EXHIBIT 10.31
NOTE PURCHASE AND EXCHANGE AGREEMENT
CONSENT AND AMENDMENT AGREEMENT
This Consent and Amendment Agreement (this "Amendment") is dated as of
June 30, 1998 among Falcon Telecable, a California Limited Partnership (the
"Company"), AUSA Life Insurance Company, Inc., by AUER & Co. its nominee, and
MONY Life Insurance Company of America, by J. ROMEO & Co., its nominee (the
"Purchasers").
The Company and the Purchasers agree as follows:
1. Reference to Note Purchase and Exchange Agreement. Reference is
made to a Note Purchase and Exchange Agreement dated as of October 21, 1991 as
heretofore amended and modified (the "Note Purchase Agreement"). Reference is
also made to a Second Restated Subordination Agreement dated as of July 12, 1996
among the Purchasers, Falcon Holding Group, L.P. ("Holding, L.P."), Falcon
Holding Group, Inc. ("Holding, Inc.") and certain subsidiaries of Holding, L.P.
and Holding, Inc. listed as signatories thereto, as heretofore amended and
modified (the "Subordination Agreement"). Reference is also made to a Second
Restated Guaranty Agreement dated as of July 12, 1996 among the Purchasers and
certain subsidiaries of Holding, L.P. and Holding Inc. listed as signatories
thereto, as heretofore amended and modified (the "Guaranty Agreement"). The Note
Purchase Agreement, the Subordination Agreement and the Guaranty Agreement are
collectively referred to as the "Telecable Agreements." Capitalized terms
defined in the Telecable Agreements that are not defined herein shall have the
meanings ascribed to them in the Telecable Agreements as applicable.
2. Consent. Reference is also made to the Bank Credit Agreement as in
effect before giving effect to the New Bank Credit Agreement (the "Existing Bank
Credit Agreement"). The Company and other borrowers under the Existing Bank
Credit Agreement anticipate entering into a Credit Agreement on June 30, 1998
(the "New Bank Credit Agreement") with BankBoston, N.A., as Documentation Agent,
borrowings under which will be used, among other things, to discharge all
outstanding obligations under the Existing Bank Credit Agreement. The Purchasers
hereby consent to the Company's and its affiliates' execution, delivery and
performance of the New Bank Credit Agreement, such New Bank Credit Agreement to
be substantially in the form attached hereto as Exhibit A.
3. Amendments to Telecable Agreements.
3.1. Section 7.19 of the Note Purchase Agreement is amended to
read as follows:
"7.19 Compliance with Bank Credit Agreement. The Company shall comply,
and shall cause the Restricted Companies to comply, with each of the
covenants contained in Section 7 of the Bank Credit Agreement (other
than Sections 7.5.2 and 7.15) as in effect
on the Amendment Closing Date (except as such covenants may be amended
pursuant to Section 7.20 below, other than those set forth in the
immediately following paragraph), a copy of which is attached hereto as
Exhibit E. All references therein to Lenders, Agents and similar
persons shall be deemed, for purposes of this Agreement, to be holders
of the Notes."
For purposes of this Agreement, the incorporated provisions of
Sections 7.5.1, 7.5.3 and 7.5.4 of the Bank Credit Agreement (as
defined in Section 11.1 of this Agreement) are amended to read as
follows and shall not be subject to amendment or modification without
the consent of the holders of the Notes:
Consolidated Total Debt to Consolidated Annualized Operating
Cash Flow." Consolidated Total Debt shall not on any date exceed the
percentage indicated in the table below of Consolidated Annualized
Operating Cash Flow for the period of three consecutive months then
most recently ended for which financial statements have been (or are
required to have been) furnished in accordance with Section 8:
DATE PERCENTAGE
Amendment Closing 650%
Date through June 29, 1999
June 30, 1999 through 600%
December 30, 1999
December 31, 1999 550%
through June 29, 2000
June 30, 2000 through 500%
December 30, 2000
December 31, 2000 and 450%
thereafter
Consolidated Annualized Operating Cash Flow to Consolidated Pro
Forma Debt Service." As of the last day of each month, Consolidated
Annualized Operating Cash Flow for the period of three consecutive
months ended on such date shall exceed 100% of Consolidated Pro Forma
Debt Service for the period of twelve consecutive months beginning
immediately after such date.
Consolidated Operating Cash Flow Plus Cash and Cash Equivalents to
Consolidated Total Fixed Charges." As of the last day of each month
commencing December 31, 2000, the sum of (a) Consolidated Operating
Cash Flow for the period of twelve consecutive months ended on such
date plus (b) the lesser of (i) cash and Cash Equivalents owned by the
Restricted Companies as of such date determined in accordance with GAAP
on a Consolidated Basis or (ii) $2,000,000 shall exceed 95% of
Consolidated Total Fixed Charges for such period."
