EXHIBIT 99.2
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$62,500,000
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of October 31, 1996
BETWEEN
GCI COMMUNICATION CORP.
and
NATIONSBANK OF TEXAS, N.A.
As Administrative Agent
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General Communication, Inc. - Form 8-K
Page 46
TABLE OF CONTENTS
ARTICLE I. DEFINITIONS
1.01. Definitions......................................................1
1.02. Accounting and Other Terms......................................20
ARTICLE II. AMOUNTS AND TERMS OF ADVANCES
2.01. Advances Under the Revolving Loan...............................20
2.02. Making Advances Under the Revolving Loan........................20
2.03. Evidence of Indebtedness........................................22
2.04. Reduction of Commitment.........................................22
2.05. Prepayments.....................................................23
2.06. Repayment.......................................................24
2.07. Interest........................................................24
2.08. Default Interest................................................25
2.09. Continuation and Conversion Elections...........................25
2.10. Fees............................................................26
2.11. Funding Losses..................................................26
2.12. Computations and Manner of Payments.............................27
2.13. Yield Protection................................................28
2.14. Use of Proceeds.................................................30
2.15. Collateral and Collateral Call..................................30
ARTICLE III. LETTERS OF CREDIT
3.01. Issuance of Letters of Credit...................................31
3.02. Letters of Credit Fees..........................................31
3.03. Reimbursement Obligations.......................................32
3.04. Lenders' Obligations............................................33
3.05. Administrative Agent's Obligations..............................33
ARTICLE IV. CONDITIONS PRECEDENT
4.01. Conditions Precedent to the Initial Advance.....................34
4.02. Conditions Precedent to All Advances and Letters of Credit......35
ARTICLE V. REPRESENTATIONS AND WARRANTIES
5.01. Organization and Qualification..................................36
5.02. Due Authorization; Validity.....................................37
5.03. Conflicting Agreements and Other Matters........................37
5.04. Financial Statements............................................37
5.05. Litigation......................................................37
5.06. Compliance With Laws Regulating the Incurrence of Debt..........38
5.07. Licenses, Title to Properties, and Related Matters..............38
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5.08. Outstanding Debt and Liens......................................39
5.09. Taxes...........................................................39
5.10. ERISA...........................................................39
5.11. Environmental Laws..............................................39
5.12. Disclosure......................................................40
5.13. Investments; Restricted Subsidiaries............................40
5.14. Certain Fees....................................................40
5.15. Intellectual Property...........................................41
5.16. Survival of Representations and Warranties, etc.................41
ARTICLE VI. AFFIRMATIVE COVENANTS
6.01. Compliance with Laws and Payment of Debt........................41
6.02. Insurance.......................................................42
6.03. Inspection Rights...............................................42
6.04. Records and Books of Account; Changes in GAAP...................42
6.05. Reporting Requirements..........................................42
6.06. Use of Proceeds.................................................45
6.07. Maintenance of Existence and Assets.............................45
6.08. Payment of Taxes................................................45
6.09. Indemnity.......................................................45
6.10. Interest Rate Hedging...........................................46
6.11. Management Fees Paid and Earned.................................46
6.12. Authorizations and Material Agreements..........................46
6.13. Further Assurances..............................................46
6.14. Subsidiaries and Other Obligors.................................47
ARTICLE VII. NEGATIVE COVENANTS
7.01. Financial Covenants.............................................47
7.02. Debt............................................................47
7.03. Contingent Liabilities..........................................47
7.04. Liens...........................................................48
7.05. Dispositions of Assets..........................................48
7.06. Distributions and Restricted Payments...........................48
7.07. Merger; Consolidation...........................................48
7.08. Business........................................................48
7.09. Transactions with Affiliates....................................48
7.10. Loans and Investments...........................................48
7.11. Fiscal Year and Accounting Method...............................49
7.12. Issuance of Partnership Interest and Capital Stock;
Amendment of Articles and By-Laws..............................49
7.13. Change of Ownership.............................................49
7.14. Sale and Leaseback..............................................49
7.15. Compliance with ERISA...........................................49
7.16. Rate Swap Exposure..............................................50
7.17. Restricted Subsidiaries and Other Obligors......................50
7.18. Amendments to Material Agreements...............................50
General Communication, Inc. - Form 8-K
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ARTICLE VIII. EVENTS OF DEFAULT
8.01. Events of Default...............................................50
8.02. Remedies Upon Default...........................................54
8.03. Cumulative Rights...............................................55
8.04. Waivers.........................................................55
8.05. Performance by Administrative Agent or any Lender...............55
8.06. Expenditures....................................................55
8.07. Control.........................................................55
ARTICLE IX. THE ADMINISTRATIVE AGENT
9.01. Authorization and Action........................................56
9.02. Administrative Agent's Reliance, Etc............................56
9.03. NationsBank of Texas, National Association and Affiliates.......57
9.04. Lender Credit Decision..........................................57
9.05. Indemnification by Lenders......................................57
9.06. Successor Administrative Agent..................................57
ARTICLE X. MISCELLANEOUS
10.01. Amendments and Waivers..........................................58
10.02. Notices.........................................................58
10.03. Parties in Interest.............................................60
10.04. Assignments and Participations..................................60
10.05. Sharing of Payments.............................................61
10.06. Right of Set-off................................................61
10.07. Costs, Expenses, and Taxes......................................62
10.08. Indemnification by the Company..................................62
10.09. Rate Provision..................................................63
10.10. Severability....................................................63
10.11. Exceptions to Covenants.........................................63
10.12. Counterparts....................................................63
10.13. GOVERNING LAW; WAIVER OF JURY TRIAL.............................64
10.14. ENTIRE AGREEMENT................................................64
10.15. Amendment, Restatement, Extension, Renewal and Increase.........65
General Communication, Inc. - Form 8-K
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TABLE OF SCHEDULES AND EXHIBITS
SCHEDULES *
Schedule 1.01 Systems
Schedule 1.02 Prior Liens on the Stock of GCI Leasing Company, Inc.
Schedule 1.03 Issuance of Capital Stock related to the Cable
Acquisition Transactions
Schedule 2.04(b) Stock Options
Schedule 5.01 Organization and Qualification of the GCI Entities
Schedule 5.03 Consents under Material Agreements
Schedule 5.05 Litigation
Schedule 5.07a Authorizations
Schedule 5.07b County and State Locations of Assets
Schedule 5.08a Debt, Contingent Liabilities and Liens of the
Company and each other GCI Entity in Existence on the
Closing Date
Schedule 5.11 Environmental Liabilities of the GCI Entities on the
Closing Date
Schedule 5.13 Investments and GCI Entities
EXHIBITS
Exhibit A - Form of Note
Exhibit B - Assignment and Acceptance
Exhibit C - Form of Pledge and Security Agreement
Exhibit D - Form of Compliance Certificate
Exhibit E - Form of Conversion/Continuation Notice
Exhibit F - Form of Borrowing Notice
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* Not included in document submitted as exhibit to the Form 8-K Current Report
for General Communication, Inc. for event as of October 31, 1996.
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General Communication, Inc. - Form 8-K
Page 50
GCI COMMUNICATION CORP.
$62,500,000
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
THIS THIRD AMENDED AND RESTATED CREDIT AGREEMENT is dated as of October
31, ang GCI COMMUNICATION CORP., an Alaskan corporation, (the "Company"), the
Lenders from time to time party hereto or to an Assignment and Acceptance, and
NATIONSBANK OF TEXAS, N.A., a national banking association, as a Lender and
Administrative Agent.
BACKGROUND
1. The Company and the Administrative Agent had entered into that
certain Amended and Restated Credit Agreement, dated as of April 30, 1993, as
amended by that certain First Amendment to Amended and Restated Credit
Agreement, dated as of the October 3, 1994, and by that certain Second Amendment
to Amended and Restated Credit Agreement, dated as of October 31, 1995, as fully
amended and restated by that certain Second Amended and Restated Credit
Agreement, dated as of April 26, 1996 (as amended, the "Original Credit
Agreement") which provided a senior secured loan and letter of credit facility
in the aggregate amount of $62,500,000;
2. The Company and the Administrative Agent have agreed to amend and
restate the Original Credit Agreement to provide for certain changes therein;
AGREEMENT
NOW, THEREFORE, for valuable consideration hereby acknowledged, the
parties hereto agree as follows:
ARTICLE I. DEFINITIONS
1.01. Definitions. As used in this Agreement, the following terms have
the respective meanings indicated below (such meanings to be applicable equally
to both the singular and plural forms of such terms):
"Administrative Agent" means NationsBank of Texas, National
Association, in its capacity as Administrative Agent hereunder, or any successor
Administrative Agent appointed pursuant to Section 9.06 hereof.
"Advance" means an advance made by a Lender to the Company pursuant to
Section 2.01 hereof.
General Communication, Inc. - Form 8-K
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"Affiliate" means a Person that directly, or indirectly through one or
more intermediaries, Controls or is Controlled By or is Under Common Control
with another Person, and with respect to the Company, "Affiliate" means a Person
that directly, or indirectly through one or more intermediaries, Controls or is
Controlled By or is Under Common Control with the Parent, the Company or any
Subsidiary of the Company or Parent.
"Agreement" means this Third Amended and Restated Credit Agreement, as
hereafter amended, modified, or supplemented in accordance with its terms.
"Annualized Operating Cash Flow" means, as of any date of
determination, the product of two times Operating Cash Flow for the two most
recently ended fiscal quarters.
"Applicable Law" means (a) in respect of any Person, all provisions of
Laws applicable to such Person, and all orders and decrees of all courts and
arbitrators in proceedings or actions to which the Person in question is a party
and (b) in respect of contracts made or performed in the State of Texas,
"Applicable Law" shall also mean the laws of the United States of America,
including, without limiting the foregoing, 12 USC Sections 85 and 86, as amended
to the date hereof and as the same may be amended at any time and from time to
time hereafter, and any other statute of the United States of America now or at
any time hereafter prescribing the maximum rates of interest on loans and
extensions of credit, and the laws of the State of Texas, including, without
limitations, Articles 5069-1.04 and 5069-1.07(a), Title 79, Revised Civil
Statutes of Texas, 1925, as amended ("Art. 1.04"), and any other statute of the
State of Texas now or at any time hereafter prescribing maximum rates of
interest on loans and extensions of credit, provided however, that pursuant to
Article 5069-15.10(b), Title 79, Revised Civil Statutes of Texas, 1925, as
amended, the Company agrees that the provisions of Chapter 15, Title 79, Revised
Civil Statutes of Texas, 1925, as amended, shall not apply to the Advances
hereunder.
"Applicable Margin" means (i) with respect to the Base Rate Advances
under the Facility, 1.125% per annum and (ii) with respect to LIBOR Advances,
2.250% per annum. Notwithstanding the foregoing, effective three Business Days
after receipt by the Administrative Agent from the Company of a Compliance
Certificate delivered to the Lenders for any reason and demonstrating a change
in the Leverage Ratio to an amount so that another Applicable Margin should be
applied pursuant to the table set forth below, the Applicable Margin for each
type of Advance shall mean the respective amount set forth below opposite such
relevant Leverage Ratio in Columns A and B below, in each case until the first
succeeding Quarterly Date which is at least three Business Days after receipt by
the Administrative Agent from the Company of a Compliance Certificate,
demonstrating a change in the Leverage Ratio to an amount so that another
Applicable Margin shall be applied; provided that, if there exists a Default or
Event of Default or if the Leverage Ratio shall at any time exceed or equal 2.50
to 1.00, the Applicable Margin shall again be the respective amounts first set
forth in this definition; provided further, that the Applicable Margin in effect
on the Closing Date shall be determined pursuant to a Compliance Certificate
delivered on the Closing Date, provided, further, that if the Company fails to
deliver any financial statements to the Administrative Agent within the required
time periods set forth in Sections 6.05(a) and Section 6.05(b) hereof, the
Applicable Margin shall again be the respective amounts first set forth in this
definition until the date which is three Business Days after the Administrative
Agent receives financial statements from the Company which demonstrate that
another Applicable Margin should be applied pursuant
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to the table set forth below; and provided further, that the Applicable Margin
shall never be a negative number.
Column A Column B
Leverage Ratio Base Rate LIBOR
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Greater than or equal
to 2.50 to 1.00 1.125% 2.250%
Greater than or equal to
2.00 to 1.00 but less than
2.50 to 1.00 0.875% 2.000%
Less than 0.625% 1.750%
2.00 to 1.00
"Application" means any stand-by letter of credit application delivered
to Administrative Agent for or in connection with any Stand-By Letter of Credit
pursuant to Article III hereof, in Administrative Agent's standard form for
stand-by letters of credit.
"Art. 1.04" has the meaning specified in the definition herein of
"Applicable Law".
"Asset Sale" means any sale, disposition, liquidation, conveyance or
transfer by the Company or any Restricted Subsidiary of any Property (or portion
thereof) or an interest (other than Permitted Liens or a Lien granted to the
Administrative Agent on behalf of the Lenders) therein, other than in the
ordinary course of business.
"Assignment and Acceptance" means an assignment and acceptance entered
into by a Lender and an Eligible Assignee, and accepted by Administrative Agent,
in the form of Exhibit B hereto, as each such agreement may be amended,
modified, extended, restated, renewed, substituted or replaced from time to
time.
"Auditor" means KPMG Peat Marwick, L.L.P., or other independent
certified public accountants selected by the Company and acceptable to
Administrative Agent.
"Authorizations" means all filings, recordings and registrations with,
and all validations or exemptions, approvals, orders, authorizations, consents,
Licenses, certificates and permits from, the FCC, applicable public utilities
and other federal, state and local regulatory or governmental bodies and
authorities or any subdivision thereof, including, without limitation, FCC
Licenses.
"Authorized Officer" means any of the President, Vice President-Chief
Financial Officer, Vice President-Chief Accounting Officer or any other officer
authorized by the Company from time to time of which the Administrative Agent
has been notified in writing.
"Bank Affiliate" means the holding company of any Lender, or any
wholly-owned direct or indirect subsidiary of such holding company or of such
Lender.
General Communication, Inc. - Form 8-K
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"Base Rate Advance" means an Advance bearing interest at the Base Rate.
"Base Rate" means a fluctuating rate per annum as shall be in effect
from time to time equal to the lesser of (a) the Highest Lawful Rate and (b) the
sum of the Applicable Margin plus the greater of (i) the sum of Federal Funds
Rate in effect from time to time plus .50% and (ii) the rate of interest as then
in effect announced publicly by NationsBank of Texas, N.A. in Dallas, Texas from
time to time as its U.S. dollar prime commercial lending rate (such rate may or
may not be the lowest rate of interest charged by NationsBank from time to
time). The Base Rate shall be adjusted automatically as of the opening of
business on the effective date of each change in the prime rate to account for
such change.
"Borrowing" means a borrowing under the Facility of the same Type made
on the same day.
"Borrowing Notice" has the meaning set forth in Section 2.02(a) hereof.
"Business Day" means a day of the year on which banks are not required
or authorized to close in Dallas, Texas and, if the applicable day relates to
any notice, payment or calculation related to a LIBOR Advance, London, England.
"Cable Acquisition Transactions" means that certain acquisition of
certain cable television operating systems in Alaska pursuant to the agreements
referenced in Section 7.10(e) hereof, and the related issuance of Capital Stock
described on Schedule 1.03 hereto.
"Capital Expenditures" means the aggregate amount of all purchases or
acquisitions of items considered to be capital items under GAAP, and in any
event shall include the aggregate amount of items leased or acquired under
Capital Leases at the cost of the item, and the acquisition of realty, tools,
equipment, and fixed assets, and any deferred costs associated with any of the
foregoing.
"Capital Leases" means capital leases and subleases, as defined in
accordance with GAAP.
"Capital Stock" means, as to any Person, the equity interests in such
Person, including, without limitation, the shares of each class of capital stock
of any Person that is a corporation and each class of partnership interests
(including without limitation, general, limited and preference units) in any
Person that is a partnership.
"Cash Equivalents" means investments (directly or through a money
market fund) in (a) certificates of deposit and other interest bearing deposits
or accounts with United States commercial banks having a combined capital and
surplus of at least $300,000,000, which certificates, deposits, and accounts
mature within one year from the date of investment and are fully insured as to
principal by the FDIC, (b) obligations issued or unconditionally guaranteed by
the United States government, or issued by an agency thereof and backed by the
full faith and credit of the United States government, which obligations mature
within one year from the date of investment, (c) direct obligations issued by
any state or political subdivision of the United States, which mature within one
year from the date of investment and have the highest rating obtainable from
Standard & Poor's Ratings Group or Moody's Investors Services, Inc. on the
General Communication, Inc. - Form 8-K
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date of investment, and (d) commercial paper which has one of the three highest
ratings obtainable from Standard & Poor's Ratings Group or Moody's Investors
Services, Inc.
"Change of Control" means the occurrence of one or more of the
following events: (a) any change in the ownership of the Company or any
Restricted Subsidiary (except any change due to any merger or consolidation
among the Wholly-Owned Subsidiaries) or (b) any change in the Parent resulting
in MCI owning less than 20% of the Parent, or (c) MCI shall at any time have
less than two representatives sitting on the Parent's Board of Directors.
"Closing Date" means the date hereof.
"Code" means the Internal Revenue Code of 1986, as amended, and the
rules and regulations issued thereunder, as from time to time in effect.
"Collateral" means all "collateral" referred to in any Loan Paper and
all other property which is or may be subject to a Lien in favor or for the
benefit of Administrative Agent on behalf of Lenders or any Lender to secure the
Obligations, including, without limitation, "Collateral" as defined in Section
2.15(a) hereof.
"Commitment" means, with respect to the Revolving Loan, $62,500,000, as
such amount may be reduced from time to time in accordance with the terms of
Section 2.04 hereof.
"Commitment Fee" means the fee described in Section 2.10(a) hereof.
"Company" means GCI Communication Corp., an Alaskan corporation.
"Compliance Certificate" means a certificate of an Authorized Officer
of the Company acceptable to Administrative Agent, in the form of Exhibit D
hereto, (a) certifying that such individual has no knowledge that a Default or
Event of Default has occurred and is continuing, or if a Default or Event of
Default has occurred and is continuing, a statement as to the nature thereof and
the action being taken or proposed to be taken with respect thereto, and (b)
setting forth detailed calculations with respect to each of the covenants
described in Section 7.01 hereof.
"Consequential Loss," with respect to (a) the Company's payment of all
or any portion of the then-outstanding principal amount of a LIBOR Advance on a
day other than the last day of the related Interest Period, including, without
limitation, payments made as a result of the acceleration of the maturity of a
Note, (b) (subject to Administrative Agents' prior consent), a LIBOR Advance
made on a date other than the date on which the Advance is to be made according
to Section 2.02(a) or Section 2.09 hereof, or (c) any of the circumstances
specified in Section 2.04, Section 2.05 and Section 2.06 hereof on which a
Consequential Loss may be incurred, means any loss, cost or expense incurred by
any Lender as a result of the timing of the payment or Advance or in
liquidating, redepositing, redeploying or reinvesting the principal amount so
paid or affected by the timing of the Advance or the circumstances described in
Section 2.04, Section 2.05, and Section 2.06 hereof, which amount shall be the
sum of (i) the interest that, but for the payment or timing of Advance, such
Lender would have earned in respect of that principal amount, reduced, if such
Lender is able to redeposit, redeploy, or reinvest the principal amount, by the
interest earned by such Lender as a result of redepositing, redeploying or
reinvesting the principal amount plus (ii) any expense or penalty incurred by
such
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Lender by reason of liquidating, redepositing, redeploying or reinvesting the
principal amount. Each determination by each Lender of any Consequential Loss
is, in the absence of manifest error, conclusive and binding.
"Contingent Liability" means, as to any Person, any obligation,
contingent or otherwise, of such Person guaranteeing or having the economic
effect of guaranteeing any Debt or obligation of any other Person in any manner,
whether directly or indirectly, including without limitation any obligation of
such Person, direct or indirect, (a) to purchase or pay (or advance or supply
funds for the purchase or payment of) such Debt or to purchase (or to advance or
supply funds for the purchase of) any security for the payment of such Debt, (b)
to purchase Property or services for the purpose of assuring the owner of such
Debt of its payment, or (c) to maintain the solvency, working capital, equity,
cash flow, fixed charge or other coverage ratio, or any other financial
condition of the primary obligor so as to enable the primary obligor to pay any
Debt or to comply with any agreement relating to any Debt or obligation, and
shall, in any event, include any contingent obligation under any letter of
credit, application for any letter of credit or other related documentation.
"Continue," "Continuation" and "Continued" each refer to the
continuation pursuant to Section 2.09 hereof of a LIBOR Advance from one
Interest Period to the next Interest Period.
"Control" or "Controlled By" or "Under Common Control" mean possession,
direct or indirect, of power to direct or cause the direction of management or
policies (whether through ownership of voting securities, by contract or
otherwise); provided that, in any event (a) it shall include any director (or
Person holding the equivalent position) or executive officer (or Person holding
the equivalent position) of such Person or of any Affiliate of such Person, (b)
any Person which beneficially owns 5% or more (in number of votes) of the
securities having ordinary voting power for the election of directors of a
corporation shall be conclusively presumed to control such corporation, (c) any
general partner of any partnership shall be conclusively presumed to control
such partnership, (d) any other Person who is a member of the immediate family
(including parents, spouse, siblings and children) of any general partner of a
partnership, and any trust whose principal beneficiary is such individual or one
or more members of such immediate family and any Person who is controlled by any
such member or trust, or is the executor, administrator or other personal
representative of such Person, shall be conclusively presumed to control such
Person, and (e) no Person shall be deemed to be an Affiliate of a corporation
solely by reason of his being an officer or director of such corporation.
"Controlled Group" means, as to any Person, all members of a controlled
group of corporations and all trades or businesses (whether or not incorporated)
which are under common control with such Person and which, together with such
Person, are treated as a single employer under Section 414(b), (c), (m) or (o)
of the Code.
"Conversion or Continuance Notice" has the meaning set forth in Section
2.09(b) hereof.
"Convertible Subordinated Notes" means those certain Convertible
Subordinated Notes of the Parent dated October 31, 1996 due October 31, 2006
issued in connection with the acquisition of Alaska Cablevision, Inc. pursuant
to the Asset Purchase Agreement described in Section 7.10(e)(ii) hereof.
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"Debt" means all obligations, contingent or otherwise, which in
accordance with GAAP are required to be classified on the balance sheet as
liabilities, and in any event including Capital Leases, Contingent Liabilities
that are required to be disclosed and quantified in notes to consolidated
financial statements in accordance with GAAP, and liabilities secured by any
Lien on any Property, regardless of whether such secured liability is with or
without recourse.
"Debt for Borrowed Money" means, as to any Person, at any date, without
duplication, (a) all obligations of such Person for borrowed money, (b) all
obligations of such Person evidenced by bonds, debentures, notes, letters of
credit (or applications for letters of credit) or other similar instruments, (c)
all obligations of such Person to pay the deferred purchase price of property or
services, except trade accounts payable arising in the ordinary course of
business and (d) all obligations of such Person secured by a Lien on any assets
or property of any Person.
"Debtor Relief Laws" means applicable bankruptcy, reorganization,
moratorium, or similar Laws, or principles of equity affecting the enforcement
of creditors' rights generally.
"Default" means any event specified in Section 8.01 hereof, whether or
not any requirement in connection with such event for the giving of notice,
lapse of time, or happening of any further condition has been satisfied.
"Distribution" means, as to any Person, (a) any declaration or payment
of any distribution or dividend (other than a stock dividend) on, or the making
of any pro rata distribution, loan, advance, or investment to or in any holder
(in its capacity as a partner, shareholder or other equity holder) of, any
partnership interest or shares of capital stock or other equity interest of such
Person, or (b) any purchase, redemption, or other acquisition or retirement for
value of any shares of partnership interest or capital stock or other equity
interest of such Person.
"Eligible Assignee" means (a) any Bank Affiliate, (b) a commercial bank
organized under the laws of the United States, or any state thereof, and having
total assets in excess of $500,000,000; (c) a commercial bank organized under
the laws of any other country which is a member of the Organization for Economic
Cooperation and Development, or a political subdivision of any such country, and
having total assets in excess of $500,000,000, provided that such bank is acting
through a branch or agency located in the country in which it is organized or
another country which is described in this clause; and (d) the central bank of
any country which is a member of the Organization for Economic Cooperation and
Development.
"Environmental Laws" means the Comprehensive Environmental Response,
Compensation, and Liability Act (42 U.S.C. section 9601 et seq.) ("CERCLA"), the
Hazardous Material Transportation Act (49 U.S.C. section1801 et seq.), the
Resource Conservation and Recovery Act (42 U.S.C section 6901 et seq.), the
Federal Water Pollution Control Act (33 U.S.C. sectio 1251 et seq.), the Clean
Air Act (42 U.S.C. section 7401 et seq.), the Toxic Substances Control Act (15
U.S.C. section 2601 et seq.), and the Occupational Safety and Health Act (29
U.S.C. section 651 et seq.) ("OSHA"), as such laws have been or hereafter may be
amended or supplemented, and any and all analogous future federal, or present or
future state or local, Laws.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and the rulings and regulations issued thereunder, as from time to time
in effect.
General Communication, Inc. - Form 8-K
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"ERISA Affiliate" means any Person that for purposes of Title IV of
ERISA is a member of the controlled group of the Parent, the Company or any
Subsidiary of the Parent or the Company, or is under common control with the
Parent, the Company or any Subsidiary of the Parent or the Company, within the
meaning of Section 414(c) of the Code.
"ERISA Event" means (a) a reportable event, within the meaning of
Section 4043 of ERISA, unless the 30-day notice requirement with respect thereto
has been waived by the PBGC, (b) the issuance by the administrator of any Plan
of a notice of intent to terminate such Plan in a distress situation, pursuant
to Section 4041(a)(2) and 4041(c) of ERISA (including any such notice with
respect to a plan amendment referred to in Section 4041(e) of ERISA), (c) the
cessation of operations at a facility in the circumstances described in Section
4062(e) of ERISA, (d) the withdrawal by the Company, any Subsidiary of the
Company or the Parent, or an ERISA Affiliate from a Multiple Employer Plan
during a Plan year for which it was a substantial employer, as defined in
Section 4001(a)(2) of ERISA, (e) the failure by the Company, any Subsidiary of
the Company or Parent, or any ERISA Affiliate to make a payment to a Plan
required under Section 302 of ERISA, (f) the adoption of an amendment to a Plan
requiring the provision of security to such Plan, pursuant to Section 307 of
ERISA, or (g) the institution by the PBGC of proceedings to terminate a Plan,
pursuant to Section 4042 of ERISA, or the occurrence of any event or condition
that constitutes grounds under Section 4042 of ERISA for the termination of, or
the appointment of a trustee to administer, a Plan.
"Event of Default" means any of the events specified in Section 8.01
hereof, provided there has been satisfied any requirement in connection
therewith for the giving of notice, lapse of time, or happening of any further
condition.
"Facility" means the revolving loan evidenced by this Agreement and the
Loan Papers.
"FCC" means the Federal Communications Commission and any successor
thereto.
"FCC License" means any community antenna relay service, broadcast
auxiliary license, earth station registration, business radio, microwave or
special safety radio service license issued by the FCC pursuant to the
Communications Act of 1934, as amended, and any other FCC license from time to
time necessary or advisable for the operation of the Parent's, the Company's or
any of their Subsidiaries' business.
"Federal Funds Rate" means, for any period, a fluctuating interest rate
per annum equal for each day during such period 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 published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of Dallas, or, if such rate is not so published for any day
which is a Business Day, the average of the quotations for such date on such
transactions received by Administrative Agent from three federal funds brokers
of recognized standing selected by it.
"Fee Letters" means that certain letter agreement, dated the April 26,
1996, addressed to the Company and acknowledged by the Company, and describing
certain fees payable to the Administrative Agent in connection with this
Agreement and the Facility, and such other fee
General Communication, Inc. - Form 8-K
Page 58
letter agreements as may be executed from time to time among the parties hereto,
as each may be amended, modified, substituted or replaced by the parties
thereto.
"Funded Debt" means, without duplication, with respect to any Person,
all Debt of such Person, determined on a consolidated basis and measured in
accordance with GAAP that is either (a) Debt for Borrowed Money, (b) Debt having
a final maturity (or extendable at the option of the obligor for a period
ending) more than one year after the date of creation thereof, notwithstanding
the fact that payments are required to be made less than one year after such
date, (c) Capital Lease obligations (without duplication), (d) reimbursement
obligations relating to letters of credit, (e) Contingent Liabilities relating
to any of the foregoing (without duplication), (f) Withdrawal Liability, (g)
Debt, if any, associated with Interest Hedge Agreements, (h) payments due under
Non-Compete Agreements, plus (i) payments due for the deferred purchase price of
property and services (but excluding trade payables that are less than 90 days
old and any thereof that are being contested in good faith).
"GAAP" means generally accepted accounting principles applied on a
consistent basis. Application on a consistent basis shall mean that the
accounting principles observed in a current period are comparable in all
material respects to those applied in a preceding period, except for new
developments or statements promulgated by the Financial Accounting Standards
Board.
"GCI Entities" means the Company, the Parent, each Restricted
Subsidiary and each Guarantor from time to time in existence, and any other
Person from time to time constituting a Subsidiary of Parent or the Company,
except the Unrestricted Subsidiaries.
"Guarantors" means General Communication, Inc., GCI Communication
Services, Inc. and GCI Leasing Co., Inc., and each other Person from time to
time guaranteeing payment of the Obligations to the Administrative Agent and
Lenders.
"Guaranty" of a Person means any agreement by which such Person
assumes, guarantees, endorses, contingently agrees to purchase or provide funds
for the payment of, or otherwise becomes liable upon, the obligation of any
other Person, or agrees to maintain the net worth or working capital or other
financial condition of any other Person, or otherwise assures any creditor or
such other Person against loss, including, without limitation, any agreement
which assures any creditor or such other Person payment or performance of any
obligation, or any take-or-pay contract and shall include without limitation,
the contingent liability of such Person in connection with any application for a
letter of credit (without duplication of any amount already included in its
Debt).
"Hazardous Materials" means all materials subject to any Environmental
Law, including without limitation materials listed in 49 C.F.R. section 172.101,
Hazardous Substances, explosive or radioactive materials, hazardous or toxic
wastes or substances, petroleum or petroleum distillates, asbestos, or material
containing asbestos.
"Hazardous Substances" means hazardous waste as defined in the Clean
Water Act, 33 U.S.C. section 1251 et seq., the Comprehensive Environmental
Response Compensation and Liability Act as amended by the Superfund Amendments
and Reauthorization Act, 42 U.S.C. section 9601 et seq., the Resource
Conservation Recovery Act, 42 U.S.C. section 6901 et seq., and the Toxic
Substances Control Act, 15 U.S.C. section 2601 et seq.
General Communication, Inc. - Form 8-K
Page 59
"Highest Lawful Rate" means at the particular time in question the
maximum rate of interest which, under Applicable Law, Administrative Agent is
then permitted to charge on the Obligations. If the maximum rate of interest
which, under Applicable Law, such Lender is permitted to charge on the
Obligations shall change after the date hereof, the Highest Lawful Rate shall be
automatically increased or decreased, as the case may be, from time to time as
of the effective time of each change in the Highest Lawful Rate without notice
to the Company. For purposes of determining the Highest Lawful Rate under
Applicable Law, the applicable rate ceiling shall be (a) the indicated rate
ceiling described in and computed in accordance with the provisions of Section
(a)(l) of Art. l.04; or (b) provided notice is given as required in Section
(h)(l) of Art. 1.04, either the annualized ceiling or quarterly ceiling computed
pursuant to Section (d) of Art. 1.04; provided, however, that at any time the
indicated rate ceiling, the annualized ceiling or the quarterly ceiling, as
applicable, shall be less than 18% per annum or more than 24% per annum, the
provisions of Sections (b)(1) and (2) of said Art. l.04 shall control for
purposes of such determination, as applicable.
