited Partner or Limited Partner upon compliance with the
provisions of Article 10 hereof.
9.4 Obligation to Repay Negative Capital Accounts. Upon the
dissolution of the Partnership and liquidation of its assets
pursuant to Section 9.5, if the Managing General Partner has a
negative balance in its Capital Account it shall be obligated to
pay to the Partnership, in cash, by the end of such taxable year
within which such dissolution occurs (or, if later, within 90
days after the date of such liquidation) an amount equal to such
negative balance, which amount shall be applied and distributed
as provided in Section 9.5 hereof; provided, however, that in no
event shall the obligation of the Managing General Partner under
this Section 9.4 exceed an amount equal to the lesser of (i) the
deficit balance in its Capital Account, or (ii) the excess of
one and one-hundredth percent (1.01%) of the total Capital
Contributions of the Partners (other than the Managing General
Partner) over the Capital Contributions previously contributed
by the Managing General Partner.
9.5 Distribution on Liquidation. Upon the dissolution of the
Partnership, other than by incorporation of the Partnership, the
Managing General Partner, or in the event of the removal,
resignation, dissolution or bankruptcy of the Managing General
Partner, such liquidating agent as may be appointed by a
Majority-in-Interest, shall proceed to collect from the Managing
General Partner the amounts, if any, required to be paid
pursuant to Section 9.4 hereof in respect of the negative
balance, if any, in its Capital Account and to wind up the
affairs of the Partnership and apply and distribute the proceeds
in the following order of priority:
(A) To the payment of the debts and liabilities of the
Partnership and the expenses of liquidation in the order
of priority as provided by law, and to the establishment
of any reserves which the Managing General Partner or
liquidating agent, as the case may be, shall deem
reasonably necessary for any contingent or unforeseen
liabilities or obligations of the Partnership. Said
reserves may be paid over by the Managing General Partner
or liquidating agent to a bank or an attorney-at-law, to
be held in escrow for the purpose of paying any such
contingent or unforeseen liabilities or obligations and,
at the expiration of such period as the Managing General
Partner or liquidating agent, as the case may be, shall
deem advisable, such reserves shall be distributed to the
Partners or their assigns in the order of priority
provided in this Section 9.5;
(B) Prior to the application of the allocation provisions of
Article 7 hereof, to each Senior Limited Partner in
proportion to its respective accrued but unpaid Senior
Priority Return until each Senior Limited Partner has
received, on a cumulative basis pursuant to distributions
under this Section 9.5(B) and Section 7.3(a) hereof, an
amount equal to such Senior Priority Return, and then in
an amount equal to the Adjusted Capital Contributions of
such Senior Limited Partner;
(C) Prior to the application of the allocation provisions of
Article 7 hereof, to each Special Limited Partner in
proportion to its respective accrued but unpaid Special
Priority Return until each Special Limited Partner has
received, on a cumulative basis pursuant to distributions
under this Section 9.5(C) and Section 7.3(b) hereof, an
amount equal to such Special Priority Return, provided,
however, that no distribution shall be made pursuant to
this Section 9.5(C) which would cause a Special Limited
Partner to have an Adjusted Capital Account Deficit;
(D) Prior to the application of the allocation provisions of
Article 7 hereof, to each Preferred Limited Partner in
proportion to its respective accrued but unpaid Priority
Return until each Preferred Limited Partner has received,
on a cumulative basis pursuant to distributions under this
Section 9.5(D) and Section 7.3(c) hereof, an amount equal
to such Priority Return, provided, however, that no
distribution shall be made pursuant to this Section 9.5(D)
which would cause a Preferred Limited Partner to have an
Adjusted Capital Account Deficit;
(E) To the Special Limited Partners, the Preferred Limited
Partners, the Managing General Partner, the General
Partner and the Limited Partner in an amount equal to the
credit balance in each of their Capital Accounts, after
giving effect to all contributions, distributions and
allocations for all periods.
A reasonable time shall be allowed for the orderly liquidation
of the assets of the Partnership and the discharge of its
liabilities so as to enable the Managing General Partner or
liquidating agent, as the case may be to minimize the normal
losses attendant upon such a liquidation. All distributions in
liquidation shall be made in cash. The Partnership shall
terminate when all property owned by the Partnership shall have
been disposed of and the net proceeds, after satisfaction of
liabilities to creditors, shall have been distributed among the
Partners as aforesaid. The establishment of any reserves in
accordance with the provisions of subsection 9.5(A) shall not
have the effect of extending the term of the Partnership.
ARTICLE 10
TRANSFERS OF PARTNERSHIP INTERESTS
10.1 Binding Effect and Benefit of This Agreement. This Agreement
shall be binding upon, and shall inure to the benefit of, the
parties hereto and their respective heirs, executors,
administrators, successors, and assigns.
10.2 Transfer of Interests Generally. The Partners shall not have
the right to make a Transfer of their Interests except as
otherwise specifically provided in Article 10 or Article 11 of
this Agreement. For purposes of this Article 10, the term
"Transfer" shall include any sale, assignment, transfer,
mortgage, pledge, hypothecation or other encumbrance (including
by operation of law), or contract to do or permit any of the
foregoing as to any or all of any Partner(s)'s Interests or
rights hereunder, as now owned or as hereinafter acquired, or as
to any right, title or interest therein, but expressly excluding
any pledge or other encumbrance in connection with any financing
or refinancing by the Partnership which has been consented to by
the Partners as provided herein. For purposes of this Article
10, a Transfer of an Interest by the Managing General Partner
shall be deemed to have occurred if, (x) as a result of and
immediately following a sale, assignment or other transfer
(which shall not include a pledge in any event) by the Rigas
Family of shares of the capital stock of Adelphia (collectively,
the "Adelphia Stock"), the Rigas Family does not beneficially
own directly or indirectly in the aggregate (i) more than 20% of
the total number of shares of Adelphia Stock then outstanding
and (ii) shares of Adelphia Stock which entitle the holders
thereof to elect a majority of the Board of Directors of
Adelphia, or (y) if an Approved Adelphia Transferee (as defined
below) does not control, directly or indirectly, any ACP
Holdings Partner.
10.3 Transfers of Interests. Transfers of Interests shall be subject
to and made in accordance with this Article 10 and any purported
Transfer to the contrary shall be null and void ab initio and
shall not be recognized by or binding upon the Partnership.
(A) No Transfer of an Interest shall be made except in
accordance with the Securities Act and the rules and
regulations promulgated thereunder and any applicable
state securities laws and regulations, as the same may be
amended from time to time, and upon receipt by the
Managing General Partner of an opinion of counsel
reasonably satisfactory to the Managing General Partner to
the effect that the Transfer as proposed to be made will
comply in all respects with the registration provisions of
the Securities Act, the rules and regulations promulgated
thereunder, and any applicable state securities laws and
regulations.
(B) Any Partner who proposes to Transfer any or all of his or
its Interest shall pay to the Partnership a sum sufficient
to cover all reasonable out-of-pocket expenses (including
legal and accounting fees) in connection with the Managing
General Partner's determination of whether the Transfer
complies with this Article 10 and the processing of such
proposed Transfer.
(C) Except as otherwise expressly provided herein, no Partner
may Transfer its Interest without the prior written
consent of a Majority-in-Interest, which consent shall not
be unreasonably withheld.
(D) A Partner may Transfer all or a portion of its Interest in
the Partnership to one or more Approved Adelphia
Transferees or Approved Telesat Transferees (as each is
defined below) without the consent of a Majority-in-
Interest or the opinion of counsel required by Section
6.2(C). An "Approved Adelphia Transferee" shall mean
Adelphia, a member of the Rigas Family, or a Person over
which Adelphia and/or the Rigas Family have Equity
Control. An "Approved Telesat Transferee" shall mean FPL
Group Capital Inc or a Person over which FPL Group Capital
Inc has Equity Control. "Equity Control" means the
possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of a
Person through ownership of voting securities (which shall
include rights held as a partner under a partnership
agreement).
(E) Each of the Partners hereby agree to pledge its Interests
in the Partnership if required in connection with any
borrowings by the Partnership, provided such borrowings
have been approved by the Partners as required under this
Agreement.
10.4 Substitution of a Partner.
(A) No Partner may substitute an assignee (including, without
limitation, any transferee, heir, legatee or purchaser) of
all or any part of the Interest of such Partner unless the
assignee shall have:
(1) Accepted and assumed, in form reasonably
satisfactory to the Managing General Partner, all
the terms and provisions of this Agreement;
(2) Provided, at the request of the Managing General
Partner, an opinion of counsel, in form and
substance reasonably satisfactory to counsel for
the Partnership, that neither the offering nor the
assignment of the Partnership Interest violates any
registration provision of any Federal or state
securities or comparable law;
(3) Executed such other documents or instruments, or
provided such other opinions of counsel, as the
Managing General Partner may reasonably require to
effect the admission of such assignee as a
substituted Partner; and
(4) Paid all legal, accounting, filing, and other
expenses as the Partnership may reasonably incur in
connection with such substitution.
(B) The term "Managing General Partner," "Senior Limited
Partner," "Special Limited Partner," "Preferred Limited
Partner," "Limited Partner" or "General Partner" as used
in this Agreement shall include the assignee of the whole
or part of a Partnership Interest of a Managing General
Partner, Senior Limited Partner, Special Limited Partner,
Preferred Limited Partner, Limited Partner or General
Partner only if such assignee shall have become a
substituted Managing General Partner, Senior Limited
Partner, Special Limited Partner, Preferred Limited
Partner, Limited Partner or General Partner in accordance
with this Agreement; provided, that such an assignee who
has not become a substituted Managing General Partner,
Senior Limited Partner, Special Limited Partner, Preferred
Limited Partner, Limited Partner or General Partner shall
be considered a Managing General Partner, Senior Limited
Partner, Special Limited Partner, Preferred Limited
Partner, Limited Partner or General Partner for purposes
of Article 7 and the distribution provisions of Article 9
hereof.
(C) The Managing General Partner is authorized, pursuant to
the power of attorney set forth in Section 12.2 hereof,
without requesting the consent of the Partners to amend
this Agreement and the Certificate to reflect the
admission of any Person who complies with the provisions
of Section 10.4(A) and the other provisions of Articles 10
and 11.
10.5 Amendment of Certificate and Qualification Filings. If required
under applicable law after a Person has become an additional or
substituted Partner, the Managing General Partner shall cause an
amendment to the Certificate or any state qualification filing
reflecting the admission of such Partner to be prepared and
filed promptly, and each Limited Partner and General Partner
agrees that his attorney-in-fact (appointed in accordance with
Section 12.2 hereof) may execute such amendment on his/its
behalf and any Managing General Partner who may hereafter
withdraw from the Partnership appoints any remaining or
successor Managing General Partner his attorney-in-fact and
agrees that said attorney-in-fact may execute such amendment on
his behalf. However, unless otherwise agreed, the Partnership
shall recognize the substituted Partner by no later than ten
days after the date on which such assignee satisfies the
conditions of this Article 10, regardless of when an amendment
to the Certificate or state qualification filing, if any, is
filed.
10.6 Limitation on Sale or Exchange of Partnership Interests.
Notwithstanding any provision of this Agreement, no Transfer of
a Managing General Partner, General Partner, Senior Limited
Partner, Special Limited Partner, Preferred Limited Partner or
Limited Partner Interest may be made if the Interest sought to
be Transferred, when added to the total of all other Interests
Transferred within a period of 12 consecutive months prior
thereto, equals or exceeds 50% of the aggregate of all
Interests, unless such Transfer is consented to by the Managing
General Partner.
10.7 Fundamental Issues; Disengagement.
(A) At any time after the sixth anniversary of the original
execution date of this Agreement, if either (i) the
Managing General Partner and a majority of the Preferred
Limited Partner Interests held by the ACP Preferred
Limited Partner (as defined in Section 3.7(C)(1)(e)
hereof) (the group of Partners consisting of the Managing
General Partner and the ACP Preferred Limited Partners
collectively being the "ACP Holdings Partners") or (ii)
the General Partner, the Limited Partner and a majority of
the Preferred Limited Partner Interests held by the
Telesat Preferred Limited Partner (as defined in Section
3.7(C)(1)(e) hereof) (the group of Partners consisting of
the General Partner, the Limited Partner and the Telesat
Preferred Limited Partners collectively being the "Telesat
Partners") desires in their sole discretion to terminate
their status and relationship as Partners with the other
group of Partners in the Partnership (the "Other
Partners"), the ACP Holdings Partners or the Telesat
Partners, as the case may be, so desiring to terminate
(the "Electing Partners") shall provide written notice
(the "Electing Notice") to such effect to each of the
Other Partners. The Electing Notice shall be signed by
the Electing Partners and shall state that it is an
Electing Notice pursuant to Section 10.7(A).
(1) Within 15 days of the delivery of the Electing
Notice, the Electing Partners and the Other
Partners shall commence good faith negotiations in
a commercially reasonable manner with the objective
of negotiating mutually agreeable terms, procedures
and financial arrangements for the Electing
Partners to terminate their relationship as
Partners with the Other Partners in the
Partnership.
(2) In the event the Electing Partners and the Other
Partners cannot reach a mutual agreement to
terminate their relationship within 60 days of the
delivery of the Electing Notice, the parties shall
terminate the negotiations, the Managing General
Partner shall provide a written notice (a
"Terminating Notice") of such termination to all
Partners, and the parties shall proceed in
accordance with Sections 10.7(C) through 10.7(E)
below.
(B) In addition, in the event that the Managing General
Partner has sought the approval of a Majority-in-Interest
or a Super Majority-in-Interest, as the case may be, with
respect to a Fundamental Issue (as defined below in
Section 10.7(E)), and such approval has not been obtained
within the applicable time period therefor under this
Agreement or the General Partner and Limited Partner have
notified the Managing General Partner in writing that they
will not grant the necessary approval therefor, then
(1) The Managing General Partner shall have the right,
but not the obligation, to provide written notice
(the "Preliminary Notice") to the General Partner
and Limited Partner to the effect that the Managing
General Partner is exercising its rights under this
Section 10.7(B)(1). Within 15 days after delivery
of the Preliminary Notice the Managing General
Partner, the General Partner and the Limited
Partner shall commence good faith negotiations in a
commercially reasonable manner with the objective
of reaching a mutually agreeable resolution to the
dispute with respect to the Fundamental Issue for
which necessary approval was not obtained.
(2) In the event such Partners cannot reach a mutually
agreeable resolution to the dispute, within 60 days
after delivery of the Preliminary Notice, the
parties shall terminate the negotiations, and
proceed in accordance with Sections 10.7(C) through
10.7(E) below, but only if the Managing General
Partner so elects and provides, within 45 days
after the termination of the negotiations, written
notice (the "Trigger Notice") to the General
Partner and the Limited Partner to that effect,
stating that such notice is being provided pursuant
to Section 10.7(B)(2).
(C) Upon delivery of a Terminating Notice as described in
Section 10.7(A)(2) or upon delivery of a Trigger Notice
pursuant to Section 10.7(B)(2) (in either case, a "Trigger
Date"), the parties shall proceed as follows:
(1) Within 60 days after the Trigger Date, the Telesat
Partners shall deliver to the ACP Holdings Partners
an irrevocable, unconditional written offer (the
"Offer") meeting the following requirements:
(a) The Offer shall state a single cash price
representing the value (the "Equity Value")
of all the Interests of the Managing General
Partner, the General Partner, the Limited
Partner, and all Preferred Limited Partners
in the Partnership, which Equity Value shall
be based on a fair market valuation of the
Partnership (and its assets and liabilities)
as a going concern, and which shall take into
account and assume the full payment of
principal and interest on all outstanding
Senior Debt and the full payment of all
amounts of unpaid Senior Priority Return and
Special Priority Return and the full
repayment of the Adjusted Capital
Contributions of all Senior Limited Partners
and Special Limited Partners.
(b) The Offer shall also include a reasonably
detailed schedule or exhibit setting forth
the methodology (including any assumptions)
used in determining the Equity Value,
including but not limited to a statement of
the multiple of annualized Cash Flow for the
most recent fiscal quarter for which
financial statements are available, which
multiple was used in or resulted from such
determination of Equity Value.
(c) The Offer shall contain as an exhibit an
opinion from a nationally recognized
investment banking firm with expertise in
valuation of CATV Systems (the "Investment
Banker") to the effect that (i) the Equity
Value set forth in the Offer is fair and
based on a fair market valuation of the
Partnership as described in Section
10.7(C)(1)(a) and (ii) each Secondary Florida
System Price set forth in the Offer as
described below is fair and based on a fair
market valuation of the applicable Secondary
Florida System as described in Section
10.7(C)(1)(d)(v). The Investment Banker
shall be a firm mutually agreed to by the
parties within 10 days of the Trigger Date
or, if the parties cannot so agree, shall be
selected by two other nationally recognized
investment banking firms, one selected by the
ACP Holdings Partners and one selected by the
Telesat Partners, within 20 days of the
Trigger Date.
(d) The Offer shall state that the Telesat
Partners (or their designees):
(i) are offering (the "Buy Offer") to
purchase the Interests held by the
Managing General Partner and the ACP
Preferred Limited Partners for an
aggregate purchase price of two-thirds
(2/3) times the Equity Value (the "Buy
Price"), with one-half (1/2) of the
Buy Price to be paid in cash, one-
fourth (1/4) of the Buy Price to be
paid either in cash or in a Short Term
Purchase Note (as defined below) or in
a combination thereof, and the
remaining one-fourth (1/4) of the Buy
Price to be paid either in cash or in
a Purchase Note (as defined below) or
in a combination thereof;
(ii) are offering (the "Sell Offer") to
sell to the Managing General Partner
and the ACP Preferred Limited Partners
(or their designees) for an aggregate
purchase price of one-third (1/3) of
the Equity Value (the "Sell Price"),
the Interests of the General Partner,
the Limited Partner and the Telesat
Preferred Limited Partners, with one-
half (1/2) of the Sell Price to be
paid in cash, and one-half (1/2) of
the Sell Price to be paid either in
cash or in a Sale Note (as defined
below) or in a combination thereof;
(iii) are agreeing, in the case of either a
Buy Offer or a Sell Offer, (x) to have
all principal and interest on Senior
Debt, all unpaid Senior Priority
Return and Special Priority Return and
all Adjusted Capital Contributions of
Senior Limited Partners and Special
Limited Partners (which Senior Debt or
Interests are held by Partners (or
their Affiliates) receiving the
respective Buy Price or Sell Price, as
the case may be) paid in full at the
closing thereof, and (y) to use all
commercially reasonable efforts, in
good faith and using prudent business
judgment under the circumstances, to
pay as much of the Buy Price or Sell
Price (as the case may be) in cash as
is reasonably practicable,
notwithstanding the provisions of
Section 10.7(C)(1)(d)(i) and (ii);
(iv) are agreeing to use all commercially
reasonable efforts to pay in full the
Short Term Purchase Notes before the
Purchase Notes, in the event both
Notes are issued in payment of the Buy
Price; and
(v) in the case of a Buy Offer, are also
offering to purchase severally (the
"Secondary Buy Offer") each CATV
System located in Florida (a
"Secondary Florida System") which is
owned or controlled by the ACP
Holdings Partners, Adelphia, the Rigas
Family or an Approved Adelphia
Transferee (collectively, the
"Secondary Offerees") for cash in an
aggregate amount equal to the
Secondary Buy Price as defined below.
The "Secondary Buy Price" shall be the
aggregate sum of the purchase prices
for asset purchases of each Secondary
Florida System, each such purchase
price being equal to the fair market
value in an asset purchase of such
Secondary Florida System as a going
concern (taking into account its
assets and liabilities) (each a
"Secondary Florida System Price").
The Secondary Buy Offer shall also
state that the ACP Holdings Partners
shall have the right to reject the
Secondary Buy Offer (x) in the
Response (as defined below), as to any
Secondary Florida System and (y) after
acceptance in the Response, as to any
Secondary Florida System for which
approvals or consents to transfer
cannot reasonably be obtained, and
that in any event the closing for a
full or partial acceptance of the
Secondary Buy Offer shall be at the
same time as the closing for the
acceptance of the Buy Offer.
(2) Within 60 days after delivery of the Offer, the
Managing General Partner and the ACP Preferred
Limited Partners (the "Offeree Partners") shall
provide a written response to the Offer to the
Telesat Partners (the "Response"), which shall
state that:
(a) the Offeree Partners accept the Buy Offer
and, separately, whether the Secondary
Offerees accept the Secondary Buy Offer as to
each Secondary Florida System (subject to the
right to reject after acceptance as set forth
in Section 10.7(C)(1)(d)(v));
(b) the Offeree Partners accept the Sell Offer
and agree to the provisions of Section
10.7(C)(1)(d)(iii)(y); or
(c) the Offeree Partners decline both the Buy
Offer and the Sell Offer and elect to
continue the business of the Partnership and
the relationship of the Partners among each
other as had been the case prior to the
Trigger Date, including if applicable the
lack of necessary approval on the Fundamental
Issue for which approval was not obtained,
provided that the Offeree Partners shall have
no right to decline under this clause (c) if
the provisions hereof have been triggered
under Section 10.7(A).
(D) In the event the Buy Offer or the Sell Offer is accepted
in the Response, the Closing shall be held on a mutually
agreeable date within the later to occur of 270 days
following the delivery of the Response or seven (7) days
following the receipt of all regulatory consents and
approvals necessary to consummate the transactions, and
the parties shall use all commercially reasonable efforts
to obtain all necessary consents and approvals thereto and
to deliver all agreements, certificates, opinions and
other documents related thereto as would be reasonable and
customary in similar transactions. If a Purchase Note, a
Short Term Purchase Note or a Sale Note is to be delivered
at Closing, (i) the party to be receiving any such Note
shall cooperate with the party to be delivering any such
Note to provide or make available all information
necessary for the registration of such Note pursuant to
Section 10.7(E)(1) or (2) and (ii) the party delivering
any such Note at Closing shall, no less than three (3) and
no more than fifteen (15) business days prior to Closing,
deliver to the other party an opinion by a nationally
recognized investment banking firm to the effect that, as
of the date of the opinion, each such Note to be delivered
has a fair market value not materially less than the
portion of the Buy Price or Sell Price (as the case may
be) that such Note represents.
(E) For purposes of this Section 10.7, the following shall
apply:
(1) The "Sale Note" or the "Purchase Note" shall be one
or more senior unsecured promissory notes of the
Partnership, with a ten (10) year maturity,
interest payable quarterly, payable in full as to
principal and interest at maturity and with the
right of prepayment without penalty or premium,
registered by the Partnership for resale by the
holders thereof under the Securities Act and
containing covenants and other provisions otherwise
substantially similar to the covenants and default
and other provisions of Adelphia's 12.5% Senior
Notes Due 2002. The interest rate for any such
Note shall be selected by the party responsible for
delivering such Note at Closing but shall be
subject to the requirements of Section 10.7(D).
(2) A "Short Term Purchase Note" shall be identical to
a Purchase Note except that a Short Term Purchase
Note shall have a maturity of eighteen (18) months.
The interest rate for any such Note shall be
selected by the party responsible for delivering
such Note at Closing but shall be subject to the
requirements of Section 10.7(D).
(3) A "Fundamental Issue" shall include any of the
following matters for which the Managing General
Partner has sought the required approval of a
Majority-in-Interest, a Super Majority-in-Interest,
the Limited Partner or the General Partner, and for
which the required approval has not been granted:
(a) a material amendment of this Agreement for
which approval is sought under Section
4.7(A);
(b) any matter for which approval is sought under
Section 4.7(G), provided that at least one
year has elapsed from the time a proposed
Budget has been provided pursuant to Sections
4.7(G)(iv)(y);
(c) any matter for which approval is sought under
Section 4.7(B), 4.7(E), 4.7(I), or 4.7(L);
and
(d) any matter for which approval is sought under
Section 4.8(B).
10.8 Certain Bankruptcy Matters.
(A) As used in this Section 10.8, a "Transfer Event" shall
occur in the event that Adelphia, the Rigas Family and
Persons controlled by either of them do not collectively
hold operating control (the meaning of which shall not be
restricted by the definition of "control" in this
Agreement) over, and control over day to day business
decisions of, Adelphia or the Managing General Partner for
a period of at least ten (10) consecutive days as a result
of a Bankruptcy Event of Adelphia or the Managing General
Partner. A "Bankruptcy Event" of a Person shall occur in
the event the Person:
(a) The institution by or against it of a case or other
proceeding under any section or chapter of the
Federal Bankruptcy Code (Title 11 of the United
States Code) as now existing or hereafter amended
or becoming effective, or any similar order or
decree under any federal or state law now in
existence or hereafter enacted having the same
general purpose, and which, if involuntary, such
proceeding or such order or decree is not
dismissed, stayed, discharged or vacated within
ninety (90) days thereafter;
(b) Shall be dissolved or liquidated;
(c) Admits in writing its inability to pay its debts
generally as they become due;
(d) Makes an assignment for the benefit of its
creditors;
(e) Causes, suffers, permits or consents to the
appointment of a receiver, custodian, trustee,
administrator, conservator, sequestrator,
liquidator or similar official in any federal,
state or foreign judicial or nonjudicial
proceeding, to hold, administer and/or liquidate
all or substantially all of its assets and such
appointment is not revoked or terminated and such
official is not discharged of his duties within
ninety (90) days of his appointment; or
(f) The attachment, execution or other judicial seizure
of all or any substantial part of its assets or of
its percentage ownership interest in the
Partnership or any part thereof, remaining
undismissed or undischarged for a period of fifteen
(15) days after the levy thereof.
(B) In the event that a Transfer Event occurs, the Telesat
Partners shall have the rights and duties of the ACP
Holdings Partners set forth in Section 10.7(C), (D) and
(E) and the ACP Holdings Partners shall have the rights
and duties of the Telesat Partners set forth in Section
10.7(C), (D) and (E) to the effect that the ACP Holdings
Partners must make the Offer to buy the Interests held by
the Telesat Partners or sell the Interests held by the ACP
Holdings Partners to the Telesat Partners, and the Telesat
Partners will serve as the Offeree Partners.
(C) Notwithstanding anything to the contrary contained herein,
the Managing General Partner and the General Partner
(collectively, the "Referenced Partners") acknowledge and
agree that the partnership form of association creates a
fiduciary relationship between the Referenced Partners,
which is based upon personal trust and confidence. The
Referenced Partners further acknowledge and agree that
each has entered into this Agreement in reliance upon the
unique knowledge, experience and expertise of the other
Referenced Partners in the planning, development,
management and operation of the CATV Systems, and in
reliance on the duties of loyalty, trust and
confidentiality which each of the Referenced Partners
undertakes, as provided in this Agreement, and upon the
fiduciary nature of the relationship. The duties and
obligations of each of the Referenced Partners, as set
forth in this Agreement, are, therefore, nondelegable
fiduciary duties and obligations, which are not (except as
expressly permitted in this Agreement), assignable or
assumable without the express written consent of the other
Referenced Partner as provided in this Agreement. The
Referenced Partners further acknowledge that this is an
agreement under which applicable law excuses each of the
Referenced Partners from accepting performance, after a
Transfer Event has occurred and is continuing, from any
person which is a debtor in a case under the Bankruptcy
Code, 11 U.S.C. Section 101 et seq., from a trustee of any
such debtor or from an assignee of any such debtor or
trustee. If notwithstanding the foregoing, any interest,
right or duty is assigned and/or assumed, (a) any entity
or person to which such assignment has been made pursuant
to the provisions of the Bankruptcy Code shall be deemed,
without further act, to have assumed all of the
obligations and duties arising under this Agreement on and
after the date of such assignment, and, upon demand, any
such assignee shall execute and deliver to the Partnership
an instrument confirming such assumption and such other
documents and instruments as shall reasonably be necessary
or advisable to effectuate such assignment, and the
failure to deliver such instruments shall be deemed a
Bankruptcy Event and the other Partners (the
"Nondefaulting Partners") which are not Affiliates of the
Referenced Partner shall be entitled to exercise the
remedies provided in this Section 10.8 with respect
thereto.
(D) In the event of a Transfer Event, the Nondefaulting
Partners may, at their option, remove the Managing General
Partner (the "Defaulting Partner") and designate one of
themselves or their designee as the sole Managing General
Partner, in which event from and after the exercise of
such option, actions to be taken and decisions to be made
by or on behalf of the Partnership with respect to the
conduct of the business and affairs of the Partnership may
thereafter be taken or made without the approval of the
Defaulting Partner, notwithstanding any provisions of this
Agreement to the contrary. In such case, automatically
and without further action (A) the Interest of the
Defaulting Partner in the Partnership shall be converted
to a limited partnership interest of a special class as
provided in Section 11.4 and such Defaulting Partner shall
not be deemed to have any rights as Managing General
Partner, (B) all rights to appoint representatives to the
Operating Committee shall terminate and be of no further
force and effect, (C) all voting and consent rights as
Managing General Partner shall also terminate and be of no
further force and effect, and (D) the Defaulting Partner
shall be considered to have involuntarily withdrawn as
Managing General Partner for purposes of Section 11.1
hereof upon the designation of the new Managing General
Partner. The provisions of Section 11.5 hereof shall not
be applicable to the designation of a new Managing General
Partner pursuant to this Section 10.8(D).
ARTICLE 11
WITHDRAWAL OF MANAGING GENERAL PARTNER,
SUCCESSOR MANAGING GENERAL PARTNER
11.1 Involuntary Withdrawal of a Managing General Partner.
(A) A Managing General Partner may be removed by the action of
Partners (other than the Managing General Partner) holding
more than 51% of the outstanding Units in the Partnership
excluding Units held by the Managing General Partner only
for specified conduct constituting negligence, willful
misconduct, fraud or material breach of the Managing
General Partner's duties (including without limitation
fiduciary duties), covenants or agreements under this
Agreement or the Investment Agreement. The Interest and
Units of the Managing General Partner who is removed shall
be treated as provided in Section 11.4 hereof.
(B) A Managing General Partner shall automatically be deemed
to have involuntarily withdrawn as Managing General
Partner without action by the other Partners if the
Managing General Partner dissolves or a final adjudication
of bankruptcy is rendered against such Managing General
Partner and, in the case of an individual Managing General
Partner, a final adjudication of incompetence is rendered
against him or in the event of his death.
(C) A Managing General Partner who involuntarily withdraws
shall be indemnified by the Partnership as to Partnership
obligations arising after the effective date of his or its
removal. However, the foregoing sentence shall not reduce
the Managing General Partner's liability for his or its
willful misconduct, gross negligence, breach of fiduciary
duty or fraud.
(D) The involuntary withdrawal of a Managing General Partner
who is not the sole remaining Managing General Partner
shall not cause the dissolution of the Partnership, but
rather the Partnership shall continue under the management
of the remaining Managing General Partner and the Interest
and Units, if any, retained by the former Managing General
Partner shall be treated as provided in Section 11.4.
11.2 Resignation of a Managing General Partner. A Managing General
Partner may resign from its duties and obligations as a Managing
General Partner upon receiving the consent of a Super Majority-
in-Interest, which shall not be unreasonably withheld. Any
Interest and Units retained by the resigning Managing General
Partner after his resignation shall be treated as provided in
Section 11.4.
11.3 Sole Remaining Managing General Partner. The dissolution,
removal, resignation, or final adjudication of bankruptcy of the
sole remaining Managing General Partner and, in the case of an
individual Managing General Partner, the death or a final
adjudication of incompetence of the sole remaining Managing
General Partner, will cause the dissolution and liquidation of
the Partnership as provided in Article 9; provided, that the
Partnership shall continue if (i) Partners holding a majority in
economic interest (based on the amount of the Adjusted Capital
Contribution for each Partner) of each of the Special Limited
Partners and the Preferred Limited Partners, and (ii) Partners
holding a majority of the Units (other than such sole remaining
or such individual Managing General Partner) agree, within 90
days of any such occurrence, to continue the business of the
Partnership and a new Managing General Partner is elected.
11.4 Status of Former Managing General Partner. The Interest and
Units of a Managing General Partner which involuntarily
withdraws as provided in Section 11.1 or resigns as provided in
Section 11.2, which are not sold or otherwise transferred shall
be converted to a limited partner Interest of a special class
and the former Managing General Partner (or his heirs, executor,
administrator, personal representative, or trustee) shall not
have any right to participate in the management of the business
of the Partnership, shall not be deemed a Limited Partner or
General Partner for purposes of any action requiring the
approval of Limited Partners or General Partner, shall not be
entitled to vote on any Partnership matter except as otherwise
provided in Section 12.6 and shall not be entitled to any amount
allocable or distributable to the Limited Partners or General
Partner. Such special limited partner shall be entitled to all
allocations and distributions which would have been allocable or
distributable if such special limited partner had remained a
Managing General Partner with respect to that portion of its
Interest not sold or transferred to the remaining Managing
General Partner.
11.5 Additional or Substitute Managing General Partner. An
additional or substitute Managing General Partner may be
designated by the Managing General Partner at any time with the
consent of a Majority-in-Interest (unless the additional or
substitute Managing General Partner is an Approved Adelphia
Transferee, in which case no such consent is required) and may
be admitted to the Partnership as a Managing General Partner
subject to satisfaction of the conditions for substitution
provided in Section 10.4. Any such additional or substitute
Managing General Partner shall have all the rights and
obligations of a Managing General Partner.
ARTICLE 12
GENERAL PROVISIONS
12.1 Certificates, etc. At the expense of the Partnership, the
Managing General Partner shall promptly have prepared, executed,
and filed, maintained or recorded all legally required
fictitious name or other applications, registrations,
publications, certificates, and affidavits for filing with the
proper governmental authorities and have arranged for the proper
advertisement, publication, and filing of record thereof.
12.2 Power of Attorney. The Limited Partner, Senior Limited Partner,
Special Limited Partners, Preferred Limited Partners and General
Partner, by their execution of this Agreement hereby irrevocably
make, constitute and appoint the Managing General Partner and
any successor Managing General Partner or agent(s) duly
appointed in accordance with the provisions of this Agreement,
its true and lawful attorney-in-fact for it and in its name,
place and stead and for its use and benefit, from time to time:
(A) to make, file and record all agreements amending this
Agreement, as now or hereafter amended, that may be appropriate
to reflect or effect, as the case may be:
(i) a change of the name or the location of the
principal place of business of the Partnership;
(ii) the transfer or acquisition of any Interests or
Units by a Partner in any manner permitted by this
Agreement;
(iii) a person becoming a substituted or additional
Partner of the Partnership as permitted by this
Agreement;
(iv) a change in any provision of this agreement
effected by the exercise by any person of any right
or rights hereunder;
(v) a correction of a scrivener's error; and
(vi) the dissolution and termination of the Partnership
pursuant to this Agreement.
(B) to make certificates, affidavits, instruments and
documents required by, or appropriate under, the laws of
Delaware or other applicable states in connection with the
use of the name of the Partnership by the Partnership;
(C) to make certificates, instruments and documents which the
General Partner or the Limited Partner are required to
make, or which are appropriate for the General Partner or
the Limited Partner to make, under the laws of Delaware or
other applicable states to reflect:
(i) any changes in or amendments to this Agreement, or
pertaining to the Partnership, of any kind referred
to in this Section 12.2; and
(ii) any other changes in or amendments to this
Agreement, but only if and when the consent thereto
has been obtained from the Limited Partner and the
General Partner as required herein;
(D) each of the agreements, certificates, affidavits,
instruments and documents made pursuant to paragraphs (A)
through (C) of this Section 12.2 shall be in the form that
the Managing General Partner and counsel for the
Partnership deem appropriate. The powers conferred by
this Section to make agreements, certificates, affidavits,
instruments and documents shall be deemed to include
without limitation the powers to sign, execute, swear to,
verify, deliver, file, record or publish them.
This power of attorney is coupled with an interest and is
irrevocable and may be exercised by the Managing General Partner
as attorney-in-fact.
12.3 Partners' Relationships Inter Se. Except as expressly provided
herein, nothing herein contained shall be construed to
constitute any Partner the agent of any other Partner or in any
manner to limit the Partners in the carrying on of their own
respective businesses or activities.
12.4 Notices, etc. Except, as otherwise expressly provided herein,
all notices which are required or contemplated by this Agreement
shall be in writing. Delivery of such notices shall be deemed
to be made when the same are either delivered to the Person
entitled thereto or sent by telecopy (fax) to such Person or
five (5) days after being deposited in the mails, by certified
or registered mail, with postage prepaid or delivered to the
telegraph company, addressed to such Person at his last known
mailing address.
12.5 Confidentiality. The Managing General Partner, the Limited
Partner, the Senior Limited Partner, the Special Limited
Partners, the Preferred Limited Partners and the General Partner
shall maintain the confidentiality of all information about the
Partnership, including, without limitation, its finances,
activities, proposed activities, opportunities and business
plans; provided, however, that nothing herein shall prevent the
disclosure of such information by the Managing General Partner,
the Senior Limited Partner, the Special Limited Partners, the
Preferred Limited Partners, the Limited Partner or the General
Partner if: (a) it is seeking to enforce its rights against the
Partnership under this Agreement or otherwise; (b) it is
required to do so by an order of court or other competent
governmental authority or by governmental process or as
otherwise required by law; (c) such information is or shall have
become part of the public domain through Section 12.5(e) or
otherwise or through no fault of the Partner making the
disclosure; (d) such information is needed by the Managing
General Partner, the Senior Limited Partner, the Special Limited
Partners, the Preferred Limited Partners, the Limited Partner or
the General Partner in completing any tax returns or in
responding to any inquiries of applicable tax authorities with
respect to such tax returns; or (e) such disclosure is required
on behalf of any party pursuant to the Federal or state
securities laws.
12.6 Integration and Amendments.
(A) This Agreement and the Investment Agreement represent the
entire understanding of the parties with respect to the
subject matter hereof. No revocation, waiver,
modification or amendment of this Agreement shall be
binding unless in writing and approved by the Managing
General Partner and a Majority-in-Interest; provided,
however, that approval of a Majority-in-Interest shall not
be required in the case of any amendment to this Agreement
by the Managing General Partner pursuant to this Section
12.6 or any other provision of this Agreement specifically
authorizing such amendment to be made without the approval
of a Majority-in-Interest; provided, further, however,
that no amendment shall be made to this Agreement if such
amendment would: (a) result in the loss of limited
liability for any Senior Limited Partner, Special Limited
Partner, Preferred Limited Partner or Limited Partner; (b)
amend this Section 12.6, or (c) amend this Agreement in a
manner which would have a materially adverse effect upon
the Senior Limited Partner, Limited Partner, Special
Limited Partners, Preferred Limited Partners or General
Partner without the consent of such Partner. By execution
of this Agreement, each of the Partners represents and
warrants that it has relied on no oral or written
statements, promises, inducements, representations or
warranties to enter into this Agreement except for those
expressly set forth herein and in the Investment
Agreement. The Partners agree that the inclusion of this
provision evidences the intent of the Partners that no
other evidence shall be admissible to alter or vary the
terms of this Agreement. The inclusion of this provision
herein has been a material inducement for each of the
Partners to enter into this Agreement. Subject to the
restrictions set forth in this Section 12.6, the Managing
General Partner shall be authorized to amend this
Agreement without the approval of a Majority-in-Interest
solely in order to reflect the issuance of additional
Preferred Limited Partner Interests or Special Limited
Partner Interests in accordance with Article 3 hereof. No
amendment shall be made to this Agreement which would
reduce the rights of the Senior Limited Partner, Preferred
Limited Partners or Special Limited Partners to receive
distributions from the Partnership pursuant to Articles 7
or 9 hereof without the consent of the Senior Limited
Partner, the Preferred Limited Partners or the Special
Limited Partners, as the case may be. No amendment shall
be made to this Agreement which would result in the loss
of the limited liability of any limited partner of a
special class created as provided in Section 11.4. Notice
of any amendment or supplement made to this Agreement
shall be sent to all of the Partners as provided in
Section 12.4. Without limiting the generality of the
foregoing, and subject to the restrictions set forth in
this Section 12.6, the Managing General Partner is
specifically authorized, without being required to obtain
the approval of a Majority-in-Interest, to enter into any
amendment to this Agreement which it shall deem necessary
or desirable in order to satisfy any requirements
contained in any opinion, directive, order, ruling, or
regulation of the Securities and Exchange Commission, the
Service or any other Federal, state, or local governmental
authority or agency, or to comply with any Federal, state
or local law, rule or regulation or any judgment, decree,
writ, injunction, or order of any court, administrative
agency, arbitrator, or governmental authority or agency.
(B) The Partners agree that, upon the reasonable request of
the Managing General Partner, they will take all
reasonable and necessary actions to amend this Agreement
to redefine their voting and economic interests so as to
combine the Preferred Limited Partner Interests and the
Units into one common class of Partnership equity, so long
as such amendment does not have a material adverse effect
on the aggregate economic interests and voting rights of
the Partners.
12.7 Interpretation. This Agreement shall be interpreted and
construed in accordance with the laws of the State of Delaware
without regard to principles of conflicts of laws. As used in
this Agreement, the masculine gender shall include the feminine
or neuter gender, and the plural shall include the singular
wherever appropriate. The titles of the Articles and Sections
herein have been inserted as a matter of convenience of
reference only and shall not control or affect the meaning or
construction of any of the terms or provisions hereof. The rule
of interpretation that an agreement should be construed against
its draftsman shall not apply to this Agreement.
12.8 Nonrecourse Obligations. The Managing General Partner will
cause any loan or credit agreements and other financing
documents entered into by the Partnership to contain language to
the effect that such obligations shall be non-recourse to the
Limited Partners, Senior Limited Partner, Preferred Limited
Partners and Special Limited Partners. The Managing General
Partner shall use commercially reasonable efforts to cause any
such loan or credit agreements and other financing documents to
contain language to the effect that such obligations shall be
non-recourse to the General Partner and Managing General
Partner.
12.9 Counterparts. The parties hereto may execute this Agreement in
any number of counterparts, each of which, when executed and
delivered, shall be an original; but all such counterparts shall
constitute one and the same instrument.
12.10 Waivers. Any term or provision of this Agreement may be waived,
or the time for its performance may be extended, by the party or
parties entitled to the benefit thereof, but any such waiver
must be in writing and must comply with the notice provisions
contained herein. The failure of any party hereto to enforce at
any time any provision of this Agreement shall not be construed
to be a waiver of such provision, nor in any way to affect the
validity of this Agreement or any part hereof or the right of
any party thereafter to enforce each and every such provision.
No waiver of any breach of this Agreement shall be held to
constitute a waiver of any other or subsequent breach.
12.11 Partial Invalidity. Wherever possible, each provision hereof
shall be interpreted in such a manner as to be effective and
valid under applicable law, but in case any one or more of the
provisions contained herein shall, for any reason, be held to be
invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any
other provisions of this Agreement, and this Agreement shall be
construed as if such invalid, illegal or unenforceable
provisions had never been contained herein unless the deletion
of such provision or provisions would result in such a material
change as to cause the completion of the transactions
contemplated hereby to be unreasonable.
IN WITNESS WHEREOF, the parties hereto have executed this Second
Amended and Restated Limited Partnership Agreement by their duly authorized
officers or attorneys-in-fact on the day and year first above written.
MANAGING GENERAL PARTNER:
ACP HOLDINGS, INC.
By: ______________________________
Name:
Title:
GENERAL PARTNER:
CABLE GP, INC.
By:
Name:
Title:
LIMITED PARTNER:
CABLE LP III, INC.
By: ______________________________
Name:
Title:
PREFERRED LIMITED PARTNERS:
ACP HOLDINGS, INC.
By:
Name:
Title:
CABLE LP III, INC.
By:
Name:
Title:
SENIOR LIMITED PARTNER:
CABLE LP III, INC.
By:
Name:
Title:
<PAGE>
EXHIBIT A
WITHDRAWING LIMITED PARTNERS
Joseph S. Gans, Sr.
Irene F. Gans
Joseph S. Gans, III
Janice Gans Moisey
<PAGE>
EXHIBIT B
CAPITAL CONTRIBUTIONS*
Managing General Partner: $5,000.00
General Partner: $100.00
Limited Partner: $4,900.00
Preferred Limited Partner (ACP Holdings, Inc.): $225,000,000.00
Preferred Limited Partner (Cable LP III, Inc.): $112,500,000.00
Senior Limited Partner (Cable LP III, Inc.): $20,000,000.00
* The amounts set forth on this Exhibit B include Capital Contributions
made prior to the date of this Agreement, and contributions of
property made pursuant to and as described in the Investment
Agreement. The Senior Limited Partner Interest is issued in exchange
for goodwill, going concern value and assembled workforce.
<PAGE>
EXHIBIT C
PLP PERCENTAGE INTERESTS
Preferred Limited Partner: PLP Percentage Interest
ACP Holdings, Inc. 66.67%
Cable LP III, Inc. 33.33%
<PAGE>
EXHIBIT D
UNITS
Managing General Partner: 5.0 Units
General Partner: .1 Units
Limited Partner: 4.9 Units
<PAGE>
EXHIBIT E
METHODOLOGY FOR ALLOCATION OF CORPORATE OVERHEAD
<PAGE>
EXHIBIT F
SENIOR DEBT AS OF THE DATE OF THE AGREEMENT
ACP Holdings, Inc. or its Affiliates $40,000,000.00
<PAGE>
TABLE OF CONTENTS
OLYMPUS COMMUNICATIONS, L.P.
SECOND AMENDED AND RESTATED
LIMITED PARTNERSHIP AGREEMENT
Page
ARTICLE 1 DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . .2
1.1 Definitions . . . . . . . . . . . . . . . . . . . . . . . .2
ARTICLE 2 THE PARTNERSHIP . . . . . . . . . . . . . . . . . . . . . 11
2.1 Name. . . . . . . . . . . . . . . . . . . . . . . . . . . 11
2.2 Offices . . . . . . . . . . . . . . . . . . . . . . . . . 12
2.3 Purposes. . . . . . . . . . . . . . . . . . . . . . . . . 12
2.4 Authority of the Partnership. . . . . . . . . . . . . . . 12
2.5 Execution and Filing of the Certificate . . . . . . . . . 13
2.6 Other Qualifications. . . . . . . . . . . . . . . . . . . 14
ARTICLE 3 CAPITALIZATION. . . . . . . . . . . . . . . . . . . . . . 14
3.1 Capital Contribution of the Managing General Partner. . . 14
3.2 Capital Contributions of the General Partner. . . . . . . 14
3.3 Capital Contribution of the Limited Partner . . . . . . . 14
3.4 Capital Contribution of the Preferred Limited Partners. . 15
3.5 Capital Contribution of a Special Limited Partner . . . . 15
3.6 Capital Contributions of the Senior Limited Partner . . . 15
3.7 Additional Capital Contributions. . . . . . . . . . . . . 15
3.8 Capital Accounts. . . . . . . . . . . . . . . . . . . . . 19
3.9 No Return of or Interest on Capital; No Partition . . . . 20
3.10 Third Party Beneficiaries . . . . . . . . . . . . . . . . 20
3.11 Senior Debt . . . . . . . . . . . . . . . . . . . . . . . 20
ARTICLE 4 MANAGEMENT OF THE PARTNERSHIP . . . . . . . . . . . . . . 21
4.1 Rights and Duties of Partners, Control. . . . . . . . . . 21
4.2 Fiduciary Duties of the Managing General Partner. . . . . 22
4.3 Power of the Managing General Partner . . . . . . . . . . 22
4.4 Partners and Their Affiliates Dealing with the Partnership27
4.5 Other Activities. . . . . . . . . . . . . . . . . . . . . 29
4.6 Holding of Property . . . . . . . . . . . . . . . . . . . 31
4.7 Majority-in-Interest Approval of Certain Matters. . . . . 31
4.8 Super Majority-in-Interest Approval of Certain Matters. . 34
4.9 Offer to Purchase Partners' Interests . . . . . . . . . . 35
4.10 Operating Committee . . . . . . . . . . . . . . . . . . . 35
ARTICLE 5 EXCULPATION AND INDEMNIFICATION . . . . . . . . . . . . . 36
5.1 Exculpation . . . . . . . . . . . . . . . . . . . . . . . 36
5.2 Partnership Indemnification of the Partners . . . . . . . 36
ARTICLE 6 RIGHTS, OBLIGATIONS AND REPRESENTATIONS OF LIMITED
PARTNERS. . . . . . . . . . . . . . . . . . . . . . . . . 37
6.1 Liability of Partners . . . . . . . . . . . . . . . . . . 37
6.2 Representations of Telesat. . . . . . . . . . . . . . . . 38
6.3 Indemnification of Managing General Partner and
Partnership for Breach of Representations and Warranties. 39
6.4 Voting Rights . . . . . . . . . . . . . . . . . . . . . . 40
ARTICLE 7 ALLOCATIONS OF PROFITS AND LOSSES; CASH FLOW DISTRIBUTIONS41
7.1 Profits . . . . . . . . . . . . . . . . . . . . . . . . . 41
7.2 Losses. . . . . . . . . . . . . . . . . . . . . . . . . . 41
7.3 Distributions . . . . . . . . . . . . . . . . . . . . . . 41
7.4 Senior Priority Return, Special Priority Return and
Priority Return Allocations . . . . . . . . . . . . . . . 42
7.5 Special Allocations . . . . . . . . . . . . . . . . . . . 43
7.6 Curative Allocations. . . . . . . . . . . . . . . . . . . 44
7.7 Tax Allocations: Code Section 704(c) . . . . . . . . . . 45
7.8 Miscellaneous . . . . . . . . . . . . . . . . . . . . . . 45
ARTICLE 8 ACCOUNTING AND TAX MATTERS
8.1 Books and Records . . . . . . . . . . . . . . . . . . . . 46
8.2 Fiscal Year . . . . . . . . . . . . . . . . . . . . . . . 47
8.3 Tax and Financial Reports . . . . . . . . . . . . . . . . 47
8.4 Partnership's Accountant. . . . . . . . . . . . . . . . . 48
8.5 Tax Matters Partner . . . . . . . . . . . . . . . . . . . 48
8.6 Federal Income Tax Elections. . . . . . . . . . . . . . . 50
8.7 Banking . . . . . . . . . . . . . . . . . . . . . . . . . 51
ARTICLE 9 TERM AND DISSOLUTION. . . . . . . . . . . . . . . . . . . 51
9.1 Term. . . . . . . . . . . . . . . . . . . . . . . . . . . 51
9.2 Dissolution . . . . . . . . . . . . . . . . . . . . . . . 51
9.3 Actions, Death, etc., of General Partner, Senior Limited
Partner, Special Limited Partner, Preferred Limited
Partner or Limited Partner. . . . . . . . . . . . . . . . 51
9.4 Obligation to Repay Negative Capital Accounts . . . . . . 52
9.5 Distribution on Liquidation . . . . . . . . . . . . . . . 52
ARTICLE 10 TRANSFERS OF PARTNERSHIP INTERESTS. . . . . . . . . . . . 54
10.1 Binding Effect and Benefit of This Agreement. . . . . . . 54
10.2 Transfer of Interests Generally . . . . . . . . . . . . . 54
10.3 Transfers of Interests. . . . . . . . . . . . . . . . . . 55
10.4 Substitution of a Partner . . . . . . . . . . . . . . . . 56
10.5 Amendment of Certificate and Qualification Filings. . . . 57
10.6 Limitation on Sale or Exchange of Partnership Interests . 58
10.7 Fundamental Issues; Disengagement . . . . . . . . . . . . 58
10.8 Certain Bankruptcy Matters. . . . . . . . . . . . . . . . 66
ARTICLE 11 WITHDRAWAL OF MANAGING GENERAL PARTNER, SUCCESSOR MANAGING
GENERAL PARTNER . . . . . . . . . . . . . . . . . . . . . 69
11.1 Involuntary Withdrawal of a Managing General Partner. . . 69
11.2 Resignation of a Managing General Partner . . . . . . . . 70
11.3 Sole Remaining Managing General Partner . . . . . . . . . 70
11.4 Status of Former Managing General Partner . . . . . . . . 70
11.5 Additional or Substitute Managing General Partner . . . . 71
ARTICLE 12 GENERAL PROVISIONS. . . . . . . . . . . . . . . . . . . . 71
12.1 Certificates, etc.. . . . . . . . . . . . . . . . . . . . 71
12.2 Power of Attorney . . . . . . . . . . . . . . . . . . . . 71
12.3 Partners' Relationships Inter Se. . . . . . . . . . . . . 73
12.4 Notices, etc. . . . . . . . . . . . . . . . . . . . . . . 73
12.5 Confidentiality . . . . . . . . . . . . . . . . . . . . . 73
12.6 Integration and Amendments. . . . . . . . . . . . . . . . 74
12.7 Interpretation. . . . . . . . . . . . . . . . . . . . . . 75
12.8 Nonrecourse Obligations . . . . . . . . . . . . . . . . . 76
12.9 Counterparts. . . . . . . . . . . . . . . . . . . . . . . 76
12.10 Waivers . . . . . . . . . . . . . . . . . . . . . . . . . 76
12.11 Partial Invalidity. . . . . . . . . . . . . . . . . . . . 76
EXHIBIT A WITHDRAWING LIMITED PARTNERS
EXHIBIT B CAPITAL CONTRIBUTIONS
EXHIBIT C PLP PERCENTAGE INTERESTS
EXHIBIT D UNITS
EXHIBIT E METHODOLOGY FOR ALLOCATION OF CORPORATE OVERHEAD
EXHIBIT F SENIOR DEBT AS OF THE DATE OF THE AGREEMENT
<PAGE>
SECOND AMENDED AND RESTATED
LIMITED PARTNERSHIP AGREEMENT
OLYMPUS COMMUNICATIONS, L.P.
1
CREDIT, SECURITY AND GUARANTY AGREEMENT
Dated as of March 15, 1995
among
UCA CORP.
ADELPHIA CABLE T.V., INC.
LORAIN CABLE TELEVISION, INC.
MULTI-CHANNEL T.V. CABLE COMPANY OF VIRGINIA
VAN BUREN COUNTY CABLEVISION, INC.
GRAND ISLAND CABLE, INC.
