SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_________________
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
July 12, 1996
_________________________________________________________
Falcon Holding Group, L.P.
____________________________________________________________
(Exact name of registrant as specified in its charter)
Delaware
_______________________________________________________
(State or other jurisdiction of incorporation)
33-60776 95-4408577
__________________________________ ___________________________________
(Commission File Number) (IRS Employer Identification No.)
10900 Wilshire Boulevard, 15th Floor, Los Angeles, CA 90024
_____________________________________________________ _________
(Address of principal executive offices) (Zip Code)
(310) 824-9990
_______________________________________
(Registrant's Telephone Number)<PAGE>
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On July 12, 1996, Falcon Holding Group, L.P. (the
"Partnership") acquired, through its subsidiary Falcon Cable
Systems Company II, L.P. ("FCSC II"), substantially all of
the assets of Falcon Cable Systems Company, a California
limited partnership ("FCSC") for an aggregate purchase price
of $247,396,814 in cash pursuant to the Asset Purchase
Agreement by and between the FCSC and FCSC II, dated June 13,
1996 (the "Purchase Agreement"), which is filed as Exhibit 1
hereto, and is hereby incorporated herein by reference.
Filed herewith as Exhibit 2 is the joint press re-
lease of the Partnership, FCSC, and FCSC II announcing the
consummation of the sale, which press release is hereby in-
corporated herein by reference. Additional information re-
lating to the transaction is contained in the joint press
release of the Partnership and FCSC dated June 13, 1996, an-
nouncing the execution of the Purchase Agreement, which is
filed as Exhibit 3 hereto, and is hereby incorporated herein
by reference, as well as in the respective Current Reports on
Form 8-K of each of the Partnership and FCSC, dated June 13,
1996.
The acquisition described above was financed
through borrowings under the Amended and Restated Credit
Agreement, dated as of July 12, 1996, originally dated as of
December 28, 1995 (the "Financing Facility"). The Financing
Facility is filed as Exhibit 4 hereto and is hereby
incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA
FINANCIAL INFORMATION AND EXHIBITS.
It is impracticable for the Partnership to file the
financial statements and information required by Items 7(a)
and (b) at this time. The Company will file such financial
statements and information as soon as practicable and in any
event no later than the date on which the Company is required
to file such statements and information pursuant to Items
7(a)(4) and 7(b)(2) of the Current Report on Form 8-K.
(c) Exhibits.
Exhibit No. Description
___________ ___________
1 Purchase Agreement (filed as Exhibit 4 to the
Current Report on Form 8-K of the Partnership,
dated June 13, 1996).
2 Press Release of the Partnership, FCSC and
FCSC II dated July 12, 1996 (filed as Exhibit<PAGE>
2 to the Current Report on Form 8-K of FCSC
dated July 12, 1996).
3 Press Release of the Partnership and FCSC
dated June 13, 1996 (filed as Exhibit 3 to the
Current Report on Form 8-K of FCSC dated July
12, 1996).
4 Financing Facility.<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Ex-
change Act of 1934, the registrant has duly caused this re-
port to be signed on its behalf by the undersigned hereunto
duly authorized.
Date: July 12, 1996
FALCON HOLDING GROUP, L.P.
By: Falcon Holding Group, Inc.
General Partner
By: /s/ Michael K. Menerey
Michael K. Menerey, Secretary
and Chief Financial Officer<PAGE>
EXHIBIT INDEX
Exhibit No. Description Page No.
___________ ___________ ________
1 Purchase Agreement (filed
as Exhibit 4 to the Cur-
rent Report on Form 8-K of
the Partnership, dated
June 13, 1996).
2 Press Release of the Part-
nership, FCSC and FCSC II
dated July 12, 1996 (filed
as Exhibit 2 to the Cur-
rent Report on Form 8-K of
FCSC dated July 12, 1996).
3 Press Release of the Part-
nership and FCSC dated
June 13, 1996 (filed as
Exhibit 3 to the Current
Report on Form 8-K of FCSC
dated July 12, 1996).
4 Financing Facility.
____________________________________________________________
____________________________________________________________
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.
AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of July 12, 1996
Originally Dated as of December 28, 1995
THE FIRST NATIONAL BANK OF BOSTON
as Managing Agent
TORONTO-DOMINION (TEXAS) INC.
as Administrative Agent
and
NATIONSBANK OF TEXAS, N.A.
as Syndication Agent
____________________________________________________________
____________________________________________________________
3133296.08 FALCON CREDIT AGREEMENT
<PAGE>
TABLE OF CONTENTS
PAGE
1. Restatement: Definitions; Certain Rules of
Construction.............................................. 1
2. The Credits............................................... 28
2.1. Tranche A - Revolving Credit....................... 28
2.1.1. Revolving Loan.............................. 28
2.1.2. Borrowing Requests.......................... 30
2.1.3. Revolving Notes............................. 30
2.2. Tranche B - Term Loan.............................. 31
2.2.1. Term Loan................................... 31
2.2.2. Term Notes.................................. 31
2.3. Acquisition Facility............................... 31
2.4. Application of Proceeds............................ 32
2.4.1. Loan........................................ 32
2.4.2. Specifically Prohibited Applications........ 32
2.5. Nature of Obligations of Lenders to Extend
Credit............................................. 33
3. Interest; Pricing Options; Fees........................... 33
3.1. Interest........................................... 33
3.2. Pricing Options.................................... 33
3.2.1. Election of Pricing Options................. 33
3.2.2. Notice to Lenders and Borrowers............. 35
3.2.3. Selection of Interest Periods............... 35
3.2.4. Additional Interest......................... 35
3.2.5. Change in Applicable Laws, Regulations,
etc......................................... 36
3.2.6. Funding Procedure........................... 36
3.3. Commitment Fees.................................... 36
3.4. Taxes.............................................. 37
3.5. Capital Adequacy................................... 38
3.6. Regulatory Changes................................. 38
3.7. Computations of Interest and Fees.................. 39
3.8. Interest Limitation................................ 39
4. Payment................................................... 39
4.1. Payment at Maturity................................ 39
4.2. Fixed Prepayment of Term Loan...................... 39
4.3. Maximum Amount of Revolving Credit, etc............ 40
4.4. Targeted Asset Sales............................... 40
4.5. Non-Targeted Asset Sales........................... 40
4.5.1. Prepayment on Sale.......................... 40
3133296.08 -i- FALCON CREDIT AGREEMENT<PAGE>
4.5.2. Asset Swap Reserve Amount................... 41
4.6. Designated Financing Debt.......................... 41
4.7. Voluntary Prepayments.............................. 42
4.8. Application of Payments............................ 42
5. Conditions to Extending Credit............................ 42
5.1. Conditions on Initial Closing Date................. 42
5.1.1. Satisfaction of Existing Bank Debt.......... 42
5.1.2. Notes....................................... 43
5.1.3. Guarantors Contribution Agreement........... 43
5.1.4. Payment of Fees............................. 43
5.1.5. Legal Opinions.............................. 43
5.1.6. Security Agreement.......................... 43
5.1.7. Holding Pledge and Subordination
Agreement................................... 44
5.1.8. Perfection of Security...................... 44
5.1.9. Falcon Cable Systems Purchase Agreemen..... 44
5.1.10. Listed System............................. 45
5.1.11. Repayment of Falcon Cable Systems Debt.... 45
5.1.12. MONY Subordinated Debt.................... 45
5.2. Conditions to Each Extension of Credit............ 45
5.2.1. Officer's Certificate....................... 45
5.2.2. Proper Proceedings.......................... 46
5.2.3. Legality, etc............................... 46
6. Guarantees................................................ 46
6.1. Guarantees of Credit Obligations................... 46
6.2. Continuing Obligation.............................. 47
6.3. Waivers with Respect to Credit Obligations......... 47
6.4. Lenders' Power to Waive, etc....................... 49
6.5. Information Regarding Obligors, etc................ 50
6.6. Certain Guarantor Representations.................. 51
6.7. No Subrogation..................................... 51
6.8. Subordination...................................... 52
6.9. Future Subsidiaries; Further Assurances............ 52
7. General Covenants......................................... 52
7.1. Taxes and Other Charges; Accounts Payable.......... 52
7.1.1. Taxes and Other Charges..................... 52
7.1.2. Accounts Payable............................ 53
7.2. Conduct of Business, etc........................... 53
7.2.1. Types of Business........................... 53
7.2.2. Maintenance of Properties................... 53
7.2.3. Compliance with Material Agreements......... 53
3133296.08 -ii- FALCON CREDIT AGREEMENT<PAGE>
7.2.4. Statutory Compliance........................ 54
7.3. Insurance.......................................... 54
7.3.1. Business Interruption Insurance............. 54
7.3.2. Property Insurance.......................... 54
7.3.3. Liability Insurance......................... 55
7.3.4. Flood Insurance............................. 55
7.4. Financial Statements and Reports................... 55
7.4.1. Annual Reports.............................. 55
7.4.2. Quarterly Reports........................... 56
7.4.3. Other Reports............................... 57
7.4.4. Notice of Litigation; Notice of Default..... 58
7.4.5. Franchise Matters........................... 58
7.4.6. ERISA Reports............................... 58
7.4.7. Other Information........................... 59
7.5. Certain Financial Tests............................ 59
7.5.1. Consolidated Total Debt to Consolidated
Annualized Operating Cash Flow.............. 59
7.5.2. Consolidated Operating Cash Flow to
Consolidated Cash Interest Expense.......... 60
7.5.3. Consolidated Annualized Operating Cash
Flow to Consolidated Pro Forma Debt
Service..................................... 60
7.5.4. Consolidated Operating Cash Flow Plus
Cash and Cash Equivalents to Consolidated
Total Fixed Charges......................... 60
7.5.5. Capital Expenditures........................ 60
7.6. Indebtedness....................................... 78
7.7. Guarantees; Letters of Credit...................... 80
7.8. Liens.............................................. 80
7.9. Investments and Acquisitions....................... 82
7.10. Distributions..................................... 83
7.11. Merger, Consolidation and Dispositions of As-
sets.............................................. 85
7.12. Issuance of Stock by Subsidiaries; Subsidiary
Distributions...................................... 86
7.12.1. Issuance of Stock by Subsidiaries.......... 86
7.12.2. No Restrictions on Subsidiary
Distributions.............................. 86
7.13. ERISA, etc........................................ 86
7.14. Transactions with Affiliates...................... 87
7.15. Interest Rate Protection.......................... 87
7.16. Compliance with Environmental Laws................ 87
7.17. No Outside Management Fees........................ 88
7.18. Special Restrictions on Falcon Telecom............ 88
8. Representations and Warranties............................ 88
8.1. Organization and Business.......................... 88
8.1.1. The Borrowers............................... 88
8.1.2. Other Guarantors............................ 89
3133296.08 -iii- FALCON CREDIT AGREEMENT<PAGE>
8.1.3. Qualification................................ 89
8.1.4. Capitalization.............................. 89
8.2. Financial Statements and Other Information;
Material Agreements................................ 90
8.2.1. Financial Statements and Other
Information................................. 90
8.2.2. Material Agreements......................... 90
8.3. Changes in Condition............................... 91
8.4. Agreements Relating to Financing Debt, Invest-
ments, etc......................................... 91
8.5. Title to Assets.................................... 91
8.6. Licenses, etc...................................... 91
8.6.1. Franchises; FCC Licenses.................... 92
8.6.2. FCC and Other Matters....................... 92
8.7. Litigation......................................... 93
8.8. Tax Returns........................................ 93
8.9. Authorization and Enforceability................... 93
8.10. No Legal Obstacle to Agreements................... 93
8.11. Defaults.......................................... 94
8.12. Certain Business Representations.................. 94
8.12.1. Labor Relations............................ 94
8.12.2. Antitrust.................................. 95
8.12.3. Consumer Protection........................ 95
8.12.4. Burdensome Obligations..................... 95
8.12.5. Future Expenditures........................ 95
8.13. Environmental Regulations......................... 95
8.13.1. Environmental Compliance................... 95
8.13.2. Environmental Litigation................... 96
8.13.3. Hazardous Material......................... 96
8.13.4. Environmental Condition of Properties...... 97
8.14. Pension Plans..................................... 97
8.15. Falcon Cable Systems Purchase Agreement, etc...... 97
8.16. Foreign Trade Regulations; Government Regula-
tion; Margin Stock................................ 97
8.16.1. Foreign Trade Regulations.................. 97
8.16.2. Government Regulation...................... 97
8.16.3. Margin Stock............................... 98
8.17. Disclosure........................................ 98
9. Defaults.................................................. 98
9.1. Events of Default.................................. 98
9.2. Certain Actions Following an Event of Default...... 102
9.2.1. No Obligation to Extend Credit.............. 102
9.2.2. Specific Performance; Exercise of Rights.... 102
9.2.3. Acceleration................................ 102
9.2.4. Enforcement of Payment; Credit Security;
Setoff...................................... 102
9.2.5. Cumulative Remedies......................... 103
3133296.08 -iv- FALCON CREDIT AGREEMENT<PAGE>
9.3. Annulment of Defaults.............................. 103
9.4. Waivers............................................ 103
10. Expenses; Indemnity...................................... 103
10.1. Expenses.......................................... 103
10.2. General Indemnity................................. 105
11. Operations............................................... 105
11.1. Interests in Credits.............................. 105
11.2. Agents' Authority to Act, etc..................... 106
11.3. Borrowers to Pay Agent, etc....................... 106
11.4. Lender Operations for Advances, etc............... 106
11.4.1. Advances................................... 106
11.4.2. Administrative Agent to Allocate
Payments, etc.............................. 106
11.4.3. Delinquent Lenders; Nonperforming
Lenders.................................... 107
11.5. Sharing of Payments, etc.......................... 108
11.6. Amendments, Consents, Waivers, etc................ 108
11.7. Agent's Resignation or Removal.................... 110
11.8. Concerning the Agents............................. 111
11.8.1. Action in Good Faith, etc.................. 111
11.8.2. No Implied Duties, etc..................... 111
11.8.3. Validity, etc.............................. 111
11.8.4. Compliance................................. 111
11.8.5. Employment of Agents and Counsel........... 112
11.8.6. Reliance on Documents and Counsel.......... 112
11.8.7. Agent's Reimbursement...................... 112
11.9. Rights as a Lender................................ 112
11.10. Independent Credit Decision...................... 113
11.11. Indemnification.................................. 113
12. Successors and Assigns; Lender Assignments and
Participations........................................... 114
12.1. Assignments by Lenders............................ 114
12.1.1. Assignees and Assignment Procedures........ 114
12.1.2. Terms of Assignment and Acceptance......... 115
12.1.3. Register................................... 116
12.1.4. Acceptance of Assignment and
Assumption................................. 116
12.1.5. Federal Reserve Bank....................... 117
12.1.6. Further Assurances......................... 117
12.2. Credit Participants............................... 117
13. Confidentiality.......................................... 119
14. Foreign Persons.......................................... 119
3133296.08 -v- FALCON CREDIT AGREEMENT<PAGE>
15. Notices.................................................. 120
16. Course of Dealing; Amendments and Waivers................ 121
17. Defeasance............................................... 121
18. Limited Recourse Against Partners........................ 121
19. Venue; Service of Process................................ 122
20. WAIVER OF JURY TRIAL..................................... 122
21. General.................................................. 123
3133296.08 -vi- FALCON CREDIT AGREEMENT<PAGE>
EXHIBITS
1 - Example of Pro Rata Revolver Prepayment
2.1.3 - Form of Revolving Note
2.2.2 - Form of Term Note
5.1.3 - Guarantors Contribution Agreement
5.1.6 - Security Agreement
5.1.7 - Holding Pledge and Subordination Agreement
5.1.9(d) - Pending Falcon Cable Systems Franchise Transfers
5.2.1. - Officer's Certificate
8.1 - Restricted Companies
8.4 - Financing Debt, Certain Investments, etc.
8.6.1 - Franchises, Systems, FCC Licenses
8.7 - Litigation
11.1 - Lender Percentage Interests
12.1.1 - Assignment and Acceptance
3133296.08 -vii- FALCON CREDIT AGREEMENT<PAGE>
FALCON RESTRICTED COMPANIES
AMENDED AND RESTATED CREDIT AGREEMENT
This Agreement, dated as of July 12, 1996, 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 The First National Bank
of Boston, as Managing Agent for itself and the other Lenders,
Toronto-Dominion (Texas) Inc., as Administrative Agent and
NationsBank of Texas, N.A., as Syndication Agent.
Under this Agreement, the Lenders are providing a
$650,000,000 reducing revolving credit facility maturing in
2005 and a $125,000,000 amortizing term loan maturing in 2005
to eight 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). Each Investor Group Company is itself a limited partner-
ship 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 certain Excluded Companies)
are Restricted Companies hereunder and are guaranteeing all the
Credit Obligations and are providing a security interest in all
their assets as collateral therefor. Holding, L.P. and Hold-
ing, Inc. are also pledging their equity and debt interests in
the Restricted Companies as collateral for the Credit Obliga-
tions.
The parties agree as follows:
1. Restatement: Definitions; Certain Rules of Construction.
This Agreement amends and restates in its entirety the Credit
Agreement dated as of December 28, 1995, as now in effect,
among certain of the parties hereto, which amendment and
restatement shall become effective upon the Initial Closing
Date and shall be implemented pursuant to an Amendment and
Restatement Agreement dated as of the date hereof among the
parties hereto and certain other parties. Except as otherwise
explicitly specified to the contrary, (a) the capitalized term
"Section" refers to sections of this Agreement, (b) the capi-
talized 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 other-
wise defined herein shall have the meaning provided under GAAP
and (f) terms defined in the UCC and not otherwise defined
herein shall have the meaning provided under the UCC. Certain
capitalized terms are used in this Agreement as specifically
defined as follows:
3133296.08 FALCON CREDIT AGREEMENT<PAGE>
1.1. "Accumulated Benefit Obligations" means the
actuarial present value of the accumulated benefit obligations
under any Plan, calculated in a manner consistent with State-
ment No. 87 of the Financial Accounting Standards Board.
1.2. "Acquisition Facility" is defined in Section 2.3.
1.3. "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 11.7.
1.4. "Affected Lender" is defined in Section 12.3.
1.5. "Affiliate" means, with respect to any Restricted
Company (or any other specified Person), any other Person
directly or indirectly controlling, controlled by or under
direct or indirect common control with such Restricted Company
(or other specified Person), 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 5% of the outstanding
equity securities having the general power to vote or (ii) at
least 5% of all equity interests.
1.6 "Agent" means each of the Managing Agent, the
Administrative Agent, the Syndication Agent and the Co-Agents.
1.7 "Agreement" means this Agreement as from time to time
in effect.
1.8 "Aggregate Percentage Interests" means, at any date,
the sum of (a) the dollar amount represented by the Percentage
Interests in the Revolving Loan plus (b) the dollar amount
represented by the Percentage Interests in the Term Loan.