"Indemnitees" has the meaning ascribed thereto in Section 6.09 hereof.
"Initial Advance" means the initial Advance made in accordance with the
terms hereof, which shall only be after the Company has satisfied each of the
conditions set forth in Section 4.01 and Section 4.02 hereof (or any such
condition shall have been waived by each Lender).
"Insufficiency" means, with respect to any Plan, the amount, if any, of
its unfunded benefit liabilities within the meaning of Section 4001(a)(18) of
ERISA.
"Interest Coverage Ratio" means as of any date of determination, the
ratio of (a) the difference between (i) Operating Cash Flow for the most
recently completed fiscal quarter of the Parent, the Company and the Restricted
Subsidiaries minus (ii) Taxes paid during the most recently completed fiscal
quarter of the Parent, the Company and the Restricted Subsidiaries to (b) Total
Interest Expense for the most recently completed fiscal quarter of the Parent,
the Company and the Restricted Subsidiaries.
"Interest Hedge Agreements" means any interest rate swap agreements,
interest cap agreements, interest rate collar agreements, or any similar
agreements or arrangements designed to hedge the risk of variable interest rate
volatility, or foreign currency hedge, exchange or similar agreements, on terms
and conditions reasonably acceptable to Administrative Agent (evidenced by
Administrative Agent's consent in writing), as such agreements or arrangements
may be modified, supplemented, and in effect from time to time.
"Interest Period" means, with respect to any LIBOR Advance, the period
beginning on the date an Advance is made or continued as or converted into a
LIBOR Advance and ending one, three or six months thereafter (as the Company
shall select) provided, however, that:
(a) the Company may not select any Interest Period that ends
after any principal repayment date unless, after giving effect to such
selection, the aggregate principal amount of LIBOR Advances having
Interest Periods that end on or prior to such principal repayment date,
shall be at least equal to the principal amount of Advances due and
payable on and prior to such date;
General Communication, Inc. - Form 8-K
Page 60
(b) whenever the last day of any Interest Period would
otherwise occur on a day other than a Business Day, the last day of
such Interest Period shall be extended to occur on the next succeeding
Business Day, provided, however, that if such extension would cause the
last day of such Interest Period to occur in the next following
calendar month, the last day of such Interest Period shall occur on the
next preceding Business Day; and
(c) whenever the first day of any Interest Period occurs on a
day of an initial calendar month for which there is no numerically
corresponding day in the calendar month that succeeds such initial
calendar month by the number of months equal to the number of months in
such Interest Period, such Interest Period shall end on the last
Business Day of such succeeding calendar month.
"Investment" means any acquisition of all or substantially all assets
of any Person, or any direct or indirect purchase or other acquisition of, or a
beneficial interest in, capital stock or other securities of any other Person,
or any direct or indirect loan, advance (other than advances to employees for
moving and travel expenses, drawing accounts, and similar expenditures in the
ordinary course of business), or capital contribution to or investment in any
other Person, including without limitation the incurrence or sufferance of Debt
or accounts receivable of any other Person that are not current assets or do not
arise from sales to that other Person in the ordinary course of business.
"Law" means any constitution, statute, law, ordinance, regulation,
rule, order, writ, injunction, or decree of any Tribunal.
"Lenders" means the lenders listed on the signature pages of this
Agreement, and each Eligible Assignee which hereafter becomes a party to this
Agreement pursuant to Section 10.04 hereof, for so long as any such Person is
owed any portion of the Obligations or obligated to make any Advances under the
Revolving Loan.
"Lending Office" means, with respect to each Lender, its branch or
affiliate, (a) initially, the office of such Lender, branch or affiliate
identified as such on the signature pages hereof, and (b) subsequently, such
other office of such Lender, branch or affiliate as such Lender may designate to
the Company and Administrative Agent as the office from which the Advances of
such Lender will be made and maintained and for the account of which all
payments of principal and interest on the Advances and the Commitment Fee will
thereafter be made. Lenders may have more than one Lending Office for the
purpose of making Base Rate Advances and LIBOR Advances.
"Letters of Credit" means the irrevocable standby letters of credit
issued by Administrative Agent under and pursuant to Article III hereof, as each
may be amended, modified, substituted, increased, replaced, renewed or extended
from time to time.
"Letter of Credit Commitment" means an amount equal to the lesser of
(i) the Unused Commitment and (ii) $13,100,000.
"Leverage Ratio" means as of any date of determination, the ratio of
(a) Total Debt of the Parent, the Company and the Restricted Subsidiaries on
such date of determination to (b)
General Communication, Inc. - Form 8-K
Page 61
Annualized Operating Cash Flow, all calculated for the Parent, the Company and
the Restricted Subsidiaries on a consolidated basis in accordance with GAAP
consistently applied.
"LIBOR Advance" means an Advance bearing interest at the LIBOR Rate.
"LIBOR Rate" means a simple per annum interest rate equal to the lesser
of (a) the Highest Lawful Rate, and (b) the sum of the LIBOR Rate Basis plus the
Applicable Margin. The LIBOR Rate shall, with respect to LIBOR Advances subject
to reserve or deposit requirements, be subject to premiums assessed therefor by
each Lender, which are payable directly to each Lender. Once determined, the
LIBOR Rate shall remain unchanged during the applicable Interest Period.
"LIBOR Rate Basis" means, for any Interest Period, the interest rate
per annum (rounded upward to the nearest 1/16th of one percent) determined by
Administrative Agent at approximately 9:00 a.m., on the second Business Day
before the first day of such Interest Period to be the offered quotations that
appear on the Reuter's Screen LIBO page for dollar deposits in the London
interbank market for a length of time approximately equal to the Interest Period
for the LIBOR Advance sought by the Company. If at least two such offered
quotations appear on the Reuter's Screen LIBO page, the LIBOR Rate shall be the
arithmetic mean (rounded upward to the nearest 1/16th of one percent) of such
offered quotations, as determined by Administrative Agent. If the Reuter's
Screen LIBO page is not available or has been discontinued, the LIBOR Rate Basis
shall be the rate per annum that Administrative Agent determines to be the
arithmetic mean (rounded as aforesaid) of the per annum rates of interest at
which deposits in dollars in an amount approximately equal to the principal
amount of, and for a length of time approximately equal to the Interest Period
for, the LIBOR Advance sought by the Company are offered to Administrative Agent
in immediately available funds in the London interbank market at 11:00 a.m.,
London time, on the date which is the second Business Day prior to the first day
of an Interest Period.
"License" means, as to any Person, any license, permit, certificate of
need, authorization, certification, accreditation, franchise, approval, or grant
of rights by any Tribunal or third person necessary or appropriate for such
Person to own, maintain, or operate its business or Property, including FCC
Licenses.
"Lien" means any mortgage, pledge, security interest, encumbrance,
lien, or charge of any kind, including without limitation any agreement to give
or not to give any of the foregoing, any conditional sale or other title
retention agreement, any lease in the nature thereof, and the filing of or
agreement to give any financing statement or other similar form of public notice
under the Laws of any jurisdiction (except for the filing of a financing
statement or notice in connection with an operating lease).
"Litigation" means any proceeding, claim, lawsuit, arbitration, and/or
investigation conducted or threatened by or before any Tribunal, including
without limitation proceedings, claims, lawsuits, and/or investigations under or
pursuant to any environmental, occupational, safety and health, antitrust,
unfair competition, securities, Tax, or other Law, or under or pursuant to any
contract, agreement, or other instrument.
General Communication, Inc. - Form 8-K
Page 62
"Loan Papers" means this Agreement; the Notes; Interest Rate Hedge
Agreements executed among any GCI Entity and any Lender or Bank Affiliate; all
Pledge Agreements; all Guaranties executed by any Person guaranteeing payment of
any portion of the Obligations; all Fee Letters; all Letters of Credit, all
Applications and all documentation related to any Letter of Credit; each
Assignment and Acceptance; all promissory notes evidencing any portion of the
Obligations; assignments, security agreements and pledge agreements granting any
interest in any of the Collateral; stock certificates and partnership agreements
constituting part of the Collateral; mortgages, deeds of trust, financing
statements, collateral assignments, and other documents and instruments granting
an interest in any portion of the Collateral, or related to the perfection
and/or the transfer thereof; and all other documents, instruments, agreements or
certificates executed or delivered by the Company or any other GCI Entity, as
security for the Company's obligations hereunder, in connection with the loans
to the Company or otherwise; as each such document shall, with the consent of
the Lenders pursuant to the terms hereof, be amended, revised, renewed,
extended, substituted or replaced from time to time.
"Majority Lenders" means any combination of Lenders having at least
66.67% of the aggregate amount of Advances under the Facility; provided,
however, that if no Advances are outstanding under this Agreement, such term
means any combination of Lenders having a Specified Percentage equal to at least
66.67% of the Facility.
"Management Fees" means all fees from time to time directly or
indirectly (including any payments made pursuant to guarantees of such fees)
paid or payable by the Company, any GCI Entity or any of the Restricted
Subsidiaries to any Person for management services for managing any portion of
any System.
"Material Adverse Change" means any circumstance or event that (a) can
reasonably be expected to cause a Default or an Event of Default, (b) otherwise
can reasonably be expected to (i) be material and adverse to the continued
operation of the Company and the Restricted Subsidiaries taken as a whole or any
other GCI Entity, or (ii) be material and adverse to the financial condition,
business operations, prospects or Properties of the Company and the Restricted
Subsidiaries taken as a whole or any other GCI Entity, or (c) in any manner
whatsoever does or can reasonably be expected to materially and adversely affect
the validity or enforceability of any of the Loan Papers.
"Maturity Date" means April 25, 1997, or such earlier date all of the
Obligations become due and payable (whether by acceleration, prepayment in full,
scheduled reduction or otherwise).
"Maximum Amount" means the maximum amount of interest which, under
Applicable Law, Administrative Agent or any Lender is permitted to charge on the
Obligations.
"MCI" means MCI Telecommunications Corporation.
"Multiemployer Plan" means a multiemployer plan, as defined in Section
4001(a)(3) of ERISA, to which the Company, any Subsidiary of the Company or
Parent, or any ERISA Affiliate is making or accruing an obligation to make
contributions, or has within any of the preceding five plan years made or
accrued an obligation to make contributions, such plan being maintained pursuant
to one or more collective bargaining agreements.
General Communication, Inc. - Form 8-K
Page 63
"Multiple Employer Plan" means a single employer plan, as defined in
Section 4001(a)(15) of ERISA, that (a) is maintained for employees of the
Company, any Subsidiary of the Company or Parent, or any ERISA Affiliate and at
least one Person other than the Company, any Subsidiary of the Company or
Parent, and any ERISA Affiliate, or (b) was so maintained and in respect of
which the Company, any Subsidiary of the Company or Parent, or any ERISA
Affiliate could have liability under Section 4064 or 4069 of ERISA in the event
such plan has been or were to be terminated.
"Net Proceeds" means the gross proceeds received by the Company or any
Restricted Subsidiary in connection with or as a result of any Asset Sale, minus
(so long as each of the following are estimated in good faith by the Vice
President - Chief Financial Officer of the Company or such Restricted Subsidiary
and certified to the Lenders in reasonable detail by an Authorized Officer) (a)
amounts paid or reserved in good faith, if any, for taxes payable with respect
to such Asset Sale in an amount equal to the tax liability of the Company or any
Restricted Subsidiary in respect of such sale (taking into account all other tax
benefits of each of the parties) and (b) reasonable and customary transaction
costs payable by the Company or any Restricted Subsidiary related to such sale.
"Non-Compete Agreement" means any agreement or related set of
agreements under which the Company or any Restricted Subsidiary agrees to pay
money in one or more installments to one or more Persons in exchange for
agreements from such Persons to refrain from competing with the Company or such
Restricted Subsidiary in a certain line of business in a specific geographical
area for a certain time period, or pursuant to which any Person agrees to limit
or restrict its right to engage, directly or indirectly, in the same or similar
industry for any period of time for any geographic location.
"Note" means each and "Notes" means all promissory notes of the Company
evidencing the Advances and obligations owing hereunder to each Lender under the
Revolving Loan, in substantially the form of Exhibit A hereto, each payable to
the order of each Lender, as each such note may be amended, extended, restated,
renewed, substituted or replaced from time to time.
"Obligations" means all present and future obligations, indebtedness
and liabilities, and all renewals and extensions of all or any part thereof, of
the Company and each other GCI Entity to Lenders and Administrative Agent
arising from, by virtue of, or pursuant to this Agreement, any of the other Loan
Papers and any and all renewals and extensions thereof or any part thereof, or
future amendments thereto, all interest accruing on all or any part thereof and
reasonable attorneys' fees incurred by Lenders and Administrative Agent for the
administration, execution of waivers, amendments and consents, and in connection
with any restructuring, workouts or in the enforcement or the collection of all
or any part thereof, whether such obligations, indebtedness and liabilities are
direct, indirect, fixed, contingent, joint, several or joint and several.
Without limiting the generality of the foregoing, "Obligations" includes all
amounts which would be owed by the Company, each other GCI Entity and any other
Person (other than Administrative Agent or Lenders) to Administrative Agent or
Lenders under any Loan Paper, but for the fact that they are unenforceable or
not allowable due to the existence of a bankruptcy, reorganization or similar
proceeding involving the Company, any other GCI Entity or any other Person
(including all such amounts which would become due or would be secured but for
the filing of any petition in bankruptcy, or the commencement of any insolvency,
General Communication, Inc. - Form 8-K
Page 64
reorganization or like proceeding of the Company, any other GCI Entity or any
other Person under any Debtor Relief Law).
"Operating Cash Flow" means for any fiscal quarter of the Parent, the
Company and the Restricted Subsidiaries, the Parent's, the Company's and the
Restricted Subsidiaries' operating revenues for such period, minus the sum of
(a) costs of sales for such period, plus (b) operating expenses during such
period, excluding depreciation, amortization expense and other non-cash charges
for such period, all calculated on a consolidated basis in accordance with GAAP
consistently applied.
"Operating Leases" means operating leases, as defined in accordance
with GAAP.
"Original Credit Agreement" has the meaning ascribed thereto in
paragraph 1 the Background section on page 1 of this Credit Agreement.
"Parent" means General Communication, Inc., an Alaska corporation.
"PBGC" means the Pension Benefit Guaranty Corporation, or any successor
agency or entity performing substantially the same functions.
"Permitted Liens" means
(a) those imposed by the Loan Papers;
(b) Liens in connection with workers' compensation,
unemployment insurance or other social security obligations (which phrase shall
not be construed to refer to ERISA);
(c) deposits, pledges or liens to secure the performance of
bids, tenders, contracts (other than contracts for the payment of borrowed
money), leases, statutory obligations, surety, customs, appeal, performance and
payment bonds and other obligations of like nature arising in the ordinary
course of business;
(d) mechanics', worker's, carriers, warehousemen's,
materialmen's, landlords', or other like Liens arising in the ordinary course of
business with respect to obligations which are not due or which are being
contested in good faith and by appropriate proceedings diligently conducted;
(e) Liens for taxes, assessments, fees or governmental charges
or levies not delinquent or which are being contested in good faith and by
appropriate proceedings diligently conducted, and in respect of which adequate
reserves shall have been established in accordance with GAAP on the books of the
Company or such GCI Entity;
(f) Liens or attachments, judgments or awards against the
Company or any other GCI Entity with respect to which an appeal or proceeding
for review shall be pending or a stay of execution shall have been obtained, and
which are otherwise being contested in good faith and by appropriate proceedings
diligently conducted, and in respect of which adequate reserves shall have been
established in accordance with GAAP on the books of the Company or such other
GCI Entity;
General Communication, Inc. - Form 8-K
Page 65
(g) Liens in existence on the Closing Date described on Schedule
5.08(a) hereto;
(h) statutory Liens in favor of lessors arising in connection with
Property leased to the Company or any other GCI Entity; and
(i) easements, rights of way, restrictions, leases of Property
to others, easements for installations of public utilities, title imperfections
and restrictions, zoning ordinances and other similar encumbrances affecting
Property which in the aggregate do not materially adversely affect the value of
such Property or materially impair its use for the operation of the business of
the Company or such GCI Entity.
"Person" means an individual, partnership, joint venture, corporation,
trust, Tribunal, unincorporated organization, and government, or any department,
agency, or political subdivision thereof.
"Plan" means a Single Employer Plan or a Multiple Employer Plan.
"Pledge Agreement" means each Second Amended and Restated Pledge and
Security Agreement, each First Amended and Restated Pledge and Security
Agreement and each Pledge and Security Agreement whereby the Pledged Interests
are pledged to Administrative Agent and a security interest is granted in the
assets of the GCI Entities to secure the Obligations, each substantially in the
form of Exhibit C hereto, as each such agreement may be amended, modified,
extended, renewed, restated, substituted or replaced from time to time.
"Pledged Interests" means (a) a first perfected security interest in
100% of the Capital Stock of the Company; (b) a first perfected security
interest in 100% of the Capital Stock of GCI Communication Services, Inc.; (c)
subject to the Prior Stock Lien, a first perfected security interest in 100% of
the Capital Stock of GCI Leasing Co., Inc.; and (d) a first perfected security
interest in 100% of the Capital Stock of each other Restricted Subsidiary, if
any, now existing or hereafter formed or acquired.
"Prior Stock Lien" means those certain Liens in the stock of GCI
Leasing Company, Inc. and such other Liens as are listed on Schedule 1.02
hereto.
"Prohibited Transaction" has the meaning specified therefor in Section
4975 of the Code or Section 406 of ERISA.
"Property" means all types of real, personal, tangible, intangible, or
mixed property, whether owned in fee simple or leased.
"Quarterly Date" means the last Business Day of each March, June,
September and December during the term of this Agreement, commencing on June 30,
1996.
"Ratable" means, as to any Lender, in accordance with its Specified
Percentage.
"Refinancing Advance" means an Advance that is used to pay the
principal amount of an existing Advance (or any performance thereof) at the end
of its Interest Period and which, after
General Communication, Inc. - Form 8-K
Page 66
giving effect to such application, does not result in an increase in the
aggregate amount of outstanding Advances.
"Regulatory Change" means any change after the date hereof in federal,
state, or foreign Laws (including the introduction of any new Law) or the
adoption or making after such date of any interpretations, directives, or
requests of or under any federal, state, or foreign Laws (whether or not having
the force of Law) by any Tribunal charged with the interpretation or
administration thereof, applying to a class of financial institutions that
includes any Lender, excluding, however, any such change which results in an
adjustment of the LIBOR Reserve Percentage and the effect of which is reflected
in a change in the LIBOR Rate as provided in the definition of such term.
"Reportable Event" means a reportable event as defined in Section 4043
of ERISA and the regulations issued under such section, with respect to a Plan,
excluding, however, such events as to which the PBGC by regulation waived the
requirement of Section 4043(a) of ERISA that it be notified within 30 days of
the occurrence of such event, provided that a failure to meet the minimum
funding standard of Section 412 of the Code and of Section 302 of ERISA shall be
a Reportable Event regardless of the issuance of any such waivers in accordance
with either Section 4043(a) of ERISA or Section 412(d) of the Code.
"Restricted Payments" means (a) any direct or indirect distribution,
Distribution or other payment on account of any general or limited partnership
interest in (or the setting aside of funds for, or the establishment of a
sinking fund or analogous fund with respect to), or shares of Capital Stock or
other securities of, the Company or any Restricted Subsidiary; (b) any payments
of principal of, or interest on, or fees related to, or any other payments and
prepayments with respect to, or the establishment of, or any payment to, any
sinking fund or analogous fund for the purpose of making any such payments on,
Funded Debt of the Company, any Restricted Subsidiary or any other GCI Entity
(excluding the Obligations); (c) any Management Fee or any management,
consulting or other similar fees, or any interest thereon, payable by the
Company or any Restricted Subsidiary to any Affiliate of the Company or Parent
or to any other Person; (d) any administration fee or any administration,
consulting or other similar fees, or any interest thereon, payable by the
Company or any Restricted Subsidiary to any Affiliate of Parent or the Company
or to any other Person; (e) any payments of any amounts owing under any
Non-Compete Agreements; and (f) fees or payments by the Company or any
Restricted Subsidiary to any Affiliate of Parent or the Company, except to the
extent such payments are permitted in accordance with the terms of Section 7.09
hereof.
"Restricted Subsidiaries" means GCI Leasing Co., Inc., GCI
Communication Services, Inc. and any other Subsidiary, now or hereafter created
or acquired, of the Company or the Parent that engages in the operation of
switched message long distance telephone systems and ancillary services
including DAMA, cellular resale and PCS systems, and "Restricted Subsidiary"
means any one of them, as applicable in the context.
"Revolving Loan" means that certain Revolving Loan made to the Company
on the Closing Date until the Maturity Date in accordance with Section 2.01
hereof.
"Rights" means rights, remedies, powers, and privileges.
General Communication, Inc. - Form 8-K
Page 67
"Single Employer Plan" means a single employer plan, as defined in
Section 4001(a)(15) of ERISA, other than a Multiple Employer Plan, that is
maintained for employees of the Company or any ERISA Affiliate.
"Solvent" means, with respect to any Person, that on such date (a) the
fair value of the Property of such Person is greater than the total amount of
liabilities, including without limitation Contingent Liabilities of such Person,
(b) the present fair salable value of the assets of such Person is not less than
the amount that will be required to pay the probable liability of such Person on
its debts as they become absolute and matured, (c) such Person does not intend
to, and does not believe that it will, incur debts or liabilities beyond such
Person's ability to pay as such debts and liabilities mature, and (d) such
Person is not engaged in business or a transaction, and is not about to engage
in business or a transaction, for which such Person's Property would constitute
an unreasonably small capital.
"Special Counsel" means the law firm of Donohoe, Jameson & Carroll,
P.C., Dallas, Texas, special counsel to Administrative Agent, or such other
counsel selected by the Administrative Agent from time to time.
"Specified Percentage" means, as to any Lender, the percentage
indicated beside its name on the signature pages hereof, or as adjusted or
specified in any Assignment and Acceptance, or amendment to this Agreement.
"Subsidiary" of any Person means any corporation, partnership, joint
venture, trust or estate of which (or in which) more than 50% of:
(a) the outstanding Capital Stock having voting power to elect
a majority of the Board of Directors of such corporation (or other
Persons performing similar functions of such entity, and irrespective
of whether at the time Capital Stock of any other class or classes of
such corporation shall or might have voting power upon the occurrence
of any contingency),
(b) the interest in the capital or profits of such partnership
or joint venture, or
(c) the beneficial interest of such trust or estate,
is at the time directly or indirectly owned by (i) such Person, (ii)
such Person and one or more of its Subsidiaries or (iii) one or more of
such Person's Subsidiaries.
"System" or "Systems" means the Company's and the other GCI Entities'
switched message long distance telephone systems and ancillary services
including DAMA, cellular resale and PCS systems between Alaska and the
contiguous states and the foreign countries listed on Schedule 1.01 hereto, and
any and all other switched message long distance telephone systems, DAMA,
cellular resale and PCS systems acquired or owned by the Parent, the Company,
any of the Restricted Subsidiaries and any of the other GCI Entities from time
to time.
"Taxes" means all taxes, assessments, imposts, fees, or other charges
at any time imposed by any Laws or Tribunal.
General Communication, Inc. - Form 8-K
Page 68
"Total Debt" means, without duplication, with respect to the Parent,
the Company and the Restricted Subsidiaries, the sum of all Funded Debt of the
Parent, the Company and the Restricted Subsidiaries, calculated on a
consolidated basis in accordance with GAAP, except Funded Debt represented by
the Convertible Subordinated Notes.
"Total Interest Expense" means as of any date of determination for any
period of calculation, all Parent's, the Company's and the Restricted
Subsidiaries' consolidated interest expense included in a consolidated income
statement (without deduction of interest income) on Total Debt for such period
calculated on a consolidated basis in accordance with GAAP, including without
limitation or duplication (or, to the extent not so included, with the addition
of) for the Parent, the Company and the Restricted Subsidiaries: (a) the
amortization of Debt discounts; (b) any commitment fees or agency fees related
to any Funded Debt, but specifically excluding any one-time facility fees; (c)
any fees or expenses with respect to letters of credit, bankers' acceptances or
similar facilities; (d) fees and expenses with respect to interest rate swap or
similar agreements or foreign currency hedge, exchange or similar agreements,
other than fees or charges related to the acquisition or termination thereof
which are not allocable to interest expense in accordance with GAAP; (e)
preferred stock Distributions for the Parent, the Company and the Restricted
Subsidiaries declared and payable in cash; and (f) interest capitalized in
accordance with GAAP.
"Tribunal" means any state, commonwealth, federal, foreign,
territorial, or other court or government body, subdivision, agency, department,
commission, board, bureau, or instrumentality of a governmental body.
"Type" refers to the distinction between Advances bearing interest at
the Base Rate and LIBOR Rate.
"UCC" means the Uniform Commercial Code as adopted in the State of
Texas.
"Unrestricted Subsidiary" means GCI Cable, Inc., GCI Cable/Fairbanks,
Inc., GCI Cable/Juneau, Inc., Prime Cable of Alaska, L.P., GCI Cable Holdings,
Inc. and, with the prior written consent of the Lenders, any other Subsidiary of
the Parent designated as a "Unrestricted Subsidiary" by the Company from time to
time.
"Unused Commitment" means, on any date of determination, the Commitment
in effect on such date, minus all outstanding Advances made under the Revolving
Loan on such date.
"Wholly-Owned Subsidiary" means any Subsidiary of the Company that is
owned 100% by the Company or the Parent, directly or indirectly, except any
Unrestricted Subsidiary.
"Withdrawal Liability" has the meaning given such term under Part I of
Subtitle E of Title IV of ERISA.
1.02. Accounting and Other Terms. All accounting terms used in this
Agreement which are not otherwise defined herein shall be construed in
accordance with GAAP consistently applied on a consolidated basis for Company
and the Restricted Subsidiaries, unless otherwise expressly stated herein.
References herein to one gender shall be deemed to include all other
General Communication, Inc. - Form 8-K
Page 69
genders. Except where the context otherwise requires, all references to time are
deemed to be Central Standard time.
ARTICLE II. AMOUNTS AND TERMS OF ADVANCES
2.01. Advances Under the Revolving Loan. Each Lender severally agrees,
on the terms and subject to the conditions hereinafter set forth, from the
Closing Date until the Maturity Date, to make Advances under the Revolving Loan
to the Company on any Business Day during the period from the Funding Date of
this Agreement until the Maturity Date, in an aggregate principal amount not to
exceed at any time outstanding such Lender's Specified Percentage of the
difference between (i) the Commitment minus (ii) the sum of the aggregate face
amount of all outstanding Letters of Credit plus, without duplication, all
reimbursement obligations related to any draw on any Letter of Credit. Subject
to the terms and conditions of this Agreement, until the Maturity Date, the
Company may borrow, repay and reborrow the Advances under the Revolving Loan.
2.02. Making Advances Under the Revolving Loan.
(a) Each Borrowing of Advances shall be made upon the written notice of
the Company, received by Administrative Agent not later than (i) 12:00 noon
three Business Days prior to the proposed date of the Borrowing, in the case of
LIBOR Advances and (ii) not later than 10:00 a.m. on the date of such Borrowing,
in the case of Base Rate Advances. Each such notice of a Borrowing (a "Borrowing
Notice") shall be by telecopy, promptly confirmed by letter, in substantially
the form of Exhibit F hereto specifying therein:
(i) the date of such proposed Borrowing, which shall be a
Business Day;
(ii) the amount of such proposed Borrowing which, (A)
shall not when aggregated together with all other outstanding Advances
plus the sum of the aggregate face amount of all outstanding Letters of
Credit plus, without duplication, all reimbursement obligations related
to any draw on any Letter of Credit, exceed the Commitment and (B)
shall, in the case of a Borrowing of LIBOR Advances, be in an amount of
not less than $1,000,000 or an integral multiple of $500,000 in excess
thereof and, in the case of a Borrowing of Base Rate Advances, be in an
amount of not less than $500,000 or an integral multiple of $100,000 in
excess thereof;
(iii) the Type of Advances of which the Borrowing is to be
comprised; and
(iv) if the Borrowing is to be comprised of LIBOR
Advances, the duration of the initial Interest Period applicable to
such Advances.
If the Borrowing Notice fails to specify the duration of the initial
Interest Period for any Borrowing comprised of LIBOR Advances, such Interest
Period shall be three months. Each Lender shall, before 1:00 p.m. on the date of
each Advance hereunder under the Revolving Loan (other than a Refinancing
Advance), make available to
General Communication, Inc. - Form 8-K
Page 70
Administrative Agent
NationsBank Plaza
901 Main Street
13th Floor
Dallas, Texas 75202
such Lender's Specified Percentage of the aggregate Advances under the Revolving
Loan to be made on that day in immediately available funds.
(b) Unless any applicable condition specified in Article IV hereof has
not been satisfied, Administrative Agent will make the funds on Advances under
the Revolving Loan promptly available to the Company (other than with respect to
a Refinancing Advance) by wiring National Bank of Alaska referencing GCI
Communication Corp., account number 037730738, ABA #125200057 or such other
account as shall have been specified by the Company.
(c) After giving effect to any Borrowing, (i) there shall not be more
than five different Interest Periods in effect and (ii) the aggregate principal
of outstanding Advances plus the sum of the aggregate face amount of all
outstanding Letters of Credit plus, without duplication, all reimbursement
obligations related to any draw on any Letter of Credit, shall not exceed the
Commitment.
(d) No Interest Period for a Borrowing under the Facility shall extend
beyond the Maturity Date.
(e) Unless a Lender shall have notified Administrative Agent prior to
the date of any Advance that it will not make available its Specified Percentage
of any Advance, Administrative Agent may assume that such Lender has made the
appropriate amount available in accordance with Section 2.02(a), and
Administrative Agent may, in reliance upon such assumption, make available to
the Company a corresponding amount. If and to the extent any Lender shall not
have made such amount available to Administrative Agent, such Lender and the
Company severally agree to repay to Administrative Agent immediately on demand
such corresponding amount together with interest thereon, from the date such
amount is made available to the Company until the date such amount is repaid to
Administrative Agent, at (i) in the case of the Company, the Base Rate, and (ii)
in the case of such Lender, the Federal Funds Rate.
(f) The failure by any Lender to make available its Specified
Percentage of any Advance hereunder shall not relieve any other Lender of its
obligation, if any, to make available its Specified Percentage of any Advance.
In no event, however, shall any Lender be responsible for the failure of any
other Lender to make available any portion of any Advance.
(g) The Company shall indemnify each Lender against any Consequential
Loss incurred by each Lender as a result of (i) any failure to fulfill, on or
before the date specified for the Advance, the conditions to the Advance set
forth herein or (ii) the Company's requesting that an Advance not be made on the
date specified in the Borrowing Notice.
General Communication, Inc. - Form 8-K
Page 71
2.03. Evidence of Indebtedness.
(a) The obligations of the Company with respect to the Letters of
Credit and all Advances under the Revolving Loan made by each Lender shall be
evidenced by a Note in the form of Exhibit A hereto and in the amount of such
Lender's Specified Percentage of $62,500,000 (as the same may be modified
pursuant to Section 10.04 hereof).
