SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) October 31, 1996
General Communication, Inc.
(Exact name of registrant as specified in its charter)
Alaska 0-15279 92-0072737
(State or other jurisdiction (Commission File Number) (I.R.S. Employer
of incorporation) Identification No.)
2550 Denali Street, Suite 1000, Anchorage Alaska 99503-2781
(Address of principal executive offices) (Zip Code)
(907) 265-5600
(Registrant's telephone number, including area code.)
N/A
(Former name or former address, if changed since last report)
<PAGE>
1. Changes in Control of Registrant
(a) Background. General Communication, Inc. ("Company"),
itself and through its wholly-owned subsidiaries, GCI Cable, Inc. ("GCI Cable"),
GCI Cable/Fairbanks, Inc., and GCI Cable/Juneau, Inc. (all three subsidiaries
collectively, "Cable Subsidiaries"), closed as of October 31, 1996 ("Closing
Date") on the following purchase and acquisition transactions and certain other
related agreements ("Transactions"): (1) Prime Securities Purchase and Sale
Agreement ("Prime Purchase Agreement"); (2) the Alaskan Cable Purchase Agreement
("Alaskan Cable Purchase Agreement"); (3) Alaska Cablevision Asset Purchase
Agreement ("Alaska Cablevision Purchase Agreement"); (4) McCaw/Rock Homer Asset
Purchase Agreement ("McCaw/Rock Homer Purchase Agreement"); (5) McCaw/Rock
Seward Asset Purchase Agreement ("McCaw/Rock Seward Purchase Agreement"); and
(6) MCI Stock Purchase Agreement ("MCI Purchase Agreement"). The purchase
agreements included in the previous items (1)-(6) are collectively referred to
as "Purchase Agreements." The Transactions include other agreements entered into
as of the Closing Date or otherwise implemented as of that date in conjunction
with the Prime Purchase Agreement as described elsewhere in this report (see
Item 2 of this report) and a new voting agreement entered into between certain
holders of Class A common stock ("New Voting Agreement") described elsewhere in
this Item 1.
Through the Transactions the Company, through the Cable
Subsidiaries, has acquired, as of the Closing Date, interests in seven cable
companies providing services in Alaska as follows ("Cable Companies"): (1)
directly or indirectly, all of the equity securities and equity participation
interests (characterized as profit participation rights) in Prime Cable of
Alaska, L.P., a Delaware limited partnership ("Prime"); (2) substantially all of
the assets of the Alaskan Cable companies comprised of three Alaska corporations
as follows (collectively, "Alaskan Cable"): (a) Alaskan Cable Network/Fairbanks,
Inc. ("Alaskan Cable/Fairbanks"), (b) Alaskan Cable Network/Juneau, Inc.
("Alaskan Cable/Juneau") and (c) Alaskan Cable Network/Ketchikan-Sitka, Inc.
("Alaskan Cable/Ketchikan"); (3) substantially all of the assets of Alaska
Cablevision, Inc., a Delaware corporation ("Alaska Cablevision"); (4)
substantially all of the assets of McCaw/Rock Homer Cable Systems, J.V., an
Alaska joint venture ("McCaw/Rock Homer"); and (5) substantially all of the
assets of McCaw/Rock Seward Cable Systems, J.V., an Alaska joint venture
("McCaw/Rock Seward").
As part of the consideration for the acquisition of Prime and
Alaskan Cable, the Company, as of the Closing Date, issued and sold 14,723,077
shares of Company Class A common stock ("Company Stock") which was divided
between those companies for further distribution to their respective security
holders and subject to share holdback: (1) Prime--11,800,000 shares of Company
Class A common stock ("Prime Company Shares"); and (2) Alaskan Cable--2,923,077
shares of Company Class A common stock ("Alaskan Cable Company Shares") to be
distributed between the sole shareholder of each of the three corporations
comprising Alaskan Cable in portions acceptable to the
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Company. Through the MCI Purchase Agreement the Company issued, as of the
Closing Date, 2 million shares of Company Class A common stock ("MCI Company
Stock"). The Transactions were approved by the shareholders of the Company at
its annual meeting held on October 17, 1996. The security holders of each of the
Cable Companies approved the transaction corresponding to their respective Cable
Companies or otherwise consented to the Transactions on or prior to October 30,
1996.
Portions of the Company Stock were held back as of the Closing
Date for deposit in escrow with third-party escrow agents to secure each Cable
Company party's corresponding indemnification for breaches of representations,
warranties and covenants. If no breach of the corresponding Purchase Agreement
occurs the escrowed shares will be released to the party which deposited them
into the corresponding escrow, effective as of 180 days after the Closing Date.
A portion of the Prime Company Shares are subject to other escrow and holdback
conditions.
(b) Registration Statement. The Company's offer and sale of
the Company Stock was registered under the Securities Act of 1933, as amended
("Securities Act"), through a registration statement which became effective
October 4, 1996 (Registration No. 333-13473, "Registration Statement"). The
offer and sale of the Company Stock and the MCI Company Stock and the Company's
overall plan of acquisition of the Cable Companies ("Acquisition Plan") were
subject to approval of the shareholders of the Company. The Acquisition Plan was
further subject to approval or consent of the security holders of the Cable
Companies. The shareholders of the Company approved the Acquisition Plan
including the issuance of the Company Stock and the MCI Company Stock at the
annual meeting of shareholders held on October 17, 1996. The Acquisition Plan as
it pertains to each Cable Company was approved or consented to by the
corresponding Cable Company security holders on or prior to October 30, 1996.
The closing on the Transactions was subject to other approvals or consents
generally as described in the Registration Statement, and all material approvals
and consents had been obtained as of the Closing Date. The consent of the U.S.
military to the transfer of control of Prime was not received by the parties as
of the Closing Date. Prime and the Company (through GCI Cable) waived receipt of
this consent as a condition to the parties' obligation to close the Prime
Transaction. The Company is continuing to seek the transfer and is currently
operating under Prime's contract to provide the cable services in question to
Elmendorf Air Force Base and Fort Richardson, Alaska. The Company does not
consider this waiver as a material change to the Prime Purchase Agreement.
(c) Changes in Control.
General. With the consummation of the Prime Purchase
Agreement, the Alaskan Cable Purchase Agreement, and the MCI Purchase Agreement,
the Company has issued Company Stock and MCI Company Stock in the total
approximate amount of 16.7 million new shares of Class A common stock, and
several new persons have
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become shareholders. The issuance of the Company Stock and the MCI Company Stock
has diluted the holdings of shareholders of the Company immediately prior to the
Closing Date, and the concentration of ownership of the Company has become even
greater in a few shareholders.
Distribution. With the issuance of the Company Stock and the
MCI Company Stock under the Transactions, the percentage ownership of the
aggregate outstanding Company Class A and Class B common stock became as
follows: (1) the Prime sellers ("Prime Sellers"), i.e., Prime Cable Growth
Partners, L.P., a Delaware limited partnership and limited partner of Prime
("Prime Growth"), Prime Venture I Holdings, L.P., a Delaware limited partnership
and limited partner of Prime and general partner of Prime Growth ("Prime
Holdings"), Prime Cable Limited Partnership, a Delaware limited partnership and
sole shareholder of Prime General Partner ("PCLP"), the shareholders of Alaska
Cable, Inc., a Delaware corporation and limited partner of Prime ("ACI"), and
the holders of the equity participation interests in Prime, i.e., BancBoston
Capital, Inc., First Chicago Investment Corporation and Madison Dearborn
Partners V, prior to any distributions to the security holders of the Prime
Sellers--29%; (2) MCI--23% (down from approximately 31% immediately prior to the
Closing Date); (3) the Company's employees and management combined--10% (down
from approximately 17% immediately prior to the closing on the Transactions);
(4) Alaskan Cable--7%; and (5) others--31%.
The Transactions provide for a distribution of the Company
Stock to certain of the Cable Companies which in turn are, pursuant to
resolutions or other appropriate action, to distribute their pro rata portions
of the Company Stock to their security holders according to their interests
under the applicable limited partnership agreements or their ownership of shares
of the applicable corporation, as the case may be. The table below sets forth
the names and addresses of certain persons who will receive shares of the
Company Stock pursuant to the Transactions, the nature of beneficial ownership,
the number of shares of Company Stock to be received by each pursuant to the
Transactions, and the percent of Company Class A common stock outstanding as of
the Closing Date received by or allocated to each such person receiving a
portion of the Company Stock pursuant to the Transactions. A beneficial owner
includes any person who, directly or indirectly, through any contract,
arrangement, understanding, relationship, or otherwise, has or shares the
following powers within 60 days of the Closing Date: (1) voting power, which
includes the power to vote or to direct the voting of shares of common stock of
the Company; or (2) investment power, which includes the power to dispose of or
to direct the disposition of such shares of common stock of the Company. So far
as is known to the Company, the persons named in the table had sole voting and
investment power with respect to the shares indicated as owned by them except as
otherwise stated in the footnotes to the table.
The Prime Company Shares will ultimately be distributed to the
holders, directly or indirectly, of all of the limited and general partner
interests and equity
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participation interests of Prime and their respective security holders
(collectively, "Prime Group"). The allocation of the Prime Company Shares to be
distributed to the Prime Group is also based upon the assumption that all such
Prime Company Shares were distributed to them by the Prime Sellers in accordance
with the distribution provisions of the respective limited partnership
agreements or other governing document of the Prime Sellers. The distribution to
the partners of the shareholders of ACI and the partners of the sole shareholder
of Prime General Partner may not take place for a period of as much as one year
and two years, respectively, to satisfy certain continuity of interest
requirements of the Internal Revenue Code of 1986, as amended ("Code") in order
to obtain tax treatment as reorganizations Type A under Section 368(a) of the
Code.
<TABLE>
DISTRIBUTION OF COMPANY STOCK
AMONG SECURITY HOLDERS OF
CERTAIN CABLE COMPANIES
<CAPTION>
Amount and Nature
of Beneficial
Name and Address Ownership of
of Recipient of Company Stock (Relation to Company Stock to
Name of Cable Company Cable Company) Be Received Percent of Class (1,2)
- ---------------------------- --------------------------------------------- ------------------- ----------------------
<S> <C> <C> <C>
Prime: (7)
Shareholders of
Alaska Cable, Inc. (3) 5,691,404 (3) 15.6%
(limited partner of Prime)
Prime Cable Limited Partnership (4) 2,227,071 (4) 6.1%
(sole shareholder of Prime General Partner)
3000 One American Center
600 Congress Avenue
Austin, Texas 78701
Prime Cable Growth Partners, L.P. (5) 2,725,649 (5) 7.5%
(limited partner of Prime)
3000 One American Center
600 Congress Avenue
Austin, Texas 78701
Prime Venture I Holdings, L.P. (6) 2,290,510 (6) 6.3%
(limited partner of Prime)
3000 One American Center
600 Congress Avenue
Austin, Texas 78701
Banc Boston Capital, Inc. 332,323 *
(equity participation interest holder of
Prime)
100 Federal Street
Boston, Massachusetts 02110
First Chicago Investment Corporation 301,407 *
(equity participation interest holder of
Prime)
Three First National Plaza, Suite 1330
Chicago, Illinois 60670
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Madison Dearborn Partners V 30,916 *
(equity participation interest holder of
Prime)
Three First National Plaza, Suite 1330
Chicago, Illinois 60670
Alaskan Cable/Fairbanks (8) Alaskan Cable Network, Inc. 1,110,769 3.0
Kent Farms
Middleburg, Virginia 20117
(sole shareholder)
Alaskan Cable/Juneau (8) Alaskan Cable Network/Juneau 1,110,769 3.0
Holdings, Inc.
Kent Farms
Middleburg, Virginia 20117
(sole shareholder)
Alaskan Cable/Ketchikan (8) Jack Kent Cooke Incorporated 701,539 2.0
Kent Farms
Middleburg, Virginia 20117
(sole shareholder)
===================================================================================================================
<FN>
- ----------------
1 Asterisk (*) means less than 1% of class.
2 After giving effect to the issuance of all of the Company Stock and the
MCI Company Stock.
3 To be distributed to seven shareholders of ACI as shown below, pursuant
to the ACI Merger. These shareholders will either hold the Company
Stock acquired by them in that merger or distribute such stock to their
investors, consistent with the escrow holdback provisions of the Prime
Transaction and with the restrictions on transfer in the Prime
Transaction. The seven shareholders of ACI, their addresses and the
number of shares of Company Stock to be acquired by them in connection
with the merger, are as follows: (1) PVII, 3000 One American Center,
600 Congress Avenue, Austin, Texas 78701 - 1,237,262 shares; (2)
William Blair Venture Partners III Limited Partnership, 222 West Adams,
Chicago, Illinois 60606 - 1,237,262 shares; (3) Austin Ventures, L.P.,
114 West Seventh Street, #1300, Austin, Texas 78701 - 989,809 shares;
(4) Prime Holdings, 3000 One American Center, 600 Congress Avenue,
Austin, Texas 78701 - 742,357 shares; (5) Centennial Fund III, L.P.,
1999 Broadway, #2100, Denver, Colorado 80202 - 742,357 shares; (6)
Centennial Business Development Fund, Ltd., 1999 Broadway, #2100,
Denver, Colorado 80202 - 494,905 shares; and (7) Centennial Fund II,
L.P., 1999 Broadway, #2100, Denver, Colorado 80202 - 247,452 shares.
Based on Company Class A common stock outstanding as of the Closing
Date, and with the issuance of the Prime Company Shares, the Alaskan
Cable Company Shares and the MCI Company Stock on that date, none of
the ACI shareholders will acquire 5% or more of the Company Class A
common stock.
4 To be distributed to the approximately 300 partners of PCLP, consistent
with the escrow holdback provisions of the Prime Proposed Transaction
and with the restrictions on transfer. Based on Company Class A common
stock outstanding as of the Closing Date, and with the issuance of the
Prime Company Shares, the Alaskan Cable Company Shares and the MCI
Company Stock on that date, none of the partners of PCLP will acquire
5% or more of the Company Class A common stock.
5 Includes 2,721,974 shares to be received by Prime Growth as a limited
partner of Prime, to be distributed among the partners of Prime Growth,
consistent with the escrow holdback provisions of the Prime Transaction
with the restrictions on transfer. Based on Class A common stock
outstanding as of the Closing Date, and with the issuance of the Prime
Company Shares, the Alaskan Cable Company Shares and the MCI Company
Stock on that date, none of the partners of Prime Growth will acquire
5% or more of the Company Class A common stock. In addition to the
2,721,974 shares described above, Prime Growth will ultimately receive
3,675 shares as a limited partner of the general partner of PVII (also
a shareholder of ACI). As a result, Prime Growth will acquire a total
of 2,725,649 shares of Company Stock in the Prime Transaction.
6 Includes 494,905 shares received by Prime Holdings as a limited partner
of Prime, to be distributed among the partners of Prime Holdings,
consistent with the escrow holdback provisions of the Prime Transaction
and with the restrictions on transfer. Based on Company Class A common
stock outstanding as of the Closing Date, and with the issuance of the
Prime Company Shares, the Alaskan Cable Company Shares and the MCI
Company Stock on that date, none of the
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partners of Prime Holdings will acquire 5% or more of the Company Class
A common stock. In addition to the 494,905 shares of Company Stock
described above acquired by Prime Holdings as a limited partner of
Prime, Prime Holdings will ultimately receive 742,357 shares of Prime
Company Shares as a shareholder of ACI (see footnote 3 above) and will
ultimately receive 3,675 shares as a limited partner of the general
partner of PVII (also a shareholder of ACI) and approximately 1,049,573
shares of Company Stock as general partner of Prime Growth. As a
result, Prime Holdings will acquire a total of approximately 2,290,510
shares of Company Stock in the Prime Transaction.
7 A total of 11,800,000 shares of Company Stock were issued in the Prime
Transaction. The total number of shares to be distributed to the
various entities shown in this table with respect to Prime is greater
than 11,800,000 shares for the reason that some of the shares to be
received by the shareholders of ACI will be received by (and are
included in the number of shares shown opposite) the following other
entities shown in this table with respect to Prime: Prime Growth and
Prime Holdings.
8 All three corporations comprising Alaskan Cable are ultimately
controlled by Jack Kent Cooke Incorporated, of which Jack Kent Cooke is
a controlling shareholder.
- ----------------
</FN>
</TABLE>
New Voting Agreement. As of the Closing Date on their
respective Transactions, the ownership of Company common stock by MCI, the Prime
Sellers (and their distributees who agree in writing to be bound thereby) became
subject to the New Voting Agreement along with certain other persons. The
parties to the New Voting Agreement, the number of shares of Company Class A and
Class B common stock and the percentage ownership of Company Class A and Class B
common stock as of the Closing Date and subsequent to the closing on the
Transactions are as follows: (1) MCI -- 8,251,509 shares and 23% of Class A and
1,275,791 shares and 31% of Class B common stock; (2) TCI GCI Inc. ("TCI") --
590,043 shares and 14% of Class B and no Class A common stock; (3) Ronald A.
Duncan, President and Chief Executive Officer of the Company -- 776,305 shares
and 3% of Class A and 248,062 and 6% of Class B common stock; (4) Robert M.
Walp, Vice Chairman of the board of directors of the Company ("Company Board")
- -- 572,845 shares and 2% of Class A and 303,457 shares and 7% of Class B common
stock; and (5) the Prime Sellers (and their distributees who elect in writing to
be bound by the agreement), through Prime II Management, L.P., a Delaware
limited partnership ("PIIM") as the designated agent of the Prime Sellers --
11,057,643 shares and 30% of Class A and no Class B common stock. The total
percentage of Company common stock outstanding subject to the New Voting
Agreement as of the Closing Date and subsequent to the closing on the
Transactions was 56% of Class A and 59% of Class B for a combined 57% of the
outstanding voting power (one vote for one share of Class A and ten votes for
one share of Class B common stock) of the Company.
The New Voting Agreement provides that the parties to it will,
to the extent possible, cause the full membership of the Company Board to be
maintained at not less than eight directors. The New Voting Agreement provides
that all of the shares subject to the agreement will be voted as one block for
so long as the full membership on the Company Board is at least eight and will
be voted for the election to the Company Board of individuals recommended by a
party to the New Voting Agreement. The allocation of recommendations for
positions on the Company Board made by parties to the agreement is as follows:
(1) for recommendations from MCI, two nominees; (2) for recommen-
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dations from Messrs. Duncan and Walp, one nominee each; (3) for recommendations
from TCI, two nominees; and (4) for recommendations from the Prime Sellers who
are parties to that agreement through PIIM, two nominees for so long as such
Prime Sellers (and their distributees who agree in writing to be bound by the
terms of the agreement) collectively own at least 10% of the then issued and
outstanding shares of Company Class A common stock and the management agreement
entered into between PIIM and the Company ("Prime Management Agreement") is in
full force and effect. However, if either of these conditions pertaining to the
Prime Sellers is not satisfied, then the Prime Sellers (and their distributees
who elect in writing to be bound thereby) are to be entitled to recommend only
one nominee. If neither of these conditions pertaining to the Prime Sellers are
met, the Prime Sellers are not to be entitled to recommend any nominee pursuant
to the terms of the New Voting Agreement.
The shares of the Company common stock subject to the New
Voting Agreement are to be voted as one block, to the extent possible, to cause
the full membership of the Company Board to be maintained at not less than eight
members. Furthermore, under the New Voting Agreement, the shares of Company
common stock subject to it are to be voted on other matters to which the parties
to the agreement have unanimously agreed.
The stated term of the New Voting Agreement is through the
completion of the annual shareholder meeting of the Company to take place in
June, 2001 or until there remains only one party to the agreement, whichever
occurs first. However, the parties to the New Voting Agreement may extend its
term but only upon unanimous vote and written amendment to the agreement.
Parties to the New Voting Agreement are to remain parties to it as to voting for
nominees to the Company Board and to maintain at least eight members on that
board only for so long as either the Prime Sellers who are parties to the
agreement (and their distributees who agree in writing to be bound by the terms
of the agreement) collectively own at least 10% of the then issued and
outstanding Company Class A common stock or the Prime Management Agreement is in
effect. Except for the stated term and the conditions just outlined, a party to
the New Voting Agreement (other than the Prime Sellers and their distributees
who elect in writing to be bound thereby) will be subject to the agreement until
the party disposes of more than 25% of the votes represented by that party's
holdings of Company Common Stock. That is, these conditions on a term of the New
Voting Agreement control and not the stated term ending in 2001. A party to the
agreement (other than the Prime Sellers and their distributees who elect in
writing to be bound thereby) shall then be subject to the New Voting Agreement
regardless of whether the party disposes of more than 25% of its votes.
The New Voting Agreement commenced effective as of the Closing
Date. With the execution of the New Voting Agreement, the Company Board will
take such action as necessary to cause its size to increase from the present
seven to nine
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members, and the Prime Sellers who are parties to the New Voting Agreement will
thereafter present their nominees for two positions on the Company Board.
The New Voting Agreement replaces the previous voting
agreement ("Voting Agreement") between the following parties: (1) MCI; (2) TCI;
(3) Mr. Duncan; and (4) Mr. Walp. Under the terms of the Prime Purchase
Agreement, the parties to the Voting Agreement agreed that upon closing on the
Prime Purchase Agreement, the Voting Agreement would be terminated and would be
replaced by the New Voting Agreement.
(d) Other Information on Changes in Control. The amount and
the source of consideration used by the Cable Companies in entering into these
Transactions were as follows: (1) in the case of Prime, the exchange of all of
the security interests, i.e., all of the limited and general partner interests,
directly or indirectly, and all of the equity participation interests, in Prime
for the Prime Company Shares; (2) in the case of Alaskan Cable, the sale of
substantially all of the assets of the three corporations comprising Alaskan
Cable for the Alaskan Cable Company Shares and cash; (3) in the case of Alaska
Cablevision, the sale of substantially all of the assets of Alaska Cablevision
in return for the issuance of the Cablevision Company Notes and cash; (4) in the
case of McCaw/Rock Homer, the sale of substantially all of the assets of the
Cable Company to the Company in return for cash; and (5) in the case of
McCaw/Rock Seward, the sale of substantially all of the assets of the Cable
Company in return for the payment by the Company of cash.
2. Acquisition or Disposition of Assets
(a) Brief Description, Manner of Acquisition. As of the
Closing Date, the Company closed on the seven Purchase Agreements involving the
acquisition of all of the security interests of Prime, i.e., all of the limited
and general partner interests, directly or indirectly, and all of the equity
participation interests in Prime, and substantially all of the assets of Alaskan
Cable, Alaska Cablevision, McCaw/Rock Homer and McCaw/Rock Seward. The seven
Cable Companies acquired by the Company have cable distribution systems passing
approximately 74% of households throughout Alaska. As of June 30, 1996, those
systems had more than 105,000 basic cable television subscribers in the state.
With the closing on the Transactions, the Company has through
the Cable Subsidiaries become the owner and operator of the cable systems of
Prime located in Alaska ("Prime Cable Systems") and the cable systems of the
other six Cable Companies in Alaska. The Prime Alaska Systems consist of three
cable communications systems serving several communities in Alaska: (1)
Anchorage (including Eagle River, Chugiak, Fort Richardson, and Elmendorf Air
Force Base); (2) Kenai and Soldotna; and (3) Bethel. The Alaskan Cable systems
acquired by the Company under the Alaskan Cable Purchase Agreement are comprised
of three systems serving the following
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Alaskan communities: (1) Fairbanks (including Fort Wainwright and Eielson Air
Force Base); (2) Juneau; and (3) Ketchikan and Sitka. The Alaska Cablevision
cable systems acquired by the Company under the Alaska Cablevision Purchase
Agreement are comprised of seven systems serving the following Alaskan
communities: (1) Kodiak; (2) Valdez; (3) Cordova; (4) Petersburg; (5) Wrangell;
(6) Kotzebue; and (7) Nome. The McCaw/Rock Homer cable system acquired by the
Company under the McCaw/Rock Homer Purchase Agreement services the Homer, Alaska
area. The McCaw/Rock Seward cable system acquired by the Company under the
McCaw/Rock Seward Purchase Agreement services the Seward, Alaska area. The
acquisition by the Company of the Prime Cable Systems, and the cable systems of
Alaskan Cable and Alaska Cablevision are considered significant. However, the
acquisitions by the Company of the McCaw/Rock Homer and the McCaw/Rock Seward
cable systems are considered insignificant by the Company for purposes of
financial disclosure in the Registration Statement and in this report.
The Company will for the foreseeable future operate these
Cable Company cable systems as the Company's cable systems ("Company Cable
Systems"). Over a longer period of time, the Company intends to integrate the
cable operations of the Company Cable Systems into the Company's
telecommunication activities as a part of the Company's overall business
development. With the acquisition of substantially all of the assets of Alaskan
Cable, the Company does not envision any of the executive officers of the
corporations comprising Alaskan Cable joining the Company or assisting in the
development of the new line of cable services to be provided by the Company. As
of the Closing Date, the Company envisioned that an executive officer of Alaska
Cablevision might become an employee of the Company or a subsidiary of it.
However, as of that date, the Company did not envision that individual would
immediately become an executive officer of the Company or a subsidiary of it.
The Company anticipates with the closing on the Transactions, there will be
realignments of the personnel structure of the operation of the assets acquired
from the Cable Companies. The Company has interviewed employees of the Cable
Companies and others, and has selected in its determination the best qualified
applicant for each available position. As of the Closing Date, the Company had
made no commitment to retain any personnel of the Cable Companies other than as
previously described.
The Company has accomplished the acquisition of Prime through
an exchange of Class A common stock for certain of the limited partner interests
in Prime, all of the capital stock of Prime General Partner, all of the capital
stock of Alaska Cable, Inc., a limited partner of Prime ("ACI"), and all of the
equity participation interests in Prime as further identified elsewhere in this
report. See, Item 1 of this report. As a part of the Prime Transaction and as of
the Closing Date, the Company, through its wholly-owned subsidiary GCI Cable has
entered into the following merger agreements where GCI Cable is to be the
surviving corporation in each Transaction: (1) Agreement and Plan of Merger of
Alaska Cable, Inc. with and into GCI Cable; and (2) Agreement and Plan of Merger
of Prime Cable Fund I, Inc. with and into GCI Cable. These merger
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agreements have been structured as Type A reorganizations under Section 368(a)
of the Code. In addition in the context of the Prime Transaction, the Company
closed on the following agreements as of the Closing Date: (1) the New Voting
Agreement with and including certain of the Prime Sellers through their
designated agent PIIM (for description, see, Item 1 of this report); (2) the
Prime Registration Rights Agreement with and including the Prime Sellers; and
(3) the Prime Management Agreement with PIIM.
Under the Prime Registration Rights Agreement, the initial
distribution to and, to the extent required, subsequent resales or distributions
by the Prime Sellers (and their distributees) of their portion of the Prime
Company Shares will be registered under the Securities Act. To the extent
subsequent resale or distributions by the Prime Sellers (and their distributees)
are required to be registered, the Company will keep the prospectus through
which such offers would be made current for a period of two years from the
Closing Date or otherwise satisfy its responsibilities for registration through
other registration formats.
Under the Alaskan Cable Purchase Agreement, Alaskan Cable has
registration rights similar to those described for the Prime Sellers. Under the
Alaska Cablevision Purchase Agreement, Alaska Cablevision and its shareholders
have registration rights similar to that described previously for the Prime
Sellers, should Alaska Cablevision or its shareholders exercise their rights to
convert the Cablevision Company Notes to Company Class A common stock.
Under the Prime Management Agreement, PIIM will manage the
Company Cable Systems. PIIM had, previous to the Closing Date, managed the Prime
Alaska Systems. The Prime Management Agreement is to continue for a term of nine
years unless earlier terminated under a number of circumstances including the
following: (1) with respect to any of the Company Cable Systems, upon the
termination or revocation of the Company's cable television certificates of
public convenience and necessity or franchises in those systems; (2) upon the
sale of all or substantially all of the assets of the Company Cable Systems or
the sale of all of the equity interests of the owner of the Company Cable
Systems; (3) upon PIIM's material breach of the agreement and failure to cure
within 30 days; (4) upon the Company's material breach of the agreement and
failure to cure within 30 days; or (5) after the second anniversary of the date
of the agreement, at the option of either PIIM or the Company.
(b) Consideration. Through the Prime Purchase Agreement, the
Company as of the Closing Date issued and delivered (subject to holdback escrow)
to the Prime Sellers, the Prime Company Shares in return for acquiring, directly
or indirectly, all of the security interests in Prime.
Through the Alaskan Cable Purchase Agreement the Company as of
the Closing Date delivered, for allocation among the three corporations
comprising Alaskan Cable in amounts to be agreed to by those corporations and
the Company for
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subsequent distribution to the shareholders of those three corporations and as
payment for substantially all of the Alaskan Cable assets, $70,000,000 as
follows: (1) $51,000,000 in cash; and (2) issuance of the Alaskan Cable Company
Shares, subject to share holdback.
Through the Alaska Cablevision Purchase Agreement the Company
as of the Closing Date delivered to Alaska Cablevision, for distribution to its
shareholders as payment for substantially all of the Alaska Cablevision assets,
$26,650,000 as follows: (1) $16,650,000 paid in cash, subject to adjustments at
closing which were immaterial; and (2) $10,000,000 in subordinated convertible
Cablevision Company Notes issued by the Company, subject to note holdback as
provided in the agreement. The Cablevision Company Notes are convertible into as
many as 1,538,462 shares of Company Class A common stock.
Through the McCaw/Rock Homer Purchase Agreement, the Company
as of the Closing Date delivered to McCaw/Rock Homer in return for substantially
all of the McCaw/Rock Homer assets $1,466,132 paid in cash, subject to
adjustments at closing, which were immaterial, and holdback at closing as
provided in the agreement.
Through the McCaw/Rock Seward Purchase Agreement, the Company
as of the Closing Date delivered to McCaw/Rock Seward in return for
substantially all of the McCaw/Rock Seward assets $2,883,868 paid in cash,
subject to adjustments at closing, which were immaterial, and holdback at
closing as provided in the agreement.
Through the MCI Purchase Agreement, the Company as of the
Closing Date issued and sold to MCI in return for $13 million paid in cash, the
MCI Company Stock.
(c) Determination of Value.
General. For purposes of valuing the Company Stock and the MCI
Company Stock, the respective parties to the Prime Purchase Agreement, the
Alaskan Cable Purchase Agreement and the MCI Purchase Agreement agreed that the
value would be set at $6.50 per share of Company Class A common stock.
Similarly, the parties to the Alaska Cablevision Purchase Agreement agreed that
the conversion of the Cablevision Company Notes would be based upon a value of
the Company Class A common stock at $6.50 per share.
Company. Company management considered several alternative
methods to value its stock to be issued pursuant to the Transactions, including
multiples of net sales, return on equity and multiples of operating cash flow. A
range of multiples and corresponding values were derived and evaluated. For
example, the Company gathered information on six similar transactions closing
during the period from January, 1993 through December, 1995. The Company
calculated a range of net sales multiples for
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<PAGE>
those companies from 0.62 to 3.38. The mean multiple was 1.77 times net sales
which, if used for the Company, would result in a stock price of approximately
$8.08 per share for the year ended December 31, 1995. In general, smaller
companies in those transactions received lower multiples, and each of the
companies included in the analysis generated revenues in excess of those of the
Company. Valuations vary based upon a number of factors including the size of
the company studied, its equity structure and the nature of its products and
services.
A value of $6.50 per share was agreed upon as a fair value for
the Company Stock after considering several factors, including the following:
(1) management's evaluation of other transactions in the telecommunications
industry; (2) management's consideration of the value it would likely receive in
a sale of equity in the public markets; (3) management's broad knowledge and
experience in the telecommunications industry; and (4) arms-length negotiations
between the parties to the Transactions. This price represents a 30% premium to
its pre-acquisition price, which was approximately $5.00 per share prior to
March, 1996.
The Company's valuation of the Cable Companies, at the time of
its negotiation of the acquisition of those Cable Companies during the first
quarter of 1996, was based upon the Company Board's assessment of the Cable
Companies' value as independent cable companies at that time, using cash flow
multiples that the Company Board believed were less than other then recent
acquisitions in the cable industry. The Company Board determined that the
proposed prices and structure of the Acquisition Plan represented fair prices
for all parties and created opportunities for growth in the future value of the
equity. In making its final determination on the Acquisition Plan, the Company
Board did not seek and did not receive any independent valuations or opinions
from financial advisors as to fairness of the consideration to be paid in
connection with any of the Transactions.
Prime and Alaskan Cable. Cable television companies have
traditionally been valued on the basis of a multiple of historical or projected
operating cash flow. The particular multiple varies depending upon general
market and economic conditions, the regulatory climate for the cable television
industry, and other factors.
Prime management considered a range of multiples of
twelve-month historical or projected operating cash flow, less indebtedness owed
by the Cable Company. In determining operating cash flow, Prime used "earnings
before interest, taxes, depreciation and amortization." Using the operating cash
flow valuation method, Prime was valued by Prime management and the Company at
$186.1 million, representing a multiple of 10.7 times the net operating cash
flow for the first calendar quarter of 1996 (annualized), less indebtedness of
$109.4 million, resulting in a net equity value of $76.7 million.
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Prime management used an assumed value of $6.50 per share for
the Company Stock for purposes of determining the fixed number of shares of
Company Stock to be issued and delivered in connection with the Prime
Transaction. The $6.50 per share valuation is equal to approximately 7.7 times
annualized budgeted operating cash flow of the Company for the first calendar
quarter of 1996, based upon budgets prepared by the Company.
The $6.50 per share value for the Company was agreed upon
after considering several valuation methods, including return on equity, a
multiple of revenues and a multiple of operating cash flow. In addition to the
information referred to in the preceding paragraph, Prime management also
gathered information regarding recent acquisitions involving telecommunications
companies, although some of the acquisitions were between long distance
companies and might have involved a synergy that might not exist in the Prime
Transaction. One group of acquired companies with annual revenues below $500
million (Link, Enhanced, WCT, and American Sharecom) were valued at an average
multiple of 1.26 times gross revenue. Using this same multiple, the Company
would be valued at $6.28 per share at the end of calendar 1995 and a $5.80 per
share value at the end of 1996. The decline in such per share valuation at the
end of 1996 is due primarily to the planned capital expenditures for 1996 which
will require the Company to incur additional indebtedness at a rate that exceeds
the increase in gross asset value based on revenues.
Management for each of the corporations comprising Alaskan
Cable has extensive experience in and knowledge of the cable communications
industry and believes that it is generally familiar with transactions involving
the purchase and sale of cable communications systems of comparable size to the
cable systems which are the subject of the Alaskan Cable Purchase Agreement.
Based upon that experience and knowledge, management for each corporation
concluded that the terms of the Alaskan Cable Purchase Agreement as negotiated
with the Company were at least as favorable as could have been obtained from any
third party.
(d) Identity of Persons from Whom Assets Were Acquired. Prime
is a Delaware limited partnership with principal offices in Austin, Texas and is
structured as follows: (1) general partner--Prime General Partner whose sole
shareholder is PCLP, a Delaware limited partnership; (2) corporate limited
partner--ACI, a Delaware corporation; and (3) two other limited partners--Prime
Growth and Prime Holdings, both Delaware limited partnerships. The holders of
equity participation interests in Prime were as follows: (1) BancBoston Capital,
Inc.; (2) First Chicago Investment Corporation; and (3) Madison Dearborn
Partners V.
Alaskan Cable is comprised of three Alaska corporations, all
with principal offices in Middleburg, Virginia: (1) Alaskan Cable/Fairbanks,
whose sole shareholder is Alaskan Cable Network, Inc., (2) Alaskan Cable/Juneau,
whose sole shareholder is Alaska Cable Network/Juneau Holdings, Inc.; and (3)
Alaskan Cable/Ketchikan, whose
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sole shareholder is Jack Kent Cooke Incorporated. As of the Closing Date, Jack
Kent Cooke, a director and executive officer of each of the three corporations
comprising Alaskan Cable controlled directly or indirectly through affiliates
all of the shares of outstanding voting common stock of all three of these
corporations.
Alaska Cablevision is a Delaware corporation with principal
offices in Kirkland, Washington. McCaw/Rock Homer is an Alaska joint venture
with principal offices in Kirkland, Washington. McCaw/Rock Homer is comprised of
Rock Associates, Inc. and McCaw Communications of Homer, Inc., a wholly-owned
subsidiary of AT&T Corporation. McCaw/Rock Seward is an Alaska joint venture
with principal offices in Kirkland, Washington. McCaw/Rock Seward is comprised
of Rock Associates, Inc. and McCaw Communications of Seward, Inc., a
wholly-owned subsidiary of AT&T Corporation.
As of immediately prior to the Closing Date, the Company had
no material relationship with any of the Cable Companies or their affiliates,
except through the corresponding Purchase Agreements.
(e) Sources of Funds, Purchase Price. The total purchase price
(approximately $285,700,000) was paid by the Company through the issuance of the
Company Stock, bank financing of approximately $167,000,000 (including
assumption of approximately $103,000,000 of existing Prime debt and new
financing of approximately $59,000,000), sale of the MCI Company Stock to MCI
and other financing of approximately $10,000,000 in the form of issuance of the
Cablevision Company Notes. The total purchase price was approximately $5 million
higher than originally envisioned in that the debt of Prime increased by that
amount to approximately $167 million because of capital expenditures by and
refinancing costs of Prime between the time of execution of the Prime Purchase
Agreement and the Closing Date. Both Prime and the Company agreed to these
changes at closing on that agreement, and the parties did not consider the
increases material to the Prime Transaction.
Item 7. Financial Statements and Exhibits
(a) Financial Statements. The historical financial statements
for Prime, Alaskan Cable (combined for the three corporations of which it is
comprised), and Alaska Cablevision for the three- and six- month periods ended
June 30, 1996 and for the years ended December 31, 1995, 1994, and 1993 were
prepared in accordance with Regulation S-X and included in the Registration
Statement. Those historical financial statements are found at pages F-1 through
F-57 of the Registration Statement and are incorporated by reference into this
report.
The pro forma combined condensed financial statements
(unaudited) for the Company pursuant to the Transactions, including a pro forma
combined condensed balance sheet as of June 30, 1996 (unaudited), a pro forma
combined condensed
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statement of operations for the six months ended June 30, 1996 (unaudited), a
pro forma combined condensed statement of operations for the year ended December
31, 1995 (unaudited), and notes to pro forma combined financial statements, June
30, 1996 and December 31, 1995 (unaudited), were prepared in accordance with
Regulation S-X and included in the Registration Statement. Those pro forma
combined condensed financial statements (unaudited) and notes to them are found
at pages F-58 through F-68 of the Registration Statement and are incorporated by
reference into this report.
(b) Exhibits. None thought to be appropriate, and none to be
filed with this report, other than the exhibits listed in the following table
which have not previously been filed with the Commission except as expressly
identified.
As of the Closing Date, the Company and the Prime Sellers
documented their agreement to certain non-material amendments to the Prime
Purchase Agreement by executing the Amendment No. 1 to Securities Purchase and
Sale Agreement. As of the Closing Date, the Company and Alaskan Cable documented
their agreement to certain non-material amendments to the Alaskan Cable Purchase
Agreement by executing the Amendment No. 1 to the Alaskan Cable Purchase
Agreement.
The Company and the Prime Sellers documented at closing the
waiver of certain non-material terms of the Prime Purchase Agreement through the
Waiver. As of the Closing Date, and as a part of the closing on the Company's
acquisition of the Cable Companies, the senior loan agreement for Prime and the
senior credit agreement for the Company through its subsidiary GCI Communication
Corp. were amended. The Company issued a press release dated November 7, 1996.
Copies of these documents and materials have been included as exhibits to this
report.
The Purchase Agreements, the merger agreements as described in this
report, the Prime Registration Rights Agreement, and the New Voting Agreement,
all of which are exhibits to the Registration Statement, are incorporated by
reference into this report.
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Exhibit
Number Description
- ------ -----------
2.1 Amendment No. 1 to Securities Purchase and Sale Agreement
[Prime] (1)
2.2 Amendment No. 1 to Alaskan Cable Purchase Agreement (2)
2.3 Waiver [Prime]
23.1 Consent of Ernst & Young LLP (Prime accountant 1994, 1995 and
1996)
23.2 Consent of Coopers & Lybrand L.L.P. (Prime accountant 1993)
23.3 Consent of Ernst & Young LLP (Alaskan Cable accountant for
Alaskan Cable/Fairbanks, Alaskan Cable/Juneau, and Alaskan
Cable/Ketchikan)
23.4 Consent of Carl & Carlsen (Alaska Cablevision accountant)
23.5 Report of Independent Auditors (1994 and 1995) [Ernst & Young
LLP for Prime]
23.6 Report of Independent Accountants (1993) [Coopers & Lybrand
for Prime]
23.7 Report of Independent Auditors [Ernst & Young for Alaskan
Cable]
23.8 Report of Independent Auditors [Carl & Carlsen for Alaskan
Cablevision]
99.1 Press Release of the Company Dated November 7, 1996
99.2 Third Amended and Restated Credit Agreement Dated as of
October 31, 1996 Between GCI Communication Corp. and
NationsBank of Texas, N.A.
99.3 Loan Agreement Among GCI Cable, Inc., as Borrower;
Toronto-Dominion (Texas), Inc., et al., as of October 31, 1996
- --------------------
(1) The Prime Purchase Agreement was amended at closing as of the Closing Date.
The amendment was in major part made to cause the agreement to reflect changes
in the historical financial statements suggested by the staff of the Commission
at the time of the staff's reveiw of the Registration Statement. Those changes
were made to the financial statements included in the Registration Statement.
The Company does not consider the amendment to the Prime Purchase Agreement as
material, and the amendment is included as an exhibit to this report.
(2) The Alaskan Cable Purchase Agreement was amended at closing as of the
Closing Date. The amendment consisted in major part of miscellaneous items of
clarification of terms and conditions of the agreement. Those changes were not
included in the Registration Statement. The Company does not consider the
amendment to the Alaskan Cable Purchase Agreement as material, and the amendment
is included as an exhibit to this report.
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<PAGE>
SIGNATURES
----------
Pursuant to the requirements of the Securities and Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
GENERAL COMMUNICATION, INC.
(Registrant)
DATED: November 8, 1996 By: /s/
Ronald A. Duncan
Its: President and Chief Executive Officer
DATED: November 8, 1996 By: /s/
John M. Lowber
Its: Secretary and Chief Financial Officer
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
Form 8-K
CURRENT REPORT
UNDER
THE SECURITIES EXCHANGE ACT OF 1934
GENERAL COMMUNICATION, INC.
November 8, 1996
EXHIBITS
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<PAGE>
<TABLE>
EXHIBIT INDEX
<CAPTION>
Page Number in
Exhibit Sequentially
Number Description Numbered Copy
- ------ ----------- -------------
<S> <C> <C>
2.1 Amendment No. 1 to Securities Purchase and Sale Agreement
[Prime] (1)...........................................................................21
2.2 Amendment No. 1 to Alaskan Cable Purchase Agreement (2)........................................28
2.3 Waiver [Prime].................................................................................33
23.1 Consent of Ernst & Young LLP (Prime accountant 1994, 1995
and 1996).............................................................................36
23.2 Consent of Coopers & Lybrand L.L.P. (Prime accountant 1993)....................................37
23.3 Consent of Ernst & Young LLP (Alaskan Cable accountant for
Alaskan Cable/Fairbanks, Alaskan Cable/Juneau, and
Alaskan Cable/Ketchikan)..............................................................38
23.4 Consent of Carl & Carlsen (Alaska Cablevision accountant)......................................39
23.5 Report of Independent Auditors (1994 and 1995) [Ernst &
Young LLP for Prime]..................................................................40
23.6 Report of Independent Accountants (1993) [Coopers &
Lybrand for Prime]....................................................................41
23.7 Report of Independent Auditors [Ernst & Young for
Alaskan Cable]........................................................................42
23.8 Report of Independent Auditors [Carl & Carlsen for
Alaskan Cablevision]..................................................................43
99.1 Press Release of the Company Dated November 7, 1996............................................44
99.2 Third Amended and Restated Credit Agreement Dated
as of October 31, 1996 Between GCI Communication Corp.
and NationsBank of Texas, N.A.........................................................46
99.3 Loan Agreement Among GCI Cable, Inc., as Borrower;
Toronto-Dominion (Texas), Inc., et al.,
as of October 31, 1996...............................................................154
<FN>
- --------------------
1 The Prime Purchase Agreement was amended at closing as of the Closing
Date. The amendment was in major part made to cause the agreement to reflect
changes in the historical financial statements suggested by the staff of the
Commission at the time of the staff's review of the Registration Statement.
Those changes were made to the financial statements included in the Registration
Statement. The Company does not consider the amendment to the Prime Purchase
Agreement as material, and the amendment is included as an exhibit to this
report.
2 The Alaskan Cable Purchase Agreement was amended at closing as of the
Closing Date. The amendment consisted in major part of miscellaneous items of
clarification of terms and conditions of the agreement. Those changes were not
included in the Registration Statement. The Company does not consider the
amendment to the Alaskan Cable Purchase Agreement as material, and the amendment
is included as an exhibit to this report.
</FN>
</TABLE>
General Communication, Inc. - Form 8-K
Page 20
EXHIBIT 2.1
Amendment No. 1 to Securities
Purchase and Sale Agreement
This Amendment No. 1 to Securities Purchase and Sale Agreement
("Amendment") is entered into as of October 31, 1996 among General
Communication, Inc., an Alaska corporation ("Buyer"), Prime Venture I Holdings,
L.P., a Delaware limited partnership ("Holdings"), Prime Cable Growth Partners,
L.P. a Delaware limited partnership ("Growth"), Prime Venture II, L.P., a
Delaware limited partnership ("PVII"), Prime Cable Limited Partnership, a
Delaware limited partnership (`PCLP"), BancBoston Capital, Inc., a Massachusetts
corporation ("BBC"), First Chicago Investment Corporation, a Delaware
corporation ("FCIC"), Madison Dearborn Partners V, an Illinois partnership
("MDP"), Austin Ventures, L.P., a Delaware limited partnership ("AV"), William
Blair Ventures Partners III Limited Partnership, an Illinois limited partnership
("WBVP"), Centennial Fund II, L.P., a Delaware limited partnership ("CFII"),
Centennial Fund III, L.P., a Colorado limited partnership ("CFIII"), Centennial
Business Development Fund, Ltd., a Colorado limited partnership ("CBDF," and
collectively with Holdings, Growth, PVII, PCLP, BBC, FCIC, MDP, AV, WBVP, CFII
and CFIII, the "Sellers"), and Prime II Management, L.P., a Delaware limited
partnership ("PIIM"), individually and acting as Sellers' Agent on behalf of the
Sellers.
WHEREAS, Buyer, Sellers and PIIM are parties to that certain Securities
Purchase and Sale Agreement dated May 2, 1996 (as amended herein, the
"Agreement"), pursuant to which Sellers have agreed to sell to Buyer, directly
or indirectly, all of their respective interests in Prime Cable of Alaska, L.P.,
a Delaware limited partnership (the "Company"); and
WHEREAS, Buyer, Sellers and PIIM now desire to amend the Agreement to
provide for certain changes which the Company has agreed to make to its
historical financial statements in response to comments made by the Securities
and Exchange Commission (the "SEC") in response to Buyer's submission to the SEC
of its proxy statement/prospectus;
NOW, THEREFORE, for and in consideration of the premises and other good
and valuable consideration, the receipt and sufficiency of which are
acknowledged by the execution and delivery hereof, the parties agree as follows
(capitalized terms used herein and not otherwise defined shall have the meanings
ascribed to them in the Agreement):
1. Amendments to the Agreement.
1.1 Amendment to Section 3.9. Section 3.9 of the Agreement is amended
by deleting the existing Section 3.9 and inserting a new Section 3.9 which shall
read as follows:
"3.9 Indebtedness. As of February 29, 1996, Company's combined
outstanding subordinated and senior debt (i) less any
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positive working capital balance or plus any working capital
deficit, as the case may be, calculated without regard to the
current portion of long term debt, and (ii) excluding the
liability of Company related to the profit participation
interests in Company owned by BBC, FCIC and MDP (the "Profit
Participation Obligation")(which Profit Participation
Obligation will be discharged at the Closing by Buyer's
issuance of a portion of the GCI Shares to BBC, FCIC and MDP
pursuant to the terms of this Agreement), did not exceed
$107,000,000 in the aggregate."
1.2 Amendment to Section 3.16. Section 3.16 of the Agreement is amended
by deleting the existing Section 3.16 and inserting a new Section 3.16 which
shall read as follows:
"3.16 Financial Statements. Sellers have delivered to Buyer
correct and complete copies of Company's audited financial
statements for each of the two most recent fiscal years ended
prior to the date of this Agreement (such audit financial
statements for the fiscal year ended December 31, 1995 having
been restated in September 1996 to reflect the Profit
Participation Obligation) and unaudited interim monthly
financial statements for the two month period ended February
29, 1996 (the "Financial Statements"). The Financial
Statements were prepared in accordance with generally accepted
accounting principles applied on a consistent basis throughout
the periods covered thereby (and except, in the case of
interim financial statements, subject to normal recurring
year-end adjustments and the absence of footnotes), and fairly
present in accordance with generally accepted accounting
principles the financial condition and results of operation of
Company as of the dates indicated and for the periods covered
thereby. Except as disclosed by, or reserved against in, its
most recent balance sheet included in the Financial Statements
(and except for the subsequent adjustment made in September
1996 to reflect the Profit Participation Obligation), Company
did not have as of the date of such balance sheet any
liability or obligation, whether accrued, absolute, fixed, or
contingent (including, without limitation, liabilities for
taxes or unusual forward or long-term commitments), which was
material to the business, results of operations, or financial
condition of Company and which is required to be disclosed on,
or reserved against in, a balance sheet. Sellers have received
no notice of any fact which may form a basis for any claim by
a third party which, if asserted, could result in a liability
affecting Company not disclosed by or reserved against in the
most recent balance sheet of Company. From the date of the
most recent balance sheet included in the Financial Statements
to and
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including the date of this Agreement, (i) the CATV Business
has been operated only in the ordinary course, (ii) Company
has not sold or disposed of any assets other than in the
ordinary course of business, (iii) there has not occurred any
material adverse change or event in the business, operations,
assets, liabilities, financial condition or results of
operations of Company compared to the business, operations,
assets, liabilities, financial condition, or results of
operations reflected in the Financial Statements, and (iv)
there has not occurred any theft, damage, destruction, or loss
which has had a material adverse effect on Company."
1.3 Amendment to Section 3.27. Section 3.27 of the Agreement is amended
by deleting the existing Section 3.27 and inserting a new Section 3.27 which
shall read as follows:
"3.27 No Other Assets or Liabilities. Except for the Excluded
Assets and the Other Required Assets, Company does not own,
use or hold for use any material assets of any kind other than
the Assets described on Schedules 2, 3, 5 and 6; and Company
has no material liabilities, obligations, or commitments of
any kind other than (i) obligations under the CATV Instruments
and Company Contracts described on Schedules 2 and 3, (ii)
liabilities disclosed on the Financial Statements (as adjusted
in September 1996 to reflect the Profit Participation
Obligation), and (iii) liabilities incurred after the date of
this Agreement in the ordinary course of business and in
compliance with the terms of this Agreement."
1.4 Amendment to Section 9.5. Section 9.5 of the Agreement is amended
by deleting the existing Section 9.5 and inserting a new Section 9.5 which shall
read as follows:
"9.5 Cash Flow, Indebtedness. As of the Closing Date,
Company's Operating Cash Flow for the full months in 1996 that
precede the Closing shall be no less than ninety percent (90%)
of Company's budgeted Operating Cash Flow for such period (the
difference between (A) such actual Operating Cash Flow to the
extent that it is not less than ninety percent (90%) of such
budgeted Operating Cash Flow, and (B) such budgeted Operating
Cash Flow, being referred to herein as the "Prime Cash flow
Shortfall"). Company's budgeted Operating Cash Flow for 1996
is $17,600,000. As of the Closing Date, the combined
outstanding subordinated and senior debt (i) less any positive
working capital balance or plus any working capital deficit,
as the case may be, calculated without regard to the current
portion of long term debt, and (ii) excluding the Profit
Participation Obligation, for the
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Company shall not exceed the sum of (A) $108,000,000, plus (B)
indebtedness in an amount equal to the sum of (X) the
aggregate amount not exceeding $7,000,000 to be spent (the
"Prime Upgrade Expense") on upgrading the CATV Business (the
"Alaska System Upgrade"), (Y) the aggregate amount of any
Prime Cap-Ex Excess excluding any expenditures on the Alaska
System Upgrade (including in such excluded expenditures the
Prime Upgrade Expense), and (Z) the Prime Cash Flow Shortfall
(provided, that the Profit Participation Obligation will be
discharged at the Closing by Buyer's issuance of a portion of
the GCI Shares to BBC, FCIC and MDP pursuant to the terms of
this Agreement)."
1.5 Amendment to Section 11.1. Section 11.1 of the Agreement is amended
by deleting the existing Section 11.1 and inserting a new Section 11.1 which
shall read as follows:
"11.1 Simultaneous Closing. The closing of the transactions
contemplated under the GCI and MCI Stock Purchase Agreement
dated September 13, 1996 (the "MCI Stock Purchase Agreement"),
shall occur on the Closing Date substantially simultaneously
with the Closing hereunder, whereby MCI shall purchase for
cash Two Million shares of Buyer's Class A common stock, at a
price equal to $6.50 per share."
2. Miscellaneous.
2.1 Counterparts. This Amendment may be executed by one or
more of the parties hereto in any number of counterparts and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument.
2.2 Construction. Each of the parties hereto acknowledges that
it has reviewed this Amendment and that the normal rule of construction to the
effect that any ambiguities are to be resolved against the drafting party shall
not be employed in the interpretation of this Agreement or any amendments
hereto.
2.3 Governing Law. This Amendment shall be governed by and
construed in accordance with the internal laws, and not the law of conflicts, of
the State of Alaska.
2.4 Further Assurances. The parties agree that they will take
all such further actions and execute and deliver all such further instruments
and documents as may be required in order to effectuate the agreements set forth
in this Amendment.
2.5 Miscellaneous. Except to the extent specifically amended
hereby, the provisions of the Agreement shall remain unmodified and the
Agreement is hereby confirmed as being in full force and effect. This Amendment
and the Agreement constitute the entire
General Communication, Inc. - Form 8-K
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<PAGE>
understanding of the parties with respect to the subject matter hereof an
thereof and supersede all prior and current understandings and agreements,
whether written or oral.
* * * * *
General Communication, Inc. - Form 8-K
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have duly executed this
Amendment as of the date first above written.
BUYER:
GENERAL COMMUNICATIONS, INC.
By: /s/
Name: John M. Lowber
Title: Senior Vice President
SELLERS:
PRIME VENTURE I HOLDINGS, L.P.,
PRIME CABLE GROWTH PARTNERS,
L.P., PRIME CABLE LIMITED
PARTNERSHIP, BANCBOSTON CAPITAL,
INC., FIRST CHICAGO INVESTMENT
CORPORATION, MADISON DEARBORN
PARTNERS V, PRIME VENTURE II,
L.P., AUSTIN VENTURES, L.P.,
WILLIAM BLAIR VENTURE PARTNERS
III LIMITED PARTNERSHIP,
CENTENNIAL FUND II, L.P.,
CENTENNIAL FUND III, L.P., and
CENTENNIAL BUSINESS DEVELOPMENT
FUND, LTD., by Prime II
Management, L.P. as Sellers'Agent
pursuant to Section 19.13 of the
Agreement
Prime II Managment L.P.
By: Prime II Management, Inc.
Its: General Partner
By: /s/
Name: Rudolph H. Green
Title: Vice President
General Communication, Inc. - Form 8-K
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<PAGE>
PIIM:
PRIME II MANAGEMENT, L.P.
By: Its General Partner
Prime II Management, Inc.
By: /s/
Name: Rudolph H. Green
Title: Vice President
General Communication, Inc. - Form 8-K
Page 27
EXHIBIT 2.2
FIRST AMENDMENT TO ASSET PURCHASE AGREEMENT
THIS FIRST AMENDMENT to the Asset Purchase Agreement ("Amendment"), is
dated as of the day of October, 1996, and entered into among GENERAL
COMMUNICATION, INC., an Alaska corporation (herein, together with its
wholly-owned subsidiaries, its successors and assigns, "GCI"), ALASKAN CABLE
NETWORK/FAIRBANKS, INC., an Alaska corporation ("ACNFI"), ALASKAN CABLE
NETWORK/JUNEAU, INC., an Alaska corporation ("ACNJ"), ALASKA CABLE
NETWORK/KETCHIKAN-SITKA, INC., an Alaska corporation ("ACNKS") (ACNI, ACNJ and
ACNKS, collectively "Companies" or individually "Company").
W I T N E S S E T H:
WHEREAS, the Companies and GCI entered into an Asset Purchase
Agreement, dated as of April 15, 1996 (as amended, restated or otherwise
modified from time to time, the "Agreement");
WHEREAS, Schedules 3 and 4 erroneously list the union and programming
contracts as liabilities for GCI's assumption, which contracts GCI shall not be
assuming pursuant to the consummation on the Agreement to the Closing Date;
WHEREAS, Section 4.2 erroneously lists the retransmission consent
agreements as an Excluded Asset, but which agreements GCI shall be assuming
under the Agreement on the Closing Date;
WHEREAS, Section 4.1 erroneously omits certain contracts and leases
which GCI will be assuming under the Agreement on the Closing Date, which
contracts and leases were inadvertently omitted from Schedule 2;
WHEREAS, GCI and the Companies desire to amend Section 10.6 of the
Agreement in the manner set forth herein;
WHEREAS, GCI and the Companies have agreed to modify the Agreement upon
the terms and conditions set forth below to reflect the parties' intent;
NOW, THEREFORE, for valuable consideration hereby acknowledged, the
Companies and GCI agree as follows:
SECTION 1. Definitions. Unless specifically defined or redefined below,
capitalized terms used herein shall have the meanings ascribed thereto in the
Agreement.
General Communication, Inc. - Form 8-K
Page 28
<PAGE>
SECTION 2. Non-Assumption of Union and Programming Contracts.
The Companies and GCI agree that GCI shall not assume
the Union Contracts or the Programming Contracts listed on Schedule 3 to the
Agreement. The Companies agree to delete the Union Contracts from Schedule 4 as
a Required Consent. GCI shall have no obligation under the Agreement to assume
or otherwise abide by the Union Contracts, nor any obligation to hire any of the
Companies' employees.
SECTION 3. Updated Schedule 2.
The Companies and GCI hereby agree that Schedule 2 to
the Agreement is amended to add the following items:
(1) Dark Fiber Lease Agreement between Alaska
Cable Network and Alascom;
(2) Memorandum of Agreement between Mt.
Edgecumbe School and McCaw
CableVision/Sitka;
(3) Fiber Optic Link Purchase Order between
University of Alaska and Alaska Cable
Network;
(4) Joint Use Agreement between McCaw
Communications of Juneau and Juneau Douglas
Telephone Company;
(5) Smith Broadcasting Group of Alaska, L.P.
lease;
(6) Retransmission Agreements:
a. King Broadcasting Company (KING-TV)
(Ketchikan and Sitka);
b. Smith Broadcasting Group Alaska,
Inc. (KATN and KJUD) (Ketchikan and
Sitka);
c. Northern Television, Inc. (KTVF);
d. Netlink USA;
e. Fox Television Stations, Inc.;
f. KSCT-TV;
g. Smith Broadcasting Group of Alaska,
Inc. (KATN);
h. Smith Broadcasting Group of Alaska,
Inc. (KJUD);
General Communication, Inc. - Form 8-K
Page 29
<PAGE>
i. KTNL-TV; and
j. 25 The Ketchikan Channel.
SECTION 4. Restatement of Section 4 of the Agreement. The Companies and GCI
hereby agree that Section 4 of the Agreement is hereby amended and restated in
its entirety as follows:
SECTION 4. Assumed Liabilities and Excluded Assets.
4.1 Assignment and Assumption. The Companies
will assign, and Buyer will assume and perform, the Assumed
Liabilities, which are defined as: (a) Companies' obligations to
subscribers of the Business for (i) subscriber deposits held by
Companies as of the Closing Date and which are refundable, (ii)
subscriber advance payments held by Companies as of the Closing Date
for services to be rendered by a System after the Closing Date and
(iii) the delivery of cable television service to subscribers of the
Business after the Closing Date; and (b) obligations accruing and
relating to periods after the Closing Date under all of the contracts,
leases, permits and other agreements listed on Schedule 2, including
without limitation, all Franchise Agreements, Leases, Pole Attachment
Agreements, Easements, Service Agreements, Retransmission Agreements
and Governmental Permits listed on Schedule 2 and the APUC Certificates
listed on Schedule 3 (collectively referred to as the "Assumed
Agreements and Permits"). Buyer will not assume or have any
responsibility for any liabilities or obligations of Companies other
than the Assumed Liabilities. In no event will Buyer assume or have any
responsibility for any liabilities or obligations associated with the
Excluded Assets.
4.2 Excluded Assets. The Excluded Assets,
which will be retained by Companies, will consist of the following: (a)
insurance policies and rights and claims thereunder (except as
otherwise provided in Section 6.21); (b) bonds, letters of credit,
surety instruments and other similar items; (c) cash and cash
equivalents; (d) Companies' trademarks, trade names, service marks,
service names, logos and similar proprietary rights (subject to Buyer's
rights under Section 6.26); (e) Companies' rights under any agreement
governing or evidencing an obligation of Companies for borrowed money;
(f) Companies' rights under any contract, license, authorization,
agreement or commitment other than those creating or evidencing Assumed
Liabilities; (g) the assets described on Schedule 10, and (h) the
General Communication, Inc. - Form 8-K
Page 30
<PAGE>
Union Contracts and Program Contracts listed on Schedule 3.
SECTION 5. Assignment and Assumption Agreement; Nondisturbance Agreement.
(a) It is the intention and agreement of the
Companies and GCI that at Closing, the Companies will assign to GCI all of their
rights under all of the Assumed Agreements and Permits referred to in Section
4.1 of the Agreement and GCI will assume all of the Companies' duties and
obligations under all of the Assumed Agreements and Permits arising from and
after the date of Closing. With respect to those Assumed Agreements and Permits
for which consents to transfer or assignment have been received as of the date
of this Amendment, the assignment by the Companies to GCI and the assumption by
GCI of the duties and obligations of the Companies thereunder shall be effected
by the execution and delivery at Closing of the Assignment of Company Contracts
and Assignment of Leases referred to in Section 8.3 and 8.4 of the Agreement.
With respect to those Assumed Agreements and Permits referred to in Section 4.1
of the Agreement for which a consent to assignment or transfer has not been
received as of the date of this Amendment (collectively referred to as the
"Other Assumed Agreements and Permits"), the assignment by the Companies to GCI
and the assumption by GCI of the duties and obligations of the Companies
thereunder shall be effected by the execution and delivery at Closing of an
assignment and assumption agreement in the form of Exhibit "A" annexed hereto
("Assignment and Assumption Agreement"). This Assignment and Assumption
Agreement shall be in lieu of the Assignment of Company Contracts and Assignment
of Leases referred to in Section 8.3 and 8.4 of the Agreement with respect to
the Other Assumed Agreements and Permits.
(b) Section 8.6 of the Agreement is hereby deleted in
its entirety.
SECTION 6. Amendment to Section 10.6. The Companies and GCI hereby agree that
Section 10.6 of the Agreement is hereby amended and restated in its entirety as
follows:
10.6 Cash Flow. As of the Closing Date,
Companies' twelve (12) month trailing Operating Cash Flow shall be no
less than Seven Million Three Hundred Thousand Dollars ($7,300,000).
SECTION 7. Entire Agreement; Ratification. The Agreement represents the final
agreement between the parties and may not be contradicted by evidence of prior,
contemporaneous or subsequent oral agreement of the parties. Except as modified
or supplemented hereby, the Agreement and all other documents are agreements
General Communication, Inc. - Form 8-K
Page 31
<PAGE>
executed in connection therewith shall continue in full force and effect.
SECTION 8. Counterparts. This Amendment may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
SECTION 9. Governing Law. This Amendment shall be construed in accordance with
the internal laws (and not the law of conflicts) of the State of Alaska, but
giving effect to federal laws.
IN WITNESS WHEREOF, this Amendment to Agreement is executed as of the
date first set forth above.
ALASKAN CABLE NETWORK/FAIRBANKS, INC.
By: /s/
Jack Kent Cooke
Title: Chairman of the Board
ALASKAN CABLE NETWORK/JUNEAU, INC.
By: /s/
Jack Kent Cooke
Title: Chairman of the Board
ALASKAN CABLE NETWORK/KETCHIKAN- SITKA,
INC.
By: /s/
Jack Kent Cooke
Title: Chairman of the Board
GENERAL COMMUNICATION, INC.
By: /s/
John M. Lowber
Title: Senior Vice President
General Communication, Inc. - Form 8-K
Page 32
EXHIBIT 2.3
Waiver
Reference is made to that certain Securities Purchase and Sale
Agreement dated May 2, 1996, as amended (the "Agreement"), among GCI Cable, Inc.
(as assignee of General Communication, Inc.)("Buyer"), Prime II Management, L.P.
and the "Sellers" named therein. Capitalized terms used in this Waiver and not
otherwise defined shall have the meanings ascribed to them in the Agreement.
Section 9.5 of the Agreement provides that it is a condition precedent
to Buyer's obligation to consummate the transactions contemplated by the
Agreement that as of the Closing Date, the combined outstanding subordinated and
senior debt for the Company shall not exceed $108,000,000 in the aggregate (i)
less any positive working capital balance or plus any working capital deficit,
as the case may be, calculated without regard to the current portion of long
term debt, (ii) excluding the Profit Participation Obligation, and (iii) plus
indebtedness in an amount equal to the sum of (X) the Prime Upgrade Expense, (Y)
the aggregate amount of any Prime Cap-Ex Excess excluding any expenditures on
the Alaska System Upgrade (including in such excluded expenditures the Prime
Upgrade Expense), and (Z) the Prime Cash Flow Shortfall (the "Company Debt
Limit"). The Company has exceeded the Company Debt Limit by $66,000.
Section 11.3 of the Agreement provides that it is a condition precedent
to Buyer's and Sellers' obligations to consummate the transactions contemplated
by the Agreement that all "Required Consents" identified on Schedules 4 and 16
to the Agreement as "Material Required Consents," or waivers thereof, be
obtained. Buyer and Seller acknowledge that the consent referenced as item D.2
(the "Military Base Consent") on Schedule 4 to the Agreement will not be
obtained prior to the Final Closing.
Buyer hereby waives the failure of the Buyer's closing condition under
Section 9.5 of the Agreement, and Buyer and Sellers hereby each waive their
mutual closing condition under Section 11.3 of the Agreement with respect to the
Military Base Consent, to have been met as of the Final Closing and agree to
proceed with the consummation of the transactions contemplated by the Agreement.
Dated to be effective as of October 31, 1996.
BUYER:
GCI Cable, Inc.
By: /s/
John Lowber
Secretary
General Communication, Inc. - Form 8-K
Page 33
<PAGE>
SELLERS:
PRIME VENTURE I HOLDINGS, L.P., PRIME CABLE
GROWTH PARTNERS, L.P., PRIME CABLE LIMITED
PARTNERSHIP, BANCBOSTON CAPITAL, INC., FIRST
CHICAGO INVESTMENT CORPORATION, MADISON
DEARBORN PARTNERS V, PRIME VENTURE II, L.P.,
AUSTIN VENTURES, L.P., WILLIAM BLAIR VENTURE
PARTNERS III LIMITED PARTNERSHIP, CENTENNIAL
FUND II, L.P., CENTENNIAL FUND III, L.P., and
CENTENNIAL BUSINESS DEVELOPMENT FUND, LTD., by
Prime II Management, L.P. as Sellers'Agent
pursuant to Section 19.13 of the Agreement
Prime II Management L.P.
By: Prime II Management, Inc.
Its: General Partner
By: /s/
Name: Rudolph H. Green
Title: Vice President
Agreed to and Acknowledged:
GENERAL COMMUNICATION, INC.
By: /s/
John M. Lowber, Senior Vice President
General Communication, Inc. - Form 8-K
Page 34
<PAGE>
and
PRIME II MANAGEMENT, L.P.
By: Its General Partner,
Prime II Management, Inc.
By: /s/
Name: Rudolph H. Green
Title: Vice President
General Communication, Inc. - Form 8-K
Page 35
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Current Report on Form 8-K
of General Communication, Inc. pertaining to the closing as of October 31, 1996
on the acquisition by General Communication, Inc. of seven cable companies and
the issuance of 16,723,077 shares of its Class A common stock of our report
dated March 18, 1996, except for the last paragraph of Note 7, as to which the
date is September 9, 1996, with respect to the financial statements of Prime
Cable of Alaska, L.P.
ERNST & YOUNG LLP
/s/
Austin, Texas
November 8, 1996
General Communication, Inc. - Form 8-K
Page 36
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the Current Report on
Form 8-K of General Communication, Inc., pertaining to the closing as of October
31, 1996 on the acquisition by General Communication, Inc. of seven cable
companies and the issuance of 16,723,077 shares of its Class A common stock, of
our report dated March 15, 1994, on our audit of the statements of operations,
changes in partners' capital deficiency, and cash flows of Prime Cable of
Alaska, L.P. for the year ended December 31, 1993 appearing in the Registration
Statement on Form S-4 SEC File No. (333-13473) of General Communication, Inc.
filed with the Securities and Exchange Commission pursuant to the Securities Act
of 1933.
COOPERS & LYBRAND L.L.P.
/s/
Austin, Texas
November 8, 1996
General Communication, Inc. - Form 8-K
Page 37
EXHIBIT 23.3
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors and Stockholders
General Communication, Inc.:
We hereby consent to the use of our report dated February 9, 1996
(except for Note 13, as to which the date is March 14, 1996), with respect to
the financial statements of the Alaskan Cable Network incorporated by reference
in the Current Report on Form 8-K of General Communication, Inc. pertaining to
the closing as of October 31, 1996 on the acquisition by General Communication,
Inc. of seven cable companies and the issuance of 16,723,077 shares of its Class
A common stock.
ERNST & YOUNG LLP
/s/
Woodland Hills, California
November 8, 1996
General Communication, Inc. - Form 8-K
Page 38
EXHIBIT 23.4
CONSENT OF INDEPENDENT ACCOUNTANTS
The Board of Directors and Stockholders
General Communication, Inc.:
We hereby consent to the use of our report dated February 27, 1996,
with respect to the financial statements of Alaska Cablevision, Inc.,
incorporated by reference in the Current Report on Form 8-K pertaining to the
closing as of October 31, 1996 on the acquisition by General Communication, Inc.
of seven cable companies and the issuance of 16,723,077 shares of its Class A
common stock.
CARL & CARLSEN
/s/
Seattle, Washington
November 8, 1996
General Communication, Inc. - Form 8-K
Page 39
EXHIBIT 23.5
Report of Independent Auditors
To the Partners
Prime Cable of Alaska, L.P.
We have audited the balance sheets of Prime Cable of Alaska, L.P. (the
Partnership) as of December 31, 1995 and 1994 and the related statements of
operations, changes in partners' capital deficiency, and cash flows for the
years then ended. The financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the 1995 and 1994 financial statements referred to above present
fairly, in all material respects, the financial position of Prime Cable of
Alaska, L.P. as of December 31, 1995 and 1994, and the results of its operations
and its cash flows for the years then ended in conformity with generally
accepted accounting principles.
ERNST & YOUNG LLP
/s/
Austin, Texas
March 18, 1996, except for the last
paragraph of Note 7, as to which
the date is September 9, 1996
General Communication, Inc. - Form 8-K
Page 40
EXHIBIT 23.6
Report of Independent Accountants
To the Partners
Prime Cable of Alaska, L.P.
We have audited the accompanying statements of operations, changes in partners'
capital deficiency, and cash flows for the year ended December 31, 1993 of Prime
Cable of Alaska, L.P. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the results of operations and cash flows of Prime Cable
of Alaska, L.P. for the year ended December 31, 1993, in conformity with
generally accepted accounting principles.
COOPERS & LYBRAND L.L.P.
/s/
Austin, Texas
March 15, 1994
General Communication, Inc. - Form 8-K
Page 41
EXHIBIT 23.7
Report of Independent Auditors
The Board of Directors
Alaskan Cable Network
We have audited the accompanying combined balance sheets of the Alaskan Cable
Network (see Note 1) as of December 31, 1995 and 1994, and the related combined
statements of income, shareholder's equity, and cash flows for each of the three
years in the period ended December 31, 1995. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the combined financial position of the Alaskan Cable
Network at December 31, 1995 and 1994, and the combined results of its
operations and its cash flows for each of the three years in the period ended
December 31, 1995, in conformity with generally accepted accounting principles.
ERNST & YOUNG LLP
/s/
Woodland Hills, California
February 9, 1996, except for
Note 13, as to which the date is
March 14, 1996
General Communication, Inc. - Form 8-K
Page 42
EXHIBIT 23.8
Report of Independent Auditors
To the Stockholders
Alaska Cablevision, Inc.
Kirkland, Washington
We have audited the accompanying balance sheets of Alaska Cablevision, Inc. as
of December 31, 1995 and 1994 and the related statements of income,
stockholders' equity, and cash flows for each of the years in the three-year
period ended December 31, 1995. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Alaska Cablevision, Inc. as of
December 31, 1995 and 1994 and the results of its operations and its cash flows
for each of the years in the three-year period ended December 31, 1995 in
conformity with generally accepted accounting principles.
CARL & CARLSEN
/s/
February 27, 1996
Seattle, Washington
General Communication, Inc. - Form 8-K
Page 43
EXHIBIT 99.1
PRESS RELEASE OF THE COMPANY
DATED NOVEMBER 7, 1996
November 7, 1996
John Lowber (907) 265-5600
David Morris (907) 227-4919
Bonnie Bernholz (907) 561-4488
FOR IMMEDIATE RELEASE
GCI CLOSES CABLE TRANSACTIONS
ANCHORAGE, AK -- General Communication, Inc. (GCI) announced today it
has closed the purchase and acquisition transactions of Prime Cable of Alaska,
Alaska Cablevision and Alaskan Cable Network effective as of October 31, 1996.
"With the passage of the Telecom Reform Act, the time was right to
bring further benefits of competition to the Alaska scene," said John Lowber,
GCI's chief financial officer. "We believe this transaction will allow us to
offer a broader package of services to our customers by providing GCI with
access to a wired, local network. In part, it helps establish GCI as the major
player in competitive, end-to-end telecommunication services in Alaska."
"We will be at the forefront of offering one-stop shopping for
telecommunications products throughout the state," Lowber continued. "Our core
long-distance business will continue to grow while we add broadband video. We
also have begun to test our wireless PCS product that will be deployed next
year."
According to Lowber, GCI shareholders approved the transactions at its
annual meeting held on October 17, 1996. The cable companies acquired by GCI
offer cable television service to more than 101,000 subscribers serving 74
percent of households throughout Alaska, including Kodiak, Valdez, Cordova,
Petersburg, Wrangell, Kotzebue,
General Communication, Inc. - Form 8-K
Page 44
<PAGE>
Nome, Seward, Homer, Fairbanks, Juneau, Ketchikan, Sitka, Anchorage, Kenai,
Soldotna and Bethel.
