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SEC Filings

424B1
RENAISSANCE MEDIA GROUP LLC filed this Form 424B1 on 09/10/1998
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           RENAISSANCE MEDIA HOLDINGS LLC AND RENAISSANCE MEDIA LLC
 
                  NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
 
3. ASSET PURCHASE AGREEMENT
 
  On November 14, 1997, Holdings entered into an Asset Purchase Agreement (the
"Asset Purchase Agreement") with TWI Cable whereby Holdings agreed to purchase
from TWI Cable the assets of certain cable television systems in Louisiana,
Tennessee and Mississippi (the "Acquisition"). This transaction closed on
April 9, 1998 and was accounted for using the purchase method. The purchase
price for the assets acquired was $309.5 million, $300 million of which was
paid in cash and $9.5 million of which was paid by the issuance of an equity
interest (9,500 units) in Holdings to TWI Cable at the closing. The 9,500
units issued to TWI Cable as equity represent an 8.8% interest in Holdings,
determined by dividing the TWI Cable interest of 9,500 units by the total
units outstanding of Holdings of 108,500. TWI Cable's interest in Holdings is
as a minority member with one Board representative, and TWI Cable has economic
interests in Holdings equal to its ownership percentage on the same basis as
all other members of Holdings. Holdings was formed to consummate the
Acquisition and had no assets prior to this transaction. In accordance with
the Limited Liability Company Agreement of Holdings, TWI Cable is not required
to make any future equity contribution to Holdings and its ability to sell or
otherwise dispose of its interests in Holdings is limited. In accordance with
the Asset Purchase Agreement, Holdings made a deposit payment of $15 million
on December 5, 1997 which was held by an escrow agent until the closing date.
(See Note 9.)
 
4. CAPITALIZATION AND DEBT FINANCING
 
  In accordance with a commitment letter dated November 14, 1997, Morgan
Stanley Senior Funding, Inc. has committed to provide up to $200 million of
acquisition debt financing to Media ("Acquisition Debt"), including $25
million available to Media, if necessary, to fund capital expansion and
upgrade programs as well as for general working capital requirements. (See
Note 9.)
 
5. INTEREST-RATE CAP AGREEMENT
 
  On December 5, 1997, Media purchased an interest-rate cap agreement from
Morgan Stanley Capital Services Inc. At December 31, 1997, the interest-rate
cap agreement effectively fixed or set a maximum interest rate of 7.25% on
bank debt borrowings up to $100 million. The interest-rate cap agreement
expires on December 5, 1999. The cost of this agreement has been recorded as
deferred financing costs and is being amortized to interest expense ratably
over the life of the agreement.
 
6. DUE TO MANAGEMENT INVESTORS
 
  Subsequent to the formation of the Company and the execution of the Asset
Purchase Agreement, the Management Investors advanced $1 million to Holdings.
At the closing of the Asset Purchase Agreement, (see Note 9), this advance
will be contributed by the Management Investors to Holdings as equity.
 
7. COMMITMENTS
 
  Media entered into a lease agreement on January 5, 1998 for corporate office
headquarters. The lease agreement expires on January 4, 1999. Annual rental
expense for 1998 under the agreement will be $90,000.
 
8. INCOME TAXES
 
  Holdings and Media are limited liability companies and are not subject to
Federal or State Income Tax. Any income earned by these entities will be taxed
to their respective members.
 
9. SUBSEQUENT EVENTS (UNAUDITED)
 
  On April 9, 1998, the Acquisition described in Note 3 was completed. At that
time Holdings assigned its rights and obligations under the Asset Purchase
Agreement to Media.
 
  The capitalization of Holdings was modified with respect to the financing
aspects of the transaction such that the Acquisition Debt described in Note 4
was reduced to $150 million of which $110 million was drawn
 
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