ULTRACOM OF MONTGOMERY COUNTY, INC.
as Borrowers
and
THE SUBSIDIARIES OF THE BORROWERS NAMED HEREIN
as Guarantors
and
THE LENDERS REFERRED TO HEREIN
and
SOCIETE GENERALE
PNC BANK, NATIONAL ASSOCIATION
FIRST UNION NATIONAL BANK OF NORTH CAROLINA
CREDIT LYONNAIS CAYMAN ISLAND BRANCH
as Managing Agents
and
SOCIETE GENERALE
as Structuring Agent
and
PNC BANK, NATIONAL ASSOCIATION
as Syndication Agent
and
CREDIT LYONNAIS CAYMAN ISLAND BRANCH
as Documentation Agent
and
FIRST UNION NATIONAL BANK OF NORTH CAROLINA
as Administrative Agent
<PAGE>
TABLE OF CONTENTS
1. DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2. THE LOANS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 2.1. Commitments. . . . . . . . . . . . . . . . . . . . . 21
SECTION 2.2. Loans. . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 2.3. Use of Proceeds. . . . . . . . . . . . . . . . . . . 22
SECTION 2.4. Borrowing Procedure. . . . . . . . . . . . . . . . . 22
SECTION 2.5. Continuation and Conversion
of Loans.. . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 2.6. Fees.. . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 2.7. Notes; Repayment of Loans. . . . . . . . . . . . . . 24
SECTION 2.8. Interest on Loans. . . . . . . . . . . . . . . . . . 25
SECTION 2.9. Interest on Event of Default.. . . . . . . . . . . . 25
SECTION 2.10. Alternate Rate of Interest.. . . . . . . . . . . . . 26
SECTION 2.11. Termination and Reduction
of Commitments . . . . . . . . . . . . . . . . . . . . 27
SECTION 2.12. Prepayment of Loans. . . . . . . . . . . . . . . . . 28
SECTION 2.13. Reserve Costs. . . . . . . . . . . . . . . . . . . . 29
SECTION 2.14. Reserve Requirements; Change
in Circumstances.. . . . . . . . . . . . . . . . . . . 29
SECTION 2.15. Change in Legality. . . . . . . . . . . . . . . . . 32
SECTION 2.16. Reimbursement of Lenders.. . . . . . . . . . . . . . 32
SECTION 2.17. Pro Rata Treatment.. . . . . . . . . . . . . . . . . 33
SECTION 2.18. Right of Setoff. . . . . . . . . . . . . . . . . . . 34
SECTION 2.19. Manner of Payments.. . . . . . . . . . . . . . . . . 34
SECTION 2.20. United States Withholding. . . . . . . . . . . . . . 34
SECTION 2.21. Interest Adjustments.. . . . . . . . . . . . . . . . 36
3. REPRESENTATIONS AND WARRANTIES OF BORROWERS. . . . . . . . . . . . . 36
SECTION 3.1. Corporate Existence and
Power. . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 3.2. Corporate Authority and No
Violation. . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 3.3. Governmental and Other
Approval and Consents.. . . . . . . . . . . . . . . . 37
SECTION 3.4. Financial Condition of
Borrowers and Oxford. . . . . . . . . . . . . . . . . 38
SECTION 3.5. No Material Adverse Change.. . . . . . . . . . . . . 38
SECTION 3.6. Subsidiaries.. . . . . . . . . . . . . . . . . . . . 38
SECTION 3.7. Copyrights, Patents and Other
Rights. . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 3.8. Fictitious Names.. . . . . . . . . . . . . . . . . . 39
SECTION 3.9. Title to Properties. . . . . . . . . . . . . . . . . 39
SECTION 3.10. UCC Filing Information.. . . . . . . . . . . . . . . 39
SECTION 3.11. Litigation.. . . . . . . . . . . . . . . . . . . . . 40
SECTION 3.12. Federal Reserve Regulations. . . . . . . . . . . . . 40
SECTION 3.13. Investment Company Act.. . . . . . . . . . . . . . . 40
SECTION 3.14. Enforceability.. . . . . . . . . . . . . . . . . . . 40
SECTION 3.15. Taxes. . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 3.16. Maintenance of Plans.. . . . . . . . . . . . . . . . 41
SECTION 3.17. Agreements.. . . . . . . . . . . . . . . . . . . . . 41
SECTION 3.18. Indebtedness.. . . . . . . . . . . . . . . . . . . . 41
SECTION 3.19. Disclosure.. . . . . . . . . . . . . . . . . . . . . 42
SECTION 3.20. Environmental Liabilities. . . . . . . . . . . . . . 42
SECTION 3.21. Security Interest. . . . . . . . . . . . . . . . . . 43
SECTION 3.22. Franchises; FCC and Copyright
Matters. . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 3.23. Labor Matters. . . . . . . . . . . . . . . . . . . . 44
SECTION 3.24. Quarterly Subscriber Report. . . . . . . . . . . . . 45
4. CONDITIONS OF LENDING. . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 4.1. Conditions Precedent to
Initial Loans. . . . . . . . . . . . . . . . . . . . . 45
SECTION 4.2. Conditions Precedent to Each
Loan.. . . . . . . . . . . . . . . . . . . . . . . . . 49
5. AFFIRMATIVE COVENANTS. . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 5.1. Financial Statements, Reports,
etc. . . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 5.2. Corporate Existence;
Compliance with Statutes.. . . . . . . . . . . . . . . 52
SECTION 5.3. Insurance. . . . . . . . . . . . . . . . . . . . . . 52
SECTION 5.4. Taxes and Charges;
Indebtedness in Ordinary
Course of Business.. . . . . . . . . . . . . . . . . . 53
SECTION 5.5. ERISA Compliance and Reports.. . . . . . . . . . . . 53
SECTION 5.6. Access to Books and Records;
Examinations. . . . . . . . . . . . . . . . . . . . . 54
SECTION 5.7. Maintenance of Properties. . . . . . . . . . . . . . 54
SECTION 5.8. Material Changes.. . . . . . . . . . . . . . . . . . 54
SECTION 5.9. Environmental Laws.. . . . . . . . . . . . . . . . . 55
SECTION 5.10. Performance of Obligations.. . . . . . . . . . . . . 55
SECTION 5.11. Interest Rate Protection.. . . . . . . . . . . . . . 56
SECTION 5.12. Corporate Name; Chief
Executive Office.. . . . . . . . . . . . . . . . . . . 56
SECTION 5.13. Further Assurances; Security
Interests. . . . . . . . . . . . . . . . . . . . . . . 56
6. NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . 57
SECTION 6.1. Limitation on Indebtedness.. . . . . . . . . . . . . 57
SECTION 6.2. Limitation on Guaranties.. . . . . . . . . . . . . . 58
SECTION 6.3. Changes in Business. . . . . . . . . . . . . . . . . 58
SECTION 6.4. Consolidation, Merger. . . . . . . . . . . . . . . . 59
SECTION 6.5. Limitation on Sale of Assets,
Acquisitions.. . . . . . . . . . . . . . . . . . . . . 59
SECTION 6.6. Limitations on Liens.. . . . . . . . . . . . . . . . 60
SECTION 6.7. Receivables. . . . . . . . . . . . . . . . . . . . . 61
SECTION 6.8. Sale and Leaseback.. . . . . . . . . . . . . . . . . 61
SECTION 6.9. ERISA Compliance.. . . . . . . . . . . . . . . . . . 62
SECTION 6.10. Transactions with Affiliates.. . . . . . . . . . . . 62
SECTION 6.11. Hazardous Materials. . . . . . . . . . . . . . . . . 62
SECTION 6.12. Limitation on Restrictions on
Subsidiary Dividends and other
Distributions, etc.. . . . . . . . . . . . . . . . . . 63
SECTION 6.13. No Further Negative Pledges. . . . . . . . . . . . . 63
SECTION 6.14. Executive Offices. . . . . . . . . . . . . . . . . . 63
SECTION 6.15. Subsidiaries.. . . . . . . . . . . . . . . . . . . . 64
SECTION 6.16. Senior Funded Debt Ratio.. . . . . . . . . . . . . . 64
SECTION 6.17. Fixed Charges Ratio. . . . . . . . . . . . . . . . . 64
SECTION 6.18. Interest Expense Ratio.. . . . . . . . . . . . . . . 64
SECTION 6.19. Pro Forma Debt Service Ratio.. . . . . . . . . . . . 64
SECTION 6.20. Accounting Practices.. . . . . . . . . . . . . . . . 65
SECTION 6.21. Restricted Payments. . . . . . . . . . . . . . . . . 65
SECTION 6.22. Limitation on Loans and
Investment.. . . . . . . . . . . . . . . . . . . . . . 65
SECTION 6.23. Management Agreements,
Franchises.. . . . . . . . . . . . . . . . . . . . . . 66
SECTION 6.24. Management Fees. . . . . . . . . . . . . . . . . . . 66
7. EVENTS OF DEFAULT. . . . . . . . . . . . . . . . . . . . . . . . . . 67
8. GRANT OF SECURITY INTEREST; REMEDIES . . . . . . . . . . . . . . . . 69
SECTION 8.1. Security Interests.. . . . . . . . . . . . . . . . . 69
SECTION 8.2. Use of Collateral. . . . . . . . . . . . . . . . . . 69
SECTION 8.3. Application of Proceeds. . . . . . . . . . . . . . . 69
SECTION 8.4. Collections, etc.. . . . . . . . . . . . . . . . . . 70
SECTION 8.5. Possession, Sale of
Collateral, etc. . . . . . . . . . . . . . . . . . . . 70
SECTION 8.6. Application of Proceeds
on Default.. . . . . . . . . . . . . . . . . . . . . . 71
SECTION 8.7. Power of Attorney. . . . . . . . . . . . . . . . . . 72
SECTION 8.8. Financing Statements, Direct
Payments, Confirmation of
Receivables and Audit Rights. . . . . . . . . . . . . 72
SECTION 8.9. Further Assurances.. . . . . . . . . . . . . . . . . 73
SECTION 8.10. Termination. . . . . . . . . . . . . . . . . . . . . 73
SECTION 8.11. Remedies Not Exclusive.. . . . . . . . . . . . . . . 73
SECTION 8.12. Regulatory Approvals.. . . . . . . . . . . . . . . . 73
9. GUARANTY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
SECTION 9.1. Guaranty.. . . . . . . . . . . . . . . . . . . . . . 74
SECTION 9.2. No Impairment of Guaranty,
etc.. . . . . . . . . . . . . . . . . . . . . . . . . . 75
SECTION 9.3. Continuation and
Reinstatement, etc.. . . . . . . . . . . . . . . . . . 76
SECTION 9.4. Limitation on Guaranteed
Amount etc.. . . . . . . . . . . . . . . . . . . . . . 76
10. JOINT AND SEVERAL LIABILITY OF THE BORROWERS. . . . . . . . . . . . 77
11. THE ADMINISTRATIVE AGENT . . . . . . . . . . . . . . . . . . . . . 77
SECTION 11.1. Administration by Administrative
Agent. . . . . . . . . . . . . . . . . . . . . . . . . 77
SECTION 11.2. Advances and Payments. . . . . . . . . . . . . . . . 78
SECTION 11.3. Sharing of Setoffs and Cash
Collateral.. . . . . . . . . . . . . . . . . . . . . . 78
SECTION 11.4. Notice to the Lenders. . . . . . . . . . . . . . . . 79
SECTION 11.5. Liability of Administrative
Agent. . . . . . . . . . . . . . . . . . . . . . . . . 79
SECTION 11.6. Reimbursement and
Indemnification. . . . . . . . . . . . . . . . . . . . 80
SECTION 11.7. Rights of Administrative
Agent. . . . . . . . . . . . . . . . . . . . . . . . . 80
SECTION 11.8. Independent Investigation by
Lenders. . . . . . . . . . . . . . . . . . . . . . . . 80
SECTION 11.9. Notice of Transfer.. . . . . . . . . . . . . . . . . 81
SECTION 11.10. Successor Administrative
Agent. . . . . . . . . . . . . . . . . . . . . . . . . 81
12. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
SECTION 12.1. Notices. . . . . . . . . . . . . . . . . . . . . . . 81
SECTION 12.2. Survival of Agreement,
Representations and
Warranties, etc. . . . . . . . . . . . . . . . . . . . 82
SECTION 12.3. Successors and Assigns;
Syndications; Loan Sales;
Participations.. . . . . . . . . . . . . . . . . . . . 82
SECTION 12.4. Expenses; Documentary Taxes. . . . . . . . . . . . . 85
SECTION 12.5. Indemnity. . . . . . . . . . . . . . . . . . . . . . 86
SECTION 12.6. Choice of Law. . . . . . . . . . . . . . . . . . . . 86
SECTION 12.7. No Waiver. . . . . . . . . . . . . . . . . . . . . . 86
SECTION 12.8. Extension of Maturity. . . . . . . . . . . . . . . . 87
SECTION 12.9. Amendments, etc. . . . . . . . . . . . . . . . . . . 87
SECTION 12.10. Severability.. . . . . . . . . . . . . . . . . . . . 87
SECTION 12.11. Service of Process; Waiver of
Jury Trial. . . . . . . . . . . . . . . . . . . . . . . 88
SECTION 12.12. Headings.. . . . . . . . . . . . . . . . . . . . . . 89
SECTION 12.13. Execution in Counterparts. . . . . . . . . . . . . . 89
SECTION 12.14. Entire Agreement.. . . . . . . . . . . . . . . . . . 89
<PAGE>
SCHEDULES
2.1 Commitments
3.3 Required Filings, Governmental Approvals
3.6 Subsidiaries
3.7 Proprietary Rights
3.8 Fictitious Names
3.10 Principal Executive Offices/Location
of Collateral
3.11 Litigation
3.16 Plans
3.18 Existing Indebtedness and Guaranties
3.20 Environmental Liabilities
3.22(a) Systems and Franchises
3.22(d) Oxford Consents
3.22(f) Pending FCC Matters
6.6 Existing Liens
6.12 Existing Restrictions on Subsidiary
Dividends and other Distributions
EXHIBITS
A Form of Note
B-1 Form of Opinion of counsel to the Borrowers
B-2 Form of Opinion of General Counsel
B-3 Form of Opinion of FCC Counsel to the Borrowers
B-4 Form of Opinion of Local Counsel
C Form of Assignment and Acceptance
D Form of Compliance Certificate
E-1 Form of Adelphia Pledge Agreement
E-2 Form of Debtor Pledge Agreement
F-1 Form of Management Subordination Agreement
F-2 Form of Affiliate Subordination Agreement
G Form of Quarterly Subscriber Report
H Form of Contribution Agreement
<PAGE>
CREDIT, SECURITY AND GUARANTY AGREEMENT
(the "Agreement") dated as of March 15, 1995,
among (i) UCA CORP., a Delaware corporation
("UCA"), ADELPHIA CABLE T.V., INC., a
Pennsylvania corporation ("ACTV"), LORAIN
CABLE TELEVISION, INC., an Ohio corporation
("Lorain"), MULTI-CHANNEL T.V. CABLE COMPANY
OF VIRGINIA, a Delaware corporation ("Multi-
Channel"), VAN BUREN COUNTY CABLEVISION, INC.,
a Michigan corporation ("Van Buren"), GRAND
ISLAND CABLE, INC., a Delaware corporation
("Grand Island")and ULTRACOM OF MONTGOMERY
COUNTY, INC., a Pennsylvania corporation
("UltraCom") (ii) the SUBSIDIARIES named
herein, (iii) the LENDERS referred to herein,
(iv) SOCIETE GENERALE, PNC BANK, NATIONAL
ASSOCIATION, FIRST UNION NATIONAL BANK OF
NORTH CAROLINA and CREDIT LYONNAIS CAYMAN
ISLAND BRANCH, as Managing Agents, (v) SOCIETE
GENERALE, as Structuring Agent, (vi) PNC BANK,
NATIONAL ASSOCIATION, as Syndication Agent,
(vii) CREDIT LYONNAIS CAYMAN ISLAND BRANCH, as
Documentation Agent and (viii) FIRST UNION
NATIONAL BANK OF NORTH CAROLINA, as
administrative agent (the "Administrative
Agent") for the Lenders.
INTRODUCTORY STATEMENT
The Borrowers have requested that the Lenders establish a
$200,000,000 reducing revolving credit facility pursuant to which Loans may
be made to the Borrowers (i) to repay certain existing indebtedness of UCA
and ACTV in an aggregate amount not to exceed $65,000,000; (ii) to provide
financing for the acquisition from Chauncey of Lorain, Multi-Channel and Van
Buren in an aggregate amount not to exceed $65,000,000; (iii) to refinance
certain intercompany indebtedness of Grand Island to Adelphia in an
aggregate amount not to exceed $21,000,000; (iv) for capital expenditures;
and (v) for working capital and general corporate purposes of the Borrowers
and their respective Restricted Subsidiaries.
To provide assurance for the repayment of the Loans and all
other Obligations of the Borrowers hereunder, Adelphia, the Borrowers and/or
their respective Restricted Subsidiaries will provide to the Administrative
Agent, for the benefit of the Lenders, the following (each as more fully
described herein):
(i) a first priority security interest in all of the Debtors'
personal property, tangible or intangible whether now owned or hereafter
acquired on the terms set forth in Article 8 hereof;
(ii) a guaranty of the Obligations by the Guarantors pursuant to
Article 9 hereof;
(iii) a pledge by Adelphia of all of the issued and outstanding
shares of the Capital Stock of the Borrowers on the terms set forth in the
Adelphia Pledge Agreement; and
(iv) a pledge by the Debtors of the issued and outstanding shares
of the Capital Stock of their respective Restricted Subsidiaries on the
terms set forth in the Debtor Pledge Agreement.
Subject to the terms and conditions set forth herein, the
Administrative Agent is willing to act as agent for the Lenders, and each
Lender is willing to make Loans to the Borrowers.
Accordingly, the parties hereto hereby agree as follows:
1. DEFINITIONS
For the purposes hereof unless the context otherwise requires,
the following terms shall have the meanings indicated, all accounting terms
not otherwise defined herein shall have the respective meanings accorded to
them under GAAP and all terms defined in the New York Uniform Commercial
Code and not otherwise defined herein shall have the respective meanings
accorded to them therein. Unless the context otherwise requires, any of the
following terms may be used in the singular or the plural, depending on the
reference:
"ABR Borrowing" shall mean a Borrowing comprised of ABR Loans.
"ABR Loan" shall mean any Loan bearing interest at a rate
determined by reference to the Alternate Base Rate in accordance with the
provisions of Article 2.
"ACI" shall mean Adelphia Cablevision, Inc., a Pennsylvania
corporation.
"Acquisition" shall mean, as to any Person, (i) any acquisition
by such Person of the Capital Stock of any other Person which owns or
operates a System, provided that such other Person shall, as a result of
such acquisition, become a Subsidiary of such Person and the accounts of
such Subsidiary shall be consolidated with such Person in accordance with
GAAP or (ii) any acquisition by such Person of a System.
"Active Plant" shall mean a coaxial or fiber optic television
cable, together with all amplifiers and electronics, which has been
connected to a headend and has been energized and which is capable of
carrying television signals to subscribers with only the addition of a drop
line from such television cable to the Homes of such subscribers.
"ACTV/UCA Credit Agreement" shall be as defined in
Section 4.1(1).
"Adelphia" shall mean Adelphia Communications Corporation, a
Delaware corporation.
"Adelphia Pledge Agreement" shall mean the Pledge Agreement
substantially in the form of Exhibit E-1, to be executed by Adelphia and
delivered to the Administrative Agent, as the same may be amended or
supplemented from time to time.
"Affiliate" shall mean any Person which, directly or indirectly,
is in control of, is controlled by, or is under common control with, the
Borrowers. For purposes of this definition, a Person shall be deemed to be
"controlled by" another if such latter Person possesses, directly or
indirectly, power either to (i) vote 5% or more of the securities having
ordinary voting power for the election of directors of such controlled
Person or (ii) direct or cause the direction of the management and policies
of such controlled Person whether by contract or otherwise.
"Affiliate Subordination Agreement" shall mean the Subordination
Agreement substantially in the form of Exhibit F-2, to be entered into by
certain Affiliates of the Borrowers and the Administrative Agent, as the
same may be amended or supplemented from time to time.
"Alternate Base Rate" shall mean for any day, a rate per annum
(rounded upwards to the nearest 1/100 of 1% if not already an integral
multiple of 1/100 of 1%) equal to the greatest of (a) the Prime Rate in
effect for such day or (b) the Federal Funds Effective Rate in effect for
such day plus 1/2 of 1%. For purposes hereof, "Prime Rate" shall mean the
rate per annum announced by the Administrative Agent from time to time as
its prime rate. For purposes of this Agreement, any change in the Alternate
Base Rate due to a change in the Prime Rate shall be effective on the date
such change in the Prime Rate is announced as effective. For purposes
hereof, "Federal Funds Effective Rate" shall mean, for any day, a
fluctuating interest rate per annum equal to the weighted average of the
rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published on the
succeeding Business Day by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day which is a Business Day, the average of
the quotations for the day of such transactions received by the
Administrative Agent from three Federal funds brokers of recognized standing
selected by it. If for any reason the Administrative Agent shall have
determined (which determination shall be conclusive absent manifest error)
that it is unable to ascertain the Federal Funds Effective Rate for any
reason, including, without limitation, the inability or failure of the
Administrative Agent to obtain sufficient bids or publications in accordance
with the terms hereof, the Alternate Base Rate shall be determined without
regard to clause (b) until the circumstances giving rise to such inability
no longer exist. Any change in the Alternate Base Rate due to a change in
the Federal Funds Effective Rate shall be effective on the effective date of
such change in the Federal Funds Effective Rate.
"Annualized Operating Cash Flow" shall mean, at any date at
which it is to be determined, Operating Cash Flow for the most recently
completed fiscal quarter for which the Lenders have received financial
statements and a Compliance Certificate pursuant to Section 5.1 multiplied
by four.
"Applicable Law" shall mean all provisions of statutes, rules,
regulations and orders of governmental bodies or regulatory agencies
applicable to a Person, and all orders and decrees of all courts and
arbitrators in proceedings or actions in which the Person in question is a
party.
"Applicable Margin" shall mean, at any date at which it is to be
determined, in the case of each ABR Loan, LIBOR Loan and CD Loan, the
applicable rate per annum set forth in the relevant column below opposite
the Senior Funded Debt Ratio at the date of determination:
Senior Funded Debt Ratio Applicable Margin
greater than or ABR LIBOR CD
equal to less than Loan Loan Loan
5.50:1 .875% 1.875% 2.125%
5.00:1 5.50:1 .675% 1.625% 1.875%
4.50:1 5.00:1 .375% 1.375% 1.625%
4.00:1 4.50:1 .125% 1.125% 1.375%
4.00:1 .000% .875% 1.125%
Adjustments, if any, in the Applicable Margin shall be made by the
Administrative Agent effective on the third Business Day after receipt by
the Administrative Agent of financial statements for the Borrowers and the
accompanying Compliance Certificate required under Section 5.1 setting forth
the Senior Funded Debt Ratio as of the most recent fiscal quarter end;
provided, however, that any increase in the Applicable Margin shall be
retroactive to the day the Administrative Agent should have received the
financial statements and Compliance Certificate required under Section 5.1.
"Assessment Rate" shall mean, for any day, the net annual
assessment rate (rounded upwards, if necessary, to the next higher 1/100 of
1%) as most recently estimated by the Administrative Agent for determining
the then current annual assessment payable by the Administrative Agent to
the Federal Deposit Insurance Corporation (or any successor) for insurance
by such Corporation (or such successor) of time deposits made in dollars at
the Administrative Agent's domestic offices.
"Asset Sale" shall mean, as to any Person, any sale or other
disposition (including any sale and leaseback of assets, and any mortgage or
lease of real property), or any series of related sales or other
dispositions, subsequent to the Closing Date of any property of such Person,
including any sale or other disposition of a System and/or Franchise owned
or operated by such Person.
"Assignment and Acceptance" shall mean an agreement in the form
of Exhibit C, executed by the assignor, assignee and the other parties as
contemplated thereby.
"Authorized Signatory" shall mean, as to each Borrower, such
senior personnel of such Borrower as may be duly authorized and designated
in writing by such Borrower to execute documents, agreements and instruments
on its behalf.
"Available Cash Flow" shall mean, with respect to any Rolling
Period for which it is to be determined, the sum of (i) Operating Cash Flow
for such Rolling Period plus (ii) the Excess Cash Balance as of the
beginning of the Rolling Period.
"Basic Subscriber" shall mean all of the following to the extent
they receive basic cable television service provided by the Systems owned or
operated by a Borrower or any of its Restricted Subsidiaries and pay at
least the minimum monthly basic service rate: (a) private residential
customer accounts which are not more than sixty days past due (including
those of employees of such Borrower and its Subsidiaries and Affiliates and
regardless of whether the service is provided in single family homes or in
individually billed units in multi-unit buildings, but excluding "second
connects" or "additional outlets" as such terms are commonly understood in
the cable television industry), each of which shall be counted as one Basic
Subscriber; and (b) commercial and bulk-billed accounts which are not more
than sixty days past due, such as hotels, motels, apartment houses and
multifamily homes, provided that the number of Basic Subscribers serviced by
each commercial or bulk-billed account shall be determined as the quotient
of the monthly basic service revenue derived from such commercial or
bulk-billed account (excluding any charges for taxes or other nonrecurring
items) divided by the predominant monthly fees and charges derived from the
provision of "basic service" as that term is commonly understood in the
cable television industry (excluding any charges for additional outlets and
installation fees and revenues derived from the rental of converters, remote
control devices and other like charges for equipment).
"Board" shall mean the Board of Governors of the Federal Reserve
System.
"Borrowers" shall mean UCA, ACTV, Lorain, Multi-Channel, Van
Buren, Grand Island and UltraCom.
"Borrowing" shall mean a group of Loans of a single Interest
Rate Type made by the Lenders on a single date and as to which a single
Interest Period is in effect.
"Business Day" shall mean any day other than a Saturday, Sunday
or other day on which banks in the States of New York and North Carolina are
permitted to close; provided, however, that when used in connection with a
LIBOR Loan, the term "Business Day" shall also exclude any day on which
banks are not open for dealings in Dollar deposits on the London Interbank
Market.
"Cable Act" shall mean the Cable Communications Policy Act of
1984 and the Cable Television Consumer Protection Act of 1992 and the rules
and regulations promulgated thereunder as now and hereafter in effect, or
any successor provision thereto.
"Capital Contribution" shall mean, for any period for which such
amount is being determined, the sum of any cash investments in the Borrowers
and their respective Restricted Subsidiaries subsequent to the Closing Date,
whether in the form of equity by Adelphia, the Rigas Family or any of the
Borrowers' Affiliates or in the form of Subordinated Debt.
"Capital Expenditures" shall mean, with respect to any Person
for any period, the aggregate of all expenditures (whether paid in cash or
accrued as a liability) by such Person during that period in respect of the
purchase of capital assets, all as determined in accordance with GAAP.
"Capital Lease" shall mean, as applied to any Person, any lease
of any property (whether real, personal or mixed) by that Person as lessee
which, in accordance with GAAP, is or should be accounted for as a capital
lease on the balance sheet of that Person.
"Capital Stock" shall mean any and all shares, interests,
participations or other equivalents (however designated) of capital stock of
a corporation, any and all equivalent ownership interests (including
partnership interests) in a Person (other than a corporation) and any and
all warrants or options to purchase any of the foregoing.
"Cash Balance" shall mean at any date of determination, the
aggregate amount of cash and Cash Equivalents of the Borrowers and their
Restricted Subsidiaries at such date of determination, as determined on a
consolidated and combined basis in accordance with GAAP minus the aggregate
amount of Designated Capital Contributions that have not yet been expended.
"Cash Equivalents" shall mean (i) investments in commercial
paper maturing in not more than 90 days from the date of issuance which at
the time of acquisition is rated at least A-1 or the equivalent thereof by
S&P, or P-1 or the equivalent thereof by Moody's, (ii) investments in direct
obligations or obligations which are guaranteed or insured by the United
States of America or any agency or instrumentality thereof (provided that
the full faith and credit of the United States of America is pledged in
support thereof) having a maturity of not more than 90 days from the date of
acquisition, (iii) investments in certificates of deposit maturing not more
than 90 days from the date of origin issued by (x) any Managing Agent or (y)
a bank or trust company organized or licensed under the laws of the United
States of America or any state or territory thereof having capital, surplus
and undivided profits aggregating at least $500,000,000 and A rated or
better by S&P or Moody's, and (iv) banker's acceptances maturing not more
than 90 days from the date of origin issued by a bank or trust company
organized or licensed under the laws of the United States of America or any
state or territory thereof and having a capital, surplus and undivided
profits aggregating at least $500,000,000, and rated A or better by S&P or
Moody's.
"CD Rate" shall mean, with respect to any CD Borrowing for any
Interest Period, an interest rate per annum (rounded upwards, if necessary,
to the next 1/100 of 1%) equal to the sum of (a) a rate per annum equal to
the product of (i) the Fixed Certificate of Deposit Rate in effect for such
Interest Period, and (ii) Statutory Reserves as in effect on the first day
of such Interest Period plus (b) the Assessment Rate as in effect on the
first day of such Interest Period. For purposes hereof, "Fixed Certificate
of Deposit Rate" shall mean the rate per annum determined by the
Administrative Agent to be the average of the bid rates quoted at 10:00
a.m., New York time (or as soon thereafter as is practicable), on the first
day of such Interest Period by two or more New York certificate of deposit
dealers of recognized standing, selected by the Administrative Agent, for
the purchase at face value of certificates of deposit of the Administrative
Agent in the secondary market in an amount approximately equal to the
Administrative Agent's pro rata share of such CD Borrowing, with a maturity
corresponding to the last day of such Interest Period.
"CD Borrowing" shall mean a Borrowing comprised of CD Loans.
"CD Loan" shall mean any Loan bearing interest at a rate
determined by reference to the CD Rate in accordance with the provisions of
Article 2.
"Change in Control" shall mean (a) Adelphia shall cease for any
reason to own, directly or indirectly, all of the Capital Stock of the
Borrowers or (b) the Rigas Family shall cease for any reason to own,
directly or indirectly, shares of Adelphia common stock which entitle the
holders thereof to cast more than 75% of the total number of votes that
holders of all shares of Adelphia's common stock then outstanding would be
entitled to cast on a matter where the Class A common stock and Class B
common stock vote together as a single class, provided, however, that such
percentage may, with the prior written consent of the Required Lenders which
consent shall not be unreasonably withheld, be less than 75%, but in no
event shall such percentage be less than 51%.
"Change in Management" shall mean that the Manager shall cease
for any reason to manage the Borrowers as provided in the Management
Agreements.
"Chauncey" shall mean Chauncey Communications Corporation, a
Delaware corporation.
"Chauncey Group Acquisition" shall mean the Acquisition by
UltraCom of the Capital Stock of each of Lorain, Van Buren and Multi-Channel
pursuant to the Stock Purchase Agreements dated as of the date hereof and
each between UltraCom and Chauncey.
"Chelsea" shall mean Chelsea Communications, Inc., a Delaware
corporation.
"Closing Date" shall mean the date on which the conditions
precedent to the making of the Loans as set forth in Section 4.1 have been
satisfied or waived, which shall in no event be later than March 31, 1995.
"Code" shall mean the Internal Revenue Code of 1986 and the
rules and regulations issued thereunder, as now and hereafter in effect, or
any successor provision thereto.
"Collateral" shall mean all personal property of the Debtors,
tangible and intangible, wherever located or situated and whether now owned
or hereafter acquired or created, including without limitation, all goods
(including, but not limited to, such goods to the extent constituting
fixtures), accounts, documents, instruments, chattel paper, inventory,
equipment, general intangibles (as the foregoing terms are defined under the
New York Uniform Commercial Code), contract rights, Franchises and FCC
Licenses (except to the extent the Debtors are prohibited from granting a
security interest in such Franchises or FCC Licenses pursuant to the terms
thereof or Applicable Law), insurance proceeds, cash, bank accounts and
machinery, and any proceeds thereof or income therefrom.
"Commitment" shall mean, with respect to each Lender, the
commitment of such Lender as set forth (i) on Schedule 2.1 hereto, and/or
(ii) any applicable Assignment and Acceptance to which it may be a party, as
the case may be, as such Lender's Commitment may be permanently terminated
or reduced from time to time pursuant to Section 2.11 or Article 7. The
Commitments shall automatically and permanently terminate on the Maturity
Date.
"Commitment Fee" shall have the meaning given such term in
Section 2.6 hereof.
"Communications Act" shall mean the Communications Act of 1934
and the rules and regulations issued thereunder, as now and hereafter in
effect, or any successor provision thereto.
"Compliance Certificate" shall mean a certificate of the
Borrowers executed and delivered on behalf of the Borrowers by an Authorized
Signatory of each Borrower, substantially in the form of Exhibit D, or in
such other form as the Administrative Agent may reasonably request.
"Controlled Group" shall mean all members of a controlling group
of corporations and all trades or businesses (whether or not incorporated)
under common control which, together with the Borrowers, are treated as a
single employer under Section 414(b), (c), (m) or (o) of the Code, and the
regulations and publications thereunder.
"Contribution Agreement" shall mean the contribution agreement
substantially in the form of Exhibit H hereto, as the same may be amended or
supplemented from time to time.
"Copyright Act" shall mean Title 17 of the United States Code
and the rules and regulations issued thereunder, as now and hereafter in
effect.
"Debtor Pledge Agreement" shall mean, as to each applicable
Debtor, the Pledge Agreement substantially in the form of Exhibit E-2, to be
executed by such Debtor and delivered to the Administrative Agent, as the
same may be amended or supplemented from time to time.
"Debtors" shall mean the Borrowers and their respective
Restricted Subsidiaries.
"Default" shall mean any event, act or condition which with
notice or lapse of time, or both, would constitute an Event of Default.
"Designated Capital Contribution" shall mean, for any period for
which such amount is being determined, the sum of the aggregate Capital
Contributions to the Borrowers and their respective Restricted Subsidiaries
during such period which at the time being made are designated as available
for (i) the payment of Management Fees or a portion thereof during such
period as set forth in the Compliance Certificate delivered with respect to
such period or (ii) the payment of Capital Expenditures as set forth in the
Compliance Certificate delivered with respect to such period.
"Dollars" and "$" shall mean lawful money of the United States
of America.
"Environmental Laws" shall mean any and all federal, state,
local or municipal laws, rules, orders, regulations, statutes, ordinances,
codes, decrees or requirements of any Governmental Authority regulating,
relating to or imposing liability or standards of conduct concerning, any
Hazardous Material or environmental protection or health and safety, as now
or may at any time hereafter be in effect, including without limitation, the
Clean Water Act also known as the Federal Water Pollution Control Act
("FWPCA"), 33 U.S.C. 1251 et seq., the Clean Air Act ("CAA"), 42 U.S.C.
7401 et seq., the Federal Insecticide, Fungicide and Rodenticide Act
("FIFRA"), 7 U.S.C. 136 et seq., the Surface Mining Control and Reclamation
Act ("SMCRA"), 30 U.S.C. 1201 et seq., the Comprehensive Environmental
Response, Compensation and Liability Act ("CERCLA"), 42 U.S.C. 9601 et
seq., the Superfund Amendment and Reauthorization Act of 1986 ("SARA"),
Public Law 99-499, 100 Stat. 1613, the Emergency Planning and Community
Right to Know Act ("ECPCRKA"), 42 U.S.C. 11001 et seq., the Resource
Conservation and Recovery Act ("RCRA"), 42 U.S.C. 6901 et seq., the
Occupational Safety and Health Act as amended ("OSHA"), 29 U.S.C. 655 and
657, together, in each case, with any amendment thereto, and the regulations
adopted and publications promulgated thereunder and all substitutions
thereof.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as such Act may be amended, and the regulations promulgated
thereunder.
"Event of Default" shall have the meaning given such term in
Article 7 hereof.
"Excess Cash Balance" shall mean, at any date of determination,
the excess, if any, of the Cash Balance at such date of determination over
$1,000,000.
"FCC" shall mean the Federal Communications Commission or any
Governmental Authority which succeeds to the powers and functions thereof.
"FCC Licenses" shall mean any license or permit issued by the
FCC, including, without limitation, licenses issued for the operation of
Systems.
"Fixed Charges" shall mean, for any period for which the amount
is being determined, (a) the sum of, without duplication, (i) Interest
Expense during such period, plus (ii) Commitment Fees paid by the Borrowers
during such period, plus (iii) Capital Expenditures of the Borrowers and
their respective Restricted Subsidiaries during such period, plus
(iv) Management Fees paid by the Borrowers and their Restricted Subsidiaries
during such period, plus (v) the excess, if any, of the aggregate amount of
Loans outstanding at the beginning of such period over the Total Commitment
scheduled to be in effect at the end of such period, all as determined on a
consolidated and combined basis in accordance with GAAP plus (vi) cash
income taxes actually paid by any of the Borrowers or paid by the Borrowers
to any other member of the same consolidating filing group pursuant to any
tax sharing agreement(s), less (b) Designated Capital Contributions made to
the Borrowers and their respective Restricted Subsidiaries during such
period.
"Fixed Charges Ratio" shall mean, with respect to any Rolling
Period for which it is to be determined, the ratio of Available Cash Flow to
Fixed Charges.
"Franchise" shall mean a franchise, license (including, without
limitation, any FCC License) or other authorization or right to construct,
own, operate, promote and/or otherwise exploit any System or the reception
and transmission of signals by microwave granted by the FCC or any state,
county, city, town, village or other local Governmental Authority.
"Fundamental Documents" shall mean this Agreement, the Notes,
the Contribution Agreement, the Pledge Agreements, the Subordination
Agreements and any other ancillary documentation which is required to be, or
is otherwise, delivered to the Administrative Agent in connection with this
Agreement.
"GAAP" shall mean United States generally accepted accounting
principles consistently applied (except for accounting changes in response
to FASB releases or other authoritative pronouncements) provided, however,
that all calculations made pursuant to Sections 6.16 through 6.19 and the
related definitions shall have been computed based on such generally
accepted accounting principles as are in effect on the date hereof.
"General Capital Contribution" shall mean, for any period for
which such amount is being determined, the sum of (i) the aggregate Capital
Contributions to the Borrowers and their respective Restricted Subsidiaries
for such period less (ii) Designated Capital Contributions to the Borrowers
and their respective Restricted Subsidiaries for such period.
"Governmental Authority" shall mean any federal, state,
municipal or other governmental department, commission, board, bureau,
agency or instrumentality, or any court, in each case whether of the United
States or foreign.
"Guarantor" shall mean each Borrower and each Restricted
Subsidiary of each Borrower, whether now existing or hereafter created or
acquired, whose name appears on the signature pages hereof or which becomes
a party to this Agreement pursuant to Section 5.13.
"Guaranty" shall mean, as to any Person, any direct or indirect
obligation of such Person guaranteeing or intended to guarantee any
Indebtedness, Capital Lease, dividend or other monetary obligation ("primary
obligation") of any other Person (the "primary obligor") in any manner,
whether directly or indirectly, including, without limitation, any
obligation of such Person, whether or not contingent, (a) to purchase any
such primary obligation or any property constituting direct or indirect
security therefor, (b) to advance or supply funds (i) for the purchase or
payment of any such primary obligation or (ii) to maintain working capital
or equity capital of the primary obligor or otherwise to maintain the net
worth or solvency of the primary obligor, (c) to purchase property,
securities or services, in each case, primarily for the purpose of assuring
the owner of any such primary obligation of the repayment of such primary
obligation or (d) as a general partner of a partnership or a joint venturer
of a joint venture in respect of Indebtedness of such partnership or such
joint venture which is treated as a general partnership for purposes of
Applicable Law. The amount of any Guaranty shall be deemed to be an amount
equal to the stated or determinable amount (or portion thereof) of the
primary obligation in respect of which such Guaranty is made or, if not
stated or determinable, the maximum reasonably anticipated liability in
respect thereof (assuming such Person is required to perform thereunder).
Notwithstanding the foregoing definition, the term "Guaranty" shall not
include any direct or indirect obligation of a Person as a general partner
of a general partnership or a joint venturer of a joint venture in respect
of Indebtedness of such general partnership or joint venture, to the extent
such Indebtedness is contractually non-recourse to the assets of such Person
as a general partner or joint venturer (other than assets comprising the
capital of such general partnership or joint venture).
"Hazardous Materials" shall mean any flammable materials,
explosives, radioactive materials, hazardous materials, hazardous wastes,
hazardous or toxic substances, or similar materials defined as such in any
Environmental Law.
"Home" shall mean a single residential dwelling or commercial
building which can be connected by a single drop line. In the case of
multiple residential dwellings, such as apartment houses and multi-family
homes, which do not obtain reduced bulk service rates, each separate
dwelling unit shall be counted as one Home. The number of Homes in a
multiple residential dwelling which does obtain a reduced bulk service rate
shall be the number of Basic Subscribers for such multiple residential
dwelling.
"Home Passed" shall mean a Home which can be connected by a
single drop line from Active Plant.
"Indebtedness" shall mean (without double counting), at any time
and with respect to any Person, (i) indebtedness of such Person for borrowed
money (whether by loan or the issuance and sale of debt securities) or for
the deferred purchase price of property or services purchased (other than
amounts constituting current trade payables arising in the ordinary course
of business and payable in accordance with customary practices); (ii)
indebtedness of others which such Person has directly or indirectly assumed
or guaranteed (but only to the extent so assumed or guaranteed) or otherwise
provided credit support therefor, including without limitation, Guaranties;
(iii) indebtedness of others secured by a Lien on assets of such Person,
whether or not such Person shall have assumed such indebtedness (but only to
the extent of the fair market value of such assets); (iv) obligations of
such Person in respect of letters of credit, acceptance facilities, or
drafts or similar instruments issued or accepted by banks and other
financial institutions for the account of such Person (other than current
trade payables arising in the ordinary course of business and payable in
accordance with customary practices) or (v) obligations of such Person under
Capital Leases.
"Interest Expense" shall mean for any period for which the
amount is being determined, the aggregate interest expense of the Borrowers
and their respective Restricted Subsidiaries with respect to Senior Funded
Debt during such period (including in such expense any net amounts paid
during such period in respect of Interest Rate Protection Agreements), as
determined on a consolidated and combined basis in accordance with GAAP.
"Interest Expense Ratio" shall mean, for any period for which it
is to be determined, the ratio of Operating Cash Flow to Interest Expense.
"Interest Payment Date" shall mean, with respect to any
Borrowing, the last day of the Interest Period applicable thereto and, in
the case of a LIBOR Borrowing with an Interest Period of more than three
months' duration or a CD Borrowing with an Interest Period of more than 90
days' duration, each day that would have been an Interest Payment Date had
successive Interest Periods of three months' duration or 90 days' duration,
as the case may be, been applicable to such Borrowing, and, in addition, the
date of any conversion of a Borrowing with, or to, a Borrowing of a
different Interest Rate Type.
"Interest Period" shall mean (a) as to any LIBOR Borrowing, the
period commencing on the date of such Borrowing, and ending on the
numerically corresponding day (or, if there is no numerically corresponding
day, on the last day) in the calendar month that is 1, 2, 3 or 6 months
thereafter, as the Borrowers may elect, (b) as to any ABR Borrowing, the
period commencing on the date of such Borrowing and ending on the earliest
of (i) the next succeeding March 31, June 30, September 30 or December 31,
(ii) the Maturity Date and (iii) the date such Borrowing is refinanced with
a Borrowing of a different Interest Rate Type in accordance with Section 2.5
or is prepaid in accordance with Section 2.12 and (c) as to any CD
Borrowing, the period commencing on the date of such Borrowing and ending on
the date that is 30, 60, 90 or 180 days thereafter, as the Borrowers may
elect; provided, however, that (i) if any Interest Period would end on a day
other than a Business Day, such Interest Period shall be extended to the
next succeeding Business Day unless, in the case of LIBOR Loans only, such
next succeeding Business Day would fall in the next calendar month, in which
case such Interest Period shall end on the next preceding Business Day and
(ii) no Interest Period with respect to any LIBOR Borrowing or CD Borrowing
may be selected which would result in the aggregate amount of LIBOR Loans
and CD Loans having Interest Periods ending after any day on which a
Commitment reduction is scheduled to occur being in excess of the Total
Commitment scheduled to be in effect after such date. Interest shall accrue
from, and including, the first day of an Interest Period to, but excluding,
the last day of such Interest Period.
"Interest Rate Protection Agreement" shall mean any interest
rate swap agreement, interest rate cap agreement or other similar financial
agreement or arrangement.
"Interest Rate Type", when used in respect of any Loan or
Borrowing, shall refer to the rate by reference to which interest on such
Loan or on the Loans comprising such Borrowing is determined. For purposes
hereof, "Rate" shall include LIBOR, the Alternate Base Rate and the CD Rate.
"Investment" shall mean, with respect to any Person, any direct
or indirect purchase or other acquisition by such Person of the Capital
Stock, bonds, notes, debentures, or other securities of any other Person, or
any direct or indirect loan, advance (other than advances to employees for
moving and travel expenses, drawing accounts and expenditures in the
ordinary course of business) or capital contribution by such Person to any
other Person, including, without limitation, all debt and accounts
receivable owed to such Person by such other Person which are not current
assets or do not arise out of sales to such other Person in the ordinary
course of business.
"Lender" and "Lenders" shall mean the financial institutions
whose names appear on the signature pages hereof and any assignee of a
Lender pursuant to Section 12.3(b).
"Lending Office" shall mean, with respect to any of the Lenders,
the branch or branches (or affiliate or affiliates) from which any such
Lender's LIBOR Loans, CD Loans or ABR Loans, as the case may be, are made or
maintained and for the account of which all payments of principal of, and
interest on, such Lender's LIBOR Loans, CD Loans or ABR Loans are made, as
notified to the Administrative Agent from time to time.
"LIBOR" shall mean, with respect to any LIBOR Borrowing for any
Interest Period, an interest rate per annum (rounded upwards, if necessary,
to the next 1/16th of 1%) equal to the quotient of (A) the arithmetic
average of the rates at which Dollar deposits approximately equal to the
Administrative Agent's pro rata share of such LIBOR Borrowing and for a
maturity equal to the applicable Interest Period are offered to the
Administrative Agent in immediately available funds in the London Interbank
Market at approximately 11:00 a.m., London time, two Business Days prior to
the commencement of such Interest Period divided by (B) one minus the
applicable reserve requirements of the Administrative Agent, expressed as a
decimal (including without duplication or limitation, basic, supplemental,
marginal and emergency reserves), from time to time in effect under
Regulation D or similar regulations of the Board. It is agreed that for
purposes of this definition, LIBOR Loans made hereunder shall be deemed to
constitute Eurocurrency Liabilities as defined in Regulation D and to be
subject to the reserve requirements of Regulation D.
"LIBOR Borrowing" shall mean a Borrowing comprised of LIBOR
Loans.
"LIBOR Loan" shall mean any Loan bearing interest at a rate
determined by reference to LIBOR in accordance with the provisions of
Article 2.
"Lien" shall mean any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind whatsoever (including any
conditional sale or other title retention agreement, any lease in the nature
thereof or agreement to give any financing statement under the Uniform
Commercial Code of any jurisdiction).
"Loan" shall mean any Loan made hereunder in accordance with the
provisions of Article 2, whether made as a LIBOR Loan, an ABR Loan or a CD
Loan, as permitted hereby.
"Management Agreements" shall mean collectively, (a) the Amended
and Restated Management Services Agreement, dated as of March 11, 1988, by
and between Van Buren and ACI (b) the Management Services Agreement, dated
as of April 1, 1991, by and between Multi-Channel and Chelsea, (c) the
Amended and Restated Management Services Agreement, dated as of March 11,
1988, by and between Lorain and ACI, (d) the Management Services Agreement,
dated as of March 14, 1989, by and between UltraCom and ACI, (e) the
Management Services Agreement, dated as of March 14, 1989, by and between
ACTV and ACI, (f) the Management Services Agreement, dated as of March 14,
1988, by and between UCA and ACI, (g) the Management Services Agreement,
dated as of March 8, 1995 by and between Grand Island and ACI, (h) the
Management Services Agreement, dated as of March 14, 1989 by and between ACI
and UltraCom of Lansdale, Inc., and (i) the Management Services Agreement,
dated as of March 14, 1989, by and between ACI and UltraCom of Marple, Inc.,
in each case as the same may be amended, supplemented or otherwise modified
from time to time.
"Management Fees" shall mean the fees payable by the Borrowers
to the Manager pursuant to the terms of the Management Agreements as
compensation for providing management or supervisory services for the
Systems.
"Management Subordination Agreement" shall mean the
Subordination Agreement substantially in the form of Exhibit F-1, to be
entered into by the Borrowers, the Manager and the Administrative Agent, as
the same may be amended or supplemented from time to time.
"Manager" shall mean collectively (i) ACI, (ii) Chelsea and
(iii) any other wholly-owned subsidiary of Adelphia as specified in the
Management Agreements.
"Managing Agents" shall mean Societe Generale, PNC Bank,
National Association, Credit Lyonnais Cayman Island Branch and First Union
National Bank of North Carolina.
"Margin Stock" shall be as defined in Regulation U of the Board.
"Maturity Date" shall mean September 30, 2003 or such earlier
date on which the Commitments shall terminate in accordance with the
provisions of either Section 2.11 or Article 7.
"Moody's" shall mean Moody's Investors Service Inc.
"Multiemployer Plan" shall mean a plan described in Section
3(37) of ERISA.
"Net Cash Proceeds" shall mean with respect to any Permitted
Asset Sale by a Borrower or any Restricted Subsidiary, 100% of the cash
proceeds (including any cash payments received by way of deferred payment of
principal pursuant to a note or installment receivable or purchase price
adjustment receivable or otherwise, but only as and when received) of such
sale net of (i) reasonable and customary amounts of attorneys' fees,
accountants' fees, investment banking fees, survey costs, title insurance
premiums, and related search and recording charges, transfer taxes, deed or
mortgage recording taxes, required debt payments (other than pursuant
hereto), other customary expenses and brokerage, consultant and other
customary fees actually incurred in connection therewith (other than such
amounts payable to Affiliates) and (ii) taxes paid or payable as a result
thereof.
"Note(s)" shall be as defined in Section 2.7.
"Obligations" shall mean the obligation of the Borrowers to make
due and punctual payment of (i) principal of, and interest on, the Loans,
(ii) the Commitment Fee and (iii) all other monetary obligations of the
Borrowers to the Administrative Agent, any Lender under this Agreement, the
Notes or the Fundamental Documents or with respect to any Interest Rate
Protection Agreements entered into between the Borrowers and any Lender.
"Operating Cash Flow" shall mean for any period for which such
amount is being determined, net income (excluding extraordinary gains or
losses) for such period, plus, to the extent deducted in determining such
net income, (i) interest expense, (ii) Management Fees, (iii) depreciation,
(iv) amortization, (v) income taxes and (vi) all other non-cash expenses,
all as determined on a consolidated and combined basis for the Borrowers and
their respective Restricted Subsidiaries in accordance with GAAP, minus, to
the extent included in determining such net income, all non-cash income and
non-cash gains and all fees, interest income, dividends and distributions
received from Affiliates to the extent such fees, interest income, dividends
and distributions (i) were not paid in cash or (ii) if paid in cash, exceed
10% of Operating Cash Flow for such period (before giving effect to such
payment); provided that, if any Borrower or any Restricted Subsidiary shall
have made one or more Acquisitions during such period, Operating Cash Flow
for such period shall be adjusted on a Pro Forma Basis to give effect to all
such Acquisitions as if they had occurred at the beginning of such period
and provided, further, that if any Borrower or any Restricted Subsidiary
shall have effected one or more Asset Sales during such period, Operating
Cash Flow for such period shall be adjusted on a Pro Forma Basis to give
effect to all such Asset Sales as if they had occurred at the beginning of
such period.
"Oxford" shall mean Oxford Cable Television, Inc., a
North Carolina corporation.
"Pay Subscriber" shall be as commonly understood in the cable
television industry.
"PBGC" shall mean the Pension Benefit Guaranty Corporation or
any successor thereto.
"Permitted Asset Sale" shall mean any Asset Sale permitted
pursuant to Section 6.5(a)(i).
"Permitted Encumbrances" shall mean Liens permitted under
Section 6.6.
"Person" shall mean any natural person, corporation, division of
a corporation, partnership, limited liability company, trust, joint venture,
association, company, estate, unincorporated organization or government or
any agency or political subdivision thereof.
"Plan" shall mean each "employee pension benefit plan" as
defined in Section 3(2) of ERISA maintained by the Borrower or any member of
the Controlled Group, or to which the Borrower or any member of the
Controlled Group contributes or is required to contribute or other plan
covered by Title IV of ERISA.
"Pledge Agreements" shall mean the Adelphia Pledge Agreement and
the Debtor Pledge Agreement.
"Pole Rental Leases" shall mean the leases and other agreements
under which a Borrower or any of its Restricted Subsidiaries has the right
to use telephone or utility poles, conduits or trenches for the purpose of
supporting or housing cables of any System owned or operated by a Borrower
or any of its Restricted Subsidiaries.
"Pro Forma Basis" shall mean in connection with any transaction
for which a determination on a Pro Forma Basis is required to be made
hereunder, that such determination shall be made (i) after giving effect to
any issuance of Indebtedness, any acquisition, any disposition or any other
transaction (as applicable) and (ii) assuming that the issuance of
Indebtedness, acquisition, disposition or other transaction and, if
applicable, the application of any proceeds therefrom, occurred at the
beginning of the most recent Rolling Period for which the Lenders have
received financial statements and a Compliance Certificate pursuant to
Section 5.1.
"Pro Forma Debt Service" shall mean, at any date of
determination, the sum of all pro forma Interest Expense, commitment fees
and principal payments, including the current maturities thereof, due in
respect of Senior Funded Debt during the period of four consecutive fiscal
quarters following such date of determination, provided that (i) the
interest rate on the Loans shall be assumed to be fixed throughout such
period at the weighted average of the actual interest rates in effect on the
Loans on the date of determination (taking into account any net amounts to
be paid during such period in respect of Interest Rate Protection
Agreements), and (ii) pro forma principal payments with respect to Loans
outstanding shall be equal to the excess of the Loans outstanding on such
date of determination over the Total Commitment scheduled to be in effect at
the end of such period.
"Pro Forma Debt Service Ratio" shall mean, at any date of
determination, the ratio of Annualized Operating Cash Flow to Pro Forma Debt
Service.
"Proprietary Rights" shall be as defined in Section 3.7.
"Quarterly Subscriber Report" shall mean the report delivered
pursuant to Section 5.1(i) in the form of Exhibit G.
"Required Lenders" shall mean at any time, Lenders holding at
least 66 2/3% of the aggregate principal amount of the Loans at the time
outstanding or, if no Loans are then outstanding, Lenders representing at
least 66 2/3% of the Total Commitment.
"Reportable Event" shall mean any reportable event as defined in
Section 4043(b) of ERISA, other than a reportable event as to which
provision for 30-day notice to the PBGC would be waived under applicable
regulations had the regulations in effect on the Closing Date been in effect
on the date of occurrence of such reportable event.
"Restricted Investments" shall mean, with respect to any Person,
any Investment by such Person in any of its Affiliates (including
Subsidiaries) other than a Restricted Subsidiary.
"Restricted Payment" shall mean (i) any distribution, dividend
or other direct or indirect payment on account of shares of any class of
stock of a Borrower or any Restricted Subsidiary now or hereafter
outstanding except for distributions, dividends or other payments solely in
shares of capital stock of a Restricted Subsidiary which are distributed
pro-rata to its stockholders or solely in shares of capital stock of such
Borrower, (ii) any redemption or other acquisition or re-acquisition by a
Borrower or a Restricted Subsidiary of any class of its own stock or other
equity interest of such Borrower, a Restricted Subsidiary or an Affiliate
now or hereafter outstanding, (iii) any payment made to retire, or obtain
the surrender of any outstanding warrants or options or other rights to
purchase or acquire shares of any class of stock of such Borrower or a
Restricted Subsidiary now or hereafter outstanding, (iv) Management Fees,
(v) any payment of principal or interest on Subordinated Debt and (vi) any
Restricted Investment; provided, however, that the term "Restricted Payment"
as used herein, shall not include any distribution, dividend, redemption or
other payment made to such Borrower by any of its Restricted Subsidiaries,
or to a Borrower's Restricted Subsidiaries by such Borrower or any of its
other Subsidiaries.
"Restricted Subsidiary" shall mean any Subsidiary of a Borrower
that is not an Unrestricted Subsidiary.
"Rigas Family" shall mean any of John J. Rigas, Timothy J.
Rigas, James P. Rigas, Ellen K. Rigas, Michael J. Rigas or their respective
spouses, children, or estates, personal representatives, trusts,
partnerships, corporations or other entities controlled by one or more of
any of the foregoing, provided, that neither Adelphia nor any of its
Subsidiaries shall be deemed to be a part of the Rigas Family. For purposes
of this definition, the term "controlled" means the ownership, directly or
indirectly, of equity securities or other ownership interests in a Person by
another Person or Persons, which represent more than 50% of the voting power
in such Person.
"Rolling Period" shall mean with respect to any fiscal quarter,
such fiscal quarter and the three immediately preceding fiscal quarters
considered as a single accounting period.
"Senior Funded Debt" shall mean, at any date of determination,
all Indebtedness of the Borrowers and their respective Restricted
Subsidiaries on such date of determination which is not by its terms
subordinated to the Obligations.
"Senior Funded Debt Ratio" shall mean, at any date at which it
is to be determined, the ratio of (a) the amount of Senior Funded Debt less
the Excess Cash Balance to (b) Annualized Operating Cash Flow.
"S&P" shall mean Standard & Poor's Corporation.
"Statutory Reserves" shall mean a fraction (expressed as a
decimal), the numerator of which is the number one and the denominator of
which is the number one minus the aggregate of the reserve percentages
(expressed as a decimal) established by the Board and any other banking
authority for determining the maximum reserve requirement (including any
marginal, special, emergency or supplemental reserves) for a member bank of
the Federal Reserve System in New York City, for new negotiable nonpersonal
time deposits in Dollars of $100,000 or more with maturities equal to the
applicable Interest Period. Such reserve percentages shall include those
imposed under Regulation D. Statutory Reserves shall be adjusted
automatically on and as of the effective date of any change in any reserve
percentage.
"Subordination Agreements" shall mean the Affiliate
Subordination Agreement and the Management Subordination Agreement.
"Subordinated Debt" shall mean all Indebtedness owing by a
Borrower or any of its Restricted Subsidiaries to Adelphia, a wholly-owned
Subsidiary of Adelphia or the Rigas Family which is subordinated to the
Obligations pursuant to an Affiliate Subordination Agreement, substantially
in the form of Exhibit F-2, provided that such Indebtedness is unsecured
and, has an interest rate of no greater than 10% per annum.
"Subsidiary" shall mean with respect to any Person, any
corporation, association, joint venture, partnership or other business
entity (whether now existing or hereafter organized) of which in the case of
a corporation, at least a majority of the voting stock or other ownership
interests having ordinary voting power for the election of directors or in
the case of a partnership, joint venture or other business entity, having
the power to direct or cause the direction of management, or the power for
the election of any managing general partner (or the equivalent) is, at the
time as of which any determination is being made, owned or controlled by
such Person or one or more subsidiaries of such Person or by such Person and
one or more subsidiaries of such Person.
