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EXHIBIT 10.32
FALCON RESTRICTED COMPANIES
1995 CREDIT AGREEMENT
AMENDMENT NO. 1
This Agreement, dated as of April 26, 1996, is among the affiliates of
Falcon Holding Group, Inc., a California corporation, set forth on the signature
pages hereto, their respective subsidiaries set forth on the signature pages
hereto and The First National Bank of Boston, as managing agent for itself and
the other Lenders under the Credit Agreement (as defined below) and as
collateral agent for itself and the other Secured Lenders under the Security
Agreement (as defined below), and Toronto-Dominion (Texas) Inc., as
administrative agent for itself and the other Lenders under the Credit
Agreement. The parties agree as follows:
1. Credit Agreement; Definitions. This Agreement amends the Credit
Agreement dated as of December 28, 1995 among the parties hereto (as in effect
prior to giving effect to this Agreement, the "Credit Agreement"). The terms
defined in the Credit Agreement as amended hereby (the "Amended Credit
Agreement") are used with the meaning so defined.
2. Amendment of Credit Agreement. Effective upon the date all the
conditions set forth in Section 4 hereof are satisfied (the "Amendment Date"),
which conditions must be satisfied no later than April 30, 1996, the Credit
Agreement is amended as follows:
3. Amendment of Section 1.20. The definition of "Borrower" in
Section 1.20 of the Credit Agreement is amended by replacing the word
"and" in the last line thereof with a semicolon and adding the
following text at the end thereof:
"and Falcon Telecom, L.P., a California limited
partnership."
4. Amendment of Section 1.36. The definition of "Computation
Covenants" in Section 1.36 of the Credit Agreement is amended by
replacing the word "and" before the reference to Section 7.13 with a
comma and adding the following text immediately after such reference:
"and 7.18".
5. Amendment of Section 1. Section 1 of the Credit Agreement is
amended by adding immediately after Section 1.69 new Section 1.69A to
read in its entirety as follows:
"1.69A. "Falcon Telecom" means Falcon Telecom, L.P., a
California limited partnership."
6. Amendment of Section 7.5.5. Section 7.5.5 of the Credit
Agreement is amended by replacing the existing figures in the table for
calendar year 1996 with the figures "$98,752,000" under the heading
"Amount" and "$94,414,000" under the heading "Budget".
7. Amendment of Section 7. Section 7 of the Credit Agreement is
amended by adding immediately after Section 7.17 a new Section 7.18 to
read in its entirety as follows:
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"7.18. Special Restrictions on Falcon Telecom. The sum of
(a) all Investments by the Restricted Companies in Falcon Telecom
plus (b) all proceeds of the Loan actually received by Falcon
Telecom for use in its business shall not exceed $15,000,000 in
the aggregate."
8. Amendment of Section 9.1.2. Section 9.1.2 of the Credit
Agreement is amended by replacing the word "and" before the reference
to Section 7.17 with a comma and adding the following text immediately
after such reference:
"and 7.18".
9. Amendment of Exhibit 8.1. Exhibit 8.1 to the Credit Agreement
is amended by adding the text provided in Exhibit 8.1 hereto in the
places indicated on such Exhibit.
10. Amendment of Exhibit 11.1. Exhibit 11.1 to the Credit
Agreement is amended to read in its entirety as set forth in Exhibit
11.1 hereto.
11. Representations and Warranties. Each of the Restricted Companies
jointly and severally represents and warrants as follows:
12. Legal Existence, Organization. Each Restricted Company is
duly organized and validly existing and in good standing under the laws
of the jurisdiction of its organization, with all power and authority,
corporate, partnership or otherwise, necessary (a) to enter into and
perform this Agreement and the Amended Credit Agreement and (b) to own
its properties and carry on the business now conducted or proposed to
be conducted by it. Each of the Restricted Companies has taken all
corporate, partnership or other action required to make the provision
of this Agreement and the Amended Credit Agreement the valid and
enforceable obligations they purport to be.
13. Enforceability. Each of the Restricted Companies has duly
executed and delivered this Agreement. Each of this Agreement and the
Amended Credit Agreement is the legal, valid and binding obligation of
each of the Restricted Companies and is enforceable against it in
accordance with its terms.