(b) Absent manifest error, Administrative Agent's and each Lender's
records shall be conclusive as to amounts owed Administrative Agent and such
Lender under the Notes and this Agreement.
2.04. Reduction of Commitment.
(a) Voluntary Commitment Reduction. The Company shall have the right
from time to time upon notice by the Company to the Administrative Agent not
later than 1:00 p.m., five Business Days in advance, to reduce the Commitment,
in whole or in part; provided, however, that the Company shall pay the accrued
commitment fee on the amount of such reduction, if any, and any partial
reduction shall be in an aggregate amount which is not less than $1,000,000 and
an integral multiple of $500,000. Such notice shall specify the amount of
reduction and the proposed date of such reduction.
(b) Mandatory Commitment Reduction.
(i) Scheduled Reduction. The Commitment shall be reduced
to zero on the Maturity Date.
(ii) Asset Sales. On the date of any Asset Sale of the
Company or any Restricted Subsidiary, the Commitment shall be
automatically and permanently reduced by an amount equal to 100% of the
Net Proceeds. On such date, the Company shall deliver to the
Administrative Agent a certificate of an Authorized Officer certifying
as to the amount of (including the calculation of) such Commitment
reduction and, with respect to the Asset Sale giving rise thereto, the
gross proceeds thereof and the costs and expenses payable as a result
thereof which were deducted in determining the amount of Net Proceeds.
(iii) Debt and Equity Issuance. On the date of any
issuance of public or private Debt by any GCI Entity or receipt by any
GCI Entity of the proceeds of any equity issuance, except in connection
with the Cable Acquisition Transactions, the Commitment shall be
automatically and permanently reduced by an amount equal to 100% of the
net proceeds of such Debt or equity issuance. On such date, the Company
shall deliver to the Administrative Agent a certificate of an
Authorized Officer certifying as to the amount of (including the
calculation of) such Commitment reduction and, with respect to the Debt
or equity issuance giving rise thereto, the gross proceeds thereof and
the costs and expenses payable as a result thereof which were deducted
in determining the amount of net proceeds, provided that, the
Commitment shall not be reduced by any stock issuance in accordance
with any stock option listed on Schedule 2.04(b) hereto.
General Communication, Inc. - Form 8-K
Page 72
(c) Commitment Reductions, Generally. To the extent the sum of (i) the
aggregate outstanding Advances under the Revolving Loan plus (ii) the sum of the
aggregate face amount of all outstanding Letters of Credit plus, (iii) without
duplication, all reimbursement obligations related to any draw on any Letter of
Credit, exceed the Commitment after any reduction thereof, the Company shall
immediately repay on the date of such reduction, any such excess amount and all
accrued interest thereon, together with any amounts constituting any
Consequential Loss. Once reduced or terminated pursuant to this Section 2.04,
the Commitment may not be increased or reinstated.
2.05. Prepayments.
(a) Optional Prepayments. The Company may, upon at least three Business
Days prior written notice to Administrative Agent stating the proposed date and
aggregate principal amount of the prepayment, prepay the outstanding principal
amount of any Advances in whole or in part, together with accrued interest to
the date of such prepayment on the principal amount prepaid without premium or
penalty other than any Consequential Loss; provided, however, that in the case
of a prepayment of a Base Rate Advance, the notice of prepayment may be given by
telephone by 11:00 a.m. on the date of prepayment. Each partial prepayment
shall, in the case of Base Rate Advances, be in an aggregate principal amount of
not less than $500,000 or a larger integral multiple of $100,000 in excess
thereof and, in the case of LIBOR Advances, be in an aggregate principal amount
of not less than $1,000,000 or a larger integral multiple of $500,000 in excess
thereof. If any notice of prepayment is given, the principal amount stated
therein, together with accrued interest on the amount prepaid and the amount, if
any, due under Sections 2.11 and 2.13 hereof, shall be due and payable on the
date specified in such notice.
(b) Mandatory Prepayments.
(i) Asset Sales. On the date of any Asset Sale of the
Company or any Restricted Subsidiary, the Company shall repay the
Obligations by an amount equal to 100% of the Net Proceeds. On such
date, the Company shall deliver to the Administrative Agent a
certificate of an Authorized Officer certifying as to the amount of
(including the calculation of) such repayment and, with respect to the
Asset Sale giving rise thereto, the gross proceeds thereof and the
costs and expenses payable as a result thereof which were deducted in
determining the amount of Net Proceeds.
(ii) Debt and Equity Issuance. On the date of any issuance
of public or private Debt by any GCI Entity or receipt by any GCI
Entity of the proceeds of any equity issuance, except in connection
with the Cable Acquisition Transactions, the Company shall repay the
Obligations an amount equal to 100% of the net proceeds of such Debt or
equity issuance. On such date, the Company shall deliver to the
Administrative Agent a certificate of an Authorized Officer certifying
as to the amount of (including the calculation of) such repayment and,
with respect to the Debt or equity issuance giving rise thereto, the
gross proceeds thereof and the costs and expenses payable as a result
thereof which were deducted in determining the amount of net proceeds,
provided that, the Company shall not be required to repay the
Obligations with the proceeds of any stock issuance in accordance with
any stock option listed on Schedule 2.04(b) hereto.
General Communication, Inc. - Form 8-K
Page 73
(c) Prepayments, Generally. No prepayments of Advances under the
Revolving Loan made solely pursuant to this Section 2.05 shall cause the
Commitment to be reduced. Any prepayment of Advances pursuant to this Section
2.05 shall be applied first to Base Rate Advances, if any, then outstanding
under the Facility, second to LIBOR Advances for which the date of prepayment is
the last day of the applicable Interest Period, if any, outstanding under the
Facility and third to LIBOR Advances with the shortest remaining Interest
Periods outstanding under the Facility.
2.06. Repayment. On the date of a reduction of the Commitment pursuant
to Section 2.04 hereof, to the extent the sum of (a) the aggregate outstanding
Advances under the Revolving Loan plus (b) the sum of the aggregate face amount
of all outstanding Letters of Credit plus, (c) without duplication, all
reimbursement obligations related to any draw on any Letter of Credit,
outstanding on the date of reduction exceeds the Commitment as reduced, such
excess amounts shall be immediately due and payable, which principal payment may
not be made by means of a Refinancing Advance. The Company agrees that all
Advances outstanding under the Revolving Loan, all reimbursement obligations
from any draw on any Letter of Credit, and all other outstanding Obligations are
due and payable in full on the Maturity Date.
2.07. Interest. Subject to Section 2.08 below, the Company shall pay
interest on the unpaid principal amount of each Advance from the date of such
Advance until such principal shall be paid in full, at the following rates:
(a) Base Rate Advances. Base Rate Advances shall bear interest
at a rate per annum equal to the lesser of (i) the Base Rate as in
effect from time to time and (ii) the Highest Lawful Rate. If the
amount of interest payable in respect of any interest computation
period is reduced to the Highest Lawful Rate pursuant to the
immediately preceding sentence and the amount of interest payable in
respect of any subsequent interest computation period would be less
than the Maximum Amount, then the amount of interest payable in respect
of such subsequent interest computation period shall be automatically
increased to Maximum Amount; provided that at no time shall the
aggregate amount by which interest paid has been increased pursuant to
this sentence exceed the aggregate amount by which interest has been
reduced pursuant to the immediately preceding sentence.
(b) LIBOR Advances. LIBOR Advances shall bear interest at the
rate per annum equal to the LIBOR Rate applicable to such Advance,
which at no time shall exceed the Highest Lawful Rate.
(c) Payment Dates. Accrued and unpaid interest on Base Rate
Advances shall be paid quarterly in arrears on each Quarterly Date and
on the appropriate maturity, repayment or prepayment date. Accrued and
unpaid interest on LIBOR Advances shall be paid on the last day of the
appropriate Interest Period and on the date of any prepayment or
repayment of such Advance; provided, however, that if any Interest
Period for a LIBOR Advance exceeds three months, interest shall also be
paid on each date occurring during the Interest Period which is the
three month anniversary date of the first day of the Interest Period.
General Communication, Inc. - Form 8-K
Page 74
2.08. Default Interest. During the continuation of any Event of
Default, the Company shall pay, on demand, interest (after as well as before
judgment to the extent permitted by Law) on the principal amount of all Advances
outstanding and on all other Obligations due and unpaid hereunder for each
Advance equal to the lesser of the (a) the Highest Lawful Rate and (b) the Base
Rate (whether or not in effect) plus 3.00% per annum.
2.09. Continuation and Conversion Elections.
(a) The Company may upon irrevocable written notice to Administrative
Agent and subject to the terms of this Agreement:
(i) elect to convert, on any Business Day, all or any
portion of outstanding Base Rate Advances (in an aggregate amount not
less than $1,000,000 or a larger integral multiple of $500,000 in
excess thereof) into LIBOR Advances.
(ii) elect to convert at the end of any Interest Period
therefor, all or any portion of outstanding LIBOR Advances comprised in
the same Borrowing (in an aggregate amount not less than $500,000 or a
larger integral multiple of $100,000 in excess thereof) into Base Rate
Advances; or
(iii) elect to continue, at the end of any Interest Period
therefor, any LIBOR Advances;
provided, however, that if the aggregate amount of outstanding LIBOR
Advances comprised in the same Borrowing shall have been reduced as a result of
any payment, prepayment or conversion of part thereof to an amount less than
$1,000,000, the LIBOR Advances comprised in such Borrowing shall automatically
convert into Base Rate Advances at the end of each respective Interest Period.
(b) The Company shall deliver a notice of conversion or continuation (a
"Notice of Conversion/Continuation"), in substantially the form of Exhibit E
hereto, to Administrative Agent not later than (i) 12:00 noon three Business
Days prior to the proposed date of conversion or continuation, if the Advances
or any portion thereof are to be converted into or continued as LIBOR Advances;
and (ii) not later than 10:00 a.m. on the proposed date of conversion or
continuation, if the Advances or any portion thereof are to be converted into
Base Rate Advances.
Each such Notice of Conversion/Continuation shall be by telecopy or
telephone, promptly confirmed in writing, specifying therein:
(i) the proposed date of conversion or continuation;
(ii) the aggregate amount of Advances to be converted or
continued;
(iii) the nature of the proposed conversion or
continuation; and
(iv) the duration of the applicable Interest Period.
General Communication, Inc. - Form 8-K
Page 75
(c) If, upon the expiration of any Interest Period applicable to LIBOR
Advances, the Company shall have failed to select a new Interest Period to be
applicable to such LIBOR Advances or if an Event of Default shall then have
occurred and be continuing, the Company shall be deemed to have elected to
convert such LIBOR Advances into Base Rate Advances effective as of the
expiration date of such current Interest Period.
(d) Upon receipt of a Notice of Conversion/Continuation, Administrative
Agent shall promptly notify each Lender thereof. All conversions and
continuations shall be made pro rata among Lenders based on their Specified
Percentage of the respective outstanding principal amounts of the Advances with
respect to which such notice was given held by each Lender.
(e) Notwithstanding any other provision contained in this Agreement,
after giving effect to any conversion or continuation of any Advances, there
shall not be outstanding Advances with more than five different Interest
Periods.
2.10. Fees.
(a) Subject to Section 10.09 hereof, the Company agrees to pay to the
Administrative Agent, for the account of the Lenders in accordance with their
Specified Percentages, a commitment fee on the average daily amount of the
Unused Commitment, from the Closing Date through the Maturity Date, at the rate
of 1/2 of 1% per annum, payable quarterly in arrears on each Quarterly Date
occurring after the Closing Date, with the last such payment due and owing on
the Maturity Date.
(b) Subject to Section 10.09 hereof, the Company agrees to pay to the
Administrative Agent for its own account as administrative lender and
underwriter, and to NationsBanc Capital Markets, Inc., as arranger hereunder,
such fees as agreed to in writing among the Company and the Administrative Agent
and NationsBanc Capital Markets, Inc., payable as set forth in that certain Fee
Letter executed among the Company, the Administrative Agent and NationsBanc
Capital Markets, Inc. in accordance with the terms of the Fee Letter.
2.11. Funding Losses. If the Company makes any payment or prepayment of
principal with respect to any LIBOR Advance (including payments made after any
acceleration thereof) or converts any Advance from a LIBOR Advance on any day
other than the last day of an Interest Period applicable thereto or if the
Company fails to prepay, borrower, convert, or continue any LIBOR Advance after
a notice or prepayment, borrowing, conversion or continuation has been given (or
is deemed to have been given) to Administrative Agent, the Company shall pay to
each Lender on demand (subject to Section 10.09 hereof) any Consequential Loss.
The Company agrees that each Lender is not obligated to actually reinvest the
amount prepaid in any specific obligation as a condition to receiving any
Consequential Loss, or otherwise.
2.12. Computations and Manner of Payments.
(a) The Company shall make each payment hereunder and under the other
Loan Papers not later than 1:00 p.m. on the day when due in same day funds to
Administrative Agent, for the Ratable account of Lenders unless otherwise
specifically provided herein, at
General Communication, Inc. - Form 8-K
Page 76
Administrative Agent
NationsBank Plaza
901 Main Street
13th Floor
Dallas, Texas 75202
for further credit to the account of GCI Communication Corp. No later than the
end of each day when each payment hereunder is made, the Company shall notify
the Administrative Agent, telephone (800) 880-5537, facsimile (214) 508-2515, or
such other Person as Administrative Agent may from time to time specify.
(b) Unless Administrative Agent shall have received notice from the
Company prior to the date on which any payment is due hereunder that the Company
will not make payment in full, Administrative Agent may assume that such payment
is so made on such date and may, in reliance upon such assumption, make
distributions to Lenders. If and to the extent the Company shall not have made
such payment in full, each Lender shall repay to Administrative Agent forthwith
on demand the applicable amount distributed, together with interest thereon at
the Federal Funds Rate, from the date of distribution until the date of
repayment. The Company hereby authorizes each Lender, if and to the extent
payment is not made when due hereunder, to charge the amount so due against any
account of the Company with such Lender.
(c) Subject to Section 10.09 hereof, interest on LIBOR Advances shall
be calculated on the basis of actual days elapsed but computed as if each year
consisted of 360 days. Subject to Section 10.09 hereof, interest on Base Rate
Advances, the Commitment Fee and other amounts due under the Loan Papers shall
be calculated on the basis of actual days elapsed but computed as if each year
consisted of 365 or 366 days, as the case may be. Such computations shall be
made including the first day but excluding the last day occurring in the period
for which such interest, payment or Commitment Fee is payable. Each
determination by Administrative Agent or a Lender of an interest rate, fee or
commission hereunder shall be conclusive and binding for all purposes, absent
manifest error. All payments under the Loan Papers shall be made in United
States dollars, and without setoff, counterclaim, or other defense.
(d) Reference to any particular index or reference rate for determining
any applicable interest rate under this Agreement is for purposes of calculating
the interest due and is not intended as and shall not be construed as requiring
any Lender to actually fund any Advance at any particular index or reference
rate.
2.13. Yield Protection.
(a) If any Lender determines that either (i) the adoption, after the
date hereof, of any Applicable Law, rule, regulation or guideline regarding
capital adequacy and applicable to commercial banks or financial institutions
generally or any change therein, or any change, after the date hereof, in the
interpretation or administration thereof by any Tribunal, central bank or
comparable agency charged with the interpretation or administration thereof, or
(ii) compliance by any Lender (or Lending Office of any Lender) with any request
or directive made after the date hereof applicable to commercial banks or
financial institutions generally regarding capital adequacy (whether or not
having the force of law) of any such authority, central bank or comparable
agency has the effect of reducing the rate of return on such Lender's capital as
a
General Communication, Inc. - Form 8-K
Page 77
consequence of its obligations hereunder to a level below that which such Lender
could have achieved but for such adoption, change or compliance (taking into
consideration such Lender's policies with respect to capital adequacy (but
excluding consequences of such Lender's negligence or intentional disregard of
law or regulation)) by an amount reasonably deemed by such Lender to be
material, then from time to time, within fifteen days after demand by such
Lender, the Company shall pay to such Lender such additional amount or amounts
as will adequately compensate such Lender for such reduction. Each Lender will
notify the Company of any event occurring after the date of this Agreement which
will entitle such Lender to compensation pursuant to this Section 2.13(a) as
promptly as practicable after such Lender obtains actual knowledge of such
event; provided, no Lender shall be liable for its failure or the failure of any
other Lender to provide such notification. A certificate of such Lender claiming
compensation under this Section 2.13(a), setting forth in reasonable detail the
calculation of the additional amount or amounts to be paid to it hereunder and
certifying that such claim is consistent with such Lender's treatment of similar
customers having similar provisions generally in their agreements with such
Lender shall be conclusive in the absence of manifest error. Each Lender shall
use reasonable efforts to mitigate the effect upon the Company of any such
increased costs payable to such Lender under this Section 2.13(a).
(b) If, after the date hereof, any Tribunal, central bank or other
comparable authority, at any time imposes, modifies or deems applicable any
reserve (including, without limitation, any imposed by the Board of Governors of
the Federal Reserve System), special deposit or similar requirement against
assets of, deposits with or for the amount of, or credit extended by, any
Lender, or imposes on any Lender any other condition affecting a Letter of
Credit, a LIBOR Advance, the Notes, or its obligation to make a LIBOR Advance;
and the result of any of the foregoing is to increase the cost to such Lender of
making or maintaining its Letter of Credit, LIBOR Advances, or to reduce the
amount of any sum received or receivable by such Lender under this Agreement or
under the Notes or reimbursement obligations by an amount deemed by such Lender,
to be material, then, within five days after demand by such Lender, the Company
shall pay to such Lender such additional amount or amounts as will compensate
such Lender for such increased cost or reduction. Each Lender will (i) notify
the Company and Administrative Agent of any event occurring after the date of
this Agreement that entitles such Lender to compensation pursuant to this
Section 2.13(b), as promptly as practicable after such Lender obtains actual
knowledge of the event; provided, no Lender shall be liable for its failure or
the failure of any other Lender to provide such notification and (ii) use good
faith and reasonable efforts to designate a different Lending Office for LIBOR
Advances of such Lender if the designation will avoid the need for, or reduce
the amount of, the compensation and will not, in the sole opinion of such
Lender, be disadvantageous to such Lender. A certificate of such Lender claiming
compensation under this Section 2.13(b), setting forth in reasonable detail the
computation of the additional amount or amounts to be paid to it hereunder and
certifying that such claim is consistent with such Lender's treatment of similar
customers having similar provisions generally in their agreements with such
Lender shall be conclusive in the absence of manifest error. If such Lender
demands compensation under this Section 2.13(b), the Company may at any time, on
at least five Business Days' prior notice to such Lender (i) repay in full the
then outstanding principal amount of LIBOR Advances, of such Lender, together
with accrued interest thereon, or (ii) convert the LIBOR Advances to Base Rate
Advances in accordance with the provisions of this Agreement; provided, however,
that the Company shall be liable for the Consequential Loss arising pursuant to
those actions.
General Communication, Inc. - Form 8-K
Page 78
(c) Notwithstanding any other provision of this Agreement, if the
introduction of or any change in or in the interpretation or administration of
any Law shall make it unlawful, or any central bank or other Tribunal shall
assert that it is unlawful, for a Lender to perform its obligations hereunder to
issue or maintain Letters of Credit, make LIBOR Advances or to continue to fund
or maintain LIBOR Advances hereunder, then, on notice thereof and demand
therefor by such Lender to the Company, (i) each LIBOR Advance will
automatically, upon such demand, convert into a Base Rate Advance, (ii) the
obligation of such Lender to make, or to convert Advances into, LIBOR Advances
shall be suspended until such Lender notifies Administrative Agent and the
Company that such Lender has determined that the circumstances causing such
suspension no longer exist and (iii) the obligation of such Lender to make or
maintain Letters of Credit shall be suspended until such Lender notifies
Administrative Agent and the Company that such Lender has determined that the
circumstances causing such suspension no longer exist.
(d) Upon the occurrence and during the continuance of any Default or
Event of Default, (i) each LIBOR Advance will automatically, on the last day of
the then existing Interest Period therefor, convert into a Base Rate Advance and
(ii) the obligation of each Lender to make, or to convert Advances into, LIBOR
Advances shall be suspended.
(e) Failure on the part of any Lender to demand compensation for any
increased costs, increased capital or reduction in amounts received or
receivable or reduction in return on capital pursuant to this Section 2.13 with
respect to any period shall not constitute a waiver of any Lender's right to
demand compensation with respect to such period or any other period, subject,
however, to the limitations set forth in this Section 2.13.
(f) The obligations of the Company under this Section 2.13 shall
survive any termination of this Agreement.
(g) Determinations by Lenders for purposes of this Section 2.13 shall
be conclusive, absent manifest error. Any certificate delivered to the Company
by a Lender pursuant to this Section 2.13 shall include in reasonable detail the
basis for such Lender's demand for additional compensation and a certification
that the claim for compensation is consistent with such Lender's treatment of
similar customers having similar provisions generally in their agreements with
such Lender.
(h) If any Lender notifies Administrative Agent that the LIBOR Rate for
any Interest Period for any LIBOR Advances will not adequately reflect the cost
to such Lender of making, funding or maintaining LIBOR Advances for such
Interest Period, Administrative Agent shall promptly so notify the Company,
whereupon (i) each such LIBOR Advance will automatically, on the last day of the
then existing Interest Period therefor, convert into a Base Rate Advance and
(ii) the obligation of such Lender to make, or to convert Advances into, LIBOR
Advances shall be suspended until such Lender notifies Administrative Agent that
such Lender has determined that the circumstances causing such suspension no
longer exist and Administrative Agent notifies the Company of such fact.
2.14. Use of Proceeds. The proceeds of the Advances shall be available
(and the Company shall use such proceeds) to (a) refinance existing Funded Debt
of the Company, (b)
General Communication, Inc. - Form 8-K
Page 79
fund Capital Expenditures of the Company and the Restricted Subsidiaries
permitted by the terms of this Agreement and (c) use for general working capital
purposes.
2.15. Collateral and Collateral Call.
(a) Collateral. Payment of the Obligations is secured by (i) subject to
the Prior Stock Lien, a first perfected security interest in 100% of the Capital
Stock the Company and the Restricted Subsidiaries and 100% of the Capital Stock
of the Guarantors except the Parent, (ii) subject to Permitted Liens, a first
perfected security interest in all of the accounts, equipment, inventory,
chattel paper, general intangibles, and other assets of the Company, the
Restricted Subsidiaries and the Guarantors (except the Parent), and (iii) a
Guaranty of the Obligations executed by each Guarantor (collectively, together
with all other Properties or assets of the Company, the Restricted Subsidiaries
and other Persons securing the Obligations from time to time, the "Collateral").
The Company agrees that it will, and will cause the Restricted Subsidiaries, the
other GCI Entities and Affiliates (except the Unrestricted Subsidiaries) to,
execute and deliver, or cause to be executed and delivered, such documents as
the Administrative Agent may from time to time reasonably request to create and
perfect a first Lien (except with respect to the stock of GCI Leasing Company,
Inc., which shall be a second Lien behind the Prior Stock Lien) for the benefit
of the Administrative Agent and the Lenders in the Collateral.
(b) Collateral Call. The Company agrees that it will, and will cause
any other Person owning any interest in the Company or any Restricted Subsidiary
or other GCI Entity from time to time to immediately pledge such interest to
secure the Obligations, pursuant to a pledge agreement substantially in the form
of the Pledge Agreements. The Company agrees to, and agrees to cause the
Restricted Subsidiaries and each other GCI Entity to, promptly grant the
Administrative Agent and the Lenders from time to time at the request of the
Lenders a Lien on any of the Property of the Company or other GCI Entity not
already constituting Collateral. In that regard, the Company shall, and shall
cause each other GCI Entity to, use best efforts to assist the Administrative
Agent and the Lenders in creating and perfecting a first Lien, subject to
Permitted Liens, for the benefit of Administrative Agent and Lenders securing
the Obligations in any such Property of the Company and each other GCI Entity,
including, without limitation, providing the Administrative Agent with title
commitments, appraisals, surveys (with flood plain certification), mortgagee
title insurance, evidence of insurance including flood hazard insurance,
environmental audits, UCC-11 searches, Tax and Lien searches, recorded real
estate documents, intellectual property documentation and registration and other
similar types of documents, consents, Authorizations, instruments and agreements
relating to all Property of the Company and each other GCI Entity as reasonably
requested by the Administrative Agent from time to time.
ARTICLE III. LETTERS OF CREDIT
3.01. Issuance of Letters of Credit. The Company shall give the
Administrative Agent not less than five Business Days prior written notice of a
request for the issuance of a Letter of Credit, and the Administrative Agent
shall promptly notify each Lender of such request. Upon receipt of the Company's
properly completed and duly executed Applications, and subject to the terms of
such Applications and to the terms of this Agreement, the Administrative Agent
agrees
General Communication, Inc. - Form 8-K
Page 80
to issue Letters of Credit on behalf of the Company in an aggregate face amount
not in excess of the Letter of Credit Commitment at any one time outstanding. No
Letter of Credit shall have a maturity extending beyond the earliest of (a) the
Maturity Date, or (b) one year from the date of its issuance, or (c) such
earlier date as may be required to enable the Company to satisfy its repayment
obligations under Section 2.06 hereof. Subject to such maturity limitations and
so long as no Default or Event of Default has occurred and is continuing or
would result from the renewal of a Letter of Credit, the Letters of Credit may
be renewed by the Administrative Agent in its discretion. The Lenders shall
participate ratably in any liability under the Letters of Credit and in any
unpaid reimbursement obligations of the Company with respect to any Letter of
Credit in their Specified Percentages. The amount of the Letters of Credit
issued and outstanding and the unpaid reimbursement obligations of the Company
for such Letters of Credit shall reduce the amount of Commitment available, so
that at no time shall the sum of (i) the aggregate outstanding Advances under
the Revolving Loan plus (ii) the sum of the aggregate face amount of all
outstanding Letters of Credit plus, (iii) without duplication, all reimbursement
obligations related to any draw on any Letter of Credit, exceed the Commitment,
and at no time shall the sum of all Advances by any Lender made under the
Revolving Loan, plus its ratable share of amounts available to be drawn under
the Letters of Credit and the unpaid reimbursement obligations of the Company in
respect of such Letters of Credit exceed its Specified Percentage of the
Commitment.
3.02. Letters of Credit Fees. (a) In consideration for the issuance
(and any renewal) of each Letter of Credit, the Company shall pay to the
Administrative Agent for its sole account as issuer, a fee in an amount equal to
.50% multiplied by the face amount of each such Letter of Credit. Each fee for a
Letter of Credit shall be due and payable in full on the date of issuance of
each Letter of Credit, and each renewal of each Letter of Credit.
(b) In consideration for the issuance (and any renewal) of each Letter
of Credit, the Company shall pay to the Administrative Agent for the account of
the Administrative Agent and the Lenders in accordance with their Specified
Percentages, a per annum fee in an amount equal to 1.5% multiplied by the face
amount of each such Letter of Credit. Each fee for a Letter of Credit shall be
due and payable quarterly in arrears on each Quarterly Date until the expiration
or termination of such Letter of Credit.
3.03. Reimbursement Obligations.
(a) The Company hereby agrees to reimburse Administrative Agent
immediately upon demand by Administrative Agent, and in immediately available
funds, for any payment or disbursement made by Administrative Agent under any
Letter of Credit. Payment shall be made by the Company with interest on the
amount so paid or disbursed by Administrative Agent from and including the date
payment is made under any Letter of Credit to and including the date of payment,
at the lesser of (i) the Highest Lawful Rate, and (ii) the sum of the Base Rate
in effect from time to time plus 3% per annum; provided, however, that if the
Company would be permitted under the terms of Section 2.01, Section 2.02 and
Section 4.02 to borrow Advances in amounts at least equal to their reimbursement
obligation for a drawing under any Letter of Credit, a Base Rate Advance by each
Lender, in an amount equal to such Lender's Specified Percentage, shall
automatically be deemed made on the date of any such payment or disbursement
made by Administrative Agent in the amount of such obligation and subject to the
terms of this Agreement.
General Communication, Inc. - Form 8-K
Page 81
(b) The Company hereby also agrees to pay to Administrative Agent
immediately upon demand by Administrative Agent and in immediately available
funds, as security for their reimbursement obligations in respect of the Letters
of Credit under Section 3.03(a) hereof and any other amounts payable hereunder
and under the Notes, an amount equal to the aggregate amount available to be
drawn under Letters of Credit then outstanding, irrespective of whether the
Letters of Credit have been drawn upon, at the occurrence of any of the
following events: (i) upon an Event of Default, and (ii) upon a Change of
Control. Any such payments shall be deposited in a separate account designated
"GCI Special Account" or such other designation as Administrative Agent shall
elect. All such amounts deposited with Administrative Agent shall be and shall
remain funds of the Company on deposit with Administrative Agent and shall be
invested by Administrative Agent in an interest bearing account, as
Administrative Agent shall determine. Such amounts may not be used by
Administrative Agent to pay the drawings under the Letters of Credit; however,
such amounts may be used by Administrative Agent as reimbursement for Letter of
Credit drawings which Administrative Agent has paid. If any amounts in the GCI
Special Account shall have been deposited upon the occurrence of an Event of
Default only and such Event of Default shall have been subsequently cured or
waived and no other Event of Default exists, the Company shall be relieved of
its obligations under this Section 3.03(b) until either of the two events
specified in Section 3.03(b)(i) or Section 3.03(b)(ii) shall occur again. During
the existence of an Event of Default but after the expiry of any Letter of
Credit that was not drawn upon, the Company may direct the Administrative Agent
to use any cash collateral for any such expired Letter of Credit, if any, to
reduce the amount of the Obligations. Any amounts remaining in the GCI Special
Account, including any remaining interest, after the date of the expiry of all
Letters of Credit and after all Obligations have been paid in full, shall be
repaid to the Company promptly after such expiry and such payment in full.
(c) The obligations of the Company under this Section 3.03 will
continue until all Letters of Credit have expired and all reimbursement
obligations with respect thereto have been paid in full by the Company and until
all other Obligations shall have been paid in full.
(d) The Company shall be obligated to reimburse Administrative Agent
upon demand for all amounts paid under the Letters of Credit as set forth in
Section 3.03(a) hereof; provided, however, if the Company for any reason fails
to reimburse Administrative Agent in full upon demand, whether by borrowing
Advances to pay such reimbursement obligations or otherwise, the Lenders shall
reimburse Administrative Agent in accordance with each Lender's Specified
Percentage for amounts due and unpaid from the Companies as set forth in Section
3.04 hereof; provided, however, that no such reimbursement made by the Lenders
shall discharge the Company's obligations to reimburse Administrative Agent.
(e) The Company shall indemnify and hold Administrative Agent or any
Lender, its officers, directors, representatives and employees harmless from
loss for any claim, demand or liability which may be asserted against
Administrative Agent or such indemnified party in connection with actions taken
under the Letters of Credit or in connection therewith (including losses
resulting from the negligence of Administrative Agent or such indemnified
party), and shall pay Administrative Agent for reasonable fees of attorneys (who
may be employees of Administrative Agent) and legal costs paid or incurred by
Administrative Agent in connection with any matter related to the Letters of
Credit, except for losses and liabilities incurred as a direct result of the
gross negligence or wilful misconduct of Administrative Agent or such
indemnified party. If the Company for any reason fails to indemnify or pay
Administrative
General Communication, Inc. - Form 8-K
Page 82
Agent or such indemnified party as set forth herein in full, the Lenders shall
indemnify and pay Administrative Agent upon demand, in accordance with each
Lender's Specified Percentage of such amounts due and unpaid from the Company.