1.9 "Applicable Margin" means, on any date, the
percentage in the table below for the applicable portion of the
Revolving Loan set opposite the ratio which (a) Consolidated
Total Debt on the last day of the most recently ended fiscal
quarter for which financial statements have been furnished by
the Restricted Companies to the Lenders pursuant to Sections
7.4.1 or 7.4.2 bore to (b) Consolidated Annualized Operating
Cash Flow for the period of three consecutive months ended on
the last day of such period:
Ratio of Consolidated Total Debt
to Consolidated Annualized Eurodollar
Operating Cash Flow Base Rate Pricing Option
================================ ========= ==============
Greater than or equal to 5.0 0.500% 1.625%
3133296.08 -2- FALCON CREDIT AGREEMENT<PAGE>
Greater than or equal to 4.75 0.250% 1.375%
but less than 5.0
Greater than or equal to 4.5 0.000% 1.250%
but less than 4.75
Greater than or equal to 4.25 0.000% 1.125%
but less than 4.5
Greater than or equal to 4.0 0.000% 1.000%
but less than 4.25
Greater than or equal to 3.5 0.000% 0.875%
but less than 4.0
Less than 3.5 0.000% 0.750%
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 state-
ments required by Section 7.4.1 or 7.4.2 for any fiscal quarter by
the time required by such Sections and the Applicable Margin indi-
cated by the Consolidated Total Debt to Consolidated Annualized
Operating Cash Flow ratio for such fiscal quarter would be increased
from that previously in effect, the Applicable Margin during the
period from the date which is three Banking Days after such finan-
cial statements were due until the date on which the same are
received by the Administrative Agent shall be the Applicable Margin
as so increased.
1.10. "Applicable Rate" means, at any date, the sum of:
(a) (i) with respect to each portion of the Revolv-
ing Loan subject to a Pricing Option, the sum of the
Applicable Margin plus the Eurodollar Rate with respect to
such Pricing Option; and
(ii) with respect to each other portion of the
Revolving Loan, the sum of the Applicable Margin plus the
Base Rate;
(iii) with respect to each portion of the Term Loan:
(A) in the absence of an Event of Default under
Section 9.1.1 (payment) or except as otherwise pro-
vided in clause (B) below, the sum of 2.375% plus the
Eurodollar Rate with respect to the Pricing Options
then in effect with respect to the Term Loan and
(B) upon the occurrence and during the continu-
ance of an Event of Default under Section 9.1.1 (pay-
ment) or in the event that no Pricing Option election
is effective by virtue of the second paragraph of
Section 3.2.1, the sum of the Applicable Margin with
respect to the Revolving Loan plus (1) with
3133296.08 -3- FALCON CREDIT AGREEMENT<PAGE>
respect to the Pricing Options then in effect with
respect to the Term Loan, the Eurodollar Rate or
(2) with respect to any portion of the Term Loan
for which no Pricing Option is in effect, the Base
Rate;
plus (b) an additional 2% beginning (i) in the event
of an Event of Default under Section 9.1.1 (payment), on
the date of such Event of Default and (ii) in the event of
any other Event of Default, on the date the Managing Agent
notifies the Company that the interest rates hereunder are
increasing as a result of the occurrence and continuance
of such an Event of Default and ending on the earlier of
such time as (A) such Event of Default is no longer con-
tinuing or (B) such Event of Default is deemed no longer
to exist, in each case pursuant to Section 9.3.
1.11. "Asset Swap Reserve Amount" is defined in Section
4.5.2.
1.12. "Assignee" is defined in Section 12.1.1.
1.13. "Assignment and Acceptance" is defined in Section
12.1.1.
1.14. "Bank of Boston" means The First National Bank of
Boston.
1.15. "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 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.
1.16. "Bankruptcy Code" means Title 11 of the United
States Code (or any successor statute) and the rules and regu-
lations thereunder, all as from time to time in effect.
1.17. "Bankruptcy Default" means an Event of Default
referred to in Section 9.1.11.
1.18. "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.
1.19. "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 Eurodol-
lar Rate pursuant to the foregoing sentence shall, in the
absence of manifest error, be conclusive.
3133296.08 -4- FALCON CREDIT AGREEMENT<PAGE>
1.20. "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 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 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 Inter-
est Period in question is to commence, which determination by
the Administrative Agent shall, in the absence of manifest
error, be conclusive.
1.21. "Borrower" means each of the following Restricted
Companies: 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 partner-
ship; Falcon First, Inc., a Delaware corporation; Falcon Tele-
cable, a California limited partnership; and Falcon Telecom,
L.P., a California limited partnership.
1.22. "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.
1.23. "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 accor-
dance with GAAP, in respect of (a) the acquisition, construc-
tion, 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 accor-
dance with GAAP) and (c) software development costs to the
extent not expensed in accordance with GAAP.
1.24. "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.
1.25. "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.
1.26. "Cash Equivalents" means:
3133296.08 -5- FALCON CREDIT AGREEMENT<PAGE>
(a) negotiable certificates of deposit, time
deposits (including sweep accounts), demand deposits
and bankers' acceptances issued by any Lender or any
United States 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.; and
(d) any mutual fund or other pooled investment
vehicle rated Aa2 or better by Moody's Investors Ser-
vice, Inc. which invests principally in obligations
described above.
1.27. "CERCLA" means the federal Comprehensive Envi-
ronmental Response, Compensation and Liability Act of 1980 (or
any successor statute) and the rules and regulations thereun-
der, all as from time to time in effect.
1.28. "CERCLIS" means the federal Comprehensive
Environmental Response Compensation Liability Information Sys-
tem List (or any successor document) promulgated under CERCLA.
1.29. "Charter" means the articles of organization,
certificate of incorporation, statute, constitution, joint ven-
ture agreement, partnership agreement, trust indenture or other
charter document of any Person other than an individual, each
as from time to time in effect.
1.30. "Closing Date" means the Initial Closing Date and
each subsequent date on which any extension of credit is made
pursuant to Section 2.1.
1.31. "Co-Agents" means each Lender indicated as a co-
agent in Exhibit 11.1 in its capacity as co-agent hereunder, as
well as its successors and assigns in such capacity pursuant to
Section 11.7.
1.32. "Code" means, collectively, the federal Internal
Revenue Code of 1986 (or any successor statute) and the rules
and regulations thereunder, all as from time to time in effect.
3133296.08 -6- FALCON CREDIT AGREEMENT<PAGE>
1.33. "Collateral Agent" means Bank of Boston in its
capacity as Collateral Agent under the Security Agreement.
1.34. "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.
1.35. "Communications Act" means the federal Com-
munications Act of 1934, the federal Cable Television Consumer
Protection and Competition Act of 1992 and the federal Telecom-
munications Act of 1996 (or any successor statutes) and the
rules and regulations thereunder, all as from time to time in
effect.
1.36. "Computation Covenants" means Sections 7.5, 7.6.6,
7.6.7, 7.6.15, 7.7.3, 7.9.7, 7.9.8, 7.9.9, 7.9.10, 7.10.3,
7.10.4, 7.10.6, 7.11.1, 7.11.3, 7.13 and 7.18.
1.37. "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 Sub-
sidiaries as may be specified, consolidated or combined or con-
solidating 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 Con-
solidated 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.
1.38. "Consolidated Annualized Operating Cash Flow" means
the product of Consolidated Operating Cash Flow multiplied by
four.
1.39. "Consolidated Cash Interest Expense" means, for any
period, the aggregate amount of interest, including payments in
the nature of interest under Capitalized Leases and Interest
Rate Protection Agreements, accrued by the Restricted Companies
on Consolidated Total Debt (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, but shall not include PIK Interest Payments.
1.40. "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, 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, how-
ever, that Consolidated Net Income shall not include:
3133296.08 -7- FALCON CREDIT AGREEMENT<PAGE>
(a) the income (or loss) of any Person (other than a
Wholly Owned Subsidiary or a Restricted Company) in which
any Restricted Company has an ownership interest;
(b) all amounts included in computing such net in-
come (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, 1995;
(c) extraordinary and nonrecurring gains or losses;
(d) the income of any Subsidiary to the extent the
payment of such income in the form of a Distribution or
repayment of Indebtedness to any Borrower is not permit-
ted, whether on account of any Charter or By-law restric-
tion, 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.
1.41. "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 Consoli-
dated 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 (but not state or local) taxes based
upon or measured by income;
(iv) other non-cash charges; and
(v) any reasonable costs incurred or expensed in
connection with the sale of Systems or other related
cable television assets;
3133296.08 -8- FALCON CREDIT AGREEMENT<PAGE>
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 expens-
es), whether or not permitted thereby;
minus (d) revenues of the Restricted Companies that
are not expected to be received in cash within the next 12
months to the extent included in calculating Consolidated
Net Income.
1.42. "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, plus
(b) the aggregate amount of all mandatory scheduled
payments (excluding the final scheduled principal payment
on the Term Loan), mandatory scheduled prepayments, sink-
ing fund payments and mandatory reductions in the Revolv-
ing Loan outstanding on the first day of such period as a
result of reductions in revolving credit availability with
respect to Financing Debt of the Restricted Companies, all
in accordance with GAAP on a Consolidated basis.
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 out-
standing during the entire period, except to the extent
required to be reduced by mandatory scheduled payments,
reductions in revolving credit availability 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 (giv-
ing effect to any applicable Interest Rate Protection
Agreements).
1.43. "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 rev-
enues from the sale, refinancing, condemnation or destruc-
tion of any Systems; minus
(c) actual bad debt expense to the extent not
already deducted in computing such net operating revenues.
3133296.08 9 FALCON CREDIT AGREEMENT<PAGE>
1.44. "Consolidated Total Debt" means, at any date, all
Financing Debt of the Restricted Companies on a Consolidated
basis (other than Indebtedness of the Restricted Companies
owing to Holding, L.P. permitted by Section 7.6.14) minus the
lesser of (a) cash and Cash Equivalents of the Restricted
Companies on a Consolidated basis in accordance with GAAP or
(b) $2,000,000.
1.45. "Consolidated Total Fixed Charges" means, for any
period, the sum of:
(a) Consolidated Cash Interest Expense, plus
(b) the aggregate amount of all mandatory scheduled
payments (excluding the final scheduled principal payment
on the Term Loan), mandatory scheduled prepayments, sink-
ing fund payments and mandatory reductions in the Revolv-
ing Loan outstanding on the first day of such period as a
result of reductions in revolving credit availability, all
with respect to Financing Debt of the Restricted Companies
in accordance with GAAP on a Consolidated basis, plus
(c) Capital Expenditures, plus
(d) federal (but not state or 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 that are not Restricted Companies of a type
described in Section 7.10.6 (in respect of taxes), whether
or not permitted thereby, plus
(f) Distributions by the Restricted Companies to
Holding, L.P. of a type described in Section 7.10.3 (for
debt service), whether or not permitted thereby.
1.46. "Copyright Act" is defined in Section 8.6.2.
1.47. "Credit Documents" means:
(a) this Agreement, the Notes, the Security
Agreement, the Holding Pledge and Subordination
Agreement 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;
(b) all financial statements, reports, notices,
mortgages, assignments, Uniform Commercial Code
financing statements or certificates delivered to any
of the Lenders by any Restricted Company or any
Affiliate of any of them in connection herewith or
therewith; and
3133296.08 -10- FALCON CREDIT AGREEMENT<PAGE>
(c) 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 of the Managing
Agent or all the Lenders, on the other hand, relating
to, amending or modifying this 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.
1.48. "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, com-
mitment fees, any Acquisition Facility, 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 (whether accruing before or
after a Bankruptcy Default and whether or not allowed in a
bankruptcy proceeding) and payment and reimbursement obliga-
tions under Interest Rate Protection Agreements.
1.49. "Credit Participant" is defined in Section 12.2.
1.50. "Credit Security" means all assets now or from time
to time hereafter subjected to a security interest, mortgage or
charge (or intended or required so to be subjected pursuant to
the Security Agreement, the Holding Pledge and Subordination
Agreement or any other Credit Document) to secure the payment
or performance of any of the Credit Obligations.
1.51. "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.
1.52. "Delinquency Period" is defined in Section 11.4.3.
1.53. "Delinquent Lender" is defined in Section 11.4.3.
1.54. "Delinquent Payment" is defined in Section 11.4.3.
1.55. "Designated Financing Debt" means Financing Debt
incurred by Holding, L.P. or 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) and 7.6.14 (Indebtedness owing from a Restricted
Company to Holding, L.P.).
1.56. "Distribution" means, with respect to any
Restricted Company (or other specified Person):
3133296.08 -11- FALCON CREDIT AGREEMENT<PAGE>
(a) the declaration or payment of any dividend
or distribution, including dividends payable in
shares of capital stock or other equity interests of
any Restricted 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 prop-
erty leases to non-Affiliates.
1.57. "Enstar" means Enstar Communications Corporation, a
Georgia corporation owned by Falcon Cablevision, a California
limited partnership.
1.58. "Environmental Laws" means all applicable federal,
state or local statutes, laws, ordinances, codes, rules,
regulations and guidelines (including consent decrees and
administrative orders) relating to public health and safety and
protection of the environment.
1.59. "ERISA" means, collectively, the federal Employee
Retirement Income Security Act of 1974 (or any successor
statute) and the rules and regulations thereunder, all as from
time to time in effect.
3133296.08 -12- FALCON CREDIT AGREEMENT<PAGE>
1.60. "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 sec-
tion 4001(a)(14) of ERISA.
1.61. "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.
1.62. "Eurodollar Office" means such non-United States
office or international banking facility of any Lender as the
Lender may from time to time select.
1.63. "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 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.
1.64. "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 Lend-
er against (a) "Eurocurrency liabilities" as specified in Regu-
lation D of the Board of Governors of the Federal Reserve Sys-
tem (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
Pricing Options is determined, (c) the principal amount of or
interest on any portion of the Loan covered by a Pricing Option
or (d) any other category of extensions of credit, or other
assets, that includes loans covered by a Pricing Option.
1.65. "Event of Default" is defined in Section 9.1.
1.66. "Exchange Act" means, collectively, the federal
Securities Exchange Act of 1934 (or any successor statute) and
the rules and regulations thereunder, all as from time to time
in effect.
1.67. "Excluded Companies" means Enstar, Enstar's
Subsidiaries, Falcon Lake Las Vegas Cablevision, L.P., a Dela-
ware limited partnership, Falcon/Capital Cable, a Delaware gen-
eral partnership, and Falcon/Capital Cable Partners, L.P., a
Delaware limited partnership.
1.68. "Falcon Cable Systems" means Falcon Cable Systems
Company, a California limited partnership.
3133296.08 -13- FALCON CREDIT AGREEMENT<PAGE>
1.69. "Falcon Cable Systems II" means Falcon Cable
Systems Company II, L.P., a California limited partnership,
which is the successor entity to Falcon Cable Systems.
1.70. "Falcon Cable Systems Purchase Agreement" means the
Asset Purchase Agreement by and between Falcon Cable Systems II
and Falcon Cable Systems, dated as of June 13, 1996 pursuant to
which Falcon Cable Systems II shall purchase substantially all
the assets of Falcon Cable Systems in connection with the
dissolution of Falcon Cable Systems.
1.71. "Falcon First" means Falcon First, Inc., a Delaware
corporation.
1.72. "Falcon Telecom" means Falcon Telecom, L.P., a
California limited partnership.
1.73. "FCC" means the Federal Communications Commission
and any successor governmental agency.
1.74. "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.
1.75. "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 determina-
tion. Each determination by the Administrative Agent of the
Federal Funds Rate shall, in the absence of manifest error, be
conclusive.
1.76. "Final Revolving Maturity Date" means January 11,
2005.
1.77. "Final Term Maturity Date" means July 11, 2005.
1.78. "Financial Officer" means the chief financial
officer, treasurer or corporate controller of Holding, Inc. in
its capacity as the 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, all of whose incumbency and signa-
tures have been certified to the Administrative Agent by an
appropriate attesting officer of Holding, Inc. (or other speci-
fied Person).
3133296.08 -14- FALCON CREDIT AGREEMENT<PAGE>
1.79. "Financing Debt" means:
(a) Indebtedness in respect of borrowed money;
(b) Indebtedness evidenced by notes, debentures or
similar instruments;
(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).
1.80. "Foreign Trade Regulations" means, collectively and
as from time to time in effect (including any successor
statutes or regulations), (a) any act that prohibits or
restricts, or empowers the President or executive agencies of
the United States of America to prohibit or restrict, exports
to or financial transactions with any foreign country or for-
eign national, (b) the regulations with respect to certain pro-
hibited foreign trade transactions set forth at 22 C.F.R. Parts
120-130 and 31 C.F.R. Part 500 and (c) any order, regulation,
ruling, interpretation, direction, instruction or notice relat-
ing to any of the foregoing.
1.81. "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.
1.82. "GAAP" means generally accepted accounting
principles, as defined by the United States Financial Account-
ing Standards Board, as from time to time in effect; provided,
however, that 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, 1995 as applied by
the Restricted Companies in the preparation of the December 31,
1995 financial statements referred to in Section 8.2.1(a), and
consistently followed.
1.83. "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 Indebtedness or other obligation 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
3133296.08 -15- FALCON CREDIT AGREEMENT<PAGE>
prospective creditor of such Person) to (i) pay the
Indebtedness 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
Indebtedness or other obligations of such
partnership;
(d) any liability of the Restricted Company as
a joint venturer of a joint venture in respect of
Indebtedness or other obligations of such joint
venture; and
(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 obliga-
tions (but without giving effect to any limitations on recourse
against such obligor), determined in accordance with GAAP.
1.84. "Guarantor" means each Restricted Company and the
other Subsidiaries from time to time indicated as a Guarantor
in Exhibit 8.1 and becoming party to this Agreement as a
Guarantor.
1.85. "Guarantors Contribution Agreement" is defined in
Section 5.1.3.
1.86. "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 regula-
tions thereunder, as from time to time in effect.
1.87. "Holding Companies" means Holding, L.P., Holding,
Inc. and their respective Subsidiaries, including the
Restricted Companies.
1.88. "Holding, Inc." means Falcon Holding Group, Inc., a
California corporation that is the general partner of Holding,
L.P.
3133296.08 -16- FALCON CREDIT AGREEMENT<PAGE>
1.89. "Holding, L.P." means Falcon Holding Group, L.P., a
Delaware limited partnership, and any successor corporation
that would not result in an Event of Default immediately after
such succession and that enters into assumption agreements with
respect to the Holding Pledge and Subordination Agreement and
the other Credit Documents reasonably satisfactory to the
Required Lenders in all respects.
1.90. "Holding, L.P. Negative Cash Flow" means, for any
period, the net income (or loss) of Holding, L.P. determined in
accordance with GAAP on a stand-alone (not on a Consolidated)
basis, with the following adjustments (for computation of
permitted Distributions under Section 7.10.4 or otherwise):
(a) such net income (or loss) shall not include:
(i) the income (or loss) of any Person in which
Holding, L.P. has an ownership interest;
(ii) all amounts included in computing such net
loss in respect of the write-up of any asset or the
retirement of any Indebtedness at less than face val-
ue after December 31, 1995;
(iii) extraordinary and nonrecurring gains or
losses; and
(iv) any after-tax gains or losses attributable
to returned surplus assets of any Plan;
(b) the following amounts deducted in computing
such net income (or loss) will be added back to such
net income (or loss):
(i) depreciation, amortization and other charg-
es that are not expected to be paid in cash;
(ii) interest on Financing Debt, but excluding
payments in the nature of interest under Capitalized
Leases; and
(iii) taxes based upon or measured by income.
