Exhibit 10.18
THE CHASE MANHATTAN BANK
CHASE SECURITIES INC.
▇▇▇▇▇▇ GUARANTY TRUST COMPANY OF NEW YORK
▇.▇. ▇▇▇▇▇▇ SECURITIES INC.
September 15, 1997
FrontierVision Operating Partners, L.P.
Senior Secured Credit Facilities
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Commitment Letter
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FrontierVision Operating,
Partners, L.P.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇-▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇
Senior Vice President and
Chief Financial Officer
Ladies and Gentlemen:
You have advised The Chase Manhattan Bank ("CHASE"), Chase Securities
Inc. ("CSI"), ▇▇▇▇▇▇ Guaranty Trust Company of New York ("▇▇▇▇▇▇", and together
with Chase, the "INITIAL LENDERS") and ▇.▇. ▇▇▇▇▇▇ Securities Inc. ("JPMSI")
that FrontierVision Operating Partners, L.P. a Delaware limited partnership (the
"BORROWER"), requires senior bank financing in an aggregate principal amount up
to $650,000,000, which under certain circumstances described in the Term Sheet
(referred to below) may be increased to $900,000,000 (i) to refinance senior
debt outstanding under the Borrower's existing credit facilities, (ii) to
finance the acquisition (the "ACQUISITION") of certain cable properties owned
and operated by TCI Northeast, Cablevision Systems located in Maine and cable
properties owned and operated by ▇▇▇ Communications Inc. located in Ohio (such
cable properties to be acquired being herein called the "ACQUIRED SYSTEMS"), and
to pay for fees, commissions and expenses incurred in connection therewith,
(iii) to finance future acquisitions of cable properties and (iv) for general
corporate purposes.
Each of Chase and ▇▇▇▇▇▇ is pleased to offer to commit to provide such
required senior bank financing in the amounts of $390,000,000 and $260,000,000,
respectively, all on the terms and conditions set forth herein (this letter, the
"COMMITMENT LETTER"), in the Term Sheet attached hereto as Exhibit A (the "TERM
SHEET") and in the letter of even date herewith (the "FEE LETTER") addressed by
the Initial Lenders to you providing, among other things, for certain fees
relating to the senior bank financing (such required senior bank financing as
described in the
FrontierVision Operating -2- September 15, 1997
Partners, L.P.
attached Term Sheet is hereinafter referred to as the "SENIOR FACILITY"). The
Initial Lenders, in consultation with you, reserve the right to arrange,
directly or indirectly through one or more of their affiliates (including CSI
and JPMSI), a syndicate of banks and/or other financial institutions acceptable
to the Initial Lenders (including the Initial Lenders, the "LENDERS") and the
Borrower to provide a portion of the Senior Facility that the Initial Lenders
have offered to commit to provide. The Initial Lenders shall be relieved of
their obligation to provide the Senior Facility to the extent that you accept
the offers of Lenders other than the Initial Lenders to provide a portion of the
Senior Facility that the Initial Lenders have offered to commit to provide. The
obligations of the Initial Lenders hereunder are several and not joint.
Each Initial Lender has submitted this letter after reviewing certain
historical financial statements and other information provided to the Initial
Lenders by you and your financial advisor(s). Each Initial Lender may terminate
its obligations under the preceding paragraph to provide its respective portion
of the Senior Facility: (i) if the terms of the proposed transaction are
changed in any respect determined by such Initial Lender to be material, (ii) if
any information submitted to such Initial Lender proves to have been inaccurate,
incomplete or misleading; (iii) if any material adverse change occurs after, or
any additional information is disclosed to or discovered by such Initial Lender
that such Initial Lender deems materially adverse, in respect of the condition
(financial or otherwise), business, operations, assets, nature of assets,
liabilities or prospects of the general partner of the Borrower (the "GENERAL
PARTNER") or the Borrower (taken as a whole), the Acquisition or the Acquired
Systems; (iv) if any of the fees or other compensation provided for by the Fee
Letter are not paid when due; (v) if any condition to such Initial Lender's
obligations set forth herein or in the Term Sheet cannot be satisfied; or (vi)
if any material adverse change shall occur after the date of this letter in loan
syndication or capital market conditions generally, or in the regulatory
environment applicable to cable television systems generally. In the event that
either Initial Lender shall terminate its commitment to provide a portion of the
Senior Facility, the other Initial Lender shall have the right to terminate its
commitment to provide its respective portion of the Senior Facility. In
addition, each Initial Lender's obligations under this letter are subject to the
negotiation, execution and delivery of mutually satisfactory financing
documentation.
