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FORM 10-K 405
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934 (FEE REQUIRED)
For the fiscal year ended December 31, 1994
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transition period from __________ to __________
Commission file number: 0-15378
CABLE TV FUND 14-A, LTD.
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(Exact name of registrant as specified in its charter)
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Colorado 84-1024657
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(State of Organization) (IRS Employer Identification No.)
P.O. Box 3309, Englewood, Colorado 80155-3309 (303) 792-3111
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(Address of principal executive office and Zip Code) (Registrant's telephone no. including area code)
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Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: Limited
Partnership Interests
Indicate by check mark whether the registrants, (1) have 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
registrants were required to file such reports), and (2) have been subject to
such filing requirements for the past 90 days:
Yes x No
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Aggregate market value of the voting stock held by non-affiliates of the
registrant: N/A
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (Section 229.405) 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. x
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DOCUMENTS INCORPORATED BY REFERENCE: None
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PART I.
ITEM 1. BUSINESS
THE PARTNERSHIP. Cable TV Fund 14-A, Ltd. (the "Partnership") is a
Colorado limited partnership that was formed pursuant to the public offering of
limited partnership interests in the Cable TV Fund 14 Limited Partnership
Program (the "Program"), which was sponsored by Jones Intercable, Inc. (the
"General Partner"). Cable TV Fund 14-B, Ltd. ("Fund 14-B") is the other
partnership that was formed pursuant to the Program. The Partnership and Fund
14-B formed a general partnership known as Cable TV Fund 14-A/B Venture (the
"Venture"), in which the Partnership owns a 27 percent interest and Fund 14-B
owns a 73 percent interest. The Partnership and the Venture were formed for
the purpose of acquiring and operating cable television systems.
The Partnership directly owns cable television systems serving the areas in
and around Turnersville, New Jersey (the "Turnersville System"), Buffalo,
Minnesota (the "Buffalo System"), Naperville, Illinois (the "Naperville
System"), Calvert County, Maryland (the "Calvert County System") and certain
communities in Central Illinois (the "Central Illinois System). The Venture
owns the cable television system serving certain areas in Broward County,
Florida (the "Broward County System"). See Item 2. The Turnersville System,
Buffalo System, Naperville System, Calvert County System, Central Illinois
System and Broward County System may collectively be referred to as the
"Systems."
CABLE TELEVISION SERVICES. The Systems offer to their subscribers various
types of programming, which include basic service, tier service, premium
service, pay-per-view programs and packages including several of these services
at combined rates.
Basic cable television service usually consists of signals of all four
national television networks, various independent and educational television
stations (both VHF and UHF) and certain signals received from satellites.
Basic service also usually includes programs originated locally by the system,
which may consist of music, news, weather reports, stock market and financial
information and live or videotaped programs of a public service or
entertainment nature. FM radio signals are also frequently distributed to
subscribers as part of the basic service.
The Systems offer tier services on an optional basis to their subscribers.
A tier generally includes most of the cable networks such as Entertainment and
Sports Programming Network (ESPN), Cable News Network (CNN), Turner Network
Television (TNT), Family Channel, Discovery and others, and the cable
television operators buy tier programming from these networks. The Systems
also offer a package that includes the basic service channels and the tier
services.
The Systems also offer premium services to their subscribers, which consist
of feature films, sporting events and other special features that are presented
without commercial interruption. The cable television operators buy premium
programming from suppliers such as HBO, Showtime, Cinemax or others at a cost
based on the number of subscribers the cable operator serves. Premium service
programming usually is significantly more expensive than the basic service or
tier service programming, and consequently cable operators price premium
service separately when sold to subscribers.
The Systems also offer to subscribers pay-per-view programming.
Pay-per-view is a service that allows subscribers to receive single programs,
frequently consisting of motion pictures that have recently completed their
theatrical exhibitions and major sporting events, and to pay for such service
on a program-by-program basis.
The Turnersville System offers to its subscribers a la carte services
whereby subscribers may select a single service or a combination of services
from a menu of programming. The rates for the Turnersville System's a la carte
services are not regulated by the Federal Communications Commission. See
Regulation and Legislation.
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REVENUES. Monthly service fees for basic, tier and premium services
constitute the major source of revenue for the Systems. In addition,
advertising sales are becoming a significant source of revenues for the
Systems. As a result of the adoption by the FCC of new rules under the Cable
Television Consumer Protection and Competition Act of 1992 (the "1992 Cable
Act"), and several rate regulation orders, the Systems' rate structures for
cable programming services and equipment have been revised. See Regulation and
Legislation. At December 31, 1994, the Systems' monthly basic service rates
ranged from $5.48 to $17.50, monthly basic and tier ("basic plus") service
rates ranged from $15.95 to $26.63. and monthly premium services ranged from
$3.00 to $12.50 per premium service. Charges for additional outlets have been
eliminated, and charges for remote controls and converters have been
"unbundled" from the programming service rates. In addition, the Partnership
earns revenues from the Systems' pay-per-view programs and advertising fees.
Related charges may include a nonrecurring installation fee that ranges from
$1.99 to $43.30; however, from time to time the Systems have followed the
common industry practice of reducing or waiving the installation fee during
promotional periods. Commercial subscribers such as hotels, motels and
hospitals are charged a nonrecurring connection fee that usually covers the
cost of installation. Except under the terms of certain contracts with
commercial subscribers and residential apartment and condominium complexes, the
subscribers are free to discontinue the service at any time without penalty.
For the year ended December 31, 1994, of the total fees received by the
Systems, basic service and tier service fees accounted for approximately 61% of
total revenues, premium service fees accounted for approximately 19% of total
revenues, pay-per-view fees were approximately 3% of total revenues,
advertising fees were approximately 6% of total revenues and the remaining 11%
of total revenues came principally from equipment rentals, installation fees
and program guide sales. The Partnership is dependent upon the timely receipt
of service fees to provide for maintenance and replacement of plant and
equipment, current operating expenses and other costs of the Systems.
The Partnership's business consists of providing cable television services
to a large number of customers, the loss of any one of which would have no
material effect on the Partnership's business. Each of the Systems has had
some subscribers who later terminated the service. Terminations occur
primarily because people move to another home or to another city. In other
cases, people terminate on a seasonal basis or because they no longer can
afford or are dissatisfied with the service. The amount of past due accounts
in the Systems is not significant. The General Partner's policy with regard to
past due accounts is basically one of disconnecting service before a past due
account becomes material.
The Partnership does not depend to any material extent on the availability
of raw materials; it carries no significant amounts of inventory and it has no
material backlog of customer orders. The Partnership has no employees because
all properties are managed by employees of the General Partner. The General
Partner has engaged in research and development activities relating to the
provision of new services but the amount of the Partnership's funds expended
for such research and development has never been material.
Compliance with Federal, state and local provisions that have been enacted
or adopted regulating the discharge of materials into the environment or
otherwise relating to the protection of the environment has had no material
effect upon the capital expenditures, earnings or competitive position of the
Partnership.
FRANCHISES. The Systems are constructed and operated under non-exclusive,
fixed-term franchises or other types of operating authorities (referred to
collectively herein as "franchises") granted by local governmental authorities.
The Systems' franchises require that franchise fees ranging from 2% of basic
revenues to 10% of basic and premium revenues of the cable system be paid to
the governmental authority that granted the franchise, that certain channels be
dedicated to municipal use, that municipal facilities, hospitals and schools be
provided cable service free of charge and that any new cable plant be
substantially constructed within specific periods. (See Item 2 for a range of
franchise expiration dates of the Systems.)
The responsibility for franchising of cable television systems generally is
left to state and local authorities. There are, however, several provisions in
the Communications Act of 1934, as amended, that govern the terms and
conditions under which cable television systems provide service, including the
standards applicable to cable television operators seeking renewal of a cable
television franchise. In addition, the 1992 Cable Act also
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made several procedural 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. Generally, the franchising
authority can finally decide not to renew a franchise only if it finds that the
cable operator has not substantially complied with the material terms of the
franchise, has not provided reasonable service in light of the community's
needs, does not have the financial, legal and technical ability to provide the
services being proposed for the future, or has not presented a reasonable
proposal for future service. A final decision of non-renewal by the
franchising authority is appealable in court. The General Partner and its
affiliates recently have experienced lengthy negotiations with some franchising
authorities for the granting of franchise renewals and transfers. Some of the
issues involved in recent renewal negotiations include rate reregulation,
customer service standards, cable plant upgrade or replacement and shorter
terms of franchise agreements. The inability of the Partnership to renew a
franchise, or lengthy negotiations or litigation involving the renewal process
could have an adverse impact on the business of the Partnership.
COMPETITION. Cable television systems currently experience competition
from several sources, but two technologies, Multichannel Multipoint
Distribution Service ("MMDS") systems, commonly called wireless cable systems,
and Direct Broadcast Satellite ("DBS") systems, which distribute programming to
home satellite dishes, currently pose the greatest potential threat to the
cable television industry.
MMDS systems will likely focus on providing service to residents of rural
areas that are not served by cable television systems, but providers of
programming via MMDS systems will generally have the potential to compete
directly with cable television systems in urban areas as well, and in some
areas of the country, MMDS systems are now in direct competition with cable
television systems. To date, the Partnership has not lost a significant number
of subscribers, nor a significant amount of revenue, to MMDS operators
competing with its cable television systems.
DBS operators deliver premium channel services and specialized programming
to subscribers by high-powered DBS satellites on a wide-scale basis, and two
major companies began operations in 1994. Subscribers are able to receive DBS
services virtually anywhere in the United States with a rooftop or wall-mounted
antenna. In some instances, DBS systems may serve as a complement to cable
television operations by enabling cable television operators to offer
additional channels of programming without the construction of additional cable
plant. DBS companies use video compression technology to increase the channel
capacity of their satellite systems to provide a wide variety of program
services that are competitive with those of cable television systems.
Cable television systems also compete with broadcast television, private
cable television systems known as Master Antenna Television ("MATV"),
Satellite Master Antenna Television ("SMATV") and Television Receive-Only Earth
Stations ("TVRO"). MATV and SMATV generally serve multi-unit dwellings such as
condominiums, apartment complexes and private residential communities, and
TVROs are satellite receiving antenna dishes that are used by "backyard users."
There is also potential competition from an emerging technology, Local
Multipoint Distribution Service ("LMDS"). When it is authorized for service,
the LMDS, sometimes referred to as cellular television, could have the
capability of delivering approximately 50 channels, or if two systems were
combined 100 channels, of video programming to a subscriber's home, which
capacity could be increased by using video compression technology. The General
Partner believes that there are not any current fully operational LMDS systems.
Although the Systems have not yet encountered competition from a telephone
company entering into the business of providing video services to subscribers,
the Systems could potentially face competition from telephone companies doing
so. A Federal cross-ownership restriction has historically limited entry into
the cable television business by potentially strong competitors such as
telephone companies. This restriction, which is contained in the 1984 Cable
Act, has generally prohibited telephone companies from owning or operating
cable television systems within their own telephone service areas, but several
recent court decisions have eliminated this restriction. In addition, the FCC
is authorizing telephone companies to provide video dialtone service within
their
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service areas. Legislation is also pending in Congress that would permit
telephone companies to provide video programming thorough separate
subsidiaries. The General Partner cannot predict at this time to what extent
current restrictions will be modified to permit telephone companies to provide
cable television services within their own service areas in competition with
cable television systems. See Regulation and Legislation, Ownership and Market
Structure for a description of the potential participation of the telephone
industry in the delivery of cable television services. Entry into the market
by telephone companies as direct competitors of the Systems could adversely
impact the profitability of the Systems. If a telephone company were to become
a direct competitor of the Partnership or the Venture in an area served by a
Partnership or Venture System, the Partnership or the Venture could be at a
competitive disadvantage because of the relative financial strength of a
telephone company compared to the Partnership or Venture. Depending on a
number of factors, such competition could also result in cable television
systems providing the same types of services now provided by the telephone
industry. See the additional discussion below regarding the announced plans of
Ameritech to build a cable television system in Naperville, Illinois.
The FCC has established a new wireless telecommunications service known as
Personal Communications Service ("PCS"). It is envisioned that PCS would
provide portable non-vehicular mobile communications services similar to that
available from cellular telephone companies, but at a lower cost. PCS would be
delivered by placing numerous microcells in a particular area to be covered,
accessible to both residential and business customers. Because of the need to
link the many microcells necessary to deliver this service economically, many
parties are investigating integration of PCS with cable television operations.
Several cable television multiple systems operators and others, including
affiliates of the General Partner, hold or have requested experimental licenses
from the FCC to test PCS technology. The FCC has established spectrum
auctioning procedures for PCS licenses and the licenses are being auctioned in
a series of auction events.
Cable television franchises are not exclusive, so that more than one cable
television system may be built in the same area (known as an "overbuild"), with
potential loss of revenues to the operator of the original cable television
system. The Systems currently face no direct competition from other cable
television operators.
COMPETITION FOR SUBSCRIBERS IN THE SYSTEMS. Following is a summary of
competition from DBS, MMDS, SMATV and TVRO operators in the Systems' franchise
areas:
Broward County System: There are no MMDS or TVRO operators in the
system's service area. There are three SMATV
operators in the service area that do not
provide significant competition.
Buffalo System: There is one MMDS operator
that provides minimal competition. DBS has
been introduced in the system's area;
however, to date the system has not
experienced any significant loss of
customers.
Calvert County System: There are no MMDS or SMATV operators in the
system's service area. There are a few TVRO
operators in the system's service area that
provide minimal competition. DBS has been
introduced in the service area; however, to
date the system has not experienced any
significant loss of customers to DBS.
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Central Illinois System: There are two MMDS operators in the service
area with less than .05% penetration rate.
There are no SMATV operators or TVRO
operators. The Rantoul service area, which
is a small portion of the Central Illinois
System, is overbuilt and serviced by a second
cable television operator, Douglas
Communications. The Partnership serves
approximately 1,950 subscribers in the
Rantoul service area and has a penetration
rate of 35%; there are no subscriber numbers
available for the subscribers serviced by
Douglas Communications in the Rantoul area.
The subscriber rates are comparable for both
companies. DBS has recently been introduced
in the service area; however, to date the
system has not experienced any significant
loss of customers to DBS.
Naperville System: There is one MMDS operator and one SMATV
operator in the Naperville System service
area that provide minimal competition. DBS
service was launched in 1994 with the ability
to provide service to all homes passed in the
Naperville System. To date, the system has
not lost a significant number of subscribers;
however, the system does expect future
competition from DBS.
Ameritech has announced plans to build a
cable television system in the Naperville,
Illinois area. Ameritech is the major
provider of telephone services in the
Naperville System's service area, and it has
substantially greater financial resources
than the Partnership. Ameritech could
potentially provide significant competition
to the Naperville System.
Turnersville System There is one MMDS operator serving a portion
of the franchise area offering 23 basic
channels and 1 premium service; the estimated
penetration rate of this MMDS operator is
minimal at this time. There is one SMATV
operator serving a retirement community in
the franchise area; this operator provides
minimal competition. There is one active
TVRO operator in the franchise area that
provides minimal competition. DBS continues
to be active in advertising in the
Turnersville market; however, to date the
system has not experienced any significant
loss of customers to DBS.
REGULATION AND LEGISLATION. The cable television industry is regulated
through a combination of the Federal Communications Commission ("FCC"), some
state governments, and most local governments. In addition, the Copyright Act
of 1976 imposes copyright liability on all cable television systems. Cable
television operations are subject to local regulation insofar as systems
operate under franchises granted by local authorities.
Cable Television Consumer Protection and Competition Act of 1992. On
October 5, 1992, Congress enacted the Cable Television Consumer Protection and
Competition Act of 1992 (the "1992 Cable Act"), which became effective on
December 4, 1992. This legislation has caused significant changes to the
regulatory environment in which the cable television industry operates. The
1992 Cable Act generally allows for a greater degree of regulation of the cable
television industry. Under the 1992 Cable Act's definition of effective
competition, nearly all cable television systems in the United States,
including those owned and managed by the General Partner, are subject to rate
regulation of basic cable services. In addition, the 1992 Cable Act allows the
FCC to regulate rates for non-basic service tiers other than premium services
in response to complaints filed by franchising authorities and/or cable
subscribers. In April 1993, the FCC adopted regulations governing rates for
basic and non-basic services. The FCC's rules became effective on September 1,
1993.
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In compliance with these rules, the General Partner reduced rates charged
for certain regulated services effective September 1, 1993. These reductions
resulted in some decrease in revenues and operating income before depreciation
and amortization; however, the decrease was not as severe as originally
anticipated. The General Partner has undertaken actions to mitigate a portion
of these reductions primarily through (a) new service offerings in some
systems, (b) product re-marketing and re-packaging and (c) marketing efforts
directed at non-subscribers.
On February 22, 1994, however, the FCC adopted several additional rate
orders including an order which revised its earlier- announced regulatory
scheme with respect to rates. The FCC's new regulations generally require rate
reductions, absent a successful cost-of-service showing, of 17% of September
30, 1992 rates, adjusted for inflation, channel modifications, equipment costs,
and increases in programming costs. However, the FCC held rate reductions in
abeyance in certain systems. The new regulations became effective on May 15,
1994, but operators could elect to defer rate reductions to July 14, 1994, so
long as they made no changes in their rates and did not restructure service
offerings between May 15 and July 14.
On February 22, 1994, the FCC also adopted interim cost-of-service
regulations. Rate reductions will not be required where it is successfully
demonstrated that rates for basic and other regulated programming services are
justified and reasonable using cost-of-service standards. The FCC established
an interim industry-wide 11.25% permitted rate of return, and requested
comments on whether this standard and other interim cost-of-service standards
should be made permanent. The FCC also established a presumption that
acquisition costs above a system's book value should be excluded from the rate
base, but the FCC will consider individual showings to rebut this presumption.
The need for special rate relief will also be considered by the FCC if an
operator demonstrates that the rates set by a cost-of-service proceeding would
constitute confiscation of investment, and that, absent a higher rate, the
return necessary to operate and to attract investment could not be maintained.
The FCC will establish a uniform system of accounts for operators that elect
cost-of-service rate regulation, and the FCC has adopted affiliate transaction
regulations. After a rate has been set pursuant to a cost-of-service showing,
rate increases for regulated services will be indexed for inflation, and
operators will also be permitted to increase rates in response to increases in
costs beyond their control, such as taxes and increased programming costs.
After analyzing the effect of the two methods of rate regulation, the
Partnership elected to file cost-of-service showings for the Buffalo System,
the Naperville System and the Calvert County System. The General Partner
therefore anticipates no further reductions in revenues or operating income
before depreciation and amortization of these three systems resulting from the
FCC's rate regulations. At this time, the regulatory authorities have not
approved the cost-of-service showings, and there can be no assurance that the
Partnership's cost-of-service showings will prevent further rate reductions
until such final approval is received. The Partnership and the Venture
complied with the benchmark regulations and reduced rates in the Turnersville
System, the Central Illinois System and the Broward County System. The
Partnership and the Venture will continue their efforts to mitigate the effect
of such rate reductions.
Among other issues addressed by the FCC in its February rate orders was the
treatment of packages of a la carte channels. The FCC in its rate regulations
adopted April 1, 1993, exempted from rate regulation the price of packages of a
la carte channels upon the fulfillment of certain conditions. On November 10,
1994, the FCC reversed its policy regarding rate regulation of packages of a la
carte services. A la carte services that are offered in a package will now be
subject to rate regulation by the FCC, although the FCC indicated that it
cannot envision circumstances in which any price for a collective offering of
premium channels that have traditionally been offered on a per-channel basis
would be found to be unreasonable.
On November 10, 1994, the FCC also announced a revision to its regulations
governing the manner in which cable operators may charge subscribers for new
cable programming services. In addition to the present formula for calculating
the permissible rate for new services, the FCC instituted a three-year flat fee
mark-up plan for charges relating to new channels of cable programming
services. Commencing on January 1, 1995, operators may charge for new channels
of cable programming services added after May 14, 1994 at a rate of up to 20
cents per channel, but may not make adjustments to monthly rates totaling more
than $1.20 plus an additional 30 cents
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for programming license fees per subscriber over the first two years of the
three-year period for these new services. Operators may charge an additional
20 cents in the third year only for channels added in that year plus the costs
for the programming. Operators electing to use the 20 cent per channel
adjustment may not also take a 7.5% mark-up on programming cost increases,
which is permitted under the FCC's current rate regulations. The FCC has
requested further comment as to whether cable operators should continue to
receive the 7.5% mark-up on increases in license fees on existing programming
services.
The FCC also announced that it will permit operators to offer a "new
product tier" ("NPT"). Operators will be able to price this tier as they elect
so long as, among other conditions, other channels that are subject to rate
regulation are priced in conformity with applicable regulations and operators
do not remove programming services from existing tiers and offer them on the
NPT.
There have been several lawsuits filed by cable operators and programmers
in Federal court challenging various aspects of the 1992 Cable Act, including
provisions relating to mandatory broadcast signal carriage, retransmission
consent, access to cable programming, rate regulations, commercial leased
channels and public access channels. On April 8, 1993, a three-judge Federal
district court panel issued a decision upholding the constitutionality of the
mandatory signal carriage requirements of the 1992 Cable Act. That decision
was appealed directly to the United States Supreme Court. The United States
Supreme Court vacated the lower court decision on June 27, 1994 and remanded
the case to the district court for further development of a factual record.
The Supreme Court's majority determined that the must-carry rules were content
neutral, but that it was not yet proven that the rules were needed to preserve
the economic health of the broadcasting industry. In the interim, the
must-carry rules will remain in place during the pendency of the proceedings in
district court. In 1993, a Federal district court for the District of Columbia
upheld provisions of the 1992 Cable Act concerning rate regulation,
retransmission consent, restrictions on vertically integrated cable television
operators and programmers, mandatory carriage of programming on commercial
leased channels and public, educational and governmental access channels and
the exemption for municipalities from civil damage liability arising out of
local regulation of cable services. The 1992 Cable Act's provisions providing
for multiple ownership limits for cable operators and advance notice of free
previews for certain programming services have been found unconstitutional. In
November 1993, the United States Court of Appeals for the District of Columbia
held that the FCC's regulations implemented pursuant to Section 10 of the 1992
Cable Act, which permit cable operators to ban indecent programming on public,
educational or governmental access channels or leased access channels, were
unconstitutional, but the court has agreed to reconsider its decision. All of
these decisions construing provisions of the 1992 Cable Act and the FCC's
implementing regulations have been or are expected to be appealed.
Ownership and Market Structure. The FCC rules and Federal law generally
prohibit the direct or indirect common ownership, operation, control or
interest in a cable television system, on the one hand, and a local television
broadcast station whose television signal reaches any portion of the community
served by the cable television system, on the other hand. The FCC recently
lifted its ban on the cross-ownership of cable television systems by broadcast
networks. The FCC revised its regulations to permit broadcast networks to
acquire cable television systems serving up to 10% of the homes passed in the
nation, and up to 50% of the homes passed in a local market. Neither the
Partnership nor the General Partner has any direct or indirect ownership,
operation, control or interest in a television broadcast station, or a
telephone company, and they are thus presently unaffected by the
cross-ownership rules.
The Cable Communications Policy Act of 1984 (the "1984 Cable Act") and FCC
regulations generally prohibit the common operation of a cable television
system and a telephone company within the same service area. Until recently, a
provision of a Federal court antitrust consent decree also prohibited the
regional Bell operating companies ("RBOCs") from engaging in cable television
operations. This prohibition was recently removed when the court retaining
jurisdiction over the consent decree ruled that the RBOCs could provide
information services over their facilities. This decision permits the RBOCs to
acquire or construct cable television systems outside of their own service
areas.
The 1984 Cable Act prohibited local exchange carriers, including the RBOCs,
from providing video programming directly to subscribers within their local
exchange telephone service areas, except in rural areas or
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by specific waiver of FCC rules. Several Federal district courts have struck
down the 1984 Cable Act's telco/cross-ownership provision as facially invalid
and inconsistent with the First Amendment. The United States Courts of Appeals
for the Fourth and the Ninth Circuits have upheld the appeals of two of these
district court decisions, and the United States Justice Department is expected
to request the United States Supreme Court to review these two decisions. This
Federal cross-ownership rule is particularly important to the cable industry
since these telephone companies already own certain facilities needed for cable
television operation, such as poles, ducts and associated rights-of-way.
The FCC amended its rules in 1992 to permit local telephone companies to
offer "video dialtone" service for video programmers, including channel
capacity for the carriage of video programming and certain noncommon carrier
activities such as video processing, billing and collection and joint marketing
arrangements. In its video dialtone order, which was 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 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 also concluded that where a local
exchange carrier ("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 the LEC or its programmer customers to obtain a franchise to
provide such service. This aspect of the FCC's video dialtone order was upheld
on appeal by the United States Court of Appeals for the D.C. Circuit. The FCC
recently issued an order reaffirming its initial decision, and this order has
been appealed. Because cable operators are required to bear the costs of
complying with local franchise requirements, including the payment of franchise
fees, the FCC's decision could place cable operators at a competitive
disadvantage vis-a-vis services offered on a common carrier basis over local
telephone company provided facilities. In its Reconsideration Order, the FCC,
among other actions, refused to require telephone companies to justify cost
allocations prior to the construction of video dialtone facilities, and
indicated that it would provide guidance on costs that must be included in
proposed video dialtone tariffs. The FCC also established dual Federal/state
jurisdiction over video dialtone services based on the origination point of the
video dialtone programming service. In a separate proceeding, the FCC has
proposed to increase the numerical limit on the population of areas qualifying
as "rural" and in which LECs can provide cable service without a FCC waiver.
On January 12, 1995, the FCC adopted a Fourth Further Notice of Proposed
Rulemaking in its video dialtone docket. The FCC tentatively concluded that it
should not ban telephone companies from providing their own video programming
over their video dialtone platforms in those areas in which the cable/telephone
cross-ownership rules have been found unconstitutional. The FCC requested
comments on this issue and on further refinements of its video dialtone
regulatory framework concerning, among other issues, telephone programmer
affiliation standards, the establishment of structural safeguards to prevent
cross-subsidization of video dialtone and programming activities, and the
continuation of the FCC's ban prohibiting telephone companies from acquiring
cable systems within their telephone service areas for the provision of video
dialtone services. The FCC will also consider whether a LEC offering video
dialtone service must secure a local franchise if that LEC also engages in the
provision of video programming carried on its video dialtone platform. The FCC
has also proposed to broadly interpret its authority to waive the
cable/telephone cross-ownership ban upon a showing by telephone companies that
they comply with the safeguards which the FCC establishes as a condition of
providing video programming.
A number of bills that would have permitted telephone companies to provide
cable television service within their own service areas were considered during
the last Congress, but none were adopted. These bills would have permitted the
provision of cable television service by telephone companies in their own
service areas conditioned on the establishment of safeguards to prevent
cross-subsidization between telephone and cable television operations and the
provision of telecommunication services by cable television systems. Similar
legislation is expected to be considered by Congress during its current
session. The outcome of these FCC, legislative or court proceedings and
proposals or the effect of such outcome on cable system operations cannot be
predicted.
9
<PAGE> 10
ITEM 2. PROPERTIES
The cable television systems owned by the Partnership and the Venture at
December 31, 1994 are described below:
<TABLE>
<CAPTION>
FUND SYSTEM ACQUISITION DATE
- ---- ------ ----------------
<S> <C> <C>
Cable TV Fund 14-A, Ltd. Turnersville System May 1987
Buffalo System September 1987
Naperville System September 1987
Calvert County System September 1987
Central Illinois System May 1991
Cable TV Fund 14-A/B Venture Broward County System March 1988
</TABLE>
The following sets forth (i) the monthly basic plus service rates charged
to subscribers, (ii) the number of basic subscribers and pay units and (iii)
the range of franchise expiration dates for the Systems. The monthly basic
service rates set forth herein represent, with respect to systems with multiple
headends, the basic service rate charged to the majority of the subscribers
within the system. While the charge for basic plus service may have increased
in 1993 in some cases as a result of the FCC's rate regulations, overall
revenues may have decreased due to the elimination of charges for additional
outlets and certain equipment. In cable television systems, basic subscribers
can subscribe to more than one pay TV service. Thus, the total number of pay
services subscribed to by basic subscribers are called pay units. As of
December 31, 1994, the Partnership's systems operated approximately 2,600 miles
of cable plant, passing approximately 150,000 homes, representing an
approximate 68% penetration rate, and the Venture's systems operated
approximately 1,000 miles of cable plant, passing approximately 91,000 homes,
representing an approximate 60% penetration rate. Figures for numbers of
subscribers, miles of cable plant and homes passed are compiled from the
General Partner's records and may be subject to adjustments.
CABLE TV FUND 14-A, LTD.
<TABLE>
<CAPTION>
At December 31,
---------------
TURNERSVILLE, NEW JERSEY 1994 1993 1992
- ------------------------ ---- ---- ----
<S> <C> <C> <C>
Monthly basic plus service rate $19.66 $21.07 $19.50
Basic subscribers 33,961 32,426 31,054
Pay units 36,462 35,035 40,698
</TABLE>
Franchise expiration dates range from July 1995 to January 2003. The General
Partner is in the process of negotiating a renewal of any franchise expiring in
1995.
<TABLE>
<CAPTION>
At December 31,
---------------
BUFFALO, MINNESOTA 1994 1993 1992
- ------------------ ---- ---- ----
<S> <C> <C> <C>
Monthly basic plus service rate $20.00 $20.00 $19.45
Basic subscribers 9,567 7,929 7,397
Pay units 7,305 6,657 5,855
</TABLE>
Franchise expiration date for all franchises is September 1999.
<TABLE>
<CAPTION>
At December 31,
---------------
NAPERVILLE, ILLINOIS 1994 1993 1992
- -------------------- ---- ---- ----
<S> <C> <C> <C>
Monthly basic plus service rate $23.87 $23.87 $21.45
Basic subscribers 25,063 22,925 21,157
Pay units 17,636 17,430 16,380
</TABLE>
10
<PAGE> 11
Franchise expiration dates range from December 1999 to April 2001.
<TABLE>
<CAPTION>
At December 31,
---------------
CALVERT COUNTY, MARYLAND 1994 1993 1992
- ------------------------ ---- ---- ----
<S> <C> <C> <C>
Monthly basic plus service rate $25.36 $23.75 $22.50
Basic subscribers 15,428 14,391 13,137
Pay units 16,034 15,935 15,243
</TABLE>
Franchise expiration dates range from July 1999 to January 2001.
<TABLE>
<CAPTION>
At December 31,
---------------
CENTRAL ILLINOIS 1994 1993 1992
- ---------------- ---- ---- ----
<S> <C> <C> <C>
Monthly basic plus service rate $17.21 $20.25 $19.25
Basic subscribers 14,616 13,830 14,690
Pay units 11,713 9,878 9,231
</TABLE>
Franchise expiration dates range from June 1995 to December 2004. The General
Partner is in the process of negotiating a renewal of any franchise expiring in
1995.
CABLE TV FUND 14-A/B VENTURE
<TABLE>
<CAPTION>
At December 31,
---------------
BROWARD COUNTY, FLORIDA 1994 1993 1992
- ----------------------- ---- ---- ----
<S> <C> <C> <C>
Monthly basic plus service rate $23.56 $24.00 $23.95
Basic subscribers 47,819 45,515 42,945
Pay units 41,270 37,684 33,735
</TABLE>
Franchise expiration dates range from March 1998 to December 2024.
PROGRAMMING SERVICES
Programming services provided by the Systems include local affiliates of
the national broadcast networks, local independent broadcast channels, the
traditional satellite services (e.g., American Movie Classics, Arts &
Entertainment, Black Entertainment Network, C-SPAN, The Discovery Channel,
Lifetime, Entertainment Sports Network, Home Shopping Network, Mind Extension
University, Music Television, Nickelodeon, Turner Network Television, The
Nashville Network, Video Hits One, and superstations WOR, WGN and TBS. The
Partnership's Systems also provide a selection, which varies by system, of
premium channel programming (e.g., Cinemax, Encore, Home Box Office, Showtime
and The Movie Channel).
ITEM 3. LEGAL PROCEEDINGS
None.
11
<PAGE> 12
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
PART II.
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK
AND RELATED SECURITY HOLDER MATTERS
While the Partnership is publicly held, there is no public market for the
limited partnership interests, and it is not expected that a market will
develop in the future. As of February 15, 1995, the approximate number of
equity security holders in the Partnership was 12,958.
12
<PAGE> 13
Item 6. Selected Financial Data
<TABLE>
<CAPTION>
For the Year Ended December 31,
---------------------------------------------------------------------------------------
Cable TV Fund 14-A 1994 1993 1992 1991 1990
- ------------------ ----------- ----------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Revenues $40,442,268 $38,916,469 $ 36,315,757 $ 31,250,151 $ 25,284,771
Depreciation and Amortization 14,762,923 15,197,677 15,464,984 14,187,245 9,687,471
Operating Loss (3,259,673) (3,562,804) (4,065,858) (4,515,550) (417,505)
Equity in Net Loss of
Cable Television Joint Venture (1,468,218) (1,277,358) (1,676,435) (2,178,493) (2,224,512)
Net Loss (9,472,910) (8,608,115) (10,382,060) (11,647,299) (6,690,970)
Net Loss per Limited Partnership Unit (58.61) (53.26) (64.24) (72.07) (41.40)
Weighted average number of
Limited Partnership Units outstanding 160,000 160,000 160,000 160,000 160,000
General Partner's
Deficit (617,078) (522,349) (436,268) (332,447) (215,974)
Limited Partners' Capital 7,532,402 16,910,583 25,432,617 35,710,856 47,241,682
Total Assets 87,556,346 94,106,926 106,808,479 114,829,803 92,837,214
Debt 77,425,047 75,601,829 79,386,274 77,970,342 43,579,538
General Partner Advances 706,579 58,974 457,354 - 324,703
</TABLE>
<TABLE>
<CAPTION>
For the Year Ended December 31,
---------------------------------------------------------------------------------------
Cable TV Fund 14-A/B 1994 1993 1992 1991 1990
- -------------------- ----------- ----------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Revenues $22,183,524 $22,068,952 $20,212,867 $18,366,881 $16,681,752
Depreciation and Amortization 9,188,994 9,352,808 9,971,915 10,472,621 9,562,081
Operating Loss (2,661,198) (2,324,939) (3,293,133) (4,361,200) (3,939,561)
Net Loss (5,417,779) (4,713,500) (6,186,107) (8,038,720) (8,208,530)
Partners' Capital 22,063,963 27,481,742 32,195,242 38,381,349 46,420,069
Total Assets 66,597,460 72,315,816 80,404,133 85,533,244 92,742,834
Debt 42,271,921 43,461,730 46,908,409 46,037,691 43,533,847
Jones Intercable, Inc. Advances 354,179 57,920 125,873 16,705 74,393
</TABLE>
13
<PAGE> 14
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations
CABLE TV FUND 14-A
Results of Operations
1994 Compared to 1993-
Revenues of Cable TV Fund 14-A, Ltd. (the "Partnership") increased
$1,525,799, or approximately 4 percent, from $38,916,469 in 1993 to $40,442,268
in 1994. An increase in the subscriber base primarily accounted for the
increase in revenues. Basic subscribers increased 7,134, or approximately 8
percent, from 91,501 at December 31, 1993 to 98,635 at December 31, 1994. The
increase in revenues would have been greater but for reductions in basic rates
due to basic rate regulations issued by the FCC in April 1993 and February 1994
with which the Partnership complied effective September 1993 and July 1994,
respectively. See Item 1. No other individual factor was significant to the
increase in revenues.
Operating, general and administrative expenses increased $1,213,224,
or approximately 5 percent, from $22,598,241 in 1993 to $23,811,465 in 1994.
Operating, general and administrative expense represented 59 percent of revenue
in 1994 compared to 58 percent in 1993. Increases in programming fees
primarily accounted for the increase in expenses. The increases in programming
fees were due, in part, to the increase in the basic subscriber base. No other
factor was significant to the increase in operating, general and administrative
expenses. Management fees and allocated overhead from the General Partner
increased $444,198, or approximately 9 percent, from $4,683,355 in 1993 to
$5,127,553 in 1994. This increase was due to the increase in revenues, upon
which such management fees and allocated overhead are based, and increases in
allocated expenses from the General Partner. The General Partner has
experienced increases in expenses, including personnel costs and reregulation
costs, a portion of which is allocated to the Partnership.
Depreciation and amortization expense decreased $434,754, or
approximately 3 percent, from $15,197,677 in 1993 to $14,762,923 in 1994
primarily due to the maturation of a portion of the tangible asset base and the
intangible asset base.
Operating loss decreased $303,131, or approximately 9 percent, from
$3,562,804 in 1993 to $3,259,673 in 1994 due primarily to the increase in
revenues and the decrease in depreciation and amortization expense. Operating
income before depreciation and amortization decreased $131,623, or
approximately 1 percent, from $11,634,873 in 1993 to $11,503,250 in 1994 due to
the increases in operating, general and administrative expenses and management
fees and allocated overhead from the General Partner exceeding the increase in
revenues. The decrease in operating income before depreciation and
amortization reflects the current operating environment of the cable television
industry. The FCC rate regulations under the 1992 Cable Act have caused
revenues to increase more slowly than otherwise would have been the case. In
turn, this has caused certain expenses which are a function of revenues, such
as franchise fees, copyright fees and management fees, to increase more slowly
than otherwise would have been the case. However, other operating costs such
as programming fees, salaries and benefits, and marketing costs as well as
other costs incurred by the General Partner, which are allocated to the
Partnership, continue to increase at historical rates. This situation has led
to reductions in operating income before depreciation and amortization as a
percent of revenue ("Operating Margin"). Such reductions in Operating Margins
may continue in the near term as the Partnership and the General Partner incur
cost increases due to, among other things, increases in programming fees,
compliance costs associated with reregulation and competition, that exceed
increases in revenue. The General Partner will attempt to mitigate a portion
of these reductions through (a) new service offerings, (b) product re-marketing
and re-packaging and (c) marketing efforts targeted at non-subscribers.
Interest expense increased $835,323, or approximately 22 percent, from
$3,726,237 in 1993 to $4,561,560 in 1994 due primarily to higher effective
interest rates and higher outstanding balances on interest bearing obligations.
Loss before equity in net loss of cable television joint venture increased
$673,935, or approximately 9 percent, from $7,330,757 in 1993 to $8,004,692 in
1994 due primarily to the increase in interest expense.
1993 Compared to 1992-
Revenues of the Partnership increased $2,600,712, or approximately 7
percent, from $36,315,757 in 1992 to $38,916,469 in 1993. An increase in the
subscriber base accounted for approximately 44 percent of the increase in
revenues. Basic subscribers increased 4,066, or approximately 5 percent, from
87,435 at December 31, 1992 to 91,501 at December 31, 1993. Basic service rate
adjustments in the Partnership's systems accounted for approximately 22 percent
of the increase in revenues. An increase in advertising sales revenues
accounted for approximately 16 percent of the increase in revenues. The
increase in revenues would have been greater but for the reduction in basic
rates due to basic rate regulations issued by the FCC in April 1993 with which
the Partnership complied effective September 1, 1993. No other individual
factor was significant to the increases in revenues.
14
<PAGE> 15
Operating, general and administrative expenses increased $2,000,422,
or approximately 10 percent, from $20,597,819 in 1992 to $22,598,241 in 1993.
Operating, general and administrative expense represented 58 percent of revenue
in 1993 compared to 57 percent in 1992. Increases in programming fees
accounted for approximately 40 percent of the increase in expenses. Increases
in personnel costs accounted for approximately 20 percent of the increase in
expenses. Increases in advertising sales costs accounted for approximately 14
percent of the increase in expenses. No other factor was significant to the
increase in operating, general and administrative expenses. Management fees
and allocated overhead from the General Partner increased $364,543, or
approximately 8 percent, from $4,318,812 in 1992 to $4,683,355 in 1993. This
increase was due to the increases in revenues, upon which such fees and
allocations are based, and an increase in allocated expense from the General
Partner.
Depreciation and amortization expense decreased $267,307, or
approximately 2 percent, from $15,464,984 in 1992 to $15,197,677 in 1993
primarily due to the maturation of a portion of the intangible asset base.
Operating loss decreased $503,054, or approximately 12 percent, from
$4,065,858 in 1992 to $3,562,804 in 1993 due to the increase in revenues
exceeding the increases in operating, general and administrative expenses and
management fees and allocated overhead from the General Partner as well as the
decrease in depreciation and amortization expense. Operating income before
depreciation and amortization increased $235,747, or approximately 2 percent,
from $11,399,126 in 1992 to $11,634,873 in 1993 due to the increase in revenues
exceeding the increases in operating, general and administrative expenses and
management fees and allocated overhead from the General Partner.
Interest expense decreased $836,116, or approximately 18 percent, from
$4,562,353 in 1992 to $3,726,237 in 1993. This decrease was due primarily to
lower effective interest rates and lower outstanding balances on interest
bearing obligations. Loss before equity in net loss of cable television joint
venture decreased $1,374,868, or approximately 16 percent, from $8,705,625 in
1992 to $7,330,757 in 1993 due primarily to the decrease in operating loss and
the decrease in interest expense. Such losses are expected to continue.
In addition to the systems owned directly, the Partnership owns an
approximate 27 percent interest in Cable TV Fund 14-A/B Venture (the
"Venture"). See Management's Discussion and Analysis of Financial Condition
and Results of Operations for the Venture for details pertaining to the
Venture's operations.
Financial Condition
Capital expenditures for the Partnership's directly owned systems
totalled approximately $8,979,000 during 1994. Approximately 28 percent was
for new plant construction, approximately 26 percent of these expenditures was
attributable to construction of service drops to subscribers' homes and
approximately 15 percent of these expenditures was for system upgrades and
rebuilds in all of the Partnership's operating systems. The remainder of the
expenditures related to various enhancements throughout the Partnership's
operating systems. These expenditures were funded primarily from cash
generated from operations.
Budgeted capital expenditures for 1995 are approximately $9,609,000.
Approximately 41 percent of the total capital expenditures will be used for new
plant construction in all of the Partnership's systems. Approximately 22
percent will relate to construction of service drops to subscribers' homes.
Approximately 12 percent will be used for system upgrades and rebuilds in all
of the Partnership's systems. The remainder of the anticipated expenditures
are for various enhancements in all of the Partnership's systems. The actual
level of capital expenditures will depend, in part, upon the General Partner's
determination as to the proper scope and timing of such expenditures in light
of the 1992 Cable Act and the Partnership's liquidity position. Funding for
the improvements is expected to come from cash on hand, cash generated from
operations, and borrowings under the Partnership's revolving credit facility.
At December 31, 1992, the Partnership's former revolving credit
facility converted to a term loan. The then-outstanding balance of $74,023,000
was repaid in July 1994 with borrowings under a new $80,000,000 revolving
credit facility. The new revolving credit facility converts to a term loan on
September 30, 1996, at which time the then-outstanding balance is payable in
quarterly installments through March 31, 2002. At December 31, 1994,
$76,900,000 was outstanding under this agreement, leaving $3,100,000 available
for future needs of the Partnership. Interest on the outstanding principal
balance is at the Partnership's option of Prime plus 1/4 percent or a fixed
rate defined as the CD rate plus 1-3/8 percent or the London Interbank Offered
Rate plus 1-1/4 percent. A fee of 3/8 of one percent per annum on the unused
portion of the new commitment is also paid.
On January 12, 1993, the Partnership entered into an interest rate cap
agreement covering outstanding debt obligations of $5,000,000. The Partnership
paid a fee of $50,000. The agreement protects the Partnership from LIBOR
interest rates that exceed 7 percent for three years from the date of the
agreement. The fee is being charged to interest expense over the life of the
agreement using the straight-line method.
15
<PAGE> 16
The General Partner believes the Partnership has sufficient sources of
capital to meet its presently anticipated needs.
