SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. )*
General Communication, Inc.
(Name of Issuer)
Class A Common Stock
(Title of Class of Securities)
369385 10 9
(CUSIP Number)
Thomas R. Stephens, Esq.
Bartlit Beck Herman Palenchar & Scott
511 Sixteenth Street Suite 700
Denver, Colorado 80202
(303) 592-3100
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
October 31, 1996
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ].
Check the following box if a fee is being paid with the statement [ ] .
(A fee is not required only if the reporting person: (1) has a previous
statement on file reporting beneficial ownership of more than five percent of
the class of securities described in Item 1; and (2) has filed no amendment
subsequent thereto reporting beneficial ownership of five percent or less of
such class.) (See Rule 13d-7.)
Note: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are to
be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
(Continued on following page(s))
Page 1 of 17 Pages
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Centennial Fund III, L.P.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) X
(b)
3 SEC USE ONLY
4 SOURCE OF FUNDS*
OO
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(D) OR 2(E)
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Colorado
NUMBER OF 7 SOLE VOTING POWER
0 SHARES
BENEFICIALLY 8 SHARED VOTING POWER
742,357
OWNED BY
EACH 9 SOLE DISPOSITIVE POWER
0 REPORTING
PERSON 10 SHARED DISPOSITIVE POWER
742,357 WITH
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
742,357
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
X
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
1.9%
14 TYPE OF REPORTING PERSON*
PN
* SEE INSTRUCTIONS BEFORE FILLING OUT!
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Centennial Holdings III, L.P.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) X
(b)
3 SEC USE ONLY
4 SOURCE OF FUNDS*
Not applicable
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(D) OR 2(E)
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Colorado
NUMBER OF 7 SOLE VOTING POWER
0 SHARES
BENEFICIALLY 8 SHARED VOTING POWER
742,357
OWNED BY
EACH 9 SOLE DISPOSITIVE POWER
0 REPORTING
PERSON 10 SHARED DISPOSITIVE POWER
742,357 WITH
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
742,357
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
X
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
1.9%
14 TYPE OF REPORTING PERSON*
PN
* SEE INSTRUCTIONS BEFORE FILLING OUT!
Item 1. Security and Issuer.
This Statement relates to the Class A Common Stock (the "Shares") of
General Communication, Inc., an Alaska corporation (the "Company"). The
principal executive offices of the Company are located at 2550 Denalit Street,
Suite 1000, Anchorage, Alaska 99503-2781.
Item 2. Identity and Background
(a) This Statement is filed by Centennial Fund III, L.P., a
Colorado limited partnership ( Fund III ), by virtue of its direct beneficial
ownership of Shares, and by Centennial Holdings III, L.P., a Colorado limited
partnership ( Holdings III ), by virtue of being the sole general partner of
Fund III (collectively, the "Reporting Persons"). By signing this Statement,
each Reporting Person agrees that this Statement is filed on its behalf. Steven
C. Halstedt, G. Jackson Tankersley, Jr. and Jeffrey H. Schutz are the sole
general partners of Holdings III (the Individual Partners ). By virtue of the
relationships described above and their roles with Fund III and Holdings III,
each of the Individual Partners may be deemed to control Holdings III and Fund
III and may be deemed to possess indirect beneficial ownership of the Shares
held by Fund III. However, none of the Individual Partners, acting alone, has
voting or investment power with respect to the Shares directly beneficially held
by Fund III, and, as a result, each Individual Partner disclaims beneficial
ownership of the Shares directly beneficially owned by Fund III.