14. No Legal Obstacle to Agreements. Neither the execution,
delivery or performance of this Agreement, nor the performance of the
Amended Credit Agreement, nor the consummation of any other transaction
referred to nor contemplated by this Agreement, nor the fulfillment of
the terms hereof or thereof, has constituted or resulted in or will
constitute or result in:
15. any breach or termination of the provisions of any agreement,
instrument, deed or lease to which any Restricted Company is a party or
by which it is bound, or of the Charter or By-laws of any Restricted
Company;
16. the violation of any law, judgment, decree or governmental
order, rule or regulation applicable to any Restricted Company;
17. the creation under any agreement, instrument, deed or lease
of any Lien (other than Liens on the Credit Security which secure the
Credit Obligations) upon any of the assets of any Restricted Company;
or
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18. any redemption, retirement or other repurchase obligation of
any Restricted Company under any Charter, By-law, agreement,
instrument, deed or lease.
No approval, authorization or other action by, or declaration to or
filing with, any governmental or administrative authority or any other
Person is required to be obtained or made by any Restricted Company in
connection with the execution, delivery and performance of this
Agreement or the performance of the Amended Credit Agreement, or the
consummation of the transactions contemplated hereby or thereby.
19. Defaults. Immediately before and after giving effect to the
amendments set forth in Section 2, no Default or Event of Default will
exist.
20. Incorporation of Representations and Warranties. The
representations and warranties set forth in Section 8 of the Amended
Credit Agreement are true and correct on the date hereof as if
originally made on and as of the date hereof.
21. Conditions. The effectiveness of this Agreement shall be subject to
the satisfaction of the following conditions, which conditions must be satisfied
prior to May 1, 1996 or this Agreement shall terminate:
22. Notes. Falcon Telecom shall have duly authorized, executed
and delivered to the Managing Agent Notes for each Lender.
23. Legal Opinion. On the Amendment Date, the Lenders shall have
received from Weinstein, Boldt, Racine & Halfhide, special counsel for
the Holdings Companies, their opinion with respect to the transactions
contemplated by this Agreement, which opinion shall be in form and
substance satisfactory to the Lenders. The Restricted Companies
authorize and direct their counsel to furnish the foregoing opinion.
24. Perfection of Security. Falcon Telecom shall have duly
authorized, executed, acknowledged, delivered, filed, registered and
recorded such UCC financing statements, security agreements, notices,
transfer powers and other instruments as the Managing Agent may have
requested in order to perfect the security interests and encumbrances
purported or required pursuant to the Credit Documents to be created in
the Credit Security.
25. Officer's Certificate. The representations and warranties of
the Restricted Companies set forth or incorporated by reference herein
shall be true and correct as of the Amendment Date as if originally
made on and as of the Amendment Date; no Default shall have occurred on
or prior to the Amendment Date or hereby; and the Managing Agent shall
have received a certificate to these effects signed by a Financial
Officer.
26. Proper Proceedings. This Agreement, each other Credit
Document and the transactions contemplated hereby and thereby shall
have been authorized by all necessary proceedings of each Obligor and
any of their respective Affiliates party thereto. All necessary
consents, approvals ands authorizations of any governmental or
administrative agency or any other Person with respect to any of the
transactions contemplated hereby or by any other Credit Document shall
have been obtained and shall be in full force and effect. The Managing
Agent shall have received copies of all documents, including
certificates, records of corporate and partnership proceedings and
opinions of counsel, which the Managing Agent may have reasonably
requested in connection therewith, such documents where appropriate to
be certified by proper corporate or governmental authorities.
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27. Joinder of Falcon Telecom. Effective upon the Amendment Date,
Falcon Telecom joins in and becomes party to (a) the Credit Agreement as a
Borrower, a Guarantor, an Obligor and a Restricted Company, (b) the Security
Agreement as an Obligor, and (c) the Holding Pledge and Subordination Agreement
as an Obligor. Without limiting the foregoing, Falcon Telecom hereby (i)
represents and warrants all of the representations and warranties made by the
Borrowers, Guarantors, Obligors and Restricted Companies in the Credit Documents
described above in this Section 5 and in Section 3 hereof and (ii) mortgages,
pledges and collaterally grants and assigns to the Collateral Agent (as defined
in the Security Agreement) for the benefit of the Secured Lenders (as defined in
the Security Agreement) and the holders from time to time of any Secured
Obligation (as defined in the Security Agreement), and creates a security
interest in favor of the Collateral Agent for the benefit of the Secured Lenders
and such holders in, all of Falcon Telecom's right, title and interest in and to
(but none of its obligations or liabilities with respect to) the items and types
of present and future property described in Sections 2.1.1 through 2.1.14 of the
Security Agreement (subject, however, to Section 2.1.15 thereof), whether now
owned or hereafter acquired.