In addition to those systems owned directly by it, the Partnership
owns an approximate 27 percent interest in the Venture. The Partnership's
investment in this cable television joint venture, accounted for under the
equity method, decreased by $1,468,218 compared to the December 31, 1993
balance. This decrease represents the Partnership's proportionate share of
losses generated by the Venture during 1994. These losses are anticipated to
continue.
Regulation and Legislation
On October 5, 1992, Congress enacted the Cable Television Consumer
Protection and Competition Act of 1992 (the "1992 Cable Act"), which became
effective on December 4, 1992. The 1992 Cable Act generally allows for a
greater degree of regulation of the cable television industry. In April 1993,
the FCC adopted regulations governing rates for basic and non-basic services.
These regulations became effective on September 1, 1993. Such regulations
caused reductions in rates for certain regulated services. On February 22,
1994, the FCC adopted several additional rate orders including an order which
revised its earlier-announced regulatory scheme with respect to rates.
The Partnership has filed cost-of-service showings for the Buffalo,
Minnesota; Naperville, Illinois; and Calvert County, Maryland systems and thus
anticipates no further reductions in rates in these systems. The
cost-of-service showings for these systems have not yet received final
approvals from franchising authorities, however, and there can be no assurance
that the Partnership's cost-of-service showings will prevent further rate
reductions until such final approvals are received. The Partnership complied
with the February 1994 benchmark regulations and further reduced rates in the
Turnersville, New Jersey and Central Illinois systems effective July 1994. See
Item 1 for further discussion of the provisions of the 1992 Cable Act and the
FCC regulations promulgated thereunder.
16
<PAGE> 17
CABLE TV FUND 14-A/B VENTURE
Results of Operations
1994 Compared to 1993-
Revenues of the Venture's Broward County System increased $114,572, or
less than 1 percent, from $22,068,952 in 1993 to $22,183,524 in 1994.
Increases in advertising sales revenues and home shopping revenues were
primarily responsible for the increase in revenues. The increase in revenues
would have been greater but for the reduction in basic rates due to the basic
rate regulations issued by the FCC in April 1993 and February 1994 with which
the Venture complied effective September 1993 and July 1994, respectively.
No other individual factor significantly affected the increase in revenues.
Operating, general and administrative expense increased $538,923, or
approximately 4 percent, from $12,339,515 in 1993 to $12,878,438 in 1994.
Operating, general and administrative expenses represented 58 percent of
revenue in 1994, compared to 56 percent in 1993. The increase in operating,
general and administrative expenses was due primarily to increases in
programming fees and advertising sales expenses. No other individual factor
significantly affected the increase in operating, general and administrative
expense. Management fees and allocated overhead from Jones Intercable, Inc.
increased $75,722, or approximately 3 percent, from $2,701,568 in 1993 to
$2,777,290 in 1994 primarily due to an increase in allocated expenses from
Jones Intercable, Inc. Jones Intercable, Inc. has experienced increases in
expenses, including personnel costs and reregulation costs. Depreciation and
amortization expense decreased $163,814, or approximately 2 percent, from
$9,352,808 in 1993 to $9,188,994 in 1994. The decrease in depreciation and
amortization expense is attributable to the maturation of the Venture's
tangible asset base.
Operating loss increased $336,259, or approximately 14 percent, from
$2,324,939 in 1993 to $2,661,198 in 1994. This increase is due to the increases
in operating, general and administrative expenses and management fees and
allocated overhead from Jones Intercable, Inc. exceeding the increase in revenue
and the decrease in depreciation and amortization expense. Operating income
before depreciation and amortization expense decreased $500,073, or
approximately 7 percent, from $7,027,869 in 1993 to $6,527,796 in 1994 due to
the increases in operating, general and administrative expenses and management
fees and allocated overhead from Jones Intercable, Inc. exceeding the increase
in revenue. The decrease in operating income before depreciation and
amortization reflects the current operating environment of the cable television
industry. The FCC rate regulations under the 1992 Cable Act have caused
revenues to increase more slowly than otherwise would have been the case. In
turn, this has caused certain expenses which are a function of revenue, such as
franchise fees, copyright fees and management fees to increase more slowly than
in prior years. However, other operating costs such as programming fees,
salaries and benefits, and marketing costs as well as other costs incurred by
the Jones Intercable, Inc., which are allocated to the Venture, continue to
increase at historical rates. This situation has led to reductions in operating
income before depreciation and amortization as a percent of revenue ("Operating
Margin"). Such reductions in Operating Margins may continue in the near term as
the Venture and the Jones Intercable, Inc. incur cost increases due to, among
other things, increases in programming fees, compliance costs associated with
reregulation and competition, that exceed increases in revenue. The Jones
Intercable, Inc. will attempt to mitigate a portion of these reductions through
(a) new service offerings, (b) product re-marketing and re- packaging and (c)
marketing efforts targeted at non-subscribers.
Interest expense increased $277,362, or approximately 11 percent, from
$2,450,672 in 1993 to $2,728,034 in 1994 due to higher effective interest
rates. Net loss increased $704,279, or approximately 15 percent, from
$4,713,500 in 1993 to $5,417,779 in 1994. The increase was primarily
attributable to the increase in operating loss and the increase in interest
expense. These losses were primarily the result of the factors discussed above
and are expected to continue in the future.
1993 Compared to 1992-
Revenues of the Venture's Broward County System increased $1,856,065,
or approximately 9 percent, from $20,212,867 in 1992 to $22,068,952 in 1993.
Increases in basic subscribers and premium subscriptions accounted for
approximately 48 percent of the increase in revenue. Basic subscribers and
premium subscriptions increased 6 percent and 14 percent, respectively, during
1993. Advertising sales accounted for approximately 19 percent of the increase
in revenues. Basic service rate adjustments accounted for approximately 15
percent of the increase in revenues. The increase in revenues would have been
greater but for the reduction in basic rates due to the basic rate regulations
issued by the FCC in April 1993 with which the Venture complied effective
September 1, 1993. No other individual factor significantly affected the
increase in revenues.
Operating, general and administrative expense increased $1,287,088, or
approximately 12 percent, from $11,052,427 in 1992 to $12,339,515 in 1993.
Operating, general and administrative expenses represented 56 percent of
revenue in 1993, compared to 55 percent in 1992. The increase in operating,
general and administrative expenses was due primarily to increases in
programming fees and marketing expenses. No other individual factor
significantly affected the increase in operating, general and administrative
expense. Management fees and allocated overhead from Jones Intercable, Inc.
increased $219,910, or approximately
17
<PAGE> 18
9 percent, from $2,481,658 in 1992 to $2,701,568 in 1993 due to the increase in
revenues, upon which such fees and allocations are based, and an increase in
allocated expenses from Jones Intercable, Inc. Depreciation and amortization
expense decreased $619,107, or approximately 6 percent, from $9,971,915 in 1992
to $9,352,808 in 1993. The decrease in depreciation and amortization expense
was attributable to the maturation of the Venture's tangible asset base.
Operating loss decreased $968,164, or approximately 29 percent, from
$3,293,133 in 1992 to $2,324,939 in 1993. This decrease was due to the
increase in revenues exceeding the increases in operating, general and
administrative expenses and management fees and allocated overhead from Jones
Intercable, Inc. as well as the decrease in depreciation and amortization
expense. Operating income before depreciation and amortization expense
increased $349,087, or approximately 5 percent, from $6,678,782 in 1992 to
$7,027,869 in 1993 due to the increase in revenues exceeding the increases in
operating, general and administrative expenses and management fees and
allocated overhead from Jones Intercable, Inc.
Interest expense decreased $114,318, or approximately 4 percent, from
$2,564,990 in 1992 to $2,450,672 in 1993 due to lower effective interest rates
and lower outstanding balances on interest bearing obligations. Net loss
decreased $1,472,607, or approximately 24 percent, from $6,186,107 in 1992 to
$4,713,500 in 1993. The decrease was primarily attributable to the decrease in
operating loss and the decrease in interest expense. These losses were
primarily the result of the factors discussed above.
Financial Condition
The Venture expended approximately $3,600,000 on capital additions
during 1994. Cable television plant extensions accounted for approximately 22
percent of these expenditures. The construction of service drops to homes,
rebuilds and upgrades, and the purchase of converters accounted for
approximately 22 percent, 9 percent and 9 percent, respectively, of the
expenditures. The remainder of these expenditures related to various
enhancements in the Broward County System. These capital expenditures were
funded from cash on hand and cash generated from operations. The Venture plans
to expend approximately $3,200,000 for capital additions in 1995. Of this
total, approximately 30 percent is for cable television plant extensions.
Approximately 28 percent will relate to the construction of service drops to
homes. Approximately 14 percent will relate to upgrades and rebuild of the
Broward County System. The remainder of the anticipated expenditures are for
various enhancements in the Broward County System. These capital expenditures
are expected to be funded from cash on hand and cash generated from operations.
On December 31, 1992, the then-outstanding balance of $46,800,000 on
the Venture's revolving credit facility converted to a term loan. The balance
outstanding on the term loan at December 31, 1994 was $42,120,468. The term
loan is payable in quarterly installments which began March 31, 1993 and is
payable in full by December 31, 1999. In June 1994, Jones Intercable, Inc.
completed negotiations to lower the level of principal payments in order to
provide liquidity for capital expenditures. Installments paid during 1994
totalled $1,169,532. Installments due during 1995 total $2,340,000. Funding
for these installments is expected to come from cash on hand and cash generated
from operations. Interest is at the Venture's option of prime plus 1/2
percent, LIBOR plus 1- 1/2 percent or the CD rate plus 1-5/8 percent. The
effective interest rates on amounts outstanding as of December 31, 1994 and
1993 were 7.17 percent and 5.0 percent, respectively.
In January 1993, the Venture entered into an interest rate cap
agreement covering outstanding debt obligations of $25,000,000. The Venture
paid a fee of $246,250. The agreement protects the Venture from interest rates
that exceeded 7 percent for three years from the date of the agreement.
Jones Intercable, Inc. believes that the Venture has sufficient sources
of capital to service its presently anticipated needs.
Regulation and Legislation
On October 5, 1992, Congress enacted the Cable Television Consumer
Protection and Competition Act of 1992 (the "1992 Cable Act"), which became
effective on December 4, 1992. The 1992 Cable Act generally allows for a
greater degree of regulation of the cable television industry. In April 1993,
the FCC adopted regulations governing rates for basic and non-basic services.
These regulations became effective on September 1, 1993. Such regulations
caused reductions in rates for certain regulated services. On February 22,
1994, the FCC adopted several additional rate orders including an order which
revised its earlier-announced regulatory scheme with respect to rates. The
Venture complied with the February 1994 benchmark regulations and further
reduced rates in the Broward County System effective July 1994. See Item 1
for further discussion of the provisions of the 1992 Cable Act and the FCC
regulations promulgated thereunder.
18
<PAGE> 19
Item 8. Financial Statements
CABLE TV FUND 14-A AND
CABLE TV FUND 14-A/B
FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1994 AND 1993
INDEX
<TABLE>
<CAPTION>
Page
----
14-A 14-A/B
---- ------
<S> <C> <C>
Report of Independent Public Accountants 20 31
Balance Sheets 21 32
Statements of Operations 23 34
Statements of Partners' Capital (Deficit) 24 35
Statements of Cash Flows 25 36
Notes to Financial Statements 26 37
</TABLE>
19
<PAGE> 20
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Partners of Cable TV Fund 14-A:
We have audited the accompanying balance sheets of CABLE TV FUND 14-A
(a Colorado limited partnership) as of December 31, 1994 and 1993, and the
related statements of operations, partners' capital (deficit) and cash flows
for each of the three years in the period ended December 31, 1994. These
financial statements are the responsibility of the General Partner'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, the financial statements referred to above present
fairly, in all material respects, the financial position of Cable TV Fund 14-A
as of December 31, 1994 and 1993, and the results of its operations and its
cash flows for each of the three years in the period ended December 31, 1994,
in conformity with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Denver, Colorado,
March 8, 1995.
20
<PAGE> 21
CABLE TV FUND 14-A
(A Limited Partnership)
BALANCE SHEETS
<TABLE>
<CAPTION>
December 31,
-------------------------------------
ASSETS 1994 1993
------ -------------- --------------
<S> <C> <C>
CASH $ 426,979 $ 476,782
TRADE RECEIVABLES, less allowance for doubtful receivables of
$74,176 and $72,862 at December 31, 1994 and 1993, respectively 1,070,581 938,470
INVESTMENT IN CABLE TELEVISION PROPERTIES:
Property, plant and equipment, at cost 117,434,221 108,455,632
Less- accumulated depreciation (57,090,363) (47,132,923)
-------------- --------------
60,343,858 61,322,709
Franchise costs, net of accumulated amortization of $22,417,029 and
$18,607,312 at December 31, 1994 and 1993, respectively 11,721,633 15,531,350
Subscriber lists, net of accumulated amortization of $8,390,402 and
$7,510,999 at December 31, 1994 and 1993, respectively 1,265,948 2,145,351
Costs in excess of interests in net assets purchased, net of accumulated
amortization of $776,420 and $660,057 at December 31, 1994
and 1993, respectively 6,016,838 6,133,201
Investment in cable television joint venture 5,883,075 7,351,293
-------------- --------------
Total investment in cable television properties 85,231,352 92,483,904
DEPOSITS, PREPAID EXPENSES AND DEFERRED CHARGES 827,434 207,770
-------------- --------------
Total assets $ 87,556,346 $ 94,106,926
============== ==============
</TABLE>
The accompanying notes to financial statements
are an integral part of these balance sheets.
21
<PAGE> 22
CABLE TV FUND 14-A
(A Limited Partnership)
BALANCE SHEETS
<TABLE>
<CAPTION>
December 31,
----------------------------------
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT) 1994 1993
------------------------------------------- ------------- ------------
<S> <C> <C>
LIABILITIES:
Debt $ 77,425,047 $ 75,601,829
Accounts payable-
Trade 165,894 106,674
General Partner 706,579 58,974
Accrued liabilities 2,238,657 1,849,282
Subscriber prepayments 104,845 101,933
------------- ------------
Total liabilities 80,641,022 77,718,692
------------- ------------
COMMITMENTS AND CONTINGENCIES (Note 7)
PARTNERS' CAPITAL (DEFICIT):
General Partner-
Contributed capital 1,000 1,000
Accumulated deficit (618,078) (523,349)
------------- ------------
(617,078) (522,349)
------------- ------------
Limited Partners-
Net contributed capital (160,000 units outstanding at
December 31, 1994 and 1993) 68,722,000 68,722,000
Accumulated deficit (61,189,598) (51,811,417)
------------- ------------
7,532,402 16,910,583
------------- ------------
Total liabilities and partners' capital (deficit) $ 87,556,346 $ 94,106,926
============= ============
</TABLE>
The accompanying notes to financial statements
are an integral part of these balance sheets.
22
<PAGE> 23
CABLE TV FUND 14-A
(A Limited Partnership)
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Year Ended December 31,
---------------------------------------------------------
1994 1993 1992
------------- ------------- --------------
<S> <C> <C> <C>
REVENUES $ 40,442,268 $ 38,916,469 $ 36,315,757
COSTS AND EXPENSES:
Operating, general and administrative 23,811,465 22,598,241 20,597,819
Management fees and allocated overhead from
General Partner 5,127,553 4,683,355 4,318,812
Depreciation and amortization 14,762,923 15,197,677 15,464,984
------------- ------------- --------------
OPERATING LOSS (3,259,673) (3,562,804) (4,065,858)
------------- ------------- --------------
OTHER INCOME (EXPENSE):
Interest expense (4,561,560) (3,726,237) (4,562,353)
Other, net (183,459) (41,716) (77,414)
------------- ------------- --------------
Total other income (expense) (4,745,019) (3,767,953) (4,639,767)
------------- ------------- --------------
LOSS BEFORE EQUITY IN NET LOSS OF
CABLE TELEVISION JOINT VENTURE (8,004,692) (7,330,757) (8,705,625)
EQUITY IN NET LOSS OF CABLE TELEVISION
JOINT VENTURE (1,468,218) (1,277,358) (1,676,435)
------------- ------------- --------------
NET LOSS $ (9,472,910) $ (8,608,115) $ (10,382,060)
============= ============= ==============
ALLOCATION OF NET LOSS:
General Partner $ (94,729) $ (86,081) $ (103,821)
============= ============= ==============
Limited Partners $ (9,378,181) $ (8,522,034) $ (10,278,239)
============= ============= ==============
NET LOSS PER LIMITED PARTNERSHIP UNIT $ (58.61) $ (53.26) $ (64.24)
============= ============= ==============
WEIGHTED AVERAGE NUMBER OF LIMITED
PARTNERSHIP UNITS OUTSTANDING 160,000 160,000 160,000
============= ============= ==============
</TABLE>
The accompanying notes to financial statements
are an integral part of these statements.
23
<PAGE> 24
CABLE TV FUND 14-A
(A Limited Partnership)
STATEMENTS OF PARTNERS' CAPITAL (DEFICIT)
<TABLE>
<CAPTION>
Year Ended December 31,
-------------------------------------------------------
1994 1993 1992
------------ ----------- ------------
<S> <C> <C> <C>
GENERAL PARTNER:
Balance, beginning of year $ (522,349) $ (436,268) $ (332,447)
Net loss for year (94,729) (86,081) (103,821)
------------ ----------- ------------
Balance, end of year $ (617,078) $ (522,349) $ (436,268)
============ =========== ============
LIMITED PARTNERS:
Balance, beginning of year $ 16,910,583 $25,432,617 $ 35,710,856
Net loss for year (9,378,181) (8,522,034) (10,278,239)
------------ ----------- ------------
Balance, end of year $ 7,532,402 $16,910,583 $ 25,432,617
============ =========== ============
</TABLE>
The accompanying notes to financial statements
are an integral part of these statements.
24
<PAGE> 25
CABLE TV FUND 14-A
(A Limited Partnership)
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Year Ended December,
------------------------------------------------------
1994 1993 1992
------------ ----------- ------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (9,472,910) $(8,608,115) $(10,382,060)
Adjustments to reconcile net loss to net cash provided
by operating activities:
Depreciation and amortization 14,762,923 15,197,677 15,464,984
Equity in net loss of cable television joint venture 1,468,218 1,277,358 1,676,435
Amortization of interest rate protection contract 16,668 60,031 165,348
Increase in trade receivables (132,111) (115,166) (468,179)
Decrease (increase) in deposits, prepaid expenses
and deferred charges (636,333) (17,764) 3,040
Increase in trade accounts payable, accrued
liabilities and subscriber prepayments 451,507 89,387 487,450
Increase (decrease) in advances from General Partner 647,605 (398,380) 457,354
------------ ----------- ------------
Net cash provided by operating activities 7,105,567 7,485,028 7,404,372
------------ ----------- ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (8,978,588) (7,007,208) (5,214,466)
------------ ----------- ------------
Net cash used in investing activities (8,978,588) (7,007,208) (5,214,466)
------------ ----------- ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings 77,661,002 116,518 2,263,542
Repayment of debt (75,837,784) (3,900,963) (847,610)
Purchase of interest rate protection contract - (50,000) -
------------ ----------- ------------
Net cash provided by (used in)
financing activities 1,823,218 (3,834,445) 1,415,932
------------ ----------- ------------
Increase (decrease) in cash (49,803) (3,356,625) 3,605,838
Cash, beginning of year 476,782 3,833,407 227,569
------------ ----------- ------------
Cash, end of year $ 426,979 $ 476,782 $ 3,833,407
============ =========== ============
SUPPLEMENTAL CASH FLOW DISCLOSURE:
Interest paid $ 4,339,995 $ 3,900,545 $ 4,199,841
============ =========== ============
</TABLE>
The accompanying notes to financial statements
are an integral part of these statements.
25
<PAGE> 26
CABLE TV FUND 14-A
(A Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
(1) ORGANIZATION AND PARTNERS' INTERESTS
Formation and Business
Cable TV Fund 14-A, Ltd. (the "Partnership"), a Colorado
limited partnership, was formed on February 6, l987, under a public program
sponsored by Jones Intercable, Inc. ("Intercable"), a publicly held Colorado
corporation. The Partnership was formed to acquire, construct, develop and
operate cable television systems. Intercable is the "General Partner" and
manager of the Partnership. Intercable and its subsidiaries also own and
operate cable television systems. In addition, Intercable manages cable
television systems for other limited partnerships for which it is general
partner and, also, for other affiliated entities.
On January 8, 1988, the Partnership and Cable TV Fund 14-B
formed Cable TV Fund 14-A/B Venture (the "Venture"), to acquire the cable
television system serving areas in and around Broward County, Florida. The
Partnership contributed $18,975,000 to the capital of the Venture for an
approximate 27 percent ownership interest and Cable TV Fund 14-B contributed
$51,025,000 to the capital of the Venture for an approximate 73 percent
ownership interest.
Contributed Capital, Commissions and Syndication Costs
The capitalization of the Partnership is set forth in the
accompanying statements of partners' capital (deficit). No limited partner is
obligated to make any additional contribution to partnership capital.
Intercable purchased its interest in the Partnership by
contributing $1,000 to partnership capital.
All profits and losses of the Partnership are allocated 99
percent to the limited partners and 1 percent to Intercable, except for income
or gain from the sale or disposition of cable television properties, which will
be allocated to the partners based upon the formula set forth in the
Partnership Agreement and interest income earned prior to the first acquisition
by the Partnership of a cable television system, which was allocated 100
percent to the limited partners.
Cable Television System Acquisitions and Formation of the Venture
The Partnership acquired the cable television systems serving
certain areas in and around the communities of Turnersville, New Jersey;
Buffalo, Minnesota; Naperville, Illinois; and Calvert County, Maryland in 1987.
In 1991, the Partnership purchased additional cable television systems serving
certain communities in central Illinois (the "Central Illinois System").
The Partnership allocated the total contract purchase price of
cable television systems acquired as follows: first, to the fair value of net
tangible assets acquired; second, to the value of subscriber lists and a
noncompete agreement with previous owners; third, to franchise costs; and
fourth, to costs in excess of interests in net assets purchased. Other system
acquisition costs were capitalized and charged to distribution systems, except
for the Central Illinois System which were charged to intangible assets.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Accounting Records
The accompanying financial statements have been prepared on
the accrual basis of accounting in accordance with generally accepted
accounting principles. The Partnership's tax returns are also prepared on the
accrual basis.
Investment in Cable Television Joint Venture
In addition to its wholly owned systems, the Partnership owns
an approximate 27 percent interest in the Venture through a capital
contribution made in March 1988 of $18,975,000. The Venture acquired the
Broward County System in March 1988. The Venture incurred losses of
$5,417,779, $4,713,500 and $6,186,107 in 1994, 1993 and 1992, respectively, of
which $1,468,218, $1,277,358 and $1,676,435, respectively, was allocated to the
Partnership. The investment is accounted for on the
26
<PAGE> 27
equity method. The operations of the Venture are significant to the
Partnership and should be reviewed in conjunction with these financial
statements. Reference is made to the accompanying financial statements of the
Venture on pages 31 to 40.
Property, Plant and Equipment
Depreciation of property, plant and equipment is provided
primarily using the straight-line method over the following estimated service
lives:
<TABLE>
<S> <C>
Cable distribution systems 5 - 15 years
Equipment and tools 3 - 5 years
Office furniture and equipment 5 years
Buildings 10 - 20 years
Vehicles 3 years
</TABLE>
Replacements, renewals and improvements are capitalized and
maintenance and repairs are charged to expense as incurred.
Intangible Assets
Costs assigned to intangible assets are being amortized using
the straight-line method over the following remaining estimated useful lives:
<TABLE>
<S> <C>
Franchise costs 1 - 5 years
Subscriber lists 5 years
Costs in excess of interests in net assets purchased 32 - 37 years
</TABLE>
Revenue Recognition
Subscriber prepayments are initially deferred and recognized
as revenue when earned.
(3) TRANSACTIONS WITH THE GENERAL PARTNER AND AFFILIATES
Management Fees, Distribution Ratios and Reimbursements
Intercable manages the Partnership and receives a fee for its
services equal to 5 percent of the gross revenues of the Partnership, excluding
revenues from the sale of cable television systems or franchises. Management
fees paid to Intercable by the Partnership for the years ended December 31,
1994, 1993, and 1992 were $2,022,113, $1,945,823 and $1,815,788, respectively.
Any distributions made from cash flow (defined as cash
receipts derived from routine operations, less debt principal and interest
payments and cash expenses) are allocated 99 percent to the limited partners
and 1 percent to Intercable. Any distributions other than interest income on
limited partner subscriptions earned prior to the acquisition of the
Partnership's first cable television system or from cash flow, such as from the
sale or refinancing of a system or upon dissolution of the Partnership, will be
made as follows: first, to the limited partners in an amount which, together
with all prior distributions, will equal 125 percent of the amount initially
contributed to the Partnership capital by the limited partners; the balance, 75
percent to the limited partners and 25 percent to Intercable.
The Partnership reimburses Intercable for certain allocated
overhead and administrative expenses. These expenses represent the salaries
and benefits paid to corporate personnel, rent, data processing and other
corporate facilities costs. Such personnel provide engineering, marketing,
administrative, accounting, legal and investor relations services to the
Partnership. Allocations of personnel costs are based primarily on actual time
spent by employees of Intercable with respect to each partnership managed.
Remaining overhead costs are allocated based on total revenues and/or the cost
of partnership assets managed. Effective December 1, 1993, the allocation
method was changed to be based only on revenues, which Intercable believes
provides a more accurate method of allocation. Systems owned by Intercable and
all other systems owned by partnerships for which Jones Intercable, Inc. is the
general partner are also allocated a proportionate share of these expenses.
Intercable believes that the methodology used in allocating overhead and
administrative expenses is reasonable. Reimbursements made to Intercable by
the Partnership for allocated overhead and administrative expenses were
$3,105,440, $2,737,532 and $2,503,024 in 1994, 1993 and 1992, respectively.
27
<PAGE> 28
The Partnership was charged interest during 1994 at an average
interest rate of 10 percent on the amounts due Intercable, which approximated
Intercable's weighted average cost of borrowing. Total interest charged by
Intercable was $43,708, $1,029 and $10,063 for the years ended December 31,
1994, 1993 and 1992, respectively.
Payments to/from Affiliates for Programming Services
The Partnership receives programming from Product Information
Network, Superaudio, The Mind Extension University and Jones Computer Network,
affiliates of Intercable. Payments to Superaudio totalled $51,858, $50,655 and
$48,754 in 1994, 1993 and 1992, respectively. Payments to The Mind Extension
University totalled $51,389, $32,659 and $31,361 in 1994, 1993 and 1992,
respectively. Payments to Jones Computer Network, which initiated service in
1994, totalled $21,344 in 1994. The Partnership receives a commission from
Product Information Network based on a percentage of advertising revenue and
number of subscribers. Product Information Network, which initiated service in
1994, paid commissions to the Partnership totalling $42,223 in 1994.
(4) PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment as of December 31, 1994 and
1993, consisted of the following:
<TABLE>
<CAPTION>
December 31,
------------------------------
1994 1993
------------ ------------
<S> <C> <C>
Cable distribution systems $107,439,862 $ 99,555,761
Equipment and tools 3,601,207 3,161,178
Office furniture and equipment 1,471,959 1,275,684
Buildings 2,339,942 2,304,928
Vehicles 2,193,470 1,770,300
Land 387,781 387,781
------------ ------------
117,434,221 108,455,632
Less - accumulated depreciation (57,090,363) (47,132,923)
------------ ------------
$ 60,343,858 $ 61,322,709
============ ============
</TABLE>
(5) DEBT
<TABLE>
<CAPTION>
December 31,
------------------------------
Debt consists of the following: 1994 1993
------------ ------------
<S> <C> <C>
Lending institutions-
Revolving credit and term loan $ 76,900,000 $ 75,334,400
Capital lease obligations 525,047 267,429
------------ ------------
$ 77,425,047 $ 75,601,829
============ ============
</TABLE>
At December 31, 1992, the Partnership's former revolving credit
facility converted to a term loan. The then-outstanding balance of $74,023,000
was repaid in July 1994 with borrowings under a new $80,000,000 revolving
credit facility. The new revolving credit facility converts to a term loan on
September 30, 1996, at which time the then-outstanding balance is payable in
quarterly installments through March 31, 2002. At December 31, 1994,
$76,900,000 was outstanding under this agreement, leaving $3,100,000 available
for future needs of the Partnership. Interest on the outstanding principal
balance is at the Partnership's option of Prime plus 1/4 percent or a fixed
rate defined as the CD rate plus 1-3/8 percent or the London Interbank Offered
Rate plus 1-1/4 percent. A fee of 3/8 of one percent per annum on the unused
portion of the new commitment is also paid. The effective interest rates on
outstanding obligations as of December 31, 1994 and 1993 were 7.49 percent and
4.64 percent, respectively.
28
<PAGE> 29
On January 12, 1993, the Partnership entered into an interest
rate cap agreement covering outstanding debt obligations of $5,000,000. The
Partnership paid a fee of $50,000. The agreement protects the Partnership from
LIBOR interest rates that exceed 7 percent for three years from the date of the
agreement. The fee is being charged to interest expense over the life of this
agreement using the straight-line method.
Installments due on debt principal for each of the five years
in the period ending December 31, 1999, and thereafter, respectively, are:
$157,514, $2,080,014, $4,002,514, $9,665,005, $13,457,500 and $48,062,500. At
December 31, 1994, substantially all of the Partnership's property, plant and
equipment secured the above indebtedness.
(6) INCOME TAXES
Income taxes have not been recorded in the accompanying
financial statements because they accrue directly to the partners. The Federal
and state income tax returns of the Partnership are prepared and filed by the
General Partner.
The Partnership's tax returns, the qualification of the
Partnership as such for tax purposes, and the amount of distributable
partnership income or loss are subject to examination by Federal and state
taxing authorities. If such examinations result in changes with respect to the
Partnership's qualification as such, or in changes with respect to the
Partnership's recorded income or loss, the tax liability of the general and
limited partners would likely be changed accordingly.
Taxable loss reported to the partners is different from that
reported in the statements of operations due to the difference in depreciation
recognized under generally accepted accounting principles and the expense
allowed for tax purposes under the Modified Accelerated Cost Recovery System
(MACRS). There are no other significant differences between taxable loss and
the net loss reported in the statements of operations.
(7) COMMITMENTS AND CONTINGENCIES
On October 5, 1992, Congress enacted the Cable Television
Consumer Protection and Competition Act of 1992 (the "1992 Cable Act"), which
became effective on December 4, 1992. The 1992 Cable Act generally allows for
a greater degree of regulation of the cable television industry. In April
1993, the FCC adopted regulations governing rates for basic and non-basic
services. These regulations became effective on September 1, 1993. Such
regulations caused reductions in rates for certain regulated services. On
February 22, 1994, the FCC adopted several additional rate orders including an
order which revised its earlier-announced regulatory scheme with respect to
rates. The Partnership has filed cost-of-service showings for the Buffalo,
Minnesota; Naperville, Illinois; and Calvert County, Maryland systems and thus
anticipates no further reductions in rates in these systems. The
cost-of-service showings for these systems have not yet received final
approvals from franchising authorities, however, and there can be no assurance
that the Partnership's cost-of-service showings will prevent further rate
reductions until such final approvals are received. The Partnership complied
with the February 1994 benchmark regulations and further reduced rates in the
Turnersville, New Jersey and Central Illinois systems effective July 1994.
The Partnership rents office and other facilities under
various long-term lease arrangements. Rent paid under such lease arrangements
totalled $233,251, $250,526 and $226,896, respectively, for the years ended
December 31, 1994, 1993 and 1992. Minimum commitments under operating leases
for the five years in the period ending December 31, 1999, and thereafter are
as follows:
<TABLE>
<S> <C>
1995 $220,771
1996 165,957
1997 155,489
1998 154,339
1999 145,756
Thereafter 8,250
--------
$850,562
========
</TABLE>
29
<PAGE> 30
(8) SUPPLEMENTARY PROFIT AND LOSS INFORMATION
Supplementary profit and loss information is presented below:
<TABLE>
<CAPTION>
Year Ended December 31,
-------------------------------------------
1994 1993 1992
---------- ----------- -----------
<S> <C> <C> <C>
Maintenance and repairs $ 754,314 $ 840,307 $ 764,411
========== =========== ===========
Taxes, other than income and payroll taxes $ 162,029 $ 155,727 $ 179,572
========== =========== ===========
Advertising $ 688,611 $ 621,377 $ 841,721
========== =========== ===========
Depreciation of property, plant and equipment $9,957,440 $10,131,923 $10,068,794
========== =========== ===========
Amortization of intangible assets $4,805,483 $ 5,065,754 $ 5,396,190
========== =========== ===========
</TABLE>
30
<PAGE> 31
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Partners of Cable TV Fund 14-A/B Venture:
We have audited the accompanying balance sheets of CABLE TV FUND
14-A/B VENTURE (a Colorado general partnership) as of December 31, 1994 and
1993, and the related statements of operations, partners' capital and cash
flows for each of the three years in the period ended December 31, 1994. These
financial statements are the responsibility of the General Partner'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, the financial statements referred to above present
fairly, in all material respects, the financial position of Cable TV Fund
14-A/B Venture as of December 31, 1994 and 1993, and the results of its
operations and its cash flows for each of the three years in the period ended
December 31, 1994, in conformity with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Denver, Colorado,
March 8,1995.
31
<PAGE> 32
CABLE TV FUND 14-A/B VENTURE
(A General Partnership)
BALANCE SHEETS
<TABLE>
<CAPTION>
December 31,
-------------------------------
ASSETS 1994 1993
------ ------------ ------------
<S> <C> <C>
CASH $ 254,974 $ 313,701
TRADE RECEIVABLES, less allowance for doubtful receivables of
$95,444 and $60,902 at December 31, 1994 and 1993, respectively 601,185 826,776
INVESTMENT IN CABLE TELEVISION PROPERTIES:
Property, plant and equipment, at cost 48,109,168 44,478,623
Less- accumulated depreciation (20,972,255) (17,707,316)
------------ ------------
27,136,913 26,771,307
Franchise costs, net of accumulated amortization of $30,414,475 and
$25,903,735 at December 31, 1994 and 1993, respectively 17,228,025 21,738,765
Subscriber lists, net of accumulated amortization of $8,745,434 and
$7,923,218 at December 31, 1994 and 1993, respectively 2,974,966 3,797,182
Costs in excess of interests in net assets purchased, net of accumulated
amortization of $3,649,056 and $3,108,456 at December 31, 1994
and 1993, respectively 17,975,010 18,515,610
------------ ------------
Total investment in cable television properties 65,314,914 70,822,864
DEPOSITS, PREPAID EXPENSES AND DEFERRED CHARGES 426,387 352,475
------------ ------------
Total assets $ 66,597,460 $ 72,315,816
============ ============
</TABLE>
The accompanying notes to financial statements
are an integral part of these balance sheets.
32
<PAGE> 33
CABLE TV FUND 14-A/B VENTURE
(A General Partnership)
BALANCE SHEETS
<TABLE>
<CAPTION>
December 31,
------------------------------
LIABILITIES AND PARTNERS' CAPITAL 1994 1993
--------------------------------- ------------ -----------
<S> <C> <C>
LIABILITIES:
Debt $ 42,271,921 $ 43,461,730
Accounts payable-
Trade 60,525 14,063
Jones Intercable, Inc. 354,179 57,920
Accrued liabilities 1,350,465 832,382
Subscriber prepayments 496,407 467,979
------------ -----------
Total liabilities 44,533,497 44,834,074
------------ -----------
COMMITMENTS AND CONTINGENCIES (Note 7)
PARTNERS' CAPITAL:
Contributed capital 70,000,000 70,000,000
Accumulated deficit (47,936,037) (42,518,258)
------------ -----------
22,063,963 27,481,742
------------ -----------
Total liabilities and partners' capital $ 66,597,460 $72,315,816
============ ===========
</TABLE>
The accompanying notes to financial statements
are an integral part of these balance sheets.
33
<PAGE> 34
CABLE TV FUND 14-A/B VENTURE
(A General Partnership)
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Year Ended December 31,
-------------------------------------------------------
1994 1993 1992
----------- ----------- -----------
<S> <C> <C> <C>
REVENUES $22,183,524 $22,068,952 $20,212,867
COSTS AND EXPENSES:
Operating, general and administrative 12,878,438 12,339,515 11,052,427
Management fees and allocated overhead from
Jones Intercable, Inc. 2,777,290 2,701,568 2,481,658
Depreciation and amortization 9,188,994 9,352,808 9,971,915
----------- ----------- -----------
OPERATING LOSS (2,661,198) (2,324,939) (3,293,133)
----------- ----------- -----------
OTHER INCOME (EXPENSE):
Interest expense (2,728,034) (2,450,672) (2,564,990)
Other, net (28,547) 62,111 (327,984)
----------- ----------- -----------
Total other income (expense) (2,756,581) (2,388,561) (2,892,974)
----------- ----------- -----------
NET LOSS $(5,417,779) $(4,713,500) $(6,186,107)
=========== =========== ===========
</TABLE>
The accompanying notes to financial statements
are an integral part of these statements.
34
<PAGE> 35
CABLE TV FUND 14-A/B VENTURE
(A General Partnership)
STATEMENTS OF PARTNERS' CAPITAL
<TABLE>
<CAPTION>
Year Ended December 31,
-------------------------------------------------------
1994 1993 1992
----------- ----------- -----------
<S> <C> <C> <C>
CABLE TV FUND 14-A (27%):
Balance, beginning of year $ 7,351,293 $ 8,628,651 $10,305,086
Net loss for year (1,468,218) (1,277,358) (1,676,435)
----------- ----------- -----------
Balance, end of year $ 5,883,075 $ 7,351,293 $ 8,628,651
=========== =========== ===========
CABLE TV FUND 14-B (73%):
Balance, beginning of year $20,130,449 $23,566,591 $28,076,263
Net loss for year (3,949,561) (3,436,142) (4,509,672)
----------- ----------- -----------
Balance, end of year $16,180,888 $20,130,449 $23,566,591
=========== =========== ===========
TOTAL:
Balance, beginning of year $27,481,742 $32,195,242 $38,381,349
Net loss for year (5,417,779) (4,713,500) (6,186,107)
----------- ----------- -----------
Balance, end of year $22,063,963 $27,481,742 $32,195,242
=========== =========== ===========
</TABLE>
The accompanying notes to financial statements
are an integral part of these statements.
35
<PAGE> 36
CABLE TV FUND 14-A/B VENTURE
(A General Partnership)
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Year Ended December 31,
---------------------------------------------------------
1994 1993 1992
------------ ----------- -----------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(5,417,779) $(4,713,500) $(6,186,107)
Adjustments to reconcile net loss to net cash provided by
operating activities:
Depreciation and amortization 9,188,994 9,352,808 9,971,915
Amortization of interest rate protection agreement 82,080 82,080 -
Decrease (increase) in trade receivables 225,591 (253,001) (332,245)
Decrease (increase) in deposits, prepaid expenses
and deferred charges (206,491) 13,218 (215,681)
Increase in accounts payable, accrued
liabilities and subscriber prepayments 592,973 139,815 77,110
Increase (decrease) in advances from Jones Intercable, Inc. 296,259 (67,953) 109,168
------------ ----------- -----------
Net cash provided by operating activities 4,761,627 4,553,467 3,424,160
------------ ----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (3,630,545) (3,040,155) (2,094,077)
------------ ----------- -----------
Net cash used in investing activities (3,630,545) (3,040,155) (2,094,077)
------------ ----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings 71,380 159,493 2,286,081
Repayment of debt (1,261,189) (3,606,172) (1,415,363)
Purchase of interest rate protection contract - (246,250) -
------------ ----------- -----------
Net cash provided by (used in)
financing activities (1,189,809) (3,692,929) 870,718
------------ ----------- -----------
Increase (decrease) in cash (58,727) (2,179,617) 2,200,801
Cash, beginning of year 313,701 2,493,318 292,517
------------ ----------- -----------
Cash, end of year $ 254,974 $ 313,701 $ 2,493,318
============ =========== ===========
SUPPLEMENTAL CASH FLOW DISCLOSURE:
Interest paid $ 2,454,391 $ 2,333,869 $ 2,502,294
============ =========== ===========
</TABLE>
The accompanying notes to financial statements
are an integral part of these statements.
36
<PAGE> 37
CABLE TV FUND 14-A/B VENTURE
(A General Partnership)
NOTES TO FINANCIAL STATEMENTS
(1) ORGANIZATION AND PARTNERS' INTERESTS
Formation and Business
On January 8, 1988, Cable TV Fund 14-A, Ltd. and Cable TV Fund
14-B, Ltd. (the "Venture Partners") formed a Colorado general partnership known
as Cable TV Fund 14-A/B Venture (the "Venture") by contributing $18,975,000 and
$51,025,000, respectively, for approximate 27 percent and 73 percent ownership
interests, respectively. The Venture was formed for the purpose of acquiring
the cable television system serving areas in and around Broward County, Florida
(the "Broward County System").
Jones Intercable, Inc. ("Intercable"), general partner of each
of the Venture Partners, manages the Venture. Intercable and its subsidiaries
also own and operate cable television systems. In addition, Intercable manages
cable television systems for other limited partnerships for which it is general
partner and for other affiliated entities.
Contributed Capital
The capitalization of the Venture is set forth in the
accompanying statements of partners' capital.
All Venture distributions, including those made from cash
flow, from the sale or refinancing of Venture property and on dissolution of
the Venture, shall be made to the Venture Partners in proportion to their
approximate 27 and 73 percent interests in the Venture.
Cable Television System Acquisition
The Broward County System acquisition was accounted for as a
purchase with the purchase price allocated to tangible and intangible assets
based upon an independent appraisal. The method of allocation of purchase
price was as follows: first, to the fair value of net tangible assets
acquired; second, to the value of subscriber lists and noncompete agreements
with previous owners; third, to franchise costs; and fourth, to costs in excess
of interests in net assets purchased. Brokerage fees paid to an affiliate of
the General Partner and other system acquisition costs were capitalized and
included in the cost of intangible assets.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Accounting Records
The accompanying financial statements have been prepared on
the accrual basis of accounting in accordance with generally accepted
accounting principles. The Venture's tax returns are also prepared on the
accrual basis.
Property, Plant and Equipment
Depreciation is provided using the straight-line method over
the following estimated service lives:
<TABLE>
<S> <C>
Cable distribution systems 5 - 15 years
Equipment and tools 5 years
Office furniture and equipment 5 years
Buildings 10 - 20 years
Vehicles 3 years
</TABLE>
Replacements, renewals and improvements are capitalized and
maintenance and repairs are charged to expense as incurred.
37
<PAGE> 38
Intangible Assets
Costs assigned to franchises, subscriber lists and costs in
excess of interests in net assets purchased are amortized using the
straight-line method over the following remaining estimated useful lives:
<TABLE>
<S> <C>
Franchise costs 1 - 8 years
Subscriber lists 4 years
Costs in excess of interests in net assets purchased 34 years
</TABLE>
Revenue Recognition
Subscriber prepayments are initially deferred and recognized
as revenue when earned.
(3) TRANSACTIONS WITH AFFILIATES
Brokerage Fees
The Jones Group, Ltd., a subsidiary of Intercable, performs
brokerage services in connection with the acquisition of systems for the
Venture. For brokering the acquisition of a SMATV system in the Broward County
System for the Venture, The Jones Group, Ltd. was paid a fee of $2,456, or 4
percent of the purchase price, during 1992. There were no brokerage fees paid
in 1994 or 1993.
Management Fees and Reimbursements
Intercable manages the Venture and receives a fee for its
services equal to five percent of the gross revenues of the Venture, excluding
revenues from the sale of cable television systems or franchises. Management
fees paid to Intercable by the Venture for the years ended December 31, 1994,
1993 and 1992 were $1,109,176, $1,103,448 and $1,010,643, respectively.
The Venture reimburses Intercable for allocated overhead and
administrative expenses. These expenses include salaries and related benefits
paid for corporate personnel, rent, data processing services and other
corporate facilities costs. Such personnel provide engineering, marketing,
accounting, administrative, legal, and investor relations services to the
Venture. Allocations of personnel costs are based primarily on actual time
spent by employees of Intercable with respect to each entity managed.