(c) the following amounts will be subtracted
from such net income (or loss) in computing Holding,
L.P. Negative Cash Flow:
(i) accrued net revenues of Holding, L.P. in
accordance with GAAP that are not expected to be
received in cash within the next 12 months (which
amount may be retroactively computed by the Borrowers
for purposes of Section 7.10.4 to give effect to
actual cash receipt of revenues);
3133296.08 -17- FALCON CREDIT AGREEMENT<PAGE>
(ii) to the extent not included in clause (c)(i)
above, accrued reimbursed expenses of Holding, L.P.
in accordance with GAAP that are not expected to be
received in cash within the next 12 months (which
amount may be retroactively computed by the Borrowers
for purposes of Section 7.10.4 to give effect to
actual cash receipt of revenues);
(iii) the lesser of (A) payments in the nature of
principal with respect to Capitalized Leases over the
most recent 12-month period and (B) $250,000;
(iv) to the extent not included in clause (c)(i)
above, interest income recognized in computing such
net income (or loss) but not received in cash,
including noncash interest income from Indebtedness
owed to Holding, L.P. from the Restricted Companies
permitted by Section 7.6.14; and
(iv) the lesser of (A) Capital Expenditures or
(B) $750,000.
1.91. "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.
1.92. "Holding Pledge and Subordination Agreement" means
the Amended and Restated Pledge and Subordination Agreement
dated as of the Initial Closing Date in substantially the form
of Exhibit 5.1.7, as from time to time in effect, among
Holding, L.P., Holding, Inc., the Restricted Companies and the
Managing Agent.
1.93. "Houston Office" means the principal banking office
of the Administrative Agent in Houston, Texas.
1.94. "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 evi-
dence of beneficial interest);
3133296.08 -18- FALCON CREDIT AGREEMENT<PAGE>
(f) unfunded pension fund obligations and liabili-
ties;
(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.
1.95. "Indemnified Party" is defined in Section 10.2.
1.96. "Initial Closing Date" means July 12, 1996 or such
other date prior to September 30, 1996 as agreed by the
Borrowers and the Managing Agent as the first Closing Date
hereunder.
1.97. "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 cal-
endar 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 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.
1.98. "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 inter-
est rates into variable interest rates on Financing Debt.
1.99. "Investment" means, with respect to any Restricted
Company (or other specified Person):
(a) any share of capital stock, other equity inter-
est, 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;
3133296.08 -19- FALCON CREDIT AGREEMENT<PAGE>
(d) any acquisition of all or any part of the busi-
ness 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) cur-
rent 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 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 8.9, 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 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).
1.100. "Investor Group Company" means any Person that is
a managing general partner of a Borrower; provided, however,
that in no event shall Holding, L.P. or Holding, Inc.
constitute an Investor Group Company.
1.101. "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 adminis-
trative agency of the United States of America, of any juris-
diction 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 the best interest of such
Lender.
3133296.08 -20- FALCON CREDIT AGREEMENT<PAGE>
1.102. "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.
1.103. "Lending Officer" shall mean such officers or
employees of the Administrative Agent as from time to time des-
ignated by it in writing to the Borrowers.
1.104. "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 there-
from.
(b) Any arrangement or agreement which prohibits the
Restricted Company from creating encumbrances, mortgages,
pledges, liens, charges or security interests.
(c) 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).
(d) The sale, assignment, pledge or transfer for
security of any accounts, general intangibles or chattel
paper of the Restricted Company, with or without recourse.
(e) The transfer of any tangible property or assets
for the purpose of subjecting such items to the payment of
Indebtedness in priority to payment of the general credi-
tors of the Restricted Company.
(f) The existence for a period of more than 90 con-
secutive days of any Indebtedness against the Restricted
Company which if unpaid would by law or upon a Bankruptcy
Default be given any priority over general creditors.
1.105. "Listed Systems" means Systems located in the
following geographical areas: Plattsburgh, New York.
1.106. "Loan" means, collectively, the Revolving Loan and
the Term Loan.
1.107. "Managing Agent" means Bank of Boston in its
capacity as managing agent for the Lenders hereunder, as well
as its successors and assigns in such capacity pursuant to Sec-
tion 11.7.
3133296.08 -21- FALCON CREDIT AGREEMENT<PAGE>
1.108. "Margin Stock" means "margin stock" within the
meaning of Regulations G, T, U or X (or any successor pro-
visions) of the Board of Governors of the Federal Reserve Sys-
tem, or any regulations, interpretations or rulings thereunder,
all as from time to time in effect.
1.109. "Material Adverse Change" means a material adverse
change since December 31, 1995 in the business, assets,
financial condition or income of the Restricted Companies (on a
Consolidated basis) (or any other specified Persons) as a re-
sult of any event or development.
1.110. "Material Agreements" means each of the agreements
listed in Section 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.
1.111. "Maximum Amount of Revolving Credit" is defined in
Section 2.1.1.
1.112. "MONY Subordinated Debt" means the 11.56% Series A
and Series B Subordinated Notes due March 31, 2001, each issued
by Falcon Telecable, a California limited partnership, pursuant
to a Note Purchase Agreement dated as of October 21, 1991, as
amended through the Initial Closing Date, 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.
1.113. "Multiemployer Plan" means any Plan that is a
"multiemployer plan" as defined in section 4001(a)(3) of ERISA.
1.114. "Net Cash Proceeds" means the cash proceeds of
sale or disposition of assets 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 pro-
ceeds, (b) income taxes that, as estimated by such Restricted
Company in good faith, will be required to be paid by such
Restricted Company (or its ultimate equity owners that are not
partnerships or other tax flow through entities) in cash as a
result of, and within 15 months after, such asset sale, and (c)
all reasonable expenses of such Restricted Company incurred in
connection with the transaction.
1.115. "Net Debt Proceeds" means the cash proceeds of
the incurrence of Designated Financing Debt by Holding, L.P. or
any Restricted Company (net of reasonable out-of-pocket
transaction fees and expenses).
1.116. "Nonperforming Lender" is defined in Section
11.4.3.
1.117. "Non-Targeted Asset Sale" is defined in Section
4.5.1.
3133296.08 -22- FALCON CREDIT AGREEMENT<PAGE>
1.118. "Notes" means each of the Revolving Notes and the
Term Notes.
1.119. "Obligor" means each Borrower, each other
Guarantor and each other Restricted Company guaranteeing or
granting collateral to secure any Credit Obligations.
1.120. "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 tele-
vision services or conducting any related activities.
1.121. "Payment Date" means the last Banking Day of each
March, June, September and December occurring after the Initial
Closing Date.
1.122. "PBGC" means the Pension Benefit Guaranty
Corporation or any successor entity.
1.123. "Percentage Interest" is defined in Section 11.1.
1.124. "Performing Lender" is defined in Section 11.4.3.
1.125. "Permitted Asset Swap" means, with respect to any
Non-Targeted Asset Sale, the acquisition by a Restricted
Company of Operating Assets which occurs on the date of or
within 270 days after, such Non-Targeted Asset Sale and to
which acquisition the Required Lenders have given their prior
written consent.
1.126. "Permitted Joint Venture" means a joint venture,
general partnership or limited liability company between a
Restricted Company and a telecommunications provider pursuant
to which the new entity would operate cable television systems
and other telecommunication systems, including voice and/or
data services; provided, however, that the Restricted Companies
shall in no event incur any Indebtedness, by way of guarantee,
general partner or joint venturer liability or otherwise, as a
result of any such joint venture, general partnership or lim-
ited liability company.
1.127. "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 by the Restricted Companies for the period of three
consecutive months most recently ended prior to such contribu-
tion (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).
3133296.08 -23- FALCON CREDIT AGREEMENT<PAGE>
1.128. "Person" means any present or future natural
person or any corporation, association, partnership, joint ven-
ture, company, business trust, trust, organization, business or
government or any governmental agency or political subdivision
thereof.
1.129. "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.
1.130. "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.
1.131. "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.
1.132. "Pro Rata Revolver Prepayment Portion" means, at
any date, with respect to specified Net Cash Proceeds from any
Non-Targeted Asset Sale that will be allocated to repay the
Revolving Loan, the portion of such Net Cash Proceeds calcu-
lated as follows:
(a) add all cumulative percentage reductions of the
Revolving Loan occurring on or after the date of such Non-
Targeted Asset Sale up to but excluding the Final Revolv-
ing Maturity Date;
(b) divide the cumulative 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.
1.133. "Pro Rata Term Prepayment Portion" means, at any
date, with respect to specified Net Cash Proceeds from any Non-
Targeted Asset Sale that will be allocated to repay the Term
Loan, the portion of such Net Cash Proceeds calculated as
follows:
(a) add all cumulative percentage reductions of the
Term Loan occurring on or after the date of such Non-
Targeted Asset Sale up to but excluding the Final Term
Maturity Date;
3133296.08 -24- FALCON CREDIT AGREEMENT<PAGE>
(b) divide the cumulative 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.
1.134. "Purchase Price" means, with respect to any
Permitted Asset Swap, the purchase price of the Operating
Assets acquired in such Permitted Asset Swap which is paid on
the closing of such acquisition in cash or capital stock of any
Borrower without giving effect to any post-closing adjustments.
1.135. "Qualified Institutional Buyer" means:
(a) a duly authorized domestic bank, savings and
loan association, registered investment company, regis-
tered investment adviser or registered dealer, acting for
its own account or the accounts of other Qualified Insti-
tutional Buyers, which in the aggregate owns and invests
on a discretionary basis at least $100 million in securi-
ties 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 "qual-
ified institutional buyer" as defined in Rule 144A under
the Securities Act.
1.136. "Reference Consolidated Annualized Operating Cash
Flow Amount" means, on any date, Consolidated Annualized
Operating Cash Flow (which calculation shall include Falcon
Cable Systems) for the period of three consecutive months most
recently ended prior to the Initial Closing Date, as calculated
in connection with the certificate furnished to the Administra-
tive Agent pursuant to Section 5.2.1.
1.137. "Reference Lender" means each of Bank of Boston
and Toronto Dominion.
1.138. "Replacement Lender" is defined in Section 12.3.
1.139. "Register" is defined in Section 12.1.3.
1.140. "Required Lenders" means, with respect to any
consent or other action to be taken by either Managing Agent or
the Lenders under the Credit Documents, such Lenders as own at
least a majority of the Aggregate Percentage Interests; pro-
vided, however, that with
3133296.08 -25- FALCON CREDIT AGREEMENT<PAGE>
respect to the matters referred to in the proviso to Section
11.6, Required Lenders means such Lenders as own at least the
respective portions of the Percentage Interests indicated
therein.
1.141. "Resource Conservation and Recovery Act" means the
federal Resource Conservation and Recovery Act, 42 U.S.C.
section 690, et seq. (or any successor statute) and the rules
and regulations thereunder, all as from time to time in effect.
1.142. "Restricted Company" means each of the Borrowers,
the Investor Group Companies and their respective Subsidiaries.
1.143. "Revolving Lender" means each Lender owning a
Percentage Interest in the Revolving Loan or having a Commit-
ment to extend a portion of the Revolving Loan and its Assign-
ees permitted by Section 12.1.
1.144. "Revolving Loan" is defined in Section 2.1.1.
1.145. "Revolving Note" is defined in Section 2.1.3.
1.146. "Securities Act" means, collectively, the federal
Securities Act of 1933 (or any successor statute) and the rules
and regulations thereunder, all as from time to time in effect.
1.147. "Security Agreement" is defined in Section 5.1.6.
1.148. "Senior Subordinated Notes Indenture" means the
Indenture dated as of March 29, 1993, as in effect on the
Initial Closing Date, 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).
1.149. "Subscriber" means each customer who is connected
by a drop line to an existing trunk or distribution line
forming part of a System who has contracted to pay for the
right to receive signals constituting basic service over such
System.
1.150. "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 venturer; provided, however, that in no event shall
"Subsidiary" include an Excluded Company or a Permitted Joint
Venture.
3133296.08 -26- FALCON CREDIT AGREEMENT<PAGE>
1.151. "Syndication Agent" means NationsBank of Texas,
N.A. in its capacity as syndication agent hereunder, as well as
its successors and assigns in such capacity pursuant to Section
11.7.
1.152. "System" means the assets constituting a cable
television system substantially all 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.
1.153. "Targeted Asset Sale" is defined in Section 4.4.
1.154. "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 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.
1.155. "Term Lender" means each Lender owning a Per-
centage Interest in the Term Loan or having a Commitment to
extend a portion of the Term Loan and its Assignees permitted
by Section 12.1.
1.156. "Term Loan" is defined in Section 2.2.
1.157. "Toronto Dominion" means Toronto-Dominion (Texas)
Inc.
1.158. "Term Note" is defined in Section 2.2.2.
1.159. "UCC" means the Uniform Commercial Code as in
effect in Massachusetts on the date hereof.
1.160. "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.
1.161. "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
3133296.08 -27- FALCON CREDIT AGREEMENT<PAGE>
(or other specified Person) directly, or indirectly through one or
more Wholly Owned Subsidiaries.
2. The Credits.
2.1. Tranche A - 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, each Revolving Lender severally agrees to make
revolving loans to the Borrowers, who 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 March 31, 1999 $650,000,000 0.000%
March 31, 1999 through
June 29, 1999 $633,500,000 2.538%
June 30, 1999 through
September 29, 1999 $617,000,000 2.538%
September 30, 1999 through
December 30, 1999 $600,500,000 2.538%
December 31, 1999 through
March 30, 2000 $584,000,000 2.538%
March 31, 2000 through
June 29, 2000 $560,500,000 3.615%
June 30, 2000 through
September 29, 2000 $537,000,000 3.615%
September 30, 2000 through
December 30, 2000 $513,500,000 3.615%
December 31, 2000 through
March 30, 2001 $490,000,000 3.615%
March 31, 2001 through
June 29, 2001 $471,250,000 2.885%
3133296.08 -28- FALCON CREDIT AGREEMENT<PAGE>
June 30, 2001 through
September 29, 2001 $452,500,000 2.885%
September 30, 2001 through
December 30, 2001 $433,750,000 2,885%
December 31, 2001 through
March 30, 2002 $415,000,000 2.885%
March 31, 2002 through
June 29, 2002 $391,250,000 3.654%
June 30, 2002 through
September 29, 2002 $367,500,000 3.654%
September 30, 2002 through
December 30, 2002 $343,750,000 3.654%
December 31, 2002 through
March 30, 2003 $320,000,000 3.654%
March 31, 2003 through
June 29, 2003 $293,250,000 4.115%
June 30, 2003 through
September 29, 2003 $266,500,000 4.115%
September 30, 2003 through
December 30, 2003 $239,750,000 4.115%
December 31, 2003 through
March 30, 2004 $213,000,000 4.115%
March 31, 2004 through
June 29, 2004 $176,750,000 5.577%
June 30, 2004 through
September 29, 2004 $140,500,000 5.577%
September 30, 2004 through
December 30, 2004 $104,250,000 5.577%
December 31, 2004 up to the
Final Revolving Maturity $ 68,000,000 5.577%
Date
Final Revolving Maturity Date $ 0 10.462%
100%
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
Non-Targeted Asset Sales to the extent that (i)
the Net Cash Proceeds of all such Non-Targeted
Asset Sales within the same calendar year exceed
$5,000,000, and (ii) the amount in the foregoing
clause (i) is not applied to repay the
3133296.08 -29- FALCON CREDIT AGREEMENT<PAGE>
Term Loan pursuant to Section 4.5 or allocated to an
effective Asset Swap Reserve Amount.
(b) The amount of Net Debt Proceeds to the
extent that such amount is not applied to repay the
Term Loan pursuant to Section 4.6.
(c) Upon any Investment pursuant to Section
7.9.9, the Permitted Joint Venture Investment Multi-
ple 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 Bor-
rowers 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
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) 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.
2.1.3. Revolving Notes. Advances of the
Revolving Loan shall be evidenced by notes in
substantially the form of Exhibit 2.1.3 (the
"Revolving Notes") payable by the Borrowers on a
joint and several basis to each Revolving Lender.
Each Revolving Lender shall keep a record of the date
and amount of (a) each loan made by such Revolving
Lender pursuant to Section 2.1.1 and (b) each payment
of principal made to such Revolving Lender pursuant
to Section 4. Prior to the transfer of any Revolving
Note, the Revolving Lender shall record on a schedule
thereto appropriate notations evidencing such dates
and
3133296.08 -30- FALCON CREDIT AGREEMENT<PAGE>
amounts; provided, however, that the failure of any
Revolving Lender to make any such recordation shall not
affect the obligations of the Borrowers under this
Agreement, the Revolving Notes or any other Credit
Document.
2.2 Tranche B - Term Loan.
2.2.1. Term Loan. Subject to all the terms and
conditions hereof and so long as no Default exists,
on the Initial Closing Date the Term Lenders will, in
accordance with each Term Lender's respective
Percentage Interests in the Term Loan, lend to the
Borrowers, who shall be jointly and severally liable
therefor, as a Term Loan an aggregate principal
amount of $125,000,000. The aggregate principal
amount of the loans made pursuant to this Section
2.2.1 at any one time outstanding is referred to as
the "Term Loan".
2.2.2. Term Notes. The Term Loan advanced
under Section 2.2.1 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 term notes of the
Borrowers payable on a joint and several basis to the
respective Term Lenders. The Term Notes issued to
each Term Lender shall be in an aggregate principal
amount equal to such Term Lender's Percentage
Interest in the Term Loan advanced under Section
2.2.1 and shall be substantially in the form of
Exhibit 2.2.2 (the "Term Notes").
2.3. Acquisition Facility. From time to time after
the Initial Closing Date and prior to December 31, 1998
the Borrowers may, by written notice to all the existing
Lenders, request such several Lenders to provide a new
acquisition credit facility for the sole purpose of
funding acquisitions of businesses or other assets
permitted by Sections 7.2.1 and 7.9 and for expenses
reasonably related thereto, subject to the terms set forth
below (an "Acquisition Facility"). Such notice must set
forth (a) the amount and proposed terms (including
maturity, interest rate, fees, amortization and whether a
revolving or term credit is requested) for the proposed
Acquisition Facility, (b) the proposed use of proceeds for
the proposed Acquisition Facility, including a description
of the business or other assets to be acquired with such
proceeds and (c) projections demonstrating pro forma
compliance with the covenants contained in this Agreement
and the other Credit Documents after giving effect to the
proposed Acquisition Facility and the consummation of the
acquisition to be financed therewith.
Within 30 days after the receipt of such notice,
each Lender willing to participate in the proposed
Acquisition Facility must provide written notice to the
Borrowers, the Administrative Agent and the Managing Agent
of the principal amount of its proposed Commitment therein
and any other conditions to such Commitment.
3133296.08 -31- FALCON CREDIT AGREEMENT<PAGE>
Each Lender may elect whether to commit to provide credit for
an Acquisition Facility in its sole discretion. No Lender is
obligated to commit to, or participate in, any Acquisition
Facility. Final allocations of the Commitments for, and any
other terms of, any proposed Acquisition Facility shall be
agreed among the Borrowers and the Lenders which participate
therein. The Acquisition Facility shall be evidenced by an
amendment to this Agreement and the other Credit Documents and
the issuance of notes hereunder.