"System" shall mean a system of earth stations, microwave
transmitters, headends and/or access to headends, antennas, cables, wires,
lines, amplifiers, towers, waveguides, conductors, converters, studios,
equipment and facilities for the purpose of producing, receiving,
transmitting, amplifying and distributing audio, video and other forms of
electronic or electrical signals to and among subscribers within a defined
geographical area, including, without limitation, all related licenses,
franchises and permits issued under federal or local laws from time to time,
and all Pole Rental Leases, utility easements and other property services
provided pursuant to, and all interest to receive payments from, or pursuant
to, said licenses, franchises and permits.
"Total Commitment" shall mean, at any time, the aggregate amount
of the Lenders' Commitments as in effect at such time.
"UCC" shall mean the Uniform Commercial Code as in effect in the
State of New York; provided, however, in the event that, by reason of
mandatory provisions of law, any or all of the attachment, perfection or
priority of the Administrative Agent's security interest for the benefit of
the Lenders in the Collateral is governed by the Uniform Commercial Code as
in effect in a jurisdiction other than such state, the term "UCC" shall mean
the Uniform Commercial Code as in effect in such other jurisdiction for
purposes of the provisions hereof relating to such attachment, protection
and priority and for purposes of definitions related to such provisions.
"Unrestricted Subsidiary" shall mean any Subsidiary of any
Borrower formed or acquired after the Closing Date and designated by a
resolution of the Board of Directors of such Borrower as an Unrestricted
Subsidiary, provided that (i) if such Subsidiary is a partnership such
Subsidiary may be an Unrestricted Subsidiary only if neither the Borrower
nor a Restricted Subsidiary is general partner of such Subsidiary and (ii)
such Subsidiary shall only be an Unrestricted Subsidiary for so long as such
Subsidiary engages solely in the business of acquiring, owning or disposing
of publicly traded marketable securities and/or FCC Licenses (other than FCC
Licenses used in connection with the ownership or operation of the Systems
of the Borrowers and their respective Restricted Subsidiaries).
2. THE LOANS
SECTION 2.1. Commitments.
(a) Subject to the terms and conditions hereof and relying upon
the representations and warranties herein set forth, each Lender agrees,
severally and not jointly, to make Loans to the Borrowers, at any time and
from time to time on and after the Closing Date and until the earlier of (i)
the Maturity Date and (ii) the termination of the Commitment of such Lender,
in an aggregate principal amount at any time outstanding not to exceed such
Lender's Commitment, subject, however, to the condition that at no time
shall the outstanding aggregate principal amount of all Loans made by all
Lenders exceed the Total Commitment. The Commitments of the Lenders may be
terminated or reduced from time to time pursuant to Section 2.11 or Article
7.
(b) Within the foregoing limits, the Borrowers may borrow, pay
or repay and reborrow hereunder, on and after the Closing Date and prior to
the Maturity Date, upon the terms and subject to the conditions and
limitations set forth herein.
SECTION 2.2. Loans.
(a) Each Loan shall be made as part of a Borrowing consisting
of Loans made by the Lenders ratably in accordance with their Commitments;
provided, however, that the failure of any Lender to make any Loan shall not
in itself relieve any other Lender of its obligation to lend hereunder (it
being understood, however, that no Lender shall be responsible for the
failure of any other Lender to make any Loan required to be made by such
other Lender). The Loans comprising any Borrowing shall be (i) in the case
of CD Loans and LIBOR Loans, in an aggregate principal amount that is an
integral multiple of $1,000,000 and not less than $5,000,000 and (ii) in the
case of ABR Loans, in an aggregate principal amount that is an integral
multiple of $100,000 and not less than $1,000,000 (or if less, an aggregate
principal amount equal to the remaining balance of the available Total
Commitment).
(b) Each Lender may at its option make any LIBOR Loan or CD
Loan by causing any domestic or foreign branch or affiliate of such Lender
to make such Loan, provided that any exercise of such option shall not
affect the obligation of the Borrowers to repay such Loan in accordance with
the terms of this Agreement and such Lender's Note. Borrowings of more than
one Interest Rate Type may be outstanding at the same time; provided,
however, that the Borrowers shall not be entitled to request any Borrowing
that, if made, would result in an aggregate of more than 6 separate Loans of
any Lender being outstanding hereunder at any one time. For purposes of the
calculation required by the immediately preceding sentence, LIBOR Loans or
CD Loans having different Interest Periods, regardless of whether they
commence on the same date, shall be considered separate Loans and all Loans
of a single Interest Rate Type made on a single date shall be considered a
single Loan if such Loans have the same Interest Period.
(c) Subject to the terms and conditions hereof and in reliance
upon the representations and warranties set forth herein, each Lender shall
make each Loan to be made by it hereunder on the proposed date thereof by
making funds available at the offices of the Administrative Agent at One
First Union Center, 301 S. College Street, Charlotte, NC 28288, ABA
No. 053000219, Attention: Syndication Agency Services, RC No. 5007, GL
No. 465906 (Reference: UCA Group) no later than 1:00 p.m. New York City time
in Federal or other immediately available funds. Upon receipt of the funds
to be made available by the Lenders to fund any Borrowing hereunder, the
Administrative Agent shall disburse such funds by depositing them into an
account of the Borrowers maintained with the Administrative Agent. Loans
shall be made by all the Lenders pro rata in accordance with Section 2.1 and
this Section 2.2.
(d) Notwithstanding any other provision of this Agreement, the
Borrowers shall not be entitled to request any Borrowing if the Interest
Period requested with respect thereto would end after the Maturity Date.
SECTION 2.3. Use of Proceeds.
The proceeds of the Loans shall be used (i) to repay certain
existing indebtedness of UCA and ACTV, including without limitation all
obligations under the ACTV/UCA Credit Agreement, in an aggregate amount not
to exceed $65,000,000; (ii) to provide financing for the Chauncey Group
Acquisition in an aggregate amount not to exceed $65,000,000; (iii) to
refinance certain intercompany indebtedness of Grand Island to Adelphia in
an aggregate amount not to exceed $21,000,000; (iv) for capital expenditures
and (v) for general working capital and corporate purposes.
SECTION 2.4. Borrowing Procedure.
In order to effect a Borrowing, any Borrower shall give the
Administrative Agent prior written telecopier or telephonic (promptly
confirmed in writing) notice (a) in the case of a LIBOR Borrowing, not later
than 11:00 a.m., New York City time, three Business Days before a proposed
Borrowing, (b) in the case of an ABR Borrowing, not later than 11:00 a.m.,
New York City time, on the day of a proposed Borrowing and (c) in the case
of a CD Borrowing, not later than 11:00 a.m., New York City time, two
Business Days before a proposed Borrowing. Such notice shall be irrevocable
and shall in each case specify (a) whether the Borrowing then being
requested is to be a LIBOR Borrowing, an ABR Borrowing or a CD Borrowing,
(b) the date of such Borrowing (which shall be a Business Day) and the
amount thereof, (c) if such Borrowing is to be a LIBOR Borrowing or a CD
Borrowing, the Interest Period with respect thereto and (d) the relevant
Borrower requesting such Borrowing. If no election as to the Interest Rate
Type of a Borrowing is specified in any such notice, then the requested
Borrowing shall be an ABR Borrowing. If no Interest Period with respect to
any LIBOR Borrowing is specified in any such notice, then the Borrower shall
be deemed to have selected an Interest Period of one month's duration. If
no Interest Period with respect to any CD Borrowing is specified in any such
notice, then the Borrower shall be deemed to have selected an Interest
Period of 30 days' duration. The Administrative Agent shall promptly advise
the Lenders of any notice given pursuant to this Section 2.4 and of each
Lender's portion of the requested Borrowing.
SECTION 2.5. Continuation and Conversion of Loans.
The Borrowers shall have the right, at any time, to
convert any Loan or portion thereof to a successive Loan of a different type
or to continue such Loan for a successive Interest Period, subject to the
following:
(a) The Borrowers shall give the Administrative Agent
prior notice of each continuation or conversion hereunder of at least three
Business Days for continuation as or conversion to a LIBOR Loan, two
Business Days for continuation as or conversion to a CD Loan and on the same
Business Day for continuation as or conversion to an ABR Loan; such notice
shall be irrevocable and to be effective, must be received by the
Administrative Agent not later than 11:00 a.m. New York City time, on the
third Business Day in the case of continuation as or conversion to a LIBOR
Loan and the second Business Day in the case of continuation as or
conversion to a CD Loan, preceding the date of such continuation or
conversion and in the case of continuation as or conversion to an ABR Loan,
not later than 11:00 a.m. New York City time on the same Business Day of
such continuation or conversion;
(b) no Event of Default or Default shall have occurred
and be continuing at the time of any conversion to a LIBOR Loan or CD Loan
or continuation of any such Loan into a successive Interest Period;
(c) if fewer than all Loans at the time outstanding
shall be continued or converted, such continuation or conversion shall be
made pro rata among the Banks in accordance with the respective principal
amounts of the Loans held by the Banks immediately prior to such
continuation or conversion;
(d) the aggregate principal amount of each Loan continued
as or converted to a LIBOR Loan or CD Loan, shall be not less than
$5,000,000, and shall be an integral multiple of $1,000,000, except that any
outstanding LIBOR Loan or CD Loan may be continued or converted as a whole,
but not in part, irrespective of such numerical limitations;
(e) accrued interest on the Loan (or portion thereof)
being continued or converted shall be paid in full by the Borrowers at the
time of continuation or conversion;
(f) the Interest Period with respect to a new Loan
effected by a continuation or conversion shall commence on the date of
continuation or conversion;
(g) a LIBOR Loan or CD Loan may be continued as a Loan of
the same type or converted to another type of Loan only on the last day of
an Interest Period; and
(h) each request for a conversion to or continuation as a
LIBOR Loan or a CD Loan which fails to state an applicable Interest Period
shall be deemed to be a request for an Interest Period of a one-month or
30-days duration, respectively.
In the event that the Borrowers shall not give notice to continue or convert
any LIBOR Loan or CD Loan as provided above, such Loan (unless repaid) shall
automatically be converted to an ABR Loan at the expiration of the
then-current Interest Period. The Administrative Agent shall, after it
receives notice from the Borrowers, promptly give each Lender notice of any
continuation or conversion, in whole or part, of any Loan made by such
Lender. It is understood by all parties to this Agreement that the
continuation or conversion of any Loan pursuant to this Section 2.5 does not
constitute a repayment and a reborrowing hereunder and that the designation
of a Loan as an ABR Loan, a CD Loan or LIBOR Loan is merely a mechanism for
determining the interest rate applicable to such Loan.
SECTION 2.6. Fees.
(a) The Borrowers agree to pay to each Lender, through the
Administrative Agent, on each March 31, June 30, September 30 and December
31 and on the date on which the Commitment of such Lender shall be
terminated as provided herein, a commitment fee (a "Commitment Fee") of 3/8
of 1% per annum, on the average daily amount by which the Commitment of such
Lender exceeds the sum of such Lender's outstanding Loans during the
preceding quarter (or shorter period commencing with the Closing Date, or
ending with the Maturity Date or any date on which the Commitment of such
Lender shall be terminated). All Commitment Fees shall be computed on the
basis of the actual number of days elapsed in a year of 360 days. The
Commitment Fee due to each Lender shall commence to accrue on the Closing
Date, and shall cease to accrue on the earlier of the Maturity Date and the
termination of the Commitment of such Lender as provided herein.
(b) The Borrowers agree to pay to each Lender when due any and
all fees payable to such Lender pursuant to agreements between each Lender
and the Borrowers.
(c) All fees shall be paid on the dates due, in immediately
available funds, to the Administrative Agent for distribution, if and as
appropriate, among the Lenders. Once paid, none of the fees shall be
refundable under any circumstances absent manifest error.
SECTION 2.7. Notes; Repayment of Loans.
The Loans made by each Lender shall be evidenced by a single
Note duly executed on behalf of the Borrowers, dated as of the date hereof,
in substantially the form attached hereto as Exhibit A (each a "Note") with
the blanks appropriately filled, payable to the order of such Lender in a
principal amount equal to the Commitment of such Lender. The outstanding
principal balance of each Loan, as evidenced by the Note, shall be payable
on the Maturity Date. Each Note shall bear interest from the Closing Date
on the outstanding principal balance thereof as set forth in Section 2.8.
Each Lender is hereby authorized by the Borrowers, but not obligated, to,
endorse on the schedule to the Note held by such Lender (or on a
continuation of such schedule attached to such Note and made a part
thereof), or otherwise to record in such Lender's internal records, an
appropriate notation evidencing the date and amount of each Loan of such
Lender, each payment or prepayment of principal of Loan and the other
information provided on such schedule; provided, however, that the failure
of any Lender to make such a notation or any error therein shall not in any
manner affect the obligation of the Borrowers to repay the Loans made by
such Lender in accordance with the terms of such Lender's Note.
SECTION 2.8. Interest on Loans.
(a) Subject to the provisions of Section 2.9, the Loans
comprising each LIBOR Borrowing shall bear interest (computed on the basis
of the actual number of days elapsed over a year of 360 days) at a rate per
annum equal to LIBOR for the Interest Period in effect for such Borrowing
plus the Applicable Margin.
(b) Subject to the provisions of Section 2.9, the Loans
comprising each ABR Borrowing shall bear interest (computed on the basis of
the actual number of days elapsed over a year of 365 or 366 days, as the
case may be, when determined by reference to the Prime Rate and over a year
of 360 days in all other cases) at a rate per annum equal to the Alternate
Base Rate in effect for such Borrowing plus the Applicable Margin.
(c) Subject to the provisions of Section 2.9, the Loans
comprising each CD Borrowing shall bear interest (computed on the basis of
the actual number of days elapsed over a year of 360 days) at a rate per
annum equal to the CD Rate in effect for such Borrowing plus the Applicable
Margin.
(d) Interest on each Loan shall be payable on each Interest
Payment Date applicable to such Loan. The LIBOR Rate, CD Rate or the
Alternate Base Rate for each Interest Period or day within an Interest
Period shall be determined by the Administrative Agent, and such
determination shall be conclusive absent manifest error.
SECTION 2.9. Interest on Event of Default.
Upon any Event of Default hereunder, the Borrowers shall on
demand from time to time pay interest, to the extent permitted by Applicable
Law, on all outstanding Loans at a rate per annum computed on the basis of
the actual number of days elapsed over a year of 365 or 366 days, as
applicable, in the case of amounts bearing interest determined by reference
to the Prime Rate and a year of 360 days in all other cases, equal to (a) in
the case of the remainder of the then current Interest Period for any LIBOR
Loan or CD Loan, the rate applicable to such Loan under Section 2.8 plus 2%
per annum and (b) in the case of any other amount, the rate that would at
the time be applicable to an ABR Loan under Section 2.8 plus 2% per annum.
SECTION 2.10. Alternate Rate of Interest.
(a) In the event, and on each occasion, that on the day two
Business Days prior to the commencement of any Interest Period for a LIBOR
Loan, the Administrative Agent shall have determined that Dollar deposits in
the amount of the requested principal amount of such LIBOR Loan are not
generally available in the London Interbank Market, or that the rate at
which such Dollar deposits are being offered will not adequately and fairly
reflect the cost to any Lender of making or maintaining its portion of such
LIBOR Loan during such Interest Period, or that reasonable means do not
exist for ascertaining LIBOR, the Administrative Agent shall, as soon as
practicable thereafter, give written or telecopier notice of such
determination to the Borrowers and the Lenders. In the event of any such
determination, until the Administrative Agent shall have determined that
circumstances giving rise to such notice no longer exist, any request by a
Borrower for a LIBOR Borrowing or for conversion to a LIBOR Loan pursuant to
Section 2.4 or 2.5 shall be of no force and effect and shall be deemed to be
a request for a CD Loan or, if Section 2.10(b) shall be applicable, for an
ABR Loan. Each determination by the Administrative Agent hereunder shall be
conclusive absent manifest error.
(b) In the event, and on each occasion, that on the day one
Business Day prior to the commencement of any Interest Period for a CD Loan,
the Administrative Agent shall have received notice from any Lender of such
Lender's determination (which determination shall be conclusive and binding
upon the Borrowers absent manifest error) that the CD Rate for such CD Loan
will not adequately and fairly reflect the cost to such Lender of making or
maintaining its portion of such CD Loan during such Interest Period or that
reasonable means do not exist for ascertaining the CD Rate for any reason,
including, without limitation, the inability of the Administrative Agent to
obtain sufficient bids in accordance with the terms of the definition of
Fixed Certificate of Deposit Rate, the Administrative Agent shall, as soon
as practicable thereafter, give written or telecopier notice of such
determination to the Borrowers and the Lenders. In the event of any such
determination, until the Administrative Agent shall have determined that
circumstances giving rise to such notice no longer exist, any request by a
Borrower for a CD Borrowing or for conversion to a CD Loan pursuant to
Section 2.4 or 2.5 shall be of no force and effect and shall be deemed to be
a request for a LIBOR Loan or, if Section 2.10(a) shall be applicable, for
an ABR Loan. Each determination by the Administrative Agent hereunder shall
be conclusive absent manifest error.
SECTION 2.11. Termination and Reduction of Commitments.
(a) The Commitments of all of the Lenders shall be
automatically terminated on the earlier of (i) the Maturity Date or (ii) 90
days after the date hereof if the Closing Date has not occurred.
(b) The Total Commitment shall be automatically and permanently
reduced (i) on June 30, 1997 in an amount equal to the lesser of (x)
$25,000,000 and (y) 50% of the unused and available Total Commitment
determined at such date and (ii) in the amounts and on the dates set forth
below:
Reduction Date Reduction Amount
(expressed as a
Percentage of the
Total Commitment)
June 30, 1997 2.00%
September 30, 1997 2.00%
December 31, 1997 2.00%
March 31, 1998 2.00%
June 30, 1998 3.00%
September 30, 1998 3.00%
December 31, 1998 3.00%
March 31, 1999 3.00%
June 30, 1999 3.50%
September 30, 1999 3.50%
December 31, 1999 3.50%
March 31, 2000 3.50%
June 30, 2000 4.00%
September 30, 2000 4.00%
December 31, 2000 4.00%
March 31, 2001 4.00%
June 30, 2001 5.00%
September 30, 2001 5.00%
December 31, 2001 5.00%
March 31, 2002 5.00%
June 30, 2002 5.00%
September 30, 200 5.00%
December 31, 2002 5.00%
March 31, 2003 5.00%
June 30, 2003 5.00%
September 30, 2003 5.00%
In the event that on any date the Total Commitment is reduced
pursuant to this Section 2.11(b) the aggregate amount of the outstanding
Loans would exceed the Total Commitment in effect on such date after giving
effect to such reduction in the Total Commitment, the Borrowers shall, on
such date, make a mandatory prepayment of the Loans in a principal amount
equal to such excess, so that after giving effect to such prepayment, the
aggregate principal amount of all outstanding Loans does not exceed the
Total Commitment then in effect.
(c) Subject to Section 2.12(b), upon at least three Business
Days' prior irrevocable written or telecopy notice to the Administrative
Agent, the Borrowers may at any time in whole permanently terminate, or from
time to time in part permanently reduce, the Total Commitment; provided,
however, that (i) each partial reduction of the Total Commitment shall be in
an integral multiple of $1,000,000 and in a minimum principal amount of
$10,000,000 and (ii) the Borrowers shall not be entitled to make any such
termination or reduction that would reduce the Total Commitment to an amount
less than the sum of the aggregate outstanding principal amount of the
Loans.
(d) Upon consummation of any Permitted Asset Sale, a portion
of the Total Commitment equal to the amount of Net Cash Proceeds of such
Permitted Asset Sale shall become restricted and thereafter may be utilized
only to fund such Acquisition(s) of like assets made within twelve months of
such Permitted Asset Sale at fair market value and which are otherwise
permitted hereunder, and provided, further, that upon the twelve month
anniversary of such Permitted Asset Sale the Total Commitment shall be
permanently reduced by an amount equal to the sum of such Net Cash Proceeds
less the aggregate of Borrowings made to fund such Acquisition(s) during the
period.
(e) Each reduction in the Total Commitment hereunder shall be
made ratably among the Lenders in accordance with their respective
Commitments. The Borrowers shall pay to the Administrative Agent for the
account of the Lenders on the date of each termination or reduction in the
Total Commitment, the Commitment Fees on the amount of the Total Commitment
so terminated or reduced accrued to the date of such termination or
reduction. Each reduction of the Total Commitment pursuant to Section
2.11(b)(i), Section 2.11(c) or Section 2.11(d) shall reduce on a pro rata
basis the remaining scheduled reductions of the Total Commitment pursuant to
Section 2.11(b)(ii) scheduled to occur on or after the date of such
reduction.
SECTION 2.12. Prepayment of Loans.
(a) Prior to the Maturity Date, the Borrowers shall have the
right at any time to prepay any Borrowing, in whole or in part, subject to
the requirements of Section 2.16 but otherwise without premium or penalty,
upon prior written or telecopy notice to the Administrative Agent before
10:00 a.m. New York City time at least one Business Day in the case of an
ABR Loan, at least three Business Days in the case of a LIBOR Loan and at
least two Business Days in the case of a CD Loan; provided, however, that
each such partial prepayment shall be in an integral multiple of $1,000,000
and in a minimum aggregate principal amount of $5,000,000.
(b) On any date when the outstanding Loans (after giving effect
to any Borrowings effected on such date) exceeds the Total Commitment, the
Borrowers shall make a mandatory prepayment of the Loans in such amount as
may be necessary so that the aggregate amount of outstanding Loans after
giving effect to such prepayment does not exceed the Total Commitment then
in effect.
(c) An amount equal to 100% of the Net Cash Proceeds of any
Permitted Asset Sale by a Borrower or a Restricted Subsidiary shall be
applied to prepay the Loans upon consummation of such Permitted Asset Sale.
(d) Each notice of prepayment pursuant to Section 2.12(a) shall
specify the specific Borrowing(s), the prepayment date and the aggregate
principal amount of each Borrowing to be prepaid, shall be irrevocable and
shall commit the Borrowers to prepay such Borrowing(s) by the amount stated
therein. All prepayments under this Section 2.12 shall be accompanied by
accrued interest on the principal amount being prepaid, to the date of
prepayment.
(e) Any prepayments required by Section 2.12(b) and Section
2.12(c) shall be applied to outstanding ABR Loans up to the full amount
thereof then to outstanding CD Loans and thereafter to outstanding LIBOR
Loans.
SECTION 2.13. Reserve Costs.
The Borrowers agree to pay to each Lender from time to time such
amounts as shall be necessary to compensate such Lender for the portion of
the cost of making or maintaining any CD Loans made by it resulting from any
increase in Statutory Reserves or the Assessment Rate, it being understood
that the rates of interest applicable to CD Loans hereunder have been
determined on the hypothetical assumption that Statutory Reserves and the
Assessment Rate will not increase during an Interest Period. It is agreed
that for purposes of this Section 2.13 the CD Loans made hereunder shall be
deemed to be subject to the reserve requirements of Regulation D without
benefit or credit of proration, exemptions or offsets which might otherwise
be available to any Lender from time to time under Regulation D.
SECTION 2.14. Reserve Requirements; Change in Circumstances.
(a) Notwithstanding any other provision herein, if after the
date of this Agreement any change in Applicable Law or regulation or in the
interpretation or administration thereof by any Governmental Authority
charged with the interpretation or administration thereof (whether or not
having the force of law) (i) shall subject any Lender to, or increase the
net amount of, any tax, levy, impost, duty, charge, fee, deduction or
withholding with respect to any LIBOR Loan or CD Loan or shall change the
basis of taxation of payments to any Lender of the principal of or interest
on any LIBOR Loan or CD Loan made by such Lender or any other fees or
amounts payable hereunder (other than (x) taxes imposed on the overall net
income of such Lender by the jurisdiction in which such Lender has its
principal office or its applicable Lending Office or by any political
subdivision or taxing authority therein (or any tax which is enacted or
adopted by such jurisdiction, political subdivision or taxing authority as a
direct substitute for any such taxes) or (y) any tax, assessment, or other
governmental charge that would not have been imposed but for the failure of
any Lender to comply with any certification, information, documentation or
other reporting requirement), (ii) shall impose, modify or deem applicable
any reserve, special deposit or similar requirement against assets of,
deposits with or for the account of, or credit extended by, any Lender, or
(iii) shall impose on any Lender or the London Interbank Market any other
condition affecting this Agreement or any LIBOR Loan or any CD Loan made by
such Lender, and the result of any of the foregoing shall be to increase the
cost to such Lender of making or maintaining any LIBOR Loan or any CD Loan
or to reduce the amount of any sum received or receivable by such Lender
hereunder (whether of principal, interest or otherwise) in respect thereof
by an amount deemed in good faith by such Lender to be material, then the
Borrowers shall pay such additional amount or amounts to the Administrative
Agent for the account of such Lender as will compensate such Lender for such
increase or reduction to such Lender upon demand by such Lender.
(b) If, after the date of this Agreement, any Lender shall have
determined in good faith that the applicability of any law, rule, regulation
or guideline adopted after the date hereof pursuant to, or arising out of,
the July 1988 report of the Basle Committee on Lending Regulations and
Supervisory Practices entitled "International Convergence of Capital
Measurement and Capital Standards", or the adoption after the date hereof of
any applicable law, rule, regulation or guideline regarding capital
adequacy, or any change therein, or any change in the interpretation or
administration thereof by any Governmental Authority, central bank or
comparable agency charged with the interpretation or administration thereof,
or compliance by any Lender (or any Lending Office of such Lender) with any
request or directive regarding capital adequacy (whether or not having the
force of law) of any such Governmental Authority, central bank or comparable
agency, has or would have the effect of reducing the rate of return on such
Lender's capital or on the capital of the Lender's holding company, if any,
as a consequence of its obligations hereunder to a level below that which
such Lender (or its holding company) could have achieved but for such
applicability, adoption, change or compliance (taking into consideration
such Lender's policies or the policies of its holding company, as the case
may be, with respect to capital adequacy) by an amount deemed by such Lender
to be material, then, from time to time, the Borrowers shall pay to the
Administrative Agent for the account of such Lender such additional amount
or amounts as will compensate such Lender for such reduction upon demand by
such Lender.
(c) A certificate of a Lender setting forth in reasonable
detail (i) such amount or amounts as shall be necessary to compensate such
Lender as specified in paragraph (a) or (b) above, as the case may be, and
(ii) the calculation of such amount or amounts referred to in the preceding
clause (i), shall be delivered to the Borrowers and shall be conclusive
absent manifest error. The Borrowers shall pay the Administrative Agent for
the account of such Lender the amount shown as due on any such certificate
within 10 Business Days after its receipt of the same.
(d) Failure on the part of any Lender to demand compensation
for any increased costs or reduction in amounts received or receivable or
reduction in return on capital with respect to any Interest Period shall not
constitute a waiver of such Lender's rights to demand compensation for any
increased costs or reduction in amounts received or receivable or reduction
in return on capital with respect to such Interest Period or any other
Interest Period. The protection of this Section 2.14 shall be available to
each Lender regardless of any possible contention of invalidity or
inapplicability of the law, regulation or condition which shall have been
imposed. Each Lender agrees that it will treat the Borrowers consistent
with its internal policies with respect to the foregoing.
(e) Each Lender agrees that, as promptly as practicable after
it becomes aware of the occurrence of an event or the existence of a
condition that (i) would cause it to incur any increased cost under this
Section 2.14, Section 2.15 or Section 2.20 or (ii) would require the
Borrowers to pay an increased amount under this Section 2.14, Section 2.15
or Section 2.20, it will use reasonable efforts to notify the Borrowers of
such event or condition and, to the extent not inconsistent with such
Lender's internal policies, will use its reasonable efforts to make, fund or
maintain the affected Loans of such Lender through another Lending Office of
such Lender if as a result thereof the additional monies which would
otherwise be required to be paid or the reduction of amounts receivable by
such Lender thereunder in respect of such Loans would be materially reduced,
or any inability to perform would cease to exist, or the increased costs
which would otherwise be required to be paid in respect of such Loans
pursuant to this Section 2.14, Section 2.15 or Section 2.20 would be
materially reduced or the taxes or other amounts otherwise payable under
this Section 2.14, Section 2.15 or Section 2.20 would be materially reduced,
and if, as determined by such Lender, in its sole discretion, the making,
funding or maintaining of such Loans through such other Lending Office would
not otherwise materially adversely affect such Loans or such Lender.
(f) In the event any Lender shall have delivered to the
Borrowers a notice that LIBOR Loans or CD Loans are no longer available from
such Lender pursuant to Section 2.15, that amounts are due to such Lender
pursuant to paragraph (c) hereof or that any of the events designated in
paragraph (e) hereof have occurred, the Borrowers may (but subject in any
such case to the payments required by Section 2.16), provided that there
shall exist no Default or Event of Default, upon at least five Business
Days' prior written or telecopier notice to such Lender and the
Administrative Agent, but not more than 30 days after receipt of notice from
such Lender, identify to the Administrative Agent a lending institution
reasonably acceptable to the Administrative Agent which will purchase the
Commitment and the amount of outstanding Loans from the Lender providing
such notice and such Lender shall thereupon assign its Commitment and any
Loans owing to such Lender and the Note held by such Lender to such
replacement lending institution pursuant to Section 12.3. Such notice shall
specify an effective date for such assignment and at the time thereof, the
Borrowers shall pay all accrued interest, Commitment Fees and all other
amounts (including without limitation all amounts payable under this
Section) owing hereunder to such Lender as at such effective date for such
assignment.
SECTION 2.15. Change in Legality.
Notwithstanding anything to the contrary herein contained, if
any change in any law or regulation or in the interpretation thereof by any
Governmental Authority charged with the administration or interpretation
thereof shall make it unlawful for any Lender to make or maintain any LIBOR
Loan or to give effect to its obligations as contemplated hereby, then, by
written notice to the Borrowers and to the Administrative Agent, such Lender
may:
(a) declare that LIBOR Loans will not thereafter be made
by such Lender hereunder, whereupon the Borrowers shall be
prohibited from requesting LIBOR Loans from such Lender
hereunder unless such declaration is subsequently withdrawn; and
(b) require that all outstanding LIBOR Loans made by it
be converted to ABR Loans, in which event (A) all such LIBOR
Loans shall be automatically converted to ABR Loans as of the
effective date of such notice as provided in Section 2.15(b) and
(B) all payments and prepayments of principal which would
otherwise have been applied to repay the converted LIBOR Loans
shall instead be applied to repay the ABR Loans resulting from
the conversion of such LIBOR Loans.
SECTION 2.16. Reimbursement of Lenders.
(a) The Borrowers shall reimburse each Lender on demand for any
loss incurred or to be incurred by it in the reemployment of the funds
released (i) by any prepayment (for any reason) of any LIBOR Loan or CD Loan
if such Loan is repaid other than on the last day of the applicable Interest
Period for such Loan or (ii) in the event that after the Borrowers deliver a
notice of borrowing under Section 2.4 or a notice of continuation or
conversion under Section 2.5 in respect of LIBOR Loans or CD Loans, the
applicable Loan is not made on the first day of the Interest Period
specified by the Borrowers for any reason other than (I) a suspension or
limitation under Section 2.15 of the right of the Borrowers to select a
LIBOR Loan or CD Loan or (II) a breach by such Lender of its obligations
hereunder. In the case of such failure to borrow, continue or convert, such
loss shall be the amount as reasonably determined by such Lender as the
excess, if any of (A) the amount of interest which would have accrued to
such Lender on the amount not borrowed, continued or converted at a rate of
interest equal to the interest rate applicable to such Loan pursuant to
Section 2.8, for the period from the date of such failure to borrow,
continue or convert to the last day of the Interest Period for such Loan
which would have commenced on the date of such failure to borrow, continue
or convert over (B) the amount realized by such Lender in reemploying the
funds not advanced during the period referred to above. In the case of a
payment other than on the last day of the Interest Period for a Loan, such
loss shall be the amount as reasonably determined by the Administrative
Agent as the excess, if any, of (A) the amount of interest which would have
accrued on the amount so paid at a rate of interest equal to the interest
rate applicable to such Loan pursuant to Section 2.8, for the period from
the date of such payment to the last day of the then current Interest Period
for such Loan, over (B) the amount equal to the product of (x) the amount of
the Loan so paid times (y) the current daily yield on U.S. Treasury
Securities (at such date of determination) with maturities approximately
equal to the remaining Interest Period for such Loan times (z) the number of
days remaining in the Interest Period for such Loan. Each Lender shall
deliver to the Borrowers from time to time one or more certificates setting
forth the amount of such loss (and in reasonable detail the manner of
computation thereof) as determined by such Lender, which certificates shall
be conclusive absent manifest error. The Borrowers shall pay to the
Administrative Agent for the account of each Lender the amount shown as due
on any certificate within thirty (30) days after its receipt of the same.
(b) In the event the Borrowers fail to prepay any Loan on the
date specified in any prepayment notice delivered pursuant to Section
2.12(a), the Borrowers on demand by any Lender shall pay to the
Administrative Agent for the account of such Lender any amounts required to
compensate such Lender for any loss incurred by such Lender as a result of
such failure to prepay, including, without limitation, any loss, cost or
expenses incurred by reason of the acquisition of deposits or other funds by
such Lender to fulfill deposit obligations incurred in anticipation of such
prepayment. Each Lender shall deliver to the Borrowers and the
Administrative Agent from time to time one or more certificates setting
forth the amount of such loss (and in reasonable detail the manner of
computation thereof) as determined by such Lender, which certificates shall
be conclusive absent manifest error.
SECTION 2.17. Pro Rata Treatment.
Except as permitted under Sections 2.13, 2.14(c), 2.15 and 2.16,
each Borrowing, each payment or prepayment of principal of any Borrowing,
each payment of interest on the Loans, each payment of the Commitment Fees,
each reduction of the Total Commitment and each conversion of any Borrowing,
or continuation of any Borrowing, shall be allocated pro rata among the
Lenders in accordance with their respective Commitments (or, if such
Commitments shall have expired or been terminated, in accordance with the
respective principal amount of their outstanding Loans). Each Lender agrees
that in computing such Lender's portion of any Borrowing to be made
hereunder, the Administrative Agent may, in its discretion, round each
Lender's percentage of such Borrowing computed in accordance with Section
2.1, to the next higher or lower whole dollar amount.
SECTION 2.18. Right of Setoff.
If any Event of Default shall have occurred and be continuing
and any Lender shall have requested the Administrative Agent to declare the
Notes immediately due and payable pursuant to Article 7, each Lender is
hereby authorized at any time and from time to time, to the fullest extent
permitted by Applicable Law, to set off and apply any and all deposits of
the Debtors (general or special, time or demand, provisional or final) at
any time held by such Lender and any other indebtedness at any time owing by
such Lender to, or for the credit or the account of, the Debtors, against
any or all the Obligations now or hereafter existing under this Agreement
and the Note held by such Lender, irrespective of whether or not such Lender
shall have made any demand under this Agreement or such Note and although
such Obligations may be unmatured. Each Lender agrees promptly to notify
the Debtors after any such setoff and application made by such Lender, but
the failure to give such notice shall not affect the validity of such setoff
and application. The rights of each Lender under this Section 2.18 are in
addition to other rights and remedies (including other rights of setoff)
which such Lender may have.
SECTION 2.19. Manner of Payments.
All payments by the Borrowers hereunder and under the Notes
shall be made in Dollars in Federal or other immediately available funds at
the office of the Administrative Agent at One First Union Center, 301 S.
College Street, Charlotte, NC 28288, ABA No. 053000219, Attention:
Syndication Agency Services, RC No. 5007, GL No. 465906 (Reference: UCA
Group) no later than 12:00 noon, New York City time, on the date on which
such payment shall be due. Interest in respect of any Loan hereunder shall
accrue from and including the date of such Loan to, but excluding, the date
on which such Loan is paid or refinanced with a Loan of a different Interest
Rate Type.
SECTION 2.20. United States Withholding.
(a) Prior to the date of the initial Loans hereunder, and from
time to time thereafter if requested by the Borrowers or the Administrative
Agent or required because, as a result of a change in Applicable Law or a
change in circumstances or otherwise, a previously delivered form or
statement becomes incomplete or incorrect in any material respect, each
Lender organized under the laws of a jurisdiction outside the United States
shall provide, if applicable, the Administrative Agent and the Borrowers
with complete, accurate and duly executed forms or other statements
prescribed by the Internal Revenue Service of the United States certifying
such Lender's exemption from, or entitlement to a reduced rate of, United
States withholding taxes (including backup withholding taxes) with respect
to all payments to be made to such Lender hereunder and under such Lender's
Note.
(b) The Borrowers and the Administrative Agent shall be
entitled to deduct and withhold any and all present or future taxes or
withholdings, and all liabilities with respect thereto, from payments
hereunder or under any of or all of the Notes, if and to the extent that the
Borrowers or the Administrative Agent in good faith determines that such
deduction or withholding is required by the law of the United States,
including, without limitation, any applicable treaty of the United States.
In the event the Borrowers or the Administrative Agent shall so determine
that deduction or withholding of taxes is required, such party or parties,
as the case may be, shall advise the affected Lender as to the basis of such
determination prior to actually deducting and withholding such taxes. In
the event the Borrowers or the Administrative Agent shall so deduct or
withhold taxes from amounts payable hereunder, such party or parties as the
case may be (i) shall pay to or deposit with the appropriate taxing
authority in a timely manner the full amount of taxes it has deducted or
withheld; (ii) shall provide evidence of payment of such taxes to, or the
deposit thereof with, the appropriate taxing authority and a statement
setting forth the amount of taxes deducted or withheld, the applicable rate,
and any other information or documentation reasonably requested by the
Lenders from whom the taxes were deducted or withheld; and (iii) shall
forward to such Lenders any receipt for such payment or deposit of the
deducted or withheld taxes as may be issued from time to time by the
appropriate taxing authority. Unless the Borrowers and the Administrative
Agent have received forms or other documents satisfactory to them indicating
that payments hereunder or under any of or all of the Notes are not subject
to United States withholding tax or are subject to such tax at a rate
reduced by an applicable tax treaty, the Borrowers or the Administrative
Agent may withhold taxes from such payments at the applicable statutory rate
in the case of payments to or for any Lender organized under the laws of a
jurisdiction outside the United States.
(c) Each Lender agrees (i) that as between it and the
Borrowers or the Administrative Agent, it shall be the Person to deduct and
withhold taxes, and to the extent required by law it shall deduct and
withhold taxes, on amounts that such Lender may remit to any other Person(s)
by reason of any undisclosed transfer or assignment of an interest in this
Agreement to such other Person(s) pursuant to paragraph (g) of Section 12.3
and (ii) to indemnify the Borrowers and the Administrative Agent and any
officers, directors, agents, or employees of the Borrowers or the
Administrative Agent against, and to hold them harmless from, any tax,
interest, additions to tax, penalties, reasonable counsel and accountants'
fees, disbursements or payments arising from the assertion by any
appropriate taxing authority of any claim against them relating to a failure
to withhold taxes as required by Applicable Law with respect to amounts
described in clause (i) of this paragraph (c).
(d) Each assignee of a Lender's interest in this Agreement in
conformity with Section 12.3 shall be bound by this Section 2.20, so that
such assignee will have all of the obligations and provide all of the forms
and statements and all indemnities, representations and warranties required
to be given under this Section 2.20.
(e) In the event that any withholding taxes shall become
payable solely as a result of any change in any statute, treaty, ruling,
determination or regulation occurring after the Initial Date in respect of
any sum payable hereunder or under any other Fundamental Document to any
Lender or the Administrative Agent (i) the sum payable by the Borrowers
shall be increased as may be necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this Section 2.20) such Lender or the Administrative Agent (as the case may
be) receives an amount equal to the sum it would have received had no such
deductions been made, (ii) the Borrowers shall make such deductions and
(iii) the Borrowers shall pay the full amount deducted to the relevant
taxation authority or other authority in accordance with Applicable Law.
For purposes of this Section 2.20, the term "Initial Date" shall mean (i) in
the case of the Administrative Agent, the date hereof, (ii) in the case of
each Lender as of the date hereof, the date hereof and (iii) in the case of
any other Lender, the effective date of the Assignment and Acceptance
pursuant to which it became a Lender.
SECTION 2.21. Interest Adjustments.
If the provisions of this Agreement or any Note would at any
time require payment by the Borrowers to any Lender of any amount of
interest in excess of the maximum amount then permitted by the law
applicable to any Loan, the interest payments to such Lender shall be
reduced to the extent necessary so that such Lender shall not receive
interest in excess of such maximum amount. If, as a result of the foregoing
such Lender shall receive interest payments hereunder or under a Note in an
amount less than the amount otherwise provided hereunder, such deficit
(hereinafter called the "Interest Deficit") will, to the fullest extent
permitted by Applicable Law, cumulate and will be carried forward (without
interest) until the termination of this Agreement. Interest otherwise
payable to a Lender hereunder and under a Note for any subsequent period
shall be increased by the maximum amount of the Interest Deficit that may be
so added without causing the Lender to receive interest in excess of the
maximum amount then permitted by the law applicable to the Loans.
The amount of the Interest Deficit relating to the Loans shall
be paid in full at the time of any optional prepayment by the Borrowers to
the Lenders of all the Loans at that time outstanding pursuant to Section
2.12(a) hereof. The amount of the Interest Deficit relating to the Loans at
the time of any complete payment of the Loans at that time outstanding
(other than an optional prepayment thereof pursuant to Section 2.12(a)
hereof) shall be cancelled and not paid.
3. REPRESENTATIONS AND WARRANTIES OF BORROWERS AND GUARANTORS
In order to induce the Lenders to enter into this Agreement and
to make the Loans provided for herein, each of the Borrowers and each of the
Guarantors, jointly and severally, makes the following representations and
warranties to the Administrative Agent and the Lenders, all of which shall
survive the execution and delivery of this Agreement, the issuance of the
Notes and the making of the Loans:
SECTION 3.1. Corporate Existence and Power.
Each Borrower and its Subsidiaries have been duly organized and
are validly existing in good standing under the laws of their respective
jurisdictions of incorporation and are in good standing as a foreign
corporation in all jurisdictions where the nature of their properties or
business so requires it and where a failure to be in good standing as a
foreign corporation would have a material adverse effect on the business,
assets or condition, financial or otherwise, of the Borrowers and their
respective Subsidiaries, taken as a whole. Each Borrower and each of its
Subsidiaries have the corporate power to own their respective properties and
carry on their respective businesses as now being conducted, and in the case
of each Borrower and each Guarantor, to execute, deliver and perform its
obligations (as applicable) under this Agreement, the Notes and the other
Fundamental Documents and other documents contemplated hereby and to borrow
hereunder and to grant to the Administrative Agent, for the benefit of the
Lenders, a security interest in the Collateral.
SECTION 3.2. Corporate Authority and No Violation.
The execution, delivery and performance of this Agreement and
the other Fundamental Documents, the borrowings hereunder and the execution
and delivery of the Notes (a) have been duly authorized by all necessary
corporate action on the part of each Borrower and each Guarantor, (b) will
not violate any provision of any Applicable Law applicable to any Borrower
or any of its Subsidiaries or any of their respective properties or assets,
(c) will not violate any provision of the Certificate of Incorporation or
By-Laws of any Borrower or any of its Subsidiaries, or any indenture, any
agreement for borrowed money, any bond, note or other similar instrument or
any other material agreement to which any Borrower or any of its
Subsidiaries is a party or by which any Borrower or any of its Subsidiaries
or any of their respective properties or assets are bound, (d) will not be
in conflict with, result in a breach of, or constitute (with due notice or
lapse of time or both) a default under, any material indenture, agreement,
bond, note or instrument and (e) will not result in the creation or
imposition of any Lien upon any property or assets of any Borrower or any of
its Subsidiaries other than pursuant to this Agreement or any other
Fundamental Document.
SECTION 3.3. Governmental and Other Approval and Consents.
Except as set forth in Schedule 3.3, no action, consent or
approval of, or registration or filing with, or any other action by, any
governmental agency, bureau, commission or court is required in connection
with the execution, delivery and performance by the Borrowers and the
Guarantors of this Agreement or the other Fundamental Documents except for
filings of UCC-1 financing statements in the offices listed on Schedule 3.3.
SECTION 3.4. Financial Condition of Borrowers and Oxford.
(a) The (i) audited combined financial statements of UCA and
its Subsidiaries and ACTV for the fiscal year ended March 31, 1994, (ii)
unaudited combined financial statements of UCA and its Subsidiaries and ACTV
for the interim period ended September 30, 1994, (iii) unaudited financial
statements of Grand Island for the fiscal year ended March 31, 1994, (iv)
unaudited financial statements of Grand Island for the interim period ended
September 30, 1994, (v) unaudited combined financial statements of Lorain,
Van Buren and Multi-Channel for the fiscal year ended March 31, 1994, (vi)
unaudited combined financial statements of Lorain, Van Buren and Multi-
Channel for the interim period ended September 30, 1994 and (vii) unaudited
combined financial statements of the Borrowers and their respective
Subsidiaries for the interim period ended December 31, 1994 together with
the related unaudited statements of income, shareholders' equity and cash
flows for such periods fairly present the financial condition of the
Borrowers and their respective Subsidiaries as at the dates indicated and
the results of operations and cash flows for the periods indicated in
conformity with GAAP subject, in the case of unaudited statements, to normal
year-end adjustments.
(b) The unaudited financial statements of Oxford for the
interim period ended June 30, 1994, together with the related unaudited
statements of income and shareholders' equity for such periods fairly
present the financial condition of Oxford as at the dates indicated and the
results of operations for the periods indicated in conformity with GAAP
subject, in the case of unaudited statements to normal year-end adjustments.
SECTION 3.5. No Material Adverse Change.
Since December 31, 1994 there has been no material adverse
change in the business, assets, condition (financial or otherwise) or
results of operations of the Borrowers and their respective Subsidiaries,
taken as a whole.
SECTION 3.6. Subsidiaries.
Annexed hereto as Schedule 3.6 is a correct and complete list as
of the date hereof of all Subsidiaries of each Borrower showing, as to each
Subsidiary, its name, the jurisdiction of its incorporation, its authorized
capitalization and the ownership of the Capital Stock of such Subsidiary.
SECTION 3.7. Copyrights, Patents and Other Rights.
(a) Each Borrower and its Subsidiaries possess all U.S. and
foreign trademarks, service marks, trademark and service mark registrations
and applications for registration, tradenames, assumed names, slogans,
logos, and any goodwill of the businesses associated with any of the
foregoing; all U.S. and foreign copyrights, copyright registrations and
applications for registration of any copyright, all U.S. and foreign patents
and patent applications, all technology and know-how (including, without
limitation, all trade secrets, data bases customers lists, research and
development data, confidential information, discoveries, inventions,
improvements); and other similar intangible property and rights
(collectively, the "Proprietary Rights") which are necessary to conduct
their respective businesses.
(b) The use of the Proprietary Rights by the Borrowers and
their respective Subsidiaries, to the best knowledge of each Borrower and
Guarantor, does not infringe on the rights of any other Person, and except
as set forth on Schedule 3.7, (i) there is no claim, suit, action or
proceeding pending or, to any Borrower's or any Guarantor's knowledge
threatened, against any Borrower or any of its Subsidiaries that involves a
claim of infringement of any Proprietary Right and (ii) neither any Borrower
nor any of its Subsidiaries has any knowledge of any existing infringement
by any other Person of any of the Proprietary Rights.
SECTION 3.8. Fictitious Names.
Neither any Borrower nor any Restricted Subsidiary thereof is
doing business or intends to do business other than under its full corporate
name, including, without limitation, under any trade name or other doing
business name, except as set forth on Schedule 3.8.
SECTION 3.9. Title to Properties.
Each Borrower and its Subsidiaries has good title or valid
leasehold interests to each of the properties and assets reflected on the
balance sheets referred to in Section 3.4(a) and all such properties and
assets will be free and clear of Liens, except Permitted Encumbrances.
SECTION 3.10. UCC Filing Information.
The chief executive office of each Debtor is on the date hereof
as set forth on Schedule 3.10, which office is the place where such Debtor
is "located" for the purpose of Section 9-103(3)(d) of the UCC in effect in
the State of New York, and the places where such Debtor keeps the records
concerning the Collateral on the date hereof or regularly keeps any goods
included in the Collateral on the date hereof are also listed on Schedule
3.10.
SECTION 3.11. Litigation.
Except as set forth on Schedule 3.11, there are no lawsuits or
other proceedings pending (including, but not limited to, matters relating
to environmental liability), or, to the knowledge of any Borrower or any
Guarantor, threatened, against or affecting any Borrower or any of its
Subsidiaries or any of their respective properties, by or before any
Governmental Authority or arbitrator, which could reasonably be expected to
have a material adverse effect on the financial condition or the business of
the Borrowers and their respective Subsidiaries, taken as a whole. Neither
any Borrower nor any of its Subsidiaries is in default with respect to any
order, writ, injunction, decree, rule or regulation of any Governmental
Authority, which default would have a material adverse effect upon the
financial condition or the business of the Borrowers and their respective
Subsidiaries, taken as a whole.
SECTION 3.12. Federal Reserve Regulations.
Neither any Borrower nor any of its Subsidiaries is engaged
principally, or as one of its important activities, in the business of
extending credit for the purpose of purchasing or carrying any Margin Stock.
No part of the proceeds of the Loans will be used, whether immediately,
incidentally or ultimately, for any purpose violative of or inconsistent
with any of the provisions of Regulation G, T, U or X of the Board.
SECTION 3.13. Investment Company Act.
No Borrower is, and will not during the term of this Agreement
be, (x) an "investment company", within the meaning of the Investment
Company Act of 1940, as amended or (y) subject to regulation under the
Public Utility Holding Company Act of 1935, the Federal Power Act or any
foreign, federal or local statute or regulation limiting its ability to
incur indebtedness for money borrowed or guarantee such indebtedness as
contemplated hereby or by any other Fundamental Document.
SECTION 3.14. Enforceability.
This Agreement, the Notes and the other Fundamental Documents
when executed will constitute legal, valid and enforceable obligations (as
applicable) of the Borrowers and the Guarantors (subject, as to enforcement,
to applicable bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting the enforcement of creditors' rights generally and to
general principles of equity).
SECTION 3.15. Taxes.
Each Borrower and each of its Subsidiaries has filed or caused
to be filed all federal, state and local tax returns which are required to
be filed, and has paid or has caused to be paid all taxes as shown on said
returns or on any assessment received by them in writing, to the extent that
such taxes have become due, except as permitted by Section 5.4 hereof. No
Borrower knows of any material additional assessments or any basis therefor.
Each Borrower reasonably believes that the charges, accruals and reserves on
its books and the books of its Subsidiaries in respect of taxes or other
governmental charges are adequate.
SECTION 3.16. Maintenance of Plans.
Except as set forth on Schedule 3.16, neither any Borrower nor
any of its Subsidiaries has established or contributes to any Plan. Neither
any Borrower nor any of its Subsidiaries contributes to a Multiemployer
Plan, and no Borrower or Subsidiary of a Borrower has incurred any liability
that would be material to the Borrowers and their respective Subsidiaries,
taken as a whole on account of a partial or complete withdrawal (as defined
in Sections 4203 and 4205 of ERISA, respectively) with respect to any
Multiemployer Plan.
SECTION 3.17. Agreements.
(a) Neither any Borrower nor any of its Subsidiaries is a party
to any agreement, indenture, lease or instrument or subject to any charter
or other corporate restriction, or any judgment, order, writ, injunction,
decree, rule or regulation which materially and adversely affects the
business, properties, assets, operations or condition (financial or
otherwise) of the Borrowers and their respective Subsidiaries, taken as a
whole. For purposes of this Section 3.17, an agreement, indenture, lease or
instrument shall not be deemed to materially and adversely affect the
business, properties, assets, operations or condition (financial or
otherwise) of the Borrowers and their respective Subsidiaries, taken as a
whole, if such agreement, indenture, lease or instrument is part of a
transaction, that in its entirety, does not materially and adversely affect
the business, properties, assets, operations or condition (financial or
otherwise) of the Borrowers and their respective Subsidiaries, taken as a
whole.
(b) Neither any Borrower nor any of its Subsidiaries is in
default in the performance, observance or fulfillment of any of the
obligations, covenants or conditions contained in any agreement or
instrument (including any FCC License or Franchise) to which it is a party
which could reasonably be expected to result in any material adverse change
in the business, properties, assets, operations or condition (financial or
otherwise) of the Borrowers and their respective Subsidiaries, taken as a
whole.
SECTION 3.18. Indebtedness.
Except for this Agreement and as otherwise disclosed on
Schedule 3.18 ("Existing Indebtedness"), as of the Closing Date neither any
Borrower nor any of its Restricted Subsidiaries has incurred any
Indebtedness.
SECTION 3.19. Disclosure.
As of the Closing Date, neither this Agreement nor any other
Fundamental Document nor any other agreement, document, certificate or
statement furnished to the Administrative Agent and the Lenders by or on
behalf of the Borrowers or the Guarantors in connection with the transaction
contemplated hereby, at the time it was furnished, contained any untrue
statement of a material fact or omitted to state a material fact, under the
circumstances under which it was made, necessary in order to make the
statements contained herein or therein not misleading. At the date hereof,
there is no fact known to any Borrower or any Guarantor which materially and
adversely affects, or in the future may reasonably be expected to materially
and adversely affect the business, properties, assets, operations or
condition (financial or otherwise) of the Borrowers and their respective
Subsidiaries, taken as a whole.
SECTION 3.20. Environmental Liabilities.
(a) Except as set forth on Schedule 3.20 hereof, neither any
Borrower nor any of its Subsidiaries has used, stored, treated, transported,
manufactured, refined, handled, produced or disposed of any Hazardous
Materials on, under, at, from, or in any way affecting any of their
properties or assets, or otherwise, in any manner which at the time of the
action in question violated any Environmental Law governing the use,
storage, treatment, transportation, manufacture, refinement, handling,
production or disposal of Hazardous Materials and to the best of each
Borrower's and each Guarantor's knowledge, but without independent inquiry,
no prior owner of such property or asset or any tenant, subtenant, prior
tenant or prior subtenant thereof has used Hazardous Materials on, from or
affecting such property or asset, or otherwise, in any manner which at the
time of the action in question violated any Environmental Law governing the
use, storage, treatment, transportation, manufacture, refinement, handling,
production or disposal of Hazardous Materials, except in each instance such
violations as in the aggregate would not have a material adverse effect upon
the Borrowers and their respective Subsidiaries, taken as a whole.
(b) Except as set forth on Schedule 3.20, neither any Borrower
nor any of its Subsidiaries has any obligations or liabilities, known or
unknown, matured or not matured, absolute or contingent, assessed or
unassessed, where such would reasonably be expected to have a materially
adverse effect on the business or condition (financial or otherwise) of the
Borrowers and their respective Subsidiaries, taken as a whole and, except as
set forth in Schedule 3.20, no claims have been made against any Borrower or
any of its Subsidiaries during the past five years and no presently
outstanding citations or notices have been issued against any Borrower or
its Subsidiaries, where such could reasonably be expected to have a
materially adverse effect on the business or condition (financial or
otherwise) of the Borrowers and their respective Subsidiaries, taken as a
whole, which in either case have been or are imposed by reason of or based
upon any provision of any Environmental Laws, including, without limitation,
any such obligations or liabilities relating to or arising out of or
attributable, in whole or in part, to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
any Hazardous Materials by such Borrower, or any of its Subsidiaries or any
of their respective employees, agents, representatives or predecessors in
interest in connection with or in any way arising from or relating to such
Borrower or any of its Subsidiaries or any of their respective properties,
or relating to or arising from or attributable, in whole or in part, to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of any such substance, by any other Person at or on or
under any of the real properties owned or used by such Borrower or any of
its Subsidiaries or any other location where such could have a materially
adverse effect on the business or condition (financial or otherwise) of the
Borrowers and their respective Subsidiaries, taken as a whole.
SECTION 3.21. Security Interest.
This Agreement and the other Fundamental Documents, when
executed and delivered and, to the extent appropriate, filed in locations
where required or permitted by law, in connection with the execution and
delivery hereof will create and grant to the Administrative Agent for the
benefit of the Lenders (upon the making of the first Loan hereunder and
assuming possession by the Administrative Agent of all items of Collateral
as to which a security interest may be perfected only by possession) a valid
and first priority perfected security interest under Applicable Law in the
Collateral, except as to those items of Collateral which are specifically
excluded by Section 8.1, (in which perfection can be obtained pursuant to
Applicable Law as of the Closing Date) other than any unregistered
copyrights, and on the date of the first Loan hereunder no Person will have
any right, title or interest in or to the Collateral which is, or which
shall be, prior, paramount, superior or equal to the right, title or
interest of the Administrative Agent therein or thereto, except for
Permitted Encumbrances, miscellaneous tangible assets which are immaterial
in the aggregate, and types of Collateral which cannot be perfected by
filing under Applicable Law and which are immaterial in the aggregate.
