UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
_______________________
FORM
10-Q
_______________________
Quarterly
Report Pursuant to Section 13 or 15(d) of the
Securities
Exchange Act of 1934
For
the quarterly period ended March 31, 2006
Commission
File Number: 0-29227
Mediacom
Communications Corporation
(Exact
name of Registrant as specified in its charter)
|
Delaware
|
06-1566067
|
|
|
(State
of incorporation)
|
(I.R.S.
Employer Identification
Number)
|
100
Crystal Run Road
Middletown,
NY 10941
(Address
of principal executive offices)
(845)
695-2600
(Registrant’s
telephone number)
Indicate
by check mark whether the Registrant (1) has filed all reports required to
be
filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during
the
preceding 12 months (or for such shorter period that the Registrant was required
to file such reports), and (2) has been subject to such filing requirements
for
the past 90 days.
|
R
Yes
|
£
No
|
Indicate
by check mark whether the Registrant is a large accelerated filer, an
accelerated filer, or a non-accelerated filer. See definition of “accelerated
filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check
one):
|
£
Large accelerated filer
|
R
Accelerated filer
|
£
Non-accelerated filer
|
Indicate
by check mark whether the Registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).
|
£
Yes
|
R
No
|
As
of
April 28, 2006, there were 84,163,532 shares of Class A common stock and
27,073,628 shares
of
Class
B common
stock outstanding.
FORM
10-Q
FOR
THE PERIOD ENDED MARCH 31, 2006
TABLE
OF CONTENTS
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4
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5
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6
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16
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22
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22
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23
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23
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23
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23
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24
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Cautionary
Statement Regarding Forward-Looking Statements
You
should carefully review the information contained in this Quarterly Report
and
in other reports or documents that we file from time to time with the Securities
and Exchange Commission (the “SEC”).
In
this
Quarterly Report, we state our beliefs of future events and of our future
financial performance. In some cases, you can identify those so-called
“forward-looking statements” by words such as “may,” “will,” “should,”
“expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,”
“potential,” or “continue” or the negative of those words and other comparable
words. These forward-looking statements are subject to risks and uncertainties
that could cause actual results to differ materially from historical results
or
those we anticipate. Factors that could cause actual results to differ from
those contained in the forward-looking statements include, but are not limited
to: competition in our video, high-speed Internet access and phone businesses;
our ability to achieve anticipated customer and revenue growth and to
successfully introduce new products and services; increasing programming costs;
changes in laws and regulations; our ability to generate sufficient cash flow
to
meet our debt service obligations and access capital to maintain our financial
flexibility and the other risks and uncertainties discussed in this Quarterly
Report and in our Annual Report on Form 10-K for the year ended December 31,
2005 and other reports or documents that we file from time to time with the
SEC.
Statements included in this Quarterly Report are based upon information known
to
us as of the date that this Quarterly Report is filed with the SEC, and we
assume no obligation to update or alter our forward-looking statements made
in
this Quarterly Report, whether as a result of new information, future events
or
otherwise, except as otherwise required by applicable federal securities
laws.
|
FINANCIAL
STATEMENTS
|
MEDIACOM
COMMUNICATIONS CORPORATION AND SUBSIDIARIES
CONSOLIDATED
BALANCE SHEETS
(All
dollar amounts in thousands, except share amounts)
(Unaudited)
|
March
31,
2006
|
December
31,
2005
|
||||||
|
ASSETS
|
|||||||
|
CURRENT
ASSETS
|
|||||||
|
Cash
and cash equivalents
|
$
|
20,881
|
$
|
17,281
|
|||
|
Accounts
receivable, net of allowance for doubtful accounts of $2,639 and
$3,078,
respectively
|
58,309
|
63,845
|
|||||
|
Prepaid
expenses and other current assets
|
25,783
|
23,046
|
|||||
|
Deferred
tax asset
|
2,782
|
2,782
|
|||||
|
Total
current assets
|
107,755
|
106,954
|
|||||
|
Investment
in cable television systems:
|
|||||||
|
Property,
plant and equipment, net of accumulated depreciation of $1,276,388
and
$1,229,738, respectively
|
1,449,608
|
1,453,588
|
|||||
|
Franchise
rights, net of accumulated amortization of $140,947
|
1,803,971
|
1,803,971
|
|||||
|
Goodwill,
net of accumulated amortization of $3,232
|
221,382
|
221,382
|
|||||
|
Subscriber
lists and other intangible assets, net of accumulated amortization
of
$158,278 and $157,755, respectively
|
13,300
|
13,823
|
|||||
|
Total
investment in cable television systems
|
3,488,261
|
3,492,764
|
|||||
|
Other
assets, net of accumulated amortization of $26,307 and $24,617
respectively
|
46,405
|
49,780
|
|||||
|
Total
assets
|
$
|
3,642,421
|
$
|
3,649,498
|
|||
|
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
|||||||
|
CURRENT
LIABILITIES
|
|||||||
|
Accounts
payable and accrued expenses
|
$
|
251,499
|
$
|
270,137
|
|||
|
Deferred
revenue
|
43,714
|
41,073
|
|||||
|
Current
portion of long-term debt
|
228,412
|
222,770
|
|||||
|
Total
current liabilities
|
523,625
|
533,980
|
|||||
|
Long-term
debt, less current portion
|
2,865,678
|
2,836,881
|
|||||
|
Deferred
tax liabilities
|
232,157
|
200,090
|
|||||
|
Other
non-current liabilities
|
19,455
|
19,440
|
|||||
|
Total
liabilities
|
3,640,915
|
3,590,391
|
|||||
|
Commitments
and contingencies (Note 9)
|
|||||||
|
STOCKHOLDERS'
EQUITY
|
|||||||
|
Class
A common stock, $.01 par value; 300,000,000 shares authorized; 93,402,352
shares issued and 84,300,221 shares outstanding as of March 31, 2006
and
93,280,535 shares issued and 88,050,009 shares outstanding as of
December
31, 2005
|
934
|
933
|
|||||
|
Class
B common stock, $.01 par value; 100,000,000 shares authorized; 27,336,939
shares issued and outstanding as of March 31, 2006 and December 31,
2005,
respectively
|
274
|
274
|
|||||
|
Additional
paid-in capital
|
987,342
|
990,584
|
|||||
|
Deferred
compensation
|
-
|
(4,857
|
)
|
||||
|
Accumulated
deficit
|
(938,399
|
)
|
(901,191
|
)
|
|||
|
Treasury
stock, at cost, 9,102,131 and 5,230,526 shares of Class A common
stock, as
of March 31, 2006 and December 31, 2005, respectively
|
(48,645
|
)
|
(26,636
|
)
|
|||
|
Total
stockholders' equity
|
1,506
|
59,107
|
|||||
|
Total
liabilities and stockholders' equity
|
$
|
3,642,421
|
$
|
3,649,498
|
|||
The
accompanying notes to the unaudited financial
statements
are an integral part of these statements
MEDIACOM
COMMUNICATIONS CORPORATION AND SUBSIDIARIES
CONSOLIDATED
STATEMENTS OF OPERATIONS
(All
amounts in thousands, except per share data)
(Unaudited)
|
Three
Months Ended
March
31,
|
|||||||
|
2006
|
2005
|
||||||
|
Revenues
|
$
|
289,348
|
$
|
266,244
|
|||
|
Costs
and expenses:
|
|||||||
|
Service
costs (exclusive of depreciation and amortization of $53,717
and $53,925, respectively, shown separately below)
|
118,523
|
106,344
|
|||||
|
Selling,
general and administrative expenses
|
58,428
|
55,652
|
|||||
|
Corporate
expenses
|
5,984
|
5,274
|
|||||
|
Depreciation
and amortization
|
53,717
|
53,925
|
|||||
|
Operating
income
|
52,696
|
45,049
|
|||||
|
Interest
expense, net
|
(55,652
|
)
|
(51,274
|
)
|
|||
|
Gain
on derivatives, net
|
515
|
8,070
|
|||||
|
Other
expense
|
(2,641
|
)
|
(2,696
|
)
|
|||
|
Loss
before (provision for) benefit from income taxes
|
(5,082
|
)
|
(851
|
)
|
|||
|
(Provision
for) benefit from income taxes
|
(32,126
|
)
|
10
|
||||
|
Net
loss
|
$
|
(37,208
|
)
|
$
|
(841
|
)
|
|
|
Weighted
average shares outstanding
|
113,529
|
117,861
|
|||||
|
Basic
and diluted loss per share
|
$
|
(0.33
|
)
|
$
|
(0.01
|
)
|
|
The
accompanying notes to the unaudited financial
statements
are an integral part of these statements
MEDIACOM
COMMUNICATIONS CORPORATION AND
SUBSIDIARIES
CONSOLIDATED
STATEMENTS OF CASH FLOWS
(All
dollar amounts in thousands)
(Unaudited)
|
Three
Months Ended
March
31,
|
|||||||
|
2006
|
2005
|
||||||
|
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
|||||||
|
Net
loss
|
$
|
(37,208
|
)
|
$
|
(841
|
)
|
|
|
Adjustments
to reconcile net loss to net cash provided by operating
activities:
|
|||||||
|
Depreciation
and amortization
|
53,717
|
53,925
|
|||||
|
Gain
on derivatives, net
|
(515
|
)
|
(8,070
|
)
|
|||
|
Amortization
of deferred financing costs
|
1,690
|
1,662
|
|||||
|
Non-cash
share-based compensation
|
1,155
|
151
|
|||||
|
Deferred
income taxes
|
32,067
|
125
|
|||||
|
Changes
in assets and liabilities, net of effects from
acquisitions:
|
|||||||
|
Accounts
receivable, net
|
5,536
|
3,275
|
|||||
|
Prepaid
expenses and other assets
|
(519
|
)
|
(4,026
|
)
|
|||
|
Accounts
payable and accrued expenses
|
(25,764
|
)
|
(17,547
|
)
|
|||
|
Deferred
revenue
|
2,641
|
1,181
|
|||||
|
Other
non-current liabilities
|
15
|
(520
|
)
|
||||
|
Net
cash flows provided by operating activities
|
32,815
|
29,315
|
|||||
|
CASH
FLOWS FROM INVESTING ACTIVITIES:
|
|||||||
|
Capital
expenditures
|
(47,619
|
)
|
(54,789
|
)
|
|||
|
Net
cash flows used in investing activities
|
(47,619
|
)
|
(54,789
|
)
|
|||
|
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
|||||||
|
New
borrowings
|
105,000
|
299,000
|
|||||
|
Repayment
of debt
|
(70,561
|
)
|
(281,669
|
)
|
|||
|
Proceeds
from issuance of common stock in employee stock purchase
plan
|
461
|
477
|
|||||
|
Other
financing activities - book overdrafts
|
5,658
|
(10,223
|
)
|
||||
|
Repurchases
of Class A common stock
|
(22,009
|
)
|
-
|
||||
|
Financing
costs
|
(145
|
)
|
(50
|
)
|
|||
|
Net
cash flows provided by financing activities
|
18,404
|
7,535
|
|||||
|
Net
increase (decrease) in cash and cash equivalents
|
3,600
|
(17,939
|
)
|
||||
|
CASH
AND CASH EQUIVALENTS, beginning of period
|
17,281
|
23,875
|
|||||
|
CASH
AND CASH EQUIVALENTS, end of period
|
$
|
20,881
|
$
|
5,936
|
|||
|
SUPPLEMENTAL
DISCLOSURES OF CASH FLOW INFORMATION:
|
|||||||
|
Cash
paid during the period for interest, net of amounts
capitalized
|
$
|
78,620
|
$
|
70,635
|
|||
The
accompanying notes to the unaudited financial
statements
are an integral part of these statements
MEDIACOM
COMMUNICATIONS CORPORATION AND
SUBSIDIARIES
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
|
(1)
|
Statement
of Accounting Presentation and Other
Information
|
Basis
of Preparation of Unaudited Consolidated Financial
Statements
Mediacom
Communications Corporation (“MCC,” and collectively with its subsidiaries, the
“Company”) has prepared these unaudited consolidated financial statements as
of
March
31, 2006 and 2005. In the opinion of management, such statements include all
adjustments, consisting of normal recurring accruals
and
adjustments, necessary for a fair presentation of the Company’s consolidated
results of operations and financial position for the interim periods presented.
The accounting policies followed during such interim periods reported are in
conformity with generally accepted accounting principles in the United States
of
America and are consistent with those applied during annual periods, except
for
the adoption of SFAS No. 123(R) “Share-Based
Payment” (“SFAS
No. 123(R)”), as discussed in Note 8. For a summary of the Company’s accounting
policies and other information, refer to the Company’s Annual Report on Form
10-K for the year ended December 31, 2005.
The
results of operations for the interim periods are not necessarily indicative
of
the results that might be expected for future interim periods or for the full
year ending December 31, 2006.
Reclassifications
Certain
reclassifications have been made to prior year’s amounts to conform to the
current year’s presentation.
|
(2)
|
Liquidity
and Capital Resources
|
The
Company has a significant level of debt, interest expense obligations and
liabilities in the normal course of business. The majority of the Company’s debt
that matures during the next twelve months consists of $172.5 million of
convertible notes due July 1, 2006. Although the Company has not yet determined
how it will satisfy that obligation, several alternatives are available,
including the repayment of the notes with availability under the Company’s
subsidiary credit facilities. As of March 31, 2006, the Company had unused
revolving credit commitments of $813.0 million, all of which could be borrowed
and used for general corporate purposes based on the terms and conditions of
its
debt arrangements.
|
(3)
|
Recently
Issued Accounting
Pronouncements
|
In
February 2006, the FASB issued SFAS Statement No. 155, “Accounting
for Certain Hybrid Financial Instruments, Amendment of FASB Statement No. 133
and 140”
(“SFAS
No. 155”). SFAS No. 155 amends SFAS No. 133, “Accounting
for Derivative Instruments and Hedging Activities”
(“SFAS
No. 133”) and SFAS No. 140, “Accounting
for Transfers and Servicing of Financial Assets and Extinguishments of
Liabilities”
(“SFAS
No. 140”). SFAS No. 155 gives entities the option of applying fair value
accounting to certain hybrid financial instruments in their entirety if they
contain embedded derivatives that would otherwise require bifurcation under
SFAS
No. 133. SFAS No. 155 will be effective as of January 1, 2007 and the Company
does not believe that the adoption will have a material impact on its
consolidated financial condition or results of operations.
In
March
2006, the FASB issued SFAS No. 156, “Accounting
for Servicing of Financial Assets - an Amendment of FASB Statement No
140.”
SFAS No
156 provides guidance on the accounting for servicing assets and liabilities
when an entity undertakes an obligation to service a financial asset by entering
into a servicing contract. This statement is effective for all transactions
in
fiscal years beginning after September 15, 2006. The Company does not expect
the
adoption of SFAS No. 156 will have a material impact on its consolidated
financial condition or results of operations.
|
(4)
|
Earnings
Per Share
|
The
Company calculates earnings per share in accordance with SFAS No. 128,
“Earnings
per Share.”
SFAS
No. 128 computes basic earnings (loss) per share by dividing the net income
(loss) by the weighted average number of shares of common stock outstanding
during the period. Diluted earnings per share (“Diluted EPS”) is computed by
dividing the net income (loss) by the weighted average number of shares of
common stock outstanding during the period plus the effects of any potentially
dilutive securities. Diluted EPS considers the impact of potentially dilutive
securities except in periods in which there is a loss because the inclusion
of
the potential common shares would have an anti-dilutive effect. The Company’s
potentially dilutive securities include common shares which may be issued upon
exercise of its stock options, conversion of convertible senior notes or vesting
of restricted stock units. Diluted EPS excludes the impact of potential common
shares related to our stock options in periods in which the option exercise
price is greater than the average market price of the Company’s Class A common
stock during the period.
MEDIACOM
COMMUNICATIONS CORPORATION AND SUBSIDIARIES
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
For
the
three months ended March 31, 2006 and 2005, the Company generated net losses
so
the inclusion of the potential common shares would have been anti-dilutive.
Accordingly, diluted loss per share equaled basic loss per share. Diluted
loss per share for the three months ended March 31, 2006 and 2005, excludes
approximately 10.8 million and 10.3 million, respectively, potential common
shares related to the Company’s convertible senior notes and share-based
compensation plans.
|
(5)
|
Property,
Plant and Equipment
|
As
of
March 31, 2006
and
December 31, 2005,
property, plant and equipment consisted of (dollars in thousands):
|
March
31,
2006
|
December
31,
2005
|
||||||
|
Land
and land improvements
|
$
|
7,149
|
$
|
7,149
|
|||
|
Buildings
and leasehold improvements
|
40,844
|
40,653
|
|||||
|
Cable
systems, equipment and subscriber devices
|
2,571,042
|
2,531,840
|
|||||
|
Vehicles
|
65,234
|
64,729
|
|||||
|
Furniture,
fixtures and office equipment
|
41,727
|
38,955
|
|||||
|
2,725,996
|
2,683,326
|
||||||
|
Accumulated
depreciation
|
(1,276,388
|
)
|
(1,229,738
|
)
|
|||
|
Property,
plant and equipment, net
|
$
|
1,449,608
|
$
|
1,453,588
|
|||
MEDIACOM
COMMUNICATIONS CORPORATION AND SUBSIDIARIES
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
|
(6)
|
Accounts
Payable and Accrued
Expenses
|
Accounts
payable and accrued expenses consist of the following (dollars in
thousands):
|
March
31,
2006
|
December
31,
2005
|
||||||
|
Accounts
payable
|
$
|
12,655
|
$
|
6,329
|
|||
|
Book
overdrafts(1)
|
32,056
|
26,330
|
|||||
|
Accrued
interest
|
41,556
|
65,282
|
|||||
|
Accrued
payroll and benefits
|
25,739
|
25,824
|
|||||
|
Accrued
programming costs
|
50,246
|
52,807
|
|||||
|
Accrued
property, plant and equipment
|
18,398
|
14,839
|
|||||
|
Accrued
taxes and fees
|
25,132
|
30,617
|
|||||
|
Subscriber
advance payments
|
11,063
|
10,096
|
|||||
|
Other
accrued expenses
|
34,654
|
38,013
|
|||||
|
$
|
251,499
|
$
|
270,137
|
||||
(1) Book
overdrafts represent outstanding checks in excess of funds on deposit at the
Company’s disbursement accounts. The Company transfers funds from its depository
accounts to its disbursement accounts upon daily notification of checks
presented for payment. Changes in book overdrafts are reported as part of cash
flows from financing activities in the Company’s consolidated statement of cash
flows.
|
(7)
|
Debt
|
As
of
March 31, 2006 and December 31, 2005, debt consisted of (dollars in thousands):
|
March
31,
2006
|
December
31,
2005
|
||||||
|
Bank
credit facilities
|
$
|
1,693,750
|
$
|
1,658,750
|
|||
|
8½%
senior notes due 2015
|
200,000
|
200,000
|
|||||
|
7⅞%
senior notes due 2011
|
125,000
|
125,000
|
|||||
|
9½%
senior notes due 2013
|
500,000
|
500,000
|
|||||
|
11%
senior notes due 2013
|
400,000
|
400,000
|
|||||
|
5¼%
convertible senior notes due 2006
|
172,500
|
172,500
|
|||||
|
Capital
lease obligations
|
2,840
|
3,401
|
|||||
|
$
|
3,094,090
|
$
|
3,059,651
|
||||
|
Less:
Current portion
|
228,412
|
222,770
|
|||||
|
Total
long-term debt
|
$
|
2,865,678
|
$
|
2,836,881
|
|||
Bank
Credit Facilities
The
average interest rates on outstanding debt under the bank credit facilities
as
of March
31,
2006 and 2005,
were
6.6% and
4.8%,
respectively, before giving effect to the interest rate exchange agreements
discussed below. As of
March
31, 2006, the
Company
had unused credit commitments of approximately $813.0 million under its bank
credit facilities, all of which could be borrowed and used for general corporate
purposes based on the terms and conditions of the Company’s debt arrangements.
The Company was in compliance with all covenants under its debt arrangements
as
of March
31,
2006.
As
of
March 31, 2006, approximately $22.8 million letters of credit were issued to
various parties as collateral for our performance relating primarily to
insurance and franchise requirements.
MEDIACOM
COMMUNICATIONS CORPORATION AND SUBSIDIARIES
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Interest
Rate Exchange Agreements
The
Company uses interest rate exchange agreements in order to fix the interest
rate
on its floating rate debt. As of March 31, 2006, the Company had interest rate
exchange agreements with various banks pursuant to which the interest rate
on
$800.0 million is fixed at a weighted average rate of approximately 3.3%. The
Company’s interest rate exchange agreements are scheduled to expire on the
amounts of $500.0 million, $200.0 million and $100.0 million during the year
ended December 31, 2006, 2007 and 2009, respectively. For the three months
ended March 31, 2006, based on the mark-to-market valuation, the Company
recorded on its consolidated balance sheet an accumulated investment in
derivatives of $13.4 million, which is a component of prepaid and other
non-current assets and a gain on derivatives of $0.5 million and $8.0
million for the three months ended March 31, 2006 and 2005,
respectively.
|
(8)
|
Stockholder’s
Equity
|
Stock
Repurchase Plans
In
February 2006, the Board of Directors authorized an additional $50.0 million
stock repurchase program. During the three months ended March 31, 2006, the
Company repurchased approximately 3.9 million shares for an aggregate cost
of
$22.0 million, at an average price per share of $5.68. As of March 31, 2006,
approximately $51.4 million remains available under the Class A stock repurchase
program.
Share-based
Compensation
Effective
January 1, 2006, the Company adopted SFAS No. 123(R) using the modified
prospective method. SFAS No. 123(R) revises SFAS No. 123, “Accounting
for Stock-Based Compensation”(SFAS
No.
123) and supersedes Accounting Principles Board (“APB”) Opinion No. 25,
“Accounting
for Stock Issued to Employees”
(APB
No. 25). SFAS No. 123(R) requires the cost of all share-based payments to
employees, including grants of employee stock options, to be recognized in
the
financial statements based on their fair values at the grant date, or the date
of later modification, over the requisite service period. In addition, SFAS
123(R) requires unrecognized cost, based on the amounts previously disclosed
in
the Company’s pro forma footnote disclosure, related to options vesting after
the date of initial adoption to be recognized in the financial statements over
the remaining requisite service period.
