DRAFT 7/11/97
D J & C
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$375,000,000
CREDIT AGREEMENT
Dated as of ______, 1997
BETWEEN
GCI HOLDINGS, INC.
and
NATIONSBANK OF TEXAS, N.A.
As Administrative Agent
CREDIT LYONNAIS NEW YORK BRANCH
As Documentation Agent
TORONTO DOMINION (USA), INC.
As Syndication Agent
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TABLE OF CONTENTS
ARTICLE I. DEFINITIONS
1.01. DEFINITIONS............................................................ 1
1.02. ACCOUNTING AND OTHER TERMS.............................................24
ARTICLE II. AMOUNTS AND TERMS OF ADVANCES
2.01. THE FACILITIES.........................................................25
2.02. MAKING ADVANCES UNDER THE REVOLVING LOAN AND THE REVOLVER/TERM LOAN....25
2.03. EVIDENCE OF INDEBTEDNESS...............................................27
2.04. REDUCTION OF COMMITMENTS...............................................28
2.05. PREPAYMENTS............................................................32
2.06. MANDATORY REPAYMENT....................................................35
2.07. INTEREST...............................................................36
2.08. DEFAULT INTEREST.......................................................37
2.09. CONTINUATION AND CONVERSION ELECTIONS..................................37
2.10. FEES...................................................................38
2.11. FUNDING LOSSES.........................................................39
2.12. COMPUTATIONS AND MANNER OF PAYMENTS....................................39
2.13. YIELD PROTECTION.......................................................40
2.14. USE OF PROCEEDS........................................................42
2.15. COLLATERAL AND COLLATERAL CALL.........................................43
2.16. INCREASE OF REVOLVING COMMITMENT.......................................43
ARTICLE III. LETTERS OF CREDIT
3.01. ISSUANCE OF LETTERS OF CREDIT..........................................45
3.02. LETTERS OF CREDIT FEES.................................................45
3.03. REIMBURSEMENT OBLIGATIONS..............................................45
3.04. LENDERS' OBLIGATIONS...................................................47
3.05. ADMINISTRATIVE AGENT'S OBLIGATIONS.....................................47
ARTICLE IV. CONDITIONS PRECEDENT
4.01. CONDITIONS PRECEDENT TO THE INITIAL ADVANCE............................48
4.02. CONDITIONS PRECEDENT TO ALL ADVANCES AND LETTERS OF CREDIT.............50
ARTICLE V. REPRESENTATIONS AND WARRANTIES
5.01. ORGANIZATION AND QUALIFICATION.........................................51
5.02. DUE AUTHORIZATION; VALIDITY............................................52
5.03. CONFLICTING AGREEMENTS AND OTHER MATTERS...............................52
5.04. FINANCIAL STATEMENTS...................................................52
5.05. LITIGATION.............................................................53
5.06. COMPLIANCE WITH LAWS REGULATING THE INCURRENCE OF DEBT.................53
5.07. LICENSES, TITLE TO PROPERTIES, AND RELATED MATTERS.....................53
5.08. OUTSTANDING DEBT AND LIENS.............................................54
5.09. TAXES..................................................................54
5.10. ERISA..................................................................54
5.11. ENVIRONMENTAL LAWS.....................................................55
5.12. DISCLOSURE.............................................................56
5.13. INVESTMENTS; RESTRICTED SUBSIDIARIES...................................56
5.14. CERTAIN FEES...........................................................56
5.15. INTELLECTUAL PROPERTY..................................................56
5.16. SURVIVAL OF REPRESENTATIONS AND WARRANTIES, ETC........................57
ARTICLE VI. AFFIRMATIVE COVENANTS
6.01. COMPLIANCE WITH LAWS AND PAYMENT OF DEBT...............................57
6.02. INSURANCE..............................................................57
6.03. INSPECTION RIGHTS......................................................58
6.04. RECORDS AND BOOKS OF ACCOUNT; CHANGES IN GAAP..........................58
6.05. REPORTING REQUIREMENTS.................................................58
6.06. USE OF PROCEEDS........................................................60
6.07. MAINTENANCE OF EXISTENCE AND ASSETS....................................61
6.08. PAYMENT OF TAXES.......................................................61
6.09. INDEMNITY..............................................................61
6.10. INTEREST RATE HEDGING..................................................62
6.11. MANAGEMENT FEES PAID AND EARNED........................................62
6.12. AUTHORIZATIONS AND MATERIAL AGREEMENTS.................................62
6.13. FURTHER ASSURANCES.....................................................63
6.14. SUBSIDIARIES AND OTHER OBLIGORS........................................63
ARTICLE VII. NEGATIVE COVENANTS
7.01. FINANCIAL COVENANTS....................................................63
7.02. DEBT...................................................................65
7.03. CONTINGENT LIABILITIES.................................................65
7.04. LIENS..................................................................65
7.05. DISPOSITIONS OF ASSETS.................................................65
7.06. DISTRIBUTIONS AND RESTRICTED PAYMENTS..................................66
7.07. MERGER; CONSOLIDATION..................................................66
7.08. BUSINESS...............................................................66
7.09. TRANSACTIONS WITH AFFILIATES...........................................66
7.10. LOANS AND INVESTMENTS..................................................66
7.11. FISCAL YEAR AND ACCOUNTING METHOD......................................67
7.12. ISSUANCE OF PARTNERSHIP INTEREST AND CAPITAL STOCK; AMENDMENT OF
ARTICLES AND BY-LAWS...................................................67
ii
7.13. CHANGE OF OWNERSHIP....................................................67
7.14. SALE AND LEASEBACK.....................................................67
7.15. COMPLIANCE WITH ERISA..................................................67
7.16. RATE SWAP EXPOSURE.....................................................68
7.17. RESTRICTED SUBSIDIARIES AND OTHER OBLIGORS.............................68
7.18. AMENDMENTS TO MATERIAL AGREEMENTS......................................68
7.19. LIMITATION ON RESTRICTIVE AGREEMENTS...................................68
ARTICLE VIII. EVENTS OF DEFAULT
8.01. EVENTS OF DEFAULT......................................................69
8.02. REMEDIES UPON DEFAULT..................................................73
8.03. CUMULATIVE RIGHTS......................................................74
8.04. WAIVERS................................................................74
8.05. PERFORMANCE BY ADMINISTRATIVE AGENT OR ANY LENDER......................74
8.06. EXPENDITURES...........................................................74
8.07. CONTROL................................................................74
ARTICLE IX. THE ADMINISTRATIVE AGENT
9.01. AUTHORIZATION AND ACTION...............................................75
9.02. ADMINISTRATIVE AGENT'S RELIANCE, ETC...................................75
9.03. NATIONSBANK OF TEXAS, NATIONAL ASSOCIATION AND AFFILIATES..............75
9.04. LENDER CREDIT DECISION.................................................76
9.05. INDEMNIFICATION BY LENDERS.............................................76
9.06. SUCCESSOR ADMINISTRATIVE AGENT.........................................76
ARTICLE X. MISCELLANEOUS
10.01. AMENDMENTS AND WAIVERS................................................77
10.02. NOTICES...............................................................77
10.03. PARTIES IN INTEREST...................................................79
10.04. ASSIGNMENTS AND PARTICIPATIONS........................................80
10.05. SHARING OF PAYMENTS...................................................81
10.06. RIGHT OF SET-OFF......................................................81
10.07. COSTS, EXPENSES, AND TAXES............................................81
10.08. INDEMNIFICATION BY THE BORROWER.......................................82
10.09. RATE PROVISION........................................................82
10.10. SEVERABILITY..........................................................83
10.11. EXCEPTIONS TO COVENANTS...............................................83
10.12. COUNTERPARTS..........................................................83
10.13. GOVERNING LAW; WAIVER OF JURY TRIAL...................................83
10.14. ENTIRE AGREEMENT......................................................84
iii
TABLE OF SCHEDULES AND EXHIBITS
SCHEDULES
Schedule 1.01 Systems
***[Schedule 1.02 Prior Stock Lien on Capital Stock of GCI Leasing]***
Schedule 1.03 Issuance of Capital Stock related to the Cable Acquisition
Transactions
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 Borrower 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
Schedule 5.14 Fees Payable
Schedule 7.02 Subordination Terms
EXHIBITS
Exhibit A-1 - Form of Revolving Note
Exhibit A-2 - Form of Revolver/Term Note
Exhibit B - Assignment and Acceptance
Exhibit C - Form of Pledge and Security Agreement
Exhibit D - Form of Compliance Certificate
Exhibit E - Form of Conversion/Continuation Notice
Exhibit F - Form of Borrowing Notice
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DRAFT 7/11/97
D J & C
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GCI HOLDINGS, INC.
$375,000,000
CREDIT AGREEMENT
THIS CREDIT AGREEMENT is dated as of _________, 1997 and GCI HOLDINGS,
INC., an _______________ corporation, (the "Borrower"), the Lenders from time
to time party hereto or to an Assignment and Acceptance, and NATIONSBANK OF
TEXAS, N.A., a national banking association ("NationsBank"), as a Lender and
Administrative Agent, CREDIT LYONNAIS NEW YORK BRANCH ("Credit Lyonnais") as
Documentation Agent and TORONTO DOMINION (USA), INC. ("TD"), as Syndication
Agent, (NationsBank, Credit Lyonnais and TD being collectively referred to
herein as the "Managing Agents").
BACKGROUND
1. The Borrower, the Administrative Agent and the Lenders have agreed to
enter into this Credit Agreement to provide for (a) an eight year reducing
revolving credit facility in an amount up to $225,000,000 (which, under
certain circumstances could be increased to $325,000,000), with a
sub-facility for letters of credit up to $10,000,000, and (b) a 364 day
revolving credit facility up to a maximum amount of $50,000,000, which
converts to a term loan on the 364th day after closing.
2. The Borrower, the Administrative Agent and the Lenders therefor agree
as follows:
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):
1
"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 Borrower pursuant to
Section 2.01 hereof, whether such Advance is made under the Revolving Loan or
the Revolver/Term Loan.
"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 Borrower, "AFFILIATE" means a
Person that directly, or indirectly through one or more intermediaries,
Controls or is Controlled By or is Under Common Control with GCI, the
Borrower or any Subsidiary of the Borrower or GCI.
"AGREEMENT" means this 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 Borrower 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 Facilities, 1.375% per annum and (ii) with respect to LIBOR
Advances under the Facilities, 2.500% per annum. Notwithstanding the
foregoing, effective three Business Days after receipt by the Administrative
Agent from the Borrower of a Compliance Certificate delivered to the Lenders
for any reason and demonstrating a change in the Total 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 Total
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 Borrower
2
of a Compliance Certificate, demonstrating a change in the Total 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 Total
Leverage Ratio shall at any time exceed or equal 7.50 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 Borrower 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 Borrower
which demonstrate that another Applicable Margin should be applied pursuant
to the table set forth below; and provided further, that the Applicable
Margin shall never be a negative number. Notwithstanding anything in the
foregoing or in any other part of this Agreement or the Loan Papers to the
contrary, or any other increase of the rates of interest whether pursuant to
Section 2.08 hereof or otherwise, with respect to the Applicable Margin in
each case set forth below, if the Senior Leverage Ratio is at any time
greater than or equal to 3.50 to 1.00, and for so long as the Senior Leverage
Ratio remains greater than or equal to 3.50 to 1.00, the margins set forth
below shall in each case be increased by .125% per annum.
COLUMN A COLUMN B
Total Leverage Ratio Base Rate LIBOR
-------------------- --------- -----
Greater than or equal
to 7.50 to 1.00 1.375% 2.500%
Greater than or equal to
7.00 to 1.00 but less than
7.50 to 1.00 1.250% 2.375%
Greater than or equal to
6.50 to 1.00 but less than
7.00 to 1.00
1.125% 2.250%
Greater than or equal to
6.00 to 1.00 but less than
6.50 to 1.00 0.750% 1.875%
Greater than or equal to
5.50 to 1.00 but less than
6.00 to 1.00 0.500% 1.625%
Greater than or equal to
5.00 to 1.00 but less than
3
5.50 to 1.00 0.250% 1.375%
Greater than or equal to
4.50 to 1.00 but less than
5.00 to 1.00 0.000% 1.125%
Greater than or equal to
4.00 to 1.00 but less than
4.50 to 1.00 0.000% 1.000%
Less than 0.000% 0.750%
4.00 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 Borrower 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 Borrower and acceptable to
Administrative Agent.
