THIRD AMENDMENT TO $200,000,000 AMENDED
AND RESTATED CREDIT AGREEMENT
THIRD AMENDMENT TO $200,000,000 AMENDED AND RESTATED CREDIT AGREEMENT
(this "Amendment") is dated as of the 13th day of April, 1999 and entered into
among GCI HOLDINGS, INC., an Alaskan corporation (herein, together with its
successors and assigns, called the "Borrower"), the Lenders (as defined in the
Credit Agreement as defined below), NATIONSBANK, N.A., dba Bank of America,
National Association, a national banking association, as Administrative Agent
for itself and the Lenders (the "Administrative Agent"), CREDIT LYONNAIS NEW
YORK BRANCH, as Documentation Agent and TD SECURITIES (USA), INC. as Syndication
Agent.
WITNESSETH:
WHEREAS, the Borrower, the Lenders and the Administrative Agent entered
into a $200,000,000 Amended and Restated Credit Agreement, dated November 14,
1997, as amended by that certain Consent and First Amendment, dated January 27,
1998 and by that certain Second Amendment to Amended and Restated Credit
Agreement dated as of July 3, 1998 (as amended and as further amended, restated
or otherwise modified from time to time, the "Credit Agreement") and a
$50,000,000 Amended and Restated Credit Agreement, dated as of November 14, 1997
(as amended by that certain Consent and First Amendment, dated January 27, 1998
and that certain Second Amendment to Amended and Restated Credit Agreement dated
as of July 3, 1998 and as further amended, restated or otherwise modified from
time to time, the "Revolver/Term Credit Agreement");
WHEREAS, the Borrower has requested that, among other things, certain
financial covenants of the Credit Agreement be amended;
WHEREAS, the Lenders, the Administrative Agent and the Borrower have
agreed to modify the Credit Agreement upon the terms and conditions set forth
below;
NOW, THEREFORE, for valuable consideration hereby acknowledged, the
Borrower, the Lenders and the Administrative Agent agree as follows:
SECTION 1. Definitions.
(a) In General. Unless specifically defined or redefined below,
capitalized terms used herein shall have the meanings ascribed thereto in the
Credit Agreement.
(b) Definition of Applicable Margin . The definition of "Applicable
Margin" in Article I of the Credit Agreement is amended and restated in its
entirety as follows:
"Applicable Margin" means (i) with respect to the Base Rate Advances
under the Facility, 1.375% per annum and (ii) with respect to LIBOR Advances
under the Facility, 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
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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 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
if the Total Leverage Ratio shall at any time be greater than or equal to 6.50
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.
Column A Column B
Total Leverage Ratio Base Rate LIBOR
-------------------- --------- -----
Greater than or equal to
6.50 to 1.00 1.375% 2.500%
Greater than or equal to
6.00 to 1.00 but less than
6.50 to 1.00 1.000% 2.125%
Greater than or equal to
5.50 to 1.00 but less than
6.00 to 1.00 0.750% 1.875%
Greater than or equal to
5.00 to 1.00 but less than
5.50 to 1.00 0.500% 1.625%
Greater than or equal to
4.50 to 1.00 but less than
5.00 to 1.00 0.250% 1.375%
Greater than or equal to
4.00 to 1.00 but less than
4.50 to 1.00 0.000% 1.250%
Less than 0.000% 1.000%
4.00 to 1.00
(c) Definition of Operating Cash Flow. The definition of "Operating
Cash Flow" in Article I of the Credit Agreement is amended and restated in its
entirety as follows:
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"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, (d) cash
income tax expense for the Borrower and Restricted Subsidiaries, (e)
deferred income Taxes for the Borrower and Restricted Subsidiaries,
plus (f) for the fiscal quarter in which the Borrower purchases the
transponders pursuant to that certain Transponder Purchase Agreement
for Galaxy X, dated August 24, 1995, among GCI Communication Corp. and
Xxxxxx Communications Galaxy, Inc., now held by PanAmSat Corp., as
assignee, and that certain Transponder Service Agreement, dated August
24, 1995, among General Communication Corp. and Xxxxxx Communications
Satellite Services, Inc. (the "Galaxy X Transponders"), now held by
PanAmSat Corp., as assignee, the annualized amount of economic savings
of the Borrower resulting from the Borrower's direct purchase of such
Galaxy X Transponders instead of leasing such Galaxy X Transponders
from GCI Satellite Co., Inc. and leasing transponders from other
providers; provided, the calculation is made after giving effect to
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. In calculating AOperating
Cash Flow@ for determination of compliance with financial covenants
beginning with the fiscal quarter ending March 31, 1999, losses from
local telephone businesses shall be offset by amounts not exceeding
$20,000,000 contributed to the Borrower from the net proceeds of any
offering of preferred stock issued by GCI. The amount attributable to
such net proceeds which is available for such offset shall be reduced
by the amount of net proceeds actually used for such offset in
determining compliance with financial covenants as permitted in the
immediately preceding sentence.