Under
this method, prior periods are not restated and the amount of compensation
cost
recognized includes (i) compensation cost for all share-based payments granted
prior to, but not yet vested as of January 1, 2006, based on the grant date
fair
value estimated in accordance with the provisions of SFAS No. 123 and (ii)
compensation cost for all share-based payments granted subsequent to January
1,
2006, based on the grant date fair value estimated in accordance with the
provisions of SFAS No. 123(R). The Company uses the Black-Scholes option pricing
model which requires extensive use of accounting judgment and financial
estimates, including estimates of the expected term employees will retain their
vested stock options before exercising them, the estimated volatility of the
Company’s stock price over the expected term, and the number of options that
will be forfeited prior to the completion of their vesting requirements.
Application of alternative assumptions could produce significantly different
estimates of the fair value of share-based compensation and consequently, the
related amounts recognized in the Consolidated Statements of Operations. The
provisions of SFAS No. 123(R) apply to new stock awards and stock awards
outstanding, but not yet vested, on the effective date. In March 2005, the
SEC
issued Staff Accounting Bulletin No. 107, "Share-based Payment" (SAB
No. 107), relating to SFAS No. 123(R). We have applied the provisions of SAB
No.
107 in our adoption.
MEDIACOM
COMMUNICATIONS CORPORATION AND SUBSIDIARIES
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Impact
of the Adoption of SFAS No. 123(R)
Upon
adoption of SFAS 123(R), the Company recognizes share-based compensation
expenses associated with share awards on a straight-line basis over the
requisite service period using the fair value method. The incremental
share-based compensation expense recognized due to the adoption of SFAS
123(R)
was $0.7 million for the three months ended March 31, 2006. Compensation
expense
related to restricted stock units was recognized before the implementation
of
SFAS No. 123(R). Results for prior periods have not been restated.
Total
share-based compensation for the three month period ended March 31, 2006 was
as
follows (all dollar amounts in thousands except per share data):
|
Three
Months Ended
March
31,
2006
|
||||
|
Share-based
compensation expense by type of award:
|
||||
|
Employee
stock options
|
$
|
575
|
||
|
Employee
stock purchase plan
|
176
|
|||
|
Restricted
stock units
|
404
|
|||
|
Total
share-based compensation expense
|
1,155
|
|||
|
Tax
effect on stock-based compensation expense
|
-
|
|||
|
Net
effect on net loss
|
$
|
(1,155
|
)
|
|
|
Effect
on loss per share:
|
||||
|
Basic
and diluted
|
$
|
(0.01
|
)
|
|
As
required by SFAS No. 123(R), the Company made an estimate of expected
forfeitures and is recognizing compensation costs only for those equity awards
expected to vest. The cumulative effect of initially adopting SFAS No. 123(R)
was not material. The total future compensation cost related to unvested
share-based awards that are expected to vest was $9.7 milion as of March 31,
2006, which will be recognized over a weighted average period of 2.8 years.
In
November 2005, the FASB issued FASB Staff Position No. FAS 123(R)-3, Transition
Election Related to Accounting for Tax Effects of Shared-Based Payment Awards.
The Company has not yet adopted a method for calculating tax effects of
share-based compensation pursuant to SFAS No. 123(R).
Pro
Forma Information for Periods Prior to the Adoption of SFAS
No. 123(R)
Prior
to
January 1, 2006, the Company accounted for share-based compensation in
accordance with APB No. 25, as permitted by SFAS No. 123, and accordingly did
not recognize compensation expense for stock options with an exercise price
equal to or greater than the market price of the underlying stock at the date
of
grant. Had the fair value method prescribed by SFAS No. 123 been applied, the
effect on net loss and loss per share would have been as follows for the three
months ended March 31, 2005 (dollars in thousands, except per share
data):
|
Three
Months Ended
March
31,
2005
|
||||
|
Net
loss as reported
|
$
|
(841
|
)
|
|
|
Add:
Total
share-based compensation expense included in net loss as reported
above
|
151
|
|||
|
Deduct:
Total share-based compensation expense determined under fair value
based
method for all awards
|
(1,266 | ) | ||
|
Pro
forma net loss
|
$
|
(1,956
|
)
|
|
|
Basic
and diluted loss per share:
|
||||
|
As
reported
|
$
|
(0.01
|
)
|
|
|
Pro
forma
|
$
|
(0.02
|
)
|
|
MEDIACOM
COMMUNICATIONS CORPORATION AND SUBSIDIARIES
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Valuation
Assumptions
As
required by SFAS 123(R), the Company estimated the fair value of stock options
using the Black-Scholes valuation model and the straight-line attribution
approach with the following weighted average assumptions:
|
Employee
Stock Option Plans
Three
Months Ended
March
31,
|
Employee
Stock Purchase Plans
Three
Months Ended
March
31,
|
||||||||||||
|
2006
|
2005
|
2006
|
2005
|
||||||||||
|
Dividend
yield
|
0
|
%
|
0
|
%
|
0
|
%
|
0
|
%
|
|||||
|
Expected
volatility
|
55.3
|
%
|
45.0
|
%
|
33.0
|
%
|
45.0
|
%
|
|||||
|
Risk
free interest rate
|
4.8
|
%
|
3.4
|
%
|
4.8
|
%
|
3.7
|
%
|
|||||
|
Expected
option life (in years)
|
4.1
|
6.0
|
0.5
|
0.5
|
|||||||||
|
Forfeiture
rate
|
14.0
|
%
|
14.0
|
%
|
-
|
-
|
|||||||
The
Company does not expect to declare dividends. Expected volatility is based
on a
combination of implied and historical volatility of the Company’s Class A common
stock. Prior to January 1, 2006, the Company used historical data and other
factors to estimate the option life of the share-based payments granted. For
the
three months ended March 31, 2006, the Company elected the simplified method
in
accordance with SAB 107 to estimate the option life of share-based awards.
The risk free rate is based on the U.S. Treasury yield in effect at the date
of
grant. The forfeiture rate is based on trends in actual option
forfeitures.
Stock
Option Plan
In
April
2003, MCC’s Board of Directors adopted the Company’s 2003 Incentive Plan, or the
“2003 Plan”, which amended and restated the Company’s 1999 Stock Option Plan and
incorporated into the 2003 Plan options that were previously granted outside
the
1999 Stock Option Plan. The 2003 Plan was approved by MCC’s stockholders in June
2003. The 2003 Plan provides for the grant of incentive stock options,
nonqualified stock options, restricted shares, and other share-based awards,
in
addition to annual incentive awards.
MEDIACOM
COMMUNICATIONS CORPORATION AND SUBSIDIARIES
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
The
following table summarizes the activity of the Company’s option plans for the
three months ended March 31, 2006:
|
Shares
|
Weighted
Average
Exercise
Price
|
Weighted
Average
Remaining
Contractual
Term
(in
years)
|
||||||||
|
Outstanding
at January 1, 2006
|
4,931,915
|
$
|
14.12
|
|||||||
|
Granted
|
400,000
|
5.77
|
||||||||
|
Exercised
|
-
|
-
|
||||||||
|
Forfeited
|
(48,615
|
)
|
13.40
|
|||||||
|
Expired
|
-
|
-
|
||||||||
|
Outstanding
at March 31, 2006
|
5,283,300
|
$
|
13.36
|
5.2
|
||||||
|
Exercisable
at March 31, 2006
|
3,826,963
|
$
|
15.68
|
4.9
|
||||||
The
weighted average fair value at the date of grant of a Class A common stock
option granted under the Company’s option plan during the three months ended
March 31, 2006 and 2005 was $5.72 and $5.91, respectively. During the three
months ended March 31, 2006, approximately 259,685 shares vested with a weighted
average exercise price of $9.26.
The
following table summarizes information concerning stock options outstanding
as
of March 31, 2006:
|
Options
Outstanding
|
Options
Exercisable
|
||||||||||||||||||||||||
|
Range
of
Exercise
Prices
|
Number
of
Shares
Outstanding
|
Weighted
Average
Remaining
Contractual
Life
|
Weighted
Average
Exercise
Price
|
Aggregate
Intrinsic
Value
(in
thousands)
|
Number
of
Shares
Outstanding
|
Weighted
Average
Remaining
Contractual
Life
|
Weighted
Average
Exercise
Price
|
Aggregate
Intrinsic
Value
(in
thousands)
|
|||||||||||||||||
|
$5.00
- $12.00
|
2,580,260
|
6.4
years
|
$
|
7.81
|
$
|
104
|
1,141,973
|
6.7
years
|
$
|
8.61
|
$
|
22
|
|||||||||||||
|
$12.01
- $18.00
|
483,900
|
4.9
years
|
17.11
|
-
|
468,390
|
4.9
years
|
17.17
|
-
|
|||||||||||||||||
|
$18.01
- $22.00
|
2,219,050
|
3.8
years
|
19.01
|
-
|
2,216,600
|
3.7
years
|
19.00
|
-
|
|||||||||||||||||
|
|
5,283,300
|
5.2
years
|
$
|
13.36
|
$
|
104
|
3,826,963
|
4.9
years
|
$
|
15.68
|
$
|
22
|
|||||||||||||
The
aggregate intrinsic value in the table above represents the total pre-tax
intrinsic value, based on the Company’s average stock price of $5.80 per share
during the three months ended March 31, 2006, which would have been received
by
the option holders had all option holders exercised their options as of that
date.
Restricted
Stock Units
The
Company grants restricted stock units to certain employees and directors
(“participants”) in Class A common stock. Awards of restricted stock units
("RSUs") are valued by reference to shares of common stock that entitle
participants to receive, upon the settlement of the unit, one share of common
stock for each unit. The awards are subject to annual vesting periods not
exceeding 4 years from the date of grant. The Company made estimates of expected
forfeitures based on historic voluntary termination behavior and trends of
actual RSU forfeitures and recognized compensation costs for equity awards
expected to vest. The intrinsic value of outstanding RSUs, based on the
Company’s average stock price of $5.80 per share during the three months ended
March 31, 2006, was $8.8 million.
MEDIACOM
COMMUNICATIONS CORPORATION AND SUBSIDIARIES
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
The
following table summarizes the activity of the Company’s restricted stock unit
awards for the three months ended March 31, 2006:
|
Number
of Non-Vested
Share
Unit Awards
|
Weighted
Average
Grant
Date
Fair Value
|
||||||
|
Unvested
Awards at January 1, 2006
|
1,132,300
|
$
|
5.46
|
||||
|
Granted
|
411,700
|
5.74
|
|||||
|
Awards
Vested
|
(27,500
|
)
|
5.69
|
||||
|
Forfeited
|
(5,725
|
)
|
5.70
|
||||
|
Unvested
Awards at March 31, 2006
|
1,510,775
|
$
|
5.53
|
||||
Employee
Stock Purchase Plan
The
Company maintains an employee stock purchase plan (“ESPP”). Under the plan, all
employees are allowed to participate in the purchase of MCC’s Class A common
stock at 85% of the lower of the fair market value on the first or last day
of each six month offering period. Shares purchased by employees amounted to
94,317 and 85,716 for the three months ended for March 31, 2006 and 2005,
respectively. The net proceeds to the Company were approximately $0.5 million
for each of the periods ended March 31, 2006 and 2005, respectively.
Compensation expense related to the adoption of SFAS 123(R) was $0.2 million
for
the three months ended March 31, 2006. Compensation expense was not recorded
on
the issuance of these shares in accordance with APB No. 25 for the three months
ended March 31, 2005.
|
(9)
|
Commitments
and Contingencies
|
Legal
Proceedings
Mediacom
LLC, a wholly owned subsidiary of the Company, is named as a defendant in a
putative class action, captioned
Gary
Ogg and Janice Ogg v. Mediacom, LLC
(Case
No. CV101-2809CC), pending in
the
Circuit Court of Clay County, Missouri, by which the plaintiffs are seeking
class-based damages for an alleged trespass. The lawsuit was originally
filed on April 24, 2001. Pursuant to license agreements with the relevant
state and county authorities and utility companies, Mediacom LLC placed
interconnect fiber optic cable within state and county highway rights-of-way
and
on existing utility easements in areas of Missouri not presently served by
a
cable franchise. The lawsuit alleges that Mediacom LLC was required but
failed to obtain permission from the adjoining landowners to place the
cable. The lawsuit has not made a claim for specified damages. An
order declaring that this action is appropriate for class relief was entered
on
April 14, 2006, and Mediacom LLC is currently pursuing its appellate remedies
with respect to that order. Mediacom LLC intends to vigorously defend
against any claims made by the plaintiffs. Mediacom LLC has tendered the
lawsuit to its insurance carrier for defense and indemnification. The
carrier has agreed to defend Mediacom LLC under a reservation of rights, and
a
declaratory judgment action is pending regarding the carrier's defense and
coverage responsibilities. Mediacom LLC is unable to reasonably evaluate
the likelihood of an unfavorable outcome or quantify the possible damages,
if
any, associated with these matters, or judge whether or not those damages would
be material to its consolidated financial position, results of operations,
cash
flows or business.
The
Company is involved in various legal actions arising in the ordinary course
of
business. In the opinion of management, the ultimate disposition of these
matters will not have a material adverse effect on the Company’s consolidated
financial position, results of operations, cash flows or business.
MEDIACOM
COMMUNICATIONS CORPORATION AND SUBSIDIARIES
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
|
(10)
|
Income
Taxes
|
During
the quarter ended March 31, 2006, the Company determined that an additional
portion of its deferred tax assets from net operating loss carryforwards
will not be realized under the more-likely-than-not standard required by SFAS
No. 109, “Accounting
for Income Taxes.”
As a
result, the Company increased its valuation allowance and recognized a $32.1
million corresponding non-cash charge to income tax expense for the three months
ended March 31, 2006. This amount represents the portion of deferred tax
liabilities related to the basis differences of the Company’s indefinite-lived
intangible assets.
|
(11)
|
Related
Party Transactions
|
Mediacom
Management Corporation (“Mediacom Management”), a Delaware corporation, holds a
1% direct ownership interest in Mediacom California LLC, which in turn holds
a
1% interest in Mediacom Arizona LLC. These ownership interests represent less
than 1% of the Company’s total revenues. Mediacom Management is wholly-owned by
the Chairman and CEO of MCC.
One
of
the Company’s directors is a partner of a law firm that performs various legal
services for the Company. For the three months ended March 31, 2006 and 2005,
there were no amounts paid to this law firm for services performed.
|
(12)
|
Subsequent
Events
|
On
May 5,
2006, the operating subsidiaries of Mediacom LLC refinanced a $543.1 million
term loan with a new term loan in the amount of $650.0 million. Borrowings
under
the new term loan bear interest at a rate that is 0.5% less than the interest
rate of the term loan that it replaced. The new term loan matures in January
2015, whereas the term loan it replaced had a maturity of February
2013.
On
May 5,
2006, the operating subsidiaries of Mediacom Broadband LLC, one of the Company's
wholly-owned subsidiaries, refinanced a $495.0 million term loan with a new
term loan in the amount of $800.0 million. The new term loan consists of two
tranches: (i) a $550.0 million term loan which was funded on May 5, 2006; and
(ii) a $250.0 million delayed-draw term loan which the operating
subsidiaries may borrow at any time until July 1, 2006. Borrowings under
the new term loan bear interest at a rate that is 0.25% less than the interest
rate of the term loan that it replaced. The new term loan matures in January
2015, whereas the term loan it replaced had a maturity of February
2014.
|
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
|
The
following discussion should be read in conjunction with the Company’s unaudited
consolidated financial statements as of, and for the three months ended, March
31, 2006 and 2005, and with the Company’s annual report on Form 10-K for the
year ended December 31, 2005.
Overview
Mediacom
Communications Corporation is the nation’s eighth largest cable television
company based on customers served and the leading cable operator focused on
serving the smaller cities and towns in the United States. Through our
interactive broadband network, we provide our customers with a wide array of
broadband products and services, including video services, such as
video-on-demand (“VOD”), high-definition television (“HDTV”) and digital video
recorders (“DVRs”), high-speed data access (“HSD”), and phone service. Where our
phone service is available, we offer triple-play bundles of video, HSD and
voice. Bundled products and services offer our customers a single provider
contact for ordering, provisioning, billing and customer care.
As
of
March 31, 2006, our cable systems passed an estimated 2.81 million homes and
served 1.42 million basic video subscribers in 23 states. We provide digital
video services to 497,000 digital customers, representing a penetration of
35.0%
of our basic subscribers. We also currently provide HSD to 504,000 data
customers, representing a penetration of 17.9% of our estimated homes passed.
We
introduced phone service during the second quarter of 2005 and marketed and
provided service to about 1.6 million homes and 46,000 customers, respectively
as of March 31, 2006.
Adjusted
operating income before depreciation and amortization (“Adjusted OIBDA”) noted
below represents operating income before depreciation and amortization and
non-cash stock compensation charges. Adjusted OIBDA is not a financial measure
calculated in accordance with generally accepted accounting principles (“GAAP”)
in the United States of America. However, Adjusted OIBDA is one of the primary
measures used by management to evaluate our performance and to forecast future
results. We believe Adjusted OIBDA is useful for investors because it enables
them to assess our performance in a manner similar to the method used by
management, and provides a measure that can be used to analyze, value and
compare our performance with other companies in our business, although our
measure may not be directly comparable to similar measures used by other
companies. In addition, our debt agreements use Adjusted OIBDA in their covenant
calculations.
Limitations
of this measure, however, are that it excludes depreciation and amortization,
which represents the periodic costs of certain capitalized tangible and
intangible assets used in generating revenues in our business, and non-cash
stock compensation charges. Therefore, Adjusted OIBDA should not be regarded
as
a substitute for operating income, net income (loss), or net cash flows provided
from operating activities, or other measures of performance or liquidity
we have
reported in accordance with GAAP. We believe that operating income is the
most
directly comparable GAAP financial measure to Adjusted OIBDA. Refer to Note
8 of
our financial statements for more information on non-cash stock compensation
costs.
Actual
Results of Operations
Three
Months Ended March 31, 2006 Compared to Three Months Ended March 31,
2005
The
following table sets forth the unaudited consolidated statements of operations
for the three months ended March 31, 2006 and 2005 (dollars in thousands and
percentage changes that are not meaningful are marked NM):
|
Three
Months Ended
March
31,
|
|||||||||||||
|
2006
|
2005
|
$
Change
|
%
Change
|
||||||||||
|
Revenues
|
$
|
289,348
|
$
|
266,244
|
$
|
23,104
|
8.7
|
%
|
|||||
|
Costs
and expenses:
|
|||||||||||||
|
Service
costs
|
118,523
|
106,344
|
12,179
|
11.5
|
%
|
||||||||
|
Selling,
general and administrative expenses
|
58,428
|
55,652
|
2,776
|
5.0
|
%
|
||||||||
|
Corporate
expenses
|
5,984
|
5,274
|
710
|
13.5
|
%
|
||||||||
|
Depreciation
and amortization
|
53,717
|
53,925
|
(208
|
)
|
(0.4
|
%)
|
|||||||
|
Operating
income
|
52,696
|
45,049
|
7,647
|
17.0
|
%
|
||||||||
|
Interest
expense, net
|
(55,652
|
)
|
(51,274
|
)
|
(4,378
|
)
|
8.5
|
%
|
|||||
|
Gain
on derivatives, net
|
515
|
8,070
|
(7,555
|
)
|
NM
|
||||||||
|
Other
expense
|
(2,641
|
)
|
(2,696
|
)
|
55
|
(2.0
|
%)
|
||||||
|
Loss
before (provision for) benefit from income taxes
|
(5,082
|
)
|
(851
|
)
|
(4,231
|
)
|
NM
|
||||||
|
(Provision
for) benefit from income taxes
|
(32,126
|
)
|
10
|
(32,136
|
)
|
NM
|
|||||||
|
Net
loss
|
$
|
(37,208
|
)
|
$
|
(841
|
)
|
$
|
(36,367
|
)
|
NM
|
|||
The
following represents a reconciliation of Adjusted OIBDA to operating income,
which is the most directly comparable GAAP measure (dollars in
thousands):
|
Three
Months Ended
March
31,
|
|||||||||||||
|
2006
|
2005
|
$
Change
|
%
Change
|
||||||||||
|
Adjusted
OIBDA
|
$
|
107,568
|
$
|
99,125
|
$
|
8,443
|
8.5
|
%
|
|||||
|
Non-cash
stock compensation charges
|
(1,155
|
)
|
(151
|
)
|
(1,004
|
)
|
NM
|
||||||
|
Depreciation
and amortization
|
(53,717
|
)
|
(53,925
|
)
|
208
|
0.4
|
%
|
||||||
|
Operating
income
|
$
|
52,696
|
$
|
45,049
|
$
|
7,647
|
17.0
|
%
|
|||||
Revenues
The
following table sets forth revenue, subscriber and monthly average revenue
statistics for the three months ended March 31, 2006 and 2005 (dollars in
thousands, except per subscriber data):
|
Three
Months Ended
March
31,
|
|||||||||||||
|
2006
|
2005
|
$
Change
|
%
Change
|
||||||||||
|
Video
|
$
|
217,227
|
$
|
209,764
|
$
|
7,463
|
3.6
|
%
|
|||||
|
Data
|
55,092
|
45,041
|
10,051
|
22.3
|
%
|
||||||||
|
Phone
|
3,648
|
-
|
3,648
|
NM
|
|||||||||
|
Advertising
|
13,381
|
11,439
|
1,942
|
17.0
|
%
|
||||||||
|
$
|
289,348
|
$
|
266,244
|
$
|
23,104
|
8.7
|
%
|
||||||
|
Three
Months Ended
March
31,
|
|||||||||||||
|
2006
|
2005
|
Increase/(Decrease)
|
%
Change
|
||||||||||
|
Basic
subscribers
|
1,422,000
|
1,461,000
|
(39,000
|
)
|
(2.7
|
%)
|
|||||||
|
Data
customers
|
504,000
|
407,000
|
97,000
|
23.8
|
%
|
||||||||
|
Phone
customers
|
46,000
|
-
|
46,000
|
NM
|
|||||||||
|
Average
monthly video revenue per basic subscriber (1)
|
$
|
50.90
|
$
|
47.91
|
$
|
2.99
|
6.2
|
%
|
|||||
|
Average
monthly data revenue per data subscriber
(2)
|
$
|
37.40
|
$
|
38.80
|
$
|
(1.40
|
)
|
(3.6
|
%)
|
||||
(1)
Average
monthly video revenue per basic subscriber is calculated based on monthly video
revenue divided by the average number of basic subscribers for the
quarter.
(2)
Average
monthly data revenue per data subscriber is calculated based on monthly data
revenue divided by the average number of data subscribers for the
quarter.
