Exhibit 10.66
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FALCON CABLE COMMUNICATIONS, LLC
FALCON CABLE MEDIA, A CALIFORNIA LIMITED PARTNERSHIP
FALCON CABLE SYSTEMS COMPANY II, L.P.
FALCON CABLEVISION, A CALIFORNIA LIMITED PARTNERSHIP
FALCON COMMUNITY CABLE, L.P.
FALCON COMMUNITY VENTURES I LIMITED PARTNERSHIP
FALCON FIRST, INC.
FALCON TELECABLE, A CALIFORNIA LIMITED PARTNERSHIP
FALCON TELECOM, L.P.
CREDIT AGREEMENT
Dated as of June 30, 1998
BANKBOSTON, N.A.
as Documentation Agent
THE CHASE MANHATTAN BANK
as Co-Syndication Agent
NATIONSBANK, N.A.
as Syndication Agent
TORONTO DOMINION (TEXAS) INC.
as Administrative Agent
and
BANK OF AMERICA, N.T. & S.A.
as Agent
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TABLE OF CONTENTS
Page
1. DEFINITIONS; CERTAIN RULES OF CONSTRUCTION. . . . . . . . . . . . . . . . . . .1
2. THE CREDITS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
2.1. REVOLVING CREDIT . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
2.1.1. REVOLVING LOAN . . . . . . . . . . . . . . . . . . . . . . . . 32
2.1.2. BORROWING REQUESTS . . . . . . . . . . . . . . . . . . . . . . 34
2.1.3. REVOLVING NOTES. . . . . . . . . . . . . . . . . . . . . . . . 35
2.1.4. FALCON VIDEO REVOLVING LOAN. . . . . . . . . . . . . . . . . . 35
2.2. TERM LOAN B. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
2.2.1. TERM LOAN B. . . . . . . . . . . . . . . . . . . . . . . . . . 36
2.2.2. TERM LOAN B NOTES. . . . . . . . . . . . . . . . . . . . . . . 36
2.2.3. MANDATORY ASSIGNMENT OF TERM LOAN B-1. . . . . . . . . . . . 36
2.3. TERM LOAN C. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
2.3.1. TERM LOAN C. . . . . . . . . . . . . . . . . . . . . . . . . . 37
2.3.2. TERM LOAN C NOTES. . . . . . . . . . . . . . . . . . . . . . . 38
2.4. SUPPLEMENTAL CREDIT. . . . . . . . . . . . . . . . . . . . . . . . . . 38
2.4.1. REQUEST FOR SUPPLEMENTAL FACILITIES. . . . . . . . . . . . . 38
2.4.2. SUPPLEMENTAL FACILITIES. . . . . . . . . . . . . . . . . . . . 39
2.4.3. BORROWING REQUESTS . . . . . . . . . . . . . . . . . . . . . . 39
2.4.4. SUPPLEMENTAL NOTES.. . . . . . . . . . . . . . . . . . . . . . 40
2.5. APPLICATION OF PROCEEDS. . . . . . . . . . . . . . . . . . . . . . . . 40
2.5.1. LOAN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
2.5.2. SPECIFICALLY PROHIBITED APPLICATIONS . . . . . . . . . . . . . 40
2.6. BORROWERS OBLIGATIONS. . . . . . . . . . . . . . . . . . . . . . . . . 40
2.7. NATURE OF OBLIGATIONS OF LENDERS TO EXTEND CREDIT. . . . . . . . . . . 41
3. INTEREST; EURODOLLAR PRICING OPTIONS; FEES. . . . . . . . . . . . . . . . . . 41
3.1. INTEREST . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
3.2. EURODOLLAR PRICING OPTIONS . . . . . . . . . . . . . . . . . . . . . . 42
3.2.1. ELECTION OF EURODOLLAR PRICING OPTIONS . . . . . . . . . . . . 42
3.2.2. NOTICE TO LENDERS AND BORROWERS. . . . . . . . . . . . . . . . 43
3.2.3. SELECTION OF INTEREST PERIODS. . . . . . . . . . . . . . . . . 43
3.2.4. ADDITIONAL INTEREST. . . . . . . . . . . . . . . . . . . . . . 43
3.2.5. CHANGE IN APPLICABLE LAWS, REGULATIONS, ETC. . . . . . . . . . 44
3.2.6. FUNDING PROCEDURE. . . . . . . . . . . . . . . . . . . . . . . 44
3.3. COMMITMENT FEES. . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
3.3.1. REVOLVING LOAN . . . . . . . . . . . . . . . . . . . . . . . . 45
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3.3.2. TERM LOAN B-2. . . . . . . . . . . . . . . . . . . . . . . . . 46
3.4. TAXES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
3.5. CAPITAL ADEQUACY . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
3.6. REGULATORY CHANGES . . . . . . . . . . . . . . . . . . . . . . . . . . 47
3.7. COMPUTATIONS OF INTEREST AND FEES. . . . . . . . . . . . . . . . . . . 47
3.8. INTEREST LIMITATION. . . . . . . . . . . . . . . . . . . . . . . . . . 47
4. PAYMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
4.1. PAYMENT AT MATURITY. . . . . . . . . . . . . . . . . . . . . . . . . . 48
4.2. FIXED REQUIRED PREPAYMENTS . . . . . . . . . . . . . . . . . . . . . . 48
4.2.1. TERM LOAN B. . . . . . . . . . . . . . . . . . . . . . . . . 48
4.2.2. TERM LOAN C. . . . . . . . . . . . . . . . . . . . . . . . . . 48
4.2.3. SUPPLEMENTAL LOAN. . . . . . . . . . . . . . . . . . . . . . . 48
4.3. MAXIMUM AMOUNT OF REVOLVING CREDIT, ETC. . . . . . . . . . . . . . . . 48
4.4. ASSET SALES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
4.4.1. OPERATING ASSET SALE NOTICE. . . . . . . . . . . . . . . . . . 49
4.4.2. PREPAYMENT ON SALE . . . . . . . . . . . . . . . . . . . . . . 49
4.4.3. ASSET REINVESTMENT RESERVE AMOUNT. . . . . . . . . . . . . . . 49
4.4.4. ALLOCATIONS OF PREPAYMENT. . . . . . . . . . . . . . . . . . . 50
4.5. DESIGNATED FINANCING DEBT. . . . . . . . . . . . . . . . . . . . . . . 50
4.6. VOLUNTARY PREPAYMENTS. . . . . . . . . . . . . . . . . . . . . . . . . 50
4.7. APPLICATION OF PAYMENTS. . . . . . . . . . . . . . . . . . . . . . . . 51
5. CONDITIONS TO EXTENDING CREDIT. . . . . . . . . . . . . . . . . . . . . . . . 51
5.1. CONDITIONS ON INITIAL CLOSING DATE . . . . . . . . . . . . . . . . . . 51
5.1.1. SATISFACTION OF EXISTING BANK DEBT . . . . . . . . . . . . . . 52
5.1.2. NOTES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
5.1.3. PAYMENT OF FEES. . . . . . . . . . . . . . . . . . . . . . . . 52
5.1.4. LEGAL OPINIONS . . . . . . . . . . . . . . . . . . . . . . . . 52
5.1.5. PLEDGE AND SUBORDINATION AGREEMENT . . . . . . . . . . . . . . 52
5.1.6. MONY SUBORDINATED DEBT . . . . . . . . . . . . . . . . . . . . 52
5.2. CONDITIONS TO EACH EXTENSION OF CREDIT . . . . . . . . . . . . . . . . 53
5.2.1. OFFICER'S CERTIFICATE. . . . . . . . . . . . . . . . . . . . . 53
5.2.2. PROPER PROCEEDINGS . . . . . . . . . . . . . . . . . . . . . . 53
5.2.3. LEGALITY, ETC. . . . . . . . . . . . . . . . . . . . . . . . . 53
5.3. EXTENSIONS OF CREDIT FOLLOWING THE TCI CLOSING.. . . . . . . . . . . . 53
5.3.1. REPAYMENT OF FINANCING DEBT. . . . . . . . . . . . . . . . . . 54
5.3.2. ASSIGNMENT OF DEBENTURES AND INDENTURES. . . . . . . . . . . . 54
5.3.3. JOINDERS AND ASSIGNMENTS.. . . . . . . . . . . . . . . . . . . 54
5.4. CONDITIONS ON SUPPLEMENTAL FACILITY CLOSING DATES. . . . . . . . . . . 54
5.4.1. SUPPLEMENTAL NOTES . . . . . . . . . . . . . . . . . . . . . . 54
5.4.2. JOINDER AGREEMENT. . . . . . . . . . . . . . . . . . . . . . . 55
5.4.3. LEGAL OPINIONS . . . . . . . . . . . . . . . . . . . . . . . . 55
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5.4.4. FINANCED ACQUISITIONS. . . . . . . . . . . . . . . . . . . . . 55
5.4.5. GENERAL. . . . . . . . . . . . . . . . . . . . . . . . . . . 55
6. GUARANTEES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
6.1. GUARANTEES OF CREDIT OBLIGATIONS . . . . . . . . . . . . . . . . . . . 55
6.2. CONTINUING OBLIGATION. . . . . . . . . . . . . . . . . . . . . . . . . 56
6.3. WAIVERS WITH RESPECT TO CREDIT OBLIGATIONS . . . . . . . . . . . . . . 56
6.4. LENDERS' POWER TO WAIVE, ETC . . . . . . . . . . . . . . . . . . . . . 58
6.5. INFORMATION REGARDING OBLIGORS, ETC. . . . . . . . . . . . . . . . . . 59
6.6. CERTAIN GUARANTOR REPRESENTATIONS. . . . . . . . . . . . . . . . . . . 59
6.7. NO SUBROGATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
6.8. SUBORDINATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
6.9. CONTRIBUTION AMONG GUARANTORS. . . . . . . . . . . . . . . . . . . . . 60
6.10. FUTURE SUBSIDIARIES; FURTHER ASSURANCES. . . . . . . . . . . . . . . . 61
6.11. RELEASE OF GUARANTOR . . . . . . . . . . . . . . . . . . . . . . . . . 61
7. GENERAL COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
7.1. TAXES AND OTHER CHARGES; ACCOUNTS PAYABLE. . . . . . . . . . . . . . . 61
7.1.1. TAXES AND OTHER CHARGES. . . . . . . . . . . . . . . . . . . . 61
7.1.2. ACCOUNTS PAYABLE . . . . . . . . . . . . . . . . . . . . . . . 62
7.2. CONDUCT OF BUSINESS, ETC.. . . . . . . . . . . . . . . . . . . . . . . 62
7.2.1. TYPES OF BUSINESS. . . . . . . . . . . . . . . . . . . . . . . 62
7.2.2. MAINTENANCE OF PROPERTIES. . . . . . . . . . . . . . . . . . . 62
7.2.3. COMPLIANCE WITH MATERIAL AGREEMENTS. . . . . . . . . . . . . . 62
7.2.4. STATUTORY COMPLIANCE . . . . . . . . . . . . . . . . . . . . . 63
7.3. INSURANCE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
7.4. FINANCIAL STATEMENTS AND REPORTS . . . . . . . . . . . . . . . . . . . 63
7.4.1. ANNUAL REPORTS . . . . . . . . . . . . . . . . . . . . . . . . 63
7.4.2. QUARTERLY REPORTS. . . . . . . . . . . . . . . . . . . . . . . 64
7.4.3. TCI CLOSING REPORT . . . . . . . . . . . . . . . . . . . . . . 65
7.4.4. OTHER REPORTS. . . . . . . . . . . . . . . . . . . . . . . . . 65
7.4.5. NOTICE OF LITIGATION; NOTICE OF DEFAULTS . . . . . . . . . . . 66
7.4.6. FRANCHISE MATTERS. . . . . . . . . . . . . . . . . . . . . . . 66
7.4.7. ERISA REPORTS. . . . . . . . . . . . . . . . . . . . . . . . . 66
7.4.8. OTHER INFORMATION. . . . . . . . . . . . . . . . . . . . . . . 66
7.5. CERTAIN FINANCIAL TESTS. . . . . . . . . . . . . . . . . . . . . . . . 67
7.5.1. CONSOLIDATED TOTAL DEBT TO CONSOLIDATED ANNUALIZED OPERATING
CASH FLOW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
7.5.2. CONSOLIDATED ANNUALIZED OPERATING CASH FLOW TO CONSOLIDATED
CASH INTEREST EXPENSE . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
7.5.3. CONSOLIDATED ANNUALIZED OPERATING CASH FLOW TO CONSOLIDATED
PRO FORMA DEBT SERVICE. . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
7.5.4. CAPITAL EXPENDITURES.. . . . . . . . . . . . . . . . . . . . . 68
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7.6. INDEBTEDNESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
7.7. GUARANTEES; LETTERS OF CREDIT. . . . . . . . . . . . . . . . . . . . . 70
7.8. LIENS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
7.9. INVESTMENTS AND ACQUISITIONS . . . . . . . . . . . . . . . . . . . . . 72
7.10. DISTRIBUTIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
7.11. MERGER, CONSOLIDATION AND DISPOSITIONS OF ASSETS . . . . . . . . . . . 77
7.12. ISSUANCE OF STOCK BY SUBSIDIARIES; SUBSIDIARY DISTRIBUTIONS. . . . . . 78
7.12.1. ISSUANCE OF STOCK BY SUBSIDIARIES. . . . . . . . . . . . . . . 78
7.12.2. NO RESTRICTIONS ON SUBSIDIARY DISTRIBUTIONS. . . . . . . . . . 78
7.13. ERISA, ETC.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
7.14. TRANSACTIONS WITH AFFILIATES . . . . . . . . . . . . . . . . . . . . . 79
7.15. INTEREST RATE PROTECTION . . . . . . . . . . . . . . . . . . . . . . . 80
7.16. COMPLIANCE WITH ENVIRONMENTAL LAWS . . . . . . . . . . . . . . . . . . 80
7.17. NO OUTSIDE MANAGEMENT FEES . . . . . . . . . . . . . . . . . . . . . . 80
7.18. DERIVATIVE CONTRACTS. . . . . . . . . . . . . . . . . . . . . . . . . 81
7.19. NEGATIVE PLEDGE CLAUSES. . . . . . . . . . . . . . . . . . . . . . . . 81
7.20. FUTURE SECURITY INTEREST . . . . . . . . . . . . . . . . . . . . . . . 81
8. REPRESENTATIONS AND WARRANTIES. . . . . . . . . . . . . . . . . . . . . . . . 81
8.1. ORGANIZATION AND BUSINESS. . . . . . . . . . . . . . . . . . . . . . . 82
8.1.1. THE BORROWERS. . . . . . . . . . . . . . . . . . . . . . . . . 82
8.1.2. OTHER GUARANTORS . . . . . . . . . . . . . . . . . . . . . . . 82
8.1.3. QUALIFICATION. . . . . . . . . . . . . . . . . . . . . . . . . 82
8.1.4. CAPITALIZATION . . . . . . . . . . . . . . . . . . . . . . . . 83
8.2. FINANCIAL STATEMENTS AND OTHER INFORMATION; MATERIAL AGREEMENTS. . . . 83
8.2.1. FINANCIAL STATEMENTS AND OTHER INFORMATION . . . . . . . . . . 83
8.2.2. MATERIAL AGREEMENTS. . . . . . . . . . . . . . . . . . . . . . 84
8.3. CHANGES IN CONDITION . . . . . . . . . . . . . . . . . . . . . . . . . 84
8.4. AGREEMENTS RELATING TO FINANCING DEBT, INVESTMENTS, ETC. . . . . . . . 84
8.5. TITLE TO ASSETS. . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
8.6. LICENSES, ETC. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
8.6.1. FRANCHISES; FCC LICENSES . . . . . . . . . . . . . . . . . . . 85
8.6.2. FCC AND OTHER MATTERS. . . . . . . . . . . . . . . . . . . . . 85
8.7. LITIGATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
8.8. TAX RETURNS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
8.9. AUTHORIZATION AND ENFORCEABILITY . . . . . . . . . . . . . . . . . . . 86
8.10. NO LEGAL OBSTACLE TO AGREEMENTS. . . . . . . . . . . . . . . . . . . . 86
8.11. DEFAULTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
8.12. CERTAIN BUSINESS REPRESENTATIONS . . . . . . . . . . . . . . . . . . . 87
8.12.1. LABOR RELATIONS. . . . . . . . . . . . . . . . . . . . . . . . 87
8.12.2. ANTITRUST. . . . . . . . . . . . . . . . . . . . . . . . . . . 87
8.12.3. CONSUMER PROTECTION. . . . . . . . . . . . . . . . . . . . . . 87
8.12.4. YEAR 2000 ISSUES . . . . . . . . . . . . . . . . . . . . . . . 87
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8.13. ENVIRONMENTAL REGULATIONS. . . . . . . . . . . . . . . . . . . . . . . 87
8.13.1. ENVIRONMENTAL COMPLIANCE . . . . . . . . . . . . . . . . . . . 87
8.13.2. ENVIRONMENTAL LITIGATION . . . . . . . . . . . . . . . . . . . 88
8.13.3. HAZARDOUS MATERIAL . . . . . . . . . . . . . . . . . . . . . . 88
8.13.4. ENVIRONMENTAL CONDITION OF PROPERTIES. . . . . . . . . . . . . 88
8.14. PENSION PLANS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
8.15. CONTRIBUTION AGREEMENT, ETC. . . . . . . . . . . . . . . . . . . . . . 89
8.16. GOVERNMENT REGULATION; MARGIN STOCK. . . . . . . . . . . . . . . . . . 89
8.16.1. GOVERNMENT REGULATION. . . . . . . . . . . . . . . . . . . . . 89
8.16.2. MARGIN STOCK . . . . . . . . . . . . . . . . . . . . . . . . . 89
8.17. DISCLOSURE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
9. DEFAULTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
9.1. EVENTS OF DEFAULT. . . . . . . . . . . . . . . . . . . . . . . . . . . 90
9.1.1. NON-PAYMENT. . . . . . . . . . . . . . . . . . . . . . . . . 90
9.1.2. BREACH OF DESIGNATED COVENANTS. . . . . . . . . . . . . . . . 90
9.1.3. BREACH OF OTHER COVENANTS. . . . . . . . . . . . . . . . . . . 90
9.1.4. MISREPRESENTATION. . . . . . . . . . . . . . . . . . . . . . . 90
9.1.5. CROSS-DEFAULT, ETC.. . . . . . . . . . . . . . . . . . . . . . 90
9.1.6. CHANGE OF CONTROL, ETC. . . . . . . . . . . . . . . . . . . . 91
9.1.7. ENFORCEABILITY, ETC. . . . . . . . . . . . . . . . . . . . . 92
9.1.8. JUDGMENTS, ETC.. . . . . . . . . . . . . . . . . . . . . . . . 92
9.1.9. FRANCHISE REVOCATION, ETC. . . . . . . . . . . . . . . . . . 93
9.1.10. ERISA. . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
9.1.11. BANKRUPTCY, ETC. . . . . . . . . . . . . . . . . . . . . . . 93
9.2. CERTAIN ACTIONS FOLLOWING AN EVENT OF DEFAULT. . . . . . . . . . . . . 94
9.2.1. NO OBLIGATION TO EXTEND CREDIT . . . . . . . . . . . . . . . . 94
9.2.2. SPECIFIC PERFORMANCE; EXERCISE OF RIGHTS . . . . . . . . . . . 94
9.2.3. ACCELERATION . . . . . . . . . . . . . . . . . . . . . . . . . 94
9.2.4. ENFORCEMENT OF PAYMENT; CREDIT SECURITY; SETOFF. . . . . . . . 95
9.2.5. CUMULATIVE REMEDIES. . . . . . . . . . . . . . . . . . . . . . 95
9.3. ANNULMENT OF DEFAULTS. . . . . . . . . . . . . . . . . . . . . . . . . 95
9.4. WAIVERS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
10. EXPENSES; INDEMNITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
10.1. EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
10.2. GENERAL INDEMNITY. . . . . . . . . . . . . . . . . . . . . . . . . . . 97
11. OPERATIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
11.1. INTERESTS IN CREDITS . . . . . . . . . . . . . . . . . . . . . . . . . 97
11.2. AGENTS' AUTHORITY TO ACT, ETC. . . . . . . . . . . . . . . . . . . . . 97
11.3. BORROWERS TO PAY AGENT, ETC. . . . . . . . . . . . . . . . . . . . . . 98
11.4. LENDER OPERATIONS FOR ADVANCES, ETC. . . . . . . . . . . . . . . . . . 98
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11.4.1. ADVANCES . . . . . . . . . . . . . . . . . . . . . . . . . . . 98
11.4.2. ADMINISTRATIVE AGENT TO ALLOCATE PAYMENTS, ETC.. . . . . . . . 98
11.4.3. DELINQUENT LENDERS; NONPERFORMING LENDERS. . . . . . . . . . . 99
11.5. SHARING OF PAYMENTS, ETC.. . . . . . . . . . . . . . . . . . . . . . . 99
11.6. AGENT'S RESIGNATION OR REMOVAL . . . . . . . . . . . . . . . . . . . .100
11.7. CONCERNING THE AGENTS. . . . . . . . . . . . . . . . . . . . . . . . .100
11.7.1. ACTION IN GOOD FAITH, ETC. . . . . . . . . . . . . . . . . . .101
11.7.2. NO IMPLIED DUTIES, ETC.. . . . . . . . . . . . . . . . . . . .101
11.7.3. VALIDITY, ETC. . . . . . . . . . . . . . . . . . . . . . . . .101
11.7.4. COMPLIANCE . . . . . . . . . . . . . . . . . . . . . . . . . .101
11.7.5. EMPLOYMENT OF AGENTS AND COUNSEL . . . . . . . . . . . . . . .102
11.7.6. RELIANCE ON DOCUMENTS AND COUNSEL. . . . . . . . . . . . . . .102
11.7.7. AGENT'S REIMBURSEMENT. . . . . . . . . . . . . . . . . . . . .102
11.8. RIGHTS AS A LENDER . . . . . . . . . . . . . . . . . . . . . . . . . .102
11.9. INDEPENDENT CREDIT DECISION. . . . . . . . . . . . . . . . . . . . . .103
11.10. INDEMNIFICATION. . . . . . . . . . . . . . . . . . . . . . . . . . . .103
12. SUCCESSORS AND ASSIGNS; LENDER ASSIGNMENTS AND PARTICIPATIONS . . . . . . . .103
12.1. ASSIGNMENTS BY LENDERS . . . . . . . . . . . . . . . . . . . . . . . .104
12.1.1. ASSIGNEES AND ASSIGNMENT PROCEDURES. . . . . . . . . . . . . .104
12.1.2. TERMS OF ASSIGNMENT AND ACCEPTANCE . . . . . . . . . . . . . .105
12.1.3. REGISTER . . . . . . . . . . . . . . . . . . . . . . . . . . .106
12.1.4. ACCEPTANCE OF ASSIGNMENT AND ASSUMPTION. . . . . . . . . . . .106
12.1.5. FEDERAL RESERVE BANK . . . . . . . . . . . . . . . . . . . . .106
12.1.6. FURTHER ASSURANCES . . . . . . . . . . . . . . . . . . . . . .106
12.2. CREDIT PARTICIPANTS. . . . . . . . . . . . . . . . . . . . . . . . . .106
12.3. REPLACEMENT OF LENDER. . . . . . . . . . . . . . . . . . . . . . . . .107
13. CONFIDENTIALITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .108
14. FOREIGN LENDERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .109
15. NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .109
16. LIMITED RECOURSE AGAINST PARTNERS . . . . . . . . . . . . . . . . . . . . . .110
17. AMENDMENTS, CONSENTS, WAIVERS, ETC. . . . . . . . . . . . . . . . . . . . . .110
17.1. LENDER CONSENTS FOR AMENDMENTS . . . . . . . . . . . . . . . . . . . .110
17.2. COURSE OF DEALING; NO IMPLIED WAIVERS. . . . . . . . . . . . . . . . .112
18. GENERAL PROVISIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .112
18.1. DEFEASANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .112
18.2. NO STRICT CONSTRUCTION . . . . . . . . . . . . . . . . . . . . . . . .112
-vi-
18.3. CERTAIN OBLIGOR ACKNOWLEDGMENTS. . . . . . . . . . . . . . . . . . . .113
18.4. VENUE; SERVICE OF PROCESS; CERTAIN WAIVERS . . . . . . . . . . . . . .113
18.5. WAIVER OF JURY TRIAL . . . . . . . . . . . . . . . . . . . . . . . . .114
18.6. INTERPRETATION; GOVERNING LAW; ETC . . . . . . . . . . . . . . . . . .114
-vii-
EXHIBITS
1-A - Description of TCI Transactions
1-B - Borrowers, Restricted Companies, Investor Group Companies,
Guarantors
1-C - Example of Pro Rata Revolver Prepayment
2.1.3 - Form of Revolving Note
2.1.4 - Falcon Video Joinder
2.2.2 - Form of Term Loan B Note
2.3.2 - Form of Term Loan C Note
2.6 - New Falcon II Assignment and Assumption
5.1.5 - Pledge and Subordination Agreement
5.2.1. - Officer's Certificate
7.14 - Affiliate Contractual Obligations
8.1 - Restricted Companies
8.2.2 - Material Agreements
8.4 - Financing Debt, Certain Investments, etc.
8.7 - Litigation
11.1 - Lender Percentage Interests
12.1.1 - Assignment and Acceptance
-viii-
FALCON RESTRICTED COMPANIES
CREDIT AGREEMENT
This Agreement, dated as of June 30, 1998, is among the affiliates of
Falcon Holding Group, L.P., a Delaware limited partnership, set forth in Exhibit
8.1 hereto, their respective subsidiaries that are from time to time party
hereto and the Lenders (as defined below), including BankBoston, N.A. as
Documentation Agent for itself and the other Lenders, Toronto Dominion (Texas)
Inc., as Administrative Agent, NationsBank, N.A., as Syndication Agent, Bank of
America, N.T. & S.A., as Agent, and The Chase Manhattan Bank,, as Co-Syndication
Agent.
RECITALS: Under this Agreement, the Lenders are providing a $650,000,000
reducing revolving credit facility maturing in December 2006, a $200,000,000
amortizing term loan maturing in June 2007 and a $300,000,000 amortizing term
loan maturing in December 2007 and may make available in their discretion as
requested by the Borrowers up to $350,000,000 in additional revolving credit
and/or term loans pursuant to one or more supplemental credit facilities. The
Loan will be advanced initially to eight joint and several Borrowers, all of
whom (except Falcon First, Inc.) are limited partnerships of which Holding, L.P.
is the sole limited partner and Holding, L.P. and an Investor Group Company are
the sole general partners (except for Falcon Community Ventures I Limited
Partnership, whose ownership is set forth in Exhibit 8.1). Immediately prior to
the TCI Closing (as defined below), Falcon Video will become an additional
borrower under the revolving credit facility to the extent provided herein, and
upon the TCI Closing the sole borrower under all three facilities will be New
Falcon II. Except as set forth in Exhibit 8.1, each Investor Group Company is
itself a limited partnership of which Holding, L.P. is the sole limited partner
and Holding, L.P. and Holding, Inc. are the sole general partners. Holding,
Inc. is the sole general partner of Holding, L.P. Holding, L.P. owns all the
capital stock of Falcon First, Inc. All Investor Group Companies, all Borrowers
and all their respective Subsidiaries (other than the Excluded Companies) are
Restricted Companies hereunder and are guaranteeing all the Credit Obligations
(except to the extent otherwise provided herein prior to the TCI Closing and, in
the case of Falcon Video and its Investor Group Company, prior to the discharge
of Financing Debt of Falcon Video as contemplated in Section 5.3.1). In
addition, from and after the TCI Closing (and, in the case of Falcon Video and
its Investor Group Company, from and after the discharge of Financing Debt of
Falcon Video as contemplated in Section 5.3.1), New Falcon II is pledging its
equity interests in the other Restricted Companies, and Falcon Communications,
L.P. is pledging its equity interest in New Falcon II, as collateral for the
Credit Obligations.
The parties agree as follows:
1. DEFINITIONS; CERTAIN RULES OF CONSTRUCTION. Certain capitalized terms are
used in this Agreement and in the other Credit Documents with the specific
meanings defined below in this Section 1. Except as otherwise explicitly
specified to the contrary, (a) the capitalized term
"Section" refers to sections of this Agreement, (b) the capitalized term
"Exhibit" refers to exhibits to this Agreement, (c) references to a
particular Section include all subsections thereof, (d) the word "including"
shall be construed as "including without limitation", (e) accounting terms
not otherwise defined herein shall have the meaning provided under GAAP, (f)
references to a particular statute or regulation include all rules and
regulations thereunder and any successor statute, regulation or rules, in
each case as from time to time in effect, (g) references to a particular
Person include such Person's successors and assigns to the extent not
prohibited by this Agreement and the other Credit Documents and (h)
references to "DOLLARS" or "$" mean United States Funds. References to "the
date hereof" mean the date first set forth above.
"ACCUMULATED BENEFIT OBLIGATIONS" means the actuarial present value of the
accumulated benefit obligations under any Plan, calculated in a manner
consistent with Statement No. 87 of the Financial Accounting Standards Board.
"ADMINISTRATIVE AGENT" means Toronto Dominion in its capacity as
administrative agent for the Lenders hereunder, as well as its successors and
assigns in such capacity pursuant to Section 11.6.
"AFFECTED LENDER" is defined in Section 12.3.
"AFFILIATE" means, with respect to any Restricted Company or New Falcon II
(or any other specified Person, including a Lender), any other Person directly
or indirectly controlling, controlled by or under direct or indirect common
control with such Restricted Company (or other specified Person) or, in the case
of any Lender which is an investment fund, the investment advisor thereof and
any investment fund having the same investment advisor, and shall include (a)
any officer or director or general partner of such Restricted Company (or other
specified Person) and (b) any Person of which the Restricted Company (or other
specified Person) or any Affiliate (as defined in clause (a) above) of such
Restricted Company (or other specified Person) shall, directly or indirectly,
beneficially own either (i) at least 15% of the outstanding equity securities
having the general power to vote or (ii) at least 15% of all equity interests.
"AGENT" means each of the Documentation Agent, the Administrative Agent,
the Syndication Agent, the Co-Syndication Agent and the Agent.
"AGGREGATE PERCENTAGE INTERESTS" means, at any date, the sum of the dollar
amounts represented by the Percentage Interests in each of the Revolving Loan,
Term Loan B, Term Loan C and the Supplemental Loan.
"AGREEMENT" means this Agreement as from time to time in effect.
"APPLICABLE MARGIN" means, on any date, the percentage in the table below
for the applicable portion of the Revolving Loan, Term Loan B or Term Loan C, as
the case may be, set opposite the applicable Reference Leverage Ratio.
-2-
REVOLVING LOAN
Eurodollar
Reference Leverage Ratio Base Rate Pricing Option
------------------------ --------- --------------
Greater than or equal to 5.50 0.375% 1.375%
Greater than or equal to 5.00 0.125% 1.125%
but less than 5.50
Greater than or equal to 4.50 0.000% 0.875%
but less than 5.00
Greater than or equal to 4.00 0.000% 0.625%
but less than 4.50
Less than 4.00 0.000% 0.500%
; PROVIDED, HOWEVER, that if the TCI Closing does not occur by December 31,
1998, from January 1, 1999 until the TCI Closing, the Applicable Margin
indicated by the then-applicable Reference Leverage Ratio set forth above will
be increased 0.250%; and PROVIDED, FURTHER, that prior to the TCI Closing, the
Applicable Margin will be not less than 1.00% in the case of any Eurodollar
Pricing Option.
TERM LOAN B
Eurodollar
Reference Leverage Ratio Base Rate Pricing Option
------------------------ --------- --------------
Greater than or equal to 5.50 1.000% 2.000%
Greater than or equal to 4.50 0.750% 1.750%
but less than 5.50
Less than 4.50 0.500% 1.500%
; PROVIDED, HOWEVER, that if the TCI Closing does not occur by December 31,
1998, from January 1, 1999 until the TCI Closing, the Applicable Margin
indicated by the then-applicable Reference Leverage Ratio set forth above will
be increased 0.250%;
TERM LOAN C
Eurodollar
Reference Leverage Ratio Base Rate Pricing Option
------------------------ --------- --------------
Greater than or equal to 5.50 1.250% 2.250%
Greater than or equal to 4.50 1.000% 2.000%
but less than 5.50
Less than 4.50 0.750% 1.750%
-3-
; PROVIDED, HOWEVER, that if the TCI Closing does not occur by December 31,
1998, from January 1, 1999 until the TCI Closing, the Applicable Margin
indicated by the then-applicable Reference Leverage Ratio set forth above will
be increased 0.250%; and, PROVIDED, FURTHER, that prior to the TCI Closing, the
Applicable Margin will be not less than 2.000% in the case of any Eurodollar
Pricing Option or 1.000% in the case of the Base Rate applicable to any portion
of Term Loan C.
Any adjustment in the Applicable Margin shall take effect on the third
Banking Day following the receipt by the Administrative Agent of the financial
statements required to be furnished by Section 7.4.1 or 7.4.2; PROVIDED,
HOWEVER, that if for any reason the Restricted Companies shall not have
furnished the financial statements required by Section 7.4.1 or 7.4.2 for any
fiscal quarter by the time required by such Sections and the Documentation Agent
reasonably determines that the Applicable Margin indicated by the Reference
Leverage Ratio for such fiscal quarter would be increased from that previously
in effect, commencing on the date which is three Banking Days after such
financial statements were due until the third Banking Day following receipt by
the Administrative Agent of such financial statements, the Applicable Margin
shall be the Applicable Margin as so increased.
In connection with the TCI Closing, an adjustment in the Applicable Margin
shall take effect on the later of (a) the TCI Closing or (b) the fifth Banking
Day following the receipt by the Administrative Agent of the TCI Closing Report;
PROVIDED, HOWEVER, that if for any reason the Restricted Companies shall not
have furnished the TCI Closing Report by the time required by Section 7.4.3 and
the Applicable Margin indicated by the Reference Leverage Ratio for the period
immediately following the TCI Closing would be increased from the Applicable
Margin previously in effect, commencing on the TCI Closing until the fifth
Banking Day following receipt by the Administrative Agent of the TCI Closing
Report, the Applicable Margin shall be the Applicable Margin as so increased.
"APPLICABLE MATURITY DATE" means (a) with respect to the Revolving Loan,
the Final Revolving Maturity Date, (b) with respect to Term Loan B, the Final
Term Loan B Maturity Date, (c) with respect to Term Loan C, the Final Term Loan
C Maturity Date and (d) with respect to the Supplemental Loan, the final
maturity date of the applicable portion of the Supplemental Loan.
"APPLICABLE RATE" means, at any date, the sum of:
(a) (i) with respect to each portion of the Loan subject to a
Eurodollar Pricing Option, the sum of the Applicable Margin PLUS the
Eurodollar Rate with respect to such Eurodollar Pricing Option;
(ii) with respect to each other portion of the Loan, the
sum of the Applicable Margin PLUS the Base Rate; and
-4-
(iii) with respect to any Supplemental Facility, the rate
per annum agreed in writing by the Borrower and the Lenders
extending such Supplemental Facility in accordance with Section
2.4;
PLUS (b) an additional 2% beginning on the occurrence of an Event of
Default and ending on the date such Event of Default is no longer
continuing.
"ASSET REINVESTMENT RESERVE AMOUNT" is defined in Section 4.4.3.
"ASSIGNEE" is defined in Section 12.1.1.
"ASSIGNMENT AND ACCEPTANCE" is defined in Section 12.1.1.
"BANKBOSTON" means BankBoston, N.A.
"BANKING DAY" means any day other than Saturday, Sunday or a day on which
banks in Boston, Massachusetts or New York, New York are authorized or required
by law or other governmental action to close and, if such term is used with
reference to a Eurodollar Pricing Option, any day on which dealings are effected
in the Eurodollars in question by first-class banks in the inter-bank Eurodollar
markets in New York, New York and at the location of the applicable Eurodollar
Office.
"BANKRUPTCY CODE" means Title 11 of the United States Code (or any
successor statute) and the rules and regulations thereunder, all as from time to
time in effect.
"BANKRUPTCY DEFAULT" means an Event of Default referred to in
Section 9.1.11.
"BASE RATE" means, on any day, the greater of (a) the rate of interest
announced by the Administrative Agent at the Houston Office from time to time as
its corporate base rate (which may not be its lowest commercial lending rate) or
(b) the sum of 1/2% PLUS the Federal Funds Rate.
"BASIC EURODOLLAR RATE" means, as applied to any Interest Period, the
quotient (rounded to the nearest 1/100%) obtained by dividing (a) the sum of the
Basic Reference Eurodollar Rates of the Reference Lenders for such Interest
Period by (b) the number of such Reference Lenders. Each determination by the
Administrative Agent of any Basic Eurodollar Rate pursuant to the foregoing
sentence shall, in the absence of manifest error, be conclusive.
"BASIC REFERENCE EURODOLLAR RATE" means, for any Reference Lender as
applied to any Interest Period, the rate of interest at which Eurodollar
deposits in an amount comparable to the Percentage Interest of such Reference
Lender in the portion of the Loan as to which a Eurodollar Pricing Option has
been elected and which have a term corresponding to the Interest Period in
question are offered to such Reference Lender by first class banks in the
inter-bank Eurodollar
-5-
market for delivery in immediately available funds at a Eurodollar Office on
the first day of such Interest Period as determined by the Administrative
Agent at approximately 10:00 a.m. (New York time) two Banking Days prior to
the date upon which the Interest Period in question is to commence, which
determination by the Administrative Agent shall, in the absence of manifest
error, be conclusive.
"BORROWER" or "BORROWERS" means (a) prior to the TCI Closing and the
contemporaneous execution and delivery of the New Falcon II Assignment and
Assumption by New Falcon II, (i) the Pre-TCI Borrowers and (ii) solely with
respect to the loan made pursuant to Section 2.1.4, upon the execution and
delivery of the Falcon Video Joinder, Falcon Video and (b) upon the TCI Closing
and the contemporaneous execution and delivery of the New Falcon II Assignment
and Assumption by New Falcon II, New Falcon II.
"BY-LAWS" means all written by-laws, rules, regulations and all other
documents relating to the management, governance or internal regulation of any
Person other than an individual, or interpretive of the Charter of such Person,
all as from time to time in effect.
"CAPITAL EXPENDITURES" means, for any period, amounts added or required to
be added to the property, plant and equipment or other fixed assets account on
the Consolidated balance sheet of the Restricted Companies, prepared in
accordance with GAAP, in respect of (a) the acquisition, construction,
improvement or replacement of land, buildings, machinery, equipment, leaseholds
and any other real or personal property, (b) to the extent not included in
clause (a) above, materials, contract labor and direct labor relating thereto
(excluding amounts properly expensed as repairs and maintenance in accordance
with GAAP) and (c) software development costs to the extent not expensed in
accordance with GAAP; PROVIDED, HOWEVER, that Capital Expenditures shall not
include the purchase price for the acquisition of another Person (or all or a
portion of the assets of another Person) as a going concern permitted by
Section 7.9; and PROVIDED, FURTHER, that Capital Expenditures shall not include
amounts funded with insurance proceeds received in respect of the loss of or
damage to property, plant, equipment or other fixed assets of the Restricted
Companies.