Remaining overhead costs are allocated based on revenues and/or the cost of
assets managed for the entity. Effective December 1, 1993, the allocation
method was changed to be based only on revenue, which Intercable believes
provides a more accurate method of allocation. Systems owned by Intercable and
all other systems owned by partnerships for which Intercable is the general
partner are also allocated a proportionate share of these expenses. Intercable
believes that the methodology used in allocating overhead and administrative
expenses is reasonable. Reimbursements made to Intercable by the Venture for
allocated overhead and administrative expenses during the years ended December
31, 1994, 1993 and 1992 were $1,668,114, $1,598,120 and $1,471,015,
respectively.
The Venture was charged interest during 1994 at an average
interest rate of 10 percent on the amounts due Intercable, such rate
approximated Intercable's weighted average cost of borrowing. Total interest
charged the Venture by Intercable was $960, $2,361 and $10,475 for the years
ended December 31, 1994, 1993 and 1992, respectively.
Payments to/from Affiliates for Programming Services
The Venture receives programming from Product Information
Network, Superaudio, The Mind Extension University and Jones Computer Network,
affiliates of Intercable. Payments to Superaudio totalled $30,631, $30,018 and
$28,679 in 1994, 1993 and 1992, respectively. Payments to The Mind Extension
University totalled $27,751, $17,451 and $16,434 in 1994, 1993 and 1992,
respectively. Payments to Jones Computer Network, which initiated service in
1994, totalled $5,694 in 1994. The Venture receives a commission from Product
Information Network based on a percentage of advertising revenue and number of
subscribers. Product Information Network, which initiated service in 1994, paid
commissions to the Venture totalling $23,856 in 1994.
38
<PAGE> 39
(4) PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment as of December 31, 1994 and
1993, consisted of the following:
<TABLE>
<CAPTION>
December 31,
---------------------------------
1994 1993
------------ ------------
<S> <C> <C>
Cable distribution systems $ 41,905,039 $ 38,564,773
Equipment and tools 1,676,058 1,667,051
Office furniture and equipment 1,117,198 977,462
Buildings 1,865,476 1,820,966
Vehicles 814,530 717,504
Land 730,867 730,867
------------ ------------
48,109,168 44,478,623
Less - accumulated depreciation (20,972,255) (17,707,316)
------------ ------------
$ 27,136,913 $ 26,771,307
============ ============
</TABLE>
(5) DEBT
<TABLE>
<CAPTION>
Debt consists of the following: December 31,
---------------------------------
1994 1993
------------ ------------
<S> <C> <C>
Lending institutions-
Revolving credit and term loan $ 42,120,468 $ 43,290,000
Capital lease obligations 151,453 171,730
------------ ------------
$ 42,271,921 $ 43,461,730
============ ============
</TABLE>
On December 31, 1992, the then-outstanding balance of
$46,800,000 on the Venture's revolving credit facility converted to a term
loan. The balance outstanding on the term loan at December 31, 1994 was
$42,120,468. The term loan is payable in quarterly installments which began
March 31, 1993 and is payable in full by December 31, 1999. In June 1994,
Intercable completed negotiations to lower the level of principal payments in
order to provide liquidity for capital expenditures. Installments paid during
1994 totalled $1,169,532. Installments due during 1995 total $2,340,000.
Funding for these installments is expected to come from cash on hand and cash
generated from operations. Interest is at the Venture's option of Prime plus
1/2 percent, LIBOR plus 1-1/2 percent or the CD rate plus 1-5/8 percent. The
effective interest rates on amounts outstanding as of December 31, 1994 and
1993 were 7.17 percent and 5.0 percent, respectively.
In January 1993, the Venture entered into an interest rate cap
agreement covering outstanding debt obligations of $25,000,000. The Venture
paid a fee of $246,250. The agreement protects the Venture from LIBOR interest
rates that exceed 7 percent for three years from the date of the agreement.
The fee is being charged to interest expense over the life of the agreement
using the straight-line method.
Installments due on debt principal for each of the five years
in the period ending December 31, 1999 and thereafter, respectively, are:
$2,385,436, $3,555,436, $4,725,436, $4,695,145, $26,910,468 and $-0-. At
December 31, 1994, substantially all of the Venture's property, plant and
equipment secured the above indebtedness.
(6) INCOME TAXES
Income taxes have not been recorded in the accompanying
financial statements because they accrue directly to the partners of Cable TV
Fund 14-A, Ltd. and Cable TV Fund 14-B, Ltd.
The Venture's tax returns, the qualification of the Venture as
such for tax purposes, and the amount of distributable Venture income or loss
are subject to examination by Federal and state taxing authorities. If such
examinations result
39
<PAGE> 40
in changes with respect to the Venture's qualification as such, or in changes
with respect to the Venture's recorded income or loss, the tax liability of the
Venture's general partners would likely be changed accordingly.
Taxable loss reported to the partners is different from that
reported in the statements of operations due to the difference in depreciation
recognized under generally accepted accounting principles and the expense
allowed for tax purposes under the Modified Accelerated Cost Recovery System
(MACRS). There are no other significant differences between taxable loss and
the net loss reported in the statements of operations.
(7) COMMITMENTS AND CONTINGENCIES
On October 5, 1992, Congress enacted the Cable Television
Consumer Protection and Competition Act of 1992 (the "1992 Cable Act"), which
became effective on December 4, 1992. The 1992 Cable Act generally allows for
a greater degree of regulation in the cable television industry. In April
1993, the FCC adopted regulations governing rates for basic and non-basic
services. These regulations became effective on September 1, 1993. Such
regulations caused reductions in rates for certain regulated services. On
February 22, 1994, the FCC adopted several additional rate orders including an
order which revised its earlier-announced regulatory scheme with respect to
rates. The Venture complied with the February 1994 benchmark regulations and
further reduced rates in the Broward County System effective July 1994.
Office and other facilities are rented under various long-term
lease arrangements. Rent paid under such lease arrangements totalled $49,856,
$46,521 and $45,406, respectively for the years ended December 31, 1994, 1993
and 1992. Minimum commitments under operating leases for each of the five
years in the period ending December 31, 1999 and thereafter are as follows:
<TABLE>
<S> <C>
1995 $50,997
1996 31,381
1997 6,996
1998 1,166
1999 -
Thereafter -
-------
$90,540
=======
</TABLE>
(8) SUPPLEMENTARY PROFIT AND LOSS INFORMATION
Supplementary profit and loss information is presented below:
<TABLE>
<CAPTION>
Year Ended December 31,
-----------------------------------------------------
1994 1993 1992
---------- ---------- ----------
<S> <C> <C> <C>
Maintenance and repairs $ 238,893 $ 238,163 $ 222,104
========== ========== ==========
Taxes, other than income and payroll taxes $ 258,369 $ 265,331 $ 259,575
========== ========== ==========
Advertising $ 157,998 $ 95,211 $ 155,137
========== ========== ==========
Depreciation of property, plant and equipment $3,315,438 $3,468,602 $4,055,759
========== ========== ==========
Amortization of intangible assets $5,873,556 $5,884,206 $5,916,156
========== ========== ==========
</TABLE>
40
<PAGE> 41
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
In April 1989, a few months after it had acquired the Surfside System, Fund
14-B acquired a small cable television system in the Surfside Beach area from
Tritek/Southern Communications, Ltd. At the time of the acquisition, this
system served approximately 1,450 subscribers in the same area as the Surfside
System. In May 1990, the Federal Trade Commission ("FTC") commenced an
investigation into the effect of this acquisition on competition in the
Surfside Beach area. Fund 14-B submitted its response to the FTC's request for
information concerning the acquisition in July 1990. The FTC conducted
recorded interviews with certain employees of the General Partner in September
1991. No further action has been taken by the FTC, although to the best of the
General Partner's knowledge the investigation is still pending.
PART II.
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK
AND RELATED SECURITY HOLDER MATTERS
While the Partnership is publicly held, there is no public market for the
limited partnership interests, and it is not expected that a market will
develop in the future. As of February 15, 1995, the approximate number of
equity security holders in the Partnership was 12,358.
41
<PAGE> 42
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
None.
PART III.
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The Partnership itself has no officers or directors. Certain information
concerning the directors and executive officers of the General Partner is set
forth below.
<TABLE>
<CAPTION>
Name Age Positions with the General Partner
- ---- --- ----------------------------------
<S> <C> <C>
Glenn R. Jones 65 Chairman of the Board and Chief Executive Officer
Derek H. Burney 55 Vice Chairman of the Board
James B. O'Brien 45 President, Chief Operating Officer and Director
Ruth E. Warren 45 Group Vice President/Operations
Kevin P. Coyle 43 Group Vice President/Finance
Christopher J. Bowick 40 Group Vice President/Technology
Timothy J. Burke 44 Group Vice President/Taxation/Administration
Raymond L. Vigil 48 Group Vice President/Human Resources and Director
Cynthia A. Winning 43 Group Vice President/Marketing
Elizabeth M. Steele 43 Vice President/General Counsel/Secretary
Larry W. Kaschinske 35 Controller
James J. Krejci 53 Director
Christine Jones Marocco 39 Director
Daniel E. Somers 47 Director
Robert S. Zinn 58 Director
David K. Zonker 41 Director
</TABLE>
Mr. Glenn R. Jones has served as Chairman of the Board of Directors and
Chief Executive Officer of the General Partner since its formation in 1970, and
he was President from June 1984 until April 1988. Mr. Jones was elected a
member of the Executive Committee of the Board of Directors in April 1985. Mr.
Jones is the sole shareholder, President and Chairman of the Board of Directors
of Jones International, Ltd. He is also Chairman of the Board of Directors of
the subsidiaries of the General Partner and of certain other affiliates of the
General Partner. Mr. Jones has been involved in the cable television business
in various capacities since 1961, is a past and present member of the Board of
Directors of the National Cable Television Association, and is a former member
of its Executive Committee. Mr. Jones is a past director and member of the
Executive Committee of C-Span. Mr. Jones has been the recipient of several
awards including the Grand Tam Award in 1989, the highest award from the Cable
Television Administration and Marketing Society; the Chairman's Award from the
Investment Partnership Association, which is an association of sponsors of
public syndications; the cable television industry's Public Affairs Association
President's Award in 1990, the Donald G. McGannon award for the advancement of
minorities and women in cable; the STAR Award from American Women in Radio and
Television, Inc. for exhibition of a commitment to the issues and concerns of
women in television and radio; and the Women in Cable Accolade in 1990 in
recognition of support of this organization. Mr. Jones is also a founding
member of the James Madison Council of the Library of Congress and is on the
Board of Governors of the American Society of Training and Development.
Mr. Derek H. Burney was appointed a Director of the General Partner in
December 1994 and Vice Chairman of the Board of Directors in January 1995. He
is also a member of the Executive Committee of the Board of Directors. Mr.
Burney joined BCE Inc., Canada's largest telecommunications company, in January
1993 as Executive Vice President, International. He has been the Chairman of
Bell Canada International Inc., a
42
<PAGE> 43
subsidiary of BCE, since January 1993 and, in addition, has been Chief
Executive Officer of BCI since July 1993. Prior to joining BCE, Mr. Burney
served as Canada's ambassador to the United States from 1989 to 1992. Mr.
Burney also served as chief of staff to the Prime Minister of Canada from March
1987 to January 1989 where he was directly involved with the negotiation of the
U.S. - Canada Free Trade Agreement. In July 1993, he was named an Officer of
the Order of Canada. Mr. Burney is chairman of Bell Cablemedia plc. He is a
director of Mercury Communications Limited, Videotron Holdings plc, Tele-Direct
(Publications) Inc., Teleglobe Inc., Bimcor Inc., Maritime Telegraph and
Telephone Company, Limited, Moore Corporation Limited and Northbridge
Programming Inc.
Mr. James B. O'Brien, the General Partner's President, joined the
General Partner in January 1982. Prior to being elected President and a
Director of the General Partner in December 1989, Mr. O'Brien served as a
Division Manager, Director of Operations Planning/Assistant to the CEO, Fund
Vice President and Group Vice President/Operations. Mr. O'Brien was appointed
to the General Partner's Executive Committee in August 1993. As President, he
is responsible for the day-to-day operations of the cable television systems
managed and owned by the General Partner. Mr. O'Brien is also President and a
Director of Jones Cable Group, Ltd., Jones Global Funds, Inc. and Jones Global
Management, Inc., all affiliates of the General Partner. Mr. O'Brien is a
board member of Cable Labs, Inc., the research arm of the U.S. cable television
industry. He also serves as a director of the Cable Television Administration
and Marketing Association and as a director of the Walter Kaitz Foundation, a
foundation that places people of any ethnic minority group in positions with
cable television systems, networks and vendor companies.
Ms. Ruth E. Warren joined the General Partner in August 1980 and has
served in various operational capacities, including system manager and Fund
Vice President, since then. Ms. Warren was elected Group Vice
President/Operations of the General Partner in September 1990.
Mr. Kevin P. Coyle joined The Jones Group, Ltd. in July 1981 as Vice
President/Financial Services. In September 1985, he was appointed Senior Vice
President/Financial Services. He was elected Treasurer of the General Partner
in August 1987, Vice President/Treasurer in April 1988 and Group Vice
President/Finance and Chief Financial Officer in October 1990.
Mr. Christopher J. Bowick joined the General Partner in September 1991
as Group Vice President/Technology and Chief Technical Officer. Previous to
joining the General Partner, Mr. Bowick worked for Scientific Atlanta's
Transmission Systems Business Division in various technical management
capacities since 1981, and as Vice President of Engineering since 1989.
Mr. Timothy J. Burke joined the General Partner in August 1982 as
corporate tax manager, was elected Vice President/Taxation in November 1986 and
Group Vice President/Taxation/Administration in October 1990.
Mr. Raymond L. Vigil joined the General Partner in June 1993 as Group
Vice President/Human Resources. Previous to joining the General Partner, Mr.
Vigil served as Executive Director of Learning with USWest. Prior to USWest,
Mr. Vigil worked in various human resources posts over a 14-year term with the
IBM Corporation.
Ms. Cynthia A. Winning joined the General Partner as Group Vice
President/Marketing in December 1994. Previous to joining the General Partner,
Ms. Winning served since 1994 as the President of PRS Inc., Denver, Colorado, a
sports and event marketing company. From 1979 to 1981 and from 1986 to 1994,
Ms. Winning served as the Vice President and Director of Marketing for Citicorp
Retail Services, Inc., a provider of private-label credit cards for ten
national retail department store chains. From 1981 to 1986, Ms. Winning was
the Director of Marketing Services for Daniels & Associates cable television
operations, as well as the Western Division Marketing Director for Capital
Cities Cable. Ms. Winning also serves as a board Member of Cities in Schools,
a dropout intervention/prevention program.
43
<PAGE> 44
Ms. Elizabeth M. Steele joined the General Partner in August 1987 as
Vice President/General Counsel and Secretary. From August 1980 until joining
the General Partner, Ms. Steele was an associate and then a partner at the
Denver law firm of Davis, Graham & Stubbs, which serves as counsel to the
General Partner.
Mr. Larry Kaschinske joined the General Partner in 1984 as a staff
accountant in the General Partner's former Wisconsin Division; was promoted to
Assistant Controller in 1990 and named Controller in August 1994.
Mr. James J. Krejci was President of the International Division of
International Gaming Technology International headquartered in Reno, Nevada,
until March 1995. Prior to joining IGT in May 1994, Mr. Krejci was Group Vice
President of Jones International, Ltd. and a Group Vice President of the
General Partner. Prior to May 1994, he also served as Group Vice President of
Jones Futurex, Inc., an affiliate of the General Partner engaged in
manufacturing and marketing data encryption devices, Jones Interactive, Inc., a
subsidiary of Jones International, Ltd. providing computer data and billing
processing facilities and Jones Lightwave, Ltd., a company owned by Jones
International, Ltd. and Mr. Jones, which is engaged in the provision of
telecommunications services. Mr. Krejci has been a Director of the General
Partner since August 1987.
Ms. Christine Jones Marocco was appointed a Director of the General
Partner in December 1994. She is the daughter of Glenn R. Jones. Ms. Marocco
is also a director of Jones International, Ltd.
Mr. Daniel E. Somers was appointed a Director of the General Partner in
December 1994 and also serves on the General Partner's Audit Committee. From
January 1992 to January 1995, Mr. Somers worked as Senior Vice President and
Chief Financial Officer of Bell Canada International Inc. and was appointed
Executive Vice President and Chief Financial Officer on February 1, 1995. He
is also a Director of certain of its affiliates. Prior to joining Bell Canada
International Inc. and since January 1989, Mr. Somers was the President and
Chief Executive Officer of Radio Atlantic Holdings Limited. Mr. Somers is a
member of the North American Society of Corporate Planning, the Financial
Executives Institution and the Financial Analysts Federation.
Mr. Robert S. Zinn was appointed a Director of the General Partner in
December 1994. Mr. Zinn joined the General Partner in January 1991 and is a
member of its Legal Department. He is also Vice President/Legal Affairs of
Jones International, Ltd. Prior to joining the General Partner, Mr. Zinn was
in private law practice in Denver, Colorado for over 25 years.
Mr. David K. Zonker was appointed a Director of the General Partner in
December 1994. Mr. Zonker has been the President of Jones International
Securities, Ltd., a subsidiary of Jones International, Ltd. since January 1984
and he has been its Chief Executive Officer since January 1988. From October
1980 until joining Jones International Securities, Ltd. in January 1984, Mr.
Zonker was employed by the General Partner. Mr. Zonker is a member of the
Board of Directors of various affiliates of the General Partner, including
Jones International Securities, Ltd. Mr. Zonker is licensed by the National
Association of Securities Dealers, Inc. and he is a past chairman of the
Investment Program Association, a trade organization based in Washington, D.C.
that promotes direct investments. He is a member of the Board of Trustees of
Graceland College, Lamoni, Iowa; the International Association of Financial
Planners and the American and Colorado Institutes of Certified Public
Accountants.
ITEM 11. EXECUTIVE COMPENSATION
The Partnership has no employees; however, various personnel are
required to operate the cable television systems owned by the Partnership.
Such personnel are employed by the General Partner and, pursuant to the terms
of the limited partnership agreement of the Partnership, the cost of such
employment is charged by the General Partner to the Partnership as a direct
reimbursement item. See Item 13.
44
<PAGE> 45
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGERS
No person or entity owns more than 5 percent of the limited partnership
interests of the Partnership.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The General Partner and its affiliates engage in certain transactions with
the Partnership as contemplated by the limited partnership agreement of the
Partnership. The General Partner believes that the terms of such transactions
are generally as favorable as could be obtained by the Partnership from
unaffiliated parties. This determination has been made by the General Partner
in good faith, but none of the terms were or will be negotiated at arm's-length
and there can be no assurance that the terms of such transactions have been or
will be as favorable as those that could have been obtained by the Partnership
from unaffiliated parties.
The General Partner charges the Partnership a management fee, and the
Partnership reimburses the General Partner for certain allocated overhead and
administrative expenses in accordance with the terms of the limited partnership
agreement of the Partnership. These expenses consist primarily of salaries and
benefits paid to corporate personnel, rent, data processing services and other
facilities costs. Such personnel provide engineering, marketing,
administrative, accounting, legal and investor relations services to the
Partnership. Allocations of personnel costs are based primarily on actual time
spent by employees of the General Partner with respect to the partnership
managed. Remaining overhead costs are allocated based on revenues and/or the
costs of assets managed for the Partnership. Systems owned by the General
Partner and all other systems owned by partnerships for which Jones Intercable,
Inc. is the general partner, are also allocated a proportionate share of these
expenses.
The General Partner also advances funds and charges interest on the balance
payable from the Partnership. The interest rate charged the Partnership
approximates the General Partner's weighted average cost of borrowing.
From time to time, The Jones Group, Ltd., an affiliate of the General
Partner, performs brokerage services for the Partnership and the Venture in
connection with Partnership and Venture acquisitions and sales from or to
unaffiliated entities.
The Systems receive stereo audit programming from Superaudio, a joint
venture owned 50% by an affiliate of the General Partner and 50% by an
unaffiliated party, educational video programming from Mind Extension
University, Inc., an affiliate of the General Partner, and computer video
programming from Jones Computer Network, Ltd., an affiliate of the General
Partner, for fees based upon the number of subscribers receiving the
programming.
Product Information Network ("PIN"), an affiliate of the General Partner,
provides advertising time for third parties on the Systems. In consideration,
the revenues generated from the third parties are shared two-thirds and
one-third between PIN and the Partnership. During the year ended December 31,
1994, the Partnership received revenues from PIN of $42,223, and the Venture
received revenues from PIN of $23,856.
The charges to the Partnership and the Venture for related party
transactions are as follows for the periods indicated:
45
<PAGE> 46
<TABLE>
<CAPTION>
At December 31,
-------------------------------------------------------------
Cable TV Fund 14-A 1994 1993 1992
- ------------------ ---- ---- ----
<S> <C> <C> <C>
Management fees $ 2,022,113 $ 1,945,823 $ 1,815,788
Allocation of expenses 3,105,440 2,737,532 2,503,024
Interest expense 43,708 1,069 10,063
Amount of notes and advances outstanding 706,579 58,974 457,354
Highest amount of notes and advances outstanding 1,004,121 457,354 730,268
Programming fees:
Superaudio 51,858 50,655 48,754
Mind Extension University 51,389 32,659 31,361
Jones Computer Network 21,344 -0- -0-
</TABLE>
<TABLE>
<CAPTION>
At December 31,
-------------------------------------------------------------
Cable TV Fund 14-A/B Venture 1994 1993 1992
- ---------------------------- ---- ---- ----
<S> <C> <C> <C>
Management fees $ 1,109,176 $ 1,103,448 $ 1,010,643
Brokerage fees -0- -0- 2,456
Allocation of expenses 1,668,114 1,598,120 1,471,015
Interest expense 960 2,361 10,475
Amount of notes and advances outstanding 354,179 57,920 125,873
Highest amount of notes and advances outstanding 354,179 125,873 580,654
Programming fees:
Superaudio 30,631 30,018 28,679
Mind Extension University 27,751 17,451 16,434
Jones Computer Network 5,694 -0- -0-
</TABLE>
46
<PAGE> 47
PART IV.
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
AND REPORTS ON FORM 8-K
(a)1. See index to financial statements for the list of financial
statements and exhibits thereto filed as part of this report.
3. The following exhibits are filed herewith.
4.1 Limited Partnership Agreements for Cable TV Fund 14-A. (1)
4.2 Joint Venture Agreement of Cable TV Fund 14-A/B Venture, dated as
of January 8, 1988, between Cable TV Fund 14-A, Ltd. and Cable TV
Fund 14-B, Ltd. (1)
10.1.1 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the Big Cypress
Seminole Indian Reservation, Florida (Fund 14-A/B). (2)
10.1.2 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the Brighton
Seminole Indian Reservation, Florida (Fund 14-A/B). (2)
10.1.3 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the
unincorporated portions of Broward County, Florida (Fund 14-A/B).
(3)
10.1.4 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for Cooper City,
Florida (Fund 14-A/B).
10.1.5 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for Dania, Florida
(Fund 14-A/B). (3)
10.1.6 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for Davie, Florida
(Fund 14-A/B). (3)
10.1.7 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the Hollywood
Seminole Indian Reservation, Florida (Fund 14-A/B). (2)
10.1.8 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the Immokalee
Seminole Indian Reservation, Florida (Fund 14-A/B). (2)
10.1.9 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for Lauderdale Lakes,
Florida (Fund 14-A/B). (3)
10.1.10 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the Village of
Bement, Illinois (Fund 14-A). (5)
10.1.11 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the Village of
Cerro Gordo, Illinois (Fund 14-A). (4)
10.1.12 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for Chanute Air Force
Base, Illinois (Fund 14-A). (4)
47
<PAGE> 48
10.1.13 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the Town of
Chatsworth, Illinois (Fund 14-A). (4)
10.1.14 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the City of
Chenoah, Illinois (Fund 14-A). (4)
10.1.15 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the City of
Clinton, Illinois (Fund 14-A). (4)
10.1.16 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the County of
Dupage, Illinois (Fund 14-A). (1)
10.1.17 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the City of
Fairbury, Illinois (Fund 14-A). (4)
10.1.18 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the City of
Farmer City, Illinois (Fund 14-A).
10.1.19 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the Village of
Forrest, Illinois (Fund 14-A). (4)
10.1.20 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the City of
Gibson City, Illinois (Fund 14-A). (4)
10.1.21 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the City of
Leroy, Illinois (Fund 14-A). (4)
10.1.22 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the City of
Monticello, Illinois (Fund 14-A). (4)
10.1.23 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the City of
Naperville, Illinois (Fund 14-A). (1)
10.1.24 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the Village of
Pesotum, Illinois (Fund 14-A). (4)
10.1.25 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the Village of
Rantoul, Illinois (Fund 14-A). (4)
10.1.26 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the Village
of Thomasborough, Illinois (Fund 14-A). (9)
10.1.27 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the Village of
Tolono, Illinois (Fund 14-A).
10.1.28 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the County of
Will, Illinois (Fund 14-A). (1)
10.1.29 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the County of
Calvert, Maryland (Fund 14-A). (1)
10.1.30 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for St. Mary's
County, Maryland (Fund 14-A). (5)
48
<PAGE> 49
10.1.31 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for Southern Anne
Arundel County, Maryland (Fund 14-A). (1)
10.1.32 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the City of
Albertville, Minnesota (Fund 14-A). (1)
10.1.33 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for City of Big Lake,
Minnesota (Fund 14-A). (1)
10.1.34 Copy of Ordinance No. 1200 dated 3/5/90 relating to the City of Big
Lake franchise (Fund 14-A). (5)
10.1.35 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the City of
Buffalo, Minnesota (Fund 14-A). (1)
10.1.36 Copy of Ordinance dated 4/16/90 relating to the Buffalo franchise
(Fund 14-A). (5)
10.1.37 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the City of
Cokato, Minnesota (Fund 14-A). (1)
10.1.38 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the City of
Dassel, Minnesota (Fund 14-A). (1)
10.1.39 Copy of Ordinance No. 10.044 dated 1/16/90 relating to the Dassel
franchise (Fund 14-A). (5)
10.1.40 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the City of
Dayton, Minnesota (Fund 14-A). (1)
10.1.41 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the City of
Delano, Minnesota (Fund 14-A). (1)
10.1.42 Copy of Ordinance No. 0-90-01 dated 3/20/90 relating to the Delano
franchise (Fund 14-A). (5)
10.1.43 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the City of Elk
River, Minnesota (Fund 14-A). (1)
10.1.44 Copy of Ordinance No. 90-3 dated 2/26/90 relating to the City of
Elk River franchise (Fund 14-A). (5)
10.1.45 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the Township of
Hassan, Minnesota (Fund 14-A). (2)
10.1.46 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the City of Maple
Lake, Minnesota (Fund 14-A). (1)
10.1.47 Copy of Ordinance No. 38 dated 3/5/90 relating to the City of Maple
Lake franchise (Fund 14-A). (5)
10.1.48 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the City of
Monticello, Minnesota (Fund 14-A). (1)
49
<PAGE> 50
10.1.49 Copy of Ordinance No. 183 dated 2/26/90 relating to the City of
Monticello franchise (Fund 14-A). (5)
10.1.50 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the Township of
Monticello, Minnesota (Fund 14-A). (1)
10.1.51 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the Township of
Ostego, Minnesota (Fund 14-A). (1)
10.1.52 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the City of
Rockford, Minnesota (Fund 14-A). (1)
10.1.53 Resolutions 90-14 and 90-15 dated 4/10/90 relating to the City of
Rockford franchise (Fund 14-A). (5)
10.1.54 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the Town of
Rockford, Minnesota (Fund 14-A). (2)
10.1.55 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the City of St.
Michael, Minnesota (Fund 14-A). (1)
10.1.56 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the City of
Watertown, Minnesota (Fund 14-A). (1)
10.1.57 Copy of Ordinance No. 178 relating to the City of Watertown
franchise (Fund 14-A). (5)
10.1.58 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the Township of
Buena Vista, New Jersey (Fund 14-A). (1)
10.1.49 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the Borough of
Chesilhurst, New Jersey (Fund 14-A). (1)
10.1.60 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the Borough of
Folsom, New Jersey (Fund 14-A). (1)
10.1.61 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the Township of
Monroe, New Jersey (Fund 14-A). (1)
10.1.62 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the Township of
Washington, New Jersey (Fund 14-A). (1)
10.1.63 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the Township of
Waterford, New Jersey (Fund 14-A). (1)
10.1.64 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the Township of
Winslow, New Jersey (Fund 14-A). (1)
10.1.65 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the County of
Georgetown, South Carolina (Fund 14-B). (5)
10.2.1 Credit Agreement dated as of July 21, 1994 among Cable TV Fund 14-A
and The Bank of Nova Scotia, as agent for various lenders. (Fund
14-A)
50
<PAGE> 51
10.2.2 Credit Agreement dated as of September 30, 1988 among Cable TV Fund
14-A/B Venture and The Bank of Nova Scotia, as agent for various
lenders. (Fund 14-A/B) (6)
10.2.3 First Letter Amendment dated June 11, 1990 to Credit Agreement
dated as of September 30, 1988 among Cable TV Fund 14-A/B Venture
and The Bank of Nova Scotia, as agent for various lenders. (Fund
14-A/B) (6)
10.2.4 Second Letter Amendment dated May 28, 1992 to Credit Agreement
dated as of September 30, 1988 among Cable TV Fund 14-A/B Venture
and The Bank of Nova Scotia, as agent for various lenders. (Fund
14-A/B) (6)
10.2.5 Third Letter Amendment dated June 30, 1994 to Credit Agreement
dated as of September 30, 1988 among Cable TV Fund 14-A/B Venture
and The Bank of Nova Scotia, as agent for various lenders. (Fund
14-A/B)
10.3.1 Purchase and Sale Agreement dated as of March 31, 1988 by and
between Cable TV Fund 14-A/B Venture as Buyer and Jones Intercable,
Inc. as Seller. (Fund 14-A/B) (7)
10.3.2 Purchase and Sale Agreement dated as of May 30, 1991, by and
between Jones Intercable, Inc. and Fund 14-A. (Fund 14-A) (8)
27 Financial Data Schedule
__________
(1) Incorporated by reference from Registrant's Report on Form 10-K for
fiscal year ended December 31, 1987 (Commission File Nos. 0-15378
and 0-16200)
(2) Incorporated by reference from Registrant's Report on Form 10-K for
fiscal year ended December 31, 1990 (Commission File Nos. 0-15378
and 0-16200)
(3) Incorporated by reference from Registrant's Report on Form 10-K for
fiscal year ended December 31, 1989 (Commission File Nos. 0-15378
and 0-16200)
(4) Incorporated by reference from the Annual Report on Form 10-K for
fiscal year ended December 31, 1990 of Jones Intercable, Inc.
(Commission File No. 1-9953)
(5) Incorporated by reference from Registrant's Report on Form 10-K for
fiscal year ended December 31, 1992.
(6) Incorporated by reference from Registrants' Reports on Form 8-K
dated March 31, 1993 (Commission File Nos. 0- 15378 and 0-16200)
(7) Incorporated by reference from Registrants' Reports on Form 8-K
dated March 31, 1988 (Commission File Nos. 0- 15378 and 0-16200)
(8) Incorporated by reference from Fund 14-A's Report on Form 8-K dated
June 12, 1991 (Commission File No. 0-15378).
(b) Reports on Form 8-K
None.
51
<PAGE> 52
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.
CABLE TV FUND 14-A, LTD.
a Colorado limited partnership
By: Jones Intercable, Inc.
By: /s/ Glenn R. Jones
------------------
Glenn R. Jones
Chairman of the Board and Chief
Dated: March 22, 1995 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.
By: /s/ Glenn R. Jones
------------------
Glenn R. Jones
Chairman of the Board and Chief
Executive Officer
Dated: March 22, 1995 (Principal Executive Officer)
By: /s/ Kevin P. Coyle
------------------
Kevin P. Coyle
Group Vice President/Finance
Dated: March 22, 1995 (Principal Financial Officer)
By: /s/ Larry Kaschinske
--------------------
Larry Kaschinske
Controller
Dated: March 22, 1995 (Principal Accounting Officer)
By: /s/ James B. O'Brien
--------------------
James B. O'Brien
Dated: March 22, 1995 President and Director
By: /s/ Raymond L. Vigil
--------------------
Raymond L. Vigil
Dated: March 22, 1995 Group Vice President and
Director
By: /s/ Robert S. Zinn
------------------
Robert S. Zinn
Dated: March 22, 1995 Director
52
<PAGE> 53
By: /s/ David K. Zonker
-------------------
David K. Zonker
Dated: March 22, 1995 Director
By:
--------------------
Derek H. Burney
Dated: Director
By:
--------------------
James J. Krejci
Dated: Director
By:
--------------------
Christine Jones Marocco
Dated: Director
By:
--------------------
Daniel E. Somers
Dated: Director
53
<PAGE> 54
INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
4.1 Limited Partnership Agreements for Cable TV Fund 14-A. (1)
4.2 Joint Venture Agreement of Cable TV Fund 14-A/B Venture, dated as
of January 8, 1988, between Cable TV Fund 14-A, Ltd. and Cable TV
Fund 14-B, Ltd. (1)
10.1.1 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the Big Cypress
Seminole Indian Reservation, Florida (Fund 14-A/B). (2)
10.1.2 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the Brighton
Seminole Indian Reservation, Florida (Fund 14-A/B). (2)
10.1.3 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the
unincorporated portions of Broward County, Florida (Fund 14-A/B).
(3)
10.1.4 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for Cooper City,
Florida (Fund 14-A/B).
10.1.5 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for Dania, Florida
(Fund 14-A/B). (3)
10.1.6 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for Davie, Florida
(Fund 14-A/B). (3)
10.1.7 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the Hollywood
Seminole Indian Reservation, Florida (Fund 14-A/B). (2)
10.1.8 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the Immokalee
Seminole Indian Reservation, Florida (Fund 14-A/B). (2)
10.1.9 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for Lauderdale Lakes,
Florida (Fund 14-A/B). (3)
10.1.10 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the Village of
Bement, Illinois (Fund 14-A). (5)
10.1.11 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the Village of
Cerro Gordo, Illinois (Fund 14-A). (4)
10.1.12 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for Chanute Air Force
Base, Illinois (Fund 14-A). (4)
<PAGE> 55
10.1.13 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the Town of
Chatsworth, Illinois (Fund 14-A). (4)
10.1.14 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the City of
Chenoah, Illinois (Fund 14-A). (4)
10.1.15 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the City of
Clinton, Illinois (Fund 14-A). (4)
10.1.16 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the County of
Dupage, Illinois (Fund 14-A). (1)
10.1.17 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the City of
Fairbury, Illinois (Fund 14-A). (4)
10.1.18 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the City of
Farmer City, Illinois (Fund 14-A).
10.1.19 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the Village of
Forrest, Illinois (Fund 14-A). (4)
10.1.20 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the City of
Gibson City, Illinois (Fund 14-A). (4)
10.1.21 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the City of
Leroy, Illinois (Fund 14-A). (4)
10.1.22 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the City of
Monticello, Illinois (Fund 14-A). (4)
10.1.23 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the City of
Naperville, Illinois (Fund 14-A). (1)
10.1.24 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the Village of
Pesotum, Illinois (Fund 14-A). (4)
10.1.25 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the Village of
Rantoul, Illinois (Fund 14-A). (4)
10.1.26 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the Village
of Thomasborough, Illinois (Fund 14-A). (9)
10.1.27 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the Village of
Tolono, Illinois (Fund 14-A).
10.1.28 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the County of
Will, Illinois (Fund 14-A). (1)
10.1.29 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the County of
Calvert, Maryland (Fund 14-A). (1)
10.1.30 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for St. Mary's
County, Maryland (Fund 14-A). (5)
<PAGE> 56
10.1.31 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for Southern Anne
Arundel County, Maryland (Fund 14-A). (1)
10.1.32 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the City of
Albertville, Minnesota (Fund 14-A). (1)
10.1.33 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for City of Big Lake,
Minnesota (Fund 14-A). (1)
10.1.34 Copy of Ordinance No. 1200 dated 3/5/90 relating to the City of Big
Lake franchise (Fund 14-A). (5)
10.1.35 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the City of
Buffalo, Minnesota (Fund 14-A). (1)
10.1.36 Copy of Ordinance dated 4/16/90 relating to the Buffalo franchise
(Fund 14-A). (5)
10.1.37 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the City of
Cokato, Minnesota (Fund 14-A). (1)
10.1.38 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the City of
Dassel, Minnesota (Fund 14-A). (1)
10.1.39 Copy of Ordinance No. 10.044 dated 1/16/90 relating to the Dassel
franchise (Fund 14-A). (5)
10.1.40 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the City of
Dayton, Minnesota (Fund 14-A). (1)
10.1.41 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the City of
Delano, Minnesota (Fund 14-A). (1)
10.1.42 Copy of Ordinance No. 0-90-01 dated 3/20/90 relating to the Delano
franchise (Fund 14-A). (5)
10.1.43 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the City of Elk
River, Minnesota (Fund 14-A). (1)
10.1.44 Copy of Ordinance No. 90-3 dated 2/26/90 relating to the City of
Elk River franchise (Fund 14-A). (5)
10.1.45 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the Township of
Hassan, Minnesota (Fund 14-A). (2)
10.1.46 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the City of Maple
Lake, Minnesota (Fund 14-A). (1)
10.1.47 Copy of Ordinance No. 38 dated 3/5/90 relating to the City of Maple
Lake franchise (Fund 14-A). (5)
10.1.48 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the City of
Monticello, Minnesota (Fund 14-A). (1)
<PAGE> 57
10.1.49 Copy of Ordinance No. 183 dated 2/26/90 relating to the City of
Monticello franchise (Fund 14-A). (5)
10.1.50 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the Township of
Monticello, Minnesota (Fund 14-A). (1)
10.1.51 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the Township of
Ostego, Minnesota (Fund 14-A). (1)
10.1.52 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the City of
Rockford, Minnesota (Fund 14-A). (1)
10.1.53 Resolutions 90-14 and 90-15 dated 4/10/90 relating to the City of
Rockford franchise (Fund 14-A). (5)
10.1.54 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the Town of
Rockford, Minnesota (Fund 14-A). (2)
10.1.55 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the City of St.
Michael, Minnesota (Fund 14-A). (1)
10.1.56 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the City of
Watertown, Minnesota (Fund 14-A). (1)
10.1.57 Copy of Ordinance No. 178 relating to the City of Watertown
franchise (Fund 14-A). (5)
10.1.58 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the Township of
Buena Vista, New Jersey (Fund 14-A). (1)
10.1.49 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the Borough of
Chesilhurst, New Jersey (Fund 14-A). (1)
10.1.60 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the Borough of
Folsom, New Jersey (Fund 14-A). (1)
10.1.61 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the Township of
Monroe, New Jersey (Fund 14-A). (1)
10.1.62 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the Township of
Washington, New Jersey (Fund 14-A). (1)
10.1.63 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the Township of
Waterford, New Jersey (Fund 14-A). (1)
10.1.64 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the Township of
Winslow, New Jersey (Fund 14-A). (1)
10.1.65 Copy of a franchise and related documents thereto granting a
community antenna television system franchise for the County of
Georgetown, South Carolina (Fund 14-B). (5)
10.2.1 Credit Agreement dated as of July 21, 1994 among Cable TV Fund 14-A
and The Bank of Nova Scotia, as agent for various lenders. (Fund
14-A)
<PAGE> 58
10.2.2 Credit Agreement dated as of September 30, 1988 among Cable TV Fund
14-A/B Venture and The Bank of Nova Scotia, as agent for various
lenders. (Fund 14-A/B) (6)
10.2.3 First Letter Amendment dated June 11, 1990 to Credit Agreement
dated as of September 30, 1988 among Cable TV Fund 14-A/B Venture
and The Bank of Nova Scotia, as agent for various lenders. (Fund
14-A/B) (6)
10.2.4 Second Letter Amendment dated May 28, 1992 to Credit Agreement
dated as of September 30, 1988 among Cable TV Fund 14-A/B Venture
and The Bank of Nova Scotia, as agent for various lenders. (Fund
14-A/B) (6)
10.2.5 Third Letter Amendment dated June 30, 1994 to Credit Agreement
dated as of September 30, 1988 among Cable TV Fund 14-A/B Venture
and The Bank of Nova Scotia, as agent for various lenders. (Fund
14-A/B)
10.3.1 Purchase and Sale Agreement dated as of March 31, 1988 by and
between Cable TV Fund 14-A/B Venture as Buyer and Jones Intercable,
Inc. as Seller. (Fund 14-A/B) (7)
10.3.2 Purchase and Sale Agreement dated as of May 30, 1991, by and
between Jones Intercable, Inc. and Fund 14-A. (Fund 14-A) (8)
27 Financial Data Schedule
__________
(1) Incorporated by reference from Registrant's Report on Form 10-K for
fiscal year ended December 31, 1987 (Commission File Nos. 0-15378
and 0-16200)
(2) Incorporated by reference from Registrant's Report on Form 10-K for
fiscal year ended December 31, 1990 (Commission File Nos. 0-15378
and 0-16200)
(3) Incorporated by reference from Registrant's Report on Form 10-K for
fiscal year ended December 31, 1989 (Commission File Nos. 0-15378
and 0-16200)
(4) Incorporated by reference from the Annual Report on Form 10-K for
fiscal year ended December 31, 1990 of Jones Intercable, Inc.
(Commission File No. 1-9953)
(5) Incorporated by reference from Registrant's Report on Form 10-K for
fiscal year ended December 31, 1992.
(6) Incorporated by reference from Registrants' Reports on Form 8-K
dated March 31, 1993 (Commission File Nos. 0- 15378 and 0-16200)
(7) Incorporated by reference from Registrants' Reports on Form 8-K
dated March 31, 1988 (Commission File Nos. 0- 15378 and 0-16200)
(8) Incorporated by reference from Fund 14-A's Report on Form 8-K dated
June 12, 1991 (Commission File No. 0-15378).
<PAGE> 1
ORDINANCE NO. 94-9-1
AN ORDINANCE OF THE CITY OF COOPER CITY,
FLORIDA, ADOPTING A RENEWAL FRANCHISE
AGREEMENT WITH JONES INTERCABLE, INC.;
PROVIDING FOR SEVERABILITY, PROVIDING FOR A
REPEALER, AND PROVIDING FOR AN EFFECTIVE
DATE.
WHEREAS, the City Council of the City of Cooper City hereto desires to
adopt a Renewal Franchise Agreement with Jones Intercable, Inc., a copy of
which is attached hereto as Exhibit "A", and made a part hereof; and,
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF
COOPER CITY, FLORIDA:
Section 1: That the City Council does hereby approve a Renewal
Franchise Agreement between the City of Cooper City and Jones Intercable, Inc.,
a copy of which is attached hereto as Exhibit "A", and made a part hereof.
Section 2: Should any section or provision of this Ordinance, or any
portion thereof, or any paragraph sentence or word by declared by a Court of
competent jurisdiction to be invalid, such decision shall not affect the
validity of the remainder hereof.
Section 3: All sections or parts of sections of the Code of Municipal
Ordinances, all ordinances or parts of ordinances and all resolutions or parts
of resolutions in conflict herewith, be and the same, are hereby repealed to
the extent of such conflicts.
<PAGE> 2
ORDINANCE NO. 94-9-1
PAGE 2
SECTION 4: This Ordinance shall be in force and take full effect
immediately upon its passage and final adoption.
PASSED AND ADOPTED ON FIRST READING THIS 23RD DAY OF AUGUST, A.D.,
1994.
PASSED AND FINAL ADOPTION ON SECOND READING THIS 12TH DAY OF SEPTEMBER
A.D., 1994.