Video
revenues represent monthly subscription fees charged to customers for our core
cable television products and services (including basic, expanded basic and
digital cable programming services, wire maintenance, equipment rental and
services to commercial establishments), pay-per-view charges, installation,
reconnection and late payment fees, and other ancillary revenues. Data revenues
primarily represent monthly subscription fees charged to customers, including
commercial establishments, for our data products and services and equipment
rental fees.
Revenues
rose 8.7%, largely attributable to growth in our data customers and higher
video
revenues. We continue to expand the availability, and enhance the quality,
of
our advanced video services, such as VOD, HDTV and DVRs. Over the past two
years, we have more than tripled the download speed of our HSD product. As
of
March 31, 2006, and within nine months of the initial launch of our phone
service, we were marketing this new product to almost 1.6 million homes in
our
markets. We believe that bundled products and services offer our customers
the
convenience of having a single provider contact for ordering, scheduling,
provisioning, billing and customer care. As a result, we grew our revenue
generating units (“RGUs”) by 7.4% during the three months ended March 31, 2006,
to 2.47 million from 2.30 million. RGUs represent the sum of basic subscribers
and digital, HSD and phone customers.
Video
revenues increased 3.6%, as a result of a higher service fees from our advanced
video products and services and the impact of basic rate increases applied
on
our video subscribers. Average monthly video revenue per basic video subscriber
increased 6.2%. During the three months ended March 31, 2006, we lost 1,000
subscribers compared to a gain of 3,000 subscribers for the same period last
year. Our loss of basic subscribers as of March 31, 2006, reflected losses
during the third quarter of 2005 as a result of Hurricane Katrina. Digital
customers increased 67,000 to 497,000 from the same period last year.
Data
revenues rose 22.3%, primarily
due to the 23.8% year-over-year increase in data customers, and to a lesser
extent, the growth of our enterprise network business. Average monthly data
revenue per data customer decreased 3.6% as a result of promotional offers
during 2005.
In
June
2005, we launched Mediacom Phone, and as of March 31, 2006, our phone service
was marketed to approximately 1.6 million of our estimated 2.8 million homes
and
served 46,000 customers. We expect to market Mediacom Phone to approximately
2.5
million homes by year-end 2006.
Advertising
revenues increased 17.0%, as a result of stronger local and regional advertising
.
Costs
and Expenses
Service
costs include: programming expenses; employee expenses related to wages and
salaries of technical personnel who maintain our cable network, perform customer
installation activities, and provide customer support; data costs, including
costs of bandwidth connectivity and customer provisioning; and field
operating costs, including outside contractors, vehicle, utilities and pole
rental expenses. Programming expenses, which are generally paid on a per
subscriber basis, have historically increased due to both increases in the
rates
charged for existing programming services and the introduction of new
programming services to our customers.
Service
costs rose 11.5%, primarily due to increases in programming costs, and, to
a
lesser extent, phone service and employee expenses. Programming expense, the
largest component of service costs, increased 10.2%, principally as a result
of
higher unit costs charged by our programming vendors and, to a lesser extent,
a
benefit we recognized in the first quarter of 2005 relating to a certain
contract renewal, offset in part by a lower base of basic subscribers. Recurring
expenses related to our phone service grew incrementally with the increase
of
customers since our launch of Mediacom Phone service in the second quarter
of
2006. Personnel costs grew by 7.2%, due to increased headcount of our technical
workforce for customer installation activity and higher employee related
insurance expenses.
Selling,
general and administrative expenses include: wages and salaries for our call
centers, customer service and support and administrative personnel; franchise
fees and taxes; and office costs related to billing, telecommunications,
marketing, bad debt, advertising and office administration.
Selling,
general and administrative expenses rose 5.0%, principally due to higher
employee and tax expenses, offset in part by a significant decrease in marketing
costs. Employee expenses grew 13.5%, as a result of increased headcount of
our
administrative, direct sales and customer service personnel. Taxes and other
fees were higher by 14.0%, primarily due to an increase in property taxes and
franchise fee expenses. The increase in these expenses was significantly offset
by a 27.0% decrease in marketing costs as a result of reduced contracted third
party sales and lower advertising expenses. Selling, general and administrative
expenses as a percentage of revenues were 20.2% and 21.0% for the three months
ended March 31, 2006 and 2005, respectively.
We
expect
continued revenue growth in advanced services, which include digital video,
HDTV, DVRs, HSD and phone service. As a result, we expect our service costs
and
selling, general and administrative expenses to increase.
Corporate
expenses reflect compensation of corporate employees and other corporate
overhead. Corporate expenses rose 13.5%, principally due to increases in
employee compensation which includes non-cash share-based compensation expense
of $710,000, offset in part by a decrease in professional fees. Corporate
expenses as a percentage of revenues were 2.1% and 2.0% for the three months
ended March 31, 2006 and 2005, respectively.
Adjusted
OIBDA
Adjusted
OIBDA rose 8.5%, principally due to revenue growth, partially offset by higher
costs and expenses.
Operating
Income
Operating
income grew 17.0%, largely due to growth in Adjusted OIBDA and
relatively unchanged depreciation and amortization expense.
Interest
Expense, Net
Interest
expense, net, increased by 8.5%, primarily due to higher market interest rates
on variable rate debt and to a lesser extent, higher average
indebtedness.
Gain
on Derivatives, Net
We
enter
into interest rate exchange agreements or “interest rate swaps,” with
counterparties to fix the interest rate on a portion of our variable rate debt
to reduce the potential volatility in our interest expense that would otherwise
result from changes in variable market interest rates. As of March 31, 2006
we
had interest rate swaps with an aggregate principal amount of $800.0 million.
The changes in their mark-to-market values are derived from changes in market
interest rates, the decrease in their time to maturity and the creditworthiness
of the counterparties. As a result of the quarterly mark-to-market valuation
of
these interest rate swaps, we recorded a gain on derivatives amounting to $0.5
million and $8.1 million for the three months ended March 31, 2006 and 2005,
respectively.
Other
Expense
Other
expense was $2.6 million and $2.7 million for the three months ended March
31,
2006 and 2005, respectively. Other expense primarily represents amortization
of
deferred financing costs and fees on unused credit commitments.
(Provision
for) Benefit from Income Taxes
Provision
for income taxes was approximately $32.1 million for the three months ended
March 31, 2006, as compared to a benefit from income taxes of $10,000 for the
three months ended March 31, 2005. During the quarter ended March 31, 2006,
based on our assessment of the facts and circumstances, we determined that
an
additional portion of our deferred tax assets from net operating loss
carryforwards will not be realized under the more-likely-than-not standard
required by SFAS No. 109. As
a
result, we increased our valuation allowance and recognized a $32.1 million
corresponding non-cash charge to income tax expense for the three months ended
March 31, 2006. This amount represents the portion of deferred tax liabilities
related to the basis differences of our indefinite-lived intangible assets.
Net
Loss
As
a
result of the factors described above, we incurred a net loss for the three
months ended March 31, 2006 of $37.2 million, as compared to net loss of $0.8
million for the three months ended March 31, 2005.
Liquidity
and Capital Resources
Overview
We
have
invested, and will continue to invest, in our network to enhance its reliability
and capacity, and in the further deployment of advanced broadband services.
Our
capital spending has recently shifted away from network upgrade investments
to
the deployment of VOD, HDTV, DVRs, HSD and phone services. We also may continue
to make strategic acquisitions of cable systems. We have a high level of
indebtedness and incur significant amounts of interest expense each year. We
believe that we will meet our debt service, capital spending and other
requirements through a combination of our net cash flows from operating
activities, borrowing availability under our bank credit facilities and our
ability to secure future external financing.
As
of
March 31, 2006, our total debt was $3.09 billion. Of this amount, $228.4 million
matures within the twelve months ending March 31, 2007. During the three months
ended March 31, 2006, we paid cash interest of $77.6 million. Our cash interest
payments have historically been higher in the first and third calendar quarters
of the year due to the timing of the cash interest payments on our senior notes
and convertible senior notes.
Most
of
our debt maturing within the twelve months ending March 31, 2007, consists
of
$172.5 million of convertible notes due July 1, 2006. Although we have not
yet
determined how we will satisfy that obligation, several alternatives may be
available to us, including the repayment of the notes with availability under
our subsidiary credit facilities. As of March 31, 2006, we had unused revolving
credit commitments of $813.0 million, all of which could be borrowed and used
for general corporate purposes based on the terms and conditions of our debt
arrangements.
On
May 5,
2006, we refinanced a $543.1 million term loan with a new term loan in the
amount of $650.0 million. Borrowings under the new term loan bear interest
at a
rate that is 0.5% less than the interest rate of the term loan that it replaced.
The new term loan matures in January 2015, whereas the term loan it replaced
had
a maturity of February 2013.
On
May 5,
2006, we refinanced a $495.0 million term loan with a new term loan in the
amount of $800.0 million. The new term loan consists of two tranches: (i) a
$550.0 million term loan which was funded on May 5, 2006; and (ii) a $250.0
million delayed-draw term loan which we may borrow at any time until July 1,
2006. Borrowings under the new term loan bear interest at a rate that is 0.25%
less than the interest rate of the term loan that it replaced. The new term
loan
matures in January 2015, whereas the term loan it replaced had a maturity of
February 2014.
As
of
March 31, 2006, after giving effect to these refinancings but excluding any
borrowings under the $250.0 million delayed-draw term loan, we had unused
credit
commitments of about $961.0 million, all of which could be borrowed and used
for
general corporate purposes based on the terms and conditions of our debt
arrangements. As of March 31, 2006, after giving effect to these
refinancings and assuming that the $250.0 million delayed-draw term loan
is
borrowed in full, we had unused credit commitments of about $1,011.0 million,
all of which could be borrowed and used for general corporate purposes based
on
the terms and conditions of our debt arrangements.
For
all
periods through March 31, 2006, we were in compliance with all of the covenants
under our debt arrangements. Continued access to our credit facilities is
subject to our remaining in compliance with the covenants of these credit
facilities, including covenants tied to our operating performance. We believe
that we will not have any difficulty in the foreseeable future complying with
these covenants and that we will meet our current and long-term debt service,
capital spending and other cash requirements through a combination of our net
cash flows from operating activities, borrowing availability under our bank
credit facilities and our ability to secure future external financing. However,
there can be no assurance that we will be able to obtain sufficient future
financing, or, if we were able to do so, that the terms would be favorable
to
us. We expect that we will continue to be able to generate funds and obtain
financing sufficient to service our long-term business plan, service our debt
obligations and complete any future acquisitions if the opportunities
arise.
Operating
Activities
Net
cash
flows provided by operating activities were $32.8 million for the three months
ended March 31, 2006, as compared to $29.3 million for the comparable period
last year. The change of $3.5 million is primarily due to higher operating
income, a net increase in operating assets and liabilities offset in part by
an
increase in cash paid for interest.
Operating
income increased $7.6 million principally from higher revenues. The change
in
operating assets and liabilities was lower by $0.5 million due to the timing
of
our cash payments and cash receipts. We made cash interest payments of $77.6
million and $70.6 million for the three months ended March 31, 2006 and 2005,
respectively.
Investing
Activities
Net
cash
flows used in investing activities were $47.6 million for the three months
ended
March 31, 2006, as compared to $54.8 million for the prior year consisted of
capital expenditures. Capital expenditures decreased $7.2 million mainly due
to
lower spending on customer premise equipment.
Financing
Activities
Net
cash
flows provided by financing activities were $18.4 million for the three months
ended March 31, 2006, as compared to net cash flows used in financing activities
of $7.5 million for the comparable period in 2005. Our principal financing
activities included the following:
•
Net
borrowings under our credit facilities of $33.4 million to fund operations
and
the share repurchase of our Class A common stock.
•
Pursuant
to our Board authorized share repurchase program, we repurchased approximately
3.9 million shares of our Class A common stock for approximately $22.0 million
during the three months ended March 31, 2006.
Contractual
Obligations and Commercial Commitments
There
have been no material changes to the Company’s contractual obligations
and
commercial commitments
as
previously disclosed in the Company’s Annual Report on Form 10-K for the year
ended December 31, 2005.
Critical
Accounting Judgments and Estimates
The
preparation of our financial statements requires us to make estimates and
assumptions that affect the reported amounts of assets, liabilities, revenues
and expenses, and related disclosure of contingent assets and liabilities.
Periodically, we evaluate our estimates, including those related to doubtful
accounts, long-lived assets, capitalized costs and accruals. We base our
estimates on historical experience and on various other assumptions that we
believe are reasonable. Actual results may differ from these estimates under
different assumptions or conditions.
Share-based
Compensation
We
estimate the fair value of stock options granted using the Black-Scholes
option-pricing model. This fair value is then amortized on a straight-line
basis
over the requisite service periods of the awards, which is generally the vesting
period. This option-pricing model requires the input of highly subjective
assumptions, including the option’s expected life and the price volatility of
the underlying stock. The estimation of stock awards that will ultimately vest
requires judgment, and to the extent actual results or updated estimates differ
from our current estimates, such amounts will be recorded as a cumulative
adjustment in the periods the estimates are revised. Actual results, and future
changes in estimates, may differ substantially from our current estimates.
For
a
discussion of other critical accounting judgments and estimates we identified
that we believe require significant judgment in the preparation of our
consolidated financial statements, please refer to our Form 10-K for the year
ended December 31 2005.
Inflation
and Changing Prices
Our
systems’ costs and expenses are subject to inflation and price fluctuations.
Such changes in costs and expenses can generally be passed through to
subscribers. Programming costs have historically increased at rates in excess
of
inflation and are expected to continue to do so. We believe that under the
Federal Communications Commission’s existing cable rate regulations we may
increase rates for cable television services to more than cover any increases
in
programming. However, competitive conditions and other factors in the
marketplace may limit our ability to increase our rates.
|
ITEM
3.
|
QUANTITATIVE
AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK
|
There
have been no significant changes to the information required under this Item
from what was disclosed in our 2005 Form 10-K.
|
ITEM
4.
|
CONTROLS
AND PROCEDURES
|
Our
management carried out an evaluation, with the participation of our Chief
Executive Officer and Chief Financial Officer, of the effectiveness of our
disclosure controls and procedures as of March 31, 2006. Based upon that
evaluation, our Chief Executive Officer and Chief Financial Officer concluded
that our disclosure controls and procedures were effective to ensure that
information required to be disclosed by us in reports that we file or submit
under the Securities Exchange Act of 1934 is recorded, processed, summarized
and
reported within the time periods specified in the rules and forms of the
Securities and Exchange Commission. Disclosure controls and procedures include,
without limitation, controls and procedures designed to ensure that information
required to be disclosed by an issuer in the reports that it files or submits
under the Exchange Act are accumulated and communicated to the issuer's
management, including its principal executive and principal financial officers,
or persons performing similar functions, as appropriate to allow timely
decisions regarding required disclosure.
There
has
not been any change in our internal control over financial reporting in
connection with the evaluation required by Rule 13a-15(d) under the Exchange
Act
that occurred during the quarter ended March 31, 2006 that has materially
affected, or is reasonably likely to materially affect, our internal control
over financial reporting.
|
ITEM
1.
|
LEGAL
PROCEEDINGS
|
See
Note
9 to our consolidated financial statements.
|
RISK
FACTORS
|
There
have been no material changes in the risk factors from those disclosed in our
risk factors section in Item 1A of our 2005 Form 10-K.
|
ITEM
2.
|
UNREGISTERED
SALE OF EQUITY SECURITIES AND USE OF
PROCEEDS
|
During
the quarter ended March 31, 2006, we granted stock options to certain of our
employees and non-employee directors to purchase an aggregate of 400,000 shares
of Class A common stock at exercise prices ranging from $5.68 to $5.83 per
share. The grant of stock options to the employees and non-employee directors
was not registered under the Securities Act of 1933 because the stock options
either did not involve an offer or sale for purposes of Section 2(a)(3) of
the
Securities Act of 1933, in reliance on the fact that the stock options were
granted for no consideration, or were offered and sold in transactions not
involving a public offering, exempt from registration under the Securities
Act
of 1933 pursuant to Section 4(2).
The
following is a summary of our share repurchases of our Class A common stock
during the first quarter of 2006 under our Board-authorized repurchase
program:
|
Period
|
Total
Number
of
Shares
Purchased
|
(1) |
Average
Price
Per
Share
|
Total
Number of
Shares
Purchased
as
Part of Publicly
Announced
Program
|
Total
Dollars
Purchased
Under
the
Program
|
Approxiamte
Dollar
Value
of Shares that
May
Yet Be
Purchased
Under
the
Program
|
(2) | |||||||||
|
January
|
1,650,000
|
$
|
5.70
|
1,650,000
|
$
|
9,410,227
|
$
|
13,953,640
|
||||||||
|
February
|
466,300
|
5.82
|
466,300
|
2,715,192
|
61,238,448
|
|||||||||||
|
March
|
1,745,000
|
5.63
|
1,745,000
|
9,824,746
|
51,413,702
|
|||||||||||
|
First
Quarter 2006
|
3,861,300
|
$
|
5.68
|
3,861,300
|
$
|
21,950,165
|
$
|
51,413,702
|
||||||||
(1)
Total
number of shares purchased does not include approximately 10,305 withheld to
satisfy tax withholding obligations on vesting of restricted stock units.
(2)
A
$50.0
million share repurchase plan was authorized by our Board of Directors in May
2000 and reaffirmed in August 2004. On February 21, 2006, our Board authorized
an additional $50.0 million stock repurchase program.
|
ITEM
5.
|
OTHER
INFORMATION
|
On
May 5,
2006, the operating subsidiaries of Mediacom LLC refinanced a $543.1 million
term loan with a new term loan in the amount of $650.0 million. Borrowings
under
the new term loan bear interest at a floating rate or rates equal to, at the
option of the operating subsidiaries, the LIBOR rate or the prime rate, plus
a
margin specified in their credit facility. The margin of the new term
loan is 0.5% less than the margin of the term loan that it replaced. The
new term loan matures in January 2015, whereas the term loan it replaced had
a
maturity of February 2013. The obligations of the operating subsidiaries under
the new term loan are governed by the terms of their credit
facility.
On
May 5,
2006, the operating subsidiaries of Mediacom Broadband LLC refinanced a $495.0
million term loan with a new term loan in the amount of $800.0 million. The
new
term loan consists of two tranches: (i) a $550.0 million term loan which was
funded on May 5, 2006; and (ii) a $250.0 million delayed-draw term loan
which the operating subsidiaries may borrow at any time until July 1,
2006. Borrowings under the new term loan bear interest at a floating rate or
rates equal to, at the option of the operating subsidiaries, the LIBOR rate
or
the prime rate, plus a margin specified in their credit facility. The margin
of
the new term loan is 0.25% less than the interest rate of the term loan that
it
replaced. The new term loan matures in January 2015, whereas the term loan
it
replaced had a maturity of February 2014. The obligations of the operating
subsidiaries under the new term loan are governed by the terms of their credit
facility.
Proceeds
from each new term loan were used to pay in full the outstanding indebtedness
of
the term loan it replaced and to reduce the outstanding balance
of the revolving credit portion of each credit
facility.
JPMorgan
Chase Bank (the administrative agent of the credit facilities), several of
the
lenders of the Broadband credit facility or their respective affiliates have
in
the past performed, and may in the future from time to time perform, investment
banking, financial advisory, lending and/or commercial banking services for
the
Registrant and certain of its subsidiaries and affiliates, for which service
they have in the past received, and may in the future receive, customary
compensation and reimbursement of expenses.
|
EXHIBITS
|
|
Exhibit
Number
|
Exhibit
Description
|
|
|
Incremental
Facility Agreement, dated as of May 5, 2006, between the operating
subsidiaries of Mediacom LLC, the lenders signatory thereto and JPMorgan
Chase Bank, N.A., as administrative agent
|
||
|
Incremental
Facility Agreement, dated as of May 5, 2006, between the operating
subsidiaries of Mediacom Broadband LLC, the lenders signatory thereto
and
JPMorgan Chase Bank, N.A., as administrative agent
|
||
|
Amendment
No. 1, dated as of May 5, 2006, to the Credit Agreement, dated as
of
October 21, 2004, among the operating subsidiaries of Mediacom LLC,
the
lenders thereto and JPMorgan Chase Bank, as administrative agent
for the
lenders.
|
||
|
Amendment
No. 2, dated as of May 5, 2006, to the Amendment and Restatement,
dated as
of December 16, 2004, of Credit Agreement, dated as of July 18, 2001,
among the operating subsidiaries of Mediacom Broadband LLC, the lenders
thereto and JP Morgan Chase Bank, as administrative agent for the
lenders.
|
||
|
Rule
13a-14(a) Certifications
|
||
|
Section
1350 Certifications
|
SIGNATURES
Pursuant
to the requirements 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.
|
MEDIACOM
COMMUNICATIONS CORPORATION
|
|||
|
May
10, 2006
|
By:
|
/s/
MARK E. STEPHAN
|
|
|
Mark
E. Stephan
|
|||
|
Executive
Vice President and Chief Financial Officer
|
|||
25
EXECUTION
COPY
*****************************************************************
$650,000,000
INCREMENTAL
FACILITY AGREEMENT
(TRANCHE
C TERM LOANS)
dated
as
of May 5, 2006
between
MEDIACOM
ILLINOIS LLC
MEDIACOM
INDIANA LLC
MEDIACOM
IOWA LLC
MEDIACOM
MINNESOTA LLC
MEDIACOM
WISCONSIN LLC
ZYLSTRA
COMMUNICATIONS CORP.
MEDIACOM
ARIZONA LLC
MEDIACOM
CALIFORNIA LLC
MEDIACOM
DELAWARE LLC
MEDIACOM
SOUTHEAST LLC
The
LENDERS Party Hereto
J.P.