"CAPITALIZED LEASE" means any lease which is required to be capitalized on
the balance sheet of the lessee in accordance with GAAP, including Statement
Nos. 13 and 98 of the Financial Accounting Standards Board.
"CAPITALIZED LEASE OBLIGATIONS" means the amount of the liability
reflecting the aggregate discounted amount of future payments under all
Capitalized Leases calculated in accordance with GAAP, including Statement Nos.
13 and 98 of the Financial Accounting Standards Board.
"CASH EQUIVALENTS" means:
(a) negotiable certificates of deposit, time deposits (including
sweep accounts), demand deposits and bankers' acceptances issued by
any Lender or any United States
-6-
financial institution having capital and surplus and undivided
profits aggregating at least $100,000,000 and rated at least
Prime-2 by Moody's Investors Service, Inc. or A-2 by Standard &
Poor's Ratings Group;
(b) short-term corporate obligations rated at least Prime-2 by
Moody's Investors Service, Inc. or A-2 by Standard & Poor's Ratings
Group, or issued by any Lender;
(c) any direct obligation of the United States of America or any
agency or instrumentality thereof, or of any state or municipality
thereof, (i) which has a remaining maturity at the time of purchase of
not more than one year or (ii) which is subject to a repurchase
agreement with any Lender (or any other financial institution referred
to in clause (a) above) exercisable within one year from the time of
purchase and (iii) which, in the case of obligations of any state or
municipality, is rated Aa2 or better by Moody's Investors Service,
Inc.;
(d) any mutual fund or other pooled investment vehicle rated Aa2
or better by Moody's Investors Service, Inc. which invests principally
in obligations described above; and
(e) in an amount not to exceed $5,000,000, deposits in overnight
sweep accounts offered by a bank described in clause (a) above.
"CERCLA" means the federal Comprehensive Environmental Response,
Compensation and Liability Act of 1980.
"CERCLIS" means the federal Comprehensive Environmental Response
Compensation Liability Information System List (or any successor document)
promulgated under CERCLA.
"CHARTER" means the articles of organization, certificate of incorporation,
statute, constitution, joint venture agreement, partnership agreement, limited
liability company operating agreement, trust indenture or other charter document
of any Person other than an individual, each as from time to time in effect.
"CLOSING DATE" means the Initial Closing Date and each subsequent date on
which any extension of credit is made pursuant to Section 2.1 or 2.4.
"CODE" means, collectively, the federal Internal Revenue Code of 1986 (or
any successor statute) and the rules and regulations thereunder.
"COMMITMENT" means, with respect to any Lender, such Lender's Percentage
Interest in the obligations to extend the credits contemplated by the Credit
Documents. The original Commitments are set forth in Exhibit 11.1.
-7-
"COMMITMENT NOTICE" is defined in Section 2.4.1.
"COMMUNICATIONS ACT" means the federal Communications Act of 1934, the
federal Cable Television Consumer Protection and Competition Act of 1992 and the
federal Telecommunications Act of 1996.
"COMPUTATION COVENANTS" means Sections 7.5, 7.6.6, 7.6.7, 7.6.18, 7.7.3,
7.9.3, 7.9.7, 7.9.8, 7.9.9, 7.9.10, 7.9.12, 7.10.3, 7.10.4, 7.10.5, 7.10.7,
7.10.8, 7.10.9, 7.10.10, 7.11.3 and 7.11.5.
"CONSOLIDATED" and "CONSOLIDATING", when used with reference to any term,
mean that term as applied to the accounts of the Restricted Companies (or other
specified Person) and all of their respective Subsidiaries (or other specified
group of Persons), or such of their respective Subsidiaries as may be specified,
consolidated or combined or consolidating or combining, as the case may be, in
accordance with GAAP and with appropriate deductions for minority interests in
Subsidiaries, as required by GAAP; PROVIDED, HOWEVER, that in no event shall the
Excluded Companies be included in the Consolidated financial statements of the
Restricted Companies for purposes of compliance with Section 7 (other than
Section 7.4) or for purposes of determining the Applicable Margin and the
related definitions; and, PROVIDED, FURTHER, that upon the TCI Closing, the
Consolidated financial statements of the Restricted Companies and related
defined terms shall give pro forma effect to the TCI Transactions and the
addition of Falcon Video as a Restricted Company for calculation periods that
cover respective dates that are prior to and after the TCI Closing in a manner
consistent with Article 11 of Regulation S-X under the Securities Act.
"CONSOLIDATED ANNUALIZED OPERATING CASH FLOW" means the product of
Consolidated Operating Cash Flow multiplied by four.
"CONSOLIDATED CASH INTEREST EXPENSE" means, for any period, the aggregate
amount of interest, including payments in the nature of interest under
Capitalized Leases and net payments under Interest Rate Protection Agreements,
accrued by the Restricted Companies on Consolidated Total Debt and Interest Rate
Protection Agreements (whether such interest is reflected as an item of expense
or capitalized) in accordance with GAAP on a Consolidated basis; PROVIDED,
HOWEVER, that Consolidated Cash Interest Expense shall include commitment fees
and other Lender fees included in interest expense in accordance with GAAP and
Distributions to New Falcon I, Holding, L.P. and TCI and its Affiliates
described in Sections 7.10.3(a), (b) and (d) on account of interest on
Indebtedness incurred by New Falcon I, Holding, L.P. and TCI and its Affiliates,
but shall not include PIK Interest Payments.
"CONSOLIDATED EXCESS CASH FLOW" means, for any period, Consolidated
Operating Cash Flow MINUS Consolidated Total Fixed Charges.
-8-
"CONSOLIDATED NET INCOME" means, for any period, the net income (or loss)
of the Restricted Companies determined in accordance with GAAP on a Consolidated
basis (giving pro forma effect to the results of operations for such period of
any Person or other business acquired through purchase or exchange by the
Restricted Companies in accordance with Section 7.9 during such period, but not
giving effect to the results of operations for such period contributed by any
System or other assets sold by the Restricted Companies during such period);
PROVIDED, HOWEVER, that Consolidated Net Income shall not include:
(a) the income (or loss) of any Person (other than a Restricted
Company or a Subsidiary of a Restricted Company) in which any
Restricted Company has an ownership interest; PROVIDED, HOWEVER, that
Consolidated Net Income shall include amounts in respect of the income
of such Person when actually received in cash by the Restricted
Companies in the form of dividends or similar Distributions;
(b) all amounts included in computing such net income (or loss)
in respect of the write-up of any asset or the retirement of any
Indebtedness at less than face value after December 31, 1997;
(c) the effect of extraordinary and nonrecurring items of gain,
income, loss or expense, including in any event the following items
(i) to the extent approved by at least two of the Specified Agents,
whose approval shall not be unreasonably withheld, litigation and tax
judgments and settlements, including the Falcon Cable Systems
Settlement Payments and (ii) payments of up to an aggregate of
$5,000,000 (or such larger amount as may be approved by at least two
of the Specified Agents) during any fiscal quarter of the Restricted
Companies in respect of: franchise taxes relating to prior periods;
sales, use and other tax assessments relating to prior periods;
payments, refunds or credits in respect of customer late fees relating
to prior periods; other similar items relating to prior periods; and
acquisition deposits that are forfeited during such period.
(d) the income of any Subsidiary (other than a Restricted
Company) to the extent the payment of such income in the form of a
Distribution or repayment of Indebtedness to any Restricted Company is
not permitted, whether on account of any Charter or By-law
restriction, any agreement, instrument, deed or lease or any law,
statute, judgment, decree or governmental order, rule or regulation
applicable to such Subsidiary or otherwise; and
(e) any after-tax gains or losses attributable to returned
surplus assets of any Plan.
For purposes of computing Consolidated Net Income for any fiscal quarter,
to the extent such items have not previously been accrued or allocated to a
prior period, (i) payments of insurance deductible amounts and discretionary
employee or management bonuses shall be allocated one fourth to the fiscal
quarter in which payment is made and one fourth to each of the
-9-
next three fiscal quarters and (ii) Consolidated Net Income shall include
100% of the income of each Restricted Company, notwithstanding that such
Restricted Company may not be a wholly owned Subsidiary of New Falcon I (or
Holding, L.P. prior to the TCI Closing) and that, as a result thereof, GAAP
would otherwise require a portion of such Restricted Company's income from
Consolidated Net Income to be deducted on account of minority interests in
such Restricted Company.
"CONSOLIDATED OPERATING CASH FLOW" means, for any three-month period, the
total of:
(a) Consolidated Net Income PLUS
(b) all amounts deducted in computing such Consolidated Net
Income in respect of:
(i) depreciation, amortization and other charges that are
not expected to be paid in cash;
(ii) interest on Financing Debt (including payments in the
nature of interest under Capitalized Leases) and net payments in
the nature of interest under Interest Rate Protection Agreements;
(iii) federal, state and local taxes based upon or measured
by income;
(iv) an amount equal to the payments made pursuant to
section 2.8(i) of the Contribution Agreement in respect of the
Existing Incentive Plan (as defined in the Contribution
Agreement);
(v) other non-cash charges; and
(vi) any reasonable costs incurred or expensed in
connection with an acquisition or disposition permitted by
Sections 7.9 or 7.11.
MINUS (c) to the extent Consolidated Net Income has not already
been reduced thereby, Distributions by the Restricted Companies to
Holding, L.P. of a type described in Section 7.10.4 (for reimbursement
of management expenses), whether or not permitted thereby.
"CONSOLIDATED PRO FORMA DEBT SERVICE" means, for any period, the sum of the
following items, projected to be accrued by the Restricted Companies:
(a) Consolidated Cash Interest Expense,
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PLUS (b) the aggregate amount of all mandatory scheduled payments
(excluding the final scheduled principal payment on each Term Loan) and
mandatory prepayments of revolving loans as a result of mandatory
reductions in revolving credit availability, all with respect to Financing
Debt of the Restricted Companies in accordance with GAAP on a Consolidated
basis, including payments in the nature of principal under Capitalized
Leases, but in no event including contingent prepayments required by
Sections 4.3, 4.4 or 4.5 or voluntary payments contemplated by Section 4.6.
For purposes of computing Consolidated Pro Forma Debt Service:
(i) the amount of Financing Debt outstanding on the first
day of such period shall be assumed to remain outstanding during
the entire period, except to the extent required to be reduced by
mandatory scheduled payments, mandatory payments on the Revolving
Loan and other items described in paragraph (b) above; and
(ii) where interest varies with a floating rate, the rate
in effect on the first day of such period will be assumed to
remain constant during the entire period (giving effect to any
applicable Interest Rate Protection Agreements).
"CONSOLIDATED REVENUES" means, for any period:
(a) the net operating revenues (after reductions for discounts)
of the Restricted Companies determined in accordance with GAAP on a
Consolidated basis;
MINUS (b) any proceeds included in such net operating revenues
from the sale, refinancing, condemnation or destruction of any
Systems;
MINUS (c) actual bad debt expense to the extent not already
deducted in computing such net operating revenues.
"CONSOLIDATED TOTAL DEBT" means, at any date, the principal amount of all
Financing Debt of the Restricted Companies on a Consolidated basis (other than
Indebtedness of the Restricted Companies owing to Holding, L.P. or to New Falcon
I permitted by Section 7.6.14 or Indebtedness of the Restricted Companies owing
to TCI or its Affiliates permitted by Section 7.6.15) MINUS the lesser of (a)
cash and Cash Equivalents of the Restricted Companies on a Consolidated basis in
accordance with GAAP or (b) $5,000,000.
"CONSOLIDATED TOTAL FIXED CHARGES" means, for any period, the sum of:
(a) Consolidated Cash Interest Expense,
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PLUS (b) the aggregate amount of all mandatory scheduled
payments and mandatory prepayments of revolving loans as a result of
mandatory reductions in revolving credit availability, all with
respect to Financing Debt of the Restricted Companies in accordance
with GAAP on a Consolidated basis, including payments in the nature of
principal under Capitalized Leases, but in no event including
contingent prepayments required by Sections 4.4 or 4.5 or voluntary
prepayments contemplated by Section 4.6.
PLUS (c) Capital Expenditures,
PLUS (d) federal, state and local taxes based upon or measured
by income actually paid by any Restricted Company, other than taxes
with respect to extraordinary and nonrecurring gains,
PLUS (e) Distributions by the Restricted Companies to their
partners or members that are not Restricted Companies of a type
described in Section 7.10.5 (in respect of taxes), whether or not
permitted thereby,
PLUS (f) to the extent not included in the foregoing clauses,
Distributions by the Restricted Companies to Holding, L.P., New Falcon
I or TCI and its Affiliates of a type described in Section 7.10.3 (for
debt service), whether or not permitted thereby.
"CONTRIBUTION AGREEMENT" means the Contribution and Purchase Agreement
dated December 30, 1997, among Holding, L.P., New Falcon I, Holding, Inc., TCI
Falcon Holdings, LLC and certain other parties named therein, including the
First Amendment dated March 23, 1998, the Second Amendment dated April 2, 1998,
and the Third Amendment dated May 12, 1998, as the same may be further amended,
modified or supplemented from time to time in accordance with Section 7.2.3.
"COPYRIGHT ACT" is defined in Section 8.6.2.
"CREDIT DOCUMENTS" means:
(a) this Agreement, the Notes, the Pledge and Subordination
Agreement, the fee agreement contemplated by Section 5.1.3, the Falcon
Video Joinder, the New Falcon II Assignment and Assumption and each
Interest Rate Protection Agreement provided by a Lender (or an
Affiliate of a Lender) to any Restricted Company, each as from time to
time in effect; and
(b) any other present or future agreement or instrument from
time to time entered into among any Restricted Company or (so long as
any Restricted Company is also party thereto) any Affiliate of any of
them, on one hand, and either the Documentation Agent or all the
Lenders, on the other hand, relating to, amending or modifying this
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Agreement or any other Credit Document referred to above or which is
stated to be a Credit Document, each as from time to time in effect.
"CREDIT OBLIGATIONS" means all present and future liabilities, obligations
and Indebtedness of any Restricted Company or any of their Affiliates party to a
Credit Document owing to any Lender (or, in the case of Interest Rate Protection
Agreements, any Affiliate of a Lender) under or in connection with this
Agreement or any other Credit Document, including obligations in respect of
principal, interest, commitment fees, payment and reimbursement obligations
under Interest Rate Protection Agreements, amounts provided for in
Sections 3.2.4, 3.4, 3.5, 3.6 and 10 and other fees, charges, indemnities and
expenses from time to time owing hereunder or under any other Credit Document
(all whether accruing before or after a Bankruptcy Default and whether or not
allowed in a bankruptcy proceeding).
"CREDIT PARTICIPANT" is defined in Section 12.2.
"CREDIT SECURITY" means all assets from time to time hereafter subjected to
a security interest, mortgage or charge (or intended or required so to be
subjected pursuant to the Pledge and Subordination Agreement or any other Credit
Document) to secure the payment or performance of any of the Credit Obligations.
"DEFAULT" means any Event of Default and any event or condition which with
the passage of time or giving of notice, or both, would become an Event of
Default.
"DELINQUENCY PERIOD" is defined in Section 11.4.3.
"DELINQUENT LENDER" is defined in Section 11.4.3.
"DELINQUENT PAYMENT" is defined in Section 11.4.3.
"DESIGNATED FINANCING DEBT" means Financing Debt incurred by a Restricted
Company after the date hereof other than Financing Debt permitted by
Sections 7.6.1 (the Credit Obligations), 7.6.7 (purchase money Indebtedness and
Capitalized Leases), 7.6.9 (intercompany Indebtedness), 7.6.10 (Holding, L.P.
Senior Subordinated Notes), 7.6.11 (existing Indebtedness) 7.6.14 (Indebtedness
owing from a Restricted Company to Holding, L.P. or New Falcon I), 7.6.15
(Indebtedness owing from a Restricted Company to TCI or its Affiliates) and
7.6.18 (other Indebtedness).
"DISTRIBUTION" means, with respect to any Restricted Company (or other
specified Person):
(a) the binding declaration or payment of any dividend or
distribution, including dividends payable in shares of capital stock
or other equity interests of any Restricted
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Company, on or in respect of any shares of any class of capital
stock or other equity interests of any Restricted Company;
(b) the purchase, redemption or other retirement by any
Restricted Company of any shares of any class of capital stock or
other equity interests of any Holding Company (or of options, warrants
or other rights for the purchase of such shares), directly, indirectly
through a Subsidiary or otherwise;
(c) any other distribution on or in respect of any shares of any
class of equity of or beneficial interest in any Restricted Company;
(d) any payment by any Restricted Company of principal or
interest with respect to, or any purchase, redemption or defeasance by
any Restricted Company of, any Indebtedness of any Holding Company
which by its terms or the terms of any agreement is subordinated to
the payment of the Credit Obligations; and
(e) any payment (including amounts accrued and payable for
management fees and reimbursement of expenses), loan or advance by any
Restricted Company to, or any other Investment by any Restricted
Company in, the holder of any shares of any class of capital stock of
or equity interest in any Holding Company or any Affiliate of such
holder;
PROVIDED, HOWEVER, that the term "DISTRIBUTION" shall not include payments in
the ordinary course of business in respect of (i) reasonable compensation paid
to employees, officers and directors, (ii) advances to employees for travel
expenses, drawing accounts and similar expenditures, (iii) rent paid to or
accounts payable for services rendered or goods sold by non-Affiliates or (iv)
intercompany accounts payable and real property leases to non-Affiliates.
"DOCUMENTATION AGENT" means BankBoston in its capacity as Documentation
Agent for the Lenders hereunder, as well as its successors and assigns in such
capacity pursuant to Section 11.6.
"ENSTAR" means Enstar Communications Corporation, a Georgia corporation
owned by Falcon Cablevision, a California Limited Partnership, which will be
transferred to New Falcon II as part of the TCI Transactions.
"ENVIRONMENTAL LAWS" means all applicable federal, state or local
statutes, laws, ordinances, codes, rules, regulations and guidelines having the
force of law (including consent decrees and administrative orders) relating to
public health and safety and protection of the environment.
"ERISA" means the federal Employee Retirement Income Security Act of 1974.
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"ERISA GROUP PERSON" means each Restricted Company, any Subsidiary and any
Person which is a member of the controlled group or under common control with
any Restricted Company within the meaning of section 414 of the Code or section
4001(a)(14) of ERISA.
"EURODOLLAR PRICING OPTIONS" means the options granted pursuant to
Section 3.2.1 to have the interest on any portion of the Loan computed on the
basis of a Eurodollar Rate.
"EURODOLLARS" means, with respect to any Lender, deposits of United States
Funds in a non-United States office or an international banking facility of such
Lender.
"EURODOLLAR OFFICE" means such non-United States office or international
banking facility of any Lender as the Lender may from time to time select.
"EURODOLLAR RATE" for any Interest Period means the rate, rounded to the
nearest 1/100%, obtained by dividing (a) the Basic Eurodollar Rate for such
Eurodollar Interest Period by (b) an amount equal to 1 MINUS the Eurodollar
Reserve Rate; PROVIDED, HOWEVER, that if at any time during such Interest Period
the Eurodollar Reserve Rate applicable to any outstanding Eurodollar Pricing
Option changes, the Eurodollar Rate for such Interest Period shall automatically
be adjusted to reflect such change, effective as of the date of such change.
"EURODOLLAR RESERVE RATE" means the stated maximum rate (expressed as a
decimal) of all reserves (including any basic, supplemental, marginal or
emergency reserve or any reserve asset), if any, as from time to time in effect,
required by any Legal Requirement to be maintained by any Lender against (a)
"Eurocurrency liabilities" as specified in Regulation D of the Board of
Governors of the Federal Reserve System (or any successor regulation), (b) any
other category of liabilities that includes Eurodollar deposits by reference to
which the interest rate on portions of the Loan covered by Eurodollar Pricing
Options is determined, (c) the principal amount of or interest on any portion of
the Loan covered by a Eurodollar Pricing Option or (d) any other category of
extensions of credit, or other assets, that includes loans covered by a
Eurodollar Pricing Option.
"EVENT OF DEFAULT" is defined in Section 9.1.
"EXCHANGE ACT" means the federal Securities Exchange Act of 1934.
"EXCLUDED COMPANIES" means Enstar, Enstar's Subsidiaries, Falcon Lake Las
Vegas Cablevision, L.P., a Delaware limited partnership, Falcon/Capital Cable, a
Delaware general partnership, Falcon/Capital Cable Partners, L.P., a Delaware
limited partnership, Falcon Britannia, L.P., a California limited partnership,
Falcon Classic, Duhamel Falcon Cable Mexico, L.L.C., a Delaware limited
liability company, Pacific Microwave Joint Venture, a California general
partnership, Wilcat Transmission Company, Inc., a Delaware corporation, Falcon
Pacific Microwave, Inc., a Delaware corporation, SFC Transmissions, a California
joint venture, and 212 Seventh Street, Inc., a Missouri corporation, and any
other Subsidiary (including a Subsidiary
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that is a Permitted Joint Venture) of a Restricted Company that at the time
of determination shall be designated as an Excluded Company by written notice
of such Restricted Company to the Documentation Agent. The Borrowers may
designate any Subsidiary of the Restricted Companies (including any newly
acquired or newly organized Subsidiary of the Restricted Companies) to be an
Excluded Company by written notice to the Documentation Agent, provided the
acquisition or organization of such Subsidiary would be permitted under
Section 7.9. The Borrowers may designate any Excluded Company to be a
Restricted Company by written notice to the Documentation Agent, provided
that no Default shall occur and be continuing or shall result as a
consequence thereof.
"FALCON CABLE SYSTEMS SETTLEMENT" is defined in Section 7.10.13.
"FALCON CABLE SYSTEMS SETTLEMENT PAYMENTS" is defined in Section 7.10.13.
"FALCON CLASSIC" means Falcon Classic Cable Income Properties, L.P., a
California limited partnership.
"FALCON FIRST" means Falcon First, Inc., a Delaware corporation.
"FALCON PERMITTED HOLDERS" means any of (a) Holding, Inc. for so long as a
majority of the voting power of the voting capital stock of Holding, Inc. is
beneficially owned by any of the Persons listed in the other clauses of this
definition, (b) any Nathanson Family Investor, (c) Tele-Communications, Inc., a
Delaware corporation, and TCI Communications, Inc., a Delaware corporation, (d)
any Person in which Tele-Communications, Inc. is the owner, directly or
indirectly, of at least 25% of the outstanding voting stock or other equity
interests of such Person, and (e) any Persons controlling, controlled by or
under common control with any other Person described in clauses (a) through (d)
of this definition; PROVIDED, HOWEVER, that for purposes of calculating the
amount of voting stock or other equity interests of any Persons held by Falcon
Permitted Holders, voting stock or other equity interests held by directors and
executive officers of Holdings, Inc. shall be deemed to be held by Falcon
Permitted Holders.
"FALCON VIDEO" means Falcon Video Communications, L.P., a Delaware limited
partnership.
"FALCON VIDEO JOINDER" is defined in Section 2.1.4.
"FALCON VIDEO REVOLVING LOAN" is defined in Section 2.1.4.
"FCC" means the Federal Communications Commission and any successor
governmental agency.
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"FCC LICENSE" means any broadcasting, community antenna television or relay
systems, each station, business radio, microwave and other license issued by the
FCC under the Communications Act.
"FEDERAL FUNDS RATE" means, for any day, (a) the rate equal to the weighted
average of the rates on overnight federal funds transactions with members of the
Federal Reserve System arranged by federal funds brokers, as such weighted
average is published for such day (or, if such day is not a Banking Day, for the
immediately preceding Banking Day) by the Federal Reserve Bank of New York or
(b) if such rate is not so published for such Banking Day, as determined by the
Administrative Agent using any reasonable means of determination. Each
determination by the Administrative Agent of the Federal Funds Rate shall, in
the absence of manifest error, be conclusive.
"FINAL REVOLVING MATURITY DATE" means December 29, 2006.
"FINAL TERM LOAN B MATURITY DATE" means June 29, 2007.
"FINAL TERM LOAN C MATURITY DATE" means December 31, 2007.
"FINANCIAL OFFICER" means (a) the chief financial officer, treasurer or
corporate controller of Holding, Inc. in its capacity as general partner of the
managing general partner of New Falcon I, in its capacity as general partner of
the managing general partner of the sole member of New Falcon II, in its
capacity as managing general partner of each Investor Group Company, in such
Investor Group Company's capacity as the managing general partner of a Borrower
(or other specified Person), or a vice president whose primary responsibility is
for the financial affairs of Holding, Inc. (or other specified Person) in such
capacity, (b) in the case of Falcon First, the chief financial officer,
treasurer or corporate controller of Falcon First or a vice president whose
primary responsibility is for the financial affairs of Falcon First, (c) in the
case of Falcon Video, the chief financial officer, treasurer or corporate
controller of Falcon Video Communications Investors, L.P. or a vice president
whose primary responsibility is for the financial affairs of Falcon Video, (d)
in the case of any other specified Person, the chief financial officer,
treasurer, corporate controller or vice president whose primary responsibility
is for the financial affairs of such Person, and (e) in any event, Michael K.
Menerey and Jon W. Lunsford, all of whose incumbency and signatures will have
been certified to the Administrative Agent by an appropriate attesting officer
of Holding, Inc. (or other specified Person) prior to or contemporaneously with
the delivery of any certificates delivered to the Administrative Agent
hereunder.
"FINANCING DEBT" means:
(a) Indebtedness in respect of borrowed money;
(b) Indebtedness evidenced by notes, debentures or similar
instruments;
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(c) Indebtedness in respect of Capitalized Leases;
(d) Indebtedness in respect of the deferred purchase price of
assets (other than normal trade accounts payable that are not overdue
beyond customary practice); and
(e) Indebtedness in respect of mandatory redemption, repurchase
or dividend rights on capital stock (or other equity).
"FRANCHISE" means any franchise, permit, license or other authorization
granted by any governmental unit or authority that authorizes the construction
and operation of a System.
"GAAP" means generally accepted accounting principles, as defined by the
United States Financial Accounting Standards Board, as from time to time in
effect; PROVIDED, HOWEVER, that (a) for purposes of compliance with Section 7
(other than Section 7.4) and the related definitions, "GAAP" means such
principles as in effect on December 31, 1997 as applied by the Restricted
Companies in the preparation of the December 31, 1997 financial statements
referred to in Section 8.2.1(a), and consistently followed, without giving
effect to any subsequent changes thereto and (b) in the event of a change in
generally accepted accounting principles after such date, either the Borrowers
or the Required Lenders may request a change in the definition of "GAAP", in
which case the parties hereto shall negotiate in good faith with respect to an
amendment of this Agreement implementing such change.
"GUARANTEE" means, with respect to any Restricted Company (or other
specified Person):
(a) any guarantee by the Restricted Company of the payment or
performance of, or any contingent obligation by the Restricted Company
in respect of, any Financing Debt of any other Person;
(b) any other arrangement whereby credit is extended to a Person
on the basis of any promise or undertaking of the Restricted Company
(including any "comfort letter" or "keep well agreement" written by
the Restricted Company to a creditor or prospective creditor of such
Person) to (i) pay the Financing Debt of such Person, (ii) purchase an
obligation owed by such Person, (iii) pay for the purchase or lease of
assets or services regardless of the actual delivery thereof or (iv)
maintain the capital, working capital, solvency or general financial
condition of such Person, in each case whether or not such arrangement
is disclosed in the balance sheet of the Restricted Company or
referred to in a footnote thereto;
(c) any liability of the Restricted Company as a general partner
of a partnership in respect of Financing Debt of such partnership;
(d) any liability of the Restricted Company as a joint venturer
of a joint venture in respect of Financing Debt of such joint venture;
and
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(e) reimbursement obligations with respect to letters of credit,
surety bonds and other financial guarantees;
PROVIDED, HOWEVER, that the term "Guarantee" shall not include endorsements for
collection or deposit in the ordinary course of business. The amount of any
Guarantee and the amount of Indebtedness resulting from such Guarantee shall be
the amount which should be carried on the balance sheet of the obligor whose
obligations were guaranteed in respect of such obligations, determined in
accordance with GAAP.
"GUARANTOR" means each Restricted Company and each Subsidiary of a
Restricted Company that is party hereto and is not either a Borrower or an
Excluded Company; PROVIDED, HOWEVER, that Falcon Video and Falcon Video
Investors, L.P. shall become Guarantors only upon the TCI Closing and the
discharge of Financing Debt of Falcon Video as contemplated in Section 5.3.1.
Exhibit 1-B lists the Guarantors prior to and immediately after the TCI Closing.
"HAZARDOUS MATERIAL" means, collectively, any pollutant, toxic or hazardous
material or waste, including any "hazardous substance" or "pollutant" or
"contaminant" as defined in section 101(14) of CERCLA or any similar state or
local statute or regulation or regulated as toxic or hazardous under the
Resource Conservation and Recovery Act or any similar state or local statute or
regulation, and the rules and regulations thereunder, as from time to time in
effect.
"HOLDING COMPANIES" means Holding, L.P., Holding, Inc. and their respective
Subsidiaries, including New Falcon I and the Restricted Companies.
"HOLDING, INC." means Falcon Holding Group, Inc., a California corporation
that is the general partner of Holding, L.P., or any successor corporation,
partnership, limited liability company or other entity that would not create an
Event of Default immediately as a result of such succession and that enters into
assumption agreements with respect to the Pledge and Subordination Agreement and
the other Credit Documents to which either Holding, Inc. or Holding, L.P. is a
party reasonably satisfactory to such successor and the Required Lenders in all
respects.
"HOLDING, L.P." means Falcon Holding Group, L.P., a Delaware limited
partnership, or any successor corporation, partnership, limited liability
company or other entity that would not create an Event of Default immediately as
a result of such succession and that enters into assumption agreements with
respect to the Pledge and Subordination Agreement and the other Credit Documents
to which either Holding, Inc. or Holding, L.P. is a party reasonably
satisfactory to such successor and the Required Lenders in all respects.
"HOLDING, L.P. SENIOR SUBORDINATED NOTES" means the 11% Senior Subordinated
Notes due September 15, 2003 issued by Holding, L.P. pursuant to the Senior
Subordinated Notes Indenture.
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"HOUSTON OFFICE" means the principal banking office of the Administrative
Agent in Houston, Texas.
"INDEBTEDNESS" means all obligations, contingent or otherwise, which in
accordance with GAAP are required to be classified upon the balance sheet of any
Restricted Company (or other specified Person) as liabilities, but in any event
including:
(a) indebtedness in respect of borrowed money;
(b) indebtedness evidenced by notes, debentures or similar
instruments;
(c) Capitalized Lease Obligations;
(d) the deferred purchase price of assets (including trade
accounts payable);
(e) mandatory redemption, repurchase or dividend obligations
with respect to capital stock (or other evidence of beneficial
interest);
(f) unfunded pension fund obligations and liabilities;
(g) all Guarantees and endorsements in respect of Indebtedness
of others; and
(h) liabilities secured by any Lien existing on property owned
or acquired by any Restricted Company, whether or not the liability
secured thereby shall have been assumed; PROVIDED, HOWEVER, that, to
the extent that a liability secured by a Lien on such property is
otherwise nonrecourse to the Restricted Company, the amount of
Indebtedness in respect of such liability shall be the lesser of the
fair market value of such property or the amount of such liability.
"INDEMNIFIED PARTY" is defined in Section 10.2.
"INITIAL CLOSING DATE" means June 30, 1998 or such other date prior to
September 30, 1998 as agreed by the Borrowers and the Documentation Agent as the
first Closing Date hereunder.
"INTEREST PERIOD" means any period, selected as provided in Section 3.2.1,
of one, two, three and six months (or any longer period to which all the Lenders
have given their consent to the Administrative Agent), commencing on any Banking
Day and ending on the corresponding date in the subsequent calendar month so
indicated (or, if such subsequent calendar month has no corresponding date, on
the last day of such subsequent calendar month); PROVIDED, HOWEVER, that subject
to Section 3.2.3, if any Interest Period so selected would otherwise begin or
end on a date which is not a Banking Day, such Interest Period shall instead
begin or end, as the case may be, on the immediately preceding or succeeding
Banking Day as determined by the Administrative
-20-
Agent in accordance with the then current banking practice in the inter-bank
Eurodollar market with respect to Eurodollar deposits at the applicable
Eurodollar Office, which determination by the Administrative Agent shall, in
the absence of manifest error, be conclusive.
"INTEREST RATE PROTECTION AGREEMENT" means any interest rate swap, interest
rate cap, interest rate hedge or other contractual arrangement protecting a
Person against increases in variable interest rates or converting fixed interest
rates into variable interest rates on Financing Debt.
"INVESTMENT" means, with respect to any Restricted Company (or other
specified Person):
(a) any share of capital stock, other equity interest, evidence
of Indebtedness or other security issued by any other Person;
(b) any loan, advance or extension of credit to, or contribution
to the capital of, any other Person;
(c) any Guarantee of the Indebtedness of any other Person;
(d) any acquisition of all or any part of the business of any
other Person or the assets comprising such business or part thereof;
(e) any commitment or option to make any Investment if the
consideration for such commitment or option exceeds $1,000; and
(f) any other similar investment.
The investments described in the foregoing clauses (a) through (f) shall
constitute Investments whether they are made or acquired by purchase, exchange,
issuance of stock or other securities, merger, reorganization or any other
method; PROVIDED, HOWEVER, that Investments shall not include (i) current trade
and customer accounts receivable for property leased, goods furnished or
services rendered in the ordinary course of business and payable in accordance
with customary trade terms, (ii) advances, payments and prepayments to suppliers
for property leased, goods furnished and services rendered in the ordinary
course of business, (iii) advances to employees for travel expenses, drawing
accounts and similar expenditures, (iv) stock or other securities acquired in
connection with the satisfaction or enforcement of Indebtedness or claims due to
any Restricted Company or as security for any such Indebtedness or claim or (v)
demand deposits in banks or trust companies.
In determining the amount of outstanding Investments for purposes of
Section 7.9, the amount of any Investment shall be the cost thereof (including
the amount of any Indebtedness assumed in any purchase or secured by any asset
acquired in such purchase (whether or not any Indebtedness is assumed) or for
which any Person that becomes a Subsidiary is liable on the date
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on which the securities of such Person are acquired) MINUS any returns of
capital on such Investment actually received in cash (determined in
accordance with GAAP without regard to amounts realized as income on such
Investment).
"INVESTOR GROUP COMPANY" means any Person that is a managing general
partner of a Pre-TCI Borrower and, upon the TCI Closing and the discharge of the
Financing Debt of Falcon Video as contemplated by Section 5.3.1, Falcon Video
Communications Investors, L.P.; PROVIDED, HOWEVER, that in no event shall New
Falcon I constitute an Investor Group Company. Exhibit 1-B lists the Investor
Group Companies prior to and immediately after the TCI Closing.
"LEGAL REQUIREMENT" means any requirement imposed upon any of the Lenders
by any law of the United States of America or any jurisdiction in which any
Eurodollar Office is located or by any regulation, order, interpretation, ruling
or official directive of the Board of Governors of the Federal Reserve System or
any other board or governmental or administrative agency of the United States of
America, of any jurisdiction in which any Eurodollar Office is located, or of
any political subdivision of any of the foregoing. Any requirement imposed by
any such regulation, order, ruling or official directive not having the force of
law shall be deemed to be a Legal Requirement if any of the Lenders reasonably
believes that compliance therewith is in accordance with customary commercial
practice.
"LENDER" means the Persons owning a Percentage Interest in the Credit
Obligations or having a Commitment and their respective Assignees permitted by
Section 12.1.
"LENDING OFFICER" shall mean such officers or employees of the
Administrative Agent as from time to time designated by it in writing to the
Borrowers.
"LIEN" means, with respect to any Restricted Company (or any other
specified Person):
(a) Any encumbrance, mortgage, pledge, lien, charge or security
interest of any kind upon any property or assets of the Restricted
Company, whether now owned or hereafter acquired, or upon the income
or profits therefrom;
(b) The acquisition of, or the agreement to acquire, any
property or asset upon conditional sale or subject to any other title
retention agreement, device or arrangement (including a Capitalized
Lease); and
(c) The sale, assignment, pledge or transfer for security of any
accounts, general intangibles or chattel paper of the Restricted
Company, with or without recourse.
"LOAN" means, collectively, the Revolving Loan, the Term Loans and the
Supplemental Loan.
"MANDATORY ASSIGNMENT" is defined in Section 2.2.3.
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"MARGIN STOCK" means "margin stock" within the meaning of Regulations T, U
or X (or any successor provisions) of the Board of Governors of the Federal
Reserve System, or any regulations, interpretations or rulings thereunder, all
as from time to time in effect.
"MATERIAL ADVERSE CHANGE" means a material adverse change since December
31, 1997 in the business, assets, financial condition or income of the
Restricted Companies (on a Consolidated basis) (or any other specified Persons)
as a result of any event or development.
"MATERIAL AGREEMENTS" means each of the agreements listed in Exhibit 8.2.2
as in effect on the Initial Closing Date and furnished to the Lenders and as
subsequently amended, modified and supplemented in accordance with
Section 7.2.3.
"MATERIAL FINANCING DEBT" means any Financing Debt (other than the Credit
Obligations) outstanding in an aggregate amount of principal (whether or not
due) and accrued interest exceeding $10,000,000.
"MAXIMUM AMOUNT OF SUPPLEMENTAL CREDIT" is defined in Section 2.4.1.
"MAXIMUM AMOUNT OF SUPPLEMENTAL REVOLVING FACILITY CREDIT" is defined in
Section 2.4.1.
"MAXIMUM AMOUNT OF REVOLVING CREDIT" is defined in Section 2.1.1.
"MONY SUBORDINATED DEBT" means the 11.56% Series B Subordinated Notes due
March 31, 2001, originally issued by Falcon Telecable, a California Limited
Partnership, pursuant to a Note Purchase Agreement dated as of October 21, 1991,
as in effect from time to time in accordance with Section 7.2.3, with Affiliates
of the Mutual Life Insurance Company of New York, including notes evidencing
deferred fees due on account of risk-based capital requirements issued by such
Restricted Companies on the same terms as the other MONY Subordinated Debt
issued by Falcon Telecable, a California Limited Partnership.
"MULTIEMPLOYER PLAN" means any Plan that is a "multiemployer plan" as
defined in section 4001(a)(3) of ERISA.
"NATHANSON FAMILY INVESTORS" means Marc B. Nathanson, Greg Nathanson (the
brother of Marc B. Nathanson), Liliane Vladimirschi (the sister-in-law of Marc
B. Nathanson), any of their respective spouses, estates, lineal descendants
(including adoptive children), heirs, executors, personal representatives,
administrators, trusts for any of their benefit and charitable foundations to
which voting stock of Holding, Inc., Holding, L.P. or any successor thereto
beneficially owned by any of the foregoing have been transferred and
corporations and partnerships in which one or more of the foregoing own more
than 51% of the voting stock or other equity interests.