The final purchase price of the transaction was $285.7 million, which
was the aggregate value for all the cable systems. The purchase price for
Alaskan Cable Network was $70 million ($51 million in cash and 2,923,077 shares
of Class A stock); the price for Alaska Cablevision was $31 million ($21 million
in cash and $10 million in notes convertible into 1,538,000 shares of Class A
stock); and, for Prime Cable, 11,800,000 shares of Class A stock and assumption
of Prime's long-term debt.
Financing for the transactions was obtained through an issuance of 16.3
million shares of Class A common stock to the owners of the cable properties
(valued at $105.7 million); the sale of 2 million shares of Class A stock to MCI
at $6.50 per share; and $179 million of borrowings under a new $205 million bank
credit facility.
"In addition to propelling us forward technologically, this transaction
firms up our equity base and will, ultimately, add to our float," added Lowber.
The final closing required approval of the Alaska Public Utilities
Commission (APUC), which was granted on September 23, 1996. The APUC approval
included a few minor conditions placed on the transfer, such as continuing the
existing conditions requiring provision of public access channels and requiring
the cable operations to file annual income and operating statements.
GCI, an Alaska-based and operated company, provides long-distance
telephone, cable television and data communication services to more than 100,000
customers throughout the state. The company has more than 700 employees and
combined annualized revenues exceeding $200 million.
# # #
General Communication, Inc. - Form 8-K
Page 45
EXHIBIT 99.2
- -------------------------------------------------------------------------------
$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
- -------------------------------------------------------------------------------
General Communication, Inc. - Form 8-K
Page 46
<PAGE>
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
General Communication, Inc. - Form 8-K
Page 47
<PAGE>
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
Page 48
<PAGE>
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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<PAGE>
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
- --------------
* 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.
- --------------
General Communication, Inc. - Form 8-K
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<PAGE>
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
General Communication, Inc. - Form 8-K
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<PAGE>
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
- -------------- --------- -----
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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<PAGE>
"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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<PAGE>
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
General Communication, Inc. - Form 8-K
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<PAGE>
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.
General Communication, Inc. - Form 8-K
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<PAGE>
"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
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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
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"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;
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(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)
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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.
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"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.
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"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,
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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;
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(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
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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.
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"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.
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"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
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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
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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
<PAGE>
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
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<PAGE>
(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
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<PAGE>
(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
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<PAGE>
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
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<PAGE>
(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
<PAGE>
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
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<PAGE>
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
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<PAGE>
(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
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<PAGE>
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
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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.
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(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
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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.
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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
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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.
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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
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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
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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
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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
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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.
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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.
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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
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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;
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(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
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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.
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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,
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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
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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
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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;
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(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;
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(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,
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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
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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
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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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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
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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
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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:
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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
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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
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(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
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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
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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
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<PAGE>
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
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<PAGE>
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
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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
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<PAGE>
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
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<PAGE>
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
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<PAGE>
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
<PAGE>
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
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<PAGE>
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
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<PAGE>
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
<PAGE>
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
<PAGE>
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:
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(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
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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:
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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.
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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:
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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.
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(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.
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(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.
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(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.
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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
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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
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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
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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
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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
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<PAGE>
(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
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<PAGE>
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
<PAGE>
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
<PAGE>
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
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<PAGE>
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
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<PAGE>
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
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<PAGE>
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
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<PAGE>
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
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<PAGE>
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
<PAGE>
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
<PAGE>
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
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<PAGE>
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
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<PAGE>
(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
<PAGE>
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
<PAGE>
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
<PAGE>
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:
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<PAGE>
(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
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EXHIBIT 99.3
LOAN AGREEMENT
AMONG GCI CABLE, INC., AS BORROWER;
TORONTO DOMINION (TEXAS), INC.,
CREDIT LYONNAIS NEW YORK BRANCH,
THE CHASE MANHATTAN BANK N.A.,
AND NATIONSBANK OF TEXAS, N.A.,
AS MANAGING AGENTS;
NATIONSBANK OF TEXAS, N.A.,
AS SYNDICATION AGENT;
CREDIT LYONNAIS NEW YORK BRANCH,
AS DOCUMENTATION AGENT;
BANQUE PARIBAS AND THE BANK OF NEW YORK, AS CO-AGENTS;
THE BANKS WHOSE NAMES ARE SET FORTH
ON THE SIGNATURE PAGES HEREOF; AND
TORONTO DOMINION (TEXAS), INC.,
AS ADMINISTRATIVE AGENT
FOR THE MANAGING AGENTS AND THE BANKS.
AS OF OCTOBER 31, 1996.
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<PAGE>
<TABLE>
TABLE OF CONTENTS
<CAPTION>
<S> <C> <C>
ARTICLE 1 Definitions........................................................................ 3
ARTICLE 2 The Loans.......................................................................... 19
Section 2.1 The Loans....................................................................... 19
Section 2.2 Manner of Borrowing and Disbursement............................................ 19
Section 2.3 Interest........................................................................ 22
Section 2.4 Fees and Additional Compensation................................................ 24
Section 2.5 Voluntary Prepayment/Voluntary Reduction of Commitment.......................... 25
Section 2.6 Scheduled Reduction of Commitment............................................... 25
Section 2.7 Mandatory Reduction of Commitment............................................... 26
Section 2.8 Notes; Loan Accounts............................................................ 27
Section 2.9 Manner of Payment............................................................... 27
Section 2.10 Reimbursement................................................................... 28
Section 2.11 Pro Rata Treatment.............................................................. 29
Section 2.12 Capital Adequacy................................................................ 29
Section 2.13 Bank Tax Forms.................................................................. 30
Section 2.14 Letters of Credit............................................................... 30
ARTICLE 3 Conditions Precedent............................................................... 34
Section 3.1 Conditions Precedent to Initial Advance......................................... 34
Section 3.2 Conditions Precedent to Each Advance............................................ 37
Section 3.3 Conditions Precedent to Issuance of Each Letter of Credit....................... 38
ARTICLE 4 Representations and Warranties..................................................... 38
Section 4.1 Representations and Warranties.................................................. 38
Section 4.2 Survival of Representations and Warranties etc.................................. 45
ARTICLE 5 General Covenants.................................................................. 45
Section 5.1 Preservation of Existence and Similar Matters................................... 45
Section 5.2 Business: Compliance with Applicable Law........................................ 45
Section 5.3 Maintenance of Properties....................................................... 46
Section 5.4 Accounting Methods and Financial Records........................................ 46
Section 5.5 Insurance....................................................................... 46
Section 5.6 Payment of Taxes and Claims..................................................... 47
Section 5.7 Visits and Inspections.......................................................... 47
Section 5.8 Payment of Indebtedness......................................................... 47
Section 5.9 Use of Proceeds................................................................. 47
Section 5.10 Management...................................................................... 47
Section 5.11 Real Estate..................................................................... 47
Section 5.12 Indemnity....................................................................... 48
Section 5.13 Payment of Wages................................................................ 48
Section 5.14 Interest Rate Hedging........................................................... 48
Section 5.15 ERISA........................................................................... 48
Section 5.16 Further Assurances.............................................................. 49
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<PAGE>
ARTICLE 6 Information Covenants.............................................................. 49
Section 6.1 Quarterly Financial Statements and Information.................................. 49
Section 6.2 Annual Financial Statements and Information; Certificate of No Default.......... 49
Section 6.3 Performance Certificates........................................................ 50
Section 6.4 Monthly Reports................................................................. 50
Section 6.5 Copies of Other Reports......................................................... 50
Section 6.6 Notice of Litigation and Other Matters.......................................... 51
ARTICLE 7 Negative Covenants................................................................. 52
Section 7.1 Indebtedness of the Borrower.................................................... 52
Section 7.2 Investments..................................................................... 53
Section 7.3 Limitation on Liens............................................................. 53
Section 7.4 Amendment and Waiver............................................................ 53
Section 7.5 Liquidation; Disposition or Acquisition of Assets............................... 53
Section 7.6 Limitation on Guaranties........................................................ 54
Section 7.7 Restricted Payments and Purchases............................................... 54
Section 7.8 Leverage Ratio.................................................................. 55
Section 7.9 Interest Coverage Ratio......................................................... 55
Section 7.10 Annualized Operating Cash Flow to Pro Forma Debt Service Ratio.................. 55
Section 7.11 Fixed Charges Coverage Ratio.................................................... 56
Section 7.12 Affiliate Transactions.......................................................... 56
Section 7.13 Real Estate..................................................................... 56
Section 7.14 Transfer of Interests........................................................... 56
Section 7.15 ERISA Liabilities............................................................... 56
Section 7.16 Consolidated Tax Returns........................................................ 56
Section 7.17 Capital Expenditures............................................................ 57
ARTICLE 8 Default............................................................................ 57
Section 8.1 Events of Default............................................................... 57
Section 8.2 Remedies........................................................................ 60
ARTICLE 9 Change in Circumstances Affecting Eurodollar Advances.............................. 62
Section 9.1 Eurodollar Basis Determination Inadequate....................................... 62
Section 9.2 Illegality...................................................................... 62
Section 9.3 Increased Costs................................................................. 63
Section 9.4 Effect On Other Advances........................................................ 64
ARTICLE 10 The Administrative Agent and the Managing Agents................................... 64
Section 10.1 Appointment and Authorization................................................... 64
Section 10.2 Interest Holders................................................................ 65
Section 10.3 Consultation with Counsel....................................................... 65
Section 10.4 Documents....................................................................... 65
Section 10.5 Affiliates...................................................................... 65
Section 10.6 Responsibility of the Administrative Agent...................................... 65
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<PAGE>
Section 10.7 Action by Administrative Agent.................................................. 66
Section 10.8 Notice of Default or Event of Default........................................... 66
Section 10.9 Responsibility Disclaimed....................................................... 67
Section 10.10 Indemnification................................................................. 67
Section 10.11 Credit Decision................................................................. 67
Section 10.12 Successor Administrative Agent.................................................. 67
Section 10.13 Administrative Agent May File Proofs of Claim................................... 68
ARTICLE 11 Miscellaneous...................................................................... 69
Section 11.1 Notices......................................................................... 69
Section 11.2 Expenses........................................................................ 71
Section 11.3 Waivers......................................................................... 71
Section 11.4 Determination by Administrative Agent Presumptively Correct and Binding......... 72
Section 11.5 Set-Off......................................................................... 72
Section 11.6 Assignment...................................................................... 73
Section 11.7 Accounting Principles........................................................... 75
Section 11.8 Counterparts.................................................................... 75
Section 11.9 Governing Law................................................................... 75
Section 11.10 Severability.................................................................... 75
Section 11.11 Interest and Charges............................................................ 75
Section 11.12 Headings........................................................................ 76
Section 11.13 Amendment and Waiver............................................................ 76
Section 11.14 Entire Agreement................................................................ 76
Section 11.15 Other Relationships............................................................. 76
Section 11.16 Loan Documents.................................................................. 76
Section 11.17 Confidential Treatment.......................................................... 76
Section 11.18 Reliance on and Survival of Various Provisions.................................. 77
</TABLE>
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<PAGE>
EXHIBITS
Exhibit A - Form of Assignment and Assumption Agreement
Exhibit B - Form of Assignment of Partnership Interests
Exhibit C - Form of Borrower's Pledge Agreement
Exhibit D - Form of Note
Exhibit E - Form of Parent's Pledge Agreement
Exhibit F-1 - Form of Request for Advance
Exhibit F-2 - Form of Request for Advance (Initial Advance)
Exhibit G - Form of Request for Issuance of Letter of Credit
Exhibit H - Form of Security Agreement
Exhibit I - Form of Subordination and Assignment of Management
Agreement
Exhibit J - Form of Subsidiary Guaranty
Exhibit K - Form of Subsidiary Security Agreement
Exhibit L - Form of Use of Proceeds Letter
Exhibit M - Form of Loan Certificate
Exhibit N-1 - Form of Opinion of Borrower's General Counsel
Exhibit N-2 - Form of Opinion of Prior Borrower's Counsel
Exhibit N-3 - Form of Opion of special APUC counsel
Exhibit N-4 - Form of Opinion of Borrower's FCC Counsel
Exhibit O - Form of Certificate of Financial Condition
Exhibit P - Form of Monthly Operating Report
Exhibit Q - Form of Subordination Agreement
SCHEDULES*
Schedule 1 - Letters of Credit as of the Agreement Date
Schedule 2 - List of Licenses
Schedule 3 - Liens of Record as of the Agreement Date
Schedule 4 - List of Pole Agreements
Schedule 5 - Description of Real Estate
Schedule 6 - Exceptions to Necessary Authorizations
Schedule 7 - List of Subsidiaries and Ownership Interests Therein
Schedule 8 - Overbuilding; Competing Franchises
Schedule 9 - Litigation
Schedule 10 - Environmental Matters
Schedule 11 - Agreements with Affiliates
Schedule 12 - Indebtedness
Schedule 13 - Notice Addresses
* 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.
General Communication, Inc. - Form 8-K
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<PAGE>
LOAN AGREEMENT
AMONG GCI CABLE, INC., AS BORROWER;
TORONTO DOMINION (TEXAS), INC., CREDIT LYONNAIS NEW YORK BRANCH, THE CHASE
MANHATTAN BANK N.A., AND NATIONSBANK OF TEXAS, N.A., AS
MANAGING AGENTS;
NATIONSBANK OF TEXAS, N.A.,
AS SYNDICATION AGENT;
CREDIT LYONNAIS NEW YORK BRANCH,
AS DOCUMENTATION AGENT;
BANQUE PARIBAS AND THE BANK OF NEW YORK, AS CO-AGENTS;
THE BANKS WHOSE NAMES ARE SET FORTH ON THE
SIGNATURE PAGES HEREOF; AND TORONTO DOMINION (TEXAS), INC.,
AS ADMINISTRATIVE AGENT
FOR THE MANAGING AGENTS AND THE BANKS.
RECITALS
WHEREAS, Prime Cable of Alaska, L.P., a Delaware limited partnership
("Prior Borrower"), The Toronto-Dominion Bank Trust Company (the "Prior
Administrative Agent"), and the financial institutions named as "Banks" therein
are party to a certain Loan Agreement dated as of June 30, 1989 (as amended, the
"Prior Loan Agreement"); and
WHEREAS, the Prior Borrower, the Administrative Agent, the Managing
Agents and the Banks amended and restated the Prior Loan Agreement pursuant to
the Amended and Restated Loan Agreement dated as of March 7, 1996 ("First
Amended Loan Agreement"); and
WHEREAS, the Borrower, pursuant to the GCI Acquisition (defined below)
and simultaneously with the effectiveness of this Agreement, is acquiring a
ninety-nine percent (99%) general partnership interest in the Prior Borrower,
and GCI Cable Holdings, Inc., a wholly-owned subsidiary of the Borrower, is
acquiring a one percent (1%) limited partnership interest in the Prior Borrower,
as a result of which acquisitions the Borrower will acquire the Prime Cable
System (as defined below); and
WHEREAS, the Borrower, pursuant to the Rock and Cooke Acquisitions (as
defined below) on or shortly after the Agreement Date, is acquiring the Alaska
Cablevision System (as defined below) and the Alaskan Cable Network (as defined
below); and
WHEREAS, pursuant to the foregoing transactions, the Borrower, the
Administrative Agent, the Managing Agents and the Banks have agreed to refinance
the Loans outstanding under the First Amended Loan Agreement in order to, among
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<PAGE>
other things, replace the Prior Borrower with the Borrower as the "Borrower"
hereunder, increase the principal amount of the Commitment, and finance the Rock
and Cooke Acquisitions;
NOW, THEREFORE, in consideration of the foregoing premises and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged by each of the parties hereto, the parties hereby agree as
follows, as of the 31st day of October, 1996;
ARTICLE 1
Definitions
For the purposes of this Agreement:
"Acquisition" shall mean (whether by purchase, exchange, issuance of
stock or other equity or debt securities, merger, reorganization or any other
method) (i) any acquisition by the Borrower or its Subsidiaries (unless
otherwise indicated) of any other Person, the accounts of which Person shall
then become consolidated with the accounts of the Borrower in accordance with
GAAP, or (ii) any acquisition by the Borrower of all or any substantial part of
the assets of any other Person, or of assets in a material amount from any other
Person.
"Administrative Agent" shall mean Toronto Dominion (Texas), Inc., a
Delaware corporation, in its capacity as Administrative Agent for the Managing
Agents and the Banks, or any successor Administrative Agent named pursuant to
Section 10.12 hereof.
"Administrative Agent's Office" shall mean the office of the
Administrative Agent located at Toronto Dominion (Texas), Inc., 909 Fannin,
Suite 1700, Houston, Texas 77010, or such other office as may be designated
pursuant to the provisions of Section 11.1 of this Agreement.
"Advance" or "Advances" shall mean amounts advanced by the Banks to the
Borrower pursuant to Article 2 hereof on the occasion of any borrowing.
"Affiliate" shall mean any Person directly or indirectly controlling,
controlled by, or under common control with, the Borrower. For purposes of this
definition, "control" when used with respect to any Person includes, without
limitation, the direct or indirect beneficial ownership of more than 10 percent
(10%) of the voting securities or voting equity or partnership interests of such
Person, or the power to direct or cause the direction of the management and
policies of such Person, whether by contract or otherwise.
"Agreement" shall mean this Agreement.
"Agreement Date" shall mean October 31, 1996.
"Alaska Cablevision System" shall mean the cable television systems
which on or shortly after the Agreement Date shall be purchased by the Borrower
pursuant to
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<PAGE>
the Rock and Cooke Acquisitions and which shall be owned, operated and
maintained by the Borrower or its Subsidiaries.
"Alaskan Cable Network System" shall mean the cable television systems
which on or shortly after the Agreement Date shall be purchased by the Borrower
pursuant to the Rock and Cooke Acquisitions and which shall be owned, operated
and maintained by the Borrower or its Subsidiaries.
"Annual Excess Cash Flow" shall mean, for any calendar year of the
Borrower based on the audited financial statements required to be provided
pursuant to Section 6.2 hereof, the Operating Cash Flow of the Borrower for such
calendar year minus each of the following for such calendar year: (i) cash
interest expense, (ii) the net permanent reduction of the outstanding principal
amount of the Loans, (iii) bank fees, (iv) cash income tax payments, (v) Capital
Expenditures, (vi) management fees, expenses, and other amounts paid in cash
which were deferred in a prior period of the Borrower under the Management
Agreement, (vii) payments made in respect of Capitalized Lease Obligations, and
(viii) any Investments made as permitted hereunder.
"Annualized Operating Cash Flow" shall mean an amount equal to the
Operating Cash Flow of the Borrower for a specified calendar quarter, multiplied
by four (4).
"Applicable Law" shall mean, in respect of any Person, all provisions
of constitutions, statutes, rules, regulations, and orders of governmental
bodies or regulatory agencies applicable to such Person, including, without
limiting the foregoing, the Licenses, the Communications Act of 1934, as
amended, Environmental Laws, and Title 17 of the United States Code, and all
orders and decrees of all courts and arbitrators in proceedings or actions to
which the Person in question is a party or by which it is bound.
"Applicable Margin" shall mean the interest rate margin applicable to
Advances hereunder as determined in accordance with Section 2.3(f) hereof.
"Assets" shall mean the assets of the Borrower.
"Assignment and Assumption Agreement" shall mean that certain form of
Assignment and Assumption Agreement, in substantially the form of Exhibit A
attached hereto, pursuant to which each Bank may, as further provided in Section
11.6 hereof, sell a portion of its Commitment and Loans hereunder.
"Assignment of Partnership Interests" shall mean the Assignment of
Partnership Interests of even date, substantially in the form of Exhibit B
attached hereto.
"Authorized Signatory" shall mean such senior personnel of the Borrower
as may be duly authorized and designated in writing by the Borrower to execute
documents, agreements and instruments on behalf of the Borrower.
"Banks" shall mean each of the Banks whose names are set forth as
"Banks" on the signature pages hereof, and each direct or indirect assignee of
any of the Banks
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<PAGE>
which hereafter becomes a party to this Loan Agreement pursuant to and in
accordance with Section 11.6 hereof; and "Bank" shall mean any one of the
foregoing Banks.
"Base Rate" shall mean, as of any date, a simple interest rate per
annum equal to the greater of (x) the Prime Rate, or (y) the sum of (A) the
Federal Funds Rate plus (B) five-eighths of one percent (5/8%). The Base Rate
shall be adjusted automatically as of the opening of business on the effective
date of each change in the Prime Rate or the Federal Funds Rate, as the case may
be, to account for such change.
"Base Rate Advance" shall mean an Advance which the Borrower requests
to be made as a Base Rate Advance or is converted to a Base Rate Advance, in
accordance with the provisions of Section 2.2 hereof, bearing interest at a per
annum rate equal to the sum of the Base Rate plus the Applicable Margin, and
which shall be in a principal amount of at least $500,000 and in an integral
multiple of $100,000.
"Borrower" shall mean GCI Cable, Inc., an Alaska corporation which is a
wholly-owned Subsidiary of the Parent Company.
"Borrower's Pledge Agreement" shall mean that certain Borrower's Pledge
Agreement of even date, substantially in the form of Exhibit C attached hereto.
"Business Day" shall mean a day on which banks and foreign exchange
markets are open for the transaction of business required for this Agreement in
London, England, Houston, Texas, and New York, New York, as relevant to the
determination to be made or action to be taken.
"Cable Business" shall mean (i) the business of providing video and
audio programming and data delivered via broadband coaxial and fiber optic
cables to residential and commercial subscribers, and (ii) other activities that
use cable and non-cable technologies to provide entertainment, voice and data
transmission, educational and other services that are complementary to the
business of the Systems.
"Capital Expenditures" shall mean expenditures for the purchase of
assets of long-term use which are capitalized in accordance with GAAP.
"Capitalized Lease Obligation" shall mean that portion of any
obligation of a Person as lessee under a lease which at the time would be
required to be capitalized on the balance sheet of such lessee in accordance
with GAAP.
"Change in Control" shall mean the occurrence of any one of the
following: (i) a change in the ownership, in any transaction or series of
transactions, involving a Person who is not a stockholder of Prime II
Management, Inc., on the Agreement Date, of an aggregate of 20% or more of the
outstanding common stock of Prime II Management, Inc.; (ii) Prime II Management,
Inc. shall no longer be the sole general partner of Prime II Management, L.P.;
or (iii) the Borrower and its Subsidiaries shall no longer be Subsidiaries of
the Parent Company.
"Co-Agents" shall mean Banque Paribas, The Bank of New York, and any
other Person that becomes a Co-Agent hereunder.
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<PAGE>
"Collateral" shall mean the Assets described as "Collateral" in the
Security Agreement and the Subsidiary Security Agreement, the partnership
interest and other assets pledged pursuant to the Assignment of Partnership
Interests, the stock and other assets pledged pursuant to the Borrower's Pledge
Agreement and the Parent's Pledge Agreement, or any real property or other
property covered by any Mortgage, or any other property of any kind constituting
collateral for the Obligations pursuant to any of the Loan Documents.
"Commitment" shall mean, the several obligations of the Banks to
advance the sum of up to $205,000,000 to the Borrower in accordance with their
respective Commitment Ratios, as such obligation is reduced from time to time
pursuant to the terms hereof.
<TABLE>
"Commitment Ratios" shall mean the percentages in which the Banks are
severally bound to satisfy the Commitment to make Advances to the Borrower, as
set forth below:
<CAPTION>
Bank Commitment Ratio Commitment
---- ---------------- ----------
<S> <C> <C>
Toronto Dominion 15.243902% $ 31,250,000.00
(Texas), Inc.
NationsBank of Texas, N.A. 15.243902% $ 31,250,000.00
Credit Lyonnais 15.243902% $ 31,250,000.00
New York Branch
The Chase Manhattan Bank N.A. 15.243902% $ 31,250,000.00
The Bank of New York 12.195121% $ 25,000,000.00
Banque Paribas 12.195121% $ 25,000,000.00
PNC Bank, National 7.317073% $ 15,000,000.00
Association
The First National Bank of 7.317073% $ 15,000,000.00
Maryland
TOTAL 100% $205,000,000.00
</TABLE>
"Debt Service" shall mean, for any period, the sum for the Borrower of
(a) Total Interest Expense, (b) Required Repayments, and (c) fees due under
Section 2.4(b), (c) and (d) hereof.
"Default" shall mean any of the events specified in Section 8.1 hereof,
regardless of whether there shall have occurred any passage of time or giving of
notice or both that would be necessary in order to constitute such event an
Event of Default.
"Default Rate" shall mean a simple per annum interest rate equal to,
(a) with respect to outstanding principal, the sum of (i) the applicable
Interest Rate Basis, plus (ii) the Applicable Margin, plus (iii) two percent
(2%), and (b) with respect to all
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<PAGE>
other Obligations, the sum of (i) the Base Rate, plus (ii) the Applicable
Margin, plus (iii) two percent (2%).
"Documentation Agent" shall mean Credit Lyonnais New York Branch, and
any Person that becomes a Documentation Agent hereunder.
"Dollars" or "$" shall mean the basic unit of the lawful currency of
the United States of America.
"Environmental Laws" shall mean any and all applicable federal, state,
local or municipal laws, rules, orders, regulations, statutes, ordinances,
codes, permit conditions, decrees or requirements of any governmental authority
regulating, relating to or imposing liability or standards of conduct concerning
environmental protection matters, including without limitation, those relating
to releases, discharges, emissions or disposal to air, water, land or ground
water, to the withdrawal or use of ground water, to the use, handling or
disposal of polychlorinated biphenyls, asbestos or urea formaldehyde, to the
treatment, storage, disposal or management of hazardous substances (including,
without limitation, petroleum, crude oil or any fraction thereof, or other
hydrocarbons), pollutants or contaminants, to exposure to toxic, hazardous or
other controlled, prohibited, or regulated substances, including, without
limitation, any provisions under the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended (42 U.S.C. section 9601 et
seq.) or the Resource Conservation and Recovery Act of 1976, as amended (42
U.S.C. section 6901 et seq.).
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as in effect on the Agreement Date and as such Act may be amended thereafter
from time to time.
"ERISA Affiliate" shall mean any Person which is an "affiliate" of the
Borrower within the meaning of Section 414 of the Internal Revenue Code and
which together with the Borrower is treated as a single employer for purposes of
such Section 414.
"Eurodollar Advance" shall mean an Advance which the Borrower requests
to be made as a Eurodollar Advance or which is converted to a Eurodollar
Advance, in accordance with the provisions of Section 2.2 hereof, which bears
interest at a per annum rate equal to the Eurodollar Basis plus the Applicable
Margin, and which shall be in a principal amount of at least $1,000,000 and in
an integral multiple of $250,000.
"Eurodollar Basis" shall mean a simple interest rate per annum (rounded
upward to the nearest one-sixteenth (1/16th) of one percent) equal to the
quotient of (i) the Eurodollar Rate divided by (ii) one minus the Eurodollar
Reserve Percentage, stated as a decimal. The Eurodollar Basis shall apply to
Interest Periods of one (1), two (2), three (3) and six (6) months, and, subject
to the last sentence of this definition, of nine (9) or twelve (12) months. The
Eurodollar Basis shall be subject to Article 9 hereof and, once determined,
shall remain unchanged during the applicable Interest Period, except for changes
to reflect adjustments in the Eurodollar Reserve Percentage. The Borrower may
not elect an Interest Period for a Eurodollar Advance in excess of six (6)
months unless the Administrative Agent has notified the Borrower (i) that each
of the Banks has available to it funds for such Bank's share of
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<PAGE>
the proposed Advance which are not required for other purposes, (ii) that such
funds are available to each Bank at a rate (exclusive of reserves and other
adjustments) at or below the Eurodollar Rate for such proposed Advance and
Interest Period, and (iii) that each Bank has, in its sole discretion, agreed to
fund such Advance.
"Eurodollar Rate" shall mean, for any Interest Period, the interest
rate per annum (rounded upward to the nearest one sixteenth (1/16th) of one
percent) determined by the Administrative Agent to be the average of the rates
at which deposits in United States dollars for such Interest Period are offered
to the Administrative Agent in the Eurodollar interbank borrowing market at
approximately 11:00 a.m. (New York time), two (2) Business Days before the first
day of such Interest Period, in an amount approximately equal to the principal
amount of, and for a length of time approximately equal to the Interest Period
for, the Eurodollar Advance sought by the Borrower.
"Eurodollar Reserve Percentage" shall mean the percentage which is in
effect from time to time under Regulation D of the Board of Governors of the
Federal Reserve System, as such regulation may be amended from time to time, as
the maximum reserve requirement applicable with respect to Eurocurrency
Liabilities (as that term is defined in Regulation D), whether or not any Bank
has any such Eurocurrency Liabilities subject to such reserve requirement at
that time. The Eurodollar Basis for the applicable Interest Period shall be
adjusted automatically for any change in the Eurodollar Reserve Percentage.
"Event of Default" shall mean any of the events specified in Section
8.1 hereof to be an Event of Default.
"FCC" shall mean the Federal Communications Commission or any successor
thereto.
"Federal Funds Rate" shall mean, as of any date, the weighted average
of the rates on overnight federal funds transactions with the 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 New York, or, if such rate is not so published
for any day which is a Business Day, the average of the quotations for such day
on such transactions received by the Administrative Agent from three federal
funds brokers of recognized standing selected by the Administrative Agent.
"Fee Letters" shall mean those certain letter agreements dated as of
the Agreement Date between the Borrower and each of the Administrative Agent,
the Managing Agents and the Banks, regarding the payment of certain fees to the
Administrative Agent, the Managing Agents and the Banks.
"First Amended Loan Agreement" shall have the meaning assigned to it in
the Recitals of this Agreement.
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"Fixed Charges" shall mean, for any calendar quarter of the Borrower,
the sum of (a) Debt Service, (b) Capital Expenditures, and (c) cash taxes paid.
"GAAP" shall mean, as in effect from time to time, generally accepted
accounting principles used in the United States, consistently applied.
"GCI Acquisition" shall mean the transaction (as well as all
contemporaneous transactions associated therewith) which shall occur
simultaneously with the effectiveness of this Agreement, pursuant to the terms
of the Securities Purchase and Sale Agreement among General Communication, Inc.,
the Manager, and the direct and indirect equity owners and profit participation
right holders of Prime Cable of Alaska, L.P. dated as of May 2, 1996, as amended
by Amendment No. 1 to Securities Purchase and Sale Agreement of even date, and
pursuant to which, among other things, (a) the Borrower shall acquire a
ninety-nine percent general partnership interest in the Prior Borrower, and (b)
GCI Cable Holdings, Inc., a wholly-owned subsidiary of the Borrower, shall
acquire a one percent (1%) limited partner interest in the Prior Borrower, as a
result of which acquisitions, (x) the Prior Borrower will become a wholly-owned
subsidiary of the Borrower, and (y) the Borrower shall acquire the Prime Cable
System and all assets and business related thereto.
"Guaranty" or "Guaranteed," as applied to an obligation, shall mean and
include (a) a guaranty, direct or indirect, in any manner, of any part or all of
such obligation and (b) an agreement, direct or indirect, contingent or
otherwise, the practical effect of which is to assure in any way the payment or
performance (or payment of damages in the event of non-performance) of any part
or all of such obligation, including, without limiting the foregoing, any
reimbursement obligation as to outstanding letters of credit.
"Hazardous Materials" shall mean any and all hazardous or toxic
substances, materials or wastes as defined or listed in Environmental Laws.
"Indebtedness" shall mean, with respect to any Person, (a) all items,
except items of partners' equity or of surplus or of general contingency or
deferred tax reserves, which in accordance with GAAP would be included in
determining total liabilities as shown on the liability side of a balance sheet
of such Person, (b) all obligations secured by any Lien to which any property or
asset owned by such Person is subject, whether or not the obligation secured
thereby shall have been assumed, (c) to the extent not otherwise included, any
Guaranty and all Capitalized Lease Obligations of such Person and all
obligations of such Person with respect to leases constituting part of a sale
and lease-back arrangement, (d) all reimbursement obligations with respect to
the undrawn portions of outstanding letters of credit, and (e) obligations under
Interest Hedge Agreements.
"Indebtedness for Money Borrowed" shall mean money borrowed and
Indebtedness represented by notes payable and drafts accepted representing
extensions of credit, all obligations evidenced by bonds, debentures, notes or
other similar instruments, all Indebtedness upon which interest charges are
customarily paid, and all Indebtedness (excluding Capitalized Lease Obligations
and excluding (i) the items referred to in (d) and (e) of the definition of the
term "Indebtedness" above, and (ii) accounts payable, subscriber deposits,
accrued expenses, customer advanced payments
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and other current liabilities (other than for money borrowed) incurred in the
ordinary course of business) issued or assumed as full or partial payment for
property or services, whether or not any such notes, drafts, obligations or
Indebtedness represent Indebtedness for money borrowed. Where obligations are
evidenced by bonds, debentures, notes or other similar instruments whose face
amount exceeds the amount received by the Borrower with respect thereto, only
the amount received plus debt discount amortized as of the calculation date is
to be taken into account as Indebtedness for Money Borrowed. Interest which is
accrued but not paid on the original due date or before the expiration of any
applicable grace period for such payment shall be deemed Indebtedness for Money
Borrowed.
"Indemnified Parties" shall mean those Persons eligible to be
indemnified by the Borrower pursuant to this Agreement, and shall include the
Administrative Agent, the Managing Agents, T-D Bank, and each of the Banks and
each of their respective employees, representatives, officers, agents,
directors, and affiliates.
"Interest Hedge Agreements" shall mean any interest swap agreement,
interest rate cap agreements, interest rate collar agreements, or any similar
arrangements designed to hedge the risk of variable interest rate volatility,
arising at any time between the Borrower, on the one hand, and the
Administrative Agent, one or more of the Managing Agents, one or more of the
Banks, or any other Person, on the other hand, as such agreement or arrangements
may be modified, supplemented or amended, and as in effect from time to time.
"Interest Period" shall mean, (a) in connection with any Base Rate
Advance, the period beginning on the date such Advance is made and ending on the
last day of the calendar quarter in which such Advance is made, provided,
however, that if a Base Rate Advance is made on the last day of any calendar
quarter, it shall have an Interest Period ending on the last day of the
following calendar quarter; and (b) in connection with any Eurodollar Advance,
the term of such Advance selected by the Borrower or otherwise determined in
accordance with this Agreement. Notwithstanding the foregoing, however, (i) any
applicable Interest Period which would otherwise end on a day which is not a
Business Day shall be extended to the succeeding Business Day unless, with
respect to Eurodollar Advances only, such Business Day falls in another calendar
month, in which case such Interest Period shall end on the preceding Business
Day, (ii) any applicable Interest Period, with respect to Eurodollar Advances
only, which begins on a day for which there is no numerically corresponding day
in the calendar month during which such Interest Period is to end shall (subject
to clause (i) above) end on the last day of such calendar month, and (iii) no
Interest Period shall extend beyond the applicable Maturity Date or such earlier
date as would interfere with the Borrower's repayment obligations under Sections
2.6 or 2.7 hereof. Interest shall be due and payable with respect to any Advance
as provided in Section 2.3 hereof.
"Interest Rate Basis" shall mean the Base Rate or the Eurodollar Basis,
as appropriate.
"Internal Revenue Code" shall mean the Internal Revenue Code of 1986,
as amended.
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"Investment" shall mean any acquisition of assets from, the securities
or Indebtedness of, or making any capital contribution to, or other investment
in, any other Person by the Borrower, or any Guaranty, commitment or obligation
incurred by the Borrower in connection with the acquisition of the securities or
Indebtedness of such Person or any affiliate of such Person.
"Letter of Credit Commitment" shall mean the several obligations of the
Banks to fund Advances resulting from draws under the Letters of Credit pursuant
to the terms hereof, such Advances to be funded by the Banks in accordance with
their respective Commitment Ratios.
"Letters of Credit" shall mean any and all letters of credit, in form
and substance reasonably acceptable to T-D Bank and the Administrative Agent,
and in an aggregate face amount not to exceed $1,000,000, issued by T-D Bank
pursuant to Sections 2.1(c) and 2.14 hereof, and for the account of the
Borrower. Each Letter of Credit shall have a face amount not less than $50,000.
As of the Agreement Date, the outstanding Letters of Credit are listed on
Schedule 1 attached hereto.
"Leverage Ratio" shall mean, as of the end of any calendar quarter, the
ratio of Total Debt to Annualized Operating Cash Flow.
"Licenses" shall mean any rights including, without limitation,
certificates of public convenience and necessity issued by the Alaska Public
Utilities Commission, whether based upon any agreement, statute, order,
ordinance or otherwise, granted by any governmental authority to the Borrower or
any of its Subsidiaries, to own and operate cable television systems or SMATV
Systems, described as of the Agreement Date on Schedule 2 attached hereto, and
any other such rights subsequently obtained by the Borrower or any of its
Subsidiaries, together with any amendment, modification or replacement with
respect thereto.
"Lien" shall mean, with respect to any property, any mortgage, lien,
pledge, assignment, charge, security interest, title retention agreement, levy,
execution, seizure, attachment, garnishment or other encumbrance of any kind
(including an agreement not to permit an asset to be subject to a lien or an
encumbrance) in respect of such property, whether or not choate, vested or
perfected.
"Loan Documents" shall mean, without limitation, this Agreement, the
Notes, any Mortgages, Borrower's Pledge Agreement, Parent's Pledge Agreement,
Security Agreement, Subsidiary Security Agreement, Subsidiary Guaranty,
Assignment of Partnership Interest, the Subordination and Assignment of
Management Agreement, the Fee Letters, any Letters of Credit, any Interest Hedge
Agreement between the Borrower, on the one hand, and the Administrative Agent,
the Managing Agents, the Banks, or any of them, or any affiliate of any of them,
on the other hand, all Requests for Advance, the Use of Proceeds Letter, all
Requests for Issuance of Letter of Credit, and any other document or agreement
or certificate executed in connection herewith or contemplated hereby.
"Loans" shall mean, collectively, the amount from time to time advanced
by the Banks to the Borrower under the Commitment, not to exceed the amount of
the Commitment, and evidenced by the Notes.
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"Majority Banks" shall mean, at any time, Banks the total of whose
Commitment Ratios equals or exceeds fifty-one percent (51%) of the total amount
of all Commitment Ratios.
"Management Agreement" shall mean that certain Management Agreement
between the Borrower and Prime II Management, L.P. of even date herewith, and as
subsequently amended in accordance with the terms of this Agreement, wherein the
Manager agrees to provide management services to the Borrower and its
Subsidiaries regarding all aspects of daily operation of the Systems, including
programming, development of advertising, marketing and sales programs,
supervision of construction, preparation of financial reports, budgets and
reports to governmental and regulatory agencies, and liaison with federal, state
and local governmental officials. For purposes hereof, "Management Agreement"
shall also include any similar agreement between the Borrower and any successor
to Prime II Management, L.P. permitted hereunder, which agreement shall be in
form and substance acceptable to the Majority Banks.
"Manager" shall mean Prime II Management, L.P., a Delaware limited
partnership, or any Person having Prime II Management, L.P. as the owner of a
majority of its equity ownership interests and which has acknowledged and agreed
to be bound by the terms and conditions of the Subordination and Assignment of
Management Agreement (and executed any UCC financing statements required by the
Administrative Agent in connection therewith), and assumed the obligations of
Prime II Management, L.P. under the Management Agreement.
"Managing Agents" shall mean Toronto Dominion (Texas), Inc.,
NationsBank of Texas, N.A., Credit Lyonnais New York Branch, The Chase Manhattan
Bank N.A., and any other Person that becomes a Managing Agent hereunder.
"Materially Adverse Effect" shall mean any materially adverse effect
upon the business operations, assets, liabilities, financial condition, results
of operations or business prospects of the Borrower and its Subsidiaries, taken
as a whole, or upon the ability of the Borrower and its Subsidiaries, to
construct, operate, and maintain the Systems or to repay the Loans, resulting
from any act, omission, situation, status, event or undertaking, either singly
or taken together; provided, however, that in no event shall Materially Adverse
Effect include the effects of any future general economic conditions or
technological changes which affect the country as a whole or the cable
television industry as a whole, including, without limitation, conditions or
changes which affect the prevailing interest rates available to entities or
businesses involved in the cable television industry or which affect the
prevailing resale valuations or the method of determining such valuations of
businesses involved in the cable television industry.
"Maturity Date" shall mean September 30, 2005 or such earlier date as
payment of the Loans shall be due (whether by acceleration or otherwise).
"Mortgage" shall mean any mortgage, deed to secure debt, deed of trust,
or other instrument encumbering or transferring title (in fee simple or
leasehold) to real property, in form and substance satisfactory to the
Administrative Agent, by which the Borrower or any of its Subsidiaries grants a
mortgage to the Administrative
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Agent, as agent for the Managing Agents and the Banks, in real property owned or
leased by the Borrower or such Subsidiary to secure repayment of the
Obligations.
"Multiemployer Plan" shall have the meaning set forth in Section
4001(a)(3) of ERISA.
"Necessary Authorizations" shall mean all authorizations, consents,
permits, exemptions, approvals and licenses from, and all filings and
registrations with, and all required reports to, any governmental or other
regulatory authority, including without limiting the foregoing the Licenses and
approvals, licenses, filings and registrations under the Communications Act of
1934, as amended, necessary in order to enable the Borrower and its Subsidiaries
to construct, maintain and operate the Systems.
"Net Income" shall mean, as applied to any Person for any period, the
aggregate amount of net income of such Person, after taxes, for such period as
determined in accordance with GAAP.
"Net Proceeds" shall mean, with respect to any sale, lease, transfer or
other disposition of assets by the Borrower or any Subsidiary, or any issuance
by the Borrower or any Subsidiary of any capital stock or other debt or equity
securities permitted hereunder (in any event, a "Sales Transaction") (other than
(a) the sale of the obsolete equipment and inventory in the ordinary course of
business, (b) the sale of assets (other than as referred to in (a) above) not in
excess of $4,000,000 in the aggregate during the term of this Agreement, (c) the
incurrence of Indebtedness for Money Borrowed permitted under Section 7.1(c)
hereof, (d) the subordinated debt or equity securities issued in order to
prevent the occurrence of a Default under Section 8.1(d) hereof as permitted
thereunder, (e) loans, securities issuances or other investments permitted under
Section 7.2(a), and (f) up to $13,000,000 in additional equity contributed by
the Parent Company to the Borrower pursuant to Section 7.5(d), within six (6)
months from the Agreement Date, as a direct result of the issuance of additional
equity securities by the Parent Company to MCI Communications, Inc.), the
aggregate sales price in cash received for such assets or securities (including
without limitation any payments in respect of noncompetition covenants), net of
(i) taxes payable with respect to any such Sales Transaction, (ii) contingencies
with respect to any such Sales Transaction, appropriately reserved for by the
Borrower under GAAP, and (iii) reasonable and customary transaction costs
properly attributable to such Sales Transaction and payable by the Borrower or
any Subsidiary in connection with such Sales Transaction, including, without
limitation, sales commissions and underwriting discounts.
"Notes" shall mean those certain revolving promissory notes in the
aggregate original principal amount of $205,000,000, one issued by the Borrower
to each of the Banks hereunder, each one substantially in the form of Exhibit D
attached hereto, and any extension, modifications, renewals or replacements of
or amendments to any of the foregoing.
"Obligations" shall mean (i) all payment and performance obligations of
the Borrower, its Subsidiaries, and any other obligors to the Administrative
Agent, the Managing Agents, the Banks, or any of them under this Agreement and
the other Loan Documents (including, without limitation, obligations of the
Borrower under Interest Hedge Agreements with the Administrative Agent, the
Managing Agents, the
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Banks, or any of them or any affiliate of any of them), as they may be amended
from time to time, or as a result of making the Loans, however arising or
evidenced, whether now existing or hereafter arising, due or to become due or
absolute or contingent, and (ii) the obligation of the Borrower or any
Subsidiary to pay an amount equal to the amount of any and all damage which the
Administrative Agent and the Banks may suffer by reason of a breach of the
Borrower, any Subsidiary, or any other obligor of any obligation, covenant or
undertaking with respect to this Agreement or any other Loan Document.
"Operating Cash Flow" shall mean, as applied to any Person in respect
of any period, the sum of (a) the remainder of (i) the Net Income of such Person
for such period minus (ii) extraordinary income (including extraordinary gains
resulting from sales of assets) of such Person for such period and any taxes
associated therewith, plus (b) interest expense, depreciation, amortization,
bank fees, deferred management fees, expenses, and other amounts under the
Management Agreement, income tax expense, extraordinary losses (including losses
resulting from such sale of assets, net of any tax effect), and all other
non-cash expenses deducted in determining such Net Income.
"Parent Company" shall mean General Communication, Inc., an Alaska
corporation, which owns all of the issued and outstanding capital stock of the
Borrower.
"Parent's Pledge Agreement" shall mean that certain Parent's Pledge
Agreement of even date, substantially in the form of Exhibit E attached hereto.
"Payment Date" shall mean the last day of the Interest Period for any
Advance.
"Permitted Liens" shall mean, as applied to any Person:
(a) any Lien in favor of the Administrative Agent on behalf of
the Managing Agents and the Banks to secure the Obligations (including liens to
secure obligations of the Borrower and its Subsidiaries to the Administrative
Agent, the Managing Agents, the Banks, or any of them or an affiliate of any of
them pursuant to Interest Hedge Obligations);
(b) (i) Liens on real estate for real estate taxes not yet
delinquent and (ii) Liens for taxes, assessments, governmental charges or levies
or claims the non-payment of which is being contested in good faith by
appropriate proceedings and for which adequate reserves shall have been set
aside on such Person's books, but only so long as no foreclosure, distraint,
sale or similar proceedings have been commenced with respect thereto and remain
unstayed for a period of thirty (30) days after their commencement;
(c) Liens of carriers, warehousemen, mechanics, laborers and
materialmen incurred in the ordinary course of business for sums not yet due or
being contested in good faith, if such reserve or appropriate provision, if any,
as shall be required by GAAP shall have been made therefor;
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(d) Liens incurred in the ordinary course of business in
connection with worker's compensation and unemployment insurance;
(e) Restrictions on the transfer of assets imposed by any
License, by the Communications Act of 1934, as amended, and any regulations
thereunder, or by any state or local statute, regulation or ordinance applicable
to such Person;
(f) Liens pursuant to the Pole Agreements on cables and other
property affixed to transmission poles or contained in underground conduits;
(g) Easements, rights-of-way, restrictions and other similar
encumbrances on the use of real property which do not interfere with the
ordinary conduct of the business of such Person, or Liens incidental to the
conduct of the business of such Person or to the ownership of its properties
which were not incurred in connection with Indebtedness or other extensions of
credit and which do not in the aggregate materially detract from the value of
such properties or materially impair their use in the operation of the business
of such Person;
(h) Purchase money security interests arising and perfected by
operation of law only for a period not to exceed ten (10) days from the
inception thereof, and limited to Liens on assets so purchased;
(i) Liens of record as of the Agreement Date listed on Schedule
3 attached hereto, and other Liens securing Indebtedness in an amount not to
exceed in the aggregate at any time, together with the Indebtedness secured by
Liens listed on Schedule 3 attached hereto (other than Indebtedness arising
under leases with respect to which a notice filing appears on Schedule 3),
$3,000,000;
(j) Liens in favor of landlords to secure unpaid rental payments
under leases;
(k) Liens of lessors with respect to Capitalized Lease
Obligations permitted under this Agreement.
"Person" shall mean an individual, corporation, partnership, limited
liability company, trust or unincorporated organization, or a government or any
agency or political subdivision thereof.
"Plan" shall mean an employee benefit plan within the meaning of
Section 3(3) of ERISA or any other plan maintained for employees of any Person
or any ERISA Affiliate of such Person.
"Pole Agreements" shall mean the agreements between the Borrower or any
of its Subsidiaries and the parties referred to in Schedule 4 to this Agreement,
as more particularly described therein, and all other agreements subsequently
entered into by the Borrower, which permit the Borrower to make use of
transmission poles or conduits of such parties in distributing cable television
signals.
"Prime Rate" shall mean, at any time, the rate of interest adopted by
Toronto Dominion (Texas), Inc. (or, at such time as Toronto Dominion (Texas),
Inc. no longer serves as Administrative Agent hereunder, by the successor
Administrative
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Agent named pursuant to Section 10.12 hereof) as its reference rate for the
determination of interest rates for loans of varying maturities in United States
dollars to United States residents of varying degrees of creditworthiness and
being quoted at such time by such Bank as its "prime rate." The Prime Rate is
not necessarily the lowest rate of interest charged to borrowers of Toronto
Dominion (Texas), Inc. or any successor Administrative Agent.
"Prior Administrative Agent" shall have the meaning assigned to it in
the first paragraph of the Recitals on page 1 hereof.
"Prior Borrower" shall have the meaning assigned to it in the Recitals
of this Agreement.
"Prior Loan Agreement" shall have the meaning assigned to it in the
Recitals of this Agreement.
"Prime Cable System" shall mean the cable television systems which on
even date herewith shall be acquired by the Borrower pursuant to the GCI
Acquisition and which shall be owned, operated and maintained by the Borrower or
its Subsidiaries.
"Pro Forma Debt Service" shall mean as of the end of any calendar
quarter, Debt Service for the next succeeding four calendar quarters. For
purposes of calculating Pro Forma Debt Service, it shall be assumed that (i) the
effective, blended rate of interest on the Loans on the last day of such
calendar quarter shall be the rate of interest for the four calendar quarters
for which Pro Forma Debt Service is being calculated, after giving effect to
Eurodollar Advances and Interest Hedge Agreements, and (ii) the principal amount
outstanding on the last day of such calendar quarter shall be the principal
amount of the Loans outstanding for each day during the calendar four-quarter
period for which Pro Forma Debt Service is being calculated, except that the
effect of Required Repayments shall be taken into account.
"Property" shall mean any real property or personal property, plant,
building, facility, structure, underground storage tank or unit, equipment,
Inventory or other asset owned, leased or operated by Borrower or one of its
Subsidiaries (including, without limitation, any surface water thereon or
adjacent thereto, and soil and groundwater thereunder).
"Reportable Event" shall have the meaning set forth in Title IV of
ERISA.
"Request for Advance" shall mean any certificate of the Borrower
requesting an Advance hereunder, which certificate shall be denominated a
"Request for Advance," and shall be in substantially the form of Exhibit F-1
attached hereto, except for the Request for Advance for the initial Advance of
the Loans, which shall be in substantially the form of Exhibit F-2 attached
hereto. Each Request for Advance shall, among other things, (i) specify the date
of the Advance, which shall be a Business Day, the amount of the Advance, the
Interest Rate Basis selected by the Borrower and, with respect to Eurodollar
Advances, the Interest Period selected by the Borrower, and (ii) certify to the
Administrative Agent, the Managing Agents, and the Banks that there shall not
exist, on the date of the requested Advance and after giving effect thereto, any
Default hereunder.
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"Request for Issuance of Letter of Credit" shall mean any certificate
signed by an Authorized Signatory, which certificate will be denominated a
"Request for Issuance of Letter of Credit" and shall be in substantially the
form attached hereto as Exhibit G. Each Request for Issuance of Letter of Credit
shall, among other things, (i) specify the beneficiary of the proposed Letter of
Credit, the purpose of the Letter of Credit, the proposed date of issuance of
the Letter of Credit, which shall be a Business Day, and the documents which
must be presented to draw under such Letter of Credit (including, without
limitation, any documents which T-D Bank may require), (ii) include, as an
attachment, the proposed form of the Letter of Credit, and (iii) state that
there shall not exist, on the date of the request and after giving effect to the
issuance of the Letter of Credit, a Default hereunder.
"Required Repayments" shall mean, for any period, the difference (to
the extent positive) between the aggregate Advances outstanding as of the first
day of such period and the Commitment as of the last day of such period (and
after giving effect to any required reduction on such date).
"Restricted Payment" shall mean (a) any direct or indirect
distribution, dividend, redemption or other payment to any Person (other than
the Borrower or any Subsidiary of the Borrower) on account of any general or
limited partnership interest in, or shares of capital stock or other securities
of, the Borrower or any of its Subsidiaries, including without limitation, any
warrants or other rights or options to acquire shares of capital stock of the
Borrower or any of its Subsidiaries; and (b) any management, consulting or other
similar fees, or any interest thereon, payable by the Borrower or any of its
Subsidiaries to the Manager, or any Affiliate of the Borrower, or to any other
Person, including but not limited to payments under the Management Agreement.
"Restricted Purchase" shall mean any payment on account of the
purchase, redemption or other acquisition or retirement of any general or
limited partnership interest in, or shares of capital stock or other securities
of the Parent Company, the Borrower or any of its Subsidiaries including without
limitation any warrants or other rights or options to acquire shares of capital
stock of the Parent Company, the Borrower and any of its Subsidiaries.
"Rock and Cooke Acquisitions" shall mean the transactions (as well as
all contemporaneous transactions associated therewith) which shall occur on or
shortly after the Agreement Date pursuant to which, among other things, (a) the
Borrower shall acquire the Alaska Cablevision System and all assets and business
related thereto pursuant to those three certain Asset Purchase Agreements, each
dated as of May 10, 1996 between General Communication, Inc. or its wholly-owned
subsidiary, on the one hand, and Alaska Cablevision, Inc., McCaw/Rock Seward
Cable Systems and McCaw/Rock Homer Cable Systems, on the other hand; and (b) the
Borrower shall acquire the Alaskan Cable Network System and all assets and
business related thereto pursuant to the Asset Purchase Agreement dated as of
April 15, 1996 between General Communication, Inc. or its wholly-owned
subsidiary and Alaskan Cable Network/Fairbanks, Inc., Alaskan Cable
Network/Juneau, Inc. and Alaskan Cable Network/Ketchikan-Sitka, Inc.
"Sales Transaction" shall have the meaning set forth in the definition
of "Net Proceeds" contained in this Article I.
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"Security Agreement" shall mean that certain Second Amended and
Restated Security Agreement of even date, between the Borrower and the
Administrative Agent (for itself and for the ratable benefit of the Banks),
substantially in the form of Exhibit H attached hereto.
"Security Interest" shall have the meaning ascribed to such term in the
Security Agreement and in the Subsidiary Security Agreement.
"SMATV Systems" shall mean any satellite master antenna television
facilities used in providing cable television services to basic subscribers.
"Subordination and Assignment of Management Agreement" shall mean that
certain Subordination and Assignment of Management Agreement among the Manager,
the Borrower and the Administrative Agent, of even date, substantially in the
form of Exhibit I attached hereto, whereby, among other things, the Manager
assigns, on a nonrecourse basis, to the Administrative Agent (for itself and for
the ratable benefit of the Banks), as collateral for the Obligations its
interests under the Management Agreement, and as more fully provided therein,
subordinates to the repayment of the Obligations its right to receive payment of
management fees and other sums due under the Management Agreement.
"Subsidiary" shall mean, as applied to any Person, (a) any corporation
of which fifty percent (50%) or more of the outstanding stock (other than
directors' qualifying shares) having ordinary voting power to elect a majority
of its board of directors, regardless of the existence at the time of a right of
the holders of any class or classes of securities of such corporation to
exercise such voting power by reason of the happening of any contingency, or any
partnership of which fifty percent (50%) or more of the outstanding partnership
interests, is at the time owned by such Person, or by one or more Subsidiaries
of such Person, or by such Person and one or more Subsidiaries of such Person,
and (b) any other entity which is controlled or capable of being controlled by
such Person, or by one or more Subsidiaries of such Person, or by such Person
and one or more Subsidiaries of such Person. As of the Agreement Date, the
Subsidiaries of the Borrower are GCI Cable/Fairbanks, Inc., an Alaska
corporation; GCI Cable/Juneau, Inc., an Alaska corporation; GCI Cable Holdings,
Inc., an Alaska corporation; and Prime Cable of Alaska, L.P., a Delaware limited
partnership.
"Subsidiary Guaranty" shall mean that certain Subsidiary Guaranty of
even date, Substantially in the form of Exhibit J attached hereto.
"Subsidiary Security Agreement" shall mean that certain Amended and
Restated Subsidiary Security Agreement of even date, substantially in the form
of Exhibit K attached hereto.
"Syndication Agent" shall mean NationsBank of Texas, N.A., and any
other Person that becomes a Syndication Agent hereunder.
"Systems" shall mean, collectively, the cable television systems
(including SMATV Systems) which are owned, operated and maintained by the
Borrower or any of its Subsidiaries pursuant to the terms of the Licenses, and
any other cable television systems or any SMATV Systems, now owned or hereafter
acquired by the
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Borrower or any of its Subsidiaries, in accordance with the terms and conditions
of this Agreement. As of or shortly after the Agreement Date, the Systems shall
include the Alaska Cablevision System, Alaskan Cable Network and the Prime Cable
System.
"T-D Bank" shall mean The Toronto-Dominion Bank, acting through its
Houston Agency.
"Total Debt" shall mean at any time, the outstanding principal amount
of the Loans.
"Total Interest Expense" shall mean, for any calendar quarter of the
Borrower, accrued cash interest expense for the Loans determined in accordance
with GAAP.
"UCC" shall mean the Uniform Commercial Code as in effect in the State
of New York from time to time.
"Use of Proceeds Letter" shall mean that certain Use of Proceeds Letter
in substantially the form attached hereto as Exhibit L, delivered to the
Administrative Agent, the Managing Agents, and the Banks at closing pursuant to
Section 3.1 hereof.
* * * * *
Each definition of an agreement in this Article 1 shall include such
agreement as amended from time to time with the prior written consent of the
Majority Banks, except as provided in Section 11.13 hereof. Unless otherwise
expressly stated herein, all references to financial information and results of
the Borrower shall be determined on a consolidated basis with the Borrower's
Subsidiaries.
ARTICLE 2
The Loans
Section 2.1 The Loans.
(a) Loans. The Banks agree, severally in accordance with their
respective Commitment Ratios and not jointly, upon the terms and subject to the
conditions of this Agreement, to lend and re-lend to the Borrower, on and after
the Agreement Date, but prior to the Maturity Date, an amount not to exceed, in
the aggregate, the amount of the Commitment, less the aggregate face amount of
any outstanding Letters of Credit. Advances under the Commitment shall, at the
option of the Borrower as provided in Section 2.2 hereof (except with respect to
Advances representing reimbursement by the Banks to T-D Bank of amounts advanced
to beneficiaries under Letters of Credit, which Advances shall in all cases be
Base Rate Advances), be made as Base Rate Advances or Eurodollar Advances.
Advances under the Commitment may be converted or rolled over as provided in
Section 2.2 hereof in order to rollover Eurodollar Advances for new Interest
Periods or to otherwise effect changes in the Interest Rate Basis applicable to
the Advances thereunder.
(b) Letters of Credit. T-D Bank agrees, prior to the Maturity
Date and upon the terms and subject to the conditions of this Agreement, to
issue from time to time
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for the account of the Borrower, in the ordinary course of business of the
Borrower, Letters of Credit to such beneficiaries as shall be designated in
writing by the Borrower to T-D Bank, in an aggregate face amount not to exceed
$1,000,000. The amount available for Advances under the Commitment shall be
reduced by the aggregate face amount of all outstanding Letters of Credit.
Section 2.2 Manner of Borrowing and Disbursement.Disbursement
(a) Choice of Interest Rate, Etc. Any Advance (except with
respect to Advances in reimbursement of amounts advanced to beneficiaries under
Letters of Credit, which Advances shall in all cases be Base Rate Advances)
shall, at the option of the Borrower, be made as a Base Rate Advance or a
Eurodollar Advance; provided, however, that at such time as there shall have
occurred and be continuing a Default hereunder, the Borrower shall not have the
right to borrow any Eurodollar Advances, to rollover any Eurodollar Advances, or
to convert any Base Rate Advances to Eurodollar Advances, and all subsequent
Advances during the continuance of such Default under the Commitment shall be
made as Base Rate Advances. Any notice given to the Administrative Agent in
connection with a requested Advance hereunder shall be given to the
Administrative Agent prior to 10:00 a.m. (Houston time) in order for such
Business Day to count toward the minimum number of Business Days required.
(b) Base Rate Advances.
(i) Initial Advances. The Borrower shall give the
Administrative Agent in the case of Base Rate Advances at least one (1) Business
Days' irrevocable prior written notice in the form of a Request for Advance, or
telephonic notice followed immediately by a Request for Advance; provided,
however, that the Borrower's failure to confirm any telephonic notice with a
Request for Advance shall
not invalidate any notice so given. Upon receipt of such notice from the
Borrower, the Administrative Agent shall promptly notify each Bank by telephone
or telecopy of the contents thereof.
(ii) Prepayments and Conversions. Upon at least one (1),
with respect to item (B) of this sentence, or three (3), with respect to item
(A) of this sentence, Business Days' irrevocable prior written notice to the
Administrative Agent, and subject to the provisions of Section 2.2(c)(iii), the
Borrower may (A) convert all or a portion of the principal of a Base Rate
Advance to one or more Eurodollar Advances, or (B) prepay all or any portion of
such Base Rate Advance. On the date indicated by the Borrower, such Base Rate
Advance shall be so repaid or, as applicable, converted. Advances prepaid or
repaid (and not converted or rolled over at such time) under the Commitment may
be reborrowed and will not permanently reduce the Commitment unless otherwise
specified in accordance with Section 2.5(b) hereof.
(c) Eurodollar Advances.
(i) Initial Advances. The Borrower shall give the
Administrative Agent in the case of Eurodollar Advances at least three (3)
Business Days' irrevocable prior written notice in the form of a Request for
Advance, or telephonic notice followed immediately by a Request for Advance;
provided, however, that the Borrower's failure to confirm any telephonic notice
with a Request for Advance shall
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not invalidate any notice so given. The Administrative Agent, whose
determination shall be conclusive in the absence of manifest error, shall
determine the available Eurodollar Bases and shall promptly notify the Borrower
of such Eurodollar Bases. The Borrower shall promptly notify the Administrative
Agent by telephone or telecopy, and shall immediately confirm any such
telephonic notice in writing, of its selection of a Eurodollar Basis and
Interest Period for such Advance; provided, however, that the Borrower's failure
to confirm any such telephonic notice in writing shall not invalidate any notice
so given. Upon receipt of such notice from the Borrower, the Administrative
Agent shall promptly notify each Bank by telephone or telecopy of the contents
thereof.
(ii) Prepayments and Conversions. At least three (3)
Business Days prior to each Payment Date for a Eurodollar Advance, the Borrower
shall give the Administrative Agent written notice specifying whether all or a
portion of any Eurodollar Advance outstanding on the Payment Date (A) is to be
rolled over as another Eurodollar Advance, (B) is to be converted to a Base Rate
Advance, or (C) is to be repaid. Eurodollar Advances may be prepaid prior to the
applicable Payment Date upon at least three (3) Business Days prior written
notice to the Administrative Agent, in accordance with the terms of Section 2.5
hereof. Upon such Payment Date such Eurodollar Advance will, subject to the
provisions hereof, be so rolled over, repaid or, and, as applicable, converted.
Advances prepaid or repaid (and not converted or rolled over at such time) under
the Commitment may be reborrowed and will not permanently reduce the Commitment
unless otherwise specified in accordance with Section 2.5(b) hereof.
(iii) Maximum Eurodollar Advances. At no time may the
number of outstanding Eurodollar Advances exceed five (5).
(d) Notification of Banks. Upon receipt of a Request for
Advance, or a notice from the Borrower with respect to any outstanding Advance
prior to the Payment Date for such Advance, or a request by T-D Bank for
reimbursement under Section 2.14 hereof, the Administrative Agent shall promptly
notify each Bank by telephone or telecopy of the contents thereof and the amount
of such Bank's portion of the Advance. Each Bank shall, not later than 12:00
noon (Houston time) on the date of borrowing specified in such notice, make
available to the Administrative Agent at the Administrative Agent's Office, or
at such account as the Administrative Agent shall designate, the amount of its
portion of any Advance which represents an additional borrowing hereunder in
immediately available funds.
(e) Disbursement.
(i) Prior to 1:00 p.m. (Houston time) on the date of an
Advance hereunder, the Administrative Agent shall, subject to the satisfaction
of the conditions set forth in Article 3, disburse the amounts made available to
the Administrative Agent by the Banks in immediately available funds by (a)
transferring the amounts so made available by wire transfer pursuant to the
Borrower's instructions, (b) in the case of an Advance representing the
reimbursement of T-D Bank for a draw under a Letter of Credit, transferring such
amounts to T-D Bank, or (c) in the absence of such instructions, crediting the
amounts so made available to the account of the Borrower maintained with the
Administrative Agent.
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(ii) Unless the Administrative Agent shall have received
notice from a Bank prior to the close of business on the Business Day preceding
the date of any Advance that such Bank will not make available to the
Administrative Agent such Bank's ratable portion of such Advance, the
Administrative Agent may assume that such Bank has made or will make such
portion available to the Administrative Agent on the date of such Advance and
the Administrative Agent may in its sole discretion and in reliance upon such
assumption, make available to the Borrower on such date a corresponding amount.
If and to the extent a Bank does not make such ratable portion available to the
Administrative Agent, such Bank agrees to repay to the Administrative Agent on
demand such corresponding amount together with interest thereon, for each day
from the date such amount is made available to the Borrower until the date such
amount is repaid to the Administrative Agent, at a rate per annum equal to the
Federal Funds Rate. In the event that, at any time when the Borrower is not in
Default, a Bank for any reason fails or refuses to fund its portion of an
Advance, then, until such time as such Bank has funded its portion of such
Advance, or all other Banks have received payment in full (whether by repayment
or prepayment) of the principal and interest due in respect of such Advance,
such non-funding Bank shall not have the right (i) to vote regarding any issue
on which voting is required or advisable under this Agreement or any other Loan
Document, and the amount of the Loans of such Bank shall not be counted as
outstanding for purposes of determining "Majority Banks" hereunder, and (ii) to
receive payments of principal, interest or fees from the Borrower in respect of
its unfunded Advances.
(iii) If such Bank shall repay to the Administrative
Agent such corresponding amount, such amount so repaid shall constitute such
Bank's portion of the applicable Advance for purposes of this Agreement. If such
Bank does not repay such corresponding amount immediately upon the
Administrative Agent's demand therefor, the Administrative Agent shall notify
the Borrower and the Borrower shall promptly pay such corresponding amount to
the Administrative Agent, together with interest thereon at the interest rate
which would have been applicable to such Advance. The failure of any Bank to
fund its portion of any Advance shall not relieve any other Bank of its
obligation, if any, hereunder to fund its respective portion of the Advance on
the date of such borrowing, but no Bank shall be responsible for any such
failure of any other Bank.
Section 2.3 Interest.
(a) On Base Rate Advances. Interest on each Base Rate Advance
shall be computed on the basis of a year of 365/366 days (unless at any time
interest for a Base Rate Advance is based upon the Federal Funds Rate rather
than the Prime Rate, in which case interest shall be computed on the basis of a
year of 360 days) for the actual number of days elapsed and shall be payable in
arrears on the applicable Payment Date for the period through the date
immediately preceding such Payment Date. Interest on Base Rate Advances then
outstanding shall also be due and payable on the Maturity Date. Interest shall
accrue and be payable on each Base Rate Advance at the simple per annum interest
rate equal to the sum of (A) the Base Rate, and (B) the Applicable Margin in
effect from time to time and as more fully set forth in Section 2.3(f) below.
(b) On Eurodollar Advances. Interest on each Eurodollar Advance
shall be computed on the basis of a 360-day year for the actual number of days
elapsed and
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shall be payable in arrears on the applicable Payment Date for the period
through the day immediately preceding such Payment Date, and, in addition, if
the Interest Period for a Eurodollar Advance exceeds three (3) months, interest
on such Eurodollar Advance shall also be due and payable in arrears on every
three-month anniversary of the beginning of such Interest Period. Interest on
Eurodollar Advances then outstanding shall also be due and payable on the
Maturity Date. Interest shall accrue and be payable on each Eurodollar Advance
at a rate per annum equal to (A) the Eurodollar Basis applicable to such
Eurodollar Advance, plus (B) the Applicable Margin in effect from time to time
and as more fully set forth in Section 2.3(f) below.
(c) Interest Upon Default. Upon the occurrence of an Event of
Default, the Majority Banks shall have the option, but shall be under no
obligation, to agree in writing with the Administrative Agent that interest on
the outstanding Obligations shall accrue at the Default Rate from the date of
such Event of Default. Interest accruing at the Default Rate shall be payable on
demand and in any event on the Maturity Date and shall accrue until the earliest
to occur of (i) cure of such Event of Default or waiver in writing by the Banks
or the Majority Banks, as required under Section 11.13 hereof, of the applicable
Event of Default, (ii) agreement by the Majority Banks to rescind the charging
of interest at the Default Rate, or (iii) payment in full of the Obligations.
The Banks shall not be required to (i) accelerate the maturity of the Loans, or
(ii) exercise any other rights or remedies under the Loan Documents in order to
charge interest hereunder at the Default Rate. The Administrative Agent shall
promptly notify the Borrower and the Banks of any agreement by the Majority
Banks to charge interest at the Default Rate.
(d) Interest if no Notice of Selection of Interest Rate Basis.
If the Borrower fails to give the Administrative Agent timely notice of its
selection of a Eurodollar Basis, or if for any reason a determination of a
Eurodollar Basis for any Advance is not timely concluded, such Advance shall be
made as a Base Rate Advance.
(e) Computation of Interest. In computing interest on any
Advance, the date of making the Advance shall be included and the date of
payment shall be excluded; provided, however, that if an Advance is repaid on
the date that it is made, one (1) day's interest shall be due with respect to
such Advance.
<TABLE>
(f) Applicable Margin. The Applicable Margin with respect to any
Advance shall be the interest rate margin determined by the Administrative Agent
based upon the Leverage Ratio for the most recent calendar quarter end,
effective as of the second Business Day after the financial statements referred
to in Section 6.1 hereof are delivered by the Borrower to the Administrative
Agent for the calendar quarter most recently ended, expressed as a per annum
rate of interest as follows:
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<PAGE>
<CAPTION>
Base Rate Eurodollar
Advance Advance
Leverage Ratio Applicable Margin Applicable Margin
-----------------------------------------------------------------------------------------------------
<S> <C> <C>
Greater than 6.50 1.875% 2.875%
Less than or equal to 6.50 but greater than 1.625% 2.625%
6.00
Less than or equal to 6.00 but greater than 1.125% 2.125%
5.50
Less than or equal to 5.50 but greater than 0.750% 1.750%
5.00
Less than or equal to 5.00 but greater than 0.625% 1.625%
4.50
Less than or equal to 4.50 but greater than 0.375% 1.375%
4.00
Less than or equal to 4.00 0.125% 1.125%
</TABLE>
In the event that the Borrower fails to timely provide the financial statements
referred to above in accordance with the terms of Section 6.1 hereof, and
without prejudice to any additional rights under Section 8.2 hereof, no downward
adjustment of the Applicable Margin in effect for the preceding quarter shall
occur until the actual delivery of such statements.
Section 2.4 Fees and Additional Compensation.
(a) Fees Payable Under the Fee Letters. The Borrower agrees to
pay to the Administrative Agent, for the benefit of the Administrative Agent,
the Managing Agents and the Banks, as the case may be, such fees as are mutually
agreed upon and as are described in the Fee Letters.
(b) Commitment Fee. In addition, the Borrower agrees to pay to
the Administrative Agent, for the benefit of each of the Banks in accordance
with their respective Commitment Ratios, a commitment fee on the aggregate
unborrowed balance of the Commitment, for each day from the Agreement Date until
the Maturity Date, at a rate equal to one-half of one percent (1/2%) per annum.
Such commitment fee shall be computed on the basis of a year of 365/366 days for
the actual number of days elapsed, shall be payable quarterly in arrears on the
last day of each calendar
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quarter, commencing on December 31, 1996, shall be
fully earned when due, and shall be non-refundable when paid. A final payment of
any commitment fee then payable shall also be due and payable on the Maturity
Date.
(c) Letter of Credit Fee. The Borrower agrees to pay to the
Administrative Agent for the benefit of the Banks, in accordance with their
respective Commitment Ratios, a letter of credit fee equal to two percent (2%)
per annum (computed on the basis of a year of 365/366 days for the actual number
of days elapsed), of the face amount of each Letter of Credit. Such letter of
credit fee shall be due and payable quarterly in arrears on the last day of each
calendar quarter during which a Letter of Credit was outstanding and, if then
unpaid, on the Maturity Date. Such letter of credit fee shall be fully earned
when due and nonrefundable when paid. In the event of any inconsistency between
the terms of this Agreement and the terms of any letter of credit reimbursement
agreements or indemnification agreements between the Borrower and T-D Bank with
respect to the Letters of Credit, the terms of this Agreement shall control.
(d) Issuing Bank Fee. The Borrower agrees to pay to the
Administrative Agent for the benefit of T-D Bank, a fee equal to one-half of one
percent (0.5%) per annum (computed on the basis of a year of 365/366 days for
the actual number of days elapsed), of the face amount of each Letter of Credit,
which fee shall be due and payable quarterly in arrears on the last day of each
calendar quarter during which a Letter of Credit was outstanding and, if then
unpaid, on the Maturity Date. The foregoing fee shall be fully earned when due
and nonrefundable when paid. In the event of any inconsistency between the terms
of this Agreement and the terms of any letter of credit reimbursement agreements
or indemnification agreements between the Borrower and T-D Bank with respect to
the Letters of Credit, the terms of this Agreement shall control.
(e) Computation of Fees. In computing any fees payable under
this Section 2.4, the first day of the applicable period shall be included and
the date of payment shall be excluded.
Section 2.5 Voluntary Prepayment/Voluntary Reduction of
Commitment.
(a) The principal amount of any Base Rate Advance may be prepaid
in full or in part at any time upon one (1) Business Day's prior written notice
to the Administrative Agent, without penalty or premium; and the principal
amount of any Eurodollar Advance may be prepaid without penalty or premium prior
to the applicable Payment Date, upon three (3) Business Days' prior written
notice to the Administrative Agent, provided that Borrower shall reimburse any
Bank for any loss or reasonable out-of-pocket expense incurred by such Bank in
connection with such prepayment, as set forth in Section 2.10 hereof. Each
notice of prepayment shall be irrevocable. Upon receipt of any notice of
prepayment, the Administrative Agent shall promptly notify each Bank of the
contents thereof by telephone or telecopy and of such Bank's portion of the
prepayment. Prepayments of principal hereunder in respect of Base Rate Advances,
shall be in minimum amounts of $500,000 and integral multiples of $100,000, and
prepayments of principal hereunder in respect of Eurodollar Advances shall be in
minimum amounts of $1,000,000 and integral multiples of $250,000.
Advances prepaid pursuant to this Section 2.5(a) may be reborrowed.
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(b) The Borrower shall have the right, at any time and from time
to time after the Agreement Date, and prior to the Maturity Date, upon at least
three (3) Business Days' prior written notice to the Administrative Agent,
without premium or penalty, to cancel or reduce permanently all or a portion of
the Commitment on a pro rata basis among the Banks in accordance with the
Commitment Ratios, provided that any such partial reduction shall be made in an
amount not less than $1,000,000 and in integral multiples of $500,000 thereof.
As of the date of cancellation or reduction set forth in such notice, the
Commitment shall be permanently reduced to the amount stated in the Borrower's
notice for all purposes herein, and the Borrower shall pay to the Administrative
Agent for the benefit of the Banks the amount necessary to reduce the principal
amount of the then outstanding Loans to not more than the amount of the
Commitment as so reduced, together with the accrued interest on the amount so
prepaid and the commitment fee set forth in Section 2.4(b) accrued through the
date of the reduction with respect to the amount reduced, and shall reimburse
the Administrative Agent and the Banks for any loss or reasonable out-of-pocket
expense incurred by any of them in connection with such payment, as set forth in
Section 2.10. Each such reduction shall permanently reduce the amount of the
Commitment and shall reduce the dollar amount of each subsequent scheduled
quarterly Commitment reduction under Section 2.6 hereof on a pro rata basis.