Each of the Individual Partners is also (i) one of the three general
partners of Centennial Holdings II, L.P., a Delaware limited partnership
( Holdings II ), which is, in turn, the sole general partner of Centennial Fund
II, L.P., a Delaware limited partnership ( Fund II ), which also received Shares
in the Transaction (as defined in Item 3 of this Statement), and (ii) one of the
three general partner of Centennial Business Development Company, a Delaware
limited partnership ( CBD ), which is, in turn, the sole general partner of
Centennial Business Development Fund, Ltd., a Delaware limited partnership
( CBDF ), which also received Shares in the Transaction. By virtue of the
relationships described above and their roles with Fund II, Holdings II, CBD and
CBDF, each of the Individual Partners may be deemed to control Fund II, Holdings
III, CBD and CBDF and may be deemed to possess indirect beneficial ownership of
the Shares held by Fund II and CBDF. However, none of the Individual Partners,
acting alone, has voting or investment power with respect to the Shares directly
beneficially held by Fund II or CBDF, and, as a result, each Individual Partner
disclaims beneficial ownership of the Shares directly beneficially owned by Fund
II and CBDF.
(b) The principal executive offices of Fund III and Holdings III,
and the business address of each Individual Partner, are located at 1428
Fifteenth Street, Denver, Colorado 80202-1318.
(c) Fund III is an venture capital investment partnership.
Holdings III s principal business is acting as the general partner of Fund III.
Each of the Individual Partners is a general partner of each of Holdings III,
Centennial Holdings IV, L.P., and Centennial Holdings V, L.P., which are engaged
in the business of acting as a general partner to venture capital investment
partnerships.
(d) Neither any of the Reporting Persons nor any of the Individual
Partners has been convicted in a criminal proceeding in the past five years
(excluding traffic violations or similar misdemeanors).
(e) During the past five years, neither any of the Reporting
Persons nor any Individual Partner was a party to a civil proceeding of a
judicial or administrative body of competent jurisdiction as a result of which
such person was or is subject to a judgment, decree or final order enjoining
future violations of, or prohibiting or mandating activities subject to, federal
or state securities laws of finding any violation with respect to such laws.
(f) Fund III and Holdings III are Colorado limited partnerships.
Each of the Individual Partners is a citizen of the United States.
Item 3. Source and Amount of Funds or Other Consideration
In connection with the Company s acquisition of all equity
securities and profit participation rights in Prime Cable of Alaska, L.P., a
Delaware limited partnership ( Prime ) on October 31, 1996 (the Transaction ),
Fund III received 742,357 Shares in consideration of its interests in Prime and
Alaska Cable Inc., a Delaware corporation and a limited partner of Prime
( ACI ). The Transaction was effected, in part, pursuant to the Prime Purchase
Agreement, as amended (the Prime Purchase Agreement ) among the Company and the
holders of Prime s equity securities and profit participation rights (the Prime
Sellers ), and the merger agreement (the ACI Merger Agreement ) between a
wholly owned subsidiary of the Company and ACI. The foregoing description of
the Prime Purchase Agreement and the ACI Merger Agreement is qualified in its
entirety by reference to the attached Exhibit 1 and Exhibit 2, respectively,
which are incorporated herein by this reference.
Item 4. Purpose of Transaction
Fund III acquired the Shares described in Item 5 of this Statement
for investment only. Depending upon its evaluation of the Company's investments
and prospects, and upon future developments (including, but not limited to,
performance of the Shares in the market, the effective yield on the Shares,
availability of funds, alternative uses of funds, and money, stock market and
general economic conditions), Fund III may from time to time purchase Shares,
dispose of all or a portion of the Shares it holds (subject to certain
restrictions described under Item 6 of this Statement), or cease buying or
selling Shares. Any such additional purchases or sales of the Shares may be in
open market or privately-negotiated transactions or otherwise.
In connection with Transaction, Fund III and certain other
shareholders of the Company entered into a voting agreement with respect to the
Shares and Company s Class B Common Stock owned by such shareholders (the
Voting Agreement ). Fund II and CBDF are not parties to the Voting Agreement.