Each Acquisition Facility (i) must not, together with
the original principal amount of all other Acquisition Facili-
ties, exceed $75,000,000 in aggregate principal amount, (ii)
must contain terms (including covenants, guarantees and col-
lateral, but excluding interest rate, fees, amortization and
maturity) substantially similar to the terms of the Revolving
Loan (or less restrictive on the Restricted Companies), (iii)
shall reduce in quarterly amounts commencing March 31, 1999 (or
later) based on the Maximum Amount of Revolving Credit cumula-
tive percentage reduction schedule contained herein or an amor-
tization schedule that is later and no more onerous to the Re-
stricted Companies, in the reasonable opinion of the Restricted
Companies and the Managing Agent, than the amortization sched-
ule for the Revolving Loan and the Term Loan, (iv) may share
pro rata with the Revolving Loan and Term Loan in mandatory
prepayments under Sections 4.4 (Targeted Asset Sales), 4.5
(Non-Targeted Asset Sales) and 4.6 (Designated Financing Debt),
and (v) shall not have a maturity earlier than the Final Re-
volving Maturity Date.
2.4. Application of Proceeds.
2.4.1. Loan. Subject to Section 2.4.2, each
Borrower will apply the proceeds of the Loan for the
repayment of its existing Financing Debt to the
extent permitted by this Agreement, for its Capital
Expenditures permitted by this Agreement, for its
Investments and acquisitions permitted by Section
7.9, for its Distributions permitted by Section 7.10,
for funding the transactions contemplated by the
Falcon Cable Systems Purchase Agreement, for the
potential refinancing of the MONY Subordinated Debt,
for Credit Document transaction costs and for its
working capital; provided, however, that a portion of
the Maximum Amount of Revolving Credit equal to any
then effective Asset Swap Reserve Amount may only be
borrowed to finance a Permitted Asset Swap.
2.4.2. 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 Foreign Trade Regulations or by other laws or
regulations applicable to the Lenders.
3133296.08 -32- FALCON CREDIT AGREEMENT<PAGE>
2.5. 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; 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 or Term 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 Pricing Option. On the last day of
each Interest Period or on any earlier termination of any Pric-
ing Option, the Borrowers will jointly and severally pay the
accrued and unpaid interest on the portion of the Loan which
was subject to the Pricing Option which expired or terminated
on such date; provided, however, that in the case of any Inter-
est Period longer than three months, the Borrowers will also
pay the accrued and unpaid interest on the Loan subject to the
Pricing Option having such Interest Period on the Banking Day
constituting the 90th day after the commencement of such Inter-
est Period (or if 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 or Term Loan, as the
case may be, the Borrowers jointly and severally will pay all
accrued and unpaid interest on the Revolving Loan or Term Loan,
as the case may be, including any accrued and unpaid interest
on the portion of the Loan which is subject to a 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.
3.2. Pricing Options.
3.2.1. Election of 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, 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
3133296.08 -33- FALCON CREDIT AGREEMENT<PAGE>
computed on the basis of the Eurodollar Rate. In the
event the Borrowers, at any time, fail to elect a Pricing
Option under this Section 3.2.1 for any portion of the
Revolving Loan, then such portion of the Revolving Loan
will accrue and bear interest at the Applicable Rate based
on the Base Rate. In the event the Borrowers, at any
time, fail to elect a Pricing Option under this Section
3.2.1 for any portion of the Term Loan, the Borrowers
shall automatically be deemed to have elected under this
Section 3.2.1 an Interest Period of one month for such
portion of the Term Loan. Simultaneous elections by a
group of Borrowers for the same Interest Period of a
portion of either the Revolving Loan, the Term Loan or
both on a combined basis shall be deemed to be the
election of a single Pricing Option.
No election under this Section 3.2.1 shall become
effective if, prior to the commencement of any such Inter-
est Period, the Administrative Agent determines, in the
manner provided below, that (a) the electing or granting
of the Pricing Option in question would violate a Legal
Requirement or (b) Eurodollar deposits in an amount compa-
rable to the principal amount of the Loan as to which such
Pricing Option has been elected and which have a term cor-
responding 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 read-
ily available if any Lender shall have advised the Admin-
istrative Agent by telephone, confirmed in writing, 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 Lender of the Euro-
dollar market and after reasonable efforts to determine
the availability of such Eurodollar deposits, such Lender
reasonably determines that Eurodollar deposits in an
amount equal to the respective Percentage Interest of such
Lender in the portion of the Loan as to which such Pricing
Option has been elected and which have a term correspond-
ing 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 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).
3133296.08 -34- FALCON CREDIT AGREEMENT<PAGE>
3.2.2. Notice to Lenders and Borrowers. The Admin-
istrative Agent will promptly inform each Lender (by tele-
phone 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 Admin-
istrative Agent will promptly notify the Borrowers and
each Lender (by telephone or otherwise and promptly con-
firmed 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 Revolving Loan
or Term Loan, as the case may be, subject to any
Pricing Option shall be $5,000,000 and an integral
multiple of $1,000,000;
(b) no more than 20 Pricing Options shall be
outstanding at any one time;
(c) an aggregate principal amount of the
Revolving Loan which is not less than the amount of
the next mandatory prepayment required by Section 4.3
shall not be subject to a Pricing Option on the date
such mandatory prepayment is required to be made;
(d) no Interest Period with respect to any part
of the Revolving Loan subject to a Pricing Option
shall expire later than the Final Revolving Maturity
Date; and
(e) no Interest Period with respect to any part
of the Term Loan subject to a Pricing Option shall
expire later than the Final Term Maturity Date.
3.2.4. Additional Interest. If any portion of the
Loan which is subject to a Pricing Option is repaid, or
any 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 obliga-
tions hereunder), on a date which is prior to the last
Banking Day of the Interest Period applicable to such
Pricing Option, the Borrowers jointly and severally will
pay to the Administrative Agent for the account of each
Lender in accordance with the Lenders' respective Percent-
age Interests, in addition to any amounts of interest
otherwise payable hereunder, an
3133296.08 -35- FALCON CREDIT AGREEMENT<PAGE>
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 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 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
Pricing Option is not outstanding on the first day of the
Interest Period applicable to such Pricing Option other
than for reasons described in Section 3.2.1, the Borrowers
shall be deemed to have terminated such Pricing Option.
The determination by the Administrative Agent of such
amount of interest shall, in the absence of manifest
error, be conclusive.
3.2.5. Change in Applicable Laws, Regulations, etc.
If any Legal Requirement shall prevent any Lender from
funding through the purchase of deposits, or maintaining,
any portion of the Loan subject to a Pricing Option or
otherwise from giving effect to such Lender's obligations
as contemplated hereby, (a) the Administrative Agent may
by notice to the Borrowers terminate all of the affected
Pricing Options, (b) the portion of the Loan subject to
such terminated 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 Pricing Options exceeds the Applicable Rate based
on the Base Rate.
3.2.6. Funding Procedure. The Lenders may fund any
portion of the Loan subject to a 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 Pricing Option, how-
ever, all amounts payable hereunder, including the inter-
est 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 Lend-
er'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 Period relat-
ing 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. 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,
3133296.08 -36- FALCON CREDIT AGREEMENT<PAGE>
and on the Final Revolving Maturity Date, commitment fees in an
amount equal to the product of (a) interest at a rate equal to
the commitment fee percentage in the table below set opposite
the ratio which (i) Consolidated Total Debt on the last day of
the most recently ended fiscal quarter for which financial
statements have been furnished by the Restricted Companies to
the Lenders pursuant to Sections 7.4.1 or 7.4.2 prior to such
Payment Date bore to (ii) Consolidated Annualized Operating
Cash Flow for the period of three consecutive months ended on
the last day of such period 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:
Ratio of Consolidated Total Debt
to Consolidated Annualized Commitment Fee
Operating Cash Flow Percentage
================================ ==============
Greater than or equal to 4.75 0.375%
Less than 4.75 0.250%
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 Section 7.4.1 or 7.4.2; provided, however, that if
for any reason the Restricted Companies shall not have fur-
nished the financial statements required by Section 7.4.1 or
7.4.2 for any fiscal quarter by the time required by such Sec-
tions and the commitment fee percentage indicated by the Con-
solidated Total Debt to Consolidated Annualized Operating Cash
Flow ratio for such fiscal quarter would be increased from that
previously in effect, the commitment fee percentage during the
period from the date which is three Banking Days after such
financial statements were due until the date on which the same
are received by the Administrative Agent shall be the commit-
ment fee percentage as so increased.
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
3133296.08 -37- FALCON CREDIT AGREEMENT<PAGE>
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. If any Lender shall have
determined that compliance by such Lender with any applicable
law, governmental rule, regulation or order regarding capital
adequacy of banks or bank holding companies, or any interpreta-
tion or administration thereof by any governmental authority,
central bank or comparable agency charged with the interpreta-
tion or administration thereof, or compliance by such Lender
with any request or directive regarding capital adequacy
(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 cap-
ital 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, accompa-
nied by the certificate referred to below, pay to the Adminis-
trative 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 Sec-
tion 3.1. A certificate of an officer of any such Lender set-
ting forth the amount to be paid to it and the basis for compu-
tation 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.
3.6. 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 maintain-
ing 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 such additional amounts as such Lender determines will,
together with any adjustment in the Applicable Rate, fully com-
pensate
3133296.08 -38- FALCON CREDIT AGREEMENT<PAGE>
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 rate of
interest on overdue installments of principal provided in Sec-
tion 3.1. A certificate of an officer of such Lender setting
forth 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
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 Obliga-
tions 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 pay-
ment 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.
4. Payment.
4.1. Payment at Maturity. On the stated or any
accelerated maturity of the Revolving Loan or Term Loan, as the
case may be, the Borrowers jointly and severally will pay to
the Administrative Agent for the account of each Lender for
credit to the Revolving Loan or Term Loan, as the case may be,
an amount equal to the Revolving Loan or Term Loan, as the case
may be, then due, together with all accrued and unpaid interest
and any fees thereon, and upon any accelerated maturity date
and the Final Term Maturity Date, all other Credit Obligations
then outstanding.
4.2. Fixed Prepayment of Term Loan. Commencing in
1997 and continuing through 2004, the Borrowers will jointly
and severally pay an aggregate of $1,000,000 to the Administra-
tive Agent on December 31st of each year as a fixed prepayment
of the Term Loan for the account of each Lender participating
therein, together with
3133296.08 -39- FALCON CREDIT AGREEMENT<PAGE>
accrued interest on such amount prepaid, and a final payment of
$117,000,000 on the Final Term Maturity Date.
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.
4.4. Targeted Asset Sales. In the event that after June
1, 1996 and prior to October 1, 1997 the Restricted Companies
sell or dispose of Operating Assets (which may include the
Listed Systems) and the aggregate Net Cash Proceeds for all
such sales and dispositions is less than $40,000,000 (a "Tar-
geted Asset Sale"), such aggregate Net Cash Proceeds shall (a)
to the extent such aggregate Net Cash Proceeds are less than
$40,000,000, be applied to repay the Revolving Loan within five
Banking Days after such Targeted Asset Sale (but shall not
reduce the Maximum Amount of Revolving Credit), and (b) to the
extent such aggregate Net Cash Proceeds equal or exceed
$40,000,000, be deemed the proceeds from a Non-Targeted Asset
Sale pursuant to Section 4.5.1.
4.5. Non-Targeted Asset Sales.
4.5.1. Prepayment on Sale. Upon, or within five
days prior to, the sale, exchange or disposition of assets
by the Restricted Companies that does not constitute a
Targeted Asset Sale (a "Non-Targeted Asset Sale"), the
Borrower making (or whose Subsidiaries are making) such
sale, exchange or disposition shall provide written notice
to the Lenders of (a) the closing date for such Non-Tar-
geted Asset Sale, (b) the amount of Net Cash Proceeds (if
any, in the case of an exchange) therefrom, (c) whether
the Net Cash Proceeds will be reserved for a Permitted
Asset Swap, (d) how much of the Revolving Loan and Term
Loan will be repaid with the Net Cash Proceeds, (e) the
schedule of Pro Rata Revolver Prepayment Portions, and (f)
a revised schedule of reductions in the Maximum Amount of
Revolving Credit giving effect to such Pro Rata Revolver
Prepayment Portions. The amount of the Loan so to be
repaid shall equal the amount of such Net Cash Proceeds to
the extent that (i) the Net Cash Proceeds of all such Non-
Targeted Asset Sales within such calendar year exceed
$5,000,000 and (ii) the balance of such Net Cash Proceeds
in excess of the amount in clause (i) above are not sub-
ject to an effective Asset Swap Reserve Amount.
Such prepayment will be allocated to the Revolving
Loan and Term Loan pro rata in proportion to the relative
size of the Maximum Amount of Revolving Credit to the Term
Loan, and prepayments of the Term Loan under
3133296.08 -40- FALCON CREDIT AGREEMENT<PAGE>
this Section 4.5.1 shall be applied to the prepayments
required under Section 4.2 on a weighted basis in
accordance with the respective amounts of the fixed
prepayments required by Section 4.2. All such prepayments
(and reductions in the Maximum Amount of Revolving Credit)
must be made within five Banking Days after the Non-
Targeted Asset Sale or the termination of effectiveness of
an Asset Swap Reserve Amount, as the case may be.
4.5.2. Asset Swap Reserve Amount. The Borrowers may
elect to reserve up to $40,000,000 of Net Cash Proceeds
from all such Non-Targeted Asset Sales at any one time
outstanding for Permitted Asset Swaps; provided, however,
that this limitation shall not apply to contemporaneous
asset exchanges made in accordance with Section 7.11.5.
The amount so reserved (the "Asset Swap Reserve Amount")
must be applied to a Permitted Asset Swap within 270 days
after the Non-Targeted Asset Sale creating the Asset Swap
Reserve Amount. In the event the Permitted Asset Swap is
not consummated within such 270-day period (or if the Bor-
rower abandons its plans for a Permitted Asset Swap prior
to the end of such period), the Borrower shall notify the
Lenders within three Banking Days and specify (a) how much
of the Revolving Loan and Term Loan will be repaid with
the Asset Swap Reserve Amount, (b) the schedule of Pro
Rata Revolver Prepayment Portions and (c) a revised sched-
ule of reductions in the Maximum Amount of Revolving Cred-
it giving effect to such Pro Rata Revolver Prepayment Por-
tions.
The amount of the Loan so to be repaid will be allo-
cated to the Revolving Loan and Term Loan pro rata in pro-
portion to the relative size of the Maximum Amount of
Revolving Credit to the Term Loan, and prepayments of the
Term Loan under this Section 4.5.2 shall be applied to the
prepayments required under Section 4.2 on a weighted basis
in accordance with the respective amounts of the fixed
prepayments required by Section 4.2. All such prepayments
must be made within five Banking Days after the delivery
of such notice.
4.6. Designated Financing Debt. Upon, or within five
days prior to, the incurrence by Holding, L.P. or any of the
Restricted Companies of Designated Financing Debt, Holding,
L.P. or 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 and
Term Loan pro rata in proportion to the relative size of the
Maximum Amount of Revolving Credit to the Term Loan; provided,
however, that such Net Debt Proceeds shall not be required to
prepay the Credit Obligations to the extent such Designated
Financing Debt is incurred by Holdings L.P. and the Net Debt
Proceeds thereof are used to refinance the Holdings, L.P.
Senior Subordinated Notes at maturity. All prepayments of the
3133296.08 -41- FALCON CREDIT AGREEMENT<PAGE>
Term Loan under this Section 4.6 shall be applied to the pre-
payments required under Section 4.2 in the inverse order there-
of. All such prepayments (and reductions in the Maximum Amount
of Revolving Credit) must be made within five Banking Days
after the incurrence of such Designated Financing Debt.
4.7. Voluntary Prepayments. In addition to the pre-
payments required by Sections 4.2, 4.3, 4.4, 4.5 and 4.6, 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 pre-
mium (except as provided in Section 3.2.4 with respect to early
termination of Pricing Options). The Borrowers shall give the
Administrative Agent at least one Banking Day prior notice in
the case of a Revolving Loan prepayment (three Banking Days'
prior notice if any portion of the Revolving Loan to be repaid
is subject to a Pricing Option) and at least five Banking Day's
prior notice in the case of a Term Loan prepayment, specifying
the date of payment, the total principal amount of the Revolv-
ing Loan and Term 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 Pricing Options under
Section 3.2.4). All prepayments of the Term Loan under this
Section 4.7 shall be applied to the prepayments required under
Section 4.2 pro rata over the remaining payments.
4.8. Application of Payments. Any prepayment of the
Revolving Loan or Term Loan, as the case maybe, shall be
applied first to the portion of the Revolving Loan or Term
Loan, as the case maybe, not then subject to Pricing Options,
then the balance of any such prepayment shall be applied to the
portion of the Revolving Loan or Term Loan, as the case may be,
then subject to Pricing Options, in the chronological order of
the respective maturities thereof (or as the Restricted Compa-
nies may otherwise specify), together with any payments
required by Section 3.2.4. with respect to early termination of
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 Inter-
ests. The amounts of the Term Loan prepaid pursuant to Sec-
tions 4.2, 4.5, 4.6 or 4.7 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 addi-
tion to the further conditions in Section 5.2):
5.1.1. Satisfaction of Existing Bank Debt. Contem-
poraneously 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) as in effect immediately prior
to the Initial Closing Date shall have
3133296.08 -42- FALCON CREDIT AGREEMENT<PAGE>
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 (and
certifying as to compliance by the Restricted Companies
with Sections 5.1.11 and 5.1.12).
5.1.2. Notes. The Borrowers shall have executed the
Notes and delivered them to the Managing Agent for each
Lender. The Revolving Loan and Term Loan will close and
fund simultaneously.
5.1.3. Guarantors Contribution Agreement. Each of
the Guarantors shall have entered into an amended and
restated contribution agreement in substantially the form
of Exhibit 5.1.3 (the "Guarantors Contribution Agree-
ment"), pursuant to which the Guarantors shall make con-
tributions among themselves with respect to payments made
in accordance with their respective guarantees of the
Credit Obligations, and shall have delivered it to the
Managing Agent.
5.1.4. 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 Bor-
rowers and the Agents.
5.1.5. 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 satisfactory to the Lenders.
(a) Weinstein, Boldt, Racine & Halfhide, spe-
cial counsel for the Holding Companies.
(b) Fleischman and Walsh, P.C., special FCC
counsel for the Restricted Companies.
(c) Ropes & Gray, special counsel for the Man-
aging Agent.
The Restricted Companies authorize and direct their
counsel to furnish the foregoing opinions.
5.1.6. Security Agreement. The Restricted Companies
shall have duly authorized, executed and delivered to the
Collateral Agent an amended and restated Security Agree-
ment substantially in the form of Exhibit 5.1.6 (the
"Security Agreement").
3133296.08 -43- FALCON CREDIT AGREEMENT<PAGE>
5.1.7. Holding Pledge and Subordination Agreement.
Each of Holding, L.P., Holding, Inc. and the Restricted
Companies shall have duly authorized, executed and deliv-
ered to the Managing Agent an amended and restated Holding
Pledge and Subordination Agreement substantially in the
form of Exhibit 5.1.7.