"AULP" means Alaska United Fiber System Partnership, an Alaska general
partnership and Unrestricted Subsidiary, which is a wholly owned indirect
Subsidiary of the Borrower.
"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, Senior Vice
President-Chief Financial Officer, Vice President, Chief Financial Officer
and Vice President-Chief Accounting Officerc, Vice
4
President-Director of Finance or any other officer authorized by the Borrower
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.
"BASE RATE ADVANCE" means an Advance bearing interest at the Base Rate,
whether such Advance is made under the Revolving Loan or the Revolver/Term
Loan.
"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.
"BORROWER" means GCI Holdings, Inc., an Alaska corporation.
"BORROWING" means a borrowing under the Facilities of the same Type
made on the same day, whether made under the Revolving Loan, the
Revolver/Term Loan or any combination thereof.
"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.
"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
5
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 ▇▇▇▇▇'▇ Investors Services, Inc. on
the date of investment, and (d) commercial paper which has one of the three
highest ratings obtainable from Standard & Poor's Ratings Group or ▇▇▇▇▇'▇
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 Borrower or any
Restricted Subsidiary (except any change due to any merger or consolidation
among the Wholly-Owned Subsidiaries) or (b) any change in the ownership of
GCI resulting in MCI owning less than 18% of GCI, or (c) MCI shall at any
time have less than two representatives sitting on the GCI'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 FEES" means each of the fees described in Sections 2.10(a)
and 2.10(b) hereof.
"COMPLIANCE CERTIFICATE" means a certificate of an Authorized Officer
of the Borrower 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 Borrower'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
6
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 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.
7
"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 DATE" means the date that is 364 days after the Closing
Date.
"CONVERSION OR CONTINUANCE NOTICE" has the meaning set forth in Section
2.09(b) hereof.
"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
8
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. Section 1801 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. Section 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.
"ERISA AFFILIATE" means any Person that for purposes of Title IV of
ERISA is a member of the controlled group of GCI, the Borrower or any
Subsidiary of GCI or the Borrower, or is under common control with GCI, the
Borrower or any Subsidiary of GCI or the Borrower, 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 Borrower,
any Subsidiary of the Borrower or GCI, 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 Borrower, any
Subsidiary of the Borrower or either 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.
"EXCESS CASH FLOW" means, for the most recently completed fiscal year,
the difference between Operating Cash Flow for such year minus the sum of (a)
Total Interest Expense for such year, plus (b) scheduled repayments of
principal of Total Debt (whether by installment or as a result of a scheduled
reduction in a revolving commitment, or otherwise) for such year, plus (c)
Capital
9
Expenditures made during such year and financed with cash from operations of
the Borrower or its Restricted Subsidiaries, plus (d) not more than $_____ in
working capital of the Borrower, plus (e) cash taxes for GCII, the Borrower
and its Restricted Subsidiaries with respect to such year, whether accrued or
paid.
"FACILITIES" means both the Revolving Loan and the Revolver/Term Loan
evidenced by this Agreement and the Loan Papers, and "FACILITY" means either
of the Revolving Loan or the Revolver/Term Loan, as applicable in the context
used.
"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 Parents', the
Borrower'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 June 30,
1997, addressed to the Borrower and acknowledged by the Borrower, and
describing certain fees payable to the Administrative Agent in connection
with this Agreement and the Facilities, and such other fee 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.
"FIXED CHARGES" means, for the most recently completed four fiscal
quarters, the sum of (a) cash Total Interest Expense paid or accrued, plus
(b) scheduled repayments of principal of Total Debt (whether by installment
or as a result of a scheduled reduction in a revolving commitment, or
otherwise), plus (c) cash taxes paid or accrued for the Borrower and its
Subsidiaries, plus (d) cash payments (in the form of capital contributions,
loans, advances or otherwise) made to Unrestricted Subsidiaries, plus (e)
Capital Expenditures made by any of the Borrower and its Restricted
Subsidiaries.
"FIXED CHARGES COVERAGE RATIO" means the ratio of Annualized Operating
Cash Flow to Fixed Charges.
10
"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, without
duplication, (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" General Communication, Inc., an Alaska corporation, and immediate
parent and holder of 100% of the Capital Stock of GCII.
"GCI ENTITIES" means the Borrower, the Parents, each Restricted
Subsidiary and each Guarantor from time to time in existence, and any other
Person from time to time constituting a Subsidiary of Parents or the
Borrower, except the Unrestricted Subsidiaries.
"GCII" means GCI, Inc., an Alaska corporation, and immediate parent and
holder of 100% of the Capital Stock of the Borrower.
"GUARANTORS" means GCI, GCII, GCI Communication Services, Inc., GCI
Leasing Co., Inc., GCI Communication Corp. (including, without limitation,
the Long Distance Division and the Local & Wireless Division), GCI Cable,
Inc., each Subsidiary of GCI Cable, Inc., each other Restricted Subsidiary
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).
11
"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.
"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 Borrower 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.
"INDENTURE" means ______________________, providing for the Senior Notes.
"INITIAL ADVANCE" means the initial Advance made in accordance with the
terms hereof, which shall only be after the Borrower 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).
"INSTALLMENT PERCENTAGE" means, with respect to Advances outstanding
under the Revolver/Term Loan, a percentage of the aggregate Revolver/Term
Advances outstanding on the Conversion Date.
"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) Annualized Operating Cash Flow to (b) Total Interest Expense for
the most recently completed four fiscal quarters, provided that,
notwithstanding the preceding and any other provision in this Agreement or
12
in the Loan Papers, for the first three fiscal quarters after the Closing
Date only, Annualized Operating Cash Flow and Total Interest Expense shall be
determined by annualizing the relevant financial information of GCII, the
Borrower and the Restricted Subsidiaries from the Closing Date through the
date of determination.
"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, and notwithstanding the above, fixed rate Debt for Borrowed Money shall
be deemed an Interest Hedge Agreement.
"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 Borrower
shall select) PROVIDED, HOWEVER, that:
(a) the Borrower 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;
(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.
13
"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 Borrower 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 Fees 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 Revolving Unused Commitment and (ii) $10,000,000.
"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 LIBOR Advance for any Interest Period
therefor, the rate per annum (rounded upwards, if necessary, to the nearest
1/100 of 1%) appearing on Telerate Page 3750 (or any successor page) as the
London interbank offered rate for deposits in Dollars at approximately 11:00
a.m. (London time) two Business Days prior to the first day of such Interest
Period for a term comparable to such Interest Period. If for any reason such
rate is not available, the term "LIBOR Rate Basis" shall mean, for any LIBOR
Advance for any Interest Period therefor, the rate per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) appearing on Reuters
Screen LIBO Page as the London interbank offered rate for deposits in Dollars
at approximately 11:00 a.m. (London time) two Business Days prior to the
first day of such Interest Period for a term comparable to such Interest
Period; PROVIDED, HOWEVER, if more than one rate is specified on Reuters
Screen LIBO Page, the applicable rate shall be the arithmetic mean of all
such rates.
14
"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.
"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, all
collateral assignments or other agreements granting a Lien on any
intercompany note; and all other documents, instruments, agreements or
certificates executed or delivered by the Borrower or any other GCI Entity,
as security for the Borrower's obligations hereunder, in connection with the
loans to the Borrower 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.
"LOCAL TELEPHONE BUSINESS" means the local telephone business of the
Borrower and its Restricted Subsidiaries in Anchorage, Alaska, for which GCI
Leasing Corp. received its authority to operate from the Alaskan Public
Utilities Commission on February 4, 1997.
"MAJORITY LENDERS" means any combination of Lenders having at least
66.67% of the aggregate amount of Advances under the Facilities; 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 Facilities.
15
"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 Borrower, any GCI Entity or any of the Restricted
Subsidiaries to any Person for management services for managing any portion
of any System.
"MANAGING AGENTS" means NationsBank, Credit Lyonnais and TD.
"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 Borrower 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
Borrower 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 June 30, 2005, 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 (i) prior to the effective date of the merger of MCI
Telecommunications Corporation into [British Telecommunications, Inc.], MCI
Telecommunications Corporation and (ii) on and after the effective date of
the merger of MCI Telecommunications Corporation into
[British Telecommunications, Inc.], [British Telecommunications, Inc.]
"MULTIEMPLOYER PLAN" means a multiemployer plan, as defined in Section
4001(a)(3) of ERISA, to which the Borrower, any Subsidiary of the Borrower or
GCI 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.
"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
Borrower, any Subsidiary of the Borrower or GCI, or any ERISA Affiliate and
at least one Person other than the Borrower, any Subsidiary of the Borrower
or GCI, and any ERISA Affiliate, or (b) was so maintained and in respect of
which the Borrower, any Subsidiary of the Borrower or GCI, 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 Borrower 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 Borrower or such Restricted
Subsidiary and certified to the Lenders in reasonable detail by an Authorized
Officer) (a)
16
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
Borrower 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 Borrower or any Restricted
Subsidiary related to such sale.
"NON-COMPETE AGREEMENT" means any agreement or related set of
agreements under which the Borrower 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 Borrower 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.
"NOTES" means all Revolving Notes and Revolver/Term Notes in effect
from time to time, and "Note" means any of such notes, as applicable.
"OBLIGATIONS" means all present and future obligations, indebtedness
and liabilities, and all renewals and extensions of all or any part thereof,
of the Borrower 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 Borrower, 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 Borrower, 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, reorganization or like proceeding of the Borrower, any other GCI
Entity or any other Person under any Debtor Relief Law).
"OPERATING CASH FLOW" means, for the Borrower and the Restricted
Subsidiaries, for any period, determined in accordance with GAAP, the
consolidated net income (loss) for such period taken as a single accounting
period, excluding extraordinary gains and losses, plus the sum of the
following amounts for such period to the extent included in the determination
of such consolidated net income: (a) depreciation expense, (b) amortization
expense and other non-cash charges reducing income, (c) net Total Interest
Expense for the Borrower and the Restricted Subsidiaries, (d) cash income tax
expense for the Borrower and Restricted Subsidiaries plus (e) deferred income
Taxes for the Borrower and Restricted Subsidiaries; provided, the calculation
is made after giving effect to
17
acquisitions and dispositions of assets of the Borrower or any Restricted
Subsidiary during such period as if such transactions had occurred on the
first day of such period.
"OPERATING LEASES" means operating leases, as defined in accordance with
GAAP.
"PARENTS" means, collectively, GCI and GCII.
"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 Borrower or such GCI Entity;
(f) Liens or attachments, judgments or awards against the Borrower
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 Borrower or such other GCI Entity;
(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 Borrower or any other GCI Entity; and
18
(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 Borrower 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 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
Borrower and Restricted Subsidiaries 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 Borrower; (b) a first perfected security interest
in 100% of the Capital Stock of GCI Communication Services, Inc., and GCI
Communication Corp.; (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 GCI
Cable, Inc. each Subsidiary of GCI Cable, Inc., and 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
Co., Inc. and such other Liens as are listed on SCHEDULE 1.02 hereto.]***
"PRIME MANAGEMENT AGREEMENT" means that certain Management Agreement,
between GCI Cable, Inc. and Prime II Management, L.P., dated October 31, 1996.
"PRO FORMA DEBT SERVICE" means, for GCII, the Borrower and its Restricted
Subsidiaries for the four full fiscal quarters immediately following the date
of determination, the sum of (a) cash Total Interest Expense (using the
interest rates in effect on the date of determination to project interest
rates for any Total Debt subject to a floating interest rate), plus (b)
scheduled repayments of principal of Total Debt (whether by installment or as
a result of a scheduled reduction in a revolving commitment, or otherwise).