MORGAN SECURITIES INC. and
WACHOVIA
CAPITAL MARKETS, LLC,
as
Joint
Lead Arrangers and Joint Bookrunners
and
JPMORGAN
CHASE BANK, N.A.
as
Administrative Agent
GOLDMAN
SACHS CREDIT PARTNERS, L.P.,
SOCIÉTÉ
GÉNÉRALE and
SUNTRUST
BANK,
as
Documentation Agents
WACHOVIA
CAPITAL MARKETS, LLC,
as
Syndication Agent
*****************************************************************
INCREMENTAL
FACILITY AGREEMENT
(TRANCHE
C TERM LOANS)
INCREMENTAL
FACILITY AGREEMENT dated as of May 5, 2006, between MEDIACOM ILLINOIS LLC,
a
limited liability company duly organized and validly existing under the laws
of
the State of Delaware (“Mediacom
Illinois”);
MEDIACOM INDIANA LLC, a limited liability company duly organized and validly
existing under the laws of the State of Delaware (“Mediacom
Indiana”);
MEDIACOM IOWA LLC, a limited liability company duly organized and validly
existing under the laws of the State of Delaware (“Mediacom
Iowa”);
MEDIACOM MINNESOTA LLC, a limited liability company duly organized and validly
existing under the laws of the State of Delaware (“Mediacom
Minnesota”);
MEDIACOM WISCONSIN LLC, a limited liability company duly organized and validly
existing under the laws of the State of Delaware (“Mediacom
Wisconsin”);
ZYLSTRA COMMUNICATIONS CORP., a corporation duly organized and validly existing
under the laws of the State of Minnesota (“Zylstra”
and,
together with Mediacom Illinois, Mediacom Indiana, Mediacom Iowa, Mediacom
Minnesota and Mediacom Wisconsin, the “Mediacom
Midwest Borrowers”);
MEDIACOM ARIZONA LLC, a limited liability company duly organized and validly
existing under the laws of the State of Delaware (“Mediacom
Arizona”);
MEDIACOM CALIFORNIA LLC, a limited liability company duly organized and validly
existing under the laws of the State of Delaware (“Mediacom
California”);
MEDIACOM DELAWARE LLC, a limited liability company duly organized and validly
existing under the laws of the State of Delaware (“Mediacom
Delaware”);
and
MEDIACOM SOUTHEAST LLC, a limited liability company duly organized and validly
existing under the laws of the State of Delaware (“Mediacom
Southeast”
and,
together with Mediacom Arizona, Mediacom California and Mediacom Delaware,
the
“Mediacom
USA Borrowers”;
the
Mediacom USA Borrowers together with the Mediacom Midwest Borrowers, the
“Borrowers”);
the
TRANCHE C TERM LOAN LENDERS party hereto (including each Tranche C Term Loan
Lender as defined below that becomes a party hereto pursuant to a Lender
Addendum as defined below) and JPMORGAN CHASE BANK, N.A., as Administrative
Agent for the Lenders (together with its successors in such capacity, the
“Administrative
Agent”).
The
Borrowers, the Lenders party thereto and the Administrative Agent are parties
to
Credit Agreement (the “Credit
Agreement”)
dated
as of October 21, 2004.
Section
2.01(d) of the Credit Agreement contemplates that at any time and from time
to
time, the Borrowers may request that one or more persons (which may include
the
Lenders under and as defined in the Credit Agreement) offer to enter into
commitments to make (or, as provided herein, to convert Tranche B Term Loans
into) Incremental Facility Loans. The Borrowers have requested that $650,000,000
of Incremental Term Loans be made available to it in a single Series of term
loans. Upon the effectiveness of Amendment No. 1 (as defined below),
Incremental
Facility Agreement (Tranche C Term Loans)
$550,000,000
aggregate principal amount of the Incremental Term Loans will constitute
Reinstating Incremental Facility Term Loans. The Tranche C Term Loan Lenders
(as
defined below) are willing to make (or to convert Tranche B Term Loans into)
such loans on the terms and conditions set forth below and in accordance with
the applicable provisions of the Credit Agreement, and accordingly, the parties
hereto hereby agree as follows:
ARTICLE
I
DEFINED
TERMS
Terms
defined in the Credit Agreement are used herein as defined therein. In addition,
the following terms have the meanings specified below:
“Amendment
No. 1”
shall
mean Amendment No. 1 to the Credit Agreement, between the Borrowers and the
Administrative Agent, substantially in the form of Schedule II hereto, dated
the
date hereof.
“Lender
Addendum”
shall
mean, with respect to any Tranche C Term Loan Lender, a Lender Addendum
substantially in the form of Schedule I hereto, dated as of the date hereof
and executed and delivered by such Tranche C Term Loan Lender as provided in
Section 2.06.
“Tranche
C Term Loan Commitment”
shall
mean, with respect to each Tranche C Term Loan Lender, the commitment of such
Lender to make Tranche C Term Loans hereunder (or, as provided herein, to
convert Tranche B Term Loans into Tranche C Terms Loans hereunder). The amount
of each Tranche C Term Loan Lender’s Tranche C Term Loan Commitment is set forth
in the Lender Addendum executed and delivered by such Tranche C Term Loan
Lender. The aggregate original amount of the Tranche C Term Loan Commitments
is
$650,000,000.
“Tranche
C Term Loan Lender”
shall
mean (a) on the date hereof, a Lender that has executed and delivered a
Lender Addendum and (b) thereafter, the Lenders from time to time holding
Tranche C Term Loan Commitments or Tranche C Term Loans after giving effect
to
any assignments thereof pursuant to Section 11.06 of the Credit
Agreement.
“Tranche
C Term Loan”
shall
mean a Loan made (or, as provided herein, converted from Tranche B Term Loans)
pursuant to this Agreement which shall constitute a single Series of Incremental
Facility Term Loans under Section 2.01(d) of the Credit
Agreement.
Incremental
Facility Agreement (Tranche C Term Loans)
“Tranche
C Term Loan Effective Date”
shall
mean the date on which the conditions specified in Article IV are satisfied
(or
waived by the Majority Tranche C Term Loan Lenders).
“Tranche
C Term Loan Maturity Date”
shall
mean January 31, 2015.
ARTICLE
II
TRANCHE
C
TERM LOANS
Section
2.01. Commitments.
Subject
to the terms and conditions set forth herein and in the Credit Agreement, each
Tranche C Term Loan Lender agrees to make Tranche C Term Loans to the Borrowers
(or, as provided below, to convert Tranche B Term Loans) in Dollars, in an
aggregate principal amount equal to such Tranche C Term Loan Lender’s Tranche C
Term Loan Commitment. Proceeds of Tranche C Term Loans shall be available for
the prepayment of the Tranche B Term Loans, the making of Restricted Payments
permitted under the Credit Agreement, the payment of fees and expenses related
thereto and any use permitted under Section 8.16(b) of the Credit Agreement
(including the general business purposes of the Borrowers).
Notwithstanding
the foregoing, it is understood and agreed that any Tranche C Term Loan Lender
that also holds any Tranche B Term Loans may elect, by notice to the
Administrative Agent, that the Tranche C Term Loans required to be made by
such
Lender on the Tranche C Term Loan Effective Date shall, to the extent of the
portion of such Tranche C Term Loans not exceeding the aggregate principal
amount of the Tranche B Term Loans of such Lender, be made through such Tranche
B Term Loans being converted into Tranche C Term Loans (and
each
reference in this Agreement or the Credit Agreement to the “making” of any
Tranche C Term Loan, or words of similar import, shall in the case of such
Lender be deemed to include such conversion). Without limiting the generality
of
the foregoing, it is understood that the Tranche C Term Loans into which the
Tranche B Term Loans are so converted shall be treated identically to the
Tranche C Terms Loans being funded (and not being converted from Tranche B
Term
Loans) on the Tranche C Term Loan Effective Date and shall have identical
Interest Periods in identical proportions and durations as all other Tranche
C
Loans (and, for these purposes, any Interest Periods for Tranche B Term Loans
that are Eurodollar Loans in effect on the Tranche C Term Loan Effective Date
shall be terminated on the Tranche C Term Loan Effective Date, and any such
converting Lender shall be paid accrued interest on its Tranche B Term Loans
being
so
converted, together with any amounts payable under Section 5.05 of the
Credit Agreement, as if the Tranche B Term Loans were being prepaid in full
on
the Tranche C Term Loan Effective Date).
Incremental
Facility Agreement (Tranche C Term Loans)
Section
2.02. Termination
of Commitments.
Unless
previously terminated, the Tranche C Term Loan Commitments shall terminate
after
the Borrowing of the Tranche C Term Loans on the Tranche C Term Loan Effective
Date.
Section
2.03. Repayment
of Loans.
The
Borrowers hereby jointly and severally unconditionally promise to pay to the
Administrative Agent for the account of the Tranche C Term Loan Lenders the
principal of the Tranche C Term Loans on each Principal Payment Date set forth
in column (A) below, by an amount equal to the percentage of the Tranche C
Term Loan Closing Balance (as defined below) set forth in column (B) below
of
the aggregate principal amount of the Tranche C Term Loans:
|
(A)
|
(B)
|
||
|
Principal
Payment Date
|
Percentage
Reduction
|
||
|
March
31, 2007
|
0.250%
|
||
|
June
30, 2007
|
0.250%
|
||
|
September
30, 2007
|
0.250%
|
||
|
December
31, 2007
|
0.250%
|
||
|
March
31, 2008
|
0.250%
|
||
|
June
30, 2008
|
0.250%
|
||
|
September
30, 2008
|
0.250%
|
||
|
December
31, 2008
|
0.250%
|
||
|
March
31, 2009
|
0.250%
|
||
|
June
30, 2009
|
0.250%
|
||
|
September
30, 2009
|
0.250%
|
||
|
December
31, 2009
|
0.250%
|
||
|
March
31, 2010
|
0.250%
|
||
|
June
30, 2010
|
0.250%
|
||
|
September
30, 2010
|
0.250%
|
||
|
December
31, 2010
|
0.250%
|
||
|
March
31, 2011
|
0.250%
|
||
|
June
30, 2011
|
0.250%
|
||
|
September
30, 2011
|
0.250%
|
||
|
December
31, 2011
|
0.250%
|
||
Incremental
Facility Agreement (Tranche C Term Loans)
|
March
31, 2012
|
0.250%
|
||
|
June
30, 2012
|
0.250%
|
||
|
September
30, 2012
|
0.250%
|
||
|
December
31, 2012
|
0.250%
|
||
|
March
31, 2013
|
0.250%
|
||
|
June
30, 2013
|
0.250%
|
||
|
September
30, 2013
|
0.250%
|
||
|
December
31, 2013
|
0.250%
|
||
|
March
31, 2014
|
0.250%
|
||
|
June
30, 2014
|
0.250%
|
||
|
September
30, 2014
|
0.250%
|
||
|
December
31, 2014
|
0.250%
|
||
|
January
31, 2015
|
92.00%
|
For
purposes hereof, the “Tranche
C Term Loan Closing Balance”
shall
mean the aggregate principal amount of the Tranche C Term Loans outstanding
hereunder on the close of business on the Tranche C Term Loan Effective
Date.
To
the
extent not previously paid, all Tranche C Term Loans shall be due and payable
on
the Tranche C Term Loan Maturity Date. Notwithstanding the foregoing, if on
any
date (the “Test
Date”)
the
maturity date of the 9 ½% Senior Notes due 2013 of Mediacom LLC shall fall
within three months of the Test Date, then the Tranche C Term Loans shall be
paid in full on the Test Date.
Section
2.04. Applicable
Margin.
The
Applicable Margin for Tranche C Term Loans of any Type shall be the rates
indicated below for Loans of such Type opposite the then current Rate Ratio
(determined pursuant to Section 3.03 of the Credit Agreement) indicated below
(except that anything in this Agreement or the Credit Agreement to the contrary
notwithstanding, the Applicable Margin with respect to the Loans of any Type
shall be the highest margins indicated below during any period when an Event
of
Default shall have occurred and be continuing):
|
Rate
Ratio
|
Base
Rate Loans
|
Eurodollar
Loans
|
|
Greater
than 3.50 to 1
|
0.75%
|
1.75%
|
|
Less
than or equal to 3.50 to 1
|
0.50%
|
1.50%
|
Incremental
Facility Agreement (Tranche C Term Loans)
Section
2.05. Prepayment
Premium.
Any
optional prepayment of Tranche C Term Loans effected on or prior to the first
anniversary of the Tranche C Term Loan Effective Date with the proceeds of
a
substantially concurrent borrowing of bank debt (including any Incremental
Facility Term Loans or other term loans permitted under the Credit Agreement
pursuant to an amendment thereto, including any conversion of Tranche C Term
Loans into any such other borrowings), shall be accompanied by a prepayment
fee
equal to 1.00% of the aggregate amount of such prepayment in the event that
the
Applicable Margin in respect of such Incremental Facility Term Loans (or other
term loans) is less than the corresponding Applicable Margin in respect of
the
Tranche C Term Loans.
Section
2.06. Delivery
of Lender Addenda.
Each
Tranche C Term Loan Lender shall become a party to this Agreement by delivering
to the Administrative Agent a Lender Addendum duly executed by such Tranche
C
Term Loan Lender, the Borrowers and the Administrative Agent.
Section
2.07. Status
of Agreement.
The
Tranche C Term Loan Commitments of the Tranche C Term Lenders constitute
Incremental Term Loan Commitments. Upon the effectiveness of Amendment No.
1
(i) $550,000,000 of such Tranche C Term Loan Commitments will constitute
Reinstating Incremental Facility Term Loan Commitments and
(ii) $100,000,000 of such Tranche C Term Loan Commitments will constitute
utilization of the $650,000,000 of Incremental Term Loans available under
Section 2.01(d)(iii). In addition, the Tranche C Term Loan Lenders constitute
Incremental Facility Term Loan Lenders and the Tranche C Term Loans constitute
a
single Series of Incremental Facility Term Loans under Section 2.01(d) of the
Credit Agreement.
ARTICLE
III
REPRESENTATION
AND WARRANTIES; NO DEFAULTS
The
Borrowers represent and warrant to the Administrative Agent and the Lenders
that
(i) each of the representations and warranties made by the Borrowers in
Section 7 of the Credit Agreement, and by each Obligor in the other Loan
Documents to which it is a party, is true and complete on and as of the date
hereof with the same force and effect as if made on and as of the date hereof
(or, if any such representation or warranty is expressly stated to have been
made as of a specific date, as of such specific date) and as if each reference
therein to the Credit Agreement or Loan Documents included reference to this
Agreement and (ii) no Default has occurred and is continuing.
Incremental
Facility Agreement (Tranche C Term Loans)
ARTICLE
IV
CONDITIONS
The
obligations of the Tranche C Term Loan Lenders to make Tranche C Term Loans
are
subject to the conditions precedent that each of the following conditions shall
have been satisfied (or waived by the Majority Tranche C Term Loan
Lenders):
(a) Counterparts
of Agreement.
The
Administrative Agent shall have received duly executed and delivered
counterparts (or written evidence thereof satisfactory to the Administrative
Agent, which may include telecopy transmission of, as applicable, a signed
signature page or Lender Addendum) of (i) this Agreement from each Obligor
and (ii) Lender Addenda from the Tranche C Term Loan Lenders for aggregate
Tranche C Term Loan Commitments in an amount equal to $650,000,000.
(b) Opinion
of Counsel to Obligors.
The
Administrative Agent shall have received an opinion, dated the Tranche C Term
Loan Effective Date, of Sonnenschein Nath & Rosenthal LLP, counsel to the
Obligors, covering such matters as the Administrative Agent or any Tranche
C
Term Loan Lender may reasonably request (and the Borrowers hereby instruct
counsel to deliver such opinion to the Tranche C Term Loan Lenders and the
Administrative Agent).
(c) Organizational
Documents.
Such
organizational documents (including, without limitation, board of director
and
shareholder resolutions, member approvals and evidence of incumbency, including
specimen signatures, of officers of each Obligor) with respect to the execution,
delivery and performance of this Agreement and each other document to be
delivered by such Obligor from time to time in connection herewith and the
extensions of credit hereunder as the Administrative Agent may reasonably
request (and the Administrative Agent and each Lender may conclusively rely
on
such certificate until it receives notice in writing from such Obligor to the
contrary).
(d) Officer’s
Certificate.
A
certificate of a Senior Officer, dated the Tranche C Term Loan Effective Date,
to the effect that (i) the representations and warranties made by the
Borrowers in Article III hereof, and by each Obligor in the other Loan Documents
to which it is a party, are true and complete on and as of the date hereof
with
the same force and effect as if made on and as of such date (or, if any such
representation and warranty is expressly stated to have been made as of a
specific date, as of such specific date) and (ii) no Default shall have
occurred and be continuing.
(e) Fees
and Expenses.
The
Administrative Agent, and JPMorgan Securities Inc. and Wachovia Capital Markets,
LLC as the Joint Lead Arrangers and Joint Bookrunners, shall have received
all
fees and other amounts due and payable on or prior
Incremental
Facility Agreement (Tranche C Term Loans)
to
the
Tranche C Term Loan Effective Date, including, to the extent invoiced,
reimbursement or payment of all out-of-pocket expenses required to be reimbursed
or paid by the Borrowers hereunder.
(f)
Prepayment
of Tranche B Term Loans.
The
principal of and interest on and all other amounts (including any amounts
payable under Section 5.05 of the Credit Agreement) owing in respect of the
Tranche B Term Loans shall, to the extent not converted into Tranche C Term
Loans as provided herein, have been (or shall be concurrently) prepaid in full
from funds available to the Borrowers and the proceeds of the Tranche C Term
Loans.
(g) Other
Documents.
Such
other documents as the Administrative Agent or any Tranche C Term Loan Lender
or
special New York counsel to JPMCB may reasonably request.
ARTICLE
V
MISCELLANEOUS
SECTION
5.01. Expenses.
Subject
to the provisions of the Engagement Letter dated as of April 3, 2006 among
Mediacom LLC, J.P. Morgan Securities Inc. and Wachovia Capital Markets, LLC,
the
Obligors jointly and severally agree to pay, or reimburse JPMorgan Securities
Inc. and Wachovia Capital Markets, LLC for paying, all reasonable out-of-pocket
expenses incurred by JPMorgan Securities Inc. and Wachovia Capital Markets,
LLC
and their Affiliates, including the reasonable fees, charges and disbursements
of special New York counsel to JPMCB, in connection with the syndication of
the
Incremental Facility Loans provided for herein and the preparation of this
Agreement.
SECTION
5.02. Counterparts;
Integration; Effectiveness.
This
Agreement may be executed in counterparts (and by different parties hereto
on
different counterparts), each of which shall constitute an original, but all
of
which when taken together shall constitute a single contract. This Agreement
shall become effective when this Agreement shall have been executed by the
Administrative Agent and when the Administrative Agent shall have received
counterparts hereof and thereof which, when taken together, bear the signatures
of each of the other parties hereto and thereto, and thereafter shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns. Delivery of an executed counterpart of a signature
page
of this Agreement by telecopy shall be effective as delivery of a manually
executed counterpart of this Agreement.
SECTION
5.03. Governing
Law.
This
Agreement shall be governed by, and construed in accordance with, the law of
the
State of New York (without giving effect to any conflict of laws principles
under New York law).
Incremental
Facility Agreement (Tranche C Term Loans)
SECTION
5.04. Headings.
Article
and Section headings used herein are for convenience of reference only, are
not
part of this Agreement and shall not affect the construction of, or be taken
into consideration in interpreting, this Agreement.
SECTION
5.05. Amendment.
Each
Tranche C Term Loan Lender party to this Agreement hereby authorizes and directs
the Administrative Agent (a) to execute and deliver on its behalf
Amendment No. 1 and (b) to consent to amendments to any instrument or
agreement representing Affiliate Subordinated Indebtedness to extend the
maturity of such instrument or agreement to the date contemplated in said
Amendment No. 1.
Incremental
Facility Agreement (Tranche C Term Loans)
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered as of the day and year first above written.
|
MEDIACOM
ILLINOIS LLC
|
|||
|
MEDIACOM
INDIANA LLC
|
|||
|
MEDIACOM
IOWA LLC
|
|||
|
MEDIACOM
MINNESOTA LLC
|
|||
|
MEDIACOM
WISCONSIN LLC
|
|||
|
MEDIACOM
ARIZONA LLC
|
|||
|
MEDIACOM
CALIFORNIA LLC
|
|||
|
MEDIACOM
DELAWARE LLC
|
|||
|
MEDIACOM
SOUTHEAST LLC
|
|||
|
By:
|
Mediacom
LLC, Member
|
||
|
By:
|
Mediacom
Communications
|
||
|
Corporation,
Member
|
|||
|
By:
|
/s/ | ||
|
Name:
|
|||
|
Title:
|
|||
|
ZYLSTRA
COMMUNICATIONS CORP.
|
|||
|
By:
|
/s/ | ||
|
Name:
|
|||
|
Title:
|
|||
|
|
|||
|
c/o
Mediacom LLC
|
|||
|
100
Crystal Run Road
|
|||
|
Middletown,
New York 10941
|
|||
|
Attention:
Mark Stephan
|
|||
|
Telecopier
No.: (845) 695-2639
|
|||
|
Telephone
No.: (845) 695-2600
|
|||
Incremental
Facility Agreement (Tranche C Term Loans)
|
JPMORGAN
CHASE BANK, N.A,
|
|||
|
as
Administrative Agent
|
|||
|
By:
|
/s/ | ||
|
Name:
|
|||
|
Title:
|
|||
|
Address
for Notices to
|
|||
|
JPMorgan
Chase Bank, N.A.,
|
|||
|
as
Administrative Agent:
|
|||
|
JPMorgan
Chase Bank, N.A.
|
|||
|
1111
Fannin Street, 10th
Floor
|
|||
|
Houston,
Texas 77002-8069
|
|||
|
Attention:
Loan
and Agency Services Group
|
|||
|
Telephone
No.: 713-750-2102
|
|||
|
Telecopier
No.: 713-750-2782
|
|||
Incremental
Facility Agreement (Tranche C Term Loans)
By
its
signature below, the undersigned hereby consents to the foregoing Incremental
Facility Agreement and confirms that the Tranche C Term Loans shall constitute
“Guaranteed Obligations” under the Guarantee and Pledge Agreement under and as
defined in said Credit Agreement for all purposes of said Guarantee and Pledge
Agreement and shall be entitled to the benefits of the guarantee and security
provided under the Guarantee and Pledge Agreement.