28. Further Assurances. Each of Falcon Telecom and the other Restricted
Companies will, promptly upon the request of the Managing Agent from time to
time, execute, acknowledge, deliver, file and record all such instruments and
notices, and take all such other action, as the Managing Agent deems necessary
or advisable to carry out the intent and purposes of this Agreement.
29. General. The Amended Credit Agreement and all of the Credit
Documents are each confirmed as being in full force and effect. This Agreement,
the Amended Credit Agreement and the other Credit Documents referred to herein
or therein constitute the entire understanding of the parties with respect to
the subject matter hereof and thereof and supersede all prior and current
understandings and agreements, whether written or oral. Each of this Agreement
and the Amended Credit Agreement is a Credit Document and may be executed in any
number of counterparts, which together shall constitute one instrument, and
shall bind and inure to the benefit of the parties and their respective
successors and assigns, including as such successors and assigns all holders of
any Note. This Agreement shall be governed by and construed in accordance with
the laws (other than the conflict of law rules) of The Commonwealth of
Massachusetts.
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Each of the undersigned has caused this Agreement to be executed and
delivered by its duly authorized officer as an agreement under seal as of the
date first above written.
FALCON CABLE MEDIA, A CALIFORNIA
LIMITED PARTNERSHIP
FALCON CABLEVISION, A CALIFORNIA
LIMITED PARTNERSHIP
FALCON COMMUNITY CABLE, L.P.
FALCON COMMUNITY VENTURES I
LIMITED PARTNERSHIP
FALCON TELECABLE, A CALIFORNIA
LIMITED PARTNERSHIP
FALCON COMMUNITY INVESTORS, L.P.
FALCON INVESTORS GROUP, LTD., A
CALIFORNIA LIMITED PARTNERSHIP
FALCON MEDIA INVESTORS GROUP, A
CALIFORNIA LIMITED PARTNERSHIP
FALCON TELECABLE INVESTORS GROUP,
A CALIFORNIA LIMITED PARTNERSHIP
FALCON TELECOM, L.P.
By FALCON HOLDING GROUP, INC., as
general partner, or general partner
of the general partner, of each of
the foregoing Restricted Companies
By ________________________________
Title:
FALCON FIRST, INC.
By ____________________________________
Title:
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ATHENS CABLEVISION, INC.
AUSABLE CABLE TV, INC.
CEDAR BLUFF CABLEVISION, INC.
DALTON CABLEVISION, INC.
EASTERN MISSISSIPPI CABLEVISION, INC.
FALCON FIRST CABLE OF NEW YORK, INC.
FALCON FIRST CABLE OF THE SOUTHEAST,
INC.
FALCON FIRST HOLDINGS, INC.
FF CABLE HOLDINGS, INC.
LAUDERDALE CABLEVISION, INC.
MULTIVISION NORTHEAST, INC.
MULTIVISION OF COMMERCE, INC.
PLATTSBURG CABLEVISION, INC.
SCOTTSBORO CABLEVISION, INC.
SCOTTSBORO TV CABLE, INC.
By
As an authorized officer of each of
the foregoing corporations
THE FIRST NATIONAL BANK OF BOSTON, as
Managing Agent under the Credit
Agreement and as Collateral Agent
under the Security Agreement
By ____________________________________
Title:
TORONTO-DOMINION (TEXAS) INC., as
Administrative Agent under the Credit
Agreement
By ____________________________________
Title:
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The foregoing Amendment No. 1 is approved
by the undersigned Lenders:
CHEMICAL BANK
By _____________________________________
Title:
CHL HIGH YIELD LOAN PORTFOLIO
(A Unit of Chemical Bank)
By _____________________________________
Title:
NATIONSBANK OF TEXAS, N.A.
By _____________________________________
Title:
BANK OF AMERICA N.T. & S.A.
By _____________________________________
Title:
THE BANK OF CALIFORNIA, N.A.