"PRO FORMA DEBT SERVICE COVERAGE RATIO" means the ratio of Annualized
Operating Cash Flow to Pro Forma Debt Service.
19
"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 ***[September 30,
1997]***.
"RATABLE" means, as to any Lender, in accordance with its Specified
Percentage.
"REDUCTION PERCENTAGE" means, with respect to the Revolving Commitment, that
percentage of the Revolving Commitment as the Revolving Commitment is in effect
on June 30, 2000.
"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 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 Borrower 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 GCII, the Borrower
or any Restricted Subsidiary (excluding the Obligations); (c) any Management
Fee or any management, consulting or other similar fees, or
20
any interest thereon, payable by the Borrower or any Restricted Subsidiary to
any Affiliate of the Borrower or Parents or to any other Person; (d) any
administration fee or any administration, consulting or other similar fees,
or any interest thereon, payable by the Borrower or any Restricted Subsidiary
to any Affiliate of Parents or the Borrower or to any other Person (excluding
salaries of employees and consulting fees incurred in the ordinary course of
business payable to non-Affiliates of the Borrower); (e) any payments of any
amounts owing under any Non-Compete Agreements; and (f) fees, loans or other
payments or advances by the Borrower or any Restricted Subsidiary to any
Unrestricted Subsidiary or any other Affiliate of the Parents or the
Borrower, except to the extent such payments are permitted in accordance with
the terms of Section 7.09 hereof.
"RESTRICTED SUBSIDIARIES" means GCI Communication Services, Inc., GCI
Leasing Co., Inc., GCI Communication Corp. (including, without limitation,
the Long Distance Division and the Local & Wireless Division), GCI Cable,
Inc., each Subsidiary of GCI Cable, Inc., and any other Subsidiary, now or
hereafter created or acquired, of the Borrower or the Parents, in each case
that engages in either the operation of (a) switched message long distance
telephone systems and ancillary services including DAMA, cellular resale and
PCS systems, (b) cable distribution operations, or (c) the Local Telephone
Business and "RESTRICTED SUBSIDIARY" means any one of them, as applicable in
the context.
"REVOLVER/TERM COMMITMENT" means, with respect to the Revolver/Term Loan,
$50,000,000, as such amount may be reduced from time to time in accordance with
the terms of Section 2.04 hereof.
"REVOLVER/TERM LOAN" means that certain Revolver/Term Loan made to the
Borrower on the Closing Date in accordance with Section 2.01(b) hereof.
"REVOLVER/TERM NOTES" means the promissory notes of the Borrower
evidencing the Advances and obligations owing hereunder to each Lender under
the Revolver/Term Loan, in substantially the form of EXHIBIT A-2 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.
"REVOLVER/TERM UNUSED COMMITMENT" means, on any date of determination, the
Revolver/Term Commitment as in effect on such date, minus all outstanding
Advances made under the Revolver/Term Loan on such date.
"REVOLVING COMMITMENT" means, with respect to the Revolving Loan,
$225,000,000, as such amount may be reduced from time to time in accordance
with the terms of Section 2.04 hereof, or increased in accordance with
Section 2.16 hereof.
"REVOLVING LOAN" means that certain Revolving Loan made to the Borrower on
the Closing Date until the Maturity Date in accordance with Section 2.01(a)
hereof.
"REVOLVING NOTES" means the promissory notes of the Borrower evidencing
the Advances and obligations owing hereunder to each Lender under the
Revolving Loan, in substantially the form of
21
EXHIBIT A-1 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.
"REVOLVING UNUSED COMMITMENT" means, on any date of determination, the
Revolving Commitment as in effect on such date, minus all outstanding Advances
made under the Revolving Loan on such date.
"RIGHTS" means rights, remedies, powers, and privileges.
"SENIOR DEBT" means, without duplication, with respect to the Borrower and
the Restricted Subsidiaries, the sum of all Funded Debt of the Borrower and the
Restricted Subsidiaries, calculated on a consolidated basis in accordance with
GAAP.
"SENIOR LEVERAGE RATIO" means as of any date of determination, the ratio of
(a) Senior Debt on such date of determination to (b) Annualized Operating Cash
Flow, all calculated for the Borrower and the Restricted Subsidiaries on a
consolidated basis in accordance with GAAP consistently applied.
"SENIOR NOTES" means those certain $150,000,000 ___% Senior Notes due 2007
issued by GCII, pursuant to and in accordance with the Indenture.
"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 Borrower 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 ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, P.C.,
Dallas, Texas, special counsel to Administrative Agent, or such other counsel
selected by the Administrative Agent from time to time.
22
"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.
** 1 "SUBORDINATED DEBT" means subordinated indebtedness of the Borrower
incurred in accordance with the terms of Section 7.02(d)(ii) hereof.
"SUBSIDIARY" of any Person means any corporation, partnership, limited
liability company, 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 Borrower's and the other GCI Entities' (a)
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 Parents, the
Borrower, any of the Restricted Subsidiaries and any of the other GCI
Entities from time to time, (b) cable distribution systems owned or acquired
by the Borrower or any of its Restricted Subsidiaries which receives audio,
video, digital, other broadcast signals or information or telecommunications
by cable, optical, antennae, microwave or satellite transmission and which
amplifies and transmits such signals to persons who pay to receive such
signals, and (c) the Local Telephone Business, and all other such systems
owned by the Borrower or any other GCI Entity from time to time.
"TAXES" means all taxes, assessments, imposts, fees, or other charges at
any time imposed by any Laws or Tribunal.
"TOTAL DEBT" means, without duplication, with respect to GCII, the
Borrower and the Restricted Subsidiaries, the sum of all Funded Debt,
calculated on a consolidated basis in accordance with GAAP.
23
"TOTAL INTEREST EXPENSE" means as of any date of determination for any
period of calculation, all GCII's, the Borrower'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 GCII, the Borrower 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
and/or arrangement 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 GCII,
the Borrower and the Restricted Subsidiaries declared and payable in cash;
and (f) interest capitalized in accordance with GAAP.
"TOTAL LEVERAGE RATIO" means as of any date of determination, the ratio of
(a) Total Debt of GCII, the Borrower and the Restricted Subsidiaries on such
date of determination to (b) Annualized Operating Cash Flow, all calculated
on a consolidated basis in accordance with GAAP consistently applied.
"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 Transport Company, GCI Satellite
Company, GCI Fiber Company, Fiber Hold Company and Alaska United Limited
Partnership, and, with the prior written consent of the Majority Lenders, any
other Subsidiary of the Parents designated as a "Unrestricted Subsidiary" by
the Borrower from time to time.
"WHOLLY-OWNED SUBSIDIARY" means any Subsidiary of the Borrower that is
owned 100% by the Borrower or either of the Parents, 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
Borrower and the Restricted Subsidiaries, unless otherwise expressly stated
24
herein. References herein to one gender shall be deemed to include all other
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. THE FACILITIES.
(a) 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 Borrower on any Business Day
during the period from the Closing 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 Revolving 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 Borrower may borrow,
repay and reborrow the Advances under the Revolving Loan.
(b) ADVANCES UNDER THE REVOLVER/TERM LOAN. Each Lender severally
agrees, on the terms and subject to the conditions hereinafter set
forth, from the Closing Date until the Conversion Date, to make
Advances under the Revolver/Term Loan to the Borrower on any Business
Day during the period from the Closing Date of this Agreement until
the Conversion Date, in an aggregate principal amount not to exceed
at any time outstanding such Lender's Specified Percentage of the
Revolver/Term Commitment. Subject to the terms and conditions of
this Agreement, until the Conversion Date, the Borrower may borrow,
repay and reborrow the Advances under the Revolver/Term Loan. On the
Conversion Date, the aggregate amount of outstanding Advances under
the Revolver/Term Loan shall convert to a term loan, at which point
the Borrower may not borrow, repay and reborrow the Advances under
the Revolver/Term Loan, all Advances under the Revolver/Term Loan
being Refinancing Advances on and after the Conversion Date. In
addition to the installment repayments due on the Revolver/Term Loan
as set forth below, the aggregate amount of all outstanding
Revolver/Term Advances are due and payable on the Maturity Date.
2.02. MAKING ADVANCES UNDER THE REVOLVING LOAN AND THE
REVOLVER/TERM LOAN.
(a) Each Borrowing of Advances shall be made upon the written notice of
the Borrower, 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
25
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, and whether such Borrowing is under the Revolving Loan
or the Revolver/Term Loan;
(ii) the amount of such proposed Borrowing which, (A) if under
the Revolving Loan, shall not when aggregated together with all other
outstanding Advances under the Revolving Loan 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 Revolving Commitment, and
(B) if under the Revolver/Term Loan prior to the Conversion Date,
shall not when aggregated together with all other outstanding
Advances under the Revolver/Term Loan exceed the Revolver/Term
Commitment, and (C) 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. If the Borrowing Notice fails to specify which
Facility the Borrower selects, then such Borrowing shall be made under the
Revolving Loan. Each Lender shall, before 1:00 p.m. on the date of each
Advance under the Revolving Loan (other than a Refinancing Advance) or
Revolver/Term Loan prior to the Conversion Date (other than a Refinancing
Advance), make available to
Administrative Agent
NationsBank Plaza
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
such Lender's Specified Percentage of the aggregate Advances under the
Revolving Loan or the Revolver/Term Loan, as applicable, 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 Facilities promptly available to the Borrower (other than with respect to
a Refinancing Advance) by wiring National Bank of Alaska
26
referencing GCI Holdings Inc., account number *****[▇▇▇▇▇▇▇▇▇, ABA #▇▇▇▇▇▇▇▇▇]
**** or such other account as shall have been specified by the Borrower.
(c) After giving effect to any Borrowing, (i) there shall not be more than
eight different Interest Periods in effect under the Facilities, (ii) the
aggregate principal of outstanding Advances under the Revolving Loan 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 Revolving Commitment and (iii) if
prior to the Conversion Date, the aggregate principal of outstanding Advances
under the Revolver/Term Loan shall not exceed the Revolver/Term Commitment.
(d) No Interest Period for a Borrowing under the Facilities 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 Borrower a corresponding amount. If and to the extent any Lender shall
not have made such amount available to Administrative Agent, such Lender and
the Borrower 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 Borrower until the date such amount
is repaid to Administrative Agent, at (i) in the case of the Borrower, 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 Borrower 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 Borrower's requesting that an Advance not be made on
the date specified in the Borrowing Notice.
2.03. EVIDENCE OF INDEBTEDNESS.
(a) The obligations of the Borrower with respect to the Letters of Credit
and all Advances under the Revolving Loan made by each Lender shall be
evidenced by a Revolving Note in the form of EXHIBIT A-1 hereto and in the
amount of such Lender's Specified Percentage of the Revolving Commitment (as
the same may be modified pursuant to Section 10.04 hereof).
27
(b) The obligations of the Borrower with respect to the all Advances under
the Revolver/Term Loan made by each Lender shall be evidenced by a
Revolver/Term Note in the form of EXHIBIT A-2 hereto and in the amount of
such Lender's Specified Percentage of the Revolver/Term Commitment (as the
same may be modified pursuant to Section 10.04 hereof).
(c) 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 COMMITMENTS.
(A) VOLUNTARY COMMITMENT REDUCTION. The Borrower shall have the right
from time to time upon notice by the Borrower to the Administrative Agent not
later than 1:00 p.m., three Business Days in advance, to reduce the Revolving
Commitment and/or, prior to the Conversion Date, the Revolver/Term
Commitment, in each case in whole or in part; provided, however, that the
Borrower shall pay the accrued commitment fee on the amount of each 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, the proposed date of such
reduction and whether the reduction is being applied to the Revolving
Commitment or, if prior to the Conversion Date, the Revolver/Term Commitment.
28
(b) MANDATORY COMMITMENT REDUCTIONS.
(i) SCHEDULED REDUCTIONS IN THE REVOLVING COMMITMENT AND THE
REVOLVER/TERM COMMITMENT.