|
MEDIACOM
LLC
|
|||
|
By:
|
Mediacom
Communications Corporation,
|
||
|
Member
|
|||
|
By:
|
/s/ | ||
|
Name:
|
|||
|
Title:
|
|||
|
Address
for Notices:
|
|||
|
100
Crystal Run Road
|
|||
|
Middletown,
New York 10941
|
|||
|
Attention:
Mark Stephan
|
|||
|
Telecopier
No.: (845) 695-2639
|
|||
|
Telephone
No.: (845) 695-2600
|
|||
Incremental
Facility Agreement (Tranche C Term Loans)
|
MEDIACOM
MANAGEMENT CORPORATION
|
|||
|
By:
|
/s/ | ||
|
Name:
|
|||
|
Title:
|
|||
|
Address
for Notices:
|
|||
|
c/o
Mediacom LLC
|
|||
|
100
Crystal Run Road
|
|||
|
Middletown,
New York 10941
|
|||
|
Attention:
Mark Stephan
|
|||
|
Telecopier
No.: (845) 695-2639
|
|||
|
Telephone
No.: (845) 695-2600
|
|||
Incremental
Facility Agreement (Tranche C Term Loans)
|
MEDIACOM
INDIANA PARTNERCO LLC
|
|||
|
By:
|
Mediacom
LLC, Member
|
||
|
By:
|
Mediacom
Communications Corporation,
|
||
|
Member
|
|||
|
By:
|
/s/ | ||
|
Name:
|
|||
|
Title:
|
|||
|
Address
for Notices:
|
|||
|
c/o
Mediacom LLC
|
|||
|
100
Crystal Run Road
|
|||
|
Middletown,
New York 10941
|
|||
|
Attention:
Mark Stephan
|
|||
|
Telecopier
No.: (845) 695-2639
|
|||
|
Telephone
No.: (845) 695-2600
|
|||
Incremental
Facility Agreement (Tranche C Term Loans)
|
MEDIACOM
INDIANA HOLDINGS, L.P.
|
|||
|
By:
|
Mediacom
Indiana Partnerco LLC, General
|
||
|
Partner
|
|||
|
By:
|
Mediacom
LLC, Member
|
||
|
By:
|
Mediacom
Communications Corporation,
|
||
|
Member
|
|||
|
By:
|
/s/ | ||
|
Name:
|
|||
|
Title:
|
|||
|
Address
for Notices:
|
|||
|
c/o
Mediacom LLC
|
|||
|
100
Crystal Run Road
|
|||
|
Middletown,
New York 10941
|
|||
|
Attention:
Mark Stephan
|
|||
|
Telecopier
No.: (845) 695-2639
|
|||
|
Telephone
No.: (845) 695-2600
|
|||
Incremental
Facility Agreement (Tranche C Term Loans)
By
its
signature below, the undersigned hereby consents to the foregoing Incremental
Facility Agreement and confirms that the Tranche C Term Loans shall constitute
“Guaranteed Obligations” under the respective Subsidiary Guarantee Agreements
under and as defined in said Credit Agreement for all purposes of said
Subsidiary Guarantee Agreements and shall be entitled to the benefits of the
guarantee and security provided under the Subsidiary Guarantee
Agreements.
|
ILLINI
CABLE HOLDING, INC.
|
|||
|
By:
|
/s/ | ||
|
Name:
|
|||
|
Title:
|
|||
|
ILLINI
CABLEVISION OF ILLINOIS, INC.
|
|||
|
By:
|
/s/ | ||
|
Name:
|
|||
|
Title:
|
|||
Incremental
Facility Agreement (Tranche C Term Loans)
By
its
signature below, the undersigned hereby confirms that all of its obligations
under the Management Fee Subordination Agreement and Section 5.04 of the
Guarantee and Pledge Agreement shall continue unchanged and in full force and
effect for the benefit of the Administrative Agent, the Lenders party to the
Credit Agreement and the Tranche C Term Loan Lenders.
|
MEDIACOM
COMMUNICATIONS
|
|||
|
CORPORATION
|
|||
|
By:
|
/s/ | ||
|
Name:
Mark E. Stephan
|
|||
|
Title:
Chief Financial Officer
|
|||
Incremental
Facility Agreement (Tranche C Term Loans)
Schedule
I
[Form
of
Lender Addendum]
LENDER
ADDENDUM
Reference
is made to the Incremental Facility Agreement dated as of May 5, 2006 (the
“Incremental
Facility Agreement”)
between MEDIACOM
ILLINOIS LLC, a limited liability company duly organized and validly existing
under the laws of the State of Delaware (“Mediacom
Illinois”);
MEDIACOM INDIANA LLC, a limited liability company duly organized and validly
existing under the laws of the State of Delaware (“Mediacom
Indiana”);
MEDIACOM IOWA LLC, a limited liability company duly organized and validly
existing under the laws of the State of Delaware (“Mediacom
Iowa”);
MEDIACOM MINNESOTA LLC, a limited liability company duly organized and validly
existing under the laws of the State of Delaware (“Mediacom
Minnesota”);
MEDIACOM WISCONSIN LLC, a limited liability company duly organized and validly
existing under the laws of the State of Delaware (“Mediacom
Wisconsin”);
ZYLSTRA COMMUNICATIONS CORP., a corporation duly organized and validly existing
under the laws of the State of Minnesota (“Zylstra”
and,
together with Mediacom Illinois, Mediacom Indiana, Mediacom Iowa, Mediacom
Minnesota and Mediacom Wisconsin, the “Mediacom
Midwest Borrowers”);
MEDIACOM ARIZONA LLC, a limited liability company duly organized and validly
existing under the laws of the State of Delaware (“Mediacom
Arizona”);
MEDIACOM CALIFORNIA LLC, a limited liability company duly organized and validly
existing under the laws of the State of Delaware (“Mediacom
California”);
MEDIACOM DELAWARE LLC, a limited liability company duly organized and validly
existing under the laws of the State of Delaware (“Mediacom
Delaware”);
and
MEDIACOM SOUTHEAST LLC, a limited liability company duly organized and validly
existing under the laws of the State of Delaware (“Mediacom
Southeast”
and,
together with Mediacom Arizona, Mediacom California and Mediacom Delaware,
the
“Mediacom
USA Borrowers”;
the
Mediacom USA Borrowers together with the Mediacom Midwest Borrowers, the
“Borrowers”);
the
TRANCHE C TERM LOAN LENDERS named therein (the “Tranche
C Term Loan Lenders”);
and
JPMORGAN CHASE BANK, N.A., as Administrative Agent (the “Administrative
Agent”),
which
Incremental Facility Agreement is being entered into pursuant to Section 2.01(d)
of the Credit
Agreement (the “Credit
Agreement”)
dated
as of October 21, 2004 among the Borrowers, the Lenders party thereto and the
Administrative Agent. Terms used but not defined in this Lender Addendum have
the meanings assigned to such terms in the Incremental Facility Agreement and
the Amendment and Restatement.
By
its
signature below, and subject to the acceptance hereof by the Borrowers and
the
Administrative Agent as provided below, the undersigned hereby becomes a Tranche
C Term Loan Lender under the Incremental Facility Agreement, having the Tranche
C Term Loan Commitment, set forth below opposite its name.
Form
of Lender Addendum
It
is
understood and agreed that if the undersigned also holds any Tranche B Term
Loans under the Credit Agreement, the undersigned may elect, by notice to the
Administrative Agent, that the Tranche C Term Loans required to be made by
the
undersigned on the Tranche C Term Loan Effective Date shall, to the extent
of
the portion of such Tranche C Term Loans not exceeding the aggregate principal
amount of the Tranche B Term Loans of the undersigned, be made through such
Tranche B Term Loans being converted into Tranche C Term Loans (and
each
reference in the Incremental Facility Agreement or the Amendment and Restatement
to the “making” of any Tranche C Term Loan, or words of similar import, shall in
the case of the undersigned be deemed to include such conversion).
This
Lender Addendum shall be governed by, and construed in accordance with, the
law
of the State of New York (without giving effect to any conflict of laws
principles under New York law).
This
Lender Addendum may be executed in counterparts (and by different parties hereto
on different counterparts), each of which shall constitute an original, but
all
of which when taken together shall constitute a single contract.
Form
of Lender Addendum
IN
WITNESS WHEREOF, the parties hereto have caused this Lender Addendum to be
duly
executed and delivered by their proper and duly authorized officers as of this
5th day of May, 2006.
|
Tranche
C Term Loan Commitment:
|
|||||
|
[Name
of Tranche C Term Loan Lender]
|
|||||
|
$
|
1
|
||||
|
By:
|
/s/ | ||||
|
Name:
|
|||||
|
Title:
|
|||||
[DO
NOT COMPLETE UNTIL FINAL COMMITMENT ALLOCATIONS HAVE BEEN
DETERMINED.]
|
1
|
Lenders
may insert “Full Conversion” in lieu of a Dollar Commitment here if they
wish to convert all outstanding Tranche B Term Loans into Tranche
C Term
Loans. This option is available only if the Dollar amount of the
Tranche C
Terms Loans to be held after conversion are exactly
equal
to
the Dollar amount of the Tranche B Term Loans being
converted.
|
Form
of Lender Addendum
-
4 -
|
Accepted
and agreed:
|
||
|
JPMORGAN
CHASE BANK, N.A.,
|
||
|
as
Administrative Agent
|
||
|
By:
|
/s/ | |
|
Name:
|
||
|
Title:
|
||
|
MEDIACOM
ILLINOIS LLC
|
||
|
MEDIACOM
INDIANA LLC
|
||
|
MEDIACOM
IOWA LLC
|
||
|
MEDIACOM
MINNESOTA LLC
|
||
|
MEDIACOM
WISCONSIN LLC
|
||
|
MEDIACOM
ARIZONA LLC
|
||
|
MEDIACOM
CALIFORNIA LLC
|
||
|
MEDIACOM
DELAWARE LLC
|
||
|
MEDIACOM
SOUTHEAST LLC
|
||
|
By:
|
Mediacom
LLC, Member
|
|
|
By:
|
Mediacom
Communications
|
|
|
Corporation,
Member
|
||
|
By:
|
/s/ | |
|
Name:
|
||
|
Title:
|
||
Form
of Lender Addendum
|
ZYLSTRA
COMMUNICATIONS CORP.
|
||
|
By:
|
/s/ | |
|
Name:
|
||
|
c/o
Mediacom LLC
|
||
|
100
Crystal Run Road
|
||
|
Middletown,
New York 10941
|
||
|
Attention:
Mark Stephan
|
||
|
Telecopier
No.: (845) 695-2639
|
||
|
Telephone
No.: (845) 695-2600
|
||
Form
of Lender Addendum
Schedule
II
Form
of Amendment
[To
be
inserted]
Form
of
Amendment
EXECUTION
COPY
*****************************************************************
$800,000,000
INCREMENTAL
FACILITY AGREEMENT
(TRANCHE
D TERM LOANS)
dated
as
of May 5, 2006
between
MCC
GEORGIA LLC
MCC
ILLINOIS LLC
MCC
IOWA
LLC
MCC
MISSOURI LLC
The
LENDERS Party Hereto
J.P.
MORGAN SECURITIES INC. and
CITIGROUP
GLOBAL MARKETS INC.,
as
Joint
Lead Arrangers and Joint Bookrunners
and
JPMORGAN
CHASE BANK, N.A.,
as
Administrative Agent
CREDIT
SUISSE SECURITIES (USA) LLC,
DEUTSCHE
BANK SECURITIES INC. and
HARRIS
NESBIT FINANCING, INC.,
as
Documentation Agents
CITIGROUP
GLOBAL MARKETS INC.,
as
Syndication Agent
*****************************************************************
INCREMENTAL
FACILITY AGREEMENT
(TRANCHE
D TERM LOANS)
INCREMENTAL
FACILITY AGREEMENT dated as of May 5, 2006, between MCC IOWA LLC, a limited
liability company duly organized and validly existing under the laws of the
State of Delaware (“MCC
Iowa”);
MCC
ILLINOIS LLC, a limited liability company duly organized and validly existing
under the laws of the State of Delaware (“MCC
Illinois”);
MCC
GEORGIA LLC, a limited liability company duly organized and validly existing
under the laws of the State of Delaware (“MCC
Georgia”);
and
MCC MISSOURI LLC, a limited liability company duly organized and validly
existing under the laws of the State of Delaware (“MCC
Missouri”,
and,
together with MCC Iowa, MCC Illinois and MCC Georgia, the “Borrowers”);
the
TRANCHE D TERM LOAN LENDERS party hereto (including each Tranche D Term Loan
Lender as defined below that becomes a party hereto pursuant to a Lender
Addendum as defined below) and JPMORGAN CHASE BANK, N.A., as Administrative
Agent for the Lenders (together with its successors in such capacity, the
“Administrative
Agent”).
The
Borrowers, the Lenders party thereto and the Administrative Agent are parties
to
an Amendment and Restatement dated as of December 16, 2004 of the Credit
Agreement dated as of July 18, 2001 (as modified and supplemented and in effect
from time to time, the "Amendment
and Restatement").
Section
2.01(e) of the Amendment and Restatement contemplates that at any time and
from
time to time, the Borrowers may request that one or more persons (which may
include the Lenders under and as defined in the Amendment and Restatement)
offer
to enter into commitments to make (or, as provided herein, to convert Tranche
C
Term Loans into) Incremental Facility Loans. The Borrowers have requested that
$800,000,000 of Incremental Term Loans be made available to it in two separate
Series of term loans of which (i) $550,000,000 aggregate principal amount
will constitute a single Series of Reinstating Incremental Facility Term Loans
to be made on the Tranche D-1 Term Loan Effective Date (as defined below) and
(ii) $250,000,000 aggregate principal amount will constitute a single
Series of Incremental Facility Term Loans to be made on the Tranche D-2 Term
Loan Effective Date (as defined below). The Tranche D Term Loan Lenders (as
defined below) are willing to make (or, in the case of the Tranche D-1 Term
Loan
Lenders, to convert Tranche C Term Loans into) such loans on the terms and
conditions set forth below and in accordance with the applicable provisions
of
the Amendment and Restatement, and accordingly, the parties hereto hereby agree
as follows:
Incremental
Facility Agreement (Tranche D Term Loans)
ARTICLE
I
DEFINED
TERMS
Terms
defined in the Amendment and Restatement are used herein as defined therein.
In
addition, the following terms have the meanings specified below:
“Amendment
No. 2”
shall
mean Amendment No. 2 to the Amendment and Restatement, between the Borrowers
and
the Administrative Agent, substantially in the form of Schedule II hereto,
dated
the date hereof.
“Lender
Addendum”
shall
mean, with respect to any Tranche D Term Loan Lender, a Lender Addendum
substantially in the form of Schedule I hereto, dated as of the date hereof
and executed and delivered by such Tranche D Term Loan Lender as provided in
Section 2.06.
“Tranche
D Term Loan Commitments”
shall
mean, collectively, the Tranche D-1 Term Loan Commitments and the Tranche D-2
Term Loan Commitments.
“Tranche
D Term Loan Lenders”
shall
mean, collectively, the Tranche D-1 Term Loan Lenders and the Tranche D-2 Term
Loan Lenders.
“Tranche
D Term Loan Maturity Date”
shall
mean January 31, 2015.
“Tranche
D Term Loans”
shall
mean, collectively, the Tranche D-1 Term Loans and the Tranche D-2 Term
Loans.
“Tranche
D-1 Term Loan Commitment”
shall
mean, with respect to each Tranche D-1 Term Loan Lender, the commitment of
such
Lender to make Tranche D-1 Term Loans hereunder (or, as provided herein, to
convert Tranche C Term Loans into Tranche D-1 Terms Loans hereunder). The amount
of each Tranche D-1 Term Loan Lender’s Tranche D-1 Term Loan Commitment is set
forth in the Lender Addendum executed and delivered by such Tranche D-1 Term
Loan Lender. The aggregate original amount of the Tranche D-1 Term Loan
Commitments is $550,000,000.
“Tranche
D-1 Term Loan Lender”
shall
mean (a) on the date hereof, a Lender having Tranche D-1 Term Loan
Commitments that has executed and delivered a Lender Addendum and
(b) thereafter, the Lenders from time to time holding Tranche D-1 Term Loan
Commitments or Tranche D-1 Term Loans after giving effect to any assignments
thereof pursuant to Section 11.06 of the Amendment and
Restatement.
Incremental
Facility Agreement (Tranche D Term Loans)
“Tranche
D-1 Term Loan Effective Date”
shall
mean the date on which the conditions specified in Section 4.01 are satisfied
(or waived by the Majority Tranche D-1 Term Loan Lenders).
“Tranche
D-1 Term Loan”
shall
mean a Loan made on the Tranche D-1 Term Loan Effective Date (or, as provided
herein, converted from Tranche C Term Loans) pursuant to this Agreement which
shall constitute a single Series of Incremental Facility Term Loans under
Section 2.01(e) of the Amendment and Restatement.
“Tranche
D-2 Term Loan Commitment”
shall
mean, with respect to each Tranche D-2 Term Loan Lender, the Commitment of
such
Lender to make Tranche D-2 Term Loans hereunder. The amount of each Tranche
D-2
Term Loan Lender’s Tranche D-2 Term Loan Commitment is set forth in the Lender
Addendum executed and delivered by such Tranche D-2 Term Loan Lender. The
aggregate original amount of the Tranche D-2 Term Loan Commitments is
$250,000,000.
“Tranche
D-2 Term Loan Lender”
shall
mean (a) on the date hereof, a Lender having a Tranche D-2 Term Loan
Commitment that has executed and delivered a Lender Addendum and
(b) thereafter, the Lenders from time to time holding Tranche D-2 Term Loan
Commitments or Tranche D-2 Term Loans after giving effect to any assignments
thereof pursuant to Section 11.06 of the Amendment and
Restatement.
“Tranche
D-2 Term Loan”
shall
mean a loan made on the Tranche D-2 Term Loan Effective Date pursuant to this
Agreement which shall constitute a single Series of Incremental Facility Term
Loans under Section 2.01(e) of the Amendment and Restatement.
“Tranche
D-2 Term Loan Effective Date”
shall
mean the date on which the conditions specified in Section 4.02 are satisfied
or
waived by the Majority Tranche D-2 Term Loan Lenders.
ARTICLE
II
TRANCHE
D
TERM LOANS
Section
2.01. Commitments.
Subject
to the terms and conditions set forth herein and in the Amendment and
Restatement, (i) each Tranche D-1 Term Loan Lender agrees to make
Tranche D-1 Term Loans to the Borrowers (or, as provided below, to convert
Tranche C Term Loans) in Dollars, in an aggregate principal amount equal to
such
Tranche D-1 Term Loan Lender’s Tranche D-1 Term Loan Commitment on the Tranche
D-1 Term Loan Effective Date and (ii) each Tranche D-2 Term Loan Lender
agrees to make Tranche D-2 Term Loans to the
Incremental
Facility Agreement (Tranche D Term Loans)
Borrowers
in Dollars, in an aggregate principal amount equal to such Tranche D-2 Term
Loan
Lender’s Tranche D-2 Term Loan Commitment on the Tranche D-2 Term Loan Effective
Date. Proceeds of the Tranche D Term Loans shall be available for the making
of
Restricted Payments permitted under the Amendment and Restatement, the payment
of fees and expenses related thereto and any use permitted under
Section 8.17(c) of the Amendment and Restatement (including the general
business purposes of the Borrowers) and in addition, proceeds of Tranche
D-1
Term Loans shall be available for the prepayment of the Tranche C Term
Loans.
Notwithstanding
the foregoing, it is understood and agreed that any Tranche D-1 Term Loan Lender
that also holds any Tranche C Term Loans may elect, by notice to the
Administrative Agent, that the Tranche D-1 Term Loans required to be made by
such Lender on the Tranche D-1 Term Loan Effective Date shall, to the
extent of the portion of such Tranche D-1 Term Loans not exceeding the aggregate
principal amount of the Tranche C Term Loans of such Lender, be made through
such Tranche C Term Loans being converted into Tranche D-1 Term Loans
(and
each
reference in this Agreement or the Amendment and Restatement to the “making” of
any Tranche D-1 Term Loan, or words of similar import, shall in the case of
such
Lender be deemed to include such conversion). Without limiting the generality
of
the foregoing, it is understood that the Tranche D-1 Term Loans into which
the
Tranche C Term Loans are so converted shall be treated identically to the
Tranche D Terms Loans being funded (and not being converted from Tranche C
Term
Loans) on the Tranche D-1 Term Loan Effective Date and Tranche D-1 Term Loan
Commitments shall terminate after the Borrowing of the Tranche D-1 Term Loans
on
the Tranche D-1 Term Loan Effective Date and shall have identical Interest
Periods in identical proportions and durations as all other Tranche D Loans
(and, for these purposes, any Interest Periods for Tranche C Term Loans that
are
Eurodollar Loans in effect on the Tranche D-1 Term Loan Effective Date
shall be terminated on the Tranche D-1 Term Loan Effective Date, and any such
converting Lender shall be paid accrued interest on its Tranche C Term Loans
being
so
converted, together with any amounts payable under Section 5.05 of the
Amendment and Restatement, as if the Tranche C Term Loans were being prepaid
in
full on the Tranche D-1 Term Loan Effective Date).
Section
2.02. Termination
of Commitments.
Unless
previously terminated, the Tranche D-1 Term Loan Commitments shall terminate
after the Borrowing of the Tranche D-1 Term Loans on the Tranche D-1 Term Loan
Effective Date and
the
Tranche D-2 Term Loan Commitments shall terminate after the Borrowing of the
Tranche D-2 Term Loans on the Tranche D-2 Term Loan Effective Date.
Section
2.03. Repayment
of Loans.
The
Borrowers hereby jointly and severally unconditionally promise to pay to the
Administrative Agent for the account of the Tranche D Term Loan Lenders the
principal of the Tranche D-1 Term Loans and Tranche D-2 Term Loans held by
such
Tranche D Term Loan Lender on each Principal Payment Date set forth in
column (A) below, by an amount equal to the percentage of the Tranche D-1
Term Loan Closing Balance and the Tranche D-2 Term Loan Closing Balance (each
as
defined below), as applicable,
Incremental
Facility Agreement (Tranche D Term Loans)
set forth in column (B) below of the aggregate principal amount of the Tranche D-1 Term Loans and the Tranche D-2 Term Loans:
|
(A)
|
(B)
|
||
|
Principal
Payment Date
|
Percentage
Reduction
|
||
|
March
31, 2007
|
0.250%
|
||
|
June
30, 2007
|
0.250%
|
||
|
September
30, 2007
|
0.250%
|
||
|
December
31, 2007
|
0.250%
|
||
|
|
|||
|
March
31, 2008
|
0.250%
|
||
|
June
30, 2008
|
0.250%
|
||
|
September
30, 2008
|
0.250%
|
||
|
December
31, 2008
|
0.250%
|
||
|
|
|||
|
March
31, 2009
|
0.250%
|
||
|
June
30, 2009
|
0.250%
|
||
|
September
30, 2009
|
0.250%
|
||
|
December
31, 2009
|
0.250%
|
||
|
|
|||
|
March
31, 2010
|
0.250%
|
||
|
June
30, 2010
|
0.250%
|
||
|
September
30, 2010
|
0.250%
|
||
|
December
31, 2010
|
0.250%
|
||
|
|
|||
|
March
31, 2011
|
0.250%
|
||
|
June
30, 2011
|
0.250%
|
||
|
September
30, 2011
|
0.250%
|
||
|
December
31, 2011
|
0.250%
|
||
|
|
|||
|
March
31, 2012
|
0.250%
|
||
|
June
30, 2012
|
0.250%
|
||
|
September
30, 2012
|
0.250%
|
||
|
December
31, 2012
|
0.250%
|
||
Incremental
Facility Agreement (Tranche D Term Loans)
|
March
31, 2013
|
0.250%
|
||
|
June
30, 2013
|
0.250%
|
||
|
September
30, 2013
|
0.250%
|
||
|
December
31, 2013
|
0.250%
|
||
|
|
|||
|
March
31, 2014
|
0.250%
|
||
|
June
30, 2014
|
0.250%
|
||
|
September
30, 2014
|
0.250%
|
||
|
December
31, 2014
|
0.250%
|
||
|
|
|||
|
January
31, 2015
|
92.00%
|
For
purposes hereof, (i) the “Tranche
D-1 Term Loan Closing Balance”
shall
mean the aggregate principal amount of the Tranche D-1 Term Loans outstanding
hereunder on the close of business on the Tranche D-1 Term Loan Effective Date
and (ii) “Tranche
D-2 Term Loan Closing Balance”
shall
mean the aggregate principal amount of the Tranche D-2 Term Loans outstanding
hereunder on the close of business on the Tranche D-2 Term Loan Effective
Date.