SECTION 3.22. Franchises; FCC and Copyright Matters.
(a) Schedule 3.22(a) sets forth all of the Systems owned or
operated, and all of the Franchises held by, the Borrowers and their
respective Restricted Subsidiaries and correctly sets forth the issuer of
and the termination date, if any, of each such Franchise; provided, however,
that, to the extent permitted hereunder, if any Borrower or Guarantor
acquires any System or Franchise after the Closing Date, the Borrowers shall
provide a notice to each Lender containing information of the type contained
in Schedule 3.22(a) with respect to each such System or Franchise.
(b) Each Franchise was duly and validly issued by the issuer
thereof pursuant to procedures which complied with all requirements of
Applicable Law.
(c) Each Borrower and its Restricted Subsidiaries has the right
to use all Franchises and other licenses (including, without limitation, all
cable television or broadcast licenses), copyrights, permits, authorizations
and other rights, including, without limitation, agreements with public
utilities and microwave transmission companies, Pole Rental Leases and
utility easements, as are necessary for the conduct of the business of each
Borrower and its Restricted Subsidiaries.
(d) Each such Franchise or other license or right currently
held by any Borrower and its Restricted Subsidiaries is in full force and
effect, and except as set forth on Schedule 3.22(d), such Borrower and its
Restricted Subsidiaries is substantially in compliance with the terms
thereof with no known conflict with the valid rights of others.
(e) No event has occurred which permits, or after notice or
lapse of time or both would permit, the revocation or termination of any
such Franchise or other license or right.
(f) Except as set forth on Schedule 3.22(f), each Borrower and
its Restricted Subsidiaries has duly filed, in a timely manner, all cable
television registration statements and other filings which are required to
be filed under the Communications Act or the Cable Act and is in compliance
in all material respects with the Communications Act and the Cable Act,
including, without limitation, the rules and regulations of the FCC relating
to the carriage of television signals.
(g) Each Borrower and its Restricted Subsidiaries has submitted
all requisite notices under the Copyright Act and the rules and regulations
of the U.S. Copyright Office for the carriage of all broadcast stations as
currently carried.
(h) Each Borrower and its Restricted Subsidiaries has duly
filed, in a timely manner, with the Copyright Office all required documents,
instruments and statements of account, has remitted payments of all required
royalty fees and has obtained the compulsory license provided for in Section
111 of the Copyright Act for the carriage of broadcast signals, which
license is currently valid and in full force and effect.
SECTION 3.23. Labor Matters.
No Borrower nor any of its Subsidiaries has experienced any
strike, labor dispute, slowdown or work stoppage due to labor disagreements
which has had a materially adverse effect on the respective businesses of
the Borrowers and their respective Subsidiaries, taken as a whole and to the
best knowledge of each Borrower, there is no such strike, dispute, slowdown
or work stoppage threatened against any Borrower or any of its Subsidiaries.
SECTION 3.24. Quarterly Subscriber Report.
The Quarterly Subscriber Report dated the Closing Date and
delivered to the Lenders, is true, complete and accurate as of December 31,
1994.
4. CONDITIONS OF LENDING
SECTION 4.1. Conditions Precedent to Initial Loans.
The obligation of each Lender to make its initial Loan is
subject to the following conditions precedent:
(a) Corporate Documents for each Debtor and Adelphia. The
Administrative Agent shall have received with respect to each such Debtor
and Adelphia, with copies for each of the Lenders:
(i) a copy of such Debtor's and Adelphia's certificate
of incorporation, certified as of a recent date by the Secretary
of State of the State of such Debtor's incorporation, together
with copies of any agreements entered into by such Debtor
governing the terms or relative rights of its capital stock and
any agreements entered into by stockholders relating to such
Debtor;
(ii) a certificate of such Secretary of State, dated as
of a recent date as to the good standing of, and payment of
taxes by, such Debtor and Adelphia, as applicable, which lists
the charter documents on file in the office of such Secretary of
State;
(iii) a certificate dated as of a recent date as to the
good standing of such Debtor and Adelphia, as applicable, issued
by the Secretary of State of each jurisdiction in which such
Debtor or Adelphia, as applicable, is qualified as a foreign
corporation;
(iv) a certificate of the Secretary of such Debtor dated
the date of the initial Loans and certifying (A) that attached
thereto is a true and complete copy of the by-laws of such
Debtor as in effect on the date of such certification, (B) that
attached thereto is a true and complete copy of resolutions
adopted by the Board of Directors of such Debtor authorizing (as
applicable) the borrowings hereunder and the execution, delivery
and performance in accordance with their respective terms of
this Agreement, the Notes to be executed by it, and any other
documents required or contemplated hereunder or, (C) that the
certificate of incorporation of such Debtor has not been amended
since the date of the last amendment thereto indicated on the
certificate of the Secretary of State furnished pursuant to
clause (i) above except to the extent specified in such
Secretary's certificate and (D) as to the incumbency and
specimen signature of each officer of such Debtor executing (as
applicable) this Agreement, the Notes or any other document
delivered by it in connection herewith (such certificate to
contain a certification by another officer of such Debtor as to
the incumbency and signature of the officer signing the
certificate referred to in this clause (iv)); and
(v) a certificate of the Secretary of Adelphia dated the
date of the initial Loans and certifying (A) that attached
thereto is a true and complete copy of the by-laws of Adelphia
as in effect on the date of such certification, (B) that
attached thereto is a true and complete copy of resolutions
adopted by the Board of Directors of Adelphia authorizing the
execution, delivery and performance in accordance with their
respective terms of the Adelphia Pledge Agreement, the
Affiliate Subordination Agreement and any other documents
delivered by Adelphia pursuant thereto or contemplated hereunder
or thereunder, (C) that the certificate of incorporation of
Adelphia has not been amended since the date of the last
amendment thereto indicated on the certificate of the Secretary
of State furnished pursuant to clause (i) above except to the
extent specified in such Secretary's certificate and (D) as to
the incumbency and specimen signature of each officer of
Adelphia executing the Adelphia Pledge Agreement, the Affiliate
Subordination Agreement, or any other document delivered by
Adelphia in connection herewith or therewith (such certificate
to contain a certification by another officer of Adelphia as to
the incumbency and signature of the officer signing the
certificate referred to in this clause (v).
(b) Notes. The Administrative Agent shall have received the
Notes, executed on behalf of the Borrowers, dated as of the date hereof, and
payable to the order of each Lender, in the principal amount equal to the
respective Commitment of each Lender.
(c) Opinions of Counsel. The Administrative Agent shall have
received the favorable written opinions, dated the date of the initial Loans
and addressed to the Administrative Agent and the Lenders (i) of Buchanan
Ingersoll, counsel to the Borrowers and the Guarantors, (ii) of Colin H.
Higgin, Deputy General Counsel of the Borrowers and the Guarantors, (iii) of
Fleischman & Walsh, L.L.P., FCC Counsel to the Borrowers and the Guarantors,
and (iv) of Taylor Zunka Milnor & Carter, Moore & Van Allen, Dykema Gossett
and Black, McCuskey, each Local Counsel to the Borrowers and the Guarantors
substantially in the form of Exhibit B-1, B-2, B-3 and B-4 hereto,
respectively.
(d) Financial Information. The Lenders shall have received
copies of the Borrowers' unaudited combined balance sheet as of December 31,
1994, together with the related statement of income.
(e) Pro Forma Compliance Certificate. The Borrowers shall
have delivered to the Lenders a pro forma Compliance Certificate, dated the
date of the initial Loans, demonstrating compliance on a Pro Forma Basis
with Sections 6.16 through 6.19. Such Compliance Certificate shall have
been prepared in good faith and shall represent the reasonable, good faith
opinion of the Borrowers and its senior management.
(f) Quarterly Subscriber Report. The Lenders shall have
received a Quarterly Subscriber Report as of December 31, 1994, dated the
date of the initial Loans.
(g) Federal Reserve Regulations. The Administrative Agent
shall be satisfied that the provisions of Regulations G, T, U and X of the
Board will not be violated by the transactions contemplated hereby.
(h) No Material Adverse Change. No material adverse change
shall have occurred with respect to (i) the business, operations,
performance, properties or condition (financial or otherwise) of the
Borrowers and their respective Subsidiaries, taken as a whole since
December 31, 1994 and (ii) the regulatory climate for cable television
operators.
(i) Payment of Fees. The Administrative Agent shall be
satisfied that all amounts payable to the Administrative Agent and the other
Lenders pursuant hereto or with regard to the transactions contemplated
hereby have been or are simultaneously being paid.
(j) Litigation. No litigation shall be pending or threatened
which in the Administrative Agent's good faith judgment would be likely to
materially and adversely affect the assets, operations, business, condition,
financial or otherwise, or prospects of any Borrower and its Subsidiaries,
taken as a whole, or which could reasonably be expected to materially
adversely affect the ability of any Borrower to fulfill its obligations
hereunder or to otherwise materially impair the interests of the Lenders.
(k) Management Agreements, etc. The Administrative Agent
shall have received certified copies of each Management Agreement and the
Lenders shall have received the Management Subordination Agreements, duly
executed by the Borrowers, the Manager and the Administrative Agent.
(l) Existing Indebtedness. Simultaneously with the making of
the initial Loans, all obligations of ACTV and UCA under the Credit
Agreement dated as of March 14, 1989, among ACTV and UCA, as Borrowers, and
First Union National Bank of North Carolina, The Bank of Nova Scotia and
First Pennsylvania Bank, N.A., as the Banks, and First Union National Bank
of North Carolina, as the Agent (the "ACTV/UCA Credit Agreement") shall have
been paid in full, the commitments of the Banks pursuant thereto shall have
been terminated and all security interests, liens and other encumbrances
granted thereunder shall have been released.
(m) Completion of Chauncey Group Acquisition. The Chauncey
Group Acquisition shall have occurred in accordance with Applicable Law and
the Administrative Agent shall have received copies of all documentation
evidencing or otherwise relating to, such Acquisition.
(n) Affiliate Subordination Agreement. The Administrative
Agent shall have received the Affiliate Subordination Agreement, duly
executed by each party thereto.
(o) Officer's Certificate. The Administrative Agent shall
have received a certificate of each Borrower's chief executive officer or
chief financial officer certifying that as of the date of the making of the
initial Loans (i) no Default or Event of Default is continuing, (ii) all
other conditions precedent to the initial Borrowing are satisfied and
(iii) such other matters as the Administrative Agent shall reasonably
request.
(p) Pledge Agreements. The Administrative Agent shall have
received the Pledge Agreements, duly executed by Adelphia and the Borrowers,
as applicable, together with the Pledged Securities (as defined therein) and
the undated stock powers executed in blank.
(q) Contribution Agreement. The Administrative Agent shall
have received the Contribution Agreement, duly executed by the Borrowers and
the Guarantors.
(r) UCC Financing Statements and UCC Searches. The
Administrative Agent shall have received, in each case in form satisfactory
to it (i) UCC-1 financing statements executed on behalf of the Debtors for
filing in all jurisdictions in which it shall be necessary or advisable to
make a filing in order to provide the Administrative Agent for the benefit
of the Lenders with a perfected security interest in the Collateral as to
which a security interest may be perfected by filing and (ii) UCC searches
satisfactory to the Administrative Agent indicating that no other filings
with regard to the Debtors relating to the Collateral are of record in any
of such jurisdictions except (x) in connection with Permitted Encumbrances
disclosed to the Administrative Agent on the date hereof or (y) in
connection with the ACTV/UCA Credit Agreement, provided that, in each case,
the Administrative Agent shall have received, in form satisfactory to it,
UCC termination statements with respect to any Liens granted pursuant to the
foregoing.
(s) Insurance. The Administrative Agent shall have received a
summary of all existing insurance coverage and evidence acceptable to it
that all insurance required by Section 5.3 has been obtained and is in full
force and effect.
(t) Other Documents. The Administrative Agent shall have
received such other documents as the Administrative Agent may reasonably
require.
(u) Other Matters. All legal matters incident to this
Agreement and the transactions contemplated hereby shall be satisfactory to
Morgan, Lewis & Bockius, counsel to Managing Agents.
SECTION 4.2. Conditions Precedent to Each Loan.
The obligation of the Lenders to make each Loan, including the
initial Loan hereunder, is subject to the following conditions precedent:
(a) Notice. The Administrative Agent shall have received a
notice with respect to such Borrowing as required by Article 2 hereof.
(b) Representations and Warranties. The representations and
warranties set forth in Article 3 hereof and in the other Fundamental
Documents shall be true and correct on and as of the date of each Borrowing
hereunder (except to the extent that such representations and warranties
expressly relate to an earlier date in which case such representations and
warranties shall be true and correct as of such earlier date) with the same
effect as if made on and as of such date.
(c) No Event of Default. On the date of each Borrowing
hereunder, the Borrowers shall be in material compliance with all of the
terms and provisions set forth herein to be observed or performed and no
Event of Default or Default shall have occurred and be continuing.
Each Borrowing shall be deemed to be a representation and warranty by the
Borrowers on the date of such Borrowing as to the matters specified in
paragraphs (b) and (c) of this Section.
5. AFFIRMATIVE COVENANTS
From the date of the initial Loan and for so long as the
Commitments shall be in effect or any amount shall remain outstanding under
any Notes or unpaid under this Agreement, each of the Borrowers, jointly and
severally agrees that, unless the Required Lenders shall otherwise consent
in writing, it will, and will cause each of its Restricted Subsidiaries to:
SECTION 5.1. Financial Statements, Reports, etc.
Deliver to each Lender:
(a) As soon as is practicable, but in any event within 120
days after the end of each fiscal year of the Borrowers, the audited
combined and consolidated balance sheet of the Borrowers and their
respective Subsidiaries as at the end of, and the related combined
statements of income, shareholders' equity and cash flows for such year, and
the corresponding figures as at the end of, and for, the preceding fiscal
year, accompanied by an opinion of Deloitte & Touche or such other
independent certified public accountants of recognized standing as shall be
retained by the Borrowers and satisfactory to the Administrative Agent,
which report and opinion shall be prepared in accordance with generally
accepted auditing standards relating to reporting and which report and
opinion shall (A) be unqualified as to going concern and scope of audit and
shall state that such financial statements fairly present the financial
condition of the Borrowers and their Subsidiaries, as at the dates indicated
and the results of the operations and cash flows for the periods indicated
and (B) contain no material exceptions or qualifications except for
qualifications relating to accounting changes (with which such independent
public accountants concur) in response to FASB releases or other
authoritative pronouncements;
(b) Commencing with the quarter ending March 31, 1995 and as
soon as is practicable, but in any event within 75 days after the end of
each of the first three fiscal quarters of each fiscal year, the unaudited
combined and consolidated balance sheets of the Borrowers and their
respective Subsidiaries, as at the end of, and the related unaudited
statements of income (or changes in financial position) for such quarter and
for the period from the beginning of the then current fiscal year to the end
of such fiscal quarter and the corresponding figures as at the end of, and
for, the corresponding period in the preceding fiscal year, together with a
certificate signed by the chief financial officer or a vice president
responsible for financial administration of each Borrower to the effect that
such financial statements, while not examined by independent public
accountants, reflect, in his opinion and in the opinion of each Borrower,
all adjustments necessary to present fairly the financial position of such
Borrower and its Subsidiaries, as the case may be, as at the end of the
fiscal quarter and the results of their operations for the quarter then
ended in conformity with GAAP consistently applied, subject only to year-end
and audit adjustments and to the absence of footnote disclosure;
(c) Together with the delivery of the statements referred to
in paragraphs (a) and (b) of this Section 5.1, a certificate of an
Authorized Signatory responsible for financial administration of each
Borrower, substantially in the form of Exhibit D hereto (i) stating that the
signer has reviewed or has caused to be made under his supervision a review
of the terms of this Agreement and that in the course of the performance of
such duties, he would normally have knowledge of any condition or event
which would constitute an Event of Default or Default and stating whether or
not he has knowledge of any such condition or event and, if so, specifying
each such condition or event of which he has knowledge, the nature thereof
and any action which such Borrower has taken, is taking, or proposes to take
with respect to each such condition or event and (ii) demonstrating in
reasonable detail the Borrowers' calculation of the Applicable Margin and
compliance with the provisions of Sections 6.16, 6.17, 6.18 and 6.19 hereof;
(d) Promptly upon their becoming available, copies of all
financial statements, reports, notices and proxy statements sent or made
available by Adelphia, the Borrowers or any of their Subsidiaries to its
security holders generally, of all regular and periodic reports and all
registration statements and prospectuses, if any, filed by any of them with
any securities exchange or with the Securities and Exchange Commission, or
any comparable foreign bodies, and of all press releases and other
statements made available generally by any of them to the public concerning
material developments in the business of the Borrowers or any of their
Subsidiaries;
(e) Promptly upon any executive officer of a Borrower or any
of its Restricted Subsidiaries obtaining knowledge (i) of any Default, or
becoming aware that any Lender has given notice or taken any other action
with respect to a claimed Event of Default or (ii) that any Person has given
any notice to such Borrower or any of its Restricted Subsidiaries or taken
any other action with respect to a claimed default or event or condition of
the type referred to in paragraph (e) of Article 7 or any condition or event
which would be required to be disclosed in a current report filed by such
Borrower with the Securities and Exchange Commission on Form 8-K (other than
Item 5 as in effect on the date hereof) under the Securities Exchange Act of
1934, as amended, or the rules and regulations thereunder (or any successor
thereof), a certificate of the president or chief financial officer of such
Borrower specifying the nature and period of existence of any such condition
or event, or specifying the notice given or action taken by such holder or
Person and the nature of such claimed Event of Default or condition and what
action such Borrower has taken, is taking and proposes to take with respect
thereto;
(f) Promptly upon any executive officer of a Borrower or any
of its Subsidiaries obtaining knowledge of (i) the institution of, or threat
of, any action, suit, proceeding, investigation or arbitration by any
Governmental Authority or other Person against or affecting such Borrower or
any of its Subsidiaries or any of their assets, or (ii) any material
development in any such action, suit, proceeding, investigation or
arbitration (whether or not previously disclosed to the Lenders), which, in
the case of preceding clause (i) or (ii) might reasonably be expected to
have a material adverse effect on the Borrowers and their respective
Subsidiaries, taken as a whole, such Borrower shall promptly give notice
thereof to the Lenders and provide such other information as may be
reasonably available to it (without waiver of any applicable evidentiary
privilege) to enable the Lenders to evaluate such matters; and, in addition
to the requirements set forth in clauses (i) and (ii) of this Section
5.1(f), each Borrower upon request shall promptly give notice of the status
of any action, suit, proceeding, investigation or arbitration covered by a
report delivered to the Lenders pursuant to clause (i) or (ii) above to the
Lenders and provide such other information as may be reasonably available to
it to enable the Lenders to evaluate such matters;
(g) With reasonable promptness, such other information and
data with respect to the Borrowers and their Subsidiaries as from time to
time may be reasonably requested by any of the Lenders;
(h) Together with each set of financial statements required by
paragraph (a) above, a certificate of the independent certified public
accountants rendering the report and opinion thereon (i) stating that they
have read the relevant provisions of this Agreement as they relate to
accounting matters and have audited the financial statements of the
Borrowers and their respective Subsidiaries during the accounting period
covered by such financial statements, (ii) stating whether, in connection
with their audit, any condition or event, at any time during or at the end
of such period, which constitutes an Event of Default has come to their
attention, and if such a condition or event has come to their attention,
specifying the nature and period of existence thereof, and (iii) stating
that based on their audit nothing has come to their attention which causes
them to believe that the matters specified in paragraph (c)(ii) above for
the applicable fiscal year are not stated in accordance with the terms of
this Agreement;
(i) As soon as practicable, but in any event within 30 days
after the end of each fiscal quarter of the Borrowers, an operating report
in the form of Exhibit G;
(j) As soon as is practicable, but in any event within 10
days after the end of each fiscal year of the Borrowers, evidence in form
and substance satisfactory to the Administrative Agent that the insurance
required by Section 5.3 is in full force and effect; and
(k) As soon as is practicable, but in any event within 45 days
after the end of each fiscal year of the Borrowers comencing May 15, 1996,
an operating budget for the Borrowers and their respective Restricted
Subsidiaries for such fiscal year, in form and substance satisfactory to the
Administrative Agent.
SECTION 5.2. Corporate Existence; Compliance with Statutes.
Except as provided in Section 6.4, do or cause to be done all
things necessary to preserve, renew and keep in full force and effect its
corporate existence, material rights, FCC Licenses, Pole Rental Leases,
permits and Franchises and comply in all material respects with all
provisions of Applicable Law, and all applicable restrictions imposed by,
any Governmental Authority, including without limitation, the Communications
Act, the Cable Act and the Copyright Act.
SECTION 5.3. Insurance.
(a) Keep its assets which are of an insurable character insured
(to the extent and for time periods consistent with normal industry
practices) by financially sound and reputable insurers against loss or
damage by fire, explosion, theft or other hazards which are included under
extended coverage in amounts not less than the insurable value of the
property insured or such lesser amounts, and with such self-insured
retention or deductible levels, as are consistent with normal industry
practices.
(b) Maintain with financially sound and reputable insurers,
insurance against other hazards and risks and liability to persons and
property to the extent and in the manner customary for companies in similar
businesses; provided however, that workmen's compensation insurance or
similar coverage may be effected with respect to its operations in any
particular state or other jurisdiction through an insurance fund operated by
such state or jurisdiction.
SECTION 5.4. Taxes and Charges; Indebtedness in Ordinary Course
of Business.
Duly pay and discharge, or cause to be paid and discharged,
before the same shall become delinquent, all federal, state or local taxes,
assessments, levies and other governmental charges, imposed upon a Borrower
or any of its Restricted Subsidiaries or their respective properties, sales
and activities, or any part thereof, or upon the income or profits
therefrom, as well as all claims for labor, materials, or supplies which if
unpaid might by law become a Lien upon any of the property of either the
Borrower or any of its Restricted Subsidiaries; provided, however, that any
of the foregoing need not be paid if the validity or amount thereof shall
currently be contested in good faith by appropriate proceedings and if such
Borrower shall have set aside on its books reserves (the presentation of
which is segregated to the extent required by GAAP) adequate with respect
thereto if reserves shall be deemed necessary by such Borrower in accordance
with GAAP; and provided, further, that such Borrower will pay all of the
foregoing forthwith upon the commencement of proceedings to foreclose any
Lien which may have attached as security therefor (unless the same is fully
bonded or otherwise effectively stayed). Each Borrower will promptly pay,
and cause its Restricted Subsidiaries to promptly pay, when due, or in
conformance with customary trade terms, all other indebtedness incident to
their operations; provided, however, that any such indebtedness need not be
paid if the validity or amount thereof shall currently be contested in good
faith by appropriate proceedings and if such Borrower shall have set aside
on its books reserves (the presentation of which is segregated to the extent
required by GAAP) adequate with respect thereto if reserves shall be deemed
necessary by such Borrower in accordance with GAAP, and provided, further
that such Borrower will pay all such indebtedness which, if unpaid, might
result in a Lien on its properties or the properties of one of its
Restricted Subsidiaries, except Permitted Encumbrances.
SECTION 5.5. ERISA Compliance and Reports.
Furnish to the Administrative Agent (a) as soon as possible, and
in any event within 30 days after any executive officer of a Borrower knows
that (i) any Reportable Event with respect to any Plan has occurred, a
statement of the chief financial officer of such Borrower, setting forth
details as to such Reportable Event and the action which it proposes to take
with respect thereto, together with a copy of the notice, if any, required
to be filed by such Borrower or any of its Restricted Subsidiaries of such
Reportable Event with the PBGC or (ii) an accumulated funding deficiency has
been incurred or an application has been made to the Secretary of the
Treasury for a waiver or modification of the minimum funding standard or an
extension of any amortization period under Section 412 of the Code with
respect to a Plan, a Plan has been or is proposed to be terminated in a
"distress termination" (as defined in Section 4041(c) of ERISA), proceedings
have been instituted to terminate a Plan or a Multiemployer Plan, a
proceeding has been instituted to collect a delinquent contribution to a
Plan or a Multiemployer Plan, or either such Borrower or any of its
Restricted Subsidiaries will incur any liability (including any contingent
or secondary liability) to or on account of the termination of or withdrawal
from a Plan under Sections 4062, 4063, 4064 of ERISA or the withdrawal or
partial withdrawal from a Multiemployer Plan under Sections 4201 or 4204 of
ERISA, a statement of the chief financial officer of such Borrower, setting
forth details as to such event and the action it proposes to take with
respect thereto, (b) promptly upon the reasonable request of the
Administrative Agent, copies of each annual and other report with respect to
each Plan and (c) promptly after receipt thereof, a copy of any notice a
Borrower or any of its Restricted Subsidiaries may receive from the PBGC
relating to the PBGC's intention to terminate any Plan or to appoint a
trustee to administer any Plan.
SECTION 5.6. Access to Books and Records; Examinations.
Maintain or cause to be maintained at all times true and complete
books and records of its financial operations (in accordance with GAAP) and
upon reasonable notice to the Borrowers provide each Lender and its
representatives access to all such books and records and to any of their
properties or assets during regular business hours, in order that such
Lender make such audits and examinations and make abstracts from such books,
accounts and records and may discuss the affairs, finances and accounts
with, and be advised as to the same by, the Borrowers' officers together
with their independent accountants.
SECTION 5.7. Maintenance of Properties.
Keep its properties which are material to its business in good
repair, working order and condition consistent with industry practice and,
from time to time (i) make all necessary and proper repairs, renewals,
replacements, additions and improvements thereto and (ii) comply at all
times with the provisions of all Franchises, Pole Rental Leases, and
material leases and other material agreements to which it is a party so as
to prevent any loss or forfeiture thereof or thereunder.
SECTION 5.8. Material Changes.
Report to the Administrative Agent promptly after obtaining
knowledge of same, any material adverse change in the financial condition or
business of the Borrowers and their Subsidiaries, taken as a whole.
SECTION 5.9. Environmental Laws.
(a) Promptly notify the Administrative Agent upon any executive
officer becoming aware of any violation or potential violation or
non-compliance with, or liability or potential liability under, any
Environmental Laws which, when taken together with all other pending
violations could reasonably be expected to be materially adverse to the
Borrowers and their respective Restricted Subsidiaries taken as a whole, and
promptly furnish to the Administrative Agent all notices of any nature which
a Borrower or any of its Restricted Subsidiaries may receive from any
Governmental Authority or other Person with respect to any violation, or
potential violation or non-compliance with, or liability or potential
liability under, any Environmental Laws which, in any case or when taken
together with all such other notices, could reasonably be expected to have a
material adverse effect on a Borrower and its Restricted Subsidiaries, taken
as a whole.
(b) Comply with and use reasonable efforts to ensure compliance
by all tenants and subtenants with all Environmental Laws, and obtain and
comply in all material respects with, and maintain and use best efforts to
ensure that all tenants and subtenants obtain and comply in all material
respects with, and maintain, any and all licenses, approvals, registrations
or permits required by Environmental Laws.
(c) Conduct and complete all investigations, studies, sampling
and testing, and all remedial, removal and other actions required under all
Environmental Laws and promptly comply in all material respects with all
lawful orders and directives of all Governmental Authorities.
(d) Defend, indemnify and hold harmless the Administrative Agent
and the Lenders, and their respective employees, agents, officers and
directors, from and against any claims, demands, penalties, fines,
liabilities, settlements, damages, costs and expenses of whatever kind or
nature, known or unknown, contingent or otherwise, arising out of, or in any
way related to the violation of or non-compliance with any Environmental
Laws, or any orders, requirements or demands of Governmental Authorities
related thereto, including, without limitation, reasonable attorney and
consultant fees, investigation and laboratory fees, court costs and
litigation expenses, but excluding therefrom all claims, demands, penalties,
fines, liabilities, settlements, damages, costs and expenses arising out of
or resulting from (i) the gross negligence or willful misconduct of such
indemnified party or (ii) any acts or omissions of any indemnified party
occurring after such indemnified party is in possession of, or controls the
operation of, any property or asset.
SECTION 5.10. Performance of Obligations.
Perform, in all respects, all of its obligations under the terms
of each mortgage, indenture, security agreement, other debt instrument and
contract and agreement by which it is bound or to which it is a party or
subject, except to the extent that failure to perform in accordance
therewith could not, in the aggregate, be reasonably expected to have a
material adverse effect on the Borrowers and their respective Subsidiaries,
taken as a whole.
SECTION 5.11. Interest Rate Protection.
At all times during the period commencing 60 days after the
Closing Date and ending on the third anniversary of the Closing Date,
maintain in effect Interest Rate Protection Agreements, in a manner and
amount satisfactory to the Administrative Agent, but in any event such
Interest Rate Protection Agreements shall (i) hedge the interest rates
payable hereunder at a rate not in excess of 3% over the weighted average of
the interest rates in effect for Loans outstanding at the time of entering
into such Interest Rate Protection Agreements and (ii) at all times during
such period be in a notional principal amount equal to at least 50% of the
lesser of (A) the principal amount of the Loans outstanding on the date of
determination and (B) the principal amount of the Loans outstanding 60 days
prior to the date of determination. At least 50% of the notional principal
amount of such Interest Rate Protection Agreements shall be with financial
institutions.
SECTION 5.12. Corporate Name; Chief Executive Office.
Not change its corporate name or the location of its respective
chief executive offices or any of the offices where any such entity keeps
the books and records with respect to the Collateral owned by it or open any
new office without (i) giving the Administrative Agent 30 days' written
notice of such change and (ii) filing any additional UCC financing
statements and such other documents requested by the Administrative Agent or
which are otherwise necessary or advisable to continue the first perfected
security interest of the Administrative Agent for the benefit of the Lenders
in the Collateral.
SECTION 5.13. Further Assurances; Security Interests.
(a) Cause each Person which becomes a Restricted Subsidiary of a
Borrower after the Closing Date to become a party to this Agreement and
assume all the obligations of a Guarantor hereunder by executing a written
instrument in form and substance reasonably satisfactory to the
Administrative Agent, simultaneously with its becoming a Restricted
Subsidiary. Promptly deliver to the Administrative Agent upon the
acquisition or formation of each Restricted Subsidiary a stock pledge
agreement, substantially in the form of Exhibit E-2, together with the
Capital Stock of such Restricted Subsidiary and an undated stock power
executed in blank.
(b) Upon the reasonable request of the Administrative Agent
promptly perform or cause to be performed any and all acts and execute or
cause to be executed any and all documents (including, without limitation,
the execution, amendment or supplementation of any financing statement and
continuation statement or other statement) for filing under the provisions
of the UCC and the rules and regulations thereunder, or any other statute,
rule or regulation of any applicable foreign, federal, state or local
jurisdiction, which are necessary or advisable, from time to time, in order
to grant and maintain in favor of the Administrative Agent for the benefit
of the Lenders the security interest in the Collateral and to carry out the
provisions and purposes of the Fundamental Documents.
(c) Promptly undertake to deliver or cause to be delivered to
the Lenders from time to time such other documentation, consents,
authorizations, approvals and orders in form and substance satisfactory to
the Administrative Agent, as the Administrative Agent shall deem reasonably
necessary or advisable to perfect or maintain the Liens of the
Administrative Agent for the benefit of the Lenders.
(d) Unless otherwise agreed by the Administrative Agent use best
efforts to exclude from contracts to which it becomes a party provisions
which prevent the creation of a security interest in the rights under such
contracts, and upon the request of the Administrative Agent, use best
efforts to obtain permission for the creation of a security interest in
favor of Lenders in rights under contracts which by their terms prohibit the
creation of such a security interest.
6. NEGATIVE COVENANTS
From the date of the initial Loan and for so long as the
Commitments shall be in effect or any amount shall remain outstanding under
any Note or unpaid under this Agreement, unless the Required Lenders shall
otherwise consent in writing, each of the Borrowers, jointly and severally,
agrees that it will not, nor will it permit any of its Subsidiaries to,
directly or indirectly:
SECTION 6.1. Limitation on Indebtedness.
Incur, assume or suffer to exist any Indebtedness except:
(a) Indebtedness hereunder;
(b) Indebtedness in existence on the date hereof, or required to
be incurred pursuant to a contractual obligation in existence on the date
hereof, which in either case, is listed on Schedule 3.18 hereto, but not any
increase, extensions or renewals thereof, unless such extensions and
renewals are effected on substantially the same terms;
(c) purchase money Indebtedness incurred by the Borrowers
(including Capital Leases) to the extent permitted under Section 6.6(b)
hereof, but only to the extent that the aggregate amount outstanding at any
time does not exceed $15,000,000 in the aggregate for all Borrowers and
their respective Restricted Subsidiaries;
(d) Guaranties to the extent permitted by Section 6.2;
(e) Indebtedness owing by a Borrower to any of its Restricted
Subsidiaries, or by any Restricted Subsidiary of a Borrower to such Borrower
or any other Restricted Subsidiary, arising in the ordinary course of
business for normal business purposes;
(f) Indebtedness of a Borrower to the Manager arising as a
result of deferred Management Fees, provided such Indebtedness is
subordinated to the Obligations pursuant to a Management Subordination
Agreement;
(g) Subordinated Debt, but only to the extent that the
aggregate amount outstanding at any one time does not exceed $40,000,000
(including principal and interest) in the aggregate for all Borrowers and
their respective Restricted Subsidiaries; and
(h) subject to Section 6.5(b)(ii), Indebtedness of a corporation
or partnership which becomes a Restricted Subsidiary after the date hereof,
provided that (i) such Indebtedness existed at the time such entity became a
Restricted Subsidiary and was not created in anticipation thereof and (ii)
immediately after giving effect to the acquisition of such entity no Default
or Event of Default shall have occurred and be continuing.
SECTION 6.2. Limitation on Guaranties.
Assume or incur any Guaranty except:
(a) endorsements of negotiable instruments for deposit or
collection in the ordinary course of business;
(b) any Guaranties by a Borrower arising in respect of
Indebtedness of its Restricted Subsidiaries permitted under Section 6.1;
(c) Guaranties in existence on the date hereof which are listed
on Schedule 3.18;
(d) Guaranties by a Borrower of performance obligations of any
of its Restricted Subsidiaries arising in the ordinary course of business;
and
(e) Guaranties incurred after the date hereof in an aggregate
amount for all Borrowers and their respective Restricted Subsidiaries not to
exceed $500,000 at any one time outstanding.
SECTION 6.3. Changes in Business.
(a) No Borrower nor any of its Subsidiaries shall alter the
nature of its business in any material respect other than to utilize the
Systems to provide additional services.
(b) Permit any of its Unrestricted Subsidiaries to engage in any
business other than the business of acquiring, owning or disposing of
publicly traded marketable securities and/or FCC Licenses (other than FCC
Licenses used in connection with the ownership or operation of such
Borrower's Systems or the Systems of such Borrower's Restricted
Subsidiaries).
SECTION 6.4. Consolidation, Merger.
Enter into any merger, consolidation or amalgamation, or
liquidate, wind up or dissolve itself (or suffer any liquidation or
dissolution), or convey, sell, lease, assign, transfer or otherwise dispose
of all or substantially all of its property, business or assets, or make any
material change in its present method of conducting business, except:
(a) any Restricted Subsidiary of a Borrower may be merged or
consolidated with or into such Borrower (provided that such Borrower shall
be the continuing or surviving corporation) or with or into any other
Restricted Subsidiary of such Borrower (provided that a Restricted
Subsidiary shall be the continuing or surviving corporation);
(b) any Restricted Subsidiary of a Borrower may sell, lease,
transfer or otherwise dispose of any or all of its assets (upon voluntary
liquidation or otherwise) to such Borrower or any other Restricted
Subsidiary of such Borrower;
(c) any Borrower may be merged or consolidated with or into any
other Borrower; and
(d) as permitted by Section 6.5(a)(i).
SECTION 6.5. Limitation on Sale of Assets,
Acquisitions.
(a) Convey, sell, lease, assign, transfer or otherwise dispose of
any of its property, business or assets (including, without limitation,
receivables and leasehold interests), whether now owned or hereafter
acquired, or, in the case of any Restricted Subsidiary of a Borrower, issue
or sell any shares of such Restricted Subsidiary's Capital Stock to any
Person other than such Borrower or any wholly owned Restricted Subsidiary of
such Borrower, except:
(i) Asset Sales, provided that (x) the Systems sold by the
Borrowers and/or any of their respective Restricted Subsidiaries
in any single Asset Sale or series of related Asset Sales, after
giving effect to any such Asset Sale or Asset Sales, shall have
contributed less than 15% of Operating Cash Flow for the most
recently completed four fiscal quarters (the percentage of
Operating Cash Flow contributed by any such System is referred to
as the "System Cash Flow Percentage") and (y) the sum of System
Cash Flow Percentages of all Systems sold by the Borrowers and
their respective Restricted Subsidiaries in all Asset Sales
occurring subsequent to the Closing Date, after giving affect to
any such Asset Sale or Asset Sales, in the aggregate shall not
exceed 25%;
(ii) the sale or other disposition of obsolete or worn out
property in the ordinary course of business;
(iii) the sale of inventory in the ordinary course of
business; and
(iv) as permitted by Section 6.4.
(b) Acquire (in one transaction or series of transactions) all
or any part of the property or assets of any Person, except:
(i) purchases or other acquisitions of inventory,
materials, equipment and the like in the ordinary course of business;
(ii) an Acquisition the total consideration of which in
the aggregate when added to all Acquisitions made by the Borrowers and their
respective Restricted Subsidiaries subsequent to the Closing Date does not
exceed $40,000,000; provided, that for purposes of this Section 6.5(b)(ii)
the amount of any Indebtedness described in and permitted by Section 6.1(h)
involved in any Acquisition permitted by this Section shall be considered as
part of the total consideration given for such Acquisition; or
(iii) an Acquisition the consideration of which is funded
solely by contemporaneous Capital Contributions.
Notwithstanding the foregoing, if the consideration of any
Acquisition exceeds $10,000,000 in the aggregate the Borrowers shall deliver
to the Lenders, at least fifteen (15) Business Days prior to the
consummation of such transaction, financial statements and a Compliance
Certificate prepared on a Pro Forma Basis, together with appropriate
supporting information and evidencing compliance with Sections 6.16 through
6.19 after giving effect to such transaction.
SECTION 6.6. Limitations on Liens.
Suffer any Lien on its property, except:
(a) deposits under worker's compensation, unemployment insurance
and social security laws or to secure statutory obligations or surety or
appeal bonds or performance or other similar bonds in the ordinary course of
business, or statutory Liens of landlords, carriers, warehousemen, mechanics
and material men and other similar Liens, in respect of liabilities which
are not yet due or which are being contested in good faith, Liens for taxes
not yet due and payable, and Liens for taxes due and payable, the validity
or amount of which is currently being contested in good faith by appropriate
proceedings and as to which foreclosure and other enforcement proceedings
shall not have been commenced (unless fully bonded or otherwise effectively
stayed);
(b) purchase money Liens granted to the vendor or Person
financing the acquisition of property, plant or equipment if (i) limited to
the specific assets acquired and, in the case of tangible assets, other
property which is an improvement to or is acquired for specific use in
connection with such acquired property or which is real property being
improved by such acquired property; (ii) the debt secured by the Lien is the
unpaid balance of the acquisition cost of the specific assets on which the
Lien is granted; and (iii) such transaction does not otherwise violate this
Agreement;
(c) Liens upon real and/or personal property, which property was
acquired after the date of this Agreement (by purchase, construction or
otherwise) by a Borrower or any of its Subsidiaries, each of which Liens
existed on such property before the time of its acquisition and was not
created in anticipation thereof; provided, however, that no such Lien shall
extend to or cover any property of such Borrower or such Subsidiary other
than the respective property so acquired and improvements thereon;
(d) Liens arising out of attachments, judgments or awards as to
which an appeal or other appropriate proceedings for contest or review are
promptly commenced (and as to which foreclosure and other enforcement
proceedings (i) shall not have been commenced (unless fully bonded or
otherwise effectively stayed) or (ii) in any event shall be promptly fully
bonded or otherwise effectively stayed);
(e) Liens under Pole Rental Leases on cables and other property
affixed to transmission poles;
(f) zoning restrictions, easements, minor restrictions on the
use of real property, and other minor Liens that do not secure the payment
of money or the performance of an obligation and that do not individually or
in the aggregate materially retract from the value of a property or asset
to, or materially impair its use in the business of, a Borrower or any of
its Restricted Subsidiaries;
(g) Liens created under any Fundamental Document; and
(h) Existing Liens listed on Schedule 6.6 and any extensions or
renewals thereof.
SECTION 6.7. Receivables.
Sell, transfer, discount or otherwise dispose of notes, accounts
receivable or other obligations owing to a Borrower or any of its Restricted
Subsidiaries, except any disposition for the purpose of collection in the
ordinary course of business.
SECTION 6.8. Sale and Leaseback.
Enter into any arrangement with any Person or Persons, whereby in
contemporaneous transactions a Borrower or any of its Restricted
Subsidiaries sells essentially all of its right, title and interest in a
material asset and such Borrower or such Restricted Subsidiary acquires or
leases back the right to use such property.
SECTION 6.9. ERISA Compliance.
Engage in a "prohibited transaction", as defined in Section 406
of ERISA or Section 4975 of the Code, with respect to any Plan or
Multiemployer Plan or knowingly consent to any other "party in interest" or
any "disqualified person", as such terms are defined in Section 3(14) of
ERISA and Section 4975(e)(2) of the Code, respectively, engaging in any
"prohibited transaction", with respect to any Plan or Multiemployer Plan
maintained by a Borrower or any of its Restricted Subsidiaries; or permit
any Plan maintained by a Borrower or any of its Restricted Subsidiaries to
incur any "accumulated funding deficiency", as defined in Section 302 of
ERISA or Section 412 of the Code, unless such incurrence shall have been
waived in advance by the Internal Revenue Service; or terminate any Plan in
a manner which could result in the imposition of a Lien on any property of a
Borrower or any of its Restricted Subsidiaries pursuant to Section 4068 of
ERISA; or breach or knowingly permit any employee or officer or any trustee
or administrator of any Plan maintained by a Borrower or any of its
Restricted Subsidiaries to breach any fiduciary responsibility imposed under
Title I of ERISA with respect to any Plan; engage in any transaction which
would result in the incurrence of a liability under Section 4069 of ERISA;
or fail to make contributions to a Plan or Multiemployer Plan which results
in the imposition of a Lien on any property of a Borrower or any of its
Restricted Subsidiaries pursuant to Section 302(f) of ERISA or Section
412(n) of the Code, if the occurrence of any of the foregoing events would
result in a liability which is materially adverse to the financial condition
of the Borrowers and their respective Restricted Subsidiaries, taken as a
whole or would materially and adversely affect the ability of the Borrowers
to perform their obligations under this Agreement or the Notes.
SECTION 6.10. Transactions with Affiliates.
Directly or indirectly enter into any transaction with an
Affiliate on terms less favorable (including, but not limited to, price and
credit terms) to it or its Restricted Subsidiaries than would be the case if
such transaction had been effected at arms length with a Person other than
an Affiliate, except, subject to Section 6.24, any Management Agreement.
SECTION 6.11. Hazardous Materials.
Cause or permit any of its properties or assets to be used to
generate, manufacture, refine, transport, treat, store, handle, dispose,
transfer, produce or process Hazardous Materials, except in compliance in
all material respects with all applicable Environmental Laws, nor release,
discharge, dispose of or permit or suffer any release or disposal as a
result of any intentional act or omission on its part of Hazardous Materials
onto any such property or asset in material violation of any Environmental
Law.
SECTION 6.12. Limitation on Restrictions on Subsidiary Dividends
and other Distributions, etc.
Create or otherwise cause or suffer to exist or become effective
any consensual encumbrance or restriction on the ability of any of the
Restricted Subsidiaries of a Borrower to (a) pay dividends or make any other
distributions on its Capital Stock or any other interest or participation in
its profits owned by such Borrower or any of its Restricted Subsidiaries, or
pay any Indebtedness owed to such Borrower or any of its Restricted
Subsidiaries, (b) make loans or advances to such Borrower or any of its
Restricted Subsidiaries or (c) transfer any of its properties or assets to
it or any of its Restricted Subsidiaries, except for such encumbrances or
restrictions existing under, or by reason of, (i) Applicable Law, (ii)
customary non-assignment provisions of any agreement governing a leasehold
interest, a security agreement, mortgage or deed of trust issued in
connection with Liens permitted by Sections 6.6(b), (c) and (i) or any other
agreement which does not relate to Indebtedness, (iii) any agreement or
other instrument of a Person acquired by it or any of its Restricted
Subsidiaries at the time of such acquisition, which encumbrance or
restriction is not applicable to any Person, or the properties or assets of
any Person, other than the Person so acquired or the property or assets of
the Person so acquired and was not entered into in contemplation of such
acquisition, (iv) this Agreement and the other Fundamental Documents and (v)
encumbrances and restrictions which are in effect on the date hereof and are
listed on Schedule 6.12.
SECTION 6.13. No Further Negative Pledges.
Enter into any agreement prohibiting the creation or assumption
of any Lien upon the properties or assets of a Borrower or any of its
Subsidiaries, whether now owned or hereafter acquired, or requiring an
obligation to be secured if some other obligation is secured, except:
(a) this Agreement and the other Fundamental Documents; and
(b) prohibitions against other encumbrances on specific property
encumbered to secure payment of particular Indebtedness (which Indebtedness
relates solely to such specific property and improvements and accretions
thereto, and is otherwise permitted under this Agreement).
SECTION 6.14. Executive Offices.
Transfer executive offices, change its corporate name or location
of records for receivables, or keep inventory or equipment at locations not
presently kept or maintained without compliance with Section 5.13.
SECTION 6.15. Subsidiaries.
After the Closing Date, create or acquire any new Subsidiary
except as permitted by Section 6.5 and without compliance with Sections 5.13
and 6.22.
SECTION 6.16. Senior Funded Debt Ratio.
Permit the Senior Funded Debt Ratio at any time to be greater
than the ratios indicated below for the period in which occurred the last
day of the Rolling Period used in the calculation of the Senior Funded Debt
Ratio:
Period Ratio
Closing Date through March 31, 1996 6.00:1
April 1, 1996 through September 30, 1996 5.75:1
October 1, 1996 through March 31, 1997 5.50:1
April 1, 1997 through September 30, 1997 5.25:1
October 1, 1997 through March 31, 1998 5.00:1
April 1, 1998 through June 30, 1998 4.75:1
and thereafter 4.50:1
For purposes of this Section 6.16, Annualized Operating
Cash Flow is calculated as of the end of the most recently completed fiscal
quarter for which the Lenders have received financial statements and a
Compliance Certificate pursuant to Section 5.1.
SECTION 6.17. Fixed Charges Ratio.
Permit the Fixed Charges Ratio for any Rolling Period to be less
than 1.00 to 1.
SECTION 6.18. Interest Expense Ratio.
Permit the Interest Expense Ratio for any fiscal quarter during
the periods set forth below to be less than the ratios indicated below:
Period Ratio
Closing Date through September 30, 1998 1.875:1
and thereafter 2.000:1
SECTION 6.19. Pro Forma Debt Service Ratio.
Permit the Pro Forma Debt Service Ratio at any time to be less
than 1.05:1; provided, however, that so long as the ratio of Senior Funded
Debt to Annualized Operating Cash Flow is less than 3.00:1, then (i) the Pro
Forma Debt Service Ratio shall be calculated by adding 50% of the Excess
Cash Balance as of the first day of such period to Annualized Operating Cash
Flow for such period and (ii) the Pro Forma Debt Service Ratio at any time
shall be not less than 1.15:1.
SECTION 6.20. Accounting Practices.
Establish a fiscal year ending on other than March 31, or modify
or change accounting treatments or reporting practices except as otherwise
required or permitted by GAAP.
SECTION 6.21. Restricted Payments.
Declare, make or incur any liability to make any Restricted
Payments (excluding any Management Fee or expense reimbursement for the
actual cost of out-of-pocket expenses arising in the ordinary course),
except:
(a) Restricted Payments to a Borrower or to any Restricted
Subsidiary;
(b) any Restricted Payment so long as (i) before and after
giving effect to the proposed Restricted Payment no Default or Event of
Default has occurred and is continuing and (ii) the Senior Funded Debt Ratio
for the immediately preceding fiscal quarter and after giving effect to the
proposed Restricted Payment is less than 5.50:1; or
(c) any other Restricted Payment so long as (i) before and after
giving effect to the proposed Restricted Payment no Default or Event of
Default has occurred and is continuing, (ii) the proposed Restricted Payment
would not violate the Affiliate Subordination Agreement, (iii) no Default or
Event of Default would have occurred under Sections 6.17 or 6.19 calculated
at the end of the most recent fiscal quarter for which the Borrowers
delivered a Compliance Certificate pursuant to Section 5.1 had such proposed
Restricted Payment been made immediately prior to the last day of such
fiscal quarter and (iv) either (x) the Senior Funded Debt Ratio for the
immediately preceding fiscal quarter and after giving effect to the proposed
Restricted Payment is less than 5.50:1 or (y) the amount of the proposed
Restricted Payment does not exceed the sum of the aggregate amount of all
General Capital Contributions made subsequent to the Closing Date less any
Capital Contributions made to fund Acquisitions permitted under Section 6.5.
SECTION 6.22. Limitation on Loans and Investment.
Make any loan or advance or extend credit to any Person, firm or
corporation (whether or not a Restricted Subsidiary, employee, officer or
other Affiliate of a Borrower) or make any other Investment in any Person,
or its securities, except:
(a) Investments in Restricted Subsidiaries outstanding on the
date hereof to the extent permitted under Section 6.1(d);
(b) Cash Equivalents;
(c) Investments in new Restricted Subsidiaries to the extent
(i) the Required Lenders approve of the formation and function of any such
Restricted Subsidiary; (ii) the Administrative Agent for the benefit of the
Lenders receives a pledge of the shares of such Restricted Subsidiary's
Capital Stock and (iii) any such Restricted Subsidiary assumes the
obligations of a Guarantor and Debtor hereunder by executing a written
instrument reasonably satisfactory in form and substance to the
Administrative Agent;
(d) Investments in Unrestricted Subsidiaries; provided that all
such Investments do not exceed $25,000,000 in the aggregate for all
Borrowers and is otherwise permitted under Section 6.21; and
(e) Acquisitions permitted under Section 6.5.
SECTION 6.23. Management Agreements, Franchises.
Agree to or permit any amendment, alteration, modification or any
other change of any of the Management Agreements or the Franchises (or waive
a material right thereunder).
SECTION 6.24. Management Fees.
Make any payment on account of Management Fees, except that the
Borrowers and/or any of their respective Restricted Subsidiaries may (i) so
long as before and after giving effect to such payment no Default or Event
of Default has occurred and is continuing and so long as such payment would
not violate the Management Subordination Agreement, pay Management Fees in
arrears with respect to any fiscal quarter up to a maximum aggregate amount
for the Borrowers and their respective Restricted Subsidiaries equal to 5%
of the gross revenues of the Borrowers and their respective Restricted
Subsidiaries for such fiscal quarter, provided that, prior to any such
payment, the Borrowers shall have delivered the financial statements
required pursuant to Section 5.1 with respect to the fiscal quarter during
which such Management Fees were accrued; (ii) so long as before and after
giving effect to such payment no Default or Event of Default has occurred
and is continuing and so long as such payment would not violate the
Management Subordination Agreement, pay Management Fees (including any
previously accrued but unpaid Management Fees) on the last day of any fiscal
quarter, provided that, after giving effect to such payment, the amount of
Designated Capital Contributions for the payment of Management Fees minus
the amount of Management Fees actually paid pursuant to clause (ii) or (iii)
of this Section 6.24 shall be greater than or equal to zero and (iii) after
the occurrence and during the continuation of an Event of Default and so
long as such payment would not violate the Management Subordination
Agreement, pay Management Fees for such quarter on the last day of such
fiscal quarter with Designated Capital Contributions made subsequent to the
occurrence and continuation of such Event of Default; provided that, prior
to paying such Management Fees the Borrowers shall give ten days prior
written notice of such to the Administrative Agent together with evidence
reasonably satisfactory to the Administrative Agent as to the Designated
Capital Contribution.
7. EVENTS OF DEFAULT
In the case of the happening and during the continuance of any of
the following events (herein called "Events of Default"):
(a) any representation or warranty made by any Borrower or any
Debtor in this Agreement or any other Fundamental Document or in connection
with this Agreement or with the execution and delivery of the Notes or the
Borrowings hereunder, or any statement or representation made in any report,
financial statement, certificate or other document furnished by or on behalf
of any Borrower or any Debtor to the Administrative Agent or any Lender
under or in connection with this Agreement, shall prove to have been false
or misleading when made or delivered;
(b) default shall be made in the payment of any principal of or
interest on the Notes or of any fees or other amounts payable by a Borrower
hereunder, when and as the same shall become due and payable, whether at the
due date thereof or at a date fixed for prepayment thereof or by
acceleration thereof or otherwise, and in the case of payments of interest,
such default shall continue unremedied for three days, and in the case of
payments other than of any principal amount of or interest on the Notes,
such default shall continue unremedied for five days after receipt by the
Borrowers of an invoice therefor;
(c) default shall be made by any Borrower or any Debtor in the
due observance or performance of any covenant, condition or agreement
contained in Sections 5.1(a), (b), (c) and (e) or Article 6 of this
Agreement;
(d) default shall be made by any Borrower or any Debtor in the
due observance or performance of any other covenant, condition or agreement
to be observed or performed pursuant to the terms of this Agreement, or any
other Fundamental Document and such default shall continue unremedied for
thirty (30) days after a Borrower received knowledge thereof or, reasonably
should have known of the occurrence thereof;
(e) default in payment shall be made with respect to any
Indebtedness of any Borrower or any of its Subsidiaries where the amount or
amounts of such Indebtedness exceeds $7,500,000 in the aggregate, or default
with respect to the performance of any other obligation incurred in
connection with any such Indebtedness, if the effect of such default is, or
with the giving of notice or passage of time or both would be, to accelerate
the maturity of such Indebtedness or to permit the holder thereof (after
giving effect to any applicable grace periods) to cause such Indebtedness to
become due prior to its stated maturity, or any other circumstance shall
arise (other than the mere passage of time) by reason of which any Borrower
or any Subsidiary of any Borrower is required to redeem or repurchase, or
offer to holders the opportunity to have redeemed or repurchased, any such
Indebtedness;
(f) any Borrower or any of its Subsidiaries shall generally not
pay its debts as they become due or shall admit in writing its inability to
pay its debts, or shall make a general assignment for the benefit of
creditors; or any Borrower or any of its Subsidiaries shall commence any
case, proceeding or other action seeking to have an order for relief entered
on its behalf as debtor or to adjudicate it a bankrupt or insolvent, or
seeking reorganization, arrangement, adjustment, liquidation, dissolution or
composition of it or its debts under any law relating to bankruptcy,
insolvency, reorganization or relief of debtors or seeking appointment of a
receiver, trustee, custodian or other similar official for it or for all or
any substantial part of its property or shall file an answer or other
pleading in any such case, proceeding or other action admitting the material
allegations of any petition, complaint or similar pleading filed against it
or consenting to the relief sought therein; or any Borrower or any
Subsidiary thereof shall take any action to authorize any of the foregoing;
(g) any involuntary case, proceeding or other action against any
Borrower or any of its Subsidiaries shall be commenced seeking to have an
order for relief entered against it as debtor or to adjudicate it a bankrupt
or insolvent, or seeking reorganization, arrangement, adjustment,
liquidation, dissolution or composition of it or its debts under any law
relating to bankruptcy, insolvency, reorganization or relief of debtors, or
seeking appointment of a receiver, trustee, custodian or other similar
official for it or for all or any substantial part of its property, and such
case, proceeding or other action (i) results in the entry of any order for
relief against it or (ii) shall remain undismissed for a period of sixty
(60) days;
(h) final judgment(s) for the payment of money in excess of
$1,000,000 shall be rendered against any Borrower or any of its Subsidiaries
which within sixty (60) days from the entry of such judgment shall not have
been discharged or stayed pending appeal or which shall not have been
discharged within sixty (60) days from the entry of a final order of
affirmance on appeal;
(i) a Reportable Event relating to a failure to meet minimum
funding standards or an inability to pay benefits when due shall have
occurred with respect to any Plan under the control of any Borrower or any
of its Subsidiaries and shall not have been remedied within 45 days after
the occurrence of such Reportable Event;
(j) any Person shall have (or any Debtor shall assert that any
Person has) a right in the Collateral prior or equal to that of the
Administrative Agent on behalf of the Lenders subject only to Permitted
Encumbrances;
(k) a Change in Control shall occur;
(l) a Change in Management shall occur; or
(m) one or more Franchises shall be suspended or revoked or any
Borrower shall otherwise fail to have all authorizations and licenses
required to operate the Systems as presently operated, and all such
suspensions, revocations and/or other failures shall in the aggregate
account for more than 10% of Operating Cash Flow for the most recent Rolling
Period for which financial statements are available;
then, in every such event and at any time thereafter during the continuance
of such event, the Administrative Agent shall, if directed by the Required
Lenders, take either or both of the following actions, at the same or
different times: terminate forthwith the Commitments and/or declare the
principal of and the interest on the Loans and the Notes and all other
amounts payable hereunder or thereunder to be forthwith due and payable,
whereupon the same shall become and be forthwith due and payable, without
presentment, demand, protest, notice of acceleration, notice of intent to
accelerate or other notice of any kind, all of which are hereby expressly
waived, anything in this Agreement or in the Notes to the contrary
notwithstanding. If an Event of Default specified in paragraphs (f) or (g)
above shall have occurred, the principal of and interest on the Loans and
the Notes and all other amounts payable hereunder or thereunder shall
thereupon and concurrently become due and payable without presentment,
demand, protest, notice of acceleration, notice of intent to accelerate or
other notice of any kind, all of which are hereby expressly waived, anything
in this Agreement or the Notes to the contrary notwithstanding and the
Commitments of the Lenders shall thereupon forthwith terminate.