By _____________________________________
Title:
8
BANK OF MONTREAL, CHICAGO BRANCH
By _____________________________________
Title:
BANQUE PARIBAS
By _____________________________________
Title:
CIBC, INC.
By _____________________________________
Title:
CORESTATES BANK, N.A.
By _____________________________________
Title:
CREDIT LYONNAIS CAYMAN ISLAND BRANCH
By _____________________________________
Title:
SOCIETE GENERALE
By _____________________________________
Title:
9
UNION BANK
By _____________________________________
Title:
BARCLAYS BANK PLC
By _____________________________________
Title:
CHASE MANHATTAN BANK
By _____________________________________
Title:
THE SUMITOMO BANK, LIMITED
By _____________________________________
Title:
By _____________________________________
Title:
THE FUJI BANK, LIMITED LOS ANGELES AGENCY
By _____________________________________
Title:
THE LONG-TERM CREDIT BANK OF JAPAN, LTD.
LOS ANGELES AGENCY
By _____________________________________
Title:
10
VAN KAMPEN AMERICAN CAPITAL
PRIME RATE INCOME TRUST
By _____________________________________
Title:
SENIOR DEBT PORTFOLIO
By BOSTON MANAGEMENT AND
RESEARCH, as investment advisor
By ______________________________
Title:
MEESPIERSON, N.V.
By _____________________________________
Title:
SUNTRUST BANK, CENTRAL FLORIDA,
N.A.
By _____________________________________
Title:
11
UNION BANK OF CALIFORNIA, N.A.
By _____________________________________
Title:
12
EXHIBIT 8.1
Add to Credit Agreement Exhibit 8.1 in Alphabetical Order:
Jurisdiction of Chief Executive Office and Partners and
Name Organization Chief Place of Business Other Names Business Jurisdiction Percentage Ownership
- ---- ------------ ----------------------- ----------- --------------------- --------------------
Falcon Telecom, L.P. California 10900 Wilshire Boulevard Falcon Cable TV California FHGLP - 99%
Fifteenth Floor
Los Angeles, CA 90024 Falcon Telecable
Investors Group,
a California
limited
Partnership - 1%
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EXHIBIT 11.1
LENDER PERCENTAGE INTERESTS
Revolving Lender Maximum Principal Amount Percentage
- --------------------------------------------------------------------------------------------
Interest
The First National Bank of Boston $ 10,000,000 3.225806452%
Chemical Bank 20,000,000 6.451612904
Toronto-Dominion (Texas) Inc. 20,000,000 6.451612904
*CIBC, Inc. 11,000,000 3.548387097
*Credit Lyonnais Cayman Island Branch 23,000,000 7.419354839
NationsBank of Texas, N.A 20,000,000 6.451612904
*Bank of America, N.T. & S.A 23,000,000 7.419354839
*Bank of Montreal, Chicago Branch 20,000,000 6.451612904
CoreStates Bank, N.A 15,000,000 4.838709678
*Union Bank of California, N.A 34,000,000 10.967741935
*Banque Paribas 17,000,000 5.483870967
*Societe Generale 24,000,000 7.741935484
Chase Manhattan Bank 10,000,000 3.225806451
The Sumitomo Bank, Limited 15,000,000 4.838709677
Fuji Bank, Limited 15,000,000 4.838709677
Long-Term Credit Bank of Japan 15,000,000 4.838709677
Meespierson, N.V 8,000,000 2.580645161
SunTrust Bank, Central Florida, N.A 10,000,000 3.225806452
---------------------------------------------
TOTAL REVOLVING LOAN $310,000,000 100%
Term Lender Maximum Principal Amount Percentage
- -----------------------------------------------------------------------------------------
Interest
The First National Bank of Boston $ 3,000,000 2.400000000%
CHL High Yield Portfolio 6,000,000 4.800000000
Toronto-Dominion (Texas) Inc. 6,000,000 4.800000000
*CIBC, Inc. 12,000,000 9.600000000
NationsBank of Texas, N.A 6,000,000 4.800000000
*Union Bank of California, N.A 4,000,000 3.200000000
*Banque Paribas 6,000,000 4.800000000
Barclays Bank PLC 10,000,000 8.000000000
Chase Manhattan Bank 5,000,000 4.000000000
The Sumitomo Bank, Limited 5,000,000 4.000000000
Van Kampen American Capital 38,000,000 30.400000000
Senior Debt Portfolio 22,000,000 17.600000000
Meespierson, N.V 2,000,000 1.600000000
---------------------------------------------
TOTAL TERM LOAN $125,000,000 100%
* Co-Agent
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April 26, 1996
The Lenders who are parties to the
Credit Agreement described below
c/o The First National Bank of Boston,