To
the
extent not previously paid, all Tranche D Term Loans shall be due and payable
on
the Tranche D Term Loan Maturity Date. Notwithstanding the foregoing, if the
11%
senior notes due July 15, 2013 issued by Mediacom Broadband LLC and Mediacom
Broadband Corporation are not refinanced by April 15, 2013, the maturity of
the
Tranche D Term Loans shall be accelerated to such date.
Section
2.04. Applicable
Margin.
The
Applicable Margin for Tranche D Term Loans of any Type shall be the rates
indicated below for Loans of such Type opposite the then current Rate Ratio
(determined pursuant to Section 3.03 of the Amendment and Restatement) indicated
below (except that anything in this Agreement or the Amendment and Restatement
to the contrary notwithstanding, the Applicable Margin with respect to the
Loans
of any Type shall be the highest margins indicated below during any period
when
an Event of Default shall have occurred and be continuing):
|
Rate
Ratio
|
Base
Rate Loans
|
Eurodollar
Loans
|
|
Greater
than 3.50 to 1
|
0.75%
|
1.75%
|
|
Less
than or equal to 3.50 to 1
|
0.50%
|
1.50%
|
Section
2.05. Prepayment Premium. Any optional prepayment of Tranche D Term Loans
effected on or prior to the first anniversary of the Tranche D-1 Term Loan
Effective
Incremental
Facility Agreement (Tranche D Term Loans)
Date
with the proceeds of a substantially concurrent borrowing of bank debt
(including any Incremental Facility Term Loans or other term loans permitted
under the Amendment and Restatement pursuant to an amendment thereto, including
any conversion of Tranche D Term Loans into any such other borrowings), shall
be
accompanied by a prepayment fee equal to 1.00% of the aggregate amount of such
prepayment in the event that the Applicable Margin in respect of such
Incremental Facility Term Loans (or other term loans) is less than the
corresponding Applicable Margin in respect of the Tranche D Term
Loans.
Section
2.06. Delivery
of Lender Addenda.
Each
Tranche D Term Loan Lender shall become a party to this Agreement by delivering
to the Administrative Agent a Lender Addendum duly executed by such Tranche
D
Term Loan Lender, the Borrowers and the Administrative Agent.
Section
2.07. Status
of Agreement.
The
Tranche D Term Loan Commitments of the Tranche D Term Lenders constitute
Incremental Term Loan Commitments of which (i) $500,000,000 of the Tranche
D-1 Term Loan Commitments constitute Reinstating Incremental Facility Term
Loan
Commitments and (ii) $50,000,000 of the Tranche D-1 Term Loan Commitments
and $250,000,000 of the Tranche D-2 Term Loan Commitments constitute utilization
of the $500,000,000 of Incremental Term Loans available under Section
2.01(e)(iii). In addition, the Tranche D Term Loan Lenders constitute
Incremental Facility Term Loan Lenders, the Tranche D-1 Term Loans constitute
a
single Series of Incremental Facility Term Loans and the Tranche D-2 Term Loans
constitute a single Series of Incremental Facility Term Loans under Section
2.01(e) of the Amendment and Restatement.
Section
2.08. Tranche
D-2 Ticking Fee.
From
and after the Tranche D-1 Term Loan Effective Date and until the Tranche D-2
Term Loan Effective Date, the Borrowers shall pay to the Administrative Agent
for the account of the Tranche D-2 Term Loan Lenders, in accordance with their
pro rata share of Tranche D-2 Term Loan Commitments, a fee
(the "Tranche
D-2 Ticking Fee"),
which
shall accrue at the rate per annum of 0.375% on the Tranche D-2 Term Loan
Commitments and shall be payable on the earlier of (i) Tranche D-2 Term
Loan Effective Date and (ii) July 1, 2006.
.
ARTICLE
III
REPRESENTATION
AND WARRANTIES; NO DEFAULTS
The
Borrowers represent and warrant to the Administrative Agent and the Lenders
that
(i) each of the representations and warranties made by the Borrowers in
Section 7 of the Amendment and Restatement, and by each Obligor in the
other Loan Documents to which it is a party, is true and complete on and as
of
the date hereof with the same force and effect as if made on and as of the
date
hereof (or, if any such representation or warranty is expressly stated
Incremental
Facility Agreement (Tranche D Term Loans)
to have been made as of a specific date, as of such specific date) and as if each reference therein to the Amendment and Restatement or Loan Documents included reference to this Agreement and (ii) no Default has occurred and is continuing.
ARTICLE
IV
CONDITIONS
Section
4.01. Tranche
D-1 Term Loan Effective Date.
The
obligations of the Tranche D-1 Term Loan Lenders to make Tranche D-1 Term Loans
are subject to the conditions precedent that each of the following conditions
shall have been satisfied (or waived by the Majority Tranche D-1 Term Loan
Lenders):
(a) Counterparts
of Agreement.
The
Administrative Agent shall have received duly executed and delivered
counterparts (or written evidence thereof satisfactory to the Administrative
Agent, which may include telecopy transmission of, as applicable, a signed
signature page or Lender Addendum) of (i) this Agreement from each Obligor
and (ii) Lender Addenda from the Tranche D Term Loan Lenders for aggregate
Tranche D Term Loan Commitments in an amount equal to $800,000,000 (of which
$550,000,000 shall be Tranche D-1 Term Loan Commitments and $250,000,000 shall
be Tranche D-2 Term Loan Commitments).
(b) Opinion
of Counsel to Obligors.
The
Administrative Agent shall have received an opinion, dated the Tranche D-1
Term
Loan Effective Date, of Sonnenschein Nath & Rosenthal LLP, counsel to the
Obligors, covering such matters as the Administrative Agent or any Tranche
D
Term Loan Lender may reasonably request (and the Borrowers hereby instruct
counsel to deliver such opinion to the Tranche D Term Loan Lenders and the
Administrative Agent).
(c) Organizational
Documents.
Such
organizational documents (including, without limitation, board of director
and
shareholder resolutions, member approvals and evidence of incumbency, including
specimen signatures, of officers of each Obligor) with respect to the execution,
delivery and performance of this Agreement and each other document to be
delivered by such Obligor from time to time in connection herewith and the
extensions of credit hereunder as the Administrative Agent may reasonably
request (and the Administrative Agent and each Lender may conclusively rely
on
such certificate until it receives notice in writing from such Obligor to the
contrary).
(d) Officer’s
Certificate.
A
certificate of a Senior Officer, dated the Tranche D-1 Term Loan Effective
Date, to the effect that (i) the representations and warranties made by the
Borrowers in Article III hereof, and by each Obligor in the other Loan Documents
to which it is a party, are true and complete on and as of the date hereof
Incremental
Facility Agreement (Tranche D Term Loans)
with the same force and effect as if made on and as of such date (or, if any such representation and warranty is expressly stated to have been made as of a specific date, as of such specific date) and (ii) no Default shall have occurred and be continuing.
(e) Fees
and Expenses.
The
Administrative Agent, and JPMorgan Securities Inc. and Citigroup Global Markets
Inc. as the Joint Lead Arrangers and Joint Bookrunners, shall have received
all
fees and other amounts due and payable on or prior to the Tranche D-1 Term
Loan
Effective Date, including, to the extent invoiced, reimbursement or payment
of
all out-of-pocket expenses required to be reimbursed or paid by the Borrowers
hereunder.
(f)
Prepayment
of Tranche C Term Loans.
The
principal of and interest on and all other amounts (including any amounts
payable under Section 5.05 of the Amendment and Restatement) owing in
respect of the Tranche C Term Loans shall, to the extent not converted into
Tranche D-1 Term Loans as provided herein, have been (or shall be concurrently)
prepaid in full from funds available to the Borrowers and the proceeds of the
Tranche D-1 Term Loans.
(g) Other
Documents.
Such
other documents as the Administrative Agent or any Tranche D Term Loan Lender
or
special New York counsel to JPMCB may reasonably request.
Section
4.02. Tranche
D-2 Term Loan Effective Date.
The
obligations of the Tranche D-2 Term Loan Lenders to make Tranche D-2 Term Loans
are subject to the conditions precedent that each of the following conditions
shall have been satisfied (or waived by the Majority Tranche D-2 Term Loan
Lenders):
(a) Section
4.01 Conditions.
Each of
the conditions set forth in Section 4.01 shall have satisfied.
(b) Representations
and Warranties.
The
representations and warranties of the Borrowers set forth in this Agreement
shall be true and correct on and as of the Tranche D-2 Term Loan Effective
Date.
(c) Defaults.
At the
time of and immediately after giving effect to the borrowing to occur on the
Tranche D-2 Term Loan Effective Date, no Default shall have occurred and be
continuing.
(d) Availability.
Such
Tranche D-2 Term Loan shall be made on or before July 1, 2006.
Incremental
Facility Agreement (Tranche D Term Loans)
(e) Tranche
D-2 Ticking Fee.
The
Administrative Agent shall have received the Tranche D-2 Ticking Fee for the
account of the Tranche D-2 Term Loan Lenders.
(f)
Other
Documents.
Such
other documents as the Administrative Agent or any Tranche D Term Loan Lender
or
special New York counsel to JPMCB may reasonably request.
ARTICLE
V
MISCELLANEOUS
SECTION
5.01. Expenses.
Subject
to the provisions of the Engagement Letter dated as of April 3, 2006 among
Mediacom Broadband LLC, J.P. Morgan Securities Inc. and Citigroup Global Markets
Inc., the Obligors jointly and severally agree to pay, or reimburse JPMorgan
Securities Inc. and Citigroup Global Markets Inc. for paying, all reasonable
out-of-pocket expenses incurred by JPMorgan Securities Inc. and Citigroup Global
Markets Inc. and their Affiliates, including the reasonable fees, charges and
disbursements of special New York counsel to JPMCB, in connection with the
syndication of the Incremental Facility Loans provided for herein and the
preparation of this Agreement.
SECTION
5.02. Counterparts;
Integration; Effectiveness.
This
Agreement may be executed in counterparts (and by different parties hereto
on
different counterparts), each of which shall constitute an original, but all
of
which when taken together shall constitute a single contract. This Agreement
shall become effective when this Agreement shall have been executed by the
Administrative Agent and when the Administrative Agent shall have received
counterparts hereof and thereof which, when taken together, bear the signatures
of each of the other parties hereto and thereto, and thereafter shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns. Delivery of an executed counterpart of a signature
page
of this Agreement by telecopy shall be effective as delivery of a manually
executed counterpart of this Agreement.
SECTION
5.03. Governing
Law.
This
Agreement shall be governed by, and construed in accordance with, the law of
the
State of New York (without giving effect to any conflict of laws principles
under New York law).
SECTION
5.04. Headings.
Article
and Section headings used herein are for convenience of reference only, are
not
part of this Agreement and shall not affect the construction of, or be taken
into consideration in interpreting, this Agreement.
SECTION
5.05. Amendment.
Each
Tranche C Term Loan Lender party to this Agreement hereby authorizes and directs
the Administrative Agent (a) to execute and deliver on
Incremental
Facility Agreement (Tranche D Term Loans)
its
behalf Amendment No. 2 and (b) to consent to amendments to any
instrument or agreement representing Affiliate Subordinated Indebtedness to
extend the maturity of such instrument or agreement to the date contemplated
in
said Amendment No. 2.
Incremental
Facility Agreement (Tranche D Term Loans)
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered as of the day and year first above written.
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MCC
GEORGIA LLC
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MCC
ILLINOIS LLC
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MCC
IOWA LLC
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MCC
MISSOURI LLC
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By
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Mediacom
Broadband LLC, a Member
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By
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Mediacom
Communications Corporation,
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a
Member
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||||
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By:
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/s/ Mark E. Stephen | |||
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Name:
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Mark E. Stephan | |||
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Title:
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Chief Financial Officer | |||
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c/o
Mediacom Communications Corporation
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100
Crystal Run Road
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|
Middletown,
New York 10941
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||||
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Attention:
Mark E. Stephan
|
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Telecopier
No.: (845) 695-2639
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||||
|
Telephone
No.: (845) 695-2600
|
||||
Incremental
Facility Agreement (Tranche D Term Loans)
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JPMORGAN
CHASE BANK, N.A,
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as
Administrative Agent
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By:
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/s/ | ||
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Name:
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|||
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Title:
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Address
for Notices to
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JPMorgan
Chase Bank, N.A.,
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|||
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as
Administrative Agent:
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JPMorgan
Chase Bank, N.A.
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1111
Fannin Street, 10th
Floor
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Houston,
Texas 77002-8069
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Attention:
Loan
and Agency Services Group
|
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Telephone
No.: 713-750-2102
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|||
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Telecopier
No.: 713-750-2782
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Incremental
Facility Agreement (Tranche D Term Loans)
By
its
signature below, the undersigned hereby consents to the foregoing Incremental
Facility Agreement and confirms that the Tranche D Term Loans shall constitute
“Guaranteed Obligations” under the Guarantee and Pledge Agreement under and as
defined in said Amendment and Restatement for all purposes of said Guarantee
and
Pledge Agreement and shall be entitled to the benefits of the guarantee and
security provided under the Guarantee and Pledge Agreement.
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MEDIACOM
BROADBAND LLC
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By
Mediacom Communications Corporation, a
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Member
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By:
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/s/ Mark E. Stephen | ||
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Name:
Mark E. Stephan
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|||
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Title:
Chief Financial Officer
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Incremental
Facility Agreement (Tranche D Term Loans)
By
its
signature below, the undersigned hereby confirms that all of its obligations
under the Management Fee Subordination Agreement and Sections 5.04 and 5.05
of
the Guarantee and Pledge Agreement shall continue unchanged and in full force
and effect for the benefit of the Administrative Agent, the Lenders party to
the
Amendment and Restatement and the Tranche D Term Loan Lenders.
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MEDIACOM
COMMUNICATIONS
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CORPORATION
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By:
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/s/ Mark E. Stephen | ||
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Name:
Mark E. Stephan
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|||
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Title:
Chief Financial Officer
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Incremental
Facility Agreement (Tranche D Term Loans)
Schedule
I
[Form
of
Lender Addendum]
LENDER
ADDENDUM
Reference
is made to the Incremental Facility Agreement dated as of May 5, 2006 (the
“Incremental
Facility Agreement”)
between MCC
IOWA
LLC, a limited liability company duly organized and validly existing under
the
laws of the State of Delaware (“MCC
Iowa”);
MCC
ILLINOIS LLC, a limited liability company duly organized and validly existing
under the laws of the State of Delaware (“MCC
Illinois”);
MCC
GEORGIA LLC, a limited liability company duly organized and validly existing
under the laws of the State of Delaware (“MCC
Georgia”);
and
MCC MISSOURI LLC, a limited liability company duly organized and validly
existing under the laws of the State of Delaware (“MCC
Missouri”,
and,
together with MCC Iowa, MCC Illinois and MCC Georgia, the “Borrowers”);
the
TRANCHE D TERM LOAN LENDERS named therein (the “Tranche
D Term Loan Lenders”);
and
JPMORGAN CHASE BANK, N.A., as Administrative Agent (the “Administrative
Agent”),
which
Incremental Facility Agreement is being entered into pursuant to Section 2.01(e)
of the Amendment
and Restatement (the “Amendment
and Restatement”)
dated
as of December 16, 2004 of the Credit Agreement dated as of July 18, 2001
among the Borrowers, the Lenders party thereto and the Administrative Agent.
Terms used but not defined in this Lender Addendum have the meanings assigned
to
such terms in the Incremental Facility Agreement and the Amendment and
Restatement.
By
its
signature below, and subject to the acceptance hereof by the Borrowers and
the
Administrative Agent as provided below, the undersigned hereby becomes a Tranche
D Term Loan Lender under the Incremental Facility Agreement, having the Tranche
D Term Loan Commitment, set forth below opposite its name.
It
is
understood and agreed that if the undersigned also holds any Tranche C Term
Loans under the Amendment and Restatement, the undersigned may elect, by notice
to the Administrative Agent, that the Tranche D-1 Term Loans required to be
made
by the undersigned on the Tranche D-1 Term Loan Effective Date shall, to the
extent of the portion of such Tranche D-1 Term Loans not exceeding the
aggregate principal amount of the Tranche C Term Loans of the undersigned,
be
made through such Tranche C Term Loans being converted into Tranche D-1 Term
Loans (and
each
reference in the Incremental Facility Agreement or the Amendment and Restatement
to the “making” of any Tranche D-1 Term Loan, or words of similar import, shall
in the case of the undersigned be deemed to include such conversion).
This
Lender Addendum shall be governed by, and construed in accordance with, the
law
of the State of New York (without giving effect to any conflict of laws
principles under New York law).
Form
of
Lender Addendum
This
Lender Addendum may be executed in counterparts (and by different parties hereto
on different counterparts), each of which shall constitute an original, but
all
of which when taken together shall constitute a single
contract.
Form
of
Lender Addendum
IN
WITNESS WHEREOF, the parties hereto have caused this Lender Addendum to be
duly
executed and delivered by their proper and duly authorized officers as of
this 5th day of May, 2006.
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Amount
of
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|||||||
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Tranche
D-1 Term Loan Commitment:
|
[Name
of Tranche D Term Loan Lender]
|
||||||
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$
|
1
|
By:
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/s/ | ||||
|
Name:
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|||||||
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Title:
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|||||||
|
Tranche
D-2 Term Loan Commitment:
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|||||||
|
$
|
|||||||
[DO
NOT COMPLETE UNTIL FINAL COMMITMENT ALLOCATIONS HAVE BEEN
DETERMINED.]
|
1
|
Lenders
may insert “Full Conversion” in lieu of a Dollar Commitment here if they
wish to convert all outstanding Tranche C Term Loans into Tranche
D-1 Term
Loans. This option is available only if the Dollar amount of the
Tranche
D-1 Terms Loans to be held after conversion are exactly
equal
to
the Dollar amount of the Tranche C Term Loans being
converted.
|
Form
of
Lender Addendum
|
Accepted
and agreed:
|
||
|
JPMORGAN
CHASE BANK, N.A.,
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||
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as
Administrative Agent
|
||
|
By:
|
/s/ | |
|
Name:
|
||
|
Title:
|
||
|
MCC
GEORGIA LLC
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||
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MCC
ILLINOIS LLC
|
||
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MCC
IOWA LLC
|
||
|
MCC
MISSOURI LLC
|
||
|
By
|
Mediacom
Broadband LLC, a Member
|
|
|
By
|
Mediacom
Communications Corporation,
|
|
|
a
Member
|
||
|
By:
|
/s/ | |
|
Name:
|
||
|
Title:
|
||
Form
of
Lender Addendum
Schedule II
Form
of Amendment
[To
be
inserted]
Form
of Amendment
EXECUTION
COPY
AMENDMENT
NO. 1
AMENDMENT
NO. 1 dated as of May 5, 2006 between MEDIACOM
ILLINOIS LLC, a limited liability company duly organized and validly existing
under the laws of the State of Delaware (“Mediacom
Illinois”);
MEDIACOM INDIANA LLC, a limited liability company duly organized and validly
existing under the laws of the State of Delaware (“Mediacom
Indiana”);
MEDIACOM IOWA LLC, a limited liability company duly organized and validly
existing under the laws of the State of Delaware (“Mediacom
Iowa”);
MEDIACOM MINNESOTA LLC, a limited liability company duly organized and validly
existing under the laws of the State of Delaware (“Mediacom
Minnesota”);
MEDIACOM WISCONSIN LLC, a limited liability company duly organized and validly
existing under the laws of the State of Delaware (“Mediacom
Wisconsin”);
ZYLSTRA COMMUNICATIONS CORP., a corporation duly organized and validly existing
under the laws of the State of Minnesota (“Zylstra”
and,
together with Mediacom Illinois, Mediacom Indiana, Mediacom Iowa, Mediacom
Minnesota and Mediacom Wisconsin, the “Mediacom
Midwest Borrowers”);
MEDIACOM ARIZONA LLC, a limited liability company duly organized and validly
existing under the laws of the State of Delaware (“Mediacom
Arizona”);
MEDIACOM CALIFORNIA LLC, a limited liability company duly organized and validly
existing under the laws of the State of Delaware (“Mediacom
California”);
MEDIACOM DELAWARE LLC, a limited liability company duly organized and validly
existing under the laws of the State of Delaware (“Mediacom
Delaware”);
and
MEDIACOM SOUTHEAST LLC, a limited liability company duly organized and validly
existing under the laws of the State of Delaware (“Mediacom
Southeast”
and,
together with Mediacom Arizona, Mediacom California and Mediacom Delaware,
the
“Mediacom
USA Borrowers”;
the
Mediacom USA Borrowers together with the Mediacom Midwest Borrowers, the
“Borrowers”)
and
JPMORGAN CHASE BANK, N.A., in its capacity as Administrative Agent (the
“Administrative
Agent”)
pursuant to authority granted by the Majority Lenders pursuant to Section 11.04
of the Credit Agreement referred to below.