By your acceptance of this offer, you hereby agree to indemnify and
hold harmless each Initial Lender, CSI, JPMSI and the other Lenders and each
director, officer, employee and affiliate thereof (each, an "INDEMNIFIED
PERSON") from and against any and all losses, claims, damages, liabilities (or
actions or other proceedings commenced or threatened in respect thereof) and
expenses that arise out of, result from or in any way relate to this letter, the
Term Sheet or the Fee Letter, the other transactions contemplated hereby or the
provision or syndication of the Senior Facility, and you hereby agree to
reimburse each indemnified person, upon its demand, for any legal or other
expenses incurred in connection with investigating, defending or participating
in any such loss, claim, damage, liability or action or other proceeding
(whether or not such indemnified person is a party to any action or proceeding
out of which any
FrontierVision Operating -3- September 15, 1997
Partners, L.P.
such expenses arise), other than any of the foregoing claimed by any indemnified
person to the extent finally determined by a court of competent jurisdiction to
be incurred by reason of the gross negligence or willful misconduct of such
indemnified person. None of the Initial Lenders, CSI, JPMSI nor any other Lender
shall be responsible or liable to the Borrower, any of its shareholders or any
other person or entity for any consequential damages that may be alleged as a
result of this letter. In addition, you hereby agree to reimburse each Initial
Lender from time to time upon such Initial Lender's demand for such Initial
Lender's reasonable out-of-pocket costs and expenses (including, without
limitation, legal fees and expenses and printing, reproduction, document
delivery, communication and travel costs) incurred in connection with the
syndication of the Senior Facility and the preparation, review, negotiation,
execution and delivery of this letter, the Term Sheet, the Fee Letter, the
definitive financing agreements and the other documents relating to the Senior
Facility. Your obligations under this paragraph shall survive any termination of
the obligations of the Initial Lender under this letter and shall be effective
regardless of whether the definitive financing agreements are executed or any
loans are made.
In accordance with market practice, an information package containing
relevant information concerning the Senior Facility, the Acquisition, the
Acquired Systems, the General Partner and the Borrower and the transactions
contemplated hereby will be provided, on a confidential basis, by the Borrower
to potential lenders and participants. The Initial Lenders, CSI and JPMSI will
be pleased to assist the Borrower in the preparation of this package. The
Borrower agrees to cooperate, and to cause the management of the Borrower to
cooperate, with the Initial Lenders, CSI and JPMSI in effecting the syndication
of the Senior Facility (including participation in a reasonable number of
meetings with potential lenders and participants). The Initial Lenders, CSI and
JPMSI will manage all aspects of the primary syndication process, including,
without limitation, the invitation and timing of offers to potential lenders and
participants, the acceptance of commitments and the amounts of commitments
accepted. To assist the Initial Lenders, CSI and JPMSI in its syndication
efforts, you agree promptly to prepare and provide to the Initial Lenders, CSI
and JPMSI all information with respect to the Borrower, the Acquisition, the
Acquired Systems and the other transactions contemplated hereby, including all
financial information and projections (the "PROJECTIONS"), as we may reasonably
request in connection with the arrangement and syndication of the Senior
Facility. You hereby represent and covenant that (a) all information other than
the Projections (the "INFORMATION") that has been or will be made available to
the Initial Lenders, CSI or JPMSI by you or any of your representatives is or
will be, when furnished, complete and correct in all material respects and does
not or will not, when furnished, contain any untrue statement of a material fact
or omit to state a material fact necessary in order to make the statements
contained therein not materially misleading in light of the circumstances under
which such statements are made and (b) the Projections that have been or will be
made available to the Initial Lenders, CSI or JPMSI by you or any of your
representatives have been or will be prepared in good faith based upon
reasonable assumptions. You understand that in arranging and syndicating the
Senior Facility we may use and rely on the Information and Projections without
independent verification thereof.
FrontierVision Operating -4- September 15, 1997
Partners, L.P.
