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EXECUTION COPY
AMENDMENT NO. 2 TO NOTE PURCHASE AGREEMENT
This AMENDMENT NO. 2 TO NOTE PURCHASE AGREEMENT ("this Amendment") is
entered into as of September 30, 1994 by CABLE TV FUND 12-BCD VENTURE (the
"Company") and the NOTEHOLDERS referred to below.
PRELIMINARY STATEMENT. (1) Reference is made to the Note Purchase
Agreement, dated as of March 31, 1992 (as such Note Purchase Agreement has been
amended by Amendment No. 1 to Note Purchase Agreement dated as of March 31,
1994 and as such Note Purchase Agreement may be further amended from time to
time, the "Note Purchase Agreement"), among the Company and the purchasers of
the Notes referred to below. All capitalized terms used herein and not
otherwise defined shall have the respective meanings set forth in the Note
Purchase Agreement.
(2) Pursuant to the Note Purchase Agreement, at a closing held on
March 31, 1992, the Company issued and sold and the financial institutions
designated Purchasers therein purchased $93,000,000 in aggregate principal
amount of the Company's 8.64% Senior Secured Notes due March 31, 2000 (the
"Notes"), each Purchaser purchasing Notes in the principal amount indicated
opposite its name in Schedule I to the Note Purchase Agreement. The
institutions which are currently the beneficial holders of the Notes and any
nominees which hold Notes for such institutions and are the record holders
thereof are named in Schedule 1 hereto (for the purposes of this Amendment,
such institutions and/or such nominees, as the context requires, are included
in the term "Noteholders").
(3) The Company has requested that the Noteholders agree to amend
Section 9.12 of the Note Purchase Agreement, which establishes maximum
permitted levels for the periods specified therein for the ratio of Funded Debt
to Annualized Operating Cash Flow, and Section 9.25 of the Note Purchase
Agreement, which limits the amount of Management Fees payable by the Company,
all in the manner described herein. The Company has further requested that the
Noteholders consent to certain amendments to the Loan Agreement. On the terms
and subject to the conditions set forth in this Amendment, the Company and the
Noteholders desire to amend the Note Purchase Agreement pursuant to Section
13.4 thereof and, the Noteholders desire to consent to certain amendments to
the Loan Agreement pursuant to Section 9.22 of the Note Purchase Agreement.
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NOW, THEREFORE,the Company and each of the undersigned Noteholders
agree as follows:
SECTION 1. AMENDMENT TO THE NOTE PURCHASE AGREEMENT.
SECTION 1.1. AMENDMENT TO SECTION 9.9. The Note Purchase Agreement is
hereby amended by restating Section 9.9 thereof to read in its entirety as
follows:
SECTION 9.9. TRANSACTIONS WITH AFFILIATES. The Company will
not enter into any transaction (including, without limitation, the
purchase, sale or exchange of any property, the rendering of any
services or the payment of Management Fees) with any Affiliate, except
in the ordinary course of the businesses of the Company, and in good
faith and upon commercially reasonable terms that are no less
favorable to the Company than would obtain in a comparable
arm's-length transaction with a Person other than an Affiliate;
provided, however, that the Company may make payments to Affiliates to
the extent permitted under the provisions of Section 9.25 hereof.
SECTION 1.2. AMENDMENT TO SECTION 9.12. The Note Purchase Agreement is
hereby amended by restating Section 9.12 thereof to read in its entirety as
follows:
SECTION 9.12. FUNDED DEBT TO ANNUALIZED OPERATING CASH FLOW
RATIO. The Company will not permit the ratio of Funded Debt to
Annualized Operating Cash Flow at any time during any period set forth
below to exceed the applicable ratio set forth opposite such period
below:
Ratio of Funded Debt
to Annualized Operating
Period Cash Flow
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1/l/92 - 6/29/93 5.25:1.00
6/30/93 - 3/30/94 4.75:1.00
3/31/94 - 3/30/95 5.00:1.00
3/31/95 - 3/30/96 4.50:1.00
3/31/96 - and thereafter 4.00:1.00
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SECTION 1.3. AMENDMENT TO SECTION 9.25. The Note Purchase Agreement is
hereby amended by restating Section 9.25 thereof to read in its entirety as
follows:
SECTION 9.25. PAYMENTS TO AFFILIATES. The Company will not pay
or accrue any salaries or other compensation, fees (including
Management Fees) or other payments (including Home Office Allocations)
to Affiliates, except, in the absence of an Event of Default or
Default hereunder and so long as such payment shall not cause an Event
of Default or Default hereunder: (i) in connection with the sale of a
System as permitted by Section 9.18 hereof, the Company may make such
distributions to the Partners as shall be necessary to cover each such
Partner's tax liability arising in connection with such sale; (ii) if
the Company represents to the Noteholders as of the date of any such
proposed payment that it is not aware of any Refund Liability, the
Company may (A) repay advances (and accrued interest thereon at a rate
not to exceed Jones' Weighted Average Cost of Borrowing for the period