The other parties to the Voting Agreement are MCI Telecommunications Corporation
( MCI ), TCI GCI, Inc., Robert A. Duncan, Robert M. Walp, Austin Ventures, L.P.,
Prime Cable Growth Partners, L.P., Prime Venture I Holdings, L.P., Prime Cable
Limited Partnership, BancBoston Capital, Inc., First Chicago Investment
Corporation, Madison Dearborn Partners V, Prime Ventures II, L.P., William Blair
Venture Partners III Limited Partnership, and Prime II Management, L.P. The
Reporting Persons understand the parties to the Voting Agreement beneficially
own an aggregate of 23,839,491 Shares, or approximately 61.5% of the 38,772,050
Shares deemed outstanding (including, for this purpose, 19,648,382 Shares
outstanding as of August 19, 1996, plus 16,723,077 Shares issued in connection
with the Transaction and related matters, plus 2,400,591 Shares obtainable upon
conversion of the Company s Class B Common Stock held by parties to the Voting
Agreement, according to information contained in the Company's proxy statement
and prospectus dated October 4, 1996 (the Proxy Statement )). In addition, the
Reporting Persons understand the parties to the Voting Agreement beneficially
own an aggregate of 2,400,591 shares of the Company s Class B Common Stock, or
approximately 58.7% of the 4,085,461 outstanding shares of Class B Common Stock,
according to the Proxy Statement. The Voting Agreement replaces a previous
voting agreement among certain of the Company s shareholders.
Pursuant to the Voting Agreement, the parties thereto agreed to vote
their Shares and Class B Common Stock to cause the Board of Directors of the
Company (the Board ) to consist of not less than eight members. Fund III and
the other Prime Sellers that are parties to the Voting Agreement (the Prime
Parties ) have the right, subject to certain conditions, to nominate two members
of the Board, MCI has the right to nominate two members of the Board, TCI GCI,
Inc. has the right to nominate two members of the Board, and Robert A. Duncan
and Robert M. Walp each have the right to nominate one member of the Board. The
Voting Agreement requires the parties thereto, including Fund III, to vote their
Shares and Class B Common Stock for such nominees. The Voting Agreement
commenced on October 31, 1996 and will terminate following the Company s annual
meeting of shareholders in June 2001 or when only one person remains a party to
the Voting Agreement. Any party to the Voting Agreement, other than the Prime
Parties, will cease to be a party to the Voting Agreement when such party
disposes of more than 25% of the Shares and Class B Common Stock held by such
party as of October 31, 1996, and, in such case, each other party (including the
Prime Parties) may withdraw from the Voting Agreement (other than with respect
to the rights of the Prime Parties to nominate members of the Board). The right
of the Prime Parties to nominate two members of the Board is contingent upon the
Prime Parties owning at least 10% of the outstanding Shares and upon the
management agreement between Prime and the Company remaining in effect. The
Prime Parties will have the right to nominate only one member of the Board if
either such contingency is not satisfied, and will have no rights to nominate
members of the Board if neither such contingency is satisfied. The foregoing
description of the Voting Agreement is qualified in its entirety by reference to
the attached Exhibit 3, which is incorporated herein by this reference.
Except as described in this Item 4, none of the Reporting Persons
nor the Individual Partners has formulated any plans or proposals which relate
to or would result in any matter required to be disclosed in response to
paragraphs (a) through (j) of Item 4 of Schedule 13D.
Item 5. Interest in Securities of the Issuer.
(a) Fund III is the direct beneficial owner of 742,357 Shares, or
approximately 1.9% of the 38,772,050 Shares deemed outstanding (including, for
this purpose, 19,648,382 Shares outstanding as of August 19, 1996, plus
16,723,077 Shares issued in connection with the Transaction and related matters,
and 2,400,591 Shares obtainable upon conversion of the Company s Class B Common
Stock held by parties to the Voting Agreement, according to information
contained in the Proxy Statement). By virtue of the relationships reported
under Item 2 of this Statement, Holdings III may be deemed to share indirect
beneficial ownership of the Shares directly beneficially owned by Fund III.