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"NET CASH PROCEEDS" means the cash proceeds of an Operating Asset Sale by
any Restricted Company net of (a) any Indebtedness permitted by Section 7.6.7
(Capitalized Leases and purchase money indebtedness) secured by assets being
sold in such transaction required to be paid from such proceeds, (b) with
respect to any such Restricted Company that is not a tax flow-through entity,
income taxes that will be required to be paid as a result of such asset sale as
estimated by such Restricted Company in good faith, and with respect to any such
Restricted Company that is a tax flow-through entity, distributions to all the
direct or indirect holders of the equity of such Restricted Company, in
proportion to their ownership interests, sufficient to permit each such direct
or indirect holder of the equity of such Restricted Company to pay income taxes
that may be required to be paid by it as a result of such asset sale as
estimated by such Restricted Company in good faith, (c) all reasonable expenses
of such Restricted Company incurred in connection with the transaction and (d)
amounts subject to a reserve or escrow to fund indemnification obligations
incurred in connection with such asset sale; PROVIDED, HOWEVER, that the
principal (but not interest) component of amounts described in this clause (d)
will become Net Cash Proceeds upon release from such reserve or escrow.
"NET DEBT PROCEEDS" means the cash proceeds of the incurrence of Designated
Financing Debt by any Restricted Company (net of reasonable out-of-pocket
transaction fees and expenses).
"NEW FALCON I" means Falcon Communications, L.P., a California limited
partnership, and any successor corporation, partnership, limited liability
company or other entity that would not create an Event of Default immediately as
a result of such succession and that enters into assumption agreements with
respect to the Pledge and Subordination Agreement and the other Credit Documents
to which New Falcon I is a party reasonably satisfactory to such successor and
the Required Lenders in all respects.
"NEW FALCON I DEBENTURES" means, collectively, the $375,000,000 8.375%
Senior Debentures due 2010 and the $435,250,000 9.285% Senior Discount
Debentures due 2010, each issued jointly and severally by Holding, L.P. and its
Wholly Owned Subsidiary, Falcon Funding Corporation, pursuant to the New Falcon
I Debentures Indenture and assumed to the extent of Holding, L.P.'s obligations
by New Falcon I upon the TCI Closing.
"NEW FALCON I DEBENTURES INDENTURE" means the Indenture dated as of April
3, 1998, as in effect from time to time in accordance with Section 7.2.3, among
Holding, L.P., Falcon Funding Corporation and United States Trust Company of New
York, as trustee, with respect to the New Falcon I Debentures (and any
subsequent indentures on identical terms, except with respect to transfer
restrictions, entered into for a registered exchange offer of the New Falcon I
Debentures) and assumed to the extent of Holding, L.P.'s obligations by New
Falcon I upon the TCI Closing.
"NEW FALCON II" means Falcon Cable Communications, LLC, a Delaware limited
liability company.
"NEW FALCON II ASSIGNMENT AND ASSUMPTION" is defined in Section 2.6.
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"NONPERFORMING LENDER" is defined in Section 11.4.3.
"NOTES" means each of the Revolving Notes, the Term B Notes, the Term C
Notes and the Supplemental Notes.
"OBLIGOR" means each Borrower and each other Restricted Company
guaranteeing or granting collateral to secure any Credit Obligations.
"OPERATING ASSETS" means (a) a group of tangible and intangible assets used
by a Person to provide cable television services or to conduct any related
activities, or (b) all of the outstanding capital stock of, or other equity
interests in, a Person engaged in the provision of cable television services or
conducting any related activities.
"OPERATING ASSET SALE" is defined in Section 4.4.1.
"PAYMENT DATE" means the last Banking Day of each March, June, September
and December occurring after the Initial Closing Date.
"PBGC" means the Pension Benefit Guaranty Corporation or any successor
entity.
"PERCENTAGE INTEREST" is defined in Section 11.1.
"PERFORMING LENDER" is defined in Section 11.4.3.
"PERMITTED ASSET SWAP" means the exchange by any Restricted Company of
Operating Assets (including Systems) (a) for fair value in a single transaction
(or a substantially contemporaneous series of related transactions) pursuant to
which, within five Banking Days of the transfer of such Operating Assets, the
Restricted Companies receive Operating Assets related to businesses permitted by
Section 7.2.1 or (b) in a transaction which qualifies as a like-kind exchange
under section 1031 of the Code or any successor provision (with any cash
received by the Restricted Company in connection with such exchange constituting
Net Cash Proceeds therefrom and any cash paid by the Restricted Company in
connection with such exchange being subject to the limitations of Section 7.9);
PROVIDED, HOWEVER, that (i) no single Permitted Asset Swap may involve Operating
Assets to which 15% or more of Consolidated Operating Cash Flow for the period
of four fiscal quarters of the Restricted Companies ending on the last day of
the fiscal quarter ending immediately prior to the date of such exchange is
properly allocable and (ii) the sum of the aggregate annual percentages
described in the foregoing clause (i) between the Initial Closing Date and the
Final Term Loan C Maturity Date shall not exceed 30%.
"PERMITTED JOINT VENTURE" means a joint venture, limited partnership,
corporation, general partnership or limited liability company or other entity
between or involving a Restricted Company pursuant to which the new entity would
operate a business not prohibited by section 7.2.1; PROVIDED, HOWEVER, that if
the Permitted Joint Venture is not a Restricted Company, the
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Restricted Companies shall in no event incur any Financing Debt, by way of
guarantee, general partner or joint venturer liability or otherwise, as a
result of the incurrence of Financing Debt by any such joint venture, limited
partnership, corporation, general partnership or limited liability company.
"PERMITTED JOINT VENTURE INVESTMENT MULTIPLE AMOUNT" means the portion of
Consolidated Annualized Operating Cash Flow properly allocable to the Systems or
other assets contributed to (or otherwise invested in) a Permitted Joint Venture
that is not a Restricted Company at the time of and immediately after giving
effect to such Investment by the Restricted Companies for the period of three
consecutive months most recently ended prior to such contribution (or other
Investment) for which financial statements have been (or are required to have
been) furnished in accordance with Section 7.4.2 multiplied by the ratio of
Consolidated Total Debt to Consolidated Annualized Operating Cash Flow as shown
in the most recently submitted compliance computations pursuant to
Section 7.4.2(b).
"PERSON" means any present or future natural person or any corporation,
association, partnership, joint venture, company, limited liability company,
business trust, trust, organization, business or government or any governmental
agency or political subdivision thereof.
"PIK INTEREST PAYMENTS" means any accrued interest payments on Financing
Debt that are postponed, evidenced by book-entry accrual or made through the
issuance of "payment-in-kind" notes or other securities, all in accordance with
the terms of such Financing Debt; PROVIDED, HOWEVER, that in no event shall PIK
Interest Payments include payments made with cash or Cash Equivalents.
"PLAN" means, at any time, any pension benefit plan subject to Title IV of
ERISA maintained, or to which contributions have been made or are required to be
made, by any ERISA Group Person within six years prior to such time.
"PLEDGE AND SUBORDINATION AGREEMENT" means the Pledge and Subordination
Agreement dated as of the Initial Closing Date in substantially the form of
Exhibit 5.1.5, as from time to time in effect, among Holding, L.P., Holding,
Inc., the Restricted Companies, the Documentation Agent and, after the TCI
Closing, New Falcon I and New Falcon II.
"PRE-TCI BORROWERS" means, collectively, Falcon Cable Media, a California
Limited Partnership; Falcon Cable Systems Company II, L.P.; Falcon Cablevision,
a California Limited Partnership; Falcon Community Cable, L.P., a Delaware
limited partnership; Falcon Community Ventures I Limited Partnership, a
California limited partnership; Falcon First, Inc., a Delaware corporation;
Falcon Telecable, a California limited partnership; and Falcon Telecom, L.P., a
California Limited Partnership.
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"PRO RATA REVOLVER PREPAYMENT PORTION" means, at any date, with respect to
specified Net Cash Proceeds from any Operating Asset Sale that will be allocated
to repay the Revolving Loan, the portion of such Net Cash Proceeds calculated as
follows:
(a) add all percentage reductions of the Revolving Loan
occurring on or after the date of such Operating Asset Sale through
the Final Revolving Maturity Date;
(b) divide the percentage reduction of each remaining Payment
Date by the sum in clause (a) above; and
(c) multiply the Net Cash Proceeds by the percentage determined
under clause (b) above for each such Payment Date.
An example of the computation of the Pro Rata Revolver Prepayment Portion is set
forth in Exhibit 1-C.
"PRO RATA TERM LOAN B PREPAYMENT PORTION" means, at any date, with respect
to specified Net Cash Proceeds from any Operating Asset Sale that will be
allocated to repay Term Loan B, the portion of such Net Cash Proceeds calculated
as follows:
(a) add all percentage reductions of Term Loan B occurring on or
after the date of such Operating Asset Sale up to but excluding the
Final Term Loan B Maturity Date;
(b) divide the percentage reduction of each remaining Payment
Date by the sum in clause (a) above; and
(c) multiply the Net Cash Proceeds by the percentage determined
under clause (b) above for each such Payment Date.
"PRO RATA TERM LOAN C PREPAYMENT PORTION" means, at any date, with respect
to specified Net Cash Proceeds from any Operating Asset Sale that will be
allocated to repay Term Loan C, the portion of such Net Cash Proceeds calculated
as follows:
(a) add all percentage reductions of Term Loan C occurring on or
after the date of such Operating Asset Sale up to but excluding the
Final Term Loan C Maturity Date;
(b) divide the percentage reduction of each remaining Payment
Date by the sum in clause (a) above; and
(c) multiply the Net Cash Proceeds by the percentage determined
under clause (b) above for each such Payment Date.
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"PRO RATA TERM PREPAYMENT PORTIONS" means, collectively, the Pro Rata Term
Loan B Prepayment Portion and the Pro Rata Term Loan C Prepayment Portion.
"QUALIFIED INSTITUTIONAL BUYER" means:
(a) a duly authorized domestic bank, savings and loan
association, insurance company, registered investment company,
registered investment adviser or registered dealer, acting for its own
account or the accounts of other Qualified Institutional Buyers, which
in the aggregate owns and invests on a discretionary basis at least
$100 million in securities and (if a bank or savings and loan
association) which has a net worth of at least $25 million; or
(b) a foreign bank or savings and loan association or equivalent
institution, acting for its own account or the account of other
Qualified Institutional Buyers, which in the aggregate owns and
invests on a discretionary basis at least $100 million in securities
and has a net worth of at least $25 million; or
(c) any other entity which also constitutes a "qualified
institutional buyer" as defined in Rule 144A under the Securities Act;
or
(d) any other entity acceptable to the Restricted Companies.
"REDEEMABLE CAPITAL STOCK" means any class or series of capital stock or
other equity interests of any Person that, either by its terms, by the terms of
any security into which it is convertible or exchangeable or otherwise, is or
upon the happening of an event or passage of time would be, required to be
redeemed (in whole or in part) prior to the final maturity of any portion of the
Loan or is redeemable (in whole or in part) at the option of the holder thereof
at any time prior to the final maturity of any portion of the Loan.
"REFERENCE LENDER" means each of BankBoston and Toronto Dominion.
"REFERENCE LEVERAGE RATIO" means, at any date, the ratio of (a)
Consolidated Total Debt as of the end of the most recent fiscal quarter for
which financial statements have been furnished to the Lenders in accordance with
Section 7.4.2 prior to such date to (b) Consolidated Annualized Operating Cash
Flow for such period.
"REGISTER" is defined in Section 12.1.3.
"RELATED FUND" means, with respect to any Lender that is a fund that
invests in senior bank loans, any other fund or entity that invests in bank
loans and is advised or managed by the same investment advisor as such Lender or
by an Affiliate of such investment advisor.
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"REMAINING DOLLAR-YEARS" of any Indebtedness means, at any date, the sum of
the products obtained by multiplying (a) the amount of each remaining scheduled
payment of principal (or in the case of a revolving credit facility, each
scheduled reduction in the revolving credit commitment) by (b) the number of
years (calculated to the nearest twelfth) which will elapse between such date
and the making of the payment (or in the case of a revolving credit facility,
such scheduled reduction in the revolving credit commitment).
"REPLACEMENT LENDER" is defined in Section 12.3.
"REQUIRED LENDERS" means, with respect to any consent or other action to be
taken by either the Lenders or any Agent under the Credit Documents, such
Lenders as own at least a majority of the Aggregate Percentage Interests;
PROVIDED, HOWEVER, that with respect to the matters referred to in the proviso
to Section 17.1, Required Lenders means such Lenders as own at least the
respective portions of the Percentage Interests indicated therein.
"RESOURCE CONSERVATION AND RECOVERY ACT" means the federal Resource
Conservation and Recovery Act, 42 U.S.C. section 690, ET SEQ.
"RESTRICTED COMPANY" means each of the Borrowers, the Guarantors, the
Investor Group Companies and their respective Subsidiaries that are Guarantors
and that are not Excluded Companies; PROVIDED, HOWEVER, that Falcon Video and
Falcon Video Communications Investors, L.P. shall become Restricted Companies
only upon the TCI Closing and the discharge of Financing Debt of Falcon Video as
contemplated by Section 5.3.1. Exhibit 1-B lists the Restricted Companies prior
to and immediately after the TCI Closing.
"REVOLVING LENDER" means each Lender owning a Percentage Interest in the
Revolving Loan or having a Commitment to extend a portion of the Revolving Loan
and its Assignees permitted by Section 12.1.
"REVOLVING LOAN" is defined in Section 2.1.1.
"REVOLVING NOTE" is defined in Section 2.1.3.
"SECURITIES ACT" means the federal Securities Act of 1933.
"SENIOR SUBORDINATED NOTES INDENTURE" means the Indenture dated as of
October 29, 1993, as in effect from time to time in accordance with Section
7.2.3, between Holding, L.P. and United States Trust Company of New York, as
trustee, with respect to the Holding, L.P. Senior Subordinated Notes (and any
subsequent indenture on identical terms, except with respect to transfer
restrictions, entered into for a registered exchange offer of the Holding, L.P.
Senior Subordinated Notes).
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"SPECIFIED AGENTS" means, collectively, the Documentation Agent, the
Syndication Agent and the Administrative Agent.
"SUBSCRIBER" means each home with one or more television sets connected to
a System and each subscriber equivalent represented by a bulk account
(determined by dividing the total monthly bill for the account by the basic
monthly charge for a single outlet in the area).
"SUBSIDIARY" means any Person of which any Investor Group Company or
Borrower (or other specified Person) shall at the time, directly or indirectly
through one or more of its Subsidiaries, (a) own at least 50% of the outstanding
capital stock (or other shares of beneficial interest) entitled to vote
generally, (b) hold at least 50% of the partnership, joint venture or similar
interests or (c) be a general partner or joint venture.
"SUPPLEMENTAL AGENT" is defined in Section 2.4.1.
"SUPPLEMENTAL FACILITY" is defined in Section 2.4.1.
"SUPPLEMENTAL LENDERS" is defined in Section 2.4.1.
"SUPPLEMENTAL LOAN" is defined in Section 2.4.4.
"SUPPLEMENTAL NOTE" is defined in Section 2.4.4.
"SYNDICATION AGENT" means NationsBank, N.A. in its capacity as syndication
agent hereunder, as well as its successors and assigns in such capacity pursuant
to Section 11.6.
"SYSTEM" means the assets constituting a cable television system most of
which is within a geographical area covered by one or more Franchises held by
any Restricted Company serving subscribers who are connected by drop lines to
trunk or distribution lines carrying signals from one or more head-end
facilities.
"TAX" means any tax, levy, duty, deduction, withholding or other charges of
whatever nature at any time required by any Legal Requirement (a) to be paid by
any Lender or (b) to be withheld or deducted from any payment otherwise required
hereby to be made to any Lender, in each case on or with respect to (i) the
principal amount of or interest on any portion of the Loan, (ii) any fees,
expenses, indemnities or other amounts payable to any Lender under any Credit
Document or (iii) funds transferred from a non-United States office or an
international banking facility of any Lender to a United States office of such
Lender in order to fund (or deemed by Section 3.2.6 to have funded) a portion of
the Loan subject to a Eurodollar Pricing Option; PROVIDED, HOWEVER, that the
term "Tax" shall not include (A) taxes imposed upon or measured by the net
income of such Lender or (B) franchise or similar business licensing taxes for
qualification of offices of such Lender in any jurisdiction.
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"TCI" means TCI Falcon Holdings, LLC, a Delaware limited liability company,
and any successor entity or transferee of TCI's interest in New Falcon I that
would not create an Event of Default immediately as a result of such succession
or transfer.
"TCI CLOSING" means the "Closing" as defined in the Contribution Agreement.
"TCI CLOSING REPORT" is defined in Section 7.4.3.
"TCI DEBT" means the Financing Debt, not to exceed $440,000,000 in
aggregate principal amount, assumed by New Falcon II in the TCI Transactions
pursuant to section 4.1 of the Contribution Agreement.
"TCI TRANSACTIONS" means the transactions described in the memorandum
attached as Exhibit 1-A and the related transactions described in the
Contribution Agreement.
"TERM LENDER" means each Lender owning a Percentage Interest in the Term
Loans or having a Commitment to extend a portion of the Term Loans and its
Assignees permitted by Section 12.1.
"TERM LOAN" means Term Loan B and Term Loan C, collectively.
"TERM LOAN B" is defined in Section 2.2.1.
"TERM LOAN B NOTE" is defined in Section 2.2.2.
"TERM LOAN B-1" is defined in Section 2.2.1.
"TERM LOAN B-1 LENDERS" is defined in Section 2.2.1.
"TERM LOAN B-2" is defined in Section 2.2.1.
"TERM LOAN B-2 CLOSING DATE" is defined in Section 2.2.1.
"TERM LOAN B-2 LENDERS" is defined in Section 2.2.1.
"TERM LOAN C" is defined in Section 2.3.1.
"TERM LOAN C LENDERS" is defined in Section 2.3.1.
"TERM LOAN C NOTE" is defined in Section 2.3.2.
"TERM NOTES" means the Term Loan B Notes and the Term Loan C Notes,
collectively.
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"TORONTO DOMINION" means Toronto Dominion (Texas) Inc.
"TRANCHE" means each of the Revolving Loan, Term Loan B, Term Loan C and
the Supplemental Loan, each considered as a separate credit facility.
"UNITED STATES FUNDS" means such coin or currency of the United States of
America as at the time shall be legal tender therein for the payment of public
and private debts.
"WEIGHTED AVERAGE LIFE TO MATURITY" of any Indebtedness means, at any date,
the number of years obtained by dividing the Remaining Dollar-Years of such
Indebtedness by the outstanding principal amount of the Indebtedness (or, in the
case of a revolving credit facility, the maximum amount of revolving credit
commitment, regardless of the amount of revolving loans then outstanding).
"WHOLLY OWNED SUBSIDIARY" means any Subsidiary of which all of the
outstanding capital stock (or other shares of beneficial interest) entitled to
vote generally (other than directors' qualifying shares) is owned by any
Investor Group Company or any Borrower (or other specified Person) directly, or
indirectly through one or more Wholly Owned Subsidiaries.
2. THE CREDITS.
2.1. REVOLVING CREDIT.
2.1.1. REVOLVING LOAN. Subject to all of the terms and conditions
of this Agreement and so long as no Default exists and is continuing, each
Revolving Lender severally agrees to make revolving loans to the Borrowers,
who, except as provided in Section 2.1.4, shall be jointly and severally
liable therefor, in an aggregate principal amount for all Revolving Lenders
equal to the amount requested in accordance with Section 2.1.2 from time to
time prior to the Final Revolving Maturity Date, but not to exceed at any
time outstanding the Maximum Amount of Revolving Credit. In no event will
the principal amount of the loans at any one time outstanding made by any
Revolving Lender under this Section 2.1 exceed an amount equal to such
Revolving Lender's Percentage Interest in the Maximum Amount of Revolving
Credit.
"MAXIMUM AMOUNT OF REVOLVING CREDIT" means, on any date, the amount
set forth for such date in the table below, reduced as provided further
below:
Percentage
Date Stated Amount Reduction
---- ------------- ---------
Prior to September 30, 2001 $650,000,000 0.000%
September 30, 2001 through
December 30, 2001 $633,750,000 2.500%
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December 31, 2001 through
March 30, 2002 $617,500,000 2.500%
March 31, 2002 through
June 29, 2002 $601,250,000 2.500%
June 30, 2002 through
September 29, 2002 $585,000,000 2.500%
September 30, 2002 through
December 30, 2002 $568,750,000 2.500%
December 31, 2002 through
March 30, 2003 $552,500,000 2.500%
March 31, 2003 through
June 29, 2003 $536,250,000 2.500%
June 30, 2003 through
September 29, 2003 $520,000,000 2.500%
September 30, 2003 through
December 30, 2003 $503,750,000 2.500%
December 31, 2003 through
March 30, 2004 $487,500,000 2.500%
March 31, 2004 through
June 29, 2004 $455,000,000 5.000%
June 30, 2004 through
September 29, 2004 $422,500,000 5.000%
September 30, 2004 through
December 30, 2004 $390,000,000 5.000%
December 31, 2004 through
March 30, 2005 $357,500,000 5.000%
March 31, 2005 through
June 29, 2005 $316,875,000 6.250%
June 30, 2005 through
September 29, 2005 $276,250,000 6.250%
September 30, 2005 through
December 30, 2005 $235,625,000 6.250%
December 31, 2005 through
March 30, 2006 $195,000,000 6.250%
March 31, 2006 through
June 29, 2006 $146,250,000 7.500%
June 30, 2006 through
September 29, 2006 $ 97,500,000 7.500%
September 30, 2006 up to the Final
Revolving Maturity Date $ 48,750,000 7.500%
Final Revolving Maturity Date $ 0 7.500%
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Each amount in the foregoing table shall be further permanently reduced by
the following amounts:
(a) The sum of the Pro Rata Revolver Prepayment Portions
applicable to the reduction date for such amount set forth in such
table of the respective amounts of Net Cash Proceeds from Operating
Asset Sales to the extent that such Net Cash Proceeds are not applied
to repay the Term Loans or the Supplemental Loan pursuant to
Section 4.4 or allocated to an effective Asset Reinvestment Reserve
Amount.
(b) The amount of Net Debt Proceeds to the extent that such
amount is allocated to the permanent reduction of the Maximum Amount
of Revolving Credit by Section 4.5.
(c) Upon any Investment pursuant to Section 7.9.9 in a Permitted
Joint Venture that is not a Restricted Company at the time of and
immediately after giving effect to such Investment, the Permitted
Joint Venture Investment Multiple Amount with respect to such
Investment.
(d) Such amount (in an integral multiple of $1,000,000 and in a
minimum amount of $1,000,000) specified by three Banking Days' notice
from the Borrowers to the Administrative Agent.
The aggregate principal amount of the loans made pursuant to this
Section 2.1.1 at any time outstanding is referred to as the "REVOLVING
LOAN".
2.1.2. BORROWING REQUESTS. Revolving Loans will be made to the
Borrowers by the Revolving Lenders under Section 2.1.1 on any Banking Day
on or after the Initial Closing Date and prior to the Final Revolving
Maturity Date. Not later than noon (New York time) on the first Banking
Day (third Banking Day if any portion of such loan will be subject to a
Eurodollar Pricing Option on the requested Closing Date) prior to the
requested Closing Date for any such loan, a Financial Officer for the
Borrowers will give the Administrative Agent notice of its request (which
may be given by a telephone call received by a Lending Officer and promptly
confirmed in writing), specifying (a) the amount of the requested loan (not
less than $1,000,000 and an integral multiple of $100,000) (except to the
extent a greater amount may be required in the case of a Eurodollar Pricing
Option) and (b) the requested Closing Date therefor. Upon receipt of such
notice by the Administrative Agent, the Administrative Agent shall give
prompt telephonic or written notice to each Lender. Each such loan will be
made at the Houston Office by wire deposit to the Administrative Agent as
specified in writing from time to time. In connection with each such loan,
the Borrowers shall furnish to the Administrative Agent a certificate in
substantially the form of Exhibit 5.2.1.
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2.1.3. REVOLVING NOTES. The Administrative Agent shall keep a
record of the Revolving Loan and the respective interests of the Lenders
therein as part of the Register, which shall evidence the Revolving Loan.
The Revolving Loan shall be deemed owed to each Lender having a Commitment
therein severally in accordance with such Lender's Percentage Interest
therein, and all payments thereon shall be for the account of each Lender
in accordance with its Percentage Interest therein. Upon written request
of any Lender, the Borrowers' obligations to pay such Lender's Percentage
Interest in the Revolving Loan shall be evidenced by a separate note of the
Borrowers in substantially the form of Exhibit 2.1.3 (the "REVOLVING
NOTES"), payable to such Lender in accordance with such Lender's Percentage
Interest in the Revolving Loan.
2.1.4. FALCON VIDEO REVOLVING LOAN. Upon or after execution and
delivery by Falcon Video of a joinder agreement in substantially the form
of Exhibit 2.1.4 (the "FALCON VIDEO JOINDER"), Falcon Video may request,
and each Revolving Lender severally agrees to make in accordance with this
Section 2.1, a revolving loan to Falcon Video in an amount sufficient to
permit Falcon Video to discharge its obligations pursuant to section 2.8(b)
of the Contribution Agreement (the "FALCON VIDEO REVOLVING LOAN");
PROVIDED, HOWEVER, that in no event will the Falcon Video Revolving Loan
exceed $125,000,000 or cause the Revolving Loan to exceed the Maximum
Amount of Revolving Credit.
Not later than noon (New York time) on the third Banking Day prior to
the requested initial Closing Date for the Falcon Video Revolving Loan,
which initial Closing Date shall be on or immediately prior to the TCI
Closing, a Financial Officer for Falcon Video will give the Administrative
Agent written notice of its request, specifying (a) the amount of the
requested loan (not less than $1,000,000 and an integral multiple of
$100,000) (except to the extent a greater amount may be required in the
case of a Eurodollar Pricing Option) and (b) the requested Closing Date
therefor. Upon receipt of such notice by the Administrative Agent, the
Administrative Agent shall give prompt telephonic or written notice to each
Revolving Lender. Such loan will be made at the Houston Office by wire
deposit to the Administrative Agent as specified in writing from time to
time. In connection with such loan, Falcon Video shall furnish to the
Administrative Agent a certificate in substantially the form of Exhibit
5.2.1.
Prior to the TCI Closing and the discharge of Financing Debt of Falcon
Video as contemplated in Section 5.3.1, Falcon Video shall be solely liable
for the Falcon Video Revolving Loan, which shall in all other respects be
treated for purposes of this Agreement as a portion of the Revolving Loan.
Prior to the TCI Closing and the discharge of Financing Debt of Falcon
Video as contemplated in Section 5.3.1, no other Borrowers or Guarantors
shall be liable in respect of the Falcon Video Revolving Loan, and, prior
to the TCI Closing and the discharge of Financing Debt of Falcon Video as
contemplated in Section 5.3.1, Falcon Video shall not be liable for, or
incur any obligation hereunder in respect of, any portion of the Loan other
than the Falcon Video
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Revolving Loan. Prior to the TCI Closing and the discharge of Financing
Debt of Falcon Video as contemplated in Section 5.3.1, the Falcon Video
Revolving Loan shall be unsecured by any collateral granted in favor of
the Lenders, and the Lenders acknowledge the existence of first priority
Liens on the assets of Falcon Video (and Falcon Video Communications
Investors, L.P.'s partnership interest in Falcon Video) securing Falcon
Video's obligations to its present senior lenders, which existing Liens
are permitted hereunder to the extent provided in Section 7.8.14.
Immediately after the TCI Closing, pursuant to Section 2.6, New Falcon
II will assume Falcon Video's liabilities and obligations as the
Borrower in respect of the Falcon Video Revolving Loan and the Falcon
Video Revolving Loan will thereafter be treated for all purposes of this
Agreement as a portion of the Revolving Loan.
2.2. TERM LOAN B.
2.2.1. TERM LOAN B. Subject to all the terms and conditions of this
Agreement and so long as no Default exists and is continuing, on the
Initial Closing Date, the Lenders other than the Lenders that are also
acting as Agents (the "TERM LOAN B-1 LENDERS") will, in accordance with
their respective Percentage Interests in Term Loan B-1, severally lend to
the Borrowers (who shall be jointly and severally liable therefor) as a
term loan ("TERM LOAN B-1") an aggregate amount of $125,794,117.75. On a
date after the Initial Closing Date, but in no event later than September
30, 1998 (the "TERM LOAN B-2 CLOSING DATE"), the Lenders that are also
acting as Agents (the "TERM LOAN B-2 LENDERS") will, upon at least five
Banking Days' written notice from the Borrowers to the Administrative
Agent, in accordance with their respective Percentage Interests in Term
Loan B-2, severally lend to the Borrowers (who shall be jointly and
severally liable therefor) as a term loan ("TERM LOAN B-2") an aggregate
amount of $74,205,882.25. The aggregate principal amount of the loans made
pursuant to this Section 2.2.1 at any one time outstanding is collectively
referred to as "TERM LOAN B". In connection with both Term Loan B-1 and
Term Loan B-2, the Borrowers shall furnish to the Administrative Agent
certificates in substantially the form of Exhibit 5.2.1.
2.2.2. TERM LOAN B NOTES. Term Loan B-1 and Term Loan B-2 shall be
made at the Houston Office by crediting the amount of each such loan to the
general account of the Borrowers with the Administrative Agent against, in
each case, delivery to the Administrative Agent of the separate joint and
several term notes of the Borrowers (the "TERM LOAN B NOTES") payable to
the respective Lenders. The Term Loan B Note issued to each Lender shall
be in substantially the form of Exhibit 2.2.2.
2.2.3. MANDATORY ASSIGNMENT OF TERM LOAN B-1. On any Banking Day
prior to the earlier of the Term Loan B-2 Closing Date and October 15,
1998, after the occurrence and during the continuance of an Event of
Default, the Term Loan B-1 Lenders holding at least a majority of Term Loan
B-1 may, in their sole discretion, give notice to the Term Loan B-2 Lenders
and the Borrowers that all Term Loan B-1 Lenders are making a
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mandatory assignment at par of a portion of Term Loan B-1 to the Term
Loan B-2 Lenders (the "MANDATORY ASSIGNMENT") within the next five
Banking Days. The portion of Term Loan B-1 subject to the Mandatory
Assignment shall be in the amount necessary so that, after giving effect
to the Mandatory Assignment, the Term Loan B-1 Lenders and the Term Loan
B-2 Lenders will own the respective Percentage Interests in Term Loan
B-1 that they would have owned in Term Loan B in the event Term Loan B-2
had been outstanding. Such a notice of the Mandatory Assignment shall be
deemed to have been automatically given upon a Bankruptcy Default or
upon the exercise of any of the remedies provided in Section 9.2. Each
Lender irrevocably agrees to consummate the Mandatory Assignment in the
manner specified above in this Section 2.2.3, notwithstanding (a)
whether any conditions specified in Section 5 have been satisfied and
(b) that a Default has occurred and is continuing. In the event that
any Mandatory Assignment cannot for any reason be made on the date
required above (including as a result of the commencement of a
proceeding under the Bankruptcy Code), each Term Loan B-2 Lender shall
promptly purchase from the Term Loan B-1 Lenders as of the date the
Mandatory Assignment otherwise would have occurred such participation in
Term Loan B-1 as shall be necessary to cause the Lenders to share in
Term Loan B-1 ratably based upon their respective Percentage Interests
in Term Loan B as if Term Loan B-2 had been outstanding. In the event
of such participations, all interest payable on Term Loan B-1 shall be
for the account of the Term Loan B-1 Lenders until the date on which the
participations are required to be purchased and, to the extent
attributable to the purchased participations, shall be payable to the
participants from and after such date. At the time any such purchase of
participations is actually made, the purchasing Lender shall pay the
Term Loan B-1 Lenders interest on the principal amount of the
participation purchased at the overnight Federal Funds Rate for each
day, commencing with the date the Mandatory Assignment otherwise would
have occurred to the date of payment for such participation. In the
event a Mandatory Assignment is consummated and the Borrowers
subsequently become entitled to borrow Term Loan B-2 in accordance with
this Agreement, the Commitments of the Lenders in Term Loan B-2 shall
equal the Percentage Interests in Term Loan B as if Term Loan B-2 had
already been outstanding.
2.3. TERM LOAN C.
2.3.1. TERM LOAN C. Subject to all the terms and conditions of
this Agreement and so long as no Default exists and is continuing, on the
Initial Closing Date those Lenders having Commitments in Term Loan C (the
"TERM LOAN C LENDERS") will, in accordance with their respective Percentage
Interests in Term Loan C, severally lend to the Borrowers (who shall be
jointly and severally liable therefor) as a term loan an aggregate amount
of $300,000,000. The aggregate principal amount of the loans made pursuant
to this Section 2.3.1 at any one time outstanding is referred to as "TERM
LOAN C". In connection with Term Loan C, the Borrowers shall furnish to
the Administrative Agent a certificate in substantially the form of Exhibit
5.2.1.
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2.3.2. TERM LOAN C NOTES. Term Loan C shall be made at the Houston
Office by crediting the amount of such loan to the general account of the
Borrowers with the Administrative Agent against delivery to the
Administrative Agent of the separate joint and several term notes of the
Borrowers (the "TERM LOAN C NOTES") payable to the respective Term Loan C
Lenders. The Term Loan C Note issued to each Term Loan C Lender shall be
in substantially the form of Exhibit 2.3.2.
2.4. SUPPLEMENTAL CREDIT.
2.4.1. REQUEST FOR SUPPLEMENTAL FACILITIES. Subject to all the
terms of this Agreement and so long as no Default exists and is continuing,
from time to time on and after the Initial Closing Date, the Borrowers may
request, by written notice to the Documentation Agent, a revolving credit
and/or term loan facility (a "SUPPLEMENTAL FACILITY") in a specified
aggregate amount (in the case of a revolving credit facility requested
under this Section 2.4.1, the "MAXIMUM AMOUNT OF SUPPLEMENTAL REVOLVING
FACILITY CREDIT") that, when added to the sum of then effective
Supplemental Facilities, does not exceed $350,000,000 (the "MAXIMUM AMOUNT
OF SUPPLEMENTAL CREDIT"). The interest rate, commitment fee rate,
amortization schedule, maturity date and other terms and conditions for
each Supplemental Facility shall be proposed by the Borrowers at the time
the Borrowers request such Supplemental Facility; PROVIDED, HOWEVER, that
(a) the maturity of all or any portion of such Supplemental Facility shall
in no event occur prior to the Final Term Loan C Maturity Date, (b) the
Weighted Average Life to Maturity of such Supplemental Facility shall in no
event be shorter than, if the Supplemental Facility is a revolving credit
loan, the Weighted Average Life to Maturity of the Revolving Loan and, if
the Supplemental Facility is a term loan, the Weighted Average Life to
Maturity of Term Loan C and (c) the terms and conditions of such
Supplemental Facility shall be materially no more restrictive on the
Restricted Companies than the provisions of this Agreement applicable to
the Loan. Such request shall also include a diligence package with respect
to any proposed acquisition to which the requested Supplemental Facility
relates.
Upon receipt of such request and proposed terms, the Documentation
Agent will promptly notify, and deliver a copy of such request and related
materials to, each other Lender (by telephone or otherwise). Within 10
Banking Days after receipt by the Lenders of such request, each Lender
interested in participating in the requested Supplemental Facility shall
notify the Documentation Agent and the Borrowers of its desire to
participate and the maximum amount of its proposed Commitment with respect
to such Supplemental Facility (a "COMMITMENT NOTICE"); PROVIDED, HOWEVER,
that each Lender may participate in such Supplemental Facility in its sole
discretion, and no Lender shall be deemed to have committed to participate
in any Supplemental Facility as of the date hereof, nor shall any Lender
have any obligation to participate in any Supplemental Facility unless and
until it commits to do so as provided in this Section 2.4.1. Following
receipt of such Commitment Notices, the Borrowers (i) shall allocate the
Commitments
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with respect to such Supplemental Facility, which allocations may be
made, at the Borrowers' option, in whole or in part to one or more of
the Lenders or other lenders selected by the Borrowers (such Lenders or
other lenders, the "SUPPLEMENTAL LENDERS"), (ii) shall select one or
more financial institutions (which financial institutions may, but need
not, include one or more of the Agents or Lenders) to serve as the agent
or agents for the Supplemental Facility (such agent or agents, the
"SUPPLEMENTAL AGENT") and (iii) shall advise each Lender of the amount
of such Lender's Commitment with respect to the Supplemental Facility;
PROVIDED; HOWEVER, that the existing Lenders providing a Commitment
Notice with respect to such Supplemental Facility shall be entitled to
participate in such Supplemental Facility on terms and conditions
generally applicable to all Supplemental Lenders with respect to such
Supplemental Facility, subject, however, to the allocations made by the
Borrowers pursuant to clause (i) above. Supplemental Lenders and
Supplemental Agents not otherwise Lenders hereunder shall become Lenders
hereunder pursuant to a joinder agreement reasonably satisfactory to the
Specified Agents and the Borrowers. The Specified Agents and the
Borrowers will agree on amendments to this Agreement, if any, necessary
to implement any Supplemental Facility and a form of Supplemental Note
to be issued by the Borrowers in connection with such Supplemental
Facility.
2.4.2. SUPPLEMENTAL FACILITIES. Subject to all the terms and
conditions of this Agreement and so long as no Default exists and is
continuing, from time to time on and after the Initial Closing Date and
prior to the final maturity of the Supplemental Facility determined in
accordance with Section 2.4.1, the Supplemental Lenders will, severally in
accordance with their respective Commitments therein, make loans to the
Borrowers with respect to such Supplemental Facility as may be requested by
the Borrowers in accordance with Section 2.4.3. The aggregate principal
amount of outstanding revolving loans under any Supplemental Facility shall
in no event exceed the Maximum Amount of Revolving Facility Credit for such
Supplemental Facility. The sum of the aggregate principal amount of
outstanding loans under all Supplemental Facilities shall in no event
exceed the Maximum Amount of Supplemental Credit.
2.4.3. BORROWING REQUESTS. After a Supplemental Facility has been
established as provided in this Section 2.4, the Borrowers may from time to
time request a loan under this Section 2.4 by providing to the Supplemental
Agent and the Documentation Agent a written notice in accordance with
Section 2.4.1. Such notice must be not later than noon (Boston time) on
the first Banking Day (third Banking Day if any portion of such loan will
be subject to a Eurodollar Pricing Option on the requested Closing Date)
prior to the requested Closing Date for such loan. The notice must specify
(a) the amount of the requested loan (which shall be not less than $500,000
and an integral multiple of $100,000) and (b) the requested Closing Date
therefor (which shall be a Banking Day). Upon receipt of such notice, the
Supplemental Agent will promptly inform each Supplemental Lender
participating in such Supplemental Facility (by telephone or otherwise).
Each such loan will be made at the office of the Supplemental Agent
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specified by such Supplemental Agent by depositing the amount thereof to
the general account of the Borrowers with the Supplemental Agent or by wire
transfer as the Borrowers may direct in writing to the Supplemental Agent.