as Managing Agent
100 Federal Street
Boston, MA 02110
Ladies and Gentlemen:
This opinion is being furnished to you pursuant to Section 4.2 of
Amendment No. 1 dated April 26, 1996 (the "Amendment") which amends certain
provisions of the Credit Agreement dated as of December 28, 1995 (the "Credit
Agreement"), among Falcon Cablevision, a California limited partnership, Falcon
Cable Media, a California limited partnership, Falcon Community Cable, L.P., a
Delaware limited partnership, Falcon Community Ventures I Limited Partnership, a
California limited partnership, Falcon Telecable, a California limited
partnership, Falcon First, Inc., a Delaware corporation and its Subsidiaries,
Falcon Media Investors Group, a California limited partnership, Falcon Investor
Group, Ltd., a California limited partnership, Falcon Community Investors, L.P.,
a California limited partnership, Falcon Telecable Investors Group, a California
limited partnership (collectively, along with Falcon Telecom, L.P., a California
limited partnership, the "Restricted Companies"), and each of you (collectively,
the "Banks"). Terms defined in the Credit Agreement as amended by the Amendment
(the "Amended Credit Agreement") and not otherwise defined herein are used
herein with the meanings so defined.
We are counsel for each of the Restricted Companies, Falcon Holding
Group, L.P., a Delaware limited partnership ("FHGLP"), and Falcon Holding Group,
Inc., a California corporation ("Falcon Group"). The Restricted Companies,
FHGLP, The Investor Group Companies and Falcon Group are hereinafter sometimes
referred to collectively as the "Companies". We have acted as counsel for the
Companies in connection with the preparation, execution and delivery of the
Amendment.
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April 26, 1996
Page 2
We have examined the Amendment and such other documents, certificates
and papers and have made such examination of law and such investigation of fact
as we have deemed necessary to enable us to render the opinions expressed below.
We have also relied upon covenants contained in and made pursuant to the
Amendment and the Amended Credit Agreement as to the application of the proceeds
of the loans made pursuant to the Amendment and the Amended Credit Agreement,
and on matters of fact (other than facts constituting conclusions of law)
contained in the Amendment and Amended Credit Agreement.
In rendering this opinion, we point out that our opinion is limited to
matters of law of the state of California, the United States of America and the
Delaware Revised Uniform Limited Partnership Act, and we express no opinion as
to the laws of any other states or jurisdictions.
We call your attention to the fact that the Amendment, the Amended
Credit Agreement, the Security Agreement, the Subordination Agreement, the
Contribution Agreement and the Notes each provides that it is to be governed by
and construed in accordance with the laws (other than the conflict of laws
rules) of The Commonwealth of Massachusetts, and we are of the opinion that a
California court or a federal court sitting in California would, under conflict
of laws principles observed by the courts of California, give effect to such
provisions. We have assumed that none of such agreements or instruments is
inconsistent with or repugnant to Massachusetts law. If, however, a court of
competent jurisdiction were to determine that the Amendment, the Credit
Agreement, the Security Agreement, the Subordination Agreement, the Contribution
Agreement or the Notes should be governed and construed in accordance with the
laws (other than the conflict of laws rules) of California, our opinions
expressed in Paragraphs 4, 5, 6, 7, 8, 9 and 10 below would remain unchanged.
For the purposes of this opinion we have assumed that you have all
requisite power and authority and have taken all necessary corporate action to
enter into the Amendment and to effect the transactions contemplated thereby.
You have not asked us to opine upon the application to you or the Agent's
authority to do so of any federal or state law or regulation, except as provided
in Paragraph 15 below.