/s/ SUELLEN H. FARDELMANN
SUELLEN H. FARDELMANN
Mayor
ATTEST:
/s/ SUSAN BERNARD
SUSAN BERNARD
City Clerk
Approved As To Form:
/s/ ALAN F. RUF
ALAN F. RUF
City Attorney
ROLL CALL
---------
Mayor Fardelmann aye
---
Councilmember Palank aye
---
Councilmember Brown aye
---
Councilmember Litsch aye
---
Councilmember Warsch aye
---
<PAGE> 3
CABLE TELEVISION FRANCHISE AGREEMENT
BETWEEN THE CITY OF COOPER CITY, FLORIDA
AND CABLE TV FUND 14-A/B VENTURE
WHEREAS, Cable TV Fund 14-A/B Venture, a Colorado joint venture doing
business as Jones Intercable, Inc. ("Jones"), has asked the City of Cooper
City, Florida (the "City"), to renew the franchise ("Prior Franchise") which
Jones holds to provide cable television service to the City; and
WHEREAS, the City has reviewed Jones' performance under the Prior
Franchise and, after careful consideration, analysis and deliberation, has
determined the technical ability, financial condition, legal qualifications and
past performance of Jones are adequate; and
WHEREAS, the City Council of the City has determined that, subject to
the terms and conditions set forth herein, the grant of a new, non-exclusive
franchise to Jones, to supersede the Prior Franchise, is consistent with the
public interest; and
WHEREAS, the City and Jones have reached agreement on the terms and
conditions of the new franchise, as set forth herein;
NOW, THEREFORE, in consideration of the City's grant of a new
franchise to Jones, the terms and conditions set forth herein, and other good
and valuable consideration, the receipt and adequacy of which is hereby
acknowledged, the parties do hereby agree as follows:
1. Definitions. In addition to the definitions elsewhere in this
Agreement, the following words and terms shall have the meanings ascribed to
them:
a. "Affiliate" means, as to the Franchisee, any entity
which controls, is controlled by, or is under common control with the
Franchisee.
b. "Agreement" means this agreement and any amendments,
exhibits or appendices hereto.
<PAGE> 4
c. "Basic Cable Service" means the service tier offered
over the Cable System which includes the retransmission of local television
broadcast signals, and public, educational or governmental channels.
d. "Cable Act" means the Cable Communications Policy Act
of 1984, 47 U.S.C. Sections 521 et seq., and the Cable Television Consumer
Protection and Competition Act of 1992, Pub. L. No. 102-385, 106 Stat. 1460, as
those Acts may hereinafter be amended.
e. "Cable Ordinance" means Ordinance No. __, known as
the City of Cooper City, Florida Cable Communications Ordinance, as it may
hereinafter be amended or superseded.
f. "Cable Service" means (i) the one-way transmission to
Subscribers of video programming or other programming services, any Subscriber
interaction that is required for the selection of such video programming or
other programming services, and (ii) the provision of any other lawful
communications services.
g. "Cable System" means a facility, operating by means
of coaxial cable, optical fiber, or other transmission lines or forms of
transmission and associated signal generation, reception and control equipment,
that is designed to provide Cable Service to multiple Subscribers within the
City.
h. "City" means the City of Cooper City, a municipal
corporation of the State of Florida, in its present incorporated form or in any
later recognized, consolidated, enlarged or reincorporated form.
i. "Franchisee" means Cable TV Fund 14-A/B Venture, a
Colorado joint venture, and its lawful and permitted successors, assigns, and
transferees.
j. "Gross Subscriber Receipts" means all receipts
collected by the Franchisee, its affiliates and subsidiaries, from Subscribers
in the City for
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<PAGE> 5
Cable Service, including but not limited to receipts from Subscribers in the
City derived from subscriber rates, bulk billing rates, menu-driven service,
pay-per-view events or channels, premium channels, service tiers, service
clusters, multiplexing any channel or programming service, installations,
downgrades, reconnections, late charges and collection charges; provided,
however, that Gross Subscriber Receipts shall not include (i) franchise fees
collected from Subscribers, and (ii) any taxes on services furnished by the
Franchisee imposed directly upon any Subscriber by federal, state, local or
other governmental unit and collected by the Franchisee on behalf of said
governmental unit.
k. "Prior Franchise Agreement" means Ordinance No.
79-7-3, adopted on July 10, 1979, as amended by Ordinance Nos. 83-10-3 and
83-10-4, adopted on October 11, 1983, and Resolution No. 88-1-19, adopted
January 22, 1988.
1. "Streets" means the surface, the air space above the
surface and the area below the surface of any public street, highway, road,
boulevard, concourse, driveway, freeway, thorough-fare, parkway, sidewalk,
bridge, tunnel, park, waterway, dock, bulkhead, wharf, pier, court, lane, path,
alley way, drive, circle, easement, or any other public-right-of-way or public
place, including public utility easements dedicated for compatible uses, or any
other property in which the City holds any kind of property interest or over
which the City exercises any type of lawful control, and any temporary or
permanent fixtures or improvements located thereon.
m. "Subscriber" means any person who lawfully receives
Cable Service delivered over the Franchisee's Cable System.
2. Grant of Authority: Limits and Reservations.
a. Grant. Subject to the terms and conditions of this
Agreement, the City hereby grants to the Franchisee a franchise (the
"Franchise") to
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<PAGE> 6
construct, maintain and operate a Cable System under, on and over the Streets
and other public rights-of-way within the City. The Franchise shall further
include the right, privilege, easement and authority to construct, erect,
suspend, install, lay, renew, repair, maintain and operate such poles, wires,
cables, underground conduits, manholes, ducts, trenches, fixtures, appliances
and appurtenances for the purpose of distribution of Cable Service to
inhabitants within the jurisdictional limits of the City. Without limiting the
generality of the foregoing, the Franchise shall and does hereby include the
right to repair, replace, enlarge and extend the Cable System.
b. Grant Not Exclusive. The Franchise and the rights it
grants to use and occupy the Streets of the City shall not be exclusive and do
not explicitly or implicitly preclude the issuance of other franchises to
operate Cable Systems within the City, or affect the City's right to authorize
the use of the Streets by other persons for other purposes as it determines
appropriate. Notwithstanding the foregoing, the City agrees that it shall not
authorize another franchisee to utilize the Streets to provide Cable Services
on terms and conditions which are more favorable or less burdensome than those
applied to the Franchisee.
c. Term. The Franchise and this Agreement shall be
effective upon approval by the City Council and shall expire on the 15th
anniversary of such date, unless the Franchise is earlier revoked as provided
in this Agreement. The Franchise may be renewed for successive periods of 15
years on the same terms and conditions set forth in this Agreement, or on such
different terms and conditions as the parties may agree, consistent with the
renewal provisions of the Cable Act.
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<PAGE> 7
d. Agreement Subject to Exercise of Police Powers. All
rights and privileges granted in this Agreement are subject to the police
powers of the City.
e. Agreement Subject to Other Laws. This Agreement is
subject to and shall be governed by all terms, conditions and provisions of the
Cable Act and any other applicable provisions of supervening federal or state
law.
f. Agreement Terms Prevail. Notwithstanding the
provisions of subsection A of Section 29.07.1 of the Cable Ordinance, the City
and the Franchisee agree that the express terms and provisions of this
Agreement will prevail over conflicting or inconsistent terms and provisions in
the Cable Ordinance. The parties further agree that the terms and provisions of
this Agreement may not be modified or amended except by a written instrument
signed by both parties. Subject to the foregoing, the Franchisee acknowledges
that the Franchise is granted by the City pursuant to and in accordance with
the Cable Ordinance.
g. Claims Related to Prior Franchise Agreement. Except
for the payment of all franchise fees owed under the Prior Franchise Agreement,
as of the effective date of this Agreement, the Prior Franchise Agreement is
superseded and is of no further force and effect, and the City and the
Franchisee mutually release each other from any claims each had, has or may
have against the other under the Prior Franchise Agreement.
3. The Cable System: Provision of Cable Services.
a. The Cable System shall at all times have a minimum
capacity of at least 54 video channels.
b. The Franchisee shall have the right, so far as
allowed by law, to audit its feeder lines and connection lines to prevent
improper usage of the Cable System.
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<PAGE> 8
c. The Franchisee shall provide Cable Service to any
occupant of a residential or commercial structure who requests Cable Service,
including all multiple dwelling unit buildings (except those structures and
multiple dwelling unit buildings to which the Franchisee cannot obtain access),
provided that such structure can be served with a standard cable drop of no
more than 150 feet. If an occupant of a structure who requests Cable Service
cannot be served with a standard cable drop, the Franchisee shall extend the
distribution plant of its Cable System as necessary to provide such Cable
Service. The Franchisee shall bear all costs of any such extension, provided
there is a density in the area to be reached by the extension of at least 40
structures per linear mile of cable plant.
d. The Franchisee shall provide one free service outlet
and Basic Cable Service to all public schools and City buildings that can be
served with a standard 150 foot cable drop from the existing Cable System.
Franchisee shall provide additional service outlets and Cable Service upon the
City's request at the Franchisee's then standard rates.
e. The Franchisee shall cablecast all regularly
scheduled, public City Council meetings live to all Subscribers. In addition,
the Franchisee shall cablecast, at the City's request, up to four other City
meetings or events per year.
f. The Franchisee shall provide leased access channels
on the Cable System as required by federal law.
g. The Franchisee shall continuously monitor
developments in cable technology and how other cable companies in Broward
County, Florida, have incorporated or are planning to incorporate such
developments into their Cable Systems. At the City's request (but not more
often than three times during the term of this Agreement), the Franchisee shall
prepare and deliver a report describing developments in cable technology and
whether the Franchisee plans to incorporate any such developments into its
Cable System. Based on this report,
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<PAGE> 9
the City may determine that the Cable System or this Agreement should be
updated, changed, revised, or that additional services should be provided, but
only if such update, change, revision or provision of additional services is
economically feasible. Economic feasibility shall be determined by the City and
the Franchisee in good faith following an evaluation of the Franchisee's
financial condition, economic waste, if any, that would occur should the
changes be made, the remaining term of this Agreement, and the rate of return
on the Franchisee's investment in the City.
4. Maintenance of Cable System; Safety Requirements.
a. The Franchisee shall at all times employ reasonable
care in conducting its operations and shall install and use generally accepted
methods and devices for preventing failure and accidents which are likely to
cause damage, injuries, or nuisances to the public. The Franchisee shall
install and maintain its Cable System and other equipment in accordance with
the applicable requirements of the National Electrical Safety Code and local
ordinances. The Franchisee may mark the Cable System as necessary to apprise or
warn persons using the Streets of the City of the existence of the Cable
System, provided that such marks shall be located so as to cause minimum
interference with the rights and reasonable convenience of property owners who
adjoin any of said streets.
b. The Franchisee shall have the right to remove, trim,
cut and keep clear of the Cable System the trees in and along the Streets of
the City, subject to the limitations and conditions of City Code Section
26-18(d), as it may be amended from time to time, and provided that in the
exercise of such right, the Franchisee shall not remove, trim, cut or otherwise
injure such trees to any greater extent than is necessary for the installation,
maintenance and use of the Cable System.
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<PAGE> 10
c. The Franchisee shall install and maintain the Cable
System so as not to interfere with the equipment of any utility of the City or
any other entity lawfully and rightfully using the Streets of the City.
Whenever the City shall require the relocation or reinstallation of the Cable
System in conjunction with an improvement program for the Streets of the City,
it shall be the obligation of the Franchisee, upon 60 days' written notice of
such requirement, to remove and relocate immediately the Cable System as may be
reasonably necessary to meet the requirements of such improvement program. Such
removal and relocation by the Franchisee shall be at the sole cost of the
Franchisee.
d. The Franchisee shall at all times during the term of
this Franchise Agreement adopt and adhere to a maintenance program designed to
minimize the possibility of a material degradation of the Cable System and the
quality of the Cable Services offered to Subscribers.
6. Franchise Fee.
a. Each year during the Franchise term, as compensation
for use of the Streets, the Franchisee shall pay to the City, on a quarterly
basis, a franchise fee in an amount not less than, nor more than, three percent
of the sum of (i) the Franchisee's Gross Subscriber Receipts for such quarter
and (ii) an allocated portion of the advertising revenues received by the
Franchisee from the operation of its Cable System during such quarter. The
allocated portion of the Franchisee's advertising revenues shall be determined
by taking the gross advertising revenues received by the Franchisee during the
quarter from the operation of its Cable System and multiplying this amount by a
fraction, the numerator of which is the number of basic subscribers to the
Franchisee's Cable System at the end of the quarter that reside within the
jurisdictional limits of the City, and the denominator of which is the total
number of basic subscribers served by the Franchisee's Cable System at the end
of the quarter. Notwithstanding the
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<PAGE> 11
foregoing, the City may, in its sole discretion, at any time during the term of
this Agreement, give the Franchisee written notice that the rate used to
calculate the franchise fee shall increase up to the maximum rate permitted
under federal law, and such new rate shall be effective 120 days following the
Franchisee's receipt of such notice. Payment for each quarter shall be made to
the City not later than 45 days after the end of each quarter and shall be
accompanied by a statement that details by category (e.g., receipts from basic
services, premium services, installations, etc.) the Gross Subscriber Receipts
and allocable advertising revenues for the quarter, and which is certified as
to its correctness by the Franchisee's chief financial officer or other duly
authorized financial officer.
b. The Franchisee shall file with the City, within 90
days after the end of each calendar year, an audited financial statement
showing the Gross Subscriber Receipts used to calculate the franchise fee for
the preceding year. The financial information provided pursuant to this Section
6 shall be in addition to any information or reports that the City may request
of the Franchisee under the Cable Ordinance.
7. Insurance Requirements; Bond; Indemnification.
a. The Franchisee shall maintain throughout the term of
the Franchise and this Agreement the following liability insurance coverage
insuring the City and the Franchisee: worker's compensation and employer
liability insurance to meet all requirements of Florida law, and general
comprehensive liability insurance with respect to the construction, operation
and maintenance of the Cable System and the conduct of the Franchisee's
business in the City, in the minimum amounts of:
1. $250,000 for property damage in any one
accident;
2. $500,000 for personal bodily injury to any
one person;
and
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<PAGE> 12
3. $1,500,000 for personal bodily injury in any
one accident.
b. All insurance policies shall be with sureties
qualified to do business in the State of Florida; and shall be with sureties
with a minimum rating of A-1 in Best's Key Rating Guide, Property/Casualty
Edition. The City may require coverage and amounts in excess of the above
minimums where reasonably necessary to reflect changing liability exposure and
limits or where required by law.
c. The Franchisee shall keep on file with the City
certificates of insurance and, upon reasonable notice and request, shall make
all insurance policies available for City inspection.
d. All insurance policies shall name the City as an
additional insured and shall further provide that any cancellation or reduction
in coverage shall not be effective unless 30 days prior written notice thereof
has been given to the City. The Franchisee shall not cancel any required
insurance policy without submission of proof that the Franchisee has obtained
alternative insurance satisfactory to the City which complies with this
Section.
e. Within 30 days of the effective date of the
Franchise, the Franchisee shall file with the City a performance bond running
to the City, with good and sufficient surety approved by the City, in the sum
of $10,000 conditioned upon the faithful performance and discharge of the
obligations imposed by this Agreement. The bond shall provide for 30 days'
prior written notice to the City of any intention on the part of the Franchisee
to cancel, fail to renew or otherwise materially alter its terms. Neither the
filing of a bond with the City, nor receipt of any damages recovered by the
City thereunder, shall be construed to excuse the faithful performance by the
Franchisee of its obligations
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<PAGE> 13
under this Agreement or limit the liability of the Franchisee for damages under
the terms of this Agreement.
e. The Franchisee shall, at its sole cost and expense,
indemnify, hold harmless, and defend the City, its officials, boards,
commissions, commissioners, agents, and employees, against any and all claims,
suits, causes of action, proceedings, judgments for damages or equitable
relief, and costs and expenses arising out of the construction, maintenance or
operation of the Cable System, the conduct of the Franchisee's business in the
City, or in any way arising out of the Franchisee's enjoyment or exercise of
the Franchise, regardless of whether the act or omission complained of is
authorized, allowed or prohibited by this Agreement; provided, however, that
the Franchisee's obligation hereunder shall not extend to any claims caused by
intentional misconduct or negligence of the City, its officials, commissioners,
agents or employees. This provision includes, but is not limited to, the City's
reasonable attorneys' fees incurred in defending against any such claim, suit
or proceedings; claims arising out of copyright infringements or a failure by
the Franchisee to secure consents from the owners, authorized distributors, or
the franchisees of programs to be delivered by the Cable System; claims arising
out of Section 638 of the Cable Act; and claims against the Franchisee for
invasion of the right of privacy, defamation of any person, firm or
corporation, or the violation or infringement of any trade mark, trade name,
service mark or patent, or of any other right of any person, firm or
corporation.
8. Assignment or Transfer of the Franchise. The Franchisee may
not assign or transfer the Franchise without the prior written consent of the
City, which consent shall not be unreasonably withheld. The Franchisee shall
comply with the provisions of applicable federal, state and local law when
requesting the City's consent to the assignment or transfer of the Franchise.
Notwithstanding the
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foregoing, the City's consent shall not be necessary (i) for the assignment or
transfer of the Franchise by the Franchisee to any Affiliate, or (ii) for the
granting of a security interest in, or the mortgage or pledge of, all of the
Franchise's rights, powers and privileges under the Franchise to such lending
institution or institutions as may be designated by the Franchisee. In
addition, any change in the ownership of the Franchisee that does not result in
a change in voting control or of actual working control of the Franchisee shall
not be considered an assignment or transfer of the Franchise.
9. Revocation or Termination of the Franchise.
a. The Franchise may be revoked by the City, in
accordance with the provisions of this Section 9, if the Franchisee fails to
operate or maintain the Cable System as required by this Agreement, or violates
any other material provision of this Agreement. In such event, the City shall
give the Franchisee written notice that the Franchisee is in material violation
of this Agreement, which notice describes the nature of the alleged violation
or breach. If, within 90 days following receipt of such written notice from the
City, the Franchisee has not cured such violation or breach, or has not
commenced corrective action and such corrective action is not being actively
and expeditiously pursued, the City may give written notice to the Franchisee
of its intent to revoke the Franchise, stating its reasons.
b. Prior to revoking the Franchise under subsection a
hereof, the City Council shall hold a public hearing, upon 30 days notice to
the Franchisee, at which time the Franchisee and the public shall be given an
opportunity to be heard. Following the public hearing, the City Council shall
determine whether to revoke the Franchise based on the evidence presented at
the hearing, and other evidence of record. If the City Council determines to
revoke the Franchise, it
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<PAGE> 15
shall issue a written decision setting forth the reasons for its decision, a
copy of which shall be delivered to the Franchisee.
c. Notwithstanding subsection a and b hereof, the City
Council may, following a public hearing, revoke the Franchise effective 120
days after an assignment for the benefit of creditors or the appointment of a
receiver or trustee to take over the business of the Franchise, whether in a
receivership, reorganization, bankruptcy, assignment for the benefit of
creditors, or other action or proceeding, unless within that 120-day period:
1. Such assignment, receivership or trusteeship
has been vacated; or
2. Such assignee, receiver or trustee has fully
complied with the terms and conditions of this Agreement and has executed an
agreement, approved by a court having jurisdiction, assuming and agreeing to be
bound by the terms and conditions of this Agreement.
d. In the event of foreclosure or other judicial sale of
the Cable System, the City may revoke the Franchise, following a public hearing
before the City Council, by serving notice upon the Franchisee and the
successful bidder at the sale, in which event the Franchise and all rights and
privileges of the Franchise shall be revoked and will terminate 30 days after
serving such notice, unless:
1. The City has approved the transfer of the
Franchise to the successful bidder; and
2. The successful bidder has agreed with the
City to assume and be bound by the terms and conditions of this Agreement.
e. If the City revokes the Franchise, or if for any
other reason the Franchisee abandons the Cable System, the following procedures
and rights shall apply:
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<PAGE> 16
1. The City may require the Franchisee to remove
its Cable System from the Streets. If the Franchisee fails to do so within a
reasonable period of time, the City may have the Cable System removed from the
Streets at the Franchisee's expense.
2. The City, by resolution of the City Council,
may acquire ownership, or effect a transfer, of the Cable System at the fair
market value of the Cable System, which shall be paid to the Franchisee, net of
transfer expenses.
10. Inter-local Emergency Plan. The Franchisee shall cooperate
with the City in the development of an inter-local plan, which may include all
local governmental entities within Broward County, which plan is designed to
alert Subscribers in the event of an impending natural or man-made emergency
and to provide for standby power for the Cable System. In order to implement
the interlocal plan, the Cable System shall be designed so as to permit an
override of the audio portion of all channels, by touch-tone phone (or
functional equivalent), from any location by the government officials
designated in the plan, and pursuant to the provisions of such plan.
11. Notices; Other Provisions.
a. Every notice served upon the City shall be delivered
or sent by mail to:
City of Cooper City
City Hall
9090 S.W. 50th Place
Cooper City, FL 33328-4298
Attn: City Clerk
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With a copy to:
Alan Francis Ruf, Esq.
City Attorney
2455 E. Sunrise Boulevard
International Building, PH-E
Fort Lauderdale, FL 33304
Every notice served upon the Franchisee shall be delivered or sent by mail to:
Jones Intercable, Inc.
6565 Nova Drive
Davie, FL 33317
Attn: General Manager
With a copy to:
Jones Intercable, Inc.
9697 East Mineral Avenue
P.O. Box 3309
Englewood, Colorado 80155
Attn: Legal Department
b. This Agreement shall be binding upon and inure to the benefit
of the parties and their respective successors and permitted assigns.
c. If the City or the Franchisee institutes legal proceedings to
enforce the terms and conditions of this Agreement, the prevailing party shall
be permitted to recover from the adverse party all reasonable attorneys' fees
and costs incurred in such proceedings.
d. If any section, subsection, sentence, clause, or phrase or
portion of this Agreement is for any reason held invalid or unconstitutional by
any court of competent jurisdiction, such portion shall be deemed a separate,
distinct and independent provision, and such holding shall not affect the
validity of the remaining portions hereof.
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AGREED TO THIS 12th DAY OF SEPTEMBER, 1994.
CITY OF COOPER CITY
By: /s/ SUELLEN H. FARDELMANN
Mayor
ATTEST:
/s/ SUSAN BERNARD
City Clerk
APPROVED AS TO FORM:
/s/ ALAN F. RUF
City Attorney
CABLE TV FUND 14-A/B VENTURE,
a Colorado joint venture
By: Cable TV Fund 14-A, Ltd.,
as a Venturer
By: Cable TV Fund 14-B, Ltd.,
as a Venturer
By: Jones Intercable, Inc.
as their General Partner
By: /s/ RUTH E. WARREN
Name: Ruth E. Warren
Title: Group Vice President/Operations
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<PAGE> 1
ORDINANCE NO. 642
An Ordinance Granting a Franchise to Cable TV Fund 14-A, Ltd., Its Successors
and Assigns, to Operate and Maintain a Community Antenna Cable Television
System in the City; Setting Forth Conditions Accompanying the Grant of the
Franchise Renewal; Providing for City Regulation and Use of the Cable
Television System.
WHEREAS, the City Council of the City of Farmer City, County of
DeWitt, State of Illinois (the "City") is authorized and empowered to award a
cable television franchise to Cable TV Fund 14-A, Ltd., its successors and
assigns (the "Company");
WHEREAS, the City after careful consideration, analysis and
deliberation has determined the technical ability, financial condition, legal
qualifications and past performance of the Company sufficient; and
WHEREAS, the City has also considered and analyzed the plans of the
Company for the future operation of the cable television system within the City
and found it to be adequate and feasible in view of the needs and requirements
of the City and its residents.
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF FARMER CITY, COUNTY
OF DeWITT, STATE OF ILLINOIS:
SECTION 1. Definitions. For the purposes of this Ordinance, the following terms,
phrases, words and their derivation shall have the meaning given herein. When
not inconsistent with the context, words used in the present tense include the
future, words in the plural number include the singular number, and words in
<PAGE> 2
the singular number include the plural number. The word "shall" is always
mandatory and directory.
a. "City" is the City of Farmer City.
b. "Cable Television System", hereinafter referred to also as "Cable
System" or "System" means a system of coaxial cables, fiber, or other
electrical conductors and transmission equipment used or to be used primarily
to receive television, radio signals, directly or indirectly off-the-air and
transmit them and other telecommunication services to subscribers for various
fees.
c. "Company" shall be Cable TV Fund 14-A, Ltd., or anyone who succeeds
it in accordance with the provisions of this Ordinance.
d. "Person" is any individual, firm, partnership, association,
corporation, company or organization of any kind.
e. "Annual Gross Subscriber Receipts" shall mean all receipts
collected within the City by the Company for Limited Basic or other expanded
levels of Basic Service; provided, however, that this term shall not include
any taxes or services furnished by the Company herein imposed directly upon any
subscriber or user by federal, state, City or other governmental unit and
collected by the Company on behalf of said governmental unit.
SECTION 2. Grant of Non-Exclusive Franchise
a. The City hereby grants to the Company a non-exclusive franchise for
a period of ten (10) years from the effective date hereof, unless sooner
terminated pursuant to the provisions of this Ordinance, to install, operate,
above, over and under the streets, alleys, easements (including utility
easements), public ways and public places as now laid out or dedicated, and all
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extensions thereof, and additions thereto, a system of wires, cable,
underground conduits, ducts, trenches, conductors, amplifying equipment,
manholes, fittings and any and all other fixtures, appliances and appurtenances
necessary for the installation, ownership, maintenance and operation in the
City of a cable television system for the purpose of distribution of cable
television and related service to inhabitants within the limits of the City.
The rights are granted herein by the City after due consideration and approval
by the City of the legal character, financial, technical, and other
qualifications of the Company.
b. The Company shall carry no less than thirty-six (36) channels on
the System. The Company shall provide a diversity of programming including
news, sports, children's programming and entertainment.
SECTION 3. Compliance with Applicable Laws and Ordinances. The Company at all
times during the period of this Ordinance and any renewal thereof shall be
subject to all lawful exercise of the police power by the City as the City
shall provide pursuant to Section 16 of this Ordinance. The Company and City
shall comply with, and this Ordinance shall remain consistent with, all
applicable laws, statutes, codes, ordinances, rules or regulations, including
those of the Cable Communications Policy Act of 1984 and the Cable Television
Consumer Protection and Competition Act of 1992 as they may be amended from
time to time.
SECTION 4. Effective Date and Period. Upon final passage and publication hereof
as provided by law, and upon acceptance by the Company, this Ordinance
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shall take effect and shall then continue in full force and effect for a period
of ten (10) years upon the terms and conditions set forth herein.
SECTION 5. Applicable Law. This Ordinance shall apply to the present territorial
limits of the City and to any area henceforth added thereto during the period
of this franchise. The Company shall build in areas of the City it deems
financially feasible. A project shall be deemed financially feasible if the
construction passes at least thirty (30) residential homes per strand mile. The
City may require the Company to provide justification as to financial
feasibility if it refuses to extend service to a particular area. Nothing
herein contained is intended to preclude the Company from extending its cables
and equipment to other portions of the City or outside the City for the purpose
of serving other areas, provided the Company is legally authorized to service
the other areas.
SECTION 6. Liability and Indemnification
a. The Company shall pay all damages and penalties which the City, its
officers, Councils, commissions, agents and employees may legally be required
to pay as a result of the installation, operation and maintenance of the cable
system authorized herein and which result from the negligence, gross negligence
or intentional acts of the Company, its agents or employees.
b. The Company shall pay all expenses incurred by the City, its
officers, Councils, commission, agents, and employees in defending itself with
regard to all damages and penalties mentioned in subsection "a" above. These
expenses shall include all out-of-pocket expenses, such as attorney fees. The
Company shall be liable for payment of damages and penalties mentioned in "a"
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above and/or expenses in this Section only if Company has been adequately
notified of pending actions and has been allowed, at its own expense, to hire
its own counsel and to direct the prosecution or defense of the action at
Company's discretion.
c. The Company shall maintain throughout the period of this Ordinance
liability insurance insuring the City, its officers, Councils, commissions,
agents, and employees and the Company in the minimum amounts of:
(1) One Million ($1,000,000 00) Dollars for personal injury or
death resulting from any one occurrence; and
(2) Five Hundred Thousand ($500,000.00) Dollars for property
damage resulting from any one occurrence.
The insurance policies mentioned above shall contain an endorsement
stating that the policies are extended to cover the liability assumed by the
Company under the terms of this Ordinance and shall contain the following
endorsement:
"It is hereby understood and agreed that this
policy may not be cancelled nor the amount of
coverage thereof reduced without Council approval."
Said insurance coverage will remain in effect throughout the term of the
franchise. The Company shall provide to the City Clerk written evidence of
payment of required premiums upon each renewal, which shall be filed and
maintained with the City Clerk during the term of any franchise granted
hereunder or any renewal hereof.
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SECTION 7. Service Standards and Requirements
a. The Company shall provide and maintain its services in accordance
with the standards of the industry, so as to provide its subscribers with a
high level of quality and reliability.
b. Whenever it shall be necessary to shut off or interrupt service for
the purpose of making repairs, adjustments or installations, the Company shall
do so at such times as will cause the least amount of inconvenience to its
subscribers if reasonably practical.
c. In the event of any interruption of service whether planned or
unforeseen, the Company shall proceed with due diligence and restore service as
quickly as possible under the circumstances.
d. The Company shall be responsible for adopting procedures for the
investigation and resolution of complaints related to the operation of the
Company's cable television system, and will provide such procedures as adopted
to the City Clerk.
e. The System will be designed, engineered and maintained by the
Company so as not to interfere with the television reception of residents of
the City who do not subscribe to its service. Neither the City nor the Company
shall require the removal, or offer to remove, or provide an inducement for
removal, of any potential existing subscriber's antenna as a condition of
provision of services.
SECTION 8. Additional Services. Company will provide one (1) free connection to
all public schools and City buildings as long as the cable system
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passes within reasonable distance of the building. Additional connections at
such locations may be provided on a "cost-plus" basis.
SECTION 9. Safety Requirements
a. The Company shall at all times employ reasonable care in conducting
its operations and shall install and use generally accepted methods and devices
for preventing failure and accidents which are likely to cause damage,
injuries, or nuisances to the public.
b. The Company shall install and maintain its wires, cable, fixtures,
and other equipment in accordance with the applicable requirements of the
National Electrical Safety Code and local ordinances.
c. The Company shall maintain at all times its structures, lines,
equipment, and connections in, over, under or upon the streets, sidewalks,
alleys, and public ways or places of the City, wherever situated or located, in
a safe, suitable, substantial condition, and in good order and repair.
SECTION 10. New Developments. It shall be the policy of the City to amend this
Ordinance, in the best interest of its citizens upon application of the
Company, to take advantage of any developments in the field of transmission of
television signals and related service which will afford the Company an
opportunity to more effectively, efficiently, or economically to serve its
customers.
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<PAGE> 8
SECTION 11. Conditions on Street Occupancy
a. All transmission and distribution structures, lines and equipment
erected by the Company within the City shall be located so as not to cause
interference with the proper use of streets, alleys, and other public ways and
places, and to cause interference with the rights and reasonable convenience of
property owners whose land may adjoin any of the said streets, alleys, or other
public ways and places.
In case disturbances of any street, sidewalk, alley, public way, or
paved area are caused by the Company's construction or operations, the Company
shall, at its own cost and expense and in a manner approved by the City's
appropriate authority, replace and restore such street, sidewalk, alleys,
public way, or paved area to a condition as good as its condition before the
work causing such disturbance was performed.
b. The Company shall have the right, under the supervision of the
City's appropriate authority, to trim trees upon overhanging streets, alleys,
sidewalks, and public ways and places of the City so as to prevent the branches
of such trees from coming in contact with the wires and cable of the Company or
otherwise interfering with the operations of the Company.
c. The Company shall, at the request of any person holding a building
moving permit issued by the City or County, temporarily raise or lower its
wires to permit the moving of the building. The expense of such temporary
removal, raising or lowering of wires, shall be paid by the person requesting
the same, and the Company shall have the authority to require such payment in
advance. The Company shall be given not less than seventy-two (72) hours
advance notice to arrange for such temporary wire change.
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<PAGE> 9
SECTION 12. Joint Use of Public Utilities Facilities. The franchise granted
hereunder shall not relieve the Company of any obligation involved in obtaining
pole or conduit use agreements from the gas, electric and telephone companies,
or others maintaining poles or conduits in the streets or roads of the City,
whenever the Company finds it necessary to make use of said poles or conduits.
In areas where either telephone or electric utility facilities are above ground
at the time of installation, the Company may install its service above ground
provided that at such time as those facilities are required to be placed
underground by the City or are placed underground, the Company shall likewise
place its services underground. The distribution system shall be placed
underground by the Company in such areas of the City where both telephone and
electric power utilities are underground.
SECTION 13. Removal of Facilities Upon Request. Upon termination of service to
any subscriber, the Company shall promptly remove all its facilities and
equipment from the premises of such subscriber upon his or her request.
SECTION 14. Transfer or Assignment. This franchise may not be assigned by the
Company without the prior written consent of the City which consent shall not
be unreasonably withheld; provided, however, that no consent shall be necessary
(i) for the assignment of the franchise by the Company to any affiliate of the
Company, including any limited partnership or partnerships of which the Company
or any affiliate of the Company is a general partner, or any joint venture or
general partnership or partnerships of which the Company, any affiliate of the
Company, or any such limited partnership or partnerships is a
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<PAGE> 10
constituent partner (hereinafter the "Jones Entities") or (ii) for the granting
from time to time by the Company or the Jones Entities which may hold the
franchise of a security interest in all of its rights, powers and privileges
under the franchise and all of its other assets to such lending institution or
institutions as may be designated by the Company or the Jones Entities which
assignment shall be contingent upon the Company providing notice of the
Company's intention to assign and specific plans for the Company's future
operation of the system.
SECTION 15. Rights in Ordinance
a. The right is hereby reserved to the City to adopt, in addition to
the provisions contained herein and in existing applicable agreement, such
additional regulations as it shall find necessary in the lawful exercise of its
police power; provided that such regulations, by ordinance or otherwise shall
be reasonable and not in conflict with the rights herein granted.
b. The City shall have the right to supervise all construction or
installation work performed subject to the provisions of the Ordinance and make
such inspections as it shall find necessary to insure compliance with the terms
of this Ordinance and other pertinent provisions of law.
SECTION 16. Revocation. The City may revoke any franchise granted hereunder and
rescind all rights and privileges associated therewith upon the occurrence of
one of the following events:
a. Failure of the Company to pay all fees due the City, provided that
said fees are not subject to a pending lawsuit;
b. A material breach of the terms and conditions of this Ordinance; or
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c. Bankruptcy, insolvency, or assignment for the benefit of creditors
by Company.
Company shall be notified in writing fully explaining the details of
any such deficiency and Company will be allowed no less than sixty (60) days to
correct any such deficiency. If during the 60 day period, the cause shall be
cured, the notice and right to terminate shall be null and void. The Company
shall be given an opportunity to be heard before the Council regarding
termination, and the Company shall be afforded all due process rights regarding
termination. In the event of termination, the Council shall provide a written
summary of its reasons for termination. A public hearing to consider revocation
with a 20 day notice given to Company shall be held prior to termination.
Company must be given the opportunity to be heard at such public hearing.
Notwithstanding anything to the contrary herein, the Company shall not
be liable for any breach, in the event the Company is delayed in or prevented
from performing any obligation required of it by this Ordinance due to war,
riot, act of public enemy, insurrection, strike, lockout, labor or material
shortage, act of God, fire, flood, storm or other casualty, breakdown of or
damage to plant, equipment or facilities, interruption of transportation,
orders or acts of civil or military authorities, or outside the Company's
control.
SECTION 17. System Security-Tampering with Cable Television Equipment
a. Unauthorized Connections Prohibited. It shall be unlawful for any
firm, person, group, company, corporation, or governmental body or agency,
without the expressed consent of the Company, to make or possess any
connection, extension, or division, whether physically, acoustically,
inductively,
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electronically or otherwise, with or to any segment of the franchised community
antenna television and audio communications system for any purpose whatsoever.
b. Removal or Destruction Prohibited. It shall be unlawful for any
firm, person, group, company, corporation or governmental body or agency to
willfully interfere, tamper, remove, obstruct, or damage any part, segment or
content of the franchised community antenna television and audio communication
system for any purpose whatsoever.
c. Penalty. Any firm, person, group, company, corporation or
governmental body or agency convicted of a violation of this Section shall, for
each offense, forfeit a sum of not less than $1.00 nor more than $999.00,
together with costs of such prosecution.
d. The Company shall have the right at all times to take such legal
action as it deems necessary to preserve the security of its cable television
system and to assure only authorized use thereof by its subscribers or other
persons. Any person who willfully or maliciously damages, or causes to be
damaged, any wire, cable, apparatus or equipment of the Company with intent to
obtain a signal or impulse therefrom without authorization of the Company,
shall be liable to the Company in the amount of $500.00 per occurrence or
actual damage to the equipment, whichever is greater.
e. The City Council bears no responsibility for monitoring or
enforcing any of the above stated causes of action.
SECTION 18. Renewal. This franchise will be subject to renewal to the Company
for an additional five (5) year term subject to the provisions of the
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Federal Cable Communications Policy Act of 1984, Pub. L. 98-549, 47 U.S.C. 521
et seq. (1984).
SECTION 19. City's Right to Inspect Records. The City Council reserves the right
to reasonable inspection of the books, records, maps, plans and other like
material of the Company at the Company's local office during normal business
hours. The records required to be made available for an inspection by the City
Council are not an inclusive list of all such relevant records, and such list
does not relieve the Company from the obligation of furnishing or making
available to the City Council for inspection any other records that would be
relevant to the franchise granted.
SECTION 21. Severability. If any section, subsection, sentence, clause, or
phrase or portion of this Ordinance is for any reason held invalid or
unconstitutional by any court of competent jurisdiction, such portion shall be
deemed a separate, distinct and independent provision, and such holding shall
not affect the validity of the remaining portions hereof.
SECTION 22. Franchise Acceptance. The Company shall, within thirty (30) days
after passage of this Ordinance, file with the City its written acceptance
thereof. This Ordinance shall be in full force and effect from passage by the
City and the acceptance by the Company.
SECTION 23. Franchise Fee. The Company shall pay to the City a Franchise Fee of
five percent (5%) of the Company's Annual Gross Subscriber Receipts.
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No other fee, charge or consideration shall be imposed. Sales tax or other
taxes, if any, levied directly on a per-subscription basis and collected by the
Company shall be deducted from the above bases before computation of the
Franchise Fee due the City hereunder is made. Payments of the Franchise Fee
shall be made on a quarterly basis.
This Ordinance is hereby passed and adopted by the City Council of the City of
Farmer City this 21st day of November, 1994.
YEAS: 6 BY:/s/ MAURICE MILLER
MAURICE MILLER, MAYOR
NAYS: 0
ABSENT: 0 ATTEST: /s/ KHRISTINA L. KIRK
CITY CLERK
ACCEPTANCE OF THE FRANCHISE:
CABLE TV FUND 14-A, LTD.,
a Colorado limited partnership
By: Jones Intercable, Inc., (SEAL}
a Colorado corporation
as general partner
By: /s/ RUTH E. WARREN
Ruth E. Warren
Group Vice President/Operations
Date: December 15, 1994
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STATE OF ILLINOIS )
COUNTY OF CHAMPAIGN ) SS.
VILLAGE OF TOLONO )
ORDINANCE NO. 94 - 8
AN ORDINANCE GRANTING TO CABLE TV
FUND 14-A, LTD. PERMISSION TO CONSTRUCT,
OPERATE AND MAINTAIN A COMMUNITY ANTENNA
TELEVISION SYSTEM UPON, ALONG, ACROSS, OVER,
AND UNDER THE STREETS AND PUBLIC RIGHTS OF
WAY OF THE VILLAGE OF TOLONO, ILLINOIS
---------------------------------
WHEREAS, the Village desires to make available to its residents a
community antenna television system subject to certain terms and conditions the
Mayor and Board of Trustees believe to be necessary and appropriate; and
WHEREAS, Cable TV Fund 14-A,-Ltd., a Colorado limited partnership
doing business as Jones Intercable, Inc., desires to continue to construct,
install and maintain a community antenna television system within the
jurisdictional limits of the Village of Tolono, Illinois; now, therefore
BE IT ORDAINED by the Mayor and Board of Trustees of the Village of
Tolono, Illinois that the following Ordinance is adopted and approved in Board
assembled:
1. Definitions:
a. "Basic Service" means those audio and visual signals
carried on the service tier of the CATV System which includes local off-air
television signals and public, educational, or governmental channels. Basic
Service shall not include any other tier of service or any premium or
pay-per-view channels or services.
b. "Cable Act" means the Cable Communications Policy Act of
1984, P.L. 98-549, 47 U.S.C. 521 Supp., as it may be amended or superseded,
including the Cable Television Consumer Protection and Competition Act of 1992,
P.L. 102-385.
c. "Village" means the Village of Tolono, Illinois.
d. "Community Antenna Television System" ("CATV System") means
a system of antennas, cables, wires, lines, towers, microwaves, waveguides,
laser beams or any
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other conductors, converters, equipment or facilities designed, constructed, or
operated for the purpose of producing, receiving, amplifying, modifying and
distributing audio, video, and other forms of communication or electronic
signals to and from residential and business subscribers and locations within
the jurisdictional limits of the Village.
e. "Board" means the governing body of the Village.
f. "Franchise" means the authorization granted hereunder of a
franchise, privilege, permit, license or otherwise to construct, operate and
maintain a CATV System within the jurisdictional limits of the Village.
g. "Grantee" means Cable TV Fund 14-A, Ltd., a Colorado
limited partnership, and its permitted successors and assigns.
h. "Gross Receipts" means any and all compensation received by
Grantee from subscribers to the CATV System who are located within the
jurisdictional limits of the Village. In computing said sum, however, franchise
fees shall not be included and any sales, service, rent, occupational or other
excise tax or fee shall not be included to the extent such taxes or fees are
charged separately in addition to the regular monthly service charge and are
remitted by Grantee to the taxing authority.
i. "Streets and dedicated easements" means the public streets,
avenues, highways, boulevards, concourses, driveways, bridges, tunnels, parks,
parkways, waterways; alleys, all other public rights-of-way and easements, and
the public grounds, places or water within the Village.
j. "Subscriber" means a purchaser of any service delivered
over the CATV System.
2. Granting of Franchise. The Village hereby grants to Grantee a
nonexclusive Franchise for the use of the streets and dedicated easements
within the Village for the Construction, operation and maintenance of the CATV
System, upon the terms and conditions set forth herein.
3. Term. The Franchise shall be for a term of ten (10) years,
commencing on the effective date of this Ordinance. Subsequent renewals shall
be pursuant to the renewal provisions of the Cable Act as it shall provide.