The
Borrowers, the lenders party thereto, and the Administrative Agent are parties
to a Credit Agreement dated as of October 21, 2004 (as modified and supplemented
and in effect from time to time, the “Credit
Agreement”),
providing, subject to the terms and conditions thereof, for extensions of credit
(by means of loans and letters of credit) to be made by said lenders to the
Borrowers in an aggregate principal or face amount not exceeding $1,150,000,000
(which may, in circumstances therein provided, be increased to
$1,800,000,000).
The
Borrowers and the Administrative Agent, pursuant to authority granted by, and
having obtained the consent of Lenders party to the Credit Agreement
constituting the Majority Lenders wish now to amend the Credit Agreement in
certain respects, and accordingly, the parties hereto hereby agree as
follows:
Amendment
No. 1
Section
1. Definitions.
Except
as otherwise defined in this Amendment No. 1, terms defined in the Credit
Agreement are used herein as defined therein.
Section
2. Amendments.
Subject
to the satisfaction of the conditions precedent specified in Section 4
below, but effective as of the date hereof, the Credit Agreement shall be
amended as follows:
2.01.
References
Generally.
References in the Credit Agreement (including references to the Credit Agreement
as amended hereby) to “this Agreement” (and indirect references such as
“hereunder”, “hereby”, “herein” and “hereof”) shall be deemed to be references
to the Credit Agreement as amended hereby.
2.02.
Definitions.
Section 1.01 of the Credit Agreement shall be amended by amending the
following definitions (to the extent already included in said Section 1.01)
and adding the following definitions in the appropriate alphabetical location
(to the extent not already included in said Section 1.01):
“Affiliate
Subordinated Indebtedness”
shall
mean Indebtedness to an Affiliate (i) for which a Borrower is directly and
primarily liable, (ii) in respect of which none of its Subsidiaries is
contingently or otherwise obligated, (iii) that is subordinated to the
obligations of the Borrowers to pay principal of and interest on the Loans,
Reimbursement Obligations, fees and other amounts payable hereunder and under
the other Loan Documents pursuant to an Affiliate Subordinated Indebtedness
Subordination Agreement, (iv) that does not mature prior to January 31,
2016, and that is issued pursuant to documentation containing terms (including
interest, covenants and events of default) in form and substance satisfactory
to
the Majority Lenders, (v) that states by its terms that principal and
interest in respect thereof shall only be payable to the extent permitted under
Section 8.09 hereof and (vi) that is pledged by the respective holder
thereof to the Administrative Agent in a manner that creates a first priority
perfected security interest in favor of the Administrative Agent, as collateral
security for the obligations of the Borrowers hereunder, pursuant to (in the
case of Mediacom LLC) the Guarantee and Pledge Agreement and (in the case of
any
other holder) a security document in form and substance satisfactory to the
Administrative Agent.
“Majority
Lenders”
shall
mean, subject to the last paragraph of Section 11.04 hereof, Lenders having
more than 50% of the sum of (a) the aggregate outstanding principal amount
of the Term Loans of each Class or, if the Term Loans of either Class shall
not
have been made, the aggregate outstanding principal amount of the Term Loan
Commitments of such Class plus
(b) the aggregate outstanding principal amount of the Incremental Facility
Term Loans of each Series or, if the Incremental Facility Term Loans of such
Series shall not have been made, the aggregate outstanding principal amount
of
the Incremental Facility Commitments of such Series plus
(c) the sum of (i) the aggregate unused amount, if any, of the
Incremental Facility Revolving Credit Commitments of each Series at such time
plus
(ii) the aggregate amount of Letter of Credit
Amendment
No. 1
Liabilities
in respect of Incremental Facility Letters of Credit of each Series at such
time
plus
(iii) the aggregate outstanding principal amount of the Incremental
Facility Revolving Credit Loans of each Series at such time plus
(d) the sum of (i) the aggregate unused amount, if any, of the
Revolving Credit Commitments at such time plus
(ii) the aggregate amount of Letter of Credit Liabilities in respect of
Revolving
Credit
Letters
of Credit at such time plus
(iii) the aggregate outstanding principal amount of the Revolving Credit
Loans at such time.
The
“Majority Lenders” of a particular Class of Loans shall mean Lenders having
outstanding Loans, Letter of Credit Liabilities, Commitments or unused
Commitments (as applicable, and determined in the manner provided above) of
such
Class representing more than 50% of the total outstanding Loans, Letter of
Credit Liabilities, Commitments or unused Commitments of such Class at such
time.
Notwithstanding
any of the foregoing, (i) for purposes of modifying, waiving or making any
determination (including taking any action under the last paragraph of
Section 9.01) with respect to Section 8.10(a), (b) or (c), the
“Majority Lenders” shall mean the Lenders having outstanding Loans, Letter of
Credit Liabilities, Commitments or unused Commitments (other than the Tranche
C
Term Loans and Tranche C Term Loan Commitments) representing more than 50%
of
the total outstanding Loans, Letter of Credit Liabilities, Commitments or unused
Commitments (other than the Tranche C Term Loans and Tranche C Term Loan
Commitments) and (ii) for purposes of modifying, waiving or making any
determination (including taking any action under the last paragraph of
Section 9.01) with respect to Section 8.10(d), the “Majority Lenders”
shall mean Lenders having outstanding Tranche C Term Loans representing more
than 50% of the total outstanding Tranche C Term Loans.
“Reinstating”,
when
used with respect to any Incremental Facility Commitment, Incremental Facility
Loan or Incremental Facility Letter of Credit of any Series, shall refer to
(a) in the case of any Incremental Facility Revolving
Credit
Commitments of any Series, Incremental Facility Revolving Credit Commitments
of
such Series that replace or reinstate an amount equal to all or any portion
of
either the Revolving Credit Commitments as of the Closing Date or the
Incremental Facility Revolving
Credit
Commitments of any other Series hereunder, whether concurrently with a voluntary
or scheduled reduction of such Commitments or at any time thereafter, and
(b) in the case of any Incremental Facility Term Loans of any Series,
Incremental Facility Term Loans of such Series either (i) the proceeds of
which are applied to the replacement, repayment or prepayment of Term Loans
of
any Class or Incremental Facility Term Loans of any Series or (ii) that
reinstate an amount equal to the Term Loan Commitments or Incremental Facility
Term Loan Commitments that have previously expired or been terminated and as
to
which the Term Loans or Incremental Facility Term Loans thereunder have been
paid.
Amendment
No. 1
“System
Cash Flow”
shall
mean, for any period, the sum, for the Borrowers and their Subsidiaries
(determined on a combined basis without duplication in accordance with GAAP),
of
the following: (a) gross operating revenues (not including extraordinary or
unusual items but including business interruption insurance (to the extent
it
represents lost revenue for such period)) for such period minus
(b) all operating expenses (not including extraordinary or unusual items)
for such period, including, without limitation, technical, programming and
selling, general and administrative expenses, but excluding (to the extent
included in operating expenses) income taxes, Management Fees, depreciation,
amortization, interest expense (including, without limitation, all items
included in Interest Expense) and any extraordinary or unusual items
plus
(c) any compensation received for management services provided by the
Borrowers during any such period in respect of any Franchises retained by the
seller pursuant to any agreement for the purchase of such Franchises by the
Borrowers during any such period plus
(d) non-cash operating expenses, including,
without limitation, any non-cash compensation expense realized from grants
of
equity instruments or other rights (including, without limitation, stock
options, stock appreciation or other rights, restricted stock, restricted stock
units, deferred stock and deferred stock units) to officers, directors and
employees of the Borrowers and their Subsidiaries.
For the
purposes of determining System Cash Flow, gross operating revenues will include
revenues received in cash in respect of investments, so long as such investments
are recurring (i.e. reasonably expected to continue for four or more fiscal
quarters) and do not for any period exceed 20% of gross operating revenues
for
such period (not including (i) extraordinary or unusual items and
(ii) such investment revenues).
Notwithstanding
the foregoing, if during any period for which System Cash Flow is being
determined the Borrowers or any of their Subsidiaries shall have consummated
any
acquisition of any CATV System or other business, or consummated any
Disposition, then, for all purposes of this Agreement (other than for purposes
of the definition of Excess Cash Flow), System Cash Flow shall be determined
on
a pro forma basis as if such acquisition or Disposition had been made or
consummated on the first day of such period.
“Tranche
C Term Loan Commitment”
means,
with respect to each Tranche C Term Loan Lender, the commitment of such Lender
to make Tranche C Term Loans under the Tranche C Term Loan Incremental Facility
Agreement.
“Tranche
C Term Loan Lender”
has
the
meaning specified in the Tranche C Term Loan Incremental Facility
Agreement.
“Tranche
C Term Loan”
means
an Incremental Term Loan made pursuant to the Tranche C Term Loan Incremental
Facility Agreement.
“Tranche
C Term Loan Incremental Facility Agreement”
means
the Incremental Facility Agreement (Tranche C Term Loans) dated as of May 5,
2006 between the Borrowers, the lenders party thereto and the Administrative
Agent.
Amendment
No. 1
2.03. References
to “Refinancing”.
Section
1.01 of the Existing Credit Agreement shall be further amended by deleting
the
definition of “Refinancing”. In addition, references in the Credit Agreement to
“Refinancing” in provisions not otherwise amended hereby (including in the
definition of “Incremental Facility Commitments”, and in Section 2.01(d))
are hereby replaced with “Reinstating”.
2.04. Incremental
Facility Loans.
Section 2.01(d) of the Credit Agreement is hereby amended to read in its
entirety as follows:
“(d) Incremental
Facility Loans.
In
addition to borrowings of Term Loans and Revolving Credit Loans provided above,
the Borrowers may at any time and from time to time request that the Lenders
(or
additional financial institutions that will become Lenders hereunder) enter
into
commitments to make Incremental Facility Revolving
Credit
Loans
(and participate in Incremental Facility Letters of Credit, under Incremental
Facility Revolving Credit Commitments) or Incremental Facility Term Loans of
one
or more Series hereunder. In the event that one or more Lenders (which term,
as
used in this paragraph (d) shall include such additional financial
institutions) offer, in their sole discretion, to enter into such commitments,
and such Lenders, the Borrowers and the Administrative Agent (and, if
applicable, the Issuing Lenders) agree pursuant to an instrument in writing
(the
form and substance of which shall be satisfactory, and a copy of which shall
be
delivered, to the Administrative Agent and the Lenders making such Loans and,
if
applicable, the Issuing Lenders; any such instrument for any Series of
Incremental Loans being herein called an “Incremental
Facility Agreement”
for
such Series) as to the amount of such commitments that shall be allocated to
the
respective Lenders making such offers, the fees (if any) to be payable by the
Borrowers in connection therewith and the amortization and interest rate to
be
applicable thereto, such Lenders shall become obligated to make Incremental
Facility Loans, and (if applicable) to participate in Incremental Facility
Letters of Credit, under this Agreement in an amount equal to the amount of
their respective Incremental Facility Commitments. The Incremental Facility
Loans to be made, and (if applicable) Incremental Facility Letters of Credit
to
be issued, pursuant to any Incremental Facility Agreement in response to any
such request by the Borrowers shall be deemed to be a separate “Series”
of
Incremental Facility Loans, or (if applicable) Incremental Facility Letters
of
Credit, for all purposes of this Agreement.
Anything
herein to the contrary notwithstanding, the following additional provisions
shall be applicable to Incremental Facility Commitments and Incremental Facility
Loans:
(i) the
minimum aggregate principal amount of Incremental Facility Commitments entered
into pursuant to any such request (and, accordingly, the minimum aggregate
principal amount of any Series of Incremental Facility Loans and Incremental
Facility Letters of Credit) shall be $10,000,000,
Amendment
No. 1
(ii)
any
additional financial institution that is not already a Lender hereunder that
will provide all or any portion of the Incremental Facility Commitment of any
Series shall be approved by the Borrowers and the Administrative Agent (which
approval shall not be unreasonably withheld) and, in the case of any Incremental
Facility Revolving
Credit
Commitments that provide for Letters of Credit, by each applicable Issuing
Lender,
(iii)
the
aggregate amount of all unused Incremental Facility Commitments and Incremental
Facility Loans and Incremental Facility Letters of Credit of all Series shall
not exceed $650,000,000 at any time, except that the limitations of this
clause (iii) shall not apply to Reinstating Incremental Facility
Commitments, Reinstating Incremental Facility Loans and Reinstating Incremental
Facility Letters of Credit,
(iv)
in
no
event shall the final maturity date for the Incremental Facility Term Loans
of
any Series, or the final commitment termination date of any Incremental Facility
Revolving
Credit
Commitments of any Series, be earlier than the final Principal Payment Date
for
the Tranche C Term Loans, except that the limitations of this clause (iv)
shall not apply to (x) Incremental Facility Revolving
Credit
Commitments and Incremental Facility Term Loans in an aggregate amount as to
all
Series up to but not exceeding $200,000,000, so long as the commitment
termination date or final maturity thereof is not earlier than the Revolving
Credit
Commitment Termination Date (in the case of Incremental Facility Revolving
Credit Commitments) or the final Principal Payment Date for the Tranche A Term
Loans (in the case of Incremental Facility Term Loans) or (y) Reinstating
Incremental Facility Commitments, Reinstating Incremental Facility Loans and
Reinstating Incremental Facility Letters of Credit,
(v)
the
Incremental Facility Term Loans, and Incremental Facility Revolving
Credit
Commitments, shall have an average life at least as long as any other Class
of
Loans with the longest average life, except that the limitations of this
clause (v) shall not apply to (x) Incremental Facility Revolving
Credit
Commitments and Incremental Facility Term Loans in an aggregate amount as to
all
Series up to but not exceeding $200,000,000, so long as the weighted average
life to maturity thereof is not earlier than the weighted
average life to maturity applicable to the Revolving Credit Commitments
hereunder (in
the
case of Incremental Facility Revolving Credit Commitments) or Tranche A Term
Loans hereunder (in the case of Incremental Facility Term Loans) or
(y) Reinstating Incremental Facility Commitments, Reinstating Incremental
Facility Loans and Reinstating Incremental Facility Letters of
Credit,
Amendment
No. 1
(vi) in
no
event shall the aggregate principal amount of all Revolving Credit Commitments
and Reinstating Incremental Facility Revolving Credit Commitments as in effect
at any time exceed the Revolving Credit Commitments on the Closing Date, and
the
Reinstating Incremental Facility Revolving Credit Commitments shall not have
a
commitment termination date earlier than the scheduled commitment termination
date for the Commitments being replaced or reinstated or a commitment reduction
schedule with an average life to maturity earlier than the average life to
maturity of the commitment reduction schedule of the Commitments being replaced
or reinstated,
(vii)
in
no
event shall the aggregate principal amount of all Term Loans and Reinstating
Incremental Facility Term Loans of any Class outstanding at any time exceed
the
aggregate principal amount of the Term Loans outstanding on the Closing Date,
and the Reinstating Incremental Facility Term Loans shall not have a final
maturity date earlier than the final maturity date of the Loans being refinanced
or reinstated or an average life to maturity earlier than the average life
to
maturity of the Loans being refinanced or reinstated and
(viii) except
for the amortization and interest rate and financial covenants (which may be
less restrictive than those set forth in Section 8.10 hereof) to be
applicable thereto, any fees to be paid in connection therewith and, if
applicable, the terms upon which Incremental Facility Letters of Credit are
to
be issued, the Incremental Facility Loans and Incremental Facility Letters
of
Credit of any Series shall have the same terms applicable to the Revolving
Credit
Loans,
Term Loans and Letters of Credit hereunder, provided
that any
Incremental Facility Loans may provide for any terms, whether or not the same
as
those applicable to the Revolving
Credit
Loans,
Term Loans and Letters of Credit hereunder, if such terms become effective
upon
the payment in full of the Revolving
Credit
Loans,
Term Loans and Letters of Credit hereunder.
Following
execution and delivery by the Borrowers, one or more Incremental Facility
Lenders and the Administrative Agent as provided above of an Incremental
Facility Agreement with respect to any Series then, subject to the terms and
conditions set forth herein:
(x)
if
such
Incremental Facility Loans are to be Incremental Facility Revolving Credit
Loans, each Incremental Facility Lender of such Series agrees to make
Incremental Facility Revolving Credit Loans of such Series to the Borrowers,
and
(if applicable) issue Incremental Facility Letters of Credit of such Series
for
the account of the Borrowers, from time to time during the availability period
for such Loans as set forth in such Incremental Facility Agreement, in each
case
in an aggregate amount
Amendment
No. 1
that
will
not result in such Lender’s Incremental Facility Revolving Credit Loans and
Incremental Facility Letters of Credit of such Series exceeding such Lender’s
Incremental Facility Revolving Credit Commitment of such Series; within the
foregoing limits and subject to the terms and conditions set forth herein,
the
Borrowers may borrow, prepay and reborrow Incremental Facility Revolving Credit
Loans of such Series; and
(y)
if
such
Incremental Facility Loans are to be Incremental Facility Term Loans, each
Incremental Facility Term Loan Lender of such Series agrees to make Incremental
Facility Term Loans of such Series to the Borrowers from time to time during
the
availability period for such Loans set forth in such Incremental Facility
Agreement, in a principal amount up to but not exceeding such Lender’s
Incremental Facility Term Loan Commitment of such Series.
Proceeds
of Incremental Facility Loans and Incremental Facility Letters of Credit
hereunder shall be available for any use permitted under Section 8.16(b)
hereof.”
2.05.
No
Reinstatement.
Section 2.04(c) of the Credit Agreement is hereby amended to read in its
entirety as follows:
“(c)
No
Reinstatement.
Except
for Reinstating Incremental Facility Revolving Credit Commitments or Reinstating
Incremental Facility Term Loan Commitments, the Commitments once terminated
or
reduced may not be reinstated.”
2.06.
Certain
Financial Covenants.
Section 8.10 of the Credit Agreement is hereby amended to read in its
entirety as follows:
“8.10
Certain
Financial Covenants.
(a) Total
Leverage Ratio.
As
to all
the Lenders (other than the Tranche C Term Loan Lenders), the
Borrowers will not permit the Total Leverage Ratio to exceed the following
respective ratios at any time during the following respective
periods:
|
Total
|
||
|
Period
|
Leverage
Ratio
|
|
|
From
April 1, 2006
|
||
|
through
March 31, 2007
|
5.75
to 1
|
|
|
From
April 1, 2007
|
||
|
through
March 31, 2008
|
5.50
to 1
|
Amendment
No. 1
|
From
April 1, 2008
|
||
|
through
March 31, 2009
|
4.75
to 1
|
|
|
From
April 1, 2009
|
||
|
and
at all times thereafter
|
4.50
to 1
|
(b) Interest
Coverage Ratio.
As
to all
the Lenders (other than the Tranche C Term Loan Lenders), the
Borrowers will not permit the Interest Coverage Ratio to be less than the
following respective ratios as at the last day of any fiscal quarter ending
during the following respective periods:
|
Period
|
Ratio
|
|
|
From
April 1, 2006
|
||
|
through
March 31, 2007
|
1.60
to 1
|
|
|
From
April 1, 2007
|
||
|
through
March 31, 2008
|
1.70
to 1
|
|
|
From
April 1, 2008
|
||
|
through
March 31, 2009
|
1.90
to 1
|
|
|
From
April 1, 2009
|
||
|
and
at all times thereafter
|
2.00
to 1
|
(c) Debt
Service Coverage Ratio.
As
to all
the Lenders (other than the Tranche C Term Loan Lenders), the
Borrowers will not permit the Debt Service Coverage Ratio to be less than 1.10
to 1 as at any time.
(d) Tranche
C Term Loan Total Leverage Ratio.
As to
the Tranche C Term Loan Lenders, the Borrowers will not permit the Total
Leverage Ratio to exceed 6.00 to 1 at any time.”
2.07.
Use
of
Proceeds.
Section 8.16(c) of the Credit Agreement is hereby amended to read in its
entirety as follows:
“(c) Incremental
Facility Loans.
The
Borrowers will use the proceeds of the Incremental Facility Loans for any of
the
purposes described in paragraph (a) above; provided
that
neither the Administrative Agent nor any Lender shall have any responsibility
as
to the use of any of such proceeds.”
Section
3. Representations
and Warranties.
Each
Obligor represents and warrants to the Lenders and the Administrative Agent,
as
to itself and each of its subsidiaries, that (a) the representations and
warranties set forth in Section 7 (as hereby amended) of the Credit Agreement,
and in each of the other Loan Documents, are true and complete on the date
hereof as if made on and as of the date hereof (or, if any such
Amendment
No. 1
representation
or warranty is expressly stated to have been made as of a specific date, such
representation or warranty shall be true and correct as of such specific date),
and as if each reference in said Section 7 to “this Agreement” included
reference to this Amendment No. 1 and (b) no Default or Event of Default
has occurred and is continuing.
Section
4. Conditions
Precedent.
The
amendments set forth in Section 2 hereof shall become effective, as of the
date hereof, upon the execution and delivery of this Amendment No. 1 by the
Borrowers and the Administrative Agent.
Section
5. Miscellaneous.
Except
as herein provided, the Credit Agreement shall remain unchanged and in full
force and effect. This Amendment No. 1 may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
amendatory instrument and any of the parties hereto may execute this Amendment
No. 1 by signing any such counterpart. This Amendment No. 1 shall be governed
by, and construed in accordance with, the law of the State of New
York.
Section
6. Confirmation
of Security Documents.
Each of
the Borrowers hereby confirms and ratifies all of its obligations under the
Loan
Documents to which it is a party. By its execution on the respective signature
lines provided below, each of the Obligors hereby confirms and ratifies all
of
its obligations and the Liens granted by it under the Security Documents to
which it is a party, represents
and warrants that the representations
and warranties set forth in such Security Documents are complete and correct
on
the date hereof as if made on and as of such date and confirms
that all references in such Security Documents to the “Credit Agreement” (or
words of similar import) refer to the Credit Agreement as amended hereby without
impairing any such obligations or Liens in any respect.
Amendment
No. 1
IN
WITNESS WHEREOF, the parties hereto have caused this Amendment No. 1 to Credit
Agreement to be duly executed and delivered as of the day and year first above
written.