The provisions of this Section 3.03(e) shall survive the termination of this
Agreement.
3.04. Lenders' Obligations. Each Lender agrees, unconditionally and
irrevocably to reimburse Administrative Agent (to the extent Administrative
Agent is not otherwise reimbursed by the Company in accordance with Section
3.03(a) hereof) on demand for such Lender's Specified Percentage of each draw
paid by Administrative Agent under any Letter of Credit. All amounts payable by
any Lender under this subsection shall include interest thereon at the Federal
Funds Effective Rate, from the date of the applicable draw to the date of
reimbursement by such Lender. No Lender shall be liable for the performance or
nonperformance of the obligations of any other Lender under this Section. The
obligations of the Lenders under this Section shall continue after the Maturity
Date and shall survive termination of any Loan Papers.
3.05. Administrative Agent's Obligations.
(a) Administrative Agent makes no representation or warranty, and
assumes no responsibility with respect to the validity, legality, sufficiency or
enforceability of any Application or any document relative thereto or to the
collectibility thereunder. Administrative Agent assumes no responsibility for
the financial condition of the Company and the Restricted Subsidiaries or for
the performance of any obligation of the Company. Administrative Agent may use
its discretion with respect to exercising or refraining from exercising any
rights, or taking or refraining from taking any action which may be vested in it
or which it may be entitled to take or assert with respect to any Letter of
Credit or any Application.
(b) Except as set forth in subsection (c) below, Administrative Agent
shall be under no liability to any Lender, with respect to anything the
Administrative Agent may do or refrain from doing in the exercise of its
judgment, the sole liability and responsibility of Administrative Agent being to
handle each Lender's share on as favorable a basis as Administrative Agent
handles its own share and to promptly remit to each Lender its share of any sums
received by Administrative Agent under any Application. Administrative Agent
shall have no duties or responsibilities except those expressly set forth herein
and those duties and liabilities shall be subject to the limitations and
qualifications set forth herein.
(c) Neither Administrative Agent nor any of its directors, officers, or
employees shall be liable for any action taken or omitted (whether or not such
action taken or omitted is expressly set forth herein) under or in connection
herewith or any other instrument or document in connection herewith, except for
gross negligence or willful misconduct, and no Lender waives its right to
institute legal action against Administrative Agent for wrongful payment of any
Letter of Credit due to Administrative Agent's gross negligence or willful
misconduct. Administrative Agent shall incur no liability to any Lender, the
Company or any Affiliate of the Company or Lender in acting upon any notice,
document, order, consent, certificate, warrant or other instrument reasonably
believed by Administrative Agent to be genuine or authentic and to be signed by
the proper party.
General Communication, Inc. - Form 8-K
Page 83
ARTICLE IV. CONDITIONS PRECEDENT
4.01. Conditions Precedent to the Initial Advance. The obligations of
each Lender under this Agreement and the obligation of each Lender to make the
Initial Advance shall be subject to the following conditions precedent that on
the Closing Date:
(a) All terms, conditions and documentation in connection with this
amendment and restatement shall be acceptable to the Lenders.
(b) The making of the Commitment shall not contravene any Law
applicable to the Administrative Agent or any Lender.
(c) Each Lender shall have received a Certificate from an Authorized
Officer stating that no Material Adverse Change, as determined by the Lenders,
shall have occurred and be continuing (A) in the financial markets, or (B) in
the Systems, business, assets, prospects, or financial condition since the
December 31, 1995 audited financial statements provided to the Lenders.
(d) All proceedings of the Company, the Restricted Subsidiaries and
each other GCI Entity taken in connection with the transactions contemplated
hereby, and all documents incidental thereto, shall be reasonably satisfactory
in form and substance to the Lenders. Each Lender shall have received copies of
all documents or other evidence that it may reasonably request in connection
with such transactions.
(e) Each Lender shall have received an executed copy of this Agreement
and its respective Notes, duly completed and correct. The Lenders shall have
received copies of the Fee Letters signed by the Company, as applicable. Each of
the following shall have been delivered to the Administrative Agent on behalf of
Lenders, in form and substance satisfactory to the Administrative Agent, Special
Counsel and each Lender to the extent required by the Administrative Agent: Each
other Loan Paper requested by the Administrative Agent, including, without
limitation, a confirmation of all existing guarantees, pledge agreements,
security agreements and other agreements granting collateral.
(f) The Company shall have delivered to each Lender a Certificate,
dated the Closing Date, executed by an Authorized Officer, certifying that (i)
no Default or Event of Default has occurred and is continuing, (ii) the
representations and warranties set forth in Article V hereof are true and
correct, and (iii) each of the GCI Entities has complied with all agreements and
conditions to be complied with by it under the Loan Papers by such date.
(g) Each Lender shall have received opinions of Hartig, Rhodes, Norman,
Mahoney & Edwards, P.C., corporate counsel to the Company, the Restricted
Subsidiaries and each other GCI Entity, dated the Closing Date, acceptable to
the Lenders and otherwise in form and substance satisfactory to the Lenders and
Special Counsel, with respect to this loan transaction and otherwise, including,
without limitation, opinions (i) to the valid and binding nature of the Loan
Papers, (ii) to the enforceability of the Loan Papers, (iii) to the power,
authorization and corporate matters of each such Person taken in connection with
the transactions contemplated by the Loan Papers, (iv) that the execution,
delivery and performance by the GCI Entities, as applicable, of the Agreement
and the Loan Papers does not violate any of the terms of the
General Communication, Inc. - Form 8-K
Page 84
Company's, the Restricted Subsidiaries' or any other GCI Entities' agreements,
and (v) to such other matters as are reasonably requested by Special Counsel.
(h) No management agreement with any Person shall be in existence at
the Parent, the Company or any Restricted Subsidiaries.
(i) All proceedings of the Parent, the Company and the Subsidiaries of
the Parent and the Company taken in connection with the transactions
contemplated hereby, and all documents incidental thereto, shall be satisfactory
in form and substance to each Lender. The Administrative Agent and each Lender
shall have received copies of all documents or other evidence that it may
reasonably request in connection with such transactions.
4.02. Conditions Precedent to All Advances and Letters of Credit. The
obligation of each Lender to make each Advance (including the Initial Advance),
and the obligation of the Administrative Agent to issue any Letter of Credit
shall be subject to the further conditions precedent that on the date of such
Advance or such issuance of such Letter of Credit the following statements shall
be true:
(i) The representations and warranties contained in Article V
hereof are true and correct on such date, as though made on and as of
such date (and the delivery of each Borrowing Notice under Section
2.02(a), each Application and each Conversion or Continuation Notice
under Section 2.09(b), or the failure to deliver a Conversion or
Continuation Notice under Section 2.09(b), shall constitute a
representation that on the disbursement date or date of issuance of a
Letter of Credit such representations are true (except as to
representations and warranties which (i) refer to a specific date, (ii)
have been modified by transactions permitted pursuant to this Agreement
or any other Loan Paper or (iii) have been specifically waived in
writing by Administrative Agent));
(ii) No event has occurred and is continuing, or would result
from such Advance or such Letter of Credit (including the intended
application of the proceeds of such Advance), that does or could
constitute a Default or Event of Default;
(iii) There shall have occurred no Material Adverse Change,
and the making of such Advance or the issuance of such Letter of
Credit, as applicable, shall not cause or result in a Material Adverse
Change;
(iv) In the case of each Letter of Credit, the Company shall
have delivered to the Administrative Agent a duly executed and complete
Application acceptable to Administrative Agent;
(v) After giving effect to each such Advance, the sum of (A)
the aggregate outstanding Advances, plus (B) the sum of the aggregate
face amount of all outstanding Letters of Credit plus, (C) without
duplication, all reimbursement obligations related to any draw on any
Letter of Credit, does not exceed the Commitment;
and (b) Administrative Agent shall have received, in form and substance
acceptable to it, such other approvals, documents, certificates, opinions, and
information as it may deem necessary or appropriate.
General Communication, Inc. - Form 8-K
Page 85
ARTICLE V. REPRESENTATIONS AND WARRANTIES
The Company represents and warrants that the following are true and
correct:
5.01. Organization and Qualification. Each GCI Entity is a corporation
duly organized, validly existing, and in good standing under the Laws of its
state of incorporation. Each GCI Entity is qualified to do business in all
jurisdictions where the nature of its business or Properties require such
qualification. Set forth on Schedule 5.01 attached hereto is a complete and
accurate listing with respect to the Company and each other GCI Entity, showing
(a) the jurisdiction of its organization and its mailing address, which is the
principal place of business and executive offices of each unless otherwise
indicated, (b) the classes of Capital Stock and shares of Capital Stock issued
and outstanding in each GCI Entity, and the numbers or amounts of each GCI
Entity's Capital Stock authorized and outstanding, (c) each record and
beneficial owner of outstanding Capital Stock on the date hereof, indicating the
ownership percentage, and (d) and all outstanding options, rights, rights of
conversion or purchase, repurchase, rights of first refusal, and similar rights
relating to the Capital Stock of each GCI Entity. Except as set forth on
Schedule 5.01 hereto, neither the Company, nor any Restricted Subsidiary nor any
other GCI Entity has agreed to grant or issue any options, warrants or similar
rights to any Person to acquire any Capital Stock of the Company, any Restricted
Subsidiary or any other GCI Entity. All Capital Stock is validly issued and
fully paid. The Company has no knowledge of any share of Capital Stock of any
GCI Entity being subject to any Lien, including any restrictions on
hypothecation or transfer, except Liens described on Schedule 5.08a hereto.
5.02. Due Authorization; Validity. The board of directors of the
Company and each other GCI Entity have duly authorized the execution, delivery,
and performance of the Loan Papers to be executed by the Company and each other
GCI Entity, as appropriate. Each GCI Entity has full legal right, power, and
authority to execute, deliver, and perform under the Loan Papers to be executed
and delivered by it. The Loan Papers constitute the legal, valid, and binding
obligations of the Company and each other GCI Entity, as appropriate,
enforceable in accordance with their terms (subject as to enforcement of
remedies to any applicable Debtor Relief Laws).
5.03. Conflicting Agreements and Other Matters. The execution or
delivery of any Loan Papers, and performance thereunder, does not conflict with,
or result in a breach of the terms, conditions, or provisions of, or constitute
a default under, or result in any violation of, or result in the creation of any
Lien (other than in favor of Administrative Agent) upon any Properties of the
Company or any other GCI Entity under, or require any consent (other than
consents described on Schedule 5.03 hereto), approval, or other action by,
notice to, or filing with any Tribunal or Person pursuant to any organizational
document, bylaws, award of any arbitrator, or any agreement, instrument, or Law
to which the Company or any other GCI Entity, or any of their Properties is
subject, except possible breaches of certain immaterial leases of the GCI
Entities.
5.04. Financial Statements. The audited financial statements of the
Parent, the Company, their Subsidiaries and each other GCI Entity, dated
December 31, 1995 and delivered to Administrative Agent, fairly present its
financial condition and the results of operations as of the dates and for the
periods shown, all in accordance with GAAP. Such financial statements reflect
all material liabilities, direct and contingent, of the Company and each other
GCI Entity
General Communication, Inc. - Form 8-K
Page 86
that are required to be disclosed in accordance with GAAP. As of the date of
such financial statements, there were no Contingent Liabilities, liabilities for
Taxes, forward or long-term commitments, or unrealized or anticipated losses
from any unfavorable commitments that are substantial in amount and that are not
reflected on such financial statements or otherwise disclosed in writing to
Administrative Agent. Since December 31, 1995, there has been no Material
Adverse Change. The Company and each other GCI Entity is Solvent. The
projections of the Company dated April 26, 1996 delivered to Administrative
Agent were prepared in good faith and management believes them to be based on
reasonable assumptions (each of which are stated in such statement) and to
provide reasonable estimations of future performance as of the dates and for the
periods shown for the Parent, the Company and their Subsidiaries, subject to the
uncertainty and approximation inherent in any projections. The Company's fiscal
year ends on December 31.
5.05. Litigation. Shown on Schedule 5.05 is all Litigation that is
pending and, to the Company's best knowledge, threatened against the Company or
any other GCI Entity, any of their Properties or assets on the date hereof.
There is no pending or, to the Company's best knowledge, threatened Litigation
against the Company, any other GCI Entity, any of their Properties that could
cause a Material Adverse Change.
5.06. Compliance With Laws Regulating the Incurrence of Debt. No
proceeds of any Advance will be used directly or indirectly to acquire any
security in any transaction which is subject to Sections 13 and 14 of the
Securities Exchange Act of 1934, as amended. The Company is not, nor is any
other GCI Entity, engaged in the business of extending credit for the purpose of
purchasing or carrying margin stock (within the meaning of Regulation U issued
by the Board of Governors of the Federal Reserve System), and no proceeds of any
Advance will be used to purchase or carry any margin stock or to extend credit
to others for the purpose of purchasing or carrying any margin stock. Following
the Company's intended use of the proceeds of each Advance, not more than 25% of
the value of the assets of the Company will be "margin stock" within the meaning
of Regulation U. The Company is not subject to regulation under the Public
Utility Holding Company Act of 1935, the Federal Power Act, the Investment
Company Act of 1940, the Interstate Commerce Act (as any of the preceding acts
have been amended), or any other Law that the incurring of Debt by the Company
would violate in any material respect, including without limitation Laws
relating to common or contract carriers or the sale of electricity, gas, steam,
water, or other public utility services.
5.07. Licenses, Title to Properties, and Related Matters. Except as
listed on Schedule 5.07a hereto, the Company and each other GCI Entity possess
all material Authorizations necessary and appropriate to own, operate and
construct the Systems or otherwise for the operation of their businesses and are
not in violation thereof in any material respect. All such Authorizations are in
full force and effect, are listed on Schedule 5.07a hereto, and no event has
occurred that permits, or after notice or lapse of time could permit, the
revocation, termination or material and adverse modification of any such
Authorization, except those which in the aggregate could not reasonably be
expected to cause a Material Adverse Change. Schedule 5.07a shows the expiration
date and/or termination date for each Authorization (including, without
limitation, FCC Licenses) in effect on the Closing Date. The Company is not, nor
is any Subsidiary of the Company or the Parent, in violation of any material
duty or obligation required by the Communications Act of 1934, as amended, or
any FCC rule or regulation applicable to the operation of any portion of any of
the Systems. There is not pending or, to
General Communication, Inc. - Form 8-K
Page 87
the best knowledge of the Company, threatened, any action by the FCC to revoke,
cancel, suspend or refuse to renew any FCC License relating to any System. There
is not pending or, or to the best knowledge of the Company, threatened, any
action by the FCC to modify adversely, revoke, cancel, suspend or refuse to
renew any other Authorization relating to any System. There is not issued or
outstanding or, to the best knowledge of the Company, threatened, any notice of
any hearing, violation or material complaint against the Company, the Parent or
any of the Restricted Subsidiaries with respect to the operation of any portion
of the Systems and the Company has no knowledge that any Person intends to
contest renewal of any Authorization relating to any System. Each GCI Entity has
requisite corporate power (as applicable) and legal right to own and operate its
Property and to conduct its business. Each has good and indefeasible title (fee
or leasehold, as applicable) to its Property, subject to no Lien of any kind,
except Permitted Liens. All of the assets of the Company and each other GCI
Entity are located within the municipalities and borough locations described on
Schedule 5.07b. No GCI Entity is in violation of its respective articles of
organization or incorporation (as applicable) or bylaws. None of the GCI
Entities is in violation of any Law, or material agreement or instrument binding
on or affecting it or any of its Properties, the effect of which could
reasonably be expected to cause a Material Adverse Change. No business or
Properties of the Parent, the Company or any Restricted Subsidiary is affected
by any strike, lock-out or other labor dispute. No business or Properties of the
Parent, the Company or any Restricted Subsidiary is affected by any drought,
storm, earthquake, embargo, act of God or public enemy, or other casualty, the
effect of which could reasonably be expected to cause a Material Adverse Change.
5.08. Outstanding Debt and Liens. The GCI Entities have no outstanding
Debt, Contingent Liabilities or Liens, except Permitted Liens, except as shown
on Schedule 5.08a hereto. No breach, default or event of default exists under
any document, instrument or agreement evidencing or otherwise relating to any
Funded Debt of any GCI Entity, which could reasonably be expected to cause a
Material Adverse Change.
5.09. Taxes. The Parent, the Company and each Subsidiary of the Parent
and the Company has filed all federal, state, and other Tax returns (or
extensions related thereto) which are required to be filed, and has paid all
Taxes as shown on said returns, as well as all other Taxes, to the extent due
and payable, except to the extent payment is contested in good faith and for
which adequate reserves have been established therefor in accordance with GAAP.
All Tax liabilities of the Parent, the Company and each Subsidiary of the Parent
and the Company are adequately provided for on its books, including interest and
penalties, and adequate reserves have been established therefor in accordance
with GAAP. No income Tax liability of a material nature has been asserted by
taxing authorities for Taxes in excess of those already paid, and no taxing
authority has notified the Parent, the Company or any Subsidiary of the Parent
or the Company of any deficiency in any Tax return.
5.10. ERISA. Each Plan of the Parent, the Company and each Subsidiary
of the Parent and the Company has satisfied the minimum funding standards under
all Laws applicable thereto, and no Plan has an accumulated funding deficiency
thereunder. The Company has not, and neither has the Parent, or any Subsidiary
of the Company or the Parent incurred any material liability to the PBGC with
respect to any Plan. No ERISA Event has occurred with respect to any Plan for
which an Insufficiency in excess of $100,000 exists on the date of such
occurrence. None of the Parent, the Company, or any Subsidiary of the Parent or
the Company has
General Communication, Inc. - Form 8-K
Page 88
participated in any non-exempt Prohibited Transaction with respect to any Plan
or trust created thereunder. None of the Company, the Parent or any Subsidiary
of the Company and the Parent, nor any ERISA Affiliate, has incurred any
Withdrawal Liability to any Multiemployer Plan that has not been satisfied. None
of the Company, the Parent or any Subsidiary of the Parent or the Company, nor
any ERISA Affiliate has been notified by the sponsor of a Multiemployer Plan
that such Multiemployer Plan is in reorganization or has been terminated, within
the meaning of Title IV of ERISA.
5.11. Environmental Laws. The Company and each other GCI Entity has
obtained all material environmental, health and safety permits, licenses and
other material authorizations required under all Applicable Environmental Laws
to carry on its business as being conducted. On the Closing Date, there are no
environmental liabilities of the Company or any other GCI Entity (with respect
to any fee owned or leased Properties), except as disclosed and described in
detail on Schedule 5.11 hereto. Each of such permits, licenses and
authorizations is in full force and effect and the Company and each other GCI
Entity is in compliance with the terms and conditions thereof, and is also in
compliance with all other limitations, restrictions, conditions, standards,
prohibitions, requirements, obligations, schedules and timetables contained in
any applicable Environmental Law or in any regulation, code, plan, order,
decree, judgment, injunction, notice or demand letter issued, entered,
promulgated or approved thereunder, except to the extent failure to comply with
any thereof could not reasonably be expected to cause a Material Adverse Change.
In addition, no written notice, notification, demand, request for information,
citation, summons or order has been issued, no written complaint has been filed,
no penalty has been assessed and no investigation or review is pending or, to
the best knowledge of the Company or any other GCI Entity, threatened, by any
Tribunal or other entity with respect to any alleged failure by the Company or
any other GCI Entity to have any environmental, health or safety permit, license
or other authorization required under any Applicable Environmental Law in
connection with the conduct of the business of the Company or any other GCI
Entity or with respect to any generation, treatment, storage, recycling,
transportation, discharge, disposal or release of any Hazardous Materials by the
Company or any other GCI Entity. To the best knowledge of the Company and each
other GCI Entity, there are no material environmental liabilities of the Company
or any other GCI Entity, except as previously disclosed in writing to the
Lenders. To the best knowledge of the Company and each other GCI Entity, there
are no environmental liabilities of the Company or any other GCI Entity which
could reasonably be expected to cause a Material Adverse Change. The Company has
delivered to the Administrative Agent copies of all environmental studies and
reports conducted or received by the Company or any other GCI Entity in
connection with real Property. Such studies cover all real Property, if any,
owned in fee by the Company and each other GCI Entity. No Hazardous Materials
are generated or produced at or in connection with the Properties and operations
of any of the Company or any of the other GCI Entities, nor have any Hazardous
Materials been disposed of or otherwise released on or to any Property on which
any operations of the Company or any other GCI Entities are conducted, except in
compliance with Applicable Environmental Laws.
5.12. Disclosure. Neither the Company nor any other GCI Entity has made
a material misstatement of fact, or failed to disclose any fact necessary to
make the facts disclosed not misleading, in light of the circumstances under
which they were made, to Administrative Agent or any Lender during the course of
application for and negotiation of any Loan Papers or otherwise in connection
with any Advances. There is no fact known to the Company or any other GCI Entity
that materially adversely affects any of the Company's or any of the other GCI
Entity's Properties or business, or that could constitute a Material Adverse
Change, and that has
General Communication, Inc. - Form 8-K
Page 89
not been set forth in the Loan Papers or in other documents furnished to
Administrative Agent or any Lender.
5.13. Investments; Restricted Subsidiaries. The GCI Entities have no
Investments except as described on Schedule 5.13 hereto and as permitted by
Section 7.10 hereof. Schedule 5.13 is a complete and accurate listing of each
GCI Entity, showing (a) its complete name, (b) its jurisdiction of organization,
(c) its capital structure, (d) its street and mailing address, which is its
principal place of business and executive office and (e) all interests in such
GCI Entity.
5.14. Certain Fees. No broker's, finder's, management fee or other fee
or commission will be payable by the Company with respect to the making of
Commitment or Advances hereunder (other than to Administrative Agent and
NationsBanc Capital Markets, Inc. hereunder), or the offering, issuance or sale
of the Capital Stock of the Company. The Company and each other GCI Entity
hereby agrees to indemnify and hold harmless Administrative Agent and each
Lender from and against any claims, demand, liability, proceedings, costs or
expenses asserted with respect to or arising in connection with any such fees or
commissions.
5.15. Intellectual Property. The Company and each other GCI Entity has
obtained all patents, trademarks, service-marks, trade names, copyrights,
licenses and other rights, free from material restrictions, which are necessary
for the operation of their respective businesses as presently conducted and as
proposed to be conducted. Nothing has come to the attention of the Company or
any other GCI Entity to the effect that (a) any process, method, part or other
material presently contemplated to be employed by the Company or any other GCI
Entity may or could reasonably be alleged to infringe any patent, trademark,
service-mark, trade name, license or other right (except copyright) owned by any
other Person, or (b) except as shown on Schedule 5.05 attached hereto, there is
pending or threatened any claim or litigation against or affecting the Company
or any other GCI Entity contesting its right to sell or use any such process,
method, part or other material. Nothing has come to the attention of the Company
or any other GCI Entity to the effect that any material presently contemplated
to be employed by the Company or any other GCI Entity may or could reasonably be
alleged to infringe any copyright owned by any other Person, except to the
extent that any such infringement, when aggregated with all other copyright
infringements, could not reasonably be expected to cause a Material Adverse
Change.
5.16. Survival of Representations and Warranties, etc. All
representations and warranties made under this Agreement shall be deemed to be
made at and as of the Closing Date and at and as of the date of each Advance,
and each shall be true and correct when made, except to the extent (a)
previously fulfilled in accordance with the terms hereof, (b) subsequently
inapplicable, or (c) previously waived in writing by Administrative Agent and
Lenders with respect to any particular factual circumstance. The representations
and warranties made under this Agreement shall be deemed applicable to each
Restricted Subsidiary as of the formation or acquisition of such Restricted
Subsidiary and at and as of each date the representations and warranties are
remade pursuant to this provision. All representations and warranties made under
this Agreement shall survive, and not be waived by, the execution hereof by the
Administrative Agent and Lenders, any investigation or inquiry by the
Administrative Agent or any Lender, or by the making of any Advance under this
Agreement.
General Communication, Inc. - Form 8-K
Page 90
ARTICLE VI. AFFIRMATIVE COVENANTS
So long as the Commitment, any Advance, any Letter of Credit or any
portion of the Obligations is outstanding, or the Company or any other GCI
Entity owes any other amount hereunder or under any other Loan Paper:
6.01. Compliance with Laws and Payment of Debt. The Company shall, and
shall cause each the Parent and all Subsidiaries of the Company and the Parent
to, comply with all Applicable Laws, including without limitation compliance
with ERISA and all applicable federal and state securities Laws. The Company
shall, and shall cause each other GCI Entity to, pay its (a) Funded Debt as and
when due (or within any applicable grace period), unless payment thereof is
being contested in good faith by appropriate proceedings and adequate reserves
have been established therefor, and (b) trade debt in accordance with its past
practices, and in any event, before any trade creditor takes any action or
terminates any relationship.
6.02. Insurance. The Company shall, (a) and shall cause each of the
Restricted Subsidiaries to, keep its offices and other insurable Properties
adequately insured at all times by reputable insurers to such extent and against
such risks, including fire and other risks insured against by extended coverage,
as what is customary with companies similarly situated and in the same or
similar businesses, (b) and shall cause each other GCI Entity to, maintain in
full force and effect public liability (including liability insurance for all
vehicles and other insurable Property) and worker's compensation insurance, in
amounts customary for such similar companies to cover normal risks, by insurers
satisfactory to the Administrative Agent, (c) and shall cause each Restricted
Subsidiary to, maintain business interruption insurance for each System in
amounts satisfactory to the Lenders, (d) and shall cause each other GCI Entity
to, maintain other insurance as may be required by Law or reasonably requested
by the Administrative Agent, provided that such insurance policies will show the
Administrative Agent, on behalf of the Lenders, as additional insured or loss
payee, as appropriate. The Company shall deliver evidence of renewal of each
insurance policy on or before the date of its expiration, and from time to time
shall deliver to the Administrative Agent, upon demand, evidence of the
maintenance of such insurance.
6.03. Inspection Rights. The Company shall, and shall cause each other
GCI Entity to, permit the Administrative Agent or any Lender, upon one days
notice or such lesser notice as is reasonable under the circumstances, to
examine and make copies of and abstracts from their records and books of
account, to visit and inspect their Properties and to discuss their affairs,
finances, and accounts with any of their directors, officers, employees,
accountants, attorneys and other representatives, all as the Administrative
Agent or any Lender may reasonably request.
6.04. Records and Books of Account; Changes in GAAP. The Company shall,
and shall cause the Parent and each Subsidiary of the Parent and the Company to,
keep adequate records and books of account in conformity with GAAP. The Company
shall not, nor shall the Company permit the Parent or any Subsidiary of the
Company or the Parent to change its fiscal year, nor change its method of
financial accounting except in accordance with GAAP. In connection with any such
change after the date hereof, the Company and Lenders shall negotiate in good
faith to make appropriate alterations to the covenants set forth in Section 7.01
hereof, reflecting such change.
General Communication, Inc. - Form 8-K
Page 91
6.05. Reporting Requirements. The Company shall furnish to each Lender
and the Administrative Agent:
(a) As soon as available and in any event within 60 days after the end
of the Company's fiscal quarters, (i) consolidated and consolidating balance
sheets of the Parent, the Company and their Subsidiaries, and each other GCI
Entity, as of the end of such quarter, and consolidated and consolidating
statements of income, and consolidated and consolidating statements of changes
in cash flow of the Parent, the Company and their Subsidiaries, and each other
GCI Entity, for the portion of the fiscal year ending with such quarter, setting
forth, in comparative form, figures for the corresponding periods in the
previous fiscal year, all in reasonable detail, and certified by an Authorized
Officer as prepared in accordance with GAAP, and fairly presenting the financial
condition and results of operations of the Parent, the Company and their
Subsidiaries, and each other GCI Entity, (ii) for the Parent, the Company and
their Subsidiaries, comparisons and reconciliations of actual results to the
budget delivered pursuant to Section 6.05(e) below for the fiscal quarter most
recently ended, in reasonable detail and satisfactory to the Administrative
Agent, and (iii) for the Parent, the Company and the Restricted Subsidiaries,
all information set forth in (i) and (ii) above in a separate presentation.
(b) As soon as available and in any event within 120 days after the end
of each fiscal year, (i) consolidated and consolidating balance sheets of the
Parent, the Company and their Subsidiaries, and each other GCI Entity, as of the
end of such fiscal year, and consolidated and consolidating statements of income
and changes in cash flow of the Parent, the Company and their Subsidiaries, and
each other GCI Entity, for such fiscal year, all in reasonable detail, prepared
in accordance with GAAP, and accompanied by an unqualified opinion of the
Auditor, which opinion shall state that such financial statements were prepared
in accordance with GAAP, that the examination by the Auditor in connection with
such financial statements was made in accordance with generally accepted
auditing standards, and that such financial statements present fairly the
financial condition and results of operations of the Parent, the Company and
their Subsidiaries, and each other GCI Entity, and (ii) for the Parent, the
Company and the Restricted Subsidiaries, all information set forth in (i) above
in a separate presentation;
(c) Promptly upon receipt thereof, copies of all material reports or
letters submitted to the Company, the Parent or any Subsidiary of the Company or
the Parent by the Auditor or any other accountants in connection with any
annual, interim, or special audit, including without limitation the comment
letter submitted to management in connection with any such audit;
(d) Together with each set of financial statements delivered pursuant
to subsections (a) and (b) above, a Compliance Certificate executed by an
Authorized Officer, which such Compliance Certificate must (i) certify that
there has occurred no Default or Event of Default, (ii) compute the Applicable
Margin, and (iii) set forth the detailed calculations with respect to the
financial covenants required by Section 7.01 hereof;
(e) As soon as available and in any event not later than 30 days after
the beginning of each fiscal year of the Company, the annual operating and
Capital Expenditure budgets of the Company and the Restricted Subsidiaries, and
each other GCI Entity for such fiscal year;
(f) Promptly upon knowledge by the Company or any other GCI Entity of
the occurrence of any Default or Event of Default, a notice from an Authorized
Officer, setting forth
General Communication, Inc. - Form 8-K
Page 92
the details of such Default or Event of Default, and the action being taken or
proposed to be taken with respect thereto;
(g) As soon as possible and in any event within five Business Days
after knowledge thereof by the Company or any other GCI Entity, notice of any
Litigation pending or threatened against the Company or any other GCI Entity
which, if determined adversely, could reasonably be expected to result in a
judgment, penalties, or damages in excess of $1,000,000 together with a
statement of an Authorized Officer describing the allegations of such
Litigation, and the action being taken or proposed to be taken with respect
thereto;
(h) Promptly following notice or knowledge thereof by the Company or
any other GCI Entity, notice of any actual or threatened loss or termination of
any material Authorization of the Company or any other GCI Entity, together with
a statement of an Authorized Officer describing the circumstances surrounding
the same, and the action being taken or proposed to be taken with respect
thereto;
(i) Promptly after filing or receipt thereof, copies of all reports and
notices that the Company or any other GCI Entity (i) files or receives in
respect of any Plan with or from the Internal Revenue Service, the PBGC, or the
United States Department of Labor, or (ii) furnishes to or receives from any
holders of any Debt or Contingent Liability, if in either case, any information
or dispute referred to therein either causes a Default or Event of Default, or
could reasonably be expected to cause or result in a Default or an Event of
Default;
(j) Within 30 days after renewal or issuance of any hazard, public
liability, business interruption, or other insurance policy maintained by the
Company or any other GCI Entity, a copy of the binder or insurance certificate
(showing Administrative Agent, on behalf of the Company or such GCI Entity, as
loss payee or additional insured, as appropriate);
(k) Within 270 days after the close of each fiscal year, a statement of
the Insufficiencies of each Plan (but only if the aggregate amount of all
Insufficiencies for all Plans exceeds $500,000), certified as correct by an
actuary enrolled under ERISA;
(l) As soon as possible and in any event within 10 days after the
Company or any other GCI Entity knows that any Reportable Event has occurred
with respect to any Plan, a statement, signed by an Authorized Officer,
describing said Reportable Event and the action which the such Person proposes
to take with respect thereto;
(m) As soon as possible, and in any event within 10 days after receipt
by the Company or any other GCI Entity, a copy of (a) any notice or claim to the
effect that the Company or any other GCI Entity is or may be liable to any
Person as a result of the release by the Company, any other GCI Entity or any
other Person of any toxic or hazardous waste or substance into the environment,
and (b) any notice alleging any violation of any federal, state or local
environmental, health or safety law or regulation by the Company or any other
GCI Entity, which could reasonably be expected to, in either case, cause a
Material Adverse Change;
(n) Within 5 days after the receipt by the Company's Board of
Directors, a monthly report of the Company's Board of Directors;
General Communication, Inc. - Form 8-K
Page 93
(o) Promptly upon the filing thereof, copies of all material
registration statements and all annual, quarterly, monthly or other regular
reports which the Parent, the Company or any Subsidiary of the Parent or the
Company or any other GCI Entity files with the FCC or the Securities and
Exchange Commission; and
(p) Promptly upon request, such other information concerning the
condition or operations of the Company, any other GCI Entity, and any of their
Affiliates, financial or otherwise, as the Administrative Agent or any Lender
may from time to time reasonably request.