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3.2 Section 9.1(c) of the Note Purchase Agreement is amended to
read as follows:
"(c) the Company fails to perform or observe any covenant or condition
contained in Section 2.2, Section 7.20 or Section 7.21 of this
Agreement, or, to the extent resulting from a failure to comply with
Section 7.5 through Section 7.12, inclusive, Section 7.14, Section
7.15, Section 7.17 through Section 7.19, inclusive, of the Bank Credit
Agreement (as and to the extent modified and incorporated herein);"
3.3 Section 11.1 of the Note Purchase Agreement is amended to
read as follows:
"Each of the definitions set forth in Section 1 of the Bank Credit
Agreement (as defined in this Section 11.1 below) as in effect on the
Amendment Closing Date (as defined in this Section 11.1 below) (except
as such definitions are amended pursuant to section 7.20 of the
Agreement) are hereby incorporated herein to the extent such
definitions are referred to in, or are necessary to construe or further
define, the provisions and terms of the Bank Credit Agreement
incorporated herein, provided, that, all references therein to Lenders,
Agents, and similar Persons shall be deemed, for purposes of this
Agreement, to be the holders of the Notes. To the extent that any
definition so incorporated by reference from the Bank Credit Agreement
shall conflict with, or be inconsistent with, any existing definition
in the Agreement, the definition so incorporated by reference shall
prevail. In addition, the following definitions are added or
substituted for existing definitions:
"Amendment" means this Amendment.
"Amendment Closing Date" means the date described in Section
4.3 of this Amendment.
"Bank Credit Agreement" means the Credit Agreement dated as of
June 30, 1998, among the Company and other borrowers and guarantors
thereunder, the banks signatory thereto as lenders and BankBoston,
N.A., as Documentation Agent, a copy of which is attached hereto as
Exhibit E, as amended, supplemented or otherwise modified from time to
time, including any amendment, supplement or modification to reflect
the refunding or refinancing of the indebtedness outstanding
thereunder.
"Bank Pledge Agreement" means the Pledge and Subordination
Agreement dated as of June 30, 1998, among Holding, L.P., Holding,
Inc., the Company, the other Restricted Companies, and BankBoston, N.A.
as Documentation Agent, as amended, supplemented or otherwise modified
from time to time, including any amendment, supplement or modification
to reflect the refunding or refinancing of the indebtedness outstanding
under the Bank Credit Agreement.
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There is hereby added to the Agreement a revised Exhibit E
which shall be in the form of Exhibit A to this Amendment. The Bank
Credit Agreement as in effect on the date hereof is set forth in
Exhibit A to this Amendment."
4. Additional Agreements.
4.1. The Purchasers acknowledge that New Falcon II will become
the "Borrower" under the New Bank Credit Agreement substantially
contemporaneously with the TCI Closing (as defined in the New Bank Credit
Agreement) and agree that, even after New Falcon II becomes the "Borrower" under
the New Bank Credit Agreement, the Notes and all other obligations of the
Company under the Note Purchase Agreement (and all obligations of the
"Guarantors" under the Guaranty Agreement) shall remain subordinated to the
indebtedness and other obligations of the Company and the other "Borrowers" and
"Guarantors" under the New Bank Credit Agreement on the same terms as currently
subordinated. Pursuant to Section 7.21 of the Note Purchase Agreement, subject
to the Company and its affiliates entering into the New Bank Credit Agreement,
the Company will cause New Falcon II to become a "Guarantor" under the Guaranty
Agreement and a party to the Subordination Agreement contemporaneously with
becoming a "Borrower" under the New Bank Credit Agreement.
4.2 Pursuant to Section 7.21 of the Note Purchase Agreement,
subject to the Company and its affiliates entering into the New Bank Credit
Agreement, the Company will cause Falcon Video Communications, L.P. and Falcon
Video Communications Investors, L.P. to become "Guarantors" under the Guaranty
Agreement and parties to the Subordination Agreement contemporaneously with
their becoming a "Guarantor" under the New Bank Credit Agreement (i.e., upon the
TCI Closing and the discharge of the Falcon Video Financing Debt as contemplated
in Section 5.3.1 of the New Bank Credit Agreement, and not upon the earlier
making of the Falcon Video Revolving Loan under Section 2.1.4 of the New Bank
Credit Agreement).
4.3 The following are conditions precedent to the
effectiveness of this Amendment. The date on which all such conditions are met
(or waived by the Purchasers) shall be referred to in this Amendment as the
"Amendment Closing Date."
4.3.1. The transactions contemplated by the New Bank Credit
Agreement to be completed on the Initial Closing Date (as defined in the New
Bank Credit Agreement) shall be completed and all conditions theretofore shall
have been fulfilled and the New Bank Credit Agreement shall be in full force and
effect.