during which any such advance is outstanding) made by Jones to the
Company and (B) prior to March 31, 1996, pay or accrue, as applicable,
(1) Management Fees in an amount which for any Fiscal Quarter of the
Company does not exceed five percent (5%) of the Company's Gross
Operating Revenues for such Fiscal Quarter and (2) Home Office
Allocations; provided, however, that if in any Fiscal Quarter the
Company shall have repaid advances or made payments of Management Fees
and Home Office Allocations to Jones at a time when such payment was
permitted hereunder, but an Event of Default, Default or Refund
Liability shall exist as of the end of the Fiscal Quarter in which
such payment(s) were made, Jones shall repay the same to the Company
immediately upon determination of the existence of such Event of
Default, Default or Refund Liability and, after such repayment, the
same shall be deemed to have been deferred for purposes of this
Agreement; provided, further, that any Management Fees and Home Office
Allocations accrued for any Fiscal Quarter but not paid out of the
Company's Operating Cash Flow for such quarter may, prior to March 31,
1996, be deferred and subordinated to the Notes pursuant to the
Subordination Agreement; and provided, further, that so long as there
exists no Event of Default or Default under this Agreement or Refund
Liability, and the making of such payment does not cause an Event of
Default or Default hereunder, the Company may pay, prior to March 31,
1996, accrued interest on deferred Management Fees and Home Office
Allocations at a rate not to exceed Jones, Weighted Average Cost of
Borrowing for the period during which the payment of such Management
Fees and Home Office Allocations is deferred; and provided, further,
that after March 31, 1996, the Company may accrue and defer (but not
pay until
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the Notes have been repaid in full) (x) Management Fees in the amounts
described in Subsection Section 9.25(ii)(B)(1) above and (y) Allocated
Expenses; (iii) the Company may make payments to Affiliates for
brokerage services, including in connection with the purchase or sale
of a System, and for the sale of television or other signals, the
purchase or lease of television or other signals or specialized
equipment and the licensing of technology, provided (x) such
transactions are at a price and on terms at least as favorable as
those prices and terms being generally offered in the same market
place by unrelated parties for goods or services as nearly identical
as possible in regard to quality, technical advancement and
availability, provided, however, that so long as no Default or Event
of Default is in existence, the Company may pay brokerage fees to The
Jones Group, Ltd. in connection with (a) the sale of a System to an
entity which is not an Affiliate in an amount not to exceed two and
one-half percent (2-1/2%) of the gross sales price of the System, and
(b) the purchase of a System, in an amount not to exceed four and one
half percent (4-1/2%) of the lower of the gross purchase price or
appraisal value of the System and (y) payments to Jones Programming
Services, Inc. ("Programming") for the purchase of signals or
programming for the Systems shall not exceed the payments made by or
charged to other Affiliates of Programming by Programming for
comparable quantity and quality of signals or programming.
SECTION 1.4. AMENDMENT TO SECTION 12.1. The following definition is
hereby added, in alphabetical order, to Section 12.1 of the Note Purchase
Agreement:
The term "Refund Liability" shall mean a refund liability
relating to the Company's cost of service showing calculation which is
in excess of five million dollars ($5,000,000) and as to which there
has been issued a final order of the FCC.
SECTION 2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
In order to induce the Noteholders to execute and deliver this
Amendment, the Company hereby represents and warrants that, giving effect to
the amendment set forth in Section 1 of this Amendment, no event has occurred
and no condition exists which constitutes a Default or an Event of Default.
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SECTION 3. AMENDMENT FEE.
The Company shall pay to each Noteholder on or prior to the date of
effectiveness of this Amendment an amendment fee in an amount equal to 0.25% of
the aggregate unpaid principal amount of Notes outstanding and held by such
Noteholder (without regard to whether such Noteholder is executing this
Amendment).
SECTION 4. CONDITIONS TO EFFECTIVENESS OF AMENDMENT.
This Amendment shall be effective as of the date hereof, but only upon
satisfaction of the following conditions: (a) counterparts hereof have been
executed and delivered by the Company and the holders of a majority in
aggregate unpaid principal amount of Notes outstanding; (b) the Company has
paid to each Noteholder the amendment fee pursuant to Section 3 hereof; and (c)
the Amendment No. 1 to Credit Agreement, substantially in the form attached
hereto as Exhibit A, has been duly executed and delivered by the Company and
each of the other parties thereto.