6.06. Use of Proceeds. The proceeds of the Advances shall be available
(and the Company shall use such proceeds) to (a) refinance existing Funded Debt
of the Company, (b) fund Capital Expenditures of the Company and the Restricted
Subsidiaries permitted by the terms of this Agreement and (c) use for general
working capital purposes.
6.07. Maintenance of Existence and Assets. Except as provided by
Section 7.07 of this Agreement, the Company shall maintain, and shall cause each
other GCI Entity to maintain, its corporate existence, authority to do business
in the jurisdictions in which it is necessary for the Company or such GCI Entity
to do so, and all Authorizations necessary for the operation of any of their
businesses. The Company shall maintain, and shall cause each other GCI Entity to
maintain, the assets necessary for use in their respective businesses in good
repair, working order and condition, and make all such repairs, renewals and
replacements thereof as may be reasonably required.
6.08. Payment of Taxes. The Company will and will cause the Parent and
all Subsidiaries of the Parent and the Company to, promptly pay and discharge
all lawful Taxes imposed upon it or upon its income or profit or upon any
Property belonging to it, unless such Tax shall not at the time be due and
payable, or if the validity thereof shall currently be contested on a timely
basis in good faith by appropriate proceedings (provided that the enforcement of
any Liens arising out of any such nonpayment shall be stayed or bonded during
the proceedings) and adequate reserves with respect to such Tax shall have been
established in accordance with GAAP.
6.09. Indemnity.
(a) The Company agrees to defend, protect, indemnify and hold harmless
the Administrative Agent and each Lender, each of their respective Affiliates,
and each of their respective (including such Affiliates') officers, directors,
employees, agents, attorneys, shareholders and consultants (including, without
limitation, those retained in connection with the satisfaction or attempted
satisfaction of any of the conditions set forth herein) of each of the foregoing
(collectively, "Indemnitees") from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, claims,
costs, expenses and disbursements of any kind or nature whatsoever (including,
without limitation, the reasonable fees and disbursements of counsel for such
Indemnitees in connection with any investigative, administrative or judicial
proceeding, whether or not such Indemnitees shall be designated a party thereto
or such proceeding shall have actually been instituted), imposed on, incurred
by, or asserted against such Indemnitees (whether direct, indirect or
consequential and whether based on any federal, state, or local laws and
regulations, under common law or at equitable cause, or on contract, tort or
otherwise), arising from or
General Communication, Inc. - Form 8-K
Page 94
connected with the past, present or future operations of the Parent, the
Company, any Subsidiary of the Company or the Parent, any other GCI Entity, any
Affiliate or any predecessors in interest, or the past, present or future
environmental condition of property of the Parent, the Company, any Subsidiary
of the Company or Parent, any other GCI Entity, any Affiliate or any
predecessors in interest, in each case relating to or arising out of this
Agreement, the Loan Papers, or any act, event or transaction or alleged act,
event or transaction relating or attendant thereto and the management of the
Advances by the Administrative Agent, including in connection with, or as a
result, in whole or in part, of any negligence of Administrative Agent or any
Lender (other than those matters involving a claim by a participant purchaser
against any Lender and not the Company), or the use or intended use of the
proceeds of the Advances hereunder, or in connection with any investigation of
any potential matter covered hereby, but excluding any claim or liability that
arises as the result of the gross negligence or willful misconduct of any
Indemnitee, as finally judicially determined by a court of competent
jurisdiction (collectively, "Indemnified Matters").
(b) In addition, the Company shall periodically, upon request,
reimburse each Indemnitee for its reasonable legal and other actual reasonable
expenses (including the cost of any investigation and preparation) incurred in
connection with any Indemnified Matter. If for any reason the foregoing
indemnification is unavailable to any Indemnitee or insufficient to hold any
Indemnitee harmless with respect to Indemnified Matters, then the Company shall
contribute to the amount paid or payable by such Indemnitee as a result of such
loss, claim, damage or liability in such proportion as is appropriate to reflect
not only the relative benefits received by the Company and the holders of the
Capital Stock of the Company on the one hand and such Indemnitee on the other
hand but also the relative fault of the Company and such Indemnitee, as well as
any other relevant equitable considerations. The reimbursement, indemnity and
contribution obligations under this Section shall be in addition to any
liability which the Company may otherwise have, shall extend upon the same terms
and conditions to each Indemnitee, and shall be binding upon and inure to the
benefit of any successors, assigns, heirs and personal representatives of the
Company, the Administrative Agent, the Lenders and all other Indemnitees. The
obligations of the Company under this Section 6.09 shall survive (i) the
execution of this Agreement and (ii) any termination of this Agreement and
payment of the Obligations.
6.10. Interest Rate Hedging. No interest rate hedges are required.
6.11. Management Fees Paid and Earned. The Company agrees that no
Management Fees will be paid by the Company, any Restricted Subsidiary or any
other GCI Entity to any Person at any time.
6.12. Authorizations and Material Agreements. The Company shall, and
shall cause the Parent and the Restricted Subsidiaries to, obtain and comply in
all material respects with all FCC Licenses relating to any System. The Company
shall, and shall cause the Parent and the Restricted Subsidiaries to, obtain and
comply in all material respects with all Authorizations relating to the Systems,
except to the extent failure to do so could not reasonably be expected to cause
or result in a Material Adverse Change. The Company shall, and shall cause all
other GCI Entities to, maintain and comply in all material respects with all
agreements necessary or appropriate for any of them to own, maintain, or operate
any of their businesses or Properties.
General Communication, Inc. - Form 8-K
Page 95
6.13. Further Assurances. The Company shall, and shall cause each other
GCI Entity to, make, execute or endorse, and acknowledge and deliver or file or
cause the same to be done, all such vouchers, invoices, notices, certifications
and additional agreements, undertakings, conveyances, deeds of trust, mortgages,
security agreements, transfers, assignments, financing statements or other
assurances, and take any and all such other action, as Administrative Agent may,
from time to time, deem reasonably necessary or proper in connection with any
GCI Entity's obligations under any of the Loan Papers and the obligations of the
Company thereunder, or for better assuring and confirming unto Administrative
Agent all or any part of the security for any of the Obligations.
6.14. Subsidiaries and Other Obligors. The Company shall cause each of
the Restricted Subsidiaries, other GCI Entities and Affiliates to comply with
each provision of this Article VI.
ARTICLE VII. NEGATIVE COVENANTS
So long as the Commitment, any Advance, any Letter of Credit or any
portion of the Obligations is outstanding, or the Company or any other GCI
Entity owes any other amount hereunder or under any other Loan Paper:
7.01. Financial Covenants. The Company and the Restricted Subsidiaries
shall comply with the following
covenants:
(a) Leverage Ratio. At all times during the term hereof, the Leverage
Ratio shall not be greater than 3.00 to 1.00.
(b) Interest Coverage Ratio. At all times during the term hereof, the
Interest Coverage Ratio shall not be less than 2.00 to 1.00.
(c) Capital Expenditures. Capital Expenditures paid or incurred by the
Parent, the Company and the Restricted Subsidiaries during the 1996 fiscal year
shall not exceed, in the aggregate, $60,000,000. Capital Expenditures paid or
incurred by the Parent, the Company and the Restricted Subsidiaries during the
first fiscal quarter of 1997 shall not exceed, in the aggregate, $11,250,000,
provided that, any unused portion of the $60,000,000 permitted amount for 1996
not exceeding $15,000,000 (in addition to the $11,250,000) may be used in the
first fiscal quarter of 1997.
7.02. Debt. The Company shall not, and shall not permit any of the
other GCI Entities to, create, incur, assume, become or be liable in any manner
in respect of, or suffer to exist, any Debt, except (a) Debt under the Loan
Papers, (b) Debt in existence on the date hereof as shown on Schedule 5.08a
hereto, (c) trade payables incurred and paid in the ordinary course of business,
(d) so long as there exists no Default or Event of Default in existence at the
time incurred and none is caused thereby, $2,000,000 in Debt constituting
Capital Leases outstanding in the aggregate at any one time, and (e) convertible
subordinated Debt not to exceed in the aggregate $10,000,000 pursuant to the
Convertible Subordinated Notes.
7.03. Contingent Liabilities. The Company shall not, and shall not
permit any of the other GCI Entities to, create, incur, assume, become or be
liable in any manner in respect of,
General Communication, Inc. - Form 8-K
Page 96
or suffer to exist, any Contingent Liabilities, except (a) Contingent
Liabilities under or relating to the Loan Papers, (b) Contingent Liabilities in
existence on the Closing Date, as shown on Schedule 5.08a hereto, (c) Contingent
Liabilities resulting from the endorsement of negotiable instruments for
collection in the ordinary course of business and (d) utility bonds and other
similar bonds entered into in the ordinary course of business.
7.04. Liens. The Company shall not, and shall not permit any of the
other GCI Entities to, create or suffer to exist any Lien upon any of its
Properties, except Permitted Liens and Liens securing Debt permitted under
Section 7.02(d) hereof. It is specifically acknowledged and agreed that the
Company shall not, and shall not permit any of the other GCI Entities to,
hereafter agree with any Person (other than Administrative Agent) not to grant a
Lien on any of its assets.
7.05. Dispositions of Assets. The Company shall not, and shall not
permit any of the other GCI Entities to, sell, lease, assign, or otherwise
dispose of any assets of the Company or any Restricted Subsidiary, or otherwise
consummate any Asset Sale, (a) except sales or dispositions of assets in the
ordinary course of business, including dispositions of obsolete or useless
assets, and (b) so long as there exists no Default or Event of Default both
before and after giving effect to such disposition and with the prior written
consent of Majority Lenders, Asset Sales in an aggregate amount over the term of
this Agreement not to exceed $1,000,000, so long as any amounts received by the
Company and the Restricted Subsidiaries in the aggregate over $500,000 in any
fiscal year of the Company and its Restricted Subsidiaries are immediately used
to reduce the Commitment in accordance with Section 2.04 hereof.
7.06. Distributions and Restricted Payments. The Company shall not, and
shall not permit the Parent or any Restricted Subsidiary to, make any Restricted
Payments, other than a distribution to GCI Cable, Inc. from proceeds received by
the Parent from the issuance its of Capital Stock to MCI described on Schedule
1.03 in the form of a loans or a capital contribution not to exceed $13,000,000.
7.07. Merger; Consolidation. The Company shall not, and shall not
permit any of the other GCI Entities to, merge into or consolidate with any
Person except any GCI Entity other than the Company may merge or consolidate
with another Wholly-Owned Subsidiary.
7.08. Business. The Company shall not, and shall not permit any of the
other GCI Entities to, change the nature of its business as now conducted. The
Company shall not conduct any business except the ownership and operation of its
Systems.
7.09. Transactions with Affiliates. The Company shall not, and shall
not permit any of the other GCI Entities to, enter into or be party to a
transaction with any Affiliate, except on terms no less favorable than could be
obtained on an arm's-length basis with a Person that is not an Affiliate.
7.10. Loans and Investments. The Company shall not, and shall not
permit any of the other GCI Entities to, make any loan, advance, extension of
credit or capital contribution to, or make or have any Investment in, any
Person, or make any commitment to make any such extension of credit or
Investment, or make any acquisition, except (a) Investments existing on the date
hereof and contemplated by the terms of this Agreement, each as shown on
General Communication, Inc. - Form 8-K
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Schedule 5.13 hereto, (b) Investments in Cash Equivalents, (c) Investments in
advances in the ordinary course of business to officers and employees in an
amount in the aggregate not to exceed $2,000,000 outstanding at any one time,
(d) Investments in accounts receivable arising in the ordinary course of
business, (e) the Parent may enter into the following agreements and consummate
the transactions as set forth therein: (i) Asset Purchase Agreement, dated as of
May 10, 1996, among General Communication, Inc., McCaw/Rock Homer Cable Systems
and McCaw/Rock Seward Cable System, (ii) Asset Purchase Agreement, dated as of
April 15, 1996, among General Communication, Inc., Alaskan Cable
Network/Fairbanks, Inc., Alaskan Cable Network/Juneau, Inc. and Alaskan Cable
Network/Ketchikan-Sitka, Inc., (iii) Asset Purchase Agreement, dated as of May
10, 1996, among General Communication, Inc., Alaska Cablevision, Inc., and (iv)
Purchase and Sale Agreement, dated as of May 2, 1996, among General
Communication, Inc., Prime Venture I Holdings, L.P., Prime Cable Growth
Partners, L.P., Prime Venture II, L.P., Prime Cable Limited Partnership, Austin
Ventures, L.P., William Blair Venture Partners III Limited Partnership,
Centennial Fund, II, L.P., Centennial Fund III, L.P., Centennial Business
Development Fund, Ltd., BancBoston Capital, Inc., First Chicago Investment
Corporation, Madison Dearborn Partners, Prime II Management, L.P., Prime Cable
of Alaska, L.P., Alaska Cable, Inc. and Prime Cable Fund I, Inc., and (f) so
long as there exists no Default or Event of Default both immediately before and
after giving effect to such Investment, the Company may invest in additional PCS
spectrum in Alaska in an aggregate amount over the term of this Agreement not to
exceed $2,500,000.
7.11. Fiscal Year and Accounting Method. The Company shall not, and
shall not permit any of the other GCI Entities to, change its fiscal year or
method of accounting, except as may be required by GAAP.
7.12. Issuance of Partnership Interest and Capital Stock; Amendment of
Articles and By-Laws. The Company shall not, and shall not permit any of the
other GCI Entities to, issue, sell or otherwise dispose of any Capital Stock in
such Person, or any options or rights to acquire such partnership interest or
capital stock not issued and outstanding on the Closing Date, except in
connection with the Cable Acquisition Transactions. The Company shall not amend
its articles of organization or bylaws and the Company shall not permit any of
the other GCI Entities to amend its articles of organization or bylaws, except,
so long as there exists no Default or Event of Default both prior to and after
giving effect to such amendment, and after written notice to the Administrative
Agent, the Company may make (i) changes to comply with applicable Law and (ii)
changes immaterial in nature.
7.13. Change of Ownership. The Company shall not, and shall not permit
any other GCI Entity to, permit any change in the ownership of the Company and
each Guarantor from the ownership thereof as of the date hereof as disclosed on
Schedule 5.01 hereto.
7.14. Sale and Leaseback. The Company shall not, and shall not permit
any of the other GCI Entities to, enter into any arrangement whereby it sells or
transfers any of its assets, and thereafter rents or leases such assets.
7.15. Compliance with ERISA. The Company shall not, and shall not
permit the Parent or any Subsidiary of the Company and the Parent to, directly
or indirectly, or permit any member of such Person's Controlled Group to
directly or indirectly, (a) terminate any Plan so as to result in any material
(in the opinion of Administrative Agent) liability to any of the
General Communication, Inc. - Form 8-K
Page 98
Company, the Parent or any Subsidiary of the Company or the Parent, or any
member of their Controlled Group, (b) permit to exist any ERISA Event, or any
other event or condition, which presents the risk of any material (in the
opinion of Administrative Agent) liability of any of the Parent, the Company or
any Subsidiary of the Parent or the Company, or any member of their Controlled
Group, (c) make a complete or partial withdrawal (within the meaning of Section
4201 of ERISA) from any Multiemployer Plan so as to result in any material (in
the opinion of Administrative Agent) liability to any of the Company, the
Parent, or any Subsidiary of the Parent or the Company, or any member of their
Controlled Group, (d) enter into any new Plan or modify any existing Plan so as
to increase its obligations thereunder (except in the ordinary course of
business consistent with past practice) which could result in any material (in
the opinion of Administrative Agent) liability to any of the Parent, the Company
or any Subsidiary of the Parent or the Company, or any member of their
Controlled Group, or (e) permit the present value of all benefit liabilities, as
defined in Title IV of ERISA, under each Plan of each of the Parent, the Company
or any Subsidiary of the Parent or the Company, or any member of their
Controlled Group (using the actuarial assumptions utilized by the PBGC upon
termination of a Plan) to materially (in the opinion of Administrative Agent)
exceed the fair market value of Plan assets allocable to such benefits all
determined as of the most recent valuation date for each such Plan.
7.16. Rate Swap Exposure. The Company shall not enter into or become
liable in respect of any Interest Hedge Agreement pursuant to which the
aggregate amount exceeds the aggregate principal amount of all Advances.
7.17. Restricted Subsidiaries and Other Obligors. The Company shall not
permit any of its Restricted Subsidiaries or any other GCI Entity to violate any
provision of this Article VII.
7.18. Amendments to Material Agreements. The Company shall not, nor
shall the Company permit any other GCI Entity to, amend or change any Loan Paper
other than with the prior written consent of the Lenders pursuant to Section
10.01 hereof, nor shall the Company or any other GCI Entity change or amend (or
take any action or fail to take any action the result of which is an effective
amendment or change) or accept any waiver or consent with respect to (a) any
Non-Compete Agreement, (b) that certain Transponder Purchase Agreement for
Galaxy X, dated August 24, 1995, among the Company and Hughes Communications
Galaxy, Inc., and (c) that certain Transponder Service Agreement, dated August
24, 1995, among the Company and Hughes Communications Satellite Services, Inc.
ARTICLE VIII. EVENTS OF DEFAULT
8.01. Events of Default. Any one or more of the following shall be an
"Event of Default" hereunder, if the same shall occur for any reason whatsoever,
whether voluntary or involuntary, by operation of Law, or otherwise:
(a) The Company shall fail to pay (i) any principal when due; or (ii)
any interest on any Note within three days after the same becomes due; or (iii)
any Commitment Fees, other fees, or other amounts payable under any Loan Paper
within five days after the same becomes due;
General Communication, Inc. - Form 8-K
Page 99
(b) Any representation or warranty made or deemed made by the Company
or any other GCI Entity (or any of its officers or representatives) under or in
connection with any Loan Papers shall prove to have been incorrect or misleading
when made or deemed made;
(c) The Company or any other GCI Entity shall fail to perform or
observe any term or condition contained in Article VI hereof (except Section
6.05(f) hereof) which is not remedied within thirty days after the earlier of
(i) actual knowledge of such breach by the Parent, the Company or any of the
Restricted Subsidiaries of such breach and (ii) written notice from the
Administrative Agent or any Lender of such breach;
(d) The Company or any other GCI Entity shall fail to perform or
observe any term or covenant contained in Article VII hereof or in Section
6.05(f) hereof;
(e) Any GCI Entity shall fail to perform or observe any other term or
covenant contained in any Loan Paper, other than those described in Sections
8.01(a), (b), (c) and (d) hereof which is not remedied within thirty days after
the earlier of (i) actual knowledge of such breach by the Parent, the Company or
any of the Restricted Subsidiaries of such breach and (ii) written notice from
the Administrative Agent or any Lender of such breach;
(f) Any Loan Paper or material provision thereof shall, for any reason,
not be valid and binding on the GCI Entity signatory thereto, or not be in full
force and effect, or shall be declared to be null and void; the validity or
enforceability of any Loan Paper shall be contested by any GCI Entity; any GCI
Entity shall deny that it has any or further liability or obligation under its
respective Loan Papers; or any default or breach under any provision of any Loan
Papers shall continue after the applicable grace period, if any, specified in
such Loan Paper;
(g) Any of the following shall occur: (i) any of the Parent, the
Company or any Subsidiary of the Parent or the Company shall make an assignment
for the benefit of creditors or be unable to pay its debts generally as they
become due; (ii) any of the Parent, the Company or any Subsidiary of the Parent
or the Company shall petition or apply to any Tribunal for the appointment of a
trustee, receiver, or liquidator of it, or of any substantial part of its
assets, or shall commence any proceedings relating to any of the Parent, the
Company or any Subsidiary of the Parent or the Company under any Debtor Relief
Law, whether now or hereafter in effect; (iii) any such petition or application
shall be filed, or any such proceedings shall be commenced, against any of the
Parent, the Company or any Subsidiary of the Parent or the Company, or an order,
judgment or decree shall be entered appointing any such trustee, receiver, or
liquidator, or approving the petition in any such proceedings; (iv) any final
order, judgment, or decree shall be entered in any proceedings against any of
the Parent, the Company or any Subsidiary of the Parent or the Company decreeing
its dissolution; (v) any final order, judgment, or decree shall be entered in
any proceedings against any of the Parent, the Company, or any Subsidiary of the
Parent or the Company decreeing its split-up which requires the divestiture of a
substantial part of its assets; or (vi) any of the Parent, the Company or any
Subsidiary of the Parent or the Company shall petition or apply to any Tribunal
for the appointment of a trustee, receiver, or liquidator of it, or of any
substantial part of its assets, or shall commence any proceedings relating to
any of the Parent, the Company or any Subsidiary of the Parent or the Company
under any Debtor Relief Law, whether now or hereafter in effect;
General Communication, Inc. - Form 8-K
Page 100
(h) Any GCI Entity shall fail to pay any Debt or Contingent Liability
of $500,000 or more when due (whether by scheduled maturity, required
prepayment, acceleration, demand, or otherwise), and such failure shall continue
after the applicable grace period, if any, specified in the agreement or
instrument relating to such Debt or Contingent Liability; or any GCI Entity
shall fail to perform or observe any term or covenant contained in any agreement
or instrument relating to any such Debt or Contingent Liability, when required
to be performed or observed, and such failure shall continue after the
applicable grace period, if any, specified in such agreement or instrument, and
can result in acceleration of the maturity of such Debt or Contingent Liability;
or any such Debt or Contingent Liability shall be declared to be due and
payable, or required to be prepaid (other than by a regularly scheduled required
prepayment), prior to the stated maturity thereof;
(i) Any GCI Entity shall have any judgment(s) outstanding against it
for the payment of $500,000 or more, and such judgment(s) shall remain unstayed,
in effect, uncontested and unpaid for a period of 30 days;
(j) (i) Any Authorization necessary for the ownership or essential for
the operation of any of the interstate or intrastate telecommunications systems
or networks operated by the Parent, the Company or any Restricted Subsidiary or
any other System, shall expire, and on or prior to such expiration, the same
shall not have been renewed or replaced by another Authorization authorizing
substantially the same operations of such System; or (ii) any Authorization
necessary for the ownership or essential for the operation of any of System
shall be canceled, revoked, terminated, rescinded, annulled, suspended or
modified in a materially adverse respect, or shall no longer be in full force
and effect, or the grant or the effectiveness thereof shall have been stayed,
vacated, reversed or set aside, and such action shall be no longer subject to
further administrative or judicial review; or (iii) the FCC shall have issued,
on its own initiative and not upon the complaint of or at the request of a third
party, any hearing designation order in any non-comparative license renewal
proceeding or any license revocation proceeding involving any License or
Authorization necessary for the ownership or essential for the operation of any
System; or (iv) in any non-comparative license renewal proceeding or license
revocation proceeding initiated by the FCC upon the complaint of or at the
request of a third party or any comparative (i.e., multiple applicant) license
renewal proceeding, in each case involving any License or Authorization
necessary for the ownership or essential for the operation of any System; any
administrative law judge of the FCC (or successor to the functions of an
administrative law judge of the FCC) shall have issued an initial decision to
the effect that the Parent, the Company or any Restricted Subsidiary lacks the
basic qualifications to own or operate any System or is not deserving of a
renewal expectancy, and such initial decision shall not have been timely
appealed or shall otherwise have become an order that is final and no longer
subject to further administrative or judicial review (provided, however, that
none of the foregoing events described in clauses (i), (ii), (iii) or (iv) of
this Section 8.01(j) shall constitute an Event of Default if such expiration,
cancellation, revocation or other loss would not materially adversely affect the
value of any of the Collateral or the ability of the Parent, the Company or any
Restricted Subsidiary to perform its obligations under the Loan Papers to which
it is a party);
(k) Any of the Parent, the Company, or any Subsidiary of the Parent or
the Company, or any ERISA Affiliate, shall have committed a failure described in
Section 302(f)(l) of ERISA,
General Communication, Inc. - Form 8-K
Page 101
and the amount determined under Section 302(f)(3) of ERISA is equal to or
greater than $500,000;
(l) The Parent, the Company, any Subsidiary of the Parent or the
Company, or any ERISA Affiliate, shall have been notified by the sponsor of a
Multiemployer Plan that such Plan is in reorganization or is being terminated,
within the meaning of Title IV of ERISA, if as a result thereof the aggregate
annual contributions to all Multiemployer Plans in reorganization or being
terminated is increased over the amounts contributed to such Plans for the
preceding Plan year by an amount exceeding $500,000;
(m) The Company or any GCI Entity shall be required under any
Environmental Law (i) to implement any remedial, neutralization, or
stabilization process or program, the cost of which could constitute a Material
Adverse Change, or (ii) to pay any penalty, fine, or damages in an aggregate
amount of $500,000 or more;
(n) Any Property (whether leased or owned) of any GCI Entity, or the
operations conducted thereon by any of them or any current or prior owner or
operator thereof (in the case of real Property), shall violate or have violated
any applicable Environmental Law, if such violation could constitute a Material
Adverse Change; or any GCI Entity shall not obtain or maintain any License
required to be obtained or filed under any Environmental Law in connection with
the use of such Property and assets, including without limitation past or
present treatment, storage, disposal, or release of Hazardous Materials into the
environment, if the failure to obtain or maintain the same could constitute a
Material Adverse Change;
(o) Any Collateral Document shall for any reason (other than pursuant
to the terms thereof) cease to create a valid and perfected first priority Lien
in the Collateral (except for the Lien on the stock of GCI Leasing Company, Inc.
which shall be a second Lien behind the Prior Stock Lien) purported to be
covered thereby and the value of such Collateral, singly or in the aggregate,
equals or exceeds $500,000;
(p) The occurrence of any Change of Control;
(q) At any time, less than 100% of the Capital Stock of the Company,
the Restricted Subsidiaries and the Guarantors (except the Capital Stock of the
Parent does not have to be pledged) shall be pledged to the Lenders to secure
the Obligations pursuant to a first and prior perfected Lien (subject to
inchoate tax liens), except with respect to the Lien on the stock of GCI Leasing
Company, Inc.; at any time, less than 100% of the Capital Stock of GCI Leasing
Company, Inc. shall be pledged to the Lenders to secure the Obligations pursuant
to a second perfected Lien (behind the Prior Tax Lien and subject to inchoate
tax Liens); or all or any portion of the Collateral constituting any System or
systems which service 5% or more of the customers of the Company and the
Restricted Subsidiaries ("Significant Segment"), or all or any portion of the
Pledged Interests or the Pledge Agreements shall be the subject of any
proceeding instituted by any Person, or there shall exist any litigation or
overtly threatened litigation with respect to all or any portion of the
Collateral constituting Significant Segment or all or any portion of the Pledged
Interests or the Pledge Agreement; or all or any portion of the Collateral
constituting a Significant Segment shall be the subject of any legal proceeding
instituted by any Person other than a Lender or Administrative Agent (except in
connection with any Lender's exercise of any remedies under the Loan Papers); or
any document or instrument creating or
General Communication, Inc. - Form 8-K
Page 102
granting a security interest or Lien in
any Collateral shall for any reason fail to create a valid first priority
security interest (subject to Permitted Liens and the Prior Stock Lien) in any
collateral purported to be covered thereby; or any material portion of the
Collateral shall not be subject to a prior perfected security interest (subject
to Permitted Liens), or be subject to attachment, levy or replenishment, unless
such attachment, levy or replenishment shall be stayed, or bonded in an amount
substantially equal to the fair market value of such Property and only for so
long as such stay or bond exists;
(r) (i) A petition or complaint is filed before or by the Federal Trade
Commission, the United States Justice Department, or any other Tribunal, seeking
to cause the Company or any other GCI Entity to divest a significant portion of
its assets or the Capital Stock of any GCI Entity or the Company, pursuant to
any antitrust, restraint of trade, unfair competition or similar Laws, and such
petition or complaint is not dismissed or discharged within 60 days of the
filing thereof, which such divestiture could reasonably be expected to cause a
Material Adverse Change or (ii) A warrant of attachment or execution or similar
process shall be issued or levied against Property of the Company or any other
GCI Entity which, together with all other such Property of the Company and the
other GCI Entities subject to other such process, exceeds in value $500,000 in
the aggregate, and if such judgment or award is not insured or, within 60 days
after the entry, issue or levy thereof, such judgment, warrant or process shall
not have been paid or discharged, bonded or stayed pending appeal, or if, after
the expiration of any such stay, such judgment, warrant or process shall not
have been paid or discharged;
(s) Any civil action, suit or proceeding shall be commenced against any
GCI Entity under any federal or state racketeering statute (including, without
limitation, the Racketeer Influenced and Corrupt Organization Act of
1970)("RICO") and such suit shall be adversely determined by a court of
applicable jurisdiction resulting in a judgment against such GCI Entity in
excess of $500,000; or any criminal action or proceeding shall be commenced
against any GCI Entity under any federal or state racketeering statute
(including, without limitation, RICO); or
(t) There shall exist any breach or default under any agreement
relating to a loan facility benefitting any of the Unrestricted Subsidiaries, in
each case after giving effect to any applicable period of grace in connection
therewith.