4. Use of the Streets and Dedicated Easements.
a. Grantee shall have the right to use the streets and
dedicated easements of the Village for the construction, operation and
maintenance of the CATV System.
b. Grantee, at its own cost, shall have the right pursuant to
the provisions of this Ordinance to construct, erect, suspend, install, renew,
maintain and otherwise own and
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operate throughout the streets and dedicated easements of the Village, as now
laid out or dedicated and all extensions thereof and additions thereto in the
Village, the CATV System, either separately or in conjunction with any public
utility operating within the Village. The Franchise shall further include the
right, privilege, easement and authority to construct, erect, suspend, install,
lay, renew, repair, maintain and operate such poles, wires, cables, underground
conduits, manholes, ducts, trenches, fixtures, appliances and appurtenances for
the purpose of distribution to inhabitants within the jurisdictional limits of
the Village. Without limiting the generality of the foregoing, the Franchise
shall and does hereby include the right to repair, replace and enlarge and
extend the CATV System, provided that Grantee shall utilize the facilities of
utilities whenever practicable. The Grantee shall notify the Village of any
planned construction projects, other than routine cable installation, and
furnish the Village with a summary of the planned construction, including maps
and drawings.
c. Grantee may, at no cost to the Village, erect, install and
maintain on any part of the CATV System such reasonable devices to apprise or
warn persons using the streets and dedicated easements of the Village of the
existence of such CATV System. Upon at least sixty (60) days' prior notice from
the Village, Grantee agrees to relocate the CATV System at its own expense in
the event that the Village or other public entities should improve or widen
streets.
d. Grantee shall have the right to remove, trim, cut and keep
clear of the CATV System, the trees in and along the streets and dedicated
easements of the Village, provided that in the exercise of such right, the
Grantee shall not cut, remove, trim or otherwise injure such trees to any
greater extent than is necessary for the installation, maintenance and use of
the CATV System; provided, however, that the Grantee will notify the Village of
planned tree trimming prior to beginning such trimming. The Grantee must have
the approval of the Village before it removes any tree.
e. Grantee in the exercise of any right granted to it by the
Franchise shall, at no cost to the Village, promptly repair or replace any
facility or service of the Village which Grantee damages, including but not
limited to any street or dedicated easement or sewer, electric facility, water
main, fire alarm, police communication or traffic control.
f. Within thirty (30) days after the effective date of this
Ordinance, Grantee shall provide to the Village a performance bond to gurantee
the Grantee's faithful performance of its obligations under this Agreement.
This performance bond shall be in a principal sum of Twenty-Five Thousand
Dollars ($25,000).
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5. Maintenance of the System,
a. Grantee shall at all times employ ordinary care in the
maintenance and operation of the CATV System so as not to endanger the life,
health or property of any citizen of the Village or the property of the
Village.
b. Grantee shall install and maintain the CATV System so as
not to interfere with the equipment of any utility of the Village or any other
entity lawfully and rightfully using the streets and dedicated easements of the
Village.
c. The CATV System shall at all times be kept in good repair
and in a safe and acceptable condition.
d. All conductors, cables, towers, poles and other components
of the CATV System shall be located and constructed by Grantee so as to provide
minimum interference with access by adjoining property owners to the streets
and dedicated easements. No pole or other fixtures of Grantee placed in the
streets and dedicated easements shall interfere with the usual travel on such
public way.
e. The Village hereby expressly acknowledges and agrees that
Grantee will have the right allowed by law to regularly audit the improper
usage of "tapping on" the CATV System. The Village agrees to assist Grantee by
protecting Grantee's rights so far as allowed by law to audit its feeder lines
and connection lines to prevent improper usage of the CATV System.
6. Service.
a. Grantee shall provide to all residents within the current
Village limits of Tolono cable television service. Newly annexed area of the
Village shall be built out subject to a minimum density requirement of thirty
(30) homes per mile. The system as constructed will have the capacity to offer
up to thirty-six (36) channels.
b. Grantee shall provide Basis Service and on free outlet to
each of the following public facilities located within one hundred (100) feet
of existing service lines of the Grantee and within the jurisdictional limits
of the Village: Village Hall, Fire Department, Police Department, public
libraries, ESDA offices and public schools. No monthly service fee shall be
charged for any such outlet. Grantee shall provide Basic Service to new
construction hereafter for similar public facilities; provided they are within
one hundred (100) feet of the existing service lines of Grantee. The Village
reserves the right to provide service to public facilities outside of the
Village's jurisdictional limits at its own expense.
7. Franchise Fee.
a. Grantee shall pay to the Village, within forty-five (45)
days after each calendar quarter ends, an amount equal to five (5%) percent of
the Gross Receipts for such calendar quarter.
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b. Each year during which the Franchise is in force, Grantee
shall file with the Village no later than ninety (90) days after the end of
each calendar quarter a financial statement showing total Gross Receipts
derived from the CATV System during such quarter. The Village shall have the
right, at its expense, to audit the books of the Grantee to ensure proper
payment of the fees payable hereunder.
8. Insurance/Indemnity.
a. From and after the effective date of this Ordinance,
Grantee shall maintain in full force and effect at all times for the full term
of the Franchise, at the expense of the Grantee, a comprehensive general
liability insurance policy, written by a company authorized to do business in
the State of Illinois, protecting against liability for loss or bodily injury
and property damage occasioned by the installation, removal, maintenance or
operation of the CATV System by Grantee in the following minimum amounts:
One Million Dollars ($1,000,000) for property damage in any
one occurrence.
One Million Dollars ($1,000,000) per person, One Million
Dollars ($1,000,000) per occurrence, for bodily injuries.
Worker's compensation coverage in accordance with Illinois law.
The Village shall be notified at lest thirty (30) days prior to the
expiration or cancellation of such insurance policy or policies.
b. Grantee hereby agrees to indemnify and hold the Village
harmless from claims or damages resulting from the actions of Grantee in
constructing, operating or maintaining the CATV System.
9. Pledge, Assignment of Assets.
a. Grantee may mortgage or pledge the Franchise for financing
purposes. Such mortgage or pledge should not operate to circumvent the
provision of subsection b of this section.
b. Grantee may not assign or transfer control of the Franchise
without first obtaining the expressed written consent of the Village Board,
which consent shall not be unreasonably withheld.
10. Cancellation and Expiration.
a. Unless earlier terminated in accordance with this
Ordinance, the Franchise shall expire ten (10) years after the effective date
of this Ordinance.
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<PAGE> 6
b. The Village shall have the right to cancel and terminate
the Franchise of Grantee fails to comply in any material respect with the
material and substantial provisions of this Ordinance. Cancellation shall be by
duly enacted ordinance repealing this Ordinance and terminating the Franchise,
adopted after compliance with the following procedures:
1. The Village Board shall notify Grantee in writing of the
alleged failure to comply and shall give Grantee thirty (30) days to correct
such failure, or to present facts to refute the alleged failure or persistent
failure to comply with this Ordinance.
2. At the end of said thirty (30) days, the Village Board
shall hold a public hearing to decide if sufficient grounds exist to repeal
this Ordinance and terminate the Franchise. Grantee may appear at said hearing
and present such testimony and evidence as it deems appropriate with respect to
the alleged failure to comply. After such hearing the Village Board may take
such action as it deems appropriate to enforce the terms and conditions of this
Ordinance, or it may repeal this Ordinance thereby terminating the Franchise,
and the decision of the Board shall be binding in all respects upon Grantee.,
c. In the event Grantee becomes insolvent or files for
bankruptcy, the Village Board, at its election, may terminate the agreement
upon written notice to Grantee.
d. Upon expiration or termination of the Franchise, Grantee
agrees to remove the CATV System from the streets and dedicated easements of
the Village.
11. Enforcement of Terms and Conditions.
Either the Village or Grantee may institute proceedings in a court of competent
jurisdiction to enforce the terms and conditions of this Ordinance, in which
event the prevailing party shall be permitted to recover from the adverse party
all reasonable attorneys' fees and costs necessitated by the bringing of such
action.
12. Notices. Miscellaneous.
a. Every notice served upon the Village shall be delivered or
sent by certified mail, return receipt requested, to:
Village Clerk
Village Hall P.O. Box 667
Village of Tolono, Illinois 61880
and every notice served upon Grantee shall be delivered or sent by certified
mail, return receipt requested, to:
Cable TV Fund 14-A, Ltd.
10th & Lawrence
P.O. Box 151
Gibson City, Illinois 60936
Attn: General Manager
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<PAGE> 7
Cable TV Fund 14-A, Ltd.
P.O. Box 3309
9697 East Mineral Avenue
Englewood, Colorado 80155-3309
Attn: Legal Department
b. All provisions of this Ordinance shall apply to the
respective parties, their successors and assigns.
c. The fights granted by this Ordinance are subject to all
franchises and permits heretofore granted by the Village Board of the Village
to other public utility or public service operations to use the streets and
dedicated easasements of the Village. This Ordinance and the Franchise granted
herein are not intended to abridge the exercise of the police power heretofore
or hereafter granted to the Village by the general assembly. The grant of the
Franchise is subject to all ordinances and resolutions of the Board as the same
now exist and the lawful exercise of any power granted to the Village by the
general assembly.
d. If any particular section of this Ordinance shall be held
invalid, the remaining provisions and their application shall not be affected
thereby.
13. Effective Date. This Ordinance shall take effect on the date
adopted by the Village Board.
14. Future Technology Review Of the System.
a. If requested by the Village, the Grantee shall make an
annual presentation to the Village Board regarding the state of technology of
the Cable TV System in the Village the Grantee shall further be required to
submit a formal report on cable technology to the Village during the fifth (5)
year of the Franchise term. This report shall describe developments in cable
technology, and whether the Grantee plans to incorporate those technological
developments into the System. In addition, the report shall describe how, to
the Grantee's knowledge, other cable companies have incorporated or are
planning to incorporate the technological developments into their Systems and
their estimated timetable for doing so.
b. Based on this report, the village may determine that the
system or Franchise requirements should be updated, changed, revised, or that
additional services should be provided, but only if it would be economically
feasible to do so. Economic feasibility shall be determined by the Village and
Grantee in good faith following an evaluation of Grantee's financial condition,
economic waste, if any, that would occur should the changes be made, the length
of term remaining on the Franchise, and the rate of return on the Grantee's
investment
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<PAGE> 8
(both prior investment and proposed future investment) in the community. Upon
the mutual consent of the village and Grantee, this Agreement shall be amended
to incorporate the determinations made as a result of this process.
15. Boring Under Streetway, Grantee agrees that any installation
and/or repair of its system that requires disturbance of Village streets shall
be addressed by boring under the streets so as to not disturb the paving
surface and not to disturb the base of the street. No streets shall be "dug up"
or otherwise disturbed without the express permission of the Village Board
President or Village Board of Trustees.
Passed by the Village Board of the Village of Tolono,
Illinois, on the 20th day of September, 1994.
AYE: Leo Studer, Scott Hughes, Jim Snodqrass & Cecil McCormick
NAY: None
ABSENT: Roy Hanks & Jerry Harden
Approved by the Mayor of the Village of Tolono, Champaign County,
Illinois, this 20th day of September, 1994
______________________________________
Village Clerk of the Village of Tolono,
Champaign County, Illinois
Approved by the Mayor of the Village of Tolono, Champaign
County, Illinois, this 20th day of September, 1994.
/s/ CECIL A. MCCORMICK
Mayor of the Village of Tolono
Champaign County, Illinois
ATTEST:
/s/ JAMES R. BYERS
Village Clerk of the Village of Tolono
Champaign County, Illinois
(9587)
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<PAGE> 1
EXECUTION COPY
$80,000,000
CREDIT AGREEMENT, dated as of July 21, 1994,
among
CABLE TV FUND 14-A, LTD.,
as the Borrower,
and
CERTAIN COMMERCIAL LENDING INSTITUTIONS,
as the Lenders,
and
THE BANK OF NOVA SCOTIA,
as Agent for the Lenders.
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C> <C>
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.1. Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.2. Use of Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 1.3. Cross-References . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 1.4. Financial Accounting and Financial Determinations . . . . . . . . . . 21
ARTICLE II
COMMITMENTS, BORROWING PROCEDURES AND NOTES
SECTION 2.1. Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 2.1.1. Revolving Loan Commitment . . . . . . . . . . . . . . . . . . . . . 21
SECTION 2.1.2. Lenders Not Permitted or Required To Make Revolving Loans . . . . . 22
SECTION 2.2. Reduction of Commitment Amount . . . . . . . . . . . . . . . . . . . 22
SECTION 2.3. Borrowing Procedure . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 2 4. Continuation and Conversion Elections . . . . . . . . . . . . . . . . 22
SECTION 2.5. Funding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 2.6. Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
ARTICLE III
CONVERSION, REPAYMENTS, PREPAYMENTS,
INTEREST AND FEES
SECTION 3.1. Conversion, Repayments and Prepayments . . . . . . . . . . . . . . . 24
SECTION 3.2. Interest Provisions . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 3.2.1. Rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 3.2.2. Post-Maturity Rates . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 3.2.3. Payment Dates . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 3.3. Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 3.3.1. Commitment Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 3.3.2. Agent's Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
ARTICLE IV
CERTAIN CD RATE, LIBO RATE AND OTHER PROVISIONS
SECTION 4.1. Fixed Rate Lending Unlawful . . . . . . . . . . . . . . . . . . . . 29
SECTION 4.2. Deposits Unavailable . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 4.3. Increased Fixed Rate Loan Costs, etc. . . . . . . . . . . . . . . . . 30
SECTION 4.4. Funding Losses . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
section 4.5. Increased Capital Costs . . . . . . . . . . . . . . . . . . . . . . 31
</TABLE>
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<TABLE>
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SECTION 4.6. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 4.7. Payments, Computations, etc. . . . . . . . . . . . . . . . . . . . . 33
SECTION 4.8. Sharing of Payments . . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 4.9. Setoff . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
ARTICLE V
CONDITIONS TO BORROWING
SECTION 5.1. Initial Borrowing . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 5.1.1. General Partner's Certificate . . . . . . . . . . . . . . . . . . . 35
SECTION 5.1.2. Delivery of Notes . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 5.1.3. Payment of Outstanding Indebtedness, etc. . . . . . . . . . . . . . . 36
SECTION 5.1.4. Security Agreement . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 5.9.5. Subordination Agreement . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 5.1.6. Opinions of Counsel . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 5.1.7. Closing Date Certificate . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 5.1.8. Release Letter . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 5.1.9. Closing Fees, Expenses . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 5.1.10. Compliance Certificate . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 5.2. All Borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 5.2.1. Compliance with Warranties, No Default, etc. . . . . . . . . . . . . 38
SECTION 5.2.2. Borrowing Request . . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 5.2.3. Satisfactory Legal Form . . . . . . . . . . . . . . . . . . . . . . 39
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
SECTION 6.1. Organization, etc. . . . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 6.2. Due Authorization, Non-Contravention, etc. . . . . . . . . . . . . . . 41
SECTION 6.3. Government Approval, Regulation, etc. . . . . . . . . . . . . . . . . 41
SECTION 6.4. Validity, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 6.5. Financial Information . . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 6.6. No Material Adverse Change . . . . . . . . . . . . . . . . . . . . . 42
SECTION 6.7. Litigation, Labor Controversies, etc. . . . . . . . . . . . . . . . . 42
SECTION 6.8. Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 6.9. Ownership of Properties . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 6.10. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 6 11. Pension and Welfare Plans . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 6.12. Environmental Warranties . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 6.13. Regulations G, U and X . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 6.14. Accuracy of Information . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 6.15. Cable Authorizations . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 6.16. FCC Registration and Regulatory Compliance . . . . . . . . . . . . . 44
SECTION 6.17. Franchises, Copyrights and Licenses . . . . . . . . . . . . . . . . . 45
SECTION 6.18. Communications Act Filings . . . . . . . . . . . . . . . . . . . . . 45
SECTION 6.19. Partnership Agreement . . . . . . . . . . . . . . . . . . . . . . . . 46
</TABLE>
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<TABLE>
<S> <C> <C>
ARTICLE VII
COVENANTS
SECTION 7.1. Affirmative Covenants . . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 7.1.1. Financial Information, Reports, Notices, etc. . . . . . . . . . . . . 46
SECTION 7.1.2. Compliance with Laws, etc. . . . . . . . . . . . . . . . . . . . . . 48
SECTION 7.1.3. Maintenance of Properties . . . . . . . . . . . . . . . . . . . . . 49
SECTION 7.1.4. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 7.1.5. Books and Records . . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 7.1.6. Environmental Covenant . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 7.1.7. Copyright Act Filings . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 7.1.8. Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 7.1.9. Post-Closing Mortgages and Releases . . . . . . . . . . . . . . . . . 51
SECTION 7.1.10. Post-Closing Delivery of Opinion . . . . . . . . . . . . . . . . . . 51
SECTION 7.2. Negative Covenants . . . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 7.2.1. Business Activities . . . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 7.2.2. Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 7.2.3. Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
SECTION 7 2.4. Financial Condition . . . . . . . . . . . . . . . . . . . . . . . . 53
SECTION 7.2.5. Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 7.2.6. Restricted Payments, etc. . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 7.2.7. Capital Expenditures, etc. . . . . . . . . . . . . . . . . . . . . . 55
SECTION 7.2.8. General Partner Advances . . . . . . . . . . . . . . . . . . . . . . 55
SECTION 7.2.9. Consolidation, Merger, etc. . . . . . . . . . . . . . . . . . . . . . 55
SECTION 7.2.10. Asset Dispositions, etc. . . . . . . . . . . . . . . . . . . . . . . 56
SECTION 7.2.11. Modification of Certain Agreements . . . . . . . . . . . . . . . . . 56
SECTION 7.2.12. Transactions with Affiliates . . . . . . . . . . . . . . . . . . . . 56
SECTION 7.2.13. Negative Pledges, Restrictive Agreements, etc. . . . . . . . . . . . 57
SECTION 7.2 14. No Creation of Pension Plans . . . . . . . . . . . . . . . . . . . . 57
SECTION 7.2.15. Acquisition of Real Property Interests . . . . . . . . . . . . . . . 57
ARTICLE VIII
EVENTS OF DEFAULT
SECTION 8.1. Listing of Events of Default . . . . . . . . . . . . . . . . . . . . 58
SECTION 8.1.1. Non-Payment of Obligations . . . . . . . . . . . . . . . . . . . . . 58
SECTION 8.1.2. Breach of Warranty . . . . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 8.1.3. Non-Performance of Certain Covenants and Obligations . . . . . . . . 58
SECTION 8.1.4. Non-Performance of Other Covenants and Obligations . . . . . . . . . 58
SECTION 8.1.5. Default on Other Indebtedness . . . . . . . . . . . . . . . . . . . 58
SECTION 8.1.6. Judgments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 8.1.7. Change in Control . . . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 8.1.8. Bankruptcy, Insolvency, etc. . . . . . . . . . . . . . . . . . . . . 59
SECTION 8.1.9. Partnership Agreement . . . . . . . . . . . . . . . . . . . . . . . 60
SECTION 8.1.10. Impairment of Security, etc. . . . . . . . . . . . . . . . . . . . . 60
</TABLE>
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<TABLE>
<CAPTION>
<S> <C> <C>
SECTION 8.1.11. Failure to Obtain or Cessation of Authorization, etc. . . . . . . . . 60
SECTION 8.1.12. Cancellation of Franchise Agreement . . . . . . . . . . . . . . . . . 61
SECTION 8.2. Action if Bankruptcy . . . . . . . . . . . . . . . . . . . . . . . . 61
SECTION 8.3. Action if Other Event of Default . . . . . . . . . . . . . . . . . . 61
ARTICLE IX
THE AGENT
SECTION 9.1. Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
SECTION 9.2. Funding Reliance, etc. . . . . . . . . . . . . . . . . . . . . . . . 62
SECTION 9.3. Exculpation . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
SECTION 9.4. Successor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
SECTION 9.5. Loans by Scotiabank . . . . . . . . . . . . . . . . . . . . . . . . . 64
SECTION 9.6. Credit Decisions . . . . . . . . . . . . . . . . . . . . . . . . . . 64
SECTION 9.7. Copies, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.1. Waivers, Amendments, etc. . . . . . . . . . . . . . . . . . . . . . . 65
SECTION 10.2. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
SECTION 10.3. Payment of Costs and Expenses . . . . . . . . . . . . . . . . . . . 66
SECTION 10.4. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
SECTION 10.5. Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
SECTION 10.6. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
SECTION 10.7. Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
SECTION 10.8. Execution in Counterparts, Effectiveness, etc. . . . . . . . . . . . 68
SECTION 10.9. Governing Law; Entire Agreement . . . . . . . . . . . . . . . . . . 68
SECTION 10.10. Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . 68
SECTION 10.11. Sale and Transfer of Loans and Notes; Participations in
Loans and Notes . . . . . . . . . . . . . . . . . . . . . . . . . . 69
SECTION 10.11.1. Assignments . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
SECTION 10.11.2. Participations . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
SECTION 10.12. Other Transactions . . . . . . . . . . . . . . . . . . . . . . . . . 71
SECTION 10.13. Nonrecourse Obligations . . . . . . . . . . . . . . . . . . . . . . 71
SECTION 10.14. Forum Selection and Consent to Jurisdiction . . . . . . . . . . . . 72
SECTION 10.15. Waiver of Jury Trial . . . . . . . . . . . . . . . . . . . . . . . . 72
</TABLE>
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<TABLE>
<S> <C> <C>
SCHEDULE I - Disclosure schedule
SCHEDULE II - Cable Schedule
EXHIBIT A - Form of Promissory Note
EXHIBIT B - Form of Borrowing Request
EXHIBIT C - Form of Continuation/Conversion Notice
EXHIBIT D - Form of Lender Assignment Agreement
EXHIBIT E - Form of Security Agreement
EXHIBIT F - Form of Subordination Agreement
EXHIBIT G - Form of Opinion of General Counsel
to the Borrower
EXHIBIT H-1 - Form of Opinion of Local Illinois Counsel
to the Borrower
EXHIBIT H-2 - Form of Opinion of Local Maryland Counsel
to the Borrower
EXHIBIT H-3 - Form of Opinion of Local Minnesota Counsel
to the Borrower
EXHIBIT H-4 - Form of Opinion of Local New Jersey Counsel
to the Borrower
EXHIBIT I - Form of Opinion of FCC Counsel
to the Borrower
EXHIBIT J - Form of Opinion of Counsel to the Agent
EXHIBIT K - Form of Compliance Certificate
EXHIBIT L - Form of Closing Date Certificate
EXHIBIT M - Form of Release Letter
</TABLE>
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<PAGE> 7
CREDIT AGREEMENT
THIS CREDIT AGREEMENT, dated as of July 21, 1994, is made among CABLE
TV FUND 14-A, LTD., a Colorado limited partnership (the "Borrower"), the
various financial institutions as are or may become parties hereto
(collectively, the "Lenders"), and THE BANK OF NOVA SCOTIA ("Scotiabank"), as
agent for the Lenders (in such capacity, the "Agent" ).
WITNESSETH:
WHEREAS, the Borrower is currently the obligor under that certain
$80,000,000 Loan Agreement, dated as of May 30, 1991 (as amended, restated or
otherwise modified prior hereto, the "Existing Credit Agreement"), among the
Borrower, Scotiabank, as a lender, and Wells Fargo Bank, National Association
("Wells Fargo"), as a lender and as agent for the lenders;
WHEREAS, the Borrower desires to obtain Loans from the Lenders to:
(i) repay, in full, all of the loans outstanding under
the Existing Credit Agreement;
(ii) finance certain working capital requirements of the
Borrower; and
(iii) subject to Section 7.2.8 and the Subordination
Agreement, from time to time to repay advances made by the General
Partner to the Borrower; and
WHEREAS, the Lenders are willing, on the terms and subject to the
conditions hereinafter set forth, to extend such Loans to the Borrower;
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.1. Defined Terms. The following terms when used in this
Agreement, including its preamble and recitals, shall, except where the context
otherwise requires, have the following meanings (such meanings to be equally
applicable to the singular and plural forms thereof):
<PAGE> 8
"Affiliate" means, with respect to any Person, any other Person which,
directly or indirectly, controls, is controlled by or is under common control
with, such Person (excluding any trustee under, or any committee with
responsibility for administering, any Plan). A Person shall be deemed to
"control" another Person if such Person possesses, directly or indirectly, the
power
(a) to vote 10% or more of the securities of such other
Person (on a fully diluted basis) having ordinary voting power for the
election of directors or managing general partners; or
(b) to direct or cause the direction of the management
and policies of such other Person whether by contract or otherwise.
"Agent" is defined in the preamble and includes each other Person as
shall have subsequently been appointed as the successor Agent pursuant to
Section 9.4.
"Agreement" means, on any date, this Credit Agreement as originally in
effect on the Effective Date and as thereafter from time to time amended,
restated or otherwise modified and in effect on such date.
"Allocated Overhead" means, for any period, the fees payable (without
regard to the Borrower's right to defer or limit actual payment) to the General
Partner to compensate the General Partner for that portion of its general
overhead and administrative expenses, including all of its direct and indirect
expenses, allocable to the operation of the Borrower's business, including, but
not limited to, home office rent, supplies, telephone, travel and copying
charges, and salaries of full and part-time employees.
"Alternate Base Rate" means, on any date and with respect to all Base
Rate Loans, a fluctuating rate of interest per annum equal to the higher of
(a) the rate of interest most recently established by the
Agent at its Domestic Office as its base rate for Dollar loans; and
(b) the Federal Funds Rate most recently determined by
the Agent plus 1/2 of 1%.
The Alternate Base Rate is not necessarily intended to be the lowest rate of
interest determined by the Agent in connection with extensions of credit.
Changes in the rate of interest on that portion of any Loans maintained as Base
Rate Loans will take
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<PAGE> 9
effect simultaneously with each change in the Alternate Base Rate. The Agent
will give notice promptly to the Borrower and the Lenders of changes in the
Alternate Base Rate.
"Annualized Cash Flow" means, at any time, Cash Flow for the
immediately preceding Fiscal Quarter times four.
"Applicable Margin" means, at any time during which the Borrower's
Leverage Ratio falls within the ranges set forth below, and with respect to
Base Rate Loans of either type or Fixed Rate Loans, the amounts set forth below
opposite such ranges for such types of Loans:
<TABLE>
<CAPTION>
Applicable Margin
-----------------------------------------------------
Leverage Ratio Base Rate Loans LIBO Rate Loans CD Rate Loans
- --------------- ---------------- ---------------- -------------
<S> <C> <C> <C>
4.50:1 or greater 0.50% 1.50% 1.625%
4.00:1 or greater 0.25% 1.25% 1.375%
but less than
4.50:1
less than 4.00:1 0.00% 1.00% 1.125%
</TABLE>
"Assessment Rate" is defined in Section 3.2.1.
"Assignee Lender" is defined in Section 10.11.1.
"Authorized Officer" means those officers of the General Partner whose
signatures and incumbency shall have been certified to the Agent and the
Lenders pursuant to Section 5.1.1.
"Base Rate Loan" means a Loan bearing interest at a fluctuating rate
determined by reference to the Alternate Base Rate.
"Basic Penetration Rate" means, at any time, a percentage derived from
a fraction, the numerator of which is the number of Basic Subscribers, at such
time, and the denominator of which is the number of Homes Passed, at such time.
"Basic Subscriber Rate" means the minimum standard monthly fees and
charges for "basic service" (as such term is commonly understood in the cable
television industry) charged to customers of the Cable Systems.
"Basic Subscribers" means, at any time, the total number of
subscribers subscribing to the Cable Systems (excluding "second connects" as
such term is commonly understood in the cable television industry) who (i) pay
the Basic Subscriber Rate for
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<PAGE> 10
service, and (ii) are not more than 60 days past due in payment. In the case of
commercial buildings, such as hotels or motels, or in the case of multiple
residential dwellings, such as apartment houses and multifamily homes, which do
not obtain reduced bulk service rates, each separate guest unit or dwelling
unit receiving such services shall be counted as one subscriber. The number of
subscribers in a commercial building or in a multiple residential dwelling
which obtains a reduced bulk service rate shall be obtained by dividing (x) the
aggregate dollar amount of monthly subscribers' fees paid on account of such
commercial building or multiple residential dwelling for basic service by (y)
the Basic Subscriber Rate. Except for discounts to senior citizens less than
20% of the otherwise applicable rate, residential households (other than in a
multiple residential dwelling) paying the Basic Subscriber Rate on a discounted
basis or under any form of deferred payment arrangement shall not be included.
"Borrower" is defined in the preamble.
"Borrowing" means the Loans of the same type and, in the case of Fixed
Rate Loans, having the same Interest Period, made by all Lenders on the same
Business Day and pursuant to the same Borrowing Request in accordance with
Section 2.3.
"Borrowing Request" means a loan request and certificate duly executed
by an Authorized Officer of the General Partner, substantially in the form of
Exhibit B hereto.
"Business Day" means
(a) any day which is not a Saturday, a Sunday or a day on
which banks are authorized or required by law to be closed in New York
City, New York; and
(b) relative to the making, continuing, prepaying or
repaying of any LIBO Rate Loans, any day on which dealings in Dollars
are carried on in the London interbank market.
"Cable Franchises" is defined in Section 6.15.
"Cable Schedule" means the Cable Schedule attached hereto as Schedule
II, as it may be amended, supplemented or otherwise modified from time to time
by the Borrower with the written consent of the Agent.
"Cable System" means the assets constituting a CATV or SMATV system
(including, without limitation, all related licenses, franchises and permits
issued under federal, state or local laws from time to time, and all agreements
with public utilities and microwave transmission companies, pole attachment,
use, access or
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<PAGE> 11
rental agreements, conduit occupancy rights, utility easements and all other
property owned or used in connection with the services provided pursuant to,
and all other interests of the holder thereof to receive revenues from, or
pursuant to, said licenses, franchises and permits) listed on the Cable
Schedule and all assets constituting such a system hereafter acquired by the
Borrower 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.
"Capital Expenditures" means, for any period, the sum of
(a) the aggregate amount of all expenditures of the
Borrower and its Subsidiaries for fixed or capital assets made during
such period which, in accordance with GAAP, would be classified as
capital expenditures; and
(b) the aggregate amount of all Capitalized Lease
Liabilities incurred during such period.
"Capitalized Lease Liabilities" means all monetary obligations of the
Borrower or any of its Subsidiaries under any leasing or similar arrangement
which, in accordance with GAAP, would be classified as capitalized leases, and,
for purposes of this Agreement and each other Loan Document, the amount of such
obligations shall be the capitalized amount thereof, determined in accordance
with GAAP, and the stated maturity thereof shall be the date of the last
payment of rent or any other amount due under such lease prior to the first
date upon which such lease may be terminated by the lessee without payment of a
penalty.
"Cash Equivalent Investment" means, at any time:
(a) any evidence of Indebtedness, maturing not more than
one year after such time, issued or guaranteed by the United States
Government;
(b) commercial paper, maturing not more than nine months
from the date of issue, which is issued by
(i) a corporation (other than the Borrower or an
Affiliate of the Borrower) organized under the laws of any
state of the United States or of the District of Columbia and
whose long-term debt is rated at least A-1 by Standard &
Poor's Corporation or P-1 by Moody's Investors Service, Inc.,
or
(ii) any Lender (or its holding company);
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<PAGE> 12
(c) any certificate of deposit or bankers acceptance,
maturing not more than one year after such time, which is issued by
either
(i) a commercial banking institution that is a
member of the Federal Reserve System and has combined capital,
surplus and undivided profits of not less than $1,000,000,000,
or
(ii) any Lender; or
(d) any repurchase agreement entered into with any Lender
(or any other commercial banking institution of the stature referred
to in clause (c)(i)) which
(i) is secured by a fully perfected security
interest in any obligation of the type described in any of
clauses (a) through (c), and
(ii) has a market value at the time such
repurchase agreement is entered into of not less than 100% of
the repurchase obligation of such Lender (or other commercial
banking institution) thereunder.
"Cash Flow" means, for any period, total consolidated revenues of the
Borrower for such period, less the sum of (i) operating expenses of the
Borrower for such period and (ii) general and administrative expenses of the
Borrower for such period (excluding Management Fees and Allocated Overhead for
such period, if any, included in clauses (i) and (ii)).
"CATV" means community antenna television.
"CD Rate" is defined in Section 3.2.1.
"CD Rate Loan" means a Loan bearing interest, at all times during an
Interest Period applicable to such Loan, at a fixed rate determined by
reference to the CD Rate (Reserve Adjusted).
"CD Rate (Reserve Adjusted)" is defined in Section 3.2.1.
"CD Reserve Requirement" is defined in Section 3.2.1.
"CERCLA" means the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended.
"Change in Control" means the occurrence of either or both of the
following:
(a) the failure of Jones Intercable to own, free and
clear of all Liens or other encumbrances, 100% of the
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<PAGE> 13
outstanding general partnership interests in the Borrower; or
(b) the failure of Jones Intercable to be the sole
general partner of the Borrower; provided, however, that if Jones
Intercable ceases to be the sole general partner of the Borrower but
within 90 days thereafter a replacement general partner acceptable to
the Required Lenders in its sole discretion shall have been appointed,
then no Change in Control shall be deemed to have occurred.
"Closing Date Certificate" means a certificate of the General Partner,
substantially in the form of Exhibit L hereto.
"Code" means the Internal Revenue Code of 1986, as amended, reformed
or otherwise modified from time to time.
"Commitment" means, relative to any Lender, such Lender's obligation
to make Revolving Loans pursuant to Section 2.1.1.
"Commitment Amount" means, on any date prior to the Commitment
Termination Date, $80,000,000, as such amount may be reduced from time to time
pursuant to Section 2.2.
"Commitment Termination Date" means the earliest of
(a) the Conversion Date;
(b) the date on which the Commitment Amount is terminated
in full or reduced to zero pursuant to Section 2.2; and
(c) the date on which any Commitment Termination Event
occurs.
Upon the occurrence of any event described in clause (b) or (c), the
Commitments shall terminate automatically and without any further action.
"Commitment Termination Event" means
(a) the occurrence of any Default described in clauses
(a) through (d) of Section 8.1.8 with respect to the Borrower or any
Subsidiary of the Borrower; or
(b) the occurrence and continuance of any other Event of
Default and either
(i) the declaration of the Loans to be due and
payable pursuant to Section 8.3, or
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<PAGE> 14
(ii) in the absence of such declaration, the
giving of notice by the Agent, acting at the direction of the
Required Lenders, to the Borrower that the Commitments have
been terminated.
"Communications Act" means the Communications Act of 1934 and the
rules and regulations issued thereunder, as amended, reformed or otherwise
modified from time to time.
"Competing Rantoul Franchise" is defined in Section 6.15.
"Compliance Certificate" means a certificate duly executed by an
Authorized Officer of the General Partner, substantially in the form of Exhibit
K hereto.
"Contingent Liability" means any agreement, undertaking or arrangement
by which any Person guarantees, endorses or otherwise becomes or is
contingently liable upon (by direct or indirect agreement, contingent or
otherwise, to provide funds for payment, to supply funds to, or otherwise to
invest in, a debtor, or otherwise to assure a creditor against loss) any
indebtedness, obligation or other liability of any other Person (other than by
endorsements of instruments in the course of collection), or guarantees the
payment of dividends or other distributions upon the shares of any other
Person. The amount of any Person's obligation under any Contingent Liability
shall (subject to any limitation set forth therein) be deemed to be the
outstanding principal amount (or maximum principal amount, if larger) of the
debt, obligation or other liability guaranteed thereby.
"Continuation/Conversion Notice" means a notice and certificate duly
executed by an Authorized Officer of the General Partner, substantially in the
form of Exhibit C hereto.
"Controlled Group" means all members of a controlled group of
corporations and all members of a controlled group of trades or businesses
(whether or not incorporated) under common control which, together with the
Borrower, are treated as a single employer under Section 414(b) or 414(c) of
the Code or Section 4001 of ERISA.
"Conversion Date" means September 30, 1996.
"Conversion Date Amount" is defined in Section 3.1.
"Debt Service Ratio" means, at any time, the ratio, computed on a
consolidated basis, of:
(a) Annualized Cash Flow
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<PAGE> 15
to
(b) the sum for the twelve calendar month period ending on
the last day of the immediately preceding Fiscal Quarter of
(i) all scheduled payments of principal of
Indebtedness whether or not paid, plus
(ii) Interest Expense.
"Default" means any Event of Default or any condition, occurrence or
event which, after notice or lapse of time or both, would constitute an Event
of Default.
"Disclosure Schedule" means the Disclosure Schedule attached hereto as
Schedule I, as it may be amended, supplemented or otherwise modified from time
to time by the Borrower with the written consent of the Agent.
"Dollar" and the sign "$" mean lawful money of the United States.
"Domestic Office" means, relative to any Lender, the office of such
Lender designated as such below its signature hereto or, if applicable,
designated in such Lender's Lender Assignment Agreement, or such other office
of a Lender (or any successor or assign of such Lender) within the United
States as may be designated from time to time by notice from such Lender, as
the case may be, to each other Person party hereto. A Lender may have separate
Domestic Offices for purposes of making, maintaining or continuing, as the case
may be, Base Rate Loans and CD Rate Loans.
"Effective Date" means the date this Agreement becomes effective
pursuant to section 10.8.
"Environmental Laws" means all applicable federal, state or local
statutes, laws, ordinances, codes, rules, regulations and guidelines (including
consent decrees and administrative orders) relating to the protection of the
environment.
"ERISA" means the Employee Retirement Income Security Act of 1974, and
the rules and regulations issued thereunder, as amended, reformed or otherwise
modified from time to time. References to sections of ERISA also refer to any
successor sections.
"Event of Default" is defined in Section 8.1.
"Existing Credit Agreement" is defined in the first recital.
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<PAGE> 16
"FCC" means the Federal Communications Commission or any successor
agency thereto performing functions similar to those performed by the Federal
Communications Commission on the date hereof.
"FCC License" means any license or permit issued by the FCC,
including, without limitation, licenses issued in connection with the operation
of CATV or SMATV systems, community antenna relay systems, microwave systems,
earth stations and business and other two-way radios.
"Federal Funds Rate" means, for any period, a fluctuating interest
rate per annum equal for each day during such period to
(a) 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 preceding Business Day) by the
Federal Reserve Bank of New York; or
(b) if such rate is not so published for any day which is
a Business Day, the average of the quotations for such day on such
transactions received by the Agent from three federal funds brokers of
recognized standing selected by it.
"Fee Letter" means that certain confidential fee letter, dated May 26,
1994, from Scotiabank to the Borrower relating to the payment of fees in
connection with this Agreement.
"Fiscal Quarter" means any quarter of a Fiscal Year.
"Fiscal Year" means any period of twelve consecutive calendar months
ending on December 31; references to a Fiscal Year with a number corresponding
to any calendar year (e.g., the "1994 Fiscal Year") refer to the Fiscal Year
ending on the December 31 occurring during such calendar year.
"Fixed Charge Coverage Ratio" means, at any time, the ratio, computed
on a consolidated basis of:
(a) the sum of
(i) cash on the consolidated balance sheet of the
Borrower at the beginning of the immediately preceding Fiscal
Quarter, minus the aggregate amount of General Partner
Advances at such time
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<PAGE> 17
plus
(ii) Annualized Cash Flow
to
(b) the ending on the Quarter of sum for the last day of
twelve calendar month period the immediately preceding Fiscal
(i) Interest Expense,
plus
(ii) all scheduled payments of principal of
Indebtedness whether or not paid,
plus
(iii) Capital Expenditures,
plus
(iv) all state, local and federal income taxes
paid or payable in cash,
plus
(v) Management Fees and Allocated Overhead
actually paid.
"Fixed Rate Loan" means any CD Rate Loan or any LIBO Rate Loan.
"Franchise" means any franchise, permit, license or other
authorization granted by any Official Body, including all laws, regulations and
ordinances relating thereto, for the construction, operation and maintenance of
a CATV or SMATV system and the reception and transmission of signals by
microwave, and shall include, without limitation, all FCC Licenses and all
certificates of compliance and cable television registration statements which
are required to be issued by or filed with the FCC.
"Franchise Agreement" means any ordinance, agreement, contract or
other document stating the terms and conditions of any Franchise, including,
without limitation, all exhibits and schedules thereto, all amendments thereof
and consents, waivers and extensions issued thereunder, any documents
incorporated therein by reference and the application from which such Franchise
was granted.
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<PAGE> 18
"F.R.S. Board" means the Board of Governors of the Federal Reserve
System or any successor thereto.
"GAAP" is defined in Section 1.4.
"General Partner" means Jones Intercable until such time as Jones
Intercable is replaced in accordance with the terms of this Agreement by
another Person as the general partner of the Borrower, at which time, "General
Partner" shall mean such other Person. Whenever the term "General Partner" is
used herein, such term shall mean any such Person in its capacity as general
partner of the Borrower.
"General Partner Advances" means (i) all amounts representing deferred
Management Fees and deferred Allocated Overhead, (ii) all amounts representing
the Borrower's obligation to repay cash advances made to the Borrower or any of
its Subsidiaries by the General Partner or any previous general partner of the
Borrower, and (iii) any interest accrued on any of the foregoing amounts.
"Hazardous Material" means
(a) any "hazardous substance", as defined by CERCLA;
(b) any "hazardous waste", as defined by the Resource
Conservation and Recovery Act, as amended;
(c) any petroleum product; or
(d) any pollutant or contaminant or hazardous, dangerous
or toxic chemical, material or substance within the meaning of any
other applicable federal, state or local law, regulation, ordinance or
requirement (including consent decrees and administrative orders)
relating to or imposing liability or standards of conduct concerning
any hazardous, toxic or dangerous waste, substance or material, all as
amended or hereafter amended.
"Head End" means the antenna site, the tower and the antenna, the
microwave communications equipment, the earth station and the head end
facilities, equipment, leaseholds or other real estate and leasehold
improvements relating thereto.
"Hedging Obligations" means, with respect to any Person, all
liabilities of such Person under interest rate swap, interest rate cap, and
interest rate collar agreements, and all other agreements or arrangements
designed to protect such Person against fluctuations in interest rates or
currency exchange rates.
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<PAGE> 19
"herein", "hereof", "hereto", "hereunder" and similar terms contained
in this Agreement or any other Loan Document refer to this Agreement or such
other Loan Document, as the case may be, as a whole and not to any particular
Section, paragraph or provision of this Agreement or such other Loan Document.
"Homes Passed" means the actual number of residential dwellings which
can be connected to a Cable System by a single drop line from existing trunk
and distribution lines, which lines are energized and capable of carrying cable
television signals to subscribers and are connected to an existing Head End
facility. In the case of commercial buildings, such as hotels or motels, or in
the case of multiple residential dwellings, such as apartment houses and
multifamily homes, which do not and are not reasonably anticipated to obtain a
reduced bulk service rate, each separate guest unit or dwelling unit shall be
counted as one residential dwelling. The number of dwelling units in a
commercial building or in a multiple residential building which does or is
reasonably anticipated to obtain a reduced bulk service rate shall be obtained
by dividing (a) the aggregate dollar amount of monthly subscriber fees obtained
or reasonably anticipated to be obtained on account of such commercial building
or multiple residential building for basic service by (b) the applicable Basic
Subscriber Rate. Except for discounts to senior citizens less than 20% of the
otherwise applicable rate, residential households (other than a multiple
residential dwelling) paying for or reasonably expected to be paying for
services on a discounted basis or under any form of deferred payment
arrangement shall not be included.
"Impermissible Qualification" means, relative to the opinion or
certification of any independent public accountant as to any financial
statement of the Borrower, any qualification or exception to such opinion or
certification
(a) which is of a "going concern" or similar nature;
(b) which relates to the limited scope of examination of
matters relevant to such financial statement; or
(c) which relates to the treatment or classification of
any item in such financial statement and which, as a condition to its
removal, would require an adjustment to such item the effect of which
would be to cause the Borrower to be in default of any of its
obligations under Section 7.2.4.
"including" means including without limiting the generality of any
description preceding such term, and, for purposes of this Agreement and each
other Loan Document, the parties hereto agree that the rule of ejusdem generis
shall not be applicable to limit a general statement, which is followed by or
referable to an
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<PAGE> 20
enumeration of specific matters, to matters similar to the matters specifically
mentioned to matters similar to the
"Indebtedness" of any Person means, without duplication:
(a) all obligations of such Person for borrowed money and
all obligations of such Person evidenced by bonds, debentures, notes
or other similar instruments;
(b) all obligations, contingent or otherwise, relative to
the face amount of all letters of credit, whether or not drawn, and
banker's acceptances issued for the account of such Person;
(c) all obligations of such Person as lessee under leases
which have been or should be, in accordance with GAAP, recorded as
Capitalized Lease Liabilities;
(d) all Contingent Liabilities of such Person;
(e) net liabilities of such Person under all Hedging
Obligations;
(f) whether or not so included as liabilities in
accordance with GAAP, all obligations of such Person to pay the
deferred purchase price of property or services, and indebtedness
(excluding prepaid interest thereon) secured by a Lien on property
owned or being purchased by such Person (including indebtedness
arising under conditional sales or other title retention agreements),
whether or not such indebtedness shall have been assumed by such
Person or is limited in recourse; and
(g) all other items which, in accordance with GAAP, would
be included as liabilities on the liability side of the balance sheet
of such Person as of the date at which Indebtedness is to be
determined.