(A) SCHEDULED QUARTERLY REDUCTIONS IN THE REVOLVING COMMITMENT.
Commencing September 30, 2000, the Revolving Commitment in effect on
such date shall be reduced thereafter from time to time by the
Reduction Percentage set forth below on such dates as are set forth
below:
Date of Reduction Reduction Percentage
----------------- --------------------
September 30, 2000 3.750%
December 31, 2000 3.750%
March 31, 2001 3.750%
June 30, 2001 3.750%
September 30, 2001 3.750%
December 31, 2001 3.750%
March 31, 2002 5.000%
June 30, 2002 5.000%
September 30, 2002 5.000%
December 31, 2002 5.000%
March 31, 2003 5.000%
June 30, 2003 5.000%
September 30, 2003 5.000%
December 31, 2003 5.000%
March 31, 2004 5.625%
June 30, 2004 5.625%
September 30, 2004 5.625%
December 31, 2004 5.625%
March 31, 2005 7.500%
June 30, 2005 7.500%, and the Revolving
Commitment shall be zero
(B) FINAL MATURITY - THE REVOLVING LOAN. The Revolving
Commitment shall be reduced to zero on the Maturity Date.
29
(C) CONVERSION TO TERM LOAN - THE REVOLVER/TERM LOAN. The
Revolver/Term Commitment shall be reduced to zero on the Conversion Date.
(ii) ASSET SALES. On the date of any Asset Sale by any of the GCI
Entities (this provision not permitting such Asset Sales),
(A) if there exists no Default or Event of Default (I) prior to the
Conversion Date, the Revolving Commitment and the Revolver/Term
Commitment shall be automatically and permanently reduced by an amount
equal to 100% of the Net Proceeds from any Asset Sales received by any
of the GCI Entities in excess of $10,000,000 in the aggregate over the
term of this Agreement, applied pro rata to the Revolving Commitment and
the Revolver/Term Commitment, and (II) after the Conversion Date, the
Revolving Commitment shall be automatically and permanently reduced by
an amount equal to the Revolving Commitment's percentage of the sum of
the Revolving Commitment and outstanding amounts under the Revolver/Term
Loan, of 100% of the Net Proceeds from any Asset Sales received by any
of the GCI Entities in excess of $10,000,000 in the aggregate over the
term of this Agreement, and
(B) if there exists a Default or an Event of Default, (I) prior to the
Conversion Date, the Revolving Commitment and the Revolver/Term
Commitment shall be automatically and permanently reduced by an amount
equal to 100% of the Net Proceeds from any Asset Sales received by any
of the GCI Entities applied pro rata to the Revolving Commitment and the
Revolver/Term Commitment, and (II) after the Conversion Date, the
Revolving Commitment shall be automatically and permanently reduced by
an amount equal to the amount required by Section 2.05(b)(i)(B)(II)
hereof to repay the outstanding Advances under the Revolving Loan, and
(C) on each such date set forth in (A) and (B) above, the Borrower
shall deliver to the Administrative Agent a certificate of an Authorized
Officer certifying as to the amount of (including the calculation of)
the reduction of the Revolving Commitment and/or Revolver/Term
Commitment, as applicable, 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 ISSUANCE. On the date of any issuance of public or private
Subordinated Debt by the Borrower (this provision not permitting such Debt
issuance),
(A) if there exists a Default or an Event of Default or if the
Total Leverage Ratio equals or is greater than 5.00 to 1.00, (I) prior
to the Conversion Date, the Revolving Commitment and the Revolver/Term
Commitment shall be automatically and permanently reduced by an amount
equal to 100% of the net proceeds from any issuances of Subordinated
Debt received by the Borrower, applied pro rata to the
30
Revolving Commitment and the Revolver/Term Commitment, and (II) after
the Conversion Date, the Revolving Commitment shall be automatically
and permanently reduced by an amount equal to the amount required by
Section 2.05(b)(ii)(B)(II) hereof to repay the outstanding Advances
under the Revolving Loan, and
(B) on such date, the Borrower shall deliver to the
Administrative Agent a certificate of an Authorized Officer
certifying as to the amount of (including the calculation of) such
reduction in the Revolving Commitment and/or the Revolver/Term
Commitment, as applicable, and, with respect to the Debt 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 of such Debt issuance.
(iv) EQUITY ISSUANCES; CHANGE OF CONTROL. On the date of any issuance of
equity by any of the GCI Entities (this provision not permitting such equity
issuances),
(A) if a Change of Control occurs, the Revolving Commitment and
the Revolver/Term Commitment shall be automatically and permanently
reduced by to zero, and
(B) if there exists a Default or an Event of Default, (I) prior to
the Conversion Date, the Revolving Commitment and the Revolver/Term
Commitment shall be automatically and permanently reduced by an
amount equal to 100% of the net proceeds from any such equity
issuances received by any of the GCI Entities applied pro rata to the
Revolving Commitment and the Revolver/Term Commitment, and (II) after
the Conversion Date, the Revolving Commitment shall be automatically
and permanently reduced by an amount equal to the amount required by
Section 2.05(b)(iii)(B)(II) hereof to repay the outstanding Advances
under the Revolving Loan, and
(C) on each such date set forth in (A) and (B) above, the Borrower
shall deliver to the Administrative Agent a certificate of an
Authorized Officer certifying as to the amount of (including the
calculation of) the reduction of the Revolving Commitment and/or
Revolver/Term Commitment, as applicable, and, with respect to the
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 of such equity
issuance.
(v) DISTRIBUTIONS FROM ANY UNRESTRICTED SUBSIDIARY. On the date that
any distribution is received by any GCI Entity from any Unrestricted Subsidiary,
(A) if there exists a Default or an Event of Default, (I) prior to
the Conversion Date, the Revolving Commitment and the Revolver/Term Commitment
shall be
31
automatically and permanently reduced by an amount equal to 100% of
the distribution received by any GCI Entity from any Unrestricted
Subsidiary, applied pro rata to the Revolving Commitment and the
Revolver/Term Commitment, and (II) after the Conversion Date, the
Revolving Commitment shall be automatically and permanently
reduced by an amount equal to the amount required by Section
2.05(b)(iv)(B)(II) hereof to repay the outstanding Advances under
the Revolving Loan, and
(B) on each such date set forth above, the Borrower shall
deliver to the Administrative Agent a certificate of an Authorized
Officer certifying as to the amount of (including the calculation of)
the reduction of the Revolving Commitment and/or Revolver/Term
Commitment, as applicable.
(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 Revolving Commitment after any reduction
thereof, the Borrower 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. To the extent the sum of the
aggregate outstanding Advances under the Revolver/Term Loan exceed the
Revolver/Term Commitment after any reduction thereof, the Borrower 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, neither the Revolving Commitment and/or the Revolver/Term Commitment,
as applicable, may be increased or reinstated.
2.05. PREPAYMENTS.
(a) OPTIONAL PREPAYMENTS. The Borrower 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.
32
(i) ASSET SALES. (A) Prior to the Conversion Date, on the date of any
Asset Sale of any GCI Entity, the Borrower shall repay the Obligations by
an amount equal to 100% of the Net Proceeds, applied pro rata to Advances
outstanding under the Revolving Loan and the Revolver/Term Loan, and (B)
after the Conversion Date, (I) if there exists no Default or Event of
Default, on the date of any Asset Sale of any GCI Entity, the Borrower
shall repay the Obligations by an amount equal to 100% of the Net
Proceeds, applied to Advances outstanding under the Revolving Loan, and
(II) if there exists a Default or Event of Default, on the date of any
Asset Sale of any GCI Entity, the Borrower shall repay the Obligations by
an amount equal to 100% of the Net Proceeds, applied pro rata to Advances
outstanding under the Revolving Loan and Advances outstanding under the
Revolver/Term Loan. Any amounts repaying the Revolver/Term Loan on and
after the Conversion Date will be applied in the inverse order of maturity
and may not be reborrowed. On such date, the Borrower 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 ISSUANCES. (A) Prior to the Conversion Date, on the date of
any issuance of public or private Subordinated Debt by the Borrower (this
provision not permitting such Debt issuance), the Borrower shall repay the
Obligations by an amount equal to 100% of the net proceeds from such
issuance, applied pro rata to Advances outstanding under the Revolving
Loan and the Revolver/Term Loan, and (B) after the Conversion Date, (I) if
there exists no Default or Event of Default, on the date of any issuance
of any private or public Subordinated Debt by the Borrower, the Borrower
shall repay the Obligations by an amount equal to 100% of the net proceeds
of such Subordinated Debt issuance, applied to Advances outstanding under
the Revolving Loan, and (II) if there exists a Default or Event of Default
or if the Total Leverage Ratio is equal to or greater than 5.00 to 1.00,
on the date of any such issuance by the Borrower, the Borrower shall repay
the Obligations by an amount equal to 100% of the net proceeds of such
issuance, applied pro rata to Advances outstanding under the Revolving
Loan and Advances outstanding under the Revolver/Term Loan. Any amounts
repaying the Revolver/Term Loan on and after the Conversion Date will be
applied in the inverse order of maturity and may not be reborrowed. On
such date, the Borrower 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 of such Debt issuance.
(iii) EQUITY ISSUANCES. (A) Prior to the Conversion Date, on the date
of any issuance of equity by any GCI Entity, the Borrower shall repay the
Obligations by an amount equal to 50% of the net proceeds of such equity
issuances in excess of $50,000,000 in the aggregate over the term of this
Agreement, applied pro rata to Advances outstanding under the Revolving
Loan and the Revolver/Term Loan, and (B) after the Conversion Date, (I) if
33
there exists no Default or Event of Default, on the date of any
issuance of equity by any GCI Entity, the Borrower shall repay the
Obligations by an amount equal to 50% of the net proceeds of such
equity issuances in excess of $50,000,000 in the aggregate over the
term of this Agreement, applied to Advances outstanding under the
Revolving Loan, and (II) if there exists a Default or Event of
Default, on the date of any such equity issuance by any GCI Entity,
the Borrower shall repay the Obligations by an amount equal to 100%
of the net proceeds of such equity issuances, applied pro rata to
Advances outstanding under the Revolving Loan and Advances
outstanding under the Revolver/Term Loan. Any amounts repaying the
Revolver/Term Loan on and after the Conversion Date will be applied
in the inverse order of maturity and may not be reborrowed. On such
date, the Borrower 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 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 of such equity
issuance.
(iv) DISTRIBUTIONS FROM UNRESTRICTED SUBSIDIARIES. (A) Prior to
the Conversion Date, on the date of any receipt by the Borrower or
any Restricted Subsidiary of a distribution from any Unrestricted
Subsidiary, the Borrower shall repay the Obligations by an amount
equal to 100% of such distribution, applied pro rata to Advances
outstanding under the Revolving Loan and the Revolver/Term Loan, and
(B) after the Conversion Date, (I) if there exists no Default or
Event of Default, on the date of any receipt by the Borrower or any
Restricted Subsidiary of a distribution from any Unrestricted
Subsidiary, the Borrower shall repay the Obligations by an amount
equal to 100% of such distribution, applied to Advances outstanding
under the Revolving Loan, and (II) if there exists a Default or Event
of Default, on the date of any such receipt by the Borrower or any
Restricted Subsidiary of a distribution from any Unrestricted
Subsidiary, the Borrower shall repay the Obligations by an amount
equal to 100% of such distribution, applied pro rata to Advances
outstanding under the Revolving Loan and Advances outstanding under
the Revolver/Term Loan. Any amounts repaying the Revolver/Term Loan
on and after the Conversion Date will be applied in the inverse order
of maturity and may not be reborrowed. On such date, the Borrower
shall deliver to the Administrative Agent a certificate of an
Authorized Officer certifying as to the amount of (including the
calculation of) such repayment.
(v) CHANGE OF CONTROL. If a Change of Control occurs, the
Borrower shall repay Obligations in full.