In connection with each such loan, the Borrowers shall furnish to the
Supplemental Agent and the Documentation Agent a certificate in
substantially the form of Exhibit 5.2.1 and any additional information the
Supplemental Agent, Documentation Agent or any Lender shall reasonably
request.
2.4.4. SUPPLEMENTAL NOTES. The aggregate principal amount of the
loans outstanding from time to time under this Section 2.4 is referred to
as the "SUPPLEMENTAL LOAN". The Documentation Agent shall keep a record of
the Supplemental Loan and the interests of the respective Lenders therein
as part of the Register, which shall evidence the Supplemental Loan. The
Supplemental Loan shall be deemed owed to each Lender having a Commitment
therein severally in accordance with such Lender's Percentage Interest
therein, and all payments thereon shall be for the account of each Lender
in accordance with its Percentage Interest therein. Upon request of any
Lender, the Borrowers' obligations to pay such Lender's Percentage Interest
in the Supplemental Loan shall be evidenced by a separate note of the
Borrowers (the "SUPPLEMENTAL NOTE"), payable to such Lender in accordance
with such Lender's Percentage Interest in the Supplemental Loan.
2.5. APPLICATION OF PROCEEDS.
2.5.1. LOAN. Subject to Section 2.5.2, each Borrower will apply
the proceeds of the Loan for (a) the repayment of existing Financing Debt
of the Borrowers, (b) the repayment by redemption or tender of the Holding,
L.P. Senior Subordinated Notes pursuant to the Holding, L.P. Senior
Subordinated Note Indenture, (c) the repayment of the TCI Debt, (d) the
acquisition of the assets of Falcon Classic pursuant to Section 7.9.12, (e)
Capital Expenditures permitted by this Agreement, Investments and
acquisitions permitted by Section 7.9 and for Distributions permitted by
Section 7.10, (f) general corporate, partnership and limited liability
company purposes and (g) the satisfaction of Falcon Video's obligations
pursuant to section 2.8(b) of the Contribution Agreement and the repayment
of all outstanding Indebtedness of Falcon Video under its bank credit
facilities as contemplated by Section 5.3.1.
2.5.2. SPECIFICALLY PROHIBITED APPLICATIONS. No Borrower will,
directly or indirectly, apply any part of the proceeds of any extension of
credit made pursuant to the Credit Documents to purchase or to carry Margin
Stock or to any transaction prohibited by the Credit Documents or by Legal
Requirements applicable to the Lenders.
2.6. BORROWERS OBLIGATIONS. Except as provided in Section 2.1.4, prior to
the TCI Closing and the execution and delivery by New Falcon II of the
Assignment and Assumption Agreement in substantially the form of Exhibit 2.6
(the "NEW FALCON II ASSIGNMENT AND
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ASSUMPTION"), the Borrowers shall be the Pre-TCI Borrowers, the obligations
of which under this Agreement shall be joint and several, and, solely with
respect to the loan made pursuant to Section 2.1.4 upon the execution and
delivery of the Falcon Video Joinder, Falcon Video. Immediately after the TCI
Closing, pursuant to the New Falcon II Assignment and Assumption, (a) the
Pre-TCI Borrowers will assign to New Falcon II, and New Falcon II will
assume, all of the Pre-TCI Borrowers' rights, obligations and liabilities as
Borrowers under this Agreement and (b) pursuant to the New Falcon II
Assignment and Assumption, Falcon Video will assign to New Falcon II, and New
Falcon II will assume, all of Falcon Video's obligations and liabilities as a
Borrower in respect of the Falcon Video Revolving Loan. Upon such
assignments and assumptions, New Falcon II will be the sole Borrower
hereunder and the Pre-TCI Borrowers' and Falcon Video's rights, liabilities
and obligations as Borrowers hereunder (but not as Guarantors) shall cease.
2.7. NATURE OF OBLIGATIONS OF LENDERS TO EXTEND CREDIT. The Lenders'
obligations under this Agreement to make the Loan are several and are not joint
or joint and several. If any Lender shall fail to perform its obligations to
extend any such credit, the amount of the commitment of the Lender so failing to
perform may be assumed by the other Lenders, in their sole discretion, in such
proportions as such Lenders may agree among themselves and the Percentage
Interests of each other Lender shall be appropriately adjusted, but such
assumption and adjustment shall not relieve the Lenders from any of their
obligations to make any such extension of credit or to repay any Delinquent
Payment required by Section 11.4.
3. INTEREST; EURODOLLAR PRICING OPTIONS; FEES.
3.1. INTEREST. The Loan shall accrue and bear interest at a rate per annum
which shall at all times equal the Applicable Rate. Prior to any stated or
accelerated maturity of the Revolving Loan, either Term Loan or the Supplemental
Loan, as the case may be, the Borrowers jointly and severally will, on each
Payment Date, pay the accrued and unpaid interest on the portion of the Loan
which was not subject to a Eurodollar Pricing Option. On the last day of each
Interest Period or on any earlier termination of any Eurodollar Pricing Option,
the Borrowers will jointly and severally pay the accrued and unpaid interest on
the portion of the Loan which was subject to the Eurodollar Pricing Option which
expired or terminated on such date; PROVIDED, HOWEVER, that in the case of any
Interest Period longer than three months, the Borrowers will also pay the
accrued and unpaid interest on the Loan subject to the Eurodollar Pricing Option
having such Interest Period every 90 days, beginning on the 90th day after the
commencement of such Interest Period (or if any such day is not a Banking Day,
the Banking Day immediately preceding such 90th day). On any stated or
accelerated maturity of the Revolving Loan, either Term Loan or the Supplemental
Loan, as the case may be, the Borrowers jointly and severally will pay all
accrued and unpaid interest on the Revolving Loan, the Term Loans or the
Supplemental Loan, as the case may be, including any accrued and unpaid interest
on the portion of the Loan which is subject to a Eurodollar Pricing Option. All
payments of interest hereunder shall be made to the Administrative Agent for the
account of each Lender in accordance with the Lenders' respective Percentage
Interests.
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3.2. EURODOLLAR PRICING OPTIONS.
3.2.1. ELECTION OF EURODOLLAR PRICING OPTIONS. Subject to all of
the terms and conditions hereof and so long as no Default under
Sections 9.1.1, 9.1.5 (except clause (b) thereof) or 9.1.11 exists and is
continuing, the Borrowers may from time to time, by irrevocable notice from
a Financial Officer to the Administrative Agent received no later than noon
(New York time) three Banking Days prior to the commencement of the
Interest Period selected in such notice, elect to have such portion of the
Loan as the Borrowers may specify in such notice accrue and bear daily
interest during the Interest Period so selected at the Applicable Rate
computed on the basis of the Eurodollar Rate. In the event the Borrowers,
at any time, fail to elect a Eurodollar Pricing Option under this
Section 3.2.1 for any portion of the Loan, then such portion of the Loan
will accrue and bear interest at the Applicable Rate based on the Base
Rate. Simultaneous elections by a group of Borrowers for the same Interest
Period of a portion of the Revolving Loan, either Term Loan, the
Supplemental Loan or all of such Tranches on a combined basis shall be
deemed to be the election of a single Eurodollar Pricing Option.
No election under this Section 3.2.1 shall become effective if, prior
to the commencement of any such Interest Period, the Administrative Agent
determines, in the manner provided below, that (a) the electing or granting
of the Eurodollar Pricing Option in question would violate a Legal
Requirement or (b) Eurodollar deposits in an amount comparable to the
principal amount of the Loan as to which such Eurodollar Pricing Option has
been elected and which have a term corresponding to the proposed Interest
Period are not readily available in the inter-bank Eurodollar market for
delivery at any Eurodollar Office or, by reason of circumstances affecting
such market, adequate and reasonable methods do not exist for ascertaining
the interest rate applicable to such deposits for the proposed Interest
Period.
For purposes of determining ready availability of Eurodollar deposits
with respect to a proposed Interest Period, such Eurodollar deposits shall
be deemed not readily available if the Required Lenders shall have advised
the Administrative Agent by telephone, confirmed in writing or by
facsimile, at or prior to noon (New York time) on the second Banking Day
prior to the commencement of such proposed Interest Period that, based upon
the knowledge of such Lenders of the Eurodollar market and after reasonable
efforts to determine the availability of such Eurodollar deposits, such
Lenders reasonably determine that Eurodollar deposits in an amount equal to
the respective Percentage Interest of such Lenders in the portion of the
Loan as to which such Eurodollar Pricing Option has been elected and which
have a term corresponding to the Interest Period in question will not be
offered in the Eurodollar market to such Lender at a rate of interest that
does not exceed the Basic Eurodollar Rate, and the Administrative Agent and
the Borrowers reasonably concur in such determination (unless the foregoing
results from the creditworthiness of such Lenders or a change in the
availability of
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Eurodollar markets to such Lenders resulting from the failure of such
Lenders to comply with legal or regulatory requirements).
3.2.2. NOTICE TO LENDERS AND BORROWERS. The Administrative Agent
will promptly inform each Lender (by telephone or otherwise and promptly
confirmed in writing) of each notice received by it from the Borrowers
pursuant to Section 3.2.1 and of the Interest Period specified in such
notice. Upon determination by the Administrative Agent of the Eurodollar
Rate for such Interest Period or in the event no such election shall become
effective, the Administrative Agent will promptly notify the Borrowers and
each Lender (by telephone or otherwise and promptly confirmed in writing)
of the Eurodollar Rate so determined or why such election did not become
effective.
3.2.3. SELECTION OF INTEREST PERIODS. Interest Periods shall be
selected so that:
(a) the minimum portion of the Loan subject to any Eurodollar
Pricing Option shall be $5,000,000 and an integral multiple of
$1,000,000;
(b) no more than 20 Eurodollar Pricing Options shall be
outstanding at any one time;
(c) a portion of Term Loan B equal to the amount of the next
mandatory prepayment required by Section 4.2.1 shall not be subject to
a Eurodollar Pricing Option on the date such mandatory prepayment is
required to be made;
(d) a portion of Term Loan C equal to the amount of the next
mandatory prepayment required by Section 4.2.2 shall not be subject to
a Eurodollar Pricing Option on the date such mandatory prepayment is
required to be made;
(e) an aggregate principal amount of the Revolving Loan equal to
the amount of the next mandatory prepayment required by Section 4.3
shall not be subject to a Eurodollar Pricing Option on the date such
mandatory prepayment is required to be made; and
(f) no Interest Period with respect to any part of the Loan
subject to a Eurodollar Pricing Option shall expire later than the
Applicable Maturity Date.
3.2.4. ADDITIONAL INTEREST. If any portion of the Loan which is
subject to a Eurodollar Pricing Option is repaid, or any Eurodollar Pricing
Option is terminated for any reason (other than (a) a Legal Requirement not
having the force of law or (b) the payment in full of the Credit
Obligations as a result of the failure of any Lender to perform its
obligations hereunder), on a date which is prior to the last Banking Day of
the Interest Period applicable to such Eurodollar Pricing Option, the
Borrowers jointly and severally will pay to the Administrative Agent for
the account of each Lender in
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accordance with the Lenders' respective Percentage Interests, in
addition to any amounts of interest otherwise payable hereunder, an
amount equal to daily interest for the unexpired portion of such
Interest Period on the portion of the Loan so repaid, or as to which a
Eurodollar Pricing Option was so terminated, at a per annum rate equal
to the excess, if any, of (i) the Eurodollar Rate calculated on the
basis of the rate applicable to such Eurodollar Pricing Option MINUS
(ii) the lowest rate of interest obtainable by the Lenders with respect
to Eurodollar deposits which have a maturity date approximating the last
Banking Day of such Interest Period. For purposes of this Section
3.2.4, if any portion of the Loan which was to have been subject to a
Eurodollar Pricing Option is not outstanding on the first day of the
Interest Period applicable to such Eurodollar Pricing Option other than
for reasons described in Section 3.2.1, the Borrowers shall be deemed to
have terminated such Eurodollar Pricing Option. A certificate of an
officer of the Administrative Agent setting forth in reasonable detail
the basis of calculation of such amount of interest shall, in the
absence of manifest error, be conclusive. Except to the extent set
forth in Section 12.3, the assignment by any Lender of all or a portion
of such Lender's interests, rights and obligations under this Agreement
and the other Credit Documents shall not constitute a termination of a
Eurodollar Pricing Option.
3.2.5. CHANGE IN APPLICABLE LAWS, REGULATIONS, ETC. If any Legal
Requirement having the force of law shall prevent any Lender from funding
through the purchase of deposits, or maintaining, any portion of the Loan
subject to a Eurodollar Pricing Option or otherwise from giving effect to
such Lender's obligations as contemplated hereby (unless the foregoing
results from the creditworthiness of such Lender or a change in the
availability of Eurodollar markets to such Lender resulting from the
failure of such Lender to comply with legal or regulatory requirements),
(a) the Administrative Agent may by notice to the Borrowers terminate all
of the affected Eurodollar Pricing Options, (b) the portion of the Loan
subject to such terminated Eurodollar Pricing Options shall immediately
bear interest thereafter at the Applicable Rate computed on the basis of
the Base Rate and (c) the Borrowers shall make any payment required by
Section 3.2.4 to the extent the Applicable Rate based on the Eurodollar
Rates for the affected Eurodollar Pricing Options exceeds the Applicable
Rate based on the Base Rate. A certificate of an officer of the
Administrative Agent describing in reasonable detail such mandatory Legal
Requirement and setting forth in reasonable detail a calculation of the
payment required by Section 3.2.4 shall, in the absence of manifest error,
be conclusive.
3.2.6. FUNDING PROCEDURE. The Lenders may fund any portion of the
Loan subject to a Eurodollar Pricing Option out of any funds available to
the Lenders. Regardless of the source of the funds actually used by any of
the Lenders to fund any portion of the Loan subject to a Eurodollar Pricing
Option, however, all amounts payable hereunder, including the interest rate
applicable to any such portion of the Loan and the amounts payable under
Sections 3.2.4 and 3.4, shall be computed as if each Lender had actually
funded such Lender's Percentage Interest in such portion of the Loan
through the purchase of deposits in such amount with a maturity the same as
the applicable Interest
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Period relating thereto and through the transfer of such deposits from
an office of the Lender having the same location as the applicable
Eurodollar Office to one of such Lender's offices in the United States
of America.
3.3. COMMITMENT FEES.
3.3.1. REVOLVING LOAN. In consideration of the Revolving Lenders'
commitments to make the extensions of credit provided for in Section 2.1,
while such commitments are outstanding, the Borrowers jointly and severally
will pay to the Administrative Agent for the account of the Revolving
Lenders, on each Payment Date and on the Final Revolving Maturity Date,
commitment fees in an amount equal to the product of:
(a) annual interest at a rate equal to the commitment fee percentage
in the table below set opposite the Reference Leverage Ratio as of such
date;
MULTIPLIED BY (b) the amount by which (i) the average daily Maximum
Amount of Revolving Credit during the three-month period or portion thereof
ending on such date exceeded (ii) the average daily Revolving Loan during
such period or portion thereof:
Commitment Fee
Reference Leverage Ratio Percentage
------------------------ ----------
Greater than or equal to 5.00 0.375%
Less than 5.00 0.250%
The commitment fee under this Section 3.3.1 shall begin to accrue on the
date hereof. Any adjustment in the commitment fee percentage shall take
effect on the third Banking Day following the receipt by the Administrative
Agent of the financial statements required to be furnished by
Sections 7.4.1 or 7.4.2; PROVIDED, HOWEVER, that if for any reason the
Restricted Companies shall not have furnished the financial statements
required by Sections 7.4.1 or 7.4.2 for any fiscal quarter by the time
required by such Sections, the commitment fee percentage during the period
from the date which is three Banking Days after such financial statements
were due until the third Banking Day following receipt by the
Administrative Agent of such financial statements shall be 0.375%.
In connection with the TCI Closing, an adjustment in the commitment
fee percentage shall take effect on the later of (a) the TCI Closing or (b)
the fifth Banking Day following the receipt by the Administrative Agent of
the TCI Closing Report; provided, however, that if for any reason the
Restricted Companies shall not have furnished the TCI Closing Report by the
time required by Section 7.4.3, commencing on the TCI Closing until the
fifth Banking Day following receipt by the Administrative Agent of the TCI
Closing Report, the commitment fee percentage shall be 0.375%.
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3.3.2. TERM LOAN B-2. In consideration of the commitments of the
Term Loan B-2 Lenders to make Term Loan B-2, the Borrowers jointly and
severally will pay to the Administrative Agent for the account of the Term
Loan B-2 Lenders, on the later of the Term Loan B-2 Closing Date and
September 30, 1998, commitment fees in an aggregate amount equal to the
product of (a) the average daily unborrowed amount of the Term Loan B-2
Commitments MULTIPLIED BY (b) annual interest at a rate equal to 0.375%.
The commitment fee under this Section 3.3.2 shall begin to accrue on the
date hereof.
3.4. TAXES. If (a) any Lender shall be subject to any Tax or (b) any
Borrower shall be required to withhold or deduct any Tax, the Borrowers will on
demand by the Administrative Agent or such Lender, accompanied by the
certificate referred to below, pay to the Administrative Agent for such Lender's
account such additional amount as is necessary to enable such Lender to receive
net of any Tax the full amount of all payments of principal, interest, fees,
expenses, indemnities and other amounts payable by the Borrowers to such Lender
under any Credit Document. Each Lender agrees that if, after the payment by the
Borrowers of any such additional amount, any amount identifiable as a part of
any Tax related thereto is subsequently recovered or used as a credit by such
Lender, such Lender shall reimburse the Borrowers to the extent of the amount so
recovered or used. A certificate of an officer of such Lender setting forth the
amount of such Tax or recovery or use and the basis therefor shall, in the
absence of manifest error, be conclusive. In determining such amount, such
Lender may use any reasonable averaging and attribution methods.
3.5. CAPITAL ADEQUACY. Except as provided in Section 3.6, if any Lender
shall have determined that compliance by such Lender with any change after the
date hereof in any applicable law, governmental rule, regulation or order
regarding capital adequacy of banks or bank holding companies, or any
interpretation or administration thereof by any governmental authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or compliance by such Lender with any request or directive regarding
capital adequacy if such Lender reasonably believes that compliance therewith is
in accordance with customary commercial practice (whether or not having the
force of law and whether or not failure to comply therewith would be unlawful)
of any such authority, central bank or comparable agency, has or would have the
effect of reducing the rate of return on such Lender's capital as a consequence
of such Lender's obligations hereunder to a level below that which such Lender
could have achieved but for such compliance (taking into consideration such
Lender's policies with respect to capital adequacy immediately before such
compliance and assuming that such Lender's capital was fully utilized prior to
such compliance) by an amount deemed by such Lender to be material, then the
Borrowers jointly and severally will on demand by the Administrative Agent,
accompanied by the certificate referred to below, pay to the Administrative
Agent from time to time as specified by such Lenders as are so affected such
additional amounts as shall be sufficient to compensate such Lenders for such
reduced return, together with interest on each such amount from 15 Banking Days
after the date demanded until payment in full thereof at the rate of interest on
overdue installments of principal provided in Section 3.1. A certificate of an
officer of any such Lender setting forth the amount to be paid to it and the
basis for computation thereof hereunder
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shall, in the absence of manifest error, be conclusive. In determining such
amount, such Lender may use any reasonable averaging and attribution methods.
3.6. REGULATORY CHANGES. If any Lender shall have determined that (a) any
change in any Legal Requirement after the date hereof shall directly or
indirectly (i) reduce the amount of any sum received or receivable by such
Lender with respect to the Loan or the return to be earned by such Lender on the
Loan, (ii) impose a cost on such Lender or any Affiliate of such Lender that is
attributable to the making or maintaining of, or such Lender's commitment to
make, its portion of the Loan, (iii) require such Lender or any Affiliate of
such Lender to make any payment on or calculated by reference to the gross
amount of any amount received by such Lender under any Credit Document, or (iv)
reduce, or have the effect of reducing, the rate of return on any capital of
such Lender or any Affiliate of such Lender that such Lender or such Affiliate
is required to maintain on account of the Loan or such Lender's Commitment and
(b) such reduction, increased cost or payment shall not be fully compensated for
by an adjustment in the Applicable Rate, then the Borrowers jointly and
severally shall pay to such Lender (without duplication of payments to other
Lenders) such additional amounts as such Lender determines will, together with
any adjustment in the Applicable Rate, fully compensate for such reduction,
increased cost or payment, together with interest on each such amount from 15
Banking Days after the date demanded until payment in full thereof at the then
highest Applicable Rate. A certificate of an officer of such Lender setting
forth in reasonable detail the amount to be paid to it and the basis for
computation thereof hereunder shall, in the absence of manifest error, be
conclusive. In determining such amount, such Lender may use any reasonable
averaging and attribution methods.
3.7. COMPUTATIONS OF INTEREST AND FEES. For purposes of this Agreement,
interest and commitment fees (and any amount expressed as interest) shall be
computed on a daily basis and (a) with respect to any portion of the Loan
subject to a Eurodollar Pricing Option, on the basis of a 360-day year and (b)
with respect to commitment fees and any other portion of the Loan, on the basis
of a 365 or 366-day year, as the case may be.
3.8. INTEREST LIMITATION. Notwithstanding any other provision of this
Agreement or any other Credit Document, the maximum amount of interest that may
be charged to or collected from any Borrower by any Lender under this Agreement
or any other Credit Document shall in no event exceed the maximum amount of
interest that could lawfully be charged or collected under applicable law. Any
provision of this Agreement or any other Credit Document that could be construed
as providing for interest in excess of such lawful maximum shall be expressly
subject to this Section 3.8. Any part of the Credit Obligations consisting of
amounts to be paid to any Lender for the use, forbearance or retention of the
Credit Obligations shall, to the extent permitted by applicable law, be
allocated throughout the full term of the Credit Obligations until payment in
full of the Credit Obligations (including any renewal or extension thereof) so
that interest on account of the Credit Obligations shall not exceed the maximum
amount permitted by applicable law.
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4. PAYMENT.
4.1. PAYMENT AT MATURITY. On the Applicable Maturity Date or any
accelerated maturity of any portion of the Loan, the Borrowers jointly and
severally will pay to the Administrative Agent for the account of each Lender
for credit to the Revolving Loan, Term Loan B, Term Loan C or the Supplemental
Loan, as the case may be, an amount equal to the Revolving Loan, Term Loan B,
Term Loan C or the Supplemental Loan, as the case may be, then due, together
with all accrued and unpaid interest and any fees thereon, and on the latest
Applicable Maturity Date or any earlier accelerated maturity of the Loan, all
other Credit Obligations then outstanding.
4.2. FIXED REQUIRED PREPAYMENTS.
4.2.1. TERM LOAN B. On the last Banking Day of March, June,
September and December, beginning March 31, 1999, the Borrowers will
jointly and severally pay to the Administrative Agent, for the account of
the Lenders as a prepayment of Term Loan B, the lesser of (a) $500,000, as
adjusted after the date hereof in accordance with this Section 4, or (b)
the amount of Term Loan B then outstanding, in each case, together with
accrued interest on such amount prepaid, and a final payment of the balance
of Term Loan B on the Final Term Loan B Maturity Date.
4.2.2. TERM LOAN C. On the last Banking Day of each March, June,
September and December, beginning March 31, 1999, the Borrowers will
jointly and severally pay to the Administrative Agent, for the account of
the Lenders as a prepayment of Term Loan C, the lesser of (a) $750,000, as
adjusted after the date hereof in accordance with this Section 4, or (b)
the amount of Term Loan C then outstanding, in each case together with
accrued interest on such prepaid amount, and a final payment of the balance
of Term Loan C on the Final Term Loan C Maturity Date.
4.2.3. SUPPLEMENTAL LOAN. The schedule for prepayments of each
Supplemental Facility shall be determined in accordance with Section 2.4.
4.3. MAXIMUM AMOUNT OF REVOLVING CREDIT, ETC. If at any time the Revolving
Loan exceeds the Maximum Amount of Revolving Credit, the Borrowers jointly and
severally will immediately pay the amount of such excess to the Administrative
Agent for the account of the Revolving Lenders as a mandatory prepayment of the
Revolving Loan. If at any time a revolving portion of the Supplemental Loan
exceeds the applicable Maximum Amount of Supplemental Revolving Facility Credit,
the Borrowers jointly and severally will immediately pay the amount of such
excess to the Administrative Agent for the account of the Lenders participating
therein as a mandatory prepayment of such Supplemental Facility. If for any
reason the TCI Closing does not occur within 30 days after the Falcon Video
Revolving Loan is advanced, Falcon Video shall repay the Falcon Video Revolving
Loan in full and shall cease to be a Borrower.
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4.4. ASSET SALES.
4.4.1. OPERATING ASSET SALE NOTICE. In the event that the
Restricted Companies sell, exchange or dispose of Operating Assets in a
transaction (other than a transaction permitted by Section 7.11.1 or
Section 7.11.2) (including a Permitted Asset Swap to the extent of the
amount of cash received by the Restricted Companies), the Borrower making
(or whose Subsidiaries are making) such sale, exchange or disposition
(each, an "OPERATING ASSET SALE") shall, within five days of such Operating
Asset Sale, provide written notice to the Lenders of (a) the closing date
for such Operating Asset Sale, (b) the amount of Net Cash Proceeds (if any,
in the case of an exchange) therefrom, (c) whether any portion of the Net
Cash Proceeds will be reserved as an Asset Reinvestment Reserve Amount in
accordance with Section 4.4.3, (d) how much of the Revolving Loan, the Term
Loan and the Supplemental Loan will be prepaid with the Net Cash Proceeds
in accordance with Section 4.4.2, (e) a revised schedule of reductions in
the Maximum Amount of Revolving Credit and any Maximum Amount of
Supplemental Revolving Facility Credit giving effect to such prepayment,
(f) a revised schedule of mandatory prepayments of each of Term Loan B and
Term Loan C giving effect to such prepayment and (g) a revised schedule of
mandatory prepayments of the Supplemental Loan giving effect to such
prepayment.
4.4.2. PREPAYMENT ON SALE. The Loan shall be repaid in accordance
with this Section 4.4 to the extent that (a) the Net Cash Proceeds of the
Operating Asset Sale described in such written notice exceeds 15% of
Consolidated Operating Cash Flow for the period of four fiscal quarters of
the Restricted Companies ending on the last day of the fiscal quarter
ending immediately prior to the date of the Operating Asset Sale and (b)
such excess Net Cash Proceeds are not subject to an effective Asset
Reinvestment Reserve Amount in accordance with Section 4.4.3.
4.4.3. ASSET REINVESTMENT RESERVE AMOUNT. The Borrowers may elect
to reserve Net Cash Proceeds described in Section 4.4.2(a) for reinvestment
(directly or by stock purchase, merger or otherwise, provided any entity so
acquired becomes a Restricted Company) in replacement Operating Assets.
The amount so reserved (the "ASSET REINVESTMENT RESERVE AMOUNT") must be so
applied within 540 days after the Operating Asset Sale creating the Asset
Reinvestment Reserve Amount. In the event the Asset Reinvestment Reserve
Amount is not reinvested within such 540-day period (or if the Borrowers
abandon their plans for the reinvestment of the Asset Reinvestment Reserve
Amount), the Borrowers shall notify the Lenders within three Banking Days
and specify (a) how much of the Revolving Loan, the Term Loan and the
Supplemental Loan will be prepaid with the Asset Reinvestment Reserve
Amount in accordance with Section 4.4.4, (b) a revised schedule of
reductions in the Maximum Amount of Revolving Credit and any Maximum Amount
of Supplemental Revolving Facility Credit giving effect to such prepayment,
(c) a revised schedule of mandatory prepayments of each of Term Loan B
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and Term Loan C giving effect to such prepayment and (d) a revised
schedule of mandatory prepayments of the Supplemental Loan giving effect
to such prepayment.
4.4.4. ALLOCATIONS OF PREPAYMENT. Prepayments of the Loan (and
reductions in the Maximum Amount of Revolving Credit and any Maximum Amount
of Supplemental Revolving Facility Credit) made pursuant to this
Section 4.4 will be allocated to the Revolving Loan, Term Loan B, Term Loan
C and the Supplemental Loan, pro rata in proportion to the relative size of
the Maximum Amount of Revolving Credit, any Maximum Amount of Supplemental
Revolving Facility Credit, Term Loan B, Term Loan C and the term portions
of the Supplemental Loan, and prepayments of Term Loan B, Term Loan C and
the term portions of the Supplemental Loan under this Section 4.4 shall be
applied to the prepayments required under Section 4.2 pro rata over the
remaining payments in accordance with the Pro Rata Term Prepayment
Portions. All such prepayments (and reductions in the Maximum Amount of
Revolving Credit, and any Maximum Amount of Supplemental Revolving Facility
Credit) must be made within five Banking Days after the Operating Asset
Sale or the termination of effectiveness of an Asset Reinvestment Reserve
Amount, as the case may be.
4.5. DESIGNATED FINANCING DEBT. Upon, or within five days prior to, the
incurrence by any of the Restricted Companies of Designated Financing Debt, the
Borrower incurring (or whose Subsidiaries are incurring) such Designated
Financing Debt shall provide written notice to the Lenders of the closing date
for such incurrence and the amount of Net Debt Proceeds. Such Net Debt Proceeds
shall be applied to the prepayment of the Revolving Loan, Term Loan B, Term Loan
C and the Supplemental Loan, pro rata in proportion to the relative size of the
Maximum Amount of Revolving Credit, any Maximum Amount of Supplemental Revolving
Facility Credit, Term Loan B, Term Loan C and the term portions of the
Supplemental Loan, and prepayments of Term Loan B, Term Loan C and term portions
of the Supplemental Loan under this Section 4.5 shall be applied to the
prepayments required under Section 4.2 pro rata over the remaining payments in
accordance with the Pro Rata Term Prepayment Portions. All such payments (and
reductions in the Maximum Amount of Revolving Credit and any Maximum Amount of
Supplemental Revolving Facility Credit) must be made within five Banking Days
after the incurrence of the Designated Financing Debt.
4.6. VOLUNTARY PREPAYMENTS. In addition to the prepayments required by
Sections 4.2, 4.3, 4.4 and 4.5, the Borrowers jointly and severally may from
time to time prepay all or any portion of the Loan (in a minimum amount of
$1,000,000 and an integral multiple of $100,000), without premium (except as
provided in Section 3.2.4 with respect to early termination of Eurodollar
Pricing Options). The Borrowers shall give the Administrative Agent at least
one Banking Day prior notice in the case of a Revolving Loan or revolving
portion of the Supplemental Loan prepayment (three Banking Days' prior notice if
any portion of the Revolving Loan or revolving portion of the Supplemental Loan
to be repaid is subject to a Eurodollar Pricing Option) and at least five
Banking Day's prior notice in the case of a Term Loan or term portion of the
Supplemental Loan prepayment, specifying the date of payment, the total
principal
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amount of the Revolving Loan, Term Loan or Supplemental Loan to be paid on
such date and the amount of interest to be paid with such prepayment (and any
amounts due with respect to early termination of Eurodollar Pricing Options
under Section 3.2.4). Any prepayment of the Revolving Loan or revolving
portion of the Supplemental Loan made pursuant to this Section 4.6 may, at
the Borrowers' option as indicated in the notice delivered pursuant to the
preceding sentence, permanently reduce the Maximum Amount of Revolving Credit
or Maximum Amount of Supplemental Revolving Facility Credit, as the case may
be. The effectiveness of such notice may, at the Borrowers' option, be
conditioned on the closing of a credit facility the proceeds of which will be
used to prepay the Loan, or the effectiveness of Investments or acquisitions
permitted by Section 7.9 or mergers, consolidations or dispositions of assets
permitted by Section 7.11, in which case such notice may be revoked by the
Borrowers (by notice delivered in accordance with this Section 4.6) if such
condition is not satisfied without any liability to the Lenders. If such
condition is satisfied, such notice shall be deemed to have been effective as
of the date of the giving of such notice. All prepayments of Term Loan B,
Term Loan C or the term portions of the Supplemental Loan under this Section
4.6 shall be applied to the prepayments required under Section 4.2 pro rata
over the remaining payments. With respect to the amount of such prepayment
allocated to the Term Loan in accordance with the previous sentence, the
Borrowers may allocate the first $80,000,000 of such prepayment either pro
rata in proportion to the relative size of Term Loan B and Term Loan C or
disproportionately to Term Loan C, as the Borrowers may elect. To the extent
of aggregate prepayments over $80,000,000, such excess amounts shall be
allocated pro rata in proportion to the relative size of Term Loan B and Term
Loan C.
4.7. APPLICATION OF PAYMENTS. Any prepayment of the Revolving Loan, Term
Loan or the Supplemental Loan, as the case may be, shall be applied first to the
portion of the Revolving Loan, Term Loan or the Supplemental Loan, as the case
may be, not then subject to Eurodollar Pricing Options, then the balance of any
such prepayment shall be applied to the portion of the Revolving Loan, Term Loan
or Supplemental Loan, as the case may be, then subject to Eurodollar Pricing
Options, in the chronological order of the respective maturities thereof (or as
the Restricted Companies may otherwise specify), together with any payments
required by Section 3.2.4 with respect to early termination of Eurodollar
Pricing Options. All payments of principal hereunder shall be made to the
Administrative Agent for the account of each Lender in accordance with the
Lenders' respective Percentage Interests. The amounts of the Term Loan or term
portion of the Supplemental Loan prepaid pursuant to Sections 4.2, 4.4, 4.5 or
4.6 may not be reborrowed.
5. CONDITIONS TO EXTENDING CREDIT.
5.1. CONDITIONS ON INITIAL CLOSING DATE. The obligations of the Lenders to
make any extension of credit pursuant to Section 2 shall be subject to the
satisfaction, on or before the Initial Closing Date, of the following conditions
(in addition to the further conditions in Section 5.2):
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5.1.1. SATISFACTION OF EXISTING BANK DEBT. Contemporaneously with
the extension of credit on the Initial Closing Date, all outstanding
Indebtedness of the Restricted Companies under any bank credit facilities
(other than this Agreement, Indebtedness of Falcon Video and the Mezzanine
Notes, as defined in the Contribution Agreement) as in effect immediately
prior to the Initial Closing Date shall have been paid in full, and any
collateral pledged or granted thereunder shall have been released, and the
Borrower shall have furnished to the Administrative Agent on such Closing
Date a certificate to these effects).
5.1.2. NOTES. The Borrowers shall have executed the Notes and
delivered them to the Documentation Agent for each Lender. The Revolving
Loan and each of Term Loan B-1 and Term Loan C will close and fund
simultaneously.
5.1.3. PAYMENT OF FEES. The Borrowers shall have paid to the
Agents the respective fees due on the Initial Closing Date in the amounts
agreed separately by the Borrowers and the Agents as set forth in a
separate fee letter among such parties.
5.1.4. LEGAL OPINIONS. On the Initial Closing Date, the Lenders
shall have received from the following counsel their respective opinions
with respect to the transactions contemplated by the Credit Documents,
which opinions shall be in form and substance reasonably satisfactory to
the Lenders.
(a) Dow, Lohnes & Albertson, PLLC, special counsel for the
Restricted Companies.
(b) Ropes & Gray, special counsel for the Documentation Agent.
The Restricted Companies authorize and direct their counsel to furnish
the opinion described in clause (a).
5.1.5. PLEDGE AND SUBORDINATION AGREEMENT. Each of Holding, L.P.,
Holding, Inc. and the Restricted Companies (prior to the TCI Closing) shall
have duly authorized, executed and delivered to the Documentation Agent a
Pledge and Subordination Agreement substantially in the form of Exhibit
5.1.5 and shall have executed, delivered, filed and registered such
notices, Uniform Commercial Code financing statements and other documents
as the Documentation Agent may have reasonably requested in order to
perfect the security interests required to be created pursuant to the
Pledge and Subordination Agreement.
5.1.6. MONY SUBORDINATED DEBT. The note purchase agreements and
other documents relating to the MONY Subordinated Debt shall not prohibit
the Restricted Companies from entering into, or performing the transactions
contemplated by, the Credit Documents.
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5.2. CONDITIONS TO EACH EXTENSION OF CREDIT. The obligations of the
Lenders to make any extension of credit pursuant to Section 2 shall be subject
to the satisfaction, on or before the Closing Date for such extension of credit,
of the following conditions:
5.2.1. OFFICER'S CERTIFICATE. (a) The representations and
warranties contained in Sections 6.6 and 8 and in sections 2.2 and 4 of the
Pledge and Subordination Agreement shall be true and correct on and as of
the Closing Date with the same force and effect as though originally made
on and as of such date (except for those representations and warranties
made as of a specified earlier date, which shall have been true and correct
as of such date); (b) no Default shall exist and be continuing on such
Closing Date prior to or immediately after giving effect to the requested
extension of credit; (c) as of the Closing Date, the Borrowers shall be
permitted to incur the requested loan under section 4.03 of the Senior
Subordinated Notes Indenture and section 4.07 of the New Falcon I
Debentures Indentures; (d) as of the Closing Date, no Material Adverse
Change shall have occurred; and (e) the Borrowers shall have furnished to
the Administrative Agent on such Closing Date a certificate to such effect
in substantially the form of Exhibit 5.2.1, signed by a Financial Officer.
5.2.2. PROPER PROCEEDINGS. This Agreement, each other Credit
Document and the extensions of credit and the granting of the security
interests 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 and
authorizations of any governmental or administrative agency or any other
Person with respect to the foregoing shall have been obtained and shall be
in full force and effect. The Administrative Agent shall have received
copies of all documents, including certificates, records of corporate,
partnership and limited liability company proceedings and opinions of
counsel, which the Administrative Agent may have reasonably requested in
connection therewith, such documents where appropriate to be certified by
proper corporate or governmental authorities.
5.2.3. LEGALITY, ETC. The making of the requested extension of
credit shall not (a) subject any Lender to any penalty or special tax
(other than a Tax for which the Borrowers have reimbursed the Lenders under
Section 3.4), (b) be prohibited by any law or governmental order or
regulation applicable to any Lender or any Obligor or (c) violate any
mandatory credit restraint program of the executive branch of the
government of the United States of America, the Board of Governors of the
Federal Reserve System or any other governmental or administrative agency.
5.3. EXTENSIONS OF CREDIT FOLLOWING THE TCI CLOSING. With respect to any
extension of credit pursuant to Section 2 which is requested by the Borrowers
upon or after the TCI Closing:
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5.3.1. REPAYMENT OF FINANCING DEBT. Contemporaneously with or
immediately following the TCI Closing, Falcon Video shall have paid in full
all Financing Debt owed by it, all revolving credit or other committed
credit facilities relating to such Financing Debt shall have been
terminated (except for indemnification and other customary provisions that
survive termination) and all collateral and guarantees granted by Falcon
Video with respect to such Financing Debt shall have been released. The
conditions set forth in this Section 5.3.1 shall be deemed satisfied upon
receipt of payoff letters, executed UCC-3 termination statements and other
appropriate releases the effectiveness of which are explicitly conditioned
on the extensions of credit pursuant to this Agreement, the proceeds of
which will be used to pay in full such Financing Debt.