In connection with the Transaction, Fund II acquired a total of
247,452 Shares, or approximately 0.7% of the 36,371,459 Shares outstanding
(including, for this purpose, 19,648,382 Shares outstanding as of August 19,
1996, plus 16,723,077 Shares issued in connection with the Transaction and
related matters, according to information contained in the Proxy Statement), and
CBDF acquired a total of 494,905 Shares, or approximately 1.4% of the 36,371,459
Shares outstanding (including, for this purpose, 19,648,382 Shares outstanding
as of August 19, 1996, plus 16,723,077 Shares issued in connection with the
Transaction and related matters, according to information contained in the Proxy
Statement).
The information included in the second and third paragraphs under
Item 4 of this Statement is hereby incorporated in its entirety by this
reference. Fund III and Holdings III each disclaim beneficial ownership of
Shares and Class B Common Stock held by parties to the Voting Agreement (other
than Fund III), and each Individual Partner disclaims beneficial ownership of
Shares and Class B Common Stock held by all parties to the Voting Agreement.
(b) Fund III has the direct power to direct the disposition of the
Shares held by it and, subject to the Voting Agreement, Fund III has the direct
power to vote the Shares held by it. By virtue of the relationships described
in Item 2, Holdings III may be deemed to share the indirect power to vote and
direct the disposition of the Shares held by Fund III.
(c) The information included under Item 3 of this Statement is
hereby incorporated in its entirety by this reference.
(d) Fund III has the right to receive and the power to direct the
receipt of dividends from, and proceeds from the sale of, the Shares held by it.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships With
Respect to Securities of the Issuer.
The information included under Item 3 of this Statement is hereby
incorporated in its entirety by this reference.
The information included in the second and third paragraphs under
Item 4 of this Statement is hereby incorporated in its entirety by this
reference.
In connection with the Transaction, Fund III, the other Prime
Sellers and the Company entered into a Registration Rights Agreement dated as of
October 31, 1996 pursuant to which Fund III may require the Company, subject to
certain limitations, to register Fund III s Shares for resale pursuant to the
Securities Act of 1933, as amended. In addition, Fund III has agreed to certain
holdback restrictions on Fund III s ability to sell Shares during the 149 day
period following the closing of the Transaction. The foregoing description of
the Registration Rights Agreement is qualified in its entirety by reference to
the attached Exhibit 4, which is incorporated herein by this reference.
In connection with the Transaction, Fund III and the other Prime
Sellers entered into an escrow agreement with the Company and the National Bank
of Alaska as escrow agent dated as of October 31, 1996 (the Escrow Agreement).
Pursuant to the Escrow Agreement, the Prime Sellers placed approximately 9.27%
of the Shares received by the Prime Sellers in the Transaction into an escrow
account for 180 days the benefit of the Company in the event of certain breaches
of the Prime Purchase Agreement by Prime. The foregoing description of the
Escrow Agreement is qualified in its entirety by reference to the attached
Exhibit 5, which is incorporated herein by this reference.
In addition, Fund III and certain of the Prime Sellers entered into
a second escrow agreement with Texas Commerce Bank National Association as
escrow agent dated as of May 2, 1996 (the ACI Escrow Agreement ) pursuant to
which Fund III and the other parties to the ACI Escrow Agreement agreed, in
connection with certain federal income tax continuity of interest
requirements, not to dispose of certain Shares for a period terminating on
November 5, 1997. The ACI Escrow Agreement applies to all of the Shares held by
Fund III. The foregoing description of the ACI Escrow Agreement is qualified in
its entirety by reference to the attached Exhibit 6, which is incorporated
herein by this reference.
Other than set forth above, neither any of the Reporting Persons nor
any Individual Partner has any contract, arrangement, understanding or
relationship (legal or otherwise) with any person with respect to securities of
the Company, including, but not limited to, transfer or voting of any such
securities, finder's fees, joint ventures, loans or option arrangements, puts or
calls, guarantees of profits, division of profits or losses, or the giving or
withholding of proxies.