8. GRANT OF SECURITY INTEREST; REMEDIES
SECTION 8.1. Security Interests.
As security for the Obligations, each of the Debtors hereby
mortgages, pledges, assigns, transfers, sets over, conveys and delivers to
the Administrative Agent (for the benefit of the Lenders) and grants to the
Administrative Agent (for the benefit of the Lenders) a security interest in
all of each Debtor's right, title and interest in and to the Collateral,
excluding, however, any agreement that is included in the Collateral if a
grant of a security interest in such agreement would constitute a breach of
such agreement or would result in the termination of such agreement.
SECTION 8.2. Use of Collateral.
So long as no Event of Default shall have occurred and be
continuing, and subject to the various provisions of this Agreement and the
other Fundamental Documents to which a Debtor is a party, each of the
Debtors may use the Collateral in any lawful manner.
SECTION 8.3. Application of Proceeds.
Upon request of the Administrative Agent during the continuation
of an Event of Default, each Debtor agrees to take all steps necessary to
cause all sums, monies, royalties, fees, commissions, charges, payments,
advances, income, profit and other proceeds constituting proceeds of the
Collateral to be applied to the satisfaction of the Obligations.
SECTION 8.4. Collections, etc.
Upon the occurrence and during the continuation of an Event of
Default, the Administrative Agent may, in its sole discretion, in its name
or in the name of a Debtor or otherwise, demand, sue for, collect or receive
any money or property at any time payable or receivable on account of or in
exchange for, or make any compromise or settlement deemed desirable with
respect to, any of the Collateral, but shall be under no obligation so to
do, or the Administrative Agent may, to the fullest extent permitted by
Applicable Law, extend the time of payment, arrange for payment in
installments, or otherwise modify the terms of, or release, any of the
Collateral, without thereby incurring responsibility to, or discharging or
otherwise affecting any liability of, a Debtor. The Administrative Agent
will not be required to take any steps to preserve any rights against prior
parties to the Collateral, except as may be required by Applicable Law. If
a Debtor fails to make any payment or take any action required hereunder,
the Administrative Agent may, after notice to such Debtor, make such
payments and take all such actions as the Administrative Agent reasonably
deems necessary to protect the Administrative Agent's security interests in
the Collateral and/or the value thereof, and the Administrative Agent is
hereby authorized (without limiting the general nature of the authority
hereinabove conferred) to pay, purchase, contest, or compromise any Liens
(i) that in the judgment of the Administrative Agent appear to be equal to,
prior to or superior to the security interests of the Lenders in the
Collateral and (ii) not expressly permitted by this Agreement.
SECTION 8.5. Possession, Sale of Collateral, etc.
Upon the occurrence of an Event of Default, and during the
continuation of such Event of Default, the Administrative Agent may enter
upon the premises of a Debtor or wherever the Collateral may be, and take
possession of the Collateral, and may reasonably demand and receive such
possession from any Person who has possession thereof, and the
Administrative Agent may take such measures as it may deem necessary or
proper for the care or protection thereof, including the rights to remove
all or any portion of the Collateral, and with or without taking such
possession may sell or cause to be sold, whenever the Administrative Agent
shall decide, in one or more sales or parcels, at such prices as the
Administrative Agent may deem best, and for cash or on credit or for future
delivery, without assumption of any credit risk, all or any portion of the
Collateral, at any broker's board or at public or private sale, without
demand of performance or notice of intention to sell or of time or place of
sale (except 10 days' written notice to such Debtor of the time and place of
any such public sale or sales or of the time after which any private sale or
other disposition is to be made (it being acknowledged by the Debtors that
such notice constitutes "reasonable notification") and such other notices as
may be required by Applicable Law and cannot be waived), and any Person may
be the purchaser of all or any portion of the Collateral so sold and
thereafter hold the same absolutely, free from any claim or right of
whatever kind, including any equity of redemption, of the Debtors any such
demand, notice, claim, right or equity being hereby expressly waived and
released. At any sale or sales made pursuant to this Article 8, the
Administrative Agent may bid for or purchase, free (to the fullest extent
permitted by Applicable Law) from any claim or right of whatever kind,
including any equity of redemption, of the Debtors, any such demand, notice,
claim, right or equity being hereby expressly waived and released, any part
of or all of the Collateral offered for sale, and may make any payment on
account thereof by using any claim for moneys then due and payable to the
Administrative Agent and the Lenders by the Debtors hereunder as a credit
against the purchase price. The Administrative Agent shall in any such sale
make no representations or warranties with respect to the Collateral or any
part thereof, and the Administrative Agent shall not be chargeable with any
of the obligations or liabilities of the Debtors. Each Debtor hereby agrees
(i) that it will indemnify and hold the Administrative Agent and the Lenders
harmless from and against any and all claims with respect to the Collateral
asserted before the taking of actual possession or control of the relevant
Collateral by the Administrative Agent pursuant to this Article 8, or
arising out of any act of, or omission to act on the part of, any party
other than the Administrative Agent with respect to the Collateral prior to
such taking of actual possession or control by the Administrative Agent, or
arising out of any act on the part of the Debtors, or their agents before or
after the commencement of such actual possession or control by the
Administrative Agent; and (ii) that the Administrative Agent shall have no
liability or obligation to the Debtors arising out of any such claim except
for acts of willful misconduct or gross negligence or not taken in good
faith. In any action hereunder, the Administrative Agent shall be entitled
to the appointment of a receiver without notice to the extent permitted by
Applicable Law, to take possession of all or any portion of the Collateral
and to exercise such powers as the court shall confer upon the receiver.
Notwithstanding the foregoing, upon the occurrence of an Event of Default,
and during the continuation of such Event of Default, the Administrative
Agent shall be entitled to apply, without prior notice to the Debtors, any
cash or cash items constituting Collateral in the possession of the
Administrative Agent to payment of the Obligations.
SECTION 8.6. Application of Proceeds on Default.
During the continuance of an Event of Default, the balances in
any account of a Debtor with the Administrative Agent or a Lender, all other
income on the Collateral, and all proceeds from any sale of the Collateral
pursuant hereto shall be applied (in such order as the Administrative Agent
shall in its sole discretion determine, but subject to the rights of the
Lenders) to the payment in full of the Obligations. Any amounts remaining
after such payment in full shall be remitted to an account maintained by the
Borrowers with the Administrative Agent or as a court of competent
jurisdiction may otherwise direct.
SECTION 8.7. Power of Attorney.
Upon the occurrence of an Event of Default and during the
continuation of such Event of Default (a) each Debtor does hereby
irrevocably make, constitute and appoint the Administrative Agent or any of
its officers or designees its true and lawful attorney-in-fact with full
power in the name of the Administrative Agent or such other Person to
receive, open and dispose of all mail addressed to such Debtor, and to
endorse any notes, checks, drafts, money orders or other evidences of
payment relating to the Collateral that may come into the possession of the
Administrative Agent with full power and right to cause the mail of such
Persons to be transferred to the Administrative Agent's own offices or
otherwise and to do any and all other acts necessary or proper to carry out
the intent of this Agreement and the grant of the security interests
hereunder, and each Debtor hereby ratifies and confirms all that the
Administrative Agent or its substitutes shall properly do by virtue hereof;
(b) each Debtor does hereby further irrevocably make, constitute and appoint
the Administrative Agent or any of its officers or designees its true and
lawful attorney-in-fact in the name of the Administrative Agent or any
Debtor (i) to enforce all of such Debtor's rights under and pursuant to all
agreements with respect to the Collateral, all for the sole benefit of the
Administrative Agent on behalf of the Lenders, (ii) to enter into and
perform such agreements as may be necessary in order to carry out the terms,
covenants and conditions of the Fundamental Documents that are required to
be observed or performed by the Debtors or their Subsidiaries, (iii) to
execute such other and further pledges and assignments of the Collateral,
and related instruments or agreements, as the Administrative Agent may
reasonably require for the purpose of perfecting, protecting, maintaining or
enforcing the security interests granted to the Administrative Agent on
behalf of the Lenders hereunder, and (iv) to do any and all other things
necessary or proper to carry out the intention of this Agreement and the
grant of the security interests hereunder.
SECTION 8.8. Financing Statements, Direct Payments, Confirmation
of Receivables and Audit Rights.
Each Debtor hereby authorizes the Administrative Agent to file
UCC financing statements and any amendments thereto or continuations thereof
and any other appropriate security documents or instruments and to give any
notices necessary or desirable to perfect the Liens of the Administrative
Agent on behalf of the Lenders on the Collateral, in all cases without the
signatures of such Debtor or to execute such items as attorney-in-fact for
such Debtor. Each Debtor further authorizes the Administrative Agent (i)
upon the occurrence of an Event of Default, and during the continuation of
such Event of Default, to notify any account debtors that all sums payable
to such Debtor relating to the Collateral shall be paid directly to the
Administrative Agent and (ii) to confirm with any account debtors the
amounts payable by them to such Debtor with regard to the Collateral and the
terms of their agreements with the Debtors and to participate with each
Debtor in the audits of its account debtors.
SECTION 8.9. Further Assurances.
Upon the request of the Administrative Agent, each Debtor hereby
agrees to duly execute and deliver, or cause to be duly executed and
delivered, at the cost and expense of the Borrowers, such further
instruments as may be necessary or proper, in the reasonable judgment of the
Administrative Agent, to carry out the provisions and purposes of this
Article 8, and to do all things necessary, in the reasonable judgment of the
Administrative Agent, to perfect and preserve the Liens of the
Administrative Agent on behalf of the Lenders hereunder and under the
Fundamental Documents, and in the Collateral or any portion thereof.
SECTION 8.10. Termination.
The security interests granted under this Article shall terminate
when all the Obligations have been fully paid and performed and the
Commitments shall have terminated. Upon request by the Borrowers following
such termination the Administrative Agent will take, at the expense of the
Borrowers, all action and do all things reasonably necessary to release the
Liens granted to it under the Fundamental Documents.
SECTION 8.11. Remedies Not Exclusive.
The remedies conferred upon or reserved to the Administrative
Agent in this Article are intended to be in addition to, and not in
limitation of, any other remedy or remedies available to the Administrative
Agent. Without limiting the generality of the foregoing, the Administrative
Agent and the Lenders shall have all rights and remedies of a secured
creditor under Article 9 of the New York Uniform Commercial Code.
SECTION 8.12. Regulatory Approvals.
During the continuance of an Event of Default, each Debtor will,
at its expense, promptly execute and deliver, or cause the execution and
delivery of, all applications, certificates, instruments, registration
statements and all other documents and papers the Administrative Agent may
reasonably request or as may be required by law in connection with the
obtaining of any consent, approval, registration, qualification or
authorization of the FCC or of any other Person necessary or appropriate for
the effective exercise of any rights under this Agreement or any other
Fundamental Document. Without limiting the generality of the foregoing, if
an Event of Default shall have occurred and be continuing, each Debtor shall
take any action which the Administrative Agent may reasonably request in
order to transfer and assign to the Administrative Agent, or to such one or
more third parties as the Administrative Agent may designate, or to a
combination of the foregoing, each FCC License, Franchise or other similar
rights or licenses. To enforce the provisions of this Section, the
Administrative Agent is empowered to request the appointment of a receiver
from any court of competent jurisdiction. Such receiver shall be instructed
to seek from the FCC and any other applicable regulatory authority an
involuntary transfer of control of each such FCC License, Franchise or
similar right or license for the purpose of seeking a bona fide purchaser to
whom control will ultimately be transferred. Debtor hereby agrees to
authorize such an involuntary transfer of control upon the request of the
receiver so appointed and, if such Debtor shall refuse to authorize the
transfer, its approval may be required by the court. Upon the occurrence
and continuance of an Event of Default, each Debtor shall further use its
best efforts to assist in obtaining approval of the FCC and any applicable
regulatory authority, if required, for any action or transactions
contemplated by this Agreement or any other Fundamental Document including,
without limitation, the preparation, execution and filing with the FCC and
any applicable regulatory authority of the assignor's or transferor's
portion of any application or applications for consent to the assignment of
any FCC License, Franchise or similar right or license or transfer of
control necessary or appropriate under the rules and regulations of the FCC
or any regulatory authority for the approval of the transfer or assignment
of any portion of the Collateral, together with any FCC License, Franchise
or similar right or license. Each Debtor acknowledges that the assignment
or transfer of each FCC License, Franchise or similar right or license is
integral to the Administrative Agent's and Lenders' realization of the value
of the Collateral, that there is no adequate remedy at law for failure by
the Debtors to comply with the provisions of this Section and that such
failure would cause irreparable injury not adequately compensable in
damages, and therefore agrees that each and every covenant contained in this
Section may be specifically enforced, and each Debtor hereby waives and
agrees not to assert any defenses against an action for specific performance
of such covenants.
9. GUARANTY
SECTION 9.1. Guaranty.
(a) Each Guarantor unconditionally and irrevocably guarantees
the due and punctual payment by, and performance of, the Obligations
(including interest accruing on and after the filing of any petition in
bankruptcy or of reorganization of the obligor whether or not post filing
interest is allowed in such proceeding). Each Guarantor further agrees that
the Obligations may be extended or renewed, in whole or in part, without
notice or further assent from it (except as may be otherwise required
herein), and it will remain bound upon this guaranty notwithstanding any
extension or renewal of any Obligation. Each Guarantor's obligations under
this Article 9 are hereinafter referred to as such Guarantor's "Guaranty
Obligations".
(b) Each Guarantor waives presentation to, demand for payment
from and protest to, as the case may be, the Borrowers or any other
guarantor, and also waives notice of protest for nonpayment. The
obligations of each Guarantor hereunder shall not be affected by (i) the
failure of the Administrative Agent or the Lenders to assert any claim or
demand or to enforce any right or remedy against the Borrowers or any other
guarantor under the provisions of this Agreement or any other agreement or
otherwise; (ii) any extension or renewal of any provision hereof or thereof;
(iii) the failure of the Administrative Agent or the Lenders to obtain the
consent of any Guarantor with respect to any rescission, waiver, compromise,
acceleration, amendment or modification of any of the terms or provisions of
this Agreement, the Notes or of any other agreement; (iv) the release,
exchange, waiver or foreclosure of any security held by the Administrative
Agent for the Obligations or any of them; (v) the failure of the
Administrative Agent or the Lenders to exercise any right or remedy against
any other guarantor of the Obligations; or (vi) the release or substitution
of any guarantor.
(c) Each Guarantor further agrees that this guaranty
constitutes a guaranty of performance and of payment when due and not just
of collection, and waives any right to require that any resort be had by the
Administrative Agent or the Lenders to any security held for payment of the
Obligations or to any balance of any deposit, account or credit on the books
of the Administrative Agent or the Lenders in favor of the Borrowers, any
other guarantor or to any other Person.
(d) Each Guarantor hereby expressly assumes all
responsibilities to remain informed of the financial condition of the
Borrowers and any circumstances affecting the ability of the Borrowers to
perform under this Agreement.
(e) Each Guarantor's guaranty shall not be affected by the
genuineness, validity, regularity or enforceability of the Obligations, the
Notes or any other instrument evidencing any Obligations, or by the
existence, validity, enforceability, perfection, or extent of any collateral
therefor or by any other circumstance relating to the Obligations which
might otherwise constitute a defense to this Guaranty. The Administrative
Agent and the Lenders make no representation or warranty in respect to any
such circumstances and have no duty or responsibility whatsoever to each
Guarantor in respect to the management and maintenance of the Obligations or
any collateral security for the Obligations.
SECTION 9.2. No Impairment of Guaranty, etc.
The obligations of each Guarantor hereunder shall not be subject
to any reduction, limitation, impairment or termination for any reason,
including, without limitation, any claim of waiver, release, surrender,
alteration or compromise, and shall not be subject to any defense or
set-off, counterclaim, recoupment or termination whatsoever by reason of the
invalidity, illegality or unenforceability of the Obligations or otherwise.
Without limiting the generality of the foregoing, the obligations of each
Guarantor hereunder shall not be discharged or impaired or otherwise
affected by the failure of the Administrative Agent or the Lenders to assert
any claim or demand or to enforce any remedy under this Agreement or any
other agreement, by any waiver or modification of any provision thereof, by
any default, failure or delay, willful or otherwise, in the performance of
the Obligations, or by any other act or thing or omission or delay to do any
other act or thing which may or might in any manner or to any extent vary
the risk of such Guarantor or would otherwise operate as a discharge of such
Guarantor as a matter of law, unless and until the Obligations are paid in
full.
SECTION 9.3. Continuation and Reinstatement, etc.
(a) Each Guarantor further agrees that its guaranty hereunder
shall continue to be effective or be reinstated, as the case may be, if at
any time payment, or any part thereof, of principal of or interest on any
Obligation is rescinded or must otherwise be restored by the Administrative
Agent or the Lenders upon the bankruptcy or reorganization of a Borrower or
a Guarantor, or otherwise. In furtherance of the provisions of this Article
9, and not in limitation of any other right which the Administrative Agent
or the Lenders may have at law or in equity against a Borrower or a
Guarantor by virtue hereof, upon failure of a Borrower to pay any Obligation
when and as the same shall become due, whether at maturity, by acceleration,
after notice or otherwise, each Guarantor hereby promises to and will, upon
receipt of written demand by the Administrative Agent on behalf of the
Lenders, forthwith pay or cause to be paid to the Administrative Agent on
behalf of the Lenders in cash an amount equal to the unpaid amount of all
the Obligations with interest thereon at a rate of interest equal to the
rate specified in Section 2.9 hereof, and thereupon the Administrative Agent
on behalf of the Lenders shall assign such Obligation, together with all
security interests, if any, then held by the Administrative Agent in respect
of such Obligation, to the Guarantor making such payment.
(b) All rights of the Guarantors against the Borrowers, arising
as a result of the payment by any Guarantor of any sums to the
Administrative Agent for the benefit of the Lenders or directly to the
Lenders hereunder by way of right of subrogation or otherwise shall in all
respects be subordinated and junior in right of payment to the prior final
and indefeasible payment in full of all the Obligations to the
Administrative Agent on behalf of the Lenders. If any amount shall be paid
to such Guarantor for the account of a Borrower, such amount shall be held
in trust for the benefit of the Administrative Agent and shall forthwith be
paid to the Administrative Agent on behalf of the Lenders to be credited and
applied to the Obligations, whether matured or unmatured.
SECTION 9.4. Limitation on Guaranteed Amount etc.
Notwithstanding any other provision of this Article 9, the
amount guaranteed by the Guarantor hereunder shall be limited to the extent,
if any, required so that its obligations under this Article 9 shall not be
subject to avoidance under Section 548 of the Bankruptcy Code or to being
set aside or annulled under any applicable state law relating to fraud on
creditors. In determining the limitations, if any, on the amount of the
Guarantor's obligations hereunder pursuant to the preceding sentence, it is
the intention of the parties hereto that any rights of subrogation or
contribution which the Guarantor may have under this Article 9 (or as a
result of the operation of Article 8 with regard to assets of other Debtors)
or the Contribution Agreement or any other Agreement or under Applicable Law
shall be taken into account.
10. JOINT AND SEVERAL LIABILITY OF THE BORROWERS
Unless otherwise specifically provided for herein, the Borrowers
are and will be jointly and severally liable for each and every
representation, covenant and obligation to be performed by the Borrowers
under this Agreement, the Notes and the other Fundamental Documents and the
invalidity, unenforceability or illegality of this Agreement and/or the
Notes and/or the release by the Lenders of any Borrower hereunder and/or
under the Notes and/or any other Fundamental Document will not affect the
obligations of the other Borrowers under this Agreement and/or the Notes
and/or any other Fundamental Document which otherwise remain valid and
legally binding obligations of such other Borrowers. Each of the Borrowers
hereby covenants and agrees that (i) it will not enforce or otherwise
exercise any rights of reimbursement, subrogation, contribution or other
similar rights with respect to the Obligations against any Person, including
without limitation any other Borrower, prior to the payment in full of the
Obligations and (ii) so long as there shall exist any Event of Default, all
Indebtedness, claims and liabilities now or hereafter owing by a Borrower to
any other Borrower or, if by law any Borrower is subrogated to the rights of
the Lenders or any other Borrower, such rights are hereby subordinated to
the prior payment in full of the Obligations and are so subordinated as a
claim against such Borrower or any of its assets, whether such claim be in
the ordinary course of business or in the event of voluntary or involuntary
liquidation, dissolution, insolvency or bankruptcy, so that no payment with
respect to any such Indebtedness, claim or liability will be made or
received while any of the Obligations are outstanding.
11. THE ADMINISTRATIVE AGENT
SECTION 11.1. Administration by Administrative Agent.
The general administration of the Fundamental Documents and any
other documents contemplated by this Agreement shall be by the
Administrative Agent or its designees. Each of the Lenders hereby
irrevocably authorizes the Administrative Agent, at its discretion, to take
or refrain from taking such actions as agent on its behalf and to exercise
or refrain from exercising such powers under the Fundamental Documents, the
Notes and any other documents contemplated by this Agreement as are
delegated by the terms hereof or thereof, as appropriate, together with all
powers reasonably incidental thereto. The Administrative Agent shall have
no duties or responsibilities except as set forth in the Fundamental
Documents. Any Lender which is a Managing Agent for the credit facility
hereunder shall not have any duties or responsibilities except as a Lender
hereunder.
SECTION 11.2. Advances and Payments.
(a) On the date of each Loan, the Administrative Agent shall be
authorized (but not obligated) to advance, for the account of each of the
Lenders, the amount of the Loan to be made by it in accordance with this
Agreement. Each of the Lenders hereby authorizes and requests the
Administrative Agent to advance for its account, pursuant to the terms
hereof, the amount of the Loan to be made by it, unless with respect to any
Lender, such Lender has theretofore specifically notified the Administrative
Agent that such Lender does not intend to fund that particular Loan. Each
of the Lenders agrees forthwith to reimburse the Administrative Agent in
immediately available funds for the amount so advanced on its behalf by the
Administrative Agent pursuant to the immediately preceding sentence. If any
such reimbursement is not made in immediately available funds on the same
day on which the Administrative Agent shall have made any such amount
available on behalf of any Lender in accordance with this Section 11.2, such
Lender shall pay interest to the Administrative Agent at a rate per annum
equal to the Administrative Agent's cost of obtaining overnight funds in the
New York Federal Funds Market. Notwithstanding the preceding sentence, if
such reimbursement is not made by the second Business Day following the day
on which the Administrative Agent shall have made any such amount available
on behalf of any Lender or such Lender has indicated that it does not intend
to reimburse the Administrative Agent, the Borrower shall immediately pay
such unreimbursed advance amount (plus any accrued, but unpaid interest at
the rate applicable to ABR Loans) to the Administrative Agent.
(b) Any amounts received by the Administrative Agent in
connection with this Agreement or the Notes the application of which is not
otherwise provided for shall be applied after subtracting therefrom all
costs and expenses incurred by the Administrative Agent hereunder in its
capacity as Administrative Agent, in accordance with each of the Lenders'
pro rata interest therein, first, to pay accrued but unpaid Commitment Fees,
second, to pay accrued but unpaid interest on the Notes, third, to pay the
principal balance outstanding on the Notes and any amounts owing to the
Lenders pursuant to Interest Rate Protection Agreements, on a pro rata and
pari passu basis and fourth, to pay other amounts payable to the
Administrative Agent and/or the Lenders. All amounts to be paid to any of
the Lenders by the Administrative Agent shall be credited to the Lenders,
after collection by the Administrative Agent, in immediately available funds
either by wire transfer or deposit in such Lender's correspondent account
with the Administrative Agent, or as such Lender and the Administrative
Agent shall from time to time agree.
SECTION 11.3. Sharing of Setoffs and Cash Collateral.
Each of the Lenders agrees that if it shall, through the
operation of Section 2.18 hereof or the exercise of a right of bank's lien,
setoff or counterclaim against any Borrower, including, but not limited to,
a secured claim under Section 506 of Title 11 of the United States Code or
other security or interest arising from, or in lieu of, such secured claim
and received by such Lender under any applicable bankruptcy, insolvency or
other similar law, or otherwise, obtain payment in respect of its Loans as a
result of which the unpaid portion of its Loans is proportionately less than
the unpaid portion of any of the other Lenders (a) it shall promptly
purchase at par (and shall be deemed to have thereupon purchased) from such
other Lenders a participation in the Loans of such other Lenders, so that
the aggregate unpaid principal amount of each of the Lenders' Loans and its
participation in Loans of the other Lenders shall be in the same proportion
to the aggregate unpaid principal amount of all Loans then outstanding as
the principal amount of its Loans prior to the obtaining of such payment was
to the principal amount of all Loans outstanding prior to the obtaining of
such payment and (b) such other adjustments shall be made from time to time
as shall be equitable to ensure that the Lenders share such payment pro
rata.
SECTION 11.4. Notice to the Lenders.
Upon receipt by the Administrative Agent from any Borrower of
any communication calling for an action on the part of the Lenders, or upon
notice to the Administrative Agent of any Event of Default, the
Administrative Agent will in turn immediately inform the other Lenders in
writing (which shall include telegraphic communications) of the nature of
such communication or of the Event of Default, as the case may be.
SECTION 11.5. Liability of Administrative Agent.
(a) The Administrative Agent, when acting on behalf of the
Lenders, may execute any of its duties under this Agreement by or through
its officers, agents, or employees and neither the Administrative Agent, nor
its directors, officers, agents, or employees shall be liable to the Lenders
or any of them for any action taken or omitted to be taken in good faith, or
be responsible to the Lenders or to any of them for the consequences of any
oversight or error of judgment, or for any loss, unless the same shall
happen through its gross negligence or willful misconduct. The
Administrative Agent and its directors, officers, agents, and employees
shall in no event be liable to the Lenders or to any of them for any action
taken or omitted to be taken by it pursuant to instructions received by it
from the Required Lenders or in reliance upon the advice of counsel selected
by it. Without limiting the foregoing, neither the Administrative Agent nor
any of its directors, officers, employees, or agents shall be responsible to
any of the Lenders for the due execution, validity, genuineness,
effectiveness, sufficiency, or enforceability of, or for any statement,
warranty, or representation in, or for the perfection of any security
interest contemplated by, this Agreement or any related agreement, document
or order, or for the designation or failure to designate this transaction as
a "Highly Leveraged Transaction" for regulatory purposes, or shall be
required to ascertain or to make any inquiry concerning the performance or
observance by any Borrower of any of the terms, conditions, covenants, or
agreements of this Agreement or any related agreement or document.
(b) Neither the Administrative Agent nor any of its directors,
officers, employees, or agents shall have any responsibility to Borrowers on
account of the failure or delay in performance or breach by any of the
Lenders or any of the Borrowers of any of their respective obligations
under this Agreement or the Notes or any related agreement or document or in
connection herewith or therewith.
(c) The Administrative Agent shall be entitled to rely on any
communication, instrument, or document reasonably believed by it to be
genuine or correct and to have been signed or sent by a Person or Persons
believed by it to be the proper Person or Persons, and it shall be entitled
to rely on advice of legal counsel, independent public accountants, and
other professional advisers and experts selected by it.
SECTION 11.6. Reimbursement and Indemnification.
Each of the Lenders severally and not jointly agrees (i) to
reimburse the Administrative Agent, ratably in accordance with its
Commitment, for any expenses and fees incurred for the benefit of the
Lenders under the Fundamental Documents, including, without limitation,
counsel fees and compensation of agents and employees paid for services
rendered on behalf of the Lenders, and any other expense incurred in
connection with the administration or enforcement thereof not reimbursed by
the Borrowers or one of their respective Restricted Subsidiaries, and (ii)
to indemnify and hold harmless the Administrative Agent and any of its
directors, officers, employees, or agents, on demand, in the amount of its
proportionate share, from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses, or
disbursements of any kind or nature whatsoever which may be imposed on,
incurred by, or asserted against it or any of them in any way relating to or
arising out of the Fundamental Documents or any action taken or omitted by
it or any of them under the Fundamental Documents to the extent not
reimbursed by the Borrowers or one of their respective Restricted
Subsidiaries (except such as shall result from the gross negligence or
willful misconduct of the Person seeking indemnification).
SECTION 11.7. Rights of Administrative Agent.
It is understood and agreed that First Union National Bank of
North Carolina shall have the same rights and powers hereunder (including
the right to give such instructions) as the other Lenders and may exercise
such rights and powers, as well as its rights and powers under other
agreements and instruments to which it is or may be party, and engage in
other transactions with any Borrower or any Debtor as though it were not the
Administrative Agent on behalf of the Lenders under this Agreement.
SECTION 11.8. Independent Investigation by Lenders.
Each of the Lenders acknowledges that it has decided to enter
into this Agreement and to make the Loans based on its own analysis of the
transactions contemplated hereby and of the creditworthiness of the
Borrowers and agrees that the Administrative Agent shall bear no
responsibility therefor.
SECTION 11.9. Notice of Transfer.
The Administrative Agent may deem and treat any Lender which is
a party to this Agreement as the owner of such Lender's portions of the
Loans for all purposes, unless and until a written notice of the assignment
or transfer thereof executed by any such Lender shall have been received by
the Administrative Agent and become effective pursuant to Section 12.3.
SECTION 11.10. Successor Administrative Agent.
The Administrative Agent may resign at any time by giving
written notice thereof to the Lenders and the Borrowers. The Required
Lenders may at any time remove the Administrative Agent, effective on the
date specified by them, by written notice to the Administrative Agent and
the Borrowers. Upon any such resignation or removal, the Required Lenders
shall have the right to appoint a successor Administrative Agent from among
the Managing Agents. If no successor Administrative Agent shall have been
so appointed by the Required Lenders and shall have accepted such
appointment within 30 days after the retiring Administrative Agent's giving
of notice of resignation, the retiring Administrative Agent may, on behalf
of the Lenders, appoint a successor Administrative Agent (with the consent
of the Borrowers, which consent shall not be unreasonably withheld or
delayed; provided, no such consent need be obtained if a Default or an Event
of Default has occurred and is continuing), which shall be a commercial bank
organized or licensed under the laws of the United States of America or of
any State thereof and having a combined capital and surplus of at least
$250,000,000. Upon the acceptance of any appointment as Administrative
Agent hereunder by a successor Administrative Agent, such successor
Administrative Agent shall thereupon succeed to and become vested with all
the rights, powers, privileges and duties of the retiring Administrative
Agent, and the retiring Administrative Agent shall be discharged from its
duties and obligations under this Agreement. After any retiring
Administrative Agent's resignation or removal hereunder as Administrative
Agent, the provisions of this Article 11 shall inure to its benefit as to
any actions taken or omitted to be taken by it while it was Administrative
Agent under this Agreement.
12. MISCELLANEOUS
SECTION 12.1. Notices.
Notices and other communications provided for herein shall be in
writing and shall be delivered or mailed (or in the case of telegraphic
communication, if by telegram, delivered to the telegraph company and, if by
telex, telecopy, graphic scanning or other telegraphic communications
equipment of the sending party hereto, delivered by such equipment)
addressed, if to the Administrative Agent or First Union National Bank of
North Carolina, to it at One First Union Center, 301 S. College Street,
Charlotte, NC 28288, Attention: Syndication Agency Service, or if to a
Debtor, to it at its address set forth on the signature page, or if to a
Lender, to it at its address set forth on the signature page (or in its
Assignment and Acceptance pursuant to which it became a Lender hereunder),
or such other address as such party may from time to time designate by
giving written notice to the other parties hereunder. All notices and other
communications given to any party hereto in accordance with the provisions
of this Agreement shall be deemed to have been given on the fifth Business
Day after the date when sent by registered or certified mail, postage
prepaid, return receipt requested, if by mail, or when delivered to the
telegraph company, charges prepaid, if by telegram, or when receipt is
acknowledged, if by any telecopier or telegraphic communications equipment
of the sender, in each case addressed to such party as provided in this
Section 12.1 or in accordance with the latest unrevoked written direction
from such party.
SECTION 12.2. Survival of Agreement, Representations and
Warranties, etc.
All warranties, representations and covenants made by each
Borrower herein or in any certificate or other instrument delivered by it or
on its behalf in connection with this Agreement shall be considered to have
been relied upon by the Administrative Agent and the Lenders and shall
survive the making of the Loans herein contemplated and the issuance and
delivery to the Administrative Agent of the Notes regardless of any
investigation made by the Administrative Agent or the Lenders or on their
behalf and shall continue in full force and effect so long as any amount due
or to become due hereunder is outstanding and unpaid and so long as the
Commitment has not been terminated. All statements in any such certificate
or other instrument shall constitute representations and warranties by each
Borrower hereunder.
SECTION 12.3. Successors and Assigns; Syndications; Loan Sales;
Participations.
(a) Whenever in this Agreement any of the parties hereto is
referred to, such reference shall be deemed to include the successors and
assigns of such party (provided, however, that the Borrowers may not assign
their rights hereunder without the prior written consent of all the
Lenders), and all covenants, promises and agreements by, or on behalf of,
each Borrower which are contained in this Agreement shall inure to the
benefit of the successors and assigns of the Lenders.
(b) Each of the Lenders may (but only with the prior written
consent of the Administrative Agent and the Borrowers, which consent shall
not be unreasonably withheld or delayed; provided no such Borrower consent
need be obtained if a Default or an Event of Default has occurred and is
continuing) assign to one or more banks or other entities all or a portion
of its interests, rights and obligations under this Agreement (including,
without limitation, all or a portion of its Commitment and the same portion
of the Loans at the time owing to it and the Note held by it) (an
"Assignment"); provided, however, that (1) each Assignment shall be of a
constant, not a varying, percentage of all of the assigning Lender's rights
and obligations in respect of the Loans and the Commitment (if applicable),
which are the subject of such assignment, (2) the amount of the Commitment
of the assigning Lender subject to each such assignment (determined as of
the date the Assignment and Acceptance with respect to such assignment is
delivered to the Lender) shall be in a minimum principal amount of
$10,000,000 and (3) the parties to each such assignment shall execute and
deliver to the Administrative Agent, for its acceptance and recording in the
Register (as defined below), an Assignment and Acceptance, together with the
Note subject to such assignment (if required hereunder) and a processing and
recordation fee of $3,000. Upon such execution, delivery, acceptance and
recording, and from and after the effective date specified in each
Assignment and Acceptance, which effective date shall be not earlier than
five Business Days after the date of acceptance and recording by the
Administrative Agent, (x) the assignee thereunder shall be a party hereto
and, to the extent provided in such Assignment and Acceptance, have the
rights and obligations of a Lender hereunder and (y) the assigning Lender
thereunder shall, to the extent provided in such Assignment and Acceptance,
be released from its obligations under this Agreement (and, in the case of
an Assignment and Acceptance covering all or the remaining portion of the
assigning Lender's rights and obligations under this Agreement, such
assigning Lender shall cease to be a party hereto).
(c) Notwithstanding the other provisions of this Section 12.3,
each Lender may at any time make an Assignment of its interests, rights and
obligations under this Agreement to (i) any Affiliate of such Lender or
(ii) any other Lender hereunder, provided that after giving effect to such
assignment, the percentage that such assignee's Commitment bears to the
Total Commitment shall not exceed 25%.
(d) By executing and delivering an Assignment and Acceptance,
the assigning Lender thereunder and the assignee thereunder confirm to and
agree with each other and the other parties hereto as follows: (i) other
than the representation and warranty that it is the legal and beneficial
owner of the interest being assigned thereby free and clear of any adverse
claim, the assigning Lender makes no representation or warranty and assumes
no responsibility with respect to any statements, warranties or
representations made in, or in connection with, this Agreement or the
execution, legality, validity, enforceability, genuineness, sufficiency or
value of the Fundamental Documents or any other instrument or document
furnished pursuant hereto or thereto; (ii) such Lender assignor makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of any Borrower or the performance or observance by any
Borrower of any of its obligations under the Fundamental Documents;
(iii) such assignee confirms that it has received a copy of this Agreement,
together with copies of the most recent financial statements delivered
pursuant to Sections 5.1(a) and 5.1(b) (or if none of such financial
statements shall have then been delivered, then copies of the financial
statements referred to in Section 3.4 hereof) and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into such Assignment and Acceptance; (iv) such assignee
will, independently and without reliance upon the assigning Lender, the
Administrative Agent or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its
own credit decisions in taking or not taking action under this Agreement;
(v) such assignee appoints and authorizes the Administrative Agent to take
such action as agent on its behalf and to exercise such powers under the
Fundamental Documents as are delegated to the Administrative Agent by the
terms thereof, together with such powers as are reasonably incidental
thereto; and (vi) such assignee agrees that it will be bound by the
provisions of this Agreement and will perform in accordance with its terms
all of the obligations which by the terms of this Agreement are required to
be performed by it as a Lender.
(e) The Administrative Agent shall maintain at its address at
which notices are to be given to it pursuant to Section 12.1, a copy of each
Assignment and Acceptance and a register for the recordation of the names
and addresses of the Lenders and the Commitments of, and principal amount of
the Loans owing to, each Lender from time to time (the "Register"). The
entries in the Register shall be conclusive, in the absence of manifest
error, and the Borrowers, the Administrative Agent and the Lenders may treat
each Person whose name is recorded in the Register as a Lender hereunder for
all purposes of the Fundamental Documents. The Register shall be available
for inspection by the Borrowers or any Lender at any reasonable time and
from time to time upon reasonable prior notice.
(f) Upon its receipt of an Assignment and Acceptance executed
by an assigning Lender and an assignee, any Note subject to such assignment
(if required hereunder) and the processing and recordation fee, the
Administrative Agent shall, if such Assignment and Acceptance has been
completed and is in the form of Exhibit C hereto, (i) accept such Assignment
and Acceptance, (ii) record the information contained therein in the
Register and (iii) give prompt written notice thereof to the Borrowers. If
a portion of the Commitment has been assigned by an assigning Lender, then
such Lender shall deliver its Note at the same time it delivers the
applicable Assignment and Acceptance to the Administrative Agent. Within
five Business Days after receipt of the notice, the Borrowers, at their own
expense, shall execute and deliver to the applicable Lenders, in exchange
for the surrendered Note, a new Note to the order of such assignee in an
amount equal to the Commitment assumed by it pursuant to such Assignment and
Acceptance and a new Note to the order of the assigning Lender in an amount
equal to the Commitment retained by it hereunder. Each new Note shall be
dated the date hereof and shall otherwise be in substantially the form of
Exhibit A hereto.
(g) Each of the Lenders may without the consent of the
Borrowers sell participations to one or more banks or other entities in all
or a portion of its rights and obligations under this Agreement (including,
without limitation, all or a portion of its Commitment and the Loans owing
to it and the Note held by it); provided, however, that (i) any such
Lender's obligations under this Agreement shall remain unchanged, (ii) such
participant shall not be granted any voting rights under this Agreement,
except with respect to proposed changes to interest rates, amounts of
Commitments, final maturity of Loans, and fees (as applicable to such
participant), (iii) any such Lender shall remain solely responsible to the
other parties hereto for the performance of such obligations, (iv) the
participating banks or other entities shall be entitled to the cost
protection provisions contained in Sections 2.13, 2.14 and 2.16 hereof but a
participant shall not be entitled to receive pursuant to such provisions an
amount larger than its share of the amount to which the Lender granting such
participation would have been entitled to receive, and (v) the Borrowers,
the Administrative Agent and the other Lenders shall continue to deal solely
and directly with such Lender in connection with such Lender's rights and
obligations under this Agreement.
(h) The Lenders may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this
Section 12.3, disclose to the assignee or participant or proposed assignee
or participant, any information relating to the Borrowers furnished to the
Administrative Agent by or on behalf of the Borrowers; provided that prior
to any such disclosure, each such assignee or participant or proposed
assignee or participant shall agree, by executing a confidentiality letter
in form and substance equivalent to the confidentiality letter executed by
the Lenders in connection with information received by such Lenders relating
to this transaction to preserve the confidentiality of any confidential
information relating to the Borrowers received from such Lender.
(i) Each Lender hereby represents that it is a commercial
lender or financial institution which makes loans in the ordinary course of
its business and that it will make the Loans hereunder for its own account
in the ordinary course of such business; provided, however, that, subject to
preceding clauses (a) through (h), the disposition of the Note or other
evidence of Indebtedness held by that Lender shall at all times be within
its exclusive control.
(j) Each Borrower hereby consents that any Lender may at any
time and from time to time pledge, or otherwise grant a security interest
in, any Loan or any Note evidencing such Loan (or any part thereof) to any
Federal Reserve Bank.
SECTION 12.4. Expenses; Documentary Taxes.
Whether or not the transactions hereby contemplated shall be
consummated, each of the Borrowers agrees to pay all reasonable
out-of-pocket expenses incurred by the Managing Agents in connection with
the syndication, preparation, execution, delivery and administration of this
Agreement, the Notes, the making of the Loans, including but not limited to
any internally allocated audit costs, the reasonable fees and disbursements
of Morgan, Lewis & Bockius, counsel for the Managing Agents, as well as all
reasonable out-of-pocket expenses incurred by the Lenders in connection with
any restructuring or workout of this Agreement, or the Notes or in
connection with the enforcement or protection of the rights of the Lenders
in connection with this Agreement or the Notes or any other Fundamental
Document, and with respect to any action which may be instituted by any
Person against any Lender in respect of the foregoing, or as a result of any
transaction, action or nonaction arising from the foregoing, including but
not limited to the fees and disbursements of any counsel for the Lenders.
Such payments shall be made on the date of execution of this Agreement and
thereafter on demand. Each Borrower agrees that it shall indemnify the
Administrative Agent and the Lenders from, and hold them harmless against,
any documentary taxes, assessments or charges made by any Governmental
Authority by reason of the execution and delivery of this Agreement or the
Notes or any other Fundamental Document. The obligations of the Borrowers
under this Section shall survive the termination of this Agreement and/or
the payment of the Loans.
SECTION 12.5. Indemnity.
Further, by the execution hereof, each Debtor agrees to
indemnify and hold harmless the Administrative Agent and the Lenders and
their respective directors, officers, employees and agents (each, an
"Indemnified Party") from and against any and all expenses (including
reasonable fees and disbursements of counsel), losses, claims, damages and
liabilities arising out of any claim, litigation, investigation or
proceeding (regardless of whether any such Indemnified Party is a party
thereto) in any way relating to the transactions contemplated hereby, but
excluding therefrom all expenses, losses, claims, damages, and liabilities
arising out of or resulting from the gross negligence or willful misconduct
of the Indemnified Party seeking indemnification. The obligations of the
Debtors under this Section 12.5 shall survive the termination of this
Agreement and/or payment of the Loans.
SECTION 12.6. CHOICE OF LAW.
THIS AGREEMENT AND THE NOTES HAVE BEEN EXECUTED AND DELIVERED IN
THE STATE OF NEW YORK AND SHALL IN ALL RESPECTS BE CONSTRUED IN ACCORDANCE
WITH, AND GOVERNED BY, THE LAWS OF SUCH STATE APPLICABLE TO CONTRACTS MADE
AND TO BE PERFORMED WHOLLY WITHIN SUCH STATE AND, IN THE CASE OF PROVISIONS
RELATING TO INTEREST RATES, ANY APPLICABLE LAWS OF THE UNITED STATES OF
AMERICA.
SECTION 12.7. No Waiver.
No failure on the part of the Administrative Agent or any Lender
to exercise, and no delay in exercising, any right, power or remedy
hereunder or under the Notes shall operate as a waiver thereof, nor shall
any single or partial exercise of any such right, power or remedy preclude
any other or further exercise thereof or the exercise of any other right,
power or remedy. All remedies hereunder are cumulative and are not
exclusive of any other remedies provided by law.
SECTION 12.8. Extension of Maturity.
Except as otherwise specifically provided in Article 11 hereof,
should any payment of principal of or interest on the Notes or any other
amount due hereunder become due and payable on a day other than a Business
Day, the maturity thereof shall be extended to the next succeeding Business
Day and, in the case of principal, interest shall be payable thereon at the
rate herein specified during such extension.
SECTION 12.9. Amendments, etc.
No modification, amendment or waiver of any provision of this
Agreement, and no consent to any departure by the Borrowers herefrom or
therefrom, shall in any event be effective unless the same shall be in
writing and signed or consented to in writing by the Required Lenders and
the Borrowers, and then such waiver or consent shall be effective only in
the specific instance and for the purpose for which given; provided,
however, that no such modification or amendment shall without the written
consent of each Lender affected thereby (x) increase the Commitment of a
Lender or postpone or waive any scheduled reduction in the Commitments, or
(y) alter the stated maturity or principal amount of any installment of any
Loan, or decrease the rate of interest payable thereon, or the rate at which
the Commitment Fees accrue or (z) waive a default under Section 7(b) hereof
and further provided that no such modification or amendment shall without
the written consent of all of the Lenders (i) decrease the Commitment of any
Lender, (ii) release all or any portion of the Collateral unless such
release is pursuant to a Permitted Asset Sale or is otherwise expressly
permitted hereby, (iii) release any Debtor from its obligations hereunder,
(iv) amend or modify any provision of this Agreement which provides for the
unanimous consent or approval of the Lenders, or (v) amend this Section 12.9
or the definition of Required Lenders or the definition of Subordinated
Debt. No such amendment or modification may adversely affect the rights and
obligations of the Administrative Agent without its prior written consent.
No notice to or demand on the Borrowers shall entitle the Borrowers to any
other or further notice or demand in the same, similar or other
circumstances. Each holder of a Note shall be bound by any amendment,
modification, waiver or consent authorized as provided herein, whether or
not a Note shall have been marked to indicate such amendment, modification,
waiver or consent and any consent by any holder of a Note shall bind any
Person subsequently acquiring a Note, whether or not a Note is so marked.
SECTION 12.10. Severability.
Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
SECTION 12.11. SERVICE OF PROCESS; WAIVER OF JURY TRIAL.
(a) EACH DEBTOR HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION
OF THE STATE COURTS OF THE STATES OF NEW YORK AND NORTH CAROLINA LOCATED IN
NEW YORK COUNTY AND IN MECKLENBURG COUNTY, RESPECTIVELY, AND TO THE
JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT
OF NEW YORK AND TO THE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR
THE WESTERN DISTRICT OF NORTH CAROLINA, FOR THE PURPOSES OF ANY SUIT, ACTION
OR OTHER PROCEEDING ARISING OUT OF OR BASED UPON THIS AGREEMENT OR THE
SUBJECT MATTER HEREOF BROUGHT BY THE ADMINISTRATIVE AGENT OR A LENDER. EACH
DEBTOR TO THE EXTENT PERMITTED BY APPLICABLE LAW (A) HEREBY WAIVES, AND
AGREES NOT TO ASSERT, BY WAY OF MOTION, AS A DEFENSE, OR OTHERWISE, IN ANY
SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH COURTS, ANY CLAIM THAT IT IS
NOT SUBJECT PERSONALLY TO THE JURISDICTION OF THE ABOVE-NAMED COURTS, THAT
ITS PROPERTY IS EXEMPT OR IMMUNE FROM ATTACHMENT OR EXECUTION, THAT THE
SUIT, ACTION OR PROCEEDING IS BROUGHT IN AN INCONVENIENT FORUM, THAT THE
VENUE OF THE SUIT, ACTION OR PROCEEDING IS IMPROPER OR THAT THIS AGREEMENT
OR THE SUBJECT MATTER HEREOF MAY NOT BE ENFORCED IN OR BY SUCH COURT, AND
(B) HEREBY WAIVES THE RIGHT TO ASSERT IN ANY SUCH ACTION, SUIT OR PROCEEDING
ANY OFFSETS OR COUNTERCLAIMS EXCEPT COUNTERCLAIMS THAT ARE COMPULSORY OR
OTHERWISE ARISE FROM THE SAME SUBJECT MATTER. EACH DEBTOR HEREBY CONSENTS
TO SERVICE OF PROCESS BY MAIL AT ITS ADDRESS TO WHICH NOTICES ARE TO BE
GIVEN PURSUANT TO SECTION 12.1 HEREOF. EACH DEBTOR AGREES THAT ITS
SUBMISSION TO JURISDICTION AND CONSENT TO SERVICE OF PROCESS BY MAIL IS MADE
FOR THE EXPRESS BENEFIT OF THE ADMINISTRATIVE AGENT AND EACH LENDER. FINAL
JUDGMENT AGAINST A DEBTOR IN ANY SUCH ACTION, SUIT OR PROCEEDING SHALL BE
CONCLUSIVE, AND MAY BE ENFORCED IN ANY OTHER JURISDICTION (A) BY SUIT,
ACTION OR PROCEEDING ON THE JUDGMENT, A CERTIFIED OR TRUE COPY OF WHICH
SHALL BE CONCLUSIVE EVIDENCE OF THE FACT AND THE AMOUNT OF INDEBTEDNESS OR
LIABILITY OF THE SUBMITTING PARTY THEREIN DESCRIBED OR (B) IN ANY OTHER
MANNER PROVIDED BY, OR PURSUANT TO, THE LAWS OF SUCH OTHER JURISDICTION,
PROVIDED, HOWEVER, THAT THE ADMINISTRATIVE AGENT OR A LENDER MAY AT ITS
OPTION BRING SUIT, OR INSTITUTE OTHER JUDICIAL PROCEEDINGS AGAINST ANY
DEBTOR OR ANY OF ITS ASSETS IN ANY STATE OR FEDERAL COURT OF THE UNITED
STATES OR OF ANY COUNTRY OR PLACE WHERE SUCH DEBTOR OR SUCH ASSETS MAY BE
FOUND.
(b) TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW WHICH CANNOT
BE WAIVED, EACH PARTY HERETO HEREBY WAIVES, AND COVENANTS THAT IT WILL NOT
ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR OTHERWISE), ANY RIGHT TO TRIAL BY
JURY IN ANY FORUM IN RESPECT OF ANY ISSUE, CLAIM, DEMAND, ACTION, OR CAUSE
OF ACTION ARISING OUT OF OR BASED UPON THIS AGREEMENT OR THE SUBJECT MATTER
HEREOF, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING OR WHETHER IN
CONTRACT OR TORT OR OTHERWISE. EACH PARTY HERETO ACKNOWLEDGES THAT IT HAS
BEEN INFORMED THAT THE PROVISIONS OF THIS SECTION 12.11(b) CONSTITUTE A
MATERIAL INDUCEMENT UPON WHICH THE OTHER PARTIES HAVE RELIED, ARE RELYING
AND WILL RELY IN ENTERING INTO THIS AGREEMENT. THE PARTIES HERETO MAY FILE
AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION 12.11(b) WITH ANY COURT AS
WRITTEN EVIDENCE OF THE CONSENT OF SUCH OTHER PARTY TO THE WAIVER OF ITS
RIGHTS TO TRIAL BY JURY.
SECTION 12.12. Headings.
Section headings used herein are for convenience only and are
not to affect the construction of or be taken into consideration in
interpreting this Agreement.
SECTION 12.13. Execution in Counterparts.
This Agreement may be executed in any number of counterparts,
each of which shall constitute an original, but all of which taken together
shall constitute one and the same instrument.
SECTION 12.14. Entire Agreement.
This Agreement represents the entire agreement of the parties
with regard to the subject matter hereof and the terms of any letters and
other documentation entered into between the Borrowers and the
Administrative Agent or any Lender prior to the execution of this Agreement
which relate to Loans to be made hereunder shall be replaced by the terms of
this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and the year first written.
BORROWERS:
UCA CORP.
By: /s/ L.T. Zacherl
Name: LeMoyne T. Zacherl
Title: Vice President
Address: 5 West Third Street
Coudersport, PA 16915
ADELPHIA CABLE T.V., INC.
By: /s/ L.T. Zacherl
Name: LeMoyne T. Zacherl
Title: Vice President
Address: 5 West Third Street
Coudersport, PA 16915
LORAIN CABLE TELEVISION, INC.
By: /s/ L.T. Zacherl
Name: LeMoyne T. Zacherl
Title: Vice President
Address: 5 West Third Street
Coudersport, PA 16915
MULTI-CHANNEL T.V. CABLE
COMPANY OF VIRGINIA
By: /s/ L.T. Zacherl
Name: LeMoyne T. Zacherl
Title: Vice President
Address: 5 West Third Street
Coudersport, PA 16915
VAN BUREN COUNTY CABLEVISION, INC.
By: /s/ L.T. Zacherl
Name: LeMoyne T. Zacherl
Title: Vice President
Address: 5 West Third Street
Coudersport, PA 16915
GRAND ISLAND CABLE, INC.
By: /s/ L.T. Zacherl
Name: LeMoyne T. Zacherl
Title: Vice President
Address: 5 West Third Street
Coudersport, PA 16915
ULTRACOM OF MONTGOMERY COUNTY, INC.
By: /s/ L.T. Zacherl
Name: LeMoyne T. Zacherl
Title: Vice President
Address: 5 West Third Street
Coudersport, PA 16915
<PAGE>
GUARANTORS:
ULTRACOM OF MARPLE, INC.
By: /s/ Lemoyne T. Zacherl
Name: LeMoyne T. Zacherl
Title: Vice President
Address: 5 West Third Street
Coudersport, PA 16915
ULTRACOM OF LANSDALE, INC.
By: /s/ LeMoyne T. Zacherl
Name: LeMoyne T. Zacherl
Title: Vice President
Address: 5 West Third Street
Coudersport, PA 16915
LENDERS:
FIRST UNION NATIONAL BANK OF NORTH
CAROLINA, individually and as
Administrative Agent
By: /s/ William F. Laporte, III
Name: William F. Laporte, III
Title: Vice President
Address: One First Union Center
301 S. College Street
Charlotte, NC 28288
SOCIETE GENERALE
By: /s/ Bryan G. Petermann
Name: Bryan G. Petermann
Title: Vice President
Address: 1221 Avenue of the Americas
New York, NY 10020
<PAGE>
PNC BANK, NATIONAL ASSOCIATION
By: /s/ Marlene S. Dooner
Name: Marlene S. Dooner
Title: Vice President
Address: 100 South Broad Street
Ninth Floor
Philadelphia, PA 19101
CREDIT LYONNAIS CAYMAN ISLAND BRANCH
By: /s/ James E. Morris
Name: James E. Morris
Title: Authorized Signature
Address: 1301 Avenue of the Americas
18th Floor
New York, NY 10019
THE BANK OF NOVA SCOTIA
By: /s/ Vincent J. Fitzgerald, Jr.
Name: Vincent J. Fitzgerald, Jr.
Title: Senior Relationship Manager
Address: One Liberty Plaza
26th Floor
New York, NY 10006
THE BANK OF TOKYO TRUST COMPANY
By: /s/ Charles S. Poer
Name: Charles S. Poer
Title: Vice President
Address: 1251 Avenue of the Americas
12th Floor
New York, NY 10116
FIRST FIDELITY BANK, N.A.
By: /s/ Annette F. Procacci
Name: Annette F. Procacci
Title: Vice President
Address: 123 South Broad Street
Philadelphia, PA 19101
<PAGE>
MIDLANTIC BANK, N.A.
By: /s/ Joseph E. Donahue, III
Name: Joseph E. Donahue, III
Title Senior Vice President
Address: Centre Square Tower
1500 Market Street
Ninth Floor
Philadelphia, PA 19102
NATIONSBANK OF TEXAS, N.A.