You acknowledge that the Initial Lenders, CSI and JPMSI and their
affiliates may be providing debt financing, equity capital or other services
(including financial advisory services) to other companies in respect of which
you or your affiliates may have conflicting interests. None of the Initial
Lenders, CSI nor JPMSI will use confidential information obtained from you by
virtue of the transactions contemplated by this letter or its other
relationships with you in connection with the engagements of the Initial
Lenders, CSI and JPMSI with other companies, and none of the Initial Lenders,
CSI nor JPMSI will furnish any such information to such other companies;
provided that nothing herein shall prevent the Initial Lenders, CSI or JPMSI
--------
from using such information (a) which had been publicly disclosed other than as
a result of a disclosure by the Initial Lenders, CSI or JPMSI prohibited by the
terms of this letter or (b) already in its possession prior to its disclosure by
you.
This letter is delivered to you upon the condition that, prior to your
acceptance of this offer, unless otherwise agreed to by the Initial Lenders, CSI
and JPMSI, neither the existence of this letter, the Term Sheet or the Fee
Letter nor any of their contents shall be disclosed by you except (a) as may be
compelled to be disclosed in a judicial or administrative proceeding or as
otherwise required by law or (b) on a confidential and "need to know" basis, to
your directors, officers, employees, advisors and agents. In addition, except
as provided in the previous sentence, neither the existence of the Fee Letter
nor the contents thereof shall be disclosed, whether before or after acceptance
of this offer, to any third party (including, without limitation, through the
filing of a copy thereof with any governmental agency), without the prior
written consent of the Initial Lenders, CSI and JPMSI.
The Initial Lenders, CSI and JPMSI shall have the right to review and
approve all public announcements and filings relating to the Senior Facility
that refer to the Initial Lenders, the other Lenders, CSI or JPMSI, before they
are made (such approval not to be unreasonably withheld) other than filings made
with the Securities and Exchange Commission relating to the Senior Facility.
Each Initial Lenders' offer set forth in this letter will terminate at
12:00 noon (New York City time) on September 17, 1997 unless you accept this
letter and the Fee Letter at or prior to that time by (a) signing and returning
to each of ▇▇▇▇▇ and ▇▇▇▇▇▇ counterparts of this letter and the Fee Letter and
(b) paying to each Initial Lender the fees stated in the Fee Letter to be
payable on or prior to the date on which you accept this letter. Each Initial
Lender's commitment under this letter, if accepted by you, will in any event
terminate if definitive financing agreements have not been executed at or prior
to 5:00 p.m. (New York City time) on December 12, 1997 (such financing
agreements to provide that the initial extension of credit thereunder will occur
on a date (the "Closing Date") not later than December 12, 1997).
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FrontierVision Operating -5- September 15, 1997
Partners, L.P.
We are pleased to have been given the opportunity to assist you in
connection with this important financing.
THE CHASE MANHATTAN BANK CHASE SECURITIES INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------- -----------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇ Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Title: Managing Director
▇▇▇▇▇▇ GUARANTY TRUST COMPANY ▇.▇. ▇▇▇▇▇▇ SECURITIES INC.
OF NEW YORK
By: /s/ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
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Name: ▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President Title: Managing Director
Accepted and agreed to
as of the date first
written above by:
FRONTIERVISION OPERATING
PARTNERS, L.P.
By: Frontiervision Partners, L.P.,
as general partner of
FrontierVision Operating Partners, L.P.
By: FVP GP, L.P., as general partner
of FrontierVision Partners, L.P.
By: FrontierVision Inc.,
as general partner of FVP GP, L.P.
By: /s/ ▇▇▇▇ ▇. ▇▇▇
----------------------
Name: ▇▇▇▇ ▇. ▇▇▇
Title: Senior Vice President & Chief
Financial Officer
CONFIDENTIAL FRONTIERVISION OPERATING PARTNERS, L.P.
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SUMMARY OF TERMS AND CONDITIONS
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EXHIBIT A
BORROWER: FRONTIERVISION OPERATING PARTNERS, L.P. ("FrontierVision"
or "Borrower"), a Delaware limited partnership.
PURPOSE: To partially fund the following (i) the refinancing of
existing senior debt outstanding under the existing
credit facilities; (ii) the acquisition of cable
properties; (iii) expenses related to the Transaction;
(iv) general corporate purposes; and (v) to acquire TCI
Northeast, Cablevision Systems in Maine and Cox in Ohio.