Section 2.6 Scheduled Reduction of Commitment.
<TABLE>
Commencing September 30, 1999 and at the end of each calendar
quarter thereafter, the Commitment shall be reduced by the amount set forth
below for such quarter:
<CAPTION>
Quarterly Ending
Reduction Maximum
Quarters Ending in Commitment Commitment
- --------------- ------------- ----------
<S> <C> <C>
September 30, 1999 through $5,125,000 $194,750,000
December 31, 1999
March 31, 2000 through $2,562,500 $184,500,000
December 31, 2000
March 31, 2001, through $5,125,000 $164,000,000
December 31, 2001
March 31, 2002, through $7,687,500 $133,250,000
December 31, 2002
March 31, 2003, through $10,250,000 $92,250,000
December 31, 2003
March 31, 2004, through $12,812,500 $41,000,000
December 31, 2004
March 31, 2005, through $13,666,666.67 $ 0.00
September 30, 2005
</TABLE>
As of the date of each reduction of the Commitment as set forth above, the
Borrower shall pay to the Administrative Agent for the benefit of the Banks the
amount
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necessary to reduce the principal amount of the Loans then outstanding to not
more than the amount of the Commitment as so reduced, together with accrued
interest on the amount so prepaid and the commitment fee set forth in Section
2.4(b) accrued through the date of the reduction with respect to the amount
reduced.
Section 2.7 Mandatory Reduction of Commitment. In addition to
the scheduled repayments and Commitment reductions provided for in Section 2.6
hereof, the Commitment shall be reduced and the Borrower shall, if required
pursuant to Section 2.7(c) hereof, prepay the Loans, without penalty or premium,
as follows:
(a) Excess Cash Flow. On, or at the Borrower's election prior
to, May 1, 2000, and on, or at the Borrower's election prior to, May 1st of each
year thereafter during the term of this Agreement, the Commitment shall be
reduced by an amount equal to fifty percent (50%) of the Borrower's Annual
Excess Cash Flow for the calendar year then most recently ended.
(b) Sales Transaction. If, after the Agreement Date, the
Borrower or any of its Subsidiaries, to the extent permitted hereunder,
consummates any Sales Transaction, the Commitment shall be reduced by an amount
equal to one hundred percent (100%) of the Net Proceeds received by the Borrower
or such Subsidiary from such Sales Transaction on the date of receipt of the
proceeds thereof by the Borrower or such Subsidiary.
(c) Application. Mandatory reductions pursuant to this Section
2.7 shall permanently reduce the amount of the Commitment but shall not reduce
the dollar amount of any subsequent scheduled quarterly Commitment reduction
under Section 2.6 hereof. As of the date of each reduction of the Commitment as
set forth above, the Borrower shall pay to the Administrative Agent for the
benefit of the Banks the amount, if any, necessary to reduce the principal
amount of the Loans then outstanding to not more than the amount of the
Commitment as so reduced, together with accrued interest on the amount so
prepaid and the commitment fee set forth in Section 2.4(b) accrued through the
date of the reduction with respect to the amount reduced.
Section 2.8 Notes; Loan Accounts.oan Accounts
(a) The Loans shall be repayable in accordance with the terms
and provisions set forth herein, and shall be evidenced by the Notes. One Note
shall be payable to the order of each Bank in accordance with their respective
Commitment Ratios. The Notes shall be issued by the Borrower to the Banks and
shall be duly executed and delivered by one or more Authorized Signatories.
(b) Each Bank may open and maintain on its books in the name of
the Borrower a loan account with respect to the Loans and interest thereon. Each
Bank which opens such a loan account shall debit such loan account for the
principal amount of each Advance made by it and accrued interest thereon, and
shall credit such loan account for each payment on account of principal of or
interest on its Loans. The records of a Bank with respect to the loan account
maintained by it shall be prima facie evidence of the Loans and accrued interest
thereon, but the failure of any Bank to maintain such records or to make any
such notations or any error or
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<PAGE>
mistake in such notations shall not affect the Borrower's repayment obligations
with respect to such Loans.
Section 2.9 Manner of Payment.
(a) Each payment (including any prepayment) by the Borrower on
account of the principal of or interest on the Loans, commitment fees, letter of
credit fees, and any other amount owed to the Banks, the Managing Agents or the
Administrative Agent or any of them under this Agreement or the Notes shall be
made not later than 1:00 p.m. (Houston time) on the date specified for payment
under this Agreement to the Administrative Agent at the Administrative Agent's
Office, for the account of the Banks, the Managing Agents or the Administrative
Agent, as the case may be, in lawful money of the United States of America in
immediately available funds. Any payment received by the Administrative Agent
after 1:00 p.m. (Houston time) shall be deemed received on the next Business
Day. Receipt by the Administrative Agent of any payment intended for any Bank or
Banks hereunder prior to 1:00 p.m. (Houston time) on any Business Day shall be
deemed to constitute receipt by such Bank or Banks on such Business Day. In the
case of a payment for the account of a Bank, the Administrative Agent will
promptly thereafter distribute the amount so received in like funds to such
Bank. If the Administrative Agent shall not have received any payment from the
Borrower as and when due, the Administrative Agent will promptly notify the
Banks accordingly.
(b) Subject to compliance by each Bank to the extent applicable
with the requirements of Section 2.13, the Borrower agrees to pay principal,
interest, fees and all other amounts due hereunder or under the Notes without
set-off or counterclaim or any deduction whatsoever.
(c) Prior to the declaration of an Event of Default under
Section 8.2 hereof, if some but less than all amounts due from the Borrower are
received by the Administrative Agent with respect to the Obligations, the
Administrative Agent shall distribute such amounts in the following order of
priority, all on a pro rata basis to the Banks: (i) to the payment on a pro rata
basis of any fees or expenses then due and payable to the Administrative Agent,
the Managing Agents, the Banks, or any of them; (ii) to the payment of interest
then due and payable on the Loans, on a pro rata basis; (iii) to the payment of
all other amounts not otherwise referred to in this Section 2.9(c) then due and
payable to the Administrative Agent, the Managing Agents, or the Banks, or any
of them, hereunder or under the Notes; and (iv) to the payment of principal then
due and payable on the Notes, on a pro-rata basis.
(d) Subject to any contrary provisions in the definition of
Interest Period, if any payment under this Agreement or any of the other Loan
Documents is specified to be made on a day which is not a Business Day, it shall
be made on the next Business Day, and such extension of time shall in such case
be included in computing interest and fees, if any, in connection with such
payment.
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<PAGE>
Section 2.10 Reimbursement.eimbursement
(a) Whenever any Bank shall sustain or incur any losses or
reasonable out-of-pocket expenses in connection with (i) failure by the Borrower
to borrow any Eurodollar Advance after having given notice of its intention to
borrow in accordance with Section 2.2 hereof (whether by reason of the
Borrower's election not to proceed or the non-fulfillment of any of the
conditions set forth in Article 3), other than in connection with a
determination made by the Administrative Agent, after consultation with the
Banks, under Section 9.1 hereof, or (ii) prepayment of any Eurodollar Advance in
whole or in part for any reason (including a prepayment pursuant to Sections
2.5, 2.6, 2.7, 9.2 or 9.3(b) hereof or as a result of the acceleration of the
Loans), the Borrower agrees to pay to such Bank, within five (5) Business Day's
from the Borrower's receipt of written demand from the Administrative Agent on
behalf of such Bank, an amount sufficient to compensate such Bank for all such
losses and reasonable out-of-pocket expenses. Such Bank's good faith
determination of the amount of such losses or out-of-pocket expenses, as set
forth in writing and accompanied by calculations in reasonable detail
demonstrating the basis for its demand, which shall be delivered to the Borrower
by the Administrative Agent on behalf of such Bank with each such demand, shall
be presumptively correct absent manifest error.
(b) Losses subject to reimbursement hereunder shall include,
without limiting the generality of the foregoing, expenses incurred by any Bank
or any participant of such Bank permitted hereunder in connection with the
re-employment of funds prepaid, repaid, not borrowed, or paid, as the case may
be, and the amount of such loss shall be the excess, if any, of (i) the interest
or other costs to such Bank of the deposit or other source of funding used to
make any such Eurodollar Advance, for the remainder of its Interest Period, over
(ii) the interest earned (or to be earned) by such Bank upon the re-lending or
other re-deployment of the amount of such Eurodollar Advance for the remainder
of its putative Interest Period.
Section 2.11 Pro Rata Treatment.
(a) Advances. Each Advance from the Banks under the Commitment
shall be made pro rata on the basis of the respective Commitment Ratios of the
Banks.
(b) Payments. Except as provided in Section 2.2(e)(ii) hereof,
prior to the declaration of an Event of Default by the Administrative Agent on
behalf of the Banks under Section 8.2 hereof, each payment and prepayment of the
Loans, and, except as provided in Article 9 hereof, each payment of interest on
the Loans, shall be made to the Banks pro rata on the basis of their respective
Commitment Ratios. If any Bank shall obtain any payment (whether involuntary,
through the exercise of any right of set-off, or otherwise) on account of the
Loans made by it in excess of its ratable share of the Loans under its
Commitment Ratio, such Bank shall forthwith purchase from the other Banks such
participations in the Loans made by them as shall be necessary to cause such
purchasing Bank to share the excess payment ratably with each of them according
to their respective Commitment Ratios; provided, however, that if all or any
portion of such excess payment is thereafter recovered from such purchasing
Bank, such purchase from each Bank shall be rescinded and such Bank shall repay
to the purchasing Bank the purchase price to the extent of such recovery. The
Borrower agrees that any Bank so purchasing a participation from another Bank
pursuant to this
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Section 2.11(b) 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 Bank were the direct creditor of the Borrower
in the amount of such participation. The provisions of this Section 2.11(b) set
forth the rights of the Banks with respect to payment, and are not enforceable
for the benefit of the Borrower.
(c) Payments Subsequent to Declaration of Event of Default.
Subsequent to the declaration of an Event of Default by the Administrative Agent
under Section 8.2 hereof, payments and prepayments made to the Administrative
Agent, any Managing Agent, or the Banks or otherwise received by the
Administrative Agent, any Managing Agent, or any Bank, shall be distributed as
provided in Section 8.2 hereof.
Section 2.12 Capital Adequacy. If, after the date hereof, any
Bank shall have reasonably determined that the adoption of any Applicable Law
regarding the capital adequacy of banks or bank holding companies, or any change
in Applicable Law (whether adopted before or after the Agreement Date) or any
change in the interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by such Bank with any directive regarding
capital adequacy (whether or not having the force of law) of any such
governmental authority, central bank or comparable agency, has or would have the
effect of reducing the rate of return on such Bank's capital as a consequence of
its obligations hereunder to a level below that which it could have achieved but
for such adoption, change or compliance (taking into consideration such Bank's
policies with respect to capital adequacy immediately before such adoption,
change or compliance and assuming that such Bank's capital was fully utilized
prior to such adoption, change or compliance) by an amount reasonably deemed by
such Bank to be material, then, within sixty (60) days of written demand by such
Bank, the Borrower shall in its discretion, (i) provide a replacement bank or
banks for such Bank, which replacement bank or banks will be subject to the
approval of the Administrative Agent and the Majority Banks (which approval will
not be unreasonably withheld), and shall take all necessary actions to transfer
the rights, duties and obligations of such Bank to such replacement bank or
banks within such 60-day period (including the payment in full of all
Obligations hereunder due to the Bank being replaced) or (ii) thereafter from
time to time upon written demand by such Bank, promptly pay to such Bank such
additional amounts as shall be sufficient to compensate such Bank for such
reduced return, together with interest on such amount from the fourth (4th) day
after the date of demand until payment in full thereof at the Base Rate plus the
Applicable Margin in effect for Base Rate Advances. A certificate of such Bank
setting forth the amount to be paid to such Bank by the Borrower as a result of
any event referred to in this paragraph and supporting calculations in
reasonable detail, which shall be delivered to the Borrower by such Bank with
any such demand, shall be conclusive, absent manifest error, and, at the
Borrower's request, such Bank shall demonstrate the basis for such
determination. Each Bank further agrees that it shall use reasonable, good faith
efforts to give the Borrower thirty (30) days prior notice of any proposed
adoption of or any change in any Applicable Law regarding capital adequacy of
banks or bank holding companies, or any change in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by such Bank with any request or directive regarding capital adequacy (whether
or not having the force of law) of any such governmental authority, central bank
or comparable agency which may have
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the effect of reducing the rate of return on such Bank's capital as a
consequence of its obligation hereunder to a level below that which it could
have achieved but for such adoption, change or compliance by an amount which may
be deemed by such Bank to be material.
Section 2.13 Bank Tax Forms. On or prior to the Agreement Date
and on or prior to the first Business Day of each calendar year thereafter, each
Bank which is organized in a jurisdiction other than the United States shall
provide the Administrative Agent and the Borrower with two (2) properly executed
originals of Forms 4224 or 1001 (or any successor forms) prescribed by the
Internal Revenue Service or other documents satisfactory to the Borrower and the
Administrative Agent, and properly executed Internal Revenue service Forms W-8
or W-9, as the case may be, certifying (i) as to such Bank's status for purposes
of determining exemption from United States withholding taxes with respect to
all payments to be made to such Bank hereunder and under the Notes or (ii) that
all payments to be made to such Bank hereunder and under the Notes are subject
to such taxes at a rate reduced to zero by an applicable tax treaty. Each such
Bank agrees to provide the Administrative Agent and the Borrower with new forms
prescribed by the Internal Revenue Service upon the expiration or obsolescence
of any previously delivered form, or after the occurrence of any event requiring
a change in the most recent forms delivered by it to the Administrative Agent
and the Borrower.
Section 2.14 Letters of Credit.
(a) Upon receipt by T-D Bank of at least ten (10) Business Days'
written notice from the Borrower requesting the issuance of a Letter of Credit
in the form of a Request for Issuance of Letter of Credit, T-D Bank shall
promptly forward such Request for Issuance of Letter of Credit to the
Administrative Agent which shall forward a copy thereof to each Managing Agent
and each Bank hereunder, and a Letter of Credit shall be issued in the amount
requested, provided that (i) no Default then exists or would be caused thereby,
(ii) after giving effect to the requested issuance, the aggregate face amount of
all Letters of Credit outstanding hereunder would not exceed $1,000,000, and
(iii) the issuance of the Letter of Credit together with Loans outstanding under
the Commitment would not cause the Commitment as then in effect to be exceeded.
No Letter of Credit shall have a maturity extending beyond the earlier of (x) a
term of one (1) year from the date of issuance, or (y) the Maturity Date.
Subject to the maturity limitations provided herein and so long as no Default
then exists or would be caused thereby, Letters of Credit shall be renewable
annually upon the request of the Borrower and with the consent of T-D Bank,
which consent shall not be unreasonably withheld but shall be subject to
compliance with customary letter of credit practices at the times of any
proposed renewal. Each notice from the Borrower requesting the issuance of a
Letter of Credit shall specify in reasonable detail the documents which must be
presented to draw under such Letter of Credit, which specification shall include
all documents which T-D Bank may require.
(b) If a Letter of Credit provides that it is automatically
renewable unless notice is given by T-D Bank that it will not be renewed, T-D
Bank shall not be bound to give a notice of non-renewal unless directed to by
the Majority Banks at least sixty-five (65) days prior to the then scheduled
expiration date of such Letter of Credit.
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(c) Provided that no Default then exists or would be caused
thereby, each Bank irrevocably authorizes T-D Bank to issue, reconfirm, reissue
and extend each Letter of Credit in accordance with the terms of this Agreement.
T-D Bank hereby sells, and each other Bank hereby purchases, on a continuing
basis, a participation and an undivided interest in (A) the obligations of T-D
Bank to honor any draws under the Letters of Credit issued pursuant to this
Agreement, including any Letters of Credit issued and outstanding as of the
Agreement Date, as shown on Schedule 1 attached hereto, and (B) the Indebtedness
of the Borrower to T-D Bank under this Agreement in respect of each Letter of
Credit, such participation being in the amount of such Bank's pro rata share of
such obligations and Indebtedness based on such Bank's Commitment Ratio.
(d) Upon receipt of a draw certificate from the beneficiary of a
Letter of Credit, T-D Bank shall promptly notify the Administrative Agent, which
shall in turn notify the Borrower, the Managing Agents, and each Bank, by
telephone or telecopy, of the amount of the requested draw and, in the case of
each Bank, such Bank's portion of such draw amount as calculated in accordance
with its Commitment Ratio.
(e) The Borrower hereby irrevocably requests and the Banks
hereby severally agree to make a Base Rate Advance to the Borrower
(notwithstanding the minimum amount requirements otherwise applicable to Base
Rate Advances) on each day on which a draw is made under any Letter of Credit
and in the amount of such draw, and each Bank shall fund such Bank's share of
such Base Rate Advance by payment to the Administrative Agent in accordance with
Section 2.2(e) hereof and its Commitment Ratio, without reduction for any
set-off counterclaim of any nature whatsoever. The obligation of each Bank to
make payments to the Administrative Agent, for the account of T-D Bank, in
accordance with this Section 2.14 shall be absolute and unconditional and no
Bank shall be relieved of its obligations to make such payments by reason of
non-compliance by any other Person with the terms of the Letter of Credit or for
any other reason other than the gross negligence or willful misconduct of the
Administrative Agent or T-D Bank. The Administrative Agent shall promptly remit
to T-D Bank the amounts so received from the Banks.
(f) The Borrower agrees that any action taken or omitted to be
taken by T-D Bank in connection with any Letter of Credit, except for such
actions or omissions as shall constitute gross negligence or willful misconduct
on the part of T-D Bank, shall be binding on the Borrower as between the
Borrower and T-D Bank, and shall not result in any liability of T-D Bank to the
Borrower. The obligation of the Borrower to reimburse the Banks for Advances
made to reimburse T-D Bank for draws under the Letter of Credit shall be
absolute, unconditional and irrevocable, and shall be paid strictly in
accordance with the terms of this Agreement under all circumstances whatsoever,
including, without limitation, the following circumstances:
(i) Any lack of validity or enforceability of any
Loan Document;
(ii) Any amendment or waiver of or consent to any
departure from any or all of the Loan Documents;
(iii) Any improper use which may be made of any
Letter of Credit or any improper acts or omissions of any beneficiary or
transferee of any Letter of Credit in connection therewith;
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(iv) The existence of any claim, set-off, defense
or any right which the Borrower may have at any time against any beneficiary or
any transferee of any Letter of Credit (or Persons for whom any such beneficiary
or any such transferee may be acting) or any Bank (other than the defense of
payment to such Bank in accordance with the terms of this Agreement) or any
other Person, whether in connection with any Letter of Credit, any transaction
contemplated by any Letter of Credit, this Agreement, any other Loan Document,
or any unrelated transaction;
(v) Any statement or any other documents presented
under any Letter of Credit proving to be insufficient, forged, fraudulent or
invalid in any respect or any statement therein being untrue or inaccurate in
any respect whatsoever, provided that such payment shall not have constituted
gross negligence or willful misconduct of T-D
Bank;
(vi) The insolvency of any Person issuing any
documents in connection with any Letter of Credit;
(vii) Any breach of any agreement between the
Borrower and any beneficiary or transferee of any Letter
of Credit;
(viii) Any irregularity in the transaction with
respect to which any Letter of Credit is issued, including any fraud by the
beneficiary or any transferee of such Letter of Credit;
(ix) Any errors, omissions, interruptions or delays
in transmission or delivery of any messages, by mail, cable, telegraph, wireless
or otherwise, whether or not they are in code;
(x) Any act, error, neglect or default, omission,
insolvency or failure of business of any of the correspondents of T-D Bank,
provided that the same shall not have constituted the gross negligence or
willful misconduct of T-D Bank;
(xi) Any other circumstances arising from causes
beyond the control of T-D Bank;
(xii) Payment by T-D Bank under any Letter of
Credit against presentation of a sight draft or a certificate which does not
comply with the terms of such Letter of Credit, provided that such payment shall
not have constituted gross negligence or willful misconduct of T-D Bank; and
(xiii) Any other circumstance or happening
whatsoever, whether or not similar to any of the foregoing, provided that such
other circumstances or happenings shall not have been the result of gross
negligence or wilful misconduct of T-D Bank or any Bank.
(g) If, after the Agreement Date, any change in Applicable Law,
any change in the interpretation or administration thereof, or any change in
compliance with Applicable Law by T-D Bank or any other Bank as a result of any
request or directive of any governmental authority, central bank or comparable
agency (whether or not having the force of law) shall (i) impose, modify or deem
applicable any reserve (including, without limitation, any imposed by the Board
of Governors of the Federal
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Reserve System), special deposit, capital adequacy, assessment or other
requirements or conditions against letters of credit issued by T-D Bank or
against participations by any other Bank in the Letters of Credit or (ii) impose
on T-D Bank or any other Bank any other condition regarding any Letter of Credit
or any participation therein, and the result of any of the foregoing in the
reasonable determination of T-D Bank or such Bank, as the case may be, is to
increase the cost to T-D Bank or such Bank of issuing or maintaining any Letter
of Credit or purchasing or maintaining any participation therein, as the case
may be, by an amount (which amount shall be reasonably determined) deemed by T-D
Bank or such Bank to be material, then, on the earlier of five (5) days
following the date of demand (which demand shall be made not later than six (6)
months following such Bank's determination of a need for additional
compensation) by T-D Bank or such Bank or the Maturity Date, the Borrower shall
immediately pay T-D Bank or such Bank, as the case may be, such additional
amount or amounts as T-D Bank or such Bank, as the case may be, determines will
compensate it for such increased costs. Within sixty (60) days of such written
demand by T-D Bank or such Bank, the Borrower may, in its discretion, provide a
replacement bank or banks for T-D or such Bank, which replacement bank or banks
will be subject to the approval of the Administrative Agent and the Majority
Banks (which approval, in each case, will not be unreasonably withheld), and
shall take all necessary actions to transfer the rights, duties and obligations
of T-D Bank or such Bank to such replacement bank or banks within such 60-day
period. A certificate of such Bank setting forth the amount, and in reasonable
detail the basis for T-D Bank or such Bank's determination of such amount, to be
paid to T-D Bank or such Bank by the Borrower as a result of any event referred
to in this paragraph shall, absent manifest error, be conclusive. Such
certificate shall be delivered to the Borrower with each written demand for
payment referenced above. T-D Bank and each Bank further agree that they shall
use their best efforts to give the Borrower thirty (30) days prior notice, and
in any event shall give prompt notice, of any event referred to in this
paragraph which may have the effect of materially increasing the cost to T-D
Bank or such Bank of issuing or maintaining any T-D Letter of Credit or
purchasing or maintaining any participation therein.
(h) The Borrower will indemnify and hold harmless the
Indemnified Parties from and against any and all claims, liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever (including reasonable
attorneys' fees) which may be imposed on, incurred by or asserted against the
Managing Agents, the Administrative Agent, T-D Bank or any Bank in any way
relating to or arising out of the issuance of a Letter of Credit, except that
the Borrower shall not be liable to any of the Indemnified Parties for any
portion of such claims, liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses, or disbursements resulting from the
gross negligence or willful misconduct of the Managing Agents, T-D Bank, the
Administrative Agent, or such Bank, as the case may be, as determined by a
final, non-appealable judicial order. This Section 2.14(h) shall survive
termination of this Agreement.
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(i) Each Bank shall be responsible for its pro rata share (based
on such Bank's Commitment Ratio) of any and all reasonable out-of-pocket costs,
expenses (including reasonable legal fees) and disbursements which may be
incurred or made by T-D Bank in connection with the collection of any amounts
due under, the administration of, or the presentation or enforcement of any
rights conferred by any Letter of Credit, the Borrower's or any guarantor's
obligations to reimburse or otherwise. In the event the Borrower shall fail to
pay such expenses of T-D Bank within thirty (30) days of demand for payment by
T-D Bank, provided that T-D Bank has, during such thirty-day period, made a
diligent collection effort with respect to such expenses, and provided that such
costs shall not result from the gross negligence or willful misconduct of T-D
Bank, each Bank shall thereupon pay to T-D Bank its pro rata share (based on
such Bank's Commitment Ratio) of such expenses within ten (10) days from the
date of T-D Bank's notice to the Banks of the Borrower's failure to pay;
provided, however, that if the Borrower or any guarantor shall thereafter pay
such expense, T-D Bank will repay to each Bank the amounts received from such
Bank hereunder.
ARTICLE 3
Conditions Precedent
Section 3.1 Conditions Precedent to Initial Advance. The
obligation of the Banks to undertake the Commitment and to make the initial
Advance of the Loans is subject to the prior fulfillment of each of the
following conditions:
(a) The Administrative Agent shall have received each of the
following, for itself and for the benefit of the Banks, in form and substance
satisfactory to it:
(i) Loan Certificate from the Borrower, Parent
Company and each Subsidiary of the Borrower, substantially in the form attached
hereto as Exhibit M, including a certificate of incumbency with respect to each
officer authorized to execute Loan Documents on behalf of such entity, together
with appropriate attachments which shall include, without limitation, the
following items: (A) a copy of the Certificate of Incorporation or Partnership
Agreement and Certificate of Limited Partnership, as applicable, of such entity,
certified to be true, complete and correct by the appropriate governmental
authority, (B) certificates of good standing for such entity issued by the
Secretary of State or similar state official for each state in which such entity
is incorporated or required to qualify to do business, (C) a true, complete and
correct copy of the Bylaws of such entity, as in effect on the Agreement Date,
(D) a true, complete and correct copy of the resolutions of such entity
authorizing it to execute, deliver and perform the Loan Documents to which it is
a party, (E) a true, complete and correct copy of all shareholders' or other
similar agreements or voting trust agreements in effect with respect to the
stock or partnership interests of each entity, (F) a photocopy of the Licenses,
if any, held by such entity, certified by an Authorized Signatory to be in full
force and effect on the date hereof, (G) a list of the Pole Agreements, if any,
held by such entity, certified by an Authorized Signatory to be in full force
and effect on the date hereof, and (H) a copy of the Management Agreement;
(ii) This duly executed Loan Agreement;
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(iii) A duly executed Note to the order of each
Bank in the amount of such Bank's pro rata share of the Commitment;
(iv) The duly executed Security Agreement, together
with appropriate UCC-1 financing statement forms;
(v) Lien search results with respect to the
Borrower, its Subsidiaries, Parent Company, and the Manager from all appropriate
jurisdictions and filing offices, together with appropriate UCC-3 termination
statements relating to Liens which are not Permitted Liens;
(vi) Original Uniform Commercial Code Form 1
financing statements, signed by the Borrower as debtor and naming the
Administrative Agent as secured party to be filed in all appropriate
jurisdictions, in such form, substance and number as shall be satisfactory to
the Administrative Agent;
(vii) Copies of insurance certificates covering the
Collateral, naming the Administrative Agent as additional insured or named loss
payee, as applicable, and otherwise meeting the requirements of Section 5.5;
(viii) duly executed Mortgages granting the
Administrative Agent a mortgage to secure the Obligations on the real property
having a fair market value in excess of $250,000 owned in fee simple by the
Borrower or its Subsidiaries described on Schedule 5 hereto, together with
delivery to Administrative Agent of duly executed UCC-1 Financing Statements
under the applicable Uniform Commercial Code, or other filings under applicable
law, to be filed in connection with such Mortgage in form and substance
satisfactory to Administrative Agent to perfect the Lien created by the Mortgage
on any fixtures located on the real property covered by the Mortgage;
(ix) Proof of payment of all title insurance
premiums, documentary stamp or intangible taxes, recording fees and mortgage
taxes payable in connection with the recording of any of the Loan Documents or
the issuance of the title insurance commitments referred to above (whether due
on the Agreement Date or in the future) including such sums, if any, due in
connection with any future Advances;
(x) Copies of all existing environmental reviews
and audits with respect to all real property owned by the Borrower and other
information pertaining to actual or potential environmental claims as
Administrative Agent may require;
(xi) Opinions of general counsel, special counsel
to the Manager and the Prior Borrower, special Alaska Public Utilities
Commission counsel, and FCC counsel to the Borrower and its Subsidiaries,
addressed to each Managing Agent, each Bank, and the Administrative Agent and
satisfactory to each of them, dated the Agreement Date, in substantially the
forms attached hereto as Exhibits N-1, N-2, N-3 and N-4, respectively;
(xii) A duly executed Request for Initial Advance
of the Loans, in substantially the form attached hereto as Exhibit F-2;
(xiii) The duly executed Subordination and
Assignment of Management Agreement, and corresponding UCC-1 financing
statements;
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(xiv) A duly executed Use of Proceeds Letter;
(xv) Copies of any Letters of Credit issued or
outstanding on the Agreement Date;
(xvi) Pro forma financial statements for the
Borrower and the Borrower's Subsidiaries as of the Agreement Date, with respect
to the balance sheet, and as of June 30, 1996, with respect to the income
statement;
(xvii) Copies of any pay-off letters, termination
statements, canceled mortgages and the like required by the Administrative Agent
in connection with the satisfaction of all Indebtedness of the Prior Borrower
under the Prior Loan Agreement and the removal of any Liens against the assets
of the Systems being acquired pursuant to the Rock and Cooke Acquisitions or
against the Borrower which are not Permitted Liens hereunder;
(xviii) A duly executed Certificate of Financial
Condition, issued by the Borrower and its Subsidiaries as of the Agreement Date,
and in substantially the form attached hereto as Exhibit O; and
(xix) Duly executed Borrower's Pledge Agreement,
together with appropriate Stock Certificates and Stock Powers;
(xx) Duly executed Parent's Pledge Agreement,
together with appropriate Stock Certificates and Stock Powers;
(xxi) Duly executed Subsidiary Security Agreement,
given by each Subsidiary of the Borrower, together with appropriate UCC-1
financing statement forms;
(xxii) Duly executed Subsidiary Guaranty, given by
each Subsidiary of the Borrower;
(xxiii) Duly executed Assignment of Partnership
Interests, given by the Borrower and GCI Cable Holdings, Inc. as related to
their general and limited partnership interests in Prime Cable of Alaska, L.P.;
(xxiv) All such other documents as any Managing
Agent, the Administrative Agent, or any Bank may reasonably request, certified
by an appropriate governmental official or an Authorized Signatory if so
requested.
(b) Completion of the GCI Acquisition and other transactions
associated therewith, as well as the completion of all documentation associated
therewith under terms satisfactory to the Administrative Agents, Managing
Agents, and the Banks.
(c) The Managing Agents, the Administrative Agent, and the Banks
shall have received evidence satisfactory to each of them that all Necessary
Authorizations, other than any contained on Schedule 6 hereto, have been
obtained or made, are in full force and effect and are not subject to any
pending or threatened reversal or cancellation, and shall have received a
certificate of an Authorized Signatory so stating.
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(d) The Administrative Agent, for itself, the Managing Agents,
and the Banks, shall have received all fees due on the Agreement Date from the
Borrower.
Section 3.2 Conditions Precedent to Each Advance. The obligation
of the Banks to make each Advance, including the initial Advance and including
those Advances made by virtue of Sections 2.2(b)(ii) and 2.2(c)(ii) hereof, is
subject to the fulfillment of each of the following conditions immediately prior
to or contemporaneously with such Advance:
(a) All of the representations and warranties of the Borrower
and its Subsidiaries under this Agreement and the other Loan Documents
(including, without limitation, all representations and warranties with respect
to the Borrower's Subsidiaries), which, pursuant to Section 4.2 hereof, are made
at and as of the time of such Advance, shall be true and correct at such time in
all material respects, except with respect to changes therein as permitted under
this Agreement, both before and after giving effect to the application of the
proceeds of the Advance;
(b) The incumbency of persons authorized by the Borrower to sign
documents shall be as stated in the certificate of incumbency delivered pursuant
to Section 3.1(a)(i) or as subsequently modified and reflected in a certificate
of incumbency delivered to the Administrative Agent, the Managing Agents, and
each of the Banks whose names appear on the signature pages hereof;
(c) There shall not exist, on the date of the making of the
Advance and after giving effect to the proceeds of the Advance, a Default or an
Event of Default hereunder, and the Administrative Agent shall have received a
Request for Advance signed by an Authorized Signatory so certifying, which
Request for Advance shall also certify the Borrower's compliance with Sections
7.8, 7.9, 7.10, 7.11 and 7.17 hereof; and
(d) The Administrative Agent, the Managing Agents, and each of
the Banks shall have received all such other certificates, reports, statements,
opinions of counsel or other documents as it may, having given the Borrower two
(2) Business Days' prior notice, reasonably request.
The Borrower hereby agrees that the delivery of any Request for Advance
hereunder shall be deemed to be the certification of the Authorized Signatory of
the Borrower as to the matters set forth in this Section 3.2.
Section 3.3 Conditions Precedent to Issuance of Each Letter of
Credit. The obligation of T-D Bank to issue any Letter of Credit hereunder is
subject to the prior fulfillment of each of the following conditions:
(a) All of the representations and warranties of the Borrower
under this Agreement, which, pursuant to Section 4.2 hereof, are made at and as
of the time of the issuance of such Letter of Credit, shall be true and correct
at such time in all material respects, except with respect to changes therein as
permitted under this Agreement, both before and after giving effect to the
issuance of such Letter of Credit;
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(b) The incumbency of persons authorized by the Borrower to sign
documents shall be as stated in the Certificate of Incumbency delivered pursuant
to Section 3.1(a)(i) or as subsequently modified and reflected in a certificate
of incumbency delivered to the Administrative Agent and each of the Banks;
(c) There shall not exist, on the date of the issuance of such
Letter of Credit and after giving effect thereto, a Default hereunder, and the
Administrative Agent shall have received a Request for Issuance of Letter of
Credit so stating; and
(d) The Administrative Agent, the Managing Agents, and the Banks
shall have received all such other certificates, reports, statements, opinions
of counsel or other documents as any of them may, having given the Borrower two
(2) Business Days prior notice, reasonably request.
ARTICLE 4
Representations and Warranties
Section 4.1 Representations and Warranties. The Borrower hereby
represents and warrants to the Administrative Agent, the Managing Agents, and
each of the Banks that:
(a) Organization; Power; Qualification. The Borrower is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Alaska having the Parent Company as its only shareholder of
record as of the Agreement Date. The Borrower has the corporate power and
authority to own its properties and to carry on its business as now being and
hereafter proposed to be conducted. Each Subsidiary of the Borrower is a
corporation or a limited partnership duly organized, validly existing and in
good standing under the laws of the state of its incorporation or formation, as
the case may be, and has the corporate or partnership power and authority, as
the case may be, to own its properties and to carry on its business as now being
and hereafter proposed to be conducted. The Borrower and each of its
Subsidiaries are duly qualified, in good standing and authorized to do business
in each jurisdiction in which the character of their respective properties or
the nature of their respective businesses requires such qualification or
authorization.
(b) Authorization. The Borrower has the corporate power and has
taken all necessary corporate action to authorize it to borrow hereunder, to
create the Security Interest pursuant to the Security Agreement, to execute,
deliver and perform this Agreement, any Mortgage, and each of the other Loan
Documents to which it is a party in accordance with their respective terms, and
to consummate the transactions contemplated hereby and thereby. This Agreement
has been duly executed and delivered by the Borrower and is, and each of the
other Loan Documents to which the Borrower is party is, a legal, valid and
binding obligation of the Borrower enforceable in accordance with its terms,
subject, as to enforcement of remedies, to the following qualifications: (i)
certain equitable remedies are discretionary and, in particular, may not be
available where damages are considered an adequate remedy at law, (ii)
enforcement may be limited by bankruptcy,
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insolvency, liquidation, reorganization, reconstruction and other similar laws
affecting enforcement of creditors' rights generally (insofar as any such law
relates to the bankruptcy, insolvency or similar event of the Borrower), and
(iii) enforcement may be limited by local rules and regulations or by the
Licenses themselves or by FCC rules and regulations, as the case may be.
(c) Subsidiaries, Authorization; Enforceability. The Borrower's
Subsidiaries and the respective ownership interests therein as of the Agreement
Date are as set forth in Schedule 7 attached hereto. Each Subsidiary of the
Borrower has the corporate or partnership power, as the case may be, and has
taken all necessary corporate or partnership action to authorize it to execute,
deliver and perform each of the Loan Documents to which it is a party in
accordance with their respective terms and to consummate the transactions
contemplated by this Agreement and by such other Loan Documents. Each of the
Loan Documents to which any Subsidiary of the Borrower is party is a legal,
valid and binding obligation of such Subsidiary enforceable against such
Subsidiary in accordance with its terms, subject, as to enforcement of remedies,
to the following qualifications: (i) an order of specific performance and an
injunction are discretionary remedies and, in particular, may not be available
where damages are considered an adequate remedy at law, (ii) enforcement may be
limited by bankruptcy, insolvency, liquidation, reorganization, reconstruction
and other similar laws affecting enforcement of creditors' rights generally
(insofar as any such law relates to the bankruptcy, insolvency or similar event
of any such Subsidiary), and (iii) enforcement may be subject to general
principles of equity (regardless of whether such enforcement is considered in a
proceeding in equity or at law).
(d) Compliance with Other Loan Documents and Contemplated
Transactions. The execution, delivery and performance by the Borrower and its
Subsidiaries of this Agreement and each of the other Loan Documents to which it
is a party in accordance with their respective terms, and the consummation of
the transactions contemplated hereby and thereby, do not and will not (i)
require any consent or approval not already obtained, (ii) violate any
Applicable Law respecting the Borrower or any Subsidiary of the Borrower, (iii)
conflict with, result in a breach of, or constitute a default under the
currently operative certificate or articles of incorporation, bylaws or
partnership agreement, as the case may be, of the Borrower or of any Subsidiary
of the Borrower, or under any material indenture, agreement, or other
instrument, including without limitation the Licenses and the Pole Agreements,
to which the Borrower or any of its Subsidiaries is a party or by which any of
them or their properties may be bound, or (iv) result in or require the creation
or imposition of any Lien upon or with respect to any property now owned or
hereafter acquired by the Borrower or any of its Subsidiaries, except for
Permitted Liens.
(e) Business. The Borrower through its Subsidiaries is engaged
in the Cable Business and in leasing fiber capacity on the Systems to third
parties, and currently owns, operates and maintains the Systems.
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(f) Licenses etc. All Licenses have been authorized by the
grantors thereof and are in full force and effect, and the Borrower and its
Subsidiaries are in compliance in all material respects with all of the material
provisions thereof. Except as disclosed on Schedule 6 hereto, the Borrower has
secured all Necessary Authorizations and all such Necessary Authorizations are
in full force and effect. Neither any License nor any Necessary Authorization is
the subject of any pending or, to the best of the Borrower's knowledge,
threatened attack or revocation. No other license or franchise agreement with
respect to the territory covered by any License has been granted, nor, to the
best of the Borrower's knowledge, is any application for such a license or
franchise agreement pending, except as set forth on Schedule 8 attached hereto.
To the best of the Borrower's knowledge, there is no Person holding a cable
television franchise authorizing such Person to provide cable television
services in the franchise areas served by the Systems, except as set forth on
Schedule 8 attached hereto. As of the Agreement Date, there is no overbuilding
of any territory within the Systems.
(g) Compliance with Law. The Borrower and its Subsidiaries are
each in substantial compliance with all material Applicable Laws (including,
without limitation, FCC regulations regarding signal leakage).
(h) Title to Properties. The Borrower has good, legal and
marketable title to, or a valid leasehold interest in, all of its Assets. Each
of the Borrower's Subsidiaries has good, legal and marketable title, or a valid
leasehold interest in all of its assets. None of such Assets is subject to any
Liens, except for Permitted Liens. Except for financing statements evidencing
Permitted Liens or financing statements for which UCC-3 termination statements
have been tendered at closing on the Agreement Date, no financing statement
under the UCC and no other filing which names the Borrower or any of its
Subsidiaries as debtor or which covers or purports to cover any of the
Collateral is on file in any state or other jurisdiction, and neither the
Borrower nor any of its Subsidiaries has signed any such financing statement or
filing (except as described above) or, except for the Loan Documents, any
security agreement that has not been terminated, authorizing any secured party
thereunder to file any such financing statement or filing. Neither the Borrower
nor any of its Subsidiaries owns any real estate except (i) as set forth in
Schedule 5 attached hereto or (ii) as subsequently permitted under Section 7.13
hereof and provided a Mortgage on such real estate is granted to the
Administrative Agent, as agent for the Managing Agents and the Banks to the
extent required by Section 5.11 hereof.
(i) Litigation. There is no action, suit or proceeding pending
or, to the best of the Borrower's knowledge, threatened against or in any other
manner relating directly and adversely to, the Borrower, or any of its
Subsidiaries or any of their respective properties in any court or before any
arbitrator of any kind or before or by any governmental body, except as
described on Schedule 9 attached hereto, and no such action, suit, proceeding or
investigation (i) calls into question the validity of this Agreement or any
other Loan Document, or (ii) if determined adversely to the Borrower, or any of
its Subsidiaries, would be likely to have a Materially Adverse Effect.
(j) Taxes. All federal, state and other tax returns of the
Borrower and each of its Subsidiaries required by law to be filed have been duly
filed and all federal, state and other taxes, assessments and other governmental
charges or levies upon the
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Borrower, all of its Subsidiaries, and any of their properties, income, profits
and assets, which are due and payable, have been paid, except any such taxes,
assessments or other governmental charges or levies (i) the payment of which is
being contested in good faith by appropriate proceedings, (ii) for which
adequate reserves have been provided on the books of the Borrower or the
Subsidiary of the Borrower involved, and (iii) as to which no Lien other than a
Permitted Lien has attached and no foreclosure, distraint, sale or similar
proceedings have been commenced. The charges, accruals and reserves on the books
of the Borrower and each of its Subsidiaries in respect of taxes are, in the
judgment of the Borrower, adequate.
(k) Financial Statements. The Borrower has furnished or caused
to be furnished to the Administrative Agent, the Managing Agents, and each of
the Banks the audited balance sheets and statements of income of the Parent
Company and the Prior Borrower for the calendar year ended December 31, 1995,
and the unaudited balance sheets and statements of income for the Parent
Company, the Prior Borrower, the Alaska Cablevision System and the Alaskan Cable
Network System for the calendar quarter ended June 30, 1996, which to the best
of the Borrower's knowledge as of the Agreement Date are complete and correct in
all material respects and present fairly in accordance with GAAP the financial
position of the Parent Company, the Prior Borrower, the Alaska Cablevision
System, and the Alaskan Cable Network System on and as at such dates and the
results of operations for the periods then ended. There are no material
liabilities, contingent or otherwise, of the Parent Company, the Borrower, and
the Borrower's Subsidiaries which are not disclosed in such financial
statements.
(l) No Adverse Change. Since June 30, 1996, there has occurred
no event which is likely to have a Materially Adverse Effect.
(m) ERISA. The Borrower, each of its Subsidiaries and each of
their respective ERISA Affiliates and each of their respective Plans are in
substantial compliance with ERISA and the Internal Revenue Code, and neither the
Borrower, nor any of its Subsidiaries, nor any of their respective ERISA
Affiliates has incurred any accumulated funding deficiency with respect to any
such Plan within the meaning of ERISA or the Internal Revenue Code. The Borrower
and its Subsidiaries have not incurred any material liability to the Pension
Benefit Guaranty Corporation or any successor thereto in connection with any
such Plan. The assets of each such Plan which is subject to Title IV of ERISA
are sufficient to provide the benefits under such Plan for which the Pension
Benefit Guaranty Corporation or any successor thereto would guarantee payment if
such Plan were terminated, and such assets are also sufficient to provide all
other benefits due under the Plan prior to and upon termination. No Reportable
Event has occurred and is continuing with respect to any such Plan. No such Plan
or trust created thereunder, or any party in interest, fiduciary, trustee or
administrator thereof, has engaged in a "prohibited transaction" (as such term
is defined in Section 406 of ERISA or Section 4975 of the Internal Revenue Code)
which would subject such Plan or any other Plan of the Borrower, its
Subsidiaries, or any of their respective ERISA Affiliates, any trust created
thereunder, or any party in interest, fiduciary, trustee or administrator
thereof, or any party dealing with any such Plan or any such trust to the tax or
penalty on "prohibited transactions" imposed by Section 502 of ERISA or Section
4975 of the Internal Revenue Code. Neither the Borrower, its Subsidiaries nor
any of their respective
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ERISA Affiliates is a participant in or obliged to make any payment to a
Multiemployer Plan.
(n) Compliance with Regulations G, T, U and X. The Borrower is
not engaged principally or as one of its important activities in the business of
extending credit for the purpose of purchasing or carrying any margin stock
within the meaning of Regulations G, T, U and X of the Board of Governors of the
Federal Reserve System, and no portion of the Loan is to be used for the
"purpose of purchasing or carrying" any "margin stock" as such terms are used in
such Regulations.
(o) Governmental Regulation. Neither the Borrower nor any of its
Subsidiaries is required to obtain any consent, approval, authorization, permit
or license which has not already been obtained from, or effect any filing or
registration which has not already been effected with, any federal, state or
local regulatory authority in connection with the execution and delivery, and
closing of this Agreement or any other Loan Document. Neither the Borrower nor
any of its Subsidiaries is required to obtain any consent, approval,
authorization, permit or license which has not already been obtained from, or
effect any filing or registration which has not already been effected with, any
federal, state or local regulatory authorization in connection with the
performance, in accordance with their respective terms, of this Agreement or any
other Loan Document, the borrowing hereunder and the granting of the Security
Interest, except the filing of UCC-1 financing statements with regard to the
Security Interest in such offices as may be specified in the various opinions of
counsel for the Borrower delivered as required under Section 3.1(a).
(p) Absence of Default. The Borrower and each of its
Subsidiaries are in compliance in all material respects with all of the
provisions of their certificates or articles of incorporation and bylaws or
partnership certificates or agreements, as the case may be, and no event has
occurred or failed to occur, which has not been remedied or waived, the
occurrence or non-occurrence of which constitutes, or which with the passage of
time or giving of notice or both would constitute (i) an Event of Default or
(ii) a material default by the Borrower or any of its Subsidiaries under any
material indenture, agreement or other instrument, including, without limiting
the foregoing, any License, the Management Agreement or any Pole Agreement, or
any judgment, decree or order to which the Borrower or any of its Subsidiaries
is a party or by which the Borrower or any of its Subsidiaries or any of their
respective properties may be bound or affected.
(q) Priority. The Security Interest is a valid and perfected
security interest in the Collateral securing, in accordance with the terms of
the Security Agreement and the Subsidiary Security Agreement, the outstanding
Obligations, and the assets subject to the Security Interest are subject to no
Liens that are prior to, on a parity with or junior to the Security Interest,
other than Permitted Liens, and the Security Agreement and the Subsidiary
Security Agreement are enforceable as security for the outstanding Obligations
in accordance with its terms with respect to the Collateral against the
Borrower, its Subsidiaries, and the Parent Company and all third parties,
subject, as to enforcement of remedies, to the following qualifications: (i)
certain equitable remedies are discretionary and, in particular, may not be
available where damages are considered an adequate remedy at law, (ii)
enforcement may be limited by bankruptcy, insolvency, liquidation,
reorganization, reconstruction and other similar laws affecting enforcement of
creditors' rights generally (insofar as any such
General Communication, Inc. - Form 8-K
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law relates to the bankruptcy, insolvency or similar event of the Borrower and
its Subsidiaries), and (iii) enforcement as to the Licenses may be limited by
the rules and regulations of the Alaska Public Utilities Commission or other
local laws or by the Licenses themselves or by FCC rules and regulations, as the
case may be, restricting the transfer of such Licenses. Each of the Mortgages
given by the Borrower and its Subsidiaries to the Administrative Agent grants a
valid and perfected interest in the real estate owned by the Borrower and its
Subsidiaries, subject only to the provisions of Section 5.11 hereof. Any
Mortgage secures, in accordance with its terms, the Notes and the other
outstanding Obligations and such interests will be subject to no Liens that are
prior to, on a parity with or junior to the Lien in favor of the Administrative
Agent, as agent for the Managing Agents and the Banks, other than Permitted
Liens, and any Mortgage will be enforceable as security for the outstanding
Obligations in accordance with its terms against the Borrower and its
Subsidiaries and all third parties, subject to the following qualifications: (i)
certain equitable remedies are discretionary and, in particular, may not be
available where damages are considered an adequate remedy at law, (ii)
enforcement may be limited by bankruptcy, insolvency, liquidation,
reorganization, reconstruction and other similar laws affecting enforcement of
creditors' rights generally (insofar as any such law relates to the bankruptcy,
insolvency or similar event of the Borrower or any of its Subsidiaries), and
(iii) the Licenses may require the Administrative Agent to obtain certain
governmental consents or approvals prior to enforcement.
(r) Accuracy and Completeness of Information. All information,
reports, and other papers and data relating to the Borrower and furnished by or
on behalf of the Borrower to the Administrative Agent, the Managing Agents and
the Banks were, at the time furnished, true, complete and correct in all
material respects to the extent necessary to give the Administrative Agent, the
Managing Agents and the Banks true and accurate knowledge of the subject matter
in all material respects. No fact is currently known to the Borrower which is
likely to have a Materially Adverse Effect.
(s) Environmental Matters. Except as is described on Schedule 10
attached hereto:
(i) The Property does not contain, in, on or under,
including, without limitation, the soil and groundwater thereunder, any
Hazardous Materials in violation of Environmental Laws or in amounts that could
give rise to material liability under Environmental Laws.
(ii) The Borrower and its Subsidiaries are in substantial
compliance with all applicable Environmental Laws, and there is no condition
which could interfere with the continued operation of any of the Properties in
substantial compliance with Environmental Laws, or impair the financial
condition of Borrower.
(iii) Neither the Borrower nor any of its Subsidiaries
has received from any governmental authority or any other Person any complaint,
notice of violation, alleged violation, investigation or advisory action or
notice of potential liability regarding matters of environmental protection or
permit compliance under applicable Environmental Laws with regard to the
Properties, and neither the Borrower nor any of its Subsidiaries is aware that
any governmental authority is contemplating delivering to Borrower or any of its
Subsidiaries any such notice. There has been no pending or, to the Borrower's
knowledge, threatened complaint, notice of violation,
General Communication, Inc. - Form 8-K
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alleged violation, investigation or notice of potential liability under
Environmental Laws with regard to any of the Properties.
(iv) Hazardous Materials have not been generated,
treated, stored, disposed of, at, on or under any of the Property except in
substantial compliance with all Environmental Laws or in a manner that could
give rise to material liability under Environmental Laws nor have any Hazardous
Materials been transported or disposed of from any of the Properties to any
other location except in substantial compliance with all Environmental Laws nor
in a manner that could reasonably be anticipated to give rise to material
liability under Environmental Laws.
(v) Neither the Borrower nor any of its Subsidiaries is a
party to any governmental administrative actions or judicial proceedings pending
under any Environmental Law with respect to any of the Properties, nor are there
any consent decrees or other decrees, consent orders, administrative orders or
other orders, or other administrative or judicial requirements outstanding under
any Environmental Law with respect to any of the Properties.
(vi) There has been no release or threat of release of
Hazardous Materials into the environment at or from any of the Properties, or
arising from or relating to the operations of the Borrower or any of its
Subsidiaries, in violation of Environmental Laws or in amounts that could give
rise to material liability under Environmental Laws.
(t) Investment Company Act; Public Utility Holding Company Act.
Neither the Borrower nor any of its Subsidiaries is required to register under
the provisions of the Investment Company Act of 1940, as amended, and neither
the entering into or performance by the Borrower of this Agreement nor the
issuance of the Notes violates any provision of such Act or requires any
consent, approval or authorization of, or registration with, the Securities and
Exchange Commission or any other governmental or public body or authority
pursuant to any provisions of such Act. Neither the Borrower nor any of its
Subsidiaries is a "public utility holding company" within the meaning of the
Public Utility Holding Company Act of 1935, as amended.
(u) Payment of Wages. The Borrower and each of its Subsidiaries
is in compliance in all material respects with the Fair Labor Standards Act, as
amended, and the Borrower and the Subsidiaries have in all material respects
paid all minimum and overtime wages required by law to be paid to their
respective employees.
(v) Securities Laws. The Borrower, each of its Subsidiaries, and
any underwriters, sales agents, representatives or brokers representing or
acting on behalf of the Borrower or any of its Subsidiaries have complied with
all material federal and state securities laws in connection with the offer and
sale of stock or partnership interests in the Borrower or any of its
Subsidiaries.
(w) Agreements with Affiliates and Management Agreements. Except
for the Management Agreement and as otherwise set forth on Schedule 11 attached
hereto, the Borrower does not have (i) any material agreements or binding
arrangements of any kind with any Affiliates, or (ii) any management or
consulting agreements of any kind with any third party.
General Communication, Inc. - Form 8-K
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Section 4.2 Survival of Representations and Warranties etc. All
representations and warranties made under this Agreement shall be deemed to be
made, and shall be true and correct, at and as of the Agreement Date, the date
of each Advance, and the date of issuance of each Letter of Credit, except to
the extent such representations and warranties (a) relate expressly to an
earlier date, (b) were previously fulfilled in accordance with the terms hereof,
(c) subsequently become inapplicable, or (d) are modified as a result of
activities of the Borrower or changes in circumstances, in any case as permitted
hereunder or as consented to or waived in writing in accordance with Section
11.13. All representations and warranties made under this Agreement shall
survive, and not be waived by, the execution hereof by the Administrative Agent,
the Managing Agents, and the Banks, any investigation or inquiry by the
Administrative Agent, the Managing Agents, and the Banks, or by the making of
any Advance or the issuance of any Letter of Credit under this Agreement.
ARTICLE 5
General Covenants
So long as any of the Obligations is outstanding and unpaid, or the
Borrower has a right to borrow hereunder (whether or not the conditions to
borrowing have been or can be fulfilled), or any Letter of Credit is
outstanding, and unless the Majority Banks (except with respect to Section 5.12)
shall otherwise consent in writing:
Section 5.1 Preservation of Existence and Similar Matters. The
Borrower and each of its Subsidiaries will:
(a) preserve and maintain, or timely obtain and thereafter
preserve and maintain, its existence (except as permitted under Section
7.5(a)(iii) hereof), material rights, franchises, and licenses and its material
privileges used in connection with or relating to the operation of the Systems
in the State of Alaska including, without limiting the foregoing, the Licenses,
the Pole Agreements, and all other Necessary Authorizations (or substitutions
therefor which are reasonably satisfactory to the Majority Banks), and
(b) qualify and remain qualified and authorized to do business
in each jurisdiction in which the character of its properties or the nature of
its businesses requires such qualification or authorization (except as permitted
under Section 7.5(a)(iii) hereof).
Section 5.2 Business: Compliance with Applicable Law. The
Borrower will (a) engage in the business of acting as a holding company owning
its Subsidiaries and of operating the Systems, whether directly or indirectly,
and (b) comply in all material respects with the requirements of all material
Applicable Laws, except where compliance is being contested in good faith by
appropriate proceedings and adequate reserves therefor have been set aside. The
Borrower's Subsidiaries will (a) engage solely in the business of (i) the Cable
Business and the business of owning, operating and maintaining the Systems, and
(ii) leasing fiber capacity on the Systems to third parties; and (b) comply in
all material respects with the requirements of all material
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Applicable Law except where compliance is being contested in good faith by
appropriate proceedings and adequate reserves have been set aside therefor.
Section 5.3 Maintenance of Properties. The Borrower will, and
will cause each of its Subsidiaries to, maintain or cause to be maintained in
the ordinary course of business in good repair, working order and condition
(reasonable wear and tear excepted) all properties used or useful in their
respective businesses (whether owned or held under lease), and from time to time
make or cause to be made all needed and appropriate repairs, renewals,
replacements, additions, betterments and improvements thereto, provided,
however, that the provisions of this Section 5.3 shall not prevent the Borrower
or one of its Subsidiaries from disposing of obsolete equipment and inventory in
the ordinary course of its business, or making dispositions permitted by Section
7.5(a)(ii) hereof.
Section 5.3 Accounting Methods and Financial Records. The
Borrower will maintain, on a consolidated basis with its Subsidiaries, a system
of accounting established and administered in accordance with GAAP consistently
applied, keep adequate records and books of account in which complete entries
will be made in accordance with such accounting principles consistently applied
and reflecting all transactions required to be reflected by such accounting
principles, and keep accurate and complete records of the Collateral. The
Borrower and its Subsidiaries will maintain a calendar year ending on December
31.
Section 5.4 Insurance. The Borrower will, and will cause each of
its Subsidiaries to:
(a) Maintain insurance on the assets and properties comprising
the Systems and on the operations of the Systems including, but not limited to,
public liability, business interruption and fidelity coverage insurance, from
responsible insurance companies in such amounts and against such risks as shall
be reasonably acceptable to the Administrative Agent and thereafter shall
maintain insurance coverage comparable to that in place on the Agreement Date,
taking into account the growth of the Systems after the Agreement Date.
(b) Keep the Collateral insured by insurers on terms and in a
manner reasonably acceptable to the Administrative Agent against loss or damage
by fire, theft, burglary, pilferage, loss in transit, explosions and hazards
insured against by extended coverage, in amounts reasonably satisfactory to the
Majority Banks, all premiums thereon to be paid by the Borrower and its
Subsidiaries.
(c) Require that each insurance policy on the assets and
properties comprising the Systems and on the operations of the Systems name the
Administrative Agent, as agent for the Managing Agents and the Banks, as
additional insured or named loss payee, as appropriate, to the extent of the
Obligations, and provide for at least thirty (30) days' prior written notice to
the Administrative Agent of any default under, termination of or proposed
cancellation or nonrenewal of, such policy. Subject to Section 3.2 hereof, in
the event of a casualty covered by the Borrower's or any of its Subsidiaries'
insurance maintained in accordance with this Section 5.5, the Borrower will be
entitled, to the extent otherwise permitted hereunder, to borrow a Base Rate
Advance in an amount necessary to replace or repair the damages caused by such
casualty. Proceeds of insurance paid to the Administrative Agent shall (i) be
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applied by the Administrative Agent to repay the Advance made to the Borrower
pursuant to the immediately preceding sentence as set forth in Section 2.9(c) or
Section 8.2 hereof, as appropriate, without penalty or premium and (ii)
thereafter be applied by the Administrative Agent as provided in Section 2.9(c).
Any balance thereof remaining after payment in full of the Obligations shall be
paid to the Borrower or as otherwise required by law.
Section 5.6 Payment of Taxes and Claims. The Borrower will, and
will cause each of its Subsidiaries to, pay and discharge all taxes, assessments
and governmental charges or levies imposed upon it or its income or profits or
upon any properties belonging to it prior to the date on which penalties attach
thereto, and all lawful claims for labor, materials and supplies which, if
unpaid, might become a Lien or charge upon any of its properties; except that no
such tax, assessment, charge, levy or claim need be paid which is being
contested in good faith by appropriate proceedings and for which adequate
reserves shall have been set aside on the appropriate books, but only so long as
such tax, assessment, charge, levy or claim does not become a Lien or charge
other than a Permitted Lien and no foreclosure, distraint, sale or similar
proceedings shall have been commenced. The Borrower shall, and shall cause each
of its Subsidiaries to, timely file all information returns required by federal,
state or local tax authorities.
Section 5.7 Visits and Inspections. The Borrower will, and will
cause each of its Subsidiaries to, permit representatives of the Administrative
Agent, the Managing Agents, and each of the Banks upon two (2) Business Days'
prior notice, unless a Default has occurred, in which case no notice will be
required, to (a) visit and inspect its properties during normal business hours,
(b) inspect and make extracts from and copies of its books and records, and (c)
discuss with its principal officers and auditors and those of the Manager its
businesses, assets, liabilities, financial positions, results of operations and
business prospects pertaining to the Systems.
Section 5.8 Payment of Indebtedness. Subject to Section 5.6
hereof and provisions herein or in any other Loan Document regarding
subordination, the Borrower will, and will cause each of its Subsidiaries to,
pay any and all of its Indebtedness when and as it becomes due, other than
amounts duly disputed in good faith.
Section 5.9 Use of Proceeds. The Borrower will use the aggregate
proceeds of the initial Advance of the Loans as set forth in the Use of Proceeds
Letter, and will use subsequent Advances under the Loans to fund working
capital, for Capital Expenditures, to make Restricted Payments to the extent
permitted under Section 7.7 hereof, to pay expenses incurred by the Borrower
with respect to the consummation of this Agreement and related transactions
thereto, and for other general corporate purposes.
Section 5.10 Management. The Borrower and its Subsidiaries will
be managed by the Manager under the terms of the Management Agreement.
Section 5.11 Real Estate. The Borrower will, and will cause each
of its Subsidiaries to, grant a Mortgage to the Administrative Agent, as agent
for the Managing Agents and the Banks, in substantially the form of the Mortgage
delivered on the Agreement Date, covering any parcel of real estate acquired by
the Borrower
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or any of its Subsidiaries with respect to the Systems after the Agreement Date
having a fair market value in excess of $250,000, and collaterally assign, to
the extent permitted therein, any leases entered into by the Borrower or any of
its Subsidiaries as lessor with respect to such real estate. The Borrower will,
and will cause each of its Subsidiaries to, deliver to the Administrative Agent,
the Managing Agents, and each of the Banks, all documentation, including one or
more opinions of counsel and policies of title insurance, which in the opinion
of the Administrative Agent is appropriate with each such grant or assignment.
Section 5.12 Indemnity. The Borrower for itself and on behalf of
each of its Subsidiaries, will indemnify and hold harmless the Indemnified
Parties from and against any and all claims, liabilities, losses, damages,
actions, and demands by any party (other than with respect to any claims,
actions or demands made by any other Indemnified Party or any liabilities,
losses or damages caused thereby) against any Indemnified Party resulting from
any breach or alleged breach by the Borrower or any of its Subsidiaries of any
representation or warranty made hereunder, or otherwise arising out of (i) the
Commitment or the making or administration of the Loans, (ii) allegations of any
participation by the Indemnified Parties, or any of them in the affairs of the
Borrower or any of its Subsidiaries or that the Indemnified Parties, or any of
them has any joint liability with the Borrower or any of its Subsidiaries for
any reason, or (iii) any claim against the Indemnified Parties, or any of them
by any Shareholder or other investor in or lender to the Borrower or any of its
Subsidiaries for any reason whatsoever; unless, with respect to any of the
above, the party seeking indemnification is finally judicially determined to
have acted or failed to act with gross negligence or wilful misconduct.
Section 5.13 Payment of Wages. The Borrower and each of its
Subsidiaries will at all times comply in all material respects with the
requirements of the Fair Labor Standards Act, as amended, including, without
limitation, the provisions of such act relating to the payment of minimum and
overtime wages as the same may become due from time to time.
Section 5.14 Interest Rate Hedging.Rate Hedging.
(a) Within six months from the Agreement Date, the Borrower
shall have entered into one or more Interest Hedge Agreements which fix or place
a limit on the Borrower's interest obligations at interest rates acceptable to
the Administrative Agent with respect to the Loans on an aggregate of not less
than fifty percent (50%) of the principal amount of the Loans then outstanding,
such Interest Hedge Agreements to provide interest rate protection for a period
of at least two (2) years from the date of the Interest Hedge Agreement.
(b) All obligations of the Borrower to the Administrative Agent,
the Managing Agents, the Banks, or any of them, or any affiliate of any of them,
pursuant to any Interest Hedge Agreement, shall be deemed to be part of the
Obligations.
Section 5.15 ERISA. The Borrower shall, and shall cause each of
its Subsidiaries to, at all times make, or cause to be made, prompt payment of
contributions required to meet the minimum funding standards set forth in ERISA
with respect to their and their respective ERISA Affiliates' Plans.
General Communication, Inc. - Form 8-K
Page 206
<PAGE>
Section 5.16 Further Assurances. The Borrower will promptly
cure, or cause to be cured, defects in the creation and issuance of the Notes
and the execution and delivery of the Loan Documents (including this Agreement),
resulting from any act or failure to act by the Borrower, any of its
Subsidiaries, or any of the employees or officers thereof. The Borrower and each
of its Subsidiaries at their expense will promptly execute and deliver to the
Administrative Agent and the Banks, or cause to be executed and delivered to the
Administrative Agent and the Banks, all such other and further documents,
agreements, and instruments in compliance with or accomplishment of the
covenants and agreements of the Borrower in the Loan Documents, including this
Agreement, or to correct any omissions in the Loan Documents, or to obtain any
consents which are necessary in connection with or in accomplishment of the
covenants and agreements of the Borrower and each of its Subsidiaries under the
Loan Documents, all as may be necessary or appropriate in connection therewith
as may be reasonably requested.
ARTICLE 6
Information Covenants
So long as any of the Obligations under the Loan Documents is
outstanding and unpaid or the Borrower has a right to borrow hereunder (whether
or not the conditions to borrowing have been or can be fulfilled), or any Letter
of Credit is outstanding, and unless the Majority Banks shall otherwise consent
in writing, the Borrower will furnish or cause to be furnished to the
Administrative Agent at the Administrative Agent's Office, to each Managing
Agent and to each Bank:
Section 6.1 Quarterly Financial Statements and Information.
Within sixty (60) days after the last day of each quarter of each calendar year
(other than the calendar quarter ending on December 31), the balance sheets of
(i) the Parent Company on a consolidated basis with the Borrower and the
Borrower's Subsidiaries and (ii) of the Borrower and the Borrower's Subsidiaries
on a consolidated basis, as at the end of such quarter and the related
statements of income and retained earnings and related statements of cash flows
of (i) the Parent Company on a consolidated basis with the Borrower and the
Borrower's Subsidiaries and (ii) of the Borrower and its Subsidiaries on a
consolidated basis, for such quarter and for the elapsed portion of the year
ended with the last day of such quarter, all of which shall be certified by the
chief financial officer or chief accounting officer of the Parent Company, to
be, in his opinion, complete and correct in all material respects and to present
fairly, in accordance with GAAP, the financial position of (i) the Parent
Company on a consolidated basis with the Borrower and the Borrower's
Subsidiaries and (ii) of the Borrower and its Subsidiaries on a consolidated
basis, as at the end of such period and the results of operations for such
period, and for the elapsed portion of the year ended with the last day of such
period, subject only to normal year-end adjustments.
Section 6.2 Annual Financial Statements and Information;
Certificate of No Default. Within one hundred twenty (120) days after the end of
each calendar year, the audited balance sheets of (i) the Parent Company, on a
consolidated basis with the Borrower and the Borrower's Subsidiaries and (ii) of
the Borrower and the Borrower's Subsidiaries on a consolidated basis, as at the
end of such calendar year and the related audited statement of income and
retained earnings or deficit and
General Communication, Inc. - Form 8-K
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<PAGE>
related statements of cash flows of (i) the Parent Company, the Borrower and the
Borrower's Subsidiaries on a consolidated basis and (ii) of the Borrower and its
Subsidiaries on a consolidated basis, for such calendar year, setting forth in
comparative form the figures as at the end of and for the previous calendar year
and certified by independent certified public accountants of national recognized
standing, whose opinion shall be in scope and substance reasonably satisfactory
to the Administrative Agent and the Majority Banks and include a statement
certifying that no Default or Event of Default was detected during the
examination of the Parent Company, the Borrower and the Borrower's Subsidiaries,
on a consolidated basis, and that such accountants have authorized the Parent
Company to deliver such financial statements and opinion thereon to the
Administrative Agent, the Managing Agents and each of the Banks pursuant to this
Agreement.
Section 6.3 Performance Certificates. At the time the financial
statements are furnished pursuant to Sections 6.1 and 6.2, commencing with
respect to the quarter ending December 31, 1996, a certificate of an Authorized
Signatory:
(a) setting forth as at the end of such quarterly period or
calendar year, as the case may be, the arithmetical calculations required to
establish (i) the Applicable Margin, and (ii) whether or not the Borrower was in
compliance with the requirements of Sections 7.8, 7.9, 7.10, 7.11 and 7.17; and
(b) stating that, to the best of his or her knowledge, no
Default or Event of Default has occurred as at the end of such quarterly period
or year, as the case may be, or, if a Default or Event of Default has occurred,
disclosing each such Default or Event of Default and its nature, when it
occurred, whether it is continuing and the steps being taken by Borrower with
respect to such Default or Event of Default.
Section 6.4 Monthly Reports. Within forty-five (45) days from
the last day of each month, (a) a monthly subscriber report of the Borrower and
its Subsidiaries, in substantially the form attached hereto as Exhibit P, which
report shall include, among other things, a reasonable estimate of the number of
homes passed, actual basic subscribers, actual pay subscribers, and actual
disconnecting subscribers for the Borrower for such month, and (b) a detailed
profit and loss statement for such month and for the year-to-date, as compared
with the budget for such year. Each such item shall be complete and correct in
all material respects except for audit and year-end adjustments.
Section 6.5 Copies of Other Reports.ther Reports
(a) Promptly upon receipt thereof, copies of all reports, if
any, submitted to the Borrower by the Borrower's independent public accountants
regarding the Borrower, including, without limitation, any management report
prepared in connection with the annual audit referred to in Section 6.2.
(b) Promptly after its preparation and in no event later than
January 31 of each year, a copy of the annual budget for such calendar year,
including the budget for Capital Expenditures, for the Borrower on a
consolidated basis with its Subsidiaries.
General Communication, Inc. - Form 8-K
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<PAGE>
(c) Promptly upon request therefor by the Administrative Agent,
any Managing Agent, or any Bank, copies of any material notices given to the
Borrower by the Manager under the Management Agreement.
(d) Promptly upon receipt thereof, copies of any material notice
or report regarding any License from the grantor of such License or regarding
the Systems or any License from the FCC.
(e) From time to time and promptly upon each request, such data,
certificates, reports, statements, opinions of counsel, financial projections,
documents or further information regarding the Collateral or the business,
assets, liabilities, financial position, or results of operations of the
Borrower or any of its Subsidiaries, as may be reasonably requested by the
Administrative Agent, any Managing Agent, or any Bank (provided that the
Borrower will not be required to produce separate financial statements for any
of its Subsidiaries).
(f) Promptly upon the filing thereof, copies of all material
reports, proxies, forms or other documents required to be filed or submitted by
the Parent Company to the Securities and Exchange Commission or other federal or
state securities law enforcement agency or commission.
Section 6.6 Notice of Litigation and Other Matters. Prompt
notice (and in any event, notice within three (3) Business Days) of the
following events after the Borrower has received notice thereof or otherwise
becomes aware of:
(i) the commencement of all material proceedings and
investigations by or before any governmental body and all material actions and
proceedings in any court or before any arbitrator (A) against, or (B) in any
other way relating materially adversely and directly to, the Borrower, Parent
Company, or any of the Subsidiaries of the Borrower, or the Manager or any of
their respective properties, assets or businesses or any License;
(ii) any material adverse change with respect to the
business, assets, liabilities, financial position, results of operations or
business prospects of the Borrower, or Parent Company, or any of the
Subsidiaries of the Borrower other than changes in the ordinary course of
business which have not had and are not likely to have a Materially Adverse
Effect;
(iii) any material amendment or material modification to
the budget submitted under Section 6.5(b) hereof for the operation of the
Systems;
(iv) any Default or Event of Default or the occurrence or
non-occurrence of any event (x) which constitutes, or which with the passage of
time or giving of notice or both would constitute a default by the Borrower or
any of its Subsidiaries under any material agreement other than this Agreement
to which the Borrower or any of its Subsidiaries is party or by which its
properties may be bound, and (y) which would be likely to have a Materially
Adverse Effect, giving in each case the details thereof and specifying the
action proposed to be taken with respect thereto;
General Communication, Inc. - Form 8-K
Page 209
<PAGE>
(v) the occurrence of any Reportable Event or a
"prohibited transaction" (as defined in Section 4.1(m) hereof) with respect to
any Plan of the Borrower or any of its Subsidiaries or any of their respective
ERISA Affiliates, or the institution or threatened institution by the Pension
Benefit Guaranty Corporation or any successor thereto of proceedings under ERISA
to terminate or partially terminate such Plan, or the termination or partial
termination of any such Plan, or the commencement or threatened commencement of
any litigation regarding any such Plan or naming it or the trustee of any such
Plan with respect to such Plan; and
(vi) the occurrence of any event subsequent to the
Agreement Date which, if such event had occurred prior to the Agreement Date,
would have constituted an exception to the representation and warranty in
Section 4.1(m) of this Agreement.
ARTICLE 7
Negative Covenants
So long as any of the Obligations under the Loan Documents is
outstanding and unpaid or the Borrower has a right to borrow hereunder (whether
or not the conditions to borrowing have been or can be fulfilled), or any Letter
of Credit is outstanding, and unless the Majority Banks shall otherwise consent
in writing:
Section 7.1 Indebtedness of the Borrower. The Borrower shall
not, and shall cause each of its Subsidiaries not to, create, assume, incur or
otherwise become or remain obligated in respect of, or permit to be outstanding,
any Indebtedness except:
(a) Indebtedness under this Agreement, the Notes and the other
Loan Documents including, without limitation, reimbursement obligations with
respect to Letters of Credit;
(b) Accounts payable, subscriber deposits, accrued expenses,
customer advance payments and other current liabilities (other than for money
borrowed) incurred in the ordinary course of business;
(c) An amount not to exceed $4,000,000 in the aggregate for the
Borrower on a consolidated basis with its Subsidiaries at any time consisting of
(i) Capitalized Lease Obligations and Indebtedness for Money Borrowed (other
than the Obligations) (whether or not secured) outstanding as of the Agreement
Date listed on Schedule 12 attached hereto, and (ii) other Capitalized Lease
Obligations and Indebtedness for Borrowed Money (whether or not secured);
(d) Current and deferred management fees and other expenses,
together with any interest thereon, due pursuant to the terms of the Management
Agreement and subject to the Subordination and Assignment of Management
Agreement;
(e) Indebtedness permitted pursuant to Section 7.2(a) or Section
7.6 hereof;
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<PAGE>
(f) Indebtedness incurred in order to prevent the occurrence of
a Default under Section 8.1(d) hereof as permitted thereby, subject to the terms
and conditions of a subordination agreement in the form attached hereto as
Exhibit Q;
(g) Indebtedness under Interest Hedge Agreements entered into in
satisfaction of the Borrower's obligations under Section 5.14(a) hereof; and
(h) Investments permitted hereunder that also constitute
Indebtedness.
Section 7.2 Investments. The Borrower and its Subsidiaries shall
not make or otherwise acquire for a consideration in excess of $100,000 any
Investments, except that (a) the Borrower and its Subsidiaries may make
Investments in and loans to Subsidiaries of the Borrower; (b) the Borrower and
its Subsidiaries may purchase or otherwise acquire and own (i) marketable,
direct obligations of the United States of America maturing within three hundred
sixty-five (365) days of the date of purchase, (ii) commercial paper issued by
corporations, each of which shall have a consolidated net worth of at least $250
million and each of which conducts a substantial part of its business in the
United States of America, maturing within one hundred eighty (180) days from the
date of the original issue thereof, and rated "P-1" or better by Moody's
Investor's Service, (iii) repurchase agreements in such amounts and with such
financial institutions having a rating of A or better from Moody's Investor's
Service as the Borrower may select from time to time following consultation with
the Administrative Agent, and (iv) certificates of deposit maturing within three
hundred sixty-five (365) days of the date of purchase which are issued by any
Bank or by a United States national or state bank having capital, surplus and
undivided profits totaling more than $100 million, and having a rating of A or
better from Moody's Investors Service; and (c) as permitted by Section 7.5(b)
hereof.