8.02. Remedies Upon Default. If an Event of Default described in
Section 8.01(g) hereof shall occur with respect to the Parent, the Company or
any Subsidiary of the Parent or the Company, the Commitment shall be immediately
terminated and the aggregate unpaid principal balance of and accrued interest on
all Advances shall, to the extent permitted by applicable Law, thereupon become
due and payable concurrently therewith, without any action by Administrative
Agent or any Lender, and without diligence, presentment, demand, protest, notice
of protest or intent to accelerate, or notice of any other kind, all of which
are hereby expressly waived. Subject to the foregoing sentence, if any Event of
Default shall occur and be continuing, then no LIBOR Advances shall be available
to the Company and Administrative Agent may at its election, and shall at the
direction of Majority Lenders, do any one or more of the following:
(a) Declare the entire unpaid balance of all Advances immediately due
and payable, whereupon it shall be due and payable without diligence,
presentment, demand, protest, notice
General Communication, Inc. - Form 8-K
Page 103
of protest or intent to accelerate, or notice of any other kind (except notices
specifically provided for under Section 8.01), all of which are hereby expressly
waived (except to the extent waiver of the foregoing is not permitted by
applicable Law);
(b) Terminate the Commitment and/or the Letter of Credit Commitment;
(c) Reduce any claim of Administrative Agent and Lenders to judgment;
(d) Demand (and the Company shall pay to Administrative Agent)
immediately upon demand and in immediately available funds, the amount equal to
the aggregate amount of the Letters of Credit then outstanding, irrespective of
whether such Letters of Credit have been drawn upon, all as set forth and in
accordance with the terms of provisions of Article III hereof. The
Administrative Agent shall promptly advise the Company of any such declaration
or demand but failure to do so shall not impair the effect of such declaration
or demand; and
(e) Exercise any Rights afforded under any Loan Papers, by Law,
including but not limited to the UCC, at equity, or otherwise.
8.03. Cumulative Rights. All Rights available to Administrative Agent
and Lenders under the Loan Papers shall be cumulative of and in addition to all
other Rights granted thereto at Law or in equity, whether or not amounts owing
thereunder shall be due and payable, and whether or not Administrative Agent or
any Lender shall have instituted any suit for collection or other action in
connection with the Loan Papers.
8.04. Waivers. The acceptance by Administrative Agent or any Lender at
any time and from time to time of partial payment of any amount owing under any
Loan Papers shall not be deemed to be a waiver of any Default or Event of
Default then existing. No waiver by Administrative Agent or any Lender of any
Default or Event of Default shall be deemed to be a waiver of any Default or
Event of Default other than such Default or Event of Default. No delay or
omission by Administrative Agent or any Lender in exercising any Right under the
Loan Papers shall impair such Right or be construed as a waiver thereof or an
acquiescence therein, nor shall any single or partial exercise of any such Right
preclude other or further exercise thereof, or the exercise of any other Right
under the Loan Papers or otherwise.
8.05. Performance by Administrative Agent or any Lender. Should any
covenant of any GCI Entity fail to be performed in accordance with the terms of
the Loan Papers, Administrative Agent may, at its option, perform or attempt to
perform such covenant on behalf of such GCI Entity. Notwithstanding the
foregoing, it is expressly understood that neither Administrative Agent nor any
Lender assumes, and shall not ever have, except by express written consent of
Administrative Agent or such Lender, any liability or responsibility for the
performance of any duties or covenants of any GCI Entity.
8.06. Expenditures. The Company shall reimburse Administrative Agent
and each Lender for any sums spent by it in connection with the exercise of any
Right provided herein. Such sums shall bear interest at the lesser of (a) the
Base Rate in effect from time to time, plus 3.0% and (b) the Highest Lawful
Rate, from the date spent until the date of repayment by the Company.
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Page 104
8.07. Control. None of the covenants or other provisions contained in
this Agreement shall, or shall be deemed to, give Administrative Agent or any
Lender any Rights to exercise control over the affairs and/or management of any
GCI Entity, the power of Administrative Agent and each Lender being limited to
the Rights to exercise the remedies provided in this Article; provided, however,
that if Administrative Agent or any Lender becomes the owner of any partnership,
stock or other equity interest in any Person, whether through foreclosure or
otherwise, it shall be entitled to exercise such legal Rights as it may have by
being an owner of such stock or other equity interest in such Person.
ARTICLE IX. THE ADMINISTRATIVE AGENT
9.01. Authorization and Action. Each Lender hereby appoints and
authorizes Administrative Agent to take such action as Administrative Agent on
its behalf and to exercise such powers under this Agreement and the other Loan
Papers as are delegated to the Administrative Agent by the terms of the Loan
Papers, together with such powers as are reasonably incidental thereto. As to
any matters not expressly provided for by this Agreement and the other Loan
Papers (including without limitation enforcement or collection of the Notes),
Administrative Agent shall not be required to exercise any discretion or take
any action, but shall be required to act or to refrain from acting (and shall be
fully protected in so acting or refraining from acting) upon the instructions of
Majority Lenders (or all Lenders, if required under Section 10.01), and such
instructions shall be binding upon all Lenders; provided, however, that
Administrative Agent shall not be required to take any action which exposes
Administrative Agent to personal liability or which is contrary to any Loan
Papers or applicable Law. Administrative Agent agrees to give to each Lender
notice of each notice given to it by the Company pursuant to the terms of this
Agreement, and to distribute to each applicable Lender in like funds all amounts
delivered to Administrative Agent by the Company for the Ratable or individual
account of any Lender.
9.02. Administrative Agent's Reliance, Etc. Neither Administrative
Agent, nor any of its directors, officers, agents, employees, or representatives
shall be liable for any action taken or omitted to be taken by it or them under
or in connection with this Agreement or any other Loan Paper, except for its or
their own gross negligence or willful misconduct. Without limitation of the
generality of the foregoing, Administrative Agent (a) may treat the payee of any
Note as the holder thereof until Administrative Agent receives written notice of
the assignment or transfer thereof signed by such payee and in form satisfactory
to Administrative Agent; (b) may consult with legal counsel (including counsel
for the Company or any of the Restricted Subsidiaries), independent public
accountants, and other experts selected by it, and shall not be liable for any
action taken or omitted to be taken in good faith by it in accordance with the
advice of such counsel, accountants, or experts; (c) makes no warranty or
representation to any Lender and shall not be responsible to any Lender for any
statements, warranties, or representations made in or in connection with this
Agreement or any other Loan Papers; (d) shall not have any duty to ascertain or
to inquire as to the performance or observance of any of the terms, covenants,
or conditions of this Agreement or any other Loan Papers on the part of any GCI
Entity or the Restricted Subsidiaries or to inspect the Property (including the
books and records) of any GCI Entity or the Restricted Subsidiaries; (e) shall
not be responsible to any Lender for the due execution, legality, validity,
enforceability, genuineness, sufficiency, or value of this Agreement, any other
Loan Papers, or any other instrument or document furnished
General Communication, Inc. - Form 8-K
Page 105
pursuant hereto; and (f) shall incur no liability under or in respect of this
Agreement or any other Loan Papers by acting upon any notice, consent,
certificate, or other instrument or writing believed by it to be genuine and
signed or sent by the proper party or parties.
9.03. NationsBank of Texas, National Association and Affiliates. With
respect to its Commitment, its Advances, and any Loan Papers, NationsBank of
Texas, National Association has the same Rights under this Agreement as any
other Lender and may exercise the same as though it were not Administrative
Agent. NationsBank of Texas, National Association and its Affiliates may accept
deposits from, lend money to, act as trustee under indentures of, and generally
engage in any kind of business with, any GCI Entity, any Affiliate thereof, and
any Person who may do business therewith, all as if NationsBank of Texas,
National Association were not Administrative Agent and without any duty to
account therefor to any Lender.
9.04. Lender Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon Administrative Agent or any other
Lender, and based on the financial statements referred to in Section 5.04 hereof
and such other documents and information as it has deemed appropriate, made its
own credit analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon
Administrative Agent 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 and the
other Loan Papers.
9.05. Indemnification by Lenders. Lenders shall indemnify
Administrative Agent, pro rata, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses, or disbursements of any kind or nature whatsoever which may be imposed
on, incurred by, or asserted against Administrative Agent in any way relating to
or arising out of any Loan Papers or any action taken or omitted by
Administrative Agent thereunder, including any negligence of Administrative
Agent; provided, however, that no Lender shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses, or disbursements resulting from Administrative Agent's gross
negligence or willful misconduct. Without limitation of the foregoing, Lenders
shall reimburse Administrative Agent, pro rata, promptly upon demand for any
out-of-pocket expenses (including reasonable attorneys' fees) incurred by
Administrative Agent in connection with the preparation, execution, delivery,
administration, modification, amendment, or enforcement (whether through
negotiation, legal proceedings or otherwise) of, or legal and other advice in
respect of rights or responsibilities under, the Loan Papers. The indemnity
provided in this Section 9.05 shall survive the termination of this Agreement.
9.06. Successor Administrative Agent. Administrative Agent may resign
at any time by giving written notice thereof to Lenders and the Company, and may
be removed at any time with or without cause by the action of all Lenders (other
than Administrative Agent, if it is a Lender). Upon any such resignation,
Majority Lenders shall have the right to appoint a successor Administrative
Agent. If no successor Administrative Agent shall have been so appointed and
shall have accepted such appointment within thirty days after the retiring
Administrative Agent's giving of notice of resignation, then the retiring
Administrative Agent may, on behalf of Lenders, appoint a successor
Administrative Agent, which shall be a commercial bank organized under the Laws
of the United States of America or of any State thereof and having a combined
capital and surplus of at least $50,000,000. Upon the acceptance of any
appointment as
General Communication, Inc. - Form 8-K
Page 106
Administrative Agent hereunder by a successor Administrative Agent, such
successor Administrative Agent shall thereupon succeed to and become vested with
all the Rights and duties of the retiring Administrative Agent, and the retiring
Administrative Agent shall be discharged from its duties and obligations under
the Loan Papers, provided that if the retiring or removed Administrative Agent
is unable to appoint a successor Administrative Agent, Administrative Agent
shall, after the expiration of a sixty day period from the date of notice, be
relieved of all obligations as Administrative Agent hereunder. Notwithstanding
any Administrative Agent's resignation or removal hereunder, the provisions of
this Article shall continue to inure to its benefit as to any actions taken or
omitted to be taken by it while it was Administrative Agent under this
Agreement.
ARTICLE X. MISCELLANEOUS
10.01. Amendments and Waivers. No amendment or waiver of any provision
of this Agreement or any other Loan Papers, nor consent to any departure by the
Company or any other GCI Entity therefrom, shall be effective unless the same
shall be in writing and signed by Administrative Agent with the consent of
Majority Lenders, and then any such waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given; provided,
however, that no amendment, waiver, or consent shall (and the result of action
or failure to take action shall not) unless in writing and signed by all of
Lenders and Administrative Agent, (a) increase the Commitment or the Letter of
Credit Commitment, (b) reduce any principal, interest, fees, or other amounts
payable hereunder, or waive or result in the waiver of any Event of Default
under Section 8.01(a), (c) postpone any date fixed for any payment of principal,
interest, fees, or other amounts payable hereunder, (d) release any Collateral
or Guaranties securing any GCI Entity's obligations hereunder, other than
releases contemplated hereby and by the Loan Papers, (e) change the meaning of
Specified Percentage or the number of Lenders required to take any action
hereunder, or (f) amend this Section 10.01. No amendment, waiver, or consent
shall affect the Rights or duties of Administrative Agent under any Loan Papers,
unless it is in writing and signed by Administrative Agent in addition to the
requisite number of Lenders.
10.02. Notices.
(a) Manner of Delivery. All notices communications and other materials
to be given or delivered under the Loan Papers shall, except in those cases
where giving notice by telephone is expressly permitted, be given or delivered
in writing. All written notices, communications and materials shall be sent by
registered or certified mail, postage prepaid, return receipt requested, by
telecopier, or delivered by hand. In the event of a discrepancy between any
telephonic notice and any written confirmation thereof, such written
confirmation shall be deemed the effective notice except to the extent
Administrative Agent, any Lender or the Company has acted in reliance on such
telephonic notice.
(b) Addresses. All notices, communications and materials to be given or
delivered pursuant to this Agreement shall be given or delivered at the
following respective addresses and telecopier and telephone numbers and to the
attention of the following individuals or departments:
General Communication, Inc. - Form 8-K
Page 107
If to the Company:
GCI Communication Corp.
2550 Denali Street, Suite 1000
Anchorage, Alaska 99503-2781
Attention: Mr. John M. Lowber
Telephone No.: (907) 265-5628
Facsimile No.: (907) 265-5676
With a Copy to:
Hartig, Rhodes, Norman, Mahoney & Edwards, P.C.
717 K Street
Anchorage, Alaska 99501
Attention: Robert B. Flint, Esq. and Bonnie
J. Paskvan, Esq.
Telephone No.: (907) 276-1592
Facsimile No.: (907) 277-4352
If to Administrative Agent:
NationsBank of Texas, N.A.
901 Main Street, 64th Floor
Dallas, Texas 75202
Attention: Whitney L. Busse
Vice President
Telephone No.: (214) 508-0950
Facsimile No.: (214) 508-9390
With a Copy to:
Donohoe, Jameson & Carroll, P.C.
3400 Renaissance Tower
1201 Elm Street
Dallas, Texas 75270
Attention: Melissa Ruman Stewart
Telephone No.: (214) 698-3814
Facsimile No.: (214) 744-0231
(c) If to any Lender, to its address set forth below opposite its
signature or on any Assignment and Acceptance or amendment to this Agreement.
General Communication, Inc. - Form 8-K
Page 108
or at such other address or, telecopier or telephone number or to the attention
of such other individual or department as the party to which such information
pertains may hereafter specify for the purpose in a notice to the other
specifically captioned "Notice of Change of Address".
(d) Effectiveness. Each notice, communication and any material to be
given or delivered to any party pursuant to this Agreement shall be effective or
deemed delivered or furnished (i) if sent by mail, on the fifth day after such
notice, communication or material is deposited in the mail, addressed as above
provided, (ii) if sent by telecopier, when such notice, communication or
material is transmitted to the appropriate number determined as above provided
in this Section 10.02 and the appropriate receipt is received or otherwise
acknowledged, (iii) if sent by hand delivery or overnight courier, when left at
the address of the addressee addressed as above provided, and (iv) if given by
telephone, when communicated to the individual or any member of the department
specified as the individual or department to whose attention notices,
communications and materials are to be given or delivered except that notices of
a change of address, telecopier or telephone number or individual or department
to whose attention notices, communications and materials are to be given or
delivered shall not be effective until received; provided, however, that notices
to Administrative Agent pursuant to Article II shall be effective when received.
The Company agrees that Administrative Agent shall have no duty or obligation to
verify or otherwise confirm telephonic notices given pursuant to Article II, and
agrees to indemnify and hold harmless Administrative Agent and Lenders for any
and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, claims, costs, and expenses resulting, directly or indirectly,
from acting upon any such notice.
10.03. Parties in Interest. All covenants and agreements contained in
this Agreement and all other Loan Papers shall bind and inure to the benefit of
the respective successors and assigns of the parties hereto. Each Lender may
from time to time assign or transfer its interests hereunder pursuant to Section
10.04 hereof. No GCI Entity may assign or transfer its Rights or obligations
under any Loan Paper without the prior written consent of Administrative Agent.
10.04. Assignments and Participations.
(a) Subject to the following sentence, each Lender (an "Assignor") may
assign its Rights and obligations as a Lender under the Loan Papers to one or
more Eligible Assignees pursuant to an Assignment and Acceptance, so long as (i)
each assignment shall be of a constant, and not a varying percentage of all
Rights and obligations thereunder, (ii) each Assignor shall obtain in each case
the prior written consent of Administrative Agent, which consent shall not be
unreasonably withheld, (iii) each Assignor shall in each case pay a $3,500
processing fee to Administrative Agent, and (iv) no such assignment is for an
amount less than $5,000,000. Assignments and other transfers (except
participations) with respect to each Lender's participation in a given Letter of
Credit may only be made with the prior written consent of the Administrative
Agent. Within five Business Days after Administrative Agent receives notice of
any such assignment, the Company shall execute and deliver to Administrative
Agent, in exchange for the Notes issued to Assignor, new Notes to the order of
such Assignor and its assignee in amounts equal to their respective Specified
Percentages of the Commitment. Such new Notes shall be dated the effective date
of the assignment. It is specifically acknowledged and agreed that on and after
the effective date of each assignment, the assignee shall be a party hereto and
shall have the Rights and obligations of a Lender under the Loan Papers.
General Communication, Inc. - Form 8-K
Page 109
(b) Each Lender may sell participations to one or more Persons in all
or any of its Rights and obligations under the Loan Papers; provided, however,
that (i) such Lender's obligations under the Loan Papers shall remain unchanged,
(ii) such Lender shall remain solely responsible to the other parties hereto for
the performance of such obligations, (iii) such Lender shall remain the holder
of its Notes for all purposes of the Loan Papers, (iv) the participant shall be
granted the Right to vote on or consent to only those matters described in
Sections 10.01(a), (b), (c) and (d), (v) each GCI Entity, Administrative Agent,
and other Lenders shall continue to deal solely and directly with such Lender in
connection with its Rights and obligations under the Loan Papers and (vi) no
such participation is for an amount less than $5,000,000.
(c) Any Lender may, in connection with any assignment or participation,
or proposed assignment or participation, disclose to the assignee or
participant, or proposed assignee or participant, any information relating to
any GCI Entity furnished to such Lender by or on behalf of any GCI Entity.
(d) Notwithstanding any other provision set forth in this Agreement,
each Lender may at any time create a security interest in all or any portion of
its Rights under this Agreement (including, without limitation, the Advances
owing to it and the Note or Notes held by it) in favor of any Federal Reserve
Bank in accordance with Regulation A of the Board of Governors of the Federal
Reserve System.
10.05. Sharing of Payments. If any Lender shall obtain any payment
(whether voluntary, involuntary, through the exercise of any Right of set-off,
or otherwise) on account of its Advances in excess of its pro rata share of
payments made by the Company, such Lender shall forthwith purchase
participations in Advances made by the other Lenders as shall be necessary to
share the excess payment pro rata with each of them; provided, however, that if
any of such excess payment is thereafter recovered from the purchasing Lender,
its purchase from each Lender shall be rescinded and each Lender shall repay the
purchase price to the extent of such recovery together with a pro rata share of
any interest or other amount paid or payable by the purchasing Lender in respect
of the total amount so recovered. The Company agrees that any Lender so
purchasing a participation from another Lender pursuant to this Section 10.05
may, to the fullest extent permitted by Law, exercise all its Rights of payment
(including the Right of set-off) with respect to such participation as fully as
if such Lender were the direct creditor of the Company in the amount of such
participation.
10.06. Right of Set-off. Upon the occurrence and during the continuance
of any Event of Default, each Lender is hereby authorized at any time and from
time to time, to the fullest extent permitted by Law, to set-off and apply any
and all deposits (general or special, time or demand, provisional or final) at
any time held and other indebtedness at any time owing by such Lender to or for
the credit or the account of the Company against any and all of the obligations
of the Company now or hereafter existing under this Agreement and the other Loan
Papers, whether or not Administrative Agent or any Lender shall have made any
demand under this Agreement or the other Loan Papers, and even if such
obligations are unmatured. Each Lender shall promptly notify the Company after
any such set-off and application, provided that the failure to give such notice
shall not affect the validity of such set-off and application. The Rights of
each Lender under this Section 10.06 are in addition to other Rights (including,
without limitation, other Rights of set-off) which such Lender may have.
General Communication, Inc. - Form 8-K
Page 110
10.07. Costs, Expenses, and Taxes.
(a) The Company agrees to pay on demand (i) all costs and expenses of
Administrative Agent in connection with the preparation and negotiation of all
Loan Papers, including without limitation the reasonable fees and out-of-pocket
expenses of Special Counsel and (ii) all costs and expenses (including
reasonable attorneys' fees and expenses) of Administrative Agent and each Lender
in connection with administration, interpretation, modification, amendment,
waiver, or release of any Loan Papers and any restructuring, work-out, or
collection of any portion of the Obligations or the enforcement of any Loan
Papers.
(b) In addition, the Company shall pay any and all stamp, debt, and
other Taxes payable or determined to be payable in connection with any payment
hereunder (other than Taxes on the overall net income of Administrative Agent or
any Lender or franchise Taxes or Taxes on capital or capital receipts of
Administrative Agent or any Lender), or the execution, delivery, or recordation
of any Loan Papers, and agrees to save Administrative Agent and each Lender
harmless from and against any and all liabilities with respect to, or resulting
from any delay in paying or omission to pay any Taxes in accordance with this
Section 10.07, including any penalty, interest, and expenses relating thereto.
All payments by the Company or any Restricted Subsidiary under any Loan Papers
shall be made free and clear of and without deduction for any present or future
Taxes (other than Taxes on the overall net income of Administrative Agent or any
Lender of any nature now or hereafter existing, levied, or withheld, or
franchise Taxes or Taxes on capital or capital receipts of Administrative Agent
or any Lender), including all interest, penalties, or similar liabilities
relating thereto. If the Company shall be required by Law to deduct or to
withhold any Taxes from or in respect of any amount payable hereunder, (i) the
amount so payable shall be increased to the extent necessary so that, after
making all required deductions and withholdings (including Taxes on amounts
payable to Administrative Agent or any Lender pursuant to this sentence),
Administrative Agent or any Lender receives an amount equal to the sum it would
have received had no such deductions or withholdings been made, (ii) the Company
shall make such deductions or withholdings, and (iii) the Company shall pay the
full amount deducted or withheld to the relevant taxing authority in accordance
with applicable Law. Without prejudice to the survival of any other agreement of
the Company hereunder, the agreements and obligations of the Company contained
in this Section 10.07 shall survive the execution of this Agreement, termination
of the Commitment and/or the Letter of Credit Commitment, repayment of the
Obligations, satisfaction of each agreement securing or assuring the Obligations
and termination of this Agreement and each other Loan Paper.
10.08. Indemnification by the Company. The Company shall indemnify,
defend, and hold harmless Administrative Agent, each Lender and their respective
Affiliates, directors, officers, agents, employees, and representatives, from
and against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, claims, costs, expenses, and disbursements of any
kind or nature whatsoever which may be imposed on, incurred by or asserted
against any of them in any way relating to or arising out of any Loan Papers
(including in connection with or as a result, in whole or in part, of the
negligence of any of them), any transaction related hereto or thereto, or any
act, omission, or transaction of the Company, any other GCI Entity and their
respective Affiliates, or any of their directors, partners, officers, agents,
employees, or representatives; provided, however, that neither Administrative
Agent nor any Lender shall be indemnified, defended, and held harmless pursuant
to this Section 10.08 to
General Communication, Inc. - Form 8-K
Page 111
the extent of any losses or damages which the Company proves were caused by the
indemnified party's willful misconduct or gross negligence.
10.09. Rate Provision. It is not the intention of any party to any Loan
Papers to make an agreement violative of the Laws of any applicable jurisdiction
relating to usury. In no event shall the Company or any other Person be
obligated to pay any amount in excess of the Maximum Amount. If Administrative
Agent or any Lender ever receives, collects or applies, as interest, any such
excess, such amount which would be excessive interest shall be deemed a partial
repayment of principal and treated hereunder as such; and if principal is paid
in full, any remaining excess shall be paid to the Company or the other Person
entitled thereto. In determining whether or not the interest paid or payable,
under any specific contingency, exceeds the Maximum Amount, each GCI Entity,
Administrative Agent and each Lender shall, to the maximum extent permitted
under Applicable Law, (a) characterize any nonprincipal payment as an expense,
fee or premium rather than as interest, (b) exclude voluntary prepayments and
the effect thereof, and (c) amortize, prorate, allocate and spread in equal
parts, the total amount of interest throughout the entire contemplated term of
the Obligations so that the interest rate is uniform throughout the entire term
of the Obligations; provided that if the Obligations are paid and performed in
full prior to the end of the full contemplated term thereof, and if the interest
received for the actual period of existence thereof exceeds the Maximum Amount,
Administrative Agent or Lenders, as appropriate, shall refund to the Company the
amount of such excess or credit the amount of such excess against the total
principal amount owing, and, in such event, neither Administrative Agent nor any
Lender shall be subject to any penalties provided by any Laws for contracting
for, charging or receiving interest in excess of the Maximum Amount. This
Section 10.09 shall control every other provision of all agreements among the
parties to the Loan Papers pertaining to the transactions contemplated by or
contained in the Loan Papers.
10.10. Severability. If any provision of any Loan Papers is held to be
illegal, invalid, or unenforceable under present or future Laws during the term
thereof, such provision shall be fully severable, the appropriate Loan Paper
shall be construed and enforced as if such illegal, invalid, or unenforceable
provision had never comprised a part thereof, and the remaining provisions
thereof shall remain in full force and effect and shall not be affected by the
illegal, invalid, or unenforceable provision or by its severance therefrom.
Furthermore, in lieu of such illegal, invalid, or unenforceable provision there
shall be added automatically as a part of such Loan Paper a legal, valid, and
enforceable provision as similar in terms to the illegal, invalid, or
unenforceable provision as may be possible.
10.11. Exceptions to Covenants. No GCI Entity shall be deemed to be
permitted to take any action or to fail to take any action that is permitted as
an exception to any covenant in any Loan Papers, or that is within the
permissible limits of any covenant, if such action or omission would result in a
violation of any other covenant in any Loan Papers.
10.12. Counterparts. This Agreement and the other Loan Papers may be
executed in any number of counterparts, all of which taken together shall
constitute one and the same instrument. In making proof of any such agreement,
it shall not be necessary to produce or account for any counterpart other than
one signed by the party against which enforcement is sought.
General Communication, Inc. - Form 8-K
Page 112
10.13. GOVERNING LAW; WAIVER OF JURY TRIAL.
(a) THIS AGREEMENT AND ALL OTHER LOAN PAPERS SHALL BE DEEMED TO BE
CONTRACTS MADE IN DALLAS, TEXAS, AND SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS (WITHOUT GIVING EFFECT TO
CONFLICT OF LAWS) AND THE UNITED STATES OF AMERICA. WITHOUT EXCLUDING ANY OTHER
JURISDICTION AND NOT AS A LIMITATION OF SECTION 10.14 HEREOF, THE COMPANY AGREES
THAT THE STATE AND FEDERAL COURTS OF TEXAS LOCATED IN DALLAS, TEXAS, WILL HAVE
JURISDICTION OVER PROCEEDINGS IN CONNECTION HEREWITH. TO THE MAXIMUM EXTENT
PERMITTED BY LAW, THE COMPANY HEREBY WAIVES ANY RIGHT THAT IT MAY HAVE TO A
TRIAL BY JURY OF ANY DISPUTE (WHETHER A CLAIM IN TORT, CONTRACT, EQUITY, OR
OTHERWISE) ARISING UNDER OR RELATING TO THIS AGREEMENT, THE OTHER LOAN PAPERS,
OR ANY RELATED MATTERS, AND AGREES THAT ANY SUCH DISPUTE SHALL BE TRIED BEFORE A
JUDGE SITTING WITHOUT A JURY.
(b) THE COMPANY HEREBY WAIVES PERSONAL SERVICE OF ANY LEGAL PROCESS
UPON IT. THE COMPANY AGREES THAT SERVICE OF PROCESS MAY BE MADE UPON IT BY
REGISTERED MAIL (RETURN RECEIPT REQUESTED) DIRECTED TO THE COMPANY AT ITS
ADDRESS DESIGNATED FOR NOTICE UNDER THIS AGREEMENT AND SERVICE SO MADE SHALL BE
DEEMED TO BE COMPLETED FIVE DAYS AFTER DEPOSIT IN THE UNITED STATES MAIL.
NOTHING IN THIS SECTION 10.13 SHALL AFFECT THE RIGHT OF ADMINISTRATIVE AGENT OR
ANY LENDER TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.
10.14. ENTIRE AGREEMENT. THIS AGREEMENT AND THE OTHER LOAN PAPERS
REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENT OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
General Communication, Inc. - Form 8-K
Page 113
10.15. Amendment, Restatement, Extension, Renewal and Increase. This
Agreement is a renewal, extension, amendment, increase and restatement of the
Original Credit Agreement, and, as such, except for the "Obligation" as defined
in the Original Credit Agreement (which shall survive, be renewed, extended,
increased and restated by the terms of this Agreement), all other terms and
provisions supersede in their entirety the Original Credit Agreement. All
subordination agreements, security agreements, pledge agreements, mortgages, and
deeds of trust executed and delivered in connection with this Agreement, if any,
shall supersede the subordination agreements, security agreements, pledge
agreements, mortgages, and deeds of trust executed and delivered in connection
with the Original Credit Agreement (the "Original Security Documents"), except
for the Liens created under the Original Security Documents which shall remain
valid, binding and enforceable Liens against the Company and each of the other
Persons which granted such Liens. Notwithstanding anything contained herein to
the contrary, any interest rate hedge agreements executed in connection with the
Original Credit Agreement shall remain in full force and effect.
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General Communication, Inc. - Form 8-K
Page 114
IN WITNESS WHEREOF, this Third Amended and Restated Credit Agreement is
executed as of the date first set forth above.
THE COMPANY:
GCI COMMUNICATION CORP.
/s/
By: John M. Lowber
Its: Senior Vice President and
Chief Financial Officer
ADMINISTRATIVE AGENT:
NATIONSBANK OF TEXAS, N.A., as
Administrative Agent
/s/
By: Whitney L. Busse
Its: Vice President
LENDERS:
Specified Percentage: NATIONSBANK OF TEXAS, N.A.,
Individually, as a Lender
36.800000%
Address:
901 Main, 64th Floor /s/
Dallas, Texas 75202 By: Whitney L. Busse
Its: Vice President
Attention: Whitney L. Busse
Telephone: (214) 508-0950
Facsimile: (214) 508-9390
General Communication, Inc. - Form 8-K
Page 115
Specified Percentage: TORONTO DOMINION (TEXAS), INC.,
Individually as a Lender
32.000000%
Address:
909 Fannin, Suite 1700 /s/
Houston, Texas 77010 By: David G. Parker
Its: Vice President
Attn: Dave Parker
Phone: (713) 653-8248
Facs: (713) 951-9921
With a copy to:
31 West 52nd Street
New York, New York 10019
Attn: Mr. David Oliver
Phone: (212) 468-0731
Facs: (212) 262-1928
Specified Percentage:
19.200000% CREDIT LYONNAIS NEW YORK BRANCH
Address:
1301 Avenue of the Americas /s/
New York, New York 10019 By: Mark D. Thorsheim
Its:
Attn: Mr. Mark D. Thorsheim
Phone: (212) 261-7852
Facs: (212) 261-3318
Specified Percentage:
12.000000% NATIONAL BANK OF ALASKA
Address:
301 W. Northern Lights Blvd. /s/
Anchorage, Alaska 99503 By: Patricia Jelley Benz
Its: Vice President
Attn: Ms. Pita Jelley Benz
Phone: (907) 265-2916
Facs: (907) 265-2141
General Communication, Inc. - Form 8-K
Page 116
EXHIBIT A
NOTE
$ Dallas, Texas April 26, 1996
GCI Communication Corp., an Alaskan corporation ("Company"), promises
to pay to the order of ("Lender") the lesser of the
principal sum of DOLLARS ($ ) or the
aggregate unpaid principal amount of all Advances made by Lender to Company
pursuant to Section 2.01 of the Agreement (as hereinafter defined) in
immediately available funds at the principal office of NationsBank of Texas,
N.A., as Administrative Lender, together with interest on the unpaid principal
amount hereof at the rates and on the dates set forth in the Agreement. The
Company shall pay each Advance in full on the last day of such Advance's
applicable Interest Period and shall make such mandatory payments as are
required to be made under the terms of Section 2.06 of the Agreement.
The Lender shall, and is hereby authorized to, record on the schedule
attached hereto, or to otherwise record in accordance with its usual practice,
the date and amount of each Advance and the date and amount of each principal
payment hereunder.
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (AND
NOT THE LAW OF CONFLICTS) OF THE STATE OF TEXAS BUT GIVING EFFECT TO THE FEDERAL
LAWS APPLICABLE TO NATIONAL BANKS.