FACILITIES: $200 Million Senior Secured Revolving Credit Facility
("Revolving Credit")
$250 Million Senior Secured Tranche A Term Loan Facility
("Term Loan")
$200 Million Senior Secured Tranche B Term Loan Facility
("Term Loan B")
The Term Loan and Term Loan B must be fully drawn as a
condition to availability under the Revolving Credit.
ADMINISTRATIVE AGENT: The Chase Manhattan Bank ("Chase")
CO-ARRANGERS: Chase Securities Inc. and ▇.▇. ▇▇▇▇▇▇ Securities, Inc.
SYNDICATION AGENT: ▇▇▇▇▇▇ Guaranty Trust Company of New York
LENDERS: A group of institutions satisfactory to the Borrower and
the Co-Arrangers.
MATURITY: Revolving Credit and Term Loan - 8.0 years from Closing,
or approximately October 30, 2005.
Term Loan B - 8.5 years from Closing, or approximately
April 30, 2006.
AMORTIZATION: The Revolving Credit will be fully repaid on October 30,
2005.
The Term Loan will be repaid in equal quarterly
amortizations for each year specified in percentages
equivalent to those specified below on the dates
specified below:
YEAR ANNUAL % REDUCTION
------ -------------------
1999 3.0%
2000 8.0%
2001 12.0%
2002 16.0%
2003 20.0%
2004 26.0%
2005 15.0%
The Term Loan B will be repaid in equal quarterly
amortizations in percentages equivalent to those
specified below on the dates specified below:
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CONFIDENTIAL FRONTIERVISION OPERATING PARTNERS, L.P.
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DATE ANNUAL % REDUCTION
------------ -------------------
2000 0.83%
2001 0.83%
2002 0.83%
2003 0.83%
2004 0.83%
2005 0.83%
01/31/2006 45.0%
04/30/2006 50.0%
INCREMENTAL FACILITY: $250 Million Incremental Term Loan Facility ("Incremental
Facility")
The Incremental Facility may be made available by any of
the Lenders, in their sole discretion, following a
request by the Borrower. No Lender will have committed or
be required to commit to this facility at the time of
Closing. Incurrence is subject to no default and pro
forma compliance under the Credit Agreement. Pricing is
as described in Exhibit I.
The Incremental Facility will be available for future
acquisitions.
The standby period for the Incremental Facility will
terminate 2.0 years from Closing and the final maturity
will be equal to the maturity of Term Loan B.
The Incremental Facility will be repaid in equal
quarterly amortizations for each year specified in
percentages equivalent to those specified below on the
dates specified below :
YEAR ANNUAL % REDUCTION
------------ ------------------
2000 0.83%
2001 0.83%
2002 0.83%
2003 0.83%
2004 0.83%
2005 0.83%
01/31/2006 45.0%
04/30/2006 50.0%
GUARANTEES: The Facilities will be guaranteed by the General Partner
of the Borrower (on a limited recourse basis) and by all
of the Borrower's subsidiaries.
SECURITY: The Facilities will be secured by a pledge of ownership
interests of the Borrower and a first priority lien on
the assets of the Borrower and its Subsidiaries other
than real estate that is not material to the Borrower and
its Subsidiaries.
INTEREST: Base Rate, at the Borrower's option, LIBOR loans will be
available, as follows:
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[LOGO CHASE] 2
CONFIDENTIAL FRONTIERVISION OPERATING PARTNERS, L.P.
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(i) Base Rate Option: Interest shall be at the Base
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Rate of the Administrative Agent plus the Applicable
Margin, calculated on the basis of the actual number
of days elapsed in year of 360 days, payable
quarterly in arrears. The Base Rate is defined as
the higher of the Federal Funds Rate, as published
by the Federal Reserve Bank of New York, plus 1/2 of
1%, or the prime commercial lending rate of the
Administrative agent, as announced from time to time
at its head office. Base Rate drawings shall require
one business day's prior notice and shall be in
minimum amounts of $500,000 and incremental
multiples of $100,000.
(ii) LIBOR Option: Interest Periods shall consist
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of one, two, three or six months and (if available
and agreed to by all of the Lenders) nine or twelve
months (as selected by the Borrower) and shall be at
an annual rate equal to the London Interbank Offered
Rate ("LIBOR") for the corresponding deposits of
U.S. Dollars plus the Applicable Margin. LIBOR will
be determined by the Administrative Agent at the
start of each Interest Period. Interest will be paid
at the end of each Interest Period or quarterly,
whichever is earlier, and will be calculated on the
basis of actual number of days elapsed in a year of
360 days. LIBOR will be adjusted for maximum
statutory Regulation D reserve requirements (if
any). LIBOR drawings shall require three business
days' prior notice and shall be in minimum amounts
of $2,000,000 and incremental multiples of
$1,000,000.