Section 7.3 Limitation on Liens. The Borrower shall not, and
shall cause each of its Subsidiaries not to, create, assume, incur or permit to
exist or to be created, assumed, incurred or permitted to exist, directly or
indirectly, any Lien on any of its properties or assets, whether now owned or
hereafter acquired, except for Permitted Liens.
Section 7.4 Amendment and Waiver. The Borrower shall not, and
shall cause its Subsidiaries not to, without the prior written consent of the
Majority Banks, except in connection with the issuance of equity securities to
effect a cure of an Event of Default pursuant to Section 8.1(d) hereof, enter
into any material amendment of, or agree to or accept any material waiver of any
(a) of the material provisions of its articles or certificate of incorporation,
partnership agreement, or similar organizational documents or (b) any material
provision of (i) its bylaws, (ii) any License or Pole Agreement other than in
the ordinary course of business, or (iii) the Management Agreement.
Section 7.5 Liquidation; Disposition or Acquisition of Assets.
The Borrower shall not, and shall cause each of its Subsidiaries not to, at any
time:
(a) (i) liquidate or dissolve itself (or suffer any liquidation
or dissolution) or otherwise wind up, or (ii) sell, lease, abandon, transfer or
otherwise dispose of (other than obsolete equipment and inventory) any assets or
business (including the disposition of stock or other ownership interests, and
including the sale with or
General Communication, Inc. - Form 8-K
Page 211
<PAGE>
without recourse, and the discounting or other sale for less than face value, of
any notes or accounts receivable) in excess of $4,000,000 in the aggregate
during the term of this Agreement (except that the Borrower and its Subsidiaries
may transfer assets and businesses amongst themselves), or (iii) enter into any
merger or consolidation (except among the Borrower and one or more of its
Subsidiaries provided that Borrower is the surviving corporation or among two or
more of the Subsidiaries of the Borrower);
(b) acquire capital stock, partnership interests or assets;
provided, that the foregoing notwithstanding, (A) the Borrower and its
Subsidiaries may make Investments as permitted under Section 7.2 hereof and may
transfer assets and businesses amongst themselves, and (B) the Borrower shall be
entitled to (i) make Capital Expenditures in the ordinary course of the
Borrower's business permitted by Section 7.17 below, (ii) make real estate
purchases permitted by Section 7.13 (except that Borrower and its wholly-owned
Subsidiaries may transfer assets and businesses amongst themselves), and (iii)
make other Acquisitions having a purchase price not in excess of $4,000,000 in
the aggregate during the term of this Agreement;
(c) create any new Subsidiary (other than the formation of a
Subsidiary in connection with an Acquisition permitted under Section
7.5(b)(iii), above);
(d) as to the Borrower, issue any additional shares of common
stock unless such shares are issued to the Parent Company and simultaneously
pledged by the holder thereof to the Collateral Agent pursuant to the Parent's
Pledge Agreement.
Section 7.6 Limitation on Guaranties. The Borrower shall not,
and shall cause each of its Subsidiaries not to, at any time Guaranty, or
assume, be obligated with respect to, or permit to be outstanding any Guaranty
of, any obligation of any other Person (other than the Borrower and such
Subsidiaries) other than (a) under any Loan Document or as permitted under
Section 7.1 hereof, (b) obligations under agreements to indemnify Persons who
have issued bid or performance bonds or letters or credit issued in lieu of such
bonds in the ordinary course of business of the Borrower securing performance by
the Borrower of activities otherwise permissible hereunder, and (c) a guaranty
by endorsement of negotiable instruments for collection in the ordinary course
of business.
<TABLE>
Section 7.7 Restricted Payments and Purchases. The Borrower
shall not, and shall cause each of its Subsidiaries not to, directly or
indirectly declare or make any Restricted Payment or Restricted Purchase, except
that so long as no Default hereunder then exists or would result therefrom, the
Borrower may make (a) payments of accrued and unpaid management fees, expenses
and accrued interest thereon, as of the Agreement Date totalling no more than
$2,000,000, (b) payment of previously deferred management fees, expenses and
accrued interest thereon, otherwise permitted under subsection (c) below, and
(c) current payments of management fees and expenses payable to the Manager
under the Management Agreement, provided that the total management fees paid in
any period do not exceed the following amounts:
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<PAGE>
<CAPTION>
Applicable Period Total Management Fees
----------------- ---------------------
<S> <C>
Agreement Date through $167,000
December 31, 1996
January 1, 1997 through $958,500
December 31, 1997
January 1, 1998 through $708,500
December 31, 1998
January 1, 1999 through $417,000
October 31, 1999
November 1 through $500,000
October 31 of each year thereafter
</TABLE>
<TABLE>
Section 7.8 Leverage Ratio. As of the end of any calendar
quarter, the Borrower shall not permit the Leverage Ratio for such quarter to
exceed the ratio for each quarter ended during the applicable period set forth
below:
<CAPTION>
Applicable Period Ratio
----------------- -----
<S> <C>
Agreement Date through March 31, 1997 6.60:1
April 1, 1997 through December 31, 1997 6.50:1
January 1, 1998 through December 31, 1998 6.25:1
January 1, 1999 through June 30, 1999 6.00:1
July 1, 1999 through December 31, 1999 5.50:1
January 1, 2000 through June 30, 2000 5.25:1
July 1, 2000 through December 31, 2000 4.75:1
January 1, 2001 through June 30, 2001 4.25:1
July 1, 2001 and thereafter 4.00:1
</TABLE>
Section 7.9 Interest Coverage Ratio. As of the end of any
calendar quarter, the Borrower shall not permit the ratio of (i) Operating Cash
Flow of Borrower for such quarter, to (ii) Total Interest Expense for such
quarter to be less than: (a) from the Agreement Date through June 30, 1997,
1.50:1, (b) from July 1, 1997 through December 31, 1997, 1.75:1, and (c) from
January 1, 1998 and each calendar quarter ending thereafter, 2.00:1.
Section 7.10 Annualized Operating Cash Flow to Pro Forma Debt
Service Ratio. As of the end of any calendar quarter, the Borrower shall not
permit the ratio of (i) Annualized Operating Cash Flow of Borrower for such
quarter, to (ii) Pro Forma Debt Service of Borrower to be less than 1.10:1.
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Page 213
<PAGE>
Section 7.11 Fixed Charges Coverage Ratio. From January 1, 1999
and thereafter the Borrower shall not, for any calendar quarter, permit the
ratio of (x) the sum of (a) Operating Cash Flow of Borrower for such quarter,
plus (b) cash on hand at the beginning of such quarter, to (y) Fixed Charges of
Borrower for such quarter, to be less than 1.00:1.
Section 7.12 Affiliate Transactions. The Borrower shall not, and
shall cause its Subsidiaries not to, at any time engage in any transaction with
an Affiliate (other than transactions between or among the Borrower and its
Subsidiaries), nor make an assignment or other transfer of any of its assets to
any Affiliate (other than between or among the Borrower and its Subsidiaries),
on terms less advantageous than would be the case if such transaction had been
effected with a non-Affiliate, except with respect to investments and loans
permitted under Section 7.2(a) and except as provided in the Management
Agreement with respect to the Borrower's relationship with the Manager. In
addition, the Borrower shall receive the benefit of any discounts, rebates or
special payment terms for pay television programming available to any Affiliate
which such Affiliate is permitted to pass through to the Borrower, but which are
not available to the Borrower from a non-Affiliate.
Section 7.13 Real Estate. Except for the property described on
Schedule 5 hereto, the Borrower and its Subsidiaries shall not, in the
aggregate, purchase or become obligated to purchase real estate other than
purchases of small parcels of real estate (which shall be acquired subject to a
Mortgage) in the ordinary course of business having a purchase price in an
amount not to exceed, for any single such parcel, $500,000 or, in the aggregate,
$2,000,000.
Section 7.14 Transfer of Interests. The Borrower shall not, and
shall cause its Subsidiaries not to, make or permit any transfer, assignment,
distribution, mortgage, pledge or gift of any shares of capital stock, limited
partner interest or any general partner interest or any other securities in the
Borrower or any of its Subsidiaries, or transfer the ultimate control of
Borrower or any of its Subsidiaries other than (i) in connection with mergers
permitted under Section 7.5(a)(iii), (ii) by way of transfer of ownership of one
or more of the Borrower's Subsidiaries to another wholly-owned Subsidiary of the
Borrower, and (iii) to the Administrative Agent on behalf of the Banks.
Section 7.15 ERISA Liabilities. The Borrower shall not, and
shall cause each of its Subsidiaries not to, fail to meet all of the applicable
minimum funding requirements of ERISA and the Code, without regard to any
waivers thereof, and, to the extent that the assets of any of their respective
Plans would be less than an amount sufficient to provide all accrued benefits
payable under such Plans, shall make the maximum deductible contributions
allowable under the Code. Neither the Borrower nor any of its Subsidiaries shall
become a participant in any Multiemployer Plan.
Section 7.16 Consolidated Tax Returns. The Borrower will not
file, or consent to the filing of, any consolidated income tax return with any
person other than a Subsidiary or the Parent Company or any other corporation
controlled by the Borrower.
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Page 214
<PAGE>
<TABLE>
Section 7.17 Capital Expenditures. The Borrower shall not make
Capital Expenditures in excess of the following amounts; provided, however that
unused amounts may be carried forward:
<CAPTION>
Applicable Period Maximum Capital Expenditures
----------------- ----------------------------
<S> <C>
Agreement Date through $31,000,000
December 31, 1997
January 1, 1998 through $29,000,000
December 31, 1998
January 1, 1999 and thereafter [Not Tested]
</TABLE>
ARTICLE 8
Default
Section 8.1 Events of Default. Each of the following shall
constitute an Event of Default, whatever the reason for such event and whether
it shall be voluntary or involuntary or be effected by operation of law or
pursuant to any judgment or order of any court or any order, rule or regulation
of any governmental or non-governmental body:
(a) Any material representation or warranty made or deemed made
under this Agreement shall prove incorrect or misleading in any material respect
when made or deemed made;
(b) The Borrower shall default (i) in the payment of any
interest under any of the Notes, or any reimbursement obligation with respect to
any Letter of Credit, or any fees due hereunder or under any other Loan
Document, and such Default shall not be cured by payment of such overdue amounts
in full within five (5) days from the date such payment became due; or (ii) in
the payment of any principal under any of the Notes when due;
(c) The Borrower shall default in the performance or observance
of any agreement or covenant contained in Sections 7.7, 7.9, 7.10, 7.11, or 7.17
hereof;
(d) The Borrower shall default in the performance or observance
of the agreement or covenant contained in Section 7.8 hereof; provided, that if
the Borrower, within fifteen (15) days from the date the financial statements
are delivered to the Administrative Agent pursuant to Sections 6.1 and 6.2
hereof, by using cash on hand or the proceeds of subordinated Indebtedness for
Money Borrowed (provided that such Indebtedness for Money Borrowed is
subordinated to the Obligations pursuant to the terms of a subordination
agreement in the form attached hereto as Exhibit Q) or the sale of additional
equity securities of the Borrower, reduces the amount of Total Debt then
outstanding as of the relevant calculation date to an amount that would not
cause a Default under Section 7.8, no Default or Event of Default shall be
deemed to have occurred; provided further, the Borrower may use the right to
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Page 215
<PAGE>
prevent a Default under Section 7.8 set forth in the preceding clause on not
more than two (2) occasions in non-consecutive quarters during the term of this
Agreement;
(e) The Borrower shall default in the performance or observance
of any other agreement or covenant contained in this Agreement not specifically
referred to elsewhere in this Section 8.1, and such default shall not be cured
to the Majority Banks' satisfaction evidenced in writing within a period of
thirty (30) days from the later of (i) the date of occurrence of such default,
or (ii) the date that the Borrower discovered such default;
(f) There shall occur any default in the performance or
observance of any agreement or covenant or breach of any representation or
warranty contained in any of the Loan Documents (other than this Agreement)
which shall not be cured to the Majority Banks' satisfaction evidenced in
writing within the lesser of (i) the applicable cure period, if any, provided
for in such Loan Document and (ii) a period of thirty (30) days from the later
of (a) the date of occurrence of such default, or (b) the date that the Borrower
discovered such default; or the Borrower or any of its Subsidiaries shall in any
way challenge, or any proceedings shall in any way be brought to challenge (and,
in the case of a proceeding brought by someone other than the Borrower or any of
its Subsidiaries shall continue unstayed for a period of forty-five (45) days),
the prior and perfected status of the Security Interest with respect to the
Collateral or the validity or enforceability of the Security Interest, or of any
other Loan Document which provides Collateral for the Obligations;
(g) There shall be any Lien, collateral assignment, security
interest, chattel mortgage or any other encumbrance on the equity or partnership
interests, as the case may be, of the Borrower or any of its Subsidiaries, other
than Liens of the type described in subparagraphs (a), (e) and (k) of the
definition of Permitted Liens;
(h) There shall be filed an involuntary petition under Title 11
of the United States Code, as now constituted or hereafter amended, in respect
of the Parent Company, Borrower or any of its Subsidiaries which shall remain
uncontroverted for a period of forty-five (45) consecutive days; or there shall
be entered a decree or order by a court having jurisdiction in the premises
constituting an order for relief in respect of the Parent Company, Borrower or
any of its Subsidiaries under Title 11 of the United States Code, as now
constituted or hereafter amended, or any other applicable Federal or state
bankruptcy law or other similar law, or appointing a receiver, liquidator,
assignee, trustee, custodian, sequestrator or similar official of the Parent
Company, Borrower or any of its Subsidiaries or of any substantial part of their
respective properties, or ordering the winding-up or liquidation of the affairs
of the Parent Company, Borrower or any of its Subsidiaries and any such decree
or order shall continue unstayed and in effect for a period of forty-five (45)
consecutive days;
(i) The Parent Company, Borrower or any of its Subsidiaries
shall file a petition, answer or consent seeking relief under Title 11 of the
United States Code, as now constituted or hereafter amended, or any other
applicable Federal or state bankruptcy law or other similar law, or the Parent
Company, Borrower or any of its Subsidiaries shall consent to the institution of
proceedings thereunder or to the filing of any such petition or to the
appointment or taking of possession of a receiver, liquidator, assignee,
trustee, custodian, sequestrator or other similar official of the
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Parent Company, Borrower or any of its Subsidiaries or of any substantial part
of their respective properties, or the Parent Company, Borrower or any of its
Subsidiaries shall fail generally to pay their respective debts as they become
due, or the Parent Company, Borrower or any of its Subsidiaries shall take any
action in furtherance of any such action;
(j) A final judgment shall be entered by any court against the
Borrower or any of its Subsidiaries for the payment of money which exceeds
$500,000, or a warrant of attachment or execution or similar process shall be
issued or levied against property of the Borrower or any of its Subsidiaries
which, together with all other such property of the Borrower or any of its
Subsidiaries subject to other such process, exceeds in value $500,000 in the
aggregate, and if, within thirty (30) days after the entry, issue or levy
thereof, such judgment, warrant or process shall not have been paid or
discharged 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;
(k) There shall be at any time any "accumulated funding
deficiency," as defined in ERISA or in Section 412 of the Internal Revenue Code,
with respect to any Plan maintained by the Borrower, any of its Subsidiaries or
any of their respective ERISA Affiliates, or to which the Borrower, any of its
Subsidiaries or any of their respective ERISA Affiliates has any liabilities, or
any trust created thereunder; or a trustee shall be appointed by a United States
District Court to administer any such Plan; or the Pension Benefit Guaranty
Corporation or any successor thereto shall institute proceedings to terminate
any such Plan; or the Borrower, any of its Subsidiaries or any of their
respective ERISA Affiliates shall incur any material liability to the Pension
Benefit Guaranty Corporation or any successor thereto in connection with any
such Plan; or any Plan or trust created under any Plan of the Borrower, any of
its Subsidiaries or any of their respective ERISA Affiliates shall engage in a
"prohibited transaction" (as defined in Section 4.1(m) hereof) which would
subject such Plan or any other Plan of the Borrower, any of its Subsidiaries or
any of their respective ERISA Affiliates, any trust created thereunder, or any
trustee or administrator thereof, or any party dealing with any such Plan or
trust to the tax or penalty on "prohibited transactions" imposed by Section 502
of ERISA or Section 4975 of the Internal Revenue Code; or the Borrower, any of
its Subsidiaries or any of their respective ERISA Affiliates shall enter into or
become obligated to contribute to a Multiemployer Plan;
(l) Any event shall occur which has a Materially Adverse Effect;
(m) The Manager shall for any reason cease providing management
to the Borrower and its Subsidiaries, there shall be a change of more than
twenty percent (20%) of the ownership of the Manager (other than changes in the
partnership percentages of the present partners), or the Management Agreement
shall cease to be in full force and effect or there shall be a material default
thereunder which default shall continue unremedied for a period of thirty (30)
days, or there shall occur a Change in Control;
(n) There shall occur any default under any material mortgage,
deed to secure debt, note, loan agreement, indenture, or other instrument of the
Borrower or any of its Subsidiaries evidencing Indebtedness for Money Borrowed,
which default is
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not cured within the applicable cure period and which results in acceleration
thereunder;
(o) Any License (other than a License for a portion of the
Systems having fewer than 1,500 basic subscribers or any License identified on
Schedule 2 hereto as not being a material license) shall be revoked and such
revocation shall not be cured, waived or stayed, or there shall occur a material
default under any such License which shall not have been cured or waived within
thirty (30) days of the occurrence thereof, or any proceedings shall in any way
shall be brought to challenge (and shall continue uncontested for a period of
thirty (30) days), the validity or enforceability of any such License, or any
such License shall expire due to termination, nonrenewal or for any other
reason; or
(p) There shall be any material change in the respective
percentage ownership interests of Subsidiaries held by the Borrower except in
connection with a sale of equity securities by the Borrower, and except that the
Borrower may transfer ownership of one or more of its wholly-owned Subsidiaries
to another wholly-owned Subsidiary of the Borrower.
Section 8.2 Remedies. If an Event of Default shall have occurred
and until such Event of Default shall have been waived in writing in accordance
with Section 11.13 hereof (or, if prior to acceleration or the exercise of any
other remedies hereunder, until such Event of Default shall have been cured):
(a) With the exception of an Event of Default specified in
Section 8.1(h) or 8.1(i), the Administrative Agent, at the request of the
Majority Banks, shall (i) terminate the Commitment, and (ii) declare the
principal of and interest on the Loans and the Notes and all other amounts owed
under this Agreement at such time by the Borrower (which shall not include fees
due under Section 2.4 hereof which have not accrued as of the date of such
declaration) to be forthwith due and payable without presentment, demand,
protest or notice of any kind, all of which are hereby expressly waived,
anything in this Agreement or in the Notes to the contrary notwithstanding, and
the Commitment shall forthwith terminate and all amounts hereunder shall then be
immediately due and payable.
(b) Upon the occurrence of an Event of Default specified in
Section 8.1(h) or Section 8.1(i), the principal of and interest on the Loans and
the Notes and all other amounts owed under this Loan Agreement at such time by
the Borrower (which shall not include fees due under Section 2.4 hereof which
have not accrued as of the date of such declaration) shall thereupon and
concurrently therewith automatically become due and payable and the Commitment
of the Banks shall automatically terminate, all without any action by the
Administrative Agent, the Managing Agents, or any of the Banks or any other
holder of the Notes and without presentment, demand, protest or other notice of
any kind, all of which are expressly waived, anything in this Agreement or in
the Notes to the contrary notwithstanding.
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(c) The Administrative Agent, on behalf of the Managing Agents
and the Banks, and with the concurrence of the Majority Banks may exercise all
of the post-default rights granted to it and to them under the Loan Documents or
under Applicable Law.
(d) Subject to the obtaining of any necessary consents from
appropriate federal, state and local governmental entities, the Administrative
Agent shall have the right (but not the obligation), on behalf of the Managing
Agents and the Banks, to operate the Systems in accordance with the terms of,
and subject to, the Licenses and any other Applicable Law and subject to any
limitations contained in the Loan Documents, and, within guidelines established
by the Majority Banks, to make any and all payments and expenditures necessary
or desirable in connection therewith, including, without limitation, payment of
wages as required under the Fair Labor Standards Act, as amended, and of any
necessary withholding taxes to state or federal authorities. In the event the
Majority Banks fail to agree upon the guidelines referred to in the preceding
sentence within ten (10) Business Days after the Administrative Agent has begun
to operate the Systems, the Administrative Agent may make such payments and
expenditures as it deems reasonable and advisable in its sole discretion to
maintain the normal day-to-day operation of the Systems. Such payments and
expenditures in excess of receipts shall constitute Advances under this
Agreement, notwithstanding any limitation that might otherwise be imposed on
Advances by the amount of the Commitment. Advances made pursuant to this Section
8.2(d) shall bear interest at the Default Rate for Base Rate Advances and shall
be payable on DEMAND. The making of one or more Advances under this Section
8.2(d) shall not create any obligation on the part of any of the Banks to make
any additional Advances hereunder. No exercise by the Administrative Agent, the
Managing Agents, or any of the Banks of the rights granted to them under this
Section 8.2(d) shall constitute a waiver of any other rights and remedies
granted to them under this Agreement, the Security Agreement, any other Loan
Document or at law. The Borrower hereby irrevocably appoints the Administrative
Agent, as agent for each of the Managing Agents and the Banks, the true and
lawful attorney of the Borrower, in its name and stead and on its behalf, to
execute, receipt for or otherwise act in connection with any and all contracts,
instruments or other documents in connection with the completion and operation
of the Systems in the exercise of the rights of each Bank under this Section
8.2(d).
(e) The rights and remedies of the Administrative Agent, the
Managing Agents and the Banks hereunder shall be cumulative, and not exclusive.
(f) Amounts collected by any Managing Agent or any Bank after
the acceleration of the Loans under this Section 8.2 shall be paid over
forthwith to the Administrative Agent, and any such amounts, together with any
other amounts received or collected hereunder or under any other Loan Document
by the Administrative Agent shall be applied in the following order of priority,
in accordance where applicable with the Commitment Ratios of the Banks (except
that payments under Section 9.3(b) shall be allocated to the Banks entitled to
such payments): (i) against the Administrative Agent's reasonable costs of
collection and counsel fees in obtaining such amounts; (ii) to the payment of
fees then due and payable in respect of the Loans; (iii) to the payment of
interest then due and payable on the Loans; (iv) to the payment of principal
then due and payable on Loans; (v) to the payment of all other amounts not
otherwise referred to in this Section 8.2(f) then due and payable
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hereunder; and (vi) to the Borrower or as otherwise required by Applicable Law.
For purposes of this Section 8.2(f), amounts due to the Administrative Agent,
the Managing Agents, the Banks, or any of them, or any affiliate of any of them,
pursuant to Interest Hedge Agreements shall be deemed to be principal amounts of
the Loans.
(g) In regard to all outstanding Letters of Credit with respect
to which presentment for draw shall not have occurred, the Borrower shall
promptly upon demand by the Administrative Agent (who shall act hereunder at the
request of the Majority Banks) deposit in an account opened by the
Administrative Agent and under its sole dominion and control for its benefit and
the benefit of each Bank an amount equal to one hundred percent (100%) of the
maximum amount currently or at any time thereafter available to be drawn on all
such Letters of Credit. The Borrower hereby grants the Administrative Agent, for
itself and for the ratable benefit of the Managing Agents and the Banks, a
security interest in, and right of setoff against, any and all amounts in such
accounts as security for the Borrower's reimbursement obligations with respect
to all outstanding Letters of Credit with respect to which amounts remain
available for draw by the beneficiary or beneficiaries thereof. Amounts held in
such account shall be applied by the Administrative Agent to the payment of
drafts drawn under such Letters of Credit, and the unused portion thereof after
such Letters of Credit shall have expired or been fully drawn upon, if any,
shall be applied to repay other Obligations next due in the manner set forth
herein. After all such Letters of Credit shall have expired or been fully drawn
upon, and all other Obligations shall have been paid in full, the balance, if
any, in such account shall be returned to the Borrower. Except as expressly
provided hereinabove, presentment, demand, protest and all other notices of any
kind are hereby expressly waived by the Borrower. In the event any such cash
collateralized Letters of Credit expire or are terminated undrawn, the cash
collateral therefor shall be returned forthwith to the Borrower.
ARTICLE 9
Change in Circumstances
Affecting Eurodollar Advances
Section 9.1 Eurodollar Basis Determination Inadequate. If after
the date hereof with respect to any proposed Eurodollar Advance for any Interest
Period, the Administrative Agent determines after consultation with the Banks
that deposits in dollars (in the applicable amount) are not being offered to
each of the Banks in the relevant market for such Interest Period, the
Administrative Agent shall forthwith give notice thereof to the Borrower and the
Banks, whereupon until the Administrative Agent notifies the Borrower that the
circumstances giving rise to such situation no longer exist, the obligations of
the Banks to make the effected type of Eurodollar Advances shall be suspended.
Section 9.2 Illegality. If, after the Agreement Date, any
applicable laws, rules or regulations, or any change therein, or any
interpretation or change in interpretation or administration thereof by any
governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Bank with any
request or directive (whether or not having the
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force of law) of any such authority, central bank or comparable agency, shall
make it unlawful or impossible for any Bank to make, maintain or fund its
Eurodollar Advances and such Bank shall so notify the Administrative Agent, the
Administrative Agent shall forthwith give notice thereof to the other Banks and
the Borrower. Upon receipt of such notice, notwithstanding anything contained in
Article 2 hereof, each affected Eurodollar Advance of such Bank, together with
accrued interest thereon, either (a) on the last day of the then current
Interest Period applicable to such Eurodollar Advance if such Bank may lawfully
continue to maintain and fund such Eurodollar Advance to such day or (b)
immediately, if such Bank may not lawfully continue to fund and maintain such
Eurodollar Advance to such day, shall automatically and without further action
by any party convert into a Base Rate Advance under the applicable Commitment,
in an amount equal to the amount of such Eurodollar Advance. Interest accrued on
such converted Eurodollar Advance shall be due and payable on the date such
interest would have been due and payable had such Eurodollar Advance not been
converted. Any penalties or extra costs required to be paid under Section 2.10
hereof or this Article 9 shall also be due and payable.
Section 9.3 Increased Costs.
(a) If after the Agreement Date, any applicable law, rule or
regulation, or any change therein, or any interpretation or change in
interpretation or administration thereof by any government authority, central
bank or comparable agency charged with the interpretation or administration
thereof or compliance by any Bank with any request or directive (whether or not
having the force of law) or any such authority, central bank or comparable
agency:
(1) shall subject any Bank to any tax, duty or other charge with
respect to its obligation to make Eurodollar Advances, or its
Eurodollar Advances, or shall change the basis of taxation of payments
to any Bank of the principal of or interest on its Eurodollar Advances
or in respect to any other amounts due under this Agreement, in respect
to its Eurodollar Advances or its obligation to make Eurodollar
Advances (except for taxes and changes in the tax on the overall net
income of such Bank); or
(2) shall impose, modify or deem applicable any reserve
(including, without limitation, any imposed by the Board of Governors
of the Federal Reserve System, but excluding any included in an
applicable Eurodollar Reserve Percentage or Domestic Reserve
Percentage), special deposit, capital adequacy, assessment or other
requirement or condition against the assets of, deposits with or for
the account of, or credit extended by, any Bank or shall impose on any
Bank or the Eurodollar interbank borrowing market any other condition
affecting its obligation to make such Eurodollar Advances or its
Eurodollar Advances;
and the result of any of the foregoing is, in the reasonable determination of
such Bank, to increase the cost to such Bank of making or maintaining any such
Eurodollar Advances, or to reduce the amount of any sum received by such Bank
under this Agreement or under its Note or Notes with respect thereto, then, on
the earlier of a date within fifteen (15) days after demand by such Bank or the
Maturity Date as the case may be, the Borrower agrees to pay to such Bank such
additional amount or amounts as will compensate such Bank for such increased
costs for the period
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commencing on the date that is fifteen (15) days from the date of such demand;
provided, however, that notwithstanding the foregoing, the Borrower will have
thirty (30) days to make such payments if the Borrower does not receive the
notices provided for below. Within sixty (60) days of such written demand by
such Bank, the Borrower may in its discretion provide a replacement bank or
banks for such Bank, which replacement bank or banks will be subject to the
approval of the Administrative Agent and the Majority Banks (which approval, in
each case, will not be unreasonably withheld), and shall take all necessary
actions to transfer the rights, duties and obligations of such Bank to such
replacement bank or banks within such 60-day period (including the payment in
full of all Obligations hereunder due to the Bank being replaced). A certificate
of such Bank setting forth the amount, and in reasonable detail the basis for
such Bank's determination of such amount, to be paid to such Bank by the
Borrower as a result of any event referred to in paragraphs (a)(1) or (2) above
shall, absent manifest error, be conclusive. Such certificate shall be delivered
to the Borrower by such Bank with each written demand for payment referenced
above. Each Bank further agrees that it shall use its best efforts to give the
Borrower thirty (30) days prior notice, and in any event give prompt notice, of
any event referred to in paragraphs (a)(1) or (2) above which may have the
effect of increasing the cost to such Bank of making or maintaining any such
Eurodollar Advances, or to reduce the amount of any sum received by the Bank
under this Agreement or under its Note or Notes with respect thereto, by an
amount which may be reasonably determined by such Bank to be material.
(b) A certificate of any Bank claiming compensation under this
Section 9.3, providing an explanation of the event giving rise to the claim, and
setting forth the additional amount or amounts to be paid to it hereunder and
calculations therefor in reasonable detail, shall be conclusive in the absence
of manifest error. In determining such amount, such Bank may use any reasonable
averaging and attribution methods. The foregoing notwithstanding, if any Bank
demands compensation under this Section 9.3, the Borrower may at any time, upon
at least five (5) Business Days' prior notice to such Bank, prepay in full the
then outstanding affected Eurodollar Advances of such Bank, together with
accrued interest thereon to the date of prepayment, along with any reimbursement
required under Section 2.10 hereof. Concurrently with prepaying such Eurodollar
Advances, the Borrower may, Articles 2 and 3 hereof notwithstanding, borrow a
Base Rate Advance, or a Eurodollar Advance not so affected, from such Bank, and
such Bank shall, if so requested, make such Advance in an amount equal to the
amount of the Eurodollar Advance. Interest accrued on such Eurodollar Advance
shall be due and payable on the date such interest would have been due had such
Eurodollar Advance not been so converted. Other amounts required under Section
2.10 hereof shall also then be due and payable.
Section 9.4 Effect On Other Advances. If notice has been given
pursuant to Section 9.1 or 9.2 suspending the obligation of any Bank to make any
type of Eurodollar Advance, or requiring Eurodollar Advances of any Bank to be
repaid or prepaid, then, unless and until such Bank notifies the Borrower that
the circumstances giving rise to such repayment no longer apply, all Advances
which would otherwise be made by such Bank as the type of Eurodollar Advances
affected shall, at the option of the Borrower, be made instead as Base Rate
Advances.
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ARTICLE 10
The Administrative Agent and the Managing Agents
Section 10.1 Appointment and Authorization. Subject only to
Section 10.12 hereof, each Bank hereby irrevocably appoints and authorizes, and
hereby agrees that it will require any transferee of any of its interest in its
Loans and in its Notes irrevocably to appoint and authorize, the Administrative
Agent and, to the extent provided herein, each of the Managing Agents, to take
such actions as its agents on its behalf and to exercise such powers hereunder
and under the other Loan Documents as are delegated by the terms hereof and
thereof, together with such powers as are reasonably incidental thereto. Neither
the Administrative Agent nor the Managing Agents, nor any of their respective
directors, officers, employees or agents shall be liable for any action taken or
omitted to be taken by them hereunder or in connection herewith, except for
their own gross negligence or wilful misconduct.
Section 10.2 Interest Holders. The Administrative Agent may
treat each Bank, or the Person designated in the last notice filed with the
Administrative Agent under this Section, as the holder of all of the interests
of such Bank in its Loans and in its Notes until written notice of transfer,
signed by such Bank (or the person designated in the last notice filed with the
Administrative Agent) and by the person designated in such written notice of
transfer, in form and substance satisfactory to the Administrative Agent, shall
have been filed with the Administrative Agent.
Section 10.3 Consultation with Counsel. The Administrative Agent
may consult with Paul, Hastings, Janofsky & Walker, Atlanta, Georgia, special
counsel to the Administrative Agent in connection with the Loan, or with other
legal counsel selected by them and shall not be liable for any action taken or
suffered by them in good faith, unless such action constitutes gross negligence
or wilful misconduct.
Section 10.4 Documents. The Administrative Agent shall be under
no duty to examine, inquire into, or pass upon the validity, effectiveness or
genuineness of this Agreement, any Note or any instrument, document or
communication furnished pursuant hereto or in connection herewith, and the
Administrative Agent shall be entitled to assume that they are valid, effective
and genuine, have been signed or sent by the proper parties and are what they
purport to be.
Section 10.5 Affiliates. With respect to the Commitment and the
Loans, the Managing Agents, the Administrative Agent and their respective
affiliates shall have the same rights and powers hereunder as any other Bank,
and the Managing Agents, the Administrative Agent and their respective
affiliates may accept deposits from, lend money to and generally engage in any
kind of business with the Parent Company, the Borrower, any of the Borrower's
Subsidiaries or any Affiliates of, or Persons doing business with, the Borrower
as if they were not also the Managing Agents, and the Administrative Agent or
affiliates thereof, respectively, and without any obligation to account
therefor. Each of the Administrative Agent and the Managing Agents has several
existing debt and equity relationships with Affiliates of the Borrower.
Section 10.6 Responsibility of the Administrative Agent. The
duties and obligations of the Administrative Agent under this Agreement are only
those expressly
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set forth in this Agreement. The Administrative Agent shall be entitled to
assume that no Default or Event of Default has occurred and is continuing unless
it has actual knowledge, or has been notified by the Borrower of such fact, or
has been notified by a Bank that such Bank considers that a Default or an Event
of Default has occurred and is continuing, and such Bank shall specify in detail
the nature thereof in writing. The Administrative Agent shall not be liable
hereunder for any action taken or omitted to be taken except for its own gross
negligence or wilful misconduct. The Administrative Agent shall provide each
Bank with copies of all documents received from the Borrower.
Section 10.7 Action by Administrative Agent.
(a) The Administrative Agent shall be entitled to use its
discretion vested in it under this Agreement with respect to exercising or
refraining from exercising any rights and with respect to taking or refraining
from taking any action or actions which it may be able to take under or in
respect of, this Agreement, unless the Administrative Agent shall have been
instructed by the Majority Banks to exercise or refrain from exercising such
rights or to take or refrain from taking such action; provided that the
Administrative Agent shall not exercise any rights under Section 8.2(a) of this
Agreement without the request of the Majority Banks. The Administrative Agent
shall incur no liability under or in respect of this Agreement with respect to
anything which it may do or refrain from doing in the reasonable exercise of its
judgment or which may seem to it to be necessary or desirable in the
circumstances, except for its gross negligence or wilful misconduct.
(b) The Administrative Agent shall not be liable to the Banks or
to any Bank in acting or refraining from acting under this Agreement in
accordance with the instructions of the Majority Banks (or, as provided in
Section 11.13 hereof, all Banks) and any action taken or failure to act pursuant
to such instructions shall be binding on all Banks.
(c) The Administrative Agent is hereby authorized to hold all
collateral pledged pursuant to the Loan Documents and to act on behalf of the
Managing Agents and the Banks, in its own capacity and through other agents and
sub-agents, either of them, under the Loan Documents, provided that the
Administrative Agent shall not agree to the release of any collateral, or any
property encumbered by any mortgage, pledge or security interest except in
compliance with Section 11.13 hereof.
Section 10.8 Notice of Default or Event of Default. In the event
that the Administrative Agent, any Managing Agent, or any Bank shall acquire
actual knowledge, or shall have been notified, of any Default or Event of
Default, the Administrative Agent, such Managing Agent, or such Bank shall
promptly notify the Banks, the other Managing Agents and the Administrative
Agent, and the Administrative Agent shall take such action and assert such
rights under this Agreement as the Majority Banks shall request in writing, and
the Administrative Agent shall not be subject to any liability by reason of its
acting pursuant to any such request. If the Majority Banks shall fail to request
the Administrative Agent to take action or to assert rights under this Agreement
in respect of any Default or Event of Default within ten (10) days after their
receipt of the notice of any Default or Event of Default, or shall request
inconsistent action with respect to such Default or Event of Default, the
Administrative Agent may, but shall not be required to, take such
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action and assert such rights (other than rights under Article 8 hereof) as it
deems in its discretion to be advisable for the protection of the Banks, except
that, if the Majority Banks have instructed the Administrative Agent not to take
such action or assert such right, in no event shall the Administrative Agent act
contrary to such instructions.
Section 10.9 Responsibility Disclaimed. The Administrative Agent
and the Managing Agents shall be under no liability or responsibility whatsoever
as Administrative Agent or Managing Agent, as the case may be:
(a) To the Borrower or any other person or entity as a
consequence of any failure or delay in performance by or any breach by, any Bank
or Banks of any of its or their obligations under this Agreement;
(b) To any Bank or Banks, as a consequence of any failure or
delay in performance by, or any breach by, the Borrower of any of its
obligations under this Agreement or the Notes or any other Loan Document; or
(c) To any Bank or Banks, for any statements, representations or
warranties in this Agreement, or any other document contemplated by this
Agreement or any information provided pursuant to this Agreement, any other Loan
Document, or any other document contemplated by this Agreement, or for the
validity, effectiveness, enforceability or sufficiency of this Agreement, the
Notes, any other Loan Document, or any other document contemplated by this
Agreement.
Section 10.10 Indemnification. The Banks agree to indemnify the
Administrative Agent (to the extent not reimbursed by the Borrower), pro rata
according to their respective Commitment Ratios, 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 the Administrative Agent in any way
relating to or arising out of this Agreement, any other Loan Document, or any
other document contemplated by this Agreement or any action taken or omitted by
the Administrative Agent under this Agreement, any other Loan Document, or any
other document contemplated by this Agreement, except that no Bank shall be
liable to the Administrative Agent for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from the gross negligence or wilful
misconduct of the Administrative Agent.
Section 10.11 Credit Decision. Each Bank represents and warrants
to each other Bank, to the Managing Agents, and to the Administrative Agent
that:
(a) In making its decision to enter into this Agreement and to
make its Advances it has independently taken whatever steps it considers
necessary to evaluate the financial condition and affairs of the Borrower and
that it has made an independent credit judgment, and that it has not relied upon
information provided by the Administrative Agent or any of the Managing Agents;
and
(b) So long as any portion of the Loans remain outstanding, it
will continue to make its own independent evaluation of the financial condition
and affairs of the Borrower.
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Section 10.12 Successor Administrative Agent. Subject to the
appointment and acceptance of a successor Administrative Agent as provided
below, the Administrative Agent may resign at any time by giving written notice
thereof to the Banks and the Borrower and may be removed at any time for cause
by the Majority Banks. Upon any such resignation or removal, the Majority Banks
shall have the right to appoint a successor Administrative Agent, subject (if no
Default or Event of Default then exists hereunder) to the consent of the
Borrower (which shall not be unreasonably withheld) in the event of the
appointment of a successor Administrative Agent which is not a Bank hereunder.
If no successor Administrative Agent shall have been so appointed by the
Majority Banks and shall have accepted such appointment within thirty (30) days
after the retiring Administrative Agent's giving of notice of resignation or the
Majority Banks' removal of the retiring Administrative Agent, then the retiring
Administrative Agent may, on behalf of the Banks, appoint a successor
Administrative Agent which shall be any Bank or, subject (if no Default or Event
of Default then exists hereunder) to the consent of the Borrower (which shall
not be unreasonably withheld) a commercial bank organized under the laws of the
United States of America or any political subdivision thereof which has combined
capital and reserves in excess of $250,000,000. Upon the acceptance of any
appointment as Administrative Agent hereunder by a successor Administrative
Agent, such successor Administrative Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges, duties and obligations of the
retiring Administrative Agent, and the retiring Administrative Agent shall be
discharged from any further duties and obligations hereunder other than as
provided in Section 11.16. After any retiring Administrative Agent's resignation
or removal hereunder as Administrative Agent, the provisions of this Article
shall continue in effect for its benefit in respect of any actions taken or
omitted to be taken by it while it was acting as the Administrative Agent.
Section 10.13 Administrative Agent May File Proofs of Claim. The
Administrative Agent may file such proofs of claim and other papers or documents
as may be necessary or advisable in order to have the claims of the
Administrative Agent (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Administrative Agent, its agents,
financial advisors and counsel) and the Banks allowed in any judicial
proceedings relative to the Borrower, any of its Subsidiaries, or any of its
creditors or property, and shall be entitled and empowered to collect, receive
and distribute any monies, securities or other property payable or deliverable
on any such claims, and any custodian in any such judicial proceedings is hereby
authorized by each Bank to make such payments to the Administrative Agent and,
in the event that the Administrative Agent shall consent to the making of such
payments directly to the Banks, to pay to the Administrative Agent any amount
due to the Administrative Agent for the reasonable compensation, expenses,
disbursements and advances of the Administrative Agent, its agents, financial
advisors and counsel, and any other amounts due the Administrative Agent under
Section 11.2 hereof. Nothing contained in this Agreement or the other Loan
Documents shall be deemed to authorize the Administrative Agent to authorize or
consent to or accept or adopt on behalf of any Bank any plan of reorganization,
arrangement, adjustment or composition affecting the Notes or the rights of any
holder thereof, or to authorize the Administrative Agent to vote in respect of
the claim of any Bank in any such proceeding.
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ARTICLE 11
Miscellaneous
Section 11.1 Notices.
(a) All notices and other communications under this Agreement
shall be in writing and shall be deemed to have been given upon the earlier of
receipt or three (3) Business Days from the date of deposit in the mail,
designated as certified mail, return receipt requested, post-prepaid, or one (1)
Business Day after being entrusted to a reputable commercial overnight delivery
service, or when delivered to the telegraph office or sent out by telex or
telecopy addressed to the party to which such notice is directed at its address
determined as provided in this Section 11.1 during the recipient's normal
business hours. When notes and other communications under this Agreement are
sent via telex, telegraph or telecopy, a copy of such notice or other
communication shall be sent by mail or commercial overnight delivery service as
provided above within one (1) Business Day thereafter. All notices and other
communications under this Agreement (other than with respect to routine
borrowings and repayments) shall be given to the parties hereto at the following
addresses:
(i) If to the Borrower, to it at:
GCI Cable, Inc.
2550 Denali Street
Suite 1000
Anchorage, Alaska 99503
Attn: John Lowber, Chief Financial Officer
Telephone: (907) 265-5600
Telecopier: (907) 265-5676
with copies to:
Bonnie J. Paskvan, Esq.
Hartig, Rhodes, Norman, Mahoney & Edwards
717 K Street
Anchorage, Alaska 99501-3397
Telephone: (907) 276-1592
Telecopier: (907) 277-4352
Prime II Management, Inc.
3000 One American Center
600 Congress Avenue
Austin, Texas 78701
Attn: President
Telephone: (512) 476-7888
Telecopier: (512) 476-4869
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Patrick K. Breeland, Esq.
Edens Snodgrass Nichols & Breeland, P.C.
2800 Franklin Plaza
111 Congress Avenue
Austin, TX 78701
Telephone: (512) 505-5906
Telecopier: (512) 505-5911
(ii) If to the Banks, to them at the
addresses set forth on Schedule 13
attached hereto;
(iii) If to the Administrative Agent, to it at:
Toronto Dominion (Texas), Inc.
909 Fannin, Suite 1700
Houston, Texas 77010
Attn: Vice President and Secretary
with a copy to:
Kevin Conboy, Esq.
Paul, Hastings, Janofsky & Walker
600 Peachtree Street, N.E.
Suite 2400
Atlanta, Georgia 30308-2222
Telephone: (404) 815-2211
Telecopier: (404) 815-2424
(iv) If to the Managing Agents, to them at
their addresses as Banks as set
forth on Schedule 13 attached
hereto
(b) Any party hereto may change the address to which notices
shall be directed under this Section 11.1 by giving ten (10) days' written
notice of such change to the other parties.
Section 11.2 Expenses.
The Borrower will promptly pay:
(a) all reasonable out-of-pocket expenses of the Administrative
Agent in connection with the preparation, negotiation, execution and delivery of
this Agreement and the other Loan Documents, and the transactions contemplated
hereunder and thereunder and the making of the initial Advance hereunder whether
or not such Advance is made, including, but not limited to, the reasonable fees
and disbursements of Paul, Hastings, Janofsky & Walker, special counsel for the
Administrative Agent;
(b) all reasonable out-of-pocket expenses of the Administrative
Agent in connection with the administration of the transactions contemplated in
this Agreement
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or the other Loan Documents, the restructuring, refinancing and "work-out" of
such transactions, and the preparation, negotiation, execution and delivery of
any waiver, amendment or consent by the Administrative Agent, the Managing
Agents and the Banks relating to this Agreement or the other Loan Documents,
including, but not limited to, the reasonable fees and disbursements of Paul,
Hastings Janofsky & Walker, special counsel for the Administrative Agent; and
(c) all reasonable costs and out-of-pocket expenses of obtaining
performance under this Agreement or the other Loan Documents and all reasonable
costs and out-of-pocket expenses of collection if default is made in the payment
of the Notes, which in each case shall include reasonable fees and expenses of
counsel for the Administrative Agent and administrative fees for the Managing
Agents and each Bank.
Section 11.3 Waivers. The rights and remedies of the
Administrative Agent, the Managing Agents, and the Banks under this Agreement
and the other Loan Documents shall be cumulative and not exclusive of any rights
or remedies which they or any of them would otherwise have. No failure or delay
by the Administrative Agent, the Managing Agents, the Majority Banks or the
Banks in exercising any right shall operate as a waiver of such right. The
Administrative Agent, the Managing Agents, and the Banks expressly reserve the
right to require strict compliance with the terms of this Agreement in
connection with any funding of any Advance. In the event the Banks decide to
fund a Request for Advance at a time when the Borrower is not in strict
compliance with the terms of this Agreement, such decision shall not be deemed
to constitute an undertaking by the Banks to fund any further Requests for
Advance or preclude the Banks from exercising any rights available to them under
the Loan Documents or at law or equity. Any waiver or indulgence granted by the
Banks or by the Majority Banks shall not constitute a modification of this
Agreement, except to the extent expressly provided in such waiver or indulgence,
or constitute a course of dealing by the Banks at variance with the terms of the
Agreement such as to require further notice by the Banks of the Banks' intent to
require strict adherence to the terms of the Agreement in the future. Any such
actions shall not in any way affect the ability of the Banks, in their
discretion, to exercise any rights available to them under this Agreement or
under any other agreement, whether or not the Banks are a party, relating to the
Borrower.
Section 11.4 Determination by Administrative Agent Presumptively
Correct and Binding. Absent manifest error, any determination required or
expressly permitted to be made by the Administrative Agent under this Agreement
shall be made by the Administrative Agent in good faith and, when made, shall be
presumptively correct and binding on the parties.
Section 11.5 Set-Off. In addition to any rights now or hereafter
granted under Applicable Law and not by way of limitation of any such rights,
upon the occurrence of an Event of Default and until such Event of Default is
waived in writing in accordance with Section 11.13 (or, if prior to acceleration
or the exercise of any other remedies under Section 8.2 hereof, until such Event
of Default is cured), the Banks and any subsequent holder or holders of the
Notes are hereby authorized by the Borrower at any time or from time to time,
without notice to the Borrower, or to any other Person, any such notice being
hereby expressly waived, to set off and to appropriate and to apply any and all
deposits (general or special, time or demand,
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including, but not limited to, Indebtedness evidenced by certificates of
deposit, in each case whether matured or unmatured) and any other Indebtedness
at any time held or owing by the Banks or such holder to or for the credit or
the account of the Borrower or any of its Subsidiaries, against and on account
of the obligations and liabilities of the Borrower to the Banks or such holder
under this Agreement, the Notes and any other Loan Document, including, but not
limited to, all claims of any nature or description arising out of or connected
with this Agreement, the Notes or any other Loan Document, irrespective of
whether or not (a) the Banks or the holder of the Notes shall have made any
demand hereunder or (b) the Banks shall have declared the principal of and
interest on the Loans and the Notes and other amounts due hereunder to be due
and payable as permitted by Section 8.2.
Section 11.6 Assignment.
(a) The Borrower may not assign or transfer any of its rights
nor delegate any of its obligations hereunder or under the Notes without the
prior written consent of each Bank.
(b) Each of the Banks may at any time enter into participation
or assignment agreements with one or more other Banks or other Persons pursuant
to which each Bank may sell participations in or assign its interests under this
Agreement and the other Loan Documents, provided, that unless otherwise agreed
to by the Borrower and the Administrative Agent, (1) all assignments and
participations (other than assignments described in clause (2) hereof) shall be
for no more than seventy-five percent (75%) of such Bank's interest hereunder,
and all assignments (other than assignments described in clause (2) hereof)
shall be in minimum principal amounts of Seven Million Five Hundred Thousand
Dollars ($7,500,000), (2) each Bank may sell assignments and participations of
up to one hundred percent (100%) of its interests hereunder to (a) one or more
affiliates of such Bank, or (b) any Federal Reserve Bank as collateral security
pursuant to Regulation A of the Board of Governors of the Federal Reserve System
and any Operating Circular issued by such Federal Reserve Bank, provided, that
no such assignment described in clause (b) shall relieve such Bank from its
obligations hereunder, and (3) all assignments (other than assignments described
in clause (2) hereof) and participations hereunder shall be subject to the
following additional terms and conditions:
(i) No assignment shall be sold without the consent
of the Administrative Agent and (so long as no Event of Default exists
hereunder) the Borrower, which consent shall not be unreasonably
withheld.
(ii) Any Person purchasing a participation or an
assignment of the Loans from any Bank shall be required to represent
and warrant that its purchase shall not constitute a "prohibited
transaction" (as defined in Section 4.1(m) hereof).
(iii) The Borrower, the Banks, the Managing Agents,
and the Administrative Agent agree that assignments permitted hereunder
(including the assignment of any Advance or portion thereof) may be
made with all voting rights, and shall be made pursuant to an
Assignment and Assumption Agreement in substantially the form attached
hereto as Exhibit A. An
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administrative fee of $2,500 shall be payable to the Administrative
Agent by the assigning Bank at the time of any assignment hereunder.
(iv) Each Bank agrees to provide the Administrative
Agent and the Borrower with prompt written notice of any issuance of
participations or assignments of its interests hereunder.
(v) No assignment, participation or other transfer
of any rights hereunder or under the Notes shall be effected that would
result in any interest requiring registration under the Securities Act
of 1933, as amended, or qualification under any state securities law.
(vi) Each Bank agrees that (x) no participation
agreement shall confer any rights under this Agreement or any other
Loan Document to any purchaser thereof, (y) no Person to which a
participation is issued shall have any right to exercise or enforce any
rights under this Agreement or under any other Loan Document, and (z)
any participation agreement permitted hereunder shall (a) (subject to
clause (vii) of this Section 11.6(b)) expressly provide that the issuer
thereof will at all times retain the right to vote or take any other
actions with respect to its interests hereunder for the full Commitment
Ratio assigned to such issuing Bank hereunder, both before and after
the occurrence of any Default, (b) expressly reserve the unqualified
right of such Bank to repurchase the participant's share of the Loans
at par at any time, and the right of the Borrower to repay in full the
amount of the issuing Bank's Note hereunder in the event the
participant fails to cooperate with the Borrower, the Administrative
Agent and the Banks, (c) contain an express representation by the
participant that it is purchasing such participation for its own
account and not as agent or trustee for any Plan or trust, and (d)
expressly prohibit the reassignment of any participation to any Person
other than the Administrative Agent or any of the Banks.
(vii) The participation may also provide that the
issuing Bank will not, without the consent of the participant, agree to
any modification, amendment or waiver of this Agreement which would (a)
forgive or otherwise reduce or extend the time of payment of principal
amount of or any payment of principal of or interest on the Loans, (b)
alter the amount of the Commitment, or the Commitment Ratios, (c)
reduce the amount of or delay the payment of fees (other than the fees
due the Administrative Agents and the Managing Agents hereunder)
hereunder or (d) release any Collateral, or agreements relating to any
security for the Loans, except as expressly provided herein.
(viii) The amount, terms and conditions of any
participations or assignments shall be as set forth in the
participation or assignment agreement between the issuing or assigning
Bank and the Person purchasing such participation or assignment, except
as provided in the Assignment and Assumption Agreement, and neither the
Borrower, the Administrative Agent, nor any Managing Agent, or any
other Bank shall have any responsibility or obligations with respect
thereto, or to any Person to whom such participation or assignment may
be issued.
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(ix) No such assignment may be made to any Bank or
other financial institution (x) with respect to which a receiver or
conservator (including, without limitation, the Federal Deposit
Insurance Corporation, the Resolution Trust Company or the Office of
Thrift Supervision) has been appointed or (y) that is not "adequately
capitalized" (as such term is defined in Section 131(b)(1)(B) of the
Federal Deposit Insurance Corporation Improvement Act as in effect on
the Agreement Date.
(c) Except specifically set forth in Section 11.6(b) hereof,
nothing in this Agreement or the Notes, expressed or implied, is intended to or
shall confer on any Person other than the respective parties hereto and thereto
and their successors and assignees permitted hereunder and thereunder any
benefit or any legal or equitable right, remedy or other claim under this
Agreement or the Notes.
Section 11.7 Accounting Principles. All references in this
Agreement to GAAP shall be to such principles as in effect from time to time.
All accounting terms used herein without definition shall be used as defined
under GAAP.
Section 11.8 Counterparts. This Agreement may be executed in
multiple counterparts, each of which shall be deemed to be an original, but all
such separate counterparts shall together constitute but one and the same
instrument.
Section 11.9 Governing Law. THIS AGREEMENT AND THE NOTES SHALL
BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW
YORK, WITHOUT REFERENCE TO THE CONFLICTS OR CHOICE OF LAW PRINCIPLES THEREOF.
Section 11.10 Severability. Any provision of this Agreement
which is prohibited or unenforceable in any jurisdiction shall be ineffective to
the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof in that jurisdiction or affecting the validity or
enforceability of such provision in any other jurisdiction.
Section 11.11 Interest and Charges. (a) No provision of this
Agreement, any Note, or any other Loan Document shall require the payment or
permit the collection of interest in excess of the maximum lawful rate permitted
by Applicable Law. If any excess amount of interest in such respect is provided
for, or shall be adjudicated to be so provided in connection with the Loans, the
provisions of this Section 11.11(a) shall govern and prevail, and neither the
Borrower nor any sureties, guarantors, successors or assigns of the Borrower
shall be obligated to pay the excess amount of such interest or any other excess
sum paid for the use, forbearance, or detention of sums loaned pursuant hereto.
In the event the Borrower ever pays, or any Bank ever receives, collects or
applies as interest, any such sum, such amount which would be in excess of the
maximum amount permitted by Applicable Law shall be applied as a payment in
reduction of the principal, unless the Borrower shall notify such Bank in
writing that it elects to have such excess returned forthwith; and, if the
principal has been paid in full, any remaining excess shall forthwith be
returned to the Borrower. Because of the variable nature of the rates of
interest that the Indebtedness evidenced by the Notes may bear, the total
interest that will accrue on any Note cannot be determined in advance. Neither
the Borrower nor any Bank intends for the Banks to contract for, charge or
receive usurious interest.
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(b) Notwithstanding the use by the Banks of the Base Rate and
the Eurodollar Rate as reference rates for the determination of interest on the
Loans, the Banks shall be under no obligation to obtain funds from any
particular source in order to charge interest to the Borrower at interest rates
tied to such reference rates, and may obtain funds in any manner they
respectively see fit. The provisions of this Agreement relating to the funding
and pricing of Advances hereunder are included only for the purpose of
conducting operations hereunder, and it is therefore understood that, regardless
of the manner selected by any Bank to fund Advances hereunder, all operations
hereunder, including without limitation the determination of the interest rate
applicable to any Advance and amounts payable hereunder, shall be conducted as
if each Bank had actually funded its Advance through the purchase of deposits in
like amount having terms coterminous with the applicable Interest Periods
relating thereto.
Section 11.12 Headings. Headings used in this Agreement are for
convenience only and shall not be used in connection with the interpretation of
any provision hereof.
Section 11.13 Amendment and Waiver. Neither this Agreement nor
any term hereof may be amended orally, nor may any provision hereof be waived
orally but only by an instrument in writing signed by the Majority Banks and, in
the case of an amendment, by the Borrower, except that in the event of (a) any
change in the amount of the Commitment, or in any Bank's Commitment Ratio (other
than by way of assignment pursuant to Section 11.6(b) hereof), (b) any change in
the terms of repayment of the Loans and Commitment reduction provided in
Sections 2.6 and 2.7 hereof, (c) any change in principal, interest or fees due
hereunder or postponement of the payment thereof, (d) any release or impairment
of the value of any portion of the Collateral for the Loans, except in
connection with a disposition of assets by the Borrower or any of its
Subsidiaries to the extent permitted under Section 7.5(a)(ii) hereof, (e) any
waiver of any Default due to the failure by the Borrower to pay any sum due
hereunder, (f) any change in the Manager, or (g) any amendment of Section
11.6(a), of this Section 11.13 or of the definition of Majority Banks, any
amendment or waiver or consent may be made only by an instrument in writing
signed by each of the Banks and, in the case of an amendment, by the Borrower.
Section 11.14 Entire Agreement. Except as otherwise expressly
provided herein, this Agreement and the other documents described or
contemplated herein embody the entire agreement and understanding between or
among any of the parties hereto and thereto and supersede all prior agreements
and understandings relating to the subject matter hereof and thereof between or
among any of the parties hereto.
Section 11.15 Other Relationships. No relationship created
hereunder or under any other Loan Documents shall in any way affect the ability
of the Administrative Agent, the Managing Agents, and each Bank to enter into or
maintain business relationships with the Borrower, the Manager or any of their
respective Affiliates beyond the relationships specifically contemplated by this
Agreement and the other Loan Documents.
Section 11.16 Loan Documents. All references to "Loan Agreement"
in each and every Loan Document shall hereafter refer to this Agreement, as the
same may be amended or modified from time to time. In addition, any references
in the
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Loan Documents (as defined in the Prior Loan Agreement) to specific provisions
of the Prior Loan Agreement are hereby amended by adopting the applicable
provisions, if any, set forth in this Agreement.
Section 11.17 Confidential Treatment. All agreements,
instruments, documents and other information received pursuant to this Agreement
or any other Loan Document by the Administrative Agent, the Managing Agents and
the Banks shall be held in confidence by the Administrative Agent, the Managing
Agents and the Banks, except for disclosures made (i) in connection with
assignments of or participations in the Loans made pursuant to Section 11.6
hereof (provided that such assignees or participants shall agree in writing to
keep such information confidential as provided herein), (ii) as otherwise
required to be disclosed by banking regulations, process of law, or other
Applicable Law, or to government regulators, (iii) of information received by
the Administrative Agent, a Managing Agent or a Bank without restriction as to
its disclosure or use from a Person who, to such Person's knowledge or
reasonable belief, was not prohibited from disclosing it by any duty of
confidentiality, (iv) in connection with litigation arising from this Agreement
or to which the Administrative Agent, a Managing Agent or a Bank is a party, (v)
of information which is or has become public (other than through unauthorized
disclosure by the Administrative Agent, a Managing Agent or a Bank), (vi) to the
attorneys, accountants, and other expert consultants for the Administrative
Agent, a Managing Agent or a Bank (who shall be requested to similarly hold such
information in confidence), or (vii) as otherwise permitted hereunder.
Section 11.18 Reliance on and Survival of Various Provisions.
Any right to indemnification hereunder, including, without limitation, rights
pursuant to Sections 2.10, 2.12, 5.12, 9.3, and 11.2 hereof accruing to parties
and former parties to this Agreement, shall survive the termination of this
Agreement and the payment and performance of all other Obligations; provided,
however, that upon the full payment and performance of all Obligations other
than such indemnification obligations, the Administrative Agent shall take such
reasonable measures as may be requested by the Borrower to release the Liens of
the Administrative Agent and the Banks on the Collateral.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed under seal by their duly authorized officers, all as of the day and
year first above written.
BORROWER: GCI CABLE, INC.
By: /s/ John M. Lowber
Its: Secretary/Treasurer
ADMINISTRATIVE TORONTO DOMINION (TEXAS), INC.
AGENT:
By: /s/ Jano Mott
Its: Vice President
T-D BANK: THE TORONTO DOMINION BANK, HOUSTON
AGENCY
By: /s/ Jano Mott
Its:
MANAGING TORONTO DOMINION (TEXAS), INC.
AGENTS:
By: /s/ Jano Mott
Its: Vice President
THE CHASE MANHATTAN BANK N.A.
By: /s/
Its:
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CREDIT LYONNAIS NEW YORK BRANCH
By: /s/ Mark D. Thorsheim
Its: Vice President
NATIONSBANK OF TEXAS, N.A.
By: /s/
Its: Senior Vice President
SYNDICATION NATIONSBANK OF TEXAS, N.A.
AGENT:
By: /s/
Its: Senior Vice President
DOCUMENTATION CREDIT LYONNAIS NEW YORK BRANCH
AGENT:
By: /s/ Mark D. Thorsheim
Its: Vice President
BANKS: TORONTO DOMINION (TEXAS), INC.
By: /s/ Jano Mott
Its: Vice President
THE CHASE MANHATTAN BANK N.A.
By: /s/
Its:
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CREDIT LYONNAIS NEW YORK BRANCH
By: /s/ Mark D. Thorsheim
Its: Vice President
NATIONSBANK OF TEXAS, N.A.
By: /s/
Its: Senior Vice President
THE BANK OF NEW YORK
By: /s/
Its: Vice President
BANQUE PARIBAS
By: /s/ Sonia Isaacs Harry Collyns
Its: Vice President Vice President
PNC BANK, NATIONAL ASSOCIATION
By: /s/ Ervine H. Geiger
Its: Banking Officer
THE FIRST NATIONAL BANK OF MARYLAND
By: /s/
Its: Senior Vice President
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EXHIBIT A
FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT
This Assignment and Assumption Agreement is made and entered into as of
the day of , 19 , by and among
(the "Assignor"), (the "Assignee"), GCI Cable, Inc., an
Alaska corporation (the "Borrower"), and Toronto Dominion (Texas), Inc. (the
"Administrative Agent").
RECITALS
A. Toronto Dominion (Texas), Inc., NationsBank of Texas, N.A.,
The Chase Manhattan Bank, N.A. and Credit Lyonnais Cayman Island Branch, as
managing agents (collectively, the "Managing Agents"); the Assignor and the
other Banks party thereto (the "Banks"); the Administrative Agent, as agent for
the Managing Agents and the Banks; and the Borrower are parties to that certain
Loan Agreement dated as of October 31, 1996 (as amended, supplemented or
modified from time to time, the "Loan Agreement"). Pursuant to the Loan
Agreement, the Banks have agreed to extend credit to the Borrower in an
aggregate principal amount not to exceed at any time outstanding the Commitment
(as defined in the Loan Agreement), of which the Assignor's commitment is the
amount specified in Item 1 of Schedule 1 hereto (the "Assignor's Commitment").
The aggregate principal amount of the outstanding Loan made by the Assignor to
the Borrower pursuant to the Assignor's Commitment is specified in Item 2 of
Schedule 1 hereto (the "Assignor's Loans"). All capitalized terms not otherwise
defined herein are used herein as defined in the Loan Agreement.
B. The Assignor wishes to sell and assign to the Assignee, and
the Assignee wishes to purchase and assume from the Assignor, (i) the portion of
the Assignor's Commitment specified in Item 3 of Schedule 1 hereto which is
equivalent to the percentage specified in Item 4 of Schedule 1 of the Commitment
(the "Assigned Commitment"), and (ii) a portion of the Assignor's Loan specified
in Item 5 of Schedule 1 hereto (the "Assigned Loan").
The parties agree as follows:
1. Assignment. Subject to the terms and conditions set forth
herein, the Assignor hereby sells and assigns to the Assignee, and the Assignee
hereby purchases and assumes from the Assignor, without recourse, (a) all right,
title and interest of the Assignor to the Assigned Loan and (b) all obligations
of the Assignor under the Loan Agreement with respect to the Assigned
Commitment. As full consideration for the sale of the Assigned Loan and the
Assigned Commitment, the Assignee shall pay to the Assignor the principal amount
of the Assigned Loan (the "Purchase Price").
2. Consent and Undertaking. The Borrower hereby consents to
the assignment made herein, and undertakes within five (5) Business Days from
the date hereof to provide new Notes to the Assignee and the Assignor,
reflecting the amount of the Assigned Commitment, and the Assignor's Commitment
less the Assigned Commitment, respectively, and the Assignor agrees on the
Business Day following receipt of its new Notes, to return its superseded Notes
to the Borrower.
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3. Representations and Warranties. Each of the Assignor and
the Assignee represents and warrants to the other that (a) it has full power and
legal rights to execute and deliver this Agreement and to perform the provisions
of this Agreement; (b) the execution, delivery and performance of this Agreement
have been authorized by all necessary action on its part, corporate or
otherwise, and do not violate any provisions of its charter or by-laws or any
contractual obligations or requirement of law binding on it; (c) that this
Agreement is not a "prohibited transaction," as such term is used in Section
4.1(m) of the Loan Agreement; and (d) this Agreement constitutes its legal,
valid and binding obligation, enforceable against it in accordance with its
terms.
4. Condition Precedent. The obligations of the Assignor and
the Assignee hereunder shall be subject to the fulfillment of the condition that
the Assignor shall have (i) received payment in full of the Purchase Price, and
(ii) complied with other applicable provisions of Section 11.6 of the Loan
Agreement.
5. Consent to be Bound. The Assignee acknowledges that it has
reviewed the terms and conditions of the Loan Agreement and the other Loan
Documents referred to in or delivered pursuant to the Loan Agreement, and
acknowledges and expressly agrees that it will be bound by the terms and
conditions of the Loan Agreement and the other Loan Documents.
6. Notice of Assignment. The Assignor agrees to give notice of
the assignment and assumption of the Assigned Loan and the Assigned Commitment
to the Administrative Agent and hereby instructs the Administrative Agent to
make payments with respect to the Assigned Loan and the Assigned Commitment
directly to the Assignee at the offices specified in Item 6 on Schedule 1 hereto
(which shall also be the Assignee's address for notices pursuant to Section 11.1
of the Loan Agreement); provided, however, that the Borrower and the
Administrative Agent shall be entitled to continue to deal solely and directly
with the Assignor in connection with the interest so assigned until (i) the
Administrative Agent shall have received a counterpart of this Agreement duly
executed by the Assignor, the Assignee and the Borrower, (ii) the Assignor shall
have delivered to the Borrower any Notes that shall be subject to such
assignment, and (iii) all other conditions set forth in Section 11.6(b) of the
Loan Agreement have been satisfied, including the receipt by the Administrative
Agent of the $2500 administrative fee referred to in clause (iii) thereof. From
and after the date (the "Effective Date") on which the Administrative Agent
shall notify the Borrower, the Assignee, and the Assignor that (i), (ii) and
(iii) shall have occurred and all consents (if any) required shall have been
given, the Assignee shall be deemed to be a party to the Loan Agreement and, to
the extent that rights and obligations thereunder shall have been assigned to
the Assignee as provided herein, shall have the rights and obligations of a Bank
under the Loan Agreement. After the Effective Date, (a) all interest, principal,
fees and other amounts that would otherwise be payable to the Assignor in
respect of the Assigned Loan and the Assigned Commitment shall be paid to the
Assignee, and (b) if the Assignor receives any payment on account of the
Assigned Loan or the Assigned Commitment, the Assignor shall hold such payment
for the benefit of the Assignee and shall promptly deliver it to the Assignee.
The Assignee agrees to deliver to the Borrower and the Administrative Agent such
Internal Revenue Service forms as may be required to establish that the Assignee
is entitled to receive payments under the Loan Agreement without deduction or
withholding of tax.
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7. Independent Investigation. The Assignee acknowledges that
it is purchasing the Assigned Loan and the Assigned Commitment from the Assignor
totally without recourse and, except as provided in Section 3 hereof, without
representation or warranty. The Assignee further acknowledges that it has made
its own independent investigation and credit evaluation of the Borrower in
connection with its purchase of the Assigned Loan and the Assigned Commitment.
Except for the representations or warranties set forth in Section 3 hereof, the
Assignee acknowledges that it is not relying on any representation or warranty
of the Assignor, expressed or implied, including without limitation, any
representation or warranty relating to the legality, validity, genuineness,
enforceability, collectability, interest rate, repayment schedule or accrual
status of the Assigned Loan or the Assigned Commitment, the legality, validity,
genuineness or enforceability of the Loan Agreement, the related Notes, or any
other Loan Document referred to in or delivered pursuant to the Loan Agreement,
or the financial condition or creditworthiness of the Borrower. The Assignor has
not and will not be acting as either the representative, agent or trustee of the
Assignee with respect to matters arising out of or relating to the Loan
Agreement or this Agreement. From and after the Effective Date, the Assignor
shall have no rights or obligations with respect to the Assigned Loan or the
Assigned Commitment.
8. Method of Payment. All payments to be made by any party
hereunder shall be in funds available at the place of payment on the same day
and shall be made by wire transfer to the account designated by the party to
receive payment.
9. Integration. This Agreement shall supersede any prior
agreement or understanding between the parties (other than the Loan Documents)
as to the subject matter hereof.
10. Counterparts; Etc. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original and
shall be binding upon the parties, and their respective successors and assigns.
11. Governing Law. This Agreement shall be governed by, and
construed in accordance with the laws of, the State of New York.
[ASSIGNOR]
By:
Title:
[ASSIGNEE]
By:
Title:
Acknowledged and agreed to:
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GCI CABLE, INC.
By:
Title:
and
TORONTO DOMINION (TEXAS), INC.,
as Administrative Agent
By:
Title:
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SCHEDULE 1
TO
ASSIGNMENT AND ASSUMPTION AGREEMENT
Loan Agreement
Among GCI Cable, Inc.
the Banks, the Managing Agents,
and the Administrative Agent
dated as of October 31, 1996
Item 1. Assignor's Commitment $
Item 2. Assignor's Loan $
consisting of:
Base Rate Advances $
Eurodollar Advances $
Item 3. Amount of Assigned Commitment $
Item 4. Assignee's Commitment Ratio _____%
Item 5. Amount of Assigned Loan $
consisting of:
Base Rate Advances $
Eurodollar Advances $
Item 6. Lending Office of Assignee
and Address for Notices
under Loan Agreement
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Notes to Schedule 1
1. Insert the dollar amount of Assignor's Commitment prior to
assignment.
2. Insert the total amount of outstanding Loan of Assignor,
showing breakdown by type. Description of the type of Loan should conform to the
description in the Loan Agreement.
3. Insert the dollar amount of the Assignor's Commitment,
including outstanding Loans, being assigned.
4. Assigned Commitment, as of a percentage of total
commitments of all lenders.
5. Insert the total amount of outstanding Loan of Assignor
being assigned to Assignee. Description of the type of Loans should be
consistent with Item 2.
6. Insert the name and address of the lending office of the
Assignee.
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EXHIBIT B
FORM OF ASSIGNMENT OF PARTNERSHIP INTERESTS
THIS ASSIGNMENT OF PARTNERSHIP INTERESTS (the "Assignment"), is made as
of the 31st day of October, 1996 by GCI Cable, Inc., an Alaska corporation (the
"Borrower"), and GCI Cable Holdings, Inc., an Alaska corporation ("GCI
Holdings") (the Borrower and GCI Holdings are also referred to collectively
herein as the "Partners" and individually as a "Partner") in favor of Toronto
Dominion (Texas), Inc., as administrative agent for the Banks and the Managing
Agents (the "Administrative Agent").
W I T N E S S E T H:
IN CONSIDERATION of the execution and delivery of a certain Loan
Agreement of even date (as amended, modified or supplemented from time to time,
the "Loan Agreement") among Borrower, the Administrative Agent, the Banks and
the Managing Agents pursuant to which the Banks have agreed to make loans (the
"Loans") to the Borrower; the sum of Ten and No/100 Dollars ($10.00) in hand
paid; and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged: (a) the Borrower hereby sells, assigns,
transfers, conveys and grants unto the Administrative Agent for itself and on
behalf of the Banks, the Managing Agents, and their respective successors and
assigns, all of its right, title and interest in and to, and a continuing
security interest in and security title to, its ninety-nine percent (99%)
general partner interest in the Prime Cable of Alaska, L.P., a Delaware limited
partnership (the "Partnership"); and (b) GCI Holdings hereby sells, assigns,
transfers, conveys and grants unto the Administrative Agent for itself and on
behalf of the Banks, the Managing Agents, and their respective successors and
assigns, all of its right, title and interest in and to, and a continuing
security interest in and security title to, its one percent (1%) limited partner
interest in the Partnership. Such assignment shall include, without limitation,
with respect to such general partner and limited partner interests, the right to
receive all proceeds, distributions of income, profits, surplus or other
compensation by way of income or liquidating distributions, in cash or in kind,
from the Partnership, including such right, title and interest now owned by such
Partner or which is hereafter acquired by it (the "Assigned Rights"), as
security for payment and performance of all obligations of such Partner to the
Administrative Agent, the Banks and the Managing Agents, or any of them, under
the Loan Agreement and other Loan Documents, including but not limited to the
Subsidiary Guaranty, or any extensions, renewals or amendments thereto, however
created, acquired, arising or evidenced, whether direct or indirect, absolute or
contingent, now or hereafter existing, or due or to become due (all of the
foregoing obligations being hereinafter collectively referred to as the "Senior
Debt").
TO HAVE AND TO HOLD UNTO the Administrative Agent, for the benefit of
itself and the Banks and the Managing Agents, and their successors and assigns
forever, upon and subject to the following terms and conditions:
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1. For purposes of this Assignment, capitalized terms used
herein shall have the meanings ascribed thereto in the Loan Agreement unless
otherwise defined herein.
2. Each Partner hereby constitutes and appoints the
Administrative Agent as its true and lawful attorney, in its name and stead upon
the occurrence and during the continuation of an Event of Default: (a) to
collect any and all distributions of cash and other assets due such Partner from
the Partnership or otherwise in respect of the Assigned Rights, and (b) to use
such measures, legal or equitable, as in its discretion may be deemed necessary
or appropriate to enforce the payment thereof to the Administrative Agent. The
power of attorney hereby created is coupled with an interest and is irrevocable
so long as any of the Senior Debt remains unpaid or any of the Banks shall have
an obligation to make Advances under the Loan Agreement.
3. The Administrative Agent is hereby granted full irrevocable
power and authority to hold, use and apply all cash and non-cash distributions
received by it upon the occurrence and during the continuation of an Event of
Default (together with all interest earned thereon) in full or partial payment
of the Senior Debt and may convert any such non-cash distributions to cash and
may apply the proceeds thereof in payment of charges or expenses incurred by the
Administrative Agent in connection with any and all things which the
Administrative Agent, the Banks and the Managing Agents may do or cause to be
done hereunder.
4. None of the Administrative Agent, the Banks and the
Managing Agents shall in any way be responsible for any failure to do any or all
of the things for which rights, interests, power and authority are herein
granted. The Administrative Agent, the Banks and the Managing Agents shall be
responsible only for the application of such cash or other property as they
actually receive under the terms hereof; provided, however, that the failure of
the Administrative Agent, the Banks and the Managing Agents, or any of them, to
do any of the things or exercise any of the rights, interests, powers and
authorities hereunder shall not be construed to be a waiver of any such rights,
interests, powers and authorities.