(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 Facilities, SECOND to LIBOR Advances for which the date
of prepayment is the last day of the applicable Interest Period, if any,
outstanding under the Facilities
34
and THIRD to LIBOR Advances with the shortest remaining Interest Periods
outstanding under the Facilities.
2.06. MANDATORY REPAYMENT.
(a) REVOLVING LOAN. On the date of a reduction of the Revolving Commitment
pursuant to Section 2.04(b)(i)(A) 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 Revolving
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.
(b) REVOLVER/TERM LOAN INSTALLMENT REPAYMENTS. Commencing September 30,
2000, the aggregate outstanding Advances under the Revolver/Term Loan shall
be repaid by the Borrower in installments thereafter from time to time by the
Installment Percentage set forth below on such dates as are set forth below
of the aggregate Revolver/Term Advances outstanding on the Conversion Date:
Date of Reduction Installment Percentage
----------------- ----------------------
September 30, 2000 3.750%
December 31, 2000 3.750%
March 31, 2001 3.750%
June 30, 2001 3.750%
September 30, 2001 3.750%
December 31, 2001 3.750%
March 31, 2002 5.000%
June 30, 2002 5.000%
September 30, 2002 5.000%
December 31, 2002 5.000%
March 31, 2003 5.000%
June 30, 2003 5.000%
September 30, 2003 5.000%
December 31, 2003 5.000%
March 31, 2004 5.625%
June 30, 2004 5.625%
September 30, 2004 5.625%
December 31, 2004 5.625%
35
March 31, 2005 7.500%
June 30, 2005 7.500% and all remaining
outstanding Advances all other
Obligations shall be due
and payable in full
(c) FINAL MATURITY. The Borrower agrees that all Advances outstanding
under the Revolving Loan, all Advances outstanding under the Revolver/Term
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 Borrower 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,
as selected by the Borrower in accordance with the provisions of Section 2.02
hereof:
(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.
2.08. DEFAULT INTEREST. During the continuation of any Event of Default,
the Borrower 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 equal to
the lesser of the (a) the Highest Lawful Rate and (b) the Base Rate (whether
or not in effect) plus 2.00% per annum.
36
2.09. CONTINUATION AND CONVERSION ELECTIONS.
(a) The Borrower 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 Borrower 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, and whether such Advances are under the Revolving Loan or
the Revolver/Term Loan;
(iii) the nature of the proposed conversion or continuation; and
(iv) the duration of the applicable Interest Period.
37
(c) If, upon the expiration of any Interest Period applicable to LIBOR
Advances, the Borrower 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 Borrower 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 eight different Interest Periods.
2.10. FEES.
(a) Subject to Section 10.09 hereof, the Borrower 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
Revolving Unused Commitment, from the Closing Date through the Maturity Date,
at the rate of .375% 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 Borrower 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
Revolver/Term Unused Commitment, from the Closing Date through the Conversion
Date, at the rate of .125% 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 Conversion Date.
(c) Subject to Section 10.09 hereof, the Borrower 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 Borrower and the Administrative
Agent and NationsBanc Capital Markets, Inc., payable as set forth in that
certain Fee Letter executed among the Borrower, the Administrative Agent and
NationsBanc Capital Markets, Inc. in accordance with the terms of the Fee
Letter.
2.11. FUNDING LOSSES. If the Borrower 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 Borrower fails to prepay, borrower, convert, or continue any LIBOR
Advance after a notice of prepayment, borrowing, conversion or continuation
has been given (or is
38
deemed to have been given) to Administrative Agent, the Borrower shall pay to
each Lender on demand (subject to Section 10.09 hereof) any Consequential
Loss. The Borrower 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 Borrower 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
Administrative Agent
NationsBank Plaza
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
for further credit to the account of GCI Holdings, Inc. No later than the
end of each day when each payment hereunder is made, the Borrower shall
notify the Administrative Agent, telephone (▇▇▇) ▇▇▇-▇▇▇▇, 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
Borrower prior to the date on which any payment is due hereunder that the
Borrower 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 Borrower
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 Borrower 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 Borrower 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 Fees 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 Fees
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.
39
(d) Except as specifically set forth in Sections 2.04 and 2.05 hereof, so
long as there exists no Default or Event of Default all payments made by the
Borrower shall be applied as designated by the Borrower, and, if there exists
a Default or Event of Default, or if the Borrower fails to designate
application of payments, all payments made by the Borrower shall be applied
pro rata among the Revolving Loan and the Revolver/Term Loan.
Notwithstanding anything herein or in any Loan Paper to the contrary, any
payment made by the Borrower in excess of the Revolving Commitment, the
Revolver/Term Commitment or outstanding Advances under either the Revolving
Loan or the Revolver/Term Loan, shall be applied to outstanding amounts (or
to reduce the commitment) of any other outstanding Obligations.
(e) 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 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 Borrower shall pay to
such Lender such additional amount or amounts as will adequately compensate
such Lender for such reduction. Each Lender will notify the Borrower 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 Borrower of any such increased costs payable to such Lender under this
Section 2.13(a).
40
(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 Borrower 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 Borrower 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
Borrower 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 Borrower shall be
liable for the Consequential Loss arising pursuant to those actions.
(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 Borrower, (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 Borrower 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 Borrower
that such Lender has determined that the circumstances causing such
suspension no longer exist.
41
(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 Borrower 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 Borrower
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 Borrower,
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 Borrower of
such fact.
2.14. USE OF PROCEEDS. The proceeds of the Advances shall be available
(and the Borrower shall use such proceeds) to (a) refinance existing Funded
Debt of the Borrower, (b) fund Capital Expenditures of the Borrower and the
Restricted Subsidiaries permitted by the terms of this Agreement, (c)
contribute $50,000,000 to the capitalization of AULP and (d) 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 Borrower and the Restricted Subsidiaries and 100% of the
Capital Stock of the Guarantors (other than GCI) except the Parents, (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 Borrower, the
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Restricted Subsidiaries and the Guarantors (except GCI), and (iii) a Guaranty
of the Obligations executed by each Guarantor (collectively, together with
all other Properties or assets of the Borrower, the Restricted Subsidiaries
and other Persons securing the Obligations from time to time, the
"Collateral"). The Borrower 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 Co., 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 Borrower agrees that it will, and will cause
any other Person owning any interest in the Borrower 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 Borrower 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 Borrower or
other GCI Entity not already constituting Collateral. In that regard, the
Borrower 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
Borrower 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 Borrower and each other GCI Entity as reasonably requested by the
Administrative Agent from time to time.
2.16. INCREASE OF REVOLVING COMMITMENT. From the Closing Date through
June 30, 2000, the Borrower may increase the Revolving Commitment by up to an
additional $100,000,000 subject to the satisfaction of each of the following
conditions:
(a) there exists no Default or Event of Default both on the date of
notice of such election and on the date of consummation of such event,
(b) such amount is used exclusively to refinance all indebtedness (except
agreed to baskets) of GCI Transport Company and the other Unrestricted
Subsidiaries,
(c) the Borrower receives additional commitments from existing Lenders or
other creditors acceptable to the Managing Agents and the Borrower for the
increased amount in the Commitment(which increase shall be in each Lender's
sole discretion),
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(d) (i) the Borrower and each Subsidiary of the Borrower pledges 100%
of the Capital Stock of each Unrestricted Subsidiary pursuant to a pledge
agreement in form and substance substantially similar to the pledge agreement
executed on the Closing Date securing the Obligations, (ii) each such
Unrestricted Subsidiary shall become a Restricted Subsidiary under the Loan
Papers, (iii) each such Unrestricted Subsidiary executes a Guaranty of the
Obligations substantially similar to the Guaranty executed by the Restricted
Subsidiaries on the Closing Date and (iv) each such Unrestricted Subsidiary
executes a security agreement and deeds of trust, mortgages, collateral
assignments and all other collateral documents necessary or advisable to
grant a prior first perfected Lien on all tangible and intangible assets of
each such Unrestricted (now Restricted) Subsidiary, subject to Permitted
Liens,
(e) the Borrower has delivered prior to such consummation (i) pro forma
projections for the GCI Entities through the Maturity Date and (ii) a pro
forma compliance certificate, demonstrating compliance with all repayment,
prepayment and reduction of commitment terms hereof, and with each financial
covenant included in Section 7.01 hereof, in form and detail satisfactory to
the Managing Agents and the Majority Lenders in their reasonable judgment,
(f) On any date of proposed increase, 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, except to the extent expressly made only as of a
prior date,
(g) On any date of proposed increase, there shall have occurred no
material adverse change in the business, assets or financial condition of the
businesses of the Borrower (as operated by the Restricted Subsidiaries) since
December 31, 1996,
(h) On any date of proposed increase, the sum of (i) all Advances
outstanding under the Revolving Loan, plus (ii) the aggregate face amount of
all outstanding Letters of Credit, plus (iii) (without duplication) the sum
of the aggregate reimbursement obligations, shall not exceed the Revolving
Commitment,
(i) The proposed increase shall occur prior to June 30, 2000 and shall
not be in excess of the sum of $100,000,000, and
(j) The Administrative Agent and each Lender shall have received a
written request from the Borrower not less than 30 days prior to such
increase.
ARTICLE III. LETTERS OF CREDIT
3.01. ISSUANCE OF LETTERS OF CREDIT. The Borrower 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
Borrower's properly completed and duly executed Applications, and subject to
the terms of such
44
Applications and to the terms of this Agreement, the Administrative Agent
agrees to issue Letters of Credit on behalf of the Borrower 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 Borrower
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
Borrower 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 Borrower for such Letters of Credit shall
reduce the amount of Revolving 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 Revolving 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 Borrower in
respect of such Letters of Credit exceed its Specified Percentage of the
Revolving Commitment.
3.02. LETTERS OF CREDIT FEES. (a) In consideration for the issuance
(and any renewal) of each Letter of Credit, the Borrower 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 Borrower 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 1.00% 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 Borrower 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 Borrower 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 Borrower 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
45
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.
(b) The Borrower 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 Borrower 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 Borrower 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 Borrower 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 Borrower promptly after such
expiry and such payment in full.
(c) The obligations of the Borrower 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 Borrower and
until all other Obligations shall have been paid in full.
(d) The Borrower 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 Borrower 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 Borrower as set
forth in Section 3.04 hereof; PROVIDED, HOWEVER, that no such reimbursement
made by the Lenders shall discharge the Borrower's obligations to reimburse
Administrative Agent.
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(e) The Borrower 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 Borrower for any reason fails to indemnify
or pay Administrative 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 Borrower. 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 Borrower 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 Borrower and the Restricted
Subsidiaries or for the performance of any obligation of the Borrower.
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.
47
(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 Borrower or any Affiliate of the Borrower 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.
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
Credit Agreement shall be acceptable to the Lenders.
(b) The making of the Revolving Commitment and/or the Revolver/Term
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 of
the businesses of the Borrower (as operated by the Restricted Subsidiaries)
since December 31, 1996.
(d) All proceedings of the Borrower, 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 Borrower, 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, all guarantees, pledge
agreements, security agreements, mortgages, deeds of trust, collateral
assignments and other agreements granting any interest in any collateral.
48
(f) The Borrower shall have delivered to each Lender a Certificate,
dated the Closing Date, executed by an Authorized Officer on behalf of the
Borrower, GCII and each Restricted Subsidiary, 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, (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, (iv) that the
attached resolutions for each GCI Entity are the true, accurate and complete
resolutions authorizing the corporate restructuring, the incurrence and
performance of the Facilities and the Loan Papers, (v) that the attached
copies of certified articles of incorporation, or other articles of
organization, certificates of good standing, certificates of existence and
incumbency certificates for each GCI Entity are (A) not more than 30 days old
and certified by the appropriate secretary of state of other governmental
organization and (B) represent the true and accurate certificate for each
such entity and (vi) the attached copies of by-laws or other organizational
documents represent the true and accurate by-laws or other organizational
documents for each GCI Entity in effect on the Closing Date.