Item 7. Material to be Filed as Exhibits.
Exhibit 1. Prime Securities Purchase Agreement dated as of May 2,
1996 among General Communication, Inc. and the holders of equity
securities and profit participation rights of Prime Cable of Alaska,
L.P., incorporated by reference to Exhibit 2.1 to the Registration
Statement on Form S-4 (No. 333-13473) filed by General
Communication, Inc. with the Securities and Exchange Commission on
October 4, 1996.
Exhibit 2. Form of Plan of Merger between GCI Cable, Inc. and
Alaska Cable, Inc. to be dated on or about October 31, 1996,
incorporated by reference to Exhibit 2.2.1 to the Registration
Statement on Form S-4 (No. 333-13473) filed by General
Communication, Inc. with the Securities and Exchange Commission on
October 4, 1996.
Exhibit 3. Form of Voting Agreement to be dated as of October 31,
1996 among certain shareholders of General Communication, Inc.,
incorporated by reference to Exhibit 9.1 to the Registration
Statement on Form S-4 (No. 333-13473) filed by General
Communication, Inc. with the Securities and Exchange Commission on
October 4, 1996.
Exhibit 4. Form of Registration Rights Agreement to be dated as of
October 31, 1996 among General Communication, Inc. and certain
shareholders of General Communication, Inc., incorporated by
reference to Exhibit 10.2 to the Registration Statement on Form S-4
(No. 333-13473) filed by General Communication, Inc. with the
Securities and Exchange Commission on October 4, 1996.
Exhibit 5. Form of Escrow Agreement to be dated as of October 31,
1996 among General Communication, Inc., the National Bank of Alaska
as escrow agent, and certain shareholders of General Communication,
Inc., incorporated by reference to Exhibit 2.1 to the Registration
Statement on Form S-4 (No. 333-13473) filed by General
Communication, Inc. with the Securities and Exchange Commission on
October 4, 1996.
Exhibit 6. ACI Escrow Agreement dated as of May 2, 1996 among Texas
Commerce Bank National Association as escrow agent and certain
shareholders of General Communication, Inc.
Signature
After reasonable inquiry and to the best of my knowledge and belief,
I certify that the information set forth in this Statement is true, complete and
correct.
Date: November 12, 1996
/s/ G. Jackson Tankersley, Jr.
G. Jackson Tankersley, Jr., as general
partner of Centennial Holdings III, L.P.,
general partner of Centennial Fund III,
L.P.
Exhibit 6
ACI ESCROW AGREEMENT
This ACI Escrow Agreement ("Agreement") is entered into as of May 2, 1996
among 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"),
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"), and
Centennial Business Development Fund, Ltd., a Colorado limited partnership
("CBDF," and collectively with Holdings, Growth, PVII, AV, WBVP, CFII and CFIII,
the "Sellers" and each, individually, a "Seller"), and Texas Commerce Bank
National Association, as escrow agent ("Escrow Agent").
WHEREAS, Sellers are the owners of all of the issued and outstanding stock
of Alaska Cable, Inc., a Delaware corporation ("ACI"); and
WHEREAS, Sellers are parties to that certain Securities Purchase and Sale
Agreement of even date herewith (the "GCI Agreement") with General
Communication, Inc., an Alaska corporation ("GCI"), et al., pursuant to which
Sellers have agreed to merge (the "GCI Merger") ACI with and into GCI (or a
wholly-owned subsidiary of GCI) in a transaction which qualifies as a tax-free
"reorganization" under Section 368(a)(1)(A) of the Internal Revenue Code of
1986, as amended; and
WHEREAS, in consideration of the consummation of the GCI Merger, Sellers
will receive shares of GCI's Class A Common Stock ("GCI Class A Stock") in
exchange for their stock in ACI;
NOW, THEREFORE, for and in consideration of the premises and other good
and valuable consideration, the receipt and sufficiency of which is acknowledged
by the execution and delivery hereof, Sellers and Escrow Agent hereby agree as
follows:
1. Definitions. For purposes of this Agreement, "GCI Merger Closing
Date" shall mean that date on which the closing of the GCI Merger occurs
pursuant to the terms of the GCI Agreement.