5.1.8. Perfection of Security. Each Obligor, Hold-
ing, L.P. and Holding, Inc. shall have duly authorized,
executed, acknowledged, delivered, filed, registered and
recorded such security agreements, notices, financing
statements and other instruments as the Managing Agent or
the Collateral Agent may have requested in order to per-
fect the security interests and encumbrances purported or
required pursuant to the Credit Documents to be created in
the Credit Security.
5.1.9. Falcon Cable Systems Purchase Agreement.
Other than as consented to by the Agents in writing, which
consent shall not be unreasonably withheld:
(a) The Falcon Cable Systems Purchase Agreement
shall have been duly authorized, executed and consum-
mated by the parties thereto and shall be in substan-
tially the form referred to in Section 8.2.2(a), with
only such changes as shall be satisfactory to the
Managing Agent and the Administrative Agent.
(b) All of the representations and warranties
set forth in the Falcon Cable Systems Purchase Agree-
ment shall be complete and correct in all material
respects on and as of the Initial Closing Date with
the same force and effect as though originally made
on and as of such date.
(c) All of the other conditions to the obliga-
tions of parties to the Falcon Cable Systems Purchase
Agreement shall have been satisfied.
(d) Except as disclosed on Exhibit 5.1.9(d)
and subject to Section 7.2.4 with respect to certain
Franchise transfer approvals, any material consent,
authorization, order or approval of any Person
required in connection with the transactions contem-
plated by the Falcon Cable Systems Purchase Agreement
shall have been obtained and shall be in full force
and effect.
(e) All of the items required to be delivered
under the Falcon Cable Systems Purchase Agreement
shall have been so delivered, except such items the
failure of which to deliver has not resulted, and
could not reasonably be expected to result in, a
Material Adverse Change.
3133296.08 -44- FALCON CREDIT AGREEMENT<PAGE>
(f) Holding, L.P. shall have furnished to the
Lenders certificates satisfactory to the Lenders as
to the solvency of Falcon Cable Systems II on a sepa-
rate basis and the Restricted Companies on a Consoli-
dated basis immediately after giving effect to the
Falcon Cable Systems Purchase Agreement and the
transactions contemplated thereby and hereby.
(g) Contemporaneously with the making by the
Lenders of the first extension of credit under Sec-
tion 2, the Managing Agent and the Administrative
Agent shall have received a certificate of a Finan-
cial Officer to the effect that the closing has
occurred under the Falcon Cable Systems Purchase
Agreement and to the effect that each of the condi-
tions set forth in this Section 5.1.9 has been satis-
fied.
5.1.10. Listed Systems. As of the Initial Closing
Date, the Listed Systems shall be listed for sale with a
nationally recognized broker reasonably satisfactory to
the Managing Agent.
5.1.11 Repayment of Falcon Cable Systems Debt.
Falcon Cable Systems and its Subsidiaries shall have paid
in full all Financing Debt owing by them to banks or
insurance companies, all revolving credit or other commit-
ted credit facilities relating to such Financing Debt
shall have been terminated and all collateral and guaran-
tees granted by Falcon Cable Systems and its Subsidiaries
with respect to such Financing Debt shall have been
released.
5.1.12. MONY Subordinated Debt. The note purchase
agreements and other documents relating to the MONY Subor-
dinated Debt shall have been amended to conform the finan-
cial and principal business covenants to this Agreement
and to permit the Restricted Companies to enter into, and
to perform the transactions contemplated by, the Credit
Documents.
5.2. Conditions to Each Extension of Credit. The
obligations of the Lenders to make any extension of credit pur-
suant 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. The representations
and warranties contained in Sections 6.6 and 8, sections
2.3 and 5 of the Security Agreement and in sections 2.2
and 4 of the Holding 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; no Default shall exist on such
Closing Date prior to or immediately after giving effect
to the requested extension of credit; as of such Closing
Date, no Material Adverse Change shall
3133296.08 -45- FALCON CREDIT AGREEMENT<PAGE>
have occurred; the Borrowers shall be permitted to incur
the requested loan under section 4.03 of the Senior
Subordinated Notes Indenture and the Borrowers shall have
furnished to the Administrative Agent on such Closing Date
a certificate to these effects (together with a notation
of which Borrowers will be directly using the proceeds of
the requested loan and a schedule of calculations
demonstrating, as of such Closing Date, the Reference
Consolidated Annualized Operating Cash Flow Amount and
compliance with the financial tests set forth in Section
7.5), 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 transactions contemplated
hereby and thereby shall have been authorized by all nec-
essary proceedings of each Obligor and any of their
respective Affiliates party thereto. All necessary con-
sents, approvals and authorizations of any governmental or
administrative agency or any other Person with respect to
any of the transactions contemplated hereby or by any
other Credit Document shall have been obtained and shall
be in full force and effect. The Managing Agent shall
have received copies of all documents, including certifi-
cates, records of corporate and partnership proceedings
and opinions of counsel, which the Managing Agent may have
reasonably requested in connection therewith, such docu-
ments where appropriate to be certified by proper corpo-
rate 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 reg-
ulation 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.
6. Guarantees.
6.1. Guarantees of Credit Obligations. Each Guarantor
unconditionally jointly and severally guarantees that the
Credit Obligations incurred by any Borrower or any other Obli-
gor 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 pay-
ment and not of collectability and being absolute and in no way
conditional or contingent. In the event any part of the Credit
Obligations shall not have been so paid in full when due and
payable, such Guarantor will, immediately upon written notice
by the Managing Agent or the Administrative Agent or, without
notice, immediately upon the occurrence of a Bankruptcy
Default, pay or
3133296.08 -46- FALCON CREDIT AGREEMENT<PAGE>
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 Obliga-
tions shall be 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 federal
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 Guaran-
tors shall, not later than five days after receipt of notice
from the Managing Agent or 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 Managing Agent or 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
3133296.08 -47- FALCON CREDIT AGREEMENT<PAGE>
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;
(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 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;
3133296.08 -48- FALCON CREDIT AGREEMENT<PAGE>
(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 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 the 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 noncompli-
ance 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 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, the 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,
3133296.08 -49- FALCON CREDIT AGREEMENT<PAGE>
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 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 the 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;
(d) To collect or liquidate or realize upon any
of the Credit Obligations or the 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 nec-
essary or desirable.
3133296.08 -50- FALCON CREDIT AGREEMENT<PAGE>
6.6. Certain Guarantor Representations. Each Guarantor
represents that:
(a) it is in its best interest and in pursuit
of its partnership 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
Managing Agent that the Lenders are unwilling to enter into
this Agreement unless the Guarantees contemplated by this Sec-
tion 6 are given by it. Each Guarantor represents that:
(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 exist-
ing 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 has 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 the
Guarantors Contribution Agreement.
3133296.08 -51- FALCON CREDIT AGREEMENT<PAGE>
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 liabil-
ity will be made or received while any of the Credit Obliga-
tions are outstanding; provided, however, that the Borrowers
may make payments permitted by Section 7.10.
6.9. Future Subsidiaries; Further Assurances. The
Borrowers and each Guarantor shall from time to time cause any
present or future Wholly Owned Subsidiary that is not a Guaran-
tor to join this Agreement as a Guarantor pursuant to a joinder
agreement in form and substance satisfactory to the Managing
Agent. Each Guarantor will, promptly upon the request of the
Managing Agent from time to time, execute, acknowledge and
deliver, and file and record, all such instruments, and take
all such action, as the Managing Agent deems necessary or
advisable to carry out the intent and purposes of this Section
6.
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, it and its respective
Subsidiaries will comply with such of the following provisions
as are applicable to the Person in question:
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 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
3133296.08 -52- FALCON CREDIT AGREEMENT<PAGE>
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 inci-
dent to the operations of such Person; provided, however,
that any such Indebtedness need not be paid if the valid-
ity 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 inci-
dental thereto, including the provision of programming
services, telephone services and the transmission of voice
and data and other information so long as during any peri-
od of four consecutive fiscal quarters the Investments or
cash expenditures of the Restricted Companies (including
Investments permitted by Section 7.9.7) with respect to
the businesses described in this clause (b) do not exceed
10% of Consolidated Annualized Operating Cash Flow; pro-
vided, 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 of the
Restricted Companies:
(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 compliance
is at the time being contested in good faith by
appropriate proceedings; and
(b) except to the extent permitted under Sec-
tion 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
3133296.08 -53- FALCON CREDIT AGREEMENT<PAGE>
Material Agreements (to the extent not inconsistent with this
Agreement or any other Credit Document). Without the prior
written consent of the Required Lenders, 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.
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 (a) where compliance therewith shall at the
time be contested in good faith by appropriate proceedings and
(b) for consents under Franchises required for the transactions
contemplated by the Falcon Cable Systems Purchase Agreement but
not obtained to the extent permitted by Section 5.1.9(d);
provided, however, that on or before December 31, 1996, the sum
of Subscribers of Falcon Cable Systems II who live in a
geographic area either (i) not covered by a Franchise, (ii)
covered by a Franchise for which no consent is required or
(iii) covered by a Franchise for which consent has been
obtained, shall exceed 75% of the Subscribers of Falcon Cable
Systems referred to on Exhibit 8.6.1.
7.3. Insurance.
7.3.1 Business Interruption Insurance. Each of the
Restricted Companies will maintain with financially sound
and reputable insurers insurance related to interruption
of business, either for loss of revenues or for extra
expense, in the manner customary for businesses of similar
size engaged in similar activities and consistent with
past practice of the Restricted Companies.
7.3.2 Property Insurance. Each of the Restricted
Companies will keep its assets which are of an insurable
character (other than overhead and buried cable or ampli-
fiers, tap-off devices, cables, housedrops and other com-
ponents of its cable television distribution systems which
are actually affixed to overhead or buried cable) insured
by financially sound and reputable insurers against theft
and fraud and against loss or damage by fire, explosion or
hazards to the extent, in amounts and with deductibles at
least as favorable as those generally maintained by busi-
nesses of similar size engaged in similar activities and
consistent with past practice of the Restricted Companies.
Such insurance shall provide extended coverage in amounts
sufficient to prevent such Person from becoming a co-in-
surer.
3133296.08 -54- FALCON CREDIT AGREEMENT<PAGE>
7.3.3. Liability Insurance. Each of the Restricted
Companies will maintain with financially sound and repu-
table insurers insurance against liability for hazards,
risks and liability to persons and property, including
insurance against liability for defamation, libel, slander
and invasion of privacy, to the extent, in amounts and
with deductibles at least as favorable as those generally
maintained by businesses of similar size engaged in simi-
lar activities; provided, however, that it may effect
workers' compensation insurance or similar coverage with
respect to operations in any particular state or other
jurisdiction through an insurance fund operated by such
state or jurisdiction or by meeting the self-insurance
requirements of such state or jurisdiction.
7.3.4. Flood Insurance. Each of the Restricted Com-
panies will at all times keep each parcel of real property
owned or leased by it which is (a) included in the Credit
Security, (b) in an area determined by the Director of the
Federal Emergency Management Agency to be subject to spe-
cial flood hazard and (c) in a community participating in
the National Flood Insurance Program, insured against such
special flood hazards in an amount equal to the maximum
limit of coverage available for the particular type of
property under the federal National Flood Insurance Act of
1968.
7.4 Financial Statements and Reports. Each of the
Restricted Companies will maintain a system of accounting in
which entries will be made 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 90 days after the end of each fiscal year,
the Consolidated and Consolidating balance sheet of
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
Holding, L.P. and its Subsidiaries for such fiscal year
(all in reasonable detail and, in such Consolidating
financial statements, showing the 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 satisfac-
tory to the Managing Agent), to the effect that they
have audited such Consolidated financial statements
in accordance with generally accepted auditing stan-
dards and that such Consolidated financial statements
present fairly,
3133296.08 -55- FALCON CREDIT AGREEMENT<PAGE>
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 and in particular
that they have no knowledge of any Default under Sec-
tions 7.5 through 7.15 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 accoun-
tants 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 pro-
pose 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 state-
ments 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, 8.4 and 8.6.1
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 Managing
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
quarter, the internally prepared Consolidated statement of
income of the Restricted Companies for such quarter and
for the portion of the fiscal year then ending and the
internally prepared Consolidated balance sheet of the
Restricted Companies as of the end of such quarter and the
Consolidated
3133296.08 -56- FALCON CREDIT AGREEMENT<PAGE>
statements of changes in partners' equity and cash flows of the
Restricted Companies for such quarter and for the portion of
the fiscal year then ending (all in reasonable detail),
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 posi-
tion of the Restricted Companies covered thereby at
the dates thereof and the results of their operations
for the periods covered thereby, subject only to nor-
mal year-end audit adjustments and the addition of
footnotes.
(b) Computations demonstrating, as of the end
of such quarter, compliance with the Computation Cov-
enants.
(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 quar-
ter, as well as any changes in the Charter, Bylaws or
incumbency of officers of the Restricted Companies
from those previously certified to the Managing
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 Other Reports. The Restricted Companies will
promptly furnish to the Lenders:
(a) As soon as prepared and in any event before
February 28 in each year, an annual budget and oper-
ating projections for such fiscal year of the
Restricted Companies, prepared in a manner consistent
with the manner in which the financial projections
described in Section 8.2.1 were prepared.
(b) Any material updates of such budget and
projections.
3133296.08 -57- FALCON CREDIT AGREEMENT<PAGE>
(c) Any management letters furnished to any
Restricted Company by its auditors.
(d) All budgets and Consolidated statements of
operations furnished by any Restricted Company gener-
ally to its shareholders or partners in such capac-
ity.
(e) Such registration statements, proxy state-
ments and reports, including Forms S-1, S-2, S-3, S-
4, 10-K, 10-Q and 8-K, as may be filed for Holding,
L.P. or any Restricted Company with the Securities
and Exchange Commission.
(f) Any 90-day letter or 30-day letter from the
federal Internal Revenue Service asserting tax defi-
ciencies against any Restricted Company.
7.4.4. 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 insur-
ance, of the payment by the Restricted Companies of at
least $1,000,000. 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 tak-
en, are taking or propose to take with respect thereto.
7.4.5 Franchise Matters. The Restricted Companies
will promptly furnish to the Managing Agent notice of any
action by any federal, state or local governmental author-
ity 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 of a
Franchise now or hereafter held by any Restricted Company.
7.4.6. 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,
3133296.08 -58- FALCON CREDIT AGREEMENT<PAGE>
(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 Per-
son that the PBGC has instituted or intends to insti-
tute proceedings to terminate any Plan, or that any
Multiemployer Plan is insolvent or in reorganization,
(d) notice of the possibility of the termina-
tion 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.
7.4.7. 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, finan-
cial condition, income or prospects of the Restricted Com-
panies as such officer may reasonably request, including
copies of all tax returns, licenses, agreements, con-
tracts, leases and instruments to which any of the
Restricted Companies is party. The authorized officers
and representatives of any Agent or, after the occurrence
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 Annu-
alized 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 7.4.2:
Date Percentage
==== ==========
Initial Closing Date through
June 29, 1999 550%
June 30, 1999 through
3133296.08 -59- FALCON CREDIT AGREEMENT<PAGE>
December 30, 1999 500%
December 31, 1999 through
June 29, 2000 450%
June 30, 2000 through
December 30, 2000 400%
December 31, 2000 through
June 29, 2001 350%
June 30, 2001 through
December 30, 2001 300%
December 31, 2001 through
June 29, 2002 275%
June 30, 2002 and
thereafter 250%
7.5.2. Consolidated Operating Cash Flow to Con-
solidated Cash Interest Expense. On the last day of each
quarter, Consolidated Operating Cash Flow for the three-
month period then ending shall exceed 200% of Consolidated
Cash Interest Expense for such period.
7.5.3. Consolidated Annualized Operating Cash Flow
to Consolidated Pro Forma Debt Service. On the last day
of each quarter, 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. Consolidated Operating Cash Flow Plus Cash
and Cash Equivalents to Consolidated Total Fixed Charges.
On the last day of each quarter, commencing December 31,
2000, the sum of (a) Consolidated Operating Cash Flow for
the 12-month period then ending 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 (c) Consolidated Total Fixed Charges for such
period.
7.5.5. Capital Expenditures. During each year
indicated below, Capital Expenditures of the Restricted
Companies shall not exceed the total of:
(a) the amount set forth opposite such year in the table
below plus
(b) for each year after 1996, the lesser of (i) the
amount by which actual Capital Expenditures in the
preceding year are less than the amount set forth for
such preceding year in such table or (ii) the amount
of Capital Expenditures contemplated by the budget
figures set forth in such table for such preceding
year minus
3133296.08 -60- FALCON CREDIT AGREEMENT<PAGE>
(c) in the event Net Cash Proceeds from Targeted Asset
Sales do not equal at least $38,000,000 by September
30, 1997, $18,000,000 for 1997.
Calendar Year Amount Budget
============= ====== ======
1996 $115,000,000 $102,664,000
1997 $115,000,000 $101,506,000
1998 $125,000,000 $117,235,000
1999 $ 80,000,000 $ 74,165,000
2000 and each
year thereafter $ 50,000,000 $ 50,000,000
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 borrowed money, incurred in the ordi-
nary course of business.
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 Sec-
tions 7.8.5 and 7.8.6.
7.6.6. Indebtedness in respect of judgments or
awards not in excess of $1,000,000 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 Com-
pany 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 re-
view and the Restricted Companies shall have taken ap-
propriate reserves therefor consistent with GAAP.
7.6.7. To the extent permitted by Section 7.8.10,
Indebtedness in respect of Capitalized Lease Obligations
or secured by purchase money security interests; provided,
however, that the aggregate principal amount of all
3133296.08 -61- FALCON CREDIT AGREEMENT<PAGE>
Indebtedness permitted by this Section 7.6.7 at any one
time outstanding shall not exceed $7,250,000.
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 MONY Subordi-
nated Debt.
7.6.11. Indebtedness outstanding on the date hereof
and described in Exhibit 8.4, except that only the Indebt-
edness under item A.2 (Post-Closing Financing Debt) of
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. Obligations of the Restricted Companies to
purchase cable television systems permitted by Section
7.9.
7.6.14. Indebtedness of the Restricted Companies to
Holding, L.P. pledged by Holding, L.P. to the Managing
Agent in accordance with the Holding Pledge and Subordina-
tion Agreement.
7.6.15. Other Indebtedness of the Restricted Compa-
nies, other than for borrowed money, not in excess of
$3,500,000 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 their respective Subsidiaries 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
3133296.08 -62- FALCON CREDIT AGREEMENT<PAGE>
made in the ordinary course of business, not involving
Guarantees of Financing Debt, and not exceeding $12,000,000 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 subordi-
nated 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 (including any arrangement or agreement which
prohibits them from creating any Lien), except the following:
7.8.1. Liens on the Credit Security which secure the
Credit Obligations and restrictions on transfer and on
Liens contained in the Credit Documents.
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, un-
employment insurance, old age pensions or other social
security, (b) in connection with casualty insurance main-
tained in accordance with Section 7.3, (c) to secure the
performance of bids, tenders, contracts (other than con-
tracts relating to Financing Debt) or leases, (d) to se-
cure statutory obligations or surety or appeal bonds, (e)
to secure indemnity, performance or other similar bonds in
the ordinary course of business or (f) in connection with
claims contested to the extent that payment thereof shall
not at that time be required by Section 7.1.