BORROWERS
|
MEDIACOM
ILLINOIS LLC
|
|||
|
MEDIACOM
INDIANA LLC
|
|||
|
MEDIACOM
IOWA LLC
|
|||
|
MEDIACOM
MINNESOTA LLC
|
|||
|
MEDIACOM
WISCONSIN LLC
|
|||
|
MEDIACOM
ARIZONA LLC
|
|||
|
MEDIACOM
CALIFORNIA LLC
|
|||
|
MEDIACOM
DELAWARE LLC
|
|||
|
MEDIACOM
SOUTHEAST LLC
|
|||
|
By:
|
Mediacom
LLC, Member
|
||
|
By:
|
Mediacom
Communications
|
||
|
Corporation,
Member
|
|||
|
By:
|
/s/ | ||
|
Name:
|
|||
|
Title:
|
|||
Amendment
No. 1
|
ZYLSTRA
COMMUNICATIONS CORP.
|
|||
|
By:
|
/s/ | ||
|
Name:
|
|||
|
Title:
|
|||
Amendment
No. 1
|
MEDIACOM
LLC
|
|||
|
By:
Mediacom Communications
|
|||
|
Corporation,
Member
|
|||
|
By:
|
/s/ | ||
|
Name:
|
|||
|
Title:
|
|||
Amendment
No. 1
|
MEDIACOM
MANAGEMENT
|
|||
|
CORPORATION
|
|||
|
By:
|
/s/ | ||
|
Name:
|
|||
|
Title:
|
|||
Amendment
No. 1
|
MEDIACOM
INDIANA PARTNERCO
|
|||
|
LLC
|
|||
|
By:
|
Mediacom
LLC, Member
|
||
|
By:
|
Mediacom
Communications
|
||
|
Corporation,
Member
|
|||
|
By:
|
/s/ | ||
|
Name:
|
|||
|
Title:
|
|||
Amendment
No. 1
|
MEDIACOM
INDIANA HOLDINGS, L.P.
|
|||
|
By:
|
Mediacom
Indiana Partnerco LLC,
|
||
|
General
Partner
|
|||
|
By:
|
Mediacom
LLC, Member
|
||
|
By:
|
Mediacom
Communications
|
||
|
Corporation,
Member
|
|||
|
By:
|
/s/ | ||
|
Name:
|
|||
|
Title:
|
|||
Amendment
No. 1
|
MEDIACOM
COMMUNICATIONS
|
|||
|
CORPORATION
|
|||
|
By:
|
/s/ | ||
|
Name:
Mark E. Stephan
|
|||
|
Title:
Chief Financial Officer
|
|||
Amendment
No. 1
|
ILLINI
CABLE HOLDING, INC.
|
|||
|
By:
|
/s/ | ||
|
Name:
|
|||
|
Title:
|
|||
|
ILLINI
CABLEVISION OF ILLINOIS,
|
|||
|
INC.
|
|||
|
By:
|
/s/ | ||
|
Name:
|
|||
|
Title:
|
|||
Amendment
No. 1
ADMINISTRATIVE
AGENT
|
JPMORGAN
CHASE BANK, N.A.,
|
|||
|
as
Administrative Agent
|
|||
|
By:
|
/s/ | ||
|
Name:
|
|||
|
Title:
|
|||
EXECUTION
COPY
AMENDMENT
NO. 2
AMENDMENT
NO. 2 dated as of May 5, 2006 between MCC
IOWA
LLC, a limited liability company duly organized and validly existing under
the
laws of the State of Delaware (“MCC
Iowa”);
MCC
ILLINOIS LLC, a limited liability company duly organized and validly existing
under the laws of the State of Delaware (“MCC
Illinois”);
MCC
GEORGIA LLC, a limited liability company duly organized and validly existing
under the laws of the State of Delaware (“MCC
Georgia”);
and
MCC MISSOURI LLC, a limited liability company duly organized and validly
existing under the laws of the State of Delaware (“MCC
Missouri”,
and,
together with MCC Iowa, MCC Illinois and MCC Georgia, the “Borrowers”);
and
JPMORGAN CHASE BANK, N.A., in its capacity as Administrative Agent (the
“Administrative
Agent”)
pursuant to authority granted by the Majority Lenders pursuant to Section 11.04
of the Amendment and Restatement referred to below.
The
Borrowers, the lenders party thereto, and the Administrative Agent are parties
to a Amendment and Restatement dated as of December 16, 2004 of the Credit
Agreement dated as of July 18, 2001 (as modified and supplemented and in effect
from time to time, the “Amendment
and Restatement”),
providing, subject to the terms and conditions thereof, for extensions of credit
(by means of loans and letters of credit) to be made by said lenders to the
Borrowers in an aggregate principal or face amount not exceeding
$1,450,505,440.24 (which may, in circumstances therein provided, be increased
to
$1,950,505,440.24).
The
Borrowers and the Administrative Agent, pursuant to authority granted by, and
having obtained the consent of Lenders party to the Amendment and Restatement
constituting the Majority Lenders wish now to amend the Amendment and
Restatement in certain respects, and accordingly, the parties hereto hereby
agree as follows:
Section
1. Definitions.
Except
as otherwise defined in this Amendment No. 2, terms defined in the Amendment
and
Restatement are used herein as defined therein.
Section
2. Amendments.
Subject
to the satisfaction of the conditions precedent specified in Section 4
below, but effective as of the date hereof, the Amendment and Restatement shall
be amended as follows:
2.01.
References
Generally.
References in the Amendment and Restatement (including references to the
Amendment and Restatement as amended hereby) to “this Agreement” (and indirect
references such as “hereunder”, “hereby”, “herein” and “hereof”) shall be deemed
to be references to the Amendment and Restatement as amended
hereby.
Amendment
No. 2
2.02.
Definitions.
Section 1.01
of the Amendment and Restatement shall be amended by amending the following
definitions (to the extent already included in said Section 1.01) and
adding the following definitions in the appropriate alphabetical location (to
the extent not already included in said Section 1.01):
“Affiliate
Subordinated Indebtedness”
shall
mean Indebtedness to an Affiliate (i) for which a Borrower is directly and
primarily liable, (ii) in respect of which none of its Subsidiaries is
contingently or otherwise obligated, (iii) that is subordinated to the
obligations of the Borrowers to pay principal of and interest on the Loans,
Reimbursement Obligations, fees and other amounts payable hereunder and under
the other Loan Documents pursuant to an Affiliate Subordinated Indebtedness
Subordination Agreement, (iv) that does not mature prior to January 31,
2016, and that is issued pursuant to documentation containing terms (including
interest, covenants and events of default) in form and substance satisfactory
to
the Majority Lenders, (v) that states by its terms that principal and
interest in respect thereof shall only be payable to the extent permitted under
Section 8.09 hereof and (vi) that is pledged by the respective holder
thereof to the Administrative Agent in a manner that creates a first priority
perfected security interest in favor of the Administrative Agent, as collateral
security for the obligations of the Borrowers hereunder, pursuant to (in the
case of Mediacom Broadband) the Guarantee and Pledge Agreement and (in the
case
of any other holder) a security document in form and substance satisfactory
to
the Administrative Agent.
“Majority
Lenders”
shall
mean, subject to the last paragraph of Section 11.04 hereof, Lenders having
more than 50% of the sum of (a) the aggregate outstanding principal amount
of the Tranche A Term Loans or, if the Tranche A Term Loans shall not have
been
made, the aggregate outstanding principal amount of the Tranche A Term Loan
Commitments plus
(b) the aggregate outstanding principal amount of the Tranche D Term Loans
or, if the Tranche D Term Loans shall not have been made, the aggregate
principal amount of the Tranche D Term Loan Commitments, as the case may be,
plus
(c) the
aggregate outstanding principal amount of the Incremental Facility Term Loans
of
each Series or, if the Incremental Facility Term Loans of such Series shall
not
have been made, the aggregate outstanding principal amount of the Incremental
Facility Commitments of such Series plus
(d) the sum of (i) the aggregate unused amount, if any, of the
Incremental Facility Revolving Credit Commitments of each Series at such time
plus
(ii) the aggregate amount of Letter of Credit Liabilities in respect of
Incremental Facility Letters of Credit of each Series at such time plus
(iii) the aggregate outstanding principal amount of the Incremental
Facility Revolving Credit Loans of each Series at such time plus
(e) the sum of (i) the aggregate unused amount, if any, of the
Revolving Credit Commitments at such time plus
(ii) the aggregate amount of Letter of Credit Liabilities in respect of
Revolving
Credit
Letters
of Credit at such time plus
(iii) the aggregate outstanding principal amount of the Revolving Credit
Loans at such time.
Amendment
No. 2
The
“Majority Lenders” of a particular Class of Loans shall mean Lenders having
outstanding Loans, Letter of Credit Liabilities, Commitments or unused
Commitments (as applicable, and determined in the manner provided above) of
such
Class representing more than 50% of the total outstanding Loans, Letter of
Credit Liabilities, Commitments or unused Commitments of such Class at such
time.
Notwithstanding
any of the foregoing, (i) for purposes of modifying, waiving or making any
determination (including taking any action under the last paragraph of
Section 9.01) with respect to Section 8.10(a), (b) or (c), the
“Majority Lenders” shall mean the Lenders having outstanding Loans, Letter of
Credit Liabilities, Commitments or unused Commitments (other than the Tranche
D
Term Loans and Tranche D Term Loan Commitments) representing more than 50%
of
the total outstanding Loans, Letter of Credit Liabilities, Commitments or unused
Commitments (other than the Tranche D Term Loans and Tranche D Term Loan
Commitments) and (ii) for purposes of modifying, waiving or making any
determination (including taking any action under the last paragraph of
Section 9.01) with respect to Section 8.10(d), the “Majority Lenders”
shall mean Lenders having outstanding Tranche D Term Loans representing more
than 50% of the total outstanding Tranche D Term Loans.
“System
Cash Flow”
shall
mean, for any period, the sum, for the Borrowers and their Subsidiaries
(determined on a combined basis without duplication in accordance with GAAP),
of
the following: (a) gross operating revenues (not including extraordinary or
unusual items but including business interruption insurance (to the extent
it
represents lost revenue for such period)) for such period minus
(b) all operating expenses (not including extraordinary or unusual items)
for such period, including, without limitation, technical, programming and
selling, general and administrative expenses, but excluding (to the extent
included in operating expenses) income taxes, Management Fees, depreciation,
amortization, interest expense (including, without limitation, all items
included in Interest Expense) and any extraordinary or unusual items
plus
(c) any compensation received for management services provided by the
Borrowers during any such period in respect of any Franchises retained by the
seller pursuant to any agreement for the purchase of such Franchises by the
Borrowers during any such period plus
(d) non-cash operating expenses, including,
without limitation, any non-cash compensation expense realized from grants
of
equity instruments or other rights (including, without limitation, stock
options, stock appreciation or other rights, restricted stock, restricted stock
units, deferred stock and deferred stock units) to officers, directors and
employees of the Borrowers and their Subsidiaries.
For the
purposes of determining System Cash Flow, gross operating revenues will include
revenues received in cash in respect of investments, so long as such investments
are recurring (i.e. reasonably expected to continue for four or more fiscal
quarters) and do not for any period exceed 20% of gross operating revenues
for
such period (not including (i) extraordinary or unusual items and
(ii) such investment revenues).
Amendment
No. 2
Notwithstanding
the foregoing, if during any period for which System Cash Flow is being
determined the Borrowers or any of their Subsidiaries shall have consummated
any
acquisition of any CATV System or other business, or consummated any
Disposition, then, for all purposes of this Agreement (other than for purposes
of the definition of Excess Cash Flow), System Cash Flow shall be determined
on
a pro forma basis as if such acquisition or Disposition had been made or
consummated on the first day of such period.
“Tranche
D Term Loan Commitment”
means,
with respect to each Tranche D Term Loan Lender, the commitment of such Lender
to make Tranche D Term Loans under the Tranche D Term Loan Incremental Facility
Agreement.
“Tranche
D Term Loan Lender”
has
the
meaning specified in the Tranche D Term Loan Incremental Facility
Agreement.
“Tranche
D Term Loan”
means
an Incremental Term Loan made pursuant to the Tranche D Term Loan Incremental
Facility Agreement.
“Tranche
D Term Loan Incremental Facility Agreement”
means
the Incremental Facility Agreement (Tranche D Term Loans) dated as of May 5,
2006 between the Borrowers, the lenders party thereto and the Administrative
Agent.
2.03. Certain
Financial Covenants.
Section 8.10 of the Amendment and Restatement is hereby amended to read in
its entirety as follows:
“8.10 Certain
Financial Covenants.
(a) Total
Leverage Ratio.
As
to all
the Lenders (other than the Tranche D Term Loan Lenders), the
Borrowers will not permit the Total Leverage Ratio to exceed the following
respective ratios at any time during the following respective
periods:
|
Total
|
||
|
Period
|
Leverage
Ratio
|
|
|
From
April 1, 2006
|
||
|
through
March 31, 2007
|
5.75
to 1
|
|
|
From
April 1, 2007
|
||
|
through
March 31, 2008
|
5.50
to 1
|
|
|
From
April 1, 2008
|
||
|
through
March 31, 2009
|
4.75
to 1
|
|
|
From
April 1, 2009
|
||
|
and
at all times thereafter
|
4.50
to 1
|
Amendment
No. 2
(b) Interest
Coverage Ratio.
As
to all
the Lenders (other than the Tranche D Term Loan Lenders), the
Borrowers will not permit the Interest Coverage Ratio to be less than the
following respective ratios as at the last day of any fiscal quarter ending
during the following respective periods:
|
Period
|
Ratio
|
|
|
From
April 1, 2006
|
||
|
through
March 31, 2007
|
1.60
to 1
|
|
|
From
April 1, 2007
|
||
|
through
March 31, 2008
|
1.70
to 1
|
|
|
From
April 1, 2008
|
||
|
through
March 31, 2009
|
1.90
to 1
|
|
|
From
April 1, 2009
|
||
|
and
at all times thereafter
|
2.00
to 1
|
(c) Debt
Service Coverage Ratio.
As
to all
the Lenders (other than the Tranche D Term Loan Lenders), the
Borrowers will not permit the Debt Service Coverage Ratio to be less than 1.10
to 1 as at any time.
(d) Tranche
D Term Loan Total Leverage Ratio.
As to
the Tranche D Term Loan Lenders, the Borrowers will not permit the Total
Leverage Ratio to exceed 6.00 to 1 at any time.”
Section
3. Representations
and Warranties.
Each
Obligor represents and warrants to the Lenders and the Administrative Agent,
as
to itself and each of its subsidiaries, that (a) the representations and
warranties set forth in Section 7 (as hereby amended) of the Amendment and
Restatement, and in each of the other Loan Documents, are true and complete
on
the date hereof as if made on and as of the date hereof (or, if any such
representation or warranty is expressly stated to have been made as of a
specific date, such representation or warranty shall be true and correct as
of
such specific date), and as if each reference in said Section 7 to “this
Agreement” included reference to this Amendment No. 2 and (b) no Default or
Event of Default has occurred and is continuing.
Section
4. Conditions
Precedent.
The
amendments set forth in Section 2 hereof shall become effective, as of the
date hereof, upon the execution and delivery of this Amendment No. 2 by the
Borrowers and the Administrative Agent.
Section
5. Miscellaneous.
Except
as herein provided, the Amendment and Restatement shall remain unchanged and
in
full force and effect. This Amendment No. 2 may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
amendatory instrument and any of the parties hereto may execute this Amendment
No. 2 by signing any such counterpart. This Amendment No. 2
Amendment
No. 2
shall
be
governed by, and construed in accordance with, the law of the State of New
York.
Section
6. Confirmation
of Security Documents.
Each of
the Borrowers hereby confirms and ratifies all of its obligations under the
Loan
Documents to which it is a party. By its execution on the respective signature
lines provided below, each of the Obligors hereby confirms and ratifies all
of
its obligations and the Liens granted by it under the Security Documents to
which it is a party, represents
and warrants that the representations
and warranties set forth in such Security Documents are complete and correct
on
the date hereof as if made on and as of such date and confirms
that all references in such Security Documents to the “Credit Agreement” (or
words of similar import) refer to the Amendment and Restatement as amended
hereby without impairing any such obligations or Liens in any
respect.
Amendment
No. 2
IN
WITNESS WHEREOF, the parties hereto have caused this Amendment No. 2 to
Amendment and Restatement to be duly executed and delivered as of the day and
year first above written.
BORROWERS
|
MCC
GEORGIA LLC
|
|||
|
MCC
ILLINOIS LLC
|
|||
|
MCC
IOWA LLC
|
|||
|
MCC
MISSOURI LLC
|
|||
|
By
|
Mediacom
Broadband LLC, a Member
|
||
|
By
|
Mediacom
Communications
|
||
|
Corporation,
a Member
|
|||
|
By:
|
/s/ | ||
|
Name:
|
|||
|
Title:
|
|||
|
MEDIACOM
BROADBAND LLC
|
|||
|
By
Mediacom Communications Corporation, a
|
|||
|
Member
|
|||
|
By:
|
/s/ | ||
|
Name:
|
|||
|
Title:
|
|||
|
MEDIACOM
COMMUNICATIONS
|
|||
|
CORPORATION
|
|||
|
By:
|
/s/ | ||
|
Name:
|
|||
|
Title:
|
|||
Amendment
No. 2
ADMINISTRATIVE
AGENT
|
JPMORGAN
CHASE BANK, N.A.,
|
|||
|
as
Administrative Agent
|
|||
|
|
|||
|
By:
|
/s/ | ||
|
Name:
|
|||
|
Title:
|
|||
Amendment
No. 2
Exhibit
31.1
CERTIFICATIONS
I,
Rocco
B. Commisso, certify that:
|
(1)
|
I
have reviewed this report on Form 10-Q of Mediacom Communications
Corporation;
|
|
(2)
|
Based
on my knowledge, this report does not contain any untrue statement
of a
material fact or omit to state a material fact necessary to make
the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this
report;
|
|
(3)
|
Based
on my knowledge, the financial statements, and other financial information
included in this report, fairly present in all material respects
the
financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this
report;
|
|
(4)
|
The
registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the registrant and
have:
|
|
a)
|
Designed
such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to
ensure
that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is
being
prepared;
|
|
b)
|
Designed
such internal control over financial reporting, or caused such internal
control over financial reporting to be designed under our supervision,
to
provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles;
|
|
c)
|
Evaluated
the effectiveness of the registrant's disclosure controls and procedures
and presented in this report our conclusions about the effectiveness
of
the disclosure controls and procedures, as of end of the period covered
by
this report based on such evaluation;
and
|
|
d)
|
Disclosed
in this report any change in the registrant’s internal control over
financial reporting that occurred during the registrant’s most recent
fiscal quarter (the registrant’s fourth fiscal quarter in the case of an
annual report) that has materially affected, or is reasonably likely
to
materially affect, the registrant’s internal control over financial
reporting; and
|
|
(5)
|
The
registrant's other certifying officer and I have disclosed, based
on our
most recent evaluation of internal control over financial reporting,
to
the registrant's auditors and the audit committee of registrant's
board of
directors (or persons performing the equivalent
function):
|
|
a)
|
All
significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant's ability to
record,
process, summarize and report financial information;
and
|
|
b)
|
Any
fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
control
over financial reporting.
|
|
May
10, 2006
|
By:
|
/s/
ROCCO B. COMMISSO
|
|
|
Rocco
B. Commisso
|
|||
|
Chief
Executive Officer
|
Exhibit
31.1
CERTIFICATIONS
I,
Mark
E. Stephan, certify that:
(1) I
have
reviewed this report on Form 10-Q of Mediacom Communications
Corporation;
|
(2)
|
Based
on my knowledge, this report does not contain any untrue statement
of a
material fact or omit to state a material fact necessary to make
the
statements made, in light of the circumstances under which such
statements
were made, not misleading with respect to the period covered
by this
report;
|
|
(3)
|
Based
on my knowledge, the financial statements, and other financial
information
included in this report, fairly present in all material respects
the
financial condition, results of operations and cash flows of
the
registrant as of, and for, the periods presented in this
report;
|
|
(4)
|
The
registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures
(as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
control over financial reporting (as defined in Exchange Act
Rules
13a-15(f) and 15d-15(f)) for the registrant and
have:
|
|
a)
|
Designed
such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision,
to ensure
that material information relating to the registrant, including
its
consolidated subsidiaries, is made known to us by others within
those
entities, particularly during the period in which this report
is being
prepared;
|
|
b)
|
Designed
such internal control over financial reporting, or caused such
internal
control over financial reporting to be designed under our supervision,
to
provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles;
|
|
c)
|
Evaluated
the effectiveness of the registrant's disclosure controls and
procedures
and presented in this report our conclusions about the effectiveness
of
the disclosure controls and procedures, as of end of the period
covered by
this report based on such evaluation;
and
|
|
d)
|
Disclosed
in this report any change in the registrant’s internal control over
financial reporting that occurred during the registrant’s most recent
fiscal quarter (the registrant’s fourth fiscal quarter in the case of an
annual report) that has materially affected, or is reasonably
likely to
materially affect, the registrant’s internal control over financial
reporting; and
|
|
(5)
|
The
registrant's other certifying officer and I have disclosed, based
on our
most recent evaluation of internal control over financial reporting,
to
the registrant's auditors and the audit committee of registrant's
board of
directors (or persons performing the equivalent
function):
|
|
a)
|
All
significant deficiencies and material weaknesses in the design
or
operation of internal control over financial reporting which
are
reasonably likely to adversely affect the registrant's ability
to record,
process, summarize and report financial information;
and
|
|
b)
|
Any
fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
control
over financial reporting.
|
|
May
10, 2006
|
By:
|
/s/
MARK E. STEPHAN
|
|
|
Mark
E. Stephan
|
|||
|
Executive
Vice President and Chief Financial Officer
|
Exhibit
32.1
CERTIFICATION
PURSUANT TO
18
U.S.C. SECTION 1350,
AS
ADOPTED PURSUANT TO
SECTION
906 OF THE SARBANES-OXLEY ACT OF 2002
In
connection with the Quarterly Report of Mediacom Communications Corporation
(the
“Company”) on Form 10-Q for the period ended March 31, 2005 as filed with the
Securities and Exchange Commission on the date hereof (the “Report”), Rocco B.
Commisso, Chief Executive Officer and Mark E. Stephan, Chief Financial Officer
of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to §
906 of the Sarbanes-Oxley Act of 2002, that:
|
(1)
|
the
Report fully complies with the requirements of section 13(a) or 15(d)
of
the Securities Exchange Act of 1934;
and
|
|
(2)
|
the
information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the
Company.
|
|
May
10, 2006
|
By:
|
/s/
ROCCO B. COMMISSO
|
|
|
Rocco
B. Commisso
|
|||
|
Chief
Executive Officer
|
|||
|
By:
|
/s/
MARK E. STEPHAN
|
||
|
Mark
E. Stephan
|
|||
|
Chief
Financial Officer
|