2. Escrow Agent. Sellers appoint and designate Texas Commerce Bank
National Association as escrow agent for the purposes set forth in this
Agreement, and Texas Commerce Bank National Association accepts such appointment
on the terms provided in this Agreement.
3. Deposit with Escrow Agent. On the GCI Merger Closing Date, (i) each
Seller (other than CFII, CFIII and CBDF) shall deliver or cause to be delivered
to Escrow Agent that number of shares of GCI Class A Stock equal to (A) fifty
percent (50%) of the aggregate number of shares of GCI Class A Stock received by
such Seller on the GCI Merger Closing Date in connection with the consummation
of the GCI Merger pursuant to the GCI Agreement, less (B) the number of the
Sellers' Indemnity Shares (as defined in the GCI Agreement) deposited into the
Escrow Holdback (as defined in the GCI Agreement) by such Sellers pursuant to
the GCI Agreement as set forth on Schedule 1A to the GCI Agreement, and (ii)
CFII, CFIII and CBDF shall deliver or cause to be delivered to Escrow Agent
that number of shares of GCI Class A Stock equal to (A) fifty percent (50%)
of the aggregate number of shares of GCI Class A Stock received by them as a
group on the GCI Merger Closing Date in connection with the consummation of
the GCI Merger pursuant to the GCI Agreement, less (B) the number of the
Sellers' Indemnity Shares deposited into the Escrow Holdback by CFII, CFIII
and CBDF pursuant to the GCI Agreement as set forth on Schedule 1A to the
GCI Agreement, (the shares of GCI Class A Stock delivered to Escrow Agent
hereunder by a particular Seller being referred to as such Seller's
"Deposited Escrow Shares," and all such Sellers' Escrow Shares, and all such
shares being collectively referred to as the "Sellers' Escrow Shares").
Escrow Agent shall accept such Sellers' Escrow Shares, and shall hold and
disburse such Sellers' Escrow Shares, in accordance with the terms of this
Agreement.
4. Sellers' Representations. Each Seller represents and warrants to
the others that it has no current plan or intention to sell or otherwise
distribute (other than distributions to such Seller's partners; and each Seller
represents and warrants to the others that it has no knowledge that any
distributee partner has any current plan or intention to sell or otherwise
distribute) on or after the Escrow Disbursement Date (as defined in paragraph
5(a) below) any of the shares of GCI Class A Stock received by them in exchange
for their stock in ACI in connection with the GCI Merger.
5. Disbursement of Sellers' Escrow Shares. Escrow Agent will disburse
to each Seller such Seller's Deposited Escrow Shares on that date (the "Escrow
Disbursement Date") which is one year and five days after the Closing Date.
6. Rights, Duties and Liabilities of Escrow Agent.
(a) Escrow Agent assumes no responsibility for the validity or
sufficiency of any document or paper or payment deposited or called for under
this Agreement except as may be expressly and specifically set forth in this
Agreement, and the duties and responsibilities of Escrow Agent under this
Agreement are limited to those expressly and specifically stated in this
Agreement.
(b) Escrow Agent will not be personally liable for any act it may
do or omit to do under this Agreement as such escrow agent while acting in good
faith and in the exercise of its own best judgment, and any act done or omitted
by it pursuant to the written advice of its counsel will be conclusive evidence
of such good faith unless, in any event, the same constitutes gross negligence
or willful misconduct. Escrow Agent will have the right at any time to consult
with its counsel upon any question arising under this Agreement and will incur
no liability for any delay reasonably required to obtain the advise of counsel.