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 ap-
propriate 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 re-
strictions, (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 materi-
ally detract from the value of the encumbered property or
impair the use thereof in the business of
3133296.08 -63- FALCON CREDIT AGREEMENT<PAGE>
any Restricted Company.
7.8.7. Restrictions under federal and state securi-
ties laws on the transfer of securities.
7.8.8. Restrictions under Foreign Trade Regulations,
the Communications Act and specific Franchises 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 ac-
counts.
7.8.10. Liens constituting (a) purchase money secu-
rity interests (including mortgages, conditional sales,
Capitalized Leases and any other title retention or de-
ferred 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 inter-
est referred to in the foregoing clause (a) in an amount
not to exceed the amount thereof remaining unpaid im-
mediately prior to such renewal, extension or refunding;
provided, however, that each such security interest shall
attach solely to the particular item of property so ac-
quired, and the principal amount of Indebtedness (includ-
ing Indebtedness in respect of Capitalized Lease Obliga-
tions) secured thereby shall not exceed the cost (includ-
ing 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. 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.
7.8.13. Arrangements constituting a qualified escrow
account or qualified trust for funds included in an Asset
Swap Reserve Amount to facilitate a deferred like-kind
exchange exempt from taxation under the Code.
7.9. Investments and Acquisitions. The Restricted
Companies shall not have outstanding, acquire, commit them-
selves to acquire or hold any Investment (including any Invest-
ment consisting of the acquisition of any business) except for
the following:
3133296.08 -64- FALCON CREDIT AGREEMENT<PAGE>
7.9.1. Investments of the Restricted Companies in
Wholly Owned Subsidiaries as of the date hereof and so
long as such Wholly Owned Subsidiaries are Guarantors.
7.9.2. Investments in Cash Equivalents.
7.9.3. Intercompany loans and advances from (a) any
Guarantor to the Borrowers or (b) from any Borrower to
another Borrower, but in each case only to the extent rea-
sonably necessary for Consolidated tax planning and work-
ing capital management.
7.9.4. Prepaid royalties and fees paid in the ordi-
nary 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 giv-
ing effect thereto no Default exists, acquisitions by the
Restricted Companies of businesses engaged in activities
permitted by Section 7.2.1(a), whether by acquisition of
stock or assets or by merger 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; (b) except as provided in clause (c)
below or with the prior written consent of the Required
Lenders, the aggregate consideration paid by the Re-
stricted Companies in all such acquisitions (excluding any
consideration paid through the issuance of equity inter-
ests in Holding, L.P.) will not exceed (i) $25,000,000 in
any fiscal year or (ii) $50,000,000 cumulatively since the
date hereof; and (c) except as provided in clause (b)
above or with the prior written consent of two of the Man-
aging Agent, the Administrative Agent and the Syndication
Agent, the aggregate consideration paid by the Restricted
Companies in all such acquisitions (excluding any consid-
eration paid through the issuance of equity interests in
Holding, L.P.) will not exceed the Asset Swap Reserve
Amount.
7.9.8. Loans from the Restricted Companies to Hold-
ing, L.P. not exceeding $350,000 at any one time outstand-
ing.
7.9.9. So long as immediately before and after giv-
ing effect thereto no Default exists, Investments consist-
ing of the contribution of Systems and other assets to
Permitted Joint Ventures; provided, however, that in no
event shall the sum of the respective portions which (a)
Consolidated Annualized Operating Cash Flow properly al-
locable to the Systems or other assets contributed to (or
3133296.08 -65- FALCON CREDIT AGREEMENT<PAGE>
otherwise invested in) Permitted Joint Ventures after the
Initial Closing Date by the Restricted Companies, computed
in each respective case for the period of three consecu-
tive 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,
constitutes of (b) Consolidated Annualized Operating Cash
Flow, computed in each respective case for the same pe-
riod, exceed 15%.
7.9.10. Investments (other than Investments of the
type described in Sections 7.9.7, 7.9.8, 7.9.9 and 7.18)
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.
7.10. Distributions. The Restricted Companies shall not
make any Distribution except for the following:
7.10.1. The Restricted Companies may make Distribu-
tions to the Borrowers or to any Guarantor and, so long as
immediately before and after giving effect thereto no De-
fault shall exist, Borrowers may pay cash Distributions to
the other Borrowers and Guarantors.
7.10.2. Any Restricted Company may declare and pay
dividends payable in common stock (or similar common eq-
uity) of such Restricted Company.
7.10.3 So long as immediately before and after giv-
ing effect thereto no Default exists, the Restricted Com-
panies may make (a) Distributions to Holding, L.P. after
January 1, 2001, which Distributions are used exclusively
for Holding, L.P. to pay mandatory scheduled payments then
due of principal of, and accrued interest on, Holding,
L.P.'s Indebtedness for borrowed money permitted to be
incurred by Holding, L.P. under the Holding Pledge and
Subordination Agreement and (b) redemptions of equity in-
terests in any Holding Company owned by members of manage-
ment (other than Marc B. Nathanson) upon termination of
employment in an aggregate amount not exceeding $1,000,000
in any year.
7.10.4. The Restricted Companies may make Distribu-
tions to Holding, L.P. on account of management services
provided to the Restricted Companies
3133296.08 -66- FALCON CREDIT AGREEMENT<PAGE>
in any fiscal quarter described below (in addition to any
Distributions permitted by Section 7.10.3) in an aggregate
amount not exceeding (a) for each of the first three
fiscal quarters of each fiscal year, the lesser of (i) the
amount by which Holding, L.P. Negative Cash Flow for such
fiscal quarter is less than zero or (ii) 4.25% of
Consolidated Revenues for such fiscal quarter, and (b) for
each fiscal year, the lesser of (i) the amount by which
Holding, L.P. Negative Cash Flow for such fiscal year is
less than zero or (ii) 4.25% of Consolidated Revenues for
such fiscal year.
7.10.5. 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, including the subordination terms and, so long as
immediately before and after giving effect thereto no De-
fault exists, 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 (to-
gether with accrued interest thereon) on such debt on ac-
count of risk-based capital requirements.
7.10.6. So long as immediately before and after giv-
ing effect thereto no Event of Default exists, the Re-
stricted Companies that are partnerships may pay Distribu-
tions to their partners in any calendar year only to the
extent of the product of:
(a) the lesser of (i) the consolidated net in-
come for federal and state tax purposes of the Re-
stricted Companies (or, if lesser, the Holding Compa-
nies) for the prior calendar year, or (ii) the con-
solidated net income for federal and state tax pur-
poses of the Restricted Companies (or, if lesser, the
Holding Companies) on a cumulative basis from and
after March 29, 1993 through the end of such prior
calendar year, multiplied by
(b) the marginal combined federal and Califor-
nia tax rate applicable to a company doing business
solely in California (determined after giving effect
to any deduction of state taxes for federal income
tax purposes).
7.10.7. Investments permitted by Sections 7.9.8.
7.10.8. So long as immediately before and after giv-
ing effect thereto no Default exists, the Restricted Com-
panies may repay to Holding, L.P. the principal amount of
loans made by Holding, L.P. to the Restricted Companies
3133296.08 -67- FALCON CREDIT AGREEMENT<PAGE>
in an amount not exceeding (a) the amount of net proceeds of
the initial public equity offering, if any, of Holding, L.P.
loaned by Holding, L.P. to the Restricted Companies plus
accrued interest thereon at a rate not exceeding the Base Rate
and (b) so long as no loans were advanced by Holding, L.P. to
the Restricted Companies within 90 days prior to such
repayment, the lesser of (i) $5,000,000 during any fiscal
quarter and (ii) the outstanding balance of loans advanced by
Holding, L.P. to the Restricted Companies after the Initial
Closing Date.
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 busi-
ness, (b) tangible assets to be replaced in the ordinary
course of business by other tangible assets of equal or
greater value and (c) tangible assets that are no longer
used or useful in the business of the Restricted Compa-
nies, the fair market value (or book value if greater) of
which shall not exceed $4,000,000 in any fiscal year.
7.11.2. Any Borrower may merge or be liquidated into
any other Borrower and any Guarantor may merge or be liq-
uidated into any Borrower or any other Guarantor.
7.11.3. So long as immediately before and after giv-
ing effect thereto no Default exists and the Restricted
Companies have furnished prior written notice of such sale
to the Managing Agent, the Restricted Companies may sell
Systems or other assets for fair market value; provided,
however, that, except with the prior written consent of
the Required Lenders, the portion of Consolidated Annual-
ized Operating Cash Flow for the period of three consecu-
tive months most recently ended prior to such sale for
which financial statements have been (or are required to
have been) furnished in accordance with Section 7.4.1 or
7.4.2 properly allocable to all such Systems or other as-
sets (other than Targeted Asset Sales) so sold shall not
exceed (i) 15% of the Reference Consolidated Annualized
Operating Cash Flow Amount in any fiscal year or (ii) 30%
of the Reference Consolidated Annualized Operating Cash
Flow Amount cumulatively since the date hereof.
7.11.4. So long as immediately before and after giv-
ing effect thereto no Default exists, the Restricted Sub-
sidiaries may contribute Systems and other assets to Per-
mitted Joint Ventures as Investments permitted by Section
7.9.9.
7.11.5. So long as immediately before and after giv-
ing effect thereto no
3133296.08 -68- FALCON CREDIT AGREEMENT<PAGE>
Default exists, the Restricted Companies may exchange
Systems or other assets for fair value in a single
transaction (or substantially contemporaneous series of
related transactions) pursuant to which, within five
Banking Days of the transfer of Systems and other assets,
the Restricted Companies receive Systems or assets which
are similar in size, profile and cash flow to the Systems
or assets so transferred; provided, however, that all such
exchanges pursuant to this Section 7.11.5 shall be subject
to the prior written consent of the Required Lenders.
7.12. Issuance of Stock by Subsidiaries; Subsidiary
Distributions.
7.12.1. Issuance of Stock by Subsidiaries. No Sub-
sidiary shall issue or sell any shares of its capital
stock or other evidence of beneficial ownership to any
Person other than a Borrower or any Wholly Owned Subsid-
iary of a Borrower that is a Guarantor.
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 main-
tenance of specified amounts of net worth or working capi-
tal) restricting the right of any Subsidiary to make Dis-
tributions or extensions of credit to a Borrower (directly
or indirectly through another Subsidiary).
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 ben-
efits by more than $1,500,000. 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 $1,500,000
in the aggregate. At no time shall the actuarial present value
of unfunded liabilities for post-employment health care ben-
efits, whether or not provided under a Plan, calculated in a
manner consistent with Statement No. 106 of the Financial Ac-
counting Standards Board, exceed $1,500,000.
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.
3133296.08 -69- FALCON CREDIT AGREEMENT<PAGE>
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 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
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 material compliance with all Environmental
Laws, keep all necessary permits, approvals, certificates,
licenses and other authorizations relating to environmen-
tal matters in effect and remain in material compliance
therewith, and handle all Hazardous Materials in material
compliance with all applicable Environmental Laws.
7.16.2. Immediately notify the Managing Agent, and
provide copies upon receipt, of all written claims, com-
plaints, notices or inquiries from governmental authori-
ties relating to the condition of its facilities and prop-
erties or compliance with Environmental Laws, and in the
case of potential liability in excess of $500,000 shall
promptly cure and have dismissed with prejudice to the
satisfaction of the Managing Agent any actions and pro-
ceedings relating to compliance with Environmental Laws.
7.16.3. Provide such information and certifications
which the Managing 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
Holding, L.P. permitted by Section 7.10.4.
7.18. Special Restrictions on Falcon Telecom. The sum of
(a) all Investments by the Restricted Companies in Falcon
Telecom plus (b) all proceeds of the Loan actually received by
Falcon Telecom for use in its business shall not exceed
$20,000,000 in the aggregate.
3133296.08 -70- FALCON CREDIT AGREEMENT<PAGE>
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:
8.1. Organization and Business.
8.1.1. The Borrowers. Each Borrower is a duly orga-
nized and validly existing limited partnership (or, in the
case of Falcon First, a corporation), in good standing
under the laws of the jurisdiction in which it is orga-
nized, with all partnership (or corporate) power and au-
thority 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 the security interests in the Credit
Security owned by it to secure the Credit Obligations and
(d) own its properties and carry on the business now con-
ducted or proposed to be conducted by it. Certified cop-
ies of the Charter and By-laws of each Borrower have been
previously delivered to the Managing 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, (iii) the
name under which each Borrower conducts its business and
the jurisdictions in which the name is used and (iv) 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 ex-
isting and in good standing under the laws of the juris-
diction 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 Obliga-
tions, (c) grant the Lenders the security interest in the
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 con-
ducted by it. Certified copies of the Charter and By-laws
of each such Restricted Company have been previously de-
livered to the Managing Agent and are correct and com-
plete. 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, (iii) each name under which each Re-
stricted Company conducts its business and the jurisdic-
tions in which each such name is used and (iv) the number
of authorized and issued shares and ownership of each Re-
stricted Company.
3133296.08 -71- FALCON CREDIT AGREEMENT<PAGE>
8.1.3. Qualification. Except as set forth on Ex-
hibit 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 stand-
ing in each state or jurisdiction in which such qualifica-
tion 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 busi-
ness in the places and in the manner in which it is con-
ducted, 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.
8.1.4. Capitalization. Except as set forth in Ex-
hibit 8.1, as from time to time supplemented in accordance
with Sections 7.4.1 and 7.4.2, no options, warrants, con-
version 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 separate audited Consolidated balance
sheets of each Borrower and its Subsidiaries as at
December 31 in each of 1994 and 1995 and the separate
audited Consolidated statements of income and changes
in partners' (or shareholders') equity and cash flows
of each Borrower and its Subsidiaries for the fiscal
years then ended.
(b) The eleven-year financial and operational
projections for the Restricted Companies dated June
3, 1996.
(c) Calculations demonstrating pro forma com-
pliance with the Computation Covenants as of the Ini-
tial Closing Date.
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 finan-
cial position of the Restricted Companies covered thereby on a
Consolidated basis at the respective dates thereof and the re-
sults 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 which is
not
3133296.08 -72- FALCON CREDIT AGREEMENT<PAGE>
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 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 Compa-
nies have previously furnished to the Managing Agent cor-
rect and complete copies, including all exhibits, sched-
ules and amendments thereto, of the following agreements,
each as in effect on the date hereof (or, if such agree-
ment is not in effect on the date hereof, in the form of
the most recent draft as indicated below):
(a) Falcon Cable Systems Purchase Agreement.
(b) MONY Subordinated Debt, related note pur-
chase agreements and amendments of such agreements to
take effect on the Initial Closing Date.
(c) the Holding L.P. Senior Subordinated Notes,
the Senior Subordinated Notes Indenture and the re-
lated Offering Memorandum dated March 22, 1993 of
Holding, L.P.
(d) Partnership Agreements for each Borrower
(other than Falcon First), each Investor Group Com-
pany and Holding, L.P.
(e) Management Agreements between each Borrower
(other than Falcon First and Falcon Cable Systems II)
and Holding, L.P. dated March 29, 1993, the Manage-
ment Agreement between Falcon First and Holding, L.P.
dated December 28, 1995 and the Management Agreement
between Falcon Cable Systems II and Holding, L.P.
dated the Initial Closing Date.
8.3. Changes in Condition. No Material Adverse Change
has occurred, and since December 31, 1995, no Restricted
Company has entered into any material transaction outside the
ordinary course of business except for the transactions contem-
plated by this Agreement, the other Material Agreements or the
Falcon Cable Systems Purchase Agreement or as specifically de-
scribed to the Lenders in writing.
8.4. Agreements Relating to Financing Debt, Investments,
etc. Exhibit 8.4,
313329.08 -73- FALCON CREDIT AGREEMENT
<PAGE>
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 Managing 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 marketable title to all assets necessary for or used in 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
assets 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. Except as disclosed on Exhibit
5.1.9(d), 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, as are necessary for the con-
duct of the business of the Restricted Companies as now con-
ducted by them. All of the foregoing are in full force and
effect in all material respects, and each of the Restricted
Companies is in substantial compliance with the foregoing with-
out 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 re-
vocation or termination of any such license, Franchise or other
right or affect the rights of any of the Restricted Companies
thereunder so as to result in any Material Adverse Change. No
litigation or other proceeding or dispute exists with respect
to the validity or, where applicable, the extension or renewal,
of any of the foregoing.
8.6.1. Franchises; FCC Licenses. Exhibit 8.6.1, as
from time to time hereafter supplemented in accordance
with Sections 7.4.1 and 7.4.2, identifies all Franchises
and the Systems which relate thereto, specifying the Re-
stricted Company holding each Franchise, the communities
served by each Franchise and the termination date of each
Franchise. Exhibit 8.6.1, as so supplemented, also iden-
tifies each FCC License held by any Restricted Company.
Each such 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 so as to result, or pose a material risk of re-
sulting, in any
3133296.08 -74- FALCON CREDIT AGREEMENT<PAGE>
Material Adverse Change.
8.6.2. FCC and Other Matters. Each Restricted Com-
pany has filed all cable television registration state-
ments 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 Com-
munications 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 li-
censing pursuant to section 111(c) of the Copyright Act.
Each Restricted Company is in compliance with the provi-
sions of the Copyright Act applicable to any secondary
transmission by it to the public of a primary transmission
and no Restricted Company has been notified by any Person
of any alleged copyright infringement under the Copyright
Act as a result of its cable television or other business
operations.
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. 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 pro-
vision for the payment of, all taxes which have or may become
due pursuant to such returns or to any assessment received by
it. No Restricted Company
3133296.08 -75- FALCON CREDIT AGREEMENT<PAGE>
knows of any material additional assessments or any basis
therefor. The Restricted Companies reasonably believe that the
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 the Credit Security, nor the consumma-
tion of any transaction referred to in or contemplated by this
Agreement or any other Credit Document, nor the fulfillment of
the terms hereof or thereof or of any other agreement, instru-
ment, deed or lease referred to in this Agreement or any other
Credit Document, has constituted or resulted in or will consti-
tute 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 (other than required consents under
Franchises to the extent permitted by Sections
5.1.9(d) and 7.2.4, and section 2.4 of the Security
Agreement);
(b) the violation of any law, statute,
judgment, decree or governmental order, rule or
regulation applicable to any Holding Company (other
than required consents under Franchises to the extent
permitted by Sections 5.1.9(d) and 7.2.4, and section
2.4 of the Security Agreement);
(c) the creation under any agreement,
instrument, deed or lease of any Lien (other than
Liens on the Credit Security which secure the Credit
Obligations) upon any of the assets of any Holding
Company; or
(d) 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
3133296.08 -76- FALCON CREDIT AGREEMENT<PAGE>
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 Restructuring, the
transactions contemplated hereby or thereby, the making of any
borrowing hereunder, the guaranteeing of the Credit Obligations
or the securing of the Credit Obligations with the Credit
Security (other than required consents under Franchises to the
extent permitted by Sections 5.1.9(d) and 7.2.4, and section
2.4 of the Security Agreement).
8.11. Defaults. No Restricted Company is in default
under any provision of its Charter or By-laws or of this Agree-
ment 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 governmen-
tal order, rule or regulation, in each case so as to result, or
pose a material risk of resulting, in any Material Adverse
Change.
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 antici-
pates 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 em-
ployment with which the failure to comply, in the ag-
gregate, has resulted in, or poses a material risk of re-
sulting in, a Material Adverse Change and (b) the payment
of wages.