APPLICABLE MARGIN: See Exhibit I.
COMMITMENT FEE: See Exhibit I.
POST-DEFAULT RATE: 2.00% per annum in excess of the highest applicable rate
upon a payment default, until cured or waived.
MANDATORY PREPAYMENTS: Beginning in Year 4 in respect of Year 3 (i.e. the fiscal
year ending December 31, 2001) Mandatory Prepayments
shall include 50% of Excess Cash Flow. In addition,
Mandatory Prepayments shall include 100% of the net
proceeds from (i) any sales or dispositions of property
or business, subject to limits to be agreed upon (see
little "B" Covenants below) and (ii) property or casualty
insurance not applied to replacement assets. Any such
prepayments will be applied ratably between the Term Loan
Facilities and Incremental Facility in each case
allocated pro rata to remaining amortization payments.
The Excess Cash Flow Recapture will be eliminated when
the ratio of Total Debt/EBITDA is less than 5.0x.
FINANCIAL COVENANTS: Applicable to the Borrower and its subsidiaries and to
include, without limitation, the following:
i) Total Debt/EBITDA
-----------------
The ratio of Total Debt to Annualized EBITDA will
not exceed 7.0x with step downs to be agreed upon.
ii) Senior Debt/EBITDA
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The ratio of Senior Debt to Annualized EBITDA will
not exceed 5.5x with step downs to be agreed upon.
iii) EBITDA/Total Interest Expense
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The ratio of Annualized EBITDA to Total Interest
Expense will not be less than 1.5x with step ups to
be agreed upon.
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[LOGO CHASE] 3
CONFIDENTIAL FRONTIERVISION OPERATING PARTNERS, L.P.
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iv) Net EBITDA/Total Fixed Charges
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Commencing with the fiscal quarter ending 12/31/97,
the ratio of the Annualized EBITDA (inclusive of
interest income) to Total Fixed Charges will not be
less than 1.00x at any time. This ratio will step up
to 1.05% beginning with the fiscal quarter ending
12/31/99.
v) Capital Expenditures
--------------------
Capital Expenditures limitations to be agreed upon.
vi) Restricted Payments
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After 12/31/2001 or such earlier date as of which
Total/Debt/EBITDA is less than 5.0x, the Borrower
may make dividend payments to service regularly
scheduled payments of interest on the Senior
Discount Notes and distributions to its partners to
make payments of income taxes so long as immediately
prior to such payments and after giving effect
thereto the Borrower is in compliance with the
Credit Agreement.
ADDITIONAL COVENANTS: Applicable to FrontierVision and its subsidiaries and to
include, without limitation, the following:
(a) Limitation on modifications of organizational
documents of the Borrower and other material
documents;
(b) Limitation on dispositions of assets, provided that
sales of up to $150 million in the aggregate are
permitted without the need to permanently reduce the
facilities provided that net proceeds are (i) applied
to temporarily reduce the revolver or are deposited
in a cash collateral account and (ii) redeployed for
acquisitions within one year.
(c) Limitation on loans and investments; The Company may
make deposits relating to acquisitions in an
aggregate amount to be agreed upon. The Company may
also make investments of up to $25 million in the
aggregate in related businesses. This amount will
rise to $50 million when Total Debt/EBITDA is less
than 5.0 times. These investments will not be pledged
to the banks, and the bank agreement will not contain
restrictions on liens relating to these investments.
(d) Limitation on liens;
(e) Limitation on transactions with affiliates;
(f) Limitations on distributions and other payments to
holders of partnership interests;
(g) Limitations on mergers or acquisitions; The Company
may make acquisitions of up to $150 million in the
aggregate increased by proceeds of dispositions being
held pending reinvestment, without lender approval.
(h) Delivery of financial statements and reports on a
quarterly and annual audited basis; and
(i) Limitations on additional indebtedness.
(j) Limitations on changes of lines of business or
material ownership.