(c) Other than those notices or demands expressly provided in this
Agreement, Escrow Agent is expressly authorized to disregard any and all notices
or demands given by Sellers or by any other person, firm or corporation,
excepting only orders or process of court, and Escrow Agent is expressly
authorized to comply with and obey any and all final process, orders, judgment,
or decrees of any court, and to the extent Escrow Agent obeys or complies with
any thereof of any court, it will not be liable to any party to this Agreement
or to any other person, firm or corporation by reason of such compliance.
(d) In consideration of the acceptance of this Agreement by Escrow
Agent, Sellers jointly and severally agree, for themselves and their respective
successors and assigns, to promptly pay Escrow Agent its fee and its reasonable
costs and expenses (including court costs and the reasonable fees of its
attorneys, accountants and other consultants and professionals) incurred by it
in connection with its services as escrow agent as contemplated by this
Agreement. As among themselves, Sellers agree that they will be responsible for
such fee and expenses on a pro rata basis based upon each Seller's portion of
the Sellers' Escrow Shares. Escrow Agent's fee will be $1,250. Such sum is
intended as compensation for Escrow Agent's ordinary services as contemplated by
this Agreement. In the event that Escrow Agent renders services not provided
for in this Agreement, Escrow Agent will be entitled to receive from Sellers
reasonable compensation and reasonable costs for such extraordinary services,
and such compensation and costs will be borne by Sellers on a pro rata basis as
provided above.
(e) Escrow Agent will be under no duty or obligation to ascertain
the identity, authority or right of any Sellers (or their agents) to execute or
deliver or purport to execute or deliver this Agreement or any certificates,
documents or papers or payments deposited or called for or given under this
Agreement.
(f) Escrow Agent will not be liable for the outlawing of any rights
under any statute of limitations or by reason of laches in respect of this
Agreement or any documents or papers deposited with Escrow Agent.
(g) In the event of any dispute among the parties to this Agreement
as to the facts or as to the validity or meaning of any provision of this
Agreement, or any other fact or matter relating to this Agreement or to the
transactions among Sellers, Escrow Agent is instructed that it will be under no
obligation to act, except in accordance with this Agreement or under process or
order of court or, if there be no such process or order, until it has filed or
caused to be filed an appropriate action interpleading Sellers and delivering
the Indemnity Escrow Shares (or the portion thereof in dispute) to such court,
and Escrow Agent will sustain no liability for its failure to act pending such
process of court or order or interpleader of action.
7. Modification of Agreement. The provisions of this Agreement may be
supplemented, altered, amended, modified, or revoked in writing only, signed by
all Sellers and Escrow Agent, and upon payment of all costs and expenses
incident thereto.
8. Assignment of Agreement. No assignment, transfer, conveyance or
hypothecation of any right, title or interest in and to the subject matter of
this Agreement will be binding upon any party, including Escrow Agent, unless
all costs and expenses incident thereto have been paid and then only by the
assent thereto by all parties in writing.
9. Miscellaneous.
(a) All notices and communications under this Agreement will be in
writing and will be deemed to be duly given if sent by registered mail, return
receipt requested, personal delivery or telecopy (during the recipient's normal
business hours) at the address set forth on Annex 1 attached hereto; or at such
other address or telecopy number as any of the above may have furnished to the
other parties in writing and any such notice or communication given in the
manner specified in this Section 9(a) will be deemed to have been given as of
the date received. In the event that Escrow Agent, in its sole discretion,
determines that an emergency exists, Escrow Agent may use such other means of
communication as Escrow Agent deems advisable.
(b) The undertakings and agreements contained in this Agreement
will bind and inure to the benefit of the parties to this Agreement and their
respective successors and permitted assigns.
(c) This Agreement may be executed in one or more counterparts,
each of which will be deemed an original. Whenever pursuant to this Agreement
Sellers are to deliver a jointly signed writing to Escrow Agent or jointly
advise Escrow Agent in writing, such writing may in each and all cases be signed
jointly or in counterparts and such counterparts will be deemed to be one
instrument.