SECTION 2. Amendment to Section 2.10(a). Section 2.10(a) in Article II
of the Credit Agreement is amended and restated in its entirety to read as
follows:
(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 .500% 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.
SECTION 3. Amendment to Section 7.01(a). Section 7.01(a) in Article VII
of the Credit Agreement is amended and restated in its entirety to read as
follows:
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(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 June 30, 1999 7.00 to 1.00
July 1, 1999 through
March 31, 2000 6.25 to 1.00
April 1, 2000 and thereafter 5.50 to 1.00
SECTION 4. Amendment to Section 7.01(c). Section 7.01(c) in Article VII
of the Credit Agreement is amended and restated in its entirety as follows:
(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 September 30, 1999 1.50 to 1.00
October 1, 1999 through March 31, 2000 1.75 to 1.00
April 1, 2000 and thereafter 2.00 to 1.00
SECTION 5. Amendment to Section 7.01(f). Section 7.01(f) in Article VII
of the Credit Agreement is amended and restated in its entirety as follows:
(f) Capital Expenditures. Capital Expenditures (not including
any Galaxy X Transponder (as defined in the definition of Operating
Cash Flow) purchases) 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
----------- --------------
1998 $90,000,000
1999 $35,000,000
2000 $35,000,000
2001 and thereafter Not Applicable
In addition, Capital Expenditures for the purpose of purchasing
satellite transponders may be made, provided no Default or Event of Default
exists or would result therefrom in the aggregate amount throughout the term of
this Agreement of $45,000,000 (excluding the Galaxy X Transponder down payment
of $9,100,000).
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SECTION 6. Amendment to Section 8.01. Section 8.01 in Article VIII of
the Credit Agreement is amended by deleting the "or" before subparagraph (x),
deleting the period at the end of subparagraph (x) and substituting ", or"
instead, and adding the following subparagraph (y):
(y) the Borrower shall not have received $20,000,000 in proceeds of
preferred stock offering of GCI (the terms of which shall provide for payment in
kind dividends for three years from the date of issuance and cash payments
thereafter, so long as the Total Leverage Ratio is less than 5.00 to 1.00 and no
Default or Event of Default exists or would result therefrom) by May 31, 1999.
SECTION 7. Conditions Precedent. This Third Amendment shall not be
effective until the Administrative Agent shall have determined in its sole
discretion that all proceedings of the Borrower taken in connection with this
Third Amendment and the transactions contemplated hereby shall be satisfactory
in form and substance to the Administrative Agent and the Borrower has satisfied
the following conditions:
(a) the Borrower shall have delivered to the Administrative
Agent a loan certificate of the Borrower certifying (i) as to the
accuracy of its representations and warranties set forth in Article V
of the Credit Agreement, as amended by this Third Amendment and the
other Loan Papers, (ii) that there exists no Default or Event of
Default, and the execution, delivery and performance of this Third
Amendment will not cause a Default or Event of Default, (iii) as to
resolutions authorizing the Borrower to execute, deliver and perform
this Third Amendment and all Loan Papers and other documents and
instruments delivered or executed in connection with this Third
Amendment, (iv) that it has complied with all agreements and conditions
to be complied with by it under the Credit Agreement, the other Loan
Papers and this Third Amendment by the date hereof and (v) that it has
received all consents, amendments and waivers from all Persons
necessary or required, if any, to (A) enter into this Amendment or (B)
effectuate the amendments set forth above, including, without
limitation, under the Indenture and related documentation and under the
AUSP Credit Agreement and related documentation;
(b) the Borrower shall have delivered to the Administrative
Agent and Lenders legal opinions from counsel to the Borrower and its
Restricted Subsidiaries regarding this Third Amendment and such other
matters as reasonably requested by Special Counsel, including, without
limitation, opinions regarding the waivers, consents and amendments in
connection with the Indenture and AUSP Credit Agreement, and the
related agreements;
(c) the Borrower shall have received a firm commitment for at
least $20,000,000 in proceeds from the preferred stock offering by GCI;
(d) the Borrower shall have delivered such other documents,
instruments, and certificates, in form and substance satisfactory to
the Administrative Agent, as the Administrative Agent shall deem
necessary or appropriate in connection with this Third Amendment and
the transactions contemplated hereby;
(e) the Revolving Commitment shall permanently reduce to
$150,000,000; and
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(f) the Borrower shall have paid all fees and expenses of the
Administrative Agent and the Lenders, including without limitation,
payment of an amendment fee, subject to 10.08 of the Credit Agreement,
to each Lender (to the extent it executes and delivers this Third
Amendment by April 16, 1999) of .25% of its Specified Percentage of the
aggregate amount of Revolving Commitment and Revolver\Term Commitment.