(g) Each Lender shall have received opinions of (i) ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇,
L.L.C. corporate counsel to the Borrower, 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 (A) to the valid and binding nature of the Loan
Papers, (B) to the enforceability of the Loan Papers, (C) to the power,
authorization and corporate matters of each such Person taken in connection
with the transactions contemplated by the Loan Papers, (D) 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
Borrower's, the Restricted Subsidiaries' or any other GCI Entities'
agreements, (E) regarding and the issuance and related opinions to the Senior
Notes, (F) the corporate restructuring in order to effectuate this Agreement
and the issuance of the Senior Notes, (G) regarding the equity issuance
required by Section 4.01(j) hereof, and (H) to such other matters as are
reasonably requested by Special Counsel, and (ii) such local counsel opinions
relating to the Collateral and such other matters as are requested by the
Administrative Agent and Special Counsel. Copies of all opinions delivered
in connection with the equity issuance required by Section 4.01(j) hereof,
the Senior Notes shall be delivered to the Administrative Agent together with
a reliance letter thereon.
(h) Each Lender shall have received an opinion of inhouse counsel to the
Borrower and to each other GCI Entity, dated as of the Closing Date,
acceptable to the Lenders and otherwise in form and substance satisfactory to
the Lenders and Special Counsel, with respect to this transaction and final
approval shall have been received from the FCC regarding any transfer of any
FCC license.
(i) GCII shall have (i) issued the Senior Notes in an amount not less
than $150,000,000, on terms and conditions, and subject to documentation,
satisfactory to the Administrative Agent and each Lender, and (ii)
downstreamed the net proceeds of the debt issuance described in (i) above to
the Borrower as equity.
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(j) ****[GCI shall have raised not less than $____ in equity on terms and
conditions acceptable to the Administrative Agent and the Lenders, and the
Borrower shall have (i) received not less than $_____ as an equity contribution
from such proceeds, on terms and conditions acceptable to the Administrative
Agent and each Lender, (ii) downstreamed the net proceeds of the equity issuance
described in (i) above to the Borrower as equity.]*** ****IF EQUITY WILL NOT BE
RAISED PRIOR TO EXECUTION OF THIS AGREEMENT, WE WILL DELETE THIS CONDITION
PRECEDENT AND CHANGE THE COVENANTS IN SECTION 7.01 TO REFLECT THE ALTERNATE
PROVISIONS IN THE COMMITMENT LETTER AND TERM SHEET****
(k) All Affiliate transactions among any of the Borrower, the Parents and
their Affiliates shall be pursuant to terms and conditions acceptable to the
Administrative Agent and the Lenders.
(l) No management agreement with any Person shall be in existence at the
Parents, the Borrower or any Restricted Subsidiaries, except the Prime
Management Agreement.
(m) All proceedings of the Parents, the Borrower and the Subsidiaries of
the Parents and the Borrower 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.
(n) All Obligations outstanding under the existing credit facility shall
have paid in full and released.
4.02. CONDITIONS PRECEDENT TO ALL ADVANCES AND LETTERS OF CREDIT. The
obligation of each Lender to make each Advance which constitutes an increase
(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));
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(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 Borrower
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 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, does not exceed the Revolving Commitment;
(vi) After giving effect to each such Advance, prior to the
Conversion Date, the sum of (A) the aggregate outstanding
Advances under the Revolver/Term Loan does not exceed the
Revolver/Term 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, including, without
limitation, a certificate from an Authorized Officer, in form and substance
satisfactory to the Administrative Lender, that the Advances are permitted to
incurred pursuant to the terms of the Indenture providing for the Senior
Notes.
ARTICLE V. REPRESENTATIONS AND WARRANTIES
The Borrower 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 Borrower 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
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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 Borrower, 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 Borrower,
any Restricted Subsidiary or any other GCI Entity. All Capital Stock is
validly issued and fully paid. The Borrower 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
Borrower and each other GCI Entity have duly authorized the execution,
delivery, and performance of the Loan Papers to be executed by the Borrower
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 Borrower 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 Borrower 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 Borrower or any other GCI Entity,
or any of their Properties is subject.
5.04. FINANCIAL STATEMENTS. The audited financial statements of the
Parents, and its Subsidiaries dated December 31, 1996 and delivered to
Administrative Agent, fairly present its financial position 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 GCI and its Subsidiaries 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, 1996, there has been no Material
Adverse Change. The Borrower and each other GCI Entity is Solvent. The
projections of the Borrower dated May 20, 1997 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 Parents, the Borrower and their Subsidiaries,
subject to the uncertainty and approximation inherent in any projections.
The Borrower's fiscal year ends on December 31.
52
5.05. LITIGATION. Shown on SCHEDULE 5.05 is all Litigation that is
pending and, to the Borrower's best knowledge, threatened against the
Borrower or any other GCI Entity, any of their Properties or assets on the
date hereof. There is no pending or, to the Borrower's best knowledge,
threatened Litigation against the Borrower, 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 Borrower 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 Borrower's intended use of the proceeds of each
Advance, not more than 25% of the value of the assets of the Borrower will be
"MARGIN STOCK" within the meaning of Regulation U. The Borrower 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 Borrower 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. None of the Borrower and its Restricted Subsidiaries, nor
any agent acting on their behalf, have taken or will knowingly take any
action which might cause this Agreement or any Loan Papers to violate any
regulation of the Board of Governors of the Federal Reserve System or to
violate the Securities Exchange Act of 1934, in each case as in effect now or
as the same may hereafter be in effect.
5.07. LICENSES, TITLE TO PROPERTIES, AND RELATED MATTERS. Except as
listed on SCHEDULE 5.07a hereto, the Borrower 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 Borrower is not, nor is any Subsidiary of the Borrower or
the Parents, 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 the best knowledge of the Borrower, 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 Borrower, 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
Borrower, threatened, any notice of any hearing, violation or material
complaint against the Borrower, the Parents or any of the Restricted
Subsidiaries
53
with respect to the operation of any portion of the Systems and the Borrower
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 Borrower 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 Parents, the Borrower or any Restricted
Subsidiary is affected by any strike, lock-out or other labor dispute. No
business or Properties of the Parents, the Borrower 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 Parents, the Borrower and each Subsidiary of the
Parents and the Borrower 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 Parents, the Borrower and each Subsidiary
of the Parents and the Borrower 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 Parents, the Borrower
or any Subsidiary of the Parents or the Borrower of any deficiency in any Tax
return.
5.10. ERISA. Each Plan of the Parents, the Borrower and each Subsidiary of
the Parents and the Borrower has satisfied the minimum funding standards
under all Laws applicable thereto, and no Plan has an accumulated funding
deficiency thereunder. The Borrower has not, and neither has the Parents, or
any Subsidiary of the Borrower or the Parents 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 Parents, the Borrower, or any
Subsidiary of the Parents or the Borrower has participated in any non-exempt
Prohibited Transaction with respect to any Plan or trust created thereunder.
None of the Borrower, the Parents or any Subsidiary of the Borrower and the
Parents, nor any ERISA Affiliate, has incurred any Withdrawal Liability to
any Multiemployer Plan that has not been satisfied. None of the Borrower,
the Parents or any Subsidiary of the Parents or the Borrower, nor any ERISA
Affiliate has
54
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 Borrower 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 Borrower 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 Borrower 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 Borrower
or any other GCI Entity, threatened, by any Tribunal or other entity with
respect to any alleged failure by the Borrower 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 Borrower 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 Borrower or any other GCI Entity. To the best knowledge of the Borrower
and each other GCI Entity, there are no material environmental liabilities of
the Borrower or any other GCI Entity, except as previously disclosed in
writing to the Lenders. To the best knowledge of the Borrower and each other
GCI Entity, there are no environmental liabilities of the Borrower or any
other GCI Entity which could reasonably be expected to cause a Material
Adverse Change. The Borrower has delivered to the Administrative Agent
copies of all environmental studies and reports conducted or received by the
Borrower or any other GCI Entity in connection with real Property. Such
studies cover all real Property, if any, owned in fee by the Borrower 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 Borrower 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
Borrower or any other GCI Entities are conducted, except in compliance with
Applicable Environmental Laws.
5.12. DISCLOSURE. Neither the Borrower 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 Borrower or any other GCI Entity that materially adversely affects any
of the Borrower's or any of the other GCI Entity's Properties or
55
business, or that could constitute a Material Adverse Change, and that has
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 Borrower with respect to the making of
the Revolving Commitment, the Revolver/Term Commitment or Advances hereunder
(other than to Administrative Agent, NationsBanc Capital Markets, Inc.,
Credit Lyonnais and TD hereunder), or the offering, issuance or sale of the
Capital Stock of the Borrower, except as set forth in SCHEDULE 5.14 hereof.
The Borrower 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 Borrower 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 Borrower or any other GCI Entity to the effect that (a) any process,
method, part or other material presently contemplated to be employed by the
Borrower or any other GCI Entity may or could reasonably be alleged to
infringe any patent, trademark, service-▇▇▇▇, 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 Borrower 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 Borrower or any other GCI
Entity to the effect that any material presently contemplated to be employed
by the Borrower 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
56
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.
ARTICLE VI. AFFIRMATIVE COVENANTS
So long as the Revolving Commitment, the Revolver/Term Commitment, any
Advance, any Letter of Credit or any portion of the Obligations is
outstanding, or the Borrower 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 Borrower shall, and
shall cause each the Parents and all Subsidiaries of the Borrower and the
Parents to, comply with all Applicable Laws, including without limitation
compliance with ERISA and all applicable federal and state securities Laws.
The Borrower 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, except those
disputes diligently contested in good faith by the Borrower and/or such GCI
Entity, and for which appropriate reserves have been established in
accordance with GAAP.
6.02. INSURANCE. The Borrower 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
Borrower 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 Borrower 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.
57
6.04. RECORDS AND BOOKS OF ACCOUNT; CHANGES IN GAAP. The Borrower shall,
and shall cause the Parents and each Subsidiary of the Parents and the
Borrower to, keep adequate records and books of account in conformity with
GAAP. The Borrower shall not, nor shall the Borrower permit the Parents or
any Subsidiary of the Borrower or the Parents 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 Borrower and
Lenders shall negotiate in good faith to make appropriate alterations to the
covenants set forth in Section 7.01 hereof, reflecting such change.
6.05. REPORTING REQUIREMENTS. The Borrower 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 Borrower's fiscal quarters, (i) consolidated and consolidating balance
sheets of the [Parents, the Borrower 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 [Parents, the Borrower 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
[Parents, the Borrower and their Subsidiaries, and each other GCI Entity],
(ii) for the [Parents, the Borrower 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
[Parents, the Borrower 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
[Parents, the Borrower 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 [Parents, the Borrower 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 [Parents, the Borrower and their Subsidiaries, and each
other GCI Entity], and (ii) for [the Parents, the Borrower and the Restricted
Subsidiaries], all information set forth in (i) above in a separate
presentation;
(c) Promptly upon receipt thereof, (i) copies of all material reports or
letters submitted to the Borrower, the Parents or any Subsidiary of the
Borrower or the Parents 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,
(ii) each financial
58
statement, report, notice or proxy statement sent by GCI, GCII, the Borrower
or any Restricted Subsidiary in writing to stockholders generally, (iii) each
regular or periodic report and any registration statement or prospectus (or
material written communication in respect of any thereof) filed by the
Parents, the Borrower or any Restricted Subsidiary with any securities
exchange, with the Securities and Exchange Commission or any successor
agency, and (iv) all press releases concerning material financial aspects of
the Parents, the Borrower or any Restricted Subsidiary;
(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 Borrower, the annual operating and
Capital Expenditure budgets of the Borrower and the Restricted Subsidiaries,
[and each other GCI Entity] for such fiscal year;
(f) Promptly upon knowledge by the Borrower or any other GCI Entity of
the occurrence of any Default or Event of Default, a notice from an
Authorized Officer, setting forth 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 Borrower or any other GCI Entity, notice of any
Litigation pending or threatened against the Borrower or any other GCI Entity
or Unrestricted Subsidiary 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 Borrower or
any other GCI Entity, notice of any actual or threatened loss or termination
of any material Authorization of the Borrower or any other GCI Entity or any
Unrestricted Subsidiary, 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 Borrower or any other GCI Entity or Unrestricted Subsidiary
(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;
59
(j) Within 30 days after renewal or issuance of any hazard, public
liability, business interruption, or other insurance policy maintained by the
Borrower or any other GCI Entity, a copy of the binder or insurance
certificate (showing Administrative Agent, on behalf of the Borrower or such
GCI Entity, as loss payee or additional insured, as appropriate);
(k) As soon as possible and in any event within 10 days after the Borrower
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;
(l) As soon as possible, and in any event within 10 days after receipt by
the Borrower or any other GCI Entity, a copy of (a) any notice or claim to
the effect that the Borrower or any other GCI Entity is or may be liable to
any Person as a result of the release by the Borrower, 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 Borrower or
any other GCI Entity, which could reasonably be expected to, in either case,
cause a Material Adverse Change;
(m) Promptly upon the filing thereof, copies of all material registration
statements and all annual, quarterly, monthly or other regular reports which
the Parents, the Borrower or any Subsidiary of the Parents or the Borrower or
any other GCI Entity or Unrestricted Subsidiary files with the FCC or the
Securities and Exchange Commission;
(n) Promptly upon request, such other information concerning the
condition or operations of the Borrower, any other GCI Entity, Unrestricted
Subsidiary 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 Borrower shall use such proceeds) to (a) refinance existing Funded
Debt of the Borrower and its Restricted Subsidiaries, (b) fund Capital
Expenditures of the Borrower and the Restricted Subsidiaries permitted by the
terms of this Agreement, (c) contribute $50,000,000 to the capitalization of
AULP and (d) use for general working capital purposes.