5. This Assignment shall not operate to place any
responsibility or obligation whatsoever upon the Administrative Agent, the Banks
and the Managing Agents, or any of them. None of the Administrative Agent, the
Banks and the Managing Agents shall have assumed any liability of a Partner or
of the Partnership as a result of this Assignment. Each Partner agrees to
protect, indemnify and save harmless the Administrative Agent, the Banks and the
Managing Agents from and against all liabilities, obligations, claims, damages,
penalties, causes of action, reasonable costs and expenses including, without
limitation, reasonable attorneys' fees and expenses (except as may arise from
the gross negligence or wilful misconduct of the Person seeking indemnification)
imposed upon or incurred by the Administrative Agent, the Banks and the Managing
Agents, or any of them, by reason of this Assignment and any claim and demand
whatsoever which may be asserted against the Administrative Agent, the Banks and
the Managing Agents, or any of them, by reason of any alleged obligation or
undertaking to be performed or discharged by the Administrative Agent, the Banks
and the Managing Agents, or any of them, under this Assignment. In the event the
Administrative Agent, the Banks and the Managing
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Agents, or any of them, incurs any liability, loss or damage by reason of this
Assignment, or in curing any default or breach by any Partner of its obligations
under any agreement related to the Partnership ("Partnership Agreements"), or in
the defense of any claims or demands arising out of or in connection with this
Assignment, the amount of such liability, loss or damage shall be added to the
Senior Debt (except to the extent such liabilities, losses or damages arise from
the gross negligence or willful misconduct of the Person incurring such
liabilities, losses or damages).
6. Each Partner agrees to execute, deliver and record, upon
the request of the Administrative Agent, any and all instruments reasonably
requested by the Administrative Agent to carry these presents into effect or to
accomplish any other purpose deemed by the Administrative Agent to be necessary
or appropriate in connection with these presents, expressly including UCC-l
Financing Statements.
7. Each Partner hereby warrants and represents that the copies
of the Partnership Agreement of the Partnership furnished to the Administrative
Agent, the Banks and the Managing Agents are true, complete and correct copies
of such Partnership Agreement, as amended through the date hereof; that such
Partnership Agreement is unmodified since the date of the last modification as
reflected in such copy of the Partnership Agreement and in full force and
effect; that the Assigned Rights have not been heretofore sold, assigned,
transferred, set over or encumbered by any instrument now in force, and will not
at any time during the term of this Assignment be sold, assigned, transferred,
set over or encumbered by it or by any Person or Persons whomsoever, without the
prior written consent of the Administrative Agent; that the Assigned Rights are
all of such rights such Partner has arising from its partnership interests in
the Partnership and that percentage interests of such Partner in the Partnership
are as set forth on the first page hereof; that such Partner has the right to
sell, assign, transfer, set over and encumber the Assigned Rights to the
Administrative Agent and to grant to and confer upon the Administrative Agent
the Assigned Rights; that such Partner is not at present in default in any
material respect under the Partnership Agreement; and that all actions,
approvals and consents required by Applicable Law or by any agreement to which
such Partner or any Partnership is a party have been obtained.
8. Each Partner hereby agrees that it will not, except as
permitted under the Loan Agreement, at any time during the term of this
Assignment, convey or encumber any of its interests, including, without
limitation, the Assigned Rights, in the Partnership in any manner whatsoever or
consent to any departure from or any modification or amendment to the
Partnership Agreement (except as permitted in the Loan Agreement), or consent to
the admission of any new general partner or consent to any change in the
business of the Partnership (except as permitted in the Loan Agreement), without
the prior written consent of the Administrative Agent. Each Partner agrees that
it will perform all its obligations as a general and limited partner, as the
case may be, under the Partnership Agreement and that it will do all things
necessary to maintain its interests in the Partnership in full force and effect.
9. In the event any Partner receives any payment or other
distribution of any kind or character from the Partnership or from any other
source whatsoever in
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respect of such Partner's interest in the Partnership, such payments or other
distributions shall be received in trust for the Administrative Agent, the Banks
and the Managing Agents and shall be promptly turned over by such Partner to the
Administrative Agent. Each Partner will mark its books and records, so as to
clearly indicate that such Partner's rights as a general partner and a limited
partner of the Partnership is subject to the terms of this Assignment.
10. This Assignment and the rights hereunder shall inure to
the benefit of the Administrative Agent, the Banks and the Managing Agents, and
may be assigned in whole or in part by the Administrative Agent, the Banks and
the Managing Agents in connection with any assignment of the Loan Agreement or
the Indebtedness evidenced thereby, as is permitted thereunder, and shall be
binding upon each Partner and its respective successors and assigns.
11. Notwithstanding anything herein to the contrary, it is
understood and agreed that although this Assignment is and shall be effective as
of the date hereof, no right or power granted hereunder or obligation under
Section 9 hereof shall be exercised or enforced by the Administrative Agent
unless and until an Event of Default, as hereinafter specified, shall occur and
be continuing hereunder. It is the intention of the parties hereto that
beneficial ownership of the Assigned Rights, including, without limitation, all
voting, consensual and distribution rights, shall remain in each Partner until
an Event of Default, shall occur and be continuing. Any Event of Default under
the Loan Agreement shall constitute an "Event of Default" hereunder. Upon the
occurrence of any Event of Default, the Administrative Agent may exercise such
rights and remedies as are provided in the Loan Agreement and in this
Assignment. The rights and remedies granted hereunder shall be cumulative, and
not exclusive. Each Partner expressly agrees that none of the Administrative
Agent, the Banks and the Managing Agents shall in any event be under any
obligation to resort to any right or remedy hereunder prior to exercising any
other rights any of them may have against such Partner or the Borrower or any
other Person to secure repayment of the Obligations, nor shall the
Administrative Agent, the Banks or the Managing Agents be required to resort to
any such other rights prior to the exercise of rights and remedies hereunder.
12. Subject to Section 15 below, for so long as any of the
Obligations shall remain unpaid and after the occurrence and during the
continuation of an Event of Default, the Administrative Agent may exercise all
ownership or consensual rights pertaining to the Assigned Rights of each Partner
and may notify and instruct the Partnership to thereafter make all payments
otherwise due such Partner in respect of the Assigned Rights payable directly to
the Administrative Agent, and the Administrative Agent shall have the right to
apply such payments in reduction of the Obligations. Each Partner hereby
appoints the Administrative Agent as such Partner's true and lawful
attorney-in-fact at such times to exercise such ownership or consensual rights
pertaining to the Assigned Rights in any manner the Administrative Agent deems
advisable for or against all matters with respect to the Partnership. The power
of attorney granted h
ereby is coupled with an interest and shall be irrevocable
so long as any of the Senior Debt remains unpaid or any of the Banks shall have
an obligation to make Advances under the Loan Agreement.
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13. Each Partner undertakes and agrees, in connection herewith, to
deliver to the Administrative Agent a copy of any notice or mailing received by
such Partner from the Partnership, at the address of the Administrative Agent
given for notices in Section 11.1 of the Loan Agreement.
14. In addition to their rights and privileges under this Assignment,
the Administrative Agent, the Banks and the Managing Agents shall have all of
the rights, powers and privileges of a secured party under the Uniform
Commercial Code as in effect in any applicable jurisdiction.
15. Notwithstanding anything herein which may be construed to the
contrary, no action shall be taken by any of the Administrative Agent, the
Managing Agents or the Banks with respect to the Licenses or any license of the
Federal Communications Commission ("FCC") unless and until all requirements of
Applicable Law, including, without limitation, any required approval of either
of the Alaska Public Utilities Commission or the U.S. Government (together the
"Licensors") and any required approval under the Federal Communications Act of
1934, and any applicable rules and regulations thereunder, requiring the consent
to or approval of such action by either of the Licensors, the FCC or any other
governmental or other authority, have been satisfied. Each Partner covenants
that upon request of the Administrative Agent it will cause to be filed such
applications and take such other action as may be requested by such Person or
Persons to obtain consent or approval of either of the Licensors, the FCC or any
other governmental or other authority which has granted any License to such
Partner to any action contemplated by this Agreement and to give effect to the
security interest of the Administrative Agent, including, without limitation,
the execution of an application for consent by the FCC to an assignment or
transfer involving a change in ownership or control pursuant to the provisions
of the Federal Communications Act of 1934. To the extent permitted by Applicable
Law, the Administrative Agent is hereby irrevocably appointed the true and
lawful attorney-in-fact of each Partner, in its name and stead, to execute and
file all necessary applications with the Licensors, the FCC and with any other
governmental or other authority. The power of attorney granted herein is coupled
with an interest and shall be irrevocable for so long as any of the Obligations
remains unpaid or unperformed or any of the Banks have any obligation to make
Advances under the Loan Agreement, regardless of whether the conditions
precedent to the making of any such Advances has been or can be fulfilled.
16. This Assignment shall be deemed to be made pursuant to the
internal laws of the State of New York with respect to agreements made and to be
performed wholly within the State of New York and shall be construed,
interpreted, performed and enforced in accordance therewith.
17. This Assignment may be executed in multiple counterparts, each of
which shall be deemed to be an original, but all such separate counterparts
shall together constitute but one and the same instrument.
18. Upon payment in full of all principal and interest on the Notes,
full performance by the Borrower of all covenants, undertakings and obligations
under the Loan Agreement, the Notes, and the other Loan Documents, and
satisfaction in full of
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any other Obligations and termination of the Commitments, other than the
Obligations which survive the termination of the Loan Agreement as provided in
Section 11.18 of the Loan Agreement, the Administrative Agent shall return its
interest in the Assigned Rights to the Partners.
19. Each Partner further agrees to assign and grant security title
to, and a security interest in, any partnership interests obtained by such
Partner after the date hereof. Each Partner agrees to execute, deliver and
record any amendments hereto, documents, instruments, and financing statements
deemed by the Administrative Agent to be necessary or appropriate to create or
perfect the security interest described in the foregoing sentence.
[the remainder of this page is intentionally blank]
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IN WITNESS WHEREOF, the undersigned Partner and the Administrative
Agent have caused this instrument to be executed by their duly authorized
representatives as of the day and year first above written.
PARTNERS: GCI CABLE, INC.
By: /s/ John M. Lowber
Its: Secretary/Treasurer
GCI CABLE HOLDINGS, INC.
By: /s/ John M. Lowber
Its: Secretary/Treasurer
ADMINISTRATIVE AGENT: TORONTO DOMINION (TEXAS), INC.
By: /s/ Jano Mott
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EXHIBIT C
FORM OF BORROWER'S PLEDGE AGREEMENT
THIS BORROWER'S PLEDGE AGREEMENT (the "Agreement"), is entered into as
of this 31st day of October, 1996, by and between GCI Cable, Inc., an Alaska
corporation (the "Borrower") in favor of Toronto Dominion (Texas), Inc., a
Delaware corporation, as administrative agent and on behalf of the Managing
Agents and the Banks (the "Administrative Agent").
W I T N E S S E T H:
WHEREAS, the Borrower, the Administrative Agent, the Managing Agents
and the Banks have entered into that certain Loan Agreement dated as of October
31, 1996 (as amended, modified or supplemented from time to time, the "Loan
Agreement") pursuant to which the Banks have agreed to make loans (the "Loans")
to the Borrower; and
WHEREAS, to secure the payment and performance of, among other things,
all obligations of the Borrower under the Loan Agreement, the promissory notes
issued by the Borrower to the Banks thereunder (as they may be modified, amended
or replaced, the "Notes") and the other Loan Documents, the Borrower, the
Administrative Agent, the Banks and the Managing Agents have agreed that the
shares of capital stock (the "Stock") owned by the Borrower in GCI
Cable/Fairbanks, Inc., an Alaska corporation; GCI Cable/Juneau, Inc., an Alaska
corporation; and GCI Cable Holdings, Inc., an Alaska corporation, which are all
directly-owned Subsidiaries of the Borrower (the "Subsidiaries"), shall be
pledged by the Borrower to the Administrative Agent to secure the Obligations
(as defined below);
NOW, THEREFORE, in consideration of the foregoing premises and for
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereto agree that capitalized terms used herein
shall have the meanings ascribed to them in the Loan Agreement to the extent not
otherwise defined or limited herein, and further agree as follows:
1. Warranty. The Borrower hereby represents and warrants to
the Administrative Agent, the Banks and the Managing Agents, that except for the
security interest created hereby, the Borrower owns the Stock, which is all of
the issued and outstanding stock of each of the Subsidiaries, free and clear of
all Liens, that the Stock is duly issued, fully paid and non-assessable, and
that the Borrower has the unencumbered right to pledge the Stock.
2. Security Interest. The Borrower hereby unconditionally
grants and assigns to the Administrative Agent, for itself and on behalf of the
Banks and the Managing Agents, and their respective successors and assigns, a
continuing security interest in and security title to the Stock. The Borrower
has delivered to and
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deposited with the Administrative Agent herewith all of its right, title and
interest in and to the Stock, together with certificates representing the Stock,
and stock powers endorsed in blank, as security for (a) payment and performance
of all obligations of the Borrower to the Administrative Agent, the Banks and
the Managing Agents, or any of them, under the Loan Agreement, the Notes and the
other Loan Documents (including, without limitation, any Interest Hedge
Agreements between the Borrower, on the one hand, and the Administrative Agent,
the Managing Agents and the Banks, or any of them, on the other hand, and any
interest, fees and other charges in respect of the Notes, and the other Loan
Documents that would accrue but for the filing of a bankruptcy action with
respect to the Borrower, whether or not such claim is allowed in such bankruptcy
action), as the same may be amended from time to time, or as a result of making
the Loans; (b) payment of any and all damage which the Administrative Agent, the
Banks and the Managing Agents, or any of them, may suffer by reason of a breach
of any obligation, covenant or undertaking with respect to this Agreement, the
Loan Agreement, the Notes, or any other Loan Document by the Borrower or any
other obligor thereunder (except as may arise from the gross negligence or
wilful misconduct of any such Person); and (c) the obligations of any obligor to
the Administrative Agent, the Administrative Agent, the Banks and the Managing
Agents, or any of them, under this Agreement, the Loan Agreement, the Notes and
the other Loan Documents or as a result of making the Loans and any extensions,
renewals or amendments of any of the foregoing, however created, acquired,
arising or evidenced, whether direct or indirect, absolute or contingent, now or
hereafter existing, or due or to become due (except as may arise from the gross
negligence or wilful misconduct of any such Person) (all of the foregoing
obligations (a), (b), and (c) being hereinafter collectively referred to as the
"Obligations"); it being the intention of the parties hereto that beneficial
ownership of the Stock, including, without limitation, all voting, consensual
and dividend rights, shall remain in the Borrower until the occurrence of a
Default (as defined in Section 4 below) under the terms hereof and until the
Administrative Agent shall notify the Borrower of the Administrative Agent's
exercise of voting and dividend rights to the Stock pursuant to Section 9 of
this Agreement.
3. Additional Shares. In the event that, during the term of
this Agreement:
(a) any stock dividend, stock split,
reclassification, readjustment, or other change is declared or made in
the capital structure of any Subsidiary, all new, substituted, and
additional shares, or other securities, issued by reason of any such
change and received by the Borrower or to which the Borrower shall be
entitled shall be promptly delivered to the Administrative Agent,
together with stock powers endorsed in blank by the Borrower, and shall
thereupon constitute Stock to be held by the Administrative Agent under
the terms of this Agreement; and
(b) any subscriptions, warrants or any other rights
or options shall be issued in connection with the Stock, all new stock
or other securities acquired through such subscriptions, warrants,
rights or options by the Borrower shall be promptly delivered to the
Administrative Agent and shall
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thereupon constitute Stock to be held by the Administrative Agent under
the terms of this Agreement.
4. Default. In the event of the occurrence of an Event of
Default under the terms of the Loan Agreement and so long as any such Event of
Default is continuing (any of such occurrences being herein referred to as a
"Default"), subject to Section 13 hereof, the Administrative Agent may sell or
otherwise dispose of the Stock at a public or private sale or make other
commercially reasonable disposition of the Stock or any portion thereof after
ten (10) days' notice to the Borrower and the Administrative Agent, any Bank or
any Managing Agent may purchase the Stock or any portion thereof at any public
sale. The proceeds of the public or private sale or other disposition shall be
applied to the reasonable costs of the Administrative Agent, the Banks and the
Managing Agents incurred in connection with the sale, including, without
limitation, any costs under Section 7(a) hereof. In the event the proceeds of
the sale or other disposition of the Stock are insufficient to satisfy the
Obligations, the Borrower shall remain liable for any such deficiency.
5. Additional Rights of Secured Party. In addition to its
rights and privileges under this Agreement, the Administrative Agent, for itself
and for the ratable benefit of each of the Banks and the Managing Agents, shall
have all the rights, powers and privileges of a secured party under the Uniform
Commercial Code as in effect in any applicable jurisdiction.
6. Return of Stock to the Borrower. Upon payment in full of
all principal and interest on the Notes, full performance by the Borrower of all
covenants, undertakings and obligations under the Loan Agreement, the Notes, and
the other Loan Documents, and satisfaction in full of any other Obligations,
other than the Obligations which survive the termination of the Loan Agreement
as provided in Section 11.18 of the Loan Agreement, the then remaining Stock and
all rights received by the Administrative Agent as a result of its possessory
interest in the Stock shall be returned to the Borrower.
7. Disposition of Stock by Administrative Agent. The Stock is
not registered or qualified under the various Federal or state securities laws
of the United States and disposition thereof after Default may be restricted to
one or more private (instead of public) sales in view of the lack of such
registration. The Borrower understands that upon such disposition, the
Administrative Agent may approach only a restricted number of potential
purchasers and further understands that a sale under such circumstances may
yield a lower price for the Stock than if the Stock was registered and qualified
pursuant to Federal and state securities legislation and sold on the open
market. The Borrower, therefore, agrees that:
(a) if the Administrative Agent shall, pursuant to
the terms of this Agreement, sell or cause the Stock or any portion
thereof to be sold at a private sale, the Administrative Agent shall
have the right to rely upon the advice and opinion of any unaffiliated
national brokerage or investment firm having recognized expertise and
experience in connection with shares of cable companies and other
similar companies (but shall not be obligated to seek such advice and
the failure to do so shall not be considered in determining the
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commercial reasonableness of such action) as to the best manner in
which to expose the Stock for sale and as to the best price reasonably
obtainable at the private sale thereof; and
(b) that such reliance shall be presumptive evidence
that the Administrative Agent has handled such disposition in a
commercially reasonable manner.
8. Borrower's Obligations Absolute. The obligations of the
Borrower under this Agreement shall be direct and immediate and not conditional
or contingent upon the pursuit of any remedies against any other Person, nor
against other security or liens available to the Administrative Agent, the Banks
and the Managing Agents, or any of them, or any of their respective successors,
assigns or agents. The Borrower hereby waives any right to require that an
action be brought against any other Person or to require that resort be had to
any security or to any balance of any deposit account or credit on the books of
the Administrative Agent or any of the Banks or the Managing Agents in favor of
any other Person prior to the exercise of remedies hereunder, or to require
action hereunder prior to resort by the Administrative Agent or any of the Banks
or the Managing Agents to any other security or collateral for the Notes and the
other Obligations.
9. Voting Rights.
(a) For so long as the Notes or any other Obligations
remain unpaid, after and during the continuation of a Default, but
subject to the provisions of Section 13 hereof, (i) the Administrative
Agent may, upon ten (10) days' prior written notice to the Borrower of
its intention to do so, exercise all voting rights, and all other
ownership or consensual rights of the Stock, but under no circumstances
is the Administrative Agent obligated by the terms of this Agreement to
exercise such rights, and (ii) the Borrower hereby appoints the
Administrative Agent, which appointment shall be effective on the 10th
day following the giving of notice by the Administrative Agent as
provided in the foregoing Section 9(a)(i), the Borrower's true and
lawful attorney-in-fact and IRREVOCABLE PROXY to vote the Stock in any
manner the Administrative Agent deems advisable for or against all
matters submitted or which may be submitted to a vote of shareholders.
The power-of-attorney granted hereby is coupled with an interest and
shall be irrevocable so long as any of the Senior Debt remains unpaid
or any of the Banks shall have an obligation to made Advances under the
Loan Agreement.
(b) For so long as the Borrower shall have the right
to vote the Stock, the Borrower covenants and agrees that it will not,
without the prior written consent of the Administrative Agent, vote or
take any consensual action with respect to the Stock which would
constitute a Default.
10. Notices. All notices and other communications required or
permitted hereunder shall be in writing and shall be given in a manner
prescribed and to the addresses set forth in Section 11.1 of the Loan Agreement.
General Communication, Inc. - Form 8-K
Page 254
<PAGE>
11. Governing Law, Etc. The provisions of this Agreement shall
be construed and interpreted, and all rights and obligations of the parties
hereto determined, in accordance with the laws of the State of New York without
reference to the conflicts or choice of law principles thereof. This Agreement,
together with all documents referred to herein and the Loan Agreement,
constitutes the entire agreement between the parties with respect to the matters
addressed herein, and may not be modified except by a writing executed by the
Administrative Agent and the Borrower and delivered by the Administrative Agent
to the Borrower.
12. Severability. If any paragraph or part hereof shall for
any reason be held or adjudged to be invalid, illegal, or unenforceable by any
court of competent jurisdiction, such paragraph or part hereof so adjudicated
invalid, illegal or unenforceable shall be deemed separate, distinct and
independent, and the remainder of this Agreement shall remain in full force and
effect and shall not be affected by such holding or adjudication.
13. FCC Consent. Notwithstanding anything herein which may be
construed to the contrary, no action shall be taken by any of the Administrative
Agent, the Managing Agents or the Banks with respect to the Licenses or any
license of the Federal Communications Commission ("FCC") unless and until all
requirements of Applicable Law, including, without limitation, any required
approval of either of the Alaska Public Utilities Commission or the U.S.
Government (together the "Licensors") and any required approval under the
Federal Communications Act of 1934, and any applicable rules and regulations
thereunder, requiring the consent to or approval of such action by either of the
Licensors, the FCC or any other governmental or other authority, have been
satisfied. The Borrower covenants that upon request of the Administrative Agent
it will cause to be filed such applications and take such other action as may be
requested by such Person or Persons to obtain consent or approval of either of
the Licensors, the FCC or any other governmental or other authority which has
granted any License to the Borrower to any action contemplated by this Agreement
and to give effect to the Security Interest of the Administrative Agent,
including, without limitation, the execution of an application for consent by
the FCC to an assignment or transfer involving a change in ownership or control
pursuant to the provisions of the Federal Communications Act of 1934. To the
extent permitted by Applicable Law, the Administrative Agent is hereby
irrevocably appointed the true and lawful attorney-in-fact of the Borrower, in
its name and stead, to execute and file all necessary applications with the
Licensors, the FCC and with any other governmental or other authority. The power
of attorney granted herein is coupled with an interest and shall be irrevocable
for so long as any of the Obligations remains unpaid or unperformed or any of
the Banks have any obligation to make Advances under the Loan Agreement,
regardless of whether the conditions precedent to the making of any such
Advances has been or can be fulfilled.
14. Administrative Agent. Each reference herein to any right
granted to, benefit conferred upon, or power exercisable by the "Administrative
Agent" shall be a reference to the Administrative Agent (including any
successors to the Administrative Agent pursuant to the Loan Agreement) for
itself and for the ratable benefit of the Managing Agents and the Banks, and
each action taken or right exercised hereunder shall be deemed to have been so
taken or exercised by the Administrative Agent for
General Communication, Inc. - Form 8-K
Page 255
<PAGE>
itself and for the benefit of and on behalf of all of the Managing Agents and
the Banks.
15. Benefit of Assignment. This assignment and the rights
hereunder shall inure to the benefit of the Administrative Agent, the Banks and
the Managing Agents, and may be assigned in whole or in part by the
Administrative Agent, the Banks and the Managing Agents in connection with any
assignment of the Loan Agreement or the Indebtedness evidenced thereby, as is
permitted thereunder, and shall be binding upon each Partner and its respective
successors and assigns.
16. Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original, but all such
separate counterparts shall together constitute but one and the same instrument.
17. Pledge of Additional Securities. Pursuant to the Loan
Agreement, the Borrower agrees to assign and grant security title to, and a
security interest in, any debt or equity securities acquired by the Borrower
after the date hereof. The Borrower agrees to execute, deliver and record any
amendments hereto, documents, instruments, stock powers and financing
statements, deemed by the Administrative Agent to be necessary or appropriate,
to create or perfect the security interest described in the foregoing sentence.
[the remainder of this page is intentionally blank]
General Communication, Inc. - Form 8-K
Page 256
<PAGE>
IN WITNESS WHEREOF, the undersigned parties hereto have executed this
Agreement by and through their duly authorized officers, as of the day and year
first above written.
BORROWER: GCI CABLE, INC., an Alaska
corporation
By: /s/ John M. Lowber
Title: Secretary/Treasurer
ADMINISTRATIVE AGENT: TORONTO DOMINION (TEXAS), INC.
By: /s/ Jano Mott
Title: Vice President
General Communication, Inc. - Form 8-K
Page 257
<PAGE>
EXHIBIT D
FORM OF REVOLVING PROMISSORY NOTE
U.S.$ October 31, 1996
FOR VALUE RECEIVED, the undersigned, GCI CABLE, INC., an Alaska
corporation (the "Borrower"), promises to pay to the order of
(hereinafter, together with its successors and
assigns called the "Bank"), at such place as the Bank may designate in writing
to the Borrower, in immediately available funds, the principal sum of
AND /100's DOLLARS ($ ) of United
States funds, or, if less, so much thereof as may from time to time be advanced
by the Bank to the Borrower hereunder, plus interest as hereinafter provided.
Such Advances shall be endorsed from time to time on the grid attached hereto,
but the failure to make such notations shall not affect the validity of the
Borrower's obligation to repay unpaid principal and interest hereunder.
This Note is one of the Notes referred to in that certain Loan
Agreement of even date herewith among the Borrower, the Banks, the Managing
Agents and Toronto Dominion (Texas), Inc. (the "Administrative Agent"), as
administrative agent for the Managing Agents and the Banks (as amended,
supplemented or otherwise modified from time to time, the "Loan Agreement"). All
capitalized terms used herein shall have the meanings ascribed to such terms in
the Loan Agreement, except to the extent such capitalized terms are otherwise
defined or limited herein.
The Borrower shall repay principal outstanding hereunder from time to
time as set forth in the Loan Agreement. In addition, all remaining principal
amounts and other Obligations then outstanding hereunder shall be due and
payable on the Maturity Date.
Prior to the Maturity Date, the Borrower shall be entitled to borrow,
re-pay and re-borrow funds hereunder pursuant to the terms and conditions of the
Loan Agreement. Prepayment of the principal amount of any Loan may be made only
as provided in the Loan Agreement.
The Borrower hereby promises to pay interest on the unpaid principal
amount hereof as provided in Article 2 of the Loan Agreement. Interest under
this Note shall also be due and payable when this Note shall become due (whether
at maturity, by reason of acceleration or otherwise). Overdue principal and, to
the extent permitted by law, overdue interest, shall bear interest at a rate per
annum equal to the Default Rate and shall be payable in the manner provided in
the Loan Agreement.
In no event shall the amount of interest due or payable hereunder
exceed the maximum rate of interest allowed by applicable law, and in the event
any such payment is inadvertently made by the Borrower or inadvertently received
by the Bank, then such excess sum shall be credited as a payment of principal,
unless the
General Communication, Inc. - Form 8-K
Page 258
<PAGE>
Borrower shall notify the Bank in writing that it elects to have such excess sum
returned forthwith. It is the express intent hereof that the Borrower not pay
and the Bank not receive, directly or indirectly in any manner whatsoever,
interest in excess of that which may legally be paid by the Borrower under
applicable law.
Except as otherwise expressly provided in any of the Loan Documents,
all parties now or hereafter liable with respect to this Note, whether the
Borrower, any guarantor, endorser, or any other Person hereby waive presentment
for payment, demand, notice of non-payment or dishonor, protest, notice of
protest and notice of any other kind whatsoever.
No delay or omission on the part of the Bank or any holder hereof in
exercising its rights under this Note, or delay or omission on the part of the
Bank, the Administrative Agent, the Majority Banks or the Banks collectively, or
any of them, in exercising its or their rights under the Loan Agreement or under
any other Loan Document, or course of conduct relating thereto, shall operate as
a waiver of such rights or any other right of the Bank or any holder hereof, nor
shall any waiver by the Bank or any holder hereof, the Administrative Agent, the
Majority Banks or the Banks collectively, or any of them, of any such right or
rights on any one occasion be deemed a bar to, or waiver of, the same right or
rights on any future occasion.
The Borrower promises to pay all reasonable costs of collection,
including reasonable attorneys' fees, should this Note be collected by or
through an attorney-at-law or under advice therefrom.
Time is of the essence of this Note.
This Note evidences the Bank's portion of the Loans under, and is
entitled to the benefits and subject to the terms of, the Loan Agreement, which
contains provisions with respect to the acceleration of the maturity of this
Note upon the happening of certain stated events, and provisions for prepayment.
This Note is secured by and is also entitled to the benefits of the Loan
Documents and any other agreement or instrument providing collateral for the
Loans, whether now or hereafter in existence.
This Note shall be construed in accordance with and governed by the
laws of the State of New York without reference to the conflicts or choice of
law principles thereof.
General Communication, Inc. - Form 8-K
Page 259
<PAGE>
IN WITNESS WHEREOF, the duly authorized officers of the Borrower, as
Authorized Signatories, have executed this Note, as of the day and year first
above written.
GCI CABLE, INC.
By:
Its:
Attest:
Its:
General Communication, Inc. - Form 8-K
Page 260
<PAGE>
ADVANCES
Amount of
Principal
Amount of Type of Paid or Notation
Date Advance Advance Prepaid Made By
General Communication, Inc. - Form 8-K
Page 261
<PAGE>
REVOLVING PROMISSORY NOTE
U.S.$31,250,000.00 October 31, 1996
FOR VALUE RECEIVED, the undersigned, GCI CABLE, INC., an Alaska
corporation (the "Borrower"), promises to pay to the order of TORONTO DOMINION
(TEXAS), INC. (hereinafter, together with its successors and assigns called the
"Bank"), at such place as the Bank may designate in writing to the Borrower, in
immediately available funds, the principal sum of THIRTY ONE MILLION TWO HUNDRED
FIFTY THOUSAND AND 00/100's DOLLARS ($31,250,000.00) of United States funds, or,
if less, so much thereof as may from time to time be advanced by the Bank to the
Borrower hereunder, plus interest as hereinafter provided. Such Advances shall
be endorsed from time to time on the grid attached hereto, but the failure to
make such notations shall not affect the validity of the Borrower's obligation
to repay unpaid principal and interest hereunder.
This Note is one of the Notes referred to in that certain Second
Amended and Restated Loan Agreement of even date herewith among the Borrower,
the Banks, the Managing Agents and Toronto Dominion (Texas), Inc., as
administrative agent for the Managing Agents and the Banks (the "Administrative
Agent") (as amended, supplemented or otherwise modified from time to time, the
"Loan Agreement"). All capitalized terms used herein shall have the meanings
ascribed to such terms in the Loan Agreement, except to the extent such
capitalized terms are otherwise defined or limited herein.
All principal amounts and other Obligations then outstanding hereunder
shall be due and payable on the Maturity Date.
In addition, the Borrower shall repay principal outstanding hereunder
from time to time as set forth in the Loan Agreement.
Prior to the Maturity Date, the Borrower shall be entitled to borrow,
re-pay and re-borrow funds hereunder pursuant to the terms and conditions of the
Loan Agreement. Prepayment of the principal amount of any Loan may be made only
as provided in the Loan Agreement.
The Borrower hereby promises to pay interest on the unpaid principal
amount hereof as provided in Article 2 of the Loan Agreement. Interest under
this Note shall also be due and payable when this Note shall become due (whether
at maturity, by reason of acceleration or otherwise). Overdue principal and, to
the extent permitted by law, overdue interest, shall bear interest at a rate per
annum equal to the Default Rate and shall be payable in the manner provided in
the Loan Agreement.
In no event shall the amount of interest due or payable hereunder
exceed the maximum rate of interest allowed by applicable law, and in the event
any such
General Communication, Inc. - Form 8-K
Page 262
<PAGE>
payment is inadvertently made by the Borrower or inadvertently received by the
Bank, then such excess sum shall be credited as a payment of principal, unless
the Borrower shall notify the Bank in writing that it elects to have such excess
sum returned forthwith. It is the express intent hereof that the Borrower not
pay and the Bank not receive, directly or indirectly in any manner whatsoever,
interest in excess of that which may legally be paid by the Borrower under
applicable law.
Except as otherwise expressly provided in any of the Loan Documents,
all parties now or hereafter liable with respect to this Note, whether the
Borrower, any guarantor, endorser, or any other Person hereby waive presentment
for payment, demand, notice of non-payment or dishonor, protest, notice of
protest and notice of any other kind whatsoever.
No delay or omission on the part of the Bank or any holder hereof in
exercising its rights under this Note, or delay or omission on the part of the
Bank, the Administrative Agent, the Majority Banks or the Banks collectively, or
any of them, in exercising its or their rights under the Loan Agreement or under
any other Loan Document, or course of conduct relating thereto, shall operate as
a waiver of such rights or any other right of the Bank or any holder hereof, nor
shall any waiver by the Bank or any holder hereof, the Administrative Agent, the
Majority Banks or the Banks collectively, or any of them, of any such right or
rights on any one occasion be deemed a bar to, or waiver of, the same right or
rights on any future occasion.
The Borrower promises to pay all reasonable costs of collection,
including reasonable attorneys' fees, should this Note be collected by or
through an attorney-at-law or under advice therefrom.
Time is of the essence of this Note.
This Note evidences the Bank's portion of the Loans under, and is
entitled to the benefits and subject to the terms of, the Loan Agreement, which
contains provisions with respect to the acceleration of the maturity of this
Note upon the happening of certain stated events, and provisions for prepayment.
This Note is secured by and is also entitled to the benefits of the Loan
Documents and any other agreement or instrument providing collateral for the
Loans, whether now or hereafter in existence.
This Note shall be construed in accordance with and governed by the
laws of the State of New York without reference to the conflicts or choice of
law principles thereof.
General Communication, Inc. - Form 8-K
Page 263
<PAGE>
IN WITNESS WHEREOF, the duly authorized officers of the Borrower, as
Authorized Signatories, have executed this Note, as of the day and year first
above written.
GCI CABLE, INC.
By: /s/ John M. Lowber
Its: Secretary-Treasurer
Attest:
Its:
General Communication, Inc. - Form 8-K
Page 264
<PAGE>
ADVANCES
Amount of
Principal
Amount of Type of Paid or Notation
Date Advance Advance Prepaid Made By
General Communication, Inc. - Form 8-K
Page 265
<PAGE>
REVOLVING PROMISSORY NOTE
U.S.$31,250,000.00 October 31, 1996
FOR VALUE RECEIVED, the undersigned, GCI CABLE, INC., an Alaska
corporation (the "Borrower"), promises to pay to the order of NATIONSBANK OF
TEXAS, N.A. (hereinafter, together with its successors and assigns called the
"Bank"), at such place as the Bank may designate in writing to the Borrower, in
immediately available funds, the principal sum of THIRTY ONE MILLION TWO HUNDRED
FIFTY THOUSAND AND 00/100's DOLLARS ($31,250,000.00) of United States funds, or,
if less, so much thereof as may from time to time be advanced by the Bank to the
Borrower hereunder, plus interest as hereinafter provided. Such Advances shall
be endorsed from time to time on the grid attached hereto, but the failure to
make such notations shall not affect the validity of the Borrower's obligation
to repay unpaid principal and interest hereunder.
This Note is one of the Notes referred to in that certain Second
Amended and Restated Loan Agreement of even date herewith among the Borrower,
the Banks, the Managing Agents and Toronto Dominion (Texas), Inc., as
administrative agent for the Managing Agents and the Banks (the "Administrative
Agent") (as amended, supplemented or otherwise modified from time to time, the
"Loan Agreement"). All capitalized terms used herein shall have the meanings
ascribed to such terms in the Loan Agreement, except to the extent such
capitalized terms are otherwise defined or limited herein.
All principal amounts and other Obligations then outstanding hereunder
shall be due and payable on the Maturity Date.
In addition, the Borrower shall repay principal outstanding hereunder
from time to time as set forth in the Loan Agreement.
Prior to the Maturity Date, the Borrower shall be entitled to borrow,
re-pay and re-borrow funds hereunder pursuant to the terms and conditions of the
Loan Agreement. Prepayment of the principal amount of any Loan may be made only
as provided in the Loan Agreement.
The Borrower hereby promises to pay interest on the unpaid principal
amount hereof as provided in Article 2 of the Loan Agreement. Interest under
this Note shall also be due and payable when this Note shall become due (whether
at maturity, by reason of acceleration or otherwise). Overdue principal and, to
the extent permitted by law, overdue interest, shall bear interest at a rate per
annum equal to the Default Rate and shall be payable in the manner provided in
the Loan Agreement.
In no event shall the amount of interest due or payable hereunder
exceed the maximum rate of interest allowed by applicable law, and in the event
any such
General Communication, Inc. - Form 8-K
Page 266
<PAGE>
payment is inadvertently made by the Borrower or inadvertently received by the
Bank, then such excess sum shall be credited as a payment of principal, unless
the Borrower shall notify the Bank in writing that it elects to have such excess
sum returned forthwith. It is the express intent hereof that the Borrower not
pay and the Bank not receive, directly or indirectly in any manner whatsoever,
interest in excess of that which may legally be paid by the Borrower under
applicable law.
Except as otherwise expressly provided in any of the Loan Documents,
all parties now or hereafter liable with respect to this Note, whether the
Borrower, any guarantor, endorser, or any other Person hereby waive presentment
for payment, demand, notice of non-payment or dishonor, protest, notice of
protest and notice of any other kind whatsoever.
No delay or omission on the part of the Bank or any holder hereof in
exercising its rights under this Note, or delay or omission on the part of the
Bank, the Administrative Agent, the Majority Banks or the Banks collectively, or
any of them, in exercising its or their rights under the Loan Agreement or under
any other Loan Document, or course of conduct relating thereto, shall operate as
a waiver of such rights or any other right of the Bank or any holder hereof, nor
shall any waiver by the Bank or any holder hereof, the Administrative Agent, the
Majority Banks or the Banks collectively, or any of them, of any such right or
rights on any one occasion be deemed a bar to, or waiver of, the same right or
rights on any future occasion.
The Borrower promises to pay all reasonable costs of collection,
including reasonable attorneys' fees, should this Note be collected by or
through an attorney-at-law or under advice therefrom.
Time is of the essence of this Note.
This Note evidences the Bank's portion of the Loans under, and is
entitled to the benefits and subject to the terms of, the Loan Agreement, which
contains provisions with respect to the acceleration of the maturity of this
Note upon the happening of certain stated events, and provisions for prepayment.
This Note is secured by and is also entitled to the benefits of the Loan
Documents and any other agreement or instrument providing collateral for the
Loans, whether now or hereafter in existence.
This Note shall be construed in accordance with and governed by the
laws of the State of New York without reference to the conflicts or choice of
law principles thereof.
General Communication, Inc. - Form 8-K
Page 267
<PAGE>
IN WITNESS WHEREOF, the duly authorized officers of the Borrower, as
Authorized Signatories, have executed this Note, as of the day and year first
above written.
GCI CABLE, INC.
By:
Its:
Attest:
Its:
General Communication, Inc. - Form 8-K
Page 268
<PAGE>
ADVANCES
Amount of
Principal
Amount of Type of Paid or Notation
Date Advance Advance Prepaid Made By
General Communication, Inc. - Form 8-K
Page 269
<PAGE>
REVOLVING PROMISSORY NOTE
U.S.$31,250,000.00 October 31, 1996
FOR VALUE RECEIVED, the undersigned, GCI CABLE, INC., an Alaska
corporation (the "Borrower"), promises to pay to the order of CREDIT LYONNAIS
NEW YORK BRANCH (hereinafter, together with its successors and assigns called
the "Bank"), at such place as the Bank may designate in writing to the Borrower,
in immediately available funds, the principal sum of THIRTY ONE MILLION TWO
HUNDRED FIFTY THOUSAND AND 00/100's DOLLARS ($31,250,000.00) of United States
funds, or, if less, so much thereof as may from time to time be advanced by the
Bank to the Borrower hereunder, plus interest as hereinafter provided. Such
Advances shall be endorsed from time to time on the grid attached hereto, but
the failure to make such notations shall not affect the validity of the
Borrower's obligation to repay unpaid principal and interest hereunder.
This Note is one of the Notes referred to in that certain Second
Amended and Restated Loan Agreement of even date herewith among the Borrower,
the Banks, the Managing Agents and Toronto Dominion (Texas), Inc., as
administrative agent for the Managing Agents and the Banks (the "Administrative
Agent") (as amended, supplemented or otherwise modified from time to time, the
"Loan Agreement"). All capitalized terms used herein shall have the meanings
ascribed to such terms in the Loan Agreement, except to the extent such
capitalized terms are otherwise defined or limited herein.
All principal amounts and other Obligations then outstanding hereunder
shall be due and payable on the Maturity Date.
In addition, the Borrower shall repay principal outstanding hereunder
from time to time as set forth in the Loan Agreement.
Prior to the Maturity Date, the Borrower shall be entitled to borrow,
re-pay and re-borrow funds hereunder pursuant to the terms and conditions of the
Loan Agreement. Prepayment of the principal amount of any Loan may be made only
as provided in the Loan Agreement.
The Borrower hereby promises to pay interest on the unpaid principal
amount hereof as provided in Article 2 of the Loan Agreement. Interest under
this Note shall also be due and payable when this Note shall become due (whether
at maturity, by reason of acceleration or otherwise). Overdue principal and, to
the extent permitted by law, overdue interest, shall bear interest at a rate per
annum equal to the Default Rate and shall be payable in the manner provided in
the Loan Agreement.
In no event shall the amount of interest due or payable hereunder
exceed the maximum rate of interest allowed by applicable law, and in the event
any such
General Communication, Inc. - Form 8-K
Page 270
<PAGE>
payment is inadvertently made by the Borrower or inadvertently received by the
Bank, then such excess sum shall be credited as a payment of principal, unless
the Borrower shall notify the Bank in writing that it elects to have such excess
sum returned forthwith. It is the express intent hereof that the Borrower not
pay and the Bank not receive, directly or indirectly in any manner whatsoever,
interest in excess of that which may legally be paid by the Borrower under
applicable law.
Except as otherwise expressly provided in any of the Loan Documents,
all parties now or hereafter liable with respect to this Note, whether the
Borrower, any guarantor, endorser, or any other Person hereby waive presentment
for payment, demand, notice of non-payment or dishonor, protest, notice of
protest and notice of any other kind whatsoever.
No delay or omission on the part of the Bank or any holder hereof in
exercising its rights under this Note, or delay or omission on the part of the
Bank, the Administrative Agent, the Majority Banks or the Banks collectively, or
any of them, in exercising its or their rights under the Loan Agreement or under
any other Loan Document, or course of conduct relating thereto, shall operate as
a waiver of such rights or any other right of the Bank or any holder hereof, nor
shall any waiver by the Bank or any holder hereof, the Administrative Agent, the
Majority Banks or the Banks collectively, or any of them, of any such right or
rights on any one occasion be deemed a bar to, or waiver of, the same right or
rights on any future occasion.
The Borrower promises to pay all reasonable costs of collection,
including reasonable attorneys' fees, should this Note be collected by or
through an attorney-at-law or under advice therefrom.
Time is of the essence of this Note.
This Note evidences the Bank's portion of the Loans under, and is
entitled to the benefits and subject to the terms of, the Loan Agreement, which
contains provisions with respect to the acceleration of the maturity of this
Note upon the happening of certain stated events, and provisions for prepayment.
This Note is secured by and is also entitled to the benefits of the Loan
Documents and any other agreement or instrument providing collateral for the
Loans, whether now or hereafter in existence.
This Note shall be construed in accordance with and governed by the
laws of the State of New York without reference to the conflicts or choice of
law principles thereof.
General Communication, Inc. - Form 8-K
Page 271
<PAGE>
IN WITNESS WHEREOF, the duly authorized officers of the Borrower, as
Authorized Signatories, have executed this Note, as of the day and year first
above written.
GCI CABLE, INC.
By: /s/ John M. Lowber
Its: Secretary/Treasurer
Attest:
Its:
General Communication, Inc. - Form 8-K
Page 272
<PAGE>
ADVANCES
Amount of
Principal
Amount of Type of Paid or Notation
Date Advance Advance Prepaid Made By
General Communication, Inc. - Form 8-K
Page 273
<PAGE>
REVOLVING PROMISSORY NOTE
U.S.$31,250,000.00 October 31, 1996
FOR VALUE RECEIVED, the undersigned, GCI CABLE, INC., an Alaska
corporation (the "Borrower"), promises to pay to the order of THE CHASE
MANHATTAN BANK N.A. (hereinafter, together with its successors and assigns
called the "Bank"), at such place as the Bank may designate in writing to the
Borrower, in immediately available funds, the principal sum of THIRTY ONE
MILLION TWO HUNDRED FIFTY THOUSAND AND 00/100's DOLLARS ($31,250,000.00) of
United States funds, or, if less, so much thereof as may from time to time be
advanced by the Bank to the Borrower hereunder, plus interest as hereinafter
provided. Such Advances shall be endorsed from time to time on the grid attached
hereto, but the failure to make such notations shall not affect the validity of
the Borrower's obligation to repay unpaid principal and interest hereunder.
This Note is one of the Notes referred to in that certain Second
Amended and Restated Loan Agreement of even date herewith among the Borrower,
the Banks, the Managing Agents and Toronto Dominion (Texas), Inc., as
administrative agent for the Managing Agents and the Banks (the "Administrative
Agent") (as amended, supplemented or otherwise modified from time to time, the
"Loan Agreement"). All capitalized terms used herein shall have the meanings
ascribed to such terms in the Loan Agreement, except to the extent such
capitalized terms are otherwise defined or limited herein.
All principal amounts and other Obligations then outstanding hereunder
shall be due and payable on the Maturity Date.
In addition, the Borrower shall repay principal outstanding hereunder
from time to time as set forth in the Loan Agreement.
Prior to the Maturity Date, the Borrower shall be entitled to borrow,
re-pay and re-borrow funds hereunder pursuant to the terms and conditions of the
Loan Agreement. Prepayment of the principal amount of any Loan may be made only
as provided in the Loan Agreement.
The Borrower hereby promises to pay interest on the unpaid principal
amount hereof as provided in Article 2 of the Loan Agreement. Interest under
this Note shall also be due and payable when this Note shall become due (whether
at maturity, by reason of acceleration or otherwise). Overdue principal and, to
the extent permitted by law, overdue interest, shall bear interest at a rate per
annum equal to the Default Rate and shall be payable in the manner provided in
the Loan Agreement.
In no event shall the amount of interest due or payable hereunder
exceed the maximum rate of interest allowed by applicable law, and in the event
any such
General Communication, Inc. - Form 8-K
Page 274
<PAGE>
payment is inadvertently made by the Borrower or inadvertently received by the
Bank, then such excess sum shall be credited as a payment of principal, unless
the Borrower shall notify the Bank in writing that it elects to have such excess
sum returned forthwith. It is the express intent hereof that the Borrower not
pay and the Bank not receive, directly or indirectly in any manner whatsoever,
interest in excess of that which may legally be paid by the Borrower under
applicable law.
Except as otherwise expressly provided in any of the Loan Documents,
all parties now or hereafter liable with respect to this Note, whether the
Borrower, any guarantor, endorser, or any other Person hereby waive presentment
for payment, demand, notice of non-payment or dishonor, protest, notice of
protest and notice of any other kind whatsoever.
No delay or omission on the part of the Bank or any holder hereof in
exercising its rights under this Note, or delay or omission on the part of the
Bank, the Administrative Agent, the Majority Banks or the Banks collectively, or
any of them, in exercising its or their rights under the Loan Agreement or under
any other Loan Document, or course of conduct relating thereto, shall operate as
a waiver of such rights or any other right of the Bank or any holder hereof, nor
shall any waiver by the Bank or any holder hereof, the Administrative Agent, the
Majority Banks or the Banks collectively, or any of them, of any such right or
rights on any one occasion be deemed a bar to, or waiver of, the same right or
rights on any future occasion.
The Borrower promises to pay all reasonable costs of collection,
including reasonable attorneys' fees, should this Note be collected by or
through an attorney-at-law or under advice therefrom.
Time is of the essence of this Note.
This Note evidences the Bank's portion of the Loans under, and is
entitled to the benefits and subject to the terms of, the Loan Agreement, which
contains provisions with respect to the acceleration of the maturity of this
Note upon the happening of certain stated events, and provisions for prepayment.
This Note is secured by and is also entitled to the benefits of the Loan
Documents and any other agreement or instrument providing collateral for the
Loans, whether now or hereafter in existence.
This Note shall be construed in accordance with and governed by the
laws of the State of New York without reference to the conflicts or choice of
law principles thereof.
General Communication, Inc. - Form 8-K
Page 275
<PAGE>
IN WITNESS WHEREOF, the duly authorized officers of the Borrower, as
Authorized Signatories, have executed this Note, as of the day and year first
above written.
GCI CABLE, INC.
By: /s/ John M. Lowber
Its: Secretary/Treasurer
Attest:
Its:
General Communication, Inc. - Form 8-K
Page 276
<PAGE>
ADVANCES
Amount of
Principal
Amount of Type of Paid or Notation
Date Advance Advance Prepaid Made By
General Communication, Inc. - Form 8-K
Page 277
<PAGE>
REVOLVING PROMISSORY NOTE
U.S.$25,000,000.00 October 31, 1996
FOR VALUE RECEIVED, the undersigned, GCI CABLE, INC., an Alaska
corporation (the "Borrower"), promises to pay to the order of THE BANK OF NEW
YORK (hereinafter, together with its successors and assigns called the "Bank"),
at such place as the Bank may designate in writing to the Borrower, in
immediately available funds, the principal sum of TWENTY FIVE MILLION AND
00/100's DOLLARS ($25,000,000.00) of United States funds, or, if less, so much
thereof as may from time to time be advanced by the Bank to the Borrower
hereunder, plus interest as hereinafter provided. Such Advances shall be
endorsed from time to time on the grid attached hereto, but the failure to make
such notations shall not affect the validity of the Borrower's obligation to
repay unpaid principal and interest hereunder.
This Note is one of the Notes referred to in that certain Second
Amended and Restated Loan Agreement of even date herewith among the Borrower,
the Banks, the Managing Agents and Toronto Dominion (Texas), Inc., as
administrative agent for the Managing Agents and the Banks (the "Administrative
Agent") (as amended, supplemented or otherwise modified from time to time, the
"Loan Agreement"). All capitalized terms used herein shall have the meanings
ascribed to such terms in the Loan Agreement, except to the extent such
capitalized terms are otherwise defined or limited herein.
All principal amounts and other Obligations then outstanding hereunder
shall be due and payable on the Maturity Date.
In addition, the Borrower shall repay principal outstanding hereunder
from time to time as set forth in the Loan Agreement.
Prior to the Maturity Date, the Borrower shall be entitled to borrow,
re-pay and re-borrow funds hereunder pursuant to the terms and conditions of the
Loan Agreement. Prepayment of the principal amount of any Loan may be made only
as provided in the Loan Agreement.
The Borrower hereby promises to pay interest on the unpaid principal
amount hereof as provided in Article 2 of the Loan Agreement. Interest under
this Note shall also be due and payable when this Note shall become due (whether
at maturity, by reason of acceleration or otherwise). Overdue principal and, to
the extent permitted by law, overdue interest, shall bear interest at a rate per
annum equal to the Default Rate and shall be payable in the manner provided in
the Loan Agreement.
In no event shall the amount of interest due or payable hereunder
exceed the maximum rate of interest allowed by applicable law, and in the event
any such payment is inadvertently made by the Borrower or inadvertently received
by the
General Communication, Inc. - Form 8-K
Page 278
<PAGE>
Bank, then such excess sum shall be credited as a payment of principal, unless
the Borrower shall notify the Bank in writing that it elects to have such excess
sum returned forthwith. It is the express intent hereof that the Borrower not
pay and the Bank not receive, directly or indirectly in any manner whatsoever,
interest in excess of that which may legally be paid by the Borrower under
applicable law.
Except as otherwise expressly provided in any of the Loan Documents,
all parties now or hereafter liable with respect to this Note, whether the
Borrower, any guarantor, endorser, or any other Person hereby waive presentment
for payment, demand, notice of non-payment or dishonor, protest, notice of
protest and notice of any other kind whatsoever.
No delay or omission on the part of the Bank or any holder hereof in
exercising its rights under this Note, or delay or omission on the part of the
Bank, the Administrative Agent, the Majority Banks or the Banks collectively, or
any of them, in exercising its or their rights under the Loan Agreement or under
any other Loan Document, or course of conduct relating thereto, shall operate as
a waiver of such rights or any other right of the Bank or any holder hereof, nor
shall any waiver by the Bank or any holder hereof, the Administrative Agent, the
Majority Banks or the Banks collectively, or any of them, of any such right or
rights on any one occasion be deemed a bar to, or waiver of, the same right or
rights on any future occasion.
The Borrower promises to pay all reasonable costs of collection,
including reasonable attorneys' fees, should this Note be collected by or
through an attorney-at-law or under advice therefrom.
Time is of the essence of this Note.
This Note evidences the Bank's portion of the Loans under, and is
entitled to the benefits and subject to the terms of, the Loan Agreement, which
contains provisions with respect to the acceleration of the maturity of this
Note upon the happening of certain stated events, and provisions for prepayment.
This Note is secured by and is also entitled to the benefits of the Loan
Documents and any other agreement or instrument providing collateral for the
Loans, whether now or hereafter in existence.
This Note shall be construed in accordance with and governed by the
laws of the State of New York without reference to the conflicts or choice of
law principles thereof.
General Communication, Inc. - Form 8-K
Page 279
<PAGE>
IN WITNESS WHEREOF, the duly authorized officers of the Borrower, as
Authorized Signatories, have executed this Note, as of the day and year first
above written.
GCI CABLE, INC.
By: /s/ John M. Lowber
Its: Secretary/Treasurer
Attest:
Its:
General Communication, Inc. - Form 8-K
Page 280
<PAGE>
ADVANCES
Amount of
Principal
Amount of Type of Paid or Notation
Date Advance Advance Prepaid Made By
General Communication, Inc. - Form 8-K
Page 281
<PAGE>
REVOLVING PROMISSORY NOTE
U.S.$25,000,000.00 October 31, 1996
FOR VALUE RECEIVED, the undersigned, GCI CABLE, INC., an Alaska
corporation (the "Borrower"), promises to pay to the order of BANQUE PARIBAS
(hereinafter, together with its successors and assigns called the "Bank"), at
such place as the Bank may designate in writing to the Borrower, in immediately
available funds, the principal sum of TWENTY FIVE MILLION AND 00/100's DOLLARS
($25,000,000.00) of United States funds, or, if less, so much thereof as may
from time to time be advanced by the Bank to the Borrower hereunder, plus
interest as hereinafter provided. Such Advances shall be endorsed from time to
time on the grid attached hereto, but the failure to make such notations shall
not affect the validity of the Borrower's obligation to repay unpaid principal
and interest hereunder.
This Note is one of the Notes referred to in that certain Second
Amended and Restated Loan Agreement of even date herewith among the Borrower,
the Banks, the Managing Agents and Toronto Dominion (Texas), Inc., as
administrative agent for the Managing Agents and the Banks (the "Administrative
Agent") (as amended, supplemented or otherwise modified from time to time, the
"Loan Agreement"). All capitalized terms used herein shall have the meanings
ascribed to such terms in the Loan Agreement, except to the extent such
capitalized terms are otherwise defined or limited herein.
All principal amounts and other Obligations then outstanding hereunder
shall be due and payable on the Maturity Date.
In addition, the Borrower shall repay principal outstanding hereunder
from time to time as set forth in the Loan Agreement.
Prior to the Maturity Date, the Borrower shall be entitled to borrow,
re-pay and re-borrow funds hereunder pursuant to the terms and conditions of the
Loan Agreement. Prepayment of the principal amount of any Loan may be made only
as provided in the Loan Agreement.
The Borrower hereby promises to pay interest on the unpaid principal
amount hereof as provided in Article 2 of the Loan Agreement. Interest under
this Note shall also be due and payable when this Note shall become due (whether
at maturity, by reason of acceleration or otherwise). Overdue principal and, to
the extent permitted by law, overdue interest, shall bear interest at a rate per
annum equal to the Default Rate and shall be payable in the manner provided in
the Loan Agreement.
In no event shall the amount of interest due or payable hereunder
exceed the maximum rate of interest allowed by applicable law, and in the event
any such payment is inadvertently made by the Borrower or inadvertently received
by the
General Communication, Inc. - Form 8-K
Page 282
<PAGE>
Bank, then such excess sum shall be credited as a payment of principal, unless
the Borrower shall notify the Bank in writing that it elects to have such excess
sum returned forthwith. It is the express intent hereof that the Borrower not
pay and the Bank not receive, directly or indirectly in any manner whatsoever,
interest in excess of that which may legally be paid by the Borrower under
applicable law.
Except as otherwise expressly provided in any of the Loan Documents,
all parties now or hereafter liable with respect to this Note, whether the
Borrower, any guarantor, endorser, or any other Person hereby waive presentment
for payment, demand, notice of non-payment or dishonor, protest, notice of
protest and notice of any other kind whatsoever.
No delay or omission on the part of the Bank or any holder hereof in
exercising its rights under this Note, or delay or omission on the part of the
Bank, the Administrative Agent, the Majority Banks or the Banks collectively, or
any of them, in exercising its or their rights under the Loan Agreement or under
any other Loan Document, or course of conduct relating thereto, shall operate as
a waiver of such rights or any other right of the Bank or any holder hereof, nor
shall any waiver by the Bank or any holder hereof, the Administrative Agent, the
Majority Banks or the Banks collectively, or any of them, of any such right or
rights on any one occasion be deemed a bar to, or waiver of, the same right or
rights on any future occasion.
The Borrower promises to pay all reasonable costs of collection,
including reasonable attorneys' fees, should this Note be collected by or
through an attorney-at-law or under advice therefrom.
Time is of the essence of this Note.
This Note evidences the Bank's portion of the Loans under, and is
entitled to the benefits and subject to the terms of, the Loan Agreement, which
contains provisions with respect to the acceleration of the maturity of this
Note upon the happening of certain stated events, and provisions for prepayment.
This Note is secured by and is also entitled to the benefits of the Loan
Documents and any other agreement or instrument providing collateral for the
Loans, whether now or hereafter in existence.
This Note shall be construed in accordance with and governed by the
laws of the State of New York without reference to the conflicts or choice of
law principles thereof.
General Communication, Inc. - Form 8-K
Page 283
<PAGE>
IN WITNESS WHEREOF, the duly authorized officers of the Borrower, as
Authorized Signatories, have executed this Note, as of the day and year first
above written.
GCI CABLE, INC.
By: /s/ John M. Lowber
Its: Secretary/Treasurer
Attest:
Its:
General Communication, Inc. - Form 8-K
Page 284
<PAGE>
ADVANCES
Amount of
Principal
Amount of Type of Paid or Notation
Date Advance Advance Prepaid Made By
General Communication, Inc. - Form 8-K
Page 285
<PAGE>
REVOLVING PROMISSORY NOTE
U.S.$15,000,000.00 October 31, 1996
FOR VALUE RECEIVED, the undersigned, GCI CABLE, INC., an Alaska
corporation (the "Borrower"), promises to pay to the order of THE FIRST NATIONAL
BANK OF MARYLAND (hereinafter, together with its successors and assigns called
the "Bank"), at such place as the Bank may designate in writing to the Borrower,
in immediately available funds, the principal sum of FIFTEEN MILLION AND
00/100's DOLLARS ($15,000,000.00) of United States funds, or, if less, so much
thereof as may from time to time be advanced by the Bank to the Borrower
hereunder, plus interest as hereinafter provided. Such Advances shall be
endorsed from time to time on the grid attached hereto, but the failure to make
such notations shall not affect the validity of the Borrower's obligation to
repay unpaid principal and interest hereunder.
This Note is one of the Notes referred to in that certain Second
Amended and Restated Loan Agreement of even date herewith among the Borrower,
the Banks, the Managing Agents and Toronto Dominion (Texas), Inc., as
administrative agent for the Managing Agents and the Banks (the "Administrative
Agent") (as amended, supplemented or otherwise modified from time to time, the
"Loan Agreement"). All capitalized terms used herein shall have the meanings
ascribed to such terms in the Loan Agreement, except to the extent such
capitalized terms are otherwise defined or limited herein.
All principal amounts and other Obligations then outstanding hereunder
shall be due and payable on the Maturity Date.
In addition, the Borrower shall repay principal outstanding hereunder
from time to time as set forth in the Loan Agreement.
Prior to the Maturity Date, the Borrower shall be entitled to borrow,
re-pay and re-borrow funds hereunder pursuant to the terms and conditions of the
Loan Agreement. Prepayment of the principal amount of any Loan may be made only
as provided in the Loan Agreement.
The Borrower hereby promises to pay interest on the unpaid principal
amount hereof as provided in Article 2 of the Loan Agreement. Interest under
this Note shall also be due and payable when this Note shall become due (whether
at maturity, by reason of acceleration or otherwise). Overdue principal and, to
the extent permitted by law, overdue interest, shall bear interest at a rate per
annum equal to the Default Rate and shall be payable in the manner provided in
the Loan Agreement.
In no event shall the amount of interest due or payable hereunder
exceed the maximum rate of interest allowed by applicable law, and in the event
any such
General Communication, Inc. - Form 8-K
Page 286
<PAGE>
payment is inadvertently made by the Borrower or inadvertently received by the
Bank, then such excess sum shall be credited as a payment of principal, unless
the Borrower shall notify the Bank in writing that it elects to have such excess
sum returned forthwith. It is the express intent hereof that the Borrower not
pay and the Bank not receive, directly or indirectly in any manner whatsoever,
interest in excess of that which may legally be paid by the Borrower under
applicable law.
Except as otherwise expressly provided in any of the Loan Documents,
all parties now or hereafter liable with respect to this Note, whether the
Borrower, any guarantor, endorser, or any other Person hereby waive presentment
for payment, demand, notice of non-payment or dishonor, protest, notice of
protest and notice of any other kind whatsoever.
No delay or omission on the part of the Bank or any holder hereof in
exercising its rights under this Note, or delay or omission on the part of the
Bank, the Administrative Agent, the Majority Banks or the Banks collectively, or
any of them, in exercising its or their rights under the Loan Agreement or under
any other Loan Document, or course of conduct relating thereto, shall operate as
a waiver of such rights or any other right of the Bank or any holder hereof, nor
shall any waiver by the Bank or any holder hereof, the Administrative Agent, the
Majority Banks or the Banks collectively, or any of them, of any such right or
rights on any one occasion be deemed a bar to, or waiver of, the same right or
rights on any future occasion.
The Borrower promises to pay all reasonable costs of collection,
including reasonable attorneys' fees, should this Note be collected by or
through an attorney-at-law or under advice therefrom.
Time is of the essence of this Note.
This Note evidences the Bank's portion of the Loans under, and is
entitled to the benefits and subject to the terms of, the Loan Agreement, which
contains provisions with respect to the acceleration of the maturity of this
Note upon the happening of certain stated events, and provisions for prepayment.
This Note is secured by and is also entitled to the benefits of the Loan
Documents and any other agreement or instrument providing collateral for the
Loans, whether now or hereafter in existence.
This Note shall be construed in accordance with and governed by the
laws of the State of New York without reference to the conflicts or choice of
law principles thereof.
General Communication, Inc. - Form 8-K
Page 287
<PAGE>
IN WITNESS WHEREOF, the duly authorized officers of the Borrower, as
Authorized Signatories, have executed this Note, as of the day and year first
above written.
GCI CABLE, INC.
By: /s/ John M. Lowber
Its: Secretary/Treasurer
Attest:
Its:
General Communication, Inc. - Form 8-K
Page 288
<PAGE>
ADVANCES
Amount of
Principal
Amount of Type of Paid or Notation
Date Advance Advance Prepaid Made By
General Communication, Inc. - Form 8-K
Page 289
<PAGE>
REVOLVING PROMISSORY NOTE
U.S.$15,000,000.00 October 31, 1996
FOR VALUE RECEIVED, the undersigned, GCI CABLE, INC., an Alaska
corporation (the "Borrower"), promises to pay to the order of PNC BANK, National
Association (hereinafter, together with its successors and assigns called the
"Bank"), at such place as the Bank may designate in writing to the Borrower, in
immediately available funds, the principal sum of FIFTEEN MILLION AND 00/100's
DOLLARS ($15,000,000.00) of United States funds, or, if less, so much thereof as
may from time to time be advanced by the Bank to the Borrower hereunder, plus
interest as hereinafter provided. Such Advances shall be endorsed from time to
time on the grid attached hereto, but the failure to make such notations shall
not affect the validity of the Borrower's obligation to repay unpaid principal
and interest hereunder.
This Note is one of the Notes referred to in that certain Second
Amended and Restated Loan Agreement of even date herewith among the Borrower,
the Banks, the Managing Agents and Toronto Dominion (Texas), Inc., as
administrative agent for the Managing Agents and the Banks (the "Administrative
Agent") (as amended, supplemented or otherwise modified from time to time, the
"Loan Agreement"). All capitalized terms used herein shall have the meanings
ascribed to such terms in the Loan Agreement, except to the extent such
capitalized terms are otherwise defined or limited herein.
All principal amounts and other Obligations then outstanding hereunder
shall be due and payable on the Maturity Date.
In addition, the Borrower shall repay principal outstanding hereunder
from time to time as set forth in the Loan Agreement.
Prior to the Maturity Date, the Borrower shall be entitled to borrow,
re-pay and re-borrow funds hereunder pursuant to the terms and conditions of the
Loan Agreement. Prepayment of the principal amount of any Loan may be made only
as provided in the Loan Agreement.
The Borrower hereby promises to pay interest on the unpaid principal
amount hereof as provided in Article 2 of the Loan Agreement. Interest under
this Note shall also be due and payable when this Note shall become due (whether
at maturity, by reason of acceleration or otherwise). Overdue principal and, to
the extent permitted by law, overdue interest, shall bear interest at a rate per
annum equal to the Default Rate and shall be payable in the manner provided in
the Loan Agreement.
In no event shall the amount of interest due or payable hereunder
exceed the maximum rate of interest allowed by applicable law, and in the event
any such payment is inadvertently made by the Borrower or inadvertently received
by the
General Communication, Inc. - Form 8-K
Page 290
<PAGE>
Bank, then such excess sum shall be credited as a payment of principal, unless
the Borrower shall notify the Bank in writing that it elects to have such excess
sum returned forthwith. It is the express intent hereof that the Borrower not
pay and the Bank not receive, directly or indirectly in any manner whatsoever,
interest in excess of that which may legally be paid by the Borrower under
applicable law.
Except as otherwise expressly provided in any of the Loan Documents,
all parties now or hereafter liable with respect to this Note, whether the
Borrower, any guarantor, endorser, or any other Person hereby waive presentment
for payment, demand, notice of non-payment or dishonor, protest, notice of
protest and notice of any other kind whatsoever.
No delay or omission on the part of the Bank or any holder hereof in
exercising its rights under this Note, or delay or omission on the part of the
Bank, the Administrative Agent, the Majority Banks or the Banks collectively, or
any of them, in exercising its or their rights under the Loan Agreement or under
any other Loan Document, or course of conduct relating thereto, shall operate as
a waiver of such rights or any other right of the Bank or any holder hereof, nor
shall any waiver by the Bank or any holder hereof, the Administrative Agent, the
Majority Banks or the Banks collectively, or any of them, of any such right or
rights on any one occasion be deemed a bar to, or waiver of, the same right or
rights on any future occasion.
The Borrower promises to pay all reasonable costs of collection,
including reasonable attorneys' fees, should this Note be collected by or
through an attorney-at-law or under advice therefrom.
Time is of the essence of this Note.
This Note evidences the Bank's portion of the Loans under, and is
entitled to the benefits and subject to the terms of, the Loan Agreement, which
contains provisions with respect to the acceleration of the maturity of this
Note upon the happening of certain stated events, and provisions for prepayment.
This Note is secured by and is also entitled to the benefits of the Loan
Documents and any other agreement or instrument providing collateral for the
Loans, whether now or hereafter in existence.
This Note shall be construed in accordance with and governed by the
laws of the State of New York without reference to the conflicts or choice of
law principles thereof.
General Communication, Inc. - Form 8-K
Page 291
<PAGE>
IN WITNESS WHEREOF, the duly authorized officers of the Borrower, as
Authorized Signatories, have executed this Note, as of the day and year first
above written.
GCI CABLE, INC.
By: /s/ John M. Lowber
Its: Secretary/Treasurer
Attest:
Its:
General Communication, Inc. - Form 8-K
Page 292
<PAGE>
ADVANCES
Amount of
Principal
Amount of Type of Paid or Notation
Date Advance Advance Prepaid Made By
General Communication, Inc. - Form 8-K
Page 293
<PAGE>
EXHIBIT E
FORM OF PARENT'S PLEDGE AGREEMENT
THIS PARENT'S PLEDGE AGREEMENT (the "Agreement"), is entered into as of
this 31st day of October, 1996 by General Communication, Inc., an Alaska
corporation (the "Pledgor") in favor of Toronto Dominion (Texas), Inc., as
administrative agent and on behalf of the Managing Agents and the Banks (the
"Administrative Agent").
W I T N E S S E T H:
WHEREAS, GCI Cable, Inc., an Alaska corporation (the "Borrower"), the
Administrative Agent, the Managing Agents and the Banks have entered into that
certain Loan Agreement dated as of October 31, 1996 (as amended, modified or
supplemented from time to time, the "Loan Agreement") pursuant to which the
Banks have agreed to make loans (the "Loans") to the Borrower; and
WHEREAS, the Pledgor has determined that the Borrower's making of the
Loan will be of direct or indirect benefit to the Pledgor because the Pledgor is
owner of one hundred percent (100%) of the issued and outstanding capital stock
of the Borrower; and
WHEREAS, to secure the payment and performance of, among other things,
the obligations of the Borrower under the Loan Agreement, the promissory notes
issued by the Borrower to the Banks thereunder (as they may be modified, amended
or replaced, the "Notes") and the other Loan Documents, the Pledgor, the
Administrative Agent, the Banks and the Managing Agents have agreed that the
shares of capital stock (the "Stock") owned by the Pledgor in the Borrower,
shall be pledged by the Pledgor to the Administrative Agent to secure the
Obligations (as defined below);
NOW, THEREFORE, in consideration of the foregoing premises and for
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereto agree that capitalized terms used herein
shall have the meanings ascribed to them in the Loan Agreement to the extent not
otherwise defined or limited herein, and further agree as follows:
1. Warranty. The Pledgor hereby represents and warrants to the
Administrative Agent, the Banks and the Managing Agents, that except for the
security interest created hereby, the Pledgor owns the Stock, which is all of
the issued and outstanding stock of the Borrower, free and clear of all Liens,
that the Stock is duly issued, fully paid and non-assessable, and that the
Pledgor has the unencumbered right to pledge the Stock.
General Communication, Inc. - Form 8-K
Page 294
<PAGE>
2. Security Interest. The Pledgor hereby unconditionally
grants and assigns to the Administrative Agent, for itself and on behalf of the
Banks and the Managing Agents, and their respective successors and assigns, a
continuing security interest in and security title to the Stock. The Pledgor has
delivered to and deposited with the Administrative Agent herewith all of its
right, title and interest in and to the Stock, together with certificates
representing the Stock, and stock powers endorsed in blank, as security for
payment and performance of all obligations to the Administrative Agent, the
Banks and the Managing Agents, or any of them, of the Borrower under the Loan
Agreement, Notes and all other Loan Documents, however created, acquired,
arising or evidenced, whether direct or indirect, absolute or contingent, now or
hereafter existing, or due or to become due (all of the foregoing obligations
being hereinafter collectively referred to as the "Obligations"); it being the
intention of the parties hereto that beneficial ownership of the Stock,
including, without limitation, all voting, consensual and dividend rights, shall
remain in the Pledgor until the occurrence of a Default under the terms hereof
(as defined in Section 4 below) and until the Administrative Agent shall notify
the Pledgor of the Administrative Agent's exercise of voting and dividend rights
to the Stock pursuant to Section 9 of this Agreement.
3. Additional Shares. In the event that, during the term of
this Agreement:
(a) any stock dividend, stock split,
reclassification, readjustment, or other change is declared or made in
the capital structure of the Borrower, all new, substituted, and
additional shares, or other securities, issued by reason of any such
change and received by the Pledgor or to which the Pledgor shall be
entitled shall be promptly delivered to the Administrative Agent,
together with stock powers endorsed in blank by the Pledgor, and shall
thereupon constitute Stock to be held by the Administrative Agent under
the terms of this Agreement; and
(b) any subscriptions, warrants or any other rights
or options shall be issued in connection with the Stock, all new stock
or other securities acquired through such subscriptions, warrants,
rights or options by the Pledgor shall be promptly delivered to the
Administrative Agent and shall thereupon constitute Stock to be held by
the Administrative Agent under the terms of this Agreement.
4. Default. In the event of the occurrence of an Event of
Default under the terms of the Loan Agreement and so long as any such Event of
Default is continuing (any of such occurrences being herein referred to as a
"Default"), subject to Section 13 hereof, the Administrative Agent may sell or
otherwise dispose of the Stock at a public or private sale or make other
commercially reasonable disposition of the Stock or any portion thereof after
ten (10) days' notice to the Pledgor, and the Administrative Agent, any Bank or
any Managing Agent may purchase the Stock or any portion thereof at any public
sale. The proceeds of the public or private sale or other disposition shall be
applied to the reasonable costs of the Administrative Agent, the Banks and the
Managing Agents incurred in connection with the sale, including, without
limitation, any costs under Section 7(a) hereof.
General Communication, Inc. - Form 8-K
Page 295
<PAGE>
5. Additional Rights of Secured Party. In addition to its
rights and privileges under this Agreement, the Administrative Agent, for itself
and for the ratable benefit of each of the Banks and the Managing Agents shall
have all the rights, powers and privileges of a secured party under the Uniform
Commercial Code as in effect in any applicable jurisdiction.
6. Return of Stock to the Pledgor. Upon payment in full of all
principal and interest on the Notes, full performance by the Borrower of all
covenants, undertakings and obligations under the Loan Agreement, the Notes and
the other Loan Documents, and satisfaction in full of any other Obligations,
other than the Obligations which survive the termination of the Loan Agreement
as provided in Section 11.18 of the Loan Agreement, the then remaining Stock and
all rights received by the Administrative Agent as a result of its possessory
interest in the Stock shall be returned to the Pledgor.
7. Disposition of Stock by Administrative Agent. The Stock is
not registered or qualified under the various Federal or state securities laws
of the United States and disposition thereof after Default may be restricted to
one or more private (instead of public) sales in view of the lack of such
registration. The Pledgor understands that upon such disposition, the
Administrative Agent may approach only a restricted number of potential
purchasers and further understands that a sale under such circumstances may
yield a lower price for the Stock than if the Stock was registered and qualified
pursuant to Federal and state securities legislation and sold on the open
market. The Pledgor, therefore, agrees that:
(a) if the Administrative Agent shall, pursuant to
the terms of this Agreement, sell or cause the Stock or any portion
thereof to be sold at a private sale, the Administrative Agent shall
have the right to rely upon the advice and opinion of any unaffiliated
national brokerage or investment firm having recognized expertise and
experience in connection with shares of cable companies and other
similar companies (but shall not be obligated to seek such advice and
the failure to do so shall not be considered in determining the
commercial reasonableness of such action) as to the best manner in
which to expose the Stock for sale and as to the best price reasonably
obtainable at the private sale thereof; and
(b) that such reliance shall be presumptive evidence
that the Administrative Agent has handled such disposition in a
commercially reasonable manner.