This Note is one of the Notes issued pursuant to, and is entitled to
the benefits of, the Second Amended and Restated Credit Agreement, dated as of
April 26, 1996 (as amended or modified and in effect from time to time, the
"Agreement"), among Company, the banks named therein and NationsBank of Texas,
N.A., as Administrative Lender, to which Agreement reference is hereby made for
a statement of the terms and conditions under which this Note may be prepaid or
its maturity date accelerated. This Note is secured pursuant to certain pledge
and security agreements, all as more specifically described in the Agreement,
and reference is made thereto for a statement of the terms and provisions
thereof. Capitalized terms used herein and not otherwise defined herein are used
with the meanings attributed to them in the Agreement.
This Note is a renewal, extension and modification of those certain
Notes dated October 31, 1995, in the respective principal amounts of $15,750,000
and $10,080,000, which Notes were a renewal, extension, and modification of that
certain Note dated May 14, 1993 in the principal amount of $15,000,000 executed
by the Company and made payable to the Administrative Lender.
GCI COMMUNICATION CORP.
By: John M. Lowber
Its: Senior Vice President and
Chief Financial Officer
General Communication, Inc. - Form 8-K
Page 117
SCHEDULE OF ADVANCES AND PAYMENTS OF PRINCIPAL TO
NOTE OF
GCI COMMUNICATION CORP.
DATED APRIL 26, 1996
Principal Maturity Principal
Amount of of Interest Amount Unpaid
Date Advance Period Paid Balance
- ---- ------- ------ ---- -------
General Communication, Inc. - Form 8-K
Page 118
EXHIBIT B
ASSIGNMENT AND ACCEPTANCE
Dated
Reference is made to the Second Amended and Restated Credit Agreement
dated as of April 26, 1996 (as amended, restated, or otherwise modified from
time to time, the "Credit Agreement") among GCI Communication Corp., an Alaskan
corporation (the "Company"), NationsBank of Texas, N.A., as Administrative
Lender (the "Administrative Lender"), and the Lenders parties thereto. Terms
defined in the Credit Agreement are used herein with the same meaning.
("Assignor") and ("Assignee")
agree as follows:
1. Assignor hereby sells and assigns to Assignee without recourse or
warranty, and Assignee hereby purchases and assumes from Assignor, a %
interest in and to all of Assignor's rights and obligations under the Credit
Agreement as of the Effective Date (as defined below), with respect to such
percentage interest in Assignor's portion of the Commitment as in effect on the
Effective Date, the principal amount of Loans owing to Assignor on the Effective
Date, and the Notes held by Assignor, subject to the terms and conditions of
this Assignment and Acceptance.
2. Assignor (a) represents and warrants that (i) as of the date hereof
the aggregate amount of its portion of the Commitment (without giving effect to
assignments thereof which have not yet become effective) is $ and, as of
the date hereof, the outstanding principal amount of the Loans owing to it
(without giving effect to assignments thereof which have not yet become
effective) is $ , and (ii) it is the legal and beneficial owner of the
interest being assigned by it hereunder; (b) makes no representation or warranty
and assumes no responsibility with respect to (i) any statements, warranties, or
representations made in or in connection with the Credit Agreement or the
execution, legality, validity, enforceability, genuineness, sufficiency, or
value of the Credit Agreement, the Loan Papers, or any other instrument or
document furnished pursuant thereto or (ii) the financial condition of the
Company or the performance or observance by the Company of any of its
obligations under the Credit Agreement, the Loan Papers, or any other instrument
or document furnished pursuant thereto; and (c) attaches the Note referred to in
Paragraph 1 above to exchange such Notes for new Note as follows: .
3. Assignee (a) confirms that it has received a copy of the Credit
Agreement and the other Loan Papers, together with copies of
General Communication, Inc. - Form 8-K
Page 119
the financial statements referred to in Section 6.05 of the Credit Agreement and
such other documents and information as it has deemed appropriate to make its
own credit analysis and decision to enter into this Assignment and Acceptance;
(b) agrees that it will, independently and without reliance upon the
Administrative Lender, Assignor, 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 the Credit
Agreement and the other Loan Papers; (c) appoints and authorizes the
Administrative Lender to take such action as agent on its behalf and to exercise
such powers under the Credit Agreement, the other Loan Papers, and this
Assignment and Acceptance as are delegated to the Administrative Lender by the
terms thereof and hereof, together with such powers as are reasonably incidental
thereto and hereto; (d) agrees that it will perform in accordance with its terms
all of the obligations which by the terms of the Credit Agreement, the other
Loan Papers, and this Assignment and Acceptance are required to be performed by
it as a Lender; (e) specifies the addresses set forth in Schedule I attached
hereto as its address for the receipt of notices; and (f) if it is not a United
States Person, attaches the forms prescribed by the Internal Revenue Service
certifying as to Assignee's status for purposes of determining exception from
United States withholding taxes with respect to all payments to be made to
Assignee under the Credit Agreement, the other Loan Papers, and this Assignment
and Acceptance or such other documents as are necessary to indicate that all
such payments are subject to such taxes at a rate reduced by an applicable tax
treaty.
4. The effective date for this Assignment and Acceptance shall be
(the "Effective Date").
5. Upon remittance of the $3,500 processing fee to the Administrative
Lender on behalf of the Administrative Lender and the Effective Date, (a)
Assignee shall be a party to the Credit Agreement and, to the extent provided in
this Assignment and Acceptance, have the rights and obligations of a Lender
thereunder and (b) Assignor shall, to the extent provided in this Assignment and
Acceptance, relinquish its rights and be released from its obligations under the
Credit Agreement.
6. This Assignment and Acceptance shall be governed by and construed in
accordance with the laws of the State of Texas and the United States of America.
Without excluding any other jurisdiction, Assignee agrees that the courts of
Texas will have jurisdiction over proceedings in connection herewith.
7. Assignee's Specified Percentage ("Specified Percentage") shall be
%.
8. This Assignment and Acceptance may be executed in any number of
counterparts, each of which shall be deemed to be an
General Communication, Inc. - Form 8-K
Page 120
original, but all such separate counterparts shall together constitute but one
and the same instrument.
[ASSIGNOR]
By:
[ASSIGNEE]
By:
Its:
Accepted this day of
NATIONSBANK OF TEXAS, N.A.,
as Administrative Lender
By:
Its:
General Communication, Inc. - Form 8-K
Page 121
Schedule I
ASSIGNEE'S ADDRESS
1. Address for the Loans and Receipt of Notices
2. Initial Eurodollar Lending Office
General Communication, Inc. - Form 8-K
Page 122
EXHIBIT C
PLEDGE AND SECURITY AGREEMENT
This Pledge and Security Agreement (as amended, restated, or otherwise
modified from time to time, this "Security Agreement") is executed as of April
26, 1996 by and between the undersigned Company ("Company") and NationsBank of
Texas, N.A., as Administrative Lender ("Administrative Lender") for the banks
referred to below.
BACKGROUND
GCI Communication Corp. ("Borrower") has entered into a Second Amended
and Restated Credit Agreement dated as of April 26, 1996 (as the same may be
amended or modified and in effect from time to time, the "Credit Agreement"),
which Credit Agreement is a restatement of that certain Credit Agreement dated
May 14, 1993 between The First National Bank of Chicago and Borrower, with the
banks named therein (together with their respective successors and assigns,
collectively called "Lenders") and NationsBank of Texas, N.A., as Administrative
Lender, which Credit Agreement is an amendment and restatement of that certain
Credit Agreement dated as of November 30, 1990 between The First National Bank
of Chicago as Agent and Borrower. The Credit Agreement requires that the
Obligations (as defined in the Credit Agreement) be secured by the Collateral
(as hereinafter defined) and Company desires to enter into this Security
Agreement to satisfy such terms. The board of directors of the Company has
determined that the Company will benefit, directly or indirectly, from the
Advances made under the Credit Agreement.
AGREEMENT
The parties hereto agree as follows:
1. DEFINITIONS.
As used in this Security Agreement:
"Accounts" means rights to payment for goods sold or leased or for
services rendered, whether or not earned by performance, together with all
security interests securing such rights to payment.
"Collateral" means all of the following property, wherever located, in
which Company now has or hereafter acquires any right or interest, and any and
all proceeds, insurance proceeds and products thereof, together with all cash,
bank accounts, special collateral accounts, books, records, customer lists,
credit files, computer files, programs, printouts and other computer records
related thereto:
General Communication, Inc. - Form 8-K
Page 123
(a) Accounts (e) Pledged Stock
(b) Equipment (f) Stock Rights
(c) Fixtures (g) Inventory
(d) General Intangibles
"Default" means an event described in Section 5 whether or not any
requirement in connection with such event for the giving of notice, lapse of
time, or happening of any further condition has been satisfied.
"Event of Default" means an event described in Section 5.
"Equipment" means all equipment, machinery, furniture and goods used or
usable by Company in its business and all other tangible personal property
(other than Inventory and motor vehicles), and all accessions and additions
thereto, including, without limitation, the Fixtures.
"FCC" means the Federal Communications Commission or any other
regulatory body which succeeds to the functions of the Federal Communications
Commission.
"FCC License" means any community antenna relay service, broadcast
auxiliary license, earth station, business radio, microwave or special safety
radio service license issued by the FCC pursuant to the Communications Act of
1934, as amended.
"Fixtures" means all goods of Company, which have been attached to real
property in such a manner that their removal would cause damage to the realty
and which have therefore taken on the character of real property, including,
without limitation, all trade fixtures.
"General Intangibles" means all intangible personal property including,
without limitation, all contract rights, rights to receive payments of money,
chooses in action, judgments, tax refunds and tax refund claims, patents,
trademarks, trade names, copyrights, licenses (including, without limitation,
all FCC Licenses except to the extent that it is unlawful to grant a security
interest therein and that the grant of any such security interest therein would
result in a default thereunder or forfeiture thereof), franchises, partnership
interests, joint venture interests, leasehold interests in real or personal
property, rights to receive rentals of real or personal property and guarantee
claims.
"Government Claim" means any Receivable which constitutes a claim
against the federal government, any state government or any instrumentality or
agency of any of the foregoing.
"Inventory" means all inventory, raw materials, work in process,
finished goods, returned or repossessed goods, goods held
General Communication, Inc. - Form 8-K
Page 124
for sale or lease, goods furnished or to be furnished under contracts of
service.
"Lien" means any security interest, mortgage, pledge, hypothecation,
lien, claim, charge, encumbrance, title retention agreement or lessor's interest
in, of or on the Collateral or any portion thereof.
"Person" means any corporation, natural person, firm, joint venture,
partnership, trust, unincorporated organization, enterprise, government or any
department or agency of any government.
"Pledged Stock" means all of the outstanding shares of capital stock of
each Person currently or hereafter owned by Company.
"Receivables" means the Accounts and General Intangibles.
"Section" means a numbered section of this Security Agreement, unless
another document is specifically referenced.
"Security Agreement" means this Pledge and Security Agreement, as it
may be amended or modified and in effect from time to time.
"Stock Rights" means any securities, dividends or other distributions
and any other right or property which Company shall receive or shall become
entitled to receive for any reason whatsoever with respect to, in substitution
for or in exchange for any or all of the Pledged Stock and any other property
substituted or exchanged therefor and any stock, any right to receive stock and
any right to receive earnings, in which Company now has or hereafter acquires
any right, issued by an issuer of the Pledged Stock.
The foregoing definitions shall be equally applicable to both the
singular and plural forms of the defined terms. Capitalized terms used herein
and not otherwise defined herein shall have the meanings set forth in the Credit
Agreement.
2. GRANT OF SECURITY INTEREST.
Company hereby pledges, assigns and grants to Administrative Lender for
the benefit of the Lenders, equally and ratably in proportion to the total
Obligations owing at any time to the Lenders, a continuing Lien and security
interest in and right of setoff against the Collateral to secure the full and
complete payment and performance of the Obligations.
3. REPRESENTATIONS AND WARRANTIES.
Company represents and warrants to Administrative Lender that:
General Communication, Inc. - Form 8-K
Page 125
3.1. Existence and Standing. Company is duly incorporated, validly
existing and in good standing under the laws of its jurisdiction of
incorporation and has all requisite authority to conduct its business in each
jurisdiction in which its business is conducted.
3.2. Authorization, Validity and Enforceability. The execution and
delivery by Company of this Security Agreement has been duly authorized by
proper corporate proceedings and this Security Agreement constitutes a legal,
valid and binding obligation of Company and creates a security interest which is
enforceable against Company in all now owned and hereafter acquired Collateral,
except as enforceability may be limited by bankruptcy, insolvency or similar
laws affecting the enforcement of creditors' rights generally.
3.3. Conflicting Laws and Contracts. Neither the execution and delivery
by Company of this Security Agreement, nor the creation and perfection of the
security interest in the Collateral granted hereunder, nor compliance with the
terms and provisions hereof will violate any law, rule, regulation, order, writ,
judgment, injunction, decree or award binding on Company or Company's articles
or certificate of incorporation or by-laws, the provisions of any indenture,
instrument or agreement to which Company is a party or is subject, or by which
it or its property is bound, or conflict with or constitute a default
thereunder, or result in the creation or imposition of any Lien pursuant to the
terms of any such indenture, instrument or agreement. No order, consent,
approval, license, authorization, or validation of, or filing, recording or
registration with, or exemption by, any governmental or public body or
authority, or any subdivision thereof, which has not heretofore been obtained or
made, is required to authorize, or is required in connection with the execution,
delivery and performance of, or the legality, validity, binding effect or
enforceability of this Security Agreement other than the filing, within the
period established by applicable law, of this Security Agreement with the FCC.
3.4. Principal Location. Company's mailing address for notices
hereunder, the location of its chief executive office and principal place of
business and of its books and records relating to the Receivables are all
disclosed in Exhibit A. Company has no other places of business except those set
forth in Exhibits A and B.
3.5. Property Locations. The Equipment and Fixtures are located solely
at the locations described in Exhibit B. All of said locations are owned by
Company except those listed in Part B of Exhibit B.
3.6. No Other Names. Company has not conducted business under any name
except the name in which it has executed this Security Agreement and the trade
names listed in Exhibit A.
General Communication, Inc. - Form 8-K
Page 126
3.7. No Default. No Default or Event of Default exists.
3.8. Receivables. The names of the obligors, amounts owing, due dates
and other information with respect to the Receivables are correctly stated in
all material respects in all records of Company relating thereto and in all
invoices and reports with respect thereto furnished to Administrative Lender by
Company from time to time.
3.9. Filing Requirements. None of the Collateral is of a type where
security interests or liens may be filed under any federal statute, except for
patents and copyrights held by Company described in Exhibit C. The legal
description and street address of the property on which any Fixtures are located
is set forth in Exhibit B, together with the names and addresses of the record
owner of each such property.
3.10. No Financing Statements. No financing statement describing all or
any portion of the Collateral which has not lapsed or been terminated naming
Company as debtor has been filed in any jurisdiction except (a) financing
statements naming Administrative Lender as secured party and (b) financing
statements described in Exhibit D.
3.11. Ownership of Pledged Stock. Company is the holder of record and
the sole beneficial owner of each share of the Pledged Stock and the Pledged
Stock constitutes 100% of the issued and outstanding stock of each Subsidiary.
Exhibit E sets forth a complete and accurate list of the Pledged Stock and Stock
Rights. No Person other than Company is the holder of record or the beneficial
owner of any Stock Rights. All of the shares of Pledged Stock have been duly and
validly issued, are fully paid and non-assessable and are owned by Company free
and clear of any Liens, except Permitted Liens, options, warrants, puts, calls
or other rights of third persons, and restrictions, other than (a) the security
interest granted to Administrative Lender hereunder and (b) restrictions on
transferability imposed by applicable state and Federal Securities laws or which
may arise as a result of Company being subject to the Communications Act of
1934, as amended, and the rules and regulations of the FCC thereunder. Company
agrees to warrant and defend title to and ownership of the Pledged Stock and
Stock Rights and the lien created by this Security Agreement against the claims
of all Persons and maintain and preserve such lien at all times during the term
of this Security Agreement.
4. COVENANTS.
From the date of this Security Agreement, and thereafter until this
Security Agreement is terminated:
General Communication, Inc. - Form 8-K
Page 127
4.1. General.
(a) Applications, Approvals and Consents. Company will, at its
expense, promptly execute and deliver, or cause the execution and
delivery of, all applications, certificates, instruments, registration
statements, and all other documents and papers Administrative Lender
may reasonably request in connection with the obtaining of any consent,
approval, registration, qualification, or authorization of the FCC or
of any other Person necessary or appropriate for the effective exercise
of any rights under this Security Agreement. Without limiting the
generality of the foregoing, Company agrees that in the event
Administrative Lender shall exercise its right to sell, transfer, or
otherwise dispose of or take any other action in connection with any of
the Pledged Stock or other Collateral pursuant to this Security
Agreement, Company shall execute and deliver all applications,
certificates, and other documents Administrative Lender may reasonably
request and shall otherwise promptly, fully, and diligently cooperate
with Administrative Lender, the Lenders and any other necessary
Persons, in making any application for the prior consent or approval of
the FCC or any other Person to the exercise by Administrative Lender or
the Lenders of any of such rights relating to all or any part of the
Pledged Stock or other Collateral. Furthermore, because Company agrees
that Administrative Lender's and the Lenders' remedy at law for failure
of Company to comply with the provisions of this Section 4.1(a) would
be inadequate and that such failure would not be adequately compensable
in damages, Company agrees that the covenants of this Section 4.1(a)
may be specifically enforced.
(b) Inspection. Company will permit Administrative Lender, by
its representatives and agents, to inspect the Collateral, to examine
and make copies of the records of Company relating thereto, and to
discuss the Collateral, and the records of Company with respect thereto
with, and to be advised as to the same by, Company's officers and
employees and, in the case of any Receivable, with any Person which is
or may be obligated thereon, all at such reasonable times and intervals
as Administrative Lender may determine, all at Company's expense.
(c) Taxes. Company will pay when due all taxes, assessments
and governmental charges and levies upon the Collateral, except those
which are being contested in good faith by appropriate proceedings.
(d) Records and Reports. Company will maintain complete and
accurate books and records with respect to the Collateral, and furnish
to Administrative Lender such reports relating to the Collateral as
Administrative Lender may from time to time request.
General Communication, Inc. - Form 8-K
Page 128
(e) Notice of Default. Company will give prompt notice in
writing to Administrative Lender of the occurrence of any Default or
Event of Default and of any other development, financial or otherwise,
which might materially adversely affect the Collateral or the ability
of Company to pay the Obligations.
(f) Financing Statements and Other Actions. Company will
execute and deliver to Administrative Lender all financing statements
and other documents from time to time requested by Administrative
Lender in order to maintain a first perfected security interest in the
Collateral.
(g) Further Assurances. Company, at its expense, shall from
time to time execute and deliver to Administrative Lender all such
other assignments, certificates, supplemental documents, and financing
statements, and shall do all other acts or things as Administrative
Lender may reasonably request in order to more fully create, evidence,
perfect, continue, and preserve the priority of the lien herein
created. Without limiting the generality of the foregoing, (i) Company
shall, upon the request of Administrative Lender or Majority Lenders at
such time as (A) a Default or Event of Default shall have occurred and
be continuing or (B) the total aggregate amount of all Government
Claims shall exceed 7% of all Receivables owing to Company, execute and
deliver to Administrative Lender, at Company's expense, such
assignments of claims or similar documents as shall be necessary or
appropriate to continue or perfect the priority of the lien herein
created in such Government Claims.
(h) Disposition of Collateral. Company will not lease, sell or
otherwise dispose of the Collateral except as permitted by the terms of
Section 7.05 of the Credit Agreement.
(i) Liens. Company will not create, incur, or suffer to exist
any Lien except (i) the Lien created by this Security Agreement and
(ii) those Liens permitted by the terms of Section 7.04 of the Credit
Agreement.
(j) Change in Location or Name. Without giving Administrative
Lender at least 30 days' prior written notice, Company will not (i)
have any Equipment or Fixtures or proceeds or products thereof (other
than Equipment, Fixtures or proceeds thereof disposed of as permitted
by Section 4.1(h)) at a location other than a location specified in
Exhibit B, (ii) maintain records relating to the Receivables at a
location other than at the location specified on Exhibit A, (iii)
maintain a place of business at a location other than a location
specified on Exhibits A and B, or (iv) change its name or its mailing
address or adopt a trade or assumed name.
General Communication, Inc. - Form 8-K
Page 129
(k) Other Financing Statements. Company will not sign or
authorize the signing on its behalf of any financing statement naming
it as debtor covering all or any portion of the Collateral, except
financing statements in respect of the Liens permitted by Section
4.1(i).
4.2. Receivables.
(a) Certain Agreements on Receivables. Company will not make
or agree to make any discount, credit, rebate or other reduction in the
original amount owing on a Receivable or accept in satisfaction of a
Receivable less than the original amount thereof, except that, prior to
the occurrence of an Event of Default, Company may reduce the amount of
Accounts in accordance with its present policies and in the ordinary
course of business.
(b) Collection of Receivables. Subject to the rights of
Administrative Lender under this Security Agreement and as a secured
party under applicable law, Company will collect and enforce, at
Company's sole expense, all amounts due or hereafter due to Company
under the Receivables.
(c) Delivery of Invoices. Upon the request of Administrative
Lender after the occurrence and during the continuance of an Event of
Default, Company will deliver to Administrative Lender duplicate
invoices with respect to each Account bearing such language of
assignment as Administrative Lender shall specify.
(d) Disclosure of Counterclaims on Receivables. If any
discount, credit, agreement to make a rebate or to otherwise reduce
(collectively, a "Reduction") the amount owing on a Receivable exists
or if, to the knowledge of Company, any dispute, setoff, claim,
counterclaim or defense (collectively, a "Claim") exists or has been
asserted or threatened with respect to a Receivable, which Reduction or
Claim may, singly or in the aggregate, materially adversely affect the
value of the Collateral or the ability of Company to fulfill its
obligations under the Loan Papers, Company will disclose such fact to
Administrative Lender in writing in connection with the inspection by
Administrative Lender of any record of Company relating to such
Receivable and in connection with any invoice or report furnished by
Company to Administrative Lender relating to such Receivable.
4.3. Equipment and Fixtures.
(a) Maintenance of Goods. Company will do all things necessary
to maintain, preserve, protect and keep the Equipment and Fixtures in
good repair and working condition.
General Communication, Inc. - Form 8-K
Page 130
(b) Insurance. Company will (i) maintain fire and extended
coverage insurance on the Equipment and Fixtures containing a lender's
loss payable and breach of warranty clause in favor of Administrative
Lender and providing that said insurance will not be terminated except
after at least 30 days' written notice from the insurance company to
Administrative Lender, (ii) maintain such other insurance on the
Equipment and Fixtures for the benefit of Administrative Lender as
Administrative Lender shall from time to time reasonably request, and
(iii) furnish to Administrative Lender upon the request of
Administrative Lender from time to time the originals of all policies
of insurance on the Equipment and Fixtures and certificates with
respect to such insurance.
4.4. Pledged Stock.
(a) Delivery of Pledged Stock. Company will deliver to
Administrative Lender concurrently with the execution of this Security
Agreement the certificates representing the Pledged Stock, endorsed in
blank or accompanied by appropriate instruments of transfer or
assignments executed in blank. If Company shall at any time acquire any
additional shares of the capital stock of any class of the Pledged
Stock or any instrument evidencing Stock Rights, whether such
acquisition shall be by purchase, exchange, reclassification, dividend,
or otherwise, Company shall forthwith (and without the necessity for
any request or demand by Administrative Lender or any Lender) deliver
the certificates representing such shares and such instrument or
writing to Administrative Lender, in the same manner as described in
the immediately preceding sentence.
(b) Changes in Capital Structure of Issuers. Company will not
permit or suffer the issuer of any of the Pledged Stock or Stock Rights
to dissolve, liquidate, retire any of its capital stock, authorize or
issue any stock or rights to acquire stock not outstanding in the name
of Company on the date hereof, reduce its capital or merge or
consolidate with any other Person other than Company or another
Wholly-Owned Subsidiary, and Company will not in any event vote any of
the Pledged Stock or any Stock Rights in favor of any of the foregoing.
(c) Stock Rights. Company will deliver to Administrative
Lender, promptly upon receipt, all Stock Rights (other than, unless and
until a Default shall have occurred and be continuing, ordinary cash
dividends received with respect to the Pledged Stock) and agrees that
such Stock Rights shall be held in trust by Company for Administrative
Lender until delivery thereof to Administrative Lender.
4.5. Government Claims. Company will, promptly upon a request therefor,
notify Administrative Lender of any Government Claim.
General Communication, Inc. - Form 8-K
Page 131
5. DEFAULT.
5.1. The occurrence of any one or more of the following events shall
constitute an Event of Default:
(a) Any material representation or warranty made by or on
behalf of Company to Administrative Lender or any Lender under or in
connection with this Security Agreement shall be materially false on
the date as of which made.
(b) The breach by Company of any of the terms or provisions of
Sections 4.1(a), (e), (f), (g), (h), (j) and (k), 4.4 or 7; or the
breach by Company of any of the terms or provisions of Sections 4.1(b)
and (i) of this Security Agreement which is not remedied within 10 days
after the giving of written notice by Administrative Lender.
(c) The breach by Company (other than a breach which
constitutes a Default under Section 5.1(a) or (b)) of any of the terms
or provisions of this Security Agreement which is not remedied within
30 days after the giving of written notice by Administrative Lender.
(d) Any material portion of the Collateral shall be
transferred or otherwise disposed of in any manner not permitted by
Section 4.1(h) or shall be lost, damaged or destroyed and not covered
by insurance naming Administrative Lender as loss payee (subject to
reasonable deductibles).
(e) The occurrence of any "Event of Default" under, and as
defined in, the Credit Agreement.
5.2. Acceleration and Remedies. If any Event of Default occurs, then
upon the election of Majority Lenders (or, automatically in the case of the
occurrence of a Default under Section 8.01(g) of the Credit Agreement) the
Obligations shall automatically become immediately due and payable without
notice or demand of any kind. If any other Event of Default occurs, then, upon
the election of Majority Lenders, the Obligations shall immediately become due
and payable without presentment, demand, protest or notice of any kind, all of
which are hereby expressly waived, and Administrative Lender may exercise any or
all of the rights and remedies provided (i) in this Security Agreement,
including, without limitation, Sections 5.2(a) and 5.2(b), (ii) to secured
parties under the Uniform Commercial Code as enacted in the State of Texas or
other applicable jurisdiction, as amended and (iii) any other rights afforded at
law in equity or otherwise.
(a) Exercise of Rights in Pledged Stock and Stock Rights. Upon
the occurrence and continuation of an Event of Default, subject to
compliance with applicable law, Administrative Lender, on behalf of
Lenders, shall have, subject to Section 8, the right (i) to consent in
advance to
General Communication, Inc. - Form 8-K
Page 132
any vote proposed to be cast by Company with respect to any merger,
consolidation, liquidation or reorganization of any Subsidiary and, in
connection therewith, to join in and become a party to any plan of
recapitalization, reorganization, or readjustment (whether voluntary or
involuntary) as shall seem desirable to Administrative Lender, on
behalf of Lenders, to protect or further their interests in respect of
the Pledged Stock and Stock Rights, (ii) to deposit the Pledged Stock
and Stock Rights under any such plan, and (iii) to make any exchange,
substitution, cancellation, or surrender of the Pledged Stock and Stock
Rights required by any such plan and to take such action with respect
to the Pledged Stock and Stock Rights as may be required by any such
plan or for the accomplishment thereof and no such disposition,
exchange, substitution, cancellation, or surrender shall be deemed to
constitute a release of the Pledged Stock and Stock Rights from the
lien pursuant to this Security Agreement.
(b) Right of Sale of Pledged Stock and Stock Rights after
Default. Upon the occurrence and during the continuance of an Event of
Default, subject to compliance with applicable law, Administrative
Lender, on behalf of Lenders, may, subject to Section 8, sell, without
recourse to judicial proceedings, with the right to bid for and buy the
Pledged Stock and Stock Rights or any part thereof, upon ten days'
notice (which notice is agreed to be reasonable notice for the purposes
hereof) to Company of the time and place of sale, for cash, upon credit
or for future delivery, at Administrative Lender's option and in
Administrative Lender's complete discretion:
(i) At public sale, including a sale at any broker's
board or exchange;
(ii) At private sale in any commercially reasonable
manner which will not require the Pledged Stock and Stock
Rights, or any part thereof, to be registered in accordance
with the Securities Act of 1933, as amended, or the rules and
regulations promulgated thereunder, or any other law or
regulation. Administrative Lender and Lenders are also hereby
authorized, but not obligated, to take such actions, give such
notices, obtain such consents, and do such other things as
they may deem required or appropriate in the event of sale or
disposition of any of the Pledged Stock and Stock Rights.
Company understands that Administrative Lender, on behalf of
Lenders, may in its discretion approach a restricted number of
potential purchasers and that a sale under such circumstances
may yield a lower price for the Pledged Stock and Stock
Rights, or any portion thereof, than would otherwise be
obtainable if the same were registered and sold in the open
market. Company agrees that in the event Administrative Lender
shall so sell the Pledged Stock and Stock Rights, or any
portion thereof, at such
General Communication, Inc. - Form 8-K
Page 133
private sale or sales, Administrative Lender and Lenders shall
have the right to rely upon the advice and opinion of any
Person who regularly deals in or evaluates stock of the type
constituting the Pledged Stock and Stock Rights as to the
price obtainable in a commercially reasonable manner upon such
a private sale thereof.
In the case of any sale by Administrative Lender on behalf of Lenders
of the Pledged Stock and Stock Rights on credit or for future delivery, the
Pledged Stock and Stock Rights sold may be retained by Administrative Lender
until the selling price is paid by the purchaser, but neither Administrative
Lender nor any Lender shall incur liability in case of failure of the purchaser
to take up and pay for the Pledged Stock and Stock Rights so sold.
In connection with the sale of any of the Pledged Stock and Stock
Rights, Administrative Lender and Lenders are authorized, but not obligated, to
limit prospective purchasers to the extent deemed necessary or desirable by
Administrative Lender and Lenders to render such sale exempt from the
registration requirements of the Securities Act of 1933, as amended, and any
applicable state securities laws. In the event that, in the opinion of
Administrative Lender and Lenders, it is necessary or advisable to have such
securities registered under the provisions of such Act, or any similar law
relating to the registration of securities, Company agrees, at its own expense,
to (i) execute and deliver all such instruments and documents, and to do or
cause to be done such other acts and things, as may be necessary or, in the
opinion of Administrative Lender, advisable to register such securities under
the provisions of such Act or any applicable similar law relating to the
registration of securities, and Company will use its best efforts to cause the
registration statement relating thereto to become effective and to remain
effective for such period as Administrative Lender shall reasonably request, and
to make all amendments thereof and/or to the related prospectus which, in the
opinion of Administrative Lender, are necessary or desirable, all in conformity
with the requirements of such Act and the rules and regulations of the
Securities and Exchange Commission applicable thereto; (ii) use its best efforts
to qualify such securities under state "blue sky" or securities laws, all as
reasonably requested by Administrative Lender; and (iii) at the request of
Administrative Lender, indemnify and hold harmless Lenders, Administrative
Lender, any underwriters and accountants (and their respective employees,
officers, agents, attorneys) (collectively, the "Indemnified Parties") from and
against any loss, liability, claim, damage, and expense (including, without
limitation, reasonable fees of counsel incurred in connection therewith) under
such Act or otherwise, insofar as such loss, liability, claim, damage, or
expense arises out of or is based upon any untrue statement or alleged untrue
statement of any material fact furnished by Company contained in any
registration statement under which such securities were registered under such
Act or other securities laws, any preliminary prospectus or final prospectus
contained therein, or arise out of
General Communication, Inc. - Form 8-K
Page 134
or are based upon any omission or alleged omission by Company to state therein a
material fact required to be stated or necessary to make the statements therein
not misleading, such indemnification to remain operative regardless of any
investigation made by or on behalf of any Indemnified Party; provided, however,
that Company shall not be liable in any case to the extent that any such loss,
liability, claim, damage, or expense arises out of or is based upon an untrue
statement or an omission made in reliance upon and in conformity with written
information furnished to Company by an Indemnified Party specifically for use in
such registration statement or preliminary or final prospectus and the providing
of such untrue statement or such omission resulted from the gross negligence or
willful misconduct of an Indemnified Party.