SECTION 5. CONSENT TO AMENDMENT TO LOAN AGREEMENT.
Pursuant to Section 9.22 of the Note Purchase Agreement which requires
the Company to obtain the written consent of the holders of at least 66 2/3% of
the aggregate principal amount of Notes outstanding prior to making certain
amendments to the Loan Agreement, the Noteholders hereby approve and consent to
the execution by the Company of Amendment No. 1 to the Credit Agreement
substantially in the form attached hereto as Exhibit A.
SECTION 6. MISCELLANEOUS.
SECTION 6.1. INSTRUMENT PURSUANT TO NOTE PURCHASE AGREEMENT.
This Amendment is executed pursuant to Section 13.4 of the Note Purchase
Agreement and shall (unless otherwise expressly indicated herein) be construed,
administered, and applied in accordance with all of the terms and provisions of
the Note Purchase Agreement. Except as expressly amended hereby, all of the
representations, warranties, terms, covenants and conditions of the Note
Purchase Agreement shall remain unamended and unwaived.
SECTION 6.2. SUCCESSORS AND ASSIGNS. This Amendment shall be
binding upon and inure to the benefit of the Company,the Noteholders and their
respective successors and assigns.
SECTION 6.3. COUNTERPARTS. This Amendment may be executed
simultaneously in two or more counterparts, each of which shall
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be deemed to be an original but all of which shall constitute together but one
and the same instrument.
SECTION 6.4. GOVERNING LAW. This Amendment shall be governed by and
construed in accordance with the law of the State of New York.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be executed by their respective officers duly authorized thereunto as of the
day and year first above written.
CABLE TV FUND 12-BCD VENTURE
By: Cable TV FUND 12-B, LTD., a
general partner
By: Cable TV FUND 12-C, LTD., a
general partner
By: Cable TV FUND 12-D, LTD., a
general partner
By: JONES INTERCABLE, INC.,
their general partner
By: s/ KEVIN P. COYLE
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Name: Kevin P. Coyle
Title: Group Vice President/Finance
JOHN HANCOCK MUTUAL LIFE INSURANCE
COMPANY
By: /s/ DANIEL C. BUDDE
-----------------------------------
Name: Daniel C. Budde
Title: Investment Officer
JOHN HANCOCK VARIABLE LIFE INSURANCE
COMPANY
By: s/ STEPHEN A. MACLEAN
-----------------------------------
Name: Stephen A. MacLean
Title: Investment Vice President
MELLON BANK, N.A., as Trustee for NYNEX
MASTER PENSION TRUST, as directed by
JOHN HANCOCK MUTUAL LIFE INSURANCE
COMPANY
By: s/ ALLAN M. SEAMAN
-----------------------------------
Name: ALLAN M. SEAMAN
Title: ASSOCIATE COUNSEL
The decision to particpate in this investment,
and representations made herein by the
participant, and any actions taken hereunder by
the participant has/have been made solely at the
direction of the investment fiduciary who has
sole investment discretion with respect to this
investment.
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AMERICAN GENERAL LIFE INSURANCE COMPANY
OF NEW YORK
By: /s/ PETER V. TUTERS
---------------------------------------
Name: Peter V. Tuters
Title: Vice President and
Chief Investment Officer
GULF LIFE INSURANCE COMPANY
By: /s/ PETER V. TUTERS
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Name: Peter V. Tuters
Title: Vice President and
Chief Investment Office
CONNECTICUT MUTUAL LIFE INSURANCE COMPANY
By: /s/ WILLIAM F. CASE
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Name: WILLIAM F. CASE
Title: Senior Investment Officer
GREAT-WEST LIFE ANNUITY INSURANCE
COMPANY
By: /s/ ERNIE P. FRIESEN
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Name: Ernie P. Friesen
Title: Manager
Private Placement Investments
By: /s/ JULIE BOCK
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Name: Julie Bock
Title: Manager
Private Placement Investments
MASSACHUSETTS MUTUAL LIFE INSURANCE
COMPANY
By: /s/ JOHN B. JORCE
---------------------------------------
Name: JOHN B. JORCE
Title:
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THE TRAVELERS INSURANCE COMPANY
By: /s/ GILBERT G. CAMPBELL
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Name: GILBERT G. CAMPBELL
Title: Second Vice President
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SCHEDULE I
JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY
JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY
MELLON BANK, N.A., as Trustee for NYNEX MASTER PENSION TRUST
AMERICAN GENERAL LIFE INSURANCE COMPANY OF NEW YORK
GULF LIFE INSURANCE COMPANY
CONNECTICUT MUTUAL LIFE INSURANCE COMPANY
GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY
THE TRAVELERS INSURANCE COMPANY