By: /s/ Greg Meador
Name: Gregory I. Meador
Title: Assistant Vice President
Address: P.O. Box 831000
901 Main Street
64th Floor Plaza
Dallas, TX 75283
CORESTATES BANK, N.A.
By: /s/ Anthony D. Braxton
Name: Anthony D. Braxton
Title: Vice President
Address: 1500 Market Street, West
Tower
18th Floor
Philadelphia, PA 19102
Schedule 2.1
Lenders Commitment Amount
First Union National Bank
of North Carolina $28,125,000
Credit Lyonnais Cayman
Island Branch 28,125,000
PNC Bank, National Association 28,125,000
Societe Generale 28,125,000
First Fidelity Bank, N.A. 20,000,000
The Bank of Tokyo Trust
Company 10,000,000
NationsBank of Texas, N.A. 17,500,000
Corestates Bank, N.A. 15,000,000
The Bank of Nova Scotia 15,000,000
Midlantic Bank, N.A. 10,000,000
$200,000,000
EXHIBIT A
FORM OF NOTE
[$ ] New York, New York
as of March 15, 1995
FOR VALUE RECEIVED, UCA
CORP., a Delaware corporation, ADELPHIA CABLE T.V., INC., a Pennsylvania
corporation, LORAIN CABLE TELEVISION, INC., an Ohio corporation, MULTI-
CHANNEL T.V. CABLE COMPANY OF VIRGINIA, a Delaware corporation, VAN BUREN
COUNTY CABLEVISION, INC., a Michigan corporation, GRAND ISLAND CABLE, INC.,
a Delaware corporation, and ULTRACOM OF MONTGOMERY COUNTY, INC., a
Pennsylvania corporation, (collectively, the "Obligors"), DO HEREBY PROMISE
JOINTLY AND SEVERALLY TO PAY to the order of [Insert Name of Lender] (the
"Lender") at the office of First Union National Bank of North Carolina at
One First Union Center, 301 S. College Street, Charlotte, NC 28288 in
lawful money of the United States of America in immediately available funds,
the principal amount of [____________ MILLION DOLLARS] ($_____________), or
the aggregate unpaid principal amount of all Loans (as defined in the Credit
Agreement) made by the Lenders to the makers hereof pursuant to the Credit
Agreement referred to below, whichever is less, on such date or dates as is
required by the Credit Agreement, and to pay interest on the unpaid
principal amount from time to time outstanding hereunder, in like money, at
such office, as set forth in Section 2.8 of the Credit Agreement.
Obligors and any and all
sureties, guarantors and endorsers of this Note and all other parties now or
hereafter liable hereon severally waive grace, demand, presentment for
payment, protest, notice of any kind (including, but not limited to, notice
of dishonor, notice of protest, notice of intention to accelerate or notice
of acceleration) and diligence in collecting and bringing suit against any
party hereto and agree to the extent permitted by applicable law (i) to all
extensions and partial payments, with or without notice, before or after
maturity, (ii) to any substitution, exchange or release of any security now
or hereafter given for this Note, (iii) to the release of any party
primarily or secondarily liable hereon, and (iv) that it will not be
necessary for any holder of this Note, in order to enforce payment of this
Note against any Obligor, to first institute or exhaust such holder's
remedies against any other Obligor or any other party liable therefor or
against any security for this Note. The nonexercise by the holder of any of
its rights hereunder in any particular instance shall not constitute a
waiver thereof in that or any subsequent instance.
This Note is referred to in
that certain Credit, Security and Guaranty Agreement dated as of March 15,
1995 (the "Credit Agreement"), among the Obligors, the subsidiaries of the
Obligors referred to therein as guarantors, the Lenders referred to therein,
Societe Generale, PNC Bank, National Association, First Union National Bank
of North Carolina and Credit Lyonnais Cayman Island Branch, as Managing
Agents, Societe Generale, as Structuring Agent, PNC Bank, National
Association, as Syndication Agent, Credit Lyonnais Cayman Island Branch, as
Documentation Agent, and First Union National Bank of North Carolina, as
Administrative Agent, as the same may be amended from time to time, and is
entitled to the benefits of and is secured by the security interests granted
in the Credit Agreement and the other security documents referred to and
described therein, which among other things contain provisions for optional
prepayment, and for acceleration of the maturity hereof upon the occurrence
of certain events, all as provided in the Credit Agreement.
THIS NOTE SHALL BE
CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW
YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED WHOLLY WITHIN THE
STATE OF NEW YORK.
UCA CORP.
By
Name:
Title:
ADELPHIA CABLE T.V., INC.
By
Name:
Title:
LORAIN CABLE TELEVISION, INC.
By
Name:
Title:
MULTI-CHANNEL T.V. CABLE COMPANY
OF VIRGINIA
By
Name:
Title:
VAN BUREN COUNTY CABLEVISION, INC.
By
Name:
Title:
GRAND ISLAND CABLE, INC.
By
Name:
Title:
ULTRACOM OF MONTGOMERY COUNTY, INC.
By
Name:
Title:
<PAGE>
[LAST PAGE OF NOTE]
Unpaid Name of
Principal Person
Payments Balance Making
Date Amount of Loan Principal Interest of Note Notation
` EXHIBIT C
FORM OF ASSIGNMENT AND ACCEPTANCE
Dated _______________, ____
Reference is made to the Credit, Security and Guaranty Agreement
dated as of March 15, 1995 (as the same may be amended, supplemented or
otherwise modified, renewed or replaced from time to time, the "Credit
Agreement"), among UCA Corp. ("UCA"), Adelphia Cable T.V., Inc. ("ACTV"),
Lorain Cable Television, Inc. ("Lorain"), Multi-Channel T.V. Cable Company
of Virginia ("Multi-Channel"), Van Buren County Cablevision, Inc. ("Van
Buren"), Grand Island Cable, Inc. ("Grand Island") and UltraCom of
Montgomery County, Inc. ("UltraCom"; together with UCA, ACTV, Lorain, Multi-
Channel, Van Buren and Grand Island being referred to herein collectively,
as the "Borrowers"), the Subsidiaries of the Borrowers referred to therein
as Guarantors, the lenders referred to therein (the "Lenders"), Societe
Generale, PNC Bank, National Association, First Union National Bank of North
Carolina and Credit Lyonnais Cayman Island Branch, as Managing Agents,
Societe Generale, as Structuring Agent, PNC Bank, National Association, as
Syndication Agent, Credit Lyonnais Cayman Island Branch, as Documentation
Agent, and First Union National Bank of North Carolina, as Administrative
Agent for the Lenders (in such capacity, the "Administrative Agent").
Capitalized terms used herein and not otherwise defined shall have the
meanings set forth in the Credit Agreement.
________________ (the "Assignor") and ________________ (the
"Assignee") agree as follows:
(a) The Assignor hereby irrevocably sells and assigns to the
Assignee without recourse to the Assignor, and the Assignee hereby
irrevocably purchases and assumes from the Assignor without recourse to the
Assignor, an undivided ___% interest(1) in and to all the Assignor's rights
and obligations under the Credit Agreement as of the Effective Date (such
term being used herein as hereinafter defined) (including, without
limitation, such percentage interest in (a) the Commitment of the Assignor
on the Effective Date and (b) the outstanding Loans owing to the Assignor on
(1)The amount of the Commitment to be assigned shall be in a
minimum principal amount of $10,000,000
the Effective Date, together with all unpaid interest accrued to the
Effective Date provided, however, it is expressly understood and agreed that
(x) the Assignor is not assigning to the Assignee and the Assignor shall
retain (i) all of the Assignor's rights under Section 2.14 of the Credit
Agreement with respect to any costs, reduction or payment incurred or made
prior to the Effective Date including, without limitation, the rights to
indemnification and to reimbursement for taxes, costs and expenses and (ii)
any and all amounts paid to the Assignor prior the Effective Date and (y)
both Assignor and Assignee shall be entitled to the benefits of Sections
12.4 and 12.5 of the Credit Agreement.
(b) The Assignor (i) represents that as of the date hereof
(without giving effect to any assignments thereof which have not yet become
effective), its percentage under the Credit Agreement is ___%, its
Commitment under the Credit Agreement is $_________, and the outstanding
balance of Loans owing to it is $_________; (ii) makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with the Credit
Agreement or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of the Credit Agreement or any other instrument or
document furnished pursuant therein other than as of the Effective Date it
is the legal and beneficial owner of the interest being assigned by it
hereunder and that such interest is free and clear of any adverse claim;
(iii) makes no representation or warranty and assumes no responsibility with
respect to the financial condition of the Borrowers or any other obligor or
the performance or observance by the Borrowers or any other obligor of their
respective obligations under the Credit Agreement or any Fundamental
Document or any other instrument or document furnished pursuant hereto or
thereto; and (iv) attaches the Note held by it and requests that the
Administrative Agent exchange such Note for a new Note payable to the
Assignor (if the Assignor has retained a Commitment under the Credit
Agreement) and a new Note payable to the Assignee in the respective
amount(s) which reflect the assignment(s) being made hereby (and after
giving affect to any assignments which have become effective on the
Effective Date).
(c) The Assignee (i) represents and warrants that it is
legally authorized to enter into this Assignment and Acceptance; (ii)
confirms that it has received a copy of the Credit Agreement, together with
copies of the financial statements delivered pursuant to Section 5.1 thereof
(or if none of such financial statements shall have then been delivered,
then copies of the financial statements referred to in Section 3.4 thereof)
and such other documents and information as it has deemed appropriate to
make its own credit analysis and decision to enter into this Assignment and
Acceptance; (iii) agrees that it will, independently and without reliance
upon the Assignor, the Administrative Agent or any other Lender and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action
under the Credit Agreement or any other Fundamental Documents; (iv) appoints
and authorizes the Administrative Agent to take such action as agent on its
behalf and to exercise such powers under the Credit Agreement or any other
Fundamental Document as are delegated to the Administrative Agent by the
terms thereof, together with such powers as are reasonably incidental
thereto; (v) agrees that it will be bound by the provisions of the Credit
Agreement and will perform in accordance with their terms all the
obligations which by the terms of the Credit Agreement are required to be
performed by it as a Lender; and (vi) if the Assignee is organized under the
laws of a jurisdiction outside the United States, attaches the forms
prescribed by the Internal Revenue Service of the United States certifying
as to the Assignee's exemption from the United States withholding taxes with
respect to all payments to be made to the Assignee under the Credit
Agreement, or such other documents as are necessary to indicate that all
such payments are subject to such tax at a rate reduced by an applicable tax
treaty; and (vii) has supplied the information requested on the
administrative questionnaire attached hereto as Exhibit A.
(d) The effective date for this Assignment and Acceptance
shall be __________ (the "Effective Date").(2)
(e) Following the execution of this Assignment and Acceptance,
it will be delivered to the Administrative Agent for acceptance by it and
recording by the Administrative Agent pursuant to Section 12.3 of the Credit
Agreement, effective as of the Effective Date.
(f) Upon such acceptance and recording by the Administrative
Agent, from and after the Effective Date, the Administrative Agent shall
make all payments in respect of the interest assigned hereby (including
payments of principal, interest, fees and other amounts) to the Assignee
whether such amounts have accrued prior to the Effective Date or accrue
subsequent to the Effective Date. The Assignor and the Assignee shall make
all appropriate adjustments in payments for periods prior to the Effective
date.
(2) See Section 12.3(b) of the Credit Agreement. Such date shall not be
earlier than five(5) Business dats after the date of acceptance and
recording by the Administrative Agent of the Assignment and Acceptance.
or with respect to the making of this assignment directly between
themselves.
(g) Upon the acceptance and recording by the Administrative
Agent, from and after the Effective Date, (i) the Assignee shall be a party
to the Credit Agreement and, to the extent provided in this Assignment and
Acceptance, have the rights and obligations of a Lender thereunder and under
the other Fundamental Documents and shall be bound by the provisions thereof
and (ii) the Assignor shall, to the extent provided in this Assignment and
Acceptance, relinquish its rights and be released from its obligations under
the Credit Agreement (and if this Assignment and Acceptance covers all or
the remaining portion of the Assignor's rights and obligations under the
Credit Agreement, the Assignor shall cease to be a party thereto).
(h) THIS AGREEMENT AND ANY INSTRUMENT OR AGREEMENT REQUIRED
HEREUNDER SHALL BE DEEMED TO BE MADE UNDER, SHALL BE GOVERNED BY, AND SHALL
BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.
(i) This Assignment and Acceptance may be executed in any
number of counterparts, each of which when so executed and delivered shall
constitute an original for all purposes, but all such counterparts taken
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Assignment
and Acceptance to be executed by their respective duly authorized officers.
[NAME OF ASSIGNOR], as Assignor
By:
Name:
Title:
[NAME OF ASSIGNEE], as Assignee
By:
Name:
Title:
Accepted this ___ day
of ____________, ____
FIRST UNION NATIONAL BANK OF
NORTH CAROLINA, as Administrative Agent
By:
Name:
Title:
<PAGE>
Consented to by:
UCA CORP. GRAND ISLAND CABLE, INC.
By:__________________________ By:_____________________
Name: Name:
Title: Title:
ADELPHIA CABLE T.V., INC. ULTRACOM OF MONTGOMERY
COUNTY, INC.
By:__________________________
Name: By:_____________________
Title: Name:
Title:
LORAIN CABLE TELEVISION, INC.
By:__________________________
Name:
Title:
MULTI-CHANNEL T.V. CABLE
COMPANY OF VIRGINIA
By:__________________________
Name:
Title:
VAN BUREN COUNTY
CABLEVISION, INC.
By:__________________________
Name:
Title:
EXHIBIT D
FORM OF COMPLIANCE CERTIFICATE
THE UNDERSIGNED HEREBY CERTIFIES THAT:
1. I am the duly elected [INSERT TITLE OF AUTHORIZED
SIGNATORY] of each of [INSERT NAME OF BORROWERS and [TO THE EXTENT
NECESSARY, INSERT ADDITIONAL BORROWERS] (the "Borrowers");
2. I have reviewed the terms of the Credit, Security and
Guaranty Agreement dated as of March 15, 1995 (as the same may be amended,
supplemented or otherwise modified, renewed or replaced from time to time,
the "Credit Agreement"), among UCA Corp. ("UCA"), Adelphia Cable T.V., Inc.
("ACTV"), Lorain Cable Television, Inc. ("Lorain"), Multi-Channel T.V. Cable
Company of Virginia ("Multi-Channel"), Van Buren County Cablevision, Inc.
("Van Buren"), Grand Island Cable, Inc. ("Grand Island"), and UltraCom of
Montgomery County, Inc. ("UltraCom"; together with UCA, ACTV, Lorain, Multi-
Channel, Van Buren and Grand Island being referred to herein collectively,
as the "Borrowers"), the Subsidiaries of the Borrowers referred to therein
as Guarantors, the lenders referred to therein (the "Lenders"), Societe
Generale, PNC Bank, National Association, First Union National Bank of North
Carolina and Credit Lyonnais Cayman Island Branch, as Managing Agents,
Societe Generale, as Structuring Agent, PNC Bank, National Association, as
Syndication Agent, Credit Lyonnais Cayman Island Branch, as Documentation
Agent, and First Union National Bank of North Carolina, as Administrative
Agent for the Lenders (in such capacity, the "Administrative Agent"), and
the Notes and I have made, or have caused to be made under my supervision,
in reasonable detail, a review of the transactions and condition of the
Borrowers and their Subsidiaries during the accounting period covered by the
attached financial statements. Capitalized terms used herein and not
otherwise defined shall have the meanings set forth in the Credit Agreement.
3. The examinations described in paragraph (2) did not
disclose the existence of any condition or event which constitutes an Event
of Default or Default during, or at the end of, the accounting period
covered by the attached financial statements or as of the date of this
Certificate, except as set forth in paragraph (4) below;
4. In the course of the performance of my duties, I would
normally have knowledge of any condition or event which would constitute an
Event of Default or Default. As of the date of this Certificate, I have no
knowledge of any such condition or event, except as set forth below:
Describe below (or in a separate attachment to this Certificate)
the exceptions, if any, to paragraphs (3) and (4) above by listing, in
detail, the nature of each condition or event, the period during which it
has existed and the action which the Borrowers have taken, are taking, or
propose to take, with respect to each such condition or event:
5. Attached hereto, in reasonable detail, are the
computations and comparisons required to demonstrate in detail the
Borrowers' calculation of the Applicable Margin and compliance with the
provisions of Sections 6.16, 6.17, 6.18 and 6.19 of the Credit Agreement.
The foregoing certifications, together with the computations and
comparisons set forth in the attachments hereto and the financial statements
attached to this Certificate in support hereof, are made and delivered this
_____ day of __________, pursuant to Section 5.1(c) of the Credit Agreement.
UCA CORP.
By:
Name:
Title:
ADELPHIA CABLE T.V., INC.
By:
Name:
Title:
LORAIN CABLE TELEVISION, INC.
By:
Name:
Title:
MULTI-CHANNEL T.V. CABLE COMPANY
OF VIRGINIA
By:
Name:
Title:
VAN BUREN COUNTY CABLEVISION, INC.
By:
Name:
Title:
GRAND ISLAND CABLE, INC.
By:
Name:
Title:
ULTRACOM OF MONTGOMERY COUNTY, INC.
By:
Name:
Title:
<PAGE>
Attachments
1. financial statements;
2. the computation of the Applicable Margin; and
3. the computations and comparisons (in reasonable detail)
required to demonstrate compliance with the provisions of Sections 6.16,
6.17, 6.18 and 6.19 of the Credit Agreement.
EXHIBIT E-1
FORM OF ADELPHIA PLEDGE AGREEMENT
PLEDGE AGREEMENT, dated as of March 15, 1995 between ADELPHIA COMMUNICATIONS
CORPORATION, a Delaware corporation (the "Pledgor") and FIRST UNION NATIONAL
BANK OF NORTH CAROLINA, as Administrative Agent for the Lenders referred to
herein (in such capacity, the "Administrative Agent").
Introductory Statement
Pursuant to a Credit, Security and Guaranty Agreement dated as
of March 15, 1995 among UCA Corp. ("UCA"), Adelphia Cable T.V., Inc.
("ACTV"), Lorain Cable Television, Inc. ("Lorain"), Multi-Channel T.V. Cable
Company of Virginia ("Multi-Channel"), Van Buren County Cablevision, Inc.
("Van Buren"), Grand Island Cable, Inc. ("Grand Island") and UltraCom of
Montgomery County, Inc. ("UltraCom"; together with UCA, ACTV, Lorain, Multi-
Channel, Van Buren and Grand Island being referred to herein collectively as
the "Borrowers"), certain subsidiaries of the Borrowers referred to therein
as Guarantors, the lenders referred to therein (the "Lenders"), Societe
Generale, PNC Bank, National Association, First Union National Bank of North
Carolina and Credit Lyonnais Cayman Island Branch, as Managing Agents,
Societe Generale, as Structuring Agent, PNC Bank, National Association, as
Syndication Agent, Credit Lyonnais Cayman Island Branch, as Documentation
Agent and the Administrative Agent (said agreement as it may hereafter be
amended, supplemented or otherwise modified, renewed or replaced from time
to time in accordance with its terms being the "Credit Agreement"), the
Lenders have agreed to make loans (the "Loans") to the Borrowers.
The Pledgor owns beneficially and of record all of the issued
and outstanding shares of the capital stock of each Borrower listed on
Schedule 1 hereto (being referred to herein as the "Pledged Affiliates").
In order to induce the Lenders to enter into the Credit
Agreement and make the Loans to the Borrowers and to secure the obligations
of the Borrowers under the Credit Agreement (such obligations of the
Borrowers being hereinafter referred to as the "Obligations"), the Pledgor
is pledging to the Administrative Agent, for the ratable benefit of the
Lenders, all of the issued and outstanding capital stock of the Pledged
Affiliates, all as more fully set forth herein.
Accordingly, the parties hereto agree as follows (capitalized terms used
herein and not otherwise defined shall have the meanings set forth in the
Credit Agreement):
1. Pledge; Non-Recourse. 1.1 As security for payment in full
of the Obligations, the Pledgor hereby pledges, hypothecates, assigns,
transfers, sets over and delivers unto the Administrative Agent, for the
ratable benefit of the Lenders, and grants a security interest in (i) all
the capital stock of each of the Pledged Affiliates which the Pledgor owns
beneficially and of record, and (ii) all proceeds of such capital stock and
all other securities or other property at any time and from time to time
receivable or otherwise distributed in respect of or in exchange for any or
all of such capital stock or additional securities. All items referred to
in clauses (i) and (ii) of this Section 1 are hereinafter referred to
collectively as the "Pledged Securities".
1.2 The Pledgor shall deliver to the Administrative Agent the
certificates representing the Pledged Securities accompanied by undated
stock powers executed in blank and by such other instruments or documents as
the Administrative Agent or its counsel shall reasonably request.
1.3 The Pledgor shall have no liability hereunder for payment
of the Obligations, and in any action or suit to collect the Obligations the
Administrative Agent and the Lenders shall not seek any in personam judgment
against the Pledgor or any judgment for a deficiency but shall look solely
to the security interests hereunder and the collateral described herein for
payment of the Obligations. Nothing contained in this Section 1(c) shall be
construed to impair the validity of the Obligations or this Agreement or
affect or impair in any way the right of the Administrative Agent and the
Lenders to exercise their rights and remedies under the Credit Agreement,
any Note and any other Fundamental Document.
2. Registration in Nominee Name; Denominations. The
Administrative Agent shall have the right (in its sole and absolute
discretion) to hold the certificates representing any Pledged Securities in
its own name, the name of its nominee or in the name of the Pledgor,
endorsed or assigned in blank or in favor of the Administrative Agent. Upon
the occurrence and during the continuation of an Event of Default, the
Administrative Agent shall have the right to exchange the certificates
representing Pledged Securities for certificates of smaller or larger
denominations for any purpose consistent with this Agreement.
3. Pledgor's Representations, Warranties and Covenants. The
Pledgor hereby represents and warrants to and/or covenants and agrees with
the Administrative Agent as follows:
(a) the Pledged Securities constitute 100% of the issued and
outstanding equity securities of each of the Pledged Affiliates;
(b) the Pledged Securities are duly authorized, validly
issued, fully paid and non-assessable;
(c) there are no restrictions on the transfer of the
Pledged Securities other than as a result of the Credit Agreement or
applicable securities laws or the regulations promulgated thereunder;
(d) the Pledgor has good title to the Pledged Securities;
(e) the Pledged Securities are not subject to any prior
liens or encumbrances;
(f) the Pledgor has the right to pledge the Pledged
Securities hereunder free of any encumbrances, and without the consent of
the creditors of the Pledged Affiliates or any other person or any
government agency whatsoever;
(g) the Pledgor has full power and authority to execute,
deliver and perform this Agreement and to pledge the Pledged Securities
hereunder;
(h) the Pledgor will not take any action to allow any
additional equity securities of the Pledged Affiliates to be issued or grant
any options or warrants, unless such securities are pledged to the
Administrative Agent, for the ratable benefit of the Lenders, on terms
satisfactory to the Administrative Agent as security for the Obligations;
(i) the execution, delivery and performance of this
Agreement will not violate any provision of law, administrative regulation,
any order of any court or other agency of government, any provision of any
indenture, agreement or other instrument to which the Pledgor is a party, or
be in conflict with, result in a breach of or constitute (with due notice
and/or lapse of time) a default under any such indenture, agreement or other
instrument;
(j) there are no material pending legal or governmental
proceedings to which the Pledgor is a party or to which any of its
properties is subject which will materially affect the Pledgor's ability to
perform its obligations hereunder; and
(k) on the date hereof, the Pledged Securities consist of
the securities listed on Schedule 2.
4. Voting Rights; Dividends; etc. 4.1 Unless and until an
Event of Default shall have occurred and be continuing:
(a) The Pledgor shall be entitled to exercise any and
all voting and/or consensual rights and powers accruing to the
owner of the Pledged Securities or any part thereof for any
purpose not inconsistent with the terms hereof and of the Credit
Agreement.
(b) Any dividends (other than dividends permitted by
Section 6.21 of the Credit Agreement) or distributions of any
kind whatsoever received by the Pledgor, whether resulting from
a subdivision, combination, or reclassification of the
outstanding capital stock of the shares or received in exchange
for the Pledged Securities or any part thereof or as a result of
any merger, consolidation, acquisition, or other exchange of
assets to which the shares may be a party, or otherwise, shall
be and become part of the Pledged Securities pledged hereunder
and shall immediately be delivered to the Administrative Agent
to be held subject to the terms of this Agreement.
(c) The Administrative Agent shall execute and deliver
to the Pledgor, or cause to be executed and delivered to the
Pledgor, all such proxies, powers of attorney and other
instruments as the Pledgor may reasonably request for the
purpose of enabling the Pledgor to exercise the voting and/or
consensual rights and powers which it is entitled to exercise
pursuant to clause (i) above.
4.2 Upon the occurrence and during the continuance of an Event
of Default, all rights of the Pledgor to (i) exercise the voting and/or
consensual rights and powers which it is entitled to exercise pursuant to
Section 4(a)(i) hereof and (ii) receive and retain dividends and
distributions which the Pledgor would be entitled to receive and retain
pursuant to Section 4(a)(ii) and Section 6.21 of the Credit Agreement shall
cease and all such rights shall thereupon become vested in the
Administrative Agent for the ratable benefit of the Lenders, which shall
have the sole and exclusive right and authority to exercise such voting
and/or consensual rights; provided, however, that to the extent any
governmental consents or filings are required for the exercise by the
Administrative Agent of any of the foregoing rights and powers, the
Administrative Agent shall refrain from exercising such rights or powers
until the making of such required filings, the receipt of such consents and
the expiration of all related waiting periods.
5. Remedies Upon Default. 5.1 If an Event of Default shall
have occurred and be continuing, the Administrative Agent may sell the
Pledged Securities, or any part thereof, at public or private sale or at any
broker's board or on any securities exchange, for cash, upon credit or for
future delivery as the Administrative Agent shall deem appropriate subject
to the terms hereof or as otherwise provided in the New York Uniform
Commercial Code. The Administrative Agent shall be authorized at any such
sale (if it deems it advisable to do so) to restrict the prospective bidders
or purchasers to persons who will represent and agree that they are
purchasing the Pledged Securities for their own account and not with a view
to the distribution or sale thereof, and upon consummation of any such sale
the Administrative Agent shall have the right to assign, transfer, and
deliver to the purchaser or purchasers thereof the Pledged Securities so
sold. Each such purchaser at any such sale shall hold the property sold
absolutely, free from any claim or right on the part of the Pledgor.
5.2 The Administrative Agent shall give the Pledgor 10 days'
written notice of the Administrative Agent's intention to make any such
public or private sale, or sale at any broker's board or on any such
securities exchange, or of any other disposition of the Pledged Securities.
Such notice, in the case of public sale, shall state the time and place for
such sale and, in the case of sale at a broker's board or on a securities
exchange, shall state the board or exchange at which such sale is to be made
and the day on which the Pledged Securities, or portion thereof, will first
be offered for sale at such board or exchange. Any such public sale shall
be held at such time or times within ordinary business hours and at such
place or places as the Administrative Agent may fix and shall state in the
notice of such sale. At any such sale, the Pledged Securities, or portion
thereof, to be sold may be sold in one lot as an entirety or in separate
parcels, as the Administrative Agent may (in its sole and absolute
discretion) determine. The Administrative Agent shall not be obligated to
make any sale of the Pledged Securities if it shall determine not to do so,
regardless of the fact that notice of sale of the Pledged Securities may
have been given. The Administrative Agent may, without notice or
publication, adjourn any public or private sale or cause the same to be
adjourned from time to time by announcement at the time and place fixed for
sale, and such sale may, without further notice, be made at the time and
place to which the same was so adjourned. In case the sale of all or any
part of the Pledged Securities is made on credit or for future delivery, the
Pledged Securities so sold shall be retained by the Administrative Agent
until the sale price is paid by the purchaser or purchasers thereof, but the
Administrative Agent shall not incur any liability in case any such
purchaser or purchasers shall fail to take up and pay for the Pledged
Securities so sold and, in case of any such failure, such Pledged Securities
may be sold again upon like notice. At any sale or sales made pursuant to
this Section 5, the Administrative Agent may bid for or purchase, free from
any claim or right of whatever kind, including any equity of redemption, of
the Pledgor, any such demand, notice, claim, right or equity being hereby
expressly waived and released, any or all of the Pledged Securities offered
for sale, and may make any payment on the account thereof by using any claim
for moneys then due and payable to the Administrative Agent by the Debtors
or the Pledgor as a credit against the purchase price; and the
Administrative Agent, upon compliance with the terms of sale, may hold,
retain and dispose of the Pledged Securities without further accountability
therefor to the Pledgor or any third party. The Administrative Agent shall
in any such sale make no representations or warranties with respect to the
Pledged Securities or any part thereof, and the Administrative Agent shall
not be chargeable with any of the obligations or liabilities of the Pledgor
with respect thereto. The Pledgor hereby agrees (i) it will indemnify and
hold the Administrative Agent harmless from and against any and all claims
with respect to the Pledged Securities asserted before the taking of actual
possession or control of the Pledged Securities by the Administrative Agent
pursuant to this Agreement or arising out of any act of, or omission to act
on the part of, any party other than the Administrative Agent prior to such
taking of actual possession or control by the Administrative Agent, or
arising out of any act on the part of the Pledgor or its agents before or
after the commencement of such actual possession or control by the
Administrative Agent; and (ii) the Administrative Agent shall have no
liability or obligation arising out of any such claim. As an alternative to
exercising the power of sale herein conferred upon it, the Administrative
Agent may proceed by a suit or suits at law or in equity to foreclose this
Agreement and to sell the Pledged Securities, or any portion thereof,
pursuant to a judgment or decree of a court or courts having competent
jurisdiction.
All actions which may be taken pursuant to the provisions of
this Section 5 and/or Section 7 hereof are subject, in every instance, to
the receipt of any prior consents of any Governmental Authority which may be
required by Applicable Law.
6. Application of Proceeds of Sale and Cash. The proceeds of
sale of the Pledged Securities sold pursuant to Section 5 hereof shall be
applied by the Administrative Agent (in such order as the Administrative
Agent shall in its sole discretion determine) to the payment in full of the
Obligations and the payment of costs incurred by the Administrative Agent
while enforcing its rights pursuant to this Agreement.
7. Administrative Agent Appointed Attorney-in-Fact. Upon the
occurrence of an Event of Default and during the continuance of an Event of
Default, the Pledgor hereby appoints the Administrative Agent its attorney-
in-fact for the purpose of carrying out the provisions of this Agreement and
the pledge of the Pledged Securities hereunder and taking any action and
executing any instrument which the Administrative Agent may deem necessary
or advisable to accomplish the purposes hereof, which appointment is
irrevocable and coupled with an interest. Without limiting the generality
of the foregoing, the Administrative Agent shall have the right and power to
receive, endorse, and collect all checks and other orders for the payment of
money made payable to the Pledgor representing any dividend or other
distribution payable in respect of the Pledged Securities or any part
thereof and to give full discharge for the same.
8. Securities Act, etc. In view of the position of the Pledgor
in relation to the Pledged Securities, or because of other present or future
circumstances, a question may arise under the Securities Act of 1933, as
amended, as now or hereafter in effect, or any similar statute hereafter
enacted analogous in purpose or effect (such Act and any such similar
statute as from time to time in effect being hereinafter called the "Federal
Securities Laws"), with respect to any disposition of the Pledged Securities
permitted hereunder. The Pledgor understands that compliance with the
Federal Securities Laws may very strictly limit the course of conduct of the
Administrative Agent if the Administrative Agent were to attempt to dispose
of all or any part of the Pledged Securities, and may also limit the extent
to which or the manner in which any subsequent transferee of any Pledged
Securities may dispose of the same. Similarly, there may be other legal
restrictions or limitations affecting the Administrative Agent in any
attempt to dispose of all or any part of the Pledged Securities under
applicable Blue Sky or other state securities laws, or similar laws
analogous in purpose or effect. Under applicable law, in the absence of an
agreement to the contrary, the Administrative Agent may be held to have
certain general duties and obligations to the Pledgor to make some effort
towards obtaining a fair price even though the Obligations may be discharged
or reduced by the proceeds of a sale at a lesser price. The Pledgor hereby
agrees that the Administrative Agent shall not have any such general duty or
obligation to it, and the Pledgor will not attempt to hold the
Administrative Agent responsible for selling all or any part of the Pledged
Securities at an inadequate price, even if the Administrative Agent shall
accept the first offer received or does not approach more than one possible
purchaser. Without limiting the generality of the foregoing, the provisions
of this Section 8 would apply if, for example, the Administrative Agent were
to place all or any part of the Pledged Securities for private placement by
an investment banking firm, or if such investment banking firm purchased all
or any part of the Pledged Securities for its own account, or if the
Administrative Agent placed all or any part of the Pledged Securities
privately with a purchaser or purchasers.
9. Regulatory Approval. Upon the occurrence of an Event of
Default and during the continuance of an Event of Default, the Pledgor will,
at its expense, promptly execute and deliver, or cause the execution and
delivery of, all applications, certificates, instruments, registration
statements and all other documents and papers the the Administrative Agent
may reasonably request or as may be required by law in connection with the
obtaining of any consent, approval, registration, qualification or
authorization of the FCC, any Governmental Authority or of any other person
necessary or appropriate for the effective exercise of any rights under this
Agreement. Without limiting the generality of the foregoing, if an Event of
Default shall have occurred and be continuing, the Pledgor shall take any
action which the Administrative Agent may reasonably request in order to
transfer and assign to the Administrative Agent, or to such one or more
third parties as the Administrative Agent may designate, or to a combination
of the foregoing, each FCC License, Franchise and any other agreement. To
enforce the provisions of this Section, the Administrative Agent is
empowered to request the appointment of a receiver from any court of
competent jurisdiction. Such receiver shall be instructed to seek from the
FCC and any applicable Governmental Authority an involuntary transfer of
control of each such FCC License and Franchise for the purpose of seeking a
bona fide purchaser to whom control will ultimately be transferred. The
Pledgor hereby agrees to authorize such an involuntary transfer of control
upon the request of the receiver so appointed and, if the Pledgor shall
refuse to authorize the transfer, its approval may be required by the court.
Upon the occurrence and continuance of an Event of Default, the Pledgor
shall further use its best efforts to assist in obtaining approval of the
FCC and any applicable Governmental Authority, if required, for any action
or transaction contemplated by this Agreement including, without limitation,
the preparation, execution and filing with the FCC and any applicable
Governmental Authority of the assignor's or transferor's portion of any
application or applications for consent to the assignment of any FCC License
and Franchise or transfer of control necessary or appropriate under the
rules and regulations of the FCC or any Governmental Authority for the
approval of the transfer or assignment of any portion of the Collateral,
together with any FCC License and Franchise. The Pledgor acknowledges that
the assignment or transfer of each FCC License and any other agreement is
integral to the Administrative Agent's and Lenders' realization of the value
of the Collateral, that there is no adequate remedy at law for failure by
the Pledgor to comply with the provisions of this Section 9 and that such
failure would cause irreparable injury not adequately compensable in
damages, and therefore agrees that each and every covenant contained in this
Section may be specifically enforced, and the Pledgeor hereby waives and
agrees not to assert any defenses against an action for specific performance
of such covenants.
10. Termination. The pledge hereunder shall terminate when all
of the Obligations shall have been fully paid and the Commitments have
terminated. At such time the Administrative Agent shall, at the sole cost
and expense of the Pledgor, assign and deliver to the Pledgor, or to such
person or persons as the Pledgor shall designate, against receipt, such of
the Pledged Securities (if any) as shall not have been sold or otherwise
applied by the Administrative Agent pursuant to the terms hereof and shall
still be held by it hereunder, together with appropriate instruments of
reassignment and release. Any such reassignment shall be without recourse
upon or warranty by the Administrative Agent (except as to acts of the
Administrative Agent or persons claiming through the Administrative Agent).
11. Waivers by Pledgor. Except as specifically provided for
herein, the Pledgor waives demand, notice, protest, all appraisements,
notice of acceptance of this Agreement, notice of any Loans made, extensions
granted, collateral received or delivered or any action taken in reliance
hereon, all demands and notice in connection with the delivery, acceptance,
performance, default, or enforcement of any Obligation, and all other
demands and notices of any description; and assents to any extension or
postponement of the time of payment of any of the Obligations or any other
indulgence, to any substitution, exchange or release of Collateral, or to
the addition or release of any person primarily or secondarily liable
therefor.
12. Notices. All demands, notices and other communications
which any party hereto may desire or may be required to give to any other
party hereunder shall be in writing (including telegraphic communication)
and shall be mailed, telegraphed or delivered to such other party at its
address on the signature pages hereto or to any such party at such other
address as shall be designated by such party in a written notice to the
other party, complying as to delivery with the terms of this Section 12.
All such demands, notices and other communications shall be effective when
received or five business days after mailing, whichever is earlier.
13. SERVICE OF PROCESS. THE PLEDGOR (A) HEREBY IRREVOCABLY
SUBMITS TO THE JURISDICTION OF THE STATE COURTS OF THE STATES OF NEW YORK
AND NORTH CAROLINA AND TO THE JURISDICTION OF THE UNITED STATES DISTRICT
COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND TO THE JURISDICTION OF THE
UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF NORTH CAROLINA, FOR
THE PURPOSE OF ANY SUIT, ACTION, OR OTHER PROCEEDING ARISING OUT OF OR BASED
UPON THIS AGREEMENT OR THE SUBJECT MATTER HEREOF BROUGHT BY THE
ADMINISTRATIVE AGENT OR ITS SUCCESSORS OR ASSIGNS AND (B) HEREBY WAIVES, AND
AGREES NOT TO ASSERT, BY WAY OF MOTION, AS A DEFENSE, OR OTHERWISE, IN ANY
SUCH SUIT, ACTION, OR PROCEEDING, ANY CLAIM THAT IT IS NOT SUBJECT
PERSONALLY TO THE JURISDICTION OF THE ABOVE-NAMED COURTS, THAT ITS PROPERTY
IS EXEMPT OR IMMUNE FROM ATTACHMENT OR EXECUTION, THAT THE SUIT, ACTION, OR
PROCEEDING IS BROUGHT IN AN INCONVENIENT FORUM, THAT THE VENUE OF THE SUIT,
ACTION, OR PROCEEDING IS IMPROPER OR THAT THIS AGREEMENT OR THE SUBJECT
MATTER HEREOF MAY NOT BE ENFORCED IN OR BY SUCH COURT, AND (C) HEREBY WAIVES
IN ANY SUCH SUIT, ACTION, OR PROCEEDING ANY OFFSETS OR COUNTERCLAIMS WHICH
ARE UNRELATED TO THE TRANSACTIONS CONTEMPLATED HEREIN. THE PLEDGOR HEREBY
CONSENTS TO SERVICE OF PROCESS BY REGISTERED MAIL AT THE ADDRESS TO WHICH
NOTICES ARE TO BE GIVEN. THE PLEDGOR AGREES THAT ITS SUBMISSION TO
JURISDICTION AND ITS CONSENT TO SERVICE OF PROCESS BY MAIL IS MADE FOR THE
EXPRESS BENEFIT OF THE LENDERS. FINAL JUDGMENT AGAINST THE PLEDGOR IN ANY
SUCH SUIT, ACTION, OR PROCEEDING SHALL BE CONCLUSIVE, AND MAY BE ENFORCED IN
OTHER JURISDICTIONS (A) BY SUIT, ACTION, OR PROCEEDING ON THE JUDGMENT, A
CERTIFIED OR TRUE COPY OF WHICH SHALL BE CONCLUSIVE EVIDENCE OF THE FACT AND
OF THE AMOUNT OF ANY INDEBTEDNESS OR LIABILITY OF THE PLEDGOR THEREIN
DESCRIBED OR (B) IN ANY OTHER MANNER PROVIDED BY OR PURSUANT TO THE LAWS OF
SUCH OTHER JURISDICTION; PROVIDED, HOWEVER, THAT THE ADMINISTRATIVE AGENT
MAY AT ITS OPTION BRING SUIT, OR INSTITUTE OTHER JUDICIAL PROCEEDINGS
AGAINST THE PLEDGOR OR ANY OF THE PLEDGED SECURITIES IN ANY STATE OR FEDERAL
COURT OF THE UNITED STATES OR OF ANY COUNTRY OR PLACE WHERE THE PLEDGOR OR
SUCH PLEDGED SECURITIES MAY BE FOUND. THE PLEDGOR FURTHER COVENANTS AND
AGREES THAT SO LONG AS THIS AGREEMENT SHALL BE IN EFFECT, IT SHALL MAINTAIN
A DULY APPOINTED AGENT FOR THE RECEIPT AND ACCEPTANCE ON ITS BEHALF OF
SERVICE OF SUMMONS AND OTHER LEGAL PROCESSES, AND UPON FAILURE TO DO SO THE
CLERK OF EACH COURT TO WHOSE JURISDICTION IT HAS SUBMITTED SHALL BE DEEMED
TO BE ITS RESPECTIVE DESIGNATED AGENT UPON WHOM SUCH PROCESS MAY BE SERVED
ON ITS BEHALF, AND NOTIFICATION BY THE ATTORNEY FOR THE PLAINTIFF,
COMPLAINANT OR PETITIONER THEREIN BY MAIL.
14. WAIVER OF JURY TRIAL. TO THE EXTENT NOT PROHIBITED BY
APPLICABLE LAW WHICH CANNOT BE WAIVED, THE PLEDGOR HEREBY WAIVES, AND
COVENANTS THAT IT WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR
OTHERWISE), ANY RIGHT TO TRIAL BY JURY IN ANY FORUM IN RESPECT OF ANY ISSUE,
CLAIM, DEMAND, ACTION, OR CAUSE OF ACTION ARISING OUT OF OR BASED UPON THIS
AGREEMENT OR THE SUBJECT MATTER HEREOF, IN EACH CASE WHETHER NOW EXISTING OR
HEREAFTER ARISING OR WHETHER IN CONTRACT OR TORT OR OTHERWISE. THE PLEDGOR
ACKNOWLEDGES THAT IT HAS BEEN INFORMED THAT THE PROVISIONS OF THIS SECTION
14 CONSTITUTE A MATERIAL INDUCEMENT UPON WHICH THE OTHER PARTIES HAVE
RELIED, ARE RELYING AND WILL RELY IN ENTERING INTO THIS AGREEMENT. THE
PARTIES HERETO MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION 14
WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PLEDGOR TO THE
WAIVER OF ITS RIGHTS TO TRIAL BY JURY.
15. CHOICE OF LAW. THIS AGREEMENT AND ANY INSTRUMENT OR
AGREEMENT REQUIRED HEREUNDER SHALL BE DEEMED TO BE MADE UNDER, SHALL BE
GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.
16. Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns.
17. Further Assurances. The Pledgor, at its own expense, will
execute and deliver, from time to time, any and all further, or other,
instruments, and perform such acts, as the Administrative Agent may
reasonably request to effect the purposes of this Agreement and to secure to
the Administrative Agent for the ratable benefit of the Lenders, the
benefits of all rights, authorities, and remedies conferred upon the
Administrative Agent and the Lenders by the terms of this Agreement.
18. Counterparts. This Agreement may be executed in any number
of counterparts, each of which when so executed and delivered shall
constitute an original for all purposes, but all such counterparts taken
together shall constitute the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first above written.
ADELPHIA COMMUNICATIONS
CORPORATION
By:
Name:
Title:
Address: 5 West Third Street
Coudersport, PA 16915
FIRST UNION NATIONAL BANK OF NORTH
CAROLINA, as Administrative Agent
By:
Name:
Title:
Address: One First Union Center
301 S. College Street
Charlottee, NC 28288
<PAGE>
SCHEDULE 1
Pledged Affiliates
UCA Corp.
Adelphia Cable T.V., Inc.
Grand Island Cable, Inc.
<PAGE>
SCHEDULE 2
Pledged Securities
Pledged Affiliate Stock Certificate No. No. of Shares
EXHIBIT E-2
FORM OF DEBTOR PLEDGE AGREEMENT
PLEDGE AGREEMENT, dated as of March 15,
1995 between [INSERT NAME OF DEBTOR], a __________________ corporation (the
"Pledgor") and FIRST UNION NATIONAL BANK OF NORTH CAROLINA, as
Administrative Agent for the Lenders referred to herein (in such capacity,
the "Administrative Agent").
Introductory Statement
Pursuant to a Credit, Security and Guaranty Agreement dated as
of March 15, 1995 among UCA Corp. ("UCA"), Adelphia Cable T.V., Inc.
("ACTV"), Lorain Cable Television, Inc. ("Lorain"), Multi-Channel T.V. Cable
Company of Virginia ("Multi-Channel"), Van Buren County Cablevision, Inc.
("Van Buren"), Grand Island Cable, Inc. ("Grand Island") and UltraCom of
Montgomery County, Inc. ("UltraCom"; together with UCA, ACTV, Lorain, Multi-
Channel, Van Buren and Grand Island being referred to herein collectively as
the "Borrowers"), certain subsidiaries of the Borrowers referred to therein
as Guarantors, the lenders referred to therein (the "Lenders"), Societe
Generale, PNC Bank, National Association, First Union National Bank of North
Carolina and Credit Lyonnais Cayman Island Branch, as Managing Agents,
Societe Generale, as Structuring Agent, PNC Bank, National Association, as
Syndication Agent, Credit Lyonnais Cayman Island Branch, as Documentation
Agent and the Administrative Agent (said agreement as it may hereafter be
amended, supplemented or otherwise modified, renewed or replaced from time
to time in accordance with its terms being the "Credit Agreement"), the
Lenders have agreed to make loans (the "Loans") to the Borrowers.
The Pledgor owns beneficially and of record all of the issued
and outstanding shares of the capital stock of each Restricted Subsidiary
listed on Schedule 1 hereto (being referred to herein as the "Pledged
Affiliates").
In order to induce the Lenders to enter into the Credit
Agreement and make the Loans to the Borrowers and to secure the obligations
of the Borrowers under the Credit Agreement (such obligations of the
Borrowers being hereinafter referred to as the "Obligations"), the Pledgor
is pledging to the Administrative Agent, for the ratable benefit of the
Lenders, all of the issued and outstanding capital stock of the Pledged
Affiliates, all as more fully set forth herein.
Accordingly, the parties hereto agree as follows (capitalized terms used
herein and not otherwise defined shall have the meanings set forth in the
Credit Agreement):
1. Pledge. 1.1 As security for payment in full of the
Obligations, the Pledgor hereby pledges, hypothecates, assigns, transfers,
sets over and delivers unto the Administrative Agent, for the ratable
benefit of the Lenders, and grants a security interest in (i) all the
capital stock of each of the Pledged Affiliates which the Pledgor owns
beneficially and of record, and (ii) all proceeds of such capital stock and
all other securities or other property at any time and from time to time
receivable or otherwise distributed in respect of or in exchange for any or
all of such capital stock or additional securities. All items referred to
in clauses (i) and (ii) of this Section 1 are hereinafter referred to
collectively as the "Pledged Securities".
1.2 The Pledgor shall deliver to the Administrative Agent the
certificates representing the Pledged Securities accompanied by undated
stock powers executed in blank and by such other instruments or documents as
the Administrative Agent or its counsel shall reasonably request.
2. Registration in Nominee Name; Denominations. The
Administrative Agent shall have the right (in its sole and absolute
discretion) to hold the certificates representing any Pledged Securities in
its own name, the name of its nominee or in the name of the Pledgor,
endorsed or assigned in blank or in favor of the Administrative Agent. Upon
the occurrence and during the continuation of an Event of Default, the
Administrative Agent shall have the right to exchange the certificates
representing Pledged Securities for certificates of smaller or larger
denominations for any purpose consistent with this Agreement.
3. Pledgor's Representations, Warranties and Covenants. The
Pledgor hereby represents and warrants to and/or covenants and agrees with
the Administrative Agent as follows:
(a) the Pledged Securities constitute 100% of the issued
and outstanding equity securities of each of the Pledged Affiliates;
(b) the Pledged Securities are duly authorized, validly
issued, fully paid and non-assessable;
(c) there are no restrictions on the transfer of the
Pledged Securities other than as a result of the Credit Agreement or
applicable securities laws or the regulations promulgated thereunder;
(d) the Pledgor has good title to the Pledged
Securities;
(e) the Pledged Securities are not subject to any prior
liens or encumbrances;
(f) the Pledgor has the right to pledge the Pledged
Securities hereunder free of any encumbrances, and without the consent of
the creditors of the Pledged Affiliates or any other person or any
government agency whatsoever;
(g) the Pledgor has full power and authority to execute,
deliver and perform this Agreement and to pledge the Pledged Securities
hereunder;
(h) the Pledgor will not take any action to allow any
additional equity securities of the Pledged Affiliates to be issued or grant
any options or warrants, unless such securities are pledged to the
Administrative Agent, for the ratable benefit of the Lenders, on terms
satisfactory to the Administrative Agent as security for the Obligations;
(i) the execution, delivery and performance of this
Agreement will not violate any provision of law, administrative regulation,
any order of any court or other agency of government, any provision of any
indenture, agreement or other instrument to which the Pledgor is a party, or
be in conflict with, result in a breach of or constitute (with due notice
and/or lapse of time) a default under any such indenture, agreement or other
instrument;
(j) there are no material pending legal or governmental
proceedings to which the Pledgor is a party or to which any of its
properties is subject which will materially affect the Pledgor's ability to
perform its obligations hereunder; and
(k) on the date hereof, the Pledged Securities consist of
the securities listed on Schedule 2.
4. Voting Rights; Dividends; etc. 4.1 Unless and until an
Event of Default shall have occurred and be continuing:
(a) The Pledgor shall be entitled to exercise any and
all voting and/or consensual rights and powers accruing to the owner of the
Pledged Securities or any part thereof for any purpose not inconsistent with
the terms hereof and of the Credit Agreement.
(b) Any dividends (other than dividends permitted by
Section 6.21 of the Credit Agreement) or distributions of any kind
whatsoever received by the Pledgor, whether resulting from a subdivision,
combination, or reclassification of the outstanding capital stock of the
shares or received in exchange for the Pledged Securities or any part
thereof or as a result of any merger, consolidation, acquisition, or other
exchange of assets to which the shares may be a party, or otherwise, shall
be and become part of the Pledged Securities pledged hereunder and shall
immediately be delivered to the Administrative Agent to be held subject to
the terms of this Agreement.
(c) The Administrative Agent shall execute and deliver to
the Pledgor, or cause to be executed and delivered to the Pledgor, all such
proxies, powers of attorney and other instruments as the Pledgor may
reasonably request for the purpose of enabling the Pledgor to exercise the
voting and/or consensual rights and powers which it is entitled to exercise
pursuant to clause (i) above.
4.2 Upon the occurrence and during the continuance of an Event
of Default, all rights of the Pledgor to (i) exercise the voting and/or
consensual rights and powers which it is entitled to exercise pursuant to
Section 4(a)(i) hereof and (ii) receive and retain dividends and
distributions which the Pledgor would be entitled to receive and retain
pursuant to Section 4(a)(ii) and Section 6.21 of the Credit Agreement shall
cease and all such rights shall thereupon become vested in the
Administrative Agent for the ratable benefit of the Lenders, which shall
have the sole and exclusive right and authority to exercise such voting
and/or consensual rights; provided, however, that to the extent any
governmental consents or filings are required for the exercise by the
Administrative Agent of any of the foregoing rights and powers, the
Administrative Agent shall refrain from exercising such rights or powers
until the making of such required filings, the receipt of such consents and
the expiration of all related waiting periods.
5. Remedies Upon Default. 5.1 If an Event of Default shall
have occurred and be continuing, the Administrative Agent may sell the
Pledged Securities, or any part thereof, at public or private sale or at any
broker's board or on any securities exchange, for cash, upon credit or for
future delivery as the Administrative Agent shall deem appropriate subject
to the terms hereof or as otherwise provided in the New York Uniform
Commercial Code. The Administrative Agent shall be authorized at any such
sale (if it deems it advisable to do so) to restrict the prospective bidders
or purchasers to persons who will represent and agree that they are
purchasing the Pledged Securities for their own account and not with a view
to the distribution or sale thereof, and upon consummation of any such sale
the Administrative Agent shall have the right to assign, transfer, and
deliver to the purchaser or purchasers thereof the Pledged Securities so
sold. Each such purchaser at any such sale shall hold the property sold
absolutely, free from any claim or right on the part of the Pledgor.
5.2 The Administrative Agent shall give the Pledgor 10 days'
written notice of the Administrative Agent's intention to make any such
public or private sale, or sale at any broker's board or on any such
securities exchange, or of any other disposition of the Pledged Securities.
Such notice, in the case of public sale, shall state the time and place for
such sale and, in the case of sale at a broker's board or on a securities
exchange, shall state the board or exchange at which such sale is to be made
and the day on which the Pledged Securities, or portion thereof, will first
be offered for sale at such board or exchange. Any such public sale shall
be held at such time or times within ordinary business hours and at such
place or places as the Administrative Agent may fix and shall state in the
notice of such sale. At any such sale, the Pledged Securities, or portion
thereof, to be sold may be sold in one lot as an entirety or in separate
parcels, as the Administrative Agent may (in its sole and absolute
discretion) determine. The Administrative Agent shall not be obligated to
make any sale of the Pledged Securities if it shall determine not to do so,
regardless of the fact that notice of sale of the Pledged Securities may
have been given. The Administrative Agent may, without notice or
publication, adjourn any public or private sale or cause the same to be
adjourned from time to time by announcement at the time and place fixed for
sale, and such sale may, without further notice, be made at the time and
place to which the same was so adjourned. In case the sale of all or any
part of the Pledged Securities is made on credit or for future delivery, the
Pledged Securities so sold shall be retained by the Administrative Agent
until the sale price is paid by the purchaser or purchasers thereof, but the
Administrative Agent shall not incur any liability in case any such
purchaser or purchasers shall fail to take up and pay for the Pledged
Securities so sold and, in case of any such failure, such Pledged Securities
may be sold again upon like notice. At any sale or sales made pursuant to
this Section 5, the Administrative Agent may bid for or purchase, free from
any claim or right of whatever kind, including any equity of redemption, of
the Pledgor, any such demand, notice, claim, right or equity being hereby
expressly waived and released, any or all of the Pledged Securities offered
for sale, and may make any payment on the account thereof by using any claim
for moneys then due and payable to the Administrative Agent by the Debtors
or the Pledgor as a credit against the purchase price; and the
Administrative Agent, upon compliance with the terms of sale, may hold,
retain and dispose of the Pledged Securities without further accountability
therefor to the Pledgor or any third party. The Administrative Agent shall
in any such sale make no representations or warranties with respect to the
Pledged Securities or any part thereof, and the Administrative Agent shall
not be chargeable with any of the obligations or liabilities of the Pledgor
with respect thereto. The Pledgor hereby agrees (i) it will indemnify and
hold the Administrative Agent harmless from and against any and all claims
with respect to the Pledged Securities asserted before the taking of actual
possession or control of the Pledged Securities by the Administrative Agent
pursuant to this Agreement or arising out of any act of, or omission to act
on the part of, any party other than the Administrative Agent prior to such
taking of actual possession or control by the Administrative Agent, or
arising out of any act on the part of the Pledgor or its agents before or
after the commencement of such actual possession or control by the
Administrative Agent; and (ii) the Administrative Agent shall have no
liability or obligation arising out of any such claim. As an alternative to
exercising the power of sale herein conferred upon it, the Administrative
Agent may proceed by a suit or suits at law or in equity to foreclose this
Agreement and to sell the Pledged Securities, or any portion thereof,
pursuant to a judgment or decree of a court or courts having competent
jurisdiction.
All actions which may be taken pursuant to the provisions of
this Section 5 and/or Section 7 hereof are subject, in every instance, to
the receipt of any prior consents of any Governmental Authority which may be
required by Applicable Law.
6. Application of Proceeds of Sale and Cash. The proceeds of
sale of the Pledged Securities sold pursuant to Section 5 hereof shall be
applied by the Administrative Agent (in such order as the Administrative
Agent shall in its sole discretion determine) to the payment in full of the
Obligations and the payment of costs incurred by the Administrative Agent
while enforcing its rights pursuant to this Agreement.
7. Administrative Agent Appointed Attorney-in-Fact. Upon the
occurrence of an Event of Default and during the continuance of an Event of
Default, the Pledgor hereby appoints the Administrative Agent its attorney-
in-fact for the purpose of carrying out the provisions of this Agreement and
the pledge of the Pledged Securities hereunder and taking any action and
executing any instrument which the Administrative Agent may deem necessary
or advisable to accomplish the purposes hereof, which appointment is
irrevocable and coupled with an interest. Without limiting the generality
of the foregoing, the Administrative Agent shall have the right and power to
receive, endorse, and collect all checks and other orders for the payment of
money made payable to the Pledgor representing any dividend or other
distribution payable in respect of the Pledged Securities or any part
thereof and to give full discharge for the same.