Based on the foregoing, we are of the opinion that:
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April 26, 1996
Page 3
1. Each of the Restricted Companies is a duly organized and validly
existing limited partnership (or, in the case of Falcon First, Inc. and its
Subsidiaries, corporations) in good standing under the laws of the jurisdiction
in which it is organized with partnership (or corporate) powers adequate for the
execution, delivery and performance of the Amendment and the Amended Credit
Agreement. Said powers may be exercised on behalf of the Restricted Companies
(other than Falcon First, Inc. and its Subsidiaries) by Falcon Group, the
managing general partner or the managing general partner of its managing general
partner, as the case may be, and by the officers of the Restricted Companies so
authorized by Falcon Group pursuant to their partnership agreements. Said powers
may be exercised on behalf of Falcon First, Inc. and its Subsidiaries by the
officers of each respective corporation so authorized by the Board of Directors
of each such corporation.
2. FHGLP is a duly organized and validly existing limited partnership
in good standing under the laws of the State of Delaware with partnership powers
adequate for the execution, delivery and performance, in its capacity as a
general partner of the Restricted Companies (other than Falcon First, Inc. and
its Subsidiaries), of the Amendment and the Amended Credit Agreement.
3. Falcon Group is a duly organized and validly existing corporation in
good standing under the laws of the State of California with corporate powers
adequate for the execution, delivery and performance, in its capacity as general
partner of FHGLP in FHGLP's capacity as a general partner of the Restricted
Companies (other than Falcon First, Inc. and its Subsidiaries), and in its
capacity as a general partner of the Investor Group Companies in the Investor
Group Companies' capacity as a general partner of the Borrowers (other than
Falcon First, Inc.), of the Amendment and the Amended Credit Agreement.
4. The Amendment has been duly authorized, executed and delivered on
behalf of each of the Restricted Companies, and is the legal, valid and binding
obligation of each of the Restricted Companies and (subject to the
qualifications stated in the paragraphs following Paragraph 15 hereof) is
enforceable against the Restricted Companies in accordance with its terms.
5. The Amended Credit Agreement is the legal, valid and binding
obligation of the Restricted Companies and (subject to the
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April 26, 1996
Page 4
qualifications stated in the paragraphs following Paragraph 15 hereof) is
enforceable against the Restricted Companies in accordance with its terms.
6. The Subordination Agreement is the legal, valid and binding
obligation of Falcon Telecom, L.P. (and subject to the qualifications stated in
the paragraphs following Paragraph 15 hereof) is enforceable against it in
accordance with its terms.
7. Each of the Notes issued by Falcon Telecom, L.P. has been duly
authorized, executed and delivered by Falcon Telecom, L.P., and constitutes the
legal, valid and binding obligations of Falcon Telecom, L.P. and (subject to the
qualifications stated in the paragraphs following Paragraph 15 hereof) is
enforceable against Falcon Telecom, L.P. in accordance with its terms.
8. The Contribution Agreement is the legal, valid and binding
obligation of Falcon Telecom, L.P. and (subject to the qualifications stated in
the paragraphs following Paragraph 15 hereof) is enforceable against Falcon
Telecom, L.P. in accordance with its terms.
9. The Security Agreement is the legal, valid and binding obligation of
Falcon Telecom, L.P. and (subject to the qualifications stated in the paragraphs
following Paragraph 15 hereof) is enforceable against Falcon Telecom, L.P. in
accordance with its terms.
10. The incurrence of the Credit Obligations has been duly authorized
by Falcon Telecom, L.P. and the Credit Obligations outstanding on the date
hereof and evidenced by the Notes issued by Falcon Telecom, L.P. constitute the
legal, valid and binding obligations of Falcon Telecom, L.P. and (subject to the
qualifications stated in the paragraphs following Paragraph 15 hereof) are
enforceable against Falcon Telecom, L.P. in accordance with their terms.