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 inter-
pretation 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 Ad-
verse Change.
8.12.4. Burdensome Obligations. No Restricted Com-
pany is party to or bound by any agreement, instrument,
deed or lease or is subject to any Charter, By-law or
other restriction which, in the opinion of the management
of such Person, is so unusual or burdensome as in the
foreseeable future to result
3133296.08 -77- FALCON CREDIT AGREEMENT<PAGE>
in, or pose a material risk of resulting in, a Material
Adverse Change.
8.12.5. Future Expenditures. The Restricted Compa-
nies are not aware of future expenditures, if any, by the
Restricted Companies needed to meet the provisions of any
federal, state or foreign governmental statutes, orders,
rules or regulations that will be so burdensome as to re-
sult in, or pose a material risk of resulting in, any Ma-
terial Adverse Change; provided, however, that the Re-
stricted Companies cannot predict future changes in fed-
eral, state or foreign governmental statutes or regula-
tions, including regulations to be issued under the Com-
munications Act.
8.13. Environmental Regulations.
8.13.1. Environmental Compliance. Each of the Re-
stricted Companies is in compliance in all material re-
spects with the Clean Air Act, the Federal Water Pollution
Control Act, the Marine Protection Research and Sanctuar-
ies Act, the Resource Conservation and Recovery Act, CER-
CLA 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 re-
quirements) 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 those which in the aggregate have not resulted
in, and could not reasonably be expected to result in, a
Material Adverse Change.
8.13.2. Environmental Litigation. 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 cor-
respondence from any federal, state or local governmental
authority with respect to:
(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 mate-
rials, commodities or toxic
3133296.08 -78- FALCON CREDIT AGREEMENT<PAGE>
substances); or
(c) the release into the environment by any
Restricted Company of any material amount of Hazard-
ous 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 Compa-
nies 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, fi-
nally 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 Hazard-
ous 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 re-
sult in, a Material Adverse Change.
8.13.4. Environmental Condition of Properties. None
of the properties owned or, to its knowledge, leased by
any Restricted Company has been used as a treatment, stor-
age or disposal site. No Hazardous Material is present in
any real property currently or formerly owned or operated
by any Restricted Company except that which could not re-
sult 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. Falcon Cable Systems Purchase Agreement, etc. The
Falcon Cable Systems Purchase Agreement is a valid and binding
contract as to Falcon Cable Systems and Falcon Cable Systems II
and, to the best of each Restricted Company's knowledge, as to
the other parties thereto. Falcon Cable Systems and Falcon
Cable Systems II are not in default in any material respect of
their obligations under the Falcon Cable Systems Purchase
Agreement and, to the best of each Restricted Company's
knowledge, the other parties thereto are not in default in any
material respect of any of their obligations thereunder. The
representations and warranties of
3133296.08 -79- FALCON CREDIT AGREEMENT<PAGE>
Falcon Cable Systems and Falcon Cable Systems II set forth in
the Falcon Cable Systems Purchase Agreement are true and
correct in all material respects as of the date hereof with the
same force and effect as though made on and as of the date
hereof. To the best of each Restricted Company's knowledge all
of the representations and warranties of the other parties
thereto set forth in the Falcon Cable Systems Purchase
Agreement are true and correct in all material respects as of
the date hereof with the same force and effect as though made
on and as of the date hereof.
8.16. Foreign Trade Regulations; Government Regulation;
Margin Stock.
8.16.1. Foreign Trade Regulations. Neither the ex-
ecution and delivery of this Agreement or any other Credit
Document, nor the making by the Borrowers of any borrow-
ings hereunder, nor the guaranteeing of the Credit Obliga-
tions by any Guarantor, nor the securing of the Credit
Obligations with the Credit Security, has constituted or
resulted in or will constitute or result in the violation
of any Foreign Trade Regulation.
8.16.2. Government Regulation. No Restricted Com-
pany, nor any Person controlling any Restricted Company or
under common control with any Restricted Company is sub-
ject to regulation under the Public Utility Holding Com-
pany Act of 1935, the Federal Power Act, the Investment
Company Act, the Interstate Commerce Act or any statute or
regulation which regulates the incurring by any Restricted
Company of Financing Debt as contemplated by this Agree-
ment and the other Credit Documents. Each Lender is aware
that various aspects of the business conducted by Re-
stricted 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.
8.16.3. Margin Stock. The Restricted Companies do
not own Margin Stock having a book value exceeding 20% of
the Consolidated assets of the Restricted Companies deter-
mined 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. No fact is actually known to any
Restricted Company which has resulted, or in the future (so far
as such Restricted Company can reasonably foresee) will result,
or poses a material risk of resulting, in any Material Adverse
Change, except to the extent that present or future general
economic conditions or governmental regulations may result in a
Material Adverse
3133296.08 -80- FALCON CREDIT AGREEMENT<PAGE>
Change.
9. Defaults.
9.1. Events of Default. The following events are
referred to as "Events of Default":
9.1.1. 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 con-
tinue 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 oth-
erwise.
9.1.2. 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 and 7.18 or Holding, L.P. shall
fail to perform section 5.5 or 5.6 of the Holding Pledge
Agreement.
9.1.3. Any Restricted Company or any of its Affili-
ates 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 rec-
tified or cured to the written satisfaction of the Re-
quired Lenders within 30 days after notice thereof by the
Managing Agent to the Company.
9.1.4. 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, pur-
suant to or in connection with this Agreement or any other
Credit Document shall be materially false or misleading on
the date as of which it was made.
9.1.5. (a) Holding, L.P. or any Restricted Company
shall fail to make any payment when due (after giving ef-
fect to any applicable grace periods) in respect of any
Financing Debt (other than the Credit Obligations) out-
standing in an aggregate amount of principal and accrued
interest exceeding $1,500,000 (including, in any event,
the Holding, L.P. Senior Subordinated Notes);
(b) Holding, L.P. or any Restricted Company shall
fail to perform or observe the terms of any agreement re-
lating to such Financing Debt, and such failure shall con-
tinue, 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 Financing Debt;
3133296.08 -81- FALCON CREDIT AGREEMENT<PAGE>
(c) all or any part of any such Financing Debt of
Holding, L.P. or any Restricted Company shall be acceler-
ated or become due or payable prior to its stated maturity
for any reason whatsoever (other than voluntary prepay-
ments thereof);
(d) any Lien on any property of Holding, L.P. or any
Restricted Company securing any such Financing Debt shall
be enforced by foreclosure or similar action; or
(e) any holder of any such Financing Debt shall ex-
ercise any right of rescission with respect to the issu-
ance thereof, or put or repurchase rights against any ob-
ligor with respect to such Financing Debt (other than any
such rights that may be satisfied with "payment in kind"
notes or other similar securities).
9.1.6. Except, in the case of clauses (a) through (c) of
this section, as permitted by Section 7.11:
(a) Holding, L.P., Holding, Inc. or a Re-
stricted Company shall cease to own, directly or in-
directly, all the capital stock or other equity in-
terests in the Restricted Companies.
(b) Holding, L.P., Holding, Inc. or any Bor-
rower shall initiate any action to dissolve, liqui-
date or otherwise terminate its existence.
(c) Marc B. Nathanson or an entity controlled
by him (or in the event of his death or incapacity,
his estate or a trust for the benefit of his family)
shall cease to own beneficial ownership within the
meaning of Rule 13d-3 of the Exchange Act of a major-
ity of either the voting equity or total equity in-
terests of Holding, Inc. or any other managing part-
ner of Holding, L.P.
(d) Any "Change in Control", as defined in the
Senior Subordinated Notes Indenture, shall occur.
9.1.7. Any Credit Document shall cease, for any rea-
son (other than the scheduled termination thereof in ac-
cordance 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 proceed-
ing; or the security interests created by this Agreement
and the other Credit Documents shall cease to be enforce-
able and of the same effect and priority purported to be
created hereby.
9.1.8. A final judgment (a) which, with other out-
standing final
3133296.08 -82- FALCON CREDIT AGREEMENT<PAGE>
judgments against the Restricted Companies, exceeds an
aggregate of $1,000,000 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 dis-
charged 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. Franchises covering a number of Subscribers
greater than 25% of the number of Subscribers of the Re-
stricted Companies (including for purposes of this Section
9.1.9 Falcon Cable Systems and Falcon Cable Systems II) at
December 31, 1995 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 Group Persons shall fail to pay when
due amounts (other than amounts being contested in good
faith through appropriate proceedings) aggregating in ex-
cess of $500,000 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 condi-
tion shall exist which would require the PBGC to obtain a
decree adjudicating that any Plan must be terminated.
9.1.11. Any Restricted Company, Holding, L.P., Hold-
ing, Inc. or any of their respective Affiliates obligated
with respect to any Credit Obligation shall:
(a) commence a voluntary case under the Bank-
ruptcy 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 ac-
quiescing in the relief therein provided;
(c) have entered against it an order for relief
in any involuntary
3133296.08 -83- FALCON CREDIT AGREEMENT<PAGE>
case commenced under the Bankruptcy Code;
(d) seek relief as a debtor under any ap-
plicable law, other than the Bankruptcy Code, of any
jurisdiction relating to the liquidation or reorgani-
zation of debtors or to the modification or alter-
ation 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 bank-
rupt 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 ap-
point, or consent to the appointment of, or suffer to
exist a receiver or other custodian for, all or a
substantial portion of its property.
9.1.12. As of December 31, 1996, the sum of Sub-
scribers of Falcon Cable Systems II who live in a geo-
graphic area either (i) not covered by a Franchise, (ii)
covered by a Franchise for which no consent is required or
(iii) covered by a Franchise for which consent has been
obtained, shall not exceed 75% of the Subscribers of Fal-
con Cable Systems referred to on Exhibit 8.6.1.
9.2. Certain Actions Following an Event of Default. If
any one or more Events of Default shall occur, then in each and
every such case:
9.2.1. No Obligation to Extend Credit. The Managing
Agent may (and upon written request of such Lenders as own
a majority of the Revolving Loan shall) suspend or termi-
nate the obligations of the Lenders to make any further
extensions of credit under the Credit Documents by fur-
nishing notice thereof to the Borrowers.
9.2.2. Specific Performance; Exercise of Rights.
The Managing 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 perfor-
mance of any covenant or condition contained in this
Agreement or any other Credit Document or in any instru-
ment 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 assign-
ment.
3133296.08 -84- FALCON CREDIT AGREEMENT<PAGE>
9.2.3. Acceleration. The Managing Agent on behalf
of the Lenders may (and upon written request of the Re-
quired Lenders shall) by notice in writing to the Borrow-
ers 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 presenta-
tion, protest or further demand or notice of any kind, all
of which are hereby expressly waived; provided, however,
that if a Bankruptcy Default shall have occurred, the un-
paid balance of the Credit Obligations shall automatically
become immediately due and payable.
9.2.4. Enforcement of Payment; Credit Security; Set-
off. The Managing 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 real-
ize upon any and all rights in the 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 re-
spective 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 pro-
hibited 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
Managing 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' rea-
sonable satisfaction or entered into an amendment to this
Agreement which by its express terms cures such Default or
Event of Default. No such action by the Lenders or the Manag-
ing 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 dur-
ing 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
3133296.08 -85- FALCON CREDIT AGREEMENT<PAGE>
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 of every kind and
description which may be required to be given by any
statute or rule of law; and
(d) any defense (other than indefeasible
payment in full) 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 expenses of the Managing
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
Managing 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 Managing 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
3133296.08 -86- FALCON CREDIT AGREEMENT<PAGE>
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 fore-
going indemnity in this paragraph (c) shall not apply (A)
to litigation commenced by the Borrowers against the Lend-
ers 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 nonap-
pealable judgment and (B) to the extent such claims, dam-
ages, liabilities and expenses result from a Lender's
gross negligence or willful misconduct.
(d) all reasonable costs and expenses of the Syndi-
cation Agent in connection with the preparation and dis-
tribution of the Confidential Information Memorandum dated
June 1996.
10.2 General Indemnity. The Obligors will, jointly and
severally, indemnify the Lenders and hold them harmless from
any liability, loss or damage resulting from the violation by
the Borrowers of Section 2.4. 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 and reasonable
expenses (including reasonable fees and disbursements of
counsel with whom any Indemnified Party may consult in con-
nection 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 connec-
tion with (a) the Indemnified Party's compliance with or con-
test 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 Compa-
nies 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 Docu-
ment 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
3133296.08 -87- FALCON CREDIT AGREEMENT<PAGE>
determined adversely to the Lenders in a final nonappealable
judgment and (ii) to the extent such claims, damages, li-
abilities 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 shall be computed based on the maximum
principal amount for each Lender as set forth in Exhibit 11.1.
Such percentage interests, as otherwise adjusted as the Lenders
may from time to time agree among themselves, are referred to
as the "Percentage Interests" with respect to all or any
portion of the Loan. References in any Credit Document to the
Lenders' respective Percentage Interests are to such interests
as from time to time in effect; provided, however, that after
the occurrence of (a) an Event of Default under Sections 9.1.1
or 9.1.11, (b) the acceleration of all or any part of the
Credit Obligations, (c) any exercise of rights of setoff con-
tained in Section 9.2.4 or (d) any other Event of Default if
Lenders holding at least 66% of the principal amount of the
then outstanding Credit Obligations shall have so notified the
Administrative Agent, all references in this Agreement to Per-
centage Interests shall be deemed to be references to such
Lenders as shall at the time of determination hold the speci-
fied percentage of the principal amount of the Credit Obliga-
tions then outstanding.
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 In-
terest 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
Managing Agent. The Co-Agents shall have no duties or respon-
sibilities 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 Managing Agent purportedly on the Lenders'
behalf, and in dealing with the Agents as herein provided. The
Administrative Agent shall charge the accounts of each Bor-
rower, 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
3133296.08 -88- FALCON CREDIT AGREEMENT<PAGE>
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 ac-
count, pursuant to the terms hereof, the Lender's respec-
tive Percentage Interest in such portion of the Loan and
agrees to reimburse the Administrative Agent in im-
mediately 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 fur-
ther 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 cred-
ited to such Lender by the Administrative Agent in im-
mediately available funds in such manner that the princi-
pal amount of the Credit Obligations to be paid shall be
paid proportionately in accordance with the Lenders' re-
spective 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 re-
lating to the Credit Obligations.
11.4.3. Delinquent Lenders; Nonperforming Lenders.
In the event that any Lender fails to reimburse the Admin-
istrative Agent pursuant to Section 11.4.1 for the Per-
centage 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
of the Delinquent Payment and ending on the date the De-
linquent Lender reimburses the Administrative
3133296.08 -89- FALCON CREDIT AGREEMENT<PAGE>
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.
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 ag-
gregate 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 pro-
ceedings 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; pro-
vided, however, that this Section 11.5 shall not impair the
right of any Lender to exercise any
3133296.08 -90- FALCON CREDIT AGREEMENT<PAGE>
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. Amendments, Consents, Waivers, etc. Except as
otherwise set forth herein, the Managing Agent may (and upon
the written request of such Lenders as own at least a majority
of the Aggregate Percentage Interests, the Managing Agent
shall) take or refrain from taking any action under this Agree-
ment or any other Credit Document, including giving 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 Lenders owning at least a majority
of the Aggregate Percentage Interests, no
modification of, amendment 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.
(b) Without the written consent of such Lenders
as own 100% of the Aggregate Percentage Interests
(other than Delinquent Lenders during the existence
of a Delinquency Period so long as such Delinquent
Lender is treated the same as the other Lenders with
respect to any actions enumerated below):
(i) No reduction in the interest rate on the
Revolving Loan (or commitment fees thereon) or the
Term Loan shall be made.
(ii) Except for pro rata allocations to an Ac-
quisition Facility under Sections 4.4, 4.5 and 4.6,
no extension or postponement of the stated time of
payment, and no modification of the allocation of any
payments between the Revolving Loan and the Term
Loan, (including in each case payments pursuant to
Sections 4.4, 4.5 or 4.6) of all or any portion of
the Revolving Loan or Term Loan or interest thereon
or fees relating thereto or waiver of any Default
under Section 9.1.1 with respect thereto shall be
made.
3133296.08 -91- FALCON CREDIT AGREEMENT<PAGE>
(iii) No increase in the amount, or extension of
the term, of the Commitments (other than the addition
of an Acquisition Facility in accordance with Section
2.3) beyond that provided for under Section 2 shall
be made.
(iv) No alteration of the Lenders' rights of
set-off contained in Section 9.2.4 shall be made.
(v) No release of any Credit Security or of any
Guarantor shall be made (except that the Managing
Agent may release particular items of Credit Security
or particular Guarantors in dispositions permitted by
Section 7.11 and may release all Credit Security pur-
suant to Section 17 upon payment in full of the
Credit Obligations without the written consent of the
Lenders).
(vi) No change in the Percentage Interests
(other than changes resulting solely from the addi-
tion of an Acquisition Facility in accordance with
Section 2.3, assignments made pursuant to Section
12.1 or substitutions made pursuant to Sections
3.2.1, 3.4, 3.5 or 3.6) shall be made.
(vii) No amendment to or modification of this
Section 11.6 shall be made.
(viii) No amendment, modification or waiver of any
provision of Section 5.1 shall be made.
(c) Any amendment of the Credit Documents with
respect to the implementation of the Acquisition
Facility in accordance with Section 2.3 shall require
the consent of each Lender which is participating in
such Acquisition Facility.
11.7. 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 other of the Lenders
and, in the event of the resignation of the Managing Agent
hereunder, upon the appointment by the Required Lenders of a
successor Managing Agent reasonably satisfactory to the Borrow-
ers. If in the event of the resignation of the Managing Agent,
no successor Managing Agent shall have been so appointed and
shall have accepted such appointment within 45 days after the
retiring Managing Agent's giving of such notice of resignation,
then the retiring Managing Agent may with the consent of the
Borrowers, which shall not be unreasonably withheld, appoint a
successor Managing Agent which shall be a bank or a trust com-
pany organized, or having a branch that is
3133296.08 -92- FALCON CREDIT AGREEMENT<PAGE>
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 Managing Agent appointed under this sentence
may be removed upon the written request of the Required
Lenders, which request shall also appoint a successor Managing
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, in
the event of the removal of the Managing Agent, shall also
appoint a successor Managing Agent reasonably satisfactory to
the Borrowers. Upon the appointment of a new Managing Agent
hereunder, the term "Managing Agent" shall for all purposes of
this Agreement thereafter include such successor. Upon the
resignation or removal of the Administrative Agent, the
Managing Agent shall take over the duties of the Administrative
Agent. In the event of the resignation or removal of a
Syndication Agent, Co-Administrative Agent, Co-Agent or any
other Agent not described above, no successor need be
appointed. After any retiring Agent's resignation hereunder as
Agent, or the removal hereunder of 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.
11.8. Concerning the Agents.
11.8.1. 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.
11.8.2. No Implied Duties, etc. Each Agent shall
have and may exercise such powers as are specifically del-
egated 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 Docu-
ment, each Agent may request an appropriate specific in-
demnity satisfactory to it from each Lender in addition to
the general indemnity provided for in Section 11.11. Un-
til the Agent has received such specific indemnity, the
Agent shall not be obligated to take
3133296.08 -93- FALCON CREDIT AGREEMENT<PAGE>
(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.