8. Securities Act, etc. In view of the position of the Pledgor
in relation to the Pledged Securities, or because of other present or future
circumstances, a question may arise under the Securities Act of 1933, as
amended, as now or hereafter in effect, or any similar statute hereafter
enacted analogous in purpose or effect (such Act and any such similar
statute as from time to time in effect being hereinafter called the "Federal
Securities Laws"), with respect to any disposition of the Pledged Securities
permitted hereunder. The Pledgor understands that compliance with the
Federal Securities Laws may very strictly limit the course of conduct of the
Administrative Agent if the Administrative Agent were to attempt to dispose
of all or any part of the Pledged Securities, and may also limit the extent
to which or the manner in which any subsequent transferee of any Pledged
Securities may dispose of the same. Similarly, there may be other legal
restrictions or limitations affecting the Administrative Agent in any
attempt to dispose of all or any part of the Pledged Securities under
applicable Blue Sky or other state securities laws, or similar laws
analogous in purpose or effect. Under applicable law, in the absence of an
agreement to the contrary, the Administrative Agent may be held to have
certain general duties and obligations to the Pledgor to make some effort
towards obtaining a fair price even though the Obligations may be discharged
or reduced by the proceeds of a sale at a lesser price. The Pledgor hereby
agrees that the Administrative Agent shall not have any such general duty or
obligation to it, and the Pledgor will not attempt to hold the
Administrative Agent responsible for selling all or any part of the Pledged
Securities at an inadequate price, even if the Administrative Agent shall
accept the first offer received or does not approach more than one possible
purchaser. Without limiting the generality of the foregoing, the provisions
of this Section 8 would apply if, for example, the Administrative Agent were
to place all or any part of the Pledged Securities for private placement by
an investment banking firm, or if such investment banking firm purchased all
or any part of the Pledged Securities for its own account, or if the
Administrative Agent placed all or any part of the Pledged Securities
privately with a purchaser or purchasers.
9. Regulatory Approval. Upon the occurrence of an Event of
Default and during the continuance of an Event of Default, the Pledgor will,
at its expense, promptly execute and deliver, or cause the execution and
delivery of, all applications, certificates, instruments, registration
statements and all other documents and papers the Administrative Agent may
reasonably request or as may be required by law in connection with the
obtaining of any consent, approval, registration, qualification or
authorization of the FCC, any Governmental Authority or of any other person
necessary or appropriate for the effective exercise of any rights under this
Agreement. Without limiting the generality of the foregoing, if an Event of
Default shall have occurred and be continuing, the Pledgor shall take any
action which the Administrative Agent may reasonably request in order to
transfer and assign to the Administrative Agent, or to such one or more
third parties as the Administrative Agent may designate, or to a combination
of the foregoing, each FCC License, Franchise and any other agreement. To
enforce the provisions of this Section, the Administrative Agent is
empowered to request the appointment of a receiver from any court of
competent jurisdiction. Such receiver shall be instructed to seek from the
FCC and any applicable Governmental Authority an involuntary transfer of
control of each such FCC License and Franchise for the purpose of seeking a
bona fide purchaser to whom control will ultimately be transferred. The
Pledgor hereby agrees to authorize such an involuntary transfer of control
upon the request of the receiver so appointed and, if the Pledgor shall
refuse to authorize the transfer, its approval may be required by the court.
Upon the occurrence and continuance of an Event of Default, the Pledgor
shall further use its best efforts to assist in obtaining approval of the
FCC and any applicable Governmental Authority, if required, for any action
or transaction contemplated by this Agreement including, without limitation,
the preparation, execution and filing with the FCC and any applicable
Governmental Authority of the assignor's or transferor's portion of any
application or applications for consent to the assignment of any FCC License
and Franchise or transfer of control necessary or appropriate under the
rules and regulations of the FCC or any Governmental Authority for the
approval of the transfer or assignment of any portion of the Collateral,
together with any FCC License and Franchise. The Pledgor acknowledges that
the assignment or transfer of each FCC License and any other agreement is
integral to the Administrative Agent's and Lenders' realization of the value
of the Collateral, that there is no adequate remedy at law for failure by
the Pledgor to comply with the provisions of this Section 9 and that such
failure would cause irreparable injury not adequately compensable in
damages, and therefore agrees that each and every covenant contained in this
Section may be specifically enforced, and the Pledgeor hereby waives and
agrees not to assert any defenses against an action for specific performance
of such covenants.
10. Termination. The pledge hereunder shall terminate when all
of the Obligations shall have been fully paid and the Commitments have
terminated. At such time the Administrative Agent shall, at the sole cost
and expense of the Pledgor, assign and deliver to the Pledgor, or to such
person or persons as the Pledgor shall designate, against receipt, such of
the Pledged Securities (if any) as shall not have been sold or otherwise
applied by the Administrative Agent pursuant to the terms hereof and shall
still be held by it hereunder, together with appropriate instruments of
reassignment and release. Any such reassignment shall be without recourse
upon or warranty by the Administrative Agent (except as to acts of the
Administrative Agent or persons claiming through the Administrative Agent).
11. Notices. All demands, notices and other communications
which any party hereto may desire or may be required to give to any other
party hereunder shall be in writing (including telegraphic communication)
and shall be mailed, telegraphed or delivered to such other party at its
address on the signature pages hereto or to any such party at such other
address as shall be designated by such party in a written notice to the
other party, complying as to delivery with the terms of this Section 11.
All such demands, notices and other communications shall be effective when
received or five business days after mailing, whichever is earlier.
12. SERVICE OF PROCESS. THE PLEDGOR (A) HEREBY IRREVOCABLY
SUBMITS TO THE JURISDICTION OF THE STATE COURTS OF THE STATES OF NEW YORK
AND NORTH CAROLINA AND TO THE JURISDICTION OF THE UNITED STATES DISTRICT
COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND TO THE JURISDICTION OF THE
UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF NORTH CAROLINA, FOR
THE PURPOSE OF ANY SUIT, ACTION, OR OTHER PROCEEDING ARISING OUT OF OR BASED
UPON THIS AGREEMENT OR THE SUBJECT MATTER HEREOF BROUGHT BY THE
ADMINISTRATIVE AGENT OR ITS SUCCESSORS OR ASSIGNS AND (B) HEREBY WAIVES, AND
AGREES NOT TO ASSERT, BY WAY OF MOTION, AS A DEFENSE, OR OTHERWISE, IN ANY
SUCH SUIT, ACTION, OR PROCEEDING, ANY CLAIM THAT IT IS NOT SUBJECT
PERSONALLY TO THE JURISDICTION OF THE ABOVE-NAMED COURTS, THAT ITS PROPERTY
IS EXEMPT OR IMMUNE FROM ATTACHMENT OR EXECUTION, THAT THE SUIT, ACTION, OR
PROCEEDING IS BROUGHT IN AN INCONVENIENT FORUM, THAT THE VENUE OF THE SUIT,
ACTION, OR PROCEEDING IS IMPROPER OR THAT THIS AGREEMENT OR THE SUBJECT
MATTER HEREOF MAY NOT BE ENFORCED IN OR BY SUCH COURT, AND (C) HEREBY WAIVES
IN ANY SUCH SUIT, ACTION, OR PROCEEDING ANY OFFSETS OR COUNTERCLAIMS WHICH
ARE UNRELATED TO THE TRANSACTIONS CONTEMPLATED HEREIN. THE PLEDGOR HEREBY
CONSENTS TO SERVICE OF PROCESS BY REGISTERED MAIL AT THE ADDRESS TO WHICH
NOTICES ARE TO BE GIVEN. THE PLEDGOR AGREES THAT ITS SUBMISSION TO
JURISDICTION AND ITS CONSENT TO SERVICE OF PROCESS BY MAIL IS MADE FOR THE
EXPRESS BENEFIT OF THE LENDERS. FINAL JUDGMENT AGAINST THE PLEDGOR IN ANY
SUCH SUIT, ACTION, OR PROCEEDING SHALL BE CONCLUSIVE, AND MAY BE ENFORCED IN
OTHER JURISDICTIONS (A) BY SUIT, ACTION, OR PROCEEDING ON THE JUDGMENT, A
CERTIFIED OR TRUE COPY OF WHICH SHALL BE CONCLUSIVE EVIDENCE OF THE FACT AND
OF THE AMOUNT OF ANY INDEBTEDNESS OR LIABILITY OF THE PLEDGOR THEREIN
DESCRIBED OR (B) IN ANY OTHER MANNER PROVIDED BY OR PURSUANT TO THE LAWS OF
SUCH OTHER JURISDICTION; PROVIDED, HOWEVER, THAT THE ADMINISTRATIVE AGENT
MAY AT ITS OPTION BRING SUIT, OR INSTITUTE OTHER JUDICIAL PROCEEDINGS
AGAINST THE PLEDGOR OR ANY OF ITS ASSETS IN ANY STATE OR FEDERAL COURT OF
THE UNITED STATES OR OF ANY COUNTRY OR PLACE WHERE THE PLEDGOR OR SUCH
ASSETS MAY BE FOUND. THE PLEDGOR FURTHER COVENANTS AND AGREES THAT SO LONG
AS THIS AGREEMENT SHALL BE IN EFFECT, IT SHALL MAINTAIN A DULY APPOINTED
AGENT FOR THE RECEIPT AND ACCEPTANCE ON ITS BEHALF OF SERVICE OF SUMMONS AND
OTHER LEGAL PROCESSES, AND UPON FAILURE TO DO SO THE CLERK OF EACH COURT TO
WHOSE JURISDICTION IT HAS SUBMITTED SHALL BE DEEMED TO BE ITS RESPECTIVE
DESIGNATED AGENT UPON WHOM SUCH PROCESS MAY BE SERVED ON ITS BEHALF, AND
NOTIFICATION BY THE ATTORNEY FOR THE PLAINTIFF, COMPLAINANT OR PETITIONER
THEREIN BY MAIL.
13. WAIVER OF JURY TRIAL. TO THE EXTENT NOT PROHIBITED BY
APPLICABLE LAW WHICH CANNOT BE WAIVED, THE PLEDGOR HEREBY WAIVES, AND
COVENANTS THAT IT WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR
OTHERWISE), ANY RIGHT TO TRIAL BY JURY IN ANY FORUM IN RESPECT OF ANY ISSUE,
CLAIM, DEMAND, ACTION, OR CAUSE OF ACTION ARISING OUT OF OR BASED UPON THIS
AGREEMENT OR THE SUBJECT MATTER HEREOF, IN EACH CASE WHETHER NOW EXISTING OR
HEREAFTER ARISING OR WHETHER IN CONTRACT OR TORT OR OTHERWISE. THE PLEDGOR
ACKNOWLEDGES THAT IT HAS BEEN INFORMED THAT THE PROVISIONS OF THIS SECTION
13 CONSTITUTE A MATERIAL INDUCEMENT UPON WHICH THE OTHER PARTIES HAVE
RELIED, ARE RELYING AND WILL RELY IN ENTERING INTO THIS AGREEMENT. THE
PARTIES HERETO MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION 13
WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PLEDGOR TO THE
WAIVER OF ITS RIGHTS TO TRIAL BY JURY.
14. CHOICE OF LAW. THIS AGREEMENT AND ANY INSTRUMENT OR
AGREEMENT REQUIRED HEREUNDER SHALL BE DEEMED TO BE MADE UNDER, SHALL BE
GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.
15. Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns.
16. Further Assurances. The Pledgor, at its own expense, will
execute and deliver, from time to time, any and all further, or other,
instruments, and perform such acts, as the Administrative Agent may
reasonably request to effect the purposes of this Agreement and to secure to
the Administrative Agent for the ratable benefit of the Lenders, the
benefits of all rights, authorities, and remedies conferred upon the
Administrative Agent and the Lenders by the terms of this Agreement.
17. Counterparts. This Agreement may be executed in any number
of counterparts, each of which when so executed and delivered shall
constitute an original for all purposes, but all such counterparts taken
together shall constitute the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first above written.
[INSERT NAME OF DEBTOR]
By:
Name:
Title:
Address: 5 West Third Street
Coudersport, PA 16915
FIRST UNION NATIONAL BANK OF NORTH
CAROLINA, as Administrative Agent
By:
Name:
Title:
Address: One First Union Center
301 S. College Street
Charlotte, NC 28288
<PAGE>
SCHEDULE 1
Pledged Affiliates
<PAGE>
SCHEDULE 2
Pledged Securities
Pledged Affiliate Stock Certificate No. No. of Shares
EXHIBIT F-1
FORM OF MANAGEMENT SUBORDINATION AGREEMENT
SUBORDINATION AGREEMENT dated as of March 15, 1995 among (i) UCA Corp.
("UCA"), Adelphia Cable T.V., Inc. ("ACTV"), Lorain Cable Television, Inc.
("Lorain"), Multi-Channel T.V. Cable Company of Virginia ("Multi-Channel"),
Van Buren County Cablevision, Inc. ("Van Buren"), Grand Island Cable, Inc.
("Grand Island"), UltraCom of Montgomery County, Inc. ("UltraCom") and their
respective Restricted Subsidiaries which are party to the Credit Agreement
(as hereinafter defined) (such Restricted Subsidiaries together with UCA,
ACTV, Lorain, Multi-Channel, Van Buren, Grand Island and UltraCom being
referred to herein collectively as the "Obligors" and individually as an
"Obligor"), (ii) Adelphia Cablevision, Inc., a Pennsylvania corporation
("ACI") and Chelsea Communications, Inc., a Delaware corporation ("Chelsea",
collectively with ACI, the "Subordinated Creditors") and (iii) First Union
National Bank of North Carolina, as administrative agent for the Lenders
referenced herein (in such capacity, the "Administrative Agent").
Introductory Statement
Pursuant to the terms of a Credit, Security and Guaranty
Agreement dated as of March 15, 1995 among the Obligors, the lenders
referred to therein (the "Lenders"), Societe Generale, PNC Bank, National
Association, First Union National Bank of North Carolina and Credit Lyonnais
Cayman Island Branch, as Managing Agents, Societe Generale, as Structuring
Agent, PNC Bank, National Association, as Syndication Agent, Credit Lyonnais
Cayman Island Branch, as Documentation Agent and the Administrative Agent
(the "Credit Agreement") the Lenders have agreed, subject to the terms and
conditions thereof, to make loans (the "Loans") to the Obligors. In
addition, one or more of the Lenders may from time to time enter into
Interest Rate Protection Agreements. The Credit Agreement, the Notes
referred to therein, any Interest Rate Protection Agreement and the other
documents, instruments and agreements contemplated thereby as they may be
amended or otherwise modified form time to time, shall hereinafter be
referred to as "Senior Obligation Documents". For purposes of this
Subordination Agreement, capitalized terms used herein and not otherwise
defined herein shall have the meanings set forth in the Credit Agreement.
Pursuant to the terms of the Management Agreements, the
Subordinated Creditors have agreed to render management, supervisory and
other services to the Obligors, and the Obligors have agreed to pay
Management Fees (as defined in the Credit Agreement) as provided in the
Management Agreements to the Subordinated Creditors. The obligations of the
Obligors to pay the Management Fees together with all other amounts payable
to the Subordinated Creditors in connection therewith are hereinafter
referred to as the "Subordinated Obligations". Any agreement evidencing the
Subordinated Obligations including the Management Agreements or any other
related agreement are hereinafter referred to as "Junior Obligation
Documents".
In order to induce the Administrative Agent and the
Lenders to enter into the Credit Agreement, the Subordinated Creditors have
agreed, subject to the provisions of this Subordination Agreement, that the
Subordinated Obligations shall be subordinate to the Senior Obligations (as
hereinafter defined).
NOW, THEREFORE, in consideration of the premises and other
good and valuable consideration, receipt of which is hereby acknowledged,
the parties hereto hereby agree as follows:
(1) Agreement to Subordinate. The Subordinated
Creditors agree that the Subordinated Obligations are and shall be
subordinate and subject in right of payment, to the extent and in the manner
hereinafter set forth, to the prior payment in full of the Senior
Obligations and that any guarantees, security interests, mortgages and other
liens securing payment of the Subordinated Obligations are and shall be
subordinate, to the fullest extent permitted by law and as hereinafter set
forth, to the Senior Obligations, notwithstanding the perfection, order of
perfection or failure to perfect, any such security interest or other lien,
or the filing or recording, order of filing or recording, or failure to file
or record this Agreement or any instrument or other document in any filing
or recording office in any jurisdiction. The term "Senior Obligations"
shall mean all obligations of the Obligors under the Senior Obligation
Documents including, without limitation, whether outstanding at the date
hereof or hereafter incurred or created, all obligations to pay principal,
premium, if any, interest (including, without limitation, interest accruing
after the commencement of any bankruptcy, insolvency, reorganization or
similar proceedings with respect to the Obligor, whether or not determined
to be an allowed claim in any such proceeding), charges, costs, expenses and
fees including, without limitation, the disbursements and reasonable fees of
counsel to the Administrative Agent or the Lenders, all obligations to
reimburse or indemnify the Administrative Agent and the Lenders in any way,
and all renewals, extensions, restructurings, refinancings or refunding of
any indebtedness under the Senior Obligation Documents in the nature of a
"workout" or otherwise.
The expressions "prior payment in full", "payment in full,
"paid in full" or any other similar term(s) or phrase(s) when used herein
with respect to Senior Obligation Documents shall mean the indefeasible
payment in full, in cash, of all of the Senior Obligations and the
termination of the Commitments.
(2) Restrictions on Payment of the Subordinated
Obligations, etc. The Subordinated Creditors will not ask, demand, sue for,
take or receive, directly or indirectly, from the Obligors, in cash or other
property, by setoff, by realizing upon collateral, foreclosing on any lien
or otherwise, by exercise of any remedies or rights under the Junior
Obligation Documents or by executions, garnishments, levies, attachments or
by any other action relating to the Subordinated Obligations, or in any
other manner, payment of, or additional security for, all or any part of the
Subordinated Obligations unless and until the Senior Obligations shall have
been paid in full; provided, however, that the Subordinated Creditors may
receive, and the Obligors may pay the Subordinated Obligations upon the
terms set forth in the Junior Obligation Documents so long as (i) (x) at the
time of making such payment and immediately after giving effect thereto, no
"Event of Default" (as such term is defined in the Senior Obligation
Documents) or event which with notice and/or passage of time would
constitute an Event of Default shall have occurred and be continuing and (y)
such payment would not violate Section 3 of this Agreement or clauses (i) or
(ii) of Section 6.24 of the Credit Agreement and (ii) such payment would not
violate Section 3 of this Agreement or clause (iii) of Section 6.24 of the
Credit Agreement. The Obligors will not make any payment of any of the
Subordinated Obligations, or take any other action, in contravention of the
provisions of this Agreement. The Subordinated Creditors expressly agree
that, unless and until such time as the Loans shall be accelerated, any
payment in respect to the Subordinated Obligations which is made in
violation of the provisions of this Subordination Agreement shall be deemed
to be deferred until such time as payment can be made in compliance with
this Subordination Agreement and the Obligors shall not be in default under
any of the Junior Obligation Documents by reason thereof.
Each Subordinated Creditor further acknowledges and agrees
that it will not take any collateral of the Obligors unless and until the
Senior Obligations have been paid in full.
(3) Additional Provisions Concerning Subordination. The
Subordinated Creditors and the Obligors agree as follows:
In the event of (i) any dissolution, winding up,
liquidation or reorganization of any Obligor (whether voluntary or
involuntary and whether in bankruptcy, insolvency or receivership
proceedings, or upon an assignment for the benefit of creditors or
proceedings for voluntary or involuntary liquidation, dissolution or other
winding up of such Obligor, whether or not involving insolvency or
bankruptcy, or any other marshalling of the assets and liabilities of such
Obligor or otherwise); or (ii) any Event of Default which has not been
waived or cured or an event which with notice and/or passage of time would
constitute an Event of Default which has not been waived or cured, or
acceleration of maturity regarding the Subordinated Obligations:
all Senior Obligations shall first be paid to the Administrative Agent for
the benefit of the Lenders in full before any payment or distribution is
made upon the principal of or interest on or any fees, costs, charges or
expenses in connection with the Subordinated Obligations, and before any
other action described in Sections 2 and 4 hereof is taken by the
Subordinated Creditors; and
any payment or distribution of assets of any Obligor, whether in cash,
property or securities to which the Subordinated Creditors would be entitled
except for the provisions hereof, shall be paid or delivered by such
Obligor, or any receiver, trustee in bankruptcy, liquidating trustee,
disbursing agent, agent or other person making such payment or distribution,
directly to the Administrative Agent for the benefit of the Lenders, to the
extent necessary to pay in full all Senior Obligations remaining unpaid,
after giving effect to any concurrent payment or distribution to the Lenders
before any payment or distribution is made to the Subordinated Creditors;
In any proceeding referred to or resulting from any event referred to in
subsection (a) of this Section 3 commenced by or against any Obligor:
the Administrative Agent may, and is hereby irrevocably authorized and
empowered (in its own name or in the name of the Subordinated Creditors or
otherwise), but shall have no obligation to, (i) demand, sue for, collect
and receive every payment or distribution referred to in subsection (a) of
this Section 3 and give acquittance therefor, (ii) file claims and proofs of
claim in respect of the Subordinated Obligations, but only if the
Subordinated Creditors have not filed such claims or proofs of claim with
respect to the Subordinated Obligations before the expiration of the time to
file such, and (iii) take such other action as the Administrative Agent may
deem necessary or advisable for the exercise or enforcement of any of the
rights or interests of the Administrative Agent and the Lenders hereunder;
and
the Subordinated Creditors will duly and promptly take such action as the
Administrative Agent may reasonably request to collect the Subordinated
Obligations for the account of the Lenders and to file appropriate claims or
proofs of claim with respect thereto, to execute and deliver to the
Administrative Agent such powers of attorney, assignments or other
instruments as the Administrative Agent may request in order to enable it to
enforce any and all claims with respect to the Subordinated Obligations, and
to collect and receive any and all payments or distributions which may be
payable or deliverable upon or with respect to the Subordinated Obligations;
All payments or distributions upon or with respect to the Subordinated
Obligations which are received by the Subordinated Creditors contrary to the
provisions of this Agreement shall be deemed to be the property of the
Lenders, shall be received in trust for the benefit of the Lenders, shall be
segregated from other funds and property held by the Subordinated Creditors
and shall be forthwith paid over to the Administrative Agent for the benefit
of the Lenders in the same form as so received (with any necessary
endorsement) to be applied to the payment or prepayment of the Senior
Obligations until the Senior Obligations shall have been paid in full;
The Subordinated Creditors hereby waive any requirement for
marshalling of assets by the Administrative Agent in connection with any
foreclosure of any lien of the Lenders under the Senior Obligation
Documents;
(e) The Subordinated Creditors shall not take any action to
impair or otherwise adversely affect the foreclosure of, or other
realization of the Administrative Agent's or the Lenders' rights under the
Senior Obligation Documents; and
(f) The Administrative Agent is hereby authorized to demand
specific performance of this Agreement at any time when the Subordinated
Creditors shall have failed to comply with any of the provisions of this
Agreement, and the Subordinated Creditors hereby irrevocably waive any
defense based on the adequacy of a remedy at law which might be asserted as
a bar to such remedy of specific performance.
(4) Subrogation. The Subordinated Creditors agree that no
payment or distribution to the Administrative Agent and/or the Lenders
pursuant to the provisions of this Agreement shall entitle the Subordinated
Creditors to exercise any rights of subrogation in respect thereof until the
Senior Obligations shall have been paid in full.
(5) No Negotiable Instruments. The Subordinated Creditors and
the Obligors agree that at no time hereafter will any part of the
Subordinated Obligations be represented by any negotiable instruments or
other writings.
6. Legend. Each of the Subordinated Creditors and the
Obligors will cause each promissory note evidencing any of the Subordinated
Obligations, any replacement thereof and any mortgage or security document
relating thereto to include or have endorsed thereon the following
provision:
"The indebtedness evidenced or secured by this instrument
is subordinated to other indebtedness pursuant to, and to the
extent provided in, and is otherwise subject to the terms of,
the Subordination Agreement dated as of March 15, 1995 by and
among (i) UCA Corp., Adelphia Cable T.V., Inc., Lorain Cable
Television, Inc., Multi-Channel T.V. Cable Company of Virginia,
Van Buren County Cablevision, Inc., Grand Island Cable, Inc.,
UltraCom of Montgomery County, Inc. and their respective
Restricted Subsidiaries, (ii) Adelphia Cablevision, Inc. and
Chelsea Communications, Inc. and (iii) First Union National Bank
of North Carolina, as Administrative Agent."
7. Negative Covenants of the Subordinated Creditors. So long
as any of the Senior Obligations shall remain outstanding, the Subordinated
Creditors will not, without the prior written consent of the Administrative
Agent:
(a) Sell, assign, pledge, encumber or otherwise dispose of any
instrument evidencing the indebtedness owed to the Subordinated Creditors or
any collateral securing the Subordinated Obligations unless such sale,
assignment, pledge, encumbrance or other disposition is made expressly
subject to this Agreement and the other party to such sale, assignment,
pledge, encumbrance or other disposition consents in writing to be bound by
the terms hereof;
(b) Permit the terms of the Junior Obligation Documents or
collateral securing any Subordinated Obligations to be changed in any way
which would limit or impair these subordination provisions, increase the
principal amount thereof, increase the interest payable thereon, change any
payment date thereunder or accept any collateral;
(c) Declare all or any portion of the Subordinated Obligations
due and payable prior to the date fixed therefor or realize upon, or
otherwise exercise any remedies with respect to, any collateral securing the
Subordinated Obligations or take any other action described in Section 2
hereof; or
(d) Commence, or join with any creditor other than the Lenders
in commencing any proceeding referred to in Section 3(a) hereof.
8. Obligations Unconditional. All rights and interests of
the Administrative Agent and the Lenders hereunder, and all agreements and
obligations of the Subordinated Creditors and the Obligors hereunder, shall
remain in full force and effect irrespective of:
(a) Any lack of validity or enforceability of any Senior
Obligation Document or any other agreement or instrument relating thereto;
(b) Any change in the time, manner or place of payment of, or
in any other term of, all or any of the Senior Obligations, or any other
amendment or waiver of or any consent to departure from any Senior
Obligation Document;
(c) Any exchange, release or nonperfection of any collateral,
or any release or amendment or waiver of or consent to departure from any
guaranty, for all or any of the Senior Obligations;
(d) Any other circumstances which might otherwise constitute a
defense available to, or a discharge of, either the Obligors in respect of
the Senior Obligations or of the Subordinated Creditors or the Obligors in
respect of this Agreement; or
(e) Further subordinate the Subordinated Obligations.
9. Additional Agreements and Waivers by the Subordinated
Creditors. The Subordinated Creditors waive, to the fullest extent
permitted by law, any right to request marshalling of assets or equitable
subordination (whether under or pursuant to 11 U.S.C. 510 or otherwise) and
any right to assert that the Administrative Agent or any Lender has in any
way failed to comply with the provisions of the UCC, including the
provisions of Article 9 thereof.
10. Representations and Warranties. Each Subordinated
Creditor hereby represents and warrants that:
(i) such Subordinated Creditor has the power and authority and
the legal right to execute and deliver, and to perform its obligations
under, this Agreement, and has taken all necessary action to authorize
the execution, delivery and performance of this Agreement;
(ii) this Agreement constitutes a legal, valid and binding
obligation of such Subordinated Creditor enforceable in accordance
with its terms, except as affected by bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar
laws relating to or affecting the enforcement of creditors' rights
generally, general equitable principles and an implied covenant of
good faith and fair dealing;
(iii) the execution, delivery and performance of this Agreement
will not violate any provision of any Applicable Law or any agreement
to which such Subordinated Creditor is a party;
(iv) no consent or authorization of, filing with, or other act
by or in respect of, any arbitrator or Governmental Authority and no
consent of any other Person (including, without limitation, any
partner, stockholder or creditor of such Subordinated Creditor) is
required in connection with the execution, delivery, performance,
validity or enforceability of this Agreement;
(v) no litigation, investigation or proceeding of or before
any arbitrator or Governmental Authority is pending or, to the
knowledge of such Subordinated Creditor, threatened by or against such
Subordinated Creditor with respect to this Agreement;
(vi) the agreements governing the Subordinated Obligations of
such Subordinated Creditor do not and will not contain (A) any default
which is triggered by (I) a default under any other agreements to
which any Obligor is a party or (II) any other Indebtedness of any
Obligor being declared due and payable prior to its stated maturity or
(B) without limiting clause (A) above, any covenants or events of
default which are more strict than those contained in the Credit
Agreement; and
(vii) such Subordinated Creditor is an Affiliate of the Obligors
and has received and reviewed a copy of the Credit Agreement.
11. Addition or Replacement of Manager. To the extent
permitted by the Credit Agreement, any Affiliate of the Obligors may become
a "Subordinated Creditor" under this Agreement by executing and delivering
to the Administrative Agent a Supplement to this Agreement in the form
attached hereto as Exhibit A.
12. Further Assurances. The Subordinated Creditors and the
Obligors will, at their own expense and at any time and from time to time,
promptly execute and deliver all further instruments and documents, and take
all further action that the Administrative Agent may reasonably request, in
order to perfect or otherwise protect any right or interest granted or
purported to be granted hereby or to enable the Administrative Agent to
exercise and enforce its rights and remedies hereunder.
13. Expenses. The Obligors agree to pay to the Administrative
Agent, upon demand, the amount of any and all reasonable expenses, including
the reasonable fees and expenses of counsel for the Administrative Agent,
which the Administrative Agent may incur in connection with the exercise or
enforcement of any of the rights or interests of the Administrative Agent or
the Lenders hereunder.
14. Notice. All demands, notices and other communications
which any party hereto may desire or may be required to give to any other
party hereunder shall be in writing (including telegraphic communication)
and shall be mailed, telecopied, telegraphed or delivered to such other
party at its address as set forth on the signature pages hereof or to any
such party at such other address as shall be designated by such party in a
written notice to each other party, complying as to delivery with the terms
of this Section 14. All such demands, notices, and other communications
shall be effective when received or five business days after mailing,
whichever is earlier.
15. SERVICE OF PROCESS. EACH OF THE SUBORDINATED CREDITORS
AND THE OBLIGORS (A) HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE
STATE COURTS OF THE STATES OF NEW YORK AND NORTH CAROLINA AND THE
JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT
OF NEW YORK AND TO THE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR
THE WESTERN DISTRICT OF NORTH CAROLINA, FOR THE PURPOSE OF ANY SUIT, ACTION
OR OTHER PROCEEDING ARISING OUT OF OR BASED UPON THIS AGREEMENT OR THE
SUBJECT MATTER HEREOF BROUGHT BY THE ADMINISTRATIVE AGENT OR ITS SUCCESSORS
OR ASSIGNS AND (B) HEREBY WAIVES AND AGREES NOT TO ASSERT, BY WAY OF MOTION,
AS A DEFENSE, OR OTHERWISE, IN ANY SUCH SUIT, ACTION OR PROCEEDING, ANY
CLAIM THAT IT IS NOT SUBJECT PERSONALLY TO THE JURISDICTION OF THE ABOVE-
NAMED COURTS, THAT ITS PROPERTY IS EXEMPT OR IMMUNE FROM ATTACHMENT OR
EXECUTION, THAT THE SUIT, ACTION OR PROCEEDING IS BROUGHT IN AN INCONVENIENT
FORUM, THAT THE VENUE OF THE SUIT, ACTION OR PROCEEDING IS IMPROPER OR THAT
THIS AGREEMENT OR THE SUBJECT MATTER HEREOF MAY NOT BE ENFORCED IN OR BY
SUCH COURT, AND (C) HEREBY WAIVES IN ANY SUCH ACTION, SUIT OR PROCEEDING ANY
OFFSETS OR COUNTERCLAIMS WHICH ARE UNRELATED TO THE TRANSACTIONS
CONTEMPLATED HEREIN. EACH OF THE SUBORDINATED CREDITORS AND THE OBLIGORS
HEREBY CONSENTS TO SERVICE OF PROCESS BY REGISTERED MAIL AT THE ADDRESS TO
WHICH NOTICES ARE TO BE GIVEN. EACH OF THE SUBORDINATED CREDITORS AND THE
OBLIGORS AGREES THAT ITS SUBMISSION TO JURISDICTION AND ITS CONSENT TO
SERVICE OF PROCESS BY MAIL IS MADE FOR THE EXPRESS BENEFIT OF THE LENDERS.
FINAL JUDGMENT AGAINST THE SUBORDINATED CREDITORS OR THE OBLIGORS IN ANY
SUCH ACTION, SUIT OR PROCEEDING SHALL BE CONCLUSIVE, AND MAY BE ENFORCED IN
OTHER JURISDICTIONS (A) BY SUIT, ACTION OR PROCEEDING ON THE JUDGMENT, A
CERTIFIED OR TRUE COPY OF WHICH SHALL BE CONCLUSIVE EVIDENCE OF THE FACT AND
OF THE AMOUNT OF ANY INDEBTEDNESS OR LIABILITY OF THE SUBORDINATED CREDITORS
OR THE OBLIGORS THEREIN DESCRIBED OR (B) IN ANY OTHER MANNER PROVIDED BY OR
PURSUANT TO THE LAWS OF SUCH OTHER JURISDICTION; PROVIDED, HOWEVER, THAT THE
ADMINISTRATIVE AGENT MAY AT ITS OPTION BRING SUIT, OR INSTITUTE OTHER
JUDICIAL PROCEEDINGS AGAINST THE SUBORDINATED CREDITORS OR THE OBLIGORS OR
ANY OF THEIR RESPECTIVE ASSETS IN ANY STATE OR FEDERAL COURT OF THE UNITED
STATES OR OF ANY COUNTRY OR PLACE WHERE THE SUBORDINATED CREDITORS, THE
OBLIGORS OR THEIR RESPECTIVE ASSETS MAY BE FOUND. EACH OF THE SUBORDINATED
CREDITORS AND THE OBLIGORS FURTHER COVENANTS AND AGREES THAT SO LONG AS THIS
AGREEMENT SHALL BE IN EFFECT, EACH SHALL MAINTAIN A DULY APPOINTED AGENT FOR
THE RECEIPT AND ACCEPTANCE ON ITS BEHALF OF SERVICE OF SUMMONS AND OTHER
LEGAL PROCESSES, AND UPON FAILURE TO DO SO THE CLERK OF EACH COURT TO WHOSE
JURISDICTION IT HAS SUBMITTED SHALL BE DEEMED TO BE ITS RESPECTIVE
DESIGNATED AGENT UPON WHOM SUCH PROCESS MAY BE SERVED ON ITS BEHALF, AND
NOTIFICATION BY THE ATTORNEY FOR PLAINTIFF, COMPLAINANT OR PETITIONER
THEREIN BY MAIL OR TELEGRAPH TO ANY SUBORDINATED CREDITOR OR ANY OBLIGOR OF
THE FILING OF EACH SUIT, ACTION OR PROCEEDING SHALL BE DEEMED SUFFICIENT
NOTICE THEREOF.
16. WAIVER OF JURY TRIAL. TO THE EXTENT NOT PROHIBITED BY
APPLICABLE LAW WHICH CANNOT BE WAIVED, EACH PARTY HERETO HEREBY WAIVES, AND
COVENANTS THAT IT WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR
OTHERWISE), ANY RIGHT TO TRIAL BY JURY IN ANY FORUM IN RESPECT OF ANY ISSUE,
CLAIM, DEMAND, ACTION, OR CAUSE OF ACTION ARISING OUT OF OR BASED UPON THIS
AGREEMENT OR THE SUBJECT MATTER HEREOF, IN EACH CASE WHETHER NOW EXISTING OR
HEREAFTER ARISING OR WHETHER IN CONTRACT OR TORT OR OTHERWISE. EACH PARTY
HERETO ACKNOWLEDGES THAT IT HAS BEEN INFORMED THAT THE PROVISIONS OF THIS
SECTION 16 CONSTITUTE A MATERIAL INDUCEMENT UPON WHICH THE OTHER PARTIES
HAVE RELIED, ARE RELYING AND WILL RELY IN ENTERING INTO THIS AGREEMENT. THE
PARTIES HERETO MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION 16
WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF SUCH OTHER PARTY TO THE
WAIVER OF ITS RIGHTS TO TRIAL BY JURY.
17. Miscellaneous.
(a) No amendment of any provision of this Agreement shall be
effective unless it is in writing and signed by the Subordinated Creditors,
the Obligors and the Administrative Agent, and no waiver of any provision of
this Agreement, and no consent to any departure therefrom, shall be
effective unless it is in writing and signed by the Administrative Agent,
and any such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given.
(b) No failure on the part of the Administrative Agent to
exercise, and no delay in exercising, any right hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any such right
preclude any other or further exercise thereof or the exercise of any other
right.
(c) Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction, shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or invalidity without
invalidating the remaining portions hereof or thereof or affecting the
validity or enforceability of such provision in any other jurisdiction.
(d) This Agreement shall be binding on the Subordinated
Creditors and the Obligors and their respective successors and assigns
including without limitation any holders of the instruments evidencing the
Subordinated Obligations.
(e) This Agreement, and any modifications or amendments
hereto, may be executed in any number of counterparts, each of which when so
executed and delivered shall constitute an original for all purposes, but
all such counterparts taken together shall constitute the same instrument.
(f) This Agreement and any amendment or agreement required
hereunder shall be deemed to be made under, shall be governed by, and shall
be construed and enforced in accordance with, the laws of the State of New
York without regard to principles of conflicts of laws.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on the date first above written.
UCA CORP.
By_________________________
Name:
Title:
Address: 5 West Third Street
Coudersport, PA 16915
ADELPHIA CABLE T.V., INC.
By_________________________
Name:
Title:
Address: 5 West Third Street
Coudersport, PA 16915
LORAIN CABLE TELEVISION, INC.
By_________________________
Name:
Title:
Address: 5 West Third Street
Coudersport, PA 16915
MULTI-CHANNEL T.V. CABLE COMPANY
OF VIRGINIA
By_________________________
Name:
Title:
Address: 5 West Third Street
Coudersport, PA 16915
VAN BUREN COUNTY CABLEVISION, INC.
By_________________________
Name:
Title:
Address: 5 West Third Street
Coudersport, PA 16915
GRAND ISLAND CABLE, INC.
By_________________________
Name:
Title:
Address: 5 West Third Street
Coudersport, PA 16915
ULTRACOM OF MONTGOMERY COUNTY, INC.
By_________________________
Name:
Title:
Address: 5 West Third Street
Coudersport, PA 16915
ULTRACOM OF MARPLE, INC.
By_________________________
Name:
Title:
Address: 5 West Third Street
Coudersport, PA 16915
ULTRACOM OF LANSDALE, INC.
By_________________________
Name:
Title:
Address: 5 West Third Street
Coudersport, PA 16915
ADELPHIA CABLEVISION, INC.
By_________________________
Name:
Title:
Address: 5 West Third Street
Coudersport, PA 16915
CHELSEA COMMUNICATIONS, INC.
By_________________________
Name:
Title:
Address: 5 West Third Street
Coudersport, PA 16915
FIRST UNION NATIONAL BANK OF
NORTH CAROLINA, as
Executed in Administrative Agent
New York, New York
on ____________, 1995
By_________________________
Name:
Title:
Address: One First Union Center
301 S. College Street
Charlotte, NC 28288
<PAGE>
EXHIBIT A
TO MANAGEMENT
SUBORDINATION
AGREEMENT
FORM OF
SUPPLEMENT TO MANAGEMENT SUBORDINATION AGREEMENT
DATED AS OF MARCH 15, 1995
WHEREAS, UCA CORP. ("UCA"), Adelphia Cable T.V., Inc. ("ACTV"),
Lorain Cable Television, Inc. ("Lorain"), Multi-Channel T.V. Cable Company
of Virginia ("Multi-Channel"), Van Buren County Cablevision, Inc. ("Van
Buren"), Grand Island Cable, Inc. ("Grand Island"), UltraCom of Montgomery
County, Inc. ("UltraCom") and certain of their respective subsidiaries from
time to time party thereto (the "Restricted Subsidiaries"; together with
UCA, ACTV, Lorain, Multi-Channel, Van Buren, Grand Island and UltraCom being
referred to herein collectively as the "Obligors" and individually as an
"Obligor") are party to a Credit, Security and Guaranty Agreement dated as
of March 15, 1995 (as such agreement may be amended, supplemented or
otherwise modified, renewed or replaced from time to time, the "Credit
Agreement") among the Obligors, the lenders referred to therein (the
"Lenders"), Societe Generale, PNC Bank, National Association, First Union
National Bank of North Carolina and Credit Lyonnais Cayman Island Branch, as
Managing Agents, Societe Generale, as Structuring Agent, PNC Bank, National
Association, as Syndication Agent, Credit Lyonnais Cayman Island Branch, as
Documentation Agent and First Union National Bank of North Carolina, as
administrative agent for the Lenders (in such capacity, the "Administrative
Agent");
WHEREAS, the Obligors are party to a Management Subordination
Agreement dated as of March 15, 1995 (as such agreement may be amended,
supplemented or otherwise modified, renewed or replaced from time to time,
the "Affiliate Subordination Agreement") among the Obligors, the
subordinated creditors referred to therein (the "Subordinated Creditors")
and the Administrative Agent;
WHEREAS, pursuant to the Credit Agreement, the Lenders have
severally agreed to make Loans (as defined in the Credit Agreement) to the
Borrowers upon the terms and subject to the conditions set forth therein;
WHEREAS, [Insert Name] (the "New Manager") wishes to become a
Manager under [describe Management Agreement];
WHEREAS, it is a condition precedent to the right of the
Obligors to enter into the Management Agreement with the New Manager that
the New Manager shall have become a party to the Agreement in the manner
provided for herein;
WHEREAS, the undersigned wishes to become a "Subordinated
Creditor" under the Agreement; and
WHEREAS, the Agreement provides that certain Affiliates of a
Borrower may become a Subordinated Creditor under the Agreement by executing
and delivering to the Administrative Agent a supplement in substantially the
form of this Supplement;
NOW, THEREFORE, the undersigned hereby agrees as follows:
The undersigned agrees to be bound by all of the provisions of
the Agreement applicable to a Subordinated Creditor thereunder and
agrees that it shall, on the date this Supplement is accepted by the
Administrative Agent, become a Subordinated Creditor, for all purposes
of the Agreement to the same extent as if originally a party thereto
with the representations and warranties contained therein being deemed
to be made by the undersigned as of the date hereof.
Terms defined in the Agreement shall have their defined meanings
when used herein.
IN WITNESS WHEREOF, the undersigned has caused this Supplement
to be executed and delivered by a duly authorized officer on the date first
above written.
[INSERT NAME OF SUBORDINATED
CREDITOR]
By:_______________________________
Name:
Title:
Address:
ACKNOWLEDGED AND ACCEPTED
this ____ day of ______________
FIRST UNION NATIONAL BANK OF
NORTH CAROLINA, as
Administrative Agent
By:
Name:
Title: <PAGE>
EXHIBIT F-2
FORM OF AFFILIATE SUBORDINATION AGREEMENT
SUBORDINATION AGREEMENT dated as of March 15, 1995 among (i) UCA Corp.
("UCA"), Adelphia Cable T.V., Inc. ("ACTV"), Lorain Cable Television, Inc.
("Lorain"), Multi-Channel T.V. Cable Company of Virginia ("Multi-Channel"),
Van Buren County Cablevision, Inc. ("Van Buren"), Grand Island Cable, Inc.
("Grand Island") and UltraCom of Montgomery County, Inc. ("UltraCom") and
their respective Restricted Subsidiaries which are party to the Credit
Agreement (as hereinafter defined) (such Restricted Subsidiaries together
with UCA, ACTV, Lorain, Multi-Channel, Van Buren, Grand Island and UltraCom
being referred to herein collectively as the "Obligors" and individually as
an "Obligor"), (ii) Adelphia Communications Corporation, a Delaware
corporation ("Adelphia") and Adelphia Cablevision, Inc., a Pennsylvania
corporation ("ACI"; collectively with Adelphia, the "Subordinated
Creditors") and (iii) First Union National Bank of North Carolina, as
administrative agent for the Lenders referenced herein (in such capacity,
the "Administrative Agent").
Introductory Statement
Pursuant to the terms of a Credit, Security and Guaranty
Agreement dated as of March 15, 1995 among the Obligors, the lenders
referred to therein (the "Lenders"), Societe Generale, PNC Bank, National
Association, First Union National Bank of North Carolina and Credit Lyonnais
Cayman Island Branch, as Managing Agents, Societe Generale, as Structuring
Agent, PNC Bank, National Association, as Syndication Agent, Credit Lyonnais
Cayman Island Branch, as Documentation Agent and the Administrative Agent
(the "Credit Agreement") the Lenders have agreed, subject to the terms and
conditions thereof, to make loans (the "Loans") to the Obligors. In
addition, one or more of the Lenders may from time to time enter into
Interest Rate Protection Agreements. The Credit Agreement, the Notes
referred to therein, any Interest Rate Protection Agreement and the other
documents, instruments and agreements contemplated thereby as they may be
amended or otherwise modified form time to time, shall hereinafter be
referred to as "Senior Obligation Documents". For purposes of this
Subordination Agreement, capitalized terms used herein and not otherwise
defined herein shall have the meanings set forth in the Credit Agreement.
The Subordinated Creditors have made or will make loans (the
"Subordinated Loans") to the Obligors up to an aggregate amount of
$40,000,000 (including principal and accrued interest). The obligations of
the Obligors to repay the Subordinated Loans together with all interest
thereon and all other amounts payable to the Subordinated Creditors in
connection therewith are hereinafter referred to as the "Subordinated
Obligations". Any agreement evidencing the Subordinated Loans together with
any promissory note issued in satisfaction of the obligation to pay interest
thereon or any other related agreement are hereinafter referred to as
"Junior Obligation Documents".
In order to induce the Administrative Agent and the Lenders to
enter into the Credit Agreement, the Subordinated Creditors have agreed,
subject to the provisions of this Subordination Agreement, that the
Subordinated Obligations shall be subordinate to the Senior Obligations (as
hereinafter defined).
NOW, THEREFORE, in consideration of the premises and other good
and valuable consideration, receipt of which is hereby acknowledged, the
parties hereto hereby agree as follows:
(1) Agreement to Subordinate. The Subordinated Creditors
agree that the Subordinated Obligations are and shall be subordinate and
subject in right of payment, to the extent and in the manner hereinafter set
forth, to the prior payment in full of the Senior Obligations and that any
guarantees, security interests, mortgages and other liens securing payment
of the Subordinated Obligations are and shall be subordinate, to the fullest
extent permitted by law and as hereinafter set forth, to the Senior
Obligations, notwithstanding the perfection, order of perfection or failure
to perfect, any such security interest or other lien, or the filing or
recording, order of filing or recording, or failure to file or record this
Agreement or any instrument or other document in any filing or recording
office in any jurisdiction. The term "Senior Obligations" shall mean all
obligations of the Obligors under the Senior Obligation Documents including,
without limitation, whether outstanding at the date hereof or hereafter
incurred or created, all obligations to pay principal, premium, if any,
interest (including, without limitation, interest accruing after the
commencement of any bankruptcy, insolvency, reorganization or similar
proceedings with respect to the Obligor, whether or not determined to be an
allowed claim in any such proceeding), charges, costs, expenses and fees
including, without limitation, the disbursements and reasonable fees of
counsel to the Administrative Agent or the Lenders, all obligations to
reimburse or indemnify the Administrative Agent and the Lenders in any way,
and all renewals, extensions, restructurings, refinancings or refunding of
any indebtedness under the Senior Obligation Documents in the nature of a
"workout" or otherwise.
The expressions "prior payment in full", "payment in full, "paid
in full" or any other similar term(s) or phrase(s) when used herein with
respect to Senior Obligation Documents shall mean the indefeasible payment
in full, in cash, of all of the Senior Obligations and the termination of
the Commitments.
(2) Restrictions on Payment of the Subordinated Obligations,
etc. The Subordinated Creditors will not ask, demand, sue for, take or
receive, directly or indirectly, from the Obligors, in cash or other
property, by setoff, by realizing upon collateral, foreclosing on any lien
or otherwise, by exercise of any remedies or rights under the Junior
Obligation Documents or by executions, garnishments, levies, attachments or
by any other action relating to the Subordinated Obligations, or in any
other manner, payment of, or additional security for, all or any part of the
Subordinated Obligations unless and until the Senior Obligations shall have
been paid in full; provided, however, that the Subordinated Creditors may
receive, and the Obligors may pay (but not prepay) interest on the
Subordinated Obligations upon the terms set forth in the Junior Obligation
Documents so long as (i) at the time of making such payment and immediately
after giving effect thereto, no "Event of Default" (as such term is defined
in the Senior Obligation Documents) or event which with notice and/or
passage of time would constitute an Event of Default shall have occurred and
be continuing, (ii) the rate of interest applicable to such Subordinated
Obligations does not exceed 10% per annum and (iii) such payment would not
violate Section 3 of this Agreement. The Obligors will not make any payment
of any of the Subordinated Obligations, or take any other action, in
contravention of the provisions of this Agreement. The Subordinated
Creditors expressly agree that, unless and until such time as the Loans
shall be accelerated, any payment in respect to the Subordinated Obligations
which is made in violation of the provisions of this Subordination Agreement
shall be deemed to be deferred until such time as payment can be made in
compliance with this Subordination Agreement and the Obligors shall not be
in default under any of the Junior Obligation Documents by reason thereof.
Each Subordinated Creditor further acknowledges and agrees that
it will not take any collateral of the Obligors unless and until the Senior
Obligations have been paid in full.
(3) Additional Provisions Concerning Subordination. The
Subordinated Creditors and the Obligors agree as follows:
In the event of (i) any dissolution, winding up,
liquidation or reorganization of any Obligor (whether voluntary or
involuntary and whether in bankruptcy, insolvency or receivership
proceedings, or upon an assignment for the benefit of creditors or
proceedings for voluntary or involuntary liquidation, dissolution or other
winding up of such Obligor, whether or not involving insolvency or
bankruptcy, or any other marshalling of the assets and liabilities of such
Obligor or otherwise); or (ii) any Event of Default which has not been
waived or cured or an event which with notice and/or passage of time would
constitute an Event of Default which has not been waived or cured, or
acceleration of maturity regarding the Subordinated Obligations:
all Senior Obligations shall first be paid to the Administrative Agent for
the benefit of the Lenders in full before any payment or distribution is
made upon the principal of or interest on or any fees, costs, charges or
expenses in connection with the Subordinated Obligations, and before any
other action described in Sections 2 and 4 hereof is taken by the
Subordinated Creditors; and
any payment or distribution of assets of any Obligor, whether in cash,
property or securities to which the Subordinated Creditors would be entitled
except for the provisions hereof, shall be paid or delivered by such
Obligor, or any receiver, trustee in bankruptcy, liquidating trustee,
disbursing agent, agent or other person making such payment or distribution,
directly to the Administrative Agent for the benefit of the Lenders, to the
extent necessary to pay in full all Senior Obligations remaining unpaid,
after giving effect to any concurrent payment or distribution to the Lenders
before any payment or distribution is made to the Subordinated Creditors;
In any proceeding referred to or resulting from any event
referred to in subsection (a) of this Section 3 commenced by or against any
Obligor:
the Administrative Agent may, and is hereby irrevocably authorized and
empowered (in its own name or in the name of the Subordinated Creditors or
otherwise), but shall have no obligation to, (i) demand, sue for, collect
and receive every payment or distribution referred to in subsection (a) of
this Section 3 and give acquittance therefor, (ii) file claims and proofs of
claim in respect of the Subordinated Obligations, but only if the
Subordinated Creditors have not filed any claims or proofs of claim with
respect to the Subordinated Obligations before the expiration of the time to
file such, and (iii) take such other action as the Administrative Agent may
deem necessary or advisable for the exercise or enforcement of any of the
rights or interests of the Administrative Agent and the Lenders hereunder;
and
the Subordinated Creditors will duly and promptly take such action as the
Administrative Agent may reasonably request to collect the Subordinated
Obligations for the account of the Lenders and to file appropriate claims or
proofs of claim with respect thereto, to execute and deliver to the
Administrative Agent such powers of attorney, assignments or other
instruments as the Administrative Agent may request in order to enable it to
enforce any and all claims with respect to the Subordinated Obligations, and
to collect and receive any and all payments or distributions which may be
payable or deliverable upon or with respect to the Subordinated Obligations;
All payments or distributions upon or with respect to the
Subordinated Obligations which are received by the Subordinated Creditors
contrary to the provisions of this Agreement shall be deemed to be the
property of the Lenders, shall be received in trust for the benefit of the
Lenders, shall be segregated from other funds and property held by the
Subordinated Creditors and shall be forthwith paid over to the
Administrative Agent for the benefit of the Lenders in the same form as so
received (with any necessary endorsement) to be applied to the payment or
prepayment of the Senior Obligations until the Senior Obligations shall have
been paid in full;
The Subordinated Creditors hereby waive any requirement for
marshalling of assets by the Administrative Agent in connection with any
foreclosure of any lien of the Lenders under the Senior Obligation
Documents;
(e) The Subordinated Creditors shall not take any action to
impair or otherwise adversely affect the foreclosure of, or other
realization of the Administrative Agent's or the Lenders' rights under the
Senior Obligation Documents; and
(f) The Administrative Agent is hereby authorized to demand
specific performance of this Agreement at any time when the Subordinated
Creditors shall have failed to comply with any of the provisions of this
Agreement, and the Subordinated Creditors hereby irrevocably waive any
defense based on the adequacy of a remedy at law which might be asserted as
a bar to such remedy of specific performance.
(4) Subrogation. The Subordinated Creditors agree that no
payment or distribution to the Administrative Agent and/or the Lenders
pursuant to the provisions of this Agreement shall entitle the Subordinated
Creditors to exercise any rights of subrogation in respect thereof until the
Senior Obligations shall have been paid in full.
(5) No Negotiable Instruments. The Subordinated Creditors and
the Obligors agree that at no time hereafter will any part of the
Subordinated Obligations be represented by any negotiable instruments or
other writings.
6. Legend. Each of the Subordinated Creditors and the Obligors
will cause each promissory note evidencing any of the Subordinated
Obligations, any replacement thereof and any mortgage or security document
relating thereto to include or have endorsed thereon the following
provision:
"The principal amount of the indebtedness evidenced or secured by this
instrument is subordinated to other indebtedness pursuant to, and to the
extent provided in, and is otherwise subject to the terms of, the
Subordination Agreement dated as of March 15, 1995 by and among (i) UCA
Corp., Adelphia Cable T.V., Inc., Lorain Cable Television, Inc., Multi-
Channel T.V. Cable Company of Virginia, Van Buren County Cablevision, Inc.,
Grand Island Cable, Inc., UltraCom of Montgomery County, Inc. and their
respective Restricted Subsidiaries, (ii) Adelphia Comunications Corporation
and Adelphia Cablevision, Inc., as Subordinated Creditors and (iii) First
Union National Bank of North Carolina, as Administrative Agent."
7. Negative Covenants of the Subordinated Creditors. So long
as any of the Senior Obligations shall remain outstanding, the Subordinated
Creditors will not, without the prior written consent of the Administrative
Agent:
(a) Sell, assign, pledge, encumber or otherwise dispose of any
instrument evidencing the indebtedness owed to the Subordinated Creditors or
any collateral securing the Subordinated Obligations unless such sale,
assignment, pledge, encumbrance or other disposition is made expressly
subject to this Agreement and the other party to such sale, assignment,
pledge, encumbrance or other disposition consents in writing to be bound by
the terms hereof;
(b) Permit the terms of the Junior Obligation Documents or
collateral securing any Subordinated Obligations to be changed in any way
which would limit or impair these subordination provisions, increase the
principal amount thereof, increase the interest payable thereon, change any
payment date thereunder or accept any collateral;
(c) Declare all or any portion of the Subordinated Obligations
due and payable prior to the date fixed therefor or realize upon, or
otherwise exercise any remedies with respect to, any collateral securing the
Subordinated Obligations or take any other action described in Section 2
hereof; or
(d) Commence, or join with any creditor other than the Lenders
in commencing any proceeding referred to in Section 3(a) hereof.