8. Pledgor's Obligations Absolute. The obligations of the
Pledgor under this Agreement shall be direct and immediate and not conditional
or contingent upon the pursuit of any remedies against the Borrower or any other
Person, nor against other security or liens available to the Administrative
Agent, the Banks and the Managing Agents, or any of them, or any of their
respective successors, assigns or agents. The Pledgor hereby waives any right to
require that an action be brought against any other Person or to require that
resort be had to any security or to any balance of any deposit account or credit
on the books of the Administrative Agent or any of the Banks or the Managing
Agents in favor of any other Person prior to the
General Communication, Inc. - Form 8-K
Page 296
<PAGE>
exercise of remedies hereunder, or to require action hereunder prior to resort
by the Administrative Agent or any of the Banks or the Managing Agents to any
other security or collateral for the Notes and the other Obligations.
9. Voting Rights.
(a) For so long as the Notes or any other Obligations
remain unpaid, after and during the continuation of a Default, but
subject to the provisions of Section 13 hereof, (i) the Administrative
Agent may, upon ten (10) days' prior written notice to the Pledgor of
its intention to do so, exercise all voting rights, and all other
ownership or consensual rights of the Stock, but under no circumstances
is the Administrative Agent obligated by the terms of this Agreement to
exercise such rights, and (ii) the Pledgor hereby appoints the
Administrative Agent, which appointment shall be effective on the 10th
day following the giving of notice by the Administrative Agent as
provided in the foregoing Section 9(a)(i), the Pledgor's true and
lawful attorney-in-fact and IRREVOCABLE PROXY to vote the Stock in any
manner the Administrative Agent deems advisable for or against all
matters submitted or which may be submitted to a vote of shareholders.
The power-of-attorney granted hereby is coupled with an interest and
shall be irrevocable so long as any of the Senior Debt remains unpaid
or any of the Banks shall have an obligation to make Advances under the
Loan Agreement.
(b) For so long as the Pledgor shall have the right
to vote the Stock, the Pledgor covenants and agrees that it will not,
without the prior written consent of the Administrative Agent, vote or
take any consensual action with respect to the Stock which would
constitute a Default.
10. Notices. All notices and other communications required or
permitted hereunder shall be in writing and shall be given in a manner
prescribed and to the addresses set forth in Section 11.1 of the Loan Agreement,
and with respect to the Pledgor at the address set forth on the signature page
hereof.
11. Governing Law, Etc.. The provisions of this Agreement
shall be construed and interpreted, and all rights and obligations of the
parties hereto determined, in accordance with the laws of the State of New York
without reference to the conflicts or choice of law principles thereof. This
Agreement, together with all documents referred to herein and the Loan
Agreement, constitutes the entire Agreement between the parties with respect to
the matters addressed herein, and may not be modified except by a writing
executed by the Administrative Agent and the Pledgor and delivered by the
Administrative Agent to the Pledgor.
12. Severability. If any paragraph or part hereof shall for
any reason be held or adjudged to be invalid, illegal or unenforceable by any
court of competent jurisdiction, such paragraph or part hereof so adjudicated
invalid, illegal or unenforceable shall be deemed separate, distinct and
independent, and the remainder of this Agreement shall remain in full force and
effect and shall not be affected by such holding or adjudication.
General Communication, Inc. - Form 8-K
Page 297
<PAGE>
13. FCC Consent. Notwithstanding anything herein which may be
construed to the contrary, no action shall be taken by any of the Administrative
Agent, the Managing Agents or the Banks with respect to the Licenses or any
license of the Federal Communications Commission ("FCC") unless and until all
requirements of Applicable Law, including, without limitation, any required
approval of either of the Alaska Public Utilities Commission or the U.S.
Government (together the "Licensors") and any required approval under the
Federal Communications Act of 1934, and any applicable rules and regulations
thereunder, requiring the consent to or approval of such action by either of the
Licensors, the FCC or any other governmental or other authority, have been
satisfied. The Pledgor covenants that upon request of the Administrative Agent
it will cause to be filed such applications and take such other action as may be
requested by such Person or Persons to obtain consent or approval of either of
the Licensors, the FCC or any other governmental or other authority which has
granted any License to the Pledgor to any action contemplated by this Agreement
and to give effect to the Security Interest of the Administrative Agent,
including, without limitation, the execution of an application for consent by
the FCC to an assignment or transfer involving a change in ownership or control
pursuant to the provisions of the Federal Communications Act of 1934. To the
extent permitted by Applicable Law, the Administrative Agent is hereby
irrevocably appointed the true and lawful attorney-in-fact of the Pledgor, in
its name and stead, to execute and file all necessary applications with the
Licensors, the FCC and with any other governmental or other authority. The power
of attorney granted herein is coupled with an interest and shall be irrevocable
for so long as any of the Obligations remains unpaid or unperformed or any of
the Banks have any obligation to make Advances under the Loan Agreement,
regardless of whether the conditions precedent to the making of any such
Advances has been or can be fulfilled.
14. Administrative Agent. Each reference herein to any right
granted to, benefit conferred upon, or power exercisable by the "Administrative
Agent" shall be a reference to the Administrative Agent (including any
successors to the Administrative Agent pursuant to the Loan Agreement) for
itself and for the ratable benefit of the Managing Agents and the Banks, and
each action taken or right exercised hereunder shall be deemed to have been so
taken or exercised by the Administrative Agent for itself and for the benefit of
and on behalf of all of the Managing Agents and the Banks.
15. Benefit of Assignment. This assignment and the rights
hereunder shall inure to the benefit of the Administrative Agent, the Banks and
the Managing Agents, and may be assigned in whole or in part by the
Administrative Agent, the Banks and the Managing Agents in connection with any
assignment of the Loan Agreement or the Indebtedness evidenced thereby, as is
permitted thereunder, and shall be binding upon each Partner and its respective
successors and assigns.
16. Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original, but all such
separate counterparts shall together constitute but one and the same instrument.
17. Pledge of Additional Securities. Pursuant to the Loan
Agreement, the Pledgor agrees to assign and grant security title to, and a
security interest in, any debt
General Communication, Inc. - Form 8-K
Page 298
<PAGE>
or equity securities in the Borrower acquired by the Pledgor after the date
hereof. The Pledgor agrees to execute, deliver and record any amendments hereto,
documents, instruments, stock powers and financing statements, deemed by the
Administrative Agent to be necessary or appropriate, to create or perfect the
security interest described in the foregoing sentence.
18. Nonrecourse Obligations. Except to the extent of any
representation, warranty, covenant or undertaking made specifically by the
Pledgor herein or in any other Loan Document, the Pledgor shall have no personal
liability under this Agreement or any other Loan Document, anything to the
contrary herein or therein notwithstanding.
[the remainder of this page is intentionally blank]
General Communication, Inc. - Form 8-K
Page 299
<PAGE>
IN WITNESS WHEREOF, the undersigned parties hereto have executed this
Agreement by and through their duly authorized officers, as of the day and year
first above written.
PLEDGOR: GENERAL COMMUNICATION, INC., an
Alaska corporation
By: /s/ John M. Lowber
Title: Vice President
Address:
ADMINISTRATIVE AGENT: TORONTO DOMINION (TEXAS), INC.
By: /s/ Jano Mott
Title: Vice President
General Communication, Inc. - Form 8-K
Page 300
<PAGE>
EXHIBIT F-1
FORM OF REQUEST FOR ADVANCE
I, , the of GCI Cable,
Inc., an Alaska corporation (the "Borrower") and an Authorized Signatory
thereof, hereby certify, pursuant to the provisions of that certain Loan
Agreement (as amended, supplemented or modified from time to time, the "Loan
Agreement") dated as of October 31, 1996, by and among the Borrower; Toronto
Dominion (Texas), Inc. Credit Lyonnais, Cayman Island Branch, NationsBank of
Texas, N.A. and The Chase Manhattan Bank, N.A., as Managing Agents (collectively
the "Managing Agents"); the financial institutions party thereto (the "Banks")
and Toronto Dominion (Texas), Inc. (the "Administrative Agent"), as
administrative agent for the Managing Agents and the Banks, that:
1. The Borrower hereby requests [a Base Rate Advance in the
amount of $ / a Eurodollar Advance in the amount of
$ with an Interest Period of ] to be made under the
Commitment on , 199 . The proceeds of the Advance should be wired as
set forth on Schedule 1 attached hereto. The foregoing instructions shall be
irrevocable.
2. All representations and warranties of the Borrower made
under the Loan Agreement, which in accordance with Section 4.2 of the Loan
Agreement are made at and as of the time of such Advance, are true and correct
in all material respects as of the date hereof, both before and after giving
effect to the application of the proceeds of the Advance in connection with
which this Request is given, except to the extent such representations and
warranties (a) relate expressly to an earlier date, (b) have been previously
fulfilled in accordance with the terms of the Loan Agreement, (c) have
subsequently become inapplicable, or (d) have been modified as a result of
activities of the Borrower or changes in circumstances in any case as permitted
under the Loan Agreement or as consented to or waived in writing in accordance
with Section 11.13 of the Loan Agreement.
3. The incumbency of Persons authorized by the Borrower to
sign documents is as stated in the certificate delivered pursuant to Section 3.1
of the Loan Agreement.
4. There does not exist, as of this date, and after giving
effect to the Advance requested in this Request, any Default under the Loan
Agreement.
5. All Necessary Authorizations have been obtained or made,
are in full force and effect and are not subject to any pending or threatened
reversal or cancellation.
General Communication, Inc. - Form 8-K
Page 301
<PAGE>
Capitalized terms used in this Request and not otherwise defined are
used as defined in the Loan Agreement.
Done as of the day of , 199 .
GCI CABLE, INC., an Alaska corporation
By:
Its:
Schedule 1 - Wiring Instructions
General Communication, Inc. - Form 8-K
Page 302
<PAGE>
EXHIBIT F-2
FORM OF REQUEST FOR INITIAL ADVANCE
I, , the of GCI Cable,
Inc., an Alaska corporation (the "Borrower") and an Authorized Signatory
thereof, hereby certify, pursuant to the provisions of that certain Loan
Agreement (as amended, supplemented or modified from time to time, the "Loan
Agreement") dated as of October 31, 1996, by and among the Borrower; Toronto
Dominion (Texas), Inc., Credit Lyonnais, New York Branch, NationsBank of Texas,
N.A. and The Chase Manhattan Bank, N.A., as Managing Agents (collectively the
"Managing Agents"); the financial institutions party thereto (the "Banks") and
Toronto Dominion (Texas), Inc. (the "Administrative Agent"), as administrative
agent for the Managing Agents and the Banks, that:
1. The Borrower hereby requests a Base Rate Advance in the
amount of $157,700,000.00 to be made under the Commitment on October 31, 1996.
The proceeds of such Advances will be used (i) in part to pay the loans
outstanding under the Prior Loan Agreement, (ii) in part to pay the fees due
under the Loan Agreement on the date hereof, (iii) to finance the Cooke
Acquisition, and (iv) the remainder should be wired as set forth on Schedule 1
attached hereto. The foregoing instructions shall be irrevocable.
2. All representations and warranties of the Borrower made
under the Loan Agreement, which in accordance with Section 4.2 of the Loan
Agreement are made at and as of the time of such Advance, are true and correct
in all material respects as of the date hereof, both before and after giving
effect to the application of the proceeds of the Advance in connection with
which this Request is given, except to the extent such representations and
warranties (a) relate expressly to an earlier date, (b) have been previously
fulfilled in accordance with the terms of the Loan Agreement, (c) have
subsequently become inapplicable, or (d) have been modified as a result of
activities of the Borrower or changes in circumstances in any case as permitted
under the Loan Agreement or as consented to or waived in writing in accordance
with Section 11.13 of the Loan Agreement.
3. The incumbency of Persons authorized by the Borrower to
sign documents is as stated in the certificate delivered pursuant to Section 3.1
of the Loan Agreement.
4. There does not exist, as of this date, and after giving
effect to the Advance requested in this Request, any Default under the Loan
Agreement.
5. All Necessary Authorizations have been obtained or made,
are in full force and effect and are not subject to any pending or threatened
reversal or cancellation.
General Communication, Inc. - Form 8-K
Page 303
<PAGE>
6. Attached to this Request as Schedule 2 are the calculations
(i) required to establish the Applicable Margin, and (ii) reflecting the
Borrower's compliance with Sections 7.8, 7.9 and 7.10 of the Loan Agreement.
Capitalized terms used in this Request and not otherwise defined are
used as defined in the Loan Agreement.
Done as of the 31st day of October, 1996.
GCI CABLE, INC., an Alaska corporation
By: /s/ John M. Lowber
Its: Secretary/Treasurer
Schedule 1 - Wiring Instructions
Schedule 2 - Compliance Calculations
General Communication, Inc. - Form 8-K
Page 304
<PAGE>
EXHIBIT G
FORM OF REQUEST FOR ISSUANCE OF LETTER OF CREDIT
I, , the of GCI Cable, Inc., an Alaska
corporation (the "Borrower") and an Authorized Signatory thereof, do hereby
certify pursuant to the provisions of that certain Loan Agreement (as amended
from time to time, the "Loan Agreement"), dated as of October 31, 1996, by and
among the Borrower, the Bank signatories thereto (the "Banks"), Toronto Dominion
(Texas), Inc. Credit Lyonnais, Cayman Island Branch, NationsBank of Texas, N.A.
and The Chase Manhattan Bank, N.A. (the "Managing Agents") and Toronto Dominion
(Texas), Inc., (the "Administrative Agent"), as administrative agent for the
Managing Agents and the Banks, that:
1. The Borrower hereby requests that The
Toronto-Dominion Bank issue a Letter of Credit under the Letter of
Credit Commitment in the face amount of U.S. $ to be issued
on , 199 , for the benefit of (the
"Beneficiary"), in the form attached hereto as Exhibit A, to expire on
, 199 (the "Expiration Date"). The face amount of such
Letter of Credit is not less than $50,000, and does not exceed the
remaining amount available under the Loan Agreement for the issuance of
Letters of Credit.
2. The Letter of Credit requested hereby is for the
following purpose:
-----------------------------------------------
-----------------------------------------------
-----------------------------------------------
-----------------------------------------------
3. All representations and warranties made in the
Loan Agreement and the other Loan Documents, which in accordance with
Section 4.2 of the Loan Agreement are made at and as of the time of
issuance of each Letter of Credit, are true and correct in all material
respects as of the date hereof, both before and after giving effect to
the issuance of the Letter of Credit in connection with which this
Request is given, except to the extent such representations and
warranties (a) relate expressly to an earlier date, (b) have been
previously fulfilled in accordance with the terms of the Loan
Agreement, (c) have subsequently become inapplicable, or (d) have been
modified as a result of activities of the Borrower or changes in
circumstances in any case as permitted under the Loan Agreement or as
consented to or waived in writing in accordance with Section 11.13 of
the Loan Agreement.
General Communication, Inc. - Form 8-K
Page 305
<PAGE>
4. The incumbency of persons authorized by the
Borrower to sign documents is as stated in the certificate of
incumbency most recently delivered to the Administrative Agent, the
Managing Agents and each of the Banks.
5. There does not exist, as of this date, and after
giving effect to the issuance of the Letter of Credit requested hereby,
any Default.
Capitalized terms used herein and not otherwise defined are used as
defined in the Loan Agreement.
Dated as of this day of , 199 .
GCI CABLE, INC., an Alaska corporation
By:
Title:
Exhibit A - Form of Letter of Credit
General Communication, Inc. - Form 8-K
Page 306
<PAGE>
EXHIBIT H
FORM OF SECURITY AGREEMENT
THIS SECURITY AGREEMENT (the "Agreement"), is entered into as of this
31st day of October, 1996, by and between GCI Cable, Inc., an Alaska corporation
(the "Borrower"), and Toronto Dominion (Texas), Inc. (the "Administrative
Agent"), as administrative agent for the Managing Agents and the Banks.
W I T N E S S E T H :
WHEREAS, the Borrower, the Administrative Agent, the Managing Agents
and the Banks have entered into that certain Loan Agreement dated as of October
31, 1996 (as amended, supplemented or otherwise modified from time to time, the
"Loan Agreement") pursuant to which the Banks have agreed to make loans (the
"Loans") to the Borrower, which Loans are evidenced by the promissory notes of
the Borrower in favor of each Bank (as amended, modified, renewed or extended
from time to time, the "Notes"); and
WHEREAS, to secure the due and punctual payment and performance of the
Obligations, the Borrower has entered into this Agreement;
NOW, THEREFORE, in consideration of the foregoing premises and for
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereto hereby agree that all capitalized terms
used herein shall have the meanings ascribed to such terms in the Loan Agreement
to the extent not otherwise defined or limited herein, and further agree as
follows:
1. Security Interest. The Borrower hereby grants, conveys,
transfers and assigns to the Administrative Agent, for the ratable benefit of
the Banks, a continuing security interest in and security title to (hereinafter
referred to as the "Security Interest") all of its property, whether now owned
or hereafter created, acquired, or reacquired, including, without limitation,
the property described below and all substitutions therefor, accessions thereto,
and improvements thereon:
Inventory. All of the Borrower's inventory of whatever nature
and kind and wherever situated, including, without limitation,
converters, coaxial cables and hardware, raw materials, components,
work in process, finished goods, goods in transit, and packing and
shipping materials, accretions and accessions thereto, and trust
receipts and similar documents covering the same products (the
"Inventory");
General Communication, Inc. - Form 8-K
Page 307
<PAGE>
Equipment. All machinery and equipment not included in
Inventory above, including, without limitation, motor vehicles and all
accretions and accessions thereto; CATV towers, antennas, and equipment
located at head-end facilities; distribution systems consisting of pole
hardware, strand, coaxial cables, electronic amplifiers, associated
passive devices and subscriber service drops incident to normal CATV
service; test equipment; all equipment used in the specialized mobile
radio business; and closed circuit program origination equipment (the
"Equipment");
Accounts. All right to payment for goods sold or leased or for
services rendered, including, without limitation, the provision of
cable television services, which is not evidenced by an instrument or
chattel paper, whether or not it has been earned by performance,
including, without limitation, all agreements with subscribers, and all
books and records recording, evidencing, or relating to such accounts
or any part thereof (the "Accounts");
Contracts and Leases. To the extent that the Borrower may
grant a security interest therein without violating a valid and
enforceable restriction on the granting of a security interest
contained therein:
(a) All construction contracts, Pole
Agreements, and public utility contracts to which the Borrower
is a party, whether now existing or hereafter arising (the
"Contracts");
(b) all lease agreements for real
property or personal property to which the Borrower is a party
(the "Leases"), whether now existing or hereafter arising;
(c) all other contracts and contractual
rights, remedies, or provisions now existing or hereafter
arising in favor of the Borrower (the "Other Contracts");
General Intangibles. All of the Borrower's general intangibles
(including, without limitation, any proceeds from insurance policies
after payment of prior interests), patents, unpatented inventions,
trade secrets, copyrights, contract rights, goodwill, literary rights,
rights to performance, rights under licenses, choses-in-action, claims,
information contained in computer media (such as data bases, source and
object codes, and information therein) things in action, trademarks and
trademarks applied for (together with the goodwill associated
therewith) and derivatives thereof, trade names, including the right to
make, use, and vend goods utilizing any of the foregoing, and permits,
licenses, certifications, authorizations and approvals, (to the extent
that the Borrower may grant a security interest therein without the
consent of the granting party) and the rights of the Borrower
thereunder, issued by any governmental, regulatory, or private
authority, agency, or entity whether now owned or hereafter acquired,
together with all cash and non-cash proceeds and products thereof (the
"Intangibles");
General Communication, Inc. - Form 8-K
Page 308
<PAGE>
Licenses. Subject to Section 22 hereof, and to the extent (i)
permitted by Applicable Law, or (ii) that the Borrower may grant a
security interest therein without violating a valid and enforceable
restriction on the granting of a security interest contained therein,
all franchises, licenses, permits, and operating rights authorizing or
relating to the Borrower's rights to construct and operate cable and
pay-cable television facilities, including, without limitation, the
Licenses held by the Borrower, including, without limitation, those
described on Exhibit A attached hereto (the "Licenses");
Furniture and Fixtures. All furniture and fixtures in which
the Borrower has an interest (the "Furniture and Fixtures");
Miscellaneous Items. All goods, chattel paper, documents,
instruments, choses in action, claims, money, deposits, certificates of
deposit, stock or share certificates, licenses and other rights in
intellectual property, and other tangible personal property not
included above ("Miscellaneous Items"); and
Proceeds. All proceeds of any of the above, and all proceeds
of any loss of, damage to, or destruction of the above, whether insured
or not insured, and all other proceeds of any sale, lease, or other
disposition of any property or interest therein referred to above,
together with all proceeds of any policies of insurance covering any or
all of the above, the proceeds of any award in condemnation with
respect to any of the property of the Borrower, any rebates or refunds,
whether for taxes or otherwise, and all proceeds of any such proceeds
(the "Proceeds").
The Inventory, Equipment, Accounts, Contracts, Other Contracts, Leases,
Intangibles, Licenses, Furniture and Fixtures, Miscellaneous Items, and Proceeds
thereof, as described above, are hereinafter collectively referred to as the
"Collateral."
This Agreement and the Security Interest secure the Obligations,
whether now or hereafter existing.
2. Further Assurances. The Borrower agrees to make, execute,
deliver, or cause to be done, executed, and delivered, from time to time, all
such further acts, documents, and things as the Administrative Agent on behalf
of the Managing Agents and the Banks, may reasonably require for the purpose of
perfecting or protecting its or their rights hereunder or otherwise giving
effect to this Agreement, all within thirty (30) days following the request
therefor. In addition, the Borrower hereby authorizes the Administrative Agent
upon the Borrower's failure to do so, to file such financing statements and such
other documents as the Administrative Agent may deem necessary or desirable to
protect or perfect the interest of the Administrative Agent, for itself and on
behalf of the Managing Agents and the Banks in the Collateral, and the Borrower
further irrevocably appoints the Administrative Agent as the Borrower's
attorney-in-fact, with power of attorney to execute on behalf of the Borrower
such
General Communication, Inc. - Form 8-K
Page 309
<PAGE>
UCC financing statement amendment forms as the Administrative Agent may from
time to time deem necessary or desirable. Such power of attorney is coupled with
an interest and shall be irrevocable for so long as any of the Obligations
remains unpaid or unperformed or any of the Banks have any obligation to make
Advances under the Loan Agreement, regardless of whether the conditions
precedent to the making of any such Advances have been or can be fulfilled.
3. Representations and Warranties. The Borrower represents and
warrants to the Administrative Agent, the Managing Agents and the Banks that:
(a) Exhibit B attached hereto and
incorporated herein by this reference sets forth a complete
and accurate list of the Pole Agreements and utility
agreements in effect on the date hereof, and the Borrower has
furnished or will furnish copies thereof to the Administrative
Agent, the Managing Agents and the Banks; and
(b) Exhibit C attached hereto and
incorporated herein by this reference sets forth a complete
and accurate list of all Leases for real property and all
material Capitalized Lease Obligations to which the Borrower
is a party in effect on the date hereof, and the Borrower has
furnished or will furnish copies thereof to the Administrative
Agent, the Managing Agents and the Banks.
4. Priority of Security Interest. The Borrower further
represents and warrants that the Security Interest in the Collateral granted to
the Administrative Agent hereunder shall constitute at all times a valid first
priority security interest in favor of the Administrative Agent in and upon the
Collateral, subject only to Permitted Liens. The Borrower shall take or cause to
be performed such acts and actions as shall be necessary or appropriate to
assure that the Security Interest upon the Collateral shall not become
subordinate or junior to the security interests, Liens, or claims of any other
Person, except for Permitted Liens.
5. Locations of Collateral. The Borrower further represents
and warrants that it now keeps all of its records concerning its Collateral
either at its chief executive office, or at the chief executive office of the
Manager, which are as follows:
General Communication, Inc. - Form 8-K
Page 310
<PAGE>
Borrower: GCI Cable, Inc.
-------------------------------
-------------------------------
-------------------------------
-------------------------------
Manager: Prime II Management, L.P.
3000 One American Center
600 Congress Avenue
Austin, Texas 78701
The Borrower covenants and agrees that it shall not keep any of such records at
any other address unless written notice thereof is given to the Administrative
Agent at least thirty (30) days prior to the effective date of any new address
for the keeping of such records. The Borrower's principal place of business is
located at , Anchorage,
Alaska 99503, and all of the Collateral is located in the
Recording District, Alaska. The Borrower further
agrees that it shall immediately advise the Administrative Agent, in writing,
making reference to this Section of this Agreement, of the opening of any new
place of business, the closing of any existing place of business, or any change
in the location of the place where it keeps the Collateral.
6. Collateral Not Fixtures. The parties intend that, to the
extent permitted by Applicable Law, the Collateral shall remain personal
property irrespective of the manner of its attachment or affixation to realty.
7. Risk of Loss, Sale of Collateral. Any and all injury to, or
loss or destruction of, the Collateral shall be at the Borrower's risk, and
shall not release the Borrower from its obligations hereunder. Except as
permitted under the Loan Agreement, the Borrower agrees not to sell, transfer,
assign, dispose of, mortgage, grant a security interest in, or encumber any of
the Collateral in any manner without the prior written consent of those Persons
required under Section 11.13 of the Loan Agreement. The Borrower further agrees
that the Administrative Agent may, but shall in no event be obligated to, insure
any of the Collateral in such form and amount as the Administrative Agent may
deem necessary or desirable if the Borrower fails to obtain insurance as
required by the Loan Agreement, and that the Administrative Agent may pay or
discharge any taxes, liens, or encumbrances which are not Permitted Liens on any
of the Collateral, and the Borrower agrees to pay upon demand any such sum so
expended by the Administrative Agent with interest at the Default Rate, and such
sums and interest shall be deemed to be a part of the Obligations secured by the
Collateral under the terms of this Agreement.
8. Covenants of Borrower. The Borrower shall (i) fulfill,
perform and observe each and every material condition and covenant contained in
any of the material Contracts, the Other Contracts, or the Leases, (ii) give
prompt notice to the extent required under the Loan Agreement to the
Administrative Agent, the Managing Agents and the Banks of any claim of material
default under any of the Contracts, the
General Communication, Inc. - Form 8-K
Page 311
<PAGE>
Other Contracts, or the Leases given to the Borrower or by the Borrower, (iii)
at the sole cost and expense of the Borrower, enforce the performance and
observance of each and every material covenant and condition of the material
Contracts, the Other Contracts, or the Leases to be performed or observed by
other parties to any of the material Contracts, the Other Contracts, or Leases,
and (iv) appear in, defend and, as appropriate, settle any action growing out of
or in any manner connected with any Contract, Other Contract, or Lease;
provided, however, that prior to the occurrence of an Event of Default (which
remains uncured or unwaived), the Borrower may issue or obtain waivers in the
ordinary course of business with respect to items (i) and (iii). The rights and
interests transferred and assigned to the Administrative Agent hereunder include
all of the Borrower's right and title (i) to modify the Contracts, the Other
Contracts, and Leases, (ii) to terminate the Contracts, the Other Contracts, and
the Leases, and (iii) to waive or release the performance or observance of any
obligation or condition of the Contracts, the Other Contracts, and the Leases;
provided, however, that these rights of the Administrative Agent shall not be
exercised unless an Event of Default shall exist hereunder.
9. Remedies. Upon the occurrence of an Event of Default and
until such Event of Default is waived in writing in accordance with Section
11.13 of the Loan Agreement (or, if prior to acceleration or the exercise of any
other remedies pursuant to Section 8.2 of the Loan Agreement, cured), the
Administrative Agent shall have such rights and remedies as are set forth in the
Loan Agreement and herein, all the rights, powers and privileges of a secured
party under the Uniform Commercial Code of the State of New York and any other
applicable jurisdiction, and all other rights and remedies available to the
Administrative Agent, at law or in equity. The Borrower covenants and agrees
that any notification of intended disposition, including any public or private
sale, of any Collateral, if such notice is required by law, shall be deemed
reasonably and properly given if given in the manner provided for in Section 19
hereof at least ten (10) Business Days prior to such disposition. Upon the
occurrence of an Event of Default and until such Event of Default is waived in
writing in accordance with Section 11.13 of the Loan Agreement (or, if prior to
acceleration or the exercise of any other remedies pursuant to Section 8.2 of
the Loan Agreement, cured), the Administrative Agent upon the written request of
the Majority Banks, shall have the right to the appointment of a receiver for
the properties and assets of the Borrower, and the Borrower hereby consents to
such rights and such appointment and hereby waives any objection the Borrower
may have thereto or the right to have a bond or other security posted by the
Administrative Agent in connection therewith.
10. Administrative Agent's Right to Perform Contracts. Upon
the occurrence of an Event of Default and until such Event of Default is waived
in writing in accordance with Section 11.13 of the Loan Agreement (or, if prior
to acceleration or the exercise of any other remedies pursuant to Section 8.2 of
the Loan Agreement, cured), the Administrative Agent may proceed to perform any
and all of the obligations of the Borrower contained in any of the Contracts,
the Other Contracts, or the Leases and exercise any and all rights of the
Borrower therein contained as fully as the Borrower itself could. The Borrower
hereby appoints the
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Administrative Agent its attorney-in-fact, effective upon the occurrence of an
Event of Default and until such Event of Default is waived in writing in
accordance with Section 11.13 of the Loan Agreement (or, if prior to
acceleration or the exercise of any other remedies pursuant to Section 8.2 of
the Loan Agreement, cured), with power of substitution, to take such action,
execute such documents, and perform such work, as the Administrative Agent may
deem appropriate in exercise of the rights and remedies granted the
Administrative Agent herein. The powers herein granted shall include, but not be
limited to, powers to sue on the Contracts, the Other Contracts, or the Leases
and to seek all governmental approvals required for the operation of the System
(or any portion thereof). The power of attorney granted herein is coupled with
an interest and shall be irrevocable for so long as any of the Obligations
remains unpaid or unperformed or any of the Banks have any obligation to make
Advances under the Loan Agreement, regardless of whether the conditions
precedent to the making of any such Advances have been or can be fulfilled.
11. Right to Cure Borrower's Default Under Contracts. Upon the
occurrence of an Event of Default and until such Event of Default is waived in
writing in accordance with Section 11.13 of the Loan Agreement (or, if prior to
acceleration or the exercise of any other remedies pursuant to Section 8.2 of
the Loan Agreement, cured), should the Borrower fail to perform or observe any
material covenant or comply with any material condition contained in any of the
Contracts, the Other Contracts, or the Leases, then the Administrative Agent,
but without obligation to do so and without releasing the Borrower from its
obligation to do so, may perform such covenant or condition and, to the extent
that the Administrative Agent shall incur any costs or pay any expenses in
connection therewith, including any costs or expenses of litigation associated
therewith, such costs, expenses, or payments shall be included in the
Obligations secured hereby and shall bear interest from the payment of such
costs or expenses at the Default Rate. Anything herein to the contrary
notwithstanding (a) the Borrower shall remain liable under the Contracts, the
Other Contracts, the Leases and all other contracts and agreements included in
the Collateral to the same extent set forth therein to perform all of the duties
and obligations thereunder to the same extent as if this Agreement had not been
executed, (b) the exercise by the Administrative Agent of any of the rights
hereunder shall not release the Borrower from any of its duties or obligations
under the Contracts, the Other Contracts, the Leases or any other contract or
agreements included in the Collateral, and (c) none of the Administrative Agent,
any Managing Agent, nor any Bank, shall be obligated to perform or discharge any
obligation of the Borrower under any of the Contracts, the Other Contracts, the
Leases, or any other contracts or agreements included in the Collateral and, the
Borrower agrees to indemnify and hold the Administrative Agent, the Managing
Agents, and the Banks harmless against any and all liability, loss, and damage
which the Administrative Agent, the Managing Agents, and the Banks, or any of
them, may incur under any of the Contracts, the Other Contracts, the Leases or
any other contracts or agreements included in the Collateral or under or by
reason of this Agreement, and any and all claims and demands whatsoever which
may be asserted against the Borrower by reason of an act of any of the
Administrative Agent, the Managing Agents, or the Banks under any of the terms
of this Agreement or under the Contracts, the Other Contracts or the
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Leases; unless, with respect to any of the above, the party seeking
indemnification is finally judicially determined to have acted with gross
negligence or wilful misconduct.
12. Agent Attorney-in-Fact. The Borrower hereby further
appoints the Administrative Agent as its attorney-in-fact, effective upon the
occurrence of an Event of Default and until such Event of Default is waived in
writing in accordance with Section 11.13 of the Loan Agreement (or, if prior to
acceleration or the exercise of any other remedies pursuant to Section 8.2 of
the Loan Agreement, cured), with power of substitution, and with authority to
receive, open, and take appropriate action with respect to all mail addressed to
the Borrower, and to notify the postal authorities to change the address for
delivery of mail addressed to the Borrower to such address as the Administrative
Agent may designate, to endorse the name of the Borrower on any note,
acceptance, check, draft, money order, or other evidence of debt or of payment
which may come into the possession of any of the Administrative Agent, the
Managing Agents and the Banks, and generally to do such other things and acts in
the name of the Borrower as are necessary or appropriate to protect or enforce
the rights hereunder of the Administrative Agent, the Managing Agents, and the
Banks. The Borrower further authorizes the Administrative Agent effective upon
the occurrence of an Event of Default and until such Event of Default is waived
in writing in accordance with Section 11.13 of the Loan Agreement (or, if prior
to acceleration or the exercise of any other remedies pursuant to Section 8.2 of
the Loan Agreement, cured), to compromise and settle or to sell, assign, or
transfer or to ask, collect, receive, or issue any and all claims possessed by
the Borrower all in the name of the Borrower. After deducting all reasonable
expenses and charges (including the Administrative Agent's reasonable attorneys'
fees) of retaking, keeping, storing, and selling the Collateral, the
Administrative Agent shall apply the proceeds in payment of any of the
Obligations in such order of application as is set forth in the Loan Agreement,
and, if a deficiency results after such application, the Borrower covenants and
agrees to pay such deficiency to the Administrative Agent. The power of attorney
granted herein is coupled with an interest and shall be irrevocable for so long
as any of the Obligations remains unpaid or unperformed or any of the Banks have
any obligation to make Advances under the Loan Agreement, regardless of whether
the conditions precedent to the making of any such Advances have been or can be
fulfilled. The Borrower agrees that if steps are taken by the Administrative
Agent to enforce rights hereunder, or to realize upon any of the Collateral, the
Borrower shall pay to the Administrative Agent the amount of the costs,
including reasonable attorneys' fees, incurred in connection with such
enforcement, and the Borrower's obligation to pay such amounts shall be deemed
to be a part of the Obligations secured hereunder.
13. Indemnification. The Borrower shall indemnify and hold
harmless the Administrative Agent, the Managing Agents, and the Banks, and each
of them, and any other Person acting hereunder for all losses, costs, damages,
fees, and expenses whatsoever associated with the exercise of the powers of
attorney granted herein and shall release the Administrative Agent, the Managing
Agents, and the Banks and any other Person acting hereunder from all liability
whatsoever for the exercise of the foregoing powers of attorney and all actions
taken pursuant thereto, unless in any
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such event such Person seeking indemnification hereunder is finally judicially
determined to have acted or failed to act with gross negligence or willful
misconduct.
14. Rights Cumulative. The Borrower agrees that the rights of
the Administrative Agent, the Managing Agents, and the Banks under this
Agreement, the Loan Agreement, the other Loan Documents, or any other contract
or agreement now or hereafter in existence between the Administrative Agent, the
Managing Agents, and the Banks, or any of them, and the Borrower shall be
cumulative and that the Administrative Agent may from time to time exercise such
rights and such remedies as the Administrative Agent may have thereunder and
under the laws of the United States and any state, as applicable, in the manner
and at the time that the Administrative Agent, the Managing Agents and the Banks
in their sole discretion desire. The Borrower further expressly agrees that none
of the Administrative Agent, the Managing Agents and the Banks shall in any
event be under any obligation to resort to any Collateral prior to exercising
any other rights that the Administrative Agent, the Managing Agents and the
Banks, or any of them, may have against the Borrower or its property, or to
resort to any other collateral for the Obligations prior to the exercise of
remedies hereunder.
15. Receivership. The Borrower hereby acknowledges that the
Obligations arose out of a commercial transaction, and agrees that if an Event
of Default shall occur, hereunder (and until such Event of Default is waived in
writing in accordance with Section 11.13 of the Loan Agreement or, if prior to
acceleration or the exercise of any other remedies pursuant to Section 8.2 of
the Loan Agreement, cured), the Administrative Agent shall have the right to an
immediate writ of possession without notice of a hearing, and hereby knowingly
and intelligently waives any and all rights it may have to any notice and
posting of a bond by the Administrative Agent, the Managing Agents, and the
Banks, or any of them, prior to seizure by the Administrative Agent or any of
its transferees, assigns, or successors in interest, of the Collateral or any
portion thereof.
16. Remedies Not Exclusive. No transfer or renewal, extension,
assignment, or termination of this Agreement, the Loan Agreement, any other Loan
Document, or any other instrument or document executed and delivered by the
Borrower to the Administrative Agent, the Managing Agents, and the Banks, or any
of them, nor any additional Advances made by the Banks to the Borrower, nor the
taking of further security, nor the retaking or redelivery of the Collateral to
the Borrower by any of the Administrative Agent, the Managing Agents and the
Banks, nor any other act of any of the Administrative Agent, the Managing Agents
and the Banks shall release the Borrower from any Obligation, except a release
or discharge executed in writing by the Administrative Agent, the Managing
Agents and the Banks (as and to the extent required under the Loan Agreement)
with respect to such Obligation or payment of such Obligation or upon full
payment to the Administrative Agent, the Managing Agents and the Banks and
satisfaction of all the Obligations. Neither the Administrative Agent, the
Managing Agents nor the Banks shall by any act, delay, omission or otherwise, be
deemed to have waived any of their rights or remedies hereunder, unless such
waiver is in writing and signed by the Administrative
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Agent, and, as required by the Loan Agreement, the Managing Agents and the Banks
and then only to the extent therein set forth. A waiver by the Administrative
Agent, the Managing Agents and the Banks, or any of them, of any right or remedy
on any occasion shall not be construed as a bar to the exercise of any such
right or remedy which any of the Administrative Agent, the Managing Agents and
the Banks would otherwise have had on any other occasion.
17. Assignment. The Borrower agrees that this Agreement and
rights of the Administrative Agent, the Managing Agents and the Banks hereunder
may in the discretion of such Person be assigned in whole or in part by such
Person in connection with any permitted assignment of such Person's interest in
the Loan Agreement or the Obligations. In the event this Agreement is so
assigned by any of the Administrative Agent, the Managing Agents and the Banks,
the terms "Administrative Agent," "Managing Agent,""Managing Agents," "Bank" and
"Banks" wherever used herein shall be deemed to refer to and include any such
assignee or assignees, as appropriate. This Agreement may not be assigned by the
Borrower without the prior written consent of each Bank.
18. Successors and Assigns. This Agreement shall apply to and
bind the respective successors and permitted assigns of the Borrower and inure
to the benefit of the respective successors and assigns of the Administrative
Agent, the Managing Agents and the Banks.
19. Notices. All notices and other communications required or
permitted hereunder shall be in writing and shall be given in a manner
prescribed and to the addresses set forth in Section 11.1 of the Loan Agreement.
20. Governing Law, Etc. The provisions of this Agreement shall
be construed and interpreted, and all rights and obligations of the parties
hereto determined, in accordance with the laws of the State of New York without
reference to the conflicts or choice of law principles thereof. This Agreement,
together with all documents referred to herein, constitutes the entire Agreement
between the Borrower, the Administrative Agent, the Managing Agents, and the
Banks with respect to the matters addressed herein, and may not be modified
except by a writing executed by the Administrative Agent and the Borrower.
21. Severability. If any paragraph or part hereof shall for
any reason be held or adjudged to be invalid, illegal, or unenforceable by any
court of competent jurisdiction, such paragraph or part hereof so adjudicated
invalid, illegal or unenforceable shall be deemed separate, distinct and
independent, and the remainder of this Agreement shall remain in full force and
effect and shall not be affected by such holding or adjudication.
22. FCC Consent. Notwithstanding anything herein which may be
construed to the contrary, no action shall be taken by any of the Administrative
Agent, the Managing Agents or the Banks with respect to the Licenses or any
license of the Federal Communications Commission ("FCC") unless and until all
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requirements of Applicable Law, including, without limitation, any required
approval of either of the Alaska Public Utilities Commission or the U.S.
Government (together the "Licensors") and any required approval under the
Federal Communications Act of 1934, and any applicable rules and regulations
thereunder, requiring the consent to or approval of such action by either of the
Licensors, the FCC or any other governmental or other authority, have been
satisfied. The Borrower covenants that upon request of the Administrative Agent
it will cause to be filed such applications and take such other action as may be
requested by such Person or Persons to obtain consent or approval of either of
the Licensors, the FCC or any other governmental or other authority which has
granted any License to the Borrower to any action contemplated by this Agreement
and to give effect to the Security Interest of the Administrative Agent,
including, without limitation, the execution of an application for consent by
the FCC to an assignment or transfer involving a change in ownership or control
pursuant to the provisions of the Federal Communications Act of 1934. To the
extent permitted by Applicable Law, the Administrative Agent is hereby
irrevocably appointed the true and lawful attorney-in-fact of the Borrower, in
its name and stead, to execute and file all necessary applications with the
Licensors, the FCC and with any other governmental or other authority. The power
of attorney granted herein is coupled with an interest and shall be irrevocable
for so long as any of the Obligations remains unpaid or unperformed or any of
the Banks have any obligation to make Advances under the Loan Agreement,
regardless of whether the conditions precedent to the making of any such
Advances has been or can be fulfilled.
23. Termination and Release. Upon satisfaction in full of the
Obligations (other than any Obligation which may survive the termination of the
Loan Agreement as provided for therein) and termination of the Commitment, the
Administrative Agent shall take any actions reasonably necessary to terminate
and release the security interest in the Collateral granted to the
Administrative Agent hereunder, all at the cost and expense of the Borrower.
24. Administrative Agent. Each reference herein to any right
granted to, benefit conferred upon, or power exercisable by the "Administrative
Agent" shall be a reference to the Administrative Agent (including any
successors to the Administrative Agent pursuant to the Loan Agreement) for
itself and for the ratable benefit of the Managing Agents and the Banks, and
each action taken or right exercised hereunder shall be deemed to have been so
taken or exercised by the Administrative Agent for itself and for the benefit of
and on behalf of all of the Managing Agents and the Banks.
25. Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original, but all such
separate counterparts shall together constitute but one and the same instrument.
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IN WITNESS WHEREOF, the undersigned have caused this
Agreement to be executed, by and through their duly authorized representatives,
as of the day and year first above written.
BORROWER: GCI CABLE, INC., an Alaska corporation
By: /s/ John M. Lowber
Title: Secretary/Treasurer
Attest:
Title:
[CORPORATE SEAL]
ADMINISTRATIVE
AGENT: TORONTO DOMINION (TEXAS), INC.,
as Administrative Agent
By: /s/ Jano Mott
Title: Vice President
Exhibit A - Licenses
Exhibit B - Pole and Utility Contracts
Exhibit C - Leases
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EXHIBIT I
FORM OF SUBORDINATION AND ASSIGNMENT
OF MANAGEMENT AGREEMENT
THIS SUBORDINATION AND ASSIGNMENT OF MANAGEMENT AGREEMENT (the
"Agreement"), made as of this 31st day of October, 1996, by and among GCI Cable,
Inc., an Alaska corporation (the "Borrower"), Prime II Management, L.P., a
Delaware limited partnership (the "Manager"), and Toronto Dominion (Texas), Inc.
(the "Administrative Agent"), as administrative agent for the Managing Agents
and the Banks,
W I T N E S S E T H:
WHEREAS, the Borrower has entered into that certain Loan Agreement
dated as of October 31, 1996 (as the same may be amended, supplemented or
otherwise modified from time to time, the "Loan Agreement") by and among the
Borrower, the Administrative Agent, the Managing Agents and the Banks; and
WHEREAS, the Borrower as a result of the GCI Acquisition of even date
herewith, is acquiring a ninety-nine percent (99%) general partnership interest
in the Prior Borrower, and GCI Cable Holdings, Inc., a wholly-owned subsidiary
of the Borrower, is acquiring a one-percent (1%) limited partnership interest in
the Prior Borrower; and
WHEREAS, the Manager was engaged previously in the business of
providing management services to the Prior Borrower in return for management
fees; and
WHEREAS, the Manager now desires to perform similar management services
to the Borrower and its Subsidiaries (including the Prior Borrower) in return
for management fees and deems it to be in its best interests to enter into this
Agreement; and
WHEREAS, the execution and delivery of this Agreement is a condition,
among others, to the making of the Loans by the Banks to the Borrower; and
NOW, THEREFORE, to induce the Administrative Agent, the Managing Agents
and the Banks to enter into the Loan Agreement, to induce the Banks to make the
Loans, and for Ten Dollars ($10.00) and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Manager hereby
agrees with the Administrative Agent (for itself and on behalf of the Managing
Agents, and the Banks) as follows:
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1. Definitions. For purposes hereof,
"Senior Indebtedness" means collectively (i) the Obligations
expressly including, without limitation, any post-petition interest,
and (ii) any amounts which the Administrative Agent, any Managing Agent
or any Bank may be owed as a result of a breach of any obligation,
covenant or undertaking set forth in this Agreement.
"Subordinated Debt" means, collectively, all management fees
or other obligations of the Borrower to the Manager arising under or in
connection with the Management Agreement or otherwise, however
evidenced or incurred, whether direct or indirect, absolute or
contingent, now existing or hereafter arising, due or to become due,
other than (i) out of pocket expenses reasonably incurred by officers
and employees of the Manager in traveling to and from and visiting the
Systems, and (ii) expenses reasonably incurred by the Manager for goods
and/or services provided by third parties on behalf of the Borrower.
All other capitalized terms used herein shall have the meanings ascribed to such
terms in the Loan Agreement unless otherwise defined or limited herein.
2. Security Interest. The Manager hereby unconditionally
assigns, transfers, conveys and grants to the Administrative Agent, for the
ratable benefit of the Banks, all of its rights, title and interest in and to,
and a continuing security interest in and security title to, the Management
Agreement and all proceeds thereof as security for the Senior Indebtedness.
3. Subordination.
(a) All Senior Indebtedness shall be paid in full in
cash before any payment is made or amount accrued on account of any Subordinated
Debt, except to the extent such Subordinated Debt is expressly permitted to be
accrued or paid by the Borrower to the Manager pursuant to Section 7.7 of the
Loan Agreement;
(b) In the event that the Borrower shall make any
unauthorized payment on account of the Subordinated Debt to the Manager, such
payment shall be held by the Manager in trust for the benefit of, and shall be
paid forthwith over and delivered to, the Administrative Agent, for application
to the payment of the Senior Indebtedness in accordance with the Loan Agreement;
and
(c) The Manager acknowledges and agrees that upon
the occurrence of an Event of Default and until such Event of Default is waived
in writing in accordance with Section 11.13 of the Loan Agreement (or, if prior
to acceleration or the exercise of any other remedies pursuant to Section 8.2 of
the Loan Agreement, cured), the Borrower is not permitted to make any payments
in respect of the Subordinated Debt, and that the Administrative Agent shall
have the right to notify and instruct the Borrower to thereafter make all
payments otherwise due in respect of the Subordinated Debt directly to the
Administrative Agent, and the Administrative
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Agent shall have the right to apply all such payments received in reduction of
the Senior Indebtedness in accordance with the terms and provisions of the Loan
Agreement. The Manager further agrees that immediately upon the request of the
Administrative Agent upon the occurrence of an Event of Default, and until such
Event of Default is waived in writing in accordance with Section 11.13 of the
Loan Agreement, the Manager shall cause the Borrower to make all payments under
the Management Agreement or otherwise in respect of the Subordinated Debt
directly to the Administrative Agent. In no event shall the Borrower pay or the
Manager receive any payment, interest or delinquency charges of any type
whatsoever in respect of the Subordinated Debt except to the extent permitted
under Section 7.7 of the Loan Agreement.
4. Covenants of the Manager.
(a) The Manager agrees that the Subordinated Debt
shall be unsecured, and that, so long as any of the Senior Indebtedness shall
remain unpaid or any of the Banks shall be under any obligation to make any
Advance under the Loan Agreement (whether or not the conditions to such Advance
have been or can be fulfilled), if at any time after the occurrence and during
the continuation of an Event of Default the Manager shall be in possession of
any assets of the Borrower which are subject to a Lien in favor of the
Administrative Agent ("Collateral"), the Manager shall promptly deliver such
Collateral to the Administrative Agent, and until such delivery shall hold such
Collateral in trust for the Administrative Agent for the ratable benefit of the
Banks.
(b) Until such time as the Senior Indebtedness has
been paid in full and the Banks are under no further obligation to make any
Advance to the Borrower under the Loan Agreement (whether or not the conditions
to such Advance have been or can be fulfilled), the Manager agrees not to
exercise any of its remedies under the Management Agreement or any other
document, instrument, or agreement relating thereto or to the Subordinated Debt
in order to collect the Subordinated Debt, or to accelerate or, except as
permitted to be accrued or paid by the Borrower pursuant to Section 7.7 of the
Loan Agreement, collect any portion of the Subordinated Debt, or to realize upon
any of the Collateral or any other assets of the Borrower, or to attach, levy
upon, or execute against any of the Collateral or any other assets of the
Borrower.
(c) The Manager agrees that it will not in its
capacity as a creditor of the Borrower, institute against or join any other
Person in instituting against the Borrower, any bankruptcy, reorganization,
insolvency, or liquidation proceeding or any other proceeding under any federal
or state bankruptcy or similar law for a period of one (1) year and one (1) day
after the date on which all Senior Indebtedness has been paid in full in cash
and none of the Banks is under any further obligation to make any Advance to the
Borrower, regardless of whether the conditions precedent to any such Advance
have been or can be fulfilled.
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(d) The Manager covenants and agrees that it will
not, at any time during the term of this Agreement, except as permitted under
the Loan Agreement, enter into any amendment of the Management Agreement or
convey, encumber or assign its rights or obligations thereunder in any manner
whatsoever.
5. Bankruptcy. Upon any distribution of the assets or
properties of the Borrower or upon any dissolution, winding up, liquidation, or
reorganization involving the Borrower (whether in bankruptcy, insolvency, or
receivership proceedings or upon an assignment for the benefit of creditors or
otherwise):
(a) the Administrative Agent, the Managing Agents
and the Banks shall first be entitled to receive payment in full of all Senior
Indebtedness before the Manager is entitled to receive any payment on account of
the Subordinated Debt;
(b) any payment or distribution of the assets or
properties of the Borrower of any kind or character, whether in cash, property,
or securities, to which the Manager would be entitled except for the provisions
of this Agreement, shall be paid by the trustee or agent or other Person making
such payment or distribution directly to the Administrative Agent; and
(c) in the event that, notwithstanding the
foregoing, any payment or distribution of the assets or properties of the
Borrower of any kind or character, whether in cash, property, or securities,
shall be received by the Manager on account of the Subordinated Debt before all
Senior Indebtedness is paid in full in cash, such payment or distribution shall
be received and held in trust for and shall be paid over to the Administrative
Agent, for application to the payment of the Senior Indebtedness as provided in
the Loan Agreement until all such Senior Indebtedness shall have been paid in
full in cash.
6. Rights of Agent Absolute. No right of the Administrative
Agent, any of Managing Agents, or any of the Banks, or any present or future
holder of any Senior Indebtedness to enforce subordination as provided herein
shall at any time in any way be prejudiced or impaired by any act or failure to
act on the part of the Borrower, or by any act or failure to act, in good faith,
by any such holder of the Senior Indebtedness, or by any noncompliance by the
Borrower with any of the terms of the Notes or any other Loan Document,
regardless of any knowledge thereof with which such Person may have or be
otherwise charged.
7. Agent Attorney-in-Fact. The Manager authorizes and
expressly directs the Administrative Agent to take such action as may be
necessary or appropriate from time to time to effectuate the subordination and
assignment provided herein and, effective upon the occurrence of an Event of
Default, and until such Event of Default is waived in writing in accordance with
Section 11.13 of the Loan Agreement (or, if prior to acceleration or the
exercise of any other remedies pursuant to Section 8.2 of the Loan Agreement,
cured) appoints the Administrative Agent its attorney-in-fact for such purpose,
including, without limitation, in the event of any dissolution, winding up,
liquidation, or reorganization of the Borrower (whether in bankruptcy,
insolvency,
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or receivership proceedings or upon an assignment for the benefit of creditors
or otherwise tending towards liquidation of the business or the assets of the
Borrower) the immediate filing of a claim (if such claim is not promptly filed
by the Manager) for the unpaid balance of its Subordinated Debt in the form
required in such proceedings and the taking of all steps necessary to cause such
claim to be approved. Such power of attorney is coupled with an interest, is
irrevocable and shall terminate only upon payment in full of the Senior
Indebtedness and termination of the Commitment.
8. Amendments to Senior Indebtedness. The Administrative
Agent, the Managing Agents and the Banks may extend, renew, modify, or amend the
terms of the Senior Indebtedness or any security therefor and release, transfer,
assign, sell, or exchange such security and otherwise deal freely with the
Borrower to the same extent as could any Person, all without notice to or
consent of the Manager and without affecting the liabilities and obligations of
the Manager pursuant to the provisions hereof.
9. Assignments of Senior Indebtedness. The Administrative
Agent, the Managing Agents and the Banks, or any of them, as appropriate, may
assign or transfer any or all of the Senior Indebtedness or any interest
therein, as provided in the Loan Agreement; and notwithstanding any such
assignment or transfer or any subsequent assignment or transfer thereof, such
Senior Indebtedness shall be and remain Senior Indebtedness for purposes of this
Agreement, and every immediate and permitted successive assignee or transferee
or participant of any of the Senior Indebtedness or of any interest therein
shall, to the extent of the interest of such assignee or transferee or
participant in the Senior Indebtedness, be entitled to the benefits of this
Agreement to the same extent as if such assignee or transferee or participant
were the Administrative Agent, a Managing Agent, or a Bank hereunder, as
appropriate; provided, however, that, unless the appropriate assignor shall
otherwise consent in writing, such assignor shall have an unimpaired right,
prior and superior to that of any such assignee or transferee or participant, to
enforce this Agreement as to such Senior Indebtedness which has not been
assigned or transferred.
10. Waivers. The Manager hereby waives (a) notice of
acceptance of this Agreement by the Administrative Agent, the Managing Agents,
and the Banks, (b) notice of the existence or creation or nonpayment of all or
any part of the Senior Indebtedness, and (c) all diligence in the collection or
protection of or realization upon the Senior Indebtedness or the Collateral
therefor.
11. Notation on Subordinated Debt. The Manager and the
Borrower hereby agree to make appropriate entries in their respective books and
records, to indicate that the Manager's rights under the Management Agreement
are subject to the terms of this Agreement and that the Subordinated Debt is
subordinate to the Senior Indebtedness.
12. Further Assurances. The Manager further agrees that it
will do all things necessary to maintain the enforceability of the Management
Agreement, and the
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enforceability and priority of the security interest of the Administrative Agent
therein and agrees to execute, upon the request of the Administrative Agent, any
and all other documents, instruments, and agreements reasonably deemed necessary
or desirable by the Administrative Agent to carry the matters contemplated by
this Agreement into effect.
13. Remedies. Upon the occurrence of an Event of Default and
until such Event of Default is waived in writing in accordance with Section
11.13 of the Loan Agreement (or, if prior to acceleration or the exercise of any
other remedies pursuant to Section 8.2 of the Loan Agreement, cured) the
Administrative Agent shall have all of the remedies set forth herein, all of the
rights, powers and privileges of a secured party under the UCC, including,
without limitation, the right to enforce the Management Agreement, and any and
all rights of the Manager and the Borrower, thereunder, and any other rights or
remedies available to it under any other Loan Document or otherwise at law, or
in equity. It is hereby further agreed that the Administrative Agent may enforce
any and all rights derived from this Agreement by suit, either in equity or at
law, for specific performance of any agreement herein contained or for judgment
at law and any other relief whatsoever appropriate to such action or procedure.
The remedies of the Administrative Agent hereunder are cumulative, not
exclusive, and the exercise of any one or more of the remedies provided for
herein shall not be construed as a waiver of any of the other remedies of the
Administrative Agent, so long as any part of the Senior Indebtedness remains
unsatisfied. The Manager expressly agrees that the Administrative Agent shall
not be under any obligation to resort to any right or remedy hereunder prior to
exercising any other rights it may have against the Manager, the Borrower, or
any other Person to secure repayment of the Loans, nor shall the Administrative
Agent be required to resort to any such other rights prior to the exercise of
its rights and remedies hereunder. In the event this Agreement shall be enforced
by the Administrative Agent or by its counsel, the Manager and the Borrower
agree to pay all reasonable costs and out-of-pocket expenses of such
enforcement, including reasonable attorneys fees, and such costs and expenses
shall be deemed Senior Indebtedness hereunder.
14. Representations and Warranties of Manager. The Manager
represents and warrants to the Administrative Agent, for itself and on behalf of
the Managing Agents and the Banks, that:
(i) the Manager is a limited partnership duly
organized, validly existing and in good standing under the
laws of the State of Delaware, having power and authority to
own or lease and use its properties and to carry on its
business as now being and hereafter proposed to be conducted;
(ii) the general partner of the Manager is Prime II
Management, Inc., a corporation duly organized, validly
existing and in good standing under the laws of the State of
Delaware;
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(iii) the Manager is duly qualified, in good
standing, and authorized to do business in each jurisdiction
in which the character of its properties or the nature of its
business requires such qualification or authorization;
(iv) this Agreement has been duly executed and
delivered by the Manager and is the legal, valid, and binding
obligation of the Manager enforceable in accordance with its
terms except that certain equitable remedies are discretionary
and, in particular, may not be available where damages are
considered an adequate remedy at law, and that enforcement may
be limited by bankruptcy, insolvency, liquidation,
reorganization, reconstruction, and other similar laws
affecting enforcement of creditors' rights generally (insofar
as any such law relates to the bankruptcy, insolvency, or
similar event of the Manager);
(v) the execution, delivery, and performance by the
Manager of this Agreement in accordance with its terms do not
and will not (A) require any consent or approval not already
obtained, (B) violate any material Applicable Law respecting
the Manager, or (C) conflict with, result in a breach of, or
constitute a default under the certificate of limited
partnership or the partnership agreement of the Manager or, in
any material respect, under any material indenture, agreement,
or other instrument to which the Manager is a party or by
which its properties may be bound;
(vi) there is no material action, suit, or
proceeding pending against, or to the best of the Manager's
knowledge, threatened against or in any manner relating
directly and materially adversely to, the Manager or any of
its properties in any court or before any arbitrator of any
kind or before or by any governmental body;
(vii) the Manager is in compliance with all of the
provisions of its certificate of limited partnership ; and
(viii) the purpose of this Agreement is to induce
the Banks to make the Loans, and the making of the Loans will
be of indirect interest and advantage to the Manager.
15. Miscellaneous.
(a) This Agreement shall be construed in accordance
with, and the rights of the parties shall be governed by, the laws of the State
of New York.
(b) This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original and all of which, taken
together, shall constitute but one and the same instrument.
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(c) Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
Applicable Law, but if any provision of this Agreement shall be prohibited by or
invalid under such law, such provision shall be ineffective to the extent of
such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement.
(d) No delay on the part of the Administrative
Agent, the Managing Agents and the Banks, or any of them, in the exercise of any
right or remedy shall operate as a waiver thereof, and no single or partial
exercise by the Administrative Agent, the Managing Agents and the Banks, or any
of them, of any right or remedy shall preclude other or further exercise thereof
or the exercise of any other right or remedy; nor shall any modification or
waiver of any of the provisions of this Agreement be binding upon the
Administrative Agent, the Managing Agents and the Banks, or any of them, except
as expressly set forth in a written instrument duly signed and delivered by or
on behalf of the Administrative Agent, for itself and on behalf of the Managing
Agents and the Banks.
(e) The priorities herein specified are applicable
irrespective of the time of creation of the Senior Indebtedness.
(f) Upon satisfaction in full of the Senior
Indebtedness, the Administrative Agent shall take any actions reasonably
necessary to terminate and release the subordination and assignment granted to
the Administrative Agent hereunder, all at the cost and expense of the Manager.
(g) The provisions of this Agreement shall be
binding upon the successors and assigns of the Borrower and the Manager and
shall inure to the benefit of the Administrative Agent, the Managing Agents and
the Banks and all subsequent holders of the Senior Indebtedness. All notices and
other communications require or permitted hereunder shall be given in the manner
prescribed in Section 11.1 of the Loan Agreement, and shall be addressed to the
Administrative Agent, the Managing Agents and the Banks at the addresses set
forth therein, and to the Manager at the following address:
Prime II Management, L.P.
3000 American Center
600 Congress Avenue
Austin, Texas 78701
Attn: President
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with a copy to:
Edens, Snodgrass, Nichols and Breeland, P.C.
2800 Franklin Plaza
111 Congress Avenue
Austin, Texas 78801
Attn: Patrick K. Breeland, Esq.
(h) Administrative Agent. Each reference herein to
any right granted to, benefit conferred upon, or power exercisable by the
"Administrative Agent" shall be a reference to the Administrative Agent
(including any successors to the Administrative Agent pursuant to the Loan
Agreement) for itself and for the ratable benefit of the Managing Agents and the
Banks, and each action taken or right exercised hereunder shall be deemed to
have been so taken or exercised by the Administrative Agent for itself and for
the benefit of and on behalf of all of the Managing Agents and the Banks.
16. Nonrecourse Obligations. Except to the extent of
any representation, warranty, covenant or undertaking made specifically by the
Manager in this Agreement, the Manager shall not have any personal liability
under this Agreement or any other Loan Document, anything to the contrary herein
or therein notwithstanding.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first written above.
MANAGER: PRIME II MANAGEMENT, L.P.,
a Delaware limited partnership
By its General Partner:
PRIME II MANAGEMENT, INC.,
a Delaware corporation
[CORPORATE SEAL]
By: /s/ Karen Miller
Its: Vice President
Attest:
Its:
ADMINISTRATIVE
AGENT: TORONTO DOMINION (TEXAS), INC., for itself and
on behalf of the Managing Agents and the Banks
By: /s/ Jano Mott
Its: Vice President
BORROWER: GCI CABLE, INC., a Alaska corporation
By: /s/ John M. Lowber
Its: Secretary/Treasurer
Attest:
Its:
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EXHIBIT J
FORM OF SUBSIDIARY GUARANTY
As of October 31, 1996
WHEREAS, GCI Cable, Inc., an Alaska corporation (the "Borrower"), Toronto
Dominion (Texas), Inc. as administrative agent for the Managing Agents and the
Banks (the "Administrative Agent"), the Managing Agents and the Banks have
entered into a certain Loan Agreement dated as of October 31, 1996 (as executed
on the date hereof and as the same may be amended from time to time, the "Loan
Agreement"), pursuant to which the Banks have agreed to make loans in an
aggregate principal amount not to exceed $205,000,000 (the "Loans") to the
Borrower, as evidenced by those certain promissory notes of even date from the
Borrower to each of the Banks (as executed on the date hereof and as such notes
may be amended, modified, extended or renewed from time to time, the "Notes");
and
WHEREAS, each of GCI Cable/Juneau, Inc., an Alaska corporation; GCI
Cable/Fairbanks, Inc., an Alaska corporation; GCI Cable Holdings, Inc., an
Alaska corporation; and Prime Cable of Alaska, L.P., a Delaware limited
partnership (collectively, the "Guarantors" and each, individually, a
"Guarantor") is a wholly-owned Subsidiary of the Borrower; and
WHEREAS, the Guarantors and the Borrower are mutually dependent on each
other in the conduct of their respective businesses as an integrated operation,
and the Borrower has as one of its corporate purposes the obtaining of financing
needed from time to time by the Guarantors, with the Borrower's ability to
obtain such financing being dependent, in part, on the successful operations of
and the properties owned by the Guarantors; and
WHEREAS, each of the Guarantors has determined that its execution, delivery
and performance of this Guaranty directly benefit, and are within the corporate
or partnership purposes and in the best interests of, such Guarantor; and
WHEREAS, as a condition to the Banks' extending the Loans, each Guarantor
has agreed to execute this Subsidiary Guaranty (the "Guaranty") guaranteeing the
payment and performance by the Borrower of its obligations and covenants under
the Notes, the Loan Agreement and the other Loan Documents (the Notes, Loan
Agreement and other Loan Documents as executed on the date hereof and as they
may be amended, modified or extended from time to time being hereinafter
referred to as the "Guaranteed Agreements"); and
WHEREAS, capitalized terms used herein and not otherwise defined herein
shall be used as defined in the Loan Agreement;
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NOW, THEREFORE, in consideration of the above premises, Ten Dollars ($10.00)
in hand paid and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, each Guarantor hereby guarantees
to the Administrative Agent, the Banks and the Managing Agents: (i) full and
prompt payment and performance of all obligations of the Borrower to the
Administrative Agent, the Banks and the Managing Agents, or any of them, under
the Guaranteed Agreements (including, without limitation, any Interest Hedge
Agreements between the Borrower, on the one hand, and the Administrative Agent
and the Banks, or any of them, on the other hand, and any interest, fees and
other charges in respect of any of the Guaranteed Agreements that would accrue
but for the filing of a bankruptcy action with respect to the Borrower, whether
or not such claim is allowed in such bankruptcy action), as the same may be
amended from time to time, or as a result of making the Loans; (ii) payment of
any and all damage which the Administrative Agent, the Banks and the Managing
Agents, or any of them, may suffer by reason of a breach of any obligation,
covenant or undertaking with respect to this Guaranty or any of the Guaranteed
Agreements by the Borrower or any other obligor thereunder; and (iii) payment
and performance of all of the obligations of any obligor to the Administrative
Agent, the Banks, the Managing Agents, or any of them, under this Guaranty and
the Guaranteed Agreements, or as a result of making the Loans; and any
extensions, renewals or amendments of any of the foregoing, however created,
acquired, arising or evidenced, whether direct or indirect, absolute or
contingent, now or hereafter existing, or due or to become due, including any
interest thereon, plus reasonable attorneys' fees and expenses if the
obligations represented by this Guaranty are collected by law, through an
attorney-at-law, or under advice therefrom (all of the foregoing obligations
(i), (ii), and (iii) being hereinafter collectively referred to as the
"Obligations"). Each Obligation shall rank pari passu with each other
Obligation.
Each Guarantor and the Administrative Agent hereby further agree that:
1. Regardless of whether any proposed guarantor or any other Person or
Persons is or are or shall become in any other way responsible to the
Administrative Agent, the Banks and the Managing Agents, or any of them, for or
in respect of the Obligations or any part thereof, and regardless of whether or
not any Person or Persons now or hereafter responsible to the Administrative
Agent, the Banks and the Managing Agents, or any of them, for the Obligations or
any part thereof, whether under this Guaranty or otherwise, shall cease to be so
liable, each Guarantor hereby declares and agrees that this Guaranty shall be a
several obligation, shall be a continuing guaranty and shall be operative and
binding, and that such Guarantor shall have no right of subrogation with respect
to this Guaranty.
2. Upon this Guaranty's being executed and coming into the hands of the
Administrative Agent, this Guaranty shall be deemed to be finally executed and
delivered by each Guarantor and shall not be subject to or affected by any
promise or condition affecting or limiting such Guarantor's liability, and no
statement, representation, agreement or promise on the part of the
Administrative Agent, the Banks, the Managing Agents and the Borrower, or any of
them, or any officer, employee or agent thereof, unless contained herein forms
any part of this Guaranty or
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has induced the making hereof or shall be deemed in any way to affect any
Guarantor's liability hereunder.
3. No alteration or waiver of this Guaranty or of any of its terms,
provisions or conditions shall be binding upon the parties against whom
enforcement is sought unless made in writing and signed by an authorized officer
of such party.
4. The Administrative Agent, the Banks and the Managing Agents, or any of
them, may from time to time, without exonerating or releasing any Guarantor in
any way under this Guaranty, (i) take such further or other security or
securities for the Obligations or any part thereof as the Administrative Agent,
the Banks and the Managing Agents, or any of them, may deem proper, or (ii)
release, discharge, abandon or otherwise deal with or fail to deal with any
guarantor of the Obligations or any security or securities therefor or any part
thereof now or hereafter held by the Administrative Agent, the Banks and the
Managing Agents, or any of them, or (iii) amend, modify, extend, accelerate or
waive in any manner any of the provisions, terms, or conditions of the
Guaranteed Agreements, all as the Administrative Agent, the Banks and the
Managing Agents, or any of them, may consider expedient or appropriate in their
sole discretion. Without limiting the generality of the foregoing, or of Section
5 hereof, it is understood that the Administrative Agent, the Banks and the
Managing Agents, or any of them, may, without exonerating or releasing any
Guarantor, give up, or modify or abstain from perfecting or taking advantage of
any security for the Obligations and accept or make any compositions or
arrangements, and realize upon any security for the Obligations when, and in
such manner, as the Administrative Agent, the Banks and the Managing Agents, or
any of them, may deem expedient, all without notice to any Guarantor.
5. Each Guarantor acknowledges and agrees that no change in the nature or
terms of the Obligations or any of the Guaranteed Agreements, or other
agreements, instruments or contracts evidencing, related to or attendant with
the Obligations (including any novation), shall discharge all or any part of the
liabilities and obligations of such Guarantor pursuant to this Guaranty; it
being the purpose and intent of each Guarantor, the Administrative Agent, the
Banks and the Managing Agents that the covenants, agreements and all liabilities
and obligations of such Guarantor hereunder are absolute, unconditional and
irrevocable under any and all circumstances. Without limiting the generality of
the foregoing, each Guarantor agrees that until each and every one of the
covenants and agreements of this Guaranty is fully performed, such Guarantor's
undertakings hereunder shall not be released, in whole or in part, by any action
or thing which might, but for this section of this Guaranty, be deemed a legal
or equitable discharge of a surety or guarantor, or by reason of any waiver,
omission of the Administrative Agent, the Banks and the Managing Agents, or any
of them, or their failure to proceed promptly or otherwise, or by reason of any
action taken or omitted by the Administrative Agent, the Banks and the Managing
Agents, or any of them, whether or not such action or failure to act varies or
increases the risk of, or affects the rights or remedies of, such Guarantor or
by reason of any further dealings between the Borrower, the Administrative
Agent, the Banks and the Managing Agents, or any of them, or any other guarantor
or
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surety, and each Guarantor hereby expressly waives and surrenders any defense to
its liability hereunder, or any right of counterclaim or offset of any nature or
description which it may have or which may exist based upon, and shall be deemed
to have consented to, any of the foregoing acts, omissions, things, agreements
or waivers.
6. The Administrative Agent, the Banks and the Managing Agents, or any of
them, may, without demand or notice of any kind upon or to the Guarantors, at
any time or from time to time when any amount shall be due and payable hereunder
by any Guarantor, if the Borrower shall not have timely paid its Obligations,
set off and appropriate any property, balances, credit accounts or moneys of any
Guarantor in the possession of the Administrative Agent, the Banks, the Managing
Agents, or any of them, or under any of their control for any purpose, which
property, balances, credit accounts or moneys shall thereupon be turned over and
remitted to the Administrative Agent, to be held and applied to the Obligations
by the Administrative Agent.
7. The creation or existence from time to time of Obligations in excess of
the amount committed to or outstanding on the date of this Guaranty is hereby
authorized, without notice to the Guarantors, and shall in no way impair or
affect this Guaranty or the rights of the Administrative Agent, the Banks and
the Managing Agents, or any of them, herein. Each Guarantor's obligations
hereunder shall be in, but not in excess of, the Maximum Guaranteed Amount. The
"Maximum Guaranteed Amount" shall mean for each Guarantor the greater of (a) the
amount of economic benefit received (directly or indirectly) by such Guarantor
pursuant to the Loan Agreement, and the other Loan Documents, or (b) the maximum
amount which would be paid out by such Guarantor without rendering this Guaranty
void or voidable under Applicable Laws including, without limitation, (i) the
Bankruptcy Code of 1978, as amended, and (ii) applicable state laws regarding
fraudulent conveyances, corporate distributions or insolvency.
8. Upon the bankruptcy or winding up or other distribution of assets of the
Borrower or any Guarantor or of any surety or guarantor for any Obligations of
the Borrower to the Administrative Agent, the Banks and the Managing Agents, or
any of them, the rights of the Administrative Agent, the Banks and the Managing
Agents against any Guarantor shall not be affected or impaired by the omission
of the Administrative Agent, the Banks and the Managing Agents, or any of them,
to prove its or their claim, as appropriate, or to prove its or their full
claim, as appropriate, and the Administrative Agent, the Banks and the Managing
Agents may prove such claims as they see fit and may refrain from proving any
claim and in their respective discretion they may value as they see fit or
refrain from valuing any security held by the Administrative Agent, the Banks
and the Managing Agents, or any of them, without in any way releasing, reducing
or otherwise affecting the liability to the Administrative Agent, the Banks and
the Managing Agents of any Guarantor.
9. Each Guarantor hereby expressly waives, to the fullest extent permitted
by Applicable Law: (a) notice of acceptance of this Guaranty, (b) notice of the
existence or creation of all or any of the Obligations, (c) presentment, demand,
notice
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of dishonor, protest, and all other notices whatsoever, (d) all diligence in
collection or protection of or realization upon the Obligations or any part
thereof, any obligation hereunder, or any security for any of the foregoing, (e)
all rights of subrogation, indemnification, contribution and reimbursement
against the Borrower, (f) all rights to enforce any remedy the Administrative
Agent, the Banks and the Managing Agents, or any of them, may have against the
Borrower, and (g) any benefit of, or right to participate in, any collateral or
security now or hereinafter held by the Administrative Agent, the Banks and the
Managing Agents, or any of them, in respect of the Obligations, even upon
payment in full of the Obligations, except to the extent such waiver would be
expressly prohibited by Applicable Law. If a claim is ever made upon the
Administrative Agent, the Banks and the Managing Agents, or any of them, for the
repayment or recovery of any amounts or amounts received by any of them in
payment of any of the Obligations and such Person repays all or part of such
amount by reason of (i) any judgment, decree, or order of any court or
administrative body having jurisdiction over such Person or any of its property,
or (ii) any settlement or compromise of any such claim effected in good faith by
such Person with any such claimant, including the Borrower, then in such event
each Guarantor agrees that any such judgment, decree, order, settlement, or
compromise shall be binding upon such Guarantor, notwithstanding any revocation
hereof or the cancellation of any promissory note or other instrument evidencing
any of the Obligations, and each Guarantor shall be and remain obligated to such
Person hereunder for the amount so repaid or recovered to the same extent as if
such amount had never originally been received by such Person.
10. The Administrative Agent, the Banks and the Managing Agents may each,
to the extent permitted under the Loan Agreement, and without notice of any
kind, sell, assign or transfer all or any of the Obligations, and in such event
each and every immediate and successive assignee, transferee, or holder of all
or any of the Obligations, shall have the right to enforce this Guaranty, by
suit or otherwise, for the benefit of such assignee, transferee or holder as
fully as if such assignee, transferee or holder were herein by name specifically
given such rights, powers and benefits.