5.3.2. ASSIGNMENT OF DEBENTURES AND INDENTURES. (a) Holding, L.P.
shall have assigned to New Falcon I, and New Falcon I shall have assumed,
all rights and obligations of Holding, L.P. pursuant to the New Falcon I
Debentures and New Falcon I Debentures Indenture and, to the extent then
outstanding, the Holding, L.P. Senior Subordinated Notes and the Holding,
L.P. Senior Subordinated Notes Indenture and (b) New Falcon I shall have
assigned to New Falcon II, and New Falcon II shall have assumed, all rights
and obligations of New Falcon I pursuant to such Holding, L.P. Senior
Subordinated Notes and the Holding, L.P. Senior Subordinated Notes
Indenture to the extent then outstanding.
5.3.3. JOINDERS AND ASSIGNMENTS. Contemporaneously with or
immediately following the TCI Closing upon the discharge of the Falcon
Video Financing Debt as contemplated by Section 5.3.1, (a) Falcon Video
shall have duly authorized, executed and delivered to the Documentation
Agent the Falcon Video Joinder and a joinder to the Pledge and
Subordination Agreement as a Pledgor (as defined therein), (b) New Falcon
II and the other Restricted Companies shall have duly authorized, executed
and delivered to the Agent the New Falcon II Assignment and Assumption and
(c) New Falcon I and New Falcon II shall have duly authorized, executed and
delivered to the Documentation Agent a joinder to the Pledge and
Subordination Agreement as a Pledgor (as defined therein).
5.4. CONDITIONS ON SUPPLEMENTAL FACILITY CLOSING DATES. The obligations of
the Supplemental Lenders to make any extension of credit pursuant to a
Supplemental Facility pursuant to Section 2.4 (to the extent the Supplemental
Lenders agreed to become so obligated) shall be subject to the satisfaction, on
or before the initial Closing Date for such Supplemental Facility, of the
conditions set forth in this Section 5.4, as well as the further conditions of
Section 5.2.
5.4.1. SUPPLEMENTAL NOTES. The Borrowers shall have duly executed
and delivered to the Documentation Agent the appropriate Supplemental Notes
for each Supplemental Lender having a Commitment therein.
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5.4.2. JOINDER AGREEMENT. Any new Lenders participating in such
Supplemental Facility shall have executed and delivered a joinder agreement
reasonably satisfactory to the Documentation Agent and the Borrowers
pursuant to which each such new Lender agrees to become a party to and be
bound by this Agreement.
5.4.3. LEGAL OPINIONS. On such Closing Date, the Lenders shall
have received legal opinions satisfactory to the Supplemental Lenders and
the Documentation Agent from the respective counsels of the Borrowers and
the Supplemental Agent in substantially the form delivered pursuant to
Section 5.1.4.
5.4.4. FINANCED ACQUISITIONS. Contemporaneously with the making by
the Lenders of an extension of credit under a Supplemental Facility
requested for the purpose of making an acquisition permitted under Section
7.9, the Borrowers shall have furnished to the Lenders a certificate of the
Borrowers signed on their behalf by a Financial Officer to the effect that
the closing is occurring under the acquisition agreement relating to the
proposed acquisition contemporaneously with such extension of credit.
5.4.5. GENERAL. All legal, corporate, limited liability company
and partnership proceedings in connection with the transactions
contemplated by this Agreement shall be reasonably satisfactory in form and
substance to the Documentation Agent and the Documentation Agent shall have
received copies of all documents which the Documentation Agent may have
reasonably requested in connection with such Supplemental Facility. All
other conditions as may be reasonably determined by the Documentation Agent
and set forth in the written commitments with respect to such Supplemental
Facility, including the payment of any syndication or closing fees which
are so set forth, shall be reasonably satisfactory in form and substance to
the Documentation Agent.
6. GUARANTEES.
6.1. GUARANTEES OF CREDIT OBLIGATIONS. Each Guarantor unconditionally
jointly and severally guarantees that the Credit Obligations (other than the
Falcon Video Revolving Loan) incurred by any Borrower or any other Obligor will
be performed and will be paid in full in cash when due and payable, whether at
the stated or accelerated maturity thereof or otherwise, this guarantee being a
guarantee of payment and not of collectability and being absolute and in no way
conditional or contingent. In the event any part of such Credit Obligations
shall not have been so paid in full when due and payable, such Guarantor will,
immediately upon written notice by the Documentation Agent or the Administrative
Agent or, without notice, immediately upon the occurrence of a Bankruptcy
Default, pay or cause to be paid to the Administrative Agent for the Lenders'
account the amount of such Credit Obligations which are then due and payable and
unpaid. The obligations of each Guarantor hereunder shall not be affected by
the invalidity, unenforceability or irrecoverability of any of the Credit
Obligations as against any Obligor, any other guarantor thereof or any other
Person. For purposes hereof, the Credit Obligations shall be
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due and payable when and as the same shall be due and payable under the terms
of this Agreement or any other Credit Document notwithstanding the fact that
the collection or enforcement thereof may be stayed or enjoined under the
Bankruptcy Code, as from time to time in effect, or other applicable law.
6.2. CONTINUING OBLIGATION. Each Guarantor acknowledges that the Lenders
have entered into this Agreement (and, to the extent that the Lenders may enter
into any future Credit Document, will have entered into such agreement) in
reliance on this Section 6 being a continuing irrevocable agreement, and such
Guarantor agrees that its guarantee may not be revoked in whole or in part. The
obligations of the Guarantors hereunder shall terminate when the commitment of
the Lenders to extend credit under this Agreement shall have terminated and all
of the Credit Obligations have been indefeasibly paid in full in cash and
discharged; PROVIDED, HOWEVER, that:
(a) if a claim is made upon the Lenders at any time for repayment
or recovery of any amounts or any property received by the Lenders
from any source on account of any of the Credit Obligations and the
Lenders repay or return any amounts or property so received (including
interest thereon to the extent required to be paid by the Lenders) or
(b) if the Lenders become liable for any part of such claim by
reason of (i) any judgment or order of any court or administrative
authority having competent jurisdiction, or (ii) any settlement or
compromise of any such claim,
then the Guarantors shall remain liable under this Agreement for the amounts so
repaid or returned or the amounts for which the Lenders become liable (such
amounts being deemed part of the Credit Obligations) to the same extent as if
such amounts had never been received by the Lenders, notwithstanding any
termination hereof or the cancellation of any instrument or agreement evidencing
any of the Credit Obligations. The Guarantors shall, not later than five days
after receipt of notice from the Administrative Agent, jointly and severally pay
to the Administrative Agent an amount equal to the amount of such repayment or
return for which the Lenders have so become liable. Payments hereunder by a
Guarantor may be required by the Administrative Agent on any number of
occasions.
6.3. WAIVERS WITH RESPECT TO CREDIT OBLIGATIONS. Except to the extent
expressly required by this Agreement or any other Credit Document, each
Guarantor (in its capacity as a Guarantor, but not as a Borrower for its own
account) waives, except to the extent prohibited by the provisions of applicable
law that may not be waived, all of the following (including all defenses,
counterclaims and other rights of any nature based upon any of the following):
(a) presentment, demand for payment and protest of nonpayment of
any of the Credit Obligations, and notice of protest, dishonor or
nonperformance;
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(b) notice of acceptance of this guarantee and notice that credit
has been extended in reliance on the Guarantor's guarantee of the
Credit Obligations;
(c) notice of any Default or of any inability to enforce
performance of the obligations of any Obligor or any other Person
thereunder;
(d) demand for performance or observance of, and any enforcement
of any provision of, the Credit Obligations, this Agreement or any
other Credit Document or any pursuit or exhaustion of rights or
remedies with respect to any Credit Security or against any Obligor or
any other Person in respect of the Credit Obligations or any
requirement of diligence or promptness on the part of the Lenders in
connection with any of the foregoing;
(e) any act or omission on the part of the Lenders which may
impair or prejudice the rights of the Guarantor, including subrogation
rights or rights to obtain exoneration, contribution, indemnification
or any other reimbursement from any Obligor or any other Person;
(f) failure or delay to perfect or continue the perfection of any
security interest in any Credit Security;
(g) any action which harms or impairs the value of, or any
failure to preserve or protect the value of, any Credit Security;
(h) any act or omission which might vary the risk of the
Guarantor or otherwise operate as a deemed release or discharge;
(i) any statute or rule of law which provides that the
obligation of a surety must be neither larger in amount nor in other
respects more burdensome than the obligation of the principal;
(j) the provisions of any "one action" or "anti-deficiency" law
which would otherwise prevent the Lenders from bringing any action,
including any claim for a deficiency, against the Guarantor before or
after the Lenders' commencement or completion of any foreclosure
action, whether judicially, by exercise of power of sale or otherwise,
or any other law which would otherwise require any election of
remedies by the Lenders;
(k) all demands and notices of every kind with respect to the
foregoing; and
(l) to the extent not referred to above, all defenses (other
than disputed facts) which any Obligor may now or hereafter have to
the payment of the Credit
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Obligations, together with all suretyship defenses, which could
otherwise be asserted by such Guarantor.
No delay or omission on the part of the Lenders in exercising any right
under this Agreement or any other Credit Document or under any guarantee of the
Credit Obligations or with respect to any Credit Security shall operate as a
waiver or relinquishment of such right. No action which the Lenders or any
Obligor may take or refrain from taking with respect to the Credit Obligations,
including any amendments thereto or modifications thereof or waivers with
respect thereto, shall affect the provisions of this Agreement or the
obligations of the Guarantor hereunder. None of the Lenders' rights shall at
any time in any way be prejudiced or impaired by any act or failure to act on
the part of any Obligor, or by any noncompliance by any Obligor with the terms,
provisions and covenants of this Agreement, regardless of any knowledge thereof
which the Lenders may have or otherwise be charged with.
6.4. LENDERS' POWER TO WAIVE, ETC. Each Guarantor (solely in its capacity
as a Guarantor and without affecting any of its rights as a Borrower) grants to
the Lenders full power in their discretion, without notice to or consent of such
Guarantor, such notice and consent being hereby expressly waived to the fullest
extent permitted by applicable law, and without in any way affecting the
liability of the Guarantor under its guarantee hereunder:
(a) To waive compliance with, and any Default under, and to
consent to any amendment to or modification or termination of any
terms or provisions of, or to give any waiver in respect of, this
Agreement, any other Credit Document, any Credit Security, the Credit
Obligations or any guarantee thereof (each as from time to time in
effect);
(b) To grant any extensions of the Credit Obligations (for any
duration), and any other indulgence with respect thereto, and to
effect any total or partial release (by operation of law or
otherwise), discharge, compromise or settlement with respect to the
obligations of the Obligors or any other Person in respect of the
Credit Obligations, whether or not rights against the Guarantor under
this Agreement are reserved in connection therewith;
(c) To take security from the Restricted Companies or other
Obligors in any form for the Credit Obligations, and to consent to the
addition to or the substitution, exchange, release or other
disposition of, or to deal in any other manner with, any part of any
property contained in any Credit Security whether or not the property,
if any, received upon the exercise of such power shall be of a
character or value the same as or different from the character or
value of any property disposed of, and to obtain, modify or release
any present or future guarantees of the Credit Obligations and to
proceed against any of the Credit Security or such guarantees in any
order;
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(d) To collect or liquidate or realize upon any of the Credit
Obligations or any Credit Security in any manner or to refrain from
collecting or liquidating or realizing upon any of the Credit
Obligations or the Credit Security; and
(e) To extend credit under this Agreement, any other Credit
Document or otherwise in such amount as the Lenders may determine,
even though the condition of the Obligors (financial or otherwise on
an individual or Consolidated basis) may have deteriorated since the
date hereof.
6.5. INFORMATION REGARDING OBLIGORS, ETC. Each Guarantor acknowledges and
agrees that it has made such investigation as it deems desirable of the risks
undertaken by it in entering into this Agreement and is fully satisfied that it
understands all such risks. Each Guarantor waives any obligation which may now
or hereafter exist on the part of the Lenders to inform it of the risks being
undertaken by entering into this Agreement or of any changes in such risks and,
from and after the date hereof, each Guarantor undertakes to keep itself
informed of such risks and any changes therein. Each Guarantor expressly waives
any duty which may now or hereafter exist on the part of the Lenders to disclose
to the Guarantor any matter related to the business, operations, character,
collateral, credit, condition (financial or otherwise), income or prospects of
the Obligors or their Affiliates or their properties or management, whether now
or hereafter known by the Lenders. Each Guarantor represents, warrants and
agrees that it assumes sole responsibility for obtaining from the Obligors all
information concerning this Agreement and all other Credit Documents and all
other information as to the Obligors and their Affiliates or their properties or
management as such Guarantor deems necessary or desirable.
6.6. CERTAIN GUARANTOR REPRESENTATIONS. Each Guarantor represents that:
(a) it is in its best interest and in pursuit of its partnership,
limited liability company or corporate purposes as an integral part of
the business conducted and proposed to be conducted by the Restricted
Companies (including such Guarantor), and reasonably necessary and
convenient in connection with the conduct of the business conducted
and proposed to be conducted by it, to induce the Lenders to enter
into this Agreement and to extend credit to each Borrower by making
the Guarantees contemplated by this Section 6;
(b) the credit available hereunder will directly or indirectly
inure to its benefit; and
(c) by virtue of the foregoing it is receiving at least
reasonably equivalent consideration from the Lenders for its
Guarantee.
Each Guarantor acknowledges that it has been advised by the Documentation Agent
that the Lenders are unwilling to enter into this Agreement unless the
Guarantees contemplated by this Section 6 are given by it. Each Guarantor
represents that:
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(i) it will not be rendered insolvent as a result of entering
into this Agreement,
(ii) after giving effect to the transactions contemplated by this
Agreement, it will have assets having a fair saleable value in excess
of the amount required to pay its probable liability on its existing
debts as they have become absolute and matured,
(iii) it has, and will have, access to adequate capital for the
conduct of its business and
(iv) it has the ability to pay its debts from time to time
incurred in connection therewith as such debts mature.
6.7. NO SUBROGATION. Until the Credit Obligations have been indefeasibly
paid in full and all commitments to extend further credit under the Credit
Documents have been irrevocably terminated, each Guarantor waives all rights of
reimbursement, subrogation, contribution, offset and other claims against the
Borrowers (in their capacity as borrowers hereunder) arising by contract or
operation of law in connection with any payment made or required to be made by
such Guarantor under this Agreement, except for contribution rights provided in
Section 6.9.
6.8. SUBORDINATION. Each Guarantor covenants and agrees that all
Indebtedness, claims and liabilities now or hereafter owing by any Borrower to
such Guarantor are hereby subordinated to the prior payment in full of the
Credit Obligations and are so subordinated as a claim against such Borrower or
any of its assets, whether such claim be in the ordinary course of business or
in the event of voluntary or involuntary liquidation, dissolution, insolvency or
bankruptcy, so that no payment with respect to any such Indebtedness, claim or
liability will be made or received while any of the Credit Obligations are
outstanding; PROVIDED, HOWEVER, that the Borrowers may make payments permitted
by Section 7.10.
6.9. CONTRIBUTION AMONG GUARANTORS. The Guarantors agree that, as among
themselves in their capacity as guarantors of the Credit Obligations, the
ultimate responsibility for repayment of the Credit Obligations, in the event
that the Borrowers fail to pay when due their Credit Obligations, shall be
equitably apportioned, to the extent consistent with the Credit Documents, among
the respective Guarantors (a) in the proportion that each, in its capacity as a
guarantor, has benefited from the extensions of credit to the Borrowers by the
Lenders under the Credit Agreement, or (b) if such equitable apportionment
cannot reasonably be determined or agreed upon among the affected Guarantors, in
proportion to their respective net worths determined on or about the date hereof
(or such later date as such Guarantor becomes party hereto). In the event that
any Guarantor, in its capacity as a guarantor, pays an amount with respect to
the Credit Obligations in excess of its proportionate share as set forth in this
Section 6.9, each other Guarantor shall, to the extent consistent with the
Credit Documents, make a contribution payment to such Guarantor in an amount
such that the aggregate amount paid by
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each Guarantor reflects its proportionate share of the Credit Obligations.
In the event of any default by any Guarantor under this Section 6.9, each
other Guarantor will bear, to the extent consistent with the Credit
Documents, its proportionate share of the defaulting Guarantor's obligation
under this Section 6.9. This Section 6.9 is intended to set forth only the
rights and obligations of the Guarantors among themselves and shall not in
any way affect the obligations of any Guarantor to the Lenders under the
Credit Documents (which obligations shall at all times constitute the joint
and several obligations of all the Guarantors).
6.10. FUTURE SUBSIDIARIES; FURTHER ASSURANCES. The Borrowers and each
Guarantor shall from time to time cause any present or future Subsidiary not
designated as an Excluded Company to join this Agreement as a Restricted Company
and a Guarantor pursuant to a joinder agreement in form and substance reasonably
satisfactory to the Documentation Agent. Each Guarantor will, promptly upon the
request of the Documentation Agent from time to time, execute, acknowledge and
deliver, and file and record, all such instruments, and take all such action, as
the Documentation Agent reasonably deems necessary or advisable to carry out the
intent and purposes of this Section 6.
6.11. RELEASE OF GUARANTOR. If any Guarantor is the subject of a
merger or a sale or disposition of its stock or of substantially all of its
assets in a transaction permitted under Section 7.11, the Guarantee of such
Person under this Section 6 shall be automatically terminated as of the closing
of such merger, sale or disposition and the application of any proceeds thereof
as required by this Agreement. The Guarantee under this Section 6 of any Person
that is subsequently designated as an Excluded Company in accordance with this
Agreement shall be automatically terminated as of the effectiveness of such
designation.
7. GENERAL COVENANTS. Each of the Restricted Companies covenants that, until
all of the Credit Obligations shall have been paid in full and until the
Lenders' commitments to extend credit under this Agreement and any other Credit
Document shall have been irrevocably terminated (except for indemnification and
other customary provisions that survive termination), it will comply with such
of the following provisions as are applicable to it:
7.1. TAXES AND OTHER CHARGES; ACCOUNTS PAYABLE.
7.1.1. TAXES AND OTHER CHARGES. Each of the Restricted Companies
will duly pay and discharge, or cause to be paid and discharged, before the
same shall become in arrears, all taxes, assessments and other governmental
charges imposed upon such Person and its properties, sales or activities,
or upon the income or profits therefrom, as well as all claims for labor,
materials or supplies which if unpaid might by law become a Lien upon any
of its property; PROVIDED, HOWEVER, that any such tax, assessment, charge
or claim need not be paid if the validity or amount thereof shall at the
time be contested in good faith by appropriate proceedings (or if all such
unpaid taxes, assessments, charges or claims do not exceed $500,000 in the
aggregate) and if such Person shall, in accordance with GAAP, have set
aside on its books adequate reserves with respect
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thereto; and PROVIDED, FURTHER, that each of the Restricted Companies
will pay or bond, or cause to be paid or bonded, all such taxes,
assessments, charges or other governmental claims immediately upon the
commencement of proceedings to foreclose any Lien which may have
attached as security therefor (except to the extent such proceedings
have been dismissed or stayed).
7.1.2. ACCOUNTS PAYABLE. Each of the Restricted Companies will
promptly pay when due, or in conformity with customary trade terms, all
other Indebtedness incident to the operations of such Person; PROVIDED,
HOWEVER, that any such Indebtedness need not be paid if the validity or
amount thereof shall at the time be contested in good faith and if such
Person shall, in accordance with GAAP, have set aside on its books adequate
reserves with respect thereto.
7.2. CONDUCT OF BUSINESS, ETC.
7.2.1. TYPES OF BUSINESS. The Restricted Companies will engage
only in the business of (a) developing, acquiring, constructing, improving,
owning and operating cable television systems, and (b) other businesses
incidental, related or complementary thereto, including the provision of
programming services, telephone services and the transmission of voice and
data and other information; PROVIDED, HOWEVER, that Investments permitted
by Section 7.9.9 will not be prohibited by this Section 7.2.1.
7.2.2. MAINTENANCE OF PROPERTIES. Each Restricted Company:
(a) will keep its properties in such repair, working order and
condition, and will from time to time make such repairs, replacements,
additions and improvements thereto for the efficient operation of its
businesses in management's reasonable business judgment and will
comply at all times in all material respects with all Franchises, FCC
Licenses and leases to which it is party so as to prevent any loss or
forfeiture thereof or thereunder, unless (i) compliance is at the time
being contested in good faith by appropriate proceedings or (ii) the
management of the Restricted Company reasonably determines that
compliance is not in the best interests of the Restricted Company and
that such loss or forfeiture will not result in a Material Adverse
Change; and
(b) except to the extent permitted under Section 7.11, will do
all things necessary to preserve, renew and keep in full force and
effect and in good standing its legal existence and authority
necessary to continue its business (other than in the case of an
inactive subsidiary that does not own material assets).
7.2.3. COMPLIANCE WITH MATERIAL AGREEMENTS. Each of the Restricted
Companies will comply in all material respects with the provisions of the
Material Agreements to which they are a party or bound (to the extent not
inconsistent with this Agreement or any
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other Credit Document). Without the prior written consent of the
Required Lenders, which may not be unreasonably withheld, no Material
Agreement shall be amended, modified, waived or terminated in any manner
that would have in any material respect an adverse effect on the
interests of the Lenders; PROVIDED, HOWEVER, that notwithstanding the
foregoing, in the case of the New Falcon I Debentures and New Falcon I
Debentures Indenture, the consent of the Required Lenders shall be
required only with respect to an increase in the interest rate
applicable to the Debentures currently outstanding under such Indenture.
7.2.4. STATUTORY COMPLIANCE. Each of the Restricted Companies will
comply in all material respects with the Communications Act, including the
rules and regulations of the FCC relating to the carriage of television
signals, and all other valid and applicable statutes, laws, ordinances,
zoning and building codes and other rules and regulations of the United
States of America, of the states and territories thereof and their
counties, municipalities and other subdivisions and of any foreign country
or other jurisdictions applicable to such Person, except where compliance
therewith shall at the time be contested in good faith by appropriate
proceedings or the failure so to comply is not reasonably likely to result
in a Material Adverse Change.
7.3. INSURANCE.
Each of the Restricted Companies will maintain with financially sound and
reputable insurers insurance in such amounts and against such risks as are
customarily maintained by companies engaged in the same or similar businesses
operating in the same general locations as the Restricted Companies. The
Restricted Companies will from time to time provide such information regarding
such insurance arrangements as the Documentation Agent may reasonably request.
The Agents and the Lenders acknowledge that the existing self-insurance programs
of the Restricted Companies, as they may be modified from time to time in a
manner that does not materially change the nature and relative scale of such
programs, comply with the requirements of this Section 7.3.
7.4. FINANCIAL STATEMENTS AND REPORTS. Each of the Restricted Companies
will maintain a system of accounting in which entries will be made in their
books and records of all transactions in relation to their business and affairs
in accordance with GAAP. The fiscal year of the Restricted Companies will end
on December 31 in each year.
7.4.1. ANNUAL REPORTS. The Restricted Companies will furnish to
the Lenders as soon as available, and in any event within 105 days after
the end of each fiscal year, the Consolidated and Consolidating balance
sheet of New Falcon I (prior to the TCI Closing, Holding, L.P.) and its
Subsidiaries as at the end of such fiscal year, the Consolidated and
Consolidating statements of earnings, changes in partners' equity and cash
flows of New Falcon I (prior to the TCI Closing, Holding, L.P.) and its
Subsidiaries for such fiscal year (all in reasonable detail and, in such
Consolidating financial statements, showing the
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financial condition and performance of the Restricted Companies as a
group), and together with comparative figures for the preceding fiscal
year, all accompanied by:
(a) Unqualified reports of Ernst & Young LLP (or, if they cease
to be auditors of the Restricted Companies, independent certified
public accountants of recognized national standing reasonably
satisfactory to the Documentation Agent), to the effect that they have
audited such Consolidated financial statements in accordance with
generally accepted auditing standards and that such Consolidated
financial statements present fairly, in all material respects, the
financial position of the Restricted Companies at the dates thereof
and the results of their operations for the periods covered thereby in
conformity with GAAP.
(b) The statement of such accountants that they have caused this
Agreement to be reviewed and that in the course of their audit of the
Restricted Companies no facts have come to their attention that cause
them to believe that any Default exists or, if such is not the case,
specifying such Default and the nature thereof. This statement is
furnished by such accountants with the understanding that the
examination of such accountants cannot be relied upon to give such
accountants knowledge of any such Default except as it relates to
accounting or auditing matters within the scope of their audit.
(c) A certificate of a Financial Officer to the effect that such
officer has caused this Agreement to be reviewed and has no knowledge
of any Default, or if such officer has such knowledge, specifying such
Default and the nature thereof, and what action the Restricted
Companies have taken, are taking or propose to take with respect
thereto.
(d) In the event of a material change in GAAP after the date
hereof, computations, certified by a Financial Officer, reconciling
the financial statements referred to above with financial statements
prepared in accordance with GAAP as applied to the other covenants in
Section 7 and related definitions.
(e) Computations demonstrating, as of the end of such fiscal
year, compliance with the Computation Covenants.
(f) Supplements to Exhibits 8.1 and 8.4 showing any changes in
the information set forth in such Exhibits during the last quarter of
such fiscal year, as well as any changes in the Charter, Bylaws or
incumbency of officers of the Restricted Companies from those
previously certified to the Documentation Agent.
7.4.2. QUARTERLY REPORTS. The Restricted Companies will furnish to
the Lenders as soon as available and, in any event, within 60 days after
the end of each calendar
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quarter, the internally prepared Consolidated balance sheet as of the
end of such quarter and the Consolidated statements of income, changes
in partners' equity and cash flows of New Falcon I (prior to the TCI
Closing, Holding, L.P.) and its Subsidiaries for such quarter and for
the portion of the fiscal year then ending (all in reasonable detail
and, in such Consolidating financial statements, showing the financial
condition and performance of the Restricted Companies as a group),
together with comparative figures for the same period in the preceding
fiscal year, all accompanied by:
(a) A certificate signed by a Financial Officer to the effect
that such financial statements have been prepared in accordance with
GAAP and present fairly, in all material respects, the financial
position of the Restricted Companies covered thereby at the dates
thereof and the results of their operations for the periods covered
thereby, subject only to normal year-end audit adjustments and the
addition of footnotes.
(b) Computations demonstrating, as of the end of such quarter,
compliance with the Computation Covenants.
(c) a report of a Financial Officer setting forth the number of
Subscribers, homes passed and Subscribers receiving premium services
with respect to the operating regions of the Borrowers as of the end
of such quarter.
(d) For each quarter, supplements to Exhibits 8.1 and 8.4 showing
any changes in the information set forth in such Exhibits during such
fiscal quarter, as well as any changes in the Charter, Bylaws or
incumbency of officers of the Restricted Companies from those
previously certified to the Documentation Agent.
(e) A certificate signed by a Financial Officer to the effect
that such officer has caused this Agreement to be reviewed and has no
knowledge of any Default, or if such officer has such knowledge,
specifying such Default and the nature thereof and what action the
Restricted Companies have taken, are taking or propose to take with
respect thereto.
7.4.3. TCI CLOSING REPORT. At least five Banking Days prior to the
TCI Closing, the Restricted Companies will deliver to the Administrative
Agent the reports, statements, certificates and computations described in
Section 7.4.2, giving pro-forma effect to the TCI Transactions and in
sufficient detail to enable the Lenders to calculate the Reference Leverage
Ratio as of the TCI Closing (the "TCI CLOSING REPORT").
7.4.4. OTHER REPORTS. The Restricted Companies will promptly
furnish to the Lenders such registration statements, proxy statements and
reports, including Forms S-1,
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S-2, S-3, S-4, 10-K, 10-Q and 8-K, as may be filed for New Falcon I or
any Restricted Company with the Securities and Exchange Commission.
7.4.5. NOTICE OF LITIGATION; NOTICE OF DEFAULTS. The Restricted
Companies will promptly furnish to the Lenders notice of any litigation or
any administrative or arbitration proceeding to which any Restricted
Company may hereafter become a party which involves the risk of any
judgment which resulted, or poses a material risk of resulting, after
giving effect to any applicable insurance, of the payment by the Restricted
Companies of at least $10,000,000. Promptly upon acquiring knowledge
thereof, the Restricted Companies will notify the Lenders of the existence
of any Default, specifying the nature thereof and what action the
Restricted Companies have taken, are taking or propose to take with respect
thereto.
7.4.6. FRANCHISE MATTERS. The Restricted Companies will promptly
furnish to the Documentation Agent notice of any action by any federal,
state or local governmental authority of the institution of proceedings to
revoke, terminate or suspend any Franchise now or hereafter held by any
Restricted Company, and any abandonment or expiration (without renewal) of
a Franchise now or hereafter held by any Restricted Company, in either
case, which would result, or be reasonably likely to result, in a Material
Adverse Change.
7.4.7. ERISA REPORTS. The Restricted Companies will furnish to the
Lenders as soon as available the following items with respect to any Plan:
(a) any request for a waiver of the funding standards or an
extension of the amortization period,
(b) any reportable event (as defined in section 4043 of ERISA),
unless the notice requirement with respect thereto has been waived by
regulation,
(c) any notice received by any ERISA Group Person that the PBGC
has instituted or intends to institute proceedings to terminate any
Plan, or that any Multiemployer Plan is insolvent or in
reorganization,
(d) notice of the possibility of the termination of any Plan by
its administrator pursuant to section 4041 of ERISA, and
(e) notice of the intention of any ERISA Group Person to
withdraw, in whole or in part, from any Multiemployer Plan.
7.4.8. OTHER INFORMATION. From time to time upon request of any
authorized officer of any Agent, each of the Restricted Companies will
furnish to the Lenders such other information regarding the business,
assets, financial condition, income or prospects
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of the Restricted Companies as such officer may reasonably request,
including copies of all tax returns, licenses, agreements, contracts,
leases and instruments to which any of the Restricted Companies is
party. The authorized officers and representatives of any Agent or,
after the occurrence and during the continuation of an Event of Default,
of any Lender shall have the right during normal business hours upon
reasonable notice and at reasonable intervals to examine the books and
records of the Restricted Companies, to make copies, notes and abstracts
therefrom and to make an independent examination of its books and
records, for the purpose of verifying the accuracy of the reports
delivered by any of the Restricted Companies pursuant to this Section
7.4 or otherwise and ascertaining compliance with or obtaining
enforcement of this Agreement or any other Credit Document.
7.5. CERTAIN FINANCIAL TESTS.
7.5.1. CONSOLIDATED TOTAL DEBT TO CONSOLIDATED ANNUALIZED OPERATING
CASH FLOW. Consolidated Total Debt shall not as of the end of any fiscal
quarter exceed the percentage indicated in the table below of Consolidated
Annualized Operating Cash Flow for such fiscal quarter:
Percentage in Effect Percentage in Effect
Date Prior to TCI Closing After TCI Closing
- ---- -------------------- -----------------
Initial Closing Date through
March 30, 2001 550% 600%
March 31, 2001 through
December 30, 2001 525% 575%
December 31, 2001 through
June 29, 2002 500% 550%
June 30, 2002 through
June 29, 2003 450% 500%
June 30, 2003 through
June 29, 2004 350% 400%
June 30, 2004 through
June 29, 2005 300% 350%
June 30, 2005 through
June 29, 2006 225% 275%
June 30, 2006 and
thereafter 150% 200%
7.5.2. CONSOLIDATED ANNUALIZED OPERATING CASH FLOW TO CONSOLIDATED
CASH INTEREST EXPENSE. On the last day of each fiscal quarter of the
Restricted Companies, Consolidated Annualized Operating Cash Flow for the
three-month period then ending shall exceed the percentage indicated below
of Consolidated Cash Interest Expense for
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such three-month period: (a) from the Initial Closing Date through
December 31, 2000, 140%, (b) from January 1, 2001 through December 31,
2002, 150% and (c) thereafter, 200%.
7.5.3. CONSOLIDATED ANNUALIZED OPERATING CASH FLOW TO CONSOLIDATED
PRO FORMA DEBT SERVICE. On the last day of each fiscal quarter of the
Restricted Companies, Consolidated Annualized Operating Cash Flow for the
three-month period then ending shall exceed 110% of Consolidated Pro Forma
Debt Service for the 12-month period beginning immediately after such date.
7.5.4. CAPITAL EXPENDITURES. During each year indicated below,
Capital Expenditures of the Restricted Companies shall not exceed the total
of:
(a) the applicable amount set forth opposite such year in the table below
PLUS
(b) for each year after 1998, the amount by which actual Capital
Expenditures in the preceding year are less than the applicable amount
set forth for such preceding year in such table.
Amount if the TCI Amount if TCI
Closing Occurs Closing Does Not
During Occur During
Calendar Year Such Calendar Year Such Calendar Year
------------- ------------------ ------------------
1998 $150,000,000 $120,000,000
1999 $170,000,000 $120,000,000
2000 $185,000,000 $130,000,000
2001 $130,000,000 $ 85,000,000
2002 and each
year thereafter $ 80,000,000 $ 65,000,000
7.6. INDEBTEDNESS. The Restricted Companies shall not create, incur,
assume or otherwise become or remain liable with respect to any Indebtedness
other than the following:
7.6.1. The Credit Obligations.
7.6.2. Guarantees permitted by Section 7.7.
7.6.3. Current liabilities existing from time to time, other than
for Financing Debt, incurred in the ordinary course of business.
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7.6.4. To the extent that payment thereof shall not at the time be
required by Section 7.1, Indebtedness in respect of taxes, assessments,
governmental charges and claims for labor, materials and supplies.
7.6.5. Indebtedness secured by Liens of carriers, warehousemen,
mechanics and landlords permitted by Sections 7.8.5 and 7.8.6.
7.6.6. Indebtedness in respect of judgments or awards not in excess
of $10,000,000 in the aggregate at any time outstanding (a) which have been
in force for less than the applicable appeal period, so long as execution
is not levied, or (b) in respect of which any Restricted Company shall at
the time in good faith be prosecuting an appeal or proceedings for review,
so long as execution thereof shall have been stayed pending such appeal or
review and the Restricted Companies shall have taken appropriate reserves
therefor consistent with GAAP.
7.6.7. Indebtedness in respect of Capitalized Lease Obligations or
secured by purchase money security interests to the extent Liens securing
such Indebtedness are permitted by Section 7.8.10; PROVIDED, HOWEVER, that
the aggregate principal amount of all Indebtedness permitted by this
Section 7.6.7 at any one time outstanding shall not exceed $25,000,000.
7.6.8. Indebtedness in respect of deferred taxes arising in the
ordinary course of business.
7.6.9. Indebtedness in respect of inter-company loans and advances
among the Restricted Companies which are not prohibited by Section 7.9.
7.6.10. Indebtedness evidenced by the Holding, L.P. Senior
Subordinated Notes to the extent assumed by New Falcon II upon the TCI
Closing.
7.6.11. Subject to Section 5.3.1, Indebtedness of Falcon Video and
the other Indebtedness outstanding on the date hereof and described in
Exhibit 8.4, except that only the Indebtedness of Falcon Video and the
Indebtedness under the heading "Post-Closing Financing Debt" on Exhibit 8.4
is permitted by this Section 7.6.11 to remain outstanding after the Initial
Closing Date.
7.6.12. Indebtedness on account of security deposits of Subscribers
held by the Restricted Companies to secure the return of equipment placed
by the Restricted Companies with Subscribers in the ordinary course of its
business.
7.6.13. Binding obligations of the Restricted Companies to make
acquisitions and Investments permitted by Section 7.9.
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7.6.14. Indebtedness of the Restricted Companies to Holding, L.P. or
to New Falcon I pledged by Holding, L.P. or New Falcon I to the
Documentation Agent in accordance with the Pledge and Subordination
Agreement.
7.6.15. The TCI Debt and other Indebtedness of the Restricted
Companies to TCI or its Affiliates, where such other Indebtedness is
pledged by TCI or such Affiliates to the Documentation Agent in accordance
with the Pledge and Subordination Agreement or a substantially similar
agreement.
7.6.16. The MONY Subordinated Debt.
7.6.17. Minority interests in Subsidiaries and equity in losses of
affiliated partnerships in excess of investment.
7.6.18. Other Indebtedness of the Restricted Companies not in excess
of $50,000,000 in the aggregate at any one time outstanding.
7.7. GUARANTEES; LETTERS OF CREDIT. The Restricted Companies shall not
become or remain liable with respect to any Guarantee, including reimbursement
obligations under letters of credit and other financial guarantees by third
parties, except the following:
7.7.1. Guarantees of the Credit Obligations.
7.7.2. Guarantees by the Restricted Companies of Indebtedness
incurred by any other Restricted Company and permitted by Section 7.6.
7.7.3. Guarantees to governmental authorities in respect of
performance under Franchises and to obligors upon indemnity, performance or
similar bonds or letters of credit made in the ordinary course of business,
not involving Guarantees of Financing Debt, and not exceeding $50,000,000
in aggregate principal amount at any one time outstanding.
7.7.4. Guarantees by the Restricted Companies of the MONY
Subordinated Debt, which Guarantees shall be subordinated on the same terms
as the MONY Subordinated Debt.
7.8. LIENS. The Restricted Companies shall not create, incur or enter
into, or suffer to be created or incurred or to exist, any Lien, except the
following:
7.8.1. Liens on any Credit Security which secure the Credit
Obligations and restrictions on transfer contained in the Credit Documents.
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7.8.2. Liens to secure taxes, assessments and other governmental
charges, to the extent that payment thereof shall not at the time be
required by Section 7.1.
7.8.3. Deposits or pledges made (a) in connection with, or to
secure payment of, workers' compensation, unemployment insurance, old age
pensions or other social security, (b) in connection with casualty
insurance maintained in accordance with Section 7.3, (c) to secure the
performance of bids, tenders, contracts (other than contracts relating to
Financing Debt) or leases, (d) to secure statutory obligations or surety or
appeal bonds, (e) to secure indemnity, performance or other similar bonds
in the ordinary course of business, (f) in connection with claims contested
to the extent that payment thereof shall not at that time be required by
Section 7.1 or (g) as acquisition or sale contract escrows in connection
with transactions permitted under Sections 7.9 or 7.11.
7.8.4. Liens in respect of judgments or awards, to the extent that
such judgments or awards are permitted by Section 7.6.6.
7.8.5. Liens of carriers, warehousemen, mechanics and similar
Liens, in each case (a) in existence less than 90 days from the date of
creation thereof or (b) being contested in good faith by any Restricted
Company in appropriate proceedings (so long as the Restricted Company
shall, in accordance with GAAP, have set aside on its books adequate
reserves with respect thereto).
7.8.6. Encumbrances in the nature of (a) zoning restrictions, (b)
easements, (c) restrictions of record on the use of real property, (d)
landlords' and lessors' Liens on rented premises and (e) restrictions on
transfers or assignment of leases, which in each case do not materially
detract from the value of the encumbered property or impair the use thereof
in the business of any Restricted Company.
7.8.7. Restrictions under federal and state securities laws on the
transfer of securities.