6.07. Maintenance of Existence and Assets. Except as provided by
Section 7.07 of this Agreement, the Borrower 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 Borrower or
such GCI Entity to do so, and all Authorizations necessary for the operation
of any of their businesses. The Borrower 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 Borrower will and will cause the Parents
and all Subsidiaries of the Parents and the Borrower to, promptly pay and
discharge all lawful Taxes imposed upon it or
60
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 BORROWER 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
CONNECTED WITH THE PAST, PRESENT OR FUTURE OPERATIONS OF THE PARENTS, THE
BORROWER, ANY SUBSIDIARY OF THE BORROWER OR THE PARENTS, ANY OTHER GCI
ENTITY, ANY AFFILIATE OR ANY PREDECESSORS IN INTEREST, OR THE PAST, PRESENT
OR FUTURE ENVIRONMENTAL CONDITION OF PROPERTY OF THE PARENTS, THE BORROWER,
ANY SUBSIDIARY OF THE BORROWER OR PARENTS, 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
BORROWER), 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 BORROWER 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 BORROWER
SHALL CONTRIBUTE TO THE AMOUNT PAID OR PAYABLE BY SUCH INDEMNITEE AS A RESULT
OF SUCH LOSS, CLAIM,
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DAMAGE OR LIABILITY IN SUCH PROPORTION AS IS APPROPRIATE TO REFLECT NOT ONLY
THE RELATIVE BENEFITS RECEIVED BY THE BORROWER AND THE HOLDERS OF THE CAPITAL
STOCK OF THE BORROWER ON THE ONE HAND AND SUCH INDEMNITEE ON THE OTHER HAND
BUT ALSO THE RELATIVE FAULT OF THE BORROWER 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 BORROWER 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 BORROWER, THE ADMINISTRATIVE AGENT, THE LENDERS AND ALL OTHER
INDEMNITEES. THE OBLIGATIONS OF THE BORROWER 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. By no later than 60 days after the Closing
Date, the Borrower will enter into an Interest Hedge Agreement on terms
acceptable to the Administrative Agent providing for interest rate protection
for not less than three years for 50% of Total Debt on such date. If
Borrower enters into an interest rate cap agreement, the interest rate
related thereto shall not exceed 2% per annum in excess of the then current
treasury rate for the applicable hedge period.
6.11. MANAGEMENT FEES PAID AND EARNED. The Borrower agrees that no
Management Fees will be paid by the Borrower, any Restricted Subsidiary or
any other GCI Entity to any Person at any time, except in accordance with the
terms of the Prime Management Agreement.
6.12. AUTHORIZATIONS AND MATERIAL AGREEMENTS. The Borrower shall, and
shall cause the Parents and the Restricted Subsidiaries to, obtain and comply
in all material respects with all FCC Licenses relating to any System. The
Borrower shall, and shall cause the Parents 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
Borrower 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.
6.13. FURTHER ASSURANCES. The Borrower 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 Borrower 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 Borrower shall cause each of
the Restricted Subsidiaries, other GCI Entities and Affiliates to comply with
each provision of this ARTICLE VI.
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ARTICLE VII. NEGATIVE COVENANTS
So long as the Revolving Commitment, the Revolver/Term Commitment, any
Advance, any Letter of Credit or any portion of the Obligations is
outstanding, or the Borrower or any other GCI Entity owes any other amount
hereunder or under any other Loan Paper:
7.01. FINANCIAL COVENANTS. The Borrower and the Restricted Subsidiaries
shall comply with the following covenants:
***WITH RESPECT TO THE ASTERICKED PROVISIONS BELOW, IF EQUITY IS NOT RAISED,
WE WILL SWITCH OUT THE COVENANTS TO THE ALTERNATE COVENANTS IN THE TERM
SHEET AND COMMITMENT LETTER***
(a) TOTAL LEVERAGE RATIO. At all times during the term hereof, the Total
Leverage Ratio shall not be greater during the following time periods than
the ratio set forth opposite such time periods:
TIME PERIOD MAXIMUM RATIO
----------- -------------
**[From the Closing Date through March 31, 1998 7.00 to 1.00
April 1, 1998 through March 31, 1999 6.50 to 1.00
April 1, 1999 through December 31, 1999 6.00 to 1.00
January 1, 2000 and thereafter 5.50 to 1.00]**
(b) SENIOR LEVERAGE RATIO. At all times during the term hereof, the Senior
Leverage Ratio shall not be greater during the following time periods than the
ratio set forth opposite such time periods:
TIME PERIOD MAXIMUM RATIO
----------- -------------
From the Closing Date through March 31, 1999 **[3.50 to 1.00
April 1, 1999 through December 31, 1999 3.00 to 1.00
January 1, 2000 through December 31, 2000 2.50 to 1.00
January 1, 2001 and thereafter 2.00 to 1.00]**
(c) INTEREST COVERAGE RATIO. At all times during the term hereof, the
Interest Coverage Ratio shall not be less during the following time periods
than the ratio set forth opposite such time periods:
TIME PERIOD MINIMUM RATIO
----------- -------------
From the Closing Date through December 31, 1998 **[1.50 to 1.00
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January 1, 1999 and thereafter 2.00 to 1.00]**
(d) PRO FORMA DEBT SERVICE COVERAGE RATIO. At all times during the term
hereof, the Pro Forma Debt Service Coverage Ratio shall not be less during the
following time periods than the ratio set forth opposite such time periods:
TIME PERIOD MINIMUM RATIO
----------- -------------
From the Closing Date and thereafter ***[1.25 to 1.00]***
(e) FIXED CHARGES COVERAGE RATIO. Commencing January 1, 2000, at all
times during the term hereof, the Fixed Charges Coverage Ratio shall not be
less during the following time periods than the ratio set forth opposite such
time periods:
TIME PERIOD MINIMUM RATIO
----------- -------------
From January 1, 2000 through March 31, 2003 **[1.00 to 1.00
April 1, 2003 and thereafter 1.05 to 1.00]**
(f) CAPITAL EXPENDITURES. Capital Expenditures paid or incurred by the
Borrower and the Restricted Subsidiaries shall not exceed, in the aggregate, the
following amounts during the following years, provided that, any unused portion
for any such year may be used during the following fiscal year only (but not
thereafter):
FISCAL YEAR MAXIMUM AMOUNT
----------- --------------
Partial year - Closing Date through 1997 **[$55,000,000
1998 $90,000,000
1999 $65,000,000
2000 and thereafter N/A]**
7.02. DEBT. The Borrower 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 under the Senior Notes and other Debt in existence on the
date hereof as shown on SCHEDULE 5.08a hereto, and renewals, extensions (but
not increases), and refinancings thereof on terms identical thereto, (c)
trade payables incurred and paid in the ordinary course of business, (d) Debt
permitted to be incurred under Contingent Liabilities described below, (e)
Debt between the Borrower and its Subsidiaries, and (f) so long as there
exists no Default or Event of Default in existence at the time incurred and
none is caused thereby, (i) $5,000,000 in Debt constituting Capital Leases
outstanding in the aggregate at any one time, and (ii) unsecured subordinated
Debt of the Borrower on terms and conditions acceptable to the Administrative
Agent
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and each Lender, subordinated to the Facilities pursuant to the subordination
language set forth on SCHEDULE 7.02 hereto.
7.03. CONTINGENT LIABILITIES. The Borrower 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 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 Borrower 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)(i) hereof. It is specifically acknowledged and agreed that
the Borrower shall not, and shall not permit any of the other GCI Entities
to, hereafter agree with any Person (other than Administrative Agent) not to
▇▇▇▇▇ ▇ ▇▇▇▇ on any of its assets.
7.05. DISPOSITIONS OF ASSETS. The Borrower shall not, and shall not
permit any of the other GCI Entities to, sell, lease, assign, or otherwise
dispose of any assets of the Borrower 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 $10,000,000, so long as any
amounts received by the Borrower and the Restricted Subsidiaries in the
aggregate over $10,000,000 in any fiscal year of the Borrower and its
Restricted Subsidiaries are immediately used to reduce the Revolving
Commitment and/or the Revolver/Term Commitment, as applicable, in accordance
with Section 2.04 hereof, and repay the outstanding Obligations in accordance
with the terms of Section 2.05 hereof, as applicable.
7.06. DISTRIBUTIONS AND RESTRICTED PAYMENTS. The Borrower shall not, and
shall not permit the Parents or any Restricted Subsidiary to, make any
Restricted Payments, other than any Restricted Payment in the form of a
Distribution made by any Restricted Subsidiary to any other Restricted
Subsidiary or to the Borrower, and (a) so long as (i) there exists no Default
or Event of Default both before and after giving effect to any such
Restricted Payment, (ii) the Total Leverage Ratio is less than 5.00 to 1.00
both before and after giving effect to any such Restricted Payment and (iii)
the date of such Restricted Payment is after September 30, 2000, Restricted
Payments made exclusively out of Excess Cash Flow up to a maximum amount of
the difference between $15,000,000 in the aggregate over the term of this
Agreement, minus the aggregate amount of Investments made in accordance with
the terms of Section 7.10(e) hereof over the term of this Agreement, (b) so
long as there exists no Default or Event of Default both before and after
giving effect to any such Restricted Payment, the Borrower may make
Restricted Payments in the form of Distributions to GCII in an amount not in
excess of scheduled cash interest payments required to be paid by GCII under
the Senior Notes, and GCII may make Restricted Payments in the form of (and
not in excess of) scheduled cash interest payments required to be paid by
GCII under the
65
Senior Notes, provided that, the Lenders agree that in no event shall the
opening phrase of this subsection (b) prohibit the payment of any such
Distribution by the Borrower or payment of interest by GCII on the Senior
Notes for more than 180 consecutive days in any fiscal year, unless there
exists an Event of Default under Section 8.01(a) hereof (whether by
acceleration or otherwise), (c) so long as there exists no Default or Event
of Default both before and after giving effect to the payment thereof,
payment of Management Fees and amounts due under the galaxy transponder
agreement, and (d) so long as there exists no Default or Event of Default
both before and after giving effect to any such Restricted Payment, the
Borrower may make Restricted Payments on Funded Debt incurred in accordance
with the terms of 7.02(d)(i) hereof.