SECTION 8. Representations and Warranties. The Borrower represents and
warrants to the Lenders and the Administrative Agent that (a) this Third
Amendment constitutes its legal, valid, and binding obligation, enforceable in
accordance with the terms hereof (subject as to enforcement of remedies to any
applicable bankruptcy, reorganization, moratorium, or other laws or principles
of equity affecting the enforcement of creditors' rights generally), (b) there
exists no Default or Event of Default under the Credit Agreement, (c) its
representations and warranties set forth in the Credit Agreement and other Loan
Papers are true and correct on the date hereof, (d) it has complied with all
agreements and conditions to be complied with by it under the Credit Agreement
and the other Loan Papers by the date hereof, and (e) the Credit Agreement, as
amended hereby, and the other Loan Papers remain in full force and effect.
SECTION 9. Entire Agreement; Ratification. THE CREDIT AGREEMENT AND THE
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.
EXCEPT AS MODIFIED OR SUPPLEMENTED HEREBY, THE CREDIT AGREEMENT, THE OTHER LOAN
PAPERS AND ALL OTHER DOCUMENTS AND AGREEMENTS EXECUTED IN CONNECTION THEREWITH
SHALL CONTINUE IN FULL FORCE AND EFFECT.
SECTION 10. Counterparts. This Third Amendment may be executed in any
number of counterparts, all of which taken together shall constitute one and the
same instrument. In making proof hereof, it shall not be necessary to produce or
account for any counterpart other than one signed by the party against which
enforcement is sought.
SECTION 11. GOVERNING LAW. THIS THIRD AMENDMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE OF
TEXAS, BUT GIVING EFFECT TO FEDERAL LAWS.
SECTION 12. CONSENT TO JURISDICTION. THE BORROWER HEREBY IRREVOCABLY
SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR TEXAS
STATE COURT SITTING IN DALLAS IN ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO ANY LOAN PAPERS AND THE BORROWER IRREVOCABLY AGREES THAT ALL CLAIMS
IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH
COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO
THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT
SUCH COURT IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE
ADMINISTRATIVE AGENT OR ANY LENDER TO BRING PROCEEDINGS AGAINST THE BORROWER IN
THE COURTS OF ANY OTHER JURISDICTION. ANY JUDICIAL PROCEEDING BY THE BORROWER
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AGAINST THE ADMINISTRATIVE AGENT OR ANY LENDER OR ANY AFFILIATE OF THE
ADMINISTRATIVE AGENT OR ANY LENDER INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER
IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN PAPER SHALL BE
BROUGHT ONLY IN A COURT IN DALLAS, TEXAS.
SECTION 13. WAIVER OF JURY TRIAL. THE BORROWER, THE ADMINISTRATIVE
AGENT AND EACH LENDER HEREBY WAIVES TRIAL BY JURY IN ANY JUDICIAL PROCEEDING
INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT,
CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH
ANY LOAN PAPER OR THE RELATIONSHIP ESTABLISHED THEREUNDER.
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THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.
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IN WITNESS WHEREOF, this Third Amendment to Amended and Restated Credit
Agreement is executed as of the date first set forth above.
GCI HOLDINGS, INC.
By:
Its:
NATIONSBANK, N.A., dba Bank of America,
National Association, Individually as a
Lender and as Administrative Agent
By:
Its:
CREDIT LYONNAIS NEW YORK BRANCH, as
Documentation Agent and Individually as a
Lender
By:
Its:
TD SECURITIES (USA), INC., as Syndication
Agent
By:
Its:
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TORONTO DOMINION (TEXAS), INC.,
Individually as a Lender
By:
Its:
COBANK, ACB, Individually as a Lender
By:
Its:
By:
Its:
BANQUE PARIBAS, Individually as a Lender
By:
Its:
By:
Its:
GENERAL ELECTRIC CAPITAL CORPORATION,
Individually as a Lender
By:
Its:
THE LONG-TERM CREDIT BANK OF JAPAN, LTD.,
LOS ANGELES AGENCY, Individually as a
Lender
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By:
Its:
UNION BANK OF CALIFORNIA, N.A.,
Individually as a Lender
By:
Its:
BANK OF HAWAII, Individually as a Lender
By:
Its:
THE BANK OF NEW YORK, Individually as a
Lender
By:
Its:
BANQUE NATIONALE DE PARIS, Individually
as a Lender
By:
Its:
By:
Its:
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CITY NATIONAL BANK, Individually as a
Lender
By:
Its:
FIRST NATIONAL BANK OF MARYLAND,
Individually as a Lender
By:
Its:
FLEET NATIONAL BANK, Individually as a
Lender
By:
Its:
THE FUJI BANK, LIMITED, LOS ANGELES
AGENCY, Individually as a Lender
By:
Its:
THE SUMITOMO BANK, LIMITED, Individually
as a Lender
By:
Its:
-00-
XXXXXXXX XXXX XX XXXXXX, Individually as
a Lender
By:
Its:
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