7.8.8. Restrictions under the Communications Act, specific
Franchises, pole agreements, leases and other documents entered into in the
ordinary course of business on the transfer or licensing of certain assets
of the Restricted Companies.
7.8.9. Set-off rights of depository institutions with which any
Restricted Company maintains deposit accounts.
7.8.10. Liens constituting (a) purchase money security interests
(including mortgages, conditional sales, Capitalized Leases and any other
title retention or deferred purchase devices) in real property, interests
in leases or tangible personal property existing or created on the date on
which such property is acquired, and (b) the renewal, extension or
refunding of any security interest referred to in the foregoing clause (a)
in an
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amount not to exceed the amount thereof remaining unpaid immediately
prior to such renewal, extension or refunding; PROVIDED, HOWEVER, that each
such security interest shall attach solely to the particular item of
property so acquired, and the principal amount of Indebtedness (including
Indebtedness in respect of Capitalized Lease Obligations) secured thereby
shall not exceed the cost (including all such Indebtedness secured thereby,
whether or not assumed) of such item of property; and PROVIDED, FURTHER,
that the aggregate principal amount of all Indebtedness secured by Liens
permitted by this Section 7.8.10 shall not exceed the amount permitted by
Section 7.6.7.
7.8.11. Liens as of the date hereof described in Exhibit 8.4.
7.8.12. Arrangements constituting a qualified escrow account,
qualified trust or qualified intermediary for funds included in an Asset
Reinvestment Reserve Amount to facilitate a deferred like-kind exchange
exempt from taxation under the Code.
7.8.13. Liens on the stock or other equity interests of any Person
that is not a Restricted Company to secure loans from banks and other
institutional lenders to such Person or Affiliates of such Person that are
not Restricted Companies.
7.8.14. Subject to Section 5.3.1, Liens in respect of collateral
granted by Falcon Video and Falcon Video Communications Investors, L.P. in
respect of Indebtedness of Falcon Video.
7.9. INVESTMENTS AND ACQUISITIONS. The Restricted Companies shall not have
outstanding, acquire, commit to acquire under a binding contract or a contract
not conditioned on the receipt of customary Lenders' consents or hold any
Investment (including any Investment consisting of the acquisition of any
business) except for the following:
7.9.1. Investments of the Restricted Companies in other Restricted
Companies.
7.9.2. Investments in Cash Equivalents.
7.9.3. Loans and other advances to employees, officers and
directors in an aggregate principal amount at any one time outstanding not
to exceed $10,000,000.
7.9.4. Prepaid royalties and fees paid in the ordinary course of
business.
7.9.5. Guarantees permitted by Section 7.7.
7.9.6. Investments as of the date hereof described in Exhibit 8.4.
7.9.7. So long as immediately before and after giving effect
thereto no Event of Default exists and is continuing, acquisitions by the
Restricted Companies of businesses
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engaged in activities permitted by Section 7.2.1, whether by acquisition
of equity interests or assets or by merger, consolidation or as
otherwise permitted by Section 7.11; PROVIDED, HOWEVER, that (a) the
business is acquired by a Borrower or a Guarantor or, if the business is
acquired by a new Subsidiary, the new Subsidiary becomes a Borrower or
Guarantor hereunder; and (b) the aggregate consideration paid by the
Restricted Companies in all such acquisitions (excluding any
consideration paid through the issuance of equity interests in Holding,
L.P. or New Falcon I) will not exceed (A) $25,000,000 in any fiscal year
or (B) $50,000,000 cumulatively since the date hereof.
7.9.8. Loans from the Restricted Companies to Holding, L.P., New
Falcon I or TCI not exceeding $1,000,000 in the aggregate at any one time
outstanding, provided that this Section 7.9.8 shall not apply to the loan
described in item C.2 of Exhibit 8.4 and such loan shall not be applied
against the $1,000,000 cap in this Section 7.9.8.
7.9.9. So long as immediately before and after giving effect
thereto no Event of Default exists and is continuing, Investments
consisting of the contribution of Systems and other assets to Permitted
Joint Ventures; PROVIDED, HOWEVER, that in no event shall (a) Consolidated
Annualized Operating Cash Flow properly allocable to the Systems or other
assets contributed to (or otherwise invested in) a single Permitted Joint
Venture after the Initial Closing Date by the Restricted Companies,
computed for the period of three consecutive months most recently ended
prior to such contribution for which financial statements have been (or are
required to have been) furnished in accordance with Section 7.4.2,
constitute more than 15% of Consolidated Annualized Operating Cash Flow for
the same period; or (b) the sum of the aggregate percentages in the
foregoing clause (a) between the Initial Closing Date and the Final Term
Loan C Maturity Date exceed 30%.
7.9.10. Investments (other than Investments of the type described in
Sections 7.9.7, 7.9.8 and 7.9.9) at any one time outstanding not exceeding
$20,000,000, except with the prior written consent of the Required Lenders;
PROVIDED, HOWEVER, that in no event will the book value of Margin Stock
owned by the Restricted Companies exceed 20% of the Consolidated assets of
the Restricted Companies determined in accordance with GAAP.
7.9.11. Investments consisting of the acquisition of Systems or
assets in exchange transactions permitted by Section 7.11.5.
7.9.12. So long as immediately before and after giving effect
thereto no Default exists and is continuing, Falcon Community Cable, L.P.,
Falcon Cable Media, a California Limited Partnership and Falcon Cable
Systems Company II, L.P. may acquire the remaining assets of Falcon Classic
Cable Income Properties, L.P., a California limited partnership, pursuant
to an Asset Purchase Agreement substantially in the form
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previously furnished to the Agents for an aggregate purchase price not
exceeding $7,500,000.
7.9.13. The Restricted Companies may consummate the TCI
Transactions.
7.9.14. So long as immediately before and after giving effect
thereto no Default exists and is continuing, acquisitions or Investments
(other than acquisitions and Investments of the type described in Sections
7.9.7 and 7.9.9) by the Restricted Companies with the proceeds of cash
equity contributions (other than those made in connection with the TCI
Transactions) or subordinated debt investments that are subject to the
Pledge and Subordination Agreement specified by written notice to the
Documentation Agent at the time of receipt of such proceeds for the purpose
of effecting such acquisition or Investment.
7.9.15. Acquisition deposits and deposits with a qualified
intermediary in connection with transactions permitted by this Section 7.9.
7.10. DISTRIBUTIONS. The Restricted Companies shall not make any
Distribution except for the following:
7.10.1. The Restricted Companies may make Distributions to other
Restricted Companies.
7.10.2. Any Restricted Company may declare and pay dividends payable
in common stock (or similar common equity) of such Restricted Company.
7.10.3. So long as immediately before and after giving effect
thereto no Event of Default exists and is continuing, the Restricted
Companies may make:
(a) Distributions on or about each of September 15, 1998 and
March 15, 1999 in an aggregate amount on each such date not exceeding
$15,525,000, which Distributions are used exclusively for the obligor
thereunder to pay accrued interest on the Holding, L.P. Senior
Subordinated Notes.
(b) Distributions on or about April 15 and October 15 in each
year in an amount on each such date not exceeding mandatory scheduled
cash payments then due of accrued interest on the New Falcon I
Debentures, which Distributions are used exclusively for the obligor
thereunder to pay such interest.
(c) Distributions in an amount necessary for the obligor
thereunder to pay in full the outstanding principal of, and interest
and any premium on, the Holding, L.P. Senior Subordinated Notes,
whether pursuant to a voluntary redemption on
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or after September 15, 1998 or pursuant to an earlier tender offer
(including any consent payments or other expenses incurred in
connection therewith).
(d) Distributions to New Falcon I, Holding, L.P. or TCI and its
Affiliates in an amount necessary for them to make mandatory,
scheduled payments of principal and interest on Indebtedness
(including Indebtedness owed to the Restricted Companies) of New
Falcon I, Holding, L.P. or TCI and its Affiliates not elsewhere
described in this Section 7.10; PROVIDED, HOWEVER, that (i) at least
three Banking Days prior to such Distribution the Documentation Agent
shall receive a certificate signed by a Financial Officer
demonstrating pro forma compliance as of the end of the most recent
fiscal quarter of the Restricted Companies with Sections 7.5.2 and
7.5.3 after giving effect to such Distribution, and (ii) the proceeds
of such Indebtedness are or were used to (A) prepay the Loan pursuant
to Section 4.6 or (B) make equity or subordinated debt Investments in
any Restricted Company for its own business purposes (other than
Investments in Excluded Companies).
7.10.4. The Restricted Companies may make Distributions on account
of management services provided to the Restricted Companies (in addition to
any Distributions permitted by Section 7.10.3) in an aggregate amount not
exceeding, in any fiscal year of the Restricted Companies, (i) in the case
of such Distributions made in the first fiscal quarter of the Restricted
Companies, the excess of 4.25% of Consolidated Revenues earned in such
fiscal quarter over Distributions previously made during such fiscal
quarter under this Section 7.10.4, (ii) in the case of such Distributions
made in the second fiscal quarter of the Restricted Companies, the excess
of 4.25% of Consolidated Revenues earned in the first two fiscal quarters
of the Restricted Companies over Distributions previously made during such
fiscal year under this Section 7.10.4, (iii) in the case of such
Distributions made in the third fiscal quarter of the Restricted Companies,
the excess of 4.25% of Consolidated Revenues earned in the first three
fiscal quarters of the Restricted Companies over Distributions previously
made in such fiscal year under this Section 7.10.4 and (iv) in the case of
such Distributions made in the fourth fiscal quarter of the Restricted
Companies, the excess of 4.25% of Consolidated Revenues earned in such
fiscal year over Distributions previously made during such fiscal year
under this Section 7.10.4.
7.10.5. So long as immediately before and after giving effect
thereto no Event of Default exists and is continuing, the Restricted
Companies that are partnerships or limited liability companies may, in any
calendar year, pay Distributions to all the Holders of the equity of such
Restricted Companies, in proportion to their ownership interests,
sufficient to permit each such holder to pay income taxes that may be
required to be paid by it with respect to its equity in the Restricted
Companies for the prior calendar year, as estimated by such Restricted
Company in good faith.
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7.10.6. Investments permitted by Sections 7.9.8 and 7.9.10 and
Affiliate transactions permitted by Section 7.14 or described in the second
sentence of Section 7.14.
7.10.7. So long as immediately before and after giving effect
thereto no Event of Default exists, if New Falcon II does not assume the
TCI Debt from New Falcon I pursuant to section 4.1 of the Contribution
Agreement, New Falcon II may pay Distributions in an aggregate amount not
to exceed $440,000,000 for the purpose of discharging the TCI Debt and all
interest and premiums thereon pursuant to section 2.8(e) of the
Contribution Agreement; PROVIDED, HOWEVER that any increase in the amount
of the TCI Debt assumed pursuant to section 4.1 of the Contribution
Agreement shall require the approval of the Required Lenders.
7.10.8. So long as immediately before and after giving effect
thereto no Event of Default exists and is continuing, the Borrowers may
make Distributions for any purpose; PROVIDED, HOWEVER, that, after giving
effect to any such Distribution on a pro forma basis, the Reference
Leverage Ratio shall not exceed 500%.
7.10.9. So long as immediately before and after giving effect
thereto no Event of Default exists and is continuing, the Borrowers may
make Distributions for any purpose; PROVIDED, HOWEVER, that if, after
giving effect to any such Distribution on a pro forma basis, the Reference
Leverage Ratio exceeds 500%, the cumulative, aggregate amount of all
Distributions under this Section 7.10.9 shall not exceed the sum of (a)
$25,000,000, PLUS (b) the net proceeds of cash equity contributions or
subordinated debt investments that are subject to the Pledge and
Subordination Agreement (and, with the written consent of at least two
Specified Agents, which consent shall not be unreasonably withheld, the net
equity value of non-cash equity contributions or proceeds of subordinated
debt investments that are subject to the Pledge and Subordination
Agreement) made to the Borrowers other than in connection with the TCI
Transactions (to the extent not specified for acquisitions pursuant to
Section 7.9.14), plus accrued interest thereon at a rate not exceeding the
Base Rate PLUS (c) 25% of Consolidated Excess Cash Flow for the most
recently completed fiscal year for which financial statements have been
furnished to the Lenders in accordance with Section 7.4.1.
7.10.10. So long as immediately before and after giving effect
thereto no Event of Default exists and is continuing, the Restricted
Companies may make Distributions constituting the purchase, redemption,
acquisition, cancellation or other retirement for value of equity interests
in any Holding Company, options on any such interests or related equity
appreciation rights or similar securities held by officers or employees or
former officers or employees of such Holding Company (or their estates or
beneficiaries under their estates), upon death, disability, retirement or
termination of employment; PROVIDED, HOWEVER, that the aggregate
consideration paid for such purchase, redemption,
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acquisition, cancellation or other retirement does not in any one fiscal
year of the Restricted Companies exceed $7,500,000 in the aggregate.
7.10.11. So long as immediately before and after giving effect
thereto no Event of Default exists and is continuing, the Restricted
Companies may make Distributions in respect of loans and other advances to
employees, officers and directors permitted by Section 7.9.3.
7.10.12. The Restricted Companies may make required scheduled
payments of principal and accrued interest with respect to the MONY
Subordinated Debt in accordance with the terms thereof as in effect on
the Initial Closing Date and as subsequently amended in accordance with
Section 7.2.3, including the subordination terms, and, so long as
immediately before and after giving effect thereto no Default exists and
is continuing, the Restricted Companies may make voluntary prepayments
of principal (together with accrued interest thereon and any premium
with respect thereto) on the MONY Subordinated Debt, and special
principal prepayments (together with accrued interest thereon) on such
debt on account of risk-based capital requirements.
7.10.13. The Restricted Companies may make payments (the "FALCON
CABLE SYSTEMS SETTLEMENT PAYMENTS") pursuant to any settlement, judgment or
other resolution (the "FALCON CABLE SYSTEMS SETTLEMENT") relating to the
Frank O'Shea IRA, et al, Plaintiffs, versus Falcon Cable Systems Company,
et al, Defendants, litigation in amounts and on terms reasonably
satisfactory to at least two Specified Agents.
7.10.14. The Restricted Companies may make any Distributions
specified in the memorandum attached as Exhibit 1-A in connection with the
TCI Transactions and may make any Distributions to Holding, L.P. and New
Falcon I sufficient to permit Holding, L.P. and New Falcon I to make any
Distributions specified in such memorandum.
7.10.15. Distributions in respect of Affiliate transactions permitted
by Section 7.14 or described in the second sentence of Section 7.14.
7.11. MERGER, CONSOLIDATION AND DISPOSITIONS OF ASSETS. The Restricted
Companies shall not merge or enter into a consolidation or sell, lease, sell and
lease back, sublease or otherwise dispose of any of its assets, except the
following:
7.11.1. Any Restricted Company may sell or otherwise dispose of (a)
inventory in the ordinary course of business, (b) tangible assets to be
replaced in the ordinary course of business by other tangible assets of
equal or greater value, (c) tangible assets that are no longer used or
useful in the business of the Restricted Companies, the fair market value
(or book value if greater) of which shall not be material in any fiscal
year and (d) cash and Cash Equivalents.
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7.11.2. Any Restricted Company may merge or be liquidated into, or
transfer or make dispositions of assets to, any other Restricted Company.
7.11.3. Subject to Section 4.4, so long as no Event of Default
exists and is continuing on the date a binding contract with respect to
such sale is entered into and the Restricted Companies have furnished prior
written notice of such sale to the Documentation Agent, the Restricted
Companies may sell Systems or other assets for fair market value in
transactions not constituting Permitted Asset Swaps; PROVIDED, HOWEVER,
that the sum of the aggregate percentages of Consolidated Annualized
Operating Cash Flow for the period of three consecutive months most
recently ended prior to each such sale for which financial statements have
been (or are required to have been) furnished in accordance with
Section 7.4.2 properly allocable to all such Systems or other assets so
sold between the Initial Closing Date and the Final Term Loan C Maturity
Date shall not exceed 30%.
7.11.4. So long as immediately before and after giving effect
thereto no Event of Default exists and is continuing, the Restricted
Subsidiaries may contribute Systems and other assets to Permitted Joint
Ventures as Investments permitted by Section 7.9.9.
7.11.5. So long as no Event of Default exists and is continuing on
the date a binding contract with respect to any Permitted Asset Swap is
entered into, the Restricted Companies may engage in such Permitted Asset
Swap.
7.11.6. The Restricted Companies may consummate mergers or
consolidations necessary to effect acquisitions and Investments permitted
by Section 7.9.
7.12. ISSUANCE OF STOCK BY SUBSIDIARIES; SUBSIDIARY DISTRIBUTIONS.
7.12.1. ISSUANCE OF STOCK BY SUBSIDIARIES. No Subsidiary (other
than an Excluded Company) of a Restricted Company shall issue or sell any
shares of its capital stock or other evidence of beneficial ownership to
any Person other than a Restricted Company unless (a) in the case of a
stock dividend or other distribution of equity interests, such dividend or
distribution is pro rata among existing equity owners or (b) in the case of
purchased equity, the sale of such equity is on an arm's length basis.
7.12.2. NO RESTRICTIONS ON SUBSIDIARY DISTRIBUTIONS. Except for
restrictions contained in the Credit Documents, the Restricted Companies
shall not enter into or be bound by any agreement (including covenants
requiring the maintenance of specified amounts of net worth or working
capital) restricting the right of any Subsidiary to make Distributions or
extensions of credit to a Borrower (directly or indirectly through another
Subsidiary).
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7.13. ERISA, ETC. Each of the Restricted Companies will comply, and
will cause all ERISA Group Persons to comply, in all material respects, with the
provisions of ERISA and the Code applicable to each Plan. Each of the
Restricted Companies will meet, and will cause all ERISA Group Persons to meet,
all minimum funding requirements applicable to them with respect to any Plan
pursuant to section 302 of ERISA or section 412 of the Code, without giving
effect to any waivers of such requirements or extensions of the related
amortization periods which may be granted. At no time shall the Accumulated
Benefit Obligations under any Plan that is not a Multiemployer Plan exceed the
fair market value of the assets of such Plan allocable to such benefits by more
than $10,000,000. The Restricted Companies will not withdraw, and will cause
all other ERISA Group Persons not to withdraw, in whole or in part, from any
Multiemployer Plan so as to give rise to withdrawal liability exceeding
$10,000,000 in the aggregate. At no time shall the actuarial present value of
unfunded liabilities for post-employment health care benefits, whether or not
provided under a Plan, calculated in a manner consistent with Statement No. 106
of the Financial Accounting Standards Board, exceed $10,000,000.
7.14. TRANSACTIONS WITH AFFILIATES. Other than the Material
Agreements, none of the Restricted Companies shall effect any transaction with
any of their respective Affiliates on a basis less favorable to the Restricted
Companies than would be the case if such transaction had been effected with a
non-Affiliate. This Section 7.14 shall not apply to: (a) customary directors'
fees, indemnification and similar arrangements and payments in respect thereof,
consulting fees, employee salaries, bonuses or employment agreements,
compensation or employee benefit arrangements and incentive arrangements with
any officer, director or employee of a Restricted Company entered into in the
ordinary course of business (including customary benefits thereunder), (b) the
Contribution Agreement, the partnership agreements of New Falcon I and Holding,
L.P., including any amendments or extensions thereof that do not otherwise
violate any other covenant set forth in this Agreement, and any transactions
undertaken or to be undertaken pursuant to any of such agreements or pursuant to
any other contractual obligations in the ordinary course of business in
existence on the Initial Closing Date (as in effect on the Initial Closing Date)
or as set forth on Exhibit 7.14, (c) the issuance and sale by any Restricted
Company to its partners, members or stockholders of capital stock or other
equity interests (other than Redeemable Capital Stock), (d) loans and advances
to officers, directors and employees of the Restricted Companies in the ordinary
course of business, (e) customary commercial banking, investment banking,
underwriting, placement agent or financial advisory fees paid in connection with
services rendered to the Restricted Companies in the ordinary course of
business, (f) the incurrence of intercompany indebtedness that does not
otherwise violate any other provision of this Agreement, (g) the pledge of
capital stock or other equity interests of Excluded Companies to support the
Indebtedness thereof and (h) programming agreements, marketing and promotional
agreements and other billing services, equipment agreements and agreements for
other goods and services related to the business of the Restricted Companies
entered into between TCI or its Affiliates and the Restricted Companies.
Holding, L.P. shall deliver to the Documentation Agent as soon as reasonably
practicable copies of all documents delivered pursuant to clause (ii) of the
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first sentence of section 4.13 of the New Falcon I Debentures Indenture in
connection with Affiliate transactions.
7.15. INTEREST RATE PROTECTION. Within 30 days after the Initial
Closing Date, the Borrowers will obtain and thereafter keep in effect one or
more Interest Rate Protection Agreements conforming to International Securities
Dealers Association standards with any Lender or Affiliate of a Lender or other
financial institution reasonably satisfactory to the Administrative Agent
protecting against increases in interest rates, each in form and substance
reasonably satisfactory to the Administrative Agent, covering a notional amount
of at least 50% of the Financing Debt of New Falcon I, Holding, L.P. and the
Restricted Companies for a two year period at rates reasonably satisfactory to
the Administrative Agent; PROVIDED, HOWEVER, that Financing Debt with a fixed
interest rate for a period of at least two years shall be deemed to be covered
by an Interest Rate Protection Agreement for purposes of this Section 7.15.
7.16. COMPLIANCE WITH ENVIRONMENTAL LAWS. Each of the Restricted
Companies will:
7.16.1. Use and operate all of its facilities and properties in
compliance with all Environmental Laws, keep all necessary permits,
approvals, certificates, licenses and other authorizations relating to
environmental matters in effect and remain in compliance therewith, and
handle all Hazardous Materials in compliance with all applicable
Environmental Laws, except where the failure to comply with, or keep in
effect, as applicable, such laws, permits, approvals, certificates,
licenses and authorizations would not reasonably be expected to result in
a Material Adverse Change.
7.16.2. Immediately notify the Documentation Agent, and provide
copies upon receipt, of all written claims or complaints from governmental
authorities relating to the condition of its facilities and properties or
compliance with Environmental Laws, and in the case of potential liability
in excess of $10,000,000 shall promptly cure and have dismissed with
prejudice to the satisfaction of the Documentation Agent any actions and
proceedings relating to compliance with Environmental Laws, except where
contested in good faith by appropriate proceedings and sufficient reserves
with respect thereto as required by GAAP have been established.
7.16.3. Provide such information and certifications which the
Documentation Agent may reasonably request from time to time to evidence
compliance with this Section 7.16.
7.17. NO OUTSIDE MANAGEMENT FEES. The Restricted Companies shall not
pay in cash any management fees or other amounts in respect of management
services to any Person other than another Restricted Company, except for
Distributions to New Falcon I (or Holding, L.P.) permitted by Section 7.10.4 and
payments permitted as an Affiliate transaction under Section 7.14 or described
in the second sentence of Section 7.14; PROVIDED, HOWEVER, that this Section
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7.17 shall not prohibit the payment of fees for services rendered to the
Restricted Companies on an arm's length basis in the ordinary course of
business.
7.18. DERIVATIVE CONTRACTS. None of the Restricted Companies nor any
of their Subsidiaries shall enter into any Interest Rate Protection Agreement,
foreign currency exchange contract or other financial or commodity derivative
contracts except to provide hedge protection for an underlying economic
transaction in the ordinary course of business.
7.19. NEGATIVE PLEDGE CLAUSES. None of the Restricted Companies nor
any of their Subsidiaries shall enter into any agreement, instrument, deed or
lease which prohibits or limits the ability of the Restricted Companies or any
of their Subsidiaries to create, incur, assume or suffer to exist any Lien upon
any of their respective properties, assets or revenues, whether now owned or
hereafter acquired, or which requires the grant of any collateral for such
obligation if collateral is granted for another obligation, except the
following:
7.19.1. This Agreement and the other Credit Documents.
7.19.2. Covenants in documents creating Liens permitted by Section
7.8 prohibiting further Liens on the assets encumbered thereby.
7.19.3. Covenants in the note purchase agreement relating to the
MONY Subordinated Debt prohibiting certain of the Restricted Companies from
granting Liens, but in any event permitting the Liens provided by the
Credit Documents.
7.19.4. Restrictions on transfer and pledges imposed in the ordinary
course of business pursuant to Franchises, pole agreements, leases and
other operating agreements.
7.20. FUTURE SECURITY INTEREST. If the TCI Closing has not occurred by
December 31, 1998 (or such later date prior to June 30, 1999 as may be mutually
agreed by TCI and Holding, L.P.), the Restricted Companies shall, within 20
Banking Days after December 31, 1998 (or such later mutually agreed date), duly
authorize, execute and deliver to the Documentation Agent a Security Agreement
in customary form reasonably satisfactory to the Documentation Agent and the
Borrowers sufficient to grant as Credit Security to the Lenders a senior
security interest in all assets (subject to customary exceptions) of the
Restricted Companies. By the time of delivery of such Security Agreement, each
Restricted Company shall have duly authorized, executed, delivered, filed,
registered, and recorded such security agreements, notices, Uniform Commercial
Code financing statements and other instruments as the Documentation Agent may
have requested in order to perfect the security interests and encumbrances
purported or required pursuant to the Security Agreement or the Credit Documents
to be created in the Credit Security.
8. REPRESENTATIONS AND WARRANTIES. In order to induce the Lenders to extend
credit to the Borrowers hereunder, each of the Restricted Companies jointly and
severally represents and warrants to each Lender that:
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8.1. ORGANIZATION AND BUSINESS.
8.1.1. THE BORROWERS. Each Borrower is a duly organized and
validly existing limited partnership (or, in the case of New Falcon II, a
limited liability company, or, in the case of Falcon First, a corporation),
in good standing under the laws of the jurisdiction in which it is
organized, with all partnership (or limited liability company, or
corporate) power and authority necessary to (a) enter into and perform this
Agreement and each other Credit Document to which it is party, (b) borrow
and guarantee the Credit Obligations, (c) grant the Lenders security
interests in any Credit Security owned by it to secure the Credit
Obligations and (d) own its properties and carry on the business now
conducted or proposed to be conducted by it. Certified copies of the
Charter and By-laws of each Borrower have been previously delivered to the
Documentation Agent and are correct and complete. Exhibit 8.1, as from
time to time hereafter supplemented in accordance with Sections 7.4.1 and
7.4.2, sets forth (i) the jurisdiction of organization of each Borrower,
(ii) the address of each Borrower's principal executive office and chief
place of business and (iii) the number of authorized and issued shares and
ownership of each Borrower.
8.1.2. OTHER GUARANTORS. Each Restricted Company (other than the
Borrowers) is duly organized, validly existing and in good standing under
the laws of the jurisdiction in which it is organized, with all partnership
or corporate power and authority necessary to (a) enter into and perform
this Agreement and each other Credit Document to which it is party, (b)
guarantee the Credit Obligations, (c) grant the Lenders a security interest
in Credit Security owned by such Restricted Company to secure the Credit
Obligations and (d) own its properties and carry on the business now
conducted or proposed to be conducted by it. Certified copies of the
Charter and By-laws of each such Restricted Company have been previously
delivered to the Documentation Agent and are correct and complete. Exhibit
8.1, as from time to time hereafter supplemented in accordance with
Sections 7.4.1 and 7.4.2, sets forth (i) the name and jurisdiction of
organization of each Restricted Company, (ii) the address of the chief
executive office and principal place of business of each Restricted
Company, and (iii) the number of authorized and issued shares and ownership
of each Restricted Company.
8.1.3. QUALIFICATION. Except as set forth on Exhibit 8.1 as from
time to time supplemented in accordance with Sections 7.4.1 and 7.4.2, each
Restricted Company is duly and legally qualified to do business as a
foreign limited partnership or other entity and is in good standing in each
state or jurisdiction in which such qualification is required and is duly
authorized, qualified and licensed under all laws, regulations, ordinances
or orders of public authorities, or otherwise, to carry on its business in
the places and in the manner in which it is conducted, except for failures
to be so qualified, authorized or licensed which would not in the aggregate
result, or pose a material risk of resulting, in any Material Adverse
Change.
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8.1.4. CAPITALIZATION. Except as set forth in Exhibit 8.1, as from
time to time supplemented in accordance with Sections 7.4.1 and 7.4.2, no
options, warrants, conversion rights, preemptive rights or other statutory
or contractual rights to purchase shares of capital stock or other
securities of any Restricted Company now exist, nor has any Restricted
Company authorized any such right, nor is any Restricted Company obligated
in any other manner to issue shares of its capital stock or other
securities.
8.2. FINANCIAL STATEMENTS AND OTHER INFORMATION; MATERIAL AGREEMENTS.
8.2.1. FINANCIAL STATEMENTS AND OTHER INFORMATION. The Restricted
Companies have previously furnished to the Lenders copies of the following:
(a) The unaudited Consolidated balance sheet of the Pre-TCI
Borrowers and their Subsidiaries, and the audited Consolidated balance
sheet of Holding, L.P. as at December 31 in each of 1996 and 1997 and
the unaudited Consolidated statements of income and changes in
partners' (or shareholders') equity and cash flows of the Pre-TCI
Borrowers and their Subsidiaries, and the audited Consolidated
statements of income and changes in partners' equity and cash flows of
Holding, L.P., for the fiscal years then ended.
(b) The ten-year financial and operational projections for the
Restricted Companies dated April 1998.
(c) Calculations demonstrating pro forma compliance with the
Computation Covenants as of the Initial Closing Date.
(d) The Offering Memorandum dated March 31, 1998 with respect to
the New Falcon I Debentures.
The audited Consolidated financial statements (including the notes
thereto) referred to in clause (a) above were prepared in accordance with
GAAP and fairly present the financial position of the Restricted Companies
covered thereby on a Consolidated basis at the respective dates thereof and
the results of their operations for the periods covered thereby. No
Restricted Company has any known contingent liability material to the
Restricted Companies on a Consolidated basis that is required to be
reflected by GAAP which is not reflected in the most recent balance sheet
referred to in clause (a) above (or delivered pursuant to Sections 7.4.1 or
7.4.2) or the notes thereto.
In the judgment of the Restricted Companies, the financial and
operational projections referred to in clause (b) above constitute a
reasonable basis as of the Initial Closing Date for the assessment of the
future performance of the Restricted Companies during the periods indicated
therein, it being understood that any projected financial
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information represents an estimate, based on various assumptions, of
future results of operations which may or may not in fact occur.
8.2.2. MATERIAL AGREEMENTS. The Restricted Companies have
previously furnished to the Documentation Agent correct and complete
copies, including all exhibits, schedules and amendments thereto, of the
agreements set forth in Exhibit 8.2.2, each as in effect on the date hereof
(or, if such agreement is not in effect on the date hereof, in the form of
the most recent draft as indicated in such Exhibit):
8.3. CHANGES IN CONDITION. No Material Adverse Change has occurred, and
since December 31, 1997, no Restricted Company has entered into any material
transaction outside the ordinary course of business except for the transactions
contemplated by this Agreement or the other Material Agreements or as
specifically described to the Lenders in writing.
8.4. AGREEMENTS RELATING TO FINANCING DEBT, INVESTMENTS, ETC. Exhibit 8.4,
as from time to time hereafter supplemented in accordance with Sections 7.4.1
and 7.4.2, sets forth (a) the amounts (as of the dates indicated in Exhibit 8.4,
as so supplemented) of all Financing Debt of the Restricted Companies and all
agreements which relate to such Financing Debt, (b) all Liens and Guarantees
with respect to such Financing Debt and (c) all agreements which directly or
indirectly require any Restricted Company to make any Investment. The
Restricted Companies have furnished the Documentation Agent with correct and
complete copies of any agreements described in clauses (a), (b) and (c) above
requested by the Required Lenders.
8.5. TITLE TO ASSETS. The Restricted Companies have good and valid title
to all material assets necessary for the operations of their business as now
conducted by them and reflected in the most recent balance sheet referred to in
Section 8.2.1(a) (or the balance sheet most recently furnished to the Lenders
pursuant to Sections 7.4.1 or 7.4.2), and to all material assets necessary for
the operations of such business acquired subsequent to the date of such balance
sheet, subject to no Liens except for those permitted by Section 7.8 and except
for assets disposed of as permitted by Section 7.11.
8.6. LICENSES, ETC. The Restricted Companies have all patents, patent
applications, patent licenses, patent rights, trademarks, trademark rights,
trade names, trade name rights, copyrights, licenses, FCC Licenses, Franchises,
permits, authorizations and other rights including agreements with public
utilities and microwave transmission companies, pole use, access or rental
agreements and utility easements the lack, loss or termination of which would
result, or is reasonably likely to result, in a Material Adverse Change. All of
the foregoing are in full force and effect except as would not result in, or be
reasonably likely to result in, a Material Adverse Change, and each of the
Restricted Companies is in substantial compliance with the foregoing without any
known conflict with the valid rights of others which has resulted, or poses a
material risk of resulting, in any Material Adverse Change. No event has
occurred which permits, or after notice or lapse of time or both would permit,
the revocation or termination of any such license, Franchise or other right or
affect the rights of any of the Restricted Companies thereunder so as
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to result in any Material Adverse Change. Except as would not result, or
create a material risk of resulting, in a Material Adverse Change:
8.6.1. FRANCHISES; FCC LICENSES. Each Franchise and FCC License
held by any Restricted Company is validly issued, and no Restricted Company
is in violation of the terms of any of its Franchises or FCC Licenses.
8.6.2. FCC AND OTHER MATTERS. Each Restricted Company has filed
all cable television registration statements and other filings which are
required to be filed by it under the Communications Act. Each Restricted
Company is in all material respects in compliance with the Communications
Act, including the rules and regulations of the FCC relating to the
carriage of television signals. The execution, delivery and performance by
the Restricted Companies of this Agreement does not require the approval of
the FCC and will not result in any violation of the Communications Act.
Each Restricted Company has recorded or deposited with and paid to the
federal Copyright Office and the Register of Copyright all notices,
statements of account, royalty fees and other documents and instruments
required under Title 17 of the United States Code and all rules and
regulations thereunder (collectively and as from time to time in effect,
the "COPYRIGHT ACT"), including such of the foregoing required by section
111(d) of the Copyright Act by virtue of such Restricted Company having
made any secondary transmission subject to compulsory licensing pursuant to
section 111(c) of the Copyright Act.
8.7. LITIGATION. No litigation, at law or in equity, or any proceeding
before any court, board or other governmental or administrative agency or any
arbitrator, including the litigation described in Exhibit 8.7, is pending or, to
the knowledge of the Restricted Companies, threatened which, in either case,
involves any material risk of any final judgment, order or liability which,
after giving effect to any applicable insurance, has resulted, or poses a
material risk of resulting, in any Material Adverse Change or which seeks to
enjoin (and poses a material risk of enjoining) the consummation, or which
(except for litigation which does not pose a material risk of impairing the
validity or effectiveness of the transactions contemplated by this Agreement or
any other Credit Document) questions the validity, of any of the transactions
contemplated by this Agreement or any other Credit Document. No judgment,
decree or order of any court, board or other governmental or administrative
agency or any arbitrator has been issued against or binds any Restricted Company
which has resulted, or poses a material risk of resulting, in any Material
Adverse Change.
8.8. TAX RETURNS. Except as would not result, or create a material risk of
resulting, in a Material Adverse Change, each of the Restricted Companies has
filed all material tax and information returns which are required to be filed by
it and has paid, or made adequate provision for the payment of, all taxes which
have or may become due pursuant to such returns or to any assessment received by
it (except for taxes being disputed in good faith and for which sufficient
reserves have been established) and no Restricted Company knows of any material
additional assessments or any basis therefor and the Restricted Companies
reasonably believe that the
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charges, accruals and reserves on the books of the Restricted Companies in
respect of taxes or other governmental charges are adequate.
8.9. AUTHORIZATION AND ENFORCEABILITY. Each Borrower and each other
Guarantor has taken all partnership or corporate action required to execute,
deliver and perform this Agreement and each other Credit Document to which it is
party. Each of this Agreement and each other Credit Document constitutes the
legal, valid and binding obligation of the Borrower or the Guarantor party
thereto and is enforceable against such Person in accordance with its terms.
8.10. NO LEGAL OBSTACLE TO AGREEMENTS. Neither the execution and
delivery of this Agreement or any other Credit Document, nor the making of any
borrowings hereunder, nor the guaranteeing of the Credit Obligations, nor the
securing of the Credit Obligations with any Credit Security, has constituted or
resulted in or will constitute or result in:
(a) any breach or termination of the provisions of any agreement,
instrument, deed or lease to which any Holding Company is a party or
by which it is bound, or of the Charter or By-laws of any Holding
Company;
(b) the violation of any law, statute, judgment, decree or
governmental order, rule or regulation applicable to any Holding
Company;
(c) the creation under any agreement, instrument, deed or lease
of any Lien (other than Liens on Credit Security which secure the
Credit Obligations) upon any of the assets of any Holding Company; or
(d) except as contemplated by section 2.6 of the Contribution
Agreement, any redemption, retirement or other repurchase obligation
of any Holding 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 that has not
been obtained or made is required to be obtained or made by any Holding Company
in connection with the execution, delivery and performance of this Agreement,
the Notes or any other Credit Document, the making of any borrowing hereunder,
the guaranteeing of the Credit Obligations or the securing of the Credit
Obligations with the Credit Security.
8.11. DEFAULTS. No Restricted Company is in default under any
provision of its Charter or By-laws or of this Agreement or any other Credit
Document. No Restricted Company is in default under any provision of any
agreement, instrument, deed or lease to which it is party or by which it or its
property is bound, or has violated any law, judgment, decree or governmental
order, rule or regulation, in each case so as to result, or creates a material
risk of resulting, in any Material Adverse Change.
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8.12. CERTAIN BUSINESS REPRESENTATIONS.
8.12.1. LABOR RELATIONS. No dispute or controversy between any
Restricted Company and any of its employees has resulted, or is reasonably
likely to result, in any Material Adverse Change, and no Restricted Company
anticipates that its relationships with its unions or employees will
result, or are reasonably likely to result, in any Material Adverse Change.
Each Restricted Company is in compliance in all material respects with all
federal and state laws with respect to (a) non-discrimination in employment
with which the failure to comply, in the aggregate, has resulted in, or
poses a material risk of resulting in, a Material Adverse Change and (b)
the payment of wages, the failure of which to pay, in the aggregate, has
resulted in, or creates a material risk of resulting in, a Material Adverse
Change.
8.12.2. ANTITRUST. Each of the Restricted Companies is in
compliance in all material respects with all federal and state antitrust
laws relating to its business and the geographic concentration of its
business.
8.12.3. CONSUMER PROTECTION. No Restricted Company is in violation
of any rule, regulation, order, or interpretation of any rule, regulation
or order of the Federal Trade Commission (including truth-in-lending), with
which the failure to comply, in the aggregate, has resulted in, or poses a
material risk of resulting in, a Material Adverse Change.