7.07. MERGER; CONSOLIDATION. The Borrower shall not, and shall not permit
any of the other GCI Entities to, merge into or consolidate with any Person
except any Wholly-Owned Subsidiary other than the Borrower may merge or
consolidate with the Borrower or another Wholly-Owned Subsidiary, provided
that the Borrower or such Wholly-Owned Subsidiary is the surviving entity, as
the case may be.
7.08. BUSINESS. The Borrower shall not, and shall not permit any of the
other GCI Entities to, change the nature of its business as now conducted.
The Borrower shall not conduct any business except the ownership and
operation of its Systems.
7.09. TRANSACTIONS WITH AFFILIATES. The Borrower 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 Borrower 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 on the Closing Date constituting
a $50,000,000 capital contribution to AULP and other Investments existing on
the date hereof and contemplated by the terms of this Agreement, each as
shown on 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 $4,000,000 outstanding
at any one time, (d) Investments in accounts receivable arising in the
ordinary course of business, (e) so long as (i) there exists no Default or
Event of Default, both before and after giving effect to the making of such
Investments, (ii) the Total Leverage Ratio is less than 5.00 to 1.00 both
before and after giving effect to any such Investment and (iii) the date of
such Investment is after September 30, 2000, Investments made exclusively out
of Excess Cash Flow up to a maximum amount of the difference between
$15,000,000 in the aggregate over the term of this Agreement, minus the
aggregate amount of Restricted Payments made in accordance with the terms of
Section 7.06(a) hereof over the term of this Agreement, and (f) loans,
advances, extensions of credit or capital contributions to, or among,
Wholly-Owned Subsidiaries.
66
7.11. FISCAL YEAR AND ACCOUNTING METHOD. The Borrower 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. Except in connection with the transactions consummated
on or prior to the Closing Date, and except as permitted in Section 7.07
hereof, the Borrower 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. The Borrower
shall not amend its articles of organization or bylaws and the Borrower 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 Borrower may make (i) changes
to comply with applicable Law and (ii) changes immaterial in nature.
7.13. CHANGE OF OWNERSHIP. The Borrower shall not, and shall not permit
any other GCI Entity to, permit any change in the ownership of the Borrower
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 Borrower 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 Borrower shall not, and shall not permit
the Parents or any Subsidiary of the Borrower and the Parents 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
Borrower, the Parents or any Subsidiary of the Borrower or the Parents, 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 Parents, the
Borrower or any Subsidiary of the Parents or the Borrower, 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 Borrower, the Parents, or any Subsidiary of the Parents or the Borrower,
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 Parents, the Borrower or any Subsidiary of the Parents or the
Borrower, 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 Parents, the Borrower or any Subsidiary of the Parents or
the Borrower, 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
67
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 Borrower 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 Borrower shall not
permit any of its Restricted Subsidiaries or any other GCI Entity to violate
any provision of this Article VII. u 7.18. Amendments to Material
Agreements. The Borrower shall not, nor shall the Borrower 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 Borrower 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 Borrower and ▇▇▇▇▇▇ Communications Galaxy,
Inc., (c) that certain Transponder Service Agreement, dated August 24, 1995,
among [General Communication Corp.] and ▇▇▇▇▇▇ Communications Satellite
Services, Inc., (d) the Senior Notes and all documentation and agreements
relating to the Senior Notes, other changes that result in a decrease in
interest rate, extension of maturity, or deletion of covenants or obligations
to repay, (e) the Prime Management Agreement, or (f) all documentation
related to any Funded Debt of any GCI Entity.
7.19. LIMITATION ON RESTRICTIVE AGREEMENTS. The Borrower shall not, and
shall not permit the Parents or any Restricted Subsidiary to, other than in
connection with the Senior Notes, enter into any indenture, agreement,
instrument, financing document or other arrangement which, directly or
indirectly, prohibits or restrains, or has the effect of prohibiting or
restraining, or imposes materially adverse conditions upon: (a) the
incurrence of Debt, (b) the granting of Liens, (c) the making or granting of
Guarantees, (d) the payment of dividends or Distributions, (e) the purchase,
redemption or retirement of any Capital Stock, (f) the making of loans or
advances, (g) transfers or sales of property or assets (including Capital
Stock) by the Parents, the Borrower or any of the Restricted Subsidiaries,
(h) the making of Investments or acquisitions, or (h) any change of control
or management.
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:
68
(a) The Borrower 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;
(b) Any representation or warranty made or deemed made by the Borrower 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 Borrower 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 Parents, the Borrower 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 Borrower 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 Parents, the
Borrower 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 Parents, the
Borrower or any Subsidiary of the Parents or the Borrower 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 Parents, the Borrower or any
Subsidiary of the Parents or the Borrower 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 Parents, the Borrower or any Subsidiary of the Parents
or the Borrower 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 Parents, the Borrower or
any Subsidiary of the Parents or the Borrower, or an order, judgment or
decree shall be entered appointing any such trustee, receiver, or liquidator,
or approving the petition in any such proceedings and such petition,
application or proceedings shall continue undismissed for 30 days or such
order, judgment or decred shall continue unstayed and in effect for 30 days;
(iv) any final order, judgment, or decree shall be entered in any proceedings
against any of the Parents, the Borrower or
69
any Subsidiary of the Parents or the Borrower decreeing its dissolution; (v)
any final order, judgment, or decree shall be entered in any proceedings
against any of the Parents, the Borrower, or any Subsidiary of the Parents or
the Borrower decreeing its split-up which requires the divestiture of a
substantial part of its assets; or (vi) any of the Parents, the Borrower or
any Subsidiary of the Parents or the Borrower 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 Parents, the Borrower or any Subsidiary of the Parents
or the Borrower under any Debtor Relief Law, whether now or hereafter in
effect;
(h) Any GCI Entity shall fail to pay any Debt or Contingent Liability of
$1,000,000 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 $1,000,000 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 Parents, the Borrower 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 Parents,
the Borrower or any Restricted Subsidiary lacks the basic qualifications to
own or operate
70
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 Parents, the Borrower or any Restricted
Subsidiary to perform its obligations under the Loan Papers to which it is a
party);
(k) Any of the Parents, the Borrower, or any Subsidiary of the Parents or
the Borrower, or any ERISA Affiliate, shall have committed a failure
described in Section 302(f)(l) of ERISA, and the amount determined under
Section 302(f)(3) of ERISA is equal to or greater than $1,000,000;
(l) The Parents, the Borrower, any Subsidiary of the Parents or the
Borrower, 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 $1,000,000;
(m) The Borrower 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 $1,000,000 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 Co., 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 $1,000,000;
(p) The occurrence of any Change of Control; or (i) two or more of the
following three senior executive managers of the Borrower shall not be
employees of the Borrower for 60 consecutive days: ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇
or ▇▇▇▇▇▇ ▇▇▇▇▇▇ and (ii) the Borrower shall have not
71
replaced such senior executive managers with new employees acceptable to the
Majority Lenders, such consent not to be unreasonably withheld;
(q) At any time, less than 100% of the Capital Stock of the Borrower,
the Restricted Subsidiaries and the Guarantors (except the Capital Stock
of GCI 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 Co., Inc.]***; ***[at any time, less than 100%
of the Capital Stock of GCI Leasing Co., 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 Borrower 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 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 Borrower or any other GCI Entity to divest a significant
portion of its assets or the Capital Stock of any GCI Entity or the Borrower,
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 Borrower or any other GCI Entity which, together with all other such
Property of the Borrower and the other GCI Entities subject to other such
process, exceeds in value $1,000,000 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
72
of applicable jurisdiction resulting in a judgment against such GCI
Entity in excess of $1,000,000; or any criminal action or proceeding
shall be commenced against any GCI Entity under any federal or state
racketeering statute (including, without limitation, RICO); and
(t) There shall exist any breach or default under any documentation
relating to the Senior Notes.
8.02. REMEDIES UPON DEFAULT. If an Event of Default described in Section
8.01(g) hereof shall occur with respect to the Parents, the Borrower or any
Subsidiary of the Parents or the Borrower, the Revolving Commitment and the
Revolver/Term 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 Borrower 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 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 Revolving Commitment and/or the Letter of Credit
Commitment and/or the Revolver/Term Commitment;
(c) Reduce any claim of Administrative Agent and Lenders to judgment;
(d) Demand (and the Borrower 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 Borrower
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
73
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 Borrower 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 2.0% and (b) the Highest
Lawful Rate, from the date spent until the date of repayment by the Borrower.
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
74
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 Borrower 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 Borrower 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 Borrower 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 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 Revolving Commitment, its Revolver/Term Commitment, its
Advances, its Specified Percentage of the Revolver/Term Loan 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 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.
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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 Borrower, 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 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.
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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
Borrower 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 Revolving
Commitment (except in accordance with the provisions of Section 2.16 hereof),
increase the Revolver/Term 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 Borrower 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:
If to the Borrower:
GCI Holdings, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇
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Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
With a Copy to:
Attention:
Telephone No.:
Facsimile No.:
If to Administrative Agent:
NationsBank of Texas, N.A.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Vice President
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
With a Copy to:
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, P.C.
3400 Renaissance Tower
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
(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.
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".
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(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 Borrower 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 $3,000 processing fee to Administrative Agent, and (iv) no such
assignment is for an amount less than $10,000,000. 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 Borrower 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 Revolving Commitment
and the Revolver/Term 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.
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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 $10,000,000.
(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 Borrower, 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 Borrower
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 Borrower 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 Borrower against any and
all of the obligations of the Borrower 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 Borrower after any such set-off and application, provided
that the failure to give such notice shall not
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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.
10.07. COSTS, EXPENSES, AND TAXES.
(a) The Borrower 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 Borrower 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 Borrower 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
Borrower 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 Borrower
shall make such deductions or withholdings, and (iii) the Borrower 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 Borrower hereunder, the agreements and obligations of
the Borrower contained in this Section 10.07 shall survive the execution of
this Agreement, termination of the Revolving Commitment, the Revolver/Term
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 BORROWER. The Borrower 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,
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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 Borrower, 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 the extent of
any losses or damages which the Borrower 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 Borrower 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 Borrower 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 Borrower
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.
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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.
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
BORROWER 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 BORROWER 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 BORROWER HEREBY WAIVES PERSONAL SERVICE OF ANY LEGAL PROCESS UPON
IT. THE BORROWER AGREES THAT SERVICE OF PROCESS MAY BE MADE UPON IT BY
REGISTERED MAIL (RETURN RECEIPT REQUESTED) DIRECTED TO THE BORROWER 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.
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REMAINDER OF PAGE LEFT BLANK INTENTIONALLY
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IN WITNESS WHEREOF, this Credit Agreement is executed as of the date first
set forth above.
THE BORROWER:
GCI HOLDINGS, INC.
----------------------------------------
By: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Its: Senior Vice President and Chief
Financial Officer
ADMINISTRATIVE AGENT:
NATIONSBANK OF TEXAS, N.A., as
Administrative Agent
----------------------------------------
By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Its: Vice President
DOCUMENTATION AGENT:
CREDIT LYONNAIS NEW YORK BRANCH, as
Documentation Agent
----------------------------------------
By:
------------------------------------
Its:
------------------------------------
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SYNDICATION AGENT:
TORONTO DOMINION (USA), INC., as
Syndication Agent
----------------------------------------
By:
------------------------------------
Its:
------------------------------------
LENDERS:
Specified Percentage: NATIONSBANK OF TEXAS, N.A., Individually,
% as a Lender
Address:
▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ ----------------------------------------
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Its: Vice President
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Specified Percentage: CREDIT LYONNAIS NEW YORK BRANCH,
Individually as a Lender
Address:
----------------------------------------
By:
------------------------------------
Its:
------------------------------------
Attn:
Phone:
Facs:
▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (▇▇▇), INC.,
Individually as a Lender
Address:
----------------------------------------
By:
------------------------------------
Its:
------------------------------------
Attn:
Phone:
Facs:
Specified Percentage:
----------------------------------------
Individually as a Lender
Address:
----------------------------------------
By:
------------------------------------
Its:
------------------------------------
Attn:
Phone:
Facs:
87