(d) Escrow Agent may resign and be discharged from its duties or
obligations under this Agreement by giving notice in writing of such resignation
to Sellers at least 30 days in advance of such resignation (unless waived in
writing by Sellers). Such resignation will be effective upon the appointment by
Sellers of a successor escrow agent, which will be a federally chartered bank
having combined capital and surplus of at least $250,000,000.00; provided, that
if any such appointment of any successor agent is not effectuated within 30 days
of such written notice, Escrow Agent may file an action for interpleader and
deposit all funds with a court of competent jurisdiction, all as provided for in
Section 5(g). Any such successor escrow agent will be appointed by a written
instrument mutually satisfactory to and executed by Sellers, Escrow Agent and
the successor escrow agent. Any successor escrow agent appointed under the
provisions of this Agreement will have all of the same rights, powers,
privileges, immunities and authority with respect to the matters contemplated
herein as are granted herein to Escrow Agent.
(e) Sellers hereby jointly and severally agree to indemnify Escrow
Agent for, and to hold it harmless against, any loss, liability or reasonable
out-of-pocket expense (including court costs and the reasonable fees of its
attorneys, accountants and other consultants and professionals) arising out of
or in connection with this Agreement and carrying out its duties hereunder,
including the reasonable out-of-pocket costs and expenses of defending itself
against any claim of liability, except in those cases where Escrow Agent has
been finally determined by an unappealable order of a court of competent
jurisdiction to have been guilty of gross negligence or willful misconduct.
Anything in this Agreement to the contrary notwithstanding, in no event will
Escrow Agent be liable for special, indirect or consequential loss or damage of
any kind whatsoever (including, but not limited to, lost profits), even if
Escrow Agent has been advised of the likelihood of such loss or damage and
regardless of the form of action.
(f) Sellers are providing Escrow Agent with their Tax
Identification Number (TIN) as assigned by the Internal Revenue Service below
their signatures to this Agreement. All dividends declared and paid, whether in
cash or in stock, on or with respect to the Deposited Escrow Shares will be
promptly delivered to the Seller who deposited such Deposited Escrow Shares and
reported by the recipient to the Internal Revenue Service as having been
delivered. Anything to the contrary in this Agreement notwithstanding, the
Seller's Escrow Shares will at all times be owned of record and beneficially by
Sellers, and Sellers will at all times have and be entitled to exercise sole
voting power and, subject to paragraph 5, the power to dispose of or transfer,
the Sellers' Escrow Shares.
(g) This Agreement will be governed by and construed in accordance
with the law of the State of Texas without regard to its principles of conflicts
of laws and any action brought under this Agreement will be brought in the
courts of the State of Texas, located in Austin, Travis County, Texas. Each
party hereto irrevocably waives any objection on the grounds of venue, forum
non-convenience or any similar grounds and irrevocably consents to service of
process by mail or in any other manner permitted by applicable law and consents
to the jurisdiction of such courts.
(h) Except as otherwise specified herein, each of the parties will
pay all costs and expenses incurred or to be incurred by it in negotiating and
preparing this Agreement and in closing and carrying out the transactions
contemplated by this Agreement.
(i) If any legal action or proceeding is brought for the
enforcement of this Agreement, or because of an alleged dispute, breach, default
or misrepresentation in connection with any of the provisions of this Agreement,
the successful or prevailing party or parties will be entitled to recover
reasonably attorneys' fees and other costs incurred in that action or
proceeding, in addition to any other relief to which it or they may be entitled.
(j) The provisions of this Agreement shall apply to any shares or
other securities resulting from any stock split or reverse split,
reclassification, subdivision, consolidation or reorganization of any shares or
other securities of GCI and to any shares or other securities of GCI or any
successor company which may be received by any of the parties hereto by virtue
of their respective ownership of any shares of the Sellers' Escrow Shares.