8. Obligations Unconditional. All rights and interests of the
Administrative Agent and the Lenders hereunder, and all agreements and
obligations of the Subordinated Creditors and the Obligors hereunder, shall
remain in full force and effect irrespective of:
(a) Any lack of validity or enforceability of any Senior
Obligation Document or any other agreement or instrument relating thereto;
(b) Any change in the time, manner or place of payment of, or
in any other term of, all or any of the Senior Obligations, or any other
amendment or waiver of or any consent to departure from any Senior
Obligation Document;
(c) Any exchange, release or nonperfection of any collateral,
or any release or amendment or waiver of or consent to departure from any
guaranty, for all or any of the Senior Obligations; or
(d) Any other circumstances which might otherwise constitute a
defense available to, or a discharge of, either the Obligors in respect of
the Senior Obligations or of the Subordinated Creditors or the Obligors in
respect of this Agreement; or
(e) Further subordinate the Subordinated Obligations.
9. Additional Agreements and Waivers by the Subordinated
Creditors. The Subordinated Creditors waive, to the fullest extent
permitted by law, any right to request marshalling of assets or equitable
subordination (whether under or pursuant to 11 U.S.C. 510 or otherwise) and
any right to assert that the Administrative Agent or any Lender has in any
way failed to comply with the provisions of the Uniform Commercial Code,
including the provisions of Article 9 thereof.
10. Representations and Warranties. Each Subordinated
Creditor hereby represents and warrants that:
(i) such Subordinated Creditor has the power and authority and the
legal right to execute and deliver, and to perform its obligations under,
this Agreement, and has taken all necessary action to authorize the
execution, delivery and performance of this Agreement;
(ii) this Agreement constitutes a legal, valid and binding obligation
of such Subordinated Creditor enforceable in accordance with its terms,
except as affected by bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or affecting
the enforcement of creditors' rights generally, general equitable principles
and an implied covenant of good faith and fair dealing;
(iii) the execution, delivery and performance of this Agreement will not
violate any provision of any Applicable Law or any agreement to which such
Subordinated Creditor is a party;
(iv) no consent or authorization of, filing with, or other act by or in
respect of, any arbitrator or Governmental Authority and no consent of any
other Person (including, without limitation, any partner, stockholder or
creditor of such Subordinated Creditor) is required in connection with the
execution, delivery, performance, validity or enforceability of this
Agreement;
(v) no litigation, investigation or proceeding of or before any
arbitrator or Governmental Authority is pending or, to the knowledge of such
Subordinated Creditor, threatened by or against such Subordinated Creditor
with respect to this Agreement;
(vi) the agreements governing the Subordinated Obligations of such
Subordinated Creditor do not and will not contain (A) any default which is
triggered by (I) a default under any other agreements to which any Obligor
is a party or (II) any other Indebtedness of any Obligor being declared due
and payable prior to its stated maturity or (B) without limiting clause (A)
above, any covenants or events of default which are more strict than those
contained in the Credit Agreement; and
(vii) such Subordinated Creditor is an Affiliate of the Obligors and the
Subordinated Obligations are permitted by Section 6.1 of the Credit
Agreement.
11. Addition of Obligors and Subordinated
Creditors. Any Restricted Subsidiary of a Borrower may become an "Obligor"
under this Agreement by executing and delivering to the Administrative Agent
a Supplement to this Agreement in the form attached hereto as Exhibit A. To
the extent permitted by the Credit Agreement, any Affiliate of the Obligors
may become a "Subordinated Creditor" under this Agreement by executing and
delivering to the Administrative Agent a Supplement to this Agreement in the
form attached hereto as Exhibit B.
12. Present Subordinated Obligations. Each of the Subordinated
Creditors hereby represents and warrants that the outstanding Subordinated
Obligations as of the Closing Date are $0.
13. Further Assurances. The Subordinated Creditors and the
Obligors will, at their own expense and at any time and from time to time,
promptly execute and deliver all further instruments and documents, and take
all further action that the Administrative Agent may reasonably request, in
order to perfect or otherwise protect any right or interest granted or
purported to be granted hereby or to enable the Administrative Agent to
exercise and enforce its rights and remedies hereunder.
14. Expenses. The Obligors agree to pay to the Administrative
Agent, upon demand, the amount of any and all reasonable expenses, including
the reasonable fees and expenses of counsel for the Administrative Agent,
which the Administrative Agent may incur in connection with the exercise or
enforcement of any of the rights or interests of the Administrative Agent or
the Lenders hereunder.
15. Notice. All demands, notices and other communications
which any party hereto may desire or may be required to give to any other
party hereunder shall be in writing (including telegraphic communication)
and shall be mailed, telecopied, telegraphed or delivered to such other
party at its address as set forth on the signature pages hereof or to any
such party at such other address as shall be designated by such party in a
written notice to each other party, complying as to delivery with the terms
of this Section 15. All such demands, notices, and other communications
shall be effective when received or five business days after mailing,
whichever is earlier.
16. SERVICE OF PROCESS. EACH OF THE SUBORDINATED CREDITORS AND
THE OBLIGORS (A) HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE STATE
COURTS OF THE STATES OF NEW YORK AND NORTH CAROLINA AND THE JURISDICTION OF
THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND
THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF NORTH CAROLINA,
FOR THE PURPOSE OF ANY SUIT, ACTION OR OTHER PROCEEDING ARISING OUT OF OR
BASED UPON THIS AGREEMENT OR THE SUBJECT MATTER HEREOF BROUGHT BY THE
ADMINISTRATIVE AGENT OR ITS SUCCESSORS OR ASSIGNS AND (B) HEREBY WAIVES AND
AGREES NOT TO ASSERT, BY WAY OF MOTION, AS A DEFENSE, OR OTHERWISE, IN ANY
SUCH SUIT, ACTION OR PROCEEDING, ANY CLAIM THAT IT IS NOT SUBJECT PERSONALLY
TO THE JURISDICTION OF THE ABOVE-NAMED COURTS, THAT ITS PROPERTY IS EXEMPT
OR IMMUNE FROM ATTACHMENT OR EXECUTION, THAT THE SUIT, ACTION OR PROCEEDING
IS BROUGHT IN AN INCONVENIENT FORUM, THAT THE VENUE OF THE SUIT, ACTION OR
PROCEEDING IS IMPROPER OR THAT THIS AGREEMENT OR THE SUBJECT MATTER HEREOF
MAY NOT BE ENFORCED IN OR BY SUCH COURT, AND (C) HEREBY WAIVES IN ANY SUCH
ACTION, SUIT OR PROCEEDING ANY OFFSETS OR COUNTERCLAIMS WHICH ARE UNRELATED
TO THE TRANSACTIONS CONTEMPLATED HEREIN. EACH OF THE SUBORDINATED CREDITORS
AND THE OBLIGORS HEREBY CONSENTS TO SERVICE OF PROCESS BY REGISTERED MAIL AT
THE ADDRESS TO WHICH NOTICES ARE TO BE GIVEN. EACH OF THE SUBORDINATED
CREDITORS AND THE OBLIGORS AGREES THAT ITS SUBMISSION TO JURISDICTION AND
ITS CONSENT TO SERVICE OF PROCESS BY MAIL IS MADE FOR THE EXPRESS BENEFIT OF
THE LENDERS. FINAL JUDGMENT AGAINST THE SUBORDINATED CREDITORS OR THE
OBLIGORS IN ANY SUCH ACTION, SUIT OR PROCEEDING SHALL BE CONCLUSIVE, AND MAY
BE ENFORCED IN OTHER JURISDICTIONS (A) BY SUIT, ACTION OR PROCEEDING ON THE
JUDGMENT, A CERTIFIED OR TRUE COPY OF WHICH SHALL BE CONCLUSIVE EVIDENCE OF
THE FACT AND OF THE AMOUNT OF ANY INDEBTEDNESS OR LIABILITY OF THE
SUBORDINATED CREDITORS OR THE OBLIGORS THEREIN DESCRIBED OR (B) IN ANY OTHER
MANNER PROVIDED BY OR PURSUANT TO THE LAWS OF SUCH OTHER JURISDICTION;
PROVIDED, HOWEVER, THAT THE ADMINISTRATIVE AGENT MAY AT ITS OPTION BRING
SUIT, OR INSTITUTE OTHER JUDICIAL PROCEEDINGS AGAINST THE SUBORDINATED
CREDITORS OR THE OBLIGORS OR ANY OF THEIR RESPECTIVE ASSETS IN ANY STATE OR
FEDERAL COURT OF THE UNITED STATES OR OF ANY COUNTRY OR PLACE WHERE THE
SUBORDINATED CREDITORS, THE OBLIGORS OR THEIR RESPECTIVE ASSETS MAY BE
FOUND. EACH OF THE SUBORDINATED CREDITORS AND THE OBLIGORS FURTHER
COVENANTS AND AGREES THAT SO LONG AS THIS AGREEMENT SHALL BE IN EFFECT, EACH
SHALL MAINTAIN A DULY APPOINTED AGENT FOR THE RECEIPT AND ACCEPTANCE ON ITS
BEHALF OF SERVICE OF SUMMONS AND OTHER LEGAL PROCESSES, AND UPON FAILURE TO
DO SO THE CLERK OF EACH COURT TO WHOSE JURISDICTION IT HAS SUBMITTED SHALL
BE DEEMED TO BE ITS RESPECTIVE DESIGNATED AGENT UPON WHOM SUCH PROCESS MAY
BE SERVED ON ITS BEHALF, AND NOTIFICATION BY THE ATTORNEY FOR PLAINTIFF,
COMPLAINANT OR PETITIONER THEREIN BY MAIL OR TELEGRAPH TO ANY SUBORDINATED
CREDITOR OR ANY OBLIGOR OF THE FILING OF EACH SUIT, ACTION OR PROCEEDING
SHALL BE DEEMED SUFFICIENT NOTICE THEREOF.
17. WAIVER OF JURY TRIAL. TO THE EXTENT NOT PROHIBITED BY
APPLICABLE LAW WHICH CANNOT BE WAIVED, EACH PARTY HERETO HEREBY WAIVES, AND
COVENANTS THAT IT WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR
OTHERWISE), ANY RIGHT TO TRIAL BY JURY IN ANY FORUM IN RESPECT OF ANY ISSUE,
CLAIM, DEMAND, ACTION, OR CAUSE OF ACTION ARISING OUT OF OR BASED UPON THIS
AGREEMENT OR THE SUBJECT MATTER HEREOF, IN EACH CASE WHETHER NOW EXISTING OR
HEREAFTER ARISING OR WHETHER IN CONTRACT OR TORT OR OTHERWISE. EACH PARTY
HERETO ACKNOWLEDGES THAT IT HAS BEEN INFORMED THAT THE PROVISIONS OF THIS
SECTION 17 CONSTITUTE A MATERIAL INDUCEMENT UPON WHICH THE OTHER PARTIES
HAVE RELIED, ARE RELYING AND WILL RELY IN ENTERING INTO THIS AGREEMENT. THE
PARTIES HERETO MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION 17
WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF SUCH OTHER PARTY TO THE
WAIVER OF ITS RIGHTS TO TRIAL BY JURY.
18. Miscellaneous.
(a) No amendment of any provision of this Agreement shall be
effective unless it is in writing and signed by the Subordinated Creditors,
the Obligors and the Administrative Agent, and no waiver of any provision of
this Agreement, and no consent to any departure therefrom, shall be
effective unless it is in writing and signed by the Administrative Agent,
and any such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given.
(b) No failure on the part of the Administrative Agent to
exercise, and no delay in exercising, any right hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any such right
preclude any other or further exercise thereof or the exercise of any other
right.
(c) Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction, shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or invalidity without
invalidating the remaining portions hereof or thereof or affecting the
validity or enforceability of such provision in any other jurisdiction.
(d) This Agreement shall be binding on the Subordinated
Creditors and the Obligors and their respective successors and assigns
including without limitation any holders of the instruments evidencing the
Subordinated Obligations.
(e) This Agreement, and any modifications or amendments hereto,
may be executed in any number of counterparts, each of which when so
executed and delivered shall constitute an original for all purposes, but
all such counterparts taken together shall constitute the same instrument.
(f) This Agreement and any supplement or agreement required
hereunder shall be deemed to be made under, shall be governed by, and shall
be construed and enforced in accordance with, the laws of the State of New
York without regard to principles of conflicts of laws.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on the date first above written.
UCA CORP.
By_________________________
Name:
Title:
Address: 5 West Third Street
Coudersport, PA 16915
ADELPHIA CABLE T.V., INC.
By_________________________
Name:
Title:
Address: 5 West Third Street
Coudersport, PA 16915
LORAIN CABLE TELEVISION, INC.
By_________________________
Name:
Title:
Address: 5 West Third Street
Coudersport, PA 16915
MULTI-CHANNEL T.V. CABLE
COMPANY OF VIRGINIA
By_________________________
Name:
Title:
Address: 5 West Third Street
Coudersport, PA 16915
VAN BUREN COUNTY
CABLEVISION, INC.
By_________________________
Name:
Title:
Address: 5 West Third Street
Coudersport, PA 16915
GRAND ISLAND CABLE, INC.
By_________________________
Name:
Title:
Address: 5 West Third Street
Coudersport, PA 16915
ULTRACOM OF MONTGOMERY COUNTY,
INC.
By_________________________
Name:
Title:
Address: 5 West Third Street
Coudersport, PA 16915
ADELPHIA COMMUNICATIONS
CORPORATION
By_________________________
Name:
Title:
Address: 5 West Third Street
Coudersport, PA 16915
ADELPHIA CABLEVISION, INC.
By_________________________
Name:
Title:
Address: 5 West Third Street
Coudersport, PA 16915
FIRST UNION NATIONAL BANK OF
NORTH CAROLINA, as
Administrative Agent
Executed in New York, New
York on ____________, 1995
By_________________________
Name:
Title:
Address: One First Union Center
301 S. College Street
Charlotte, NC 28288
<PAGE>
EXHIBIT A
TO AFFILIATE
SUBORDINATION
AGREEMENT
FORM OF
SUPPLEMENT TO AFFILIATE SUBORDINATION AGREEMENT
DATED AS OF _________, 1995
WHEREAS, UCA CORP. ("UCA"), Adelphia Cable T.V., Inc. ("ACTV"),
Lorain Cable Television, Inc. ("Lorain"), Multi-Channel T.V. Cable Company
of Virginia ("Multi-Channel"), Van Buren County Cablevision, Inc. ("Van
Buren"), Grand Island Cable, Inc. ("Grand Island"), UltraCom of Montgomery
County, Inc. ("UltraCom") and certain of their respective subsidiaries from
time to time party thereto (the "Restricted Subsidiaries"; together with
UCA, ACTV, Lorain, Multi-Channel, Van Buren, Grand Island and UltraCom being
referred to herein collectively as the "Obligors" and individually as an
"Obligor") are party to a Credit, Security and Guaranty Agreement dated as
of March 15, 1995 (as such agreement may be amended, supplemented or
otherwise modified, renewed or replaced from time to time, the "Credit
Agreement") among the Obligors, the lenders referred to therein (the
"Lenders"), Societe Generale, PNC Bank, National Association, First Union
National Bank of North Carolina and Credit Lyonnais Cayman Island Branch, as
Managing Agents, Societe Generale, as Structuring Agent, PNC Bank, National
Association, as Syndication Agent, Credit Lyonnais Cayman Island Branch, as
Documentation Agent and First Union National Bank of North Carolina, as
administrative agent for the Lenders (in such capacity, the "Administrative
Agent");
WHEREAS, the Obligors are party to an Affiliate Subordination
Agreement dated as of March 15, 1995 (as such agreement may be amended,
supplemented or otherwise modified, renewed or replaced from time to time,
the "Affiliate Subordination Agreement") among the Obligors, the
subordinated creditors referred to therein (the "Subordinated Creditors")
and the Administrative Agent;
WHEREAS, pursuant to the Credit Agreement, the Lenders have
severally agreed to make Loans (as defined in the Credit Agreement) to the
Borrowers upon the terms and subject to the conditions set forth therein;
WHEREAS, pursuant to subsection 6.1(f) of the Credit Agreement,
the Obligors may borrow up to an aggregate amount of $40,000,000 (including
principal and accrued interest) at any one time outstanding from the
Subordinated Creditors;
WHEREAS, it is a condition precedent to the right of the
Obligors to borrow from the Subordinated Creditors that (i) each Restricted
Subsidiary which makes any such borrowing shall be or become a party to this
Agreement in the manner provided for herein and (ii) each Affiliate from
which any such borrowing is made shall have become a party to the Agreement
in the manner provided for herein;
WHEREAS, the undersigned wishes to become an "Obligor" under the
Agreement; and
WHEREAS, the Agreement provides that any Restricted Subsidiary
of a Borrower may become an Obligor under the Agreement by executing and
delivering to the Administrative Agent a supplement in substantially the
form of this Supplement;
NOW, THEREFORE, the undersigned hereby agrees as follows:
The undersigned agrees to be bound by all of the provisions of
the Agreement applicable to an Obligor thereunder and agrees that it
shall, on the date this Supplement is accepted by the Administrative
Agent, become an Obligor, for all purposes of the Agreement to the
same extent as if originally a party thereto with the representations
and warranties contained therein being deemed to be made by the
undersigned as of the date hereof.
Terms defined in the Agreement shall have their defined meanings
when used herein.
IN WITNESS WHEREOF, the undersigned has caused this Supplement
to be executed and delivered by a duly authorized officer on the date first
above written.
[INSERT NAME OF OBLIGOR]
By:_______________________________
Name:
Title:
Address:
ACKNOWLEDGED AND ACCEPTED
this ____ day of _____________
FIRST UNION NATIONAL BANK OF
NORTH CAROLINA, as
Administrative Agent
By:
Name:
Title:<PAGE>
EXHIBIT B
TO AFFILIATE
SUBORDINATION
AGREEMENT
FORM OF
SUPPLEMENT TO AFFILIATE SUBORDINATION AGREEMENT
DATED AS OF , 1995
WHEREAS, UCA CORP. ("UCA"), Adelphia Cable T.V., Inc. ("ACTV"),
Lorain Cable Television, Inc. ("Lorain"), Multi-Channel T.V. Cable Company
of Virginia ("Multi-Channel"), Van Buren County Cablevision, Inc. ("Van
Buren"), Grand Island Cable, Inc. ("Grand Island"), UltraCom of Montgomery
County, Inc. ("UltraCom") and certain of their respective subsidiaries from
time to time party thereto (the "Restricted Subsidiaries"; together with
UCA, ACTV, Lorain, Multi-Channel, Van Buren, Grand Island and UltraCom being
referred to herein collectively as the "Obligors" and individually as an
"Obligor") are party to a Credit, Security and Guaranty Agreement dated as
of March 15, 1995 (as such agreement may be amended, supplemented or
otherwise modified, renewed or replaced from time to time, the "Credit
Agreement") among the Obligors, the lenders referred to therein (the
"Lenders"), Societe Generale, PNC Bank, National Association, First Union
National Bank of North Carolina and Credit Lyonnais Cayman Island Branch, as
Managing Agents, Societe Generale, as Structuring Agent, PNC Bank, National
Association, as Syndication Agent, Credit Lyonnais Cayman Island Branch, as
Documentation Agent and First Union National Bank of North Carolina, as
administrative agent for the Lenders (in such capacity, the "Administrative
Agent");
WHEREAS, the Obligors are party to an Affiliate Subordination
Agreement dated as of March 15, 1995 (as such agreement may be amended,
supplemented or otherwise modified, renewed or replaced from time to time,
the "Affiliate Subordination Agreement") among the Obligors, the
subordinated creditors referred to therein (the "Subordinated Creditors" and
the Administrative Agent;
WHEREAS, pursuant to the Credit Agreement, the Lenders have
severally agreed to make Loans (as defined in the Credit Agreement) to the
Borrowers upon the terms and subject to the conditions set forth therein;
WHEREAS, pursuant to subsection 6.1(f) of the Credit Agreement,
the Obligors may borrow up to an aggregate amount of $40,000,000 (including
principal and accrued interest) at any one time outstanding from the
Subordinated Creditors;
WHEREAS, it is a condition precedent to the right of the
Obligors to borrow from the Subordinated Creditors that (i) each Restricted
Subsidiary which makes any such borrowing shall be or become a party to this
Agreement in the manner provided for herein and (ii) each Affiliate from
which any such borrowing is made shall have become a party to the Agreement
in the manner provided for herein;
WHEREAS, the undersigned wishes to become a "Subordinated
Creditor" under the Agreement; and
WHEREAS, the Agreement provides that to the extent permitted by
the Credit Agreement an Affiliate of the Obligors may become a Subordinated
Creditor under the Agreement by executing and delivering to the
Administrative Agent a supplement in substantially the form of this
Supplement;
NOW, THEREFORE, the undersigned hereby agrees as follows:
The undersigned agrees to be bound by all of the provisions of
the Agreement applicable to a Subordinated Creditor thereunder and
agrees that it shall, on the date this Supplement is accepted by the
Administrative Agent, become a Subordinated Creditor, for all purposes
of the Agreement to the same extent as if originally a party thereto
with the representations and warranties contained therein being deemed
to be made by the undersigned as of the date hereof.
Terms defined in the Agreement shall have their defined meanings
when used herein.
IN WITNESS WHEREOF, the undersigned has caused this Supplement
to be executed and delivered by a duly authorized officer on the date first
above written.
[INSERT NAME OF SUBORDINATED
CREDITOR]
By:_______________________________
Name:
Title:
Address:
ACKNOWLEDGED AND ACCEPTED
this ____ day of ______________
FIRST UNION NATIONAL BANK
OF NORTH CAROLINA, as
Administrative Agent
By:
Name:
Title:
EXHIBIT G
FORM OF QUARTERLY SUBSCRIBER REPORT
[Date]
First Union National Bank
of North Carolina,
as Administrative Agent
One First Union Center
301 S. College Street
Charlotte, NC 28288
Attention:
Re: Operating Report for Fiscal Quarter Ended [Date]
Gentlemen:
Reference is made to the Credit, Security and Guaranty Agreement
dated as of March 15, 1995 among UCA Corp. ("UCA"), Adelphia Cable T.V.,
Inc. ("ACTV"), Lorain Cable Television, Inc. ("Lorain"), Multi-Channel T.V.
Cable Company of Virginia ("Multi-Channel"), Van Buren County Cablevision,
Inc. ("Van Buren"), Grand Island Cable, Inc. ("Grand Island"), UltraCom of
Montgomery County, Inc., ("UltraCom"; together with UCA, ACTV, Lorain,
Multi-Channel, Van Buren and Grand Island collectively referred to herein as
the "Borrowers" and individually as a "Borrower"), the Restricted
Subsidiaries of the Borrowers as Guarantors, the Lenders referred to
therein, Societe Generale, PNC Bank, National Association, First Union
National Bank of North Carolina and Credit Lyonnais Cayman Island Branch, as
Managing Agents, Societe Generale, as Structuring Agent, PNC Bank, National
Association, as Syndication Agent, Credit Lyonnais Cayman Island Branch, as
Documentation Agent and First Union National Bank of North Carolina, as
Administrative Agent (the "Credit Agreement", as it may be amended or
modified from time to time). Capitalized terms used herein and not
otherwise defined herein shall have the meanings set forth in the Credit
Agreement.
Presented below are the operating statistics for the Borrowers
and certain of their respective Restricted Subsidiaries for the fiscal
quarter ended [insert date]:
Homes Basic Pay
Borrower Passed Subscribers Subscribers
UCA
ACTV
Lorain
Multi-Channel
Van Buren
Grand Island
UltraCom
[Add operating
Subsidiaries]
Sincerely,
UCA CORP.
By_____________________________
Name:
Title:
ADELPHIA CABLE T.V., INC.
By_____________________________
Name:
Title:
LORAIN CABLE TELEVISION, INC.
By_____________________________
Name:
Title:
MULTI-CHANNEL T.V. CABLE
COMPANY OF VIRGINIA
By_____________________________
Name:
Title:
VAN BUREN COUNTY CABLEVISION, INC.
By_____________________________
Name:
Title:
GRAND ISLAND CABLE, INC.
By_____________________________
Name:
Title:
ULTRACOM OF MONTGOMERY COUNTY, INC.
By_____________________________
Name:
Title:
EXHIBIT H
FORM OF CONTRIBUTION AGREEMENT
This CONTRIBUTION AGREEMENT (as amended, supplemented or
otherwise modified, renewed or replaced from time to time, the "Agreement")
is entered into as of March 15, 1995 by and among UCA Corp. ("UCA"),
Adelphia Cable T.V. Inc. ("ACTV"), Lorain Television, Inc. ("Lorain"),
Multi-Channel T.V. Cable Company of Virginia ("Multi-Channel"), Van Buren
County Cablevision, Inc. ("Van Buren"), Grand Island Cable, Inc. ("Grand
Island") and UltraCom of Montgomery County, Inc. ("UltraCom"; together with
UCA, ACTV, Lorain, Multi-Channel, Van Buren and Grand Island being referred
to herein collectively as the "Borrowers" and individually as a "Borrower")
and the Restricted Subsidiaries which are party to the Credit Agreement (as
hereinafter defined) and are listed on the signature pages hereof (such
Restricted Subsidiaries together with the Borrowers being referred to herein
collectively as the "Contributors" and individually as a "Contributor") for
the purpose of establishing the respective rights and obligations of
contribution among the Contributors in connection with the Credit Agreement.
Capitalized terms used herein and not otherwise defined shall have the
meanings set forth in the Credit Agreement.
Recitals
WHEREAS, the Contributors have entered into a Credit, Security
and Guaranty Agreement dated as of March 15, 1995, with the lenders referred
to therein (the "Lenders"), Societe Generale, PNC Bank, National
Association, First Union National Bank of North Carolina and Credit Lyonnais
Cayman Island Branch, as Managing Agents, Societe Generale, as Structuring
Agent, PNC Bank, National Association, as Syndication Agent, Credit Lyonnais
Cayman Island Branch, as Documentation Agent and First Union National Bank
of North Carolina, as Administrative Agent (said agreement, as it may
hereafter be amended, supplemented or otherwise modified, renewed or
replaced from time to time in accordance with its terms being the "Credit
Agreement"), pursuant to which (i) the Lenders have made certain
commitments, subject to the terms and conditions set forth therein, to
extend a credit facility to the Borrowers and (ii) the Contributors have
guaranteed the Obligations (such term being used herein as defined in the
Credit Agreement) of the Borrowers;
WHEREAS, pursuant to the Credit Agreement, the Contributors have
granted to the Administrative Agent for the benefit of the Lenders a
security interest in the Collateral as security for their respective
obligations under the Credit Agreement;
WHEREAS, as a result of the transactions contemplated by the
Credit Agreement, the Contributors will benefit, directly and indirectly,
from the Obligations and in consideration thereof desire to enter into this
Agreement to allocate such benefits among themselves and to provide a fair
and equitable arrangement to make contributions in the event any payment is
made by a Contributor under the Credit Agreement or the Administrative Agent
(on behalf of the Lenders) exercises recourse against any of the Collateral
owned by a Contributor (such payment or recourse being referred to herein as
a "Contribution");
NOW, THEREFORE, in consideration of the foregoing premises and
for other good and valuable consideration, the receipt of which is hereby
acknowledged, the Contributors hereby agree as follows:
SECTION 1. Contribution. In order to provide for just and
equitable contribution among the Contributors in the event any Contribution
is made by a Contributor (a "Funding Contributor") under the Credit
Agreement, that Funding Contributor shall be entitled to a contribution from
certain other Contributors for all payments, damages and expenses incurred
by that Funding Contributor in discharging any of the Obligations, in the
manner and to the extent set forth in this Agreement. The amount of any
Contribution under this Agreement shall be equal to the payment made by the
Funding Contributor pursuant to the Credit Agreement or the fair saleable
value of the Funding Contributor's portion of the Collateral against which
recourse is exercised, and shall be determined as of the date on which such
payment is made or recourse is exercised, as the case may be.
SECTION 2. Benefit Amount Defined. For purposes of this
Agreement, the "Benefit Amount" of any Contributor as of any date of
determination shall be the net value of the benefits to such Contributor
from extensions of credit made by the Lenders to the Borrowers under the
Credit Agreement. Such benefits (collectively, the "Benefits") shall
include, without limitation, benefits of funds constituting proceeds of
Loans which are advanced to a Borrower by the Lenders and which are in turn
advanced or contributed by such Borrower to such Contributor. In the case
of any proceeds of Loans or Benefits advanced or contributed to, or received
by, a Person (an "Owned Entity") any of the equity interests of which are
owned directly or indirectly by a Contributor, the Benefit Amount of such
Contributor with respect thereto shall be that portion of the net value of
the benefits attributable to such proceeds of Loans or Benefits equal to the
direct or indirect percentage ownership of such Contributor in its Owned
Entity.
SECTION 3. Contribution Obligation. Each Contributor shall be
liable to a Funding Contributor in an amount equal to the greater of (A) the
product of (i) a fraction the numerator of which is the Benefit Amount of
such Contributor, and the denominator of which is the total amount of
Obligations and (ii) the amount of Obligations paid by such Funding
Contributor and (B) 95% of the excess of the fair saleable value of the
property of such Contributor over the total liabilities of such Contributor
(including the maximum amount reasonably expected to become due in respect
of contingent liabilities), as the case may be, determined as of the date on
which the payment by a Funding Contributor is deemed made for purposes of
this Agreement or any recourse is exercised against a Funding Contributor's
portion of the Collateral, as the case may be (giving effect to all payments
made by other Funding Contributors and to the exercise of recourse against
any other Funding Contributor's portion of the Collateral as of such date in
a manner to maximize the amount of such contributions).
SECTION 4. Allocation. In the event that at any time there
exists more than one Funding Contributor with respect to any Contribution
(in any such case, the "Applicable Contribution"), then payment from other
Contributors pursuant to this Agreement shall be allocated among such
Funding Contributors in proportion to the total amount of the Contribution
made for or on account of the Borrowers by each such Funding Contributor
pursuant to the Applicable Contribution. In the event that at any time any
Contributor pays an amount under this Agreement in excess of the amount
calculated pursuant to clause (A) of Section 3 hereof, that Contributor
shall be deemed to be a Funding Contributor to the extent of such excess and
shall be entitled to contribution from the other Contributors in accordance
with the provisions of this Agreement.
SECTION 5. Subrogation. Any payments made hereunder by a
Borrower shall be credited against amounts payable by such Borrower pursuant
to any subrogation rights of the Contributors which received the payments
under this Agreement.
SECTION 6. Preservation of Rights. This Agreement shall not
limit any right which any Contributor may have against any other Person
which is not a party hereto.
SECTION 7. Subsidiary Payment. The amount of contribution
payable under this Agreement by any Contributor shall be reduced by the
amount of any contribution paid hereunder by a Restricted Subsidiary of such
Contributor.
SECTION 8. Equitable Allocation. If as a result of any
reorganization, recapitalization, or other corporate change in any Borrower
or any Affiliate or Restricted Subsidiary of any Borrower, or as a result of
any amendment, waiver or modification of the terms and conditions governing
the Credit Agreement or the Obligations, or for any other reason, the
contributions under this Agreement become inequitable, the parties hereto
shall promptly modify and amend this Agreement to provide for an equitable
allocation of the contributions. Any of the foregoing modifications and
amendments shall be in writing and signed by all parties hereto.
SECTION 9. Asset of Party to Which Contribution is Owing. The
parties hereto acknowledge that the right to contribution hereunder shall
constitute an asset in favor of the party to which such contribution is
owing.
SECTION 10. Subordination. No payments payable by a
Contributor pursuant to the terms hereof shall be paid until all Obligations
then due and payable by the Borrowers to any Lender, are paid in full in
cash and the Commitments are terminated. Nothing contained in this
Agreement shall affect the Obligations or the obligations of any party
hereto to any Lender under the Credit Agreement or any other Fundamental
Document.
SECTION 11. Successors and Assigns; Amendments. This Agreement
shall be binding upon each party hereto and its respective successors and
assigns and shall inure to the benefit of the parties hereto and their
respective successors and assigns, and in the event of any transfer or
assignment of rights by a Contributor, the rights and privileges herein
conferred upon that Contributor shall automatically extend to and be vested
in such transferee or assignee, all subject to the terms and condition
hereof. Except as specifically required under Section 8, this Agreement
shall not be amended without the prior written consent of the Required
Lenders.
SECTION 12. Termination. This Agreement shall remain in effect
and shall not be terminated until the Credit Agreement has been discharged
or otherwise satisfied in accordance with its respective terms.
SECTION 13. CHOICE OF LAW. THIS AGREEMENT AND ANY INSTRUMENT
OR AGREEMENT REQUIRED HEREUNDER SHALL BE DEEMED TO BE MADE UNDER, SHALL BE
GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF
LAWS.
SECTION 14. Counterparts. This Agreement, and any
modifications or amendments hereto, may be executed in any number of
counterparts, each of which when so executed and delivered shall constitute
an original for all purposes, but all such counterparts taken together shall
constitute one and the same instrument.
SECTION 15. Effectiveness. This Agreement shall become
effective as to any party upon the execution hereof by such party and
delivery of its executed counterpart to the Administrative Agent.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first written above.
UCA CORP.
By_________________________________
Name:
Title:
ADELPHIA CABLE T.V., INC.
By_________________________________
Name:
Title:
LORAIN CABLE TELEVISION, INC.
By_________________________________
Name:
Title:
MULTI-CHANNEL T.V. CABLE COMPANY
OF VIRGINIA
By_________________________________
Name:
Title:
VAN BUREN COUNTY CABLEVISION, INC.
By_________________________________
Name:
Title:
GRAND ISLAND CABLE, INC.
By_________________________________
Name:
Title:
ULTRACOM OF MONTGOMERY COUNTY, INC.
By_________________________________
Name:
Title:
ULTRACOM OF MARPLE, INC.
By_________________________________
Name:
Title:
ULTRACOM OF LANSDALE, INC.
By_________________________________
Name:
Title:<PAGE>
SCHEDULE 3.3
Required Filings, Governmental Approvals
None
<PAGE>
SCHEDULE 3.6
Subsidiaries
A. Subsidiaries of Adelphia Cable T.V. Inc.
None
B. Subsidiaries of Grand Island Cable, Inc.
None
C. Subsidiaries of Multi-Channel T.V. Cable Company of Virginia
None
D. Subsidiaries of Van Buren County Cablevision, Inc.
None
E. Subsidiaries of Lorain Cable Television, Inc.
None
F. Subsidiaries of UCA Corp.
Issued and
Jurisdiction Outstanding
of Authorized Ownership of
Name Incorporation Capitalization Capital Stock
UltraCom of Pennsylvania 1,000 shares of 100 shares -
Marple, Inc. Common Stock, Stock Certificate
Par Value of No. 10
$1.00
UltraCom of Pennsylvania 100,000 shares 80 shares -
Montgomery of Common Stock, Stock Certificate
County, Inc. No Par Value No. 1;
20 shares -
Stock Certificate
No. 3
G. Subsidiaries of UltraCom of Montgomery County, Inc.
Issued and
Jurisdiction Outstanding
of Authorized Ownership of
Name Incorporation Capitalization Capital Stock
UltraCom of Pennsylvania 1,000 shares of 80 shares -
Lansdale, Common Stock, Stock Certificate
Inc. Par value of No. 3;
$1.00 20 shares -
Stock Certificate
No. 4
Lorain Cable Ohio 10,000 shares of 5,000 shares of Common
Television, Common Stock, Stock - Stock
Inc. Par Value of Certificate No. 14
of $100.00
10,000 shares of
Preferred Stock,
Par Value of
$1,000.00
Multi-Channel Delaware 1,000 shares of 1,000 shares -
T.V. Cable Common Stock, Stock Certificate
Company of Par Value of No. 4
Virginia $0.01
Van Buren Michigan 50,000 shares 5,000 shares -
County of Common Stock, Stock Certificate
Cablevision, Par Value of No. 10
Inc. $1.00
<PAGE>
SCHEDULE 3.7
Proprietary Rights
None
<PAGE>
SCHEDULE 3.8
Fictitious Names
Each Borrower and all Restricted Subsidiaries conduct business under the
following fictitious name:
Adelphia Cable Communications
<PAGE>
SCHEDULE 3.10
Executive Offices/Location of Collateral
A. The chief executive office of each Borrower and each Guarantor is
located at:
5 West Third Street
Coudersport, PA 16915
B. Location of Collateral:
1. UCA Corp.
1) Delaware County, Pennsylvania
2) Montgomery County, Pennsylvania
3) Potter County, Pennsylvania
2. UltraCom of Lansdale, Inc.
1) Montgomery County, Pennsylvania
2) Potter County, Pennsylvania
3. UltraCom of Marple, Inc.
1) Delaware County, Pennsylvania
2) Potter County, Pennsylvania
4. UltraCom of Montgomery County, Inc.
1) Montgomery County, Pennsylvania
2) Potter County, Pennsylvania
5. Adelphia Cable T.V., Inc.
1) Lawrence County, Pennsylvania
2) Beaver County, Pennsylvania
3) Potter County, Pennsylvania
6. Lorain Cable Television, Inc.
1) Potter County, Pennsylvania
2) Lorain County, Ohio
7. Multi-Channel T.V. Cable Company of Virginia
1) Potter County, Pennsylvania
2) Augusta County, Virginia
3) Albemarle County, Virginia
<PAGE>
8. Van Buren County Cablevision, Inc.
1) Potter County, Pennsylvania
2) Van Buren County, Michigan
3) Kalamazoo County, Michigan
9. Grand Island Cable, Inc.
1) Potter County, Pennsylvania
2) Erie County, New York
3) Granville County, North Carolina
4) Franklin County, North Carolina
<PAGE>
SCHEDULE 3.11
Litigation
The Cable Television Consumer Protection and Competition Act of 1992 (the
"Cable Act") provides that municipal franchising authorities have the
jurisdiction to regulate the rates that a cable operator may charge for
basic tier services and equipment. A limited number of franchising
authorities have exercised their jurisdiction with regard to cable systems
operated by Adelphia Cable T.V., Inc., UCA Corp., UltraCom of Lansdale,
Inc., UltraCom of Marple, Inc., UltraCom of Montgomery County, Inc., Lorain
Cable Television, Inc., Van Buren County Cablevision, Inc., Multi-Channel
T.V. Cable Company of Virginia and Grand Island Cable, Inc. (the
"Companies").
There have been no material adverse determinations by any of the franchising
authorities. The Cable Act also provides that the FCC has the jurisdiction
to regulate the rates that a cable operator may charge for certain non-basic
tier services and equipment, upon the filing by a cable system subscriber of
an appropriate complaint with the FCC. A limited number of subscribers
served by the Companies have filed complaints with the FCC. As of this
date, the FCC has not ruled on these complaints. However, the FCC's Cable
Services Bureau has found that two cable systems, ultimately owned and
controlled by Adelphia Communications Corporation, one serving Dade County,
Florida and one serving Charlottesville, Virginia, may be liable for
refunds, because the system offered certain services as "a la carte,"
unregulated services that the Bureau has determined were, as a legal matter,
regulated services. At least some of the cable systems operated by the
Companies have offered services in a manner similar or identical to the
manner employed in Dade County and Charlottesville. Both of the Bureau's
decisions have been appealed to the full Commission, which presently is
considering the matters. The Companies are preparing for submission to the
FCC materials to justify the Companies' current rates.
SCHEDULE 3.16
Adelphia Communications Corporation maintains the Adelphia Communications
Corporation Savings and Retirement Plan. This Plan is a tax-qualified,
defined contribution plan with a pre-tax "401(k)" savings feature and an
annual maximum employer "matching" contribution of $750 per participant.
<PAGE>
SCHEDULE 3.18
Existing Indebtedness and Guaranties
Outstanding Indebtedness pursuant to the Credit Agreement dated as of
March 14, 1989 by and among UCA Corp. and Adelphia Cable T.V., Inc., as the
Borrowers, First Union National Bank of North Carolina, The Bank of Nova
Scotia and First Pennsylvania Bank, N.A., as the Banks, and First Union
National Bank of North Carolina, as the Agent. The Indebtedness will be
refinanced at the closing in accordance with the Agreement.
<PAGE>
SCHEDULE 3.20
Environmental Liabilities
None
<PAGE>
SCHEDULE 3.22(a)
Systems and Franchises
A. The Borrower and their Restricted Subsidiaries operate the following
systems pursuant to the following franchises:
1. UCA Corp.
Franchise Expiration Date
Township of Marple, PA 08/08/2007
2. Ultracom of Lansdale, Inc.
Franchise Expiration Date
Borough of Lansdale, PA 11/16/1993*
3. Ultracom of Marple, Inc.
Franchise Expiration Date
Township of Haverford, PA 12/13/2005
4. Ultracom of Montgomery County, Inc.
Franchise Expiration Date
Borough of Hatboro, PA 07/16/1994*
Township of Horsham, PA 05/25/1994*
Township of Montgomery, PA 10/17/2004
Borough of North Wales, PA 10/25/1993*
Township of Towamencin, PA 02/05/1994*
Township of Upper Dublin, PA 07/08/1995
Township of Upper Gwynedd, PA 12/27/2004
5. Adelphia Cable T.V., Inc.
Franchise Expiration Date
Borough of South New Castle, PA 10/16/2009
City of New Castle, PA 10/01/2009
Township of Hickory, PA 07/11/1998
Township of Mahoning, PA 01/01/1999
Township of Neshannock, PA 01/01/1996
Township of Plain Grove, PA 12/12/2002
Township of Scott, PA 08/07/1999
Township of Shenango, PA 06/12/1997
Township of Union, PA 05/25/1998
* Renewal Pending<PAGE>
Township of Washington, PA 10/08/2000
Township of Wilmington, PA 06/10/1999
Borough of Beaver, PA 10/08/1995
Borough of Bridgewater, PA 09/10/1995
Borough of East Rochester, PA 09/11/2004
Borough of Freedom, PA 08/15/2004
Borough of Monaca, PA 04/14/1996
Borough of Rochester, PA 11/04/1995
Township of Rochester, PA 08/21/2004
Township of Vanport, PA 12/17/2004
6. Van Buren County Cablevision, Inc.
Franchise Expiration Date
Township of Almena, MI 03/20/2006
Township of Antwerp, MI 07/07/1998
Township of Decatur, MI 05/10/1998
Township of Hamilton, MI 06/24/1998
Township of Lawrence, MI 04/12/1999
Township of Oshtemo, MI 06/10/1997
Township of Paw Paw, MI 06/08/1998
Township of Porter, MI 09/12/2005
Township of Texas, MI 02/23/1997
Township of Waverly, MI 07/07/1998
Village of Decatur, MI 09/22/1995
Village of Lawton, MI 07/12/2003
Village of Mattawan, MI 09/01/2003
Village of Paw Paw, MI 07/09/2003
7. Grand Island Cable, Inc.
Franchise Expiration Date
Town of Grand Island, NY 11/25/1995
City of Oxford, NC 07/01/2000
Granville County, NC 05/05/2001
Town of Stovall, NC 11/23/2013
Town of Louisburg, NC 02/12/2009
8. Lorain Cable Television, Inc.
Franchise Expiration Date
City of Lorain, OH 10/15/1999
Township of Sheffield, OH 10/22/1999
9. Multi-Channel T.V. Cable Company of Virginia
Franchise Expiration Date
Town of Craigsville, VA 04/15/2003
<PAGE>
B. FCC Licenses
1. UCA Corp.
Type of License Call Sign Expiration Date
TVRO Earth Station WK37 09/18/2001
2. Ultracom of Lansdale, Inc.
None
3. Ultracom of Marple, Inc.
None
4. Ultracom of Montgomery County, Inc.
Type of License Call Sign Expiration Date
TVRO Earth Station WM38 05/29/2002
TVRO Earth Station E940507 09/21/2004
5. Adelphia Cable T.V., Inc.
Type of License Call Sign Expiration Date
TVRO Earth Station E880113 12/09/1998
6. Van Buren County Cablevision, Inc.
Type of License Call Sign Expiration Date
TVRO Earth Station E5265 02/18/2003
TVRO Earth Station E6302 10/07/2003
Business Radio Station KNFQ571 05/05/1997
Business Radio Station WNIJ438 04/21/1997
7. Grand Island Cable, Inc.
Type of License Call Sign Expiration Date
TVRO Earth Station E859968 10/11/1995
TVRO Earth Station E7802 10/12/2004
TVRO Earth Station E880060 12/04/1997
8. Lorain Cable Television, Inc.
Type of License Call Sign Expiration Date
TVRO Earth Station E4478 07/30/2002
Business Radio Station WPCI360 05/28/1998
Business Radio Station WNNQ605 02/22/1999
9. Multi-Channel T.V. Cable Company of Virginia
Type of License Call Sign Expiration Date
TVRO Earth Station E880965 10/07/1998
<PAGE>
SCHEDULE 3.22(d)
Grand Island is in the process of obtaining the consents of the Town of
Stovall, North Carolina and the City of Oxford, North Carolina to the merger
of Oxford Cable Television, Inc., a North Carolina corporation, with and
into Grand Island. Nonetheless, the Borrowers are substantially in
compliance with the terms of such franchises.
<PAGE>
SCHEDULE 3.22(f)
The Cable Television Consumer Protection and Competition Act of 1992 (the
"Cable Act") provides that municipal franchising authorities have the
jurisdiction to regulate the rates that a cable operator may charge for
basic tier services and equipment. A limited number of franchising
authorities have exercised their jurisdiction with regard to cable systems
operated by Adelphia Cable T.V., Inc., UCA Corp., UltraCom of Lansdale,
Inc., UltraCom of Marple, Inc., UltraCom of Montgomery County, Inc., Lorain
Cable Television, Inc., Van Buren County Cablevision, Inc., Multi-Channel
T.V. Cable Company of Virginia and Grand Island Cable, Inc. (the
"Companies").
There have been no material adverse determinations by any of the franchising
authorities. The Cable Act also provides that the FCC has the jurisdiction
to regulate the rates that a cable operator may charge for certain non-basic
tier services and equipment, upon the filing by a cable system subscriber of
an appropriate complaint with the FCC. A limited number of subscribers
served by the Companies have filed complaints with the FCC. As of this
date, the FCC has not ruled on these complaints. However, the FCC's Cable
Services Bureau has found that two cable systems, ultimately owned and
controlled by Adelphia Communications Corporation, one serving Dade County,
Florida and one serving Charlottesville, Virginia, may be liable for
refunds, because the system offered certain services as "a la carte,"
unregulated services that the Bureau has determined were, as a legal matter,
regulated services. At least some of the cable systems operated by the
Companies have offered services in a manner similar or identical to the
manner employed in Dade County and Charlottesville. Both of the Bureau's
decisions have been appealed to the full Commission, which presently is
considering the matters. The Companies are preparing for submission to the
FCC materials to justify the Companies' current rates.
SCHEDULE 6.6
Existing Liens
The following UCC financing statements are on file with the Pennsylvania
Secretary of Commonwealth:
Filing Filing Secured
Date Number Party Collateral
UCA Corporation 11/27/91 20290750 Commonwealth Bank LAT-28-15 VSM
Lift All
Telescope
Aerial Device
UCA Corporation 11/27/91 20290751 Commonwealth Bank LAT-28-15 VSM
Lift All
Telescope
Aerial Device
SCHEDULE 6.12
Existing Restrictions on Subsidiary Dividends
and Other Distributions
None
Exhibit 21.01
List of Subsidiaries of Adelphia Communications Corporation1
Jurisdiction of
Company/Subsidiary
Incorporation/Creation
ADELPHIA COMMUNICATIONS CORPORATION Delaware corporation
ACP HOLDINGS, INC.2 Delaware corporation
ADELPHIA CABLE T.V., INC. Pennsylvania corporation
ADELPHIA CABLEVISION, INC. Pennsylvania corporation
Bethel Park TV Cable Co., Inc.Pennsylvania corporation
Crestwood Holdings, Inc. Delaware corporation
Manchester Cablevision, Inc. New Jersey corporation
Indiana Cablevision, Inc. Pennsylvania corporation
Jefferson TV Cable Co., Inc. Pennsylvania corporation
Mt. Oliver TV Cable Co., Inc. Pennsylvania corporation
Niagara Frontier Cable Television, Inc.
New York corporation
Punxsutawney TV Cable Co., Inc.
Pennsylvania corporation
South Hills TV Cable Company Pennsylvania corporation
West Newton TV Cable Co., Inc.Pennsylvania corporation
Western Reserve TV Co. Ohio corporation
ADELPHIA COMMUNICATIONS INTERNATIONAL, INC.
Delaware corporation
BRAZAS COMMUNICATIONS, INC.3 Delaware corporation
CENTRAL VIRGINIA CABLE, INC. Delaware corporation
CHAUNCEY COMMUNICATIONS CORPORATION
Delaware corporation
Clear Cablevision, Inc. Delaware corporation
International Cablevision, Inc.4
New York corporation
Jurisdiction of
Company/Subsidiary Incorporation/Creation
CHELSEA COMMUNICATIONS, INC.5 Delaware corporation
Aurora Cable Vision, Inc. New York corporation
Better TV, Inc. of Bennington Vermont corporation
Campbell Communications, Inc. Massachusetts corporation
Chautauqua County Cable Vision, Inc. New York corporation
Harbor Vue Cable TV, Inc. New York corporation
Hoosick Cablevision, Inc. New York corporation
Kalamazoo County Cablevision, Inc. Michigan corporation
Mass. Cablevision, Inc. Massachusetts corporation
Mt. Lebanon Cablevision, Inc. Pennsylvania corporation
Multi-Channel T.V. Cable Company6 Ohio corporation
Pericles Communications Corporation Delaware corporation
Mountain Cable Communications Corporation
Delaware corporation
Mountain Cable Company
Vermont limited partnership
Rigpal Communications, Inc. Pennsylvania corporation
South Shore Cablevision, Inc. Massachusetts corporation
Upper St. Clair Cablevision, Inc.Pennsylvania corporation
Vermilion Cable Communications, Inc. Ohio corporation
Adelphia Cablevision Associates, L.P. Pennsylvania limited
partnership
Media Partners of Masschusetts
(61 % ownership interest) Pennsylvania general
partnership
Three Rivers Cable Associates LP Ohio limited partnership
(75 % ownership interest)
EMPIRE SPORTS PARTNERS(51% ownership interest)
Pennsylvania general partnership
<PAGE>
Jurisdiction of
Subsidiary
Incorporation/Creation
GRAND ISLAND CABLE, INC. Delaware corporation
HYPERION TELECOMMUNICATIONS, INC.7
Delaware corporation
Hyperion Telecommunications of Florida, Inc.
Florida corporation
Hyperion Telecommunications of New York, Inc.
Delaware corporation
Hyperion Telecommunications of Vermont, Inc.
Delaware corporation
Hyperion Enhanced Networks of Virginia, Inc.
Delaware corporation
Hyperion Telecommunications of Kansas, Inc.
Delaware corporation
Hyperion Telecommunications of Kentucky, Inc.
Delaware corporation
Hyperion Telecommunications of Massachusetts, Inc.
Delaware corporation
Hyperion Telecommunications of Michigan, Inc.
Delaware corporation
Hyperion Telecommunications of North Carolina, Inc.
Delaware corporation
Hyperion Telecommunications of New Jersey, Inc.
Delaware corporation
Hyperion Telecommunications of Ohio, Inc.
Delaware corporation
Hyperion Telecommunications of South Carolina, Inc.
Delaware corporation
Hyperion Telecommunications of Tennessee, Inc.
Delaware corporation
Hyperion Telecommunications of Virginia, Inc.
Virginia corporation
Multimedia Hyperion Telecommunications Partnership
Kansas general partnership
LOUISA CABLEVISION, INC. Delaware corporation
Greater Louisa County Cable Pennsylvania general
partnership
MERCURY COMMUNICATIONS, INC. Delaware corporation
NORTHEAST CABLE, INC. Delaware corporation
PAGE CALL, INC. Delaware corporation
PAGETIME, INC. Delaware corporation
PLATO COMMUNICATIONS, INC. Delaware corporation
SOUTHWEST VIRGINIA CABLE, INC. Delaware corporation
Southwest Virginia Holdings, Inc. Delaware corporation
Valley Cablevision, Inc. Delaware corporation
Richlands Cablevision, L.P. Delaware limited
partnership
ST. MARY'S CABLEVISION, INC. (50% owned)
Pennsylvania corporation
TAURUS COMMUNICATIONS, INC. North Carolina
corporation
UCA CORP. Delaware corporation
UltraCom of Montgomery County, Inc.
Pennsylvania corporation
VanBuren County Cablevision, Inc.
Michigan corporation
Multi-Channel TV Cable Co. of Virginia
Delaware corporation
Lorain Cable Television, Inc. Ohio corporation
U.S. TELE-MEDIA INVESTMENT COMPANY8
Pennsylvania corporation
TeleMedia Co. of Martha's Vineyard, L.P.
Delaware limited partnership
_________________________
1 Adelphia Communications Corporation and its subsidiaries operate
under the name "Adelphia Cable Communications."
2 ACP Holdings, Inc. is the managing general partner of, and holds
partnership interests in, Olympus Communications, L.P., a
Delaware limited partnership which is not consolidated with
Adelphia Communications Corporation. Olympus Communications,
L.P. owns 99.98% of the partnership interests of Adelphia Cable
Partners, L.P. (a Delaware limited partnership) and 99.9% of the
partnership interests in West Boca Acquisition Limited
Partnership (a Delaware limited partnership) and Telesat
Acquisition Limited Partnership (a Delaware limited partnership).
Adelphia Cable Partners, L.P. owns 100% of the stock of Southeast
Florida Cable, Inc. (a Florida corporation) and a 50% general
partnership interest in Key Biscayne Cablevision (a Pennsylvania
general partnership). Southeast Florida Cable, Inc. owns 100% of
the stock of Palm Beach Group Cable, Inc. which owns a 50%
general partnership interest in Palm Beach Group Cable Joint
Venture, both Florida entities.
3 Brazas Communications, Inc. owns 100% of the non-voting common
stock and 100% of the non-voting preferred stock of TeleMedia
Company Holdings, Inc. (a Delaware corporation), which owns
100%of the stock of TeleMedia Company of Western Connecticut (a
Connecticut corporation).
4 International Cablevision, Inc. owns a 50% general partnership
interest in Western New York Cable Advertising, L.P. (a Delaware
limited partnership).
5 Chelsea Communications, Inc. holds a 27.43% interest as General
Partner in Adelphia Cablevision Associates, L.P.; in addition,
the following entities hold the following percentage interest as
limited partners: Aurora Cable Vision, Inc. (14.37%), Mass.
Cablevision, Inc. (31.09%), Kalamazoo County Cablevision, Inc.
(10.78%), and Vermilion Cable Communications, Inc. (16.33%).
Chelsea Communications, Inc. also owns a 61% general partnership
interest in Media Partners of Massachusetts.
6 Multi-Channel TV Cable Company owns a 75% partnership interest in
Three Rivers Cable Associates, L.P. (an Ohio limited
partnership).
7 Adelphia Communications Corporation owns 89% of the issued and
outstanding common stock of Hyperion Telecommunications, Inc.
8 U.S. TeleMedia Investment Company owns a 50.1% partnership
interest in Tele-Media Company of Martha's Vineyard.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
Financial Data Statement for Adelphia Communication Corp.
for the Year ended March 31, 1995
</LEGEND>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> MAR-31-1995
<PERIOD-END> MAR-31-1995
<CASH> 5,045
<SECURITIES> 0
<RECEIVABLES> 23,936
<ALLOWANCES> 3,503
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 938,638
<DEPRECIATION> 420,233
<TOTAL-ASSETS> 1,267,291
<CURRENT-LIABILITIES> 0
<BONDS> 2,021,610
<COMMON> 258
0
0
<OTHER-SE> (1,011,317)
<TOTAL-LIABILITY-AND-EQUITY> 1,267,291
<SALES> 0
<TOTAL-REVENUES> 361,505
<CGS> 0
<TOTAL-COSTS> 268,082
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 195,698
<INCOME-PRETAX> (111,759)
<INCOME-TAX> 5,475
<INCOME-CONTINUING> (106,284)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (106,284)
<EPS-PRIMARY> (4.32)
<EPS-DILUTED> (4.32)
<FN>
</FN>
</TABLE>
EXHIBIT 23.01
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in Registration Statement Nos.
33-46550, 33-52630 and 33-53417 on Form S-3 of Adelphia Communications
Corporation of our reports dated June 28, 1995 and April 13, 1995 (June 8,
1995
as to Notes 4 and 12) for Adelphia Communications Corporation and
subsidiaries
and Olympus Communications, L.P. and subsidiaries, respectively (each of which
expresses an unqualified opinion and includes an explanatory paragraph
relating to
change in method of accounting for income taxes), appearing in this Annual
Report on Form 10-K of Adelphia Communications Corporation for the year
ended March 31, 1995.
/s/ DELOITTE & TOUCHE LLP
DELOITTE & TOUCHE LLP
Pittsburgh, Pennsylvania
June 28, 1995