"Indemnified Liabilities" is defined in Section 10.4.
"Indemnified Parties" is defined in Section 10.4.
"Interest Coverage Ratio" means, at any time, the ratio, computed on a
consolidated basis, of:
(a) Cash Flow for the immediately preceding Fiscal Quarter
to
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<PAGE> 21
(b) Interest Expense for the immediately preceding Fiscal
Quarter.
"Interest Expense" means, for any period, the interest expense of the
Borrower for such period, including, (whether or not includable under GAAP) all
net amounts payable with respect to Hedging Obligations, commitment fees owed
with respect to the Commitments and the portion of any Capitalized Lease
Liabilities of the Borrower allocable to interest expense, in each case paid or
payable during such period.
"Interest Period" means, relative to any Fixed Rate Loans, the period
beginning on (and including) the date on which such Fixed Rate Loan is made or
continued as, or converted into, a Fixed Rate Loan pursuant to Section 2.3 or
2.4 and ending on (but excluding) the day which is, in the case of a CD Rate
Loan, 30, 60, 90, 180 or, if the Agent determines that a 360 day rate is
available, 360 days thereafter, or which, in the case of a LIBO Rate Loan,
numerically corresponds to such date one, two, three, six or, if the Agent
determines that a twelve month rate is available, twelve months thereafter (or,
if such month has no numerically corresponding day, on the last Business Day of
such month), in each case as the Borrower may select in its relevant notice
pursuant to Section 2.3 or 2.4; provided, however, that
(a) the Borrower shall not be permitted to select
Interest Periods to be in effect at any one time which have expiration
dates occurring on more than six different dates;
(b) Interest Periods commencing on the same date for
Loans comprising part of the same Borrowing shall be of the same
duration;
(c) if such Interest Period would otherwise end on a day
which is not a Business Day, such Interest Period shall end on the
next following Business Day (unless, if such Interest Period applies
to LIBO Rate Loans, such next following Business Day is the first
Business Day of a calendar month, in which case such Interest Period
shall end on the Business Day next preceding such numerically
corresponding day); and
(d) no Interest Period may end later than the Stated
Maturity Date.
"Investment" means, relative to any Person,
(a) any loan or advance made by such Person to any other
Person (excluding (i) commission, travel and similar advances to
officers and employees made in the ordinary course of business and
(ii) trade credit made available to
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<PAGE> 22
or loans or advances made to subcontractors or suppliers on customary
terms and in the ordinary course of the Borrower's business);
(b) any Contingent Liability of such Person; and
(c) any ownership or similar interest held by such Person
in any other Person.
The amount of any Investment shall be the original principal or capital amount
thereof less all returns of principal or equity thereon (and without adjustment
by reason of the financial condition of such other Person) and shall, if made
by the transfer or exchange of property other than cash, be deemed to have been
made in an original principal or capital amount equal to the fair market value
of such property.
"Jones Intercable" means Jones Intercable Inc., a Colorado corporation.
"Lender Assignment Agreement" means a Lender Assignment Agreement
substantially in the form of Exhibit D hereto.
"Lenders" is defined in the preamble.
"Leverage RatiO" means, at any time, the ratio, computed on a
consolidated basis, of:
(a) Total Debt at such time
to
(b) Annualized Cash Flow.
"LIBO Rate" is defined in Section 3.2.1.
"LIBO Rate Loan" means a Loan bearing interest, at all times during an
Interest Period applicable to such Loan, at a fixed rate of interest determined
by reference to the LIBO Rate (Reserve Adjusted).
"LIBO Rate (Reserve Adjusted)" is defined in SectiOn 3.2.1.
"LIBOR Office" means, relative to any Lender, the office of such
Lender designated as such below its signature hereto or, if applicable,
designated in such Lender's Lender Assignment Agreement or such other office of
a Lender (or any successor or assign of such Lender) as designated from time to
time by notice from such Lender to the Borrower and the Agent, whether or not
outside the United States, which shall be making or maintaining LIBO Rate Loans
of such Lender hereunder.
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<PAGE> 23
"LIBOR Reserve Percentage" is defined in Section 3.2.1.
"Lien" means any security interest, mortgage, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien (statutory or otherwise),
charge against or interest in property to secure payment of a debt or
performance of an obligation or other priority or preferential arrangement of
any kind or nature whatsoever.
"Loan" means, as the context may require, either a Revolving Loan or a
Term Loan of any type.
"Loan Document" means this Agreement, the Notes, the Security
Agreement, the Subordination Agreement, the Fee Letter, each agreement
evidencing Hedging Obligations of the Borrower, and each other agreement,
document or instrument delivered in connection with this Agreement.
"Management Fees" means, for any period, the management fees payable
by the Borrower to the General Partner during such period for management
services provided to the Borrower pursuant to the Partnership Agreement.
"Material Acquisition" means a purchase by the Borrower of all or
substantially all of the assets constituting a CATV and SMATV system or all or
substantially all of the Assets of another Person, or the acquisition by the
Borrower of another Person through merger, if, in any case, the total
consideration to be paid by the Borrower in respect thereof (x) exceeds
$500,000, or (y) when added together with the total consideration paid by the
Borrower in respect of all other similar transactions, exceeds $2,000,000 in
the aggregate.
"Material Agreement" is defined in Section 8.1.12.
"Material Disposition" means a sale, transfer, lease or any other type
of disposition by the Borrower of all or a portion of the assets constituting a
Cable System or all or a portion of any other of its assets or properties (or
rights with respect thereto) if the aggregate fair market value of such Cable
System, assets or properties (x) exceeds $500,000 or (y) when added together
with the aggregate fair market value of all other Cable Systems, assets or
properties disposed of by the Borrower in similar transactions, exceeds
$2,000,000 in the aggregate.
"Naperville Cable System" means the Cable System owned by the Borrower
and located in and around Naperville, Illinois.
"Non-Excluded Taxes" is defined in Section 4.6.
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<PAGE> 24
"Note" means a promissory note of the Borrower payable to the order of
any Lender, in the form of Exhibit A hereto (as such promissory note may be
amended, endorsed or otherwise modified from time to time), evidencing (i)
prior to the Conversion Date, the aggregate Indebtedness of the Borrower to
such Lender resulting from outstanding Revolving Loans, and (ii) on and after
the Conversion Date, the principal amount of such Lender's Term Loan, and also
means all other promissory notes accepted from time to time in substitution
therefor or renewal thereof.
"Obligations" means all obligations (monetary or otherwise) of the
Borrower arising under or in connection with this Agreement, the Notes and each
other Loan Document.
"Official Body" means any Federal, State or local government or
political subdivision or any agency, authority, bureau, central bank,
commission, department or instrumentality of either, or any court, tribunal,
grand jury or arbitrator, in each case whether foreign or domestic.
"Organic Document" means, relative to any Person, as applicable, its
certificate of incorporation and its by-laws or its certificate of limited
partnership and partnership agreement, and all shareholder agreements, voting
trusts and similar arrangements applicable to any of its authorized shares of
capital stock or partnership interests, as the case may be.
"Participant" is defined in Section 10.11.2.
"Partnership Agreement" means the Limited Partnership Agreement of the
Borrower, dated as of February 4, 1987 (as the same may be amended, restated or
otherwise modified from time to time).
"Pay to Basic Rate" means, at any time, a percentage derived from a
fraction, the numerator of which is the number of Pay Units at such time, and
the denominator of which is the number of Basic Subscribers at such time.
"Pay Unit" means a cable programming service subscribed to by any
subscriber of a Cable System at an additional charge in excess of the amount
paid by any such Subscriber for basic or expanded basic service, which
subscription is not more than 60 days past due. The number of Pay Units in the
case of subscribers receiving a reduced bulk pay programming service rate shall
be determined by dividing (x) the aggregate dollar amount of monthly
subscribers' fees paid on account of such services by (y) the standard rate for
the pay programming services received.
"Pension Plan" means a "pension plan", as such term is defined in
section 3(2) of ERISA, which is subject to Title IV of
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<PAGE> 25
ERISA (other than a multiemployer plan as defined in section 4001(a) (3) of
ERISA), and to which the Borrower or any corporation, trade or business that
is, along with the Borrower, a member of a Controlled Group, may have
liability, including any liability by reason of having been a substantial
employer within the meaning of section 4063 of ERISA at any time during the
preceding five years, or by reason of being deemed to be a contributing sponsor
under section 4069 of ERISA.
"Percentage" means, relative to any Lender, the percentage set forth
opposite its signature hereto or, if applicable, set forth in such Lender's
Lender Assignment Agreement, as such percentage may be adjusted from time to
time pursuant to Lender Assignment Agreement(s) executed by such Lender and its
Assignee Lender(s) and delivered pursuant to Section 10.11.1.
"Person" means any natural person, corporation, partnership, firm,
association, trust, government, governmental agency or any other entity,
whether acting in an individual, fiduciary or other capacity.
"Plan" means any Pension Plan or Welfare Plan.
"Pole Agreement" means any conduit occupancy rights, pole agreement,
pole rental, pole use, access or similar agreement with any telephone company,
public authority, public utility or other entity pursuant to which the coaxial,
fiber optic or other type of cable and local distribution units of a cable
television system are extended.
"Quarterly Payment Date" means the last day of each March, June,
September, and December or, if any such day is not a Business Day, the next
succeeding Business Day.
"Release" means a "release", as such term is defined in CERCLA.
"Required Lenders" means, at any time, Lenders holding at least 66 and
2/3% of the then aggregate outstanding principal amount of the Notes then held
by the Lenders, or, if no such principal amount is then outstanding, Lenders
having at least 66 and 2/3% of the Commitments.
"Resource Conservation and Recovery Act" means the Resource
Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq., and the rules
and regulations issued thereunder, as amended, reformed or otherwise modified
from time to time.
"Revolving Loan" is defined in Section 2.1.1.
"Scotiabank" is defined in the preamble.
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"Security Agreement" means the Security Agreement executed and
delivered pursuant to Section 5.1.4, substantially in the form of Exhibit E
hereto (as the same may be amended, restated or otherwise modified from time to
time).
"SMATV" means satellite master antenna television.
"Stated Maturity Date" means June 30, 2002.
"Subordination Agreement" means the Subordination Agreement executed
and delivered pursuant to Section 5.1.5, substantially in the form of Exhibit F
hereto (as the same may be amended, restated or otherwise modified from time to
time).
"Subsidiary" means, with respect to any Person, any corporation of
which more than 50% of the outstanding capital stock having ordinary voting
power to elect a majority of the board of directors of such corporation
(irrespective of whether at the time capital stock of any other class or
classes of such corporation shall or might have voting power upon the
occurrence of any contingency) is at the time directly or indirectly owned by
such Person, by such Person and one or more other Subsidiaries of such Person,
or by one or more other Subsidiaries of such Person.
"Taxes" is defined in Section 4.6.
"Tax Transferee" is defined in Section 4.6.
"Term Loan" is defined in Section 3.1.
"Total Debt" means all Indebtedness of the Borrower other than
Indebtedness of the type described in clauses (e) and (h) of Section 7.2.2.
"Trade Name Certificate" means a certificate of assumed or trade name
with respect to the Borrower filed with the Department of Revenue of the State
of Colorado.
"Turnersville Cable System" means the Cable System owned by the
Borrower and located in and around Turnersville, New Jersey.
"type" means, relative to any Loan, the portion thereof, if any, being
maintained as a Base Rate Loan, a CD Rate Loan or a LIBO Rate Loan.
"United States" or "U.S." means the United States of America, its
fifty States and the District of Columbia.
"Welfare Plan" means a "welfare plan", as such term is defined in
section 3 (1) of ERISA.
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"Wells Fargo" is defined in the first recital.
SECTION 1.2. Use of Defined Terms. Unless otherwise defined or the
context otherwise requires, terms for which meanings are provided in this
Agreement shall have such meanings when used in the Disclosure Schedule and in
each Note, Borrowing Request, Continuation/Conversion Notice, Loan Document,
notice and other communication delivered from time to time in connection with
this Agreement or any other Loan Document.
SECTION 1.3. Cross-References. Unless otherwise specified, references
in this Agreement and in each other Loan Document to any Article or Section are
references to such Article or Section of this Agreement or such other Loan
Document, as the case may be, and, unless otherwise specified, references in
any Article, Section or definition to any clause are references to such clause
of such Article, Section or definition.
SECTION 1.4. Accounting and Financial Determinations. Unless otherwise
specified, all accounting terms used herein or in any other Loan Document shall
be interpreted, all accounting determinations and computations hereunder or
thereunder (including under Section 7.2.4) shall be made, and all financial
statements required to be delivered hereunder or thereunder shall be prepared
in accordance with, those generally accepted accounting principles ("GAAP")
applied in the preparation of the financial statements referred to in Section
6.5.
ARTICLE II
COMMITMENTS, BORROWING PROCEDURES AND NOTES
SECTION 2.1. Commitments. On the terms and subject to the conditions
of this Agreement, each Lender severally agrees to make Loans pursuant to the
Commitment described in this Section 2.1.
SECTION 2.1.1. Revolving Loan Commitment. From time to time on any
Business Day occurring prior to the Commitment Termination Date, each Lender
will make loans (relative to such Lender, its "Revolving Loans") to the
Borrower equal to such Lender's Percentage of the aggregate amount of the
Borrowing of Revolving Loans requested by the Borrower to be made on such day.
The Commitment of each Lender described in this Section 2.1.1 is herein
referred to as its "Commitment". On the terms and subject to the conditions
hereof, the Borrower may from time to time prior to the Commitment Termination
Date borrow, repay and reborrow the Revolving Loans.
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<PAGE> 28
SECTION 2.1.2. Lenders Not Permitted or Required To Make Revolving
Loans. No Lender shall be permitted or required to make any Revolving Loan if,
after giving effect thereto, the aggregate outstanding principal amount of all
Revolving Loans:
(i) of all the Lenders would exceed the Commitment
Amount; or
(ii) of such Lender would exceed such Lender's Percentage
of the Commitment Amount.
SECTION 2.2. Reduction of Commitment Amount. The Borrower may, from
time to time, on any Business Day occurring after the Effective Date,
voluntarily reduce the Commitment Amount; provided, however, that all such
reductions shall require at least three Business Days' prior notice to the
Agent and shall be permanent, and any partial reduction of the Commitment
Amount shall be in a minimum amount of $1,000,000 and in an integral multiple
of $100,000.
SECTION 2.3. Borrowing Procedure. By delivering a Borrowing Request to
the Agent on or before 12:00 noon, New York City time, on a Business Day, the
Borrower may from time to time irrevocably request, in the case of Fixed Rate
Loans, on not less than three nor more than five Business Days' notice, or, in
the case of Base Rate Loans, on not less than one nor more than five Business
Days' notice, that a Borrowing be made in a minimum amount of $1,000,000 and an
integral multiple of $100,000, or in the unused amount of the applicable
Commitment. Upon receipt of a Borrowing Request, the Agent shall promptly
notify the other Lenders on the same day of the Borrowing requested thereby. On
the terms and subject to the conditions of this Agreement, each Borrowing shall
be comprised of the type of Loans, and shall be made on the Business Day,
specified in such Borrowing Request. On or before 2:00 p.m., New York City
time, on such Business Day, each Lender shall deposit with the Agent same day
funds in an amount equal to such Lender's Percentage of the requested
Borrowing. Such deposit will be made to an account which the Agent shall
specify from time to time by notice to the Lenders. To the extent funds are
received from the Lenders, the Agent shall make such funds available to the
Borrower by wire transfer to the accounts the Borrower shall have specified in
its Borrowing Request. No Lender's obligation to make any Loan shall be
affected by any other Lender's failure to make any Loan.
SECTION 2.4. Continuation and Conversion Elections. By delivering a
Continuation/Conversion Notice to the Agent on or before 12:00 noon, New York
City time, on a Business Day, the Borrower may from time to time irrevocably
elect, on not less than three nor more than five Business Days' notice, that
all, or any portion in an aggregate minimum amount of $1,000,000 and an
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<PAGE> 29
integral multiple of $100,000, of any Loans be, in the case of Base Rate Loans,
converted into Fixed Rate Loans of either type or, in the case of Fixed Rate
Loans of either type, be converted into a Base Rate Loan or a Fixed Rate Loan
of the other type or continued as a Fixed Rate Loan of such type (in the
absence of delivery of a Continuation/Conversion Notice with respect to any
Fixed Rate Loan at least three Business Days before the last day of the then
current Interest Period with respect thereto, such Fixed Rate Loan shall, on
such last day, automatically convert into a Base Rate Loan); provided, however,
that (x) each such conversion or continuation shall be pro rated among the
applicable outstanding Loans of all Lenders, and (y) no portion of the
outstanding principal amount of any Loans may be continued as, or be converted
into, Fixed Rate Loans when any Default has occurred and is continuing. Upon
receipt of a Continuation/Conversion Notice, the Agent shall promptly notify
the other Lenders on the same day of the continuation or conversion requested
thereby.
SECTION 2.5. Funding. Each Lender may, if it so elects, fulfill its
obligation to make, continue or convert Fixed Rate Loans hereunder by causing
one of its foreign branches or Affiliates (or an international banking facility
created by such Lender) to make or maintain such Fixed Rate Loan; provided,
however, that such Fixed Rate Loan shall nonetheless be deemed to have been
made and to be held by such Lender, and the obligation of the Borrower to repay
such Fixed Rate Loan shall nevertheless be to such Lender for the account of
such foreign branch, Affiliate or international banking facility. In addition,
the Borrower hereby consents and agrees that, for purposes of any determination
to be made for purposes of Section 4.1, 4.2, 4.3 or 4.4, it shall be
conclusively assumed that each Lender elected to fund all Fixed Rate Loans by
purchasing, as the case may be, Dollar certificates of deposit in the U.S. or
Dollar deposits in its LIBOR Office's interbank eurodollar market.
SECTION 2.6. Notes. Each Lender's Loans shall be evidenced by a Note
payable to the order of such Lender in a maximum principal amount equal to such
Lender's Percentage of the original applicable Commitment Amount. The Borrower
hereby irrevocably authorizes each Lender to make (or cause to be made)
appropriate notations on the grid attached to such Lender's Note (or on any
continuation of such grid), which notations, if made, shall evidence, inter
alia, the date of, the outstanding principal of, and the interest rate and
Interest Period applicable to, the Loans evidenced thereby. Such notations
shall be conclusive and binding on the Borrower absent manifest error;
provided, however, that the failure of any Lender to make any such notations
shall not limit or otherwise affect any Obligations of the Borrower.
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ARTICLE III
CONVERSION, REPAYMENTS, PREPAYMENTS,
INTEREST AND FEES
SECTION 3.1. Conversion, Repayments and Prepayments. On the Conversion
Date, the aggregate outstanding principal amount of each Lender's Revolving
Loans (with respect to each Lender, the "Conversion Date Amount") shall
automatically convert into a term loan (with respect to each Lender, its "Term
Loan"). Thereafter, the Borrower shall repay the outstanding principal amount
of each Lender's Term Loan in successive quarterly installments on each
Quarterly Payment Date beginning with December 31, 1996 and ending on the
Stated Maturity Date. The amount of each installment in each calendar year
shall be equal, and the aggregate principal amount of all installments made in
each calendar year shall be equal to an amount that, when subtracted from the
Conversion Date Amount of each Lender's Term Loan, shall result in the
Conversion Date Amount at the end of such calendar year being reduced by a
percentage at least equal to the percentage set forth below opposite such year:
<TABLE>
<CAPTION>
Percentage (%) of Conversion Date Amount
Calendar Year to be Repaid at End of Calendar Year
------------- ------------------------------------
<S> <C>
1996 2.50%
1997 5.00%
1998 12.50%
1999 17.50%
2000 22.50%
2001 25.00%.
</TABLE>
The remaining unpaid principal amount of all Term Loans shall be
repaid by the Borrower at the end of the first calendar quarter in 2002 and on
the Stated Maturity Date in equal installments.
Prior to the Stated Maturity Date, the Borrower
(a) may, from time to time on any Business Day, make a
voluntary prepayment, in whole or in part, of the outstanding
principal amount of any Term Loans; provided, however, that
(i) any such prepayment shall be made pro rata
among Loans of the same type and, if applicable, having the
same Interest Period of all Lenders;
(ii) no such prepayment of any Fixed Rate Loan may
be made on any day other than the last day of the Interest
Period for such Loan;
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(iii) all such voluntary prepayments shall require
at least three but no more than five Business Days' prior
notice to the Agent in the case of Fixed Rate Loans, and at
least one but no more than five Business Days' prior notice to
the Agent in the case of Base Rate Loans; and
(iv) all such voluntary partial prepayments shall
be in an aggregate minimum amount of $1,000,000 and an
integral multiple of $100,000;
(b) shall, on each date when any reduction in the
Commitment Amount shall become effective, including pursuant to
Section 2.2, make a mandatory prepayment of all Revolving Loans equal
to the excess, if any, of the aggregate outstanding principal amount
of all Revolving Loans over the Commitment Amount as so reduced; and
(c) shall, immediately upon any acceleration of the
Stated Maturity Date of any Loans pursuant to Section 8.2 or Section
8.3, repay all Loans, unless, pursuant to Section 8.3, only a portion
of all Loans is so accelerated.
Each voluntary prepayment of Term Loans made pursuant to clause (a) shall be
applied, to the extent of such prepayment, in the inverse order of the
scheduled repayments of Term Loans set forth in this Section 3.1. Each
prepayment of any Term Loans made pursuant to this Section shall be without
premium or penalty, except as may be required by Section 4.4. No voluntary
prepayment of principal of any Revolving Loans shall cause a reduction in the
Commitment Amount.
SECTION 3.2. Interest Provisions. Interest on the outstanding
principal amount of Loans shall accrue and be payable in accordance with this
Section 3.2.
SECTION 3.2.1. Rates. Pursuant to an appropriately delivered
Borrowing Request or Continuation/Conversion Notice, the Borrower may elect
that Loans comprising a Borrowing accrue interest at a rate per annum:
(a) on that portion maintained from time to time as a
Base Rate Loan, equal to the sum of the Alternate Base Rate from time
to time in effect plus the Applicable Margin;
(b) on that portion maintained as a CD Rate Loan, during
each Interest Period applicable thereto, equal to the sum of the CD
Rate (Reserve Adjusted) for such Interest Period plus the Applicable
Margin; and
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<PAGE> 32
(c) on that portion maintained as a LIBO Rate Loan,
during each Interest Period applicable thereto, equal to the sum of
the LIBO Rate (Reserve Adjusted) for such Interest Period plus the
Applicable Margin.
The Applicable Margin for each type of Loan shall change automatically on the
date a Compliance Certificate is delivered in accordance with Sections 7.1.1
(b) and (c) indicating a change in the then existing Leverage Ratio mandating a
change in such margins; provided, however, that if such Compliance Certificate
is not delivered within the time required by such Sections, such change in such
margins shall, upon ultimate delivery of such Compliance Certificate, be deemed
nevertheless to have been effective on and as of the date on which such
Compliance Certificate was required to be delivered pursuant to such Section.
The "CD Rate (Reserve Adjusted)" means, relative to any Loan to be
made, continued or maintained as, or converted into, a CD Rate Loan for any
Interest Period, a rate per annum (rounded upwards, if necessary, to the
nearest 1/16 of 1%) determined pursuant to the following formula:
CDR(RA) = CDR + AR
-------------
(1.00 - CDRR)
where:
CDR(RA) = CD Rate (Reserve Adjusted)
CDR = CD Rate
CDRR = CD Reserve Requirement
AR = Assessment Rate
The CD Rate (Reserve Adjusted) for any Interest Period for CD Rate Loans will
be determined by the Agent on the basis of the CD Reserve Requirement and
Assessment Rate in effect on, and the applicable rates furnished to and
received by the Agent from Scotiabank, on the first day of such Interest
Period.
"CD Rate" means, relative to any Interest Period for CD Rate Loans,
the rate of interest determined by the Agent to be the arithmetic average
(rounded upwards, if necessary, to the nearest 1/16 of 1%) of the prevailing
rates per annum bid at 10:00 a.m., New York City time (or as soon thereafter as
practicable), on the first day of such Interest Period by two or more
certificate of deposit dealers of recognized standing located in New York City
for the purchase at face value from Scotiabank of its certificates of deposit
in an amount approximately equal to the CD Rate Loan being made or maintained
by Scotiabank to which such Interest Period applies and having a maturity
approximately equal to such Interest Period.
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<PAGE> 33
The "CD Reserve Requirement" means, relative to any Interest Period
for CD Rate Loans, a percentage (expressed as a decimal) equal to the maximum
aggregate reserve requirements (including all basic, supplemental, marginal and
other reserves and taking into account any transitional adjustments or other
scheduled changes in reserve requirements), specified under regulations issued
from time to time by the F.R.S. Board and then applicable to the class of banks
of which Scotiabank is a member, on deposits of the type used as a reference in
determining the CD Rate and having a maturity approximately equal to such
Interest Period.
The "Assessment Rate" means, for any Interest Period for CD Rate
Loans, the net annual assessment rate (rounded upwards, if necessary, to the
next higher 1/100 Of 1%) estimated by Scotiabank to be the then current annual
assessment payable by Scotiabank to the Federal Deposit Insurance Corporation
(or any successor) for insuring time deposits at offices of Scotiabank in the
United States.
The "LIBO Rate (Reserve Adjusted)" means, relative to any Loan to be
made, continued or maintained as, or converted into, a LIBO Rate Loan for any
Interest Period, a rate per annum (rounded upwards, if necessary, to the
nearest 1/16 of 1%) determined pursuant to the following formula:
LIBO Rate = LIBO Rate
(Reserve Adjusted) -------------------------------
1.00 - LIBOR Reserve Percentage
The LIBO Rate (Reserve Adjusted) for any Interest Period for LIBO Rate Loans
will be determined by the Agent on the basis of the LIBOR Reserve Percentage in
effect on, and the applicable rates furnished to and received by the Agent from
Scotiabank, two Business Days before the first day of such Interest Period.
"LIBO Rate" means, relative to any Interest Period for LIBO Rate
Loans, the rate of interest equal to the average (rounded upwards, if
necessary, to the nearest 1/16 of 1%) of the rates per annum at which Dollar
deposits in immediately available funds are offered to Scotiabank's LIBOR
Office in the London interbank market as at or about 11:00 a.m. London time two
Business Days prior to the beginning of such Interest Period for delivery on
the first day of such Interest Period, and in an amount approximately equal to
the amount of Scotiabank's LIBO Rate Loan and for a period approximately equal
to such Interest Period.
"LIBOR Reserve Percentage" means, relative to any Interest Period for
LIBO Rate Loans, the reserve percentage (expressed as a decimal) equal to the
maximum aggregate reserve requirements (including all basic, emergency,
supplemental, marginal and other reserves and taking into account any
transitional adjustments or
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<PAGE> 34
other scheduled changes in reserve requirements) specified under regulations
issued from time to time by the F.R.S. Board and then applicable to assets or
liabilities consisting of and including "Eurocurrency Liabilities", as
currently defined in Regulation D of the F.R.S. Board, having a term
approximately equal or comparable to such Interest Period.
All Fixed Rate Loans shall bear interest from and including the first
day of the applicable Interest Period to (but not including) the last day of
such Interest Period at the interest rate determined as applicable to such
Fixed Rate Loan.
SECTION 3.2.2. Post-Maturity Rates. After the date any principal
amount of any Loan is due and payable (whether on the Stated Maturity Date,
upon acceleration or otherwise), or after any other monetary Obligation of the
Borrower shall have become due and payable, the Borrower shall pay, but only to
the extent permitted by law, interest (after as well as before judgment) on
such amounts at a rate per annum equal to the Alternate Base Rate plus a margin
of 2%. Notwithstanding the immediately preceding sentence, the Borrower shall
not be obligated to pay interest at the default rate on a Loan if the sole
reason for the Borrower's default with respect to such Loan is failure to
timely make a required interest payment on such Loan on account of the Agent's
failure to timely invoice the Borrower with respect to the amount of accrued
interest due and payable on such Loan.
SECTION 3.2.3. Payment Dates. Interest accrued on each Loan shall be
payable, without duplication:
(a) on the Conversion Date with respect to Revolving
Loans, and on the Stated Maturity Date with respect to Term Loans;
(b) on the date of any optional or required payment or
prepayment, in whole or in part, of principal outstanding on such
Loan;
(c) with respect to Base Rate Loans, on each Quarterly
Payment Date occurring after the Effective Date;
(d) with respect to Fixed Rate Loans, on the last day of
each applicable Interest Period (and, if such Interest Period shall
exceed 90 days, on the 90th day of such Interest Period);
(e) with respect to any Base Rate Loans converted into
Fixed Rate Loans on a day when interest would not otherwise have been
payable pursuant to clause (c), on the date of such conversion; and
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<PAGE> 35
(f) on that portion of any Loans the Stated Maturity Date
of which is accelerated pursuant to Section 8.2 or Section 8.3,
immediately upon such acceleration.
Interest accrued on Loans or other monetary Obligations arising under this
Agreement or any other Loan Document after the date such amount is due and
payable (whether on the Stated Maturity Date, upon acceleration or otherwise)
shall be payable upon demand.
SECTION 3.3. Fees. The Borrower agrees to pay the fees set forth
in this Section 3.3. All such fees shall be non-refundable.
SECTION 3.3.1. Commitment Fee. The Borrower agrees to pay to the
Agent for the account of each Lender, for the period (including any portion
thereof when any of its Commitments are suspended by reason of the Borrower's
inability to satisfy any condition of Article V) commencing on the Effective
Date and continuing through the final Commitment Termination Date, a commitment
fee at the rate of 3/8 of 1% per annum on such Lender's Percentage of the sum
of the average daily unused portion of each Commitment Amount. Such commitment
fees shall be payable by the Borrower in arrears on each Quarterly Payment
Date, commencing with the first such day following the Effective Date, and on
the Commitment Termination Date.
SECTION 3.3.2. Agent's Fee. The Borrower agrees to timely pay to the
Agent, for the Agent's own account, the fees provided for in the Fee Letter.
ARTICLE IV
CERTAIN CD RATE, LIBO RATE AND OTHER PROVISIONS
SECTION 4.1. Fixed Rate Lending UnlawfUl. If any Lender shall
determine (which determination shall, upon notice thereof to the Borrower and
the Lenders, be conclusive and binding on the Borrower) that the introduction
of or any change in or in the interpretation of any law makes it unlawful, or
any central bank or other governmental authority asserts that it is unlawful,
for such Lender to make, continue or maintain any Loan as, or to convert any
Loan into a Fixed Rate Loan of a certain type, the obligations of all Lenders
to make, continue, maintain or convert into any such Loans shall, upon such
determination, forthwith be suspended until such Lender shall notify the Agent
that the circumstances causing such suspension no longer exist, and all Fixed
Rate Loans of such type shall automatically convert into Base Rate Loans at the
end of the then current Interest Periods
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<PAGE> 36
with respect thereto or sooner, if required by such law or assertion.
SECTION 4.2. Deposits Unavailable. If the Agent shall have
determined, or shall be informed by a Lender, that
(a) Dollar certificates of deposit or Dollar deposits, as
the case may be, in the relevant amount and for the relevant Interest
Period are not available to Scotiabank or such Lender in its relevant
market; or
(b) by reason of circumstances affecting such relevant
market, adequate means do not exist for ascertaining the interest rate
applicable hereunder to Fixed Rate Loans of such type,
then, upon notice from the Agent to the Borrower and the Lenders of such fact,
the obligations of all Lenders under Section 2.3 and Section 2.4 to make or
continue any Loans as, or to convert any Loans into, Fixed Rate Loans of such
type shall forthwith be suspended until the Agent shall determine, or be
informed, that and, in either case, shall give notice to the Borrower and the
other Lenders that, the circumstances causing such suspension no longer exist.
SECTION 4.3. Increased Fixed Rate Loan Costs, etc. The Borrower
agrees to reimburse each Lender for any increase in the cost to such Lender of,
or any reduction in the amount of any sum receivable by such Lender in respect
of, making, continuing or maintaining (or of its obligation to make, continue
or maintain) any Loans as, or of converting (or of its obligation to convert)
any Loans into, Fixed Rate Loans. Such Lender shall promptly notify the Agent
and the Borrower in writing of the occurrence of any such event, such notice to
state, in reasonable detail, the reasons therefor and the additional amount
required fully to compensate such Lender for such increased cost or reduced
amount. Such additional amounts shall be payable by the Borrower directly to
such Lender within five days of its receipt of such notice, and such notice
shall, in the absence of manifest error, be conclusive and binding on the
Borrower.
SECTION 4.4. Funding Losses. In the event any Lender shall incur
any loss or expense (including any loss or expense incurred by reason of the
liquidation or reemployment of deposits or other funds acquired by such Lender
to make, continue or maintain any portion of the principal amount of any Loan
as, or to convert any portion of the principal amount of any Loan into, a Fixed
Rate Loan) as a result of
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(a) any conversion or repayment or prepayment of the
principal amount of any Fixed Rate Loans on a date other than the
scheduled last day of the Interest Period applicable thereto, whether
pursuant to Section 3.1 or otherwise;
(b) any Loans not being made as Fixed Rate Loans in
accordance with the Borrowing Request therefor; or
(c) any Loans not being continued as, or converted into,
Fixed Rate Loans in accordance with the Continuation/ Conversion
Notice therefor,
then, upon the written notice of such Lender to the Borrower (with a copy to
the Agent), the Borrower shall, within five days of its receipt thereof, pay
directly to such Lender such amount as will (in the reasonable determination of
such Lender) reimburse such Lender for such loss or expense. Such written
notice (which shall include calculations in reasonable detail) shall, in the
absence of manifest error, be conclusive and binding on the Borrower.
SECTION 4.5. Increased Capital Costs. If any change in, or the
introduction, adoption, effectiveness, interpretation, reinterpretation or
phase-in of, any law or regulation, directive, guideline, decision or request
(whether or not having the force of law) of any court, central bank, regulator
or other governmental authority affects or would affect the amount of capital
required or expected to be maintained by any Lender or any Person controlling
such Lender, and such Lender determines (in its sole and absolute discretion)
that the rate of return on its or such controlling Person's capital as a
consequence of its Commitments or the Loans made by such Lender is reduced to a
level below that which such Lender or such controlling Person could have
achieved but for the occurrence of any such circumstance, then, in any such
case upon notice from time to time by such Lender to the Borrower, the Borrower
shall immediately pay directly to such Lender additional amounts sufficient to
compensate such Lender or such controlling Person for such reduction in rate of
return. A statement of such Lender as to any such additional amount or amounts
(including calculations thereof in reasonable detail) shall, in the absence of
manifest error, be conclusive and binding on the Borrower. In determining such
amount, such Lender may use any reasonable method of averaging and attribution
that it (in its sole and absolute discretion) shall deem applicable.
SECTION 4.6. Taxes. All payments by the Borrower of principal of,
and interest on, the Loans and all other amounts payable hereunder shall be
made free and clear of and without deduction for any present or future income,
excise, stamp or
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franchise taxes and other taxes, fees, duties, withholdings or other charges of
any nature whatsoever imposed by any taxing authority ("Taxes"), but excluding
(i) Taxes imposed on any Lender's net income (including, without limitation,
any Taxes imposed on branch profits) and franchise Taxes imposed on any Lender
by the jurisdiction under the laws of which such Lender is organized or any
political subdivision thereof or by the jurisdiction of such Lender's lending
office, (ii) any Taxes that are in effect and that would apply to a payment to
such Lender as of the Effective Date, (iii) if any Person acquires any interest
in this Agreement or any Note pursuant to the provisions hereof, including
without limitation a participation (whether or not by operation of law), or a
foreign Lender changes the office in which its Loan is made, accounted for or
booked (any such Person or such foreign Lender in that event being referred to
as a "Tax Transferee"), any Taxes to the extent that they are in effect and
would apply to a payment to such Tax Transferee as of the date of the
acquisition of such interest or change in office, as the case may be, and (iv)
Taxes which are otherwise included in any amounts otherwise payable by the
Borrower pursuant to any other provision of this Agreement (all such
nonexcluded Taxes being hereinafter referred to as "Nonexcluded Taxes"). In the
event that any withholding or deduction from any payment to be made by the
Borrower hereunder is required in respect of any Non-Excluded Taxes pursuant to
any applicable law, rule or regulation, then the Borrower will
(a) pay directly to the relevant authority the full
amount required to be so withheld or deducted;
(b) promptly forward to the Agent an official receipt or
other documentation satisfactory to the Agent evidencing such payment
to such authority; and
(c) pay to the Agent for the account of the Lenders such
additional amount or amounts as is necessary to ensure that the net
amount actually received by each Lender will equal the full amount
such Lender would have received had no such withholding or deduction
been required.
Moreover, if any Non-Excluded Taxes are directly asserted against the Agent or
any Lender with respect to any payment received by the Agent or such Lender
hereunder, the Agent or such Lender may pay such Non-Excluded Taxes and the
Borrower will promptly pay such additional amount (including any penalties,
interest or expenses) as is necessary in order that the net amount received by
such person after the payment of such Non-Excluded Taxes (including any
Non-Excluded Taxes on such additional amount) shall equal the amount such
Person would have received had not such Non-Excluded Taxes been asserted.
Within 30 days after the date that any Lender or any Tax Transferee receives a
refund of
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any Non-Excluded Taxes for which it has been indemnified by the Borrower
pursuant to the provisions of this Section, such Lender or Tax Transferee, as
the case may be, shall pay to the Borrower such refund of Non-Excluded Taxes
along with any interest received with respect thereto.
If the Borrower fails to pay any Non-Excluded Taxes, when due to the
appropriate taxing authority or fails to remit to the Agent, for the account of
the respective Lenders, the required receipts or other required documentary
evidence, the Borrower shall indemnify the Lenders for any incremental
Non-Excluded Taxes, interest or penalties that may become payable by any Lender
as a result of any such failure. For purposes of this Section 4.6, a
distribution hereunder by the Agent or any Lender to or for the account of any
Lender shall be deemed a payment by the Borrower.
Upon the request of the Borrower or the Agent, each Lender that is
organized under the laws of a jurisdiction other than the United States shall,
prior to the due date of any payments under the Notes, execute and deliver to
the Borrower and the Agent, on or about the first scheduled payment date in
each Fiscal Year, one or more (as the Borrower or the Agent may reasonably
request) United States Internal Revenue Service Forms 4224 or Forms 1001 or
such other forms or documents (or successor forms or documents), appropriately
completed, as may be applicable to establish the extent, if any, to which a
payment to such Lender is exempt from withholding or deduction of Non-Excluded
Taxes.
SECTION 4.7. Payments, Computations, etc. Unless otherwise
expressly provided, all payments by the Borrower pursuant to this Agreement,
the Notes or any other Loan Document shall be made by the Borrower to the Agent
for the pro rata account of the Lenders entitled to receive such payment. All
such payments required to be made to the Agent shall be made, without setoff,
deduction or counterclaim, not later than 12:00 noon, New York City time, on
the date due, in same day or immediately available funds, to such account as
the Agent shall specify from time to time by notice to the Borrower. Funds
received after that time shall be deemed to have been received by the Agent on
the next succeeding Business Day. The Agent shall promptly remit in same day
funds to each Lender its share, if any, of such payments received by the Agent
for the account of such Lender (provided, that, any such funds remitted after
the date received shall be remitted with interest accrued thereon at the
Federal Funds Rate). All interest and fees shall be computed on the basis of
the actual number of days (including the first day but excluding the last day)
occurring during the period for which such interest or fee is payable over a
year comprised of 360 days (or, in the case of interest on a Base Rate Loan
(other then when such interest is calculated with respect to the Federal Funds
Rate), 365 days or, if appropriate,
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366 days). Whenever any payment to be made shall otherwise be due on a day
which is not a Business Day, such payment shall (except as otherwise required
by clause (c) of the definition of the term "Interest Period" with respect to
LIBO Rate Loans) be made on the next succeeding Business Day and such extension
of time shall be included in computing interest and fees, if any, in connection
with such payment.
SECTION 4.8. Sharing of Payments. If any Lender shall obtain any
payment or other recovery (whether voluntary, involuntary, by application of
setoff or otherwise) on account of any Loan (other than pursuant to the terms
of Sections 4.3, 4.4, 4.5 and 4.6) in excess of its pro rata share of payments
then or therewith obtained by all Lenders, such Lender shall purchase from the
other Lenders such participations in Loans made by them as shall be necessary
to cause such purchasing Lender to share the excess payment or other recovery
ratably with each of them; provided, however, that if all or any portion of the
excess payment or other recovery is thereafter recovered from such purchasing
Lender, the purchase shall be rescinded and each Lender which has sold a
participation to the purchasing Lender shall repay to the purchasing Lender the
purchase price to the ratable extent of such recovery together with an amount
equal to such selling Lender's ratable share (according to the proportion of
(a) the amount of such selling Lender's required
repayment to the purchasing Lender
to
(b) total amount so recovered from the purchasing Lender)
of any interest or other amount paid or payable by the purchasing Lender in
respect of the total amount so recovered. The Borrower agrees that any Lender
so purchasing a participation from another Lender pursuant to this Section may,
to the fullest extent permitted by law, exercise all its rights of payment
(including pursuant to Section 4.9) with respect to such participation as fully
as if such Lender were the direct creditor of the Borrower in the amount of
such participation. If under any applicable bankruptcy, insolvency or other
similar law, any Lender receives a secured claim in lieu of a setoff to which
this Section applies, such Lender shall, to the extent practicable, exercise
its rights in respect of such secured claim in a manner consistent with the
rights of the Lenders entitled under this Section to share in the benefits of
any recovery on such secured claim.
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SECTION 4.9. Setoff. Each Lender shall, upon the occurrence of any
Default described in clauses (a) through (d) of Section 8.1.8 or, with the
consent of the Required Lenders, upon the occurrence of any other Event of
Default, have the right to appropriate and apply to the payment of the
Obligations owing to it (whether or not then due), and (as security for such
Obligations) the Borrower hereby grants to each Lender a continuing security
interest in, any and all balances, credits, deposits, accounts or moneys of the
Borrower then or thereafter maintained with or otherwise held by such Lender;
provided, however, that any such appropriation and application shall be subject
to the provisions of Section 4.8. Each Lender agrees promptly to notify the
Borrower and the Agent after any such setoff and application made by such
Lender; provided, however, that the failure to give such notice shall not
affect the validity of such setoff and application. The rights of each Lender
under this Section are in addition to other rights and remedies (including
other rights of setoff under applicable law or otherwise) which such Lender may
have.
ARTICLE V
CONDITIONS TO BORROWING
SECTION 5.1. Initial Borrowing. The obligations of the Lenders to
fund the initial Borrowing shall be subject to the prior or concurrent
satisfaction of each of the conditions precedent set forth in this Section 5.1.
SECTION 5.1.1. General Partner's Certificate. The Agent shall have
received from the General Partner, a certificate of the Secretary or an
Assistant Secretary of the General Partner, dated the date of the initial
Borrowing, as to:
(a) the Borrower's Organic Documents, in each case, as in
effect on the date of the initial Borrowing, copies of which shall be
attached thereto, together with (x) a certificate of good standing for
the Borrower issued by the jurisdiction in which it is organized, and
dated as of a date reasonably close to the date of the initial
Borrowing, and (y) the most recently filed Trade Name Certificate,
(b) the General Partner's Organic Documents, in each
case, as in effect on the date of the initial Borrowing, copies of
which shall be attached thereto, together with a certificate of good
standing for the General Partner issued by the jurisdiction in which
it is organized, and dated as of a date reasonably close to the date
of the initial Borrowing,
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(c) all action necessary for the execution, delivery and
performance of this Agreement, the Note, and each other Loan Document
by the General Partner, as the general partner of the Borrower,
together with copies of all resolutions to such effect attached
thereto, and
(d) the incumbency and signatures of those officers of
the General Partner authorized to act on behalf of and bind the
General Partner, in its capacity as general partner of the Borrower,
with respect to this Agreement, the Note and each other Loan Document;
which certificate each Lender may conclusively rely upon until it shall have
received a further certificate from the General Partner canceling or amending
such prior certificates.