11.8.3. Validity, etc. Subject to Section 11.8.1,
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 ef-
fectiveness of this Agreement or any other Credit Docu-
ment, (b) for any recitals, reports, representations, war-
ranties 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 secu-
rity 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 secu-
rity.
11.8.4. Compliance. The Agents shall not be obli-
gated 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 exten-
sion of credit under this Agreement or 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.
11.8.5. 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 em-
ployees, 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.
11.8.6. Reliance on Documents and Counsel. Each
Agent shall be entitled to rely, and shall be fully pro-
tected in relying, upon any affidavit, certificate, cable-
gram, consent, instrument, letter, notice, order, docu-
ment, 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.
3133296.08 -94- FALCON CREDIT AGREEMENT<PAGE>
11.8.7. 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 ex-
penses not reimbursed by the Borrowers or the other Guar-
antors (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 re-
sult of their gross negligence or willful misconduct.
11.9. Rights as a Lender. With respect to any credit
extended by it hereunder, each of Bank of Boston, 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 Bank of Boston, 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 Bank of Boston, Toronto Dominion and
such other financial institutions shall be included in any
computations of Percentage Interests. Bank of Boston, 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
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 Bank of Boston, Toronto Dominion or
such other financial institutions were not an Agent and without
any duty to account therefor to the other Lenders.
11.10 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 repre-
sentations 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 analy-
sis and decision to enter into this Agreement and to make the
extensions of credit provided for hereunder. Each Lender rep-
resents 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 Docu-
ment. 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
3133296.08 -95- FALCON CREDIT AGREEMENT<PAGE>
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.
11.11. 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 Percentage Interests, from and against any and all
liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, 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 hereun-
der 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 con-
nection 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 hereun-
der or under any other Credit Document and is determined ad-
versely 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 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 obliga-
tions 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 consents of the Managing Agent,
the Administrative Agent or the Borrowers if the proposed
assignee is a Lender hereunder or an Affiliate of a Lender
hereunder, or (b) otherwise with the consents of the Man-
aging Agent,
3133296.08 -96- FALCON CREDIT AGREEMENT<PAGE>
the Administrative Agent and, if no Event of Default exists,
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 (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 such assignment
to any Assignee other than another Lender (determined
as of the date the Assignment and Acceptance with
respect to such assignment is delivered to the Admin-
istrative Agent) shall be not less than $5,000,000
and in increments of $1,000,000; and
(ii) the parties to each such assignment shall
execute and deliver to the Administrative Agent (with
a copy to the Managing Agent) an Assignment and Ac-
ceptance (the "Assignment and Acceptance") substan-
tially in the form of Exhibit 12.1.1, together with
the Note or Notes subject to such assignment and 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 As-
signment 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 Ac-
ceptance, have the rights and obligations of a
Lender under this Agreement and
(2) the assigning Lender shall, to the extent pro-
vided 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 ac-
count hereunder and not yet paid).
12.1.2. Terms of Assignment and Acceptance. By ex-
ecuting 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
3133296.08 -97- FALCON CREDIT AGREEMENT<PAGE>
hereto as follows:
(a) other than the representation and warranty
that it is the legal and beneficial owner of the in-
terest being assigned thereby free and clear of any
adverse claim, such assigning Lender makes no repre-
sentation or warranty and assumes no responsibility
with respect to any statements, warranties or repre-
sentations made in or in connection with this Agree-
ment or the execution, legality, validity, enforce-
ability, 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 representa-
tion or warranty and assumes no responsibility with
respect to the financial condition of the Restricted
Companies or the performance or observance by the
Borrower or any other Guarantor of any of its obliga-
tions under this Agreement, any other Credit Document
or any other instrument or document furnished pursu-
ant 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 informa-
tion as it has deemed appropriate to make its own
credit analysis and decision to enter into such As-
signment and Acceptance;
(d) such Assignee will independently and with-
out 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
(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
3133296.08 -98- FALCON CREDIT AGREEMENT<PAGE>
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 con-
tained 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 re-
tained by it. Such new Note or Notes shall be in an ag-
gregate 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 re-
place.
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 Compa-
nies 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 or more Qualified Institutional Buyers (each a "Credit Par-
ticipant") participations in all or a portion of its interests,
rights and obligations
3133296.08 -99- FALCON CREDIT AGREEMENT<PAGE>
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 stated dates for payments of principal
of or interest on the Loan or the release of any
Guarantor or Credit Security except to the extent
permitted by the Credit Documents).
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 3.7, 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
3133296.08 -100- FALCON CREDIT AGREEMENT<PAGE>
(c) refuses to consent to a proposed amendment,
modification, waiver or other action that is
consented to by the Required Lenders or that is
consented to by all the Lenders except the Affected
Lender;
then, so long as no Event of Default exists, the Restricted
Companies shall have the right to seek a replacement lender
which is reasonably satisfactory to the Managing Agent (the
"Replacement Lender"). The Replacement Lender shall purchase
the interests of the Affected Lender in the Loan and its Com-
mitment 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 un-
able to agree, a purchase price in the amount of the Affected
Lender's Percentage Interest in the Loan and all other out-
standing 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 Com-
panies 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 obliga-
tions of the Affected Lender under this Agreement and the other
Credit Documents with a Percentage Interest equal to the Per-
centage 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 assign-
ment, 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 reason-
ably 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 Com-
panies shall continue to pay to the Affected Lender 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;
3133296.08 -101- FALCON CREDIT AGREEMENT<PAGE>
(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;
(d) to its independent counsel, auditors and
other professional advisors with an instruction to
such Person to keep such information confidential;
and
(e) with the prior written consent of the
Borrowers, to any other Person.
14. Foreign Persons. If any Lender is not incorporated or
organized under the laws of the United States of America or a
state thereof, such Lender shall deliver to the Borrowers and
the Administrative Agent the following:
(a) Two duly completed copies of United States
Internal Revenue Service Form 1001 or 4224 or
successor form, as the case may be, certifying in
each case that such Person is entitled to receive
payments under this Agreement and the Notes payable
to it, without deduction or withholding of any United
States federal income taxes.
(b) A duly completed Internal Revenue Service
Form W-8 or W-9 or successor form, as the case may
be, to establish an exemption from United States
backup withholding tax.
Each such Lender which delivers to the Borrowers and the
Agent a Form 1001 or 4224 and Form W-8 or W-9 pursuant to this
Section 15 further undertakes to deliver to the Borrowers and
the Administrative Agent two further copies of Forms 1001 or
4224 and Form W-8 or W-9, or successor applicable forms, or
other manner of certification, as the case may be, on or before
the date that any such form expires or becomes obsolete or af-
ter the occurrence of any event requiring a change in the most
recent form previously delivered by it to the Borrowers and the
Administrative Agent. Such Forms 1001 or 4224 shall certify
that such Lender is entitled to receive payments under this
Agreement without deduction or withholding of any United States
federal income taxes. The foregoing documents need not be de-
livered in the event any change in treaty, law or regulation or
official interpretation thereof has occurred which renders all
such forms inapplicable or which would prevent such Lender from
delivering any such form with respect to it, or such Lender
advises the Borrowers that it is not capable of receiving pay-
ments without any deduction or withholding of United States
federal income tax, and in the case of a Form W-8 or W-9, es-
tablishing an exemption from United States backup withholding
tax. Until such time as the Borrowers and the Administrative
Agent have received such forms indicating that payments hereun-
der are
3133296.08 102 FALCON CREDIT AGREEMENT<PAGE>
not subject to United States withholding tax or are subject to
such tax at a rate reduced by an applicable tax treaty, the
Borrowers shall withhold taxes from such payments at the
applicable statutory rate.
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 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 of-
ficer.
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 a copy to
the Managing Agent.
16. Course of Dealing; Amendments and Waivers. No course of
dealing between any Lender, on 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. Each of the Restricted Companies acknowledges
that if the Lenders, without being required to do so by this
Agreement or any other Credit Document, give any notice or
information to, or obtain any consent from, any of the Re-
stricted Companies or any of their respective Affiliates, the
Lenders shall not by implication have amended, waived or modi-
fied any provision of this Agreement or any other Credit Docu-
ment, or created any duty to give any such notice or informa-
tion or to obtain any such consent on any future occasion. No
delay or omission on the part of any Lender 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 an Agent or the holders of the required
Credit Obligations.
17. Defeasance. When all Credit Obligations have been paid,
performed and reasonably determined by the Lenders to have been
indefeasibly discharged in full, and if at the time no Lender
continues to be committed to extend any credit to any Obligor
3133296.08 -103- FALCON CREDIT AGREEMENT<PAGE>
hereunder or under any other Credit Document, this Agreement
shall terminate and, at the Borrowers' written request,
accompanied by such certificates and other items as the
Managing Agent shall reasonably deem necessary, the Credit
Security shall revert to the Obligors and the right, title and
interest of the Lenders therein shall terminate. Thereupon, on
the Borrowers' demand and at their cost and expense, the Manag-
ing Agent shall execute proper instruments, acknowledging sat-
isfaction of and discharging this Agreement, and shall rede-
liver to the Obligors any Credit Security then in its posses-
sion; provided, however, that Sections 3.2.4, 3.4, 3.5, 3.6,
10, 11.8.7, 11.11, 13, 19 and 20 shall survive the termination
of this Agreement.
18. 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 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 18 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.
19. Venue; Service of Process. Each of the Borrowers, the
other Guarantors 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 ap-
plicable law, 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.
3133296.08 -104- FALCON CREDIT AGREEMENT<PAGE>
Each of the Borrowers, the other Guarantors and the Lenders
consents to service of process in any such proceeding in any
manner permitted by Chapter 223A of the General Laws of The
Commonwealth of Massachusetts and agrees that service of pro-
cess by registered or certified mail, return receipt requested,
at its address specified in or pursuant to Section 15 is rea-
sonably calculated to give actual notice.
20. WAIVER OF JURY TRIAL. TO THE EXTENT NOT PROHIBITED BY
APPLICABLE LAW THAT CANNOT BE WAIVED, EACH OF THE BORROWERS,
THE OTHER GUARANTORS 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 BORROWERS OR ANY OTHER
GUARANTOR 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 Borrowers and the
other Guarantors acknowledges that it has been informed by the
Lenders that the provisions of this Section 20 constitute a
material inducement upon which each of the Lenders has relied
and will rely in entering into this Agreement and any other
Credit Document, and that it has reviewed the provisions of
this Section 20 with its counsel. Any Lender, any Borrower or
any other Guarantor may file an original counterpart or a copy
of this Section 20 with any court as written evidence of the
consent of the Borrowers, the other Guarantors and the Lenders
to the waiver of their rights to trial by jury.
21. General. 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 en-
forceability of any other provision hereof. The headings in
this Agreement are for convenience of reference only and shall
not limit or otherwise affect the meaning hereof. This Agree-
ment and the other Credit Documents constitute the entire un-
derstanding of the parties with respect to the subject matter
hereof and thereof and supersede all prior and current under-
standings and agreements, whether written or oral. This Agree-
ment may be executed in any number of counterparts which to-
gether shall constitute one instrument. This Agreement shall
be governed by and construed in accordance with the laws (other
than the conflict of laws rules) of The Commonwealth of Mas-
sachusetts.
3133296.08 -105- FALCON CREDIT AGREEMENT<PAGE>
3133296.08 -106- FALCON CREDIT AGREEMENT<PAGE>
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 _____________________________
Title:
FALCON FIRST, INC.
By ________________________________
Title:
3133296.08 -107- FALCON CREDIT AGREEMENT<PAGE>
ATHENS CABLEVISION, INC.
AUSABLE CABLE TV, INC.
CEDAR BLUFF CABLEVISION, INC.
DALTON CABLEVISION, INC.
EASTERN MISSISSIPPI CABLEVISION, INC.
FALCON FIRST CABLE OF NEW YORK, INC.
FALCON FIRST CABLE OF THE SOUTHEAST,
INC.
FALCON FIRST HOLDINGS, INC.
FF CABLE HOLDINGS, INC.
LAUDERDALE CABLEVISION, INC.
MULTIVISION NORTHEAST, INC.
MULTIVISION OF COMMERCE, INC.
PLATTSBURG CABLEVISION, INC.
SCOTTSBORO CABLEVISION, INC.
SCOTTSBORO TV CABLE, INC.
By
As an authorized officer of each of
the foregoing corporations
THE FIRST NATIONAL BANK OF BOSTON
By ________________________________
Title:
The First National Bank of Boston
Media and Communications Department
100 Federal Street
Boston, Massachusetts 02110
Telecopy: (617) 434-3401
Telex: 940581
3133296.08 FALCON CREDIT AGREEMENT<PAGE>
TORONTO-DOMINION (TEXAS) INC.
By ________________________________
Title:
Toronto-Dominion (Texas) Inc.
909 Fannin Street
17th Floor
Houston, TX 77010
Telecopy: (713) 951-9921
NATIONSBANK OF TEXAS, N.A.
By ________________________________
Title:
NationsBank of Texas, N.A.
901 Main Street
64th Floor
Dallas, Texas 75202
Telecopy: (214) 508-9390
ABN-AMRO BANK N.V., LOS ANGELES
INTERNATIONAL BRANCH
By: ABN-Amro North America, Inc.,
as agent
By ______________________________
Title:
By ______________________________
Title:
ABN-AMRO Bank, Los Angeles
300 South Grand Avenue, Suite 1115
Los Angeles, CA 90071
Telecopy: (213) 687-2061
3133296.08 -109- FALCON CREDIT AGREEMENT<PAGE>
BANK OF AMERICA N.T. & S.A.
By ________________________________
Title:
Bank of America N.T. & S.A.
Entertainment & Media Industry
Group
Dept. 5777
555 South Flower Street
Los Angeles, California 90071
Telecopy: (213) 228-3145
BANK OF MONTREAL, CHICAGO BRANCH
By ___________________________________
Title:
Bank of Montreal
Media & Communications
430 Park Avenue
New York, New York 10022
Telecopy: (212) 605-1648
BANQUE FRANCAISE DU COMMERCE EXTERIEUR
By ___________________________________
Title:
By ___________________________________
Title:
Banque Francaise du Commerce
Exterieur
645 Fifth Avenue, 20th Floor
New York, NY 10022
Telecopy: (212) 872-5045
3133296.08 -110- FALCON CREDIT AGREEMENT<PAGE>
BANQUE NATIONALE DE PARIS
By ___________________________________
Title:
By ___________________________________
Title:
Banque Nationale de Paris
725 South Figueroa Street,
Suite 2090
Los Angeles, CA 90017
Telecopy: (213) 488-9602
BANQUE PARIBAS
By ________________________________
Title:
Banque Paribas
2029 Century Park East
Suite 3800
Los Angeles, California 90067
Telecopy: (310) 556-8759
BARCLAYS BANK PLC
By ______________________________
Title:
Barclays
388 Market Street, Suite 1700
San Francisco, CA 94111
Telecopy: (415) 765-5760
3133296.08 -111- FALCON CREDIT AGREEMENT<PAGE>
THE CHASE MANHATTAN BANK, N.A.
By __________________________________
Title:
The Chase Manhattan Bank, N.A.
One Chase Manhattan Plaza,
4th Floor
New York, NY 10081
CHL HIGH YIELD LOAN PORTFOLIO
(A Unit of Chemical Bank)
By _________________________________
Title:
Chase Capital Partners
380 Madison Avenue, 12th Floor
New York, NY 10017
Telecopy: (212) 622-3797
CIBC, INC.
By ________________________________
Title:
CIBC, Inc.
425 Lexington Avenue
New York, New York 10017
Telecopy: (212) 856-3558
3133296.08 -112- FALCON CREDIT AGREEMENT<PAGE>
CREDIT LYONNAIS, NEW YORK BRANCH
By ________________________________
Title:
Credit Lyonnais, New York Branch
1301 Avenue of the Americas
New York, New York 10017
Telecopy: (212) 261-3318
FLEET BANK, N.A.
By _____________________________
Title:
Fleet Bank, N.A.
175 Water Street, 28th Floor
New York, NY 10038
Telecopy: (212) 602-2663
THE FUJI BANK, LIMITED LOS ANGELES
AGENCY
By ___________________________________
Title:
The Fuji Bank, Limited Los Angeles
Agency
333 South Hope Street
Los Angeles, CA 90071
Telecopy: (213) 253-4198
3133296.08 -113- FALCON CREDIT AGREEMENT<PAGE>
THE LONG-TERM CREDIT BANK OF JAPAN, LTD.
LOS ANGELES AGENCY
By ________________________________
Title:
The Long-Term Credit Bank of Japan,
Ltd.
Los Angeles Agency
444 South Flower Street, Suite 3700
Los Angeles, CA 90071
Telecopy: (213) 622-6908
MEESPIERSON, N.V.
By ________________________________
Title:
Meespierson, N.V.
445 Park Avenue
New York, NY 10022
Telecopy: (212) 801-0420
THE NIPPON CREDIT BANK, LTD.
LOS ANGELES AGENCY
By ________________________________
Title:
The Nippon Credit Bank, Ltd.
Los Angeles Agency
550 South Hope Street, Suite 2500
Los Angles, CA 90071
Telecopy: (213) 628-1649
3133296.08 -114- FALCON CREDIT AGREEMENT<PAGE>
RABOBANK NEDERLAND, NEW YORK BRANCH
By _______________________________
Title
Rabobank Nederland
245 Park Avenue
New York, NY 10167
Telecopy: (212) 818-0233
RIGGS BANK N.A.
By ____________________________
Title:
Riggs Bank N.A.
Corporate General Banking
808 17th Street, N.W.
Washington, DC 20074-0649
Telecopy: (202) 835-5977
SENIOR DEBT PORTFOLIO
By: BOSTON MANAGEMENT AND
RESEARCH, as investment advisor
By ___________________________________
Title:
Senior Debt Portfolio
24 Federal Street, 6th Floor
Boston, MA 02110
Telecopy: (617) 695-9594
3133296.08 -115- FALCON CREDIT AGREEMENT<PAGE>
SOCIETE GENERALE
By: ______________________________
Title:
Societe Generale
Media and Communications Group
1221 Avenue of the Americas,
11th Floor
New York, NY 10020
THE SUMITOMO BANK, LIMITED
By ___________________________________
Title:
By ________________________________
Title:
The Sumitomo Bank, Limited
800 West 6th Street, Suite 950
Los Angeles, CA 90017
SUNTRUST BANK, CENTRAL FLORIDA N.A.
By ________________________________
Title:
SunTrust Bank, Central Florida,
N.A.
200 South Orange Avenue
Orlando, FL 32801
Telecopy: (407) 237-4076
3133296.08 -116- FALCON CREDIT AGREEMENT<PAGE>
UNION BANK OF CALIFORNIA, N.A.
By _______________________________
Title:
Union Bank of California, N.A.
Communications/Media Division
400 California Street, 17th Floor
San Francisco, CA 94104
Telecopy: (415) 765-3146
VAN KAMPEN AMERICAN CAPITAL
PRIME RATE INCOME TRUST
By ________________________________
Title:
Van Kampen American Capital
One Parkview Plaza, 6th Floor
Oakbrook Terrace, IL 60181
Telecopy: (708) 684-6740
3133296.08 -117 FALCON CREDIT AGREEMENT