8.12.4. YEAR 2000 ISSUES. Based on a review of the operations of
the Restricted Companies as they relate to the processing, storage and
retrieval of data, the Restricted Companies do not believe that a Material
Adverse Change is reasonably likely to occur as a result of computer
software and hardware that will not function with respect to periods
commencing January 1, 2000 at least as effectively as with respect to
periods ending on or prior to December 31, 1999.
8.13. ENVIRONMENTAL REGULATIONS.
8.13.1. ENVIRONMENTAL COMPLIANCE. Each of the Restricted Companies
is in compliance in all material respects with the Clean Air Act, the
Federal Water Pollution Control Act, the Marine Protection Research and
Sanctuaries Act, the Resource Conservation and Recovery Act, CERCLA and any
similar state or local statute or regulation in effect in any jurisdiction
in which any properties of any Restricted Company are located or where any
of them conducts its business, and with all applicable published rules and
regulations (and applicable standards and requirements) of the federal
Environmental Protection Agency and of any similar agencies in states or
foreign countries in which any Restricted Company conducts its business,
other than any noncompliance which in the aggregate has not resulted in,
and could not reasonably be expected to result in, a Material Adverse
Change.
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8.13.2. ENVIRONMENTAL LITIGATION. Except as would not result in, or
could not reasonably be expected to result in, a Material Adverse Change,
no suit, claim, action or proceeding of which any Restricted Company has
been given notice or otherwise to its knowledge is now pending before any
court, governmental agency or board or other forum, or to any Restricted
Company's knowledge, threatened by any Person (nor to any Restricted
Company's knowledge, does any factual basis exist therefor) for, and the
Restricted Companies have received no written correspondence from any
federal, state or local governmental authority with respect to any of the
following that has resulted in, or creates a material risk of resulting in,
a Material Adverse Change:
(a) noncompliance in any material respect by any Restricted
Company with any such environmental law, rule or regulation;
(b) material liabilities for personal injury, wrongful death or
other tortious conduct relating to materials, commodities or products
used, generated, sold, transferred or manufactured by any Restricted
Company (including products made of, containing or incorporating
asbestos, lead or other hazardous materials, commodities or toxic
substances); or
(c) the release into the environment by any Restricted Company of
any material amount of Hazardous Material generated by any Restricted
Company whether or not occurring at or on a site owned, leased or
operated by any Restricted Company.
8.13.3. HAZARDOUS MATERIAL. The Restricted Companies have provided
to the Lenders a written list as of the Initial Closing Date of all waste
disposal or dump sites at which a material amount of Hazardous Material
generated by any Restricted Company has been disposed of directly by the
Restricted Companies and all independent contractors to whom the Restricted
Companies have delivered Hazardous Material, or to any Restricted Company's
knowledge, finally came to be located, and indicates all such sites which
are or have been included (including as a potential or suspect site) in any
published federal, state or local "superfund" or other list of hazardous or
toxic waste sites. Any waste disposal or dump sites at which Hazardous
Material generated by any Restricted Company has been disposed of directly
by the Restricted Companies and all independent contractors to whom the
Restricted Companies have delivered Hazardous Material, or to any
Restricted Company's knowledge, finally came to be located, has not
resulted in, and could not reasonably be expected to result in, a Material
Adverse Change.
8.13.4. ENVIRONMENTAL CONDITION OF PROPERTIES. Except as would not
result in, or could not reasonably be expected to result in, a Material
Adverse Change, none of the properties owned or, to its knowledge, leased
by any Restricted Company has been used as a treatment, storage or disposal
site. No Hazardous Material is present in any real
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property currently or formerly owned or operated by any Restricted
Company except that which would not reasonably be expected to result in a
Material Adverse Change.
8.14. PENSION PLANS. Each Plan is in material compliance with the
applicable provisions of ERISA and the Code. No Plan is a Multiemployer Plan or
a "defined benefit plan" (as defined in ERISA). Each ERISA Group Person has met
all of the funding standards applicable to all Plans, and no condition exists
which would permit the institution of proceedings to terminate any Plan under
section 4042 of ERISA.
8.15. CONTRIBUTION AGREEMENT, ETC. The Contribution Agreement is a
valid and binding contract as to each of the Restricted Companies that are
parties thereto and, to the best of each Restricted Company's knowledge, as to
the other parties thereto. As of the date of this Agreement, no Restricted
Company that is a party to the Contribution Agreement is in default in any
material respect of its obligations under the Contribution Agreement and, to the
best of each Restricted Company's knowledge, as of the date of this Agreement
the other parties thereto are not in default in any material respect of any of
their obligations thereunder. The representations and warranties of the Holding
Companies that are parties to the Contribution Agreement set forth therein are
true and correct in all material respects as of the date hereof with the same
force and effect as if made on and as of the date hereof. To the best of each
Restricted Company's knowledge, as of the date hereof, all of the
representations and warranties of the other parties thereto set forth in the
Contribution Agreement are true and correct in all material respects with the
same force and effect as though made on and as of the date hereof.
8.16. GOVERNMENT REGULATION; MARGIN STOCK.
8.16.1. GOVERNMENT REGULATION. No Restricted Company, nor any
Person controlling any Restricted Company or under common control with any
Restricted Company is subject to regulation under the Public Utility
Holding Company Act of 1935, the Federal Power Act, the Investment Company
Act, the Interstate Commerce Act or any similar federal or state statutes.
Each Lender is aware that various aspects of the business conducted by
Restricted Companies, including the nature of the services required to be
furnished and the rates which may be charged therefor, are subject to
regulation by federal, state and local governmental authorities.
8.16.2. MARGIN STOCK. The Restricted Companies do not own Margin
Stock having a book value exceeding 20% of the Consolidated assets of the
Restricted Companies determined in accordance with GAAP.
8.17. DISCLOSURE. Neither this Agreement nor any other Credit Document
to be furnished to the Lenders by or on behalf of any Restricted Company in
connection with the transactions contemplated hereby or by such Credit Document
contains any untrue statement of material fact or omits to state a material fact
necessary in order to make the statements contained herein or therein not
misleading in light of the circumstances under which they were made.
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9. DEFAULTS.
9.1. EVENTS OF DEFAULT. The following events are referred to as "EVENTS OF
DEFAULT":
9.1.1. NON-PAYMENT. Any Borrower shall fail to make any payment in
respect of: (a) interest or any fee on or in respect of any of the Credit
Obligations owed by it as the same shall become due and payable, and such
failure shall continue for a period of five days, or (b) principal of any
of the Credit Obligations owed by it as the same shall become due, whether
at maturity or by acceleration or otherwise.
9.1.2. BREACH OF DESIGNATED COVENANTS. Any Restricted Company
shall fail to perform or observe any of the provisions of Sections 7.5
through 7.12, 7.14, 7.15, 7.17, 7.18 or 7.19.
9.1.3. BREACH OF OTHER COVENANTS. Any Restricted Company or any of
its Affiliates party to any Credit Document shall fail to perform or
observe any other covenant, agreement or provision to be performed or
observed by it under this Agreement or any other Credit Document, and such
failure shall not be rectified or cured to the reasonable satisfaction of
the Required Lenders within 30 days after notice thereof by the
Documentation Agent or Administrative Agent to the Company.
9.1.4. MISREPRESENTATION. Any representation or warranty of or
with respect to any Restricted Company or any of its Affiliates party to
any Credit Document made to the Lenders in, pursuant to or in connection
with this Agreement or any other Credit Document or in any financial
statement, report, notice, mortgage, assignment or certificate delivered to
the Agent or any of the Lenders by any Restricted Company or any other
Obligor in connection herewith or therewith, shall be materially false or
misleading on the date as of which it was made.
9.1.5. CROSS-DEFAULT, ETC.
(a) Holding, L.P., New Falcon I or any Restricted Company
shall fail to make any payment when due (after giving effect to any
applicable grace periods) in respect of any Material Financing Debt
(including, in any event, the Holding, L.P. Senior Subordinated
Notes, the New Falcon I Debentures, the MONY Subordinated Debt and
the TCI Debt);
(b) Holding, L.P., New Falcon I or any Restricted Company
shall fail to perform or observe the terms of any agreement
relating to any Material Financing Debt, and such failure shall
continue, without having been duly cured, waived or consented to,
beyond the period of grace, if any, specified in such agreement,
and such failure shall permit the acceleration of such Material
Financing Debt;
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(c) all or any part of any Material Financing Debt of
Holding, L.P., New Falcon I or any Restricted Company shall be
accelerated or become due or payable prior to its stated maturity
for any reason whatsoever (other than voluntary prepayments or any
mandatory prepayment not resulting from a Default thereof);
(d) any Lien on any property of Holding, L.P., New Falcon
I or any Restricted Company securing any Material Financing Debt
shall be enforced by foreclosure or similar action; or
(e) any holder of any Material Financing Debt shall
exercise any right of rescission with respect to the issuance
thereof, or put or repurchase rights against any Obligor with
respect to such Material Financing Debt (other than any such rights
that may be satisfied with "payment in kind" notes or other similar
securities).
9.1.6. CHANGE OF CONTROL, ETC. Except as permitted by Section
7.11, any of the following events shall occur:
(a) any "person" or "group" (as such terms are used in
sections 13(d) and 14(d) of the Exchange Act), other than the
Falcon Permitted Holders, is or becomes the "beneficial owner" (as
defined in Rules 13d-3 and 13d-5 under the Exchange Act, except
that a person shall be deemed to have "beneficial ownership" of all
securities that such person has the right to acquire, whether such
right is exercisable immediately or only after the passage of
time), directly or indirectly, of 35% or more of the total voting
power of the outstanding voting capital stock or other equity
interests of Holding, L.P. or Holding, Inc., as the case may be,
and such ownership represents a greater percentage of the total
voting power of the voting capital stock or other equity interests
of Holding, L.P. or Holding, Inc., as the case may be, on a fully
diluted basis, than is held by the Falcon Permitted Holders in the
aggregate on such date and, in the case of Holding, L.P. (if
Holding, L.P. is then a partnership), any Person other than a
Falcon Permitted Holder is a managing general partner of Holding,
L.P.;
(b) Holding, L.P. or Holding, Inc., as the case may be,
consolidates with, or merges with or into, another Person or sells,
assigns, conveys, transfers, leases or otherwise disposes of all or
substantially all of its assets to any Person, or any Person
consolidates with, or merges with or into, Holding, L.P. or
Holding, Inc., as the case may be, in any such event pursuant to a
transaction in which the outstanding voting capital stock or other
equity interests of Holding, L.P. or Holding, Inc., as the case may
be, is converted into or exchanged for cash, securities or other
property and, immediately after such transaction, the Falcon
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Permitted Holders in the aggregate or the holders of the voting
capital stock or other equity interests of Holding, L.P. or
Holding, Inc., immediately prior thereto own, directly or
indirectly, less than 35% of the total voting power of the
outstanding voting capital stock or other equity interests of the
surviving or transferee Person and, in the case of Holding, L.P.
(if Holding, L.P. is then a partnership), any Person other than a
Falcon Permitted Holder is a managing general partner of Holding,
L.P.;
(c) the sale, lease, transfer, conveyance or other
disposition (other than by way of a merger, consolidation,
liquidation or dissolution), in one or a series of transactions, of
all or substantially all of the assets of Holding, L.P. and its
Subsidiaries, taken as a whole, to any "person" (as such term is
used in section 13(d)(3) of the Exchange Act) other than to one or
more Falcon Permitted Holders;
(d) during any consecutive two-year period, individuals
who at the beginning of such period constituted the Board of
Directors of Holding, L.P. or Holding, Inc., as the case may be
(together with any new directors whose election to such Board of
Directors was approved by the Falcon Permitted Holders or by a vote
of at least a majority of the directors then still in office who
were either directors at the beginning of such period or whose
election or nomination for election was previously so approved),
cease for any reason (other than by action of the Falcon Permitted
Holders) to constitute a majority of the Board of Directors of
Holding, L.P. or Holding, Inc., as the case may be, then in office,
in any such case in connection with any actual or threatened
solicitation of proxies or consents;
(e) Any Person other than a Falcon Permitted Holder
"controls" (as defined in Rule 12b-2 under the Exchange Act) the
Borrowers; or
(f) Less than 100% of the outstanding capital stock or
other equity interests of the Borrowers shall cease to be pledged
to the Documentation Agent pursuant to the Pledge and Subordination
Agreement or otherwise as security for the Credit Obligations.
9.1.7. ENFORCEABILITY, ETC. Any Credit Document shall cease, for
any reason (other than the scheduled or other agreed termination thereof in
accordance with its terms), to be in full force and effect; or any
Restricted Company or any of its Affiliates party thereto shall so assert
in a judicial or similar proceeding; or the security interests created by
this Agreement and the other Credit Documents shall cease to be enforceable
and of the same effect and priority purported to be created hereby, except
to the extent expressly agreed by the Required Lenders.
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9.1.8. JUDGMENTS, ETC. A final judgment (other than in connection
with the Falcon Cable Systems Settlement) (a) which, with other outstanding
final judgments against the Restricted Companies, exceeds an aggregate of
$10,000,000 (in excess of applicable insurance coverage) shall be rendered
against any Restricted Company or its Affiliates party to any Credit
Document, or (b) which grants injunctive relief that results in, or poses a
material risk of resulting in, a Material Adverse Change, and if, within 30
days after entry thereof, such judgment shall not have been discharged or
execution thereof stayed pending appeal, or if, within 30 days after the
expiration of any such stay, such judgment shall not have been discharged.
9.1.9. FRANCHISE REVOCATION, ETC. Except as would not result in,
or be reasonably likely to result in, a Material Adverse Change, Franchises
covering a number of Subscribers greater than 25% of, prior to the TCI
Closing, the number of Subscribers of the Restricted Companies at December
31, 1997 and, after the TCI Closing, the number of Subscribers of the
Restricted Companies on the TCI Closing after giving effect to the TCI
Transactions, shall have been revoked, or terminated with a notice from the
applicable franchising authority that such Franchises will not be renewed.
9.1.10. ERISA. ERISA Group Persons shall fail to pay when due
amounts (other than amounts being contested in good faith through
appropriate proceedings) aggregating in excess of $10,000,000 for all ERISA
Group Persons for which they shall have become liable under Title IV of
ERISA to pay to the PBGC or to a Plan; or the PBGC shall institute
proceedings under Title IV of ERISA to terminate or to cause a trustee to
be appointed to administer any Plan or a proceeding shall be instituted by
a fiduciary of any Plan against any ERISA Group Person to enforce sections
515 or 4219(c)(5) of ERISA and such proceeding shall not have been
dismissed within 30 days thereafter; or a condition shall exist which would
require the PBGC to obtain a decree adjudicating that any Plan must be
terminated.
9.1.11. BANKRUPTCY, ETC. Any Restricted Company, New Falcon I,
Holding, L.P., Holding, Inc. or any other Obligor shall:
(a) commence a voluntary case under the Bankruptcy Code or
authorize, by appropriate proceedings of its board of directors or
other governing body, the commencement of such a voluntary case;
(b) have filed against it a petition commencing an involuntary
case under the Bankruptcy Code which shall not have been dismissed
within 60 days after the date on which such petition is filed; or file
an answer or other pleading within such 60-day period admitting or
failing to deny the material allegations of such a petition or
seeking, consenting to or acquiescing in the relief therein provided;
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(c) have entered against it an order for relief in any
involuntary case commenced under the Bankruptcy Code;
(d) seek relief as a debtor under any applicable law, other than
the Bankruptcy Code, of any jurisdiction relating to the liquidation
or reorganization of debtors or to the modification or alteration of
the rights of creditors, or consent to or acquiesce in such relief;
(e) have entered against it an order by a court of competent
jurisdiction (i) finding it to be bankrupt or insolvent, (ii) ordering
or approving its liquidation, reorganization or any modification or
alteration of the rights of its creditors or (iii) assuming custody
of, or appointing a receiver or other custodian for, all or a
substantial portion of its property; or
(f) make an assignment for the benefit of, or enter into a
composition with, its creditors, or appoint, or consent to the
appointment of, or suffer to exist a receiver or other custodian for,
all or a substantial portion of its property.
9.2. CERTAIN ACTIONS FOLLOWING AN EVENT OF DEFAULT. If any one or more
Events of Default shall occur and be continuing, then in each and every such
case:
9.2.1. NO OBLIGATION TO EXTEND CREDIT. The Documentation Agent may
(and upon written request of such Lenders as own a majority of the
Percentage Interests in the Revolving Loan shall) suspend or terminate the
obligations of the Lenders to make any further extensions of credit under
the Credit Documents by furnishing notice thereof to the Borrowers.
9.2.2. SPECIFIC PERFORMANCE; EXERCISE OF RIGHTS. The Documentation
Agent may (and upon written request of the Required Lenders shall) proceed
to protect and enforce the Lenders' rights by suit in equity, action at law
and/or other appropriate proceeding, either for specific performance of any
covenant or condition contained in this Agreement or any other Credit
Document or in any instrument or assignment delivered to the Lenders
pursuant to this Agreement or any other Credit Document, or in aid of the
exercise of any power granted in this Agreement or any other Credit
Document or any such instrument or assignment.
9.2.3. ACCELERATION. The Documentation Agent on behalf of the
Lenders may (and upon written request of the Required Lenders shall) by
notice in writing to the Borrowers declare all or any part of the unpaid
balance of the Credit Obligations then outstanding to be immediately due
and payable, and thereupon such unpaid balance or part thereof shall become
so due and payable without presentation, protest or further demand or
notice of any kind, all of which are hereby expressly waived; PROVIDED,
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HOWEVER, that if a Bankruptcy Default shall have occurred, the unpaid
balance of the Credit Obligations shall automatically become immediately
due and payable.
9.2.4. ENFORCEMENT OF PAYMENT; CREDIT SECURITY; SETOFF. The
Documentation Agent may (and upon written request of the Required Lenders
shall) proceed to enforce payment of the Credit Obligations in such manner
as it may elect (or have been instructed by the Required Lenders) and to
realize upon any and all rights in any Credit Security. The Lenders may
offset and apply toward the payment of the Credit Obligations (and/or
toward the curing of any Event of Default) any Indebtedness from the
Lenders to the respective Obligors, including any Indebtedness represented
by deposits in any account maintained with the Lenders, regardless of the
adequacy of any security for the Credit Obligations. The Lenders shall
have no duty to determine the adequacy of any such security in connection
with any such offset.
9.2.5. CUMULATIVE REMEDIES. To the extent not prohibited by
applicable law which cannot be waived, all of the Lenders' rights hereunder
and under each other Credit Document shall be cumulative.
9.3. ANNULMENT OF DEFAULTS. Any Default or Event of Default shall be
deemed to exist and to be continuing for any purpose of this Agreement until the
Required Lenders or the Documentation Agent (with the consent of the Required
Lenders) shall have waived such Default or Event of Default in writing, stated
in writing that the same has been cured to such Lenders' reasonable satisfaction
or entered into an amendment to this Agreement which by its express terms cures
such Default or Event of Default or until such Default or Event of Default is
actually cured. No such action by the Lenders or the Documentation Agent shall
extend to or affect any subsequent Default or Event of Default or impair any
rights of the Lenders upon the occurrence thereof. The making of any extension
of credit during the existence of any Default or Event of Default shall not
constitute a waiver thereof.
9.4. WAIVERS. Each of the Restricted Companies waives to the extent not
prohibited by the provisions of applicable law that cannot be waived:
(a) all presentments, demands for performance, notices of
nonperformance (except to the extent required by the provisions of
this Agreement or any other Credit Document), protests, notices of
protest and notices of dishonor;
(b) any requirement of diligence or promptness on the part of any
Lender in the enforcement of its rights under this Agreement, the
Notes or any other Credit Document;
(c) any and all notices (other than notices required by any other
provision of this Agreement) of every kind and description which may
be required to be given by any statute or rule of law; and
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(d) any defense (other than indefeasible payment in full or
dispute of facts) which it may now or hereafter have with respect to
its liability under this Agreement, the Notes or any other Credit
Document or with respect to the Credit Obligations.
10. EXPENSES; INDEMNITY.
10.1. EXPENSES. Whether or not the transactions contemplated hereby
shall be consummated, the Obligors jointly and severally will pay:
(a) all reasonable out-of-pocket expenses of the Documentation
Agent, the Administrative Agent and the Syndication Agent (including
the out-of-pocket expenses related to forming the group of Lenders and
reasonable fees and disbursements of the special counsel to the
Documentation Agent) in connection with the preparation and
duplication of this Agreement, each other Credit Document,
examinations by, and reports of, commercial financial examiners
selected by the Documentation Agent, the transactions contemplated
hereby and thereby and operations and amendments hereunder and
thereunder, subject to the acceptance of the Obligors, which
acceptance shall not be unreasonably withheld;
(b) all recording and filing fees and transfer and documentary
stamp and similar taxes at any time payable in respect of this
Agreement, any other Credit Document, any Credit Security or the
incurrence of the Credit Obligations; and
(c) to the extent not prohibited by applicable law that cannot be
waived, all other reasonable out-of-pocket costs and expenses
(including a reasonable allowance for the hourly cost of attorneys
employed by any of the Lenders on a salaried basis and any special
counsel to the Lenders) incurred by the Lenders or the holder of any
Credit Obligation in connection with the enforcement of any rights
hereunder or under any other Credit Document, including such
reasonable costs and expenses incurred after the occurrence of an
Event of Default (i) in enforcing any Credit Obligation or in
foreclosing against the Credit Security, or exercising or enforcing
any other right or remedy available by reason of such Event of
Default; (ii) in connection with any refinancing or restructuring of
the credit arrangements provided under this Agreement or any other
Credit Document in the nature of a workout or in any insolvency or
bankruptcy proceeding; (iii) in commencing, defending or intervening
in any litigation or in filing a petition, complaint, answer, motion
or other pleadings in any legal proceeding; (iv) in taking any other
action in or with respect to any suit or proceeding (bankruptcy or
otherwise); and (v) in protecting, preserving, collecting, leasing,
selling, taking possession of or liquidating any of the Credit
Security; PROVIDED, HOWEVER, that the foregoing indemnity in this
paragraph (c) shall not apply (A) to litigation
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commenced by the Borrowers against the Lenders which seeks
enforcement of any of the rights of the Borrowers hereunder or
under any other Credit Document and is determined adversely to the
Lenders in a final nonappealable judgment and (B) to the extent
such claims, damages, liabilities and expenses result from a
Lender's gross negligence or willful misconduct.
(d) all reasonable costs and expenses of the Syndication Agent in
connection with the preparation and distribution of the Confidential
Information Memorandum dated April 1998 and related items.
10.2. GENERAL INDEMNITY. The Obligors will, jointly and severally,
indemnify the Lenders and hold them harmless from any claims, damages,
liabilities, losses and reasonable expenses (including reasonable fees and
disbursements of counsel with whom any Indemnified Party may consult in
connection therewith and all reasonable expenses of litigation or preparation
therefor) resulting from the violation by the Borrowers of Section 2.5. The
Obligors will also, jointly and severally, indemnify each Lender, each of the
Lenders' directors, officers and employees, and each Person, if any, who
controls any Lender (each Lender and each of such directors, officers, employees
and control Persons is referred to as an "INDEMNIFIED PARTY") and hold each of
them harmless from and against any and all claims, damages, liabilities, losses
and reasonable expenses (including reasonable fees and disbursements of counsel
with whom any Indemnified Party may consult in connection therewith and all
reasonable expenses of litigation or preparation therefor) which any Indemnified
Party may incur or which may be asserted against any Indemnified Party in
connection with (a) the Indemnified Party's compliance with or contest of any
subpoena or other process issued against it in any proceeding involving any
Restricted Company or Affiliates, (b) any litigation or investigation involving
the Restricted Companies or their Affiliates, or any officer, director or
employee thereof, (c) the existence or exercise of any security rights with
respect to the Credit Security in accordance with the Credit Documents or (d)
this Agreement, any other Credit Document or any transactions contemplated
hereby or thereby, other than (i) litigation commenced by the Borrowers against
the Lenders which seeks enforcement of any of the rights of the Borrowers
hereunder or under any other Credit Document and is determined adversely to the
Lenders in a final nonappealable judgment and (ii) to the extent such claims,
damages, liabilities, losses and expenses result from a Lender's gross
negligence or willful misconduct.
11. OPERATIONS.
11.1. INTERESTS IN CREDITS. The Percentage Interest of each Lender in
the Loan and each Lender's related Commitments shall be computed based on the
maximum principal amount for each Lender as set forth in the Register, as from
time to time in effect. The Percentage Interests as of the Initial Closing Date
and as of the Term Loan B-2 Closing Date are set forth in Exhibit 11.1, which
may be updated by the Agent from time to time to conform to the Register.
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11.2. AGENTS' AUTHORITY TO ACT, ETC. Each of the Lenders appoints
and authorizes the Agents (other than the Co-Agents) to act for the Lenders
as the Lenders' Agents in connection with the transactions contemplated by
this Agreement and the other Credit Documents on the terms set forth herein.
In acting hereunder, each Agent (other than the Co-Agents) is acting for its
own account to the extent of its Percentage Interest and for the account of
each other Lender to the extent of the Lenders' respective Percentage
Interests, and all action in connection with the enforcement of, or the
exercise of any remedies (other than the Lenders' rights of set-off as
provided in Section 9.2.4 or in any Credit Document) in respect of the Credit
Obligations and Credit Documents shall be taken by the Documentation Agent or
the Administrative Agent. The Co-Agents shall have no duties or
responsibilities under this Agreement or the other Credit Documents except to
the extent subsequently expressly agreed in writing by the Co-Agents and the
Borrowers.
11.3. BORROWERS TO PAY AGENT, ETC. Each Borrower and each Guarantor
shall be fully protected in making all payments in respect of the Credit
Obligations to the Administrative Agent, in relying upon consents, modifications
and amendments executed by the Documentation Agent purportedly on the Lenders'
behalf, and in dealing with the Agents as herein provided. The Administrative
Agent shall charge the accounts of each Borrower, on the dates when the amounts
thereof become due and payable, with the amounts of the principal of and
interest on the Loan, commitment fees and all other fees and amounts owing under
any Credit Document. All payments of any Credit Obligation shall be made in
United States Funds.
11.4. LENDER OPERATIONS FOR ADVANCES, ETC.
11.4.1. ADVANCES. On each Closing Date, each Lender shall advance
to the Administrative Agent in immediately available funds such Lender's
Percentage Interest in the portion of the Loan advanced on such Closing
Date prior to noon (New York time). If such funds are not received at such
time, but all the conditions set forth in Section 5 have been satisfied,
each Lender authorizes and requests the Administrative Agent to advance for
the Lender's account, pursuant to the terms hereof, the Lender's respective
Percentage Interest in such portion of the Loan and agrees to reimburse the
Administrative Agent in immediately available funds for the amount thereof
prior to 2:00 p.m. (New York time) on the day any portion of the Loan is
advanced hereunder; PROVIDED, HOWEVER, that the Administrative Agent is not
authorized to make any such advance for the account of any Lender who has
previously notified the Administrative Agent in writing that such Lender
will not be performing its obligations to make further advances hereunder.
11.4.2. ADMINISTRATIVE AGENT TO ALLOCATE PAYMENTS, ETC. All
payments of principal and interest in respect of the extensions of credit
made pursuant to this Agreement, commitment fees and other fees under this
Agreement shall, as a matter of convenience, be made by the Borrowers and
the Guarantors to the Administrative Agent in immediately available funds.
The share of each Lender shall be credited to such
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Lender by the Administrative Agent in immediately available funds in such
manner that the principal amount of the Credit Obligations to be paid shall
be paid proportionately in accordance with the Lenders' respective
Percentage Interests in such Credit Obligations. Under no circumstances
shall any Lender be required to produce or present its Notes as evidence of
its interests in the Credit Obligations in any action or proceeding
relating to the Credit Obligations.
11.4.3. DELINQUENT LENDERS; NONPERFORMING LENDERS. In the event
that any Lender fails to reimburse the Administrative Agent pursuant to
Section 11.4.1 for the Percentage Interest of such Lender (a "DELINQUENT
LENDER") in any credit advanced by the Administrative Agent pursuant
hereto, overdue amounts (the "DELINQUENT PAYMENT") due from the Delinquent
Lender to the Administrative Agent shall bear interest, payable by the
Delinquent Lender on demand, at a per annum rate equal to (a) the Federal
Funds Rate for the first three days overdue and (b) the sum of 2% PLUS the
Federal Funds Rate for any longer period. Such interest shall be payable
to the Administrative Agent for its own account for the period commencing
on the date the Delinquent Payment was due and ending on the date the
Delinquent Lender reimburses the Administrative Agent on account of the
Delinquent Payment (to the extent not paid by a Restricted Company as
provided below) and the accrued interest thereon (the "DELINQUENCY
PERIOD"), whether pursuant to the assignments referred to below or
otherwise. Within five Banking Days after the request by the
Administrative Agent, the Borrowers will pay to the Administrative Agent
the principal (but not the interest) portion of the Delinquent Payment.
During the Delinquency Period, in order to make reimbursements for the
Delinquent Payment and accrued interest thereon, the Delinquent Lender
shall be deemed to have assigned to the Administrative Agent all payments
made by the Borrowers under Section 4 which would have thereafter otherwise
been payable under the Credit Documents to the Delinquent Lender. During
any other period in which any Lender is not performing its obligations to
extend credit under Section 2 (a "NONPERFORMING LENDER"), the Nonperforming
Lender shall be deemed to have assigned to each Lender that is not a
Nonperforming Lender (a "PERFORMING LENDER") all payment made by the
Borrowers under Section 4 which would have thereafter otherwise been
payable under the Credit Documents to the Nonperforming Lender, and the
Administrative Agent shall credit a portion of such payments to each
Performing Lender in an amount equal to the Percentage Interest of such
Performing Lender divided by one MINUS the Percentage Interest of the
Nonperforming Lender until the respective portions of the Loan owed to all
the Lenders are the same as the Percentage Interests of the Lenders
immediately prior to the failure of the Nonperforming Lender to perform its
obligations under Section 2. The foregoing provisions shall be in addition
to any other remedies the Administrative Agent, the Performing Lenders or
the Borrowers may have under law or equity against the Delinquent Lender as
a result of the Delinquent Payment or against the Nonperforming Lender as a
result of its failure to perform its obligations under Section 2.
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11.5. SHARING OF PAYMENTS, ETC. Each Lender agrees that (a) if by
exercising any right of set-off or counterclaim or otherwise, it shall receive
payment of a proportion of the aggregate amount of principal and interest due
with respect to its Percentage Interest in the Loan which is greater than the
proportion received by any other Lender in respect of the aggregate amount of
principal and interest due with respect to the Percentage Interest in the Loan
of such other Lender and (b) if such inequality shall continue for more than 10
days, the Lender receiving such proportionately greater payment shall purchase
participations in the Percentage Interests in the Loan held by the other
Lenders, and such other adjustments shall be made from time to time (including
rescission of such purchases of participations in the event the unequal payment
originally received is recovered from such Lender through bankruptcy proceedings
or otherwise), as may be required so that all such payments of principal and
interest with respect to the Loan held by the Lenders shall be shared by the
Lenders pro rata in accordance with their respective Percentage Interests;
PROVIDED, HOWEVER, that this Section 11.5 shall not impair the right of any
Lender to exercise any right of set-off or counterclaim it may have and to apply
the amount subject to such exercise to the payment of Indebtedness of any
Obligor other than such Obligor's Indebtedness with respect to the Loan. Each
Obligor agrees, to the fullest extent permitted by applicable law, that any
Credit Participant and any Lender purchasing a participation from another Lender
pursuant to this Section 11.5 may exercise all rights of payment (including the
right of set-off), and shall be obligated to share payments under this
Section 11.5, with respect to its participation as fully as if such Credit
Participant or such Lender were the direct creditor of the Obligors and a Lender
hereunder in the amount of such participation.
11.6. AGENT'S RESIGNATION OR REMOVAL. Any Agent may resign at any time
by giving at least 60 days' prior written notice of its intention to do so to
each of the other Lenders and the Borrower pending the appointment by the
Borrowers of a successor Agent reasonably satisfactory to the Required Lenders.
If in the event of the resignation of any Agent, no successor Agent shall have
been so appointed and shall have accepted such appointment within 45 days after
the retiring Agent's giving of such notice of resignation, then the retiring
Agent may with the consent of the Borrowers, which shall not be unreasonably
withheld, appoint a successor Agent which shall be a bank or a trust company
organized, or having a branch that is licensed, under the laws of the United
States of America or any state thereof and having a combined capital, surplus
and undivided profit of at least $100,000,000; PROVIDED, HOWEVER, that any
successor Agent appointed under this sentence may be removed upon the written
request of the Required Lenders, which request shall also appoint a successor
Agent reasonably satisfactory to the Borrowers. Any Agent may be removed upon
the written request of such Lenders as own at least two thirds of the Percentage
Interests, which request shall also appoint a successor Agent reasonably
satisfactory to the Borrowers. Upon the appointment of a new Agent hereunder,
the term "AGENT" shall for all purposes of this Agreement thereafter include
such applicable successor Agent. Upon the resignation or removal of the
Documentation Agent, the Administrative Agent shall take over the duties of the
Documentation Agent. In the event of the resignation or removal of any Agent
that is not a Specified Agent, no successor need be appointed. After any
retiring Agent's resignation hereunder as Agent, or the removal hereunder of
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any Agent, the provisions of this Agreement shall continue to inure to the
benefit of such Agent as to any actions taken or omitted to be taken by it
while it was an Agent under this Agreement.
11.7. CONCERNING THE AGENTS.
11.7.1. ACTION IN GOOD FAITH, ETC. Each Agent and its officers,
directors, employees and agents shall be under no liability to any of the
Lenders or to any future holder of any interest in the Credit Obligations
for any action or failure to act taken or suffered in good faith, and any
action or failure to act in accordance with an opinion of its counsel shall
conclusively be deemed to be in good faith; PROVIDED, HOWEVER, that the
foregoing shall not extend to actions or omissions which are taken by an
Agent with gross negligence or willful misconduct. Each Agent shall in all
cases be entitled to rely, and shall be fully protected in relying, on
instructions given to the Agent by the required holders of Credit
Obligations as provided in this Agreement.
11.7.2. NO IMPLIED DUTIES, ETC. Each Agent shall have and may
exercise such powers as are specifically delegated to the Agent under this
Agreement or any other Credit Document together with all other powers
incidental thereto. Each Agent shall have no implied duties to any Person
or any obligation to take any action under this Agreement or any other
Credit Document except for action specifically provided for in this
Agreement or any other Credit Document to be taken by such Agent. Before
taking any action under this Agreement or any other Credit Document, each
Agent may request an appropriate specific indemnity satisfactory to it from
each Lender in addition to the general indemnity provided for in
Section 11.10. Until the Agent has received such specific indemnity, the
Agent shall not be obligated to take (although it may in its sole
discretion take) any such action under this Agreement or any other Credit
Document. Each Lender confirms that the Agents do not have a fiduciary
relationship to it under the Credit Documents. Each of the Restricted
Companies confirms that neither of the Agents nor any other Lender has a
fiduciary relationship to it under the Credit Documents.
11.7.3. VALIDITY, ETC. Subject to Section 11.7.1, the Agents shall
not be responsible to any Lender or any future holder of any interest in
the Credit Obligations (a) for the legality, validity, enforceability or
effectiveness of this Agreement or any other Credit Document, (b) for any
recitals, reports, representations, warranties or statements contained in
or made in connection with this Agreement or any other Credit Document, (c)
for the existence or value of any assets included in any security for the
Credit Obligations, (d) for the perfection or effectiveness of any Lien
purported to be included in such security or (e) for the specification or
failure to specify any particular assets to be included in such security.
11.7.4. COMPLIANCE. The Agents shall not be obligated to ascertain
or inquire as to the performance or observance of any of the terms of this
Agreement or any other Credit Document; and in connection with any
extension of credit under this Agreement or
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any other Credit Document, the Agents shall be fully protected in
relying on a certificate of any Borrower or any Guarantor as to the
fulfillment by that Borrower of any conditions to such extension of
credit.
11.7.5. EMPLOYMENT OF AGENTS AND COUNSEL. The Agents may execute
any of their duties as Agent under this Agreement or any other Credit
Document by or through employees, agents and attorneys-in-fact and shall
not be responsible to any of the Lenders, any Restricted Company or any
other Obligor (except as to money or securities received by the Agent or
the Agent's authorized agents) for the default or misconduct of any such
agents or attorneys-in-fact selected by the Agent with reasonable care.
The Agents shall be entitled to advice of counsel concerning all matters
pertaining to the agency hereby created and its duties hereunder or under
any other Credit Document.
11.7.6. RELIANCE ON DOCUMENTS AND COUNSEL. Each Agent shall be
entitled to rely, and shall be fully protected in relying, upon any
affidavit, certificate, cablegram, consent, instrument, letter, notice,
order, document, statement, telecopy, telegram, telex or teletype message
or writing reasonably believed in good faith by the Agent to be genuine and
correct and to have been signed, sent or made by the Person in question,
including any telephonic or oral statement made by such Person, and, with
respect to legal matters, upon the opinion of counsel selected by the
Agent.
11.7.7. AGENT'S REIMBURSEMENT. Each of the Lenders severally agrees
to reimburse the Agents in the amount of such Lender's Percentage Interest,
for any reasonable expenses not reimbursed by the Borrowers or the other
Guarantors (without limiting the obligation of the Borrowers or the other
Guarantors to make such reimbursement): (a) for which the Agents are
entitled to reimbursement by the Borrowers or the other Guarantors under
this Agreement or any other Credit Document, and (b) after the occurrence
of a Default, for any other reasonable expenses incurred by the Agents on
the Lenders' behalf in connection with the enforcement of the Lenders'
rights under this Agreement or any other Credit Document; provided that the
Agents shall not be reimbursed for any such expenses arising as a result of
their gross negligence or willful misconduct.
11.8. RIGHTS AS A LENDER. With respect to any credit extended by it
hereunder, each of BankBoston, Toronto Dominion and the other financial
institutions serving as Agents hereunder shall have the same rights, obligations
and powers hereunder as any other Lender and may exercise such rights and powers
as though it were not an Agent, and unless the context otherwise specifies, each
of BankBoston, Toronto Dominion and such other financial institutions shall be
treated in its individual capacity as though it were not an Agent hereunder.
Without limiting the generality of the foregoing, the Percentage Interest of
BankBoston, Toronto Dominion and such other financial institutions shall be
included in any computations of Percentage Interests. BankBoston, Toronto
Dominion, such other financial institutions and their Affiliates may accept
deposits from, lend money to, act as trustee for and generally engage in any
kind of banking or
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trust business with the Restricted Companies or any Affiliate of any of
them and any Person who may do business with or own an equity interest in the
Restricted Companies or any Affiliate of any of them, all as if BankBoston,
Toronto Dominion or such other financial institutions were not an Agent and
without any duty to account therefor to the other Lenders.
11.9. INDEPENDENT CREDIT DECISION. Each of the Lenders acknowledges
that it has independently and without reliance upon the Agents, based on the
financial statements and other documents referred to in Section 8.2, on the
other representations and warranties contained herein and on such other
information with respect to the Restricted Companies as such Lender deemed
appropriate, made such Lender's own credit analysis and decision to enter into
this Agreement and to make the extensions of credit provided for hereunder.