SECTION 5.1.2. Delivery of Notes. The Agent shall have received each
Lender's Note, in each case, duly executed and delivered by the Borrower.
SECTION 5.1.3. Payment of Outstanding Indebtedness, etc. All
Indebtedness identified in Item 7.2.2(b) ("Indebtedness to be Paid") of the
Disclosure Schedule, together with all interest, prepayment premiums and other
amounts due and payable with respect thereto, shall have been paid in full
(including, to the extent necessary, from proceeds of the initial Borrowing);
all Liens securing payment of any such Indebtedness shall have been released;
and the Agent shall have received all Uniform Commercial Code Form UCC-3
termination statements or other instruments as may be necessary or appropriate
to release such Liens (including the Liens held by Wells Fargo in its capacity
as Agent under the Existing Credit Agreement) in each case, duly executed and
completed by the holders of such Liens and in a form suitable for filing.
SECTION 5.1.4. Security Aqreement. The Agent shall have received
executed counterparts of the Security Agreement, dated as of the date hereof,
duly executed by the Borrower, together with
(a) acknowledgment copies of properly filed Uniform
Commercial Code financing statements (Form UCC-1), or such other
evidence of filing as may be acceptable to the Agent, naming the
Borrower as the debtor and the Agent as the secured party, or other
similar instruments or documents, as may be necessary or, in the
opinion of the Agent, desirable to perfect the security interest of
the Agent pursuant to the Security Agreement;
(b) executed copies of proper Uniform Commercial Code
Form UCC-3 termination statements, if any, necessary to
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release all Liens and other rights of any Person in any collateral
described in the Security Agreement previously granted by any Person
(other than with respect to collateral subject to Capitalized Leases
and purchase money Liens) together with such other Uniform Commercial
Code Form UCC-3 termination statements as the Agent may reasonably
request; and
(c) certified copies of Uniform Commercial Code Requests
for Information or Copies (Form UCC-11), or a similar search report
certified by a party acceptable to the Agent, dated a date reasonably
near to the date of the initial Borrowing, listing all effective
financing statements which name the Borrower (under its present name
and any previous names) as the debtor and which are filed in the
jurisdictions in which filings were made pursuant to clause (a) above,
together with copies of such financing statements (none of which
(other than those described in clause (a)) if such Form UCC-11 or
search report, as the case may be, is current enough to list such
financing statements described in clause (a)) shall cover any
collateral described in the Security Agreement or with respect to
assets subject to Capitalized Leases or purchase money Liens, in each
case as permitted hereunder).
SECTION 5.1.5. Subordination Agreement. The Agent shall have
received executed counterparts of the Subordination Agreement, dated as of the
date hereof, duly executed by the Borrower and Jones Intercable.
SECTION 5.1.6. Opinions of Counsel. The Agent shall have received
opinions, dated the date of the initial Borrowing and addressed to the Agent
and all Lenders, from
(a) Elizabeth Steele, Esq., general counsel to the
Borrower, substantially in the form of Exhibit G hereto, unless such
opinion is delivered after the Effective Date pursuant to Section
7.1.10;
(b) McDermott, Will & Emery, Dow Lohnes & Albertson,
Dorsey & Whitney and Meyner & Landis, local counsel to the Borrower,
in the states of Illinois, Maryland, Minnesota and New Jersey,
respectively, substantially in the form of Exhibits H-1, H-2, H-3 and
H- 4 hereto;
(c) Dow Lohnes & Albertson, FCC counsel to the Borrower,
substantially in the form of Exhibit I hereto; and
(d) Mayer, Brown & Platt, counsel to the Agent,
substantially in the form of Exhibit J hereto.
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SECTION 5.1.7. Closing Date Certificate. The Agent shall have
received a Closing Date Certificate, dated the date of the initial Borrowing,
and duly executed and completed by the Borrower.
SECTION 5.1.8. Release Letter. The Agent shall have received a copy
of a letter from Wells Fargo to the Borrower, substantially in the form of
Exhibit M hereto, duly executed by Wells Fargo.
SECTION 5.1.9. Closing Fees, Expenses.
(a) The Borrower shall have paid to the Agent, for the account of
each Lender, all of the fees then due and owing under the Fee Letter.
(b) The Agent shall have received for its own account, or for the
account of each Lender, as the case may be, all fees, costs and expenses due
and payable pursuant to Section 3.3 and 10.3, if then invoiced.
SECTION 5.1.10. Compliance Certificate. The Agent shall have received
a Compliance Certificate, duly executed and completed by the Borrower,
calculated as of March 31, 1994.
SECTION 5.2. All Borrowings. The obligation of each Lender to fund
any Loan on the occasion of any Borrowing (including the initial Borrowing)
shall be subject to the satisfaction of each of the conditions precedent set
forth in this Section 5.2.
SECTION 5.2.1. Compliance with Warranties, No Default, etc. Both
before and after giving effect to any Borrowing (but, if any Default of the
nature referred to in Section 8.1.5 shall have occurred with respect to any
other Indebtedness, without giving effect to the application, directly or
indirectly, of the proceeds thereof) the following statements shall be true and
correct:
(a) the representations and warranties set forth in
Article VI (excluding, however, those contained in Section 6.7) shall
be true and correct with the same effect as if then made (unless
stated to relate solely to an earlier date, in which case such
representations and warranties shall be true and correct as of such
earlier date);
(b) except as disclosed by the Borrower to the Agent and
the Lenders pursuant to Section 6.7,
(i) no labor controversy, litigation, arbitration
or governmental investigation or proceeding shall be pending
or, to the knowledge of the Borrower,
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threatened against the Borrower, any of its Subsidiaries or
the General Partner which if adversely determined is
reasonably likely to materially adversely affect the
Borrower's consolidated business, operations, assets,
revenues, properties or prospects (with respect to the
Borrower's ability to pay or repay the Obligations) or which
purports to affect the legality, validity or enforceability of
this Agreement, the Notes or any other Loan Document; and
(ii) no development shall have occurred in any
labor controversy, litigation, arbitration or governmental
investigation or proceeding disclosed pursuant to Section 6.7
which if adversely determined is reasonably likely to
materially adversely affect the Borrower's consolidated
business, operations, assets, revenues, properties or
prospects (with respect to the Borrower's ability to pay or
repay the Obligations); and
(c) no Default shall have then occurred and be
continuing, and neither the Borrower, nor any of its Subsidiaries are
in material violation of any law or governmental regulation or court
order or decree.
SECTION 5.2.2. Borrowing Request. The Agent shall have received a
Borrowing Request for such Borrowing. Each of the delivery of a Borrowing
Request and the acceptance by the Borrower of the proceeds of such Borrowing
shall constitute a representation and warranty by the Borrower that on the date
of such Borrowing (both immediately before and after giving effect to such
Borrowing and the application of the proceeds thereof) the statements made in
Section 5.2.1 are true and correct.
SECTION 5.2.3. Satisfactory Legal Form. All documents executed or
submitted pursuant hereto by or on behalf of the Borrower or any of its
Subsidiaries shall be satisfactory in form and substance to the Agent and its
counsel; the Agent and its counsel shall have received all information,
approvals, opinions, documents or instruments as the Agent or its counsel may
reasonably request.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
In order to induce the Lenders and the Agent to enter into this
Agreement and to make Loans hereunder, each of the Borrower and the General
Partner represents and warrants to the Agent and each Lender as set forth in
this Article VI.
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SECTION 6.1. Organization, etc. (a) The Borrower is a limited
partnership duly organized and validly existing under the laws of the State of
Colorado and is duly qualified to do business in the States of Colorado,
Illinois, Maryland, Minnesota and New Jersey, the only other jurisdiction(s) in
which the conduct or contemplated conduct of its business or the ownership or
lease of its assets requires such qualification. A Trade Name Certificate is on
file in the office of the Colorado Department of Revenue, and no other filing,
recording, publishing or other act with an Official Body is necessary or
appropriate in connection with the existence or the business of the Borrower.
(b) Each Subsidiary of the Borrower is a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation, and is duly qualified to do business in each
jurisdiction in which the conduct of its business or the ownership or lease of
its assets would require such qualification.
(c) The General Partner is a corporation duly organized, validly
existing and in good standing under the laws of the State of Colorado. The
General Partner is duly qualified and in good standing in all jurisdictions in
which the conduct of its business or the ownership or lease of its assets
requires such qualification (except where the failure to do so would not have a
material adverse effect on the business, operations or financial condition of
the General Partner).
(d) Each of the Borrower and the General Partner, and each of the
Borrower's Subsidiaries, has full partnership or corporate power and authority,
respectively, and holds all requisite governmental licenses, permits and other
approvals to enter into and perform its respective Obligations under this
Agreement, the Notes and each other Loan Document to which it is a party and
holds all requisite material governmental licenses, permits and other approvals
to own and hold under lease its property and to conduct its business
substantially as currently conducted by it.
(e) The General Partner is the sole general partner of the
Borrower and owns 100% of the outstanding general partnership interests in the
Borrower, free and clear of all Liens or other encumbrances other than those
interests which represent the right to receive certain distributions from the
Borrower and are pledged to NationsBank of Texas, N.A., as Collateral Agent for
certain secured parties, pursuant to that certain Security Agreement, dated as
of December 8, 1992, among the General Partner and NationsBank of Texas, N.A.
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SECTION 6.2. Due Authorization, Non-Contravention, etc. The execution,
delivery and performance by and on behalf of the Borrower of this Agreement,
the Notes and each other Loan Document are within the Borrower's and the
General Partner's powers, have been duly authorized by all necessary action,
and do not
(i) contravene the Borrower's or the General Partner's
Organic Documents;
(ii) contravene (x} any law or governmental regulation or
court decree or order binding on or affecting the Borrower or the
General Partner or (y) any contractual restriction binding on or
affecting the General Partner or the Borrower which contravention is
reasonably likely to have a material adverse effect on the Borrower's
consolidated business, operations, assets, revenues, properties or
prospects (with respect to the Borrower's ability to pay or repay the
Obligations); or
(iii) result in, or require the creation or imposition of,
any Lien on any of the Borrower's or the General Partner's properties
(other than the Lien of the Security Agreement).
SECTION 6.3. Government Approval, Regulation, etc. Other than as set
forth in Item 6.3 of the Disclosure Schedule or those which have been obtained
and are in full force and effect, no authorization or approval or other action
by, and no notice to or filing with, any governmental authority or regulatory
body or other Person is required for the due execution, delivery or performance
by the General Partner of the Subordination Agreement or by the Borrower of
this Agreement, the Notes or any other Loan Document. Neither the Borrower nor
any of its Subsidiaries is an "investment company" within the meaning of the
Investment Company Act of 1940 as amended, or a "holding company" or a
"subsidiary company" of a "holding company", or an "affiliate" of a "holding
company" or of a "subsidiary company" of a "holding company", within the
meaning of the Public Utility Holding Company Act of 1935, as amended.
SECTION 6.4. Validity, etc. This Agreement constitutes, and the Notes
and each other Loan Document executed by the Borrower will, on the due
execution and delivery thereof, constitute, the legal, valid and binding
obligations of the Borrower, enforceable in accordance with their respective
terms. Each of the Partnership Agreement and the Subordination Agreement
constitutes the legal, valid and binding obligation of the General Partner,
enforceable in accordance with its terms.
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SECTION 6.5. Financial Information. The balance sheet of the Borrower
as at March 31, 1994, and the related statements of operations, cash flow and
partners' capital, copies of which have been furnished to the Agent and each
Lender, have been prepared in accordance with GAAP consistently applied, and
present fairly the financial condition of the Borrower as at the dates thereof
and the results of its operations for the periods then ended.
SECTION 6.6. No Material Adverse Change. Since the date of the
financial statements described in Section 6.5, there has been no material
adverse change in the Borrower's business, assets, properties, revenue,
financial condition, operations or (with respect to the Borrower's ability to
pay or repay the Obligations) prospects.
SECTION 6.7. Litigation, Labor Controversies. etc. Except as disclosed
in Item 6.7 ("Litigation") of the Disclosure Schedule, there is no pending or,
to the knowledge of the Borrower, threatened litigation, action, proceeding, or
labor controversy affecting the Borrower, any of its Subsidiaries or the
General Partner, which if adversely determined is reasonably likely to
materially adversely affect the business, assets, properties, revenue,
financial condition, operations or prospects (with respect to the Borrower's
ability to pay or repay the Obligations) of the Borrower, or any Subsidiary, or
which purports to affect the legality, validity or enforceability of this
Agreement, the Notes or any other Loan Document.
SECTION 6.8. Subsidiaries. The Borrower has no Subsidiaries except
those Subsidiaries, if any, which the Agent and the Required Lenders have
permitted the Borrower to acquire after the Effective Date.
SECTION 6.9. Ownership Of Properties. The Borrower and each of its
Subsidiaries owns good and marketable title to all of its properties and
assets, real and personal, tangible and intangible, of any nature whatsoever
(including patents, trademarks, trade names, service marks and copyrights),
free and clear of all Liens, charges or claims (including infringement claims
with respect to patents, trademarks, copyrights and the like) except as
permitted pursuant to Section 7.2.3.
SECTION 6.10. Taxes. Each of the Borrower and its Subsidiaries has
filed all tax returns and reports required by law to have been filed by it and
has paid all taxes and governmental charges thereby shown to be owing, except
any such taxes or charges which are being diligently contested in good faith by
appropriate proceedings and for which adequate reserves in accordance with GAAP
shall have been set aside on its books.
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SECTION 6.11. Pension and Welfare Plans. Neither the Borrower, nor
any Subsidiary of the Borrower, nor any member of a Controlled Group has
established or maintained, has ever made or been obligated to make
contributions to, or is obligated to make contributions to, any Plan or
multiemployer Plan.
SECTION 6.12. Environmental Warranties. To the best of the Borrower's
knowledge, all facilities and property (including underlying groundwater) owned
or leased by the Borrower and its Subsidiaries, have been, and continue to be,
owned or leased by the Borrower and its Subsidiaries, in material compliance
with all Environmental Laws.
SECTION 6.13. Regulations G, U and X. The Borrower is not engaged in
the business of extending credit for the purpose of purchasing or carrying
margin stock, and no proceeds of any Loans will be used for a purpose which
violates, or would be inconsistent with, F.R.S. Board Regulation G, U or X.
Terms for which meanings are provided in F.R.S. Board Regulation G, U or X or
any regulations substituted therefor, as from time to time in effect, are used
in this Section with such meanings.
SECTION 6.14. Accuracy of Information.
(a) All factual information heretofore or contemporaneously
furnished by or on behalf of the Borrower or the General Partner in writing to
the 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 the Borrower or the General Partner in
writing to the Agent or any Lender will be, true and accurate in every material
respect on the date as of which such information is dated or certified and as
of the date of execution and delivery of this Agreement by the Agent and such
Lender, and such information is not, or shall not be, as the case may be,
incomplete by omitting to state any material fact necessary to make such
information not misleading.
(b) All of the information set forth in the Disclosure Schedule
and the Cable Schedule is true and accurate in every material respect as of the
Effective Date.
SECTION 6.15. Cable Authorizations. The Cable Schedule accurately and
completely lists all CATV and SMATV systems currently owned by the Borrower,
and all Franchises issued or granted to the Borrower (such Franchises, together
with all renewals and extensions thereof, are referred to collectively as the
"Cable Franchises"). The Cable Franchises constitute the only material
Franchises required or advisable in connection with the conduct by the Borrower
of its business as presently conducted. All of the Cable Franchises are duly
issued in the
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name of the Borrower (or are issued in some other name but have been duly and
validly assigned to the Borrower), the Borrower has full power and authority to
operate thereunder, and each such Cable Franchise will expire on the date set
forth for such Cable Franchise in the Cable Schedule. All assets of the Cable
Systems and all Cable Franchises, contracts, agreements and other things
necessary or advisable in connection with the present or proposed operation of
the Cable Systems shall at all times be owned (or leased on terms and
conditions permitted hereunder) and held by the Borrower. The Cable Schedule
accurately and completely lists all agreements, if any, which are presently in
effect with public utilities for the use of public utility facilities in
connection with the Cable Systems. Each of the Borrower and the General Partner
(with respect to the business and operations of the Borrower) has the right and
authority (contractual, by law or otherwise) to provide pay television and
related services to subscribers. The Cable Schedule accurately and completely
lists and (i) all deeds, leases, leaseholds and other interests in real
property held by the Borrower, together with accurate legal descriptions of all
such real property owned or leased by the Borrower, and (ii) all Pole
Agreements and wire line crossing agreements to which the Borrower is a party.
Except for the Franchise held by People's Choice TV covering the Village of
Rantoul, Illinois (the "Competing Rantoul Franchise"), other than the Cable
Franchises, to the best knowledge of the General Partner and the Borrower, no
Franchise has been granted with respect to the territory covered by the Cable
Franchises, nor, to the best of the Borrower's knowledge, is any application
for any such Franchise pending. As of the date of this Agreement, there is no
overbuilding of any territory covered by the Cable Systems, except for the
Village of Rantoul, Illinois which is covered by both a Cable Franchise and the
Competing Rantoul Franchise.
SECTION 6.16. FCC Registration and Regulatory Compliance. With respect
to each of the Cable Systems, there is a registration statement on file with
the FCC which fully complies with all applicable requirements of 47 C.F.R. Part
76, Subpart B. The Borrower is the holder of each of the FCC Licenses listed
on the Cable Schedule, each of which has the effective and expiration dates
noted on the Cable Schedule, and is, to the best of the Borrower's and General
Partners' knowledge, lawfully issued (and continues to exist) pursuant to the
rules and regulations of the FCC after compliance with all applicable
requirements of law. The Borrower is presently in compliance in all material
respects with all terms and conditions of all FCC Licenses covering the Cable
Systems, all Federal, state and local laws, all rules, regulations and
administrative orders of the FCC (other than with respect to compliance with
regulations promulgated by the FCC regarding rates and codified at 47 C.F.R.
Section Section 76.922-76.924, with which, to the Borrower's knowledge, it is
in compliance in all material respects) and all state and local
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commissions or authorities which are applicable to the Borrower or the
operation of the Cable Systems (including, without limitation, those regarding
signal leakage), and the foregoing permit any contemplated and continued
operation of the Cable Systems without the obtaining of any further approvals,
covenants, modifications or the taking of any other action of any kind or
nature whatsoever. The Borrower has received no notice that any fact or any
past, present or threatened occurrence would preclude or impair its ability to
obtain any FCC License or other Franchise necessary for the operation or
proposed expansion of the Cable Systems.
SECTION 6.17. Franchises, Copyrights and Licenses. The Borrower
possesses, or has the right to use, all FCC Licenses and all other Franchises,
all copyrights, all licenses (including all cable television or broadcast
licenses), all rights under agreements with public utilities and microwave
transmission companies, Pole Agreements, and all utility easements and other
rights, the absence of which is reasonably likely to have a material adverse
effect on the business, properties, operations or conditions, financial or
otherwise, or prospects (with respect to the Borrower's ability to pay or repay
the Obligations) of the Borrower, each of which is in full force and effect and
with which the Borrower is in compliance in all material respects, with no
known conflict with the rights of others which could affect or impair in any
material manner the businesses, properties, operations or condition, financial
or otherwise, or prospects (with respect to the Borrower's ability to pay or
repay the Obligations) of the Borrower. The General Partner or any other
Affiliate of the Borrower providing services to the Borrower, has obtained all
licenses, permits, authorizations and Franchises necessary for the ownership of
its properties used in providing services to the Cable Systems, the conduct of
its businesses in connection with the Cable Systems and any proposed expansions
of the Cable Systems, in all instances in which the failure to have obtained
such licenses, permits, authorizations and Franchises could have a material
adverse impact on the businesses, properties, operations or condition,
financial or otherwise, of the Borrower. To the best of the Borrower's
knowledge, no event has occurred which permits, or after the giving of notice
or the lapse of time, or both, would permit, the revocation or termination of
any Cable Franchise, or any copyright, license, permit, authorization or other
right of the FCC so as to adversely affect in any material manner the
businesses, properties, operations or condition, financial or otherwise, or
prospects (with respect to the Borrower's ability to pay or repay the
Obligations) of the Borrower.
SECTION 6.18. Communications Act Filings. The Borrower has duly and
timely filed all cable television registration statements and other filings
which are required to be filed under
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the Communications Act, and has complied in all other material respects with
the Communications Act (other than with respect to compliance with regulations
promulgated by the FCC regarding rates and codified at 47 C.F.R. Sections
76.922-76.924, with which, to the Borrower's knowledge, it is in compliance in
all material respects), including, without limitation, the rules and
regulations of the FCC relating to the carriage of television signals. The
Borrower has recorded or deposited with and paid to the United States Copyright
Office, the Register of Copyrights and the Copyright Royalty Tribunal, all
notices, statements of account, royalty fees and other documents, instruments
and amounts required under the Copyright Act, and is not liable to any person
for copyright infringement under the Copyright Act.
SECTION 6.19. Partnership Agreement. The Partnership Agreement is in
full force and effect and no default or event which, with the passage of time
or notice or both, would constitute a default has occurred and is continuing
thereunder.
ARTICLE VII
COVENANTS
SECTION 7.1. Affirmative Covenant. The Borrower agrees with the Agent
and each Lender that, until all Commitments have terminated and all Obligations
have been paid and performed in full, the Borrower will perform the obligations
set forth in this Section 7.1.
SECTION 7.1.1. Financial Information, Reports. Notices, etc. The
Borrower will furnish, or will cause to be furnished, to each Lender and the
Agent copies of the following financial statements, reports, notices and
information:
(a) as soon as available and in any event within 60 days
after the end of each of the first three Fiscal Quarters of each
Fiscal Year of the Borrower, consolidated balance sheets of the
Borrower and its Subsidiaries as of the end of such Fiscal Quarter and
consolidated statements of operations or income (as appropriate),
partners' equity or stockholders' equity (as appropriate), and cash
flow of the Borrower and its Subsidiaries for such Fiscal Quarter and
for the period commencing at the end of the previous Fiscal Year and
ending with the end of such Fiscal Quarter, certified by the
president, chief financial Authorized Officer or Treasurer of the
General Partner;
(b) as soon as available and in any event within 105 days
after the end of each Fiscal Year of the Borrower, a
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copy of the annual audit report for such Fiscal Year for the Borrower
and its Subsidiaries, including therein consolidated balance sheets of
the Borrower and its Subsidiaries as of the end of such Fiscal Year
and consolidated statements of operations or income (as appropriate),
partners' equity or stockholders' equity (as appropriate), and cash
flow of the Borrower and its Subsidiaries for such Fiscal Year, in
each case certified (without any Impermissible Qualification) by an
independent public accounting firm acceptable to the Agent and the
Required Lenders and accompanied by a Compliance Certificate, executed
by the General Partner, showing (in reasonable detail and with
appropriate calculations and computations in all respects satisfactory
to the Agent) compliance with the financial covenants set forth in
Section 7.2.4 and the resulting Applicable Margin);
(c) as soon as available and in any event within 60 days
after the end of each of the first three Fiscal Quarters of each
Fiscal Year, a Compliance Certificate, executed by the General
Partner, showing (in reasonable detail and with appropriate
calculations and computations in all respects satisfactory to the
Agent) compliance with the financial covenants set forth in Section
7.2.4 and the resulting Applicable Margin;
(d) as soon as possible and in any event within three
days after the occurrence of each Default, a statement of the General
Partner, setting forth details of such Default and the action which
the Borrower has taken and proposes to take with respect thereto;
(e) as soon as possible and in any event within three
days after (x) becoming aware of the occurrence of any adverse
development with respect to any litigation, action, proceeding, or
labor controversy described in Section 6.7 or (y) becoming aware of
the commencement of any labor controversy, litigation, action,
proceeding of the type described in Section 6.7, notice thereof and
copies of all documentation relating thereto;
(f) promptly after the sending or filing thereof, copies
of all reports which the Borrower sends to the General Partner, and
all reports and registration statements which the Borrower, any of its
Subsidiaries or the General Partner files with the Securities and
Exchange Commission or any national securities exchange;
(g) as soon as practicable, and in any event within 60
days after the end of each Fiscal Quarter, a subscribers report
setting forth for each Cable System as of the end of
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such Fiscal quarter (i) the number of Basic Subscribers and Pay Units
as of the end of such Fiscal Quarter, (ii) the Basic Subscriber Rate
charged to subscribers during such Fiscal Quarter, (iii) the number of
Homes Passed, the Basic Penetration Rate and Pay to Basic Rate as of
the end of such Fiscal Quarter, (iv) upon request of the Agent or any
Lender, the number of subscribers initiating and terminating Cable
Systems service during such Fiscal Quarter and (v) upon request by the
Agent or any Lender, an aging of the Borrower's accounts receivable as
of the end of such Fiscal Quarter, which report shall also include a
description of any Cable Systems sold during such Fiscal Quarter and
the consideration received therefor.
(h) promptly after the occurrence of (i) any lapse or
other termination of any Franchise issued to the Borrower or any of
its Subsidiaries, which lapse or termination may have a material
adverse effect on the business, operations, financial condition or
prospects (with respect to the Borrower's ability to pay or repay the
Obligations) of the Borrower or any of its Subsidiaries, (ii) any
refusal by any Official Body to renew or extend any such Franchise, or
(iii) any dispute between the Borrower or any of its Subsidiaries and
any Official Body which, if adversely determined, is reasonably likely
to have a material adverse effect on the business, operations,
financial condition or prospects (with respect to the Borrower's
ability to pay or repay the Obligations) of the Borrower or any of its
Subsidiaries, notice thereof;
(i) promptly upon their becoming available to the
Borrower, copies of (i) any periodic or special report filed by the
Borrower or any of its Subsidiaries with the FCC or with any other
Official Body regulating the Cable Systems if (A) such report
indicates any material adverse changes in the business, operations,
financial condition or prospects (with respect to the Borrower's
ability to pay or repay the Obligations) of the Borrower or any of its
Subsidiaries, or (B) a copy thereof is requested by any Lender, and
(ii) any material notice or other material communication from the FCC
or from any other Official Body regulating cable systems which
specifically relates to the operation of the Cable Systems; and
(j) such other information respecting the condition or
operations, financial or otherwise, of the Borrower, any of its
Subsidiaries or the General Partner, as any Lender through the Agent
may from time to time reasonably request.
SECTION 7.1.2. Compliance with Laws, etc. The Borrower will, and will
cause each of its Subsidiaries to, comply in all
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material respects with all applicable laws, rules, regulations and orders, such
compliance to include (without limitation):
(a) the maintenance and preservation of its existence and
qualification as a foreign corporation or foreign limited partnership,
as the case may be;
(b) the maintenance in full force and effect of all
material Cable Franchises, consents, approvals, exemptions and other
actions by, and all registrations, qualifications, designations and
declarations and other filings with, each Official Body necessary or
advisable in connection with the execution, delivery and performance
of this Agreement, the Notes and the other Loan Documents and the
ownership and operation of the Cable Systems; and
(c) the payment, before the same become delinquent, of
all taxes, assessments and governmental charges imposed upon it or
upon its property except to the extent being diligently contested in
good faith by appropriate proceedings and for which adequate reserves
in accordance with GAAP shall have been set aside on its books.
SECTION 7.1.3. MaintenanCe of Properties. The Borrower will, and will
cause each of its Subsidiaries to, maintain, preserve, protect and keep its
properties in good repair, working order and condition (ordinary wear and tear
excepted), and make necessary and proper repairs, renewals and replacements so
that its business carried on in connection therewith may be properly conducted
at all times unless the Borrower determines in good faith that the continued
maintenance of any of its properties is no longer economically desirable.
SECTION 7.1.4. Insurance. The Borrower will, and will cause each of
its Subsidiaries to, maintain or cause to be maintained with responsible
insurance companies insurance with respect to its properties and business
(including business interruption insurance) against such casualties and
contingencies and of such types and in such amounts as is customary in the case
of partnerships or other entities engaged in similar businesses and will, upon
request of the Agent, furnish to each Lender at reasonable intervals (and at
least annually) a certificate of insurance with respect to all insurance
maintained by the Borrower and its Subsidiaries in accordance with this
Section.
SECTION 7.1.5. Books and Records. The Borrower will, and will cause
each of its Subsidiaries to, keep books and records which accurately reflect
all of its business affairs and transactions and permit the Agent and each
Lender or any of their respective representatives, at reasonable times and
intervals and upon reasonable notice, to visit all of its offices, to discuss
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its financial matters with its officers and independent public accountant (and
the Borrower hereby authorizes such independent public accountant to discuss
the Borrower's financial matters with each Lender or its representatives with
or without a representative of the Borrower being present so long as the
Borrower has been given a reasonable opportunity to have a representative
present) and to examine (and, at the expense of the Borrower, photocopy
extracts from) any of its books or other corporate records. The Borrower shall
pay any fees of such independent public accountant incurred in connection with
the Agent's or, during any period that a Default has occurred and is
continuing, any Lender's exercise of its rights pursuant to this Section.
SECTION 7.1.6. Environmental Covenant. The Borrower will, and will
cause each of its Subsidiaries to,
(a) use and operate all of its facilities and properties
in material compliance with all Environmental Laws, keep all necessary
permits, approvals, certificates, licenses and other authorizations
relating to environmental matters in effect and remain in material
compliance therewith, and handle all Hazardous Materials in material
compliance with all applicable Environmental Laws;
(b) immediately notify the Agent and provide copies upon
receipt of all written claims, complaints, notices or inquiries
relating to the condition of its facilities and properties or
compliance with Environmental Laws, and shall timely defend any
actions and proceedings relating to compliance with Environmental
Laws; and
(c) provide such information and certifications which the
Agent may reasonably request from time to time to evidence compliance
with this Section 7.1.6.
SECTION 7.1.7. Copyright Act Filings. The Borrower will timely from
time to time in accordance with applicable law record or deposit with and pay
to the United States Copyright Office, the Register of Copyrights and/or the
Copyright Royalty Tribunal all notices, statements of account, royalty fees and
other documents, instruments and amounts required under the Copyright Act of
the United States.
SECTION 7.1.8. Use of Proceeds. The Borrower shall use the proceeds of
the initial Borrowing first to repay, in full, all amounts outstanding under
the Existing Credit Agreement, and, second, for such general corporate purposes
as the Borrower may determine appropriate (including payments of General
Partner Advances permitted under Section 7.2.8). Thereafter, the Borrower shall
use the proceeds of all additional Borrowings, if
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any, for such general corporate purposes as the Borrower may determine
appropriate. No proceeds of any Borrowing will be used acquire any "margin
stock", as defined in F.R.S. Board Regulation U.
SECTION 7.1.9. Post-Closing Mortgages and Releases. Within 30 days
after the Effective Date, the Borrower shall take all steps necessary, at its
own cost and expense, to (i) grant the Agent a first priority mortgage Lien on
the real property specified in the Cable Schedule as the "Office/Headend Site"
for the Turnersville Cable System, (ii) obtain title insurance coverage on such
property in an amount, containing such terms and exceptions and issued by an
insurance company, acceptable to the Agent in the Agent's reasonable discretion
(together with such opinions with respect thereto as the Agent may reasonably
request), and (iii) deliver to the Agent duly executed releases evidencing the
release of any and all mortgages on any real property of the Borrower other
than the mortgage described in clause (i) above.
SECTION 7.1.10. Post-CloSing Delivery of Opinion. If the Borrower is
unable to deliver the opinion required under clause (a) of Section 5.1.6, the
Borrower shall deliver such opinion by no later than the third Business Day
after the Effective Date. Failure to do so shall constitute an Event of
Default.
SECTION 7.2. Negative Covenants. The Borrower agrees with the Agent
and each Lender that, until all Commitments have terminated and all Obligations
have been paid and performed in full, the Borrower will perform the obligations
set forth in this Section 7.2.
SECTION 7.2.1. Business Activities. The Borrower will not, and will
not permit any of its Subsidiaries to, engage in any business activity, except
for the ownership and operation of the Cable Systems and such activities as may
be incidental or related thereto.
SECTION 7.2.2. Indebtedness. The Borrower will not, and will not
permit any of its Subsidiaries to, create, incur, assume or suffer to exist or
otherwise become or be liable in respect of any Indebtedness, other than,
without duplication, the following:
(a) Indebtedness in respect of the Loans and other
Obligations;
(b) until the date of the initial Borrowing, the
Indebtedness identified in Item 7,2.2(b) ("Indebtedness to be Paid")
of the Disclosure Schedule;
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(c) Indebtedness existing as of the Effective Date which
is identified in Item 7.2.2(c) ("Ongoing Indebtedness") of the
Disclosure Schedule;
(d) Indebtedness incurred by the Borrower or any of its
Subsidiaries to a vendor of any assets to finance its acquisition of
such assets which, when added to the aggregate principal amount of
Indebtedness permitted pursuant to clause (f) of this Section 7.2.2,
does not exceed $2,500,000;
(e) unsecured Indebtedness incurred in the ordinary
course of business (including open accounts extended by suppliers on
normal trade terms in connection with purchases of goods and services,
but excluding any Indebtedness incurred through the borrowing of money
or in the form of Contingent Liabilities);
(f) Indebtedness in respect of Capitalized Lease
Liabilities which, when added to the aggregate principal amount of
Indebtedness permitted pursuant to clause (d) of this Section 7.2.2,
does not exceed $2,000,000;
(g) Indebtedness of the Borrower in respect of Hedging
Obligations arising under agreements entered into with the Agent or
any other Lender; and
(h) Indebtedness in the form of General Partner Advances
which are at all times subordinate to the Loans and all other amounts
due to the Lenders hereunder pursuant to the terms of the
Subordination Agreement;
provided, however, that no Indebtedness otherwise permitted by clause (d), (e),
(f) or (g) shall be incurred if, before or after giving effect to the
incurrence thereof, any Default shall have occurred and be continuing.
SECTION 7.2.3. Liens. The Borrower will not, and will not permit any
of its Subsidiaries to, create, incur, assume or suffer to exist any Lien upon
any of its property, revenues or assets, whether now owned or hereafter
acquired, except:
(a) Liens securing payment of the Obligations, granted
pursuant to any Loan Document;
(b) Until the date of the initial Borrowing, Liens
securing payment of the Indebtedness of the type permitted and
described in clause (b) of SectiOn 7.2.2;
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(c) Liens granted prior to the Effective Date to secure
payment of the Indebtedness of the type permitted and described in
clause (c) of Section 7.2.2;
(d) Liens granted to secure payment of the Indebtedness
of the type permitted and described in clause (d) of Section 7.2.2 and
covering only those assets acquired with the proceeds of such
Indebtedness;
(e) Liens for taxes, assessments or other governmental
charges or levies not at the time delinquent or thereafter payable
without penalty or being diligently contested in good faith by
appropriate proceedings and for which adequate reserves in accordance
with GAAP shall have been set aside on its books;
(f) Liens of carriers, warehousemen, mechanics,
materialmen and landlords incurred in the ordinary course of business
for sums not overdue or being diligently contested in good faith by
appropriate proceedings and for which adequate reserves in accordance
with GAAP shall have been set aside on its books;
(g) Liens incurred in the ordinary course of business in
connection with workmen's compensation, unemployment insurance or
other forms of governmental insurance or benefits, or to secure
performance of tenders, statutory obligations, leases and contracts
(other than for borrowed money) entered into in the ordinary course of
business or to secure obligations on surety or appeal bonds; and
(h) judgment Liens in existence less than 30 days after
the entry thereof or with respect to which execution has been stayed
or the payment of which is covered in full (subject to a customary
deductible) by insurance maintained with responsible insurance
companies.
SECTION 7.2.4. Financial Condition. The Borrower will not permit:
(a) Its Leverage Ratio at any time during the periods set
forth below to be greater than the ratio set forth opposite such
periods:
<TABLE>
<CAPTION>
Period Maximum Leverage Ratio
------- ----------------------
<S> <C>
Effective Date 3/31/95 5.0:1
4/1/95 3/31/96 4.5:1
4/1/96 3/31/97 4.0:1
4/1/97 and Thereafter 3.5:1.
</TABLE>
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Additionally, if the Borrower disposes of either the Turnersville
Cable System or the Naperville Cable System, the Borrower shall not
permit its Leverage Ratio at any time thereafter to be greater than
3.0:1.
(b) Its Interest Coverage Ratio at any time during the
periods set forth below to be less than the ratio set forth opposite
such periods:
<TABLE>
<CAPTION>
Minimum Interest
Period Coverage Ratio
------- --------------
<S> <C>
Effective Date - 3/31/96 2.5:1
4/1/96 and Thereafter 3.0:1.
</TABLE>
(c) its Debt Service Ratio at any time to be less than
1.50:1.
(d) Its Fixed Charge Coverage Ratio at any time after the
Conversion Date to be less than 1.0 to 1.0.
SECTION 7.2.5. Investments. The Borrower will not, and will not permit
any of its Subsidiaries to, make, incur, assume or suffer to exist any
Investment in any other Person, except (without duplication):
(a) the Investments existing on the Effective Date and
identified in Item 7.2.5(a) ("Ongoing Investments") of the Disclosure
Schedule;
(b) Investments permitted as Capital Expenditures
pursuant to Section 7.2.7; and
(c) Cash Equivalent Investments;
provided, however, that any Investment which when made complies with the
requirements of the definition of the term "Cash Equivalent Investment" may
continue to be held notwithstanding that such Investment if made thereafter
would not comply with such requirements.
SECTION 7.2.6. Restricted Payments, etc. On and at all times after the
Effective Date:
(a) the Borrower will not, and will not permit any of its
Subsidiaries to, declare, pay or make any dividend or distribution (in
cash, property or obligations) with respect to any partnership
interest of the Borrower or stock of the Subsidiaries or on account of
the purchase, redemption, retirement or acquisition of any partnership
interest of the Borrower or stock of the Subsidiaries; and
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(b) the Borrower will not, and will not permit any of its
Subsidiaries to, make any deposit for any of the foregoing purposes.
SECTION 7.2.7. Capital Expenditures, etc. The Borrower will not, and
will not permit any of its Subsidiaries to, make or commit to make Capital
Expenditures in any Fiscal Year in an aggregate amount in excess of
$10,000,000.
SECTION 7.2.8. General Partner Advances. The Borrower will not, and
will not permit any of its Subsidiaries to, pay any amounts to, or on behalf
of, the General Partner or any limited partner of the Borrower with respect to
(a) Management Fees if the aggregate amount of Management
Fees paid during any period prior to June 30, 1998 would exceed five
percent (5%) of the Borrower's consolidated revenues for such period,
or
(b) Management Fees and Allocated Overhead if the
aggregate amount of Management Fees and Allocated Overhead paid during
any period beginning on and continuing after June 30, 1998 would
exceed two and one-half percent (2.5%) of the Borrower's consolidated
revenue for such period, or
(c) Management Fees, Allocated Overhead or General
Partner Advances if either before or after giving effect to such
payments, a Default shall have occurred and be continuing, or if such
payments would violate the terms of the Subordination Agreement.
SECTION 7.2.9. Consolidation, Merger. etc. The Borrower will not, and
will not permit any of its Subsidiaries to, liquidate or dissolve, consolidate
with, or merge into or with, any other corporation, or purchase or otherwise
acquire all or substantially all of the assets of any Person (or of any
division thereof) except
(a) any such Subsidiary may liquidate or dissolve
voluntarily into, and may merge with and into, the Borrower or any
other Subsidiary, and the assets or stock of any Subsidiary may be
purchased or otherwise acquired by the Borrower or any other
Subsidiary; and
(b) so long as no Default has occurred and is continuing
or would occur after giving effect thereto, the Borrower or any of its
Subsidiaries may purchase all or substantially all of the assets of
any Person, or acquire such Person by merger, provided that such
purchase or acquisition (i) is not a Material Acquisition, and (ii)
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involves a Person or assets of a Person engaged in the CATV or SMATV business.
SECTION 7.2.10. Asset Dispositions, etc. The Borrower will not, and
will not permit any of its Subsidiaries to, sell, transfer, lease, contribute
or otherwise convey, or grant options, warrants or other rights with respect
to, all or any portion of its assets (including accounts receivable and capital
stock of any Subsidiaries) to any Person, unless
(a) the resulting transaction is not a Material
Disposition;
(b) the resulting transaction consists of a sale of the
Turnersville Cable System or the Naperville Cable System and, after
giving effect to such transaction (and, if necessary, to the repayment
of Loans with the proceeds thereof), the Borrower's Leverage Ratio in
effect after such disposition is less than 3.0:1; or
(c) the resulting transaction consists of a sale of a
Cable System other than the Turnersville Cable System or the
Naperville Cable System and, after giving effect to such transaction
(and, if necessary, to the repayment of Loans with the proceeds
thereof), the Borrower's Leverage Ratio in effect after such
disposition is no greater than the Borrower's Leverage Ratio
immediately prior to such transaction-
Furthermore, the Borrower may not engage in any transaction permitted pursuant
to clauses (a) - (c) if, after giving effect thereto, either (i) the Borrower
would no longer own free and clear of all Liens, except those permitted under
clause (a) of Section 7.2.3, either the Turnersville Cable System or the
Naperville Cable System, or (ii) the number of Basic Subscribers would
decrease by 35% or more from the number of Basic Subscribers immediately prior
to such transaction.
SECTION 7.2.11. Modification of Certain Agreements. The Borrower
will not consent to any amendment, supplement or other modification of any of
the terms or provisions contained in, or applicable to, its Partnership
Agreement (except as to the matters set forth in Section 6.1 of the Partnership
Agreement) or the Subordination Agreement.
SECTION 7.2.12. Transactions with Affiliates. Except for Management
Fees, Allocated Overhead and General Partner Advances, payable in accordance
with Section 7.2.8 and the terms of the Subordination Agreement, the Borrower
will not, and will not permit any of its Subsidiaries to, enter into, or cause,
suffer or permit to exist any arrangement or contract with any of its
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Affiliates (a) other than as set forth in Section 2.2(n) of the Partnership
Agreement or (b) unless such arrangement or contract is fair and equitable to
the Borrower or such Subsidiary and is an arrangement or contract of the kind
which would be entered into by a prudent Person in the position of the Borrower
or such Subsidiary with a Person which is not one of its Affiliates.
SECTION 7.2.13. Negative Pledges, Restrictive Agreements, etc. The
Borrower will not, and will not permit any of its Subsidiaries to, enter into
any agreement (excluding this Agreement, any other Loan Document and any
agreement governing any Indebtedness permitted by clause (d) of Section 7.2.2
as to the assets financed with the proceeds of such Indebtedness) prohibiting
(a) the creation or assumption of any Lien upon its
properties, revenues or assets, whether now owned or hereafter
acquired, or the ability of the Borrower to amend or otherwise modify
this Agreement or any other Loan Document; or
(b) the ability of any Subsidiary to make any payments,
directly or indirectly, to the Borrower by way of dividends, advances,
repayments of loans or advances, reimbursements of management and
other intercompany charges, expenses and accruals or other returns on
investments, or any other agreement or arrangement which restricts the
ability of any such Subsidiary to make any payment, directly or
indirectly, to the Borrower.
SECTION 7.2.14. No Creation of Pension Plans. The Borrower will
not, and will not permit any of its Subsidiaries to, establish or maintain or
become obligated to make contributions to any Plan or multiemployer Plan.