5.3. Company's Obligations Upon Default. Upon the request of
Administrative Lender after the occurrence of an Event of Default and during the
continuance thereof, Company will:
(a) Assembly of Collateral. Assemble and make available to
Administrative Lender the Collateral and all records relating thereto
at any place or places specified by Administrative Lender.
(b) Administrative Lender Access. Permit Administrative
Lender, by Administrative Lender's representatives and agents, to enter any
premises where all or any part of the Collateral, or the books and records
relating thereto, or both, are located, to take possession of all or any part of
the Collateral and to remove all or any part of the Collateral.
5.4. Governance. All rights and remedies available to Lenders with
respect to the grant, foreclosure and enforcement of the security interest and
lien granted hereby and with respect to any action permitted hereunder may be
exercised solely by Administrative Lender acting with the concurrence of the
Majority Lenders provided, however, that no release of all or any portion of the
Collateral from the lien created hereby shall be effective without the consent
of all Lenders.
6. WAIVERS, AMENDMENTS AND REMEDIES.
No delay or omission of Administrative Lender to exercise any right or
remedy granted under this Security Agreement or under applicable law shall
impair such right or remedy or be construed to be a waiver of any Default or
Event of Default or an acquiescence therein, and any single or partial exercise
of any such right or remedy shall not preclude other or further exercise thereof
or the exercise of any other right or remedy, and no waiver, amendment or other
variation of the terms, conditions or provisions of this Security Agreement
whatsoever shall be valid unless in writing signed by Administrative Lender, and
then only to the extent in such writing specifically set forth. All rights and
remedies contained in this Security Agreement or by law afforded shall be
General Communication, Inc. - Form 8-K
Page 135
cumulative and all shall be available to Administrative Lender until the
Obligations have been finally paid in full.
7. PROCEEDS; COLLECTION OF RECEIVABLES.
7.1. Collection of Receivables. Administrative Lender may at any time
after the occurrence and during the continuance of an Event of Default, by
giving Company written notice, elect to require that the Receivables be paid
directly to Administrative Lender. In such event Company shall, and shall permit
Administrative Lender to, promptly notify the account debtors or obligors under
the Receivables of Administrative Lender's interest therein and direct such
account debtors or obligors to make payment of all amounts then or thereafter
due under the Receivables directly to Administrative Lender. Upon receipt of any
such notice from Administrative Lender, Company shall thereafter hold in trust
for Administrative Lender all amounts and proceeds received by it with respect
to the Receivables and other Collateral and immediately and at all times
thereafter deliver to Administrative Lender all such amounts and proceeds in the
same form as so received, whether by cash, check, draft or otherwise, with any
necessary endorsements. Administrative Lender shall hold and apply funds so
received as provided by the terms of Sections 7.3 and 7.4.
7.2. Lockboxes. Upon request of Administrative Lender at any time after
the occurrence and during the continuance of an Event of Default, Company shall
execute and deliver to Administrative Lender Administrative Lender's standard
form of irrevocable lockbox agreement and notify the obligors on the Receivables
to make payments thereon to such lockbox.
7.3. Special Collateral Account. At any time after the occurrence and
during the continuance of an Event of Default, Administrative Lender may require
all cash proceeds of the Collateral (whether collected through a lockbox
pursuant to Section 7.2 or otherwise) to be deposited in a special non-interest
bearing cash collateral account with Administrative Lender and held there as
security for the Obligations. Company hereby authorizes Administrative Lender in
Administrative Lender's sole discretion to establish such a cash collateral
account and acknowledges that Company shall have no control whatsoever over said
account. Administrative Lender may, at its option, and will (to the extent
permitted by applicable law), at Company's written request, apply the collected
balances in said cash collateral account to the payment of the Obligations
whether or not the Obligations shall then be due, or hold the balances in said
cash collateral account as Collateral hereunder.
7.4. Application of Proceeds. Administrative Lender shall apply the
proceeds of the Collateral, including the proceeds of any sales or other
disposition of the Collateral, or any part thereof, under this Section 7 or
Section 5.2(b), in the following order unless a court of competent jurisdiction
shall otherwise direct:
General Communication, Inc. - Form 8-K
Page 136
(a) First, to payment of all reasonable costs and expenses of
Administrative Lender incurred in connection with the collection and
enforcement of the Obligations or of the security interest granted to
Administrative Lender for the benefit of Lenders pursuant to this
Security Agreement;
(b) Second, to payment of that portion of the Obligations
constituting accrued and unpaid interest and fees, pro rata amongst
Lenders in accordance with the proportion which the accrued interest
and fees constituting Obligations owing to each such Lender bears to
the aggregate amount of accrued interest and fees constituting
Obligations owing to all of Lenders;
(c) Third, to payment of the principal of the Obligations and
net termination amounts payable in respect of the Obligations under
Interest Hedge Agreements owing to Lenders or any Lender, pro rata
among Lenders in accordance with the proportion which the principal
amount of Obligations and net termination amounts payable in respect of
the Obligations under Interest Hedge Agreements owing to each such
Lender bears to the aggregate principal amount of Obligations and net
termination amounts payable in respect of Obligations under Interest
Hedge Agreements owing to all of Lenders; and
(d) Fourth, the balance, if any, after all of the Obligations
have been satisfied, shall be remitted to Company.
8. CONTROL; LIMITATION OF RIGHTS.
8.1. License. Notwithstanding anything herein to the contrary, this
Security Agreement, the other Loan Papers and the transactions contemplated
hereby and thereby (i) do not and will not constitute, create, or have the
effect of constituting or creating, directly or indirectly, actual or practical
ownership of any Subsidiary by Administrative Lender or Lenders, or control,
affirmative or negative, direct or indirect, by Administrative Lender or Lenders
over the management or any other aspect of the operation of any Subsidiary,
which ownership and control remain exclusively and at all times in such
Subsidiary and Company, and (ii) do not and will not constitute the transfer,
assignment, or disposition in any manner, voluntarily or involuntarily, directly
or indirectly, of any license at any time issued by the FCC to any Subsidiary
("License"), or the transfer of control of any such Subsidiary within the
meaning of Section 310(d) of the Communications Act of 1934, as amended.
8.2. Communications Act. Notwithstanding any other provision of this
Security Agreement, any foreclosure on, sale, transfer or other disposition of,
or the exercise of any right to vote or consent with respect to, any of the
Collateral as provided herein or any other action taken or proposed to be taken
by Administrative Lender and Lenders hereunder which would affect the
operational,
General Communication, Inc. - Form 8-K
Page 137
voting, or other control of any Subsidiary, shall be pursuant to Section 310(d)
of the Communications Act of 1934, as amended, to any applicable state laws and
to the applicable rules and regulations thereunder and, if and to the extent
required thereby, subject to the prior approval of the FCC.
8.3. Assignment. Subject to Section 8.5, if an Event of Default shall
have occurred and be continuing, Company shall take any action which
Administrative Lender, on behalf of Lenders, may reasonably request in order to
transfer and assign to Administrative Lender, or to such one or more third
parties as Administrative Lender may designate, or to a combination of the
foregoing, each License. To enforce the provisions of this Section 8,
Administrative Lender is empowered to request the appointment of a receiver from
any court of competent jurisdiction. Such receiver shall be instructed to seek
from the FCC an involuntary transfer of control of each such License for the
purpose of seeking a bona fide purchaser to whom control will ultimately be
transferred. Company hereby agrees to authorize such an involuntary transfer of
control upon the request of the receiver so appointed and, if Company shall
refuse to authorize the transfer, its approval may be required by the court.
Upon the occurrence and continuance of an Event of Default, Company shall
further use its best efforts to assist in obtaining approval of the FCC, if
required, for any action or transactions contemplated by this Security Agreement
including, without limitation, the preparation, execution and filing with the
FCC of the assignor's or transferor's portion of any application or applications
for consent to the assignment of any License or transfer of control necessary or
appropriate under the FCC's rules and regulations for approval of the transfer
or assignment of any portion of the Collateral, together with any License.
8.4. Specific Enforcement. Company acknowledges that the assignment or
transfer of each License is integral to Administrative Lender's and Lenders'
realization of the value of the Collateral, that there is no adequate remedy at
law for failure by Company to comply with the provisions of this Section 8 and
that such failure would not be adequately compensable in damages, and therefore
agrees that the agreements contained in this Section 8 may be specifically
enforced.
8.5. Prior Approval. Notwithstanding anything to the contrary contained
in this Security Agreement or in any other Loan Paper, neither Administrative
Lender nor any Lender shall, without first obtaining the approval of the FCC,
take any action pursuant to this Security Agreement which would constitute or
result in any assignment of a License or any change of control of any Subsidiary
if such assignment or change in control would require, under then existing law
(including the written rules and regulations promulgated by the FCC), the prior
approval of the FCC.
General Communication, Inc. - Form 8-K
Page 138
9. GENERAL PROVISIONS.
9.1. Notice of Disposition of Collateral. Company hereby waives notice
of the time and place of any public sale or the time after which any private
sale or other disposition of all or any part of the Collateral. To the extent
such notice may not be waived under applicable law, any notice made shall be
deemed reasonable if sent to Company, addressed as set forth in Section 11, at
least ten days prior to any such public sale or the time after which any such
private sale or other disposition may be made.
9.2. Compromises and Collection of Collateral. Company and
Administrative Lender recognize that setoffs, counterclaims, defenses and other
claims may be asserted by obligors with respect to certain of the Receivables,
that certain of the Receivables may be or become uncollectible in whole or in
part and that the expense and probability of success in litigating a disputed
Receivable may exceed the amount that reasonably may be expected to be recovered
with respect to a Receivable. In view of the foregoing, Company agrees that
Administrative Lender may at any time and from time to time, if an Event of
Default has occurred and is continuing, compromise with the obligor on any
Receivable, accept in full payment of any Receivable such amount as
Administrative Lender in its sole discretion shall determine or abandon any
Receivable, and any such action by Administrative Lender shall be commercially
reasonable so long as Administrative Lender acts in good faith based on
information known to it at the time it takes any such action.
9.3. Administrative Lender Performance of Company Obligations. Without
having any obligation to do so, Administrative Lender may perform or pay any
obligation in this Security Agreement which Company has agreed to perform or pay
but which it has failed to so perform or pay in a timely manner after a request
therefor from Administrative Lender and Company shall reimburse Administrative
Lender for any amounts paid by Administrative Lender pursuant to this Section
9.3. Company's obligation to reimburse Administrative Lender pursuant to the
preceding sentence shall be part of the Obligation and is payable on demand.
9.4. Authorization for Administrative Lender to Take Certain Action.
Company irrevocably authorizes Administrative Lender at any time and from time
to time in the sole discretion of Administrative Lender and appoints
Administrative Lender as its attorney in fact to act on behalf of Company (a) to
execute on behalf of Company as debtor and to file financing statements
necessary or desirable in Administrative Lender's sole discretion to perfect and
to maintain the perfection and priority of Administrative Lender's security
interest in the Collateral, (b) in accordance with the terms of this Security
Agreement, to indorse and collect any cash proceeds of the Collateral, (c) to
file a carbon, photographic or other reproduction of this Security Agreement or
any financing statement with respect to the Collateral
General Communication, Inc. - Form 8-K
Page 139
as a financing statement in such offices as Administrative Lender in its sole
discretion deems necessary or desirable to perfect and to maintain the
perfection and priority of Administrative Lender's security interest in the
Collateral, (d) after the occurrence of an Event of Default and during the
continuance thereof, to enforce payment of the Receivables in the name of
Administrative Lender or Company, and (e) to apply the proceeds of any
Collateral received by Administrative Lender to the Obligations as provided in
Section 7. The power of attorney provided in this Section 9.4, and each other
appointment by Company of Administrative Lender or any Lender as Company's
attorney-in-fact, is coupled with an interest and is irrevocable prior to final
payment in full of the Obligation.
9.5. Specific Performance of Certain Covenants. Company acknowledges
and agrees that a breach of any of the covenants contained herein will cause
irreparable injury to Administrative Lender, that Administrative Lender has no
adequate remedy at law in respect of such breaches and therefore agrees, without
limiting the right of Administrative Lender to seek and obtain specific
performance of other obligations of Company contained in this Security
Agreement, that the covenants of Company contained in the Sections referred to
in this Section 9.5 shall be specifically enforceable against Company.
9.6. Use and Possession of Certain Premises. Upon the occurrence of an
Event of Default and during the continuance thereof, Administrative Lender shall
be entitled to occupy and use any premises owned or leased by Company where any
of the Collateral or any records relating to the Collateral are located until
the Obligations are paid or the Collateral is removed therefrom, whichever first
occurs, without any obligation to pay Company for such use and occupancy.
9.7. Dispositions Not Authorized. Company is not authorized to sell or
otherwise dispose of the Collateral except as set forth in Section 4.1(h) and
notwithstanding any course of dealing between Company and Administrative Lender
or other conduct of Administrative Lender, no authorization to sell or otherwise
dispose of the Collateral (except as set forth in Section 4.1(h)) shall be
binding upon Administrative Lender unless such authorization is in writing
signed by Administrative Lender.
9.8. Care of Collateral. Administrative Lender shall not have any duty
to assure that all certificates representing the Pledged Stock have been
delivered to it or any obligation whatsoever with respect to the care, custody
or protection of any certificates which may be delivered to it except only to
exercise the same care in physically safekeeping such certificates as it would
exercise in the ordinary course of its own business. Neither Administrative
Lender nor any Lender shall be obligated to preserve or protect any rights with
respect to the Pledged Stock or to receive or give any
General Communication, Inc. - Form 8-K
Page 140
notice with respect thereto whether or not Administrative Lender or any Lender
is deemed to have knowledge of such matters.
9.9. Definition of Certain Terms. Terms defined in the Article 9 of
Texas Business and Commerce Code which are not otherwise defined in this
Security Agreement are used in this Security Agreement as defined in the Article
9 of Texas Business and Commerce Code as in effect on the date hereof.
9.10. Benefit of Agreement. The terms and provisions of this Security
Agreement shall be binding upon and inure to the benefit of Company,
Administrative Lender and Lenders and their respective successors and assigns,
except that Company shall not have the right to assign its rights or obligations
under this Security Agreement or any interest herein, without the prior written
consent of Administrative Lender.
9.11. Survival of Representations. All representations and warranties
of Company contained in this Security Agreement shall survive the execution and
delivery of this Security Agreement.
9.12. Taxes and Expenses. Any taxes (including income taxes) payable or
ruled payable by federal or state authority in respect of this Security
Agreement shall be paid by Company, together with interest and penalties, if
any. Company shall reimburse Administrative Lender for any and all out-of-pocket
expenses and internal charges (including reasonable attorneys', auditors' and
accountants' fees and reasonable time charges of attorneys, paralegals, auditors
and accountants who may be employees of Administrative Lender) paid or incurred
by Administrative Lender in connection with the preparation, execution,
delivery, administration, collection and enforcement of this Security Agreement
and in the audit, analysis, administration, collection, preservation or sale of
the Collateral (including the expenses and charges associated with any periodic
or special audit of the Collateral). The obligations of Company under this
Section 9.12 shall survive termination of this Security Agreement.
9.13. Headings. The title of and section headings in this Security
Agreement are for convenience of reference only, and shall not govern the
interpretation of any of the terms and provisions of this Security Agreement.
9.14. Term. This Security Agreement and the Lien arising hereunder (a)
shall become effective as of the date hereof upon the execution hereof, and (b)
shall continue in force (and shall be reinstated if at any time all or any
portion of any amounts in respect of Obligations received by Administrative
Lender or any Lender are required to be returned or paid over to any Person) for
so long as any Obligations, or commitment to extend any Obligations, remain
outstanding.
General Communication, Inc. - Form 8-K
Page 141
9.15. PRIOR AGREEMENTS. THIS AGREEMENT AND THE OTHER LOAN PAPERS
REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENT OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
9.16. CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL.
THIS SECURITY AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF TEXAS WITHOUT APPLYING THE LAW OF CONFLICTS OF TEXAS OR ANY OTHER
JURISDICTION. COMPANY HEREBY CONSENTS TO THE JURISDICTION OF ANY LOCAL, STATE,
OR FEDERAL COURT LOCATED WITHIN DALLAS COUNTY, TEXAS AND WAIVES ANY OBJECTION
WHICH COMPANY MAY HAVE BASED ON IMPROPER VENUE OR FORUM NON CONVENIENS TO THE
CONDUCT OF ANY PROCEEDING IN ANY SUCH COURT AND CONSENTS THAT ALL SERVICE OF
PROCESS MAY BE MADE BY MAIL OR MESSENGER DIRECTED TO IT AT THE ADDRESS SET FORTH
IN EXHIBIT A. AT THE OPTION OF ADMINISTRATIVE LENDER, COMPANY WAIVES, TO THE
EXTENT PERMITTED BY LAW, TRIAL BY JURY, AND WAIVES ANY BOND OR SURETY OR
SECURITY UPON SUCH BOND WHICH MIGHT, BUT FOR THIS WAIVER, BE REQUIRED OF
ADMINISTRATIVE LENDER. NOTHING CONTAINED IN THIS SECTION 9.16 SHALL AFFECT THE
RIGHT OF ADMINISTRATIVE LENDER TO SERVE LEGAL PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW OR AFFECT THE RIGHT OF ADMINISTRATIVE LENDER OR LENDER TO BRING
ANY ACTION OR PROCEEDING AGAINST COMPANY OR ITS PROPERTY IN THE COURTS OF ANY
OTHER JURISDICTION.
9.17. Distribution of Reports. Company authorizes Administrative
Lender, as Administrative Lender may elect in its sole discretion, to discuss
with and furnish to any other Person or entity having an interest in the
Obligations (whether as a guarantor, pledgor of collateral, participant,
purchaser or otherwise) all financial statements, audit reports and other
information pertaining to Company and the Subsidiaries if any, whether such
information was provided by Company or prepared or obtained by Administrative
Lender.
9.18. Indemnity. Company hereby agrees to assume liability for, and
does hereby agree to indemnify and keep harmless Administrative Lender and each
Lender, and their respective successors, assigns, agents and employees, from and
against any and all liabilities, damages, penalties, suits, costs, and expenses
of any kind and nature, imposed on, incurred by or asserted against
Administrative Lender and each Lender, or their respective successors, assigns,
agents and employees, in any way relating to or arising out of this Security
Agreement, or the manufacture, purchase, acceptance, rejection, ownership,
delivery, lease, possession, use, operation, condition, sale, return or other
disposition of any Collateral (including, without limitation, latent and other
defects, whether or not discoverable by Administrative Lender, any Lender or
Company, and any claim for
General Communication, Inc. - Form 8-K
Page 142
patent, trademark or copyright infringement and any acts or omissions which
result from such Person's negligence).
9.19. Releases. Any cash dividends received by Company in accordance
with the terms of Section 4.4(c) shall be deemed released from the lien of this
Security Agreement and shall be held by Company (or any transferee of Company)
free and clear of the lien created by this Security Agreement. Upon the sale,
lease or other disposition of assets permitted by the terms of Section 4.1(h),
Administrative Lender and Lenders shall, at Company's request and expense
execute such partial releases as Company may reasonably request, in form and
upon terms acceptable to Administrative Lender and Lenders in all respects. Upon
termination of this Security Agreement in accordance with the provisions of
Section 9.14, Administrative Lender and Lenders shall, at Company's request and
expense and subject to the foregoing sentence, execute such releases as Company
may reasonably request, in form and upon terms acceptable to Administrative
Lender and Lenders in all respects, and shall deliver all certificates
representing the Pledged Stock and other property held in respect thereof
hereunder which is in Administrative Lender's possession, together with all
stock powers or other instruments of transfer reasonably required to effect
delivery to Company.
9.20. Waivers. Except to the extent expressly otherwise provided herein
or in any Loan Paper, Company waives, to the extent permitted by applicable law,
(a) any right to require either Administrative Lender or any Lender to proceed
against any other Person, to exhaust their rights in any other collateral, or to
pursue any other right which either Administrative Lender or any Lender may
have, (b) with respect to the Obligations, presentment and demand for payment,
protest, notice of protest and non-payment, and notice of the intention to
accelerate, and (c) all rights of marshalling in respect of any and all of the
Collateral.
9.21. Counterparts. This Security Agreement may be executed in any
number of counterparts, all of which taken together shall constitute one
agreement, and any of the parties hereto may execute this Security Agreement by
signing any such counterpart. This Security Agreement shall be effective when it
has been executed by Company and Administrative Lender.
10. Administrative Lender.
NationsBank of Texas, N.A. has been appointed Administrative Lender of
Lenders hereunder pursuant to Article IX of the Credit Agreement, and
Administrative Lender has agreed to act (and any successor Administrative Lender
shall act) as such hereunder only on the express conditions contained in such
Article IX. Any successor Administrative Lender appointed pursuant to Article IX
of the Credit Agreement shall be entitled to all the rights, interests and
benefits of Administrative Lender hereunder.
General Communication, Inc. - Form 8-K
Page 143
11. NOTICES.
11.1. Sending Notices. Any notice required or permitted to be given
under this Security Agreement may be, and shall be deemed, given and sent as
provided in the Credit Agreement.
11.2. Change in Address for Notices. Each of Company and Administrative
Lender or any Lender may change the address for service of notice upon it by a
notice in writing to the other.
12. SETOFF.
In addition to, and without limitation of, any rights of Administrative
Lender and Lenders under applicable law, if Company becomes insolvent, however
evidenced, or any Event of Default occurs and is continuing, any indebtedness
from Administrative Lender or Lenders to Company (including, without limitation,
funds of Company on deposit with Administrative Lender or Lenders which have not
yet been collected or which are not yet available in accordance with
Administrative Lender's or Lenders' availability schedules from time to time in
effect) may be offset and applied toward the payment of the Obligations, for the
ratable benefit of Lenders whether or not the Obligations, or any part hereof,
shall then be due.
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THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.
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General Communication, Inc. - Form 8-K
Page 144
IN WITNESS WHEREOF, the undersigned have executed this Security
Agreement as of the date first above written.
By:
Its:
2550 Denali Street, Suite 1000
Anchorage, Alaska 99503-2781
General Communication, Inc. - Form 8-K
Page 145
EXHIBIT D
COMPLIANCE CERTIFICATE
To: The Banks parties to the
Credit Agreement Described Below
This Compliance Certificate is furnished pursuant to that certain
Second Amended and Restated Credit Agreement (as amended, restated, or otherwise
modified from time to time, the "Agreement") dated as of April 26, 1996 among
GCI Communication Corp. (the "Company"), the banks party thereto and NationsBank
of Texas, N.A. as Administrative Agent for the Banks. Unless otherwise defined
herein, the terms used in this Compliance Certificate have the meanings ascribed
thereto in the Agreement.
THE UNDERSIGNED HEREBY CERTIFIES THAT:
1. I am the duly elected of the Company;
2. I have reviewed the terms of the Agreement and I have made, or have
caused to be made under my supervision, a detailed review of the transactions
and conditions of the Parent, the Company and the Subsidiaries during the
accounting period covered by the attached financial statements, dated as of ;
3. The examinations described in paragraph 2 did not disclose, and I
have no knowledge of, the existence of any condition or event which constitutes
a Default or Event of Default during or at the end of the accounting period
covered by the attached financial statements or as of the date of this
Certificate, except as set forth below; and
4. Schedule I attached hereto sets forth financial data and
computations evidencing the Company's compliance with certain covenants of the
Agreement, all of which data and computations are true, complete and correct.
Listed below are the exceptions, if any, to paragraph 3 describing, in
detail, the nature of the condition or event, the period during which it has
existed and the action which the Company has taken, is taking, or proposes to
take with respect to each such condition or event:
The foregoing certifications, together with the computations set forth
in Schedule I hereto and the financial statements delivered with this
Certificate in support hereof, are made and delivered this day of , 19 .
GCI COMMUNICATION CORP.
By:
Its:
General Communication, Inc. - Form 8-K
Page 146
SCHEDULE I TO COMPLIANCE CERTIFICATE
Schedule of Compliance as of with
Provisions of Section 7.01 of
the Agreement
1. Section 7.01(a) - Leverage Ratio
A. Total Debt (for the fiscal quarter ended
, 19 )
(i) Debt for Borrowed Money $
(ii) Debt having a final maturity
of more than one year $
(iii) Capitalized Lease Obligations $
(iv) reimbursement obligations $
relating to Letters of Credit
(v) Contingent Liablities $
(vi) Withdrawal Liabilities $
(vii) Debt, if any, associated with $
Interest Hedge Agreements
(viii) payments due under Non-compete $
Agreements
(ix) payments due for the deferred $
purchase price of property and
services that are less than
90 days old
(i) plus (ii) plus (iii) plus $
(iv) plus (v) plus (vi) plus
(vii) plus (viii) plus (ix)
General Communication, Inc. - Form 8-K
Page 147
B. Annualized Operating Cash Flow (for the
two fiscal quarters ended ,
19 )
(i) consolidated operating revenues $
(ii) costs of sales $
(iii) operating expenses (excluding $
depreciation, amortization, and
other non-cash charges)
(iv) (i) minus sum of (ii) plus (iii) $
Product of two times item (iv) $
C. The ratio of A to B :1.0
D. Permitted ratio 3.00 to 1
2. Section 7.01(b) - Interest Coverage Ratio
A. Operating Cash Flow (for the
fiscal quarter ended
, 19 )
(i) consolidated operating revenues $
(ii) costs of sales $
(iii) operating expenses (excluding $
depreciation, amortization, and
other non-cash charges)
(iv) Taxes paid $
(i) minus sum of (ii) plus $
(iii) plus (iv)
B. Total Interest Expense on all Total Debt
(for the fiscal quarter ended ,
19 )
(i) interest expense $
General Communication, Inc. - Form 8-K
Page 148
(ii) amortization of Debt discounts $
(iii) commitment fees $
(iv) agency fees (excluding one-time
facility fees) $
(v) fees or expenses with respect
to Letters of Credit $
(vi) fees, if any, associated with
Interest Hedge Agreements $
(vii) preferred stock Distributions
for the Parent, the Company
and consolidated Subsidiaries $
(viii) capitalized interest $
(i) plus (ii) plus (iii) plus (iv)
plus (v) plus (vi) plus $ (vii)
plus (viii)
C. The ratio of A to B :1.00
D. Permitted ratio: 2.00:1.00
3 Section 7.01(c) Capital Expenditures
A. Actual $
B. Permitted: $60,000,000 - 1996
$11,250,000 - 1997
(plus any unused
portion of the
1996 permitted
amount not in
excess of
$15,000,000)
General Communication, Inc. - Form 8-K
Page 149
EXHIBIT E
CONVERSION OR CONTINUANCE NOTICE
[Date]
NationsBank of Texas, National Association,
Administrative Lender
NationsBank Plaza
901 Main Street
64th Floor
Dallas, Texas 75202
GCI Communication Corp.
Ladies and Gentlemen:
The undersigned refers to the Second Amended and Restated
Credit Agreement dated as of , 1996 (the "Credit Agreement", the terms
defined therein being used herein as therein defined) between GCI Communication
Corp., and NationsBank of Texas, National Association, as Administrative Lender
for NationsBank of Texas, National Association and each lender, and each Lender,
and hereby gives you notice pursuant to Section 2.09(b) of the Credit Agreement
that the undersigned hereby requests Advance[s] under the Credit
Agreement, and in that connection sets forth below the information relating to
[each] such Advance (a "Proposed Borrowing") as required by Section 2.09(b) of
the Credit Agreement:
Proposed Borrowing:
(i) The principal amount of existing LIBOR Advance to be [converted]
[continued] is $ .
(ii) The Business Day of such Proposed Borrowing is , 199 .
(iii) The Type of Advance[s] comprising such Proposed Borrowing is
[are] LIBOR Advance [to the extent of an aggregate amount of
$ ].
[(iv) The initial Interest Period for each LIBOR Advance made as part
of such Proposed Borrowing is months.]
General Communication, Inc. - Form 8-K
Page 150
The undersigned hereby certifies that the following statements
are true on the date hereof, and will be true on the date of the Proposed
Borrowing, before and after giving effect thereto and to the application of the
proceeds therefrom:
(A) the conditions precedent specified in Sections 4.01 and
4.02 of the Credit Agreement have been satisfied with respect to the
Proposed Borrowing and will remain satisfied on the date of such
Proposed Borrowing;
(B) the representations and warranties specified in Article V
of the Credit Agreement are true and correct in all material respects
as though made on and as of such date; and
(C) no event has occurred and is continuing or would result
from such Proposed Borrowing, which constitutes a Default or Event of
Default.
Very truly yours,
GCI COMMUNICATION CORP.
By:
, President
General Communication, Inc. - Form 8-K
Page 151
EXHIBIT F
BORROWING NOTICE
[Date]
NationsBank of Texas, N.A.,
Administrative Lender
NationsBank Plaza
901 Main Street
64th Floor
Dallas, Texas 75202
GCI Communication Corp.
Ladies and Gentlemen:
The undersigned refers to the Second Amended and Restated
Credit Agreement dated as of , 1996 (the "Credit Agreement",
the terms defined therein being used herein as therein defined) among GCI
Communication Corp., and NationsBank of Texas, N.A., as Administrative Lender
for NationsBank of Texas, N.A. and each lender, and each Lender, and hereby
gives you notice pursuant to Section 2.02(a) of the Credit Agreement that the
undersigned hereby requests Borrowing[s] under the Credit
Agreement, and in that connection sets forth below the information relating to
[each] such Advance (a "Proposed Borrowing") as required by Section 2.02(a) of
the Credit Agreement:
Proposed Borrowing:
(i) The Business Day of such Proposed Borrowing is , 19 .
(ii) The Type of Advance[s] comprising such Proposed Borrowing is [are]
[Base Advance [to the extent of an aggregate amount of $ ]]
[LIBOR Advance [to the extent of an aggregate amount of
$ ]].
(iii) The aggregate amount of such Proposed Borrowing is $ .
(iv) The initial Interest Period for each LIBOR Advance made as part of
such Proposed Borrowing is .
The undersigned hereby certifies that the following statements
are true on the date hereof, and will be true on the date of the Proposed
Borrowing, before and after giving effect thereto and to the application of the
proceeds therefrom:
General Communication, Inc. - Form 8-K
Page 152
(A) the conditions precedent specified in Sections 4.01 and
4.02 of the Credit Agreement have been satisfied with respect to the
Proposed Borrowing and will remain satisfied on the date of such
Proposed Borrowing;
(B) the representations and warranties specified in Article V
of the Credit Agreement are true and correct in all material respects
as though made on and as of such date; and
(C) no event has occurred and is continuing or would result
from such Proposed Borrowing, which constitutes a Default or Event of
Default.
Very truly yours,
GCI COMMUNICATION CORP.
By:
, President
General Communication, Inc. - Form 8-K
Page 153