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[LOGO CHASE] 4
CONFIDENTIAL FRONTIERVISION OPERATING PARTNERS, L.P.
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Applicable to FrontierVision Holding Company to include,
without limitation, the following:
(a) Limitation on indebtedness, liens, acquisitions and
business activity.
EVENTS OF DEFAULT: Will include (without limitation and subject, in certain
cases, to notice and cure provisions to be agreed upon)
non-payment, misrepresentation, breach of covenants,
material environmental claims, bankruptcy, ERISA,
judgment, change of material ownership or control (to be
defined), cross-defaults, and the failure of both ▇▇▇
▇▇▇▇▇▇ and ▇▇▇▇ ▇▇▇ to be actively engaged in the
management of the Borrower and its Subsidiaries.
CONDITIONS PRECEDENT
TO CLOSING OF THE FACILITIES:
Will include, without limitation:
a) No material adverse change in the operations,
prospects, business or financial condition of
FrontierVision and cable systems being acquired;
b) Receipt as equity of at least $100,000,000 from
proceeds (net of fees and expenses) of the Senior
Discount Notes;
c) Total Debt/Annualized EBITDA less than or equal to
7.0x;
d) Appropriate Interest Rate Hedging to be agreed upon;
and
e) Lenders review of and satisfaction with recent
financial statements, and completion of (and
satisfaction with the results of) due diligence with
respect to the cable systems being acquired.
CONDITIONS PRECEDENT
FOR EACH LOAN: Conditions to each extension of credit under the
Facilities will be customary for a transaction of this
type and others determined by the Lenders to be
appropriate, including, without limitation, (a) the
absence of any continuing default or event of default and
(b) the continuing truth of representations and
warranties.
DOCUMENTATION: The Facilities will be subject to the negotiation,
execution and delivery of a definitive credit agreement
(including schedules, exhibits and ancillary
documentation) and related security agreements,
guarantees and other support documentation satisfactory
to the Lenders. Such credit agreement will contain
representations and warranties, funding and yield
protection provisions (including, without limitation, a
requirement for compensation for the cost of compliance
by the Lenders with changes in capital adequacy and
similar requirements ), conditions precedent, covenants,
events of default and other provisions determined by the
Lenders to be appropriate for transactions of this type,
including (without limitation) the following:
a) The Lenders' review and satisfaction with the
Borrower's projections and pro forma statements
reflecting the forecasted financial condition, income
and expenses of the Borrower and its subsidiaries
after giving effect to the Closing, the borrowings
under the Facility and the other transactions
contemplated hereby, and the Lenders' continuing
satisfaction with the condition (financial and
other), operations, assets, nature of assets,
liabilities and prospects of the Borrower and its
subsidiaries and environmental matters;
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[LOGO CHASE] 5
CONFIDENTIAL FRONTIERVISION OPERATING PARTNERS, L.P.
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b) The Agents' review of and satisfaction with the
following (in each case after giving effect to the
pending acquisitions): (i) the Borrower's tax
assumptions, (ii) the capital structure of the
Borrower and its subsidiaries, (iii) the value, scope
and extent of the collateral available to secure the
Facilities and (iv) the Borrower's and its
subsidiaries' material contracts;
c) A certificate of the Chief Financial Officer of the
Borrower, to the effect that after giving effect to
the Closing, the borrowings under the Facilities and
the other transactions contemplated hereby, none of
the entities liable to the Lenders is insolvent or
will be left with unreasonably small capital with
which to engage in its business or will have incurred
debts beyond its ability to pay such debts as they
mature;
d) The Lenders' review of satisfaction with the
insurance program of the Borrower and its
subsidiaries;
e) The Lenders' satisfaction with any litigation;
f) The Lenders' receipt of satisfactory legal opinions
from counsel to the Borrower covering such matters as
are appropriate for transactions of this type;
g) All agreements and other documents governing the
security arrangements and guarantees shall have been
duly executed and delivered and shall be in full
force and effect;
▇) ▇▇▇▇▇▇▇' review of and satisfaction with the most
recent financial statements of the Borrower.
DEFINITIONS Capital Expenditures
--------------------
All expenditures, including capital lease obligations,
incurred during a period to acquire or construct fixed
assets, plant and equipment, but excluding acquisitions.