SECTION 7.2.15. Acquisition of Real Property Interests. At any time
on or after the Effective Date, the Borrower will not, and will not permit its
Subsidiaries to, acquire (i) any fee or leasehold interest in real property
with a fair market value in excess of $1,000,000, or (ii) any fee or leasehold
interest in real property if the fair market value of such interest when added
together with the fair market value of all other such interests, would exceed
$3,500,000; unless prior to or contemporaneous with such acquisition, the
Borrower, at is own cost and expense, takes all steps necessary to grant the
Agent, a first priority mortgage Lien thereon and, in the case of real
property, the Borrower also obtains title insurance coverage in an amount,
containing such terms and exceptions and issued by an insurance company,
acceptable to the Agent in the Agent's reasonable discretion, with respect to
such property and such
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legal opinions with respect thereto as the Agent may reasonably request.
ARTICLE VIII
EVENTS OF DEFAULT
SECTION 8.1. LiSting of Events of Default. Each of the following
events or occurrences described in this Section 8.1 shall constitute an "Event
of Default".
SECTION 8.1.1. Non-Payment of Obligations. The Borrower shall
default in the payment or prepayment when due of any principal of any Loan, or
the Borrower shall default (and such default shall continue unremedied for a
period of three Business Days or more) in the payment when due of any interest
on any Loan, or the Borrower shall default (and such default shall continue
unremedied for a period of five days or more) in the payment when due of any
commitment fee or any other Obligation.
SECTION 8.1.2. Branch Of Warranty. Any representation or warranty
of the Borrower made or deemed to be made hereunder or in any other Loan
Document or any other writing or certificate furnished by or on behalf of the
Borrower to the Agent or any Lender for the purposes of or in connection with
this Agreement or any such other Loan Document (including any certificates
delivered pursuant to Article V) or any representation or warranty made by the
General Partner in the Subordination Agreement is or shall be incorrect when
made in any material respect.
SECTION 8.1.3. Non-Performance of Certain Covenants and Obligations.
The Borrower shall default in the due performance and observance of any of its
obligations under Section 7.1.2(a) (with respect only to maintenance and
preservation of partnership existence) or Section 7.2 or the Borrower or the
General Partner shall default in the due performance and observance of their
respective obligations under the Subordination Agreement.
SECTION 8.1.4. Non-Performance of Other Covenants and Obligations.
The Borrower shall default in the due performance and observance of any other
agreement contained herein or in any other Loan Document, and such default
shall continue unremedied for a period of 30 days after notice thereof shall
have been given to the Borrower by the Agent or any Lender.
SECTION 8.1.5. Default on Other Indebtedness. A default shall occur
in the payment when due (subject to any applicable grace period), whether by
acceleration or otherwise, of any Indebtedness (other than Indebtedness
described in Section 8.1.1)
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having, individually or in the aggregate, a principal amount in excess of
$250,000 of the Borrower or any of its Subsidiaries, or a default shall occur
in the performance or observance of any obligation or condition with respect to
such Indebtedness if the effect of such default is to accelerate the maturity
of any such Indebtedness or such default shall continue unremedied for any
applicable period of time sufficient to permit the holder or holders of such
Indebtedness, or any trustee or agent for such holders, to cause such
Indebtedness to become due and payable prior to its expressed maturity.
SECTION 8.1.6. Judgments. Any judgment or order for the payment of
money in excess of $100,000 (unless fully covered by insurance (subject to a
reasonable and customary deductible) where liability has been admitted by the
applicable insurance carrier) shall be rendered against the Borrower or any of
its Subsidiaries and either
(a) enforcement proceedings shall have been commenced by any
creditor upon such judgment or order; or
(b) there shall be any period of 30 consecutive days during which
a stay of enforcement of such judgment or order, by reason of a pending
appeal or otherwise, shall not be in effect.
SECTION 8.1.7. Change in Control. Any Change in Control shall occur.
SECTION 8.1.8. Bankruptcy, Insolvency, etc. The Borrower, any of
its Subsidiaries or the General Partner shall
(a) become insolvent or generally fail to pay, or admit in writing
its inability or unwillingness to pay, debts as they become due;
(b) apply for, consent to, or acquiesce in, the appointment of a
trustee, receiver, sequestrator or other custodian for the Borrower, any
of its Subsidiaries or the General Partner or any property of any thereof,
or make a general assignment for the benefit of creditors;
(c) in the absence of such application, consent or acquiescence,
permit or suffer to exist the appointment of a trustee, receiver,
sequestrator or other custodian for the Borrower, any of its Subsidiaries
or the General Partner or for a substantial part of the property of any
thereof, and such trustee, receiver, sequestrator or other custodian shall
not be discharged within 60 days, provided that the Borrower, each
Subsidiary and the General Partner hereby expressly authorizes the Agent
and each Lender to appear in
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any court conducting any relevant proceeding during such 60-day period
to preserve, protect and defend their rights under the Loan Documents;
(d) permit or suffer to exist the commencement of any
bankruptcy, reorganization, debt arrangement or other case or
proceeding under any bankruptcy or insolvency law, or any dissolution,
winding up or liquidation proceeding, in respect of the Borrower, any
of its Subsidiaries or the General Partner, and, if any such case or
proceeding is not commenced by the Borrower, such Subsidiary or the
General Partner, such case or proceeding shall be consented to or
acquiesced in by the Borrower, such Subsidiary or the General Partner
or shall result in the entry of an order for relief or shall remain
for 60 days undismissed, provided that the Borrower, each Subsidiary
and the General Partner hereby expressly authorizes the Agent and each
Lender to appear in any court conducting any such case or proceeding
during such 60-day period to preserve, protect and defend their rights
under the Loan Documents; or
(e) take any partnership or corporate action authorizing,
or in furtherance of, any of the foregoing.
SECTION 8.1.9. Partnership Agreement. There shall occur any default
under the Partnership Agreement.
SECTION 8.1.10. Impairment of Security, etc. Any Loan Document
(or, in the case of the General Partner, the Subordination Agreement), or any
Lien granted thereunder, shall (except in accordance with its terms), in whole
or in part, terminate, cease to be effective or cease to be the legally valid,
binding and enforceable obligation of the Borrower (or, in the case of the
Subordination Agreement, the General Partner); the Borrower, the General
Partner or any other party shall, directly or indirectly, contest in any manner
such effectiveness, validity, binding nature or enforceability; or any Lien
securing any Obligation shall, in whole or in part, cease to be a perfected
first priority Lien, subject only to those exceptions expressly permitted by
such Loan Document.
SECTION 8.1.11. Failure to Obtain or Cessation of Authorization. etc.
Any consent, approval, exemption, registration, qualification, designation,
declaration, filing, or other action or undertaking now or hereafter obtained
in connection with this Agreement (other than matters referred to in Section
8.1.12 hereof), the Notes or the other Loan Documents or any such action or
undertaking now or hereafter necessary or advisable to make this Agreement, the
Notes or the other Loan Documents legal, valid, enforceable and admissible in
evidence is not obtained or shall have ceased to be in full force and effect
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or shall have been modified or amended or shall have been held to be illegal or
invalid and the Borrower shall have been unsuccessful in curing such illegality
or invalidity within a reasonable time and the Required Lenders shall have
determined in good faith (which determination shall be conclusive) that such
event or occurrence may have a material adverse effect on the Agent's or the
Lenders' rights under this Agreement, any Note or any other Loan Document.
SECTION 8.1.12. Cancellation of Franchise Agreement. Any Franchise
Agreement(s) pursuant to which the Borrower serves more than 5% of the Basic
Subscribers or any other license, permit, lease, easement, conduit occupancy
right, Pole Agreement, certificate, consent, approval, authorization or
agreement (collectively, for purposes of this Section 8.1.12, "Material
Agreement") granted by the FCC or by any other Official Body with jurisdiction
over the Cable Systems or by any public utility or third party lessor, whether
presently existing or hereafter granted to or obtained by the Borrower, the
cancellation or termination of which would have a material adverse effect on
the Borrower or the continued operation of the Cable Systems viewed as a whole,
shall expire without renewal or shall be suspended or revoked, and shall not be
replaced, or the Borrower shall become subject to any injunction or other order
with respect to, such Franchise Agreement or Material Agreement that materially
adversely affects or which is reasonably likely to materially adversely affect
(both in the sole reasonable judgment of the Required Lenders) the business,
operations, financial condition or prospects (with respect to the Borrower's
ability to pay or repay the Obligations) of the Borrower.
SECTION 8.2. Action if Bankruptcy. If any Event of Default
described in clauses (a) through (d) of Section 8.1.8 shall occur, the
Commitments (if not theretofore terminated) shall automatically terminate and
the outstanding principal amount of all outstanding Loans and all other
Obligations shall automatically be and become immediately due and payable,
without notice or demand.
SECTION 8.3. Action if Other Event Of Default. If any Event of
Default (other than any Event of Default described in clauses (a) through (d)
of Section 8.1.8) shall occur for any reason, whether voluntary or involuntary,
and be continuing, the Agent, upon the direction of the Required Lenders, shall
by notice to the Borrower declare all or any portion of the outstanding
principal amount of the Loans and other Obligations to be due and payable
and/or the Commitments (if not theretofore terminated) to be terminated,
whereupon the full unpaid amount of such Loans and other Obligations which
shall be so declared due and payable shall be and become immediately due and
payable,
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without further notice, demand or presentment, and/or, as the case may be, the
Commitments shall terminate.
ARTICLE IX
THE AGENT
SECTION 9.1. Actions. Each Lender hereby appoints Scotiabank as
its Agent under and for purposes of this Agreement, the Notes and each other
Loan Document. Each Lender authorizes the Agent to act on behalf of such
Lender under this Agreement, the Notes and each other Loan Document and, in the
absence of other written instructions from the Required Lenders received from
time to time by the Agent (with respect to which the Agent agrees that it will
comply, except as otherwise provided in this Section or as otherwise advised by
counsel), to exercise such powers hereunder and thereunder as are specifically
delegated to or required of the Agent by the terms hereof and thereof, together
with such powers as may be reasonably incidental thereto. Each Lender hereby
indemnifies (which indemnity shall survive any termination of this Agreement)
the Agent, pro rata according to such Lender's Percentage, from and against any
and all liabilities, obligations, losses, damages, claims, costs or expenses of
any kind or nature whatsoever which may at any time be imposed on, incurred by,
or asserted against, the Agent in any way relating to or arising out of this
Agreement, the Notes and any other Loan Document, including reasonable
attorneys' fees, and as to which the Agent is not reimbursed by the Borrower;
provided, however, that no Lender shall be liable for the payment of any
portion of such liabilities, obligations, losses, damages, claims, costs or
expenses which are determined by a court of competent jurisdiction in a final
proceeding to have resulted solely from the Agent's gross negligence or wilful
misconduct. The Agent shall not be required to take any action hereunder, under
the Notes or under any other Loan Document, or to prosecute or defend any suit
in respect of this Agreement, the Notes or any other Loan Document, unless it
is indemnified hereunder to its satisfaction. If any indemnity in favor of
the Agent shall be or become, in the Agent's determination, inadequate, the
Agent may call for additional indemnification from the Lenders and cease to do
the acts indemnified against hereunder until such additional indemnity is
given.
SECTION 9.2. Funding Reliance, etc. Unless the Agent shall have
been notified by telephone, confirmed in writing, by any Lender by 5:00 p.m.,
New York City time, on the day prior to a Borrowing that such Lender will not
make available the amount which would constitute its Percentage of such
Borrowing on the date specified therefor, the Agent may assume that such Lender
has made such amount available to the Agent and, in reliance upon
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such assumption, may make available to the Borrower a corresponding amount.
If and to the extent that such Lender shall not have made such amount available
to the Agent, such Lender and the Borrower severally agree to repay the Agent
forthwith on demand such corresponding amount together with interest thereon,
for each day from the date the Agent made such amount available to the Borrower
to the date such amount is repaid to the Agent, at the Federal Funds Rate.
SECTION 9.3. Exculpation. Neither the Agent nor any of its
directors, officers, employees or agents shall be liable to any Lender for any
action taken or omitted to be taken by it under this Agreement or any other
Loan Document, or in connection herewith or therewith, except for its own
wilful misconduct or gross negligence, nor responsible for any recitals or
warranties herein or therein, nor for the effectiveness, enforceability,
validity or due execution of this Agreement or any other Loan Document, nor for
the creation, perfection or priority of any Liens purported to be created by
any of the Loan Documents, or the validity, genuineness, enforceability,
existence, value or sufficiency of any collateral security, nor to make any
inquiry respecting the performance by the Borrower of its obligations hereunder
or under any other Loan Document. Any such inquiry which may be made by the
Agent shall not obligate it to make any further inquiry or to take any action.
The Agent shall be entitled to rely upon advice of counsel concerning legal
matters and upon any notice, consent, certificate, statement or writing which
the Agent believes to be genuine and to have been presented by a proper Person.
SECTION 9.4. Successor. The Agent may resign as such at any time
upon at least 30 days' prior written notice to the Borrower and all Lenders.
If the Agent at any time shall resign, the Required Lenders may appoint another
Lender as a successor Agent which shall thereupon become the Agent hereunder;
provided, however, that the appointment of any Lender which was not a Lender on
the Effective Date shall be subject to the prior approval of the Borrower,
which approval shall not be unreasonably withheld. If no successor Agent
shall have been so appointed by the Required Lenders, and shall have accepted
such appointment, within 30 days after the retiring Agent's giving notice of
resignation, then the retiring Agent may, on behalf of the Lenders, appoint a
successor Agent, which shall be one of the Lenders or a commercial banking
institution organized under the laws of the U.S. (or any State thereof) or a
U.S. branch or agency of a commercial banking institution, and having combined
capital, surplus and undivided profits of at least $500,000,000. Upon the
acceptance of any appointment as Agent hereunder by a successor Agent, such
successor Agent shall be entitled to receive from the retiring Agent such
documents of transfer and assignment as such successor Agent may reasonably
request, and
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shall thereupon succeed to and become vested with all rights, powers,
privileges and duties of the retiring Agent, and the retiring Agent shall be
discharged from its duties and obligations under this Agreement. After any
retiring Agent's resignation hereunder as the Agent, the provisions of
(a) this Article IX shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was the Agent
under this Agreement; and
(b) Section 10.3 and SeCtiOn 10.4 shall continue to inure
to its benefit.
SECTION 9.5. Loans by Scotiabank. Scotiabank shall have the same
rights and powers with respect to (x) the Loans made by it or any of its
Affiliates, and (y) the Notes held by it or any of its Affiliates as any other
Lender and may exercise the same as if it were not the Agent. Scotiabank and
its Affiliates may accept deposits from, lend money to, and generally engage in
any kind of business with, the Borrower or any Subsidiary or Affiliate of the
Borrower as if Scotiabank were not the Agent hereunder.
SECTION 9.6. Credit Decisions. Each Lender acknowledges that it
has, independently of the Agent and each other Lender, and based on such
Lender's review of the financial information of the Borrower, this Agreement,
the other Loan Documents (the terms and provisions of which being satisfactory
to such Lender) and such other documents, information and investigations as
such Lender has deemed appropriate, made its own credit decision to extend its
Commitments. Each Lender also acknowledges that it will, independently of the
Agent and each other Lender, and based on such other documents, information and
investigations as it shall deem appropriate at any time, continue to make its
own credit decisions as to exercising or not exercising from time to time any
rights and privileges available to it under this Agreement or any other Loan
Document.
SECTION 9.7. Copies etc. The Agent shall give prompt notice to
each Lender of each notice or request required or permitted to be given to the
Agent by the Borrower pursuant to the terms of this Agreement (unless
concurrently delivered to the Lenders by the Borrower). The Agent will
distribute to each Lender each document or instrument received for its account
and copies of all other communications received by the Agent from the Borrower
for distribution to the Lenders by the Agent in accordance with the terms of
this Agreement.
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ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.1. Waivers, Amendments, etc. The provisions of this
Agreement and of each other Loan Document may from time to time be amended,
modified or waived, if such amendment, modification or waiver is in writing
and consented to by the Borrower and the Required Lenders; provided, however,
that no such amendment, modification or waiver which would:
(a) modify any requirement hereunder that any particular
action be taken by all the Lenders or by the Required Lenders shall be
effective unless consented to by each Lender;
(b) modify this Section 10.1, change the definition of
"Required Lenders", increase any Commitment Amount or the Percentage
of any Lender, reduce any fees described in Article III, release any
collateral security, except as otherwise specifically provided in any
Loan Document or extend any Commitment Termination Date shall be made
without the consent of each Lender and each holder of a Note;
(c) extend the due date for, or reduce the amount of, any
scheduled repayment or prepayment of principal of or interest on any
Loan (or reduce the principal amount of or rate of interest on any
Loan) shall be made without the consent of the holder of that Note
evidencing such Loan; or
(d) affect adversely the interests, rights or obligations
of the Agent of the Agent shall be made without consent of the Agent.
No failure or delay on the part of the Agent, any Lender or the holder of any
Note in exercising any power or right under this Agreement or any other Loan
Document shall operate as a waiver thereof, nor shall any single or partial
exercise of any such power or right preclude any other or further exercise
thereof or the exercise of any other power or right. No notice to or demand on
the Borrower in any case shall entitle it to any notice or demand in similar or
other circumstances. No waiver or approval by the Agent, any Lender or the
holder of any Note under this Agreement or any other Loan Document shall,
except as may be otherwise stated in such waiver or approval, be applicable to
subsequent transactions. No waiver or approval hereunder shall require any
similar or dissimilar waiver or approval thereafter to be granted hereunder.
SECTION 10.2. Notices. All notices and other communications
provided to any party hereto under this Agreement
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or any other Loan Document shall be in writing or by Telex or by facsimile and
addressed, delivered or transmitted to such party at its address, Telex or
facsimile number set forth below its signature hereto or, if applicable, set
forth in such Lender's Lender Assignment Agreement or at such other address,
Telex or facsimile number as may be designated by such party in a notice to the
other parties. Any notice, if mailed and properly addressed with postage
prepaid or if properly addressed and sent by pre-paid courier service, shall be
deemed given when received; any notice, if transmitted by Telex or facsimile,
shall be deemed given when transmitted (answer back confirmed in the case of
Telexes).
SECTION 10.3. Payment of Costs and Expenses. The Borrower agrees
to pay on demand all reasonable expenses of the Agent (including the fees and
reasonable out-of-pocket expenses of counsel to the Agent and of local counsel)
in connection with
(a) the negotiation, preparation, execution and delivery
of this Agreement and of each other Loan Document, including schedules
and exhibits, and any amendments, waivers, consents, supplements or
other modifications to this Agreement or any other Loan Document as
may from time to time hereafter be required, whether or not the
transactions contemplated hereby are consummated, and
(b) the filing, recording, refiling or rerecording of the
Security Agreement and any Uniform Commercial Code financing
statements relating thereto and all amendments, supplements and
modifications to any thereof and any and all other documents or
instruments of further assurance required to be filed or recorded or
refiled or rerecorded by the terms hereof or of the Security
Agreement, and
(c) the preparation and review of the form of any
document or instrument relevant to this Agreement or any other Loan
Document.
The Borrower further agrees to pay, and to save the Agent and the Lenders
harmless from all liability for, any stamp or other taxes which may be payable
in connection with the execution or delivery of this Agreement, the borrowings
hereunder, or the issuance of the Notes or any other Loan Documents. The
Borrower also agrees to reimburse the Agent and each Lender upon demand for all
reasonable out-of-pocket expenses (including reasonable attorneys' fees and
disbursements) incurred by the Agent or such Lender in connection with (x) the
negotiation of any restructuring or "work-out", whether or not consummated, of
any Obligations and (y) the enforcement of any Obligations.
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SECTION 10.4. Indemnification. In consideration of the execution
and delivery of this Agreement by each Lender and the extension of the
Commitments, the Borrower hereby indemnifies, exonerates and holds the Agent
and each Lender and each of their respective officers, directors, employees and
agents (collectively, the "Indemnified Parties") free and harmless from and
against any and all actions, causes of action, suits, losses, costs,
liabilities and damages, and expenses incurred in connection therewith
(irrespective of whether any such Indemnified Party is a party to the action
for which indemnification hereunder is sought), including reasonable
attorneys' fees and disbursements (collectively, the "Indemnified
LiabilitieS"), incurred by the Indemnified Parties or any of them as a result
of, or arising out of, or relating to
(a) any transaction financed or to be financed in whole
or in part, directly or indirectly, with the proceeds of any Loan;
(b) the entering into and performance of this Agreement
and any other Loan Document by any of the Indemnified Parties
(including any action brought by or on behalf of the Borrower as the
result of any determination by the Required Lenders pursuant to
Article V not to fund any Borrowing);
(c) any investigation, litigation or proceeding related
to any environmental cleanup, audit, compliance or other matter
relating to the protection of the environment or the Release by the
Borrower or any of its Subsidiaries of any Hazardous Material; or
(d) the presence on or under, or the escape, seepage,
leakage, spillage, discharge, emission, discharging or releases from,
any real property owned or operated by the Borrower or any of its
Subsidiaries of any Hazardous Material (including any losses,
liabilities, damages, injuries, costs, expenses or claims asserted or
arising under any Environmental Law), regardless of whether caused by,
or within the control of, the Borrower or such Subsidiaries,
except for any such Indemnified Liabilities arising for the account of a
particular Indemnified Party by reason of the relevant Indemnified Party's
gross negligence or wilful misconduct. If and to the extent that the
foregoing undertaking may be unenforceable for any reason, the Borrower hereby
agrees to make the maximum contribution to the payment and satisfaction of each
of the Indemnified Liabilities which is permissible under applicable law.
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SECTION 10.5. Survival. The obligations of the Borrower under
Sections 4.3, 4.4, 4.5, 4.6, 10.3 and 10.4, and the obligations of the Lenders
under Section 9.1, shall in each case survive any termination of this
Agreement, the payment in full of all of the Obligations and the termination of
all of the Commitments. The representations and warranties made by the
Borrower and the General Partner in this Agreement and in each other Loan
Document shall survive the execution and delivery of this Agreement and each
such other Loan Document.
SECTION 10.6. Severability. Any provision of this Agreement or any
other Loan Document which is prohibited or unenforceable in any jurisdiction
shall, as to such provision and such jurisdiction, be ineffective to the extent
of such prohibition or unenforceability without invalidating the remaining
provisions of this Agreement or such Loan Document or affecting the validity or
enforceability of such provision in any other jurisdiction.
SECTION 10.7. Headings. The various headings of this Agreement and
of each other Loan Document are inserted for convenience only and shall not
affect the meaning or interpretation of this Agreement or such other Loan
Document or any provisions hereof or thereof.
SECTION 10.8. Execution in Counterparts. Effectiveness. etc. This
Agreement may be executed by the parties hereto in several counterparts, by
hand or facsimile signatures, each of which shall be deemed to be an original
and all of which, when taken together, shall constitute one and the same
agreement. This Agreement shall become effective when counterparts hereof
executed on behalf of the Borrower, the General Partner and each Lender (or
notice thereof satisfactory to the Agent) shall have been received by the Agent
and notice thereof shall have been given by the Agent to the Borrower, the
General Partner and each Lender.
SECTION 10.9. Governing Law; Entire Agreement. THIS AGREEMENT,
THE NOTES AND EACH OTHER LOAN DOCUMENT SHALL EACH BE DEEMED TO BE A CONTRACT
MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT
GIVING EFFECT TO THE CHOICE OF LAW PROVISIONS THEREOF. This Agreement, the
Notes and the other Loan Documents constitute the entire understanding among
the parties hereto with respect to the subject matter hereof and supersede any
prior agreements, written or oral, with respect thereto.
SECTION 10.10. Successors and Assigns. This Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective successors and assigns; provided, however, that:
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(a) the Borrower may not assign or transfer its rights or
obligations hereunder without the prior written consent of the Agent
and all Lenders; and
(b) the rights of sale, assignment and transfer of the
Lenders are subject to Section 10.11.
SECTION 10.11. Sale and Transfer of Loans and NoteS; Participations
in Loans and Notes. Each Lender may assign, or sell participations in, its
Loans and Commitments to one or more other Persons in accordance with this
Section 10.11.
SECTION 10.11.1. Assignments. Any Lender may at any time assign and
delegate to one or more commercial banks or other financial institutions (each
Person to whom such assignment and delegation is to be made, being hereinafter
referred to as an "Assignee Lender"), a percentage of such Lender's total Loans
and Commitments (which assignment and delegation shall be of a constant, and
not a varying, percentage of the assigning Lender's Loans and Commitments),
provided that (i) the aggregate principal amount of Loans and Commitments to be
assigned at any one time is at least equal to $5,000,000, and (ii) after giving
effect to any such assignment, in the case of the Agent, the Agent shall
continue to be the registered holder of an aggregate principal amount of Loans
and Commitments at least equal to $25,000,000 multiplied by a fraction the
numerator of which is equal to $80,000,000 minus the aggregate principal amount
of scheduled repayments of Loans made by the Borrower as of the time of the
assignment and the denominator of which is $80,000,000 and, in the case of a
Lender, such Lender shall continue to be the registered holder of at least
fifty percent (50%) of the aggregate principal amount of Loans and Commitments
originally held by such Lender. Each Assignee Lender must furnish, if
applicable, the withholding tax exemption forms required under Section 4.6.
Additionally, the Borrower and the Agent shall be entitled to continue to deal
solely and directly with such Lender in connection with the interests so
assigned and delegated to an Assignee Lender until
(a) written notice of such assignment and delegation,
together with payment instructions, addresses and related information
with respect to such Assignee Lender, shall have been given to the
Borrower and the Agent by such Lender and such Assignee Lender;
(b) such Assignee Lender shall have executed and
delivered to the Borrower and the Agent a Lender Assignment Agreement,
accepted by the Agent; and
(c) the processing fees described below shall have been
paid.
-69-
<PAGE> 76
From and after the date that the Agent accepts a Lender Assignment Agreement,
(x) the Assignee Lender thereunder shall be deemed automatically to have become
a party hereto and to the extent that rights and obligations hereunder have
been assigned and delegated to such Assignee Lender in connection with such
Lender Assignment Agreement, shall have the rights and obligations of a Lender
hereunder and under the other Loan Documents, and (y) the assigning Lender, to
the extent that rights and obligations hereunder have been assigned and
delegated by it in connection with such Lender Assignment Agreement, shall be
released from its obligations hereunder and under the other Loan Documents.
Within five Business Days after its receipt of notice that the Agent has
received an executed Lender Assignment Agreement, the Borrower shall execute
and deliver to the Agent (for delivery to the relevant Assignee Lender) new
Notes evidencing such Assignee Lender's assigned Loans and Commitments and, if
the assigning Lender has retained Loans and Commitments hereunder, replacement
Notes in the principal amount of the Loans and Commitments retained by the
assigning Lender hereunder (such Notes to be in exchange for, but not in
payment of, those Notes then held by the assigning Lender). Each such Note
shall be dated the date of the predecessor Notes. The assigning Lender shall
mark the predecessor Notes "exchanged" and deliver them to the Borrower.
Accrued interest on that part of the predecessor Notes evidenced by the new
Notes, and accrued fees, shall be paid as provided in the Lender Assignment
Agreement. Accrued interest on that part of the predecessor Notes evidenced by
the replacement Notes shall be paid to the assigning Lender. Accrued interest
and accrued fees shall be paid at the same time or times provided in the
predecessor Notes and in this Agreement. The assigning Lender or the Assignee
Lender must also pay a processing fee to the Agent upon delivery of any Lender
Assignment Agreement in the amount of $2,000. Any attempted assignment and
delegation not made in accordance with this Section 10.11.1 shall be null and
void. Nothing in this Section 10.11.1 shall prevent or prohibit any Lender
from pledging its rights (but not its obligations to make Loans) under this
Agreement and/or its Loans and/or its Notes hereunder to a Federal Reserve
Bank in support of borrowings made by such Lender from such Federal Reserve
Bank.
SECTION 10.11.2. Participations. Any Lender may at any time sell to
one or more commercial banks or other Persons (each of such commercial banks
and other Persons being herein called a "Participant") participating interests
in any of the Loans, Commitments, or other interests of such Lender hereunder;
provided, however, that
(a) no participation contemplated in this Section 10.11.2
shall relieve such Lender from its
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<PAGE> 77
Commitments or its other obligations hereunder or under any other Loan
Document;
(b) such Lender shall remain solely responsible for the
performance of its Commitments and such other obligations;
(c) the Borrower and the Agent shall continue to deal
solely and directly with such Lender in connection with such Lender's
rights and obligations under this Agreement and each of the other Loan
Documents;
(d) no Participant, unless such Participant is an
Affiliate of such Lender, or is itself a Lender, shall be entitled to
require such Lender to take or refrain from taking any action
hereunder or under any other Loan Document, except that such Lender
may agree with any Participant that such Lender will not, without such
Participant's consent, take any actions of the type described in
clause (b) or (c) of Section 10.1; and
(e) the Borrower shall not be required to pay any amount
under Section 4.6 that is greater than the amount which it would have
been required to pay had no participating interest been sold.
The Borrower acknowledges and agrees that each Participant, for purposes of
Sections 4.3, 4.4, 4.5, 4.6, 4.8, 4.9, 10.3 and 10.4, shall be considered a
Lender.
SECTION 10.12. Other Transactions. Nothing contained herein shall
preclude the Agent or any other Lender from engaging in any transaction, in
addition to those contemplated by this Agreement or any other Loan Document,
with the Borrower or any of its Affiliates in which the Borrower or such
Affiliate is not restricted hereby from engaging with any other Person.
SECTION 10.13. Nonrecourse Obligations. Anything contained in this
Agreement, the Notes or the other Loan Documents to the contrary
notwithstanding, in any action or proceeding brought on this Agreement, the
Notes, the other Loan Documents or the Indebtedness evidenced by the Notes, no
deficiency judgment shall be enforced against the separate assets of the
General Partner (other than distributions to the General Partner made in
violation of Section 7.2.6 or 7.2.8 hereof), and the liability of the General
Partner for any amounts due under this Agreement, the Notes and the other Loan
Documents shall be limited to the interest of the General Partner in the
collateral described in the Loan Documents, its interest in any other assets of
the Borrower and any distributions made in violation of Section 7.2.6 or 7.2.8.
Subject to the preceding sentence, the Agent may join
-71-
<PAGE> 78
any present or future general partners of the Borrower in their capacities as
general partners, as defendants in any legal action it undertakes to enforce
the Lenders' rights and remedies under this Agreement, the Notes and the other
Loan Documents. Notwithstanding the foregoing, nothing set forth herein shall
be deemed to prohibit the Agent and the Lenders from taking legal action(s) and
enforcing any judgment arising therefrom against a present or future general
partner of the Borrower arising by reason of any fraud or intentional
misconduct of such general partner.
SECTION 10.14. Forum Selection and Consent to Jurisdiction. THE
BORROWER HEREBY AGREES THAT ANY LITIGATION BROUGHT BY THE AGENT OR THE LENDERS
AND BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE AGENT, THE
LENDERS, THE GENERAL PARTNER OR THE BORROWER SHALL BE BROUGHT AND MAINTAINED IN
THE COURTS OF THE STATE OF NEW YORK OR IN THE UNITED STATES DISTRICT COURT FOR
THE SOUTHERN DISTRICT OF NEW YORK; PROVIDED, HOWEVER, THAT ANY SUIT SEEKING
ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT THE
AGENT'S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE SUCH COLLATERAL OR
OTHER PROPERTY MAY BE FOUND. THE BORROWER HEREBY EXPRESSLY AND IRREVOCABLY
SUBMITS TO THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND OF THE
UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK FOR THE
PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE AND IRREVOCABLY AGREES TO BE
BOUND BY ANY NON-APPEALABLE JUDGEMENT RENDERED THEREBY IN CONNECTION WITH SUCH
LITIGATION. THE BORROWER FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF
PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE TO THE
BORROWER'S ADDRESS PROVIDED HEREIN. THE BORROWER HEREBY EXPRESSLY AND
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH
IT MAY HAVE OR HEREAFTER MAY HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION
BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH
LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. TO THE EXTENT THAT THE
BORROWER HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY
COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT
PRIOR TO JUDGEMENT ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO
ITSELF OR ITS PROPERTY, THE BORROWER HEREBY REVOCABLY WAIVES SUCH IMMUNITY IN
RESPECT OF ITS OBLIGATIONS UNDER THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.
SECTION 10.15. Waive Of Jury Trial. THE AGENT, THE LENDERS AND THE
BORROWER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY
MAY HAVE TO A TRIAL BY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING
OUT OF, UNDER, OR IN CONNECTION WITH, THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS
-72-
<PAGE> 79
(WHETHER OPAL OR WRITTEN) OR ACTIONS OF THE AGENT, THE LENDERS, THE
GENERAL PARTNER OR THE BORROWER. THE BORROWER ACKNOWLEDGES AND AGREES
THAT IT HAS RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR THIS
PROVISION (AND EACH OTHER PROVISION OF EACH OTHER LOAN DOCUMENT TO WHICH IT IS
A PARTY) AND THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE AGENT AND THE
LENDERS ENTERING INTO THIS AGREEMENT AND EACH SUCH OTHER LOAN DOCUMENT.
[The rest of this page left intentionally blank.]
-73-
<PAGE> 80
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized as of the
day and year first above written.
CABLE TV FUND 14-A, LTD.
By: JONES INTERCABLE, INC.,
as General Partner
By /s/ KEVIN P. COYLE
Name: Kevin P. Coyle
Title: Group Vice President/Finance
Address: c/o Jones Intercable, Inc.
9697 East Mineral Avenue
Englewood, Colorado 80112
Telephone No.: (303) 792-3111
Facsimile No.: (303) 790-7324
Attention: Mr. Kevin P. Coyle
THE BANK OF NOVA SCOTIA, as Agent
By /s/ J. R. PADDLE
Name: J. R. Paddle
Title: Authorized Signatory
Address: One Liberty Plaza
New York, New York 10006
Telephone No.: (212) 225-5079
Facsimile No.: (212) 225-5090
Attention: Mr. J.R. Pottle
-74-
<PAGE> 81
PERCENTAGE LENDERS
- ---------- -------
31.25% THE BANK OF NOVA SCOTIA
By /s/ J. R. PADDLE
Name: J. R. Paddle
Title: Authorized Signatory
Domestic
Office: One Liberty Plaza
New York, New York 10006
Facsimile No.: (303) 790-7324
Telex No.: N/A
Attention: Marcia Gilbert
LIBOR
Office: One Liberty Plaza
New York, New York 10006
Facsimile No.: (303) 790-7324
Telex No.: N/A
Attention: Marcia Gilbert
-75-
<PAGE> 82
31.25% TORONTO DOMINION (TEXAS) INC.
By /s/ WARREN FINLAY
Name: Warren Finlay
Title: Vice President
Credit
Contact: Robert Stevens
Manager
Communications Finance
31 West 52nd Street
New York, New York 10019-6101
Tel.: (212) 468-0727
Fax.: (212) 262-1928
Domestic
Office: 909 Fannin Street,
17th Floor Houston, Texas 77010
Facsimile No.: (713) 951-9921
Telex No.: N/A
Attention: Jano Mott
Manager, Credit Administration
Tel.: (713) 653-8244
LIBOR
Office: 909 Fannin Street,
17th Floor Houston, Texas 77010
Facsimile No.: (713) 951-9921
Telex No.: N/A
Attention: Jano Mort
Manager, Credit Administration
Tel.: (713) 653-8244
-76-
<PAGE> 83
18.7 5 % ROYAL BANK OF CANADA
GRAND CAYMAN (NORTH AMERICAN NO. 1)
BRANCH
By /s/ ALEXANDRA PYRNOS
Name: Alexandra Pyrnos
Title: Manager, Media
Credit
Contact: Alexandra Pyrros
Media/Telecomunications
1 Financial Square-24th FLoor
New York, New York 10005-3531
Tel.: (212) 428-6552
Fax: (212) 428-6460
Domestic
Office: Pierrepont Plaza
300 Cadman Plaza West
Brooklyn, New York 11201-2701
Facsimile No.: (718) 522-6292
Telex No.: N/A
Attention: Beverly Hanna
Loan Administration
LIBOR
Office: Pierrepont Plaza
300 Cadman Plaza West
Brooklyn, New York 11201-2701
Facsimile No.: (718) 522-6292
Telex No.: N/A
Attention: Beverly Hanna
Loan Administration
-77-
<PAGE> 84
18.75% SHAWMUT BANK CONNECTICUT, N.A.
By /s/ WENDY E. KLEPPER
Name: Wendy E. Klepper
Title: Specialized Lending Officer
By /s/ ROBERT F. WEST
Name: Robert F. West
Title: Director
Credit
Contact: Wendy E. Klepper
777 Main Street - MSN 397
Hartford, Connecticut 06115
Tel.: (203) 986-1128
Fax.: (203) 986-5367
Domestic
Office: 777 Main Street - MSN 397
Hartford, Connecticut 06115
Facsimile No.: (203) 986-5367
Telex No.: N/A
Attention: Karen L. Neipp
LIBOR
Office: 777 Main Street - MSN 397
Hartford, Connecticut 06115
Facsimile No.: (203) 986-5367
Telex No.: N/A
Attention: Karen L. Neipp
-78-
<PAGE> 1
June 30, 1994
Cable TV Fund 14-A/B Venture
c/o Jones Intercable, Inc.
9697 E. Mineral Avenue
Englewood, CO 80112
Attention: J. Timothy Bryan
Re: Third Letter Amendment to Cable TV Fund 14-A/B Venture
Revolving Credit and Term Loan Agreement
Gentlemen:
Reference is made to that certain Revolving Credit and Term Loan
Agreement, dated as of September 30, 1988, by and among Cable TV Fund 14-A/B
Venture (the "Borrower"), The Bank of Nova Scotia and PNC Bank, National
Association (formerly known as Provident National Bank) (the "Banks") and The
Bank of Nova Scotia, as agent for the Banks (the "Agent"), as amended by that
certain First Letter Amendment, dated June 11, 1990, and that certain Second
Letter Amendment, dated May 28, 1992 (the "Credit Agreement"). Capitalized
terms used herein and not otherwise defined shall have the meanings assigned to
them in the Credit Agreement.
The Borrower desires the Banks to amend (a) the principal amortization
schedule for the Term Loans and (b) the Total Debt to Annualized Cash Flow
ratio covenant. The Banks are willing to amend the Credit Agreement for such
purposes on the terms and conditions stated in this Third Letter Amendment.
Effective upon the satisfaction (or waiver by the Banks) of all of the
conditions precedent stated below, the Credit Agreement shall be amended as
follows:
1. Paragraph A of Section 2.6 is hereby deleted in its entirety and
replaced with the following language:
"(A) On each March 31, June 30, September 30 and December 31
during each period indicated below the Term Loan Ceiling shall be
reduced by amounts equal to the
-1-
<PAGE> 2
following percentages of the Initial Ceiling (regardless of whether
the Term Loan Ceiling shall have been reduced pursuant to (B) or (C)
below):
<TABLE>
<S> <C>
January 1, 1993 - December 31, 1993 1.875%
January 1, 1994 - March 31, 1994 0%
April 1, 1994 - December 31, 1994 0.833%
January 1, 1995 - December 31, 1995 1.250%
January 1, 1996 - December 31, 1996 1.875%
January 1, 1997 - September 30, 1999 2.500%
</TABLE>
On December 31, 1999 the Term Loan Ceiling shall be reduced to zero
(0)."
2. Section 6.1(a) is amended by deleting the last two lines of the
table of ratios of Total Debt to Annualized Cash Flow and replacing them with
the following:
<TABLE>
<S> <C>
"January 1, 1994 - March 31, 1995 5.00 to 1.00
April 1, 1995 - March 31, 1996 4.50 to 1.00
April 1, 1996 - March 31, 1997 4.00 to 1.00
April 1, 1997 - December 31, 1999 3.50 to 1.00"
</TABLE>
The effectiveness of the amendments contained in this Third Letter
Amendment is subject to the fulfillment, in form and substance satisfactory to
the Agent, of the following conditions precedent on or before June 30, 1994:
(a) The Agent shall have received three counterparts of this
Third Letter Amendment duly accepted and executed by the Borrower,
three counterparts executed by the Bank of Nova Scotia, as a Bank, and
three counterparts executed by PNC Bank, National Association.
(b) As amended by Exhibit A hereto, the representations and
warranties contained in Article III of the Credit Agreement and in the
Related Documents shall be true on and as of the date of execution and
acceptance of this Third Letter Amendment by the Borrower with the
same effect as though made on and as of such date, and no Event of
Default and no Potential Default shall have occurred and be continuing
or exist or shall occur or exist after giving effect to the amendments
contained herein.
(c) The Agent shall have received three signed copies of a
certificate, dated the date of the Borrower's acceptance and execution
of this Third Letter Amendment, and signed on behalf of the Borrower
by the President, Vice President, Treasurer or Chief Financial Officer
of Jones, to the effect that (i) the representations and warranties
described in (b) above
-2-
<PAGE> 3
are true and correct on and as of such date and (ii) on such date no
Event of Default or Potential Default has occurred and is continuing
or exists or will occur or exist after giving effect to the amendments
contained herein.
(d) The Agent shall have received three signed copies of
certificates dated as of the date of the Borrower's acceptance and
execution of this Third Letter Amendment and signed by the Secretary
or Assistant Secretary of Jones, on behalf of Jones, the Borrower, and
each General Partner, certifying as to any changes since the Closing
Date, if any, in the corporate, joint venture or partnership documents
and actions referred to in section 4.2 of the Credit Agreement, of
Jones, the Borrower and each General Partner, respectively and, in the
case of Jones, (i) as to the names, true signatures and incumbency of
the officer or officers or other authorized representatives of Jones
authorized to accept, execute and deliver this Third Letter Amendment
and the certificate referred to in (c) above, and (ii) as to the
resolution of the Board of Directors of Jones authorizing such action.
(e) The Agent shall have received certificates (i) of the
Secretary of State of the State of Colorado certifying that Jones is a
corporation in good standing and that each General Partner is a
limited partnership in good standing, and (ii) of the Secretary of
State of the State of Florida certifying that each General Partner is
qualified to do business in Florida.
(f) The Agent shall have received payment in full of a
restructuring fee in an amount equal to three-eighths of one percent
of the amount of the Term Loan Ceiling as of the effective date of
this Third Letter Amendment, for distribution to the Banks in
proportion to their respective outstanding Term Loans.
Except as amended hereby, the Credit Agreement shall remain in full
force and effect. This Third Letter Amendment may be executed in two or more
counterparts, each of which shall be deemed an original.
-3-
<PAGE> 4
If you agree to the foregoing amendments to the Credit Agreement,
execute the enclosed counterparts of this letter in the space provided below
and return them to us prior to June 30, 1994.
THE BANK OF NOVA SCOTIA,
as Agent and as a participating
Bank
By /s/ Illegible
Title Relationship Manager
Accepted:
CABLE TV FUND 14-A/B VENTURE, Date:
a Colorado general partnership
By Cable TV Fund 14-A, Ltd.,
Cable TV Fund 14-B, Ltd., both
Colorado limited partnerships
By Jones Intercable, Inc., a
Colorado corporation, as
general partner of each
By /s/ Illegible
Title Group Vice President/Finance
PNC BANK, NATIONAL ASSOCIATION, as a
participating Bank
By /s/ Illegible
Title AVP
-4-
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-01-1994
<PERIOD-END> DEC-31-1994
<CASH> 426,979
<SECURITIES> 0
<RECEIVABLES> 1,070,581
<ALLOWANCES> (74,176)
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 117,434,221
<DEPRECIATION> (57,090,363)
<TOTAL-ASSETS> 87,556,346
<CURRENT-LIABILITIES> 3,215,975
<BONDS> 77,425,047
<COMMON> 0
0
0
<OTHER-SE> 6,915,324
<TOTAL-LIABILITY-AND-EQUITY> 87,556,346
<SALES> 0
<TOTAL-REVENUES> 40,442,268
<CGS> 0
<TOTAL-COSTS> 43,701,941
<OTHER-EXPENSES> 1,651,677
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4,561,560
<INCOME-PRETAX> (9,472,910)
<INCOME-TAX> 0
<INCOME-CONTINUING> (9,472,910)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (9,472,910)
<EPS-PRIMARY> (58.61)
<EPS-DILUTED> (58.61)
</TABLE>