11. No delay by the Administrative Agent, the Banks and the Managing
Agents, or any of them, in the exercise of any right or remedy shall operate as
a waiver thereof, and no single or partial exercise by the Administrative Agent,
the Banks and the Managing Agents, or any of them, of any right or remedy shall
preclude other or further exercise thereof or the exercise of any other right or
remedy. No action by the Administrative Agent, the Banks and the Managing
Agents, or any of them, permitted hereunder shall in any way impair or affect
this Guaranty. For the purpose of this Guaranty, the Obligations shall include,
without limitation, all Obligations of the Borrower to the Administrative Agent,
the Banks and the Managing Agents, notwithstanding any right or power of any
third party, individually or in the name of the Borrower or any other Person, to
assert any claim or defense as to the invalidity or unenforceability of any such
Obligation, and no such claim or defense shall impair or affect the obligations
of any Guarantor hereunder.
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12. This Guaranty shall be binding upon each Guarantor, its successors and
assigns and inure to the benefit of the successors and assigns of the
Administrative Agent, the Banks and the Managing Agents. Each Guarantor shall
not assign its rights or obligations under this Guaranty; nor shall any
Guarantor amend this Guaranty, except with the written approval of the
Administrative Agent delivered to the Guarantors.
13. This is a Guaranty of payment and not of collection. In the event the
Administrative Agent makes a demand upon any Guarantor under this Guaranty, such
Guarantor shall be held and bound to the Administrative Agent, the Banks and the
Managing Agents directly as debtor in respect of the payment of the amounts
hereby guaranteed. All reasonable costs and expenses, including reasonable
attorneys' fees and expenses, incurred by the Administrative Agent, the Banks
and the Managing Agents, or any of them, in obtaining performance of or
collecting payments due under this Guaranty shall be deemed part of the
Obligations guaranteed hereby. Any notice or demand which the Administrative
Agent, the Banks and the Managing Agents may wish to give shall be served upon
the Guarantors in the fashion prescribed for notices in Section 11.1 of the Loan
Agreement to the Guarantors' last known places of address, and the notice so
sent shall be deemed to be served as set forth in Section 11.1 of the Loan
Agreement.
14. Each Guarantor expressly represents and acknowledges that any financial
accommodations by the Administrative Agent, the Banks and the Managing Agents,
or any of them, to the Borrower, including, without limitation, the extension of
the Loans, are and will be of direct interest, benefit and advantage to such
Guarantor.
15. Each Guarantor covenants and agrees that so long as any amount is owing
on account of Obligations or otherwise pursuant to this Guaranty, such Guarantor
shall permit representatives of the Administrative Agent, the Banks and the
Managing Agents during normal business hours after reasonable notice to visit
and inspect properties of such Guarantor, inspect such Guarantor's books and
records and discuss with the principal officers of such Guarantor its
businesses, assets, liabilities, financial positions, results of operations and
business prospects.
16. This Guaranty shall be construed and interpreted, and all rights and
obligations of the parties hereto determined, in accordance with the laws of the
State of New York without reference to the conflicts or choice of law principles
thereof.
[the rest of this page is intentionally blank]
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IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to be executed as of
the date first above written.
Address: GCI CABLE/JUNEAU, INC.
By: /s/ John M. Lowber
Its: Secretary/Treasurer
Address: GCI CABLE/FAIRBANKS, INC.
By: /s/ John M. Lowber
Its: Secretary/Treasurer
Address: GCI CABLE HOLDINGS, INC.
By: /s/ John M. Lowber
Its: Secretary/Treasurer
Address: PRIME CABLE OF ALASKA, L.P.
By: GCI CABLE, INC.
Its: General Partner
By: /s/ John M. Lowber
Its: Secretary/Treasurer
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EXHIBIT K
FORM OF
SUBSIDIARY SECURITY AGREEMENT
THIS SUBSIDIARY SECURITY AGREEMENT (the "Agreement") is entered into as
of the 31st day of October, 1996, by and between GCI Cable/Juneau, Inc., an
Alaska corporation; GCI Cable/Fairbanks, Inc., an Alaska corporation; GCI Cable
Holdings, Inc., an Alaska corporation; and Prime Cable of Alaska, L.P., a
Delaware limited partnership (collectively, the "Subsidiaries," and each, a
"Subsidiary") and Toronto Dominion (Texas), Inc. (the "Administrative Agent"),
as administrative agent for the Managing Agents and the Banks.
W I T N E S S T H :
WHEREAS, GCI Cable, Inc. (the "Borrower") the Administrative Agent, the
Managing Agents and the Banks have entered into that certain Loan Agreement
dated as of October 31, 1996 (as amended, supplemented or otherwise modified
from time to time, the "Loan Agreement") pursuant to which the Banks have agreed
to make loans (the "Loans") to the Borrower, which Loans are evidenced by the
promissory notes of the Borrower in favor of each Bank (as amended, modified,
renewed or extended from time to time, the "Notes");
WHEREAS, the making of the Loans will be of direct benefit and
advantage to the Subsidiaries, which have issued their Subsidiary Guaranty of
the Loans, of even date (as amended, modified, renewed or extended from time to
time, the "Guaranty"); and
WHEREAS, to secure the due and punctual payment and performance of
their obligations under the Guaranty and the other Obligations (as defined
below), the Subsidiaries, each direct or indirect wholly-owned Subsidiary of the
Borrower, have entered into this Agreement;
NOW, THEREFORE, in consideration of the foregoing premises and for
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereto hereby agree that all capitalized terms
used herein shall have the meanings ascribed to such terms in the Loan Agreement
to the extent not otherwise defined or limited herein, and further agree as
follows:
A. Security Interest. Each Subsidiary hereby grants, conveys, transfers
and assigns to the Administrative Agent, for the ratable benefit of the Banks, a
continuing security interest in and security title to (hereinafter referred to
as the
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"Security Interest") all of their respective property, whether now owned or
hereafter created, acquired or reacquired by such Subsidiary, including, without
limitation, the property described below and all substitutions therefor,
accessions thereto, and improvements thereon:
1. Inventory. All of such Subsidiary's inventory of
whatever nature and kind and wherever situated, including, without
limitation, converters, coaxial cables and hardware, raw materials,
components, work in process, finished goods, goods in transit, and
packing and shipping materials, accretions and accessions thereto, and
trust receipts and similar documents covering the same products (the
"Inventory");
2. Equipment. All machinery and equipment not
included in Inventory above, including, without limitation, motor
vehicles and all accretions and accessions thereto; CATV towers,
antennas, and equipment located at head-end facilities; distribution
systems consisting of pole hardware, strand, coaxial cables, electronic
amplifiers, associated passive devices and subscriber service drops
incident to normal CATV service; test equipment; all equipment used in
the specialized mobile radio business; and closed circuit program
origination equipment (the "Equipment");
3. Accounts. All right to payment for goods sold or
leased or for services rendered, including, without limitation, the
provision of cable television services, which is not evidenced by an
instrument or chattel paper, whether or not it has been earned by
performance, including, without limitation, all agreements with
subscribers, and all books and records recording, evidencing, or
relating to such accounts or any part thereof (the "Accounts");
4. Contracts and Leases. To the extent that such
Subsidiary may grant a security interest therein without violating a
valid and enforceable restriction on the granting of a security
interest contained therein:
a. all construction contracts, Pole Agreements,
and public utility contracts to which such Subsidiary
is a party, whether now existing or hereafter arising
(the "Contracts");
b. all lease agreements for real property or
personal property to which such Subsidiary is a party
(the "Leases"), whether now existing or hereafter
arising;
c. all other contracts and contractual rights,
remedies, or provisions now existing or hereafter
arising in favor of such Subsidiary (the "Other
Contracts");
5. General Intangibles. All of such Subsidiary's
general intangibles (including, without limitation, any proceeds from
insurance policies
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after payment of prior interests), patents, unpatented inventions,
trade secrets, copyrights, contract rights, goodwill, literary rights,
rights to performance, rights under licenses, choses-in-action, claims,
information contained in computer media (such as data bases, source and
object codes, and information therein) things in action, trademarks and
trademarks applied for (together with the goodwill associated
therewith) and derivatives thereof, trade names, including the right to
make, use, and vend goods utilizing any of the foregoing, and permits,
licenses, certifications, authorizations and approvals, (to the extent
that such Subsidiary may grant a security interest therein without the
consent of the granting party) and the rights of such Subsidiary
thereunder, issued by any governmental, regulatory, or private
authority, agency, or entity whether now owned or hereafter acquired,
together with all cash and non-cash proceeds and products thereof (the
"Intangibles");
6. Licenses. Subject to Section 22 hereof, and to the
extent (i) permitted by Applicable Law, or (ii) that such Subsidiary
may grant a security interest therein without violating a valid and
enforceable restriction on the granting of a security interest
contained therein, all franchises, licenses, permits, and operating
rights authorizing or relating to such Subsidiary's rights to construct
and operate cable and pay-cable television facilities, including,
without limitation, the Licenses held by such Subsidiary, including,
without limitation, those described on Exhibit A attached hereto (the
"Licenses");
7. Furniture and Fixtures. All furniture and fixtures
in which such Subsidiary has an interest (the "Furniture and
Fixtures");
8. Miscellaneous Items. All goods, chattel paper,
documents, instruments, choses in action, claims, money, deposits,
certificates of deposit, stock or share certificates, licenses and
other rights in intellectual property, and other tangible personal
property not included above ("Miscellaneous Items"); and
9. Proceeds. All proceeds of any of the above, and
all proceeds of any loss of, damage to, or destruction of the above,
whether insured or not insured, and all other proceeds of any sale,
lease, or other disposition of any property or interest therein
referred to above, together with all proceeds of any policies of
insurance covering any or all of the above, the proceeds of any award
in condemnation with respect to any of the property of such Subsidiary,
any rebates or refunds, whether for taxes or otherwise, and all
proceeds of any such proceeds (the "Proceeds").
The Inventory, Equipment, Accounts, Contracts, Other Contracts, Leases,
Intangibles, Licenses, Furniture and Fixtures, Miscellaneous Items, and Proceeds
thereof, as described above, are hereinafter collectively referred to as the
"Collateral."
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This Agreement and the Security Interest secure payment and performance
of all obligations of the Subsidiaries to the Administrative Agent and the Banks
under the Guaranty and any extensions, renewals or amendments thereto, however
created, acquired, arising or evidenced, whether direct or indirect, absolute or
contingent, now or hereafter existing, or due or to become due, together with
any and all other Obligations under the Loan Agreement (all of the foregoing
obligations being hereinafter collectively referred to as the "Obligations").
B. Further Assurances. Each Subsidiary agrees to make, execute, deliver
or cause to be done, executed, and delivered, from time to time, all such
further acts, documents and things as the Administrative Agent on behalf of the
Managing Agents and the Banks, may reasonably require for the purpose of
perfecting or protecting its or their rights hereunder or otherwise giving
effect to this Agreement, all within thirty (30) days following the request
therefor. In addition, each Subsidiary hereby authorizes the Administrative
Agent upon such Subsidiary's failure to do so, to file such financing statements
and such other documents as the Administrative Agent may deem necessary or
desirable to protect or perfect the interest of the Administrative Agent, for
itself and on behalf of the Managing Agents and the Banks in the Collateral, and
each Subsidiary further irrevocably appoints the Administrative Agent as such
Subsidiary's attorney-in-fact, with power of attorney to execute on behalf of
such Subsidiary such UCC financing statement forms as the Administrative Agent
may from time to time deem necessary or desirable. Such power of attorney is
coupled with an interest and shall be irrevocable for so long as any of the
Obligations remains unpaid or unperformed or any of the Banks have any
obligations to make Advances under the Loan Agreement, regardless of whether the
conditions precedent to the making of any such Advances have been or can be
fulfilled.
C. Representations and Warranties. Each Subsidiary represents
and warrants to the Administrative Agent, the Managing Agents and the Banks
that:
(a) the execution of this Agreement and the fulfillment of the
terms hereof will not result in a breach of any of the terms or
provisions of, or constitute a default under, such Subsidiary's
Certificate or Articles of Incorporation or Bylaws, or its Partnership
Agreement or Certificate of Limited Partnership, as the case may be, as
presently in effect, or any order, rule or regulation applicable to
such Subsidiary of any court or of any Federal or state regulatory body
or administrative agency or other governmental body having jurisdiction
over such Subsidiary, or result in the termination or cancellation or
material breach of any indenture, mortgage, deed of trust, deed to
secure debt, lease or other agreement or instrument to which such
Subsidiary is a party or by which it is bound or affected;
(b) such Subsidiary has taken all necessary corporate or
partnership action to authorize the execution and delivery of this
Agreement, and this Agreement, when executed and delivered, will be the
valid and binding obligation of such Subsidiary enforceable in
accordance with its terms, subject only to the following
qualifications:
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(i) certain equitable remedies are discretionary and, in
particular, may not be available where damages are considered
an adequate remedy at law,
(ii) enforcement may be limited by bankruptcy, insolvency,
liquidation, reorganization, reconstruction and other similar
laws affecting enforcement of creditors' rights generally
(insofar as any such law relates to the bankruptcy, insolvency
or similar event of such Subsidiary), and
(iii) enforcement as to the Licenses may be limited by FCC
rules and regulations restricting the transfer of such
Licenses.
(c) Exhibit B attached hereto and incorporated herein by this
reference sets forth a complete and accurate list of the Pole
Agreements and utility agreements in effect on the date hereof, and
such Subsidiary has furnished or will furnish copies thereof to the
Administrative Agent, the Managing Agents and the Banks; and
(d) Exhibit C attached hereto and incorporated herein by this
reference sets forth a complete and accurate list of all Leases for
real property and all material Capitalized Lease Obligations to which
such Subsidiary is a party in effect on the date hereof, and each
Subsidiary has furnished or will furnish copies thereof to the
Administrative Agent, the Managing Agents and the Banks.
D. Priority of Security Interest. Each Subsidiary further
represents and warrants that the Security Interest in the Collateral granted to
the Administrative Agent hereunder shall constitute at all times a valid first
priority security interest in favor of the Administrative Agent in and upon the
Collateral, subject only to Permitted Liens. Each Subsidiary shall take or cause
to be performed such acts and actions as shall be necessary or appropriate to
assure that the Security Interest upon the Collateral shall not become
subordinate or junior to the security interests, Liens or claims of any other
Person, except for Permitted Liens.
E. Locations of Collateral. Each Subsidiary further represents
and warrants that it now keeps all of its records concerning the Collateral
either at its chief executive office or at its principal place or places of
business, each of which addresses are shown on Schedule 1 hereto. Schedule 1
also contains for each Subsidiary a list of locations at which Collateral (other
than the distributed physical cable plant) is located. Each Subsidiary covenants
and agrees that it shall not keep any of such records or Collateral at any other
address unless written notice thereof is given to the Administrative Agent at
least thirty (30) days prior to the effective date of any new address for the
keeping of such records. Each Subsidiary further agrees that it shall
immediately advise the Administrative Agent in writing making reference to this
Section 5 of this Agreement, of the opening of any new place of business, the
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closing of any existing place of business, or any change in the location of the
place where it keeps the Collateral.
F. Collateral Not Fixtures. The parties intend that, to the
extent permitted by Applicable Law, the Collateral shall remain personal
property irrespective of the manner of its attachment or affixation to realty.
G. Risk of Loss, Sale of Collateral. Any and all injury to, or
loss or destruction of, the Collateral shall be at each Subsidiary's risk, and
shall not release such Subsidiary from its obligations hereunder. Except as
permitted under the Loan Agreement, each Subsidiary agrees not to sell,
transfer, assign, dispose of, mortgage, grant a security interest in, or
encumber any of the Collateral in any manner without the prior written consent
of those Persons required under Section 11.13 of the Loan Agreement. Each
Subsidiary further agrees that the Administrative Agent may, but shall in no
event be obligated to, insure any of the Collateral in such form and amount as
the Administrative Agent may deem necessary or desirable if such Subsidiary
fails to obtain insurance as required by the Loan Agreement, and that the
Administrative Agent may pay or discharge any taxes, liens, or encumbrances
which are not Permitted Liens on any of the Collateral, and such Subsidiary
agrees to pay upon demand any such sum so expended by the Administrative Agent
with interest at the Default Rate, and such sums and interest shall be deemed to
be a part of the Obligations secured by the Collateral under the terms of this
Agreement.
H. Covenants of Subsidiaries. Each Subsidiary shall (i)
fulfill, perform and observe each and every material condition and covenant
contained in any of the material Contracts, the Other Contracts, or the Leases,
(ii) give prompt notice to the extent required under the Loan Agreement to the
Administrative Agent, the Managing Agents and the Banks of any claim of material
default under any of the Contracts, the Other Contracts, or the Leases given to
such Subsidiary or by such Subsidiary, (iii) at the sole cost and expense of
such Subsidiary, enforce the performance and observance of each and every
material covenant and condition of the material Contracts, the Other Contracts,
or the Leases to be performed or observed by other parties to any of the
material Contracts, the Other Contracts, or Leases, and (iv) appear in, defend
and, as appropriate, settle any action growing out of or in any manner connected
with any Contract, Other Contract, or Lease; provided, however, that prior to
the occurrence of an Event of Default (which remains uncured or unwaived), such
Subsidiary may issue or obtain waivers in the ordinary course of business with
respect to items (i) and (iii). The rights and interests transferred and
assigned to the Administrative Agent hereunder include all of each Subsidiary's
right and title (i) to modify the Contracts, the Other Contracts, and Leases,
(ii) to terminate the Contracts, the Other Contracts, and the Leases, and (iii)
to waive or release the performance or observance of any obligation or condition
of the Contracts, the Other Contracts, and the Leases; provided, however, that
these rights of the Administrative Agent shall not be exercised unless an Event
of Default shall exist.
I. Remedies. Upon the occurrence of an Event of Default and
until such Event of Default is waived in writing in accordance with Section
11.13 of the Loan
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<PAGE>
Agreement (or, if prior to acceleration or the exercise of any other remedies
pursuant to Section 8.2 of the Loan Agreement, cured), the Administrative Agent
shall have such rights and remedies as are set forth in the Loan Agreement and
herein, all the rights, powers and privileges of a secured party under the
Uniform Commercial Code of the State of New York and any other applicable
jurisdiction; and all other rights and remedies available to the Administrative
Agent, at law or in equity. Each Subsidiary covenants and agrees that any
notification of intended disposition, including any public or private sale, of
any Collateral, if such notice is required by law, shall be deemed reasonably
and properly given if given in the manner provided for in Section 19 hereof at
least ten (10) Business Days prior to such disposition. Upon the occurrence of
an Event of Default and until such Event of Default is waived in writing in
accordance with Section 11.13 of the Loan Agreement (or, if prior to
acceleration or the exercise of any other remedies pursuant to Section 8.2 of
the Loan Agreement, cured), the Administrative Agent upon the written request of
the Majority Banks, shall have the right to the appointment of a receiver for
the properties and assets of any Subsidiary, and each such Subsidiary hereby
consents to such rights and such appointment and hereby waives any objection
such Subsidiary may have thereto or the right to have a bond or other security
posted by the Administrative Agent in connection therewith.
J. Administrative Agent's Right to Perform Contracts. Upon the
occurrence of an Event of Default and until such Event of Default is waived in
writing in accordance with Section 11.13 of the Loan Agreement (or, if prior to
acceleration or the exercise of any other remedies pursuant to Section 8.2 of
the Loan Agreement, cured), the Administrative Agent may proceed to perform any
and all of the obligations of each Subsidiary contained in any of the Contracts,
the Other Contracts, or the Leases and exercise any and all rights of each
Subsidiary therein contained as fully as the Subsidiary itself could. Each
Subsidiary hereby appoints the Administrative Agent its attorney-in-fact,
effective upon the occurrence of an Event of Default and until such Event of
Default is waived in writing in accordance with Section 11.13 of the Loan
Agreement (or, if prior to acceleration or the exercise of any other remedies
pursuant to Section 8.2 of the Loan Agreement, cured), with power of
substitution, to take such action, execute such documents, and perform such
work, as the Administrative Agent may deem appropriate in exercise of the rights
and remedies granted the Administrative Agent herein. The powers herein granted
shall include, but not be limited to, powers to sue on the Contracts, the Other
Contracts, or the Leases and to seek all governmental approvals required for the
operation of the System (or any portion thereof). The power of attorney granted
herein is coupled with an interest and shall be irrevocable for so long as any
of the Obligations remains unpaid or unperformed or any of the Banks have any
obligation to make Advances under the Loan Agreement, regardless of whether the
conditions precedent to the making of any such Advances have been or can be
fulfilled.
K. Right to Cure Subsidiary's Default Under Contracts. Upon
the occurrence of an Event of Default and until such Event of Default is waived
in writing in accordance with Section 11.13 of the Loan Agreement (or, if prior
to acceleration or the exercise of any other remedies pursuant to Section 8.2 of
the Loan
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Agreement, cured), should any Subsidiary fail to perform or observe any material
covenant or comply with any material condition contained in any of the
Contracts, the Other Contracts, or the Leases, then the Administrative Agent,
but without obligation to do so and without releasing such Subsidiary from its
obligation to do so, may perform such covenant or condition and, to the extent
that the Administrative Agent shall incur any costs or pay any expenses in
connection therewith, including any costs or expenses of litigation associated
therewith, such costs, expenses, or payments shall be included in the
Obligations secured hereby and shall bear interest from the payment of such
costs or expenses at the Default Rate. Anything herein to the contrary
notwithstanding (a) each Subsidiary shall remain liable under the Contracts, the
Other Contracts, the Leases and all other contracts and agreements included in
the Collateral to the same extent set forth therein to perform all of the duties
and obligations thereunder to the same extent as if this Agreement had not been
executed, (b) the exercise by the Administrative Agent of any of the rights
hereunder shall not release any Subsidiary from any of its duties or obligations
under the Contracts, the Other Contracts, the Leases or any other contract or
agreements included in the Collateral, and (c) none of the Administrative Agent,
any Managing Agent, nor any Bank, shall be obligated to perform or discharge any
obligation of any Subsidiary under any of the Contracts, the Other Contracts,
the Leases, or any other contracts or agreements included in the Collateral and,
each Subsidiary agrees to indemnify and hold the Administrative Agent, the
Managing Agents, and the Banks harmless against any and all liability, loss, and
damage which the Administrative Agent, the Managing Agents, and the Banks, or
any of them, may incur under any of the Contracts, the Other Contracts, the
Leases or any other contracts or agreements included in the Collateral or under
or by reason of this Agreement, and any and all claims and demands whatsoever
which may be asserted against a Subsidiary by reason of an act of any of the
Administrative Agent, the Managing Agents, or the Banks under any of the terms
of this Agreement or under the Contracts, the Other Contracts or the Leases;
unless, with respect to any of the above, the party seeking indemnification is
finally judicially determined to have acted with gross negligence or wilful
misconduct.
L. Agent Attorney-in-Fact. Each Subsidiary hereby further
appoints the Administrative Agent as its attorney-in-fact, effective upon the
occurrence of an Event of Default and until such Event of Default is waived in
writing in accordance with Section 11.13 of the Loan Agreement (or, if prior to
acceleration or the exercise of any other remedies pursuant to Section 8.2 of
the Loan Agreement, cured), with power of substitution, and with authority to
receive, open, and take appropriate action with respect to all mail addressed to
such Subsidiary, and to notify the postal authorities to change the address for
delivery of mail addressed to such Subsidiary to such address as the
Administrative Agent may designate, to endorse the name of such Subsidiary on
any note, acceptance, check, draft, money order, or other evidence of debt or of
payment which may come into the possession of any of the Administrative Agent,
the Managing Agents and the Banks, and generally to do such other things and
acts in the name of such Subsidiary as are necessary or appropriate to protect
or enforce the rights hereunder of the Administrative Agent, the Managing
Agents, and the Banks. Each Subsidiary further authorizes the Administrative
Agent effective upon the occurrence of an Event of Default and until such Event
of Default is waived
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in writing in accordance with Section 11.13 of the Loan Agreement (or, if prior
to acceleration or the exercise of any other remedies pursuant to Section 8.2 of
the Loan Agreement, cured), to compromise and settle or to sell, assign, or
transfer or to ask, collect, receive, or issue any and all claims possessed by
such Subsidiary all in the name of such Subsidiary. After deducting all
reasonable expenses and charges (including the Administrative Agent's reasonable
attorneys' fees) of retaking, keeping, storing, and selling the Collateral, the
Administrative Agent shall apply the proceeds in payment of any of the
Obligations in such order of application as is set forth in the Loan Agreement,
and, if a deficiency results after such application, each Subsidiary covenants
and agrees to pay such deficiency to the Administrative Agent. The power of
attorney granted herein is coupled with an interest and shall be irrevocable for
so long as any of the Obligations remains unpaid or unperformed or any of the
Banks have any obligation to make Advances under the Loan Agreement, regardless
of whether the conditions precedent to the making of any such Advances have been
or can be fulfilled. Each Subsidiary agrees that if steps are taken by the
Administrative Agent to enforce rights hereunder, or to realize upon any of the
Collateral, such Subsidiary shall pay to the Administrative Agent the amount of
the costs, including reasonable attorneys' fees, incurred in connection with
such enforcement, and such Subsidiary's obligation to pay such amounts shall be
deemed to be a part of the Obligations secured hereunder.
M. Indemnification. Each Subsidiary shall indemnify and hold
harmless the Administrative Agent, the Managing Agents, and the Banks, and each
of them, and any other Person acting hereunder for all losses, costs, damages,
fees, and expenses whatsoever associated with the exercise of the powers of
attorney granted herein and shall release the Administrative Agent, the Managing
Agents, and the Banks and any other Person acting hereunder from all liability
whatsoever for the exercise of the foregoing powers of attorney and all actions
taken pursuant thereto, unless in any such event such Person seeking
indemnification hereunder is finally judicially determined to have acted or
failed to act with gross negligence or willful misconduct.
N. Rights Cumulative. Each Subsidiary agrees that the rights
of the Administrative Agent, the Managing Agents, and the Banks under this
Agreement, the Loan Agreement, the other Loan Documents, or any other contract
or agreement now or hereafter in existence between the Administrative Agent, the
Managing Agents, and the Banks, or any of them, and such Subsidiary shall be
cumulative and that the Administrative Agent may from time to time exercise such
rights and such remedies as the Administrative Agent may have thereunder and
under the laws of the United States and any state, as applicable, in the manner
and at the time that the Administrative Agent, the Managing Agents and the Banks
in their sole discretion desire. Each Subsidiary further expressly agrees that
none of the Administrative Agent, the Managing Agents and the Banks shall in any
event be under any obligation to resort to any Collateral prior to exercising
any other rights that the Administrative Agent, the Managing Agents and the
Banks, or any of them, may have against such Subsidiary or its property, or to
resort to any other collateral for the Obligations prior to the exercise of
remedies hereunder.
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O. Receivership. Each Subsidiary hereby acknowledges that the
Obligations arose out of a commercial transaction, and agrees that if an Event
of Default shall occur, hereunder (and until such Event of Default is waived in
writing in accordance with Section 11.13 of the Loan Agreement or, if prior to
acceleration or the exercise of any other remedies pursuant to Section 8.2 of
the Loan Agreement, cured), the Administrative Agent shall have the right to an
immediate writ of possession without notice of a hearing, and hereby knowingly
and intelligently waives any and all rights it may have to any notice and
posting of a bond by the Administrative Agent, the Managing Agents, and the
Banks, or any of them, prior to seizure by the Administrative Agent or any of
its transferees, assigns, or successors in interest, of the Collateral or any
portion thereof.
P. Remedies Not Exclusive. No transfer or renewal, extension,
assignment, or termination of this Agreement, the Loan Agreement, any other Loan
Document, or any other instrument or document executed and delivered by any
Subsidiary or any other obligor to the Administrative Agent, the Managing
Agents, and the Banks, or any of them, nor any additional Advances made by the
Banks to the Borrower, nor the taking of further security, nor the retaking or
redelivery of the Collateral to such Subsidiary by any of the Administrative
Agent, the Managing Agents and the Banks, nor any other act of any of the
Administrative Agent, the Managing Agents and the Banks shall release such
Subsidiary from any Obligation, except a release or discharge executed in
writing by the Administrative Agent, the Managing Agents and the Banks (as and
to the extent required under the Loan Agreement) with respect to such Obligation
or payment of such Obligation or upon full payment to the Administrative Agent,
the Managing Agents and the Banks and satisfaction of all the Obligations.
Neither the Administrative Agent, the Managing Agents nor the Banks shall by any
act, delay, omission or otherwise, be deemed to have waived any of their rights
or remedies hereunder, unless such waiver is in writing and signed by the
Administrative Agent, and, as required by the Loan Agreement, the Managing
Agents and the Banks and then only to the extent therein set forth. A waiver by
the Administrative Agent, the Managing Agents and the Banks, or any of them, of
any right or remedy on any occasion shall not be construed as a bar to the
exercise of any such right or remedy which any of the Administrative Agent, the
Managing Agents and the Banks would otherwise have had on any other occasion.
Q. Assignment. Each Subsidiary agrees that this Agreement and
rights of the Administrative Agent, the Managing Agents and the Banks hereunder
may in the discretion of such Person be assigned in whole or in part by such
Person in connection with any permitted assignment of such Person's interest in
the Loan Agreement or the Obligations. In the event this Agreement is so
assigned by any of the Administrative Agent, the Managing Agents and the Banks,
the terms "Administrative Agent," "Managing Agent,""Managing Agents," "Bank" and
"Banks" wherever used herein shall be deemed to refer to and include any such
assignee or assignees, as appropriate. This Agreement may not be assigned by any
Subsidiary without the prior written consent of each Bank.
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R. Successors and Assigns. This Agreement shall apply to and
bind the respective successors and permitted assigns of each Subsidiary and
inure to the benefit of the respective successors and assigns of the
Administrative Agent, the Managing Agents and the Banks.
S. Notices. All notices and other communications required or
permitted hereunder shall be in writing and shall be given in a manner
prescribed and to the addresses set forth in Section 11.1 of the Loan Agreement.
T. Governing Law, Etc. The provisions of this Agreement shall
be construed and interpreted, and all rights and obligations of the parties
hereto determined, in accordance with the laws of the State of New York without
reference to the conflicts or choice of law principles thereof. This Agreement,
together with all documents referred to herein, constitutes the entire Agreement
between the Subsidiaries, the Administrative Agent, the Managing Agents, and the
Banks with respect to the matters addressed herein, and may not be modified
except by a writing executed by the Administrative Agent and the Subsidiaries.
U. Severability. If any paragraph or part hereof shall for any
reason be held or adjudged to be invalid, illegal, or unenforceable by any court
of competent jurisdiction, such paragraph or part hereof so adjudicated invalid,
illegal or unenforceable shall be deemed separate, distinct and independent, and
the remainder of this Agreement shall remain in full force and effect and shall
not be affected by such holding or adjudication.
V. FCC Consent. Notwithstanding anything herein which may be
construed to the contrary, no action shall be taken by any of the Administrative
Agent, the Managing Agents or the Banks with respect to the Licenses or any
license of the Federal Communications Commission ("FCC") unless and until all
requirements of Applicable Law, including, without limitation, any required
approval of either of the Alaska Public Utilities Commission or the U.S.
Government (together the "Licensors") and any required approval under the
Federal Communications Act of 1934, and any applicable rules and regulations
thereunder, requiring the consent to or approval of such action by either of the
Licensors, the FCC or any other governmental or other authority, have been
satisfied. Each Subsidiary covenants that upon request of the Administrative
Agent it will cause to be filed such applications and take such other action as
may be requested by such Person or Persons to obtain consent or approval of
either of the Licensors, the FCC or any other governmental or other authority
which has granted any License to such Subsidiary to any action contemplated by
this Agreement and to give effect to the Security Interest of the Administrative
Agent, including, without limitation, the execution of an application for
consent by the FCC to an assignment or transfer involving a change in ownership
or control pursuant to the provisions of the Federal Communications Act of 1934.
To the extent permitted by Applicable Law, the Administrative Agent is hereby
irrevocably appointed the true and lawful attorney-in-fact of each Subsidiary,
in its name and stead, to execute and file all necessary applications with the
Licensors, the FCC and with any other governmental or other authority. The power
of attorney
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granted herein is coupled with an interest and shall be irrevocable for so long
as any of the Obligations remains unpaid or unperformed or any of the Banks have
any obligation to make Advances under the Loan Agreement, regardless of whether
the conditions precedent to the making of any such Advances has been or can be
fulfilled.
W. Termination and Release. Upon satisfaction in full of the
Obligations (other than any Obligation which may survive the termination of the
Loan Agreement as provided for therein) and termination of the Commitment, the
Administrative Agent shall take any actions reasonably necessary to terminate
and release the security interest in the Collateral granted to the
Administrative Agent hereunder, all at the cost and expense of the Subsidiaries.
X. Administrative Agent. Each reference herein to any right
granted to, benefit conferred upon, or power exercisable by the "Administrative
Agent" shall be a reference to the Administrative Agent (including any
successors to the Administrative Agent pursuant to the Loan Agreement) for
itself and for the ratable benefit of the Managing Agents and the Banks, and
each action taken or right exercised hereunder shall be deemed to have been so
taken or exercised by the Administrative Agent for itself and for the benefit of
and on behalf of all of the Managing Agents and the Banks.
Y. Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original, but all such
separate counterparts shall together constitute but one and the same instrument.
[the rest of this page is intentionally blank]
General Communication, Inc. - Form 8-K
Page 347
<PAGE>
IN WITNESS WHEREOF, the undersigned have caused this Agreement to be
executed, by and through their duly authorized representatives, as of the day
and year first written above.
SUBSIDIARIES:
GCI CABLE/JUNEAU, INC. By: /s/ John M. Lowber
Its: Secretary/Treasurer
GCI CABLE/FAIRBANKS, INC. By: /s/ John M.
Lowber
Its: Secretary/Treasurer
GCI CABLE HOLDINGS, INC. By: /s/ John M. Lowber
Its: Secretary/Treasurer
PRIME CABLE OF ALASKA, L.P. By: GCI CABLE, INC.
Its: General Partner
By: /s/ John M. Lowber
Title: Secretary/Treasurer
ADMINISTRATIVE AGENT:
TORONTO DOMINION (TEXAS), INC.
By: /s/ Jano Mott
Its: Vice President
EXHIBIT A - Licenses
EXHIBIT B - Pole and Utility Contracts
EXHIBIT C - Leases
SCHEDULE 1 - Each Subsidiary's Principal Place of Business and Locations of
Collateral
General Communication, Inc. - Form 8-K
Page 348
<PAGE>
EXHIBIT L
FORM OF USE OF PROCEEDS LETTER
GCI CABLE, INC., an Alaska corporation (the "Borrower"), has requested
that, in connection with that certain Loan Agreement (as amended, supplemented
or otherwise modified from time to time, the "Loan Agreement"), dated as of
October 31, 1996, by and among the Borrower, the Banks (as defined therein),
Toronto Dominion (Texas), Inc., The Chase Manhattan Bank, N.A., Credit Lyonnais,
Cayman Island Branch, and NationsBank of Texas, N.A., as managing agents
(collectively, the "Managing Agents"), and Toronto Dominion (Texas), Inc. (the
"Administrative Agent"), as agent for the Managing Agents and the Banks, the
Banks make an Advance to the Borrower under the Loan Agreement on October 31,
1996 of Loans in the aggregate principal amount of $205,000,000.
The Borrower shall use the aggregate proceeds of such Advance made on
the Agreement Date: (i) to fund working capital, capital expenditures, and to
make Restricted Payments to the extent permitted under Section 7.7 of the Loan
Agreement; (ii) to pay (A) fees and expenses of the Borrower and (B) fees and
expenses of other parties which the Borrower and the Prior Borrower are
obligated to pay, in connection with the GCI Acquisition and Loan Agreement and
the transactions contemplated thereby; (iii) to finance the Rock and Cooke
Acquisitions; and (iv) as otherwise set forth on Schedule 1 attached hereto.
Capitalized terms used herein and not otherwise defined are used as
defined in the Loan Agreement.
Dated as of the day of October 31, 1996.
GCI CABLE, INC.
By: /s/ John M. Lowber
Title: Secretary/Treasurer
Schedule 1 - Uses of Proceeds of Initial Advance
General Communication, Inc. - Form 8-K
Page 349
<PAGE>
EXHIBIT M
FORM OF LOAN CERTIFICATE
BORROWER
I, John M. Lowber, do hereby certify that I am the duly elected and
qualified Secretary/Treasurer and keeper of the corporate records and corporate
seal of GCI Cable, Inc., a corporation organized and existing under the laws of
the State of Alaska (the "Borrower") . In connection with that certain Loan
Agreement dated October 31, 1996 (the "Loan Agreement") among the Borrower, the
Banks (as defined therein) (the "Banks"), Toronto Dominion (Texas), Inc.,
NationsBank of Texas, N.A., The Chase Manhattan Bank, N.A. and Credit Lyonnais,
New York Branch, as managing agents (collectively the "Managing Agents"), and
Toronto Dominion (Texas), Inc., as administrative agent for the Managing Agents
and the Banks (the "Administrative Agent"), I hereby certify to the
Administrative Agent, the Managing Agents and the Banks that:
(1) Attached hereto as Exhibit A is a true, complete and
correct copy of the Articles of Incorporation of the Borrower certified by the
Alaska Department of Commerce and Economic Development.
(2) Attached hereto as Exhibit B are certificates of good
standing issued by the Secretary of State or similar state official for each
state in which Borrower is incorporated or required to qualify to do business;
(3) Attached hereto as Exhibit C is a true, complete and
correct copy of the Bylaws of the Borrower;
(4) Attached hereto as Exhibit D is a true, complete and
correct copy of the corporate resolutions of the Borrower adopted by the
Borrower's Board of Directors on October 10, 1996; such corporate action having
been duly taken in accordance with the provisions of Applicable Law, the
Articles of Incorporation and the Bylaws, and such resolutions are now in full
force and effect, without any modifications in any respect. Such resolutions
authorize the Borrower to execute, deliver and perform the Loan Documents to
which it is a party;
(5) Attached hereto as Exhibit E is a true, complete and
correct copy of all shareholders' or other similar agreements or voting trust
agreements in effect with respect to the stock interest of the Borrower;
(6) Attached hereto as Exhibit F is a true, complete and
correct photocopy of the Licenses of the Borrower, together with all amendments
thereto, each of which is in full force and effect on the date hereof.
(7) Attached hereto as Exhibit G is a true, complete and
correct list of each of the Pole Agreements of the Borrower with all amendments
thereto, each of which is in full force and effect on the date hereof.
General Communication, Inc. - Form 8-K
Page 350
<PAGE>
(8) Attached hereto as Exhibit H is a true, complete and
correct copy of the Management Agreement.
(9) The Borrower has from the dates of the certificates
referred to in item (2) above through the date hereof remained in good standing
under the laws of such states in which it is qualified to do business.
(10) No suit or proceeding for the dissolution or liquidation
of the Borrower has been instituted or is now threatened.
(11) To the best of the Borrower's knowledge, there are no
actions, suits or proceedings pending or threatened against the Borrower or its
property before any court, arbitrator or governmental department, commission,
board, bureau, agency or other instrumentality, domestic or foreign, other than
any such actions, suits or proceedings described on Schedule 9 to the Loan
Agreement, and no such action, suit or proceeding, if determined adversely to
the Borrower, would be likely to have a Materially Adverse Effect.
(12) The following persons have been duly elected to the
offices set forth beside their names, have been duly qualified, and on the date
hereof are officers of the Borrower, holding the offices set forth opposite
their respective names below, and the signatures set forth opposite their
respective names are their respective genuine signatures:
Name Title Signature
- ---------------------- ------------------------- -------------------
- ---------------------- ------------------------- -------------------
- ---------------------- ------------------------- -------------------
Capitalized terms used herein and not otherwise defined are used as
defined in the Loan Agreement.
IN WITNESS WHEREOF, I have signed this Loan Certificate of the Borrower
as of the 31st day of October, 1996.
GCI CABLE, INC.
By: /s/ John M. Lowber
Its: Secretary/Treasurer
General Communication, Inc. - Form 8-K
Page 351
<PAGE>
EXHIBITS
Exhibit A - Articles of Incorporation
Exhibit B - Certificate of Good Standing
Exhibit C - Bylaws
Exhibit D - Corporate Resolutions
Exhibit E - Shareholders' Similar Agreements
Exhibit F - Licenses
Exhibit G - List of Pole Agreements
Exhibit H - Management Agreement
General Communication, Inc. - Form 8-K
Page 352
<PAGE>
LOAN CERTIFICATE
PARENT COMPANY
I, John M. Lowber, do hereby certify that I am the duly elected and
qualified Senior Vice President/Secretary and keeper of the corporate records
and corporate seal of General Communication, Inc., a corporation organized and
existing under the laws of the State of Alaska (the "Parent"), which owns all of
the issued and outstanding stock of GCI Cable, Inc. (the "Borrower"). In
connection with that certain Loan Agreement dated October 31, 1996 (the "Loan
Agreement") among the Borrower, the Banks (as defined therein) (the "Banks"),
Toronto Dominion (Texas), Inc., NationsBank of Texas, N.A., The Chase Manhattan
Bank, N.A. and Credit Lyonnais, New York Branch, as managing agents
(collectively the "Managing Agents"), and Toronto Dominion (Texas), Inc., as
administrative agent for the Managing Agents and the Banks (the "Administrative
Agent"), I hereby certify to the Administrative Agent, the Managing Agents and
the Banks that:
(1) Attached hereto as Exhibit A is a true, complete and
correct copy of the Articles of Incorporation of the Parent certified by the
Alaska Department of Commerce and Economic Development.
(2) Attached hereto as Exhibit B are certificates of good
standing issued by the Secretary of State or similar state official for each
state in which Parent is incorporated or required to qualify to do business;
(3) Attached hereto as Exhibit C is a true, complete and
correct copy of the Bylaws of the Parent;
(4) Attached hereto as Exhibit D is a true, complete and
correct copy of the corporate resolutions of the Parent adopted by the Parent's
Board of Directors on October 10, 1996, such corporate action having been duly
taken in accordance with the provisions of Applicable Law, the Articles of
Incorporation and the Bylaws, and such resolutions are now in full force and
effect, without any modifications in any respect. Such resolutions authorize the
Parent to execute, deliver and perform the Loan Documents to which it is a
party;
(5) Attached hereto as Exhibit E is a true, complete and
correct copy of all shareholders' or other similar agreements or voting trust
agreements in effect with respect to the stock interest of the Parent;
(6) The Parent has from the dates of the certificates
referred to in item (2) above through the date hereof remained in good standing
under the laws of the states in which it is qualified to do business.
(7) No suit or proceeding for the dissolution or liquidation
of the Parent has been instituted or is now threatened.
General Communication, Inc. - Form 8-K
Page 353
<PAGE>
(8) The following persons have been duly elected to the
offices set forth beside their names, have been duly qualified, and on the date
hereof are officers of the Parent, holding the offices set forth opposite their
respective names below, and the signatures set forth opposite their respective
names are their respective genuine signatures:
Name Title Signature
- ---------------------- ------------------------- -------------------
- ---------------------- ------------------------- -------------------
- ---------------------- ------------------------- -------------------
Capitalized terms used herein and not otherwise defined are used as
defined in the Loan Agreement.
IN WITNESS WHEREOF, I have signed this Loan Certificate of the Parent
as of the 31st day of October, 1996.
GENERAL COMMUNICATION, INC.
By: /s/ John M. Lowber
Its: Senior Vice President
EXHIBITS
Exhibit A - Articles of Incorporation
Exhibit B - Certificates of Good Standing
Exhibit C - Bylaws
Exhibit D - Corporate Resolutions
Exhibit E - Shareholder's and Other Agreements
General Communication, Inc. - Form 8-K
Page 354
<PAGE>
LOAN CERTIFICATE
GCI CABLE/FAIRBANKS, INC.
I, John M. Lowber, do hereby certify that I am the duly elected and
qualified Secretary/Treasurer and keeper of the corporate records and corporate
seal of GCI Cable/Fairbanks, Inc., a corporation organized and existing under
the laws of the State of Alaska (the "Subsidiary"), which is a wholly-owned
subsidiary of the GCI Cable, Inc. (the "Borrower"). In connection with that
certain Loan Agreement dated October 31, 1996 (the "Loan Agreement") among the
Borrower, the Banks (as defined therein) (the "Banks"), Toronto Dominion
(Texas), Inc., NationsBank of Texas, N.A., The Chase Manhattan Bank, N.A. and
Credit Lyonnais, New York Branch, as managing agents (collectively the "Managing
Agents"), and Toronto Dominion (Texas), Inc., as administrative agent for the
Managing Agents and the Banks (the "Administrative Agent"), I hereby certify to
the Administrative Agent, the Managing Agents and the Banks that:
(1) Attached hereto as Exhibit A is a true, complete and
correct copy of the Articles of Incorporation of the Subsidiary certified by the
Alaska Department of Commerce and Economic Development.
(2) Attached hereto as Exhibit B are certificates of good
standing issued by the Secretary of State or similar state official for each
state in which Subsidiary is incorporated or required to qualify to do business;
(3) Attached hereto as Exhibit C is a true, complete and
correct copy of the Bylaws of the Subsidiary;
(4) Attached hereto as Exhibit D is a true, complete and
correct copy of the corporate resolutions of the Subsidiary adopted by the
Subsidiary's Board of Directors on October 10, 1996, such corporate action
having been duly taken in accordance with the provisions of Applicable Law, the
Articles of Incorporation and the Bylaws, and such resolutions are now in full
force and effect, without any modifications in any respect. Such resolutions
authorize the Subsidiary to execute, deliver and perform the Loan Documents to
which it is a party;
(5) Attached hereto as Exhibit E is a true, complete and
correct copy of all shareholders' or other similar agreements or voting trust
agreements in effect with respect to the stock interest of the Subsidiary;
(6) Attached hereto as Exhibit F is a true, complete and
correct photocopy of the Licenses of the Subsidiary, together with all
amendments thereto, each of which is in full force and effect on the date
hereof.
(7) Attached hereto as Exhibit G is a true, complete and
correct list of each of the Pole Agreements of the Subsidiary with all
amendments thereto, each of which is in full force and effect on the date
hereof.
General Communication, Inc. - Form 8-K
Page 355
<PAGE>
(8) The Subsidiary has from the dates of the certificates
referred to in item (2) above through the date hereof remained in good standing
under the laws of the states in which it is qualified to do business.
(9) No suit or proceeding for the dissolution or liquidation
of the Subsidiary has been instituted or is now threatened.
(10) To the best of the Subsidiary's knowledge, there are no
actions, suits or proceedings pending or threatened against the Subsidiary or
any of its respective property before any court, arbitrator or governmental
department, commission, board, bureau, agency or other instrumentality, domestic
or foreign, other than any such actions, suits or proceedings described on
Schedule 9 to the Loan Agreement, and no such action, suit or proceeding, if
determined adversely to the Subsidiary, would be likely to have a Materially
Adverse Effect.
(11) The following persons have been duly elected to the
offices set forth beside their names, have been duly qualified, and on the date
hereof are officers of the Subsidiary, holding the offices set forth opposite
their respective names below, and the signatures set forth opposite their
respective names are their respective genuine signatures:
Name Title Signature
- ---------------------- ------------------------- -------------------
- ---------------------- ------------------------- -------------------
- ---------------------- ------------------------- -------------------
Capitalized terms used herein and not otherwise defined are used as
defined in the Loan Agreement.
IN WITNESS WHEREOF, I have signed this Loan Certificate of the
Subsidiary as of the 31st day of October, 1996.
GCI CABLE/FAIRBANKS, INC.
By: /s/ John M. Lowber
Its: Secretary/Treasurer
General Communication, Inc. - Form 8-K
Page 356
<PAGE>
EXHIBITS
Exhibit A - Articles of Incorporation
Exhibit B - Certificates of Good Standing
Exhibit C - Bylaws
Exhibit D - Corporate Resolutions
Exhibit E - Shareholder's and Other Agreements
Exhibit F - Licenses
Exhibit G - List of Pole Agreements
General Communication, Inc. - Form 8-K
Page 357
<PAGE>
LOAN CERTIFICATE
GCI CABLE/JUNEAU, INC.
I, John M. Lowber, do hereby certify that I am the duly elected and
qualified Secretary/Treasurer and keeper of the corporate records and corporate
seal of GCI Cable/Juneau, Inc., a corporation organized and existing under the
laws of the State of Alaska (the "Subsidiary"), which is a wholly-owned
subsidiary of the GCI Cable, Inc. (the "Borrower"). In connection with that
certain Loan Agreement dated October 31, 1996 (the "Loan Agreement") among the
Borrower, the Banks (as defined therein) (the "Banks"), Toronto Dominion
(Texas), Inc., NationsBank of Texas, N.A., The Chase Manhattan Bank, N.A. and
Credit Lyonnais, New York Branch, as managing agents (collectively the "Managing
Agents"), and Toronto Dominion (Texas), Inc., as administrative agent for the
Managing Agents and the Banks (the "Administrative Agent"), I hereby certify to
the Administrative Agent, the Managing Agents and the Banks that:
(1) Attached hereto as Exhibit A is a true, complete and
correct copy of the Articles of Incorporation of the Subsidiary certified by the
Alaska Department of Commerce and Economic Development.
(2) Attached hereto as Exhibit B are certificates of good
standing issued by the Secretary of State or similar state official for each
state in which Subsidiary is incorporated or required to qualify to do business;
(3) Attached hereto as Exhibit C is a true, complete and
correct copy of the Bylaws of the Subsidiary;
(4) Attached hereto as Exhibit D is a true, complete and
correct copy of the corporate resolutions of the Subsidiary adopted by the
Subsidiary's Board of Directors on October 10, 1996, such corporate action
having been duly taken in accordance with the provisions of Applicable Law, the
Articles of Incorporation and the Bylaws, and such resolutions are now in full
force and effect, without any modifications in any respect. Such resolutions
authorize the Subsidiary to execute, deliver and perform the Loan Documents to
which it is a party;
(5) Attached hereto as Exhibit E is a true, complete and
correct copy of all shareholders' or other similar agreements or voting trust
agreements in effect with respect to the stock interest of the Subsidiary;
(6) Attached hereto as Exhibit F is a true, complete and
correct photocopy of the Licenses of the Subsidiary, together with all
amendments thereto, each of which is in full force and effect on the date
hereof.
(7) Attached hereto as Exhibit G is a true, complete and
correct list of each of the Pole Agreements of the Subsidiary with all
amendments thereto, each of which is in full force and effect on the date
hereof.
General Communication, Inc. - Form 8-K
Page 358
<PAGE>
(8) The Subsidiary has from the dates of the certificates
referred to in item (2) above through the date hereof remained in good standing
under the laws of the states in which it is qualified to do business.
(9) No suit or proceeding for the dissolution or liquidation
of the Subsidiary has been instituted or is now threatened.
(10) To the best of the Subsidiary's knowledge, there are no
actions, suits or proceedings pending or threatened against the Subsidiary or
any of its respective property before any court, arbitrator or governmental
department, commission, board, bureau, agency or other instrumentality, domestic
or foreign, other than any such actions, suits or proceedings described on
Schedule 9 to the Loan Agreement, and no such action, suit or proceeding, if
determined adversely to the Subsidiary, would be likely to have a Materially
Adverse Effect.
(11) The following persons have been duly elected to the
offices set forth beside their names, have been duly qualified, and on the date
hereof are officers of the Subsidiary, holding the offices set forth opposite
their respective names below, and the signatures set forth opposite their
respective names are their respective genuine signatures:
Name Title Signature
- ---------------------- ------------------------- -------------------
- ---------------------- ------------------------- -------------------
- ---------------------- ------------------------- -------------------
Capitalized terms used herein and not otherwise defined are used as
defined in the Loan Agreement.
IN WITNESS WHEREOF, I have signed this Loan Certificate of the
Subsidiary as of the 31st day of October, 1996.
GCI CABLE/JUNEAU, INC.
By: /s/ John M. Lowber
Its: Secretary/Treasurer
General Communication, Inc. - Form 8-K
Page 359
<PAGE>
EXHIBITS
Exhibit A - Articles of Incorporation
Exhibit B - Certificates of Good Standing
Exhibit C - Bylaws
Exhibit D - Corporate Resolutions
Exhibit E - Shareholder's and Other Agreements
Exhibit F - Licenses
Exhibit G - List of Pole Agreements
General Communication, Inc. - Form 8-K
Page 360
<PAGE>
LOAN CERTIFICATE
GCI CABLE HOLDINGS, INC.
I, John M. Lowber, do hereby certify that I am the duly elected and
qualified Secretary/Treasurer and keeper of the corporate records and corporate
seal of GCI Cable Holdings, Inc., a corporation organized and existing under the
laws of the State of Alaska (the "Subsidiary"), which is a wholly-owned
subsidiary of the GCI Cable, Inc. (the "Borrower"). In connection with that
certain Loan Agreement dated October 31, 1996 (the "Loan Agreement") among the
Borrower, the Banks (as defined therein) (the "Banks"), Toronto Dominion
(Texas), Inc., NationsBank of Texas, N.A., The Chase Manhattan Bank, N.A. and
Credit Lyonnais, New York Branch, as managing agents (collectively the "Managing
Agents"), and Toronto Dominion (Texas), Inc., as administrative agent for the
Managing Agents and the Banks (the "Administrative Agent"), I hereby certify to
the Administrative Agent, the Managing Agents and the Banks that:
(1) Attached hereto as Exhibit A is a true, complete and
correct copy of the Articles of Incorporation of the Subsidiary certified by the
Alaska Department of Commerce and Economic Development.
(2) Attached hereto as Exhibit B are certificates of good
standing issued by the Secretary of State or similar state official for each
state in which Subsidiary is incorporated or required to qualify to do business;
(3) Attached hereto as Exhibit C is a true, complete and
correct copy of the Bylaws of the Subsidiary;
(4) Attached hereto as Exhibit D is a true, complete and
correct copy of the corporate resolutions of the Subsidiary adopted by the
Subsidiary's Board of Directors on October 10, 1996, such corporate action
having been duly taken in accordance with the provisions of Applicable Law, the
Articles of Incorporation and the Bylaws, and such resolutions are now in full
force and effect, without any modifications in any respect. Such resolutions
authorize the Subsidiary to execute, deliver and perform the Loan Documents to
which it is a party;
(5) Attached hereto as Exhibit E is a true, complete and
correct copy of all shareholders' or other similar agreements or voting trust
agreements in effect with respect to the stock interest of the Subsidiary;
(6) Attached hereto as Exhibit F is a true, complete and
correct photocopy of the Licenses of the Subsidiary, together with all
amendments thereto, each of which is in full force and effect on the date
hereof.
(7) Attached hereto as Exhibit G is a true, complete and
correct list of each of the Pole Agreements of the Subsidiary with all
amendments thereto, each of which is in full force and effect on the date
hereof.
General Communication, Inc. - Form 8-K
Page 361
<PAGE>
(8) The Subsidiary has from the dates of the certificates
referred to in item (2) above through the date hereof remained in good standing
under the laws of the states in which it is qualified to do business.
(9) No suit or proceeding for the dissolution or liquidation
of the Subsidiary has been instituted or is now threatened.
(10) To the best of the Subsidiary's knowledge, there are no
actions, suits or proceedings pending or threatened against the Subsidiary or
any of its respective property before any court, arbitrator or governmental
department, commission, board, bureau, agency or other instrumentality, domestic
or foreign, other than any such actions, suits or proceedings described on
Schedule 9 to the Loan Agreement, and no such action, suit or proceeding, if
determined adversely to the Subsidiary, would be likely to have a Materially
Adverse Effect.
(11) The following persons have been duly elected to the
offices set forth beside their names, have been duly qualified, and on the date
hereof are officers of the Subsidiary, holding the offices set forth opposite
their respective names below, and the signatures set forth opposite their
respective names are their respective genuine signatures:
Name Title Signature
- ---------------------- ------------------------- -------------------
- ---------------------- ------------------------- -------------------
- ---------------------- ------------------------- -------------------
Capitalized terms used herein and not otherwise defined are used as
defined in the Loan Agreement.
IN WITNESS WHEREOF, I have signed this Loan Certificate of the
Subsidiary as of the 31st day of October, 1996.
GCI CABLE HOLDINGS, INC.
By: /s/ John M. Lowber
Its: Secretary/Treasurer
General Communication, Inc. - Form 8-K
Page 362
<PAGE>
EXHIBITS
Exhibit A - Articles of Incorporation
Exhibit B - Certificates of Good Standing
Exhibit C - Bylaws
Exhibit D - Corporate Resolutions
Exhibit E - Shareholder's and Other Agreements
Exhibit F - Licenses
Exhibit G - List of Pole Agreements
General Communication, Inc. - Form 8-K
Page 363
<PAGE>
LOAN CERTIFICATE
LIMITED PARTNERSHIP SUBSIDIARY
I, John M. Lowber, do hereby certify that I am the duly elected and
qualified Secretary/Treasurer and keeper of the corporate records and corporate
seal of GCI Cable, Inc., a corporation organized and existing under the laws of
the State of Alaska (referred to herein as the "General Partner" or "Borrower"),
which is the sole general partner of Prime Cable of Alaska, L.P., a Delaware
limited partnership and a subsidiary of the Borrower (the "Subsidiary"). In
connection with that certain Loan Agreement dated October 31, 1996 (the "Loan
Agreement") among the Borrower, the Banks (as defined therein) (the "Banks"),
Toronto Dominion (Texas), Inc., NationsBank of Texas, N.A., The Chase Manhattan
Bank, N.A. and Credit Lyonnais, Cayman Island Branch, as managing agents
(collectively the "Managing Agents"), and Toronto Dominion (Texas), Inc., as
administrative agent for the Managing Agents and the Banks (the "Administrative
Agent"), I hereby certify to the Administrative Agent, the Managing Agents and
the Banks that:
(1) Attached hereto as Exhibit A is a true, complete and
correct copy of the Partnership Agreement of the Subsidiary, and a true,
complete and correct copy of the Certificate of Limited Partnership of the
Subsidiary certified by the Delaware Secretary of State.
(2) Attached hereto as Exhibit B are certificates of good
standing issued by the Secretary of State or similar state official for each
state in which Subsidiary and its General Partner is incorporated or required to
qualify to do business;
(3) Attached hereto as Exhibit C is a true, correct and
complete copy of corporate resolutions of the General Partner adopted by the
General Partner's Board of Directors on October 10, 1996, such corporate action
having been duly taken in accordance with the provisions of Applicable Law, the
Articles of Incorporation and the Bylaws of the General Partner, and such
resolutions are now in full force and effect, without any modifications in any
respect. Such resolutions authorize the General Partner to act on behalf of the
Borrower and the officers designated therein to execute, deliver, and perform
the Loan Documents to which the Subsidiary is a party.
(4) Attached hereto as Exhibit D is a true, complete and
correct copy of all partners' and other similar agreements or voting trust
agreements in effect with respect to the partnership interests of the
Subsidiary;
(5) Attached hereto as Exhibit E is a true, complete and
correct photocopy of the Licenses of the Subsidiary, together with all
amendments thereto, each of which is in full force and effect on the date
hereof.
(6) Attached hereto as Exhibit F is a true, complete and
correct list of each of the Pole Agreements of the Subsidiary with all
amendments thereto, each of which is in full force and effect on the date
hereof.
General Communication, Inc. - Form 8-K
Page 364
<PAGE>
(7) The Subsidiary and the General Partner have from the
dates of the certificates referred to in item (2) above through the date hereof
remained in good standing under the laws of the states in which they are
qualified to do business.
(8) No suit or proceeding for the dissolution or liquidation
of the General Partner or the Subsidiary has been instituted or is now
threatened.
(9) To the best of the General Partner's knowledge, there are
no actions, suits or proceedings pending or threatened against the General
Partner or the Subsidiary or any of their respective property before any court,
arbitrator or governmental department, commission, board, bureau, agency or
other instrumentality, domestic or foreign, other than any such actions, suits
or proceedings described on Schedule 9 to the Loan Agreement, and no such
action, suit or proceeding, if determined adversely to the General Partner or
the Subsidiary, would be likely to have a Materially Adverse Effect.
(10) The following persons have been duly elected to the
offices set forth beside their names, have been duly qualified, and on the date
hereof are officers of the General Partner, holding the offices set forth
opposite their respective names below, and the signatures set forth opposite
their respective names are their respective genuine signatures:
Name Title Signature
- ---------------------- ------------------------- -------------------
- ---------------------- ------------------------- -------------------
- ---------------------- ------------------------- -------------------
Capitalized terms used herein and not otherwise defined are used as
defined in the Loan Agreement.
IN WITNESS WHEREOF, I have signed this Loan Certificate of the
Subsidiary as of the 31st day of October, 1996.
GCI CABLE, INC.
By: /s/ John M. Lowber
Its: Secretary/Treasurer
General Communication, Inc. - Form 8-K
Page 365
<PAGE>
EXHIBITS
Exhibit A - Partnership Agreement and Certificate of
Limited Partnership
Exhibit B - Certificates of Good Standing
Exhibit C - Corporate Resolutions
Exhibit D - Partners' and Other Agreements
Exhibit E - Licenses
Exhibit F - List of Pole Agreements
General Communication, Inc. - Form 8-K
Page 365
<PAGE>
EXHIBIT N-1
[HARTIG, RHODES, NORMAN, MAHONEY & EDWARDS LETTERHEAD]
October 31, 1996
Anchorage
Toronto Dominion (Texas), Inc. The Chase Manhattan Bank N.A.
909 Fannin, Suite 1700 One Chase Manhattan Plaza
Houston, Texas 77010 4th Floor
New York, New York 10081
NationsBank of Texas, N.A. The Bank of New York
901 Main Street, 64th Floor One Wall Street
Dallas, Texas 75202 16th Floor
New York, New York 10286
Credit Lyonnais New York Branch Banque Paribas
1301 Avenue of the Americas 2029 Century Park East
New York, New York 10019 Suite 3900
Los Angeles, California 90067
PNC Bank, National Association The First National Bank of Maryland
100 South Broad Street 25 South Charles Street
Philadelphia, Pennsylvania 19101 18th Floor
Baltimore, Maryland 21201
Ladies and Gentlemen:
We have acted as counsel for General Communication, Inc. ("Parent
Company"), GCI Cable, Inc. ("Borrower"), GCI Cable/Fairbanks, Inc., GCI
Cable/Juneau, Inc., and GCI Cable Holdings, Inc. ("Guarantors") Alaska
corporations, and Prime Cable of Alaska, L.P., a Delaware limited partnership
("Prime Guarantor") in connection with that certain Loan Agreement dated as of
October 31, 1996 ("Loan Agreement") by and among Toronto Dominion (Texas), Inc.
("TD Bank"), NationsBank of Texas, N.A. ("NationsBank"), Credit Lyonnais New
York Branch ("Credit Lyonnais"), The Chase Manhattan Bank N.A. ("Chase"), The
Bank of New York, Banque Paribas, PNC Bank, National Association and The First
National Bank of Maryland, as
General Communication, Inc. - Form 8-K
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October 31, 1996
Page
lenders (collectively, "Banks"), TD Bank, NationsBank, Credit Lyonnais and Chase
acting as managing agents for the Banks (together, "Managing Agents"), and TD
Bank, as administrative agent for the Managing Agents and the Banks ("Agent"),
and the Borrower. This opinion letter is being delivered to you in accordance
with Section 3.1(a)(xi) of the Loan Agreement. Capitalized terms used in this
opinion letter without definition have the same meanings as in the Loan
Agreement.
1. Documents/Matters Reviewed
As counsel for the Parent Company, Borrower, Guarantors, and Prime
Guarantor, we have reviewed the documents listed on Schedule 1 hereto (items 1
through 19 thereof are referred to herein, collectively, as "Agreement
Documents"), the certificates of public officials and such corporate or
partnership certificates and documents of the Parent Company, Borrower,
Guarantors and Prime Guarantor as are necessary to render this opinion. In all
such examinations, we have assumed the authenticity of all signatures, the
authenticity and completeness of all documents submitted to us as originals, and
the conformity to originals and the completeness of all documents submitted to
us as photostatic, notarial or certified copies.
2. Opinions
Based on the foregoing, and subject to the assumptions, limitations,
qualifications and exceptions set forth in Sections 1, 2 and 3 of this opinion
letter, we are of the opinion that:
2.1 The Parent Company, Borrower and Guarantors are
corporations duly organized, validly existing and in good standing under the
laws of the State of Alaska. The Borrower and Guarantors have all requisite
corporate power and authority to own or lease and operate their properties, to
conduct their business as now being conducted, and to execute, deliver and
perform all of their obligations under each of the Agreement Documents to which
each is a party.
2.2 The execution, delivery and performance by Parent Company,
Borrower, Guarantors and Prime Guarantor of each of the Agreement Documents to
which it is a party, have been duly and validly authorized by all necessary
partnership or corporate, as the case may be, action on the part of each entity.
2.3 Each of the Agreement Documents constitutes the legal,
valid and binding obligation of such of the Parent Company, Borrower, Guarantors
and Prime Guarantor as are party thereto, enforceable against them,
respectively, in accordance with their respective terms.
General Communication, Inc. - Form 8-K
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October 31, 1996
Page
2.4 The execution, delivery and performance by the Parent
Company, Borrower, and Guarantors of the Agreement Documents to which each is a
party do not (i) violate any material law, rule or regulation which, in our
experience, is normally applicable to transactions of the type contemplated by
the provisions of the Agreement Documents to which the Borrower is a party, (ii)
violate the articles of incorporation or bylaws of the Parent Company, Borrower
or Guarantors, (iii) breach in any material respect, or result in a material
default under, any existing obligation of the Parent Company, Borrower, and
Guarantors under any indenture or loan or credit agreement or any other material
agreement, lease or instrument of which we are aware to which the Parent
Company, Borrower, and Guarantors are a party or by which the Parent Company,
Borrower, and Guarantors are bound, (iv) breach in any material respect or
otherwise violate in any material respect any existing obligation of the Parent
Company, Borrower, and Guarantors under any material order, writ, judgment,
injunction, decree, determination or award of any court, arbitrator or
government, commission, board, bureau, agency or other instrumentality binding
upon the Parent Company, Borrower, and Guarantors of which we are aware, or (v)
to our knowledge, result in the creation or imposition of any Lien (other than
Permitted Liens) against or upon the Borrower's or Guarantor's assets.
2.5 To our knowledge, there are no actions or proceedings
against Parent Company, Borrower, or Guarantors pending or overtly threatened in
writing (other than such matters affecting the cable television industries in
the State of Alaska or in the United States generally), before any court,
governmental agency or arbiter which, if determined adversely as to any of such
entities, could have a materially adverse effect upon any such entity.
2.6 Borrower has duly executed (or, in the case of those
documents as to which Borrower is not nominally a party, duly acknowledged) and
delivered to the Agent, the Loan Documents to which Borrower is a party.
2.7 To our knowledge, no material authorization, consent,
approval, license, exemption of or filing or registration with any court or
governmental department, commission, board, bureau, agency or other
instrumentality, domestic or foreign, is or will be necessary or appropriate to
the valid execution, delivery or performance by Borrower of the Loan Documents
to which it is a party as the case may be, or for the payment to the Agent and
the Banks of any sums under the Agreement Documents, except for (i) consents
previously obtained, and (ii) consents the absence of which would not adversely
affect the Agent's and the Banks' rights or security under the Agreement
Documents.
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October 31, 1996
Page
2.8 The Security Agreement and the Subsidiary Security
Agreements create a valid Security Interest in the Collateral in favor of the
Banks and the Agent; and assuming that appropriate UCC financing statements and
amendments and continuation statements thereof have been duly filed with the UCC
Central Filing Office in Anchorage, Alaska, the Security Interest created in the
Collateral under the Security Agreement and the Subsidiary Security Agreements
is perfected to the extent that a security interest in such Collateral can be
perfected by filing a financing statement under the provisions of the Code as
currently in effect in the State of Alaska.
2.9 The Assignment of Partnership Interests creates a valid
security interest in the interests in the Prime Guarantor owned by Borrower and
Cable Holdings, Inc., to the extent such a security interest can be created
therein by executing a security agreement under the UCC. Pursuant to Alaska
Statute, AS 45.09.103(c) of the UCC as adopted in Alaska, the law of the
jurisdiction in which the debtor is located governs the perfection and the
effect of perfection or non-perfection of a security interest in intangible
property.
3. Assumptions, Limitations, Qualifications and
Exceptions
The opinions expressed above are subject to and qualified in all
respects by the following:
3.1 In rendering the opinions expressed in Section 2 above, we
have relied solely upon (i) the factual matters stated in the certificates of
public officials, (ii) the certifications made to us as of this date by officers
of the Parent Company, Borrower, Guarantors and Prime Guarantor, (iii)
representations, warranties, certifications and statements of the Parent
Company, Borrower, Guarantors and Prime Guarantor made pursuant to the Loan
Agreement and the other Agreement Documents as to the factual matters set forth
therein, (iv) our review of counterparts of the documents referenced on Schedule
1 hereto, (v) our review of the Parent Company, Borrower, Guarantors and Prime
Guarantor's corporate or partnership documents necessary to render this opinion,
and (vi) all laws, rules and regulations which, in our experience, are normally
applicable to transactions of the type contemplated by the provisions of the
Agreement Documents, and although we have made no independent factual
investigation with regard to such matters set forth in (i)-(v) above, we have no
knowledge of any matter inconsistent with the opinions expressed in Section 2
above. The phrase "to our knowledge" or "of which we are aware," when used in
this opinion letter means the awareness of facts or other information by the
attorneys in this firm who have given substantive legal attention to
representation of the Parent Company, Borrower, Prime Guarantor, and Guarantors
in connection with the Loan Agreement. We have assumed that neither the Agent,
the Banks nor their counsel know of any reason why the opinions set forth in
this opinion letter may be incorrect.
General Communication, Inc. - Form 8-K
Page 370
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October 31, 1996
Page
3.2 We have assumed that the Agreement Documents will be
administered in accordance with the terms thereof, and that there are no other
contracts or agreements (other than the other Loan Documents), written or oral,
between or among any of the Banks, the Agent, the Parent Company, Borrower,
Guarantors and Prime Guarantor or any other parties to any thereof, with respect
to the Loans.
3.3 We express no opinion regarding the accuracy, or the
effect of any breach, of any representation, warranty or certification under the
Agreement Documents to be made, remade or renewed after the date hereof with
respect to any future event, condition or occurrence. The opinions expressed by
us are limited to the matters expressly stated herein and no opinions are
implied, or should be inferred, beyond the matters expressly so stated.
3.4 To the extent our opinions herein may be affected by such
matters, we have assumed for purposes hereof, (i) that each party to the
Agreement Documents (other than the Parent Company, Borrower, and Guarantor) is
duly organized; (ii) that each party to the Agreement Documents (other than the
Parent Company, Borrower, and Guarantor) is validly existing and in good
standing under the laws of the jurisdiction of its organization and in each
other jurisdiction in which the ownership of its properties or the conduct of
its business requires such party to qualify to do business and has the power to
own, lease and operate its properties therein and to conduct its business
therein as now conducted; (iii) that (except as to the Parent Company, Borrower,
Guarantors, and Prime Guarantor) the Agreement Documents have been duly
authorized; (iv) that (other than the Parent Company, Borrower, Guarantors, and
Prime Guarantor) the Agreement Documents have been properly executed and
delivered by all parties thereto; (v) that the Agreement Documents constitute
the legal, valid and binding obligations of the parties thereto (other than the
Parent Company, Borrower, and Guarantor, enforceable against them in accordance
with their respective terms; (vi) that each such party (other than the Parent
Company, Borrower, and Guarantor) has the requisite corporate or other
organizational power and authority to execute and deliver the Agreement
Documents and perform its obligations thereunder, as applicable; and (vii) that
the execution, delivery and performance by each party (other than the Parent
Company, Borrower, Guarantors and Prime Guarantor) to the Agreement Documents
does not and will not violate any statutes, laws, ordinances, regulations,
rules, orders, writs, injunctions or decrees or any court or governmental
authority of any jurisdiction applicable to each such party or its assets.
3.5 We express no opinions as to any matters involving (i)
choices or conflicts of laws, or (ii) applicable usury laws. We have assumed,
without inquiry, with respect to all of the Agreement Documents that the
internal laws, and not the law of conflicts, of the State of New York apply and
that the internal laws of the State of New York are the same as the internal
laws of the State of Alaska.
General Communication, Inc. - Form 8-K
Page 371
<PAGE>
October 31, 1996
Page
3.6 With your approval, we express no opinion (i) as to the
creation or perfection of security interests in any assets or properties of any
Person, except to the limited extent set forth in Paragraphs 2.8 and 2.9 above,
or (ii) with respect to matters governed by the law of the State of New York.
3.7 We are qualified to practice law in the State of Alaska
only and we have made no investigation of and express no opinion with respect to
the laws of any other state or jurisdiction, other than applicable federal laws
(except as noted below). Furthermore, we express no opinion with respect to (i)
matters governed by the Federal Communications Act of 1934, as amended, and the
rules and regulations of the Federal Communications Commission thereunder, (ii)
copyright matters under Title 17 of the United States Code, and the rules and
regulations of the United States Copyright Office thereunder, (iii) matters
governed by the Federal Aviation Act of 1958, as amended, and the rules and
regulations of the Federal Aviation Administration thereunder, (iv) land use,
environmental or ecological laws, statutes or regulations, (v) ordinances of
municipalities, and similar political subdivisions of the State of Alaska, or
(vi) matters governed by the Alaska Public Utilities Commission Act.
3.8 The opinions stated in Paragraph 2.3 above are subject to,
and shall be interpreted in accordance with, the Bankruptcy and Insolvency
Exceptions, Equitable Principals Limitation and Other Common Qualifications set
forth on Schedules 2, 3, and 4 hereto.
3.9 With regard to the opinions expressed concerning the
enforceability of the Agreement Documents, such enforceability may be limited by
the rights of the United States under the Federal Tax Lien Act of 1966, as
amended, and by requirements of due process under the United States
Constitution, the Constitution of the State of Alaska and other laws or court
decisions limiting the rights of creditors to repossess, foreclose or otherwise
realize upon the property of a debtor without appropriate notice or hearing or
both. We express no opinion as to whether a court would grant specific
performance or any other equitable remedy with respect to the enforcement of the
Agreement Documents. Further, we express no opinion as to the enforceability of
(i) non-judicial foreclosure, receivership and self-help remedies provided for
in the Agreement Documents; (ii) provisions which purport to restrict access to
legal or equitable remedies or which purport to establish penalties or
evidentiary standards; (iii) provisions relating to subrogation rights,
suretyship, delay or omission of enforcement of remedies and indemnity; (iv)
provisions which purport to appoint the Agent or the Banks, in any capacity, as
the attorney-in-fact or proxy of any of the Parent Company, Borrower, Guarantors
and Prime Guarantor; (v) provisions which purport to waive rights or notices;
(vi) provisions relating to consent judgments, waivers of defenses or the
benefits of statutes of limitations, marshaling of assets, the transferability
of any assets which by their nature are nontransferable, sales in inverse order
of alienation, or severance; (vii) provisions which purport to prohibit or
restrict transfer of title to,
General Communication, Inc. - Form 8-K
Page 372
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October 31, 1996
Page
or the granting of junior encumbrances of, all or any part of the property
covered by any of the Agreement Documents; or (viii) so-called "dragnet,"
"Mother Hubbard" or "future advance" clauses, as said provisions relate to loans
other than the loans evidenced by the Notes.