EBITDA
------
Cash revenue for any period, minus operating expenses but
excluding depreciation, amortization, interest expense
(including interest on the existing seller notes paid in
cash) other non-cash (including pension expense) charges,
income taxes accrued for such period, restructuring
charges, extraordinary gains or losses, gains or losses
from the sale of assets to the extent such items are not
included in operating expenses and any distribution to
its partners to make income tax payments.
Annualized EBITDA
-----------------
EBITDA for the most recent fiscal quarter times four.
Excess Cash Flow
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The annual excess (if any) of (a) EBITDA for the four
fiscal quarters of such Fiscal Year over (b) Total Fixed
Charges plus any cash payments made to service the Senior
Discount Notes, plus or minus the cash portion of any
extraordinary gains or losses incurred during such Fiscal
Year, without duplication of Mandatory Prepayments plus
interest paid in cash on the existing seller notes (to
the extent not paid with the proceeds of any additional
equity).
Total Debt
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All Indebtedness of the Borrower on a consolidated basis
(including letters of credit, and excluding the existing
seller notes and performance bonds). For this purpose
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[LOGO CHASE] 6
CONFIDENTIAL FRONTIERVISION OPERATING PARTNERS, L.P.
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such indebtedness shall be deemed reduced to the extent
of asset disposition proceeds on deposit in the cash
collateral account.
Senior Debt
-----------
Indebtedness other than Permitted Subordinated
Indebtedness. For this purpose such indebtedness shall be
deemed reduced to the extent of asset disposition
proceeds on deposit in the cash collateral account.
Total Debt Service
------------------
For any period of four consecutive quarters, the sum of
Total Interest Expense plus any scheduled amortization
payments made payable during such period.
Total Fixed Charges
-------------------
For any period of four consecutive quarters, the sum of
(i) Total Debt Service, (ii) Capital Expenditures
(excluding expenditures financed with purchase money
debt,) (iii) taxes paid or payable and (iv) distributions
to partners to make income tax payments.
Total Interest Expense
----------------------
For any period of four consecutive quarters, all interest
whether paid in cash or accrued as a liability (excluding
capitalized financing fees), on Total Debt, plus interest
paid in cash on the existing seller notes.
ASSIGNMENTS AND
PARTICIPATIONS: Assignments in minimum amounts of $5,000,000 will be
permitted subject to approval by the Administrative Agent
and the Borrower, not to be unreasonably withheld.
MAJORITY LENDERS: Lenders holding at least 50% of aggregate Commitments.
EXPENSES AND
INDEMNIFICATION: Customary expenses and indemnification provisions,
including, without limitation, the payment of all
expenses and costs of each Lender in connection with
enforcement proceedings or any workout or restructuring
of the Loans.
GOVERNING LAW: The law of the State of New York.
▇▇▇▇▇▇'S COUNSEL: Milbank, Tweed, ▇▇▇▇▇▇ & ▇▇▇▇▇▇.
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[LOGO CHASE] 7
CONFIDENTIAL FRONTIERVISION OPERATING PARTNERS, L.P.
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EXHIBIT I:
APPLICABLE MARGIN: REVOLVING CREDIT AND TERM LOAN
------------------------------
The initial Applicable Margin of 2.250% will be in place
for the first six months after Closing. Thereafter, the
Applicable Margin will be based on the ratio of Total
Debt to Annualized EBITDA as set forth below:
LIBOR +
--------
Initial 2.250%
Greater than 6.5x 2.250%
Greater than 6.0x 2.000%
Greater than 5.5x 1.750%
Greater than 5.0x 1.500%
Greater than 4.5x 1.375%
Greater than 4.0x 1.250%
Less than or equal to 4.0x 1.125%
TERM LOAN B AND INCREMENTAL FACILITY
------------------------------------
The Applicable Margin will be based on the ratio of Total
Debt to Annualized EBITDA.
LIBOR +
--------
Greater than or equal to 5.5x 2.375%
Less than 5.5x 2.125%
COMMITMENT FEE: A commitment fee on the unused amount of the Revolving
Credit will be payable quarterly in arrears commencing at
the first quarterly date following Closing, and
calculated on a 360 day basis. The commitment fee will be
based on the ratio of Total Debt to Annualized EBITDA as
set forth below:
COMMITMENT FEE
--------------
Greater than or equal to 5.5x 0.375%
Less than 5.5x 0.250%
UNDERWRITING FEE: 1.375% on total commitment amount
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[LOGO CHASE] 8