Each Lender represents to the Agents that such Lender will continue to make its
own independent credit and other decisions in taking or not taking action under
this Agreement or any other Credit Document. Each Lender expressly acknowledges
that neither the Agents nor any of their officers, directors, employees, agents,
attorneys-in-fact or Affiliates has made any representations or warranties to
such Lender, and no act by the Agents taken under this Agreement or any other
Credit Document, including any review of the affairs of the Restricted
Companies, shall be deemed to constitute any representation or warranty by the
Agents. Except for notices, reports and other documents expressly required to
be furnished to each Lender by the Agents under this Agreement or any other
Credit Document, the Agents shall not have any duty or responsibility to provide
any Lender with any credit or other information concerning the business,
operations, property, condition, financial or otherwise, or credit worthiness of
any Restricted Company which may come into the possession of the Agents or any
of their officers, directors, employees, agents, attorneys-in-fact or
Affiliates.
11.10. INDEMNIFICATION. The holders of the Credit Obligations agree to
indemnify the Agents (to the extent not reimbursed by the Obligors and without
limiting the obligation of any of the Obligors to do so), pro rata according to
their respective aggregate Percentage Interests, from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits
and reasonable costs, expenses or disbursements of any kind whatsoever which may
at any time be imposed on, incurred by or asserted against the Agents in their
capacity as Agents hereunder relating to or arising out of this Agreement, any
other Credit Document, the transactions contemplated hereby or thereby, or any
action taken or omitted by the Agents in connection with any of the foregoing;
PROVIDED, HOWEVER, that the foregoing shall not extend to (a) litigation
commenced by the holders of the Credit Obligations against the Agents which
seeks enforcement of any of the rights of such holders hereunder or under any
other Credit Document and is determined adversely to the Agents in a final
nonappealable judgment or (b) actions or omissions which are taken by the Agents
with gross negligence or willful misconduct.
12. SUCCESSORS AND ASSIGNS; LENDER ASSIGNMENTS AND PARTICIPATIONS. Any
reference in this Agreement to any of the parties hereto shall be deemed to
include the successors and assigns of such party, and all covenants and
agreements by or on behalf of the Borrowers, the other Guarantors, the Agents or
the Lenders that are contained in this Agreement or any other Credit
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Document shall bind and inure to the benefit of their respective successors
and assigns; PROVIDED, HOWEVER, that (a) the Restricted Companies may not
assign their rights or obligations under this Agreement except for mergers or
liquidations permitted by Section 7.11.2, and (b) the Lenders shall be not
entitled to assign their respective Percentage Interests in the Loan
hereunder except as set forth below in this Section 12.
12.1. ASSIGNMENTS BY LENDERS.
12.1.1. ASSIGNEES AND ASSIGNMENT PROCEDURES. Each Lender may (a)
without the consent of the Administrative Agent or the Borrowers if the
proposed assignee is already a Lender hereunder, a Related Fund, Affiliate
or a Subsidiary of the same corporate parent of which the assigning Lender
or any other Lender is a Subsidiary, or (b) otherwise with the consents of
the Administrative Agent and (so long as no Event of Default has occurred
and is continuing) the Borrowers (which consents will not be unreasonably
withheld) in compliance with applicable laws in connection with such
assignment, assign to one or more commercial banks or other financial
institutions or other entity reasonably acceptable to the Borrowers (each,
an "ASSIGNEE") all or a portion of its interests, rights and obligations
under this Agreement and the other Credit Documents, including all or a
portion of its Commitment, the portion of the Loan at the time owing to it
and the Notes held by it; PROVIDED, HOWEVER, that:
(i) the aggregate amount of the Commitment of the assigning
Lender subject to each assignment described in clause (b) above
(determined as of the date the Assignment and Acceptance with respect
to such assignment is delivered to the Administrative Agent) shall be
not less than $5,000,000 and in increments of $1,000,000 (or, if
smaller, the entire Commitment of such assigning Lender); and
(ii) the parties to each such assignment shall execute and
deliver to the Administrative Agent (with a copy to the Documentation
Agent) an Assignment and Acceptance (the "ASSIGNMENT AND ACCEPTANCE")
substantially in the form of Exhibit 12.1.1, together with the Note or
Notes subject to such assignment and, in the case of an assignment
described in clause (b) above, a processing and recordation fee of
$3,000.
Upon acceptance and recording pursuant to Section 12.1.4, from and after
the effective date specified in each Assignment and Acceptance (which
effective date shall be at least five Banking Days after the execution
thereof unless waived by the Administrative Agent):
(1) the Assignee shall be a party hereto and, to the extent provided
in such Assignment and Acceptance, have the rights and
obligations of a Lender under this Agreement and
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(2) the assigning Lender shall, to the extent provided in such
assignment, be released from its obligations under this Agreement
(and, in the case of an Assignment and Acceptance covering all or
the remaining portion of an assigning Lender's rights and
obligations under this Agreement, such Lender shall cease to be a
party hereto but shall continue to be entitled to the benefits of
Sections 3.2.4, 3.4, 3.5, 3.6 and 10, as well as to any fees
accrued for its account hereunder and not yet paid).
12.1.2. TERMS OF ASSIGNMENT AND ACCEPTANCE. By executing and
delivering an Assignment and Acceptance, the assigning Lender and Assignee
shall be deemed to confirm to and agree with each other and the other
parties hereto as follows:
(a) other than the representation and warranty that it is the
legal and beneficial owner of the interest being assigned thereby free
and clear of any adverse claim, such assigning Lender makes no
representation or warranty and assumes no responsibility with respect
to any statements, warranties or representations made in or in
connection with this Agreement or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement,
any other Credit Document or any other instrument or document
furnished pursuant hereto;
(b) such assigning Lender makes no representation or warranty and
assumes no responsibility with respect to the financial condition of
the Restricted Companies or the performance or observance by the
Borrowers or any other Guarantor of any of its obligations under this
Agreement, any other Credit Document or any other instrument or
document furnished pursuant hereto;
(c) such Assignee confirms that it has received a copy of this
Agreement, together with copies of the most recent financial
statements delivered pursuant to Section 8.2 and such other documents
and information as it has deemed appropriate to make its own credit
analysis and decision to enter into such Assignment and Acceptance;
(d) such Assignee will independently and without reliance upon
the Agents, such assigning Lender or any other Lender, and based on
such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not
taking action under this Agreement;
(e) such Assignee appoints and authorizes the Agents to take such
action as agent on its behalf and to exercise such powers under this
Agreement as are delegated to the Agents by the terms hereof, together
with such powers as are reasonably incidental thereto; and
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(f) such Assignee agrees that it will perform in accordance with
the terms of this Agreement all the obligations which are required to
be performed by it as a Lender.
12.1.3. REGISTER. The Administrative Agent shall maintain at the
Houston Office a register (the "REGISTER") for the recordation of (a) the
names and addresses of the Lenders and the Assignees which assume rights
and obligations pursuant to an assignment under Section 12.1.1, (b) the
Percentage Interest of each such Lender as set forth in Section 11.1 and
(c) the amount of the Loan owing to each Lender from time to time. The
entries in the Register shall be conclusive, in the absence of manifest
error, and the Borrowers, the Agents and the Lenders may treat each Person
whose name is registered therein for all purposes as a party to this
Agreement. The Register shall be available for inspection by the Borrowers
or any Lender at any reasonable time and from time to time upon reasonable
prior notice.
12.1.4. ACCEPTANCE OF ASSIGNMENT AND ASSUMPTION. Upon its receipt
of a completed Assignment and Acceptance executed by an assigning Lender
and an Assignee together with the Note or Notes subject to such assignment,
and the processing and recordation fee referred to in Section 12.1.1, the
Administrative Agent shall (a) accept such Assignment and Acceptance, (b)
record the information contained therein in the Register and (c) give
prompt notice thereof to the Borrowers. Within five Banking Days after
receipt of notice, the Borrowers, at their own expense, shall execute and
deliver to the Administrative Agent, in exchange for the surrendered Note
or Notes, a new Note or Notes to the order of such Assignee in a principal
amount equal to the applicable Commitment and Loan assumed by it pursuant
to such Assignment and Acceptance and, if the assigning Lender has retained
a Commitment and Loan, a new Note to the order of such assigning Lender in
a principal amount equal to the applicable Commitment and Loan retained by
it. Such new Note or Notes shall be in an aggregate principal amount equal
to the aggregate principal amount of such surrendered Note or Notes, and
shall be dated the date of the surrendered Notes which they replace.
12.1.5. FEDERAL RESERVE BANK. Notwithstanding the foregoing
provisions of this Section 12, any Lender may at any time pledge or assign
all or any portion of such Lender's rights under this Agreement and the
other Credit Documents to a Federal Reserve Bank; PROVIDED, HOWEVER, that
no such pledge or assignment shall release such Lender from such Lender's
obligations hereunder or under any other Credit Document.
12.1.6. FURTHER ASSURANCES. The Restricted Companies shall sign
such documents and take such other actions from time to time reasonably
requested by an Assignee to enable it to share in the benefits of the
rights created by the Credit Documents.
12.2. CREDIT PARTICIPANTS. Each Lender may, without the consent of any
Borrower or any Agent, in compliance with applicable laws in connection with
such participation, sell to one
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or more Qualified Institutional Buyers (each a "CREDIT PARTICIPANT")
participations in all or a portion of its interests, rights and obligations
under this Agreement and the other Credit Documents (including all or a
portion of its Commitment and the Loan owing to it and the Notes held by it);
PROVIDED, HOWEVER, that:
(a) such Lender's obligations under this Agreement shall remain
unchanged;
(b) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations;
(c) the Credit Participant shall be entitled to the benefit of
the cost protection provisions contained in Sections 3.2.4, 3.4, 3.5,
3.6 and 10, but shall not be entitled to receive any greater payment
thereunder than the selling Lender would have been entitled to receive
with respect to the interest so sold if such interest had not been
sold; and
(d) the Borrowers, the Agents and the other Lenders shall
continue to deal solely and directly with such Lender in connection
with such Lender's rights and obligations under this Agreement, and
such Lender shall retain the sole right to enforce the obligations of
the Borrowers relating to the Loan and to approve any amendment,
modification or waiver of any provision of this Agreement (other than
amendments, modifications or waivers with respect to any fees payable
hereunder or the amount of principal of or the rate at which interest
is payable on the Loan, or the final maturity date of any portion of
the Loan).
12.3. REPLACEMENT OF LENDER. In the event that any Lender or, to the
extent applicable, any Credit Participant (the "AFFECTED LENDER"):
(a) fails to perform its obligations to fund any portion of the
Loan on any Closing Date when required to do so by the terms of the
Credit Documents, or fails to provide its portion of any Eurodollar
Pricing Option on account of a Legal Requirement as contemplated by
Section 3.2.5 or the unavailability of Eurodollar deposits as
contemplated by the last sentence of Section 3.2.1;
(b) demands payment under the Tax provisions of Section 3.4, the
capital adequacy provisions of Section 3.5 or the regulatory change
provisions in Section 3.6 in an amount the Restricted Companies deem
materially in excess of the amounts with respect thereto demanded by
the other Lenders; or
(c) refuses to consent to a proposed amendment, modification,
waiver or other action that is consented to by Lenders holding at
least 80% of the Percentage
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Interests the consent of which is requested in connection with the
proposed amendment, modification, waiver or other action;
then, so long as no Event of Default exists, the Restricted Companies shall have
the right to seek a replacement lender or lenders reasonably satisfactory to the
Documentation Agent (the "REPLACEMENT LENDER"). The Replacement Lender shall
purchase the interests of the Affected Lender in the Loan and its Commitment and
shall assume the obligations of the Affected Lender hereunder and under the
other Credit Documents upon execution by the Replacement Lender of an Assignment
and Acceptance and the tender by it to the Affected Lender of a purchase price
agreed between it and the Affected Lender (or, if they are unable to agree, a
purchase price in the amount of the Affected Lender's Percentage Interest in the
Loan and all other outstanding Credit Obligations then owed to the Affected
Lender). Such assignment by the Affected Lender shall be deemed an early
termination of any Eurodollar Pricing Option to the extent of the Affected
Lender's portion thereof, and the Restricted Companies will pay to the Affected
Lender any resulting amounts due under Section 3.2.4. Upon consummation of such
assignment, the Replacement Lender shall become party to this Agreement as a
signatory hereto and shall have all the rights and obligations of the Affected
Lender under this Agreement and the other Credit Documents with a Percentage
Interest equal to the Percentage Interest of the Affected Lender, the Affected
Lender shall be released from its obligations hereunder and under the other
Credit Documents, and no further consent or action by any party shall be
required. Upon the consummation of such assignment, the Restricted Companies,
the Agent and the Affected Lender shall make appropriate arrangements so that
new Notes are issued to the Replacement Lender. The Restricted Companies shall
sign such documents and take such other actions reasonably requested by the
Replacement Lender to enable it to share in the benefits of the rights created
by the Credit Documents. Until the consummation of an assignment in accordance
with the foregoing provisions of this Section 12.3, the Restricted Companies
shall continue to pay to the Affected Lender (or to the Administrative Agent for
the account of the Affected Lender, as applicable) any Credit Obligations as
they become due and payable.
13. CONFIDENTIALITY. Each Lender agrees that it will make no disclosure of
confidential information furnished to it by any Restricted Company unless such
information shall have become public, except:
(a) in connection with operations under or the enforcement of
this Agreement or any other Credit Document;
(b) pursuant to any statutory or regulatory requirement or any
mandatory court order, subpoena or other legal process;
(c) to any parent or corporate Affiliate of such Lender or to any
Credit Participant, proposed Credit Participant or proposed Assignee;
PROVIDED, HOWEVER, that any such Person shall agree to comply with the
restrictions set forth in this Section 13 with respect to such
information;
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(d) to its independent counsel, auditors and other professional
advisors with an instruction to such Person to keep such information
confidential; and
(e) to any direct or indirect contractual counterparty in swap
agreements with the same professional advisor as the Lender or such
contractual counterparty's professional advisor (so long as such
contractual counterparty or professional advisor agrees to be bound by
the provisions of this Section 13); and
(f) with the prior written consent of the Borrowers, to any other
Person.
14. FOREIGN LENDERS. If any Lender is not created or organized in, or under
the laws of, the United States of America or any state thereof, such Lender, to
the extent it may legally do so, shall deliver to the Borrower and the
Administrative Agent the forms described in one of the following two clauses:
(a) Two fully completed and duly executed United States Internal
Revenue Service Forms 1001 or 4224 or any successor forms, as the case may
be, certifying that such Lender is entitled to receive payments of the
Credit Obligations payable to it without deduction or withholding of any
United States federal income taxes; or
(b) A statement, executed by such Lender under penalty of perjury,
certifying that such Lender is not a "bank" within the meaning of section
881(c)(3)(A) of the Code and two fully completed and duly executed United
States Internal Revenue Service Forms W-8 or any successor forms certifying
that such Lender is not a "United States person" within the meaning of
section 7701(a)(30) of the Code.
Each Lender that delivers any form or statement pursuant to this Section 14
further undertakes to renew such forms and statements by delivering to the
Borrower and the Administrative Agent any updated forms, successor forms or
other certification, as the case may be, on or before the date that any form or
statement previously delivered pursuant to this Section 13 expires or becomes
obsolete or after the occurrence of any event requiring a change in such most
recent form or statement. If at any time the Borrower and the Administrative
Agent have not received all forms and statements (including any renewals
thereof) required to be provided by any Lender pursuant to this Section 14,
Section 3.4 shall not apply with respect to any amount of United States federal
income taxes required to be withheld from payments of the Credit Obligations to
such Lender.
15. NOTICES. Except as otherwise specified in this Agreement, any notice
required to be given pursuant to this Agreement shall be given in writing. Any
notice, demand or other communication in connection with this Agreement shall be
deemed to be given if given in writing (including telecopy or similar
teletransmission) addressed as provided below (or to the addressee at such other
address as the addressee shall have specified by notice actually received
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by the addressor), and if either (a) actually delivered in fully legible form
to such address or (b) in the case of a letter, five days shall have elapsed
after the same shall have been deposited in the United States mails, with
first-class postage prepaid and registered or certified.
If to any Restricted Company, to it at its address set forth in Exhibit 8.1
(as supplemented pursuant to Sections 7.4.1 and 7.4.2), to the attention of the
chief financial officer.
If to any Lender, to it at its address set forth on the signature page of
this Agreement, to the attention of the account officer specified on the
signature page, with copies to the Documentation Agent and the Administrative
Agent.
16. LIMITED RECOURSE AGAINST PARTNERS. The remedies of the holders of the
Credit Obligations, including any remedy which could be exercised upon the
occurrence of an Event of Default, shall be limited to the extent that none of
the partners, members or shareholders of any Restricted Company shall have any
personal liability as a general partner or limited partner of any Restricted
Company with respect to the Credit Obligations, and in no event shall any such
partner be personally liable as a general partner or limited partner for any
deficiency judgment for any Credit Obligation; PROVIDED, HOWEVER, that the
provisions of this Section 16 shall not impair the ability of any holder of any
Credit Obligation (a) to realize on the assets of any Obligor or any of its
Subsidiaries or on any other security, including any personal property or
partnership interests pledged to secure the Credit Obligations or (b) to pursue
any remedy against any guarantor of the Credit Obligations or (c) to recover any
Distribution made in violation of Section 7.10.
17. AMENDMENTS, CONSENTS, WAIVERS, ETC.
17.1. LENDER CONSENTS FOR AMENDMENTS. Except as otherwise set forth
herein, the Documentation Agent may (and upon the written request of the
Required Lenders the Documentation Agent shall) take or refrain from taking any
action under this Agreement or any other Credit Document, including giving its
written consent to any modification of or amendment to and waiving in writing
compliance with any covenant or condition in this Agreement or any other Credit
Document (other than an Interest Rate Protection Agreement) or any Default or
Event of Default, all of which actions shall be binding upon all of the Lenders;
PROVIDED, HOWEVER, that:
(a) Except as provided below, without the written consent of the
Lenders owning at least a majority of the Aggregate Percentage
Interests (disregarding the Percentage Interest of any Delinquent
Lender during the existence of a Delinquency Period or of any
Nonperforming Lender so long as such Lender is treated equally with
the other Lenders with respect to any actions enumerated below), no
written modification of, amendment to, consent with respect to, waiver
of compliance with or waiver of a Default under, any of the Credit
Documents (other than an Interest Rate Protection Agreement) shall be
made.
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(b) Without the written consent of such Lenders as own 100% of
the Percentage Interests (disregarding the Percentage Interest of any
Delinquent Lender during the existence of a Delinquency Period or of
any Nonperforming Lender so long as such Lender is treated equally
with the other Lenders with respect to any actions enumerated below):
(i) No release of all or substantially all of the Credit Security
or release of any Borrower or any material Guarantor shall be made (in
any event, without the written consent of the Lenders, the
Documentation Agent may release particular items of Credit Security or
particular Borrowers or Guarantors whose equity has been sold in
dispositions permitted by Section 7.11, as modified by amendments
thereto approved by the Required Lenders, and may release all Credit
Security pursuant to Section 18.1 upon payment in full of the Credit
Obligations and termination of the Commitments).
(ii) No alteration shall be made of the Lenders' rights of
set-off contained in Section 9.2.4.
(iii) No amendment to or modification of this Section 17.1 or the
definition of "Required Lenders" shall be made.
(c) Without the written consent of each Lender that is directly
affected thereby and of such Lenders as own at least a majority of the
Percentage Interests (disregarding the Percentage Interest of any
Delinquent Lender during the existence of a Delinquency Period of or
any Nonperforming Lender so long as such Lender is treated equally
with the other Lenders with respect to any actions enumerated below):
(i) No reduction shall be made in (A) the amount of principal of
the Loan owing to such Lender or (B) the interest rate on or fees with
respect to the portion of the Loan owing to such Lender (other than
amendments and waivers approved by the Required Lenders that modify
defined terms used in calculating the Applicable Margin or
Consolidated Excess Cash Flow or that waive an increase in the
Applicable Rate as a result of an Event of Default).
(ii) No change shall be made in the stated, scheduled time of
payment of any portion of the Loan owing to such Lender under Sections
4.1 or 4.2 or interest thereon or fees relating to any of the
foregoing payable to such Lender, and no waiver shall be made of any
Default under Section 9.1.1 with respect to such Lender (other than
amendments and waivers approved by the Required Lenders that modify
defined terms used in calculating the Applicable Margin or
Consolidated Excess Cash Flow).
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(iii) No increase shall be made in the amount, or extension of
the term, of the stated Commitments of such Lender beyond that
provided for under Section 2.
(d) Without the written consent of such Lenders owning at least a
majority of the Percentage Interests in a particular Tranche
(disregarding the Percentage Interest of any Delinquent Lender during
the existence of a Delinquency Period or of any Nonperforming Lender
so long as such Lender is treated equally with the other Lenders with
respect to any actions enumerated below) voting as a separate class,
no change may be made in the time of payment of any portion of such
Tranche under Sections 4.3, 4.4 or 4.5 or in the allocation of
mandatory prepayments under Sections 4.3, 4.4 or 4.5 between the
respective Tranches.
(e) Without the written consent of the Administrative Agent or
the Documentation Agent, as the case may be, no amendment or
modification of any Credit Document shall affect the rights or duties
of the Administrative Agent or the Documentation agent, as the case
may be, under the Credit Documents.
17.2. COURSE OF DEALING; NO IMPLIED WAIVERS. No course of dealing
between any Lender, on the one hand, and any Restricted Company or its
Affiliates, on the other hand, shall operate as a waiver of any of the Lenders'
rights under this Agreement or any other Credit Document or with respect to the
Credit Obligations. In particular, no delay or omission on the part of any
Lender or any Agent in exercising any right under this Agreement or any other
Credit Document or with respect to the Credit Obligations shall operate as a
waiver of such right or any other right hereunder or thereunder. A waiver on
any one occasion shall not be construed as a bar to or waiver of any right or
remedy on any future occasion. No waiver, consent or amendment with respect to
this Agreement or any other Credit Document shall be binding unless it is in
writing and signed by the Documentation Agent or the Required Lenders, as
appropriate.
18. GENERAL PROVISIONS.
18.1. DEFEASANCE. When all Credit Obligations have been paid,
performed and reasonably determined by the Agent to have been indefeasibly
discharged in full, and if at the time no Lender continues to be committed to
extend any credit to the Company hereunder or under any other Credit Document,
this Agreement and the other Credit Documents shall terminate and, at the
Company's written request, accompanied by such certificates and other items as
the Agent shall reasonably deem necessary, any Credit Security shall revert to
the Obligors and the right, title and interest of the Documentation Agent and
the Lenders therein shall terminate. Thereupon, on the Obligors' demand and at
their cost and expense, the Agent shall execute proper instruments,
acknowledging satisfaction of and discharging this Agreement and the other
Credit Documents, and shall redeliver to the Obligors any Credit Security then
in its possession; PROVIDED, HOWEVER, that Sections 3.2.4, 3.5, 10, 11.7.7,
11.10, 12 and 18 shall survive the termination of this Agreement.
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18.2. NO STRICT CONSTRUCTION. The parties have participated jointly in
the negotiation and drafting of this Agreement and the other Credit Documents
with counsel sophisticated in financing transactions. In the event an ambiguity
or question of intent or interpretation arises, this Agreement and the other
Credit Documents shall be construed as if drafted jointly by the parties and no
presumption or burden of proof shall arise favoring or disfavoring any party by
virtue of the authorship of any provisions of this Agreement and the other
Credit Documents.
18.3. CERTAIN OBLIGOR ACKNOWLEDGMENTS. Each of the Restricted
Companies and the other Obligors acknowledges that:
(a) it has been advised by counsel in the negotiation, execution
and delivery of this Agreement and the other Credit Documents;
(b) neither the Agents nor any Lender has any fiduciary
relationship with or duty to the Obligors arising out of or in
connection with this Agreement or any other Credit Document, and the
relationship between the Agents and Lenders, on one hand, and the
Restricted Companies and the Obligors, on the other hand, in
connection herewith or therewith is solely that of debtor and
creditor; and
(c) no joint venture is created hereby or by the other Credit
Documents or otherwise exists by virtue of the transactions
contemplated hereby or thereby among the Obligors, the Restricted
Companies and the Lenders.
18.4. VENUE; SERVICE OF PROCESS; CERTAIN WAIVERS. Each of the
Restricted Companies, the other Obligors, the Agents and the Lenders:
(a) Irrevocably submits to the nonexclusive jurisdiction of the
state courts of The Commonwealth of Massachusetts and to the
nonexclusive jurisdiction of the United States District Court for the
District of Massachusetts for the purpose of any suit, action or other
proceeding arising out of or based upon this Agreement or any other
Credit Document or the subject matter hereof or thereof;
(b) Waives to the extent not prohibited by applicable law that
cannot be waived, and agrees not to assert, by way of motion, as a
defense or otherwise, in any such proceeding brought in any of the
above-named courts, any claim that it is not subject personally to the
jurisdiction of such court, that its property is exempt or immune from
attachment or execution, that such proceeding is brought in an
inconvenient forum, that the venue of such proceeding is improper, or
that this Agreement or any other Credit Document, or the subject
matter hereof or thereof, may not be enforced in or by such court;
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(c) Consents to service of process in any such proceeding in any
manner at the time permitted by Chapter 223A of the General Laws of
The Commonwealth of Massachusetts and agrees that service of process
by registered or certified mail, return receipt requested, at its
address specified in or pursuant to Section 15 is reasonably
calculated to give actual notice; and
(d) Waives to the extent not prohibited by applicable law that
cannot be waived any right it may have to claim or recover in any such
proceeding any special, exemplary, punitive or consequential damages.
18.5. WAIVER OF JURY TRIAL. TO THE EXTENT NOT PROHIBITED BY APPLICABLE
LAW THAT CANNOT BE WAIVED, EACH OF THE RESTRICTED COMPANIES, THE OTHER OBLIGORS,
THE AGENTS AND THE LENDERS WAIVES, AND COVENANTS THAT IT WILL NOT ASSERT
(WHETHER AS PLAINTIFF, DEFENDANT OR OTHERWISE), ANY RIGHT TO TRIAL BY JURY IN
ANY FORUM IN RESPECT OF ANY ISSUE, CLAIM OR PROCEEDING ARISING OUT OF THIS
AGREEMENT OR ANY OTHER CREDIT DOCUMENT OR THE SUBJECT MATTER HEREOF OR THEREOF
OR ANY CREDIT OBLIGATION OR IN ANY WAY CONNECTED WITH THE DEALINGS OF THE
LENDERS, THE AGENTS, THE RESTRICTED COMPANIES OR ANY OTHER OBLIGOR IN CONNECTION
WITH ANY OF THE ABOVE, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING
AND WHETHER IN CONTRACT, TORT OR OTHERWISE. Each of the Restricted Companies
and the other Obligors acknowledges that it has been informed by the
Documentation Agent that the foregoing sentence constitutes a material
inducement upon which each of the Lenders has relied and will rely in entering
into this Agreement and any other Credit Document. Any Lender, the Agents, the
Borrower or any other Obligor may file an original counterpart or a copy of this
Agreement with any court as written evidence of the consent of the Restricted
Companies, the other Obligors, the Agents and the Lenders to the waiver of their
rights to trial by jury.
18.6. INTERPRETATION; GOVERNING LAW; ETC. Time is (and shall be) of
the essence in this Agreement and the other Credit Documents. All covenants,
agreements, representations and warranties made in this Agreement or any other
Credit Document or in certificates delivered pursuant hereto or thereto shall be
deemed to have been relied on by each Lender, notwithstanding any investigation
made by any Lender on its behalf, and shall survive the execution and delivery
to the Lenders hereof and thereof. The invalidity or unenforceability of any
provision hereof shall not affect the validity or enforceability of any other
provision hereof, and any invalid or unenforceable provision shall be modified
so as to be enforced to the maximum extent of its validity or enforceability.
The headings in this Agreement are for convenience of reference only and shall
not limit or otherwise affect the meaning hereof. This Agreement and the other
Credit Documents constitute the entire understanding of the parties with respect
to the subject matter hereof and thereof and supersede all prior and
contemporaneous understandings and agreements, whether written or oral. This
Agreement may be executed in any number of counterparts which together shall
constitute one instrument. This Agreement
-114-
shall be governed by and construed in accordance with the laws (other than
the conflict of laws rules) of The Commonwealth of Massachusetts.
[THE REST OF THIS PAGE IS INTENTIONALLY BLANK.]
-115-
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 CABLE SYSTEMS COMPANY II, L.P.
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 /s/ Michael K. Menerey
--------------------------------------
Title: SVP & Chief Financial Officer
FALCON FIRST, INC.
By /s/ Michael K. Menerey
--------------------------------------
Title: SVP & Chief Financial Officer
FALCON CABLE COMMUNICATIONS, LLC
By FALCON HOLDING GROUP, INC., as general
partner of the managing general partner
of its sole member
By /s/ Michael K. Menerey
-----------------------------
Title: SVP & Chief Financial Officer
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 /s/ Michael K. Menerey
-----------------------------
Title: SVP & Chief Financial Officer
As an authorized officer of each of the
foregoing corporations
BANKBOSTON, N.A.
By /s/ David B. Herter
-----------------------------
Title: Managing Director
BankBoston, N.A.
Media and Communications Department
100 Federal Street
Boston, MA 02110
Telecopy: (617) 434-3401
Telex: 940581
TORONTO DOMINION (TEXAS) INC.
By /s/ Neva Nesbitt
-----------------------------
Title: Vice President
Toronto Dominion (Texas) Inc.
909 Fannin Street, 17th Floor
Houston, TX 77010
Telecopy: (713) 951-9921
NATIONSBANK, N.A.
By /s/ Whitney L. Busse
-----------------------------
Title: Vice President
NationsBank, N.A.
901 Main Street, 64th Floor
Dallas, TX 75202
Telecopy: (214) 508-9390
THE CHASE MANHATTAN BANK
By /s/ Mitch Gervis
-----------------------------
Title: Vice President
The Chase Manhattan Bank
270 Park Avenue, 37th Floor
New York, NY 10017
Telecopy: (212) 270-4584
BANK OF AMERICA NATIONAL TRUST &
SAVINGS ASSOCIATION
By /s/ Shannon T. Ward
-----------------------------
Title: Vice President
Bank of America National Trust &
Savings Association
Entertainment & Media Industry Group
Dept. 3283
555 South Flower Street, 10th Floor
Los Angeles, CA 90071
Telecopy: (213) 228-2641
ABN AMRO BANK N.V.
By /s/ Frances O'R. Logan
-----------------------------
Title: Vice President
By /s/ William S, Bennett
-----------------------------
Title: Vice President
ABN AMRO Bank N.V.
500 Park Avenue, 2nd Floor
New York, NY 10022
Telecopy: (212) 446-4203
ALLSTATE LIFE INSURANCE COMPANY
By /s/ Charles D. Miles
-----------------------------
Title: authorized signatory
By /s/ Jerry D. Zinkula
-----------------------------
Title: authorized signatory
Its Authorized Signatories
Allstate Life Insurance Company
3075 Sanders Road, Suite G5A
Northbrook, IL 60062
Telecopy: (847) 402-9882
BANQUE NATIONALE DE PARIS
By /s/ Clive Vettles
-----------------------------
Title: SVP & Manager
By /s/ Janice Ho
-----------------------------
Title: Vice President
Banque Nationale de Paris
725 South Figueroa, Suite 2090
Los Angeles, CA 90017
Telecopy: (213) 488-9602
BARCLAYS BANK PLC
By /s/ James K. Downey
-----------------------------
Title: Director
Barclays Bank PLC
388 Mark Street, Suite 1700
San Francisco, CA 94111
Telecopy: (415) 765-4760
CIBC INC.
By /s/ Cynthia M. Cahill
-----------------------------
Title: Executive Director
CIBC Oppenheimer Corp, as Agent
CIBC Inc.
425 Lexington Avenue
New York, NY 10017
Telecopy: (212) 856-3558
CITY NATIONAL BANK
By /s/ David Burdge
-----------------------------
Title: SVP
City National Bank
400 N. Roxbury Drive, 3rd Floor
Beverly Hills, CA 90210
Telecopy: (310) 888-6152
COOPERATIVE CENTRALE RAIFFEISEN-
BOERENLEENBANK B.A., "RABOBANK NEDERLAND",
NEW YORK BRANCH
By /s/ Alan E. McLintock
-----------------------------
Title: Vice President
By /s/ W. Pieter C. Kodde
-----------------------------
Title: Vice President
Rabobank Nederland
Media & Telecommunications
300 South Wacker Drive, Suite 3500
Chicago, IL 60606
Telecopy: (312) 786-0052
CREDIT LOCAL DE FRANCE
By /s/ Philippe Ducos
-----------------------------
Title: Deputy General Manager
By /s/ John W. Flaherty
-----------------------------
Title: Vice President:
Credit Local de France
450 Park Avenue, 3rd Floor
New York, NY 10022
Telecopy: (212) 753-5522
CREDIT LYONNAIS NEW YORK BRANCH
By /s/ Mark D. Thorsheim
-----------------------------
Title: Vice President
Credit Lyonnais New York Branch
1301 Avenue of the Americas
New York, NY 10019
Telecopy: (212) 261-3288
CYPRESSTREE INVESTMENT FUND LLC
By CYPRESSTREE INVESTMENT
MANAGEMENT COMANY its Managing
Member
By /s/ Peter Merrill
-----------------------------
Title: Managing Director
Cypresstree Investment Fund LLC
125 High Street
Boston, MA 02110
Telecopy: (617) 946-5880
DEEP ROCK AND COMPANY
By: Eaton Vance Management, as
Investment Advisor
By /s/ Payson F. Swaffield
-----------------------------
Title: Vice President
Eaton Vance Management
Attn: Prime Rate Reserves
24 Federal Street, 6th Floor
Boston, MA 02110
Telecopy: (617) 695-9594
DRESDNER BANK AG, NEW YORK AND
GRAND CAYMAN BRANCHES
By /s/ William E. Lambert
-----------------------------
Title: Assistant Vice President
By /s/ Brian Haughney
-----------------------------
Title: Assistant Treasurer
Dresdner Bank AG, New York and
Grand Cayman Branches
75 Wall Street
New York, NY 10005
Telecopy: (212) 429-2374
FLEET NATIONAL BANK
By /s/ Garrett Komjathy
-----------------------------
Title: Vice President
Fleet National Bank
Media & Communications Group
1185 Avenue of the Americas, 16th Floor
New York, NY 10036
Telecopy: (212) 819-6202
THE FUJI BANK, LIMITED,
LOS ANGELES AGENCY
By /s/ Masahito Fukuda
-----------------------------
Title: Joint General Manager
The Fuji Bank, Limited,
Los Angeles Agency
333 South Hope Street, 39th Floor
Los Angeles, CA 90071
Telecopy: (213) 253-4178
THE INDUSTRIAL BANK OF JAPAN,
LIMITED LOS ANGELES AGENCY
By /s/ Vicente L. Timiraos
-----------------------------
Title: SVP & SDGM
The Industrial Bank of Japan,
Limited Los Angeles Agency
350 Grand South Avenue, Suite 1500
Los Angeles, CA 90071
Telecopy: (213) 488-9840
KZH HOLDING CORPORATION III
By /s/ Virginia Conway
-----------------------------
Title: Authorized Agent
KZH Holding Corporation III
c/o The Chase Manhattan Bank
450 West 33rd Street, 15th Floor
New York, NY 10001
Telecopy: (212) 946-7776
KZH-SOLEIL-2 CORPORATION
By /s/ Virginia Conway
-----------------------------
Title: Authorized Agent
KZH-Soleil-2 Corporation
c/o Virginia Conway
450 West 33rd Street
New York, NY 10001
Telecopy: (212) 946-7776
OAK HILL SECURITIES FUND, L.P.
By: Oak Hill Securities GenPar, L.P.,
its General Partner
By: Oak Hill Securities MPG, Inc.,
its General Partner
By /s/ Scott D. Krase
-----------------------------
Title: Vice President
Oak Hill Securities Fund, L.P.
Park Avenue Tower
65 East 55th Street, 32nd Floor
New York, NY 10022
Telecopy: (212) 593-3596
OSPREY INVESTMENTS PORTFOLIO
By: Citibank, N.A., as Manager
By /s/ Hans L. Christensen
-----------------------------
Title: Vice President
Osprey Investments Portfolio
599 Lexington Avenue
26th Floor, Zone 10
New York, NY 10043
Telecopy: (212) 793-1871
PARIBAS
By /s/ Darlynn Ernst
-----------------------------
Title: Assistant Vice President
By /s/ Tom Brandt
-----------------------------
Title: Director
Paribas
2029 Century Park East, Suite 3900
Los Angeles, CA 90067
Telecopy: (310) 556-3762
MORGAN STANLEY DEAN WITTER
PRIME INCOME TRUST
By /s/ Sheila Finnerty
-----------------------------
Title: Vice President
Prime Income Trust
c/o Dean Witter InterCapital, Inc.
Two World Trade Center, 72nd Floor
New York, NY 10048
Telecopy: (212) 392-5345
SUMMIT BANK
By /s/ Christopher J. Annas
-----------------------------
Title: Vice President
Summit Bank
512 Township Line Road, Suite 280
Blue Bell, PA 19422
Telecopy: (215) 619-4820
SUNTRUST BANK, CENTRAL FLORIDA, N.A.
By /s/ Janet P. Sanmons
-----------------------------
Title: Vice President
Suntrust Bank, Central Florida, N.A.
200 South Orange Ave.
MC 1109
Orlando, FL 32801
Telecopy: (407) 237-5126
TRANSAMERICA
By /s/ John Casparian
-----------------------------
Title: Investment Officer
Transamerica
1100 South Olive Street, Suite 2700
Los Angeles, CA 90015
Telecopy: (213) 742-4160
THE TRAVELERS INSURANCE COMPANY
By /s/ Allen R. Cantrell
-----------------------------
Title: Investment Officer
The Travelers Insurance Company
One Tower Square
Hartford, CT 06183-2030
Telecopy: (860) 954-3730
UNION BANK OF CALIFORNIA
By /s/ Bill D. Gooch
-----------------------------
Title: Senior Vice President
Union Bank of California
445 South Figueroa Street
Los Angeles, CA 90071
Telecopy: (213) 236-5747
VAN KAMPEN AMERICAN CAPITAL
PRIME RATE INCOME TRUST
By /s/ Jeffrey W. Maillet
-----------------------------
Title: Senior Vice President & Director
Van Kampen American Capital
Prime Rate Income Trust
One Parkview Plaza, 6th Floor
Oakbrook Terrace, IL 60181
Telecopy: (630) 684-6740
VAN KAMPEN AMERICAN CAPITAL
SENIOR INCOME TRUST
By /s/ Jeffrey W. Maillet
-----------------------------
Title: Senior Vice President & Director
Van Kampen American Capital
Senior Income Trust
One Parkview Plaza, 6th Floor
Oakbrook Terrace, IL 60181
Telecopy: (630) 684-6740