4.3.2. All representations and warranties set forth in
Section 8 of the New Bank Credit Agreement shall be true and correct as of the
Amendment Closing Date, and by signing below each of the Restricted Companies
(under the New Bank Credit Agreement) confirms that such representations and
warranties are true and correct as of the date hereof and that each Purchaser
may rely on such representations and warranties as though the same were made to
such Purchaser and acknowledging that each Purchaser is relying on the truth and
accuracy of such representations and warranties in entering into this Amendment
and consummating the transactions contemplated herein.
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4.3.3. All proceedings taken in connection with this
Amendment and all documents and papers relating thereto shall be satisfactory to
the Purchasers and their special counsel. The Purchasers and their special
counsel shall have received copies of such documents and papers as they may
reasonably request in connection therewith, all in form and substance
satisfactory to the Purchasers and their special counsel.
4.4. Except as amended hereby, the Telecable Agreements remain unchanged and,
as amended hereby, the Telecable Agreements remain in full force and effect. The
Company hereby reaffirms all of its obligations and undertakings under the
Telecable Agreements as amended hereby, and the Notes (as such term is defined
in the Note Purchase Agreement), as amended hereby. All references to the Note
Purchase Agreement, the 11.56% Series A Subordinated Notes (as defined in the
Note Purchase Agreement) and the 11.56% Series B Subordinated Notes (as defined
in the Note Purchase Agreement) shall mean the Note Purchase Agreement and such
Notes as amended to date and by this Amendment.
4.5. This Amendment may be executed in multiple counterparts, each of which
shall be deemed an original and all of which shall constitute an agreement,
notwithstanding that all of the parties are not signatories on the same date or
the same counterpart. A signature page may be detached from one counterpart when
executed and attached to another counterpart.
[REMAINDER OF PAGE INTENTIONAL BLANK;
NEXT PAGE IS SIGNATURE PAGE]
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Each of the undersigned has caused this Consent Agreement to be
executed and delivered by its duly authorized officer as of the date first above
written.
FALCON TELECABLE, A CALIFORNIA
LIMITED PARTNERSHIP
By: FALCON TELECABLE INVESTORS
GROUP, LTD., a California limited
partnership, its managing general
partner
By: FALCON HOLDING GROUP, INC.,
a California corporation, its managing
general partner
By: /s/ Frank J. Intiso
-------------------------
Title: EVP - Finance
AUSA LIFE INSURANCE COMPANY, INC.
By: AUER & Co.
By:
------------------------
Title:
J. ROMEO & CO.
By:
------------------------
Title:
ACKNOWLEDGED AND CONFIRMED
FOR PURPOSES OF SECTION 4.3.2 HEREOF
FALCON CABLE MEDIA, A CALIFORNIA
LIMITED PARTNERSHIP
FALCON CABLE SYSTEMS COMPANY II,
L.P.
FALCON CABLEVISION, A CALIFORNIA
LIMITED PARTNERSHIP
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Each of the undersigned has caused this Consent Agreement to be
executed and delivered by its duly authorized officer as of the date first above
written.
FALCON TELECABLE, A CALIFORNIA
LIMITED PARTNERSHIP
By: FALCON TELECABLE INVESTORS GROUP, LTD.,
a California limited partnership, its
managing general partner
By: FALCON HOLDING GROUP, INC., a California
corporation, its managing general
partner
By: /s/ Frank J. Intiso
------------------------
Title: EVP
AUSA LIFE INSURANCE COMPANY, INC.
By: AUER & Co., ITS NOMINEE
By:
------------------------
Title:
MONY LIFE INSURANCE COMPANY OF AMERICA
By: J. ROMEO & Co., its nominee
By:
------------------------
Title:
ACKNOWLEDGED AND CONFIRMED
FOR PURPOSES OF SECTION 4.3.2 HEREOF
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.
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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
companies
By: /s/ Frank J. Intiso
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Title: EVP
FALCON FIRST, INC.
FALCON FIRST CABLE OF THE SOUTHEAST, INC.
FALCON FIRST HOLDINGS, INC.
FF CABLE HOLDING, INC.
FALCON FIRST CABLE OF NEW YORK, INC.
PLATTSBURG CABLEVISION, INC.
AUSABLE CABLE TV, INC.
CEDAR BLUFF CABLEVISION, INC.
EASTERN MISSISSIPPI CABLEVISION, INC.
SCOTTSBORO TV CABLE, INC.
LAUDERDALE CABLEVISION, INC.
SCOTTSBORO CABLEVISION, INC.
ATHENS CABLEVISION, INC.
DALTON CABLEVISION, INC.
MULTIVISION OF COMMERCE, INC.
MULTIVISION NORTHEAST, INC.
By: /s/ Frank J. Intiso
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Title: EVP
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