3.10 The enforceability of certain of the remedial, waiver,
subrogation, indemnity and other provisions of the Agreement Documents is
further subject to all applicable constitutional, legislative, judicial and
administrative provisions, statutes, decisions, rulings and other laws, in
addition to those described in Paragraph 3.9 above; however, such laws do not,
in our opinion, substantially interfere with the practical realization of the
benefits expressed in the Agreement Documents (except for the economic
consequences of any procedural delay which may result from such laws).
This opinion is given solely to the Banks, the Agent and their counsel
and shall not be relied upon by any other person or entity other than the Banks,
the Agent, their counsel, examiners and auditors. This opinion may not be
quoted, circulated or published, in whole or in part, or furnished or relied
upon by any other party, without our prior written consent, except as may be
required by process of law or in connection with litigation arising out of the
Agreement Documents, and, except that this opinion letter may be disclosed to
the bank regulatory authorities and may be relied upon by assignees of the Banks
under Section 11.6 of the Loan Agreement. The opinions herein are expressed as
of the date hereof only and not as of some future date. We undertake no
responsibility to update this opinion for events occurring after the date
hereof.
Sincerely,
HARTIG, RHODES, NORMAN,
MAHONEY & EDWARDS, P.C.
By: /s/
Robert B. Flint
RBF/jmh
Enclosures
cc:
A:\Toronto docs\Opinion.RBF
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Page 373
<PAGE>
October 31, 1996
Page
SCHEDULE 1
Documents Examined
Terms used herein and defined in the Loan Agreement are used herein as therein
defined. Reference to each document includes reference to all exhibits and
exhibits thereto.
1. Loan Agreement.
2. $31,250,000 Promissory Note dated October 31, 1996 executed by the
Borrower and payable to Toronto Dominion (Texas), Inc.
3. $31,250,000 Promissory Note dated October 31, 1996 executed by the
Borrower and payable to NationsBank of Texas, N.A.
4. $31,250,000 Promissory Note dated October 31, 1996 executed by the
Borrower and payable to Credit Lyonnais New York Branch.
5. $31,250,000 Promissory Note dated October 31, 1996 executed by the
Borrower and payable to The Chase Manhattan Bank N.A.
6. $25,000,000 Promissory Note dated October 31, 1996 executed by the
Borrower and payable to The Bank of New York.
7. $25,000,000 Promissory Note dated October 31, 1996 executed by the
Borrower and payable to Banque Paribas.
8. $15,000,000 Promissory Note dated October 31, 1996 executed by the
Borrower and payable to PNC Bank, National Association.
9. $15,000,000 Promissory Note dated October 31, 1996 executed by the
Borrower and payable to The First National Bank of Maryland.
10. Security Agreement.
11. Subsidiary Guaranty.
12. Security Agreement.
General Communication, Inc. - Form 8-K
Page 374
<PAGE>
October 31, 1996
Page
13. Fee Letters.
14. Assignment of Partnership Interests.
15. Parent's Pledge Agreement.
16. Borrower's Pledge Agreement.
17. Mortgage
18. Subordination and Assignment of Management Agreement
19. Subordination Agreement
20. Borrower's Loan Certificate.
21. Request for Initial Advance.
22. Use of Proceeds Letter.
General Communication, Inc. - Form 8-K
Page 375
<PAGE>
October 31, 1996
Page
SCHEDULE 2
Bankruptcy and Insolvency Exceptions
Paragraph 2.4 of this opinion letter is subject to the effect of
bankruptcy, insolvency, reorganization, receivership, moratorium and other
similar laws affecting the rights and remedies of creditors generally. This
exception includes;
(a) the Federal Bankruptcy Code and thus comprehends, among
others, matters of turn-over, automatic stay, avoiding powers,
fraudulent transfer, preference, discharge, conversion of a
non-recourse obligation into a recourse claim, limitations on
ipso facto and anti-assignment clauses and the coverage of
pre-petition security agreements applicable to property
acquired after a petition is filed;
(b) all other Federal and state bankruptcy, insolvency,
reorganization, receivership, moratorium, arrangement and
assignment for the benefit of creditors laws that affect the
rights and remedies of creditors generally (not just creditors
of specific types of debtors);
(c) all other Federal bankruptcy, insolvency, reorganization,
receivership, moratorium, arrangement and assignment for the
benefit of creditors laws that have reference to or affect
generally only creditors of specific types of debtors and
state laws of like character affecting generally only
creditors of financial institutions and insurance companies;
(d) state fraudulent transfer and conveyance laws; and
(e) judicially developed doctrines relevant to any of the
foregoing laws, such as substantive consolidation of entities.
General Communication, Inc. - Form 8-K
Page 376
<PAGE>
October 31, 1996
Page
SCHEDULE 3
Equitable Principles Limitation
Paragraph 2.3 of this opinion letter is subject to the effect of
general principles of equity, whether applied by a court of law or equity. This
limitation includes principles:
(a) governing the availability of specific performance, injunctive
relief or other equitable remedies, which generally place the
award of such remedies, subject to certain guidelines, in the
discretion of the court to which application for such relief
is made;
(b) affording equitable defenses (e.g., waiver, laches and
estoppel) against a party seeking enforcement;
(c) requiring good faith and fair dealing in the performance and
enforcement of a contract by the party seeking its
enforcement;
(d) requiring reasonableness in the performance and enforcement of
an agreement by the party seeking enforcement of the contract;
(e) requiring consideration of the materiality of (i) a party's
breach and (ii) the consequences of the breach to the party
seeking enforcement;
(f) requiring consideration of the impracticability or
impossibility of performance at the time of attempted
enforcement; and
(g) affording defenses based upon the unconscionability of the
enforcing party's conduct after the parties have entered into
the contract.
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Page 377
<PAGE>
October 31, 1996
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SCHEDULE 4
Other Common Qualifications
Paragraph 2.4 of this opinion letter is subject to the effect of
generally applicable rules of Alaska Law, if any, that:
(a) limit or affect the enforcement of provisions of a contract
that purport to require waiver of the obligations of good
faith, fair dealing, diligence and reasonableness;
(b) provide that forum selection clauses in contracts are not
necessarily binding on the court(s) in the forum selected;
(c) limit the availability of a remedy under certain circumstances
where another remedy has been elected;
(d) limit the right of a creditor to use force or cause a breach
of the peace in enforcing rights;
(e) relate to the sale or disposition of collateral or the
requirements of a commercially reasonable sale;
(f) limit the enforceability of provisions releasing, exculpating
or exempting a party from, or requiring indemnification of a
party for, liability for its own action or inaction, to the
extent the action or inaction involves gross negligence,
recklessness, willful misconduct or unlawful conduct;
(g) may, where less than all of a contract may be unenforceable,
limit the enforceability of the balance of the contract to
circumstances in which the unenforceable portion is not an
essential part of the agreed exchange;
(h) govern and afford judicial discretion regarding the
determination of damages and entitlement to attorneys' fees
and other costs;
(i) may, in the absence of a waiver or consent, discharge a
guarantor to the extent that (i) action by a creditor impairs
the value of collateral securing guaranteed debt to the
detriment of the guarantor, or (ii) guaranteed debt is
materially modified; and
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October 31, 1996
Page
(j) may permit a party who has materially failed to render or
offer performance required by the contract to cure that
failure unless (i) permitting a cure would unreasonably hinder
the aggrieved party from making substitute arrangements for
performance, or (ii) it was important in the circumstances to
the aggrieved party that performance occur by the date stated
in the contract.
General Communication, Inc. - Form 8-K
Page 379
<PAGE>
EXHIBIT N-2
[EDENS SNODGRASS NICHOLS & BREELAND, P.C. LETTERHEAD]
October 31, 1996
Toronto Dominion (Texas), Inc. The Chase Manhattan Bank, N.A.
909 Fannin, Suite 1700 One Chase Manhattan Plaza
Houston, Texas 77010 4th Floor
New York, New York 10081
NationsBank of Texas, N.A. The Bank of New York
901 Main Street, 64th Floor One Wall Street
Dallas, Texas 75202 16th Floor
New York, New York 10286
Credit Lyonnais New York Branch Banque Paribas
1301 Avenue of the Americas 2029 Century Park East
New York, New York 10019 Suite 3900
Los Angeles, California 90067
PNC Bank, National Association The First National Bank of Maryland
100 South Broad Street 25 South Charles Street
Philadelphia, Pennsylvania 19101 18th Floor
Baltimore, Maryland 21201
Ladies and Gentlemen:
We have acted as special counsel for Prime Cable of Alaska, L.P., a
Delaware limited partnership ("Prime Alaska"), and Prime II Management, L.P., a
Delaware limited partnership (the "Manager"), in connection with that certain
Loan Agreement dated as of October 31, 1996 (the "Loan Agreement") by and among
Toronto Dominion (Texas), Inc. ("TD Bank"), NationsBank of Texas, N.A.
("NationsBank"), Credit Lyonnais New York Branch ("Credit Lyonnais"), The Chase
Manhattan Bank N.A. ("Chase"), The Bank of New York, Banque Paribas, PNC Bank,
National Association and The First National Bank of Maryland, as lenders
(collectively, the "Banks"), TD Bank, NationsBank, Credit Lyonnais and Chase
acting as managing agents for the Banks (together, the "Managing Agents"), and
TD Bank, as administrative agent for the Managing Agents and the Banks (the
"Agent"), and GCI Cable, Inc., an Alaska corporation (the "Borrower"), as
borrower. This opinion letter is being delivered to you in accordance with
Section 3.1(a)(xi) of the Loan Agreement. Capitalized terms used in this opinion
letter without definition have the same meanings as in the Loan Agreement.
General Communication, Inc. - Form 8-K
Page 380
<PAGE>
Toronto Dominion (Texas), Inc., eta 1.
October 31, 1996
Page
1. Documents/Matters Reviewed
As special counsel for Prime Alaska and the Manager, we have reviewed
the Constituent Documents (as defined in Paragraph 2.6 below) of Prime Alaska
and the Manager, the documents listed on Schedule 1 hereto (items 2 through 5
thereof are referred to herein, collectively, as the "Prime Agreement
Documents"), and the certificates of public officials attached hereto as
Schedule 2. The description of the Prime Agreement Documents and the
definitional references to each set forth on Schedule 1 are incorporated herein.
In all such examinations, we have assumed the authenticity of all signatures
(other than signatures of representatives of the Manager), the authenticity and
completeness of all documents submitted to us as originals, and the conformity
to originals and the completeness of all documents submitted to us as
photostatic, notarial or certified copies.
2. Opinions
Based on the foregoing, and subject to the assumptions, limitations,
qualifications and exceptions set forth in Sections 1, 2 and 3 of this opinion
letter, we are of the opinion that:
2.1 The Manager and Prime Alaska are each limited partnerships
duly formed, validly existing and in good standing under the laws of the State
of Delaware. Each of Prime Alaska and the Manager has all requisite partnership
power and authority to own or lease and operate its properties, to conduct its
business as now being conducted, and to execute, deliver and perform all of
their respective obligations under each of the Prime Agreement Documents to
which it is a party.
2.2 The execution, delivery and performance by the Manager of
the Subordination and Assignment of Management Agreement has been duly and
validly authorized by all necessary partnership action on the part of the
Manager.
2.3 The Manager has duly executed and delivered to the Agent
the Subordination and Assignment of Management Agreement. The Subordination and
Assignment of Management Agreement constitutes the legal, valid and binding
obligation of the Manager, enforceable against the Manager in accordance with
its terms.
General Communication, Inc. - Form 8-K
Page 381
<PAGE>
Toronto Dominion (Texas), Inc., eta 1.
October 31, 1996
Page
2.4 The execution, delivery and performance by Prime Alaska of
the Prime Agreement Documents to which it is a party do not (i) violate the
certificate or agreement of limited partnership, as amended, of Prime Alaska
(the "Prime Alaska Documents"), (ii) breach in any material respect, or result
in a material default under, any existing obligation of Prime Alaska under any
indenture or loan or credit agreement or any other material agreement, lease or
instrument of which we are aware to which Prime Alaska is a party or by which
Prime Alaska is bound, (iii) breach in any material respect or otherwise violate
in any material respect any existing obligation of Prime Alaska under any
material order, writ, judgment, injunction, decree, determination or award of
any court, arbitrator or government, commission, board, bureau, agency or other
instrumentality binding upon Prime Alaska of which we are aware, or (iv) to our
knowledge, result in the creation or imposition of any Lien (other than
Permitted Liens) against or upon Prime Alaska's assets.
2.5 The execution, delivery and performance by the Manager of
the Subordination and Assignment of Management Agreement, do not (i) violate any
material law, rule or regulation which, in our experience, is normally
applicable to transactions of the type contemplated by the provisions of the
Subordination and Assignment of Management Agreement, (ii) violate the
certificate or agreement of limited partnership, as amended, of the Manager (the
"Manager Documents," and collectively with the Prime Alaska Documents, the
"Constituent Documents"), (iii) breach in any material respect, or result in a
material default under, any existing obligation of the Manager under any
indenture or loan or credit agreement or any other material agreement, lease or
instrument of which we are aware to which the Manager is a party or by which the
Manager is bound, (iv) breach in any material respect or otherwise violate in
any material respect any existing obligation of the Manager under any material
order, writ, judgment, injunction, decree, determination or award of any court,
arbitrator or government, commission, board, bureau, agency or other
instrumentality binding upon the Manager of which we are aware, or (v) to our
knowledge, result in the creation or imposition of any Lien (other than
Permitted Liens) against or upon the Manager's right, title or interest in and
to the Management Agreement.
2.6 To our knowledge, there are no actions or proceedings
against either of Prime Alaska or the Manager, pending or overtly threatened in
writing (other than such matters affecting the cable television industries in
the States of Alaska, Illinois, North Carolina, Texas or Nevada or in the United
States generally), before any court, governmental agency or arbiter which, if
determined adversely as to either of Prime Alaska or the Manager, could have a
materially adverse effect upon such entity.
General Communication, Inc. - Form 8-K
Page 382
<PAGE>
Toronto Dominion (Texas), Inc., eta 1.
October 31, 1996
Page
2.7 To our knowledge, no material authorization, consent,
approval, license, exemption of or filing or registration with any court or
governmental department, commission, board, bureau, agency or other
instrumentality, domestic or foreign (collectively, "Consents"), is or will be
necessary or appropriate to the valid execution, delivery or performance by the
Manager of the Subordination and Assignment of Management Agreement, except for
(i) consents previously obtained, (ii) consents the absence of which would not
adversely affect the Agent's and the Banks' rights or security under the
Subordination and Assignment of Management Agreement, and (iii) consents which
will or may be required in connection with the enforcement by the Agent or the
Banks of their rights with respect to the interests assigned pursuant to the
Subordination and Assignment of Management Agreement.
2.8 The provisions of the Subordination and Assignment of
Management Agreement are effective to create in favor of the Agent, for itself
and for the ratable benefit of the Banks, a valid security interest in all
interests of the Manager under the Management Agreement assigned thereunder in
which a security interest may be created under Chapter 9 of the Texas Business
and Commerce Code (the "Code"). Upon the due filing of UCC-1 financing
statements in the appropriate official records of the offices of the Texas
Secretary of State with respect to the interests assigned thereunder, the
Subordination and Assignment of Management Agreement will create in favor of the
Agent a perfected lien on, and security interest in, all interests of the
Manager under the Management Agreement assigned thereunder in which a security
interest may be perfected by filing of UCC-1 financing statements under Chapter
9 of the Code.
3. Assumptions, Limitations, Qualifications and Exceptions
The opinions expressed above are subject to and qualified in all
respects by the following:
3.1 In rendering the opinions expressed in Section 2 above, we
have relied solely upon (i) the factual matters stated in the certificates of
public officials attached as Schedule 2 to this letter, (ii) the certifications
made to us as of this date by officers of Prime Cable Fund I, Inc. pursuant to
the PCFI Officers' Certificate, by officers of the Borrower pursuant to the GCIC
Officers' Certificate and by officers of Prime II Management, Inc. pursuant to
the PIIMI Officers' Certificate, (iii) representations, warranties,
certifications and statements of Prime Alaska and the Manager made pursuant to
the Prime Agreement Documents as to the factual matters set forth therein, (iv)
our review of counterparts of the documents referenced on Schedule 1 hereto, (v)
General Communication, Inc. - Form 8-K
Page 383
<PAGE>
Toronto Dominion (Texas), Inc., eta 1.
October 31, 1996
Page
our review of the Constituent Documents, and (vi) all laws, rules and
regulations which, in our experience, are normally applicable to transactions of
the type contemplated by the provisions of the Prime Agreement Documents, and
although we have made no independent factual investigation with regard to such
matters set forth in (i)-(v) above, we have no knowledge of any matter
inconsistent with the opinions expressed in Section 2 above. The phrase "to our
knowledge" or "of which we are aware," when used in this opinion letter means
the awareness of facts or other information by the attorneys in this firm who
have given substantive legal attention to representation of Prime Alaska and the
Manager in connection with the Loan Agreement. We have assumed that neither the
Agent, the Banks nor their counsel know of any reason why the opinions set forth
in this opinion letter may be incorrect.
3.2 We have assumed that the Prime Agreement Documents will be
administered in accordance with the terms thereof, and that there are no other
contracts or agreements (other than the other Loan Documents), written or oral,
between or among any of the Borrower, the Banks, the Agent, Prime Alaska, the
Manager or any other parties to any thereof, with respect to the Loans.
3.3 We express no opinion regarding the accuracy, or the
effect of any breach, of any representation, warranty or certification under the
Prime Agreement Documents to be made, remade or renewed after the date hereof
with respect to any future event, condition or occurrence. The opinions
expressed by us are limited to the matters expressly stated herein and no
opinions are implied, or should be inferred, beyond the matters expressly so
stated.
3.4 To the extent our opinions herein may be affected by such
matters, we have assumed for purposes hereof, (i) that each party to the Prime
Agreement Documents (other than Prime Alaska and the Manager) is duly organized;
(ii) that each party to the Prime Agreement Documents (other than Prime Alaska
and the Manager) is validly existing and in good standing under the laws of the
jurisdiction of its organization and in each other jurisdiction in which the
ownership of its properties or the conduct of its business requires such party
to qualify to do business and has the power to own, lease and operate its
properties therein and to conduct its business therein as now conducted; (iii)
that the Prime Agreement Documents have been duly authorized (except as to the
Manager); (iv) that the Prime Agreement Documents have been properly executed
and delivered by all parties thereto (other than the Manager); (v) that the
Prime Agreement Documents constitute the legal, valid and binding obligations of
the parties thereto, enforceable against them in accordance with their
respective terms; (vi) that each such party
General Communication, Inc. - Form 8-K
Page 384
<PAGE>
Toronto Dominion (Texas), Inc., eta 1.
October 31, 1996
Page
(other than Prime Alaska and the Manager) has the requisite corporate or other
organizational power and authority to execute and deliver the Prime Agreement
Documents and perform its obligations thereunder, as applicable; and (vii) that
the execution, delivery and performance by each party (other than the Manager)
to the Agreement Documents does not and will not violate any statutes, laws,
ordinances, regulations, rules, orders, writs, injunctions or decrees or any
court or governmental authority of any jurisdiction applicable to each such
party or its assets.
3.5 With your permission, we express no opinions as to any
matters involving (i) choices or conflicts of laws, or (ii) applicable usury
laws. We have, with your permission, assumed, without inquiry, with respect to
all of the Prime Agreement Documents that the internal laws, and not the law of
conflicts, of the State of New York apply and that the internal laws of the
State of New York are the same as the internal laws of the State of Texas;
provided, however, with respect to the opinions set forth in Paragraph 2.8
above, we have assumed that the perfection of the security interests described
therein is governed by the laws of the State of Texas as if all parties and all
collateral were located in the State of Texas at all relevant times.
3.6 With your approval, we express no opinion (i) as to the
creation of perfection o security interests in any assets or properties of any
Person, except to the limited extent set forth in Paragraph 2.8 above, or (ii)
with respect to matters governed by the law of the States of Alaska or New York.
3.7 We are qualified to practice law in the State of Texas
only and, with your approval, we have made no investigation of and express no
opinion with respect to the laws of any other state or jurisdiction, other than
(a) applicable federal laws (except as noted below), and (b) the Delaware
Revised Uniform Limited Partnership Act, as currently in effect, insofar as the
same relate to the due organization, qualification and power of limited
partnerships organized in such State. Furthermore, with your approval, we
express no opinion with respect to (i) matters governed by the Federal
Communications Act of 1934, as amended, and the rules and regulations of the
Federal Communications Commission thereunder, (ii) copyright matters under Title
17 of the United States Code, and the rules and regulations of the United States
Copyright Office thereunder, (iii) matters governed by the Federal Aviation Act
of 1958, as amended, and the rules and regulations of the Federal Aviation
Administration thereunder, (iv) land use, environmental or ecological laws,
statutes or regulations, or (v) ordinances of municipalities, counties and
similar political subdivisions of the State of Texas.
General Communication, Inc. - Form 8-K
Page 385
<PAGE>
Toronto Dominion (Texas), Inc., eta 1.
October 31, 1996
Page
3.8 With respect to the opinions expressed in Paragraph 2.8
above, we have assumed (i) the attachment of the proper Schedule 1 to each UCC-1
financing statement to which a Schedule 1 is to be attached, (ii) the proper
filing of UCC-1 financing statements in the offices of the Secretary of State of
Texas, (iii) that the Manager's rights under the Management Agreement which are
collaterally assigned to the Agent and the Banks under the Subordination and
Assignment of Management Agreement (the "Assigned Manager's Rights") are free
and clear of any Liens, other than Permitted Liens, (iv) that the Manager has
good and sufficient title to the Assigned Manager's Rights, (v) that the Manager
has "rights in the collateral" as that term is used in Section 9.203 of the Code
with respect to the Assigned Manager's Rights, and (vi) that value has been
given by the Agent and the Banks within the meaning of Section 9.203 of the
Code.
3.9 We call your attention to, and our opinions stated in
Paragraph 2.8 above are limited by, the fact that:
(i) The continuation of any security interest and perfection
of any security interest in the Assigned Manager's Rights consisting of
proceeds is limited to the extent set forth in Section 9.306 of the
Code;
(ii) Continuation statements complying with the Code must be
filed with the filing offices in which each UCC-1 financing statement
is filed not more than six months prior to the expiration of a
five-year period dating from the date of filing of the UCC-1 financing
statement (or otherwise within the time permitted by Section 9.403 of
the Code) and subsequent continuation statements must be filed within
six months prior to the end of each subsequent five year period and
amendments or supplements to the UCC-1 financing statements and/or
additional financing statements may be required to be filed in the
event of a change of name, identity or corporate structure of the
debtor or if the debtor changes the jurisdiction of its place of
business (or, if it has more than one place of business, its chief
executive office) or the jurisdiction in which collateral is located;
General Communication, Inc. - Form 8-K
Page 386
<PAGE>
Toronto Dominion (Texas), Inc., eta 1.
October 31, 1996
Page
(ii) In the case of property which becomes collateral after
the date hereof, Section 552 of the Federal Bankruptcy Code limits the
extent to which property acquired by a debtor after the commencement of
a case under the Federal Bankruptcy Code may be subject to a security
interest arising from the security agreement entered into by the debtor
before the commencement of the case; and
(iii) We express no opinion as to the priority of any security
interest.
3.10 Our opinions concerning the perfection of the security
interests in the Assigned Manager's Rights (as that term is defined in Paragraph
2.8 above) are in all cases limited to the borrowing under the Prime Agreement
Documents and such future advances as are made thereunder in accordance with the
terms of the Prime Agreement Documents. No opinion is expressed as to the
effectiveness of the Prime Agreement Documents to grant and create a security
interest with respect to any indebtedness other than that created by borrowings
under the Prime Agreement Documents.
3.11 The opinions stated in the second sentence of Paragraph
2.3 above are subject to, and shall be interpreted in accordance with, the
Bankruptcy and Insolvency Exceptions, Equitable Principals Limitation and Other
Common Qualifications set forth on Schedules 3, 4 and 5 hereto.
3.12 With regard to the opinions expressed concerning the
enforceability of the Subordination and Assignment of Management Agreement, such
enforceability may be limited by the rights of the United States under the
Federal Tax Lien Act of 1966, as amended, and by bankruptcy, fraudulent
conveyance or transfer, insolvency, reorganization, moratorium, liquidation,
probate, conservatorship or similar laws of general application relating to or
affecting the enforcement of creditors' rights, and by limitations applicable to
equitable remedies (regardless of whether enforcement is considered in
proceedings at law or in equity), and by requirements of due process under the
United States Constitution, the Constitution of the State of Texas and other
laws or court decisions limiting the rights of creditors to repossess, foreclose
or otherwise realize upon the property of a debtor without appropriate notice or
hearing or both. We express no opinion as to whether a court would grant
specific performance or any other equitable remedy with respect to the
enforcement of the Subordination and Assignment of Management Agreement.
Further, we express no opinion as to the enforceability of (i) non-judicial
foreclosure, receivership and self-help remedies provided for in the
Subordination and Assignment of Management Agreement; (ii) provisions
General Communication, Inc. - Form 8-K
Page 387
<PAGE>
Toronto Dominion (Texas), Inc., eta 1.
October 31, 1996
Page
which purport to restrict access to legal or equitable remedies or which purport
to establish penalties or evidentiary standards; (iii) provisions relating to
subrogation rights, suretyship, delay or omission of enforcement of remedies and
indemnity; (iv) provisions which purport to appoint the Agent or the Banks, in
any capacity, as the attorney-in-fact or proxy of the Manager; (v) provisions
which purport to waive rights or notices; (vi) provisions relating to consent
judgments, waivers of defenses or the benefits of statutes of limitations,
marshalling of assets, the transferability of any assets which by their nature
are nontransferable, sales in inverse order of alienation, or severance; (vii)
provisions which purport to prohibit or restrict transfer of title to, or the
granting of junior encumbrances of, all or any part of the property covered by
any of the Assigned Manager's Rights; or (viii) so-called "dragnet," "Mother
Hubbard" or "future advance" clauses, as said provisions relate to loans other
than the loans evidenced by the Notes.
3.13 The enforceability of certain of the remedial, waiver,
subrogation, indemnity and other provisions of the Subordination of Assignment
of Management Agreement is further subject to all applicable constitutional,
legislative, judicial and administrative provisions, statutes, decisions,
rulings and other laws, in addition to those described in Paragraph 3.12 above;
however, such laws do not, in our opinion, substantially interfere with the
practical realization of the benefits expressed in the Subordination and
Assignment of Management Agreement (except for the economic consequences of any
procedural delay which may result from such laws).
3.14 You are hereby notified that (a) we do not consider you
to be our client in the matter to which this opinion relates, (b) neither the
Texas Code of Professional Responsibility nor current case law clearly
articulates the circumstances under which an attorney may give a legal opinion
to a person other than the attorney's own client, (c) a court might determine
that it is improper for us to issue, and for you to rely upon, a legal opinion
issued by us when we have acted as counsel to the Prime Entities in connection
with the Loan Agreement, and (d) you may wish to obtain a legal opinion from
your own legal counsel as to the matters addressed in this opinion letter.
General Communication, Inc. - Form 8-K
Page 388
<PAGE>
Toronto Dominion (Texas), Inc., eta 1.
October 31, 1996
Page
This opinion is given solely to the Banks, the Agent and their counsel
and shall not be relied upon by any other person or entity other than the Banks,
the Agent, their counsel, examiners and auditors. This opinion may not be
quoted, circulated or published, in whole or in part, or furnished or relied
upon by any other party, without our prior written consent, except as may be
required by process of law or in connection with litigation arising out of the
Agreement Documents, and, except that this opinion letter may be disclosed to
the bank regulatory authorities and may be relied upon by assignees of the Banks
under Section 11.6 of the Loan Agreement. The opinions herein are expressed as
of the date hereof only and not as of some future date. We undertake no
responsibility to update this opinion for events occurring after the date
hereof.
Very truly yours,
EDENS SNODGRASS NICHOLS
& BREELAND, P.C.
By: /s/ Patrick K. Breeland
Its: Vice President
General Communication, Inc. - Form 8-K
Page 389
<PAGE>
SCHEDULE 1
Documents Examined
Terms used herein and defined in the Loan Agreement are used herein as therein
defined. Reference to each document includes reference to all exhibits thereto.
1. Loan Agreement.
2. Subsidiary Security Agreement.
3. Subordination and Assignment of Management Agreement.
4. Subsidiary Guaranty Agreement.
5. Deed of Trust dated October 31, 1996 executed by Prime Cable of
Alaska, L. P., as trustor, to the Agent, as trustee (the "Mortgage").
6. GCI Cable, Inc. Officers' Certificate dated October 31, 1996 (the
"GCIC Officers' Certificate").
7. Prime II Management, Inc. Officers' Certificate dated October 31, 1996
("PIIMI Officers' Certificate").
8. Prime Cable Fund I, Inc. Officers' Certificate dated October 31, 1996
("PCFI Officers' Certificate").
General Communication, Inc. - Form 8-K
Page 390
<PAGE>
SCHEDULE 2
Certificates of Public Officials
Attached.
General Communication, Inc. - Form 8-K
Page 391
<PAGE>
SCHEDULE 3
Bankruptcy and Insolvency Exceptions
Paragraph 2.3 of this opinion letter is subject to the effect of
bankruptcy, insolvency, reorganization, receivership, moratorium and other
similar laws affecting the rights and remedies of creditors generally. This
exception includes;
(a) the Federal Bankruptcy Code and thus comprehends, among
others, matters of turn-over, automatic stay, avoiding powers,
fraudulent transfer, preference, discharge, conversion of a
non-recourse obligation into a recourse claim, limitations on
ipso facto and anti-assignment clauses and the coverage of
pre-petition security agreements applicable to property
acquired after a petition is filed;
(b) all other Federal and state bankruptcy, insolvency,
reorganization, receivership, moratorium, arrangement and
assignment for the benefit of creditors laws that affect the
rights and remedies of creditors generally (not just creditors
of specific types of debtors);
(c) all other Federal bankruptcy, insolvency, reorganization,
receivership, moratorium, arrangement and assignment for the
benefit of creditors laws that have reference to or affect
generally only creditors of specific types of debtors and
state laws of like character affecting generally only
creditors of financial institutions and insurance companies;
(d) state fraudulent transfer and conveyance laws; and
(e) judicially developed doctrines relevant to any of the
foregoing laws, such as substantive consolidation of entities.
General Communication, Inc. - Form 8-K
Page 392
<PAGE>
SCHEDULE 4
Equitable Principles Limitation
Paragraph 2.3 of this opinion letter is subject to the effect of
general principles of equity, whether applied by a court of law or equity. This
limitation includes principles:
(a) governing the availability of specific performance, injunctive
relief or other equitable remedies, which generally place the
award of such remedies, subject to certain guidelines, in the
discretion of the court to which application for such relief
is made;
(b) affording equitable defenses (e.g., waiver, laches and
estoppel) against a party seeking enforcement;
(c) requiring good faith and fair dealing in the performance and
enforcement of a contract by the party seeking its
enforcement;
(d) requiring reasonableness in the performance and enforcement of
an agreement by the party seeking enforcement of the contract;
(e) requiring consideration of the materiality of (i) a party's
breach and (ii) the consequences of the breach to the party
seeking enforcement;
(f) requiring consideration of the impracticability or
impossibility of performance at the time of attempted
enforcement; and
(g) affording defenses based upon the unconscionability of the
enforcing party's conduct after the parties have entered into
the contract.
General Communication, Inc. - Form 8-K
Page 393
<PAGE>
SCHEDULE 5
Other Common Qualifications
Paragraph 2.3 of this opinion letter is subject to the effect of
generally applicable rules of Texas Law, if any, that:
(a) limit or affect the enforcement of provisions of a contract
that purport to require waiver of the obligations of good
faith, fair dealing, diligence and reasonableness;
(b) provide that forum selection clauses in contracts are not
necessarily binding on the court(s) in the forum selected;
(c) limit the availability of a remedy under certain circumstances
where another remedy has been elected;
(d) limit the right of a creditor to use force or cause a breach
of the peace in enforcing rights;
(e) relate to the sale or disposition of collateral or the
requirements of a commercially reasonable sale;
(f) limit the enforceability of provisions releasing, exculpating
or exempting a party from, or requiring indemnification of a
party for, liability for its own action or inaction, to the
extent the action or inaction involves gross negligence,
recklessness, willful misconduct or unlawful conduct;
(g) may, where less than all of a contract may be unenforceable,
limit the enforceability of the balance of the contract to
circumstances in which the unenforceable portion is not an
essential part of the agreed exchange;
(h) govern and afford judicial discretion regarding the
determination of damages and entitlement to attorneys' fees
and other costs;
(i) may, in the absence of a waiver or consent, discharge a
guarantor to the extent that (i) action by a creditor impairs
the value of collateral securing guaranteed debt to the
detriment of the guarantor, or (ii) guaranteed debt is
materially modified; and
(j) may permit a party who has materially failed to render or
offer performance required by the contract to cure that
failure unless (i) permitting a cure would unreasonably hinder
the aggrieved party from making substitute arrangements for
performance, or (ii) it was important in the circumstances to
the aggrieved party that performance occur by the date stated
in the contract.
General Communication, Inc. - Form 8-K
Page 394
<PAGE>
EXHIBIT N-3
[GCI LETTERHEAD]
October 31, 1996
Toronto Dominion (Texas), Inc. The Chase Manhattan Bank N.A.
909 Fannin, Suite 1700 One Chase Manhattan Plaza
Houston, Texas 77010 4th Floor
New York, New York 10081
NationsBank of Texas, N.A. The Bank of New York
901 Main Street, 64th Floor One Wall Street
Dallas, Texas 75202 16th Floor
New York, New York 10286
Credit Lyonnais New York Branch Banque Paribas
1301 Avenue of the Americas 2029 Century Park East
New York, New York 100 19 Suite 3900
Los Angeles, California 90067
PNC Bank, National Association The First National Bank of Maryland
100 South Broad Street 25 South Charles Street
Philadelphia, Pennsylvania 19101 18th Floor
Baltimore, Maryland 21201
Ladies and Gentlemen:
I am communications counsel for GCI Cable, Inc. ("Cable"), GCI
Cable/Fairbanks, Inc. ("Fairbanks"), and GCI Cable/Juneau, Inc. ("Juneau"),
Alaska corporations, representing such companies principally in matters before
the Alaska Public Utilities Commission ("APUC") concerning the regulations by
this governmental agency of various aspects of their operations. This opinion is
rendered pursuant to Section 3(a) of the Loan Agreement dated as of October 31,
1996 ("Loan Agreement") by and among Toronto Dominion (Texas), Inc., NationsBank
of Texas, N.A., Credit Lyonnais New York Branch, The Chase Manhattan Bank N.A.,
The Bank of New York, Banque Paribas, PNC Bank, National Association and The
First National Bank of Maryland, as lenders ("Banks"). Capitalized terms used in
this
General Communication, Inc. - Form 8-K
Page 395
<PAGE>
October 31, 1996
Page
opinion letter without definition have the same meanings as in the Loan
Agreement.
1. Cable holds APUC Certificates Nos. 143, 144, 246, 261 and 287.
Fairbanks holds APUC Certificate No. 252. Juneau holds APUC
Certificate No. 156. Cable will, upon acquisitions pursuant to
three Asset Purchase Agreements dated as of May 10, 1996, hold
APUC Certificates Nos. 157, 158, 164, 168, 191, 245, 367 and
401. These APUC certificates are in full force and effect,
without any materially adverse modification, amendment,
revocation, suspension, termination, cancellation, reformation
or condition. Such certificates constitute all the APUC
authority required to operate the Cable Systems in areas over
which the APUC has jurisdiction. To the best of my knowledge,
after due inquiry, there is no APUC proceeding or any APUC
investigation pending or threatened, for the purpose of
modifying, revoking, terminating, suspending, canceling or
reforming any of such certificates.
2. Cable, Fairbanks, and Juneau operate the Cable Systems in
accordance with all material APUC rules, regulations and
orders.
This opinion has been prepared solely for your use and that of your
counsel in connection with the closing of the transactions contemplated under
the Loan Agreement, and should not be quoted in full or in part or otherwise
referred to, or be filed with or furnished to any governmental agency or other
person or entity not involved in such transactions without prior consent, except
as may be required by process of law or in connection with litigation arising
out of these transaction, and except that this opinion letter may be disclosed
to your bank regulatory authorities and may be relied upon by assignees of the
Banks under Section 11.6 of the Loan Agreement. The matters set forth in the
opinions stated in this letter are made as of the date of the letter.
Very truly yours,
James R. Jackson
Regulatory Attorney
General Communication, Inc. - Form 8-K
Page 396
<PAGE>
EXHIBIT N-4
[COLE, RAYWID & BRAVERMAN, L.L.P. LETTERHEAD]
October 31, 1996
GCI Cable, Inc.
2550 Denali Street, Suite 1000
Anchorage, AK 99503
Ladies and Gentlemen:
This letter is furnished to you pursuant to Section 7.9 of that certain
Securities Purchase and Sale Agreement dated as of May 2, 1996, as amended, (the
"Agreement"), among GCI Cable, Inc. (as assignee of General Communication,
Inc.), an Alaska corporation ("Buyer") and the direct and indirect equity owners
and profit participation rights holders of Prime Cable of Alaska, L.P., a
Delaware limited partnership (the "Company") and Prime II Management, L.P., a
Delaware limited partnership.
As communications counsel for the Company, we are engaged in the
representation of the Company before the Federal Communications Commission
("FCC") in connection with its cable television business in communities
identified in Schedule I hereto (the "System"). We have examined such records,
certificates and other documents and have considered such questions of law as
relate to the Company and the System as we have deemed necessary or appropriate
for purposes of this opinion. This opinion is limited to the Communications Act
of 1934, as amended, including amendments effected by the Telecommunications Act
of 1996 (the "Communications Act"), the rules and regulations of the FCC (the
"FCC Regulations"),
General Communication, Inc. - Form 8-K
Page 397
<PAGE>
GCI Cable, Inc.
October 31, 1996
Page
Section 111 of the Copyright Act of 1976, as amended (17 U.S.C. section 111)
(the "Copyright Act"), and the Rules and Regulations of the Federal Aviation
Administration ("FAA"), as applicable to the System as operated by the Company.
Except as specifically provided, we offer no opinion as to the Company's
compliance with the Cable Television Consumer Protection and Competition Act of
1992, Pub. L. No. 102-3, 106 Stat. 1460 (1992), or those FCC regulations
promulgated pursuant to such Act. In rendering this opinion, we have assumed the
genuineness of signatures on documents and the conformity to the original of all
copies examined by or submitted to us of photocopies or conformed copies. As to
various questions of fact in connection with this opinion, we have relied upon
examinations of available files of our office, those of the FCC and the United
States Copyright Office (the "Copyright Office"), and pertinent statements and
representations of officers, directors and responsible representatives of the
Company. We have not undertaken independent field investigation to verify the
accuracy of this information, and express no opinion regarding technical matters
or matters that would require on-scene knowledge of the System's operations,
technical or engineering matters, or local franchising matters.
Based upon and limited by the foregoing, we are of the opinion that, as
of the date set forth above:
1. Each community listed in Schedule I hereto has been registered with
the FCC. Pursuant to FCC rules, such registration authorizes the commencement of
cable television operations in the subject community.
2. The Company holds all licenses, receive-only earth station
registrations, permits and authorizations required from the FCC to operate the
System, which licenses, permits, authorizations and registrations are listed in
Schedule II hereto (the "FCC Licenses"). The FCC Licenses are the only licenses,
registrations, permits or authorizations required to continue operating the
System as presently operated. Each FCC License has been validly issued by the
FCC, remains in full force and effect, and the transfer of control of the
Company to Buyer on the Closing Date as defined in the Agreement has been
approved by the FCC, to the extent such approval is required, and such transfer
authorizations are in full force and effect. To the best of our knowledge after
due inquiry, we have no knowledge of any event that would allow, or after notice
or lapse of time would allow, revocation, termination, suspension or
cancellation of any FCC License or result in any other material impairment of
the rights of the Company.
3. All materially required FCC filings required to be made by the
Company in connection with its operation of the System have been made,
including, but not limited to,
General Communication, Inc. - Form 8-K
Page 398
<PAGE>
GCI Cable, Inc.
October 31, 1996
Page
Registration Statements and FCC Annual Report Form 325 Schedule A, to the extent
such forms are required.
4. All FCC authorizations needed to utilize the frequencies currently
used by the System have been obtained. The System has submitted to the FCC the
required notifications for the use of certain frequencies in the 108-137 MHZ or
225-400 MHZ bands. These frequencies, the geographic coordinates or the
approximate center of the System service area, and the authorized radius of the
System, are listed on Schedule III hereto. Based on information provided by the
Company and information filed with the FCC and, to the best of our knowledge,
after due inquiry, regarding frequency use and the radius of the System, these
are the only aeronautical authorizations necessary at this time to enable the
System to operate in compliance with FCC regulations.
5. Basic Signal Leakage Performance Reports (FCC Annual Report Forms
320) (showing complying index scores) for 1990-1995 are on file with the FCC for
each community unit operated by the System.
6. EEO Annual Report Forms 395(A) have been filed with the FCC for each
employment unit associated with the System for calendar years 1988-1995. The
employment unit has been certified by the FCC for calendar years 1988-1995. The
1996 certification is pending. No FCC inquiries have been received concerning
the 1995 Form 395(A).
7. Except as provided in Schedule IV, the Company has provided
subscriber privacy notices, complaint procedure notices and customer service
notices to subscribers of the System, on an annual basis, as required. The
Company also provides subscriber privacy notices to new subscribers at the time
of installation. Our opinion is limited to the fact that such notices have been
provided, and we express no opinion as to whether the contents of such notices
comply with the requirements of the Communications Act or FCC Regulations. The
Company has advised us that to the best of its knowledge, after due inquiry, the
System has received no written challenges to its compliance with the subscriber
privacy provisions of the Communications Act.
8. There is no FCC judgment, decree or order which has been issued
against the Company with respect to the System, nor is there any FCC action,
proceeding or investigation pending or, to the best of our knowledge, threatened
by the FCC against the Company with respect to the System.
General Communication, Inc. - Form 8-K
Page 399
<PAGE>
GCI Cable, Inc.
October 31, 1996
Page
9. The timely filing of the periodic Statements of Account and
accompanying royalty fees qualifies the Company for a compulsory license for the
carriage of the broadcast signals utilized by the System. The Company has filed
all required Statements of Account and supplements thereto, and, to the best of
our knowledge, has timely paid its statutory royalties for all accounting
periods beginning at least as early as the second accounting period of 1992, and
all primary transmissions listed in the latest Statements of Account qualify for
a compulsory copyright license. Although we render no opinion as to the
methodology or calculations used to determine "gross receipts" for copyright
purposes, there have been no inquiries received from the Copyright Office or any
other party which challenge or question either the computation or amount of any
royalty payments or the validity of the Statements of Account, and there is no
claim, action or demand for copyright infringement or for non-payment of
royalties, pending or, to the best of our knowledge, threatened against the
Company.
10. Except for any necessary FCC approvals which have been obtained,
the execution, delivery and performance of the Agreement does not require the
approval of the FCC, will not result in any violation of the rules and
regulations of the FCC, and will not cause any forfeiture or impairment of any
FCC license, authorization or permit of the Company, provided that Buyer
complies with any applicable ownership restrictions.
11. To the best of our knowledge, based on information provided by the
Company, to the extent required by the rules of the FAA, the Company has
obtained clearance from the FAA for the towers or other antenna structures used
by the System which are more than 200 feet above ground level or closer than
20,000 feet from the end of the nearest runway of an aircraft landing area.
12. We are advised by the Company that it has obtained all necessary
retransmission consents for the broadcast signals currently carried on the
System and that all such consents are assignable and are currently in full force
and effect.
13. We are advised by the Company that it has not received notification
from any franchise authority pursuant to Section 76.309(a) of the FCC's rules.
14. To the best of our knowledge, based on information provided by the
Company, the System is carrying all of the "must-carry" signals required to be
carried pursuant to Federal law. To the best of our knowledge, based on
information provided by the Company, there have been no "must-carry" complaints
filed against the System.
General Communication, Inc. - Form 8-K
Page 400
<PAGE>
GCI Cable, Inc.
October 31, 1996
Page
This opinion has been prepared solely for Buyer's use in connection
with the closing of transactions under the Agreement, and may not be relied upon
by, filed with or furnished to any other person or entity, other than Buyer's
senior lenders, without the prior written consent of this firm. This opinion
letter may not be quoted, circulated or published, in whole or in part, or
furnished to or relied upon by any other party, or otherwise referred to, or be
filed with or furnished to any governmental agency or other person entity not
involved in the transactions under the Agreement, other than Buyer's senior
lenders, without our prior written consent. The Senior Lenders to GCI Cable,
Inc., under a loan Agreement dated as of October 31, 1996, with the Lenders
shown on Schedule A attached hereto, may rely upon this opinion.
Very truly yours,
COLE, RAYWID & BRAVERMAN, L.L.P.
By: /s/ Joseph R. Reifer
A Member of the Firm
General Communication, Inc. - Form 8-K
Page 401
<PAGE>
SCHEDULE I
COMMUNITY FCC CUID NUMBER
- ---------------------------------------------------
Anchorage, AK AK0028
Eagle River, AK AK0029
Elmendorf AFB, AK AK0032
Ft. Richardson Army Post, AK AK0031
Chugiak, AK AK0030
Bethel, AK AK0016
Kenai, AK AK0042
Soldotna, AK AK0043
Ridgeway, AK AK0044
General Communication, Inc. - Form 8-K
Page 402
<PAGE>
SCHEDULE II
FCC AUTHORIZATIONS:
Cable Television Relay Station Authorization(s):
Call Sign Location Expiration Date
- --------------------------------------------------------------------
WAP-911 Anchorage, AK September 1, 2000
Business Radio Authorization(s):
Call Sign Location Expiration Date
- --------------------------------------------------------------------
KNCD-389 Anchorage, AK December 19, 1999
WNJY-380 Bethel, AK June 30, 1999
KNHN-226 Kenai, AK June 20, 1999
WPFT-991 Anchorage, AK October 5, 1999
Private Operational Fixed Microwave Station Authorization(s):
Call Sign Location Expiration Date
- --------------------------------------------------------------------
WPJD-479 Anchorage, AK March 5, 2001
Receive Only Earth Station Authorization(s):
Call Sign Location Expiration Date
- --------------------------------------------------------------------
KE-92 Anchorage, AK February 17, 2001
E3455 Bethel, AK November 13, 2001
E930263 Kenai, AK April 19, 2003
General Communication, Inc. - Form 8-K
Page 403
<PAGE>
SCHEDULE III
SYSTEM: Anchorage, AK
COORDINATES: 61-10-49N; 149-53-06W
RADIUS: 36 km
CHANNEL FREQUENCY FCC NOTIFICATION DATE
- -------------------------------------------------------------------------------
Control 113.2250 October 28, 1996
A-2 109.2750 October 28, 1996
A-1 115.2750 October 28, 1996
A 121.2625 October 28, 1996
B 127.2625 October 28, 1996
C 133.2625 October 28, 1996
L 229.2625 October 28, 1996
M 235.2625 October 28, 1996
N 241.2625 October 28, 1996
O 247.2625 October 28, 1996
P 253.2625 October 28, 1996
Q 259.2625 October 28, 1996
R 265.2625 October 28, 1996
S 271.2625 October 28, 1996
T 277.2625 October 28, 1996
U 283.2625 October 28, 1996
V 289.2625 October 28, 1996
W 295.2625 October 28, 1996
AA 301.2625 October 28, 1996
BB 307.2625 October 28, 1996
CC 313.2625 October 28, 1996
DD 319.2625 October 28, 1996
EE 325.2625 October 28, 1996
FF 331.2750 October 28, 1996
GG 337.2625 October 28, 1996
HH 343.2625 October 28, 1996
II 349.2625 October 28, 1996
JJ 355.2625 October 28, 1996
KK 361.2625 October 28, 1996
LL 367.2625 October 28, 1996
MM 373.2625 October 28, 1996
NN 379.2625 October 28, 1996
OO 385.2625 October 28, 1996
PP 391.2625 October 28, 1996
QQ 397.2625 October 28, 1996
General Communication, Inc. - Form 8-K
Page 404
<PAGE>
SCHEDULE III
(continued)
SYSTEM: Kanai, AK
COORDINATES: 60-34-04N; 151-07-51W
RADIUS: 12.7 km
CHANNEL FREQUENCY FCC NOTIFICATION DATE
- -------------------------------------------------------------------------------
A-2 109.2750 February 1, 1990
A-1 115.2750 February 1, 1990
A 121.2625 February 1, 1990
B 127.2625 February 1, 1990
C 133.2625 February 1, 1990
L 229.2625 February 1, 1990
M 235.2625 February 1, 1990
N 241.2625 February 1, 1990
O 247.2625 February 1, 1990
P 253.2625 February 1, 1990
Q 259.2625 February 1, 1990
R 265.2625 February 1, 1990
S 271.2625 February 1, 1990
T 277.2625 February 1, 1990
U 283.2625 February 1, 1990
V 289.2625 February 1, 1990
W 295.2625 February 1, 1990
AA 301.2625 February 1, 1990
BB 307.2625 February 1, 1990
CC 313.2625 February 1, 1990
DD 319.2625 February 1, 1990
EE 325.2625 February 1, 1990
FF 331.2750 February 1, 1990
GG 337.2625 February 1, 1990
HH 343.2625 February 1, 1990
II 349.2625 February 1, 1990
JJ 355.2625 February 1, 1990
KK 361.2625 February 1, 1990
LL 367.2625 February 1, 1990
MM 373.2625 February 1, 1990
NN 379.2625 February 1, 1990
OO 385.2625 February 1, 1990
PP 391.2625 February 1, 1990
QQ 397.2625 February 1, 1990
General Communication, Inc. - Form 8-K
Page 405
<PAGE>
SCHEDULE III
(continued)
SYSTEM: Bethel, AK
COORDINATES: 60-47-55N; 161-45-55W
RADIUS: 7 km
CHANNEL FREQUENCY FCC NOTIFICATION DATE
- -------------------------------------------------------------------------------
A-2 109.2750 February 1, 1990
A-1 115.2750 February 1, 1990
A 121.2625 February 1, 1990
B 127.2625 February 1, 1990
C 133.2625 February 1, 1990
L 229.2625 February 1, 1990
M 235.2625 February 1, 1990
N 241.2625 February 1, 1990
O 247.2625 February 1, 1990
P 253.2625 February 1, 1990
Q 259.2625 February 1, 1990
R 265.2625 Feburary 1, 1990
S 271.2625 February 1, 1990
T 277.2625 February 1, 1990
U 283.2625 February 1, 1990
V 289.2625 February 1, 1990
W 295.2625 February 1, 1990
AA 301.2625 February 1, 1990
BB 307.2625 February 1, 1990
CC 313.2625 February 1, 1990
DD 319.2625 February 1, 1990
EE 325.2625 February 1, 1990
FF 331.2750 February 1, 1990
GG 337.2625 February 1, 1990
HH 343.2625 February 1, 1990
II 349.2625 February 1, 1990
JJ 355.2625 February 1, 1990
KK 361.2625 February 1, 1990
LL 367.2625 February 1, 1990
MM 373.2625 February 1, 1990
NN 379.2625 February 1, 1990
OO 385.2625 February 1, 1990
PP 391.2625 February 1, 1990
QQ 397.2625 February 1, 1990
General Communication, Inc. - Form 8-K
Page 406
<PAGE>
SCHEDULE IV
Subscriber Notices:
Privacy Notices for 1988, 1992 and 1993 were not sent by Sellers.
Complaint Procedure Notices for 1992 were not sent by Sellers.
Customer Services Notices for 1994 and 1995 were not sent by Sellers.
General Communication, Inc. - Form 8-K
Page 407
<PAGE>
EXHIBIT O
FORM OF CERTIFICATE OF FINANCIAL CONDITION
GCI Cable, Inc., an Alaska corporation (the "Borrower"), acting by and
through , its , in connection with
that certain Loan Agreement dated October 31, 1996 (the "Loan Agreement") of
even date among the Borrower, the various financial institutions which are party
thereto (the "Banks"), Toronto Dominion (Texas), Inc., Credit Lyonnais, Cayman
Island Branch, NationsBank of Texas, N.A., and The Chase Manhattan Bank, N.A. as
managing agents (collectively, the "Managing Agents") and Toronto Dominion
(Texas), Inc., as administrative agent for the Managing Agents and the Banks
(the "Administrative Agent"), pursuant to which the Banks have agreed to make
Loans to the Borrower in an aggregate principal amount not to exceed
$205,000,000, as evidenced by those certain promissory notes of even date by the
Borrower to the order of the Banks, the undersigned hereby certifies to the
Administrative Agent, the Managing Agents and the Banks that:
1. Capitalized terms used herein and not otherwise defined
herein are used as defined in the Loan Agreement.
2. The financial statements and all other documents relating
to the Borrower's present or projected financial future condition provided to
the Administrative Agent, the Managing Agents and the Banks in connection with
the Loan Agreement, including, without limitation, the balance sheet attached
hereto as Schedule 1, have been prepared by the undersigned or under the
supervision of the undersigned, or reviewed by the undersigned, with due
diligence and in full awareness of the Administrative Agent's, the Managing
Agents' and the Banks' reliance on the information contained therein in reaching
their decision to make the Loans.
3. The Borrower, as a result of the Loans and any obligations
incurred in connection therewith and the other transactions contemplated by the
Loan Agreement, believes in good faith that it has not incurred and will not
incur debts beyond its ability to satisfy them as they mature, and will have a
positive cash flow after paying all of its anticipated Indebtedness, including
the obligations due to the Banks under the Loan Agreement.
4. After giving effect to the Loans and the obligations
incurred in connection therewith and the other transactions contemplated by the
Loan Agreement, the Borrower anticipates that it will have sufficient proceeds
from its cash flow, the sale of current assets in the ordinary course of
business, and the proceeds of contemplated sales of assets not necessary for the
Borrower's business, to pay recurring current debt and long-term debt service as
such debts mature. The cash flow of the Borrower combined with asset sales
proceeds, is expected to be sufficient
General Communication, Inc. - Form 8-K
Page 408
<PAGE>
to provide the cash needed to repay existing long-term indebtedness as such debt
matures.
5. Based on the present and anticipated needs for capital of
the businesses conducted, or anticipated to be conducted in the future by the
Borrower, and after giving effect to the Loans, the Borrower will not be left
with unreasonably small capital to finance the needs and anticipated needs of
the Borrower's business.
IN WITNESS WHEREOF, the Borrower has caused the execution of
this Certificate this day of October, 1996.
GCI CABLE, INC.
By: /s/ John M. Lowber
Title: Secretary/Treasurer
Schedule 1 - Balance Sheet of the Borrower as of
October 31, 1996, after giving effect
to the closing of the Loans and the Cooke
Acqusition as of the Agreement Date, and on
a pro forma basis as if the Rock Acquisition
had closed on such date
General Communication, Inc. - Form 8-K
Page 409
<PAGE>
EXHIBIT P
<TABLE>
GCI Cable, Inc.
1997 Subscriber Report
<CAPTION>
BASIC SERVICE
- -----------------------------------------------------------------------------------------------------------------------------------
Homes Connections
----------------------------------------------------------------------------------------------
Plant Miles Passed Adds Disconnects Actual Budget Hotel Rooms Sat. %
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Jan-97
Feb-97
Mar-97
Apr-97
May-97
Jun-97
Jul-97
Aug-97
Sep-97
Oct-97
Nov-97
Dec-97
Jan-98
- -----------------------------------------------------------------------------------------------------------------------------------
0 0
===================================================================================================================================
PAY SERVICES ADDITIONAL OUTLETS
- ---------------------------------------------------------------------------- ----------------------------
Connections
-----------------------------------------------
Actual Budget Hotel Rooms Sat. %* Actual Budget
- ---------------------------------------------------------------------------- ----------------------------
Jan-97
Feb-97
Mar-97
Apr-97
May-97
Jun-97
Jul-97
Aug-97
Sep-97
Oct-97
Nov-97
Dec-97
Jan-98
- ---------------------------------------------------------------------------- ----------------------------
============================================================================ ============================
* Saturation % computed exclusive of hotel rooms.
</TABLE>
General Communication, Inc. - Form 8-K
Page 410
<PAGE>
EXHIBIT Q
FORM OF SUBORDINATION AGREEMENT
THIS SUBORDINATION AGREEMENT (this "Agreement"), dated as of
October 31, 1996 is made by and among GCI CABLE, INC., an Alaska corporation
(the "Borrower"), GENERAL COMMUNICATION, INC., an Alaska corporation (the
"Subordinated Creditor") and TORONTO DOMINION (TEXAS), INC. (the "Administrative
Agent").
Recitals
1. The Borrower, the Managing Agents, Co-Agents, and the Banks
(as defined in the Loan Agreement) and the Administrative Agent are parties to
that certain Loan Agreement dated as of October 31, 1996 (as amended, modified,
substituted and replaced, from time to time, the "Loan Agreement") pursuant to
which the Banks have made loans to the Borrower (collectively, the "Loans") and
the Borrower has executed and delivered to the Banks one or more promissory
notes (each, as amended, modified, substituted and replaced from time to time, a
"Note").
2. The Borrower may hereafter from time to time become
indebted or otherwise obligated to the Subordinated Creditor. (All indebtedness
and other obligations of the Borrower to the Subordinated Creditor now or
hereafter existing (whether created directly or acquired by assignment or
otherwise), and interest, fees and premiums, if any, thereon and other amounts
payable in respect thereof or in connection therewith, are hereinafter referred
to as the "Subordinated Debt".)
3. It is a condition precedent to the incurrence of
Subordinated Debt by the Borrower that the Subordinated Creditor shall have
executed and delivered this Agreement.
NOW, THEREFORE, in consideration of the premises and in order
to induce the Administrative Agent, the Managing Agents, the Co-Agents and the
Banks to permit the Borrower to incur the Subordinated Debt, the Subordinated
Creditor, the Borrower and the Administrative Agent, for itself and for the
ratable benefit of the Banks, each hereby agree that all capitalized terms used
herein and not otherwise defined herein are used herein as defined in the Loan
Agreement and further agree as follows:
SECTION 1. Agreement to Subordinate. The Subordinated Creditor
and the Borrower each agrees that the Subordinated Debt shall be subordinate, to
the extent provided herein, to the prior payment in full of all Obligations of
the Borrower now or hereafter existing under the Loan Agreement, any Note and
the other Loan Documents, whether for principal, interest (including, without
limitation, interest, as provided in the Loan Agreement
General Communication, Inc. - Form 8-K
Page 411
<PAGE>
and any Note, accruing after the filing of a petition initiating any proceeding
referred to in Section 2(a), whether or not such interest accrues after the
filing of such petition for purposes of Title 11 of the United States Code or is
an allowed claim in such proceeding), fees, expenses or otherwise. For purposes
of this Agreement, the Obligations shall not be deemed to have been paid in full
until the Commitment has been terminated and the Administrative Agent, for the
ratable benefit of the Banks, shall have received indefeasible payment of the
Obligations in full in cash with such payment not being avoidable or subject to
defeasement in any proceeding referred to in Section 2(a)(ii).
SECTION 2. Events of Subordination.
(a) (i) So long as the Obligations have not been paid in full, no
payment (including any payment that may be payable by reason of any other
indebtedness of the Borrower being subordinated to payment of the Subordinated
Debt) shall be made by or on behalf of the Borrower for or on account of the
Subordinated Debt, and the Subordinated Creditor shall not take or receive from
the Borrower, directly or indirectly, in cash or other property or by set-off or
in any other manner, including, without limitation, from or by way of
collateral, payment of all or any of the Subordinated Debt, unless and until the
Obligations shall have been paid in full; and
(ii) In the event of any dissolution, winding up, liquidation,
arrangement, reorganization, adjustment, protection, relief or composition of
the Borrower or its debts, whether voluntary or involuntary, in any bankruptcy,
insolvency, arrangement, reorganization, receivership, relief or other similar
case or proceeding under any Federal or State bankruptcy or similar law or upon
an assignment for the benefit of creditors or any other marshalling of the
assets and liabilities of the Borrower or otherwise, the Administrative Agent,
for itself and for the ratable benefit of the Banks, shall be entitled to
receive payment in full of the Obligations before the Subordinated Creditor is
entitled to receive any payment of all or any of the Subordinated Debt, and any
payment or distribution of any kind (whether in cash, property or securities)
that otherwise would be payable or deliverable upon or with respect to the
Subordinated Debt in any such case, proceeding, assignment, marshalling or
otherwise (including any payment that may be payable by reason of any other
indebtedness of the Borrower being subordinated to payment of the Subordinated
Debt) shall be paid or delivered directly to the Administrative Agent for
application (in the case of cash) to, or as collateral (in the case of non-cash
property or securities) for, the payment or prepayment of the Obligations until
the Obligations shall have been paid in full.
(b) In the event that any Subordinated Debt is declared due
and payable before its stated maturity, the Administrative Agent, for itself and
for the ratable benefit of the Banks, shall, as provided in the Loan Agreement,
be entitled to receive payment in full of all amounts due or to become due on or
in respect of all Obligations before the Subordinated Creditor is entitled to
receive any payment (including any payment which may be payable by reason of the
payment of any other indebtedness of the Borrower being
General Communication, Inc. - Form 8-K
Page 412
<PAGE>
subordinated to the payment of the Subordinated Debt) by the Borrower on account
of the Subordinated Debt.
SECTION 3. In Furtherance of Subordination. The Subordinated
Creditor agrees as follows:
(a) If any proceeding referred to in Section 2(a)(ii) above is
commenced by or against the Borrower,
(i) the Administrative Agent is hereby irrevocably
authorized and empowered (in its own name or in the name of
the Subordinated Creditor or otherwise), but shall have no
obligation, to demand, sue for, collect and receive every
payment or distribution referred to in Section 2(a) and give
acquittance therefor and to file claims and proofs of claim
and take such other action (including, without limitation,
voting the Subordinated Debt in the best interests of the
Administrative Agent (which shall include the right to vote to
approve a plan of reorganization in bankruptcy in which the
claims of the Subordinated Creditor are impaired), or
enforcing any security interest or other Lien securing payment
of the Subordinated Debt) as it may deem necessary or
advisable for the exercise or enforcement of any of the rights
or interests of the Administrative Agent hereunder; and
(ii) the Subordinated Creditor shall duly and promptly
take such action as the Administrative Agent may reasonably
request (A) to collect the Subordinated Debt for the account
of the Administrative Agent, for itself and on behalf of the
Banks, and to file appropriate claims or proofs of claim in
respect of the Subordinated Debt, (B) to execute and deliver
to the Administrative Agent such powers of attorney,
assignments, or other instruments as the Administrative Agent
may reasonably request in order to enable the Administrative
Agent to enforce any and all claims with respect to, and any
security interests and other Liens securing payment of, the
Subordinated Debt, and (C) to collect and receive any and all
payments or distributions which may be payable or deliverable
upon or with respect to the Subordinated Debt.
(b) All payments or distributions upon or with respect to the
Subordinated Debt which are received by or on behalf of the
Subordinated Creditor contrary to the provisions of this Agreement
shall be received in trust for the benefit of the Administrative Agent,
for itself and for the ratable benefit of the Banks, shall be
segregated from other funds and property held by the Subordinated
Creditor and shall be forthwith paid over to the Administrative Agent
in the same form as so received (with any necessary indorsement) to be
applied (in the case of cash) to, or held as collateral (in the case of
non-cash property or securities) for, the payment or
General Communication, Inc. - Form 8-K
Page 413
<PAGE>
prepayment of the Obligations in accordance with the terms of the Loan
Agreement and the Notes.
(c) The Administrative Agent is hereby authorized to demand
specific performance of this Agreement, whether or not the Borrower
shall have complied with any of the provisions hereof applicable to it,
at any time when the Subordinated Creditor shall have failed to comply
with any of the provisions of this Agreement applicable to it. The
Subordinated Creditor hereby irrevocably waives any defense based on
the adequacy of a remedy at law, which might be asserted as a bar to
such remedy of specific performance.
(d) The Subordinated Debt shall be unsecured Indebtedness.
SECTION 4. Subordinated Creditor's Commencement of
Proceedings. The Subordinated Creditor agrees that, so long as the Commitment
shall not have been terminated and the Obligations shall not have been paid in
full in cash, the Subordinated Creditor will not take, sue for, ask or demand
from the Borrower payment of all or any of the Subordinated Debt, or commence,
or join with any creditor other than the Administrative Agent in commencing,
directly or indirectly to cause the Borrower to commence, or assist the Borrower
in commencing, any proceeding referred to in Section 2(a) or initiate any
judicial action to seek to enforce collection of the Subordinated Debt.
SECTION 5. Rights of Subrogation. The Subordinated Creditor
agrees that no payment or distribution to the Administrative Agent pursuant to
the provisions of this Agreement shall entitle the Subordinated Creditor to
exercise any right of subrogation in respect thereof until the Obligations shall
have been paid in full and the Commitment terminated.
SECTION 6. Subordination Legend; Further Assurances. The
Subordinated Creditor and the Borrower will cause each instrument evidencing
Subordinated Debt to be endorsed with the following legend:
"The indebtedness evidenced by this instrument is subordinated
to the prior payment in full of the Obligations (as defined in the
Subordination Agreement hereinafter referred to) pursuant to, and to
the extent provided in, the Subordination Agreement dated October 31,
1996 by the maker hereof and payee named herein in favor of Toronto
Dominion (Texas), Inc., as administrative agent and its successors and
assigns."
The Subordinated Creditor and the Borrower each will further mark its books of
account in such a manner as shall be effective to give proper notice of the
effect of this Agreement and will, in the case of any Subordinated Debt which is
not evidenced by any instrument, upon the Administrative Agent's request cause
such Subordinated Debt to be evidenced by an appropriate instrument or
instruments endorsed with the above legend. The Subordinated
General Communication, Inc. - Form 8-K
Page 414
<PAGE>
Creditor and the Borrower each will, at its expense and at any time and from
time to time, promptly execute and deliver all further instruments and
documents, and take all further action, that may be necessary or desirable, or
that the Administrative Agent may reasonably request, in order to protect any
right or interest granted or purported to be granted hereby or to enable the
Administrative Agent, for itself and for the ratable benefit of the Banks, to
exercise and enforce its rights and remedies hereunder.
SECTION 7. Agreements in Respect of Subordinated Debt.
(a) The Subordinated Creditor will not, without the
Administrative Agent's prior written consent:
(i) Convert or exchange any of the Subordinated Debt
into or for any other indebtedness or subordinate any of the
Subordinated Debt to any indebtedness of the Borrower other
than the Obligations;
(ii) Sell, assign, pledge, encumber or otherwise
dispose of any of the Subordinated Debt unless such sale,
assignment, pledge, encumbrance or disposition is made
expressly subject to this Agreement;
(iii) Permit the terms of any of the Subordinated
Debt to be amended or changed in any manner which adversely
affects the interests of the Administrative Agent and the
Banks hereunder; or
(iv) Accept or receive any payment of principal of,
or interest or other amounts owing on, the Subordinated Debt.
(b) The Subordinated Creditor shall promptly notify the
Administrative Agent of the occurrence of any default under its loan agreement
with the Borrower.
SECTION 8. Agreement by the Borrower. The Borrower agrees that
it will not make any payment of any of the Subordinated Debt or take any other
action, in contravention of the provisions of this Agreement.
SECTION 9. Obligations Hereunder Not Affected. All rights and
interests of the Administrative Agent for itself and for the ratable benefit of
the Banks hereunder, and all agreements and obligations of the Subordinated
Creditor and the Borrower under this Agreement, shall remain in full force and
effect irrespective of:
(i) any lack of validity or enforceability of the Loan Agreement or
any Note or any other agreement or instrument relating thereto;
(ii) any change in the time, manner or place of payment of, or in
any other term of, all or any of the Obligations, or any other
amendment or waiver of or any consent
General Communication, Inc. - Form 8-K
Page 415
<PAGE>
to any departure from the Loan Agreement or any Note, including,
without limitation, any increase in the Obligations resulting from the
extension of additional credit to the Borrower or otherwise;
(iii) any taking, exchange, or release of or non-perfection of any
security interest on, any collateral, or any taking, release or
amendment or waiver of or consent to departure from any guaranty, for
all or any of the Obligations;
(iv) any manner of application of collateral, or proceeds thereof,
to all or any of the Obligations, or any manner of sale or other
disposition of any collateral for all or any of the Obligations or any
other assets of the Borrower;
(v) any change, restructuring or termination of the corporate
structure or existence of the Borrower; or
(vi) any other circumstance which might otherwise constitute a
defense available to, or a discharge of, the Borrower or a subordinated
creditor.
This Agreement shall continue to be effective or be reinstated, as the case may
be, if at any time any payment of any of the Obligations is rescinded or must
otherwise be returned by the Administrative Agent upon the insolvency,
bankruptcy or reorganization of the Borrower or otherwise, all as though such
payment had not been made.
SECTION 10. Waiver. The Subordinated Creditor and the Borrower
each hereby waives promptness, diligence, notice of acceptance and any other
notice (except for notice expressly required under this Agreement or under any
of the Loan Documents) with respect to any of the Obligations and this Agreement
and any requirement that the Administrative Agent protect, secure, perfect or
insure any security interest or lien or any property subject thereto or exhaust
any right or take any action against the Borrower or any other person or entity
or any collateral.
SECTION 11. Representations and Warranties.
(a) The Borrower hereby represents and warrants to the
Subordinated Creditor and the Administrative Agent that all instruments
evidencing the Subordinated Debt shall be duly authorized, issued and
copies shall be delivered to the Administrative Agent simultaneously
with the incurrence of the Subordinated Debt, and shall constitute a
legal, valid and binding obligation of the Borrower enforceable against
the Borrower in accordance with their respective terms. There exists no
default in respect of any such Subordinated Debt.
(b) The Subordinated Creditor hereby represents and warrants
to the Administrative Agent as follows:
General Communication, Inc. - Form 8-K
Page 416
<PAGE>
(i) The Subordinated Creditor shall be the legal and
beneficial owner of the Subordinated Debt free and clear of
any Lien, security interest, option or other charge or
encumbrance.
(ii) There are no conditions precedent to the
effectiveness of the Subordinated Creditor's obligations under
this Agreement, which conditions have not been satisfied or
waived.
(iii) The Subordinated Creditor has, independently
and without reliance upon the Administrative Agent and based
on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to
enter into this Agreement.
SECTION 12. Amendments, Etc. No amendment or waiver of any
provision of this Agreement, and no consent to any departure by the
Administrative Agent, the Subordinated Creditor or the Borrower herefrom, shall
in any event be effective unless the same shall be in writing and signed by all
parties hereto, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given.
SECTION 13. Expenses. The Borrower agrees upon demand to pay
to the Administrative Agent the amount of any and all reasonable expenses,
including the reasonable fees and expenses of its counsel and of any experts or
agents, which the Administrative Agent may incur in connection with the (i) the
administration of this Agreement, (ii) the exercise or enforcement of any of the
rights of the Administrative Agent, for itself and the Banks, hereunder or (iii)
the failure by the Borrower to perform or observe any of the provisions hereof.
In addition, the Subordinated Creditor agrees upon demand to pay to the
Administrative Agent the amount of any and all reasonable expenses, including
the reasonable fees and expenses of its counsel and of any experts or agents,
which the Administrative Agent may incur in connection with the failure by the
Subordinated Creditor to perform or observe any of the provisions hereof.
SECTION 14. Addresses for Notices. All notices and other
communications provided for hereunder shall be in writing (including telecopier,
telegraphic, telex or cable communication) and mailed, telecopied, telegraphed,
telexed, cabled or delivered to it, if to the Subordinated Creditor, to it at
2550 Denali Street, Suite 1000, Anchorage, Alaska 99503 and if to the Borrower
or the Administrative Agent, at its address specified in the Loan Agreement, or
as to each party, at such other address as shall be designated by such party in
a written notice to each other party. All such notices and other communications
shall, when mailed, telecopied, telegraphed, telexed or cabled, be effective
when deposited in the mails, telecopied, delivered to the telegraph company,
confirmed by telex answerback or delivered to the cable company, respectively.
SECTION 15. No Waiver; Remedies. No failure on the part of the
Administrative Agent to exercise, and no delay in exercising, any right
hereunder shall
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<PAGE>
operate as a waiver thereof; nor shall any single or partial exercise of any
right hereunder preclude any other or further exercise thereof or the exercise
of any other right. The remedies herein provided are cumulative and not
exclusive of any remedies provided by law.
SECTION 16. Continuing Agreement; Assignments. This Agreement
is a continuing agreement and shall (i) remain in full force and effect until
the indefeasible payment in full in cash of the Obligations and the termination
of the Commitment(after which time this Agreement shall be of no further force
or effect), (ii) be binding upon the Subordinated Creditor, the Borrower and
their respective successors, and (iii) be binding upon, inure to the benefit of,
and be enforceable by, the Administrative Agent, the Subordinated Creditor, and
their successors, transferees and assigns. Without limiting the generality of
the foregoing clause (iii), the Administrative Agent may, as provided in the
Loan Agreement, assign or otherwise transfer all or any portion of its rights
and obligations under the Loan Agreement and any Note (including, without
limitation, all or any portion of its Loans) to any other Person, and such other
Person shall thereupon become vested with all the rights in respect thereof
granted to the Administrative Agent herein or otherwise. The Borrower shall not
assign its obligations hereunder without the prior written consent of the
Administrative Agent.
SECTION 17. Governing Law. This Agreement shall be governed
by, and construed in accordance with, the laws of the State of New York,
excluding its principles of conflicts of laws.
SECTION 18. Borrower's Obligations Unconditional. The
provisions of this Agreement are for the purpose of defining the relative rights
of the Administrative Agent, the Subordinated Creditor and the Borrower. Nothing
herein shall impair, as between the Borrower and the Subordinated Creditor, the
obligation of the Borrower, which is unconditional and absolute, to pay to the
Subordinated Creditor the full amount of the principal, premium (if any) and
interest on the Subordinated Debt in accordance with the terms thereof, and to
comply with all of its covenants and agreements with respect thereto subject
only to the Administrative Agent's rights herein; nor shall anything herein
prevent the Subordinated Creditor (except as expressly otherwise provided in
this Agreement) from exercising all remedies otherwise permitted by Applicable
Law or hereunder upon default under its loan agreement with the Borrower,
subject to the rights of the Administrative Agent set forth in this Agreement.
SECTION 19. Termination of Agreement. Upon the indefeasible
payment and satisfaction in full in cash of all of the Obligations and the
termination of the Commitment, this Agreement shall automatically terminate
without any additional action by any party hereto.
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SECTION 20. Counterparts. This Agreement may be executed in
multiple counterparts, each of which shall be deemed to be an original and all
of which, when taken together, shall constitute one in the same instrument.
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<PAGE>
IN WITNESS WHEREOF, the Subordinated Creditor, the Borrower
and the Administrative Agent each have caused this Agreement to be duly executed
and delivered by its officer or partner thereunto duly authorized as of the date
first above written.
SUBORDINATED
CREDITOR: GENERAL COMMUNICATION, INC.
By: /s/ John M. Lowber
Title: Senior Vice President
BORROWER: GCI CABLE, INC.
By: /s/ John M. Lowber
Title: Secretary/Treasurer
ADMINISTRATIVE AGENT: TORONTO DOMINION (TEXAS), INC.
By /s/ Jano Mott
Title: Vice President
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