11. Falcon Telecom, L.P. has executed certain financing statements
furnished to you regarding the Credit Security for filing in California. The
description of the Credit Security set forth in such financing statements is
adequate to perfect a security interest under the Uniform Commercial Code as in
effect in California in all such Credit Security which can be perfected by
filing thereunder. Assuming such financing statements have been
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April 26, 1996
Page 5
duly filed with the proper filing officer or officers in California and all fees
and taxes with respect thereto have been paid, your security interest in the
Credit Security owned by Falcon Telecom, L.P. within California which can be
perfected by filing is so perfected, except that no opinion is expressed as to
the perfection of your security interest in Credit Security constituting
fixtures, and we call you attention to the fact that your security interest in
certain Credit Security may not be perfected by filing. We also call your
attention to (a) the necessity of filing continuation statements from time to
time under the Uniform Commercial Code; (b) the fact that under certain
circumstances described in Section 9-306 of the Uniform Commercial Code, the
rights of a secured party to enforce a perfected security interest in the
proceeds of collateral may be limited; (c) the fact that under certain
circumstances described in Sections 9-307 and 9-308 of the Uniform Commercial
Code buyers or purchasers of collateral may take the same free of the security
interest created by the Amended Credit Agreement; and (d) the fact that Section
552 of the Bankruptcy Code limits the extent to which property acquired by a
debtor after the commencement of a case may be subject to a lien resulting from
any security agreement entered into by the Debtor before the commencement of the
case.
12. Falcon Telecom, L.P. is not in violation of any term or provision
of (a) its Charter or By-laws, or (b) to the best of our knowledge, any law,
statute or governmental regulation, or (c) to the best of our knowledge, any
Franchise, license, judgment, decree, order, agreement, indenture or other
instrument applicable to it of which we have knowledge. The execution and
delivery of the Amendment and the Notes by Falcon Telecom, L.P. and Falcon
Telecom, L.P. becoming a party to the Amended Credit Agreement, the Security
Agreement, the Subordination Agreement and the Contribution Agreement, and
compliance by Falcon Telecom, L.P. with the terms of the Amended Credit
Agreement, the Security Agreement, the Subordination Agreement, the Contribution
Agreement and the Notes applicable to it, does not and will not conflict with or
result in any breach or violation of, or constitute a default under, any term or
provision of (a) the Charter or By-laws of Falcon Telecom, L.P., or (b) to the
best of our knowledge, any governmental license, judgment, decree, order,
agreement, indenture or other instrument applicable to Falcon Telecom, L.P. of
which we have knowledge, or (c) any federal or California law, statute or
regulation or (d) the Delaware Revised Uniform Limited Partnership Agreement.
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April 26, 1996
Page 6
13. There is no action, proceeding or investigation pending or
threatened of which we have knowledge which places in question the validity or
enforceability of the Amendment, the Amended Credit Agreement, the Security
Agreement, the Subordination Agreement, the Contribution Agreement or the Notes.
14. No consent or approval of any trustee or holder of any Indebtedness
or other obligations of any of the Companies, and, under the existing provisions
of law, no approval or authorization or other action by any governmental
authority, is required to be obtained by any of the Companies that has not been
obtained in connection with the execution, delivery and performance of the
Amendment or the Amended Credit Agreement.
15. The making of the loans by you pursuant to the Amended Credit
Agreement does not contravene Regulation U of the Board of Governors of the
Federal Reserve System as in effect on the date hereof.
Our opinion that the Amendment, the Amended Credit Agreement, the Notes
issued by Falcon Telecom, L.P., the Security Agreement, the Contribution
Agreement, the Credit Obligations and the Subordination Agreement are
enforceable in accordance with their respective terms is subject to: (i)
bankruptcy, insolvency, reorganization, moratorium and similar laws of general
application affecting the rights and remedies of creditors and (ii) general
principles of equity (regardless of whether such enforcement is sought in a
proceeding in equity or at law). In addition, we advise you that a California
court may not strictly enforce certain covenants contained in the Amended Credit
Agreement or allow acceleration of the due dates of the Credit Obligations if it
concludes that such enforcement or acceleration would be unreasonable under the
then existing circumstance and might not give effect to any provisions providing
for increased interest rates for nonpayment of principal or interest. In our
opinion, however, acceleration in accordance with the Amended Credit Agreement
would be available if an Event of Default occurred as a result of a material
breach of a material covenant, contained in the Amended Credit Agreement or
related Credit Obligations and, if a California court were to conclude that a
provision for increased interest was unenforceable, the basic interest rate
would still be recoverable.
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April 26, 1996
Page 7
This opinion is limited to the matters expressly stated herein and no
opinion is implied or may be inferred beyond the matters expressly stated
herein.
This opinion is delivered by the undersigned to the addressees, and
only the addressees and their special counsel, Ropes & Gray, shall be entitled
to rely thereon.
Very truly yours,
WEINSTEIN, BOLDT, RACINE,
HALFHIDE & CAMEL
Professional Corporation