GLIBK 8-K
Liberty Capital Corp/NV (GLIBA)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
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Item 1.01. Entry into a Material Definitive Agreement.
On April 21, 2026, GCI Holdings, LLC, a Delaware limited liability company (“GCI”) and a wholly owned subsidiary of GCI Liberty, Inc., a Nevada corporation (“GCI Liberty”), agreed, subject to certain conditions, to acquire all of the issued and outstanding equity interests in Q Gateway Intermediate Holdings, LLC, a Delaware limited liability company (“Quintillion”). The acquisition of Quintillion (the “Transaction”) is being effected by GCI and GCI Liberty entering into a Securities Purchase Agreement (the “Purchase Agreement”) with Q Gateway Ultimate Holdings, LLC, a Delaware limited liability company (“Seller”).
The terms of the Purchase Agreement and certain other agreements to be entered into in connection with the Transaction are summarized below.
Purchase Agreement
Consideration. Pursuant to the Purchase Agreement, and subject to the terms thereof, GCI will acquire all of the equity interests in Quintillion in exchange for the following consideration payable to Seller: (a) $310 million in cash payable on the closing of the Transaction (the “Closing,” and the date upon which the Closing occurs, the “Closing Date”), subject to adjustment for working capital, cash, indebtedness, transaction expenses and certain capital expenditures; (b) within 30 days following the Closing Date, reimbursement of up to $50 million for certain capital expenditures incurred by Quintillion prior to Closing in connection with the construction of the Nome-to-Homer Express project; and (c) potential earn-out payments based on the amount by which certain gross revenues of Quintillion exceed agreed thresholds in respect of the 2027, 2028 and 2030 calendar years, payable (if at all) in 2028, 2029 and 2031, respectively (collectively, the “Earnout Payments”).
Pursuant to the Purchase Agreement, GCI, in its sole discretion, may determine to satisfy its obligation to make the Earnout Payment in respect of the 2030 calendar year, in whole or in part, through the issuance of Series C GCI Group Common Stock, par value $0.01 per share, of GCI Liberty (“Earnout Consideration Stock”), subject to the terms set forth in the Purchase Agreement. The value of any Earnout Consideration Stock to be issued in satisfaction of the final Earnout Payment would be determined based upon the volume weighted average sales price per share of Earnout Consideration Stock during the ten trading days after the filing with the Securities and Exchange Commission (“SEC”) of GCI Liberty’s Annual Report on Form 10-K for the year ending December 31, 2030.
Closing Conditions. In addition to customary conditions, the Closing is subject to the following conditions: (a) expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended; (b) the receipt of certain consents and approvals from the Federal Communications Commission; (c) Quintillion’s fiber network being operational with no fiber outages that are not capable of being remedied (so as to not be service-impacting) within 48 hours of such outage first occurring; (d) the completion of the construction of the terrestrial fiber network between Quintillion’s network on the North Slope of Alaska and Utqiagvik, Alaska, the achievement of such terrestrial fiber network being ready for service so as to enable the transmission of third-party data connectivity services on such network on a commercial basis; and (e) there being no law or order prohibiting the consummation of the Transaction.
Termination. In addition to certain other termination provisions, the Purchase Agreement provides that the Purchase Agreement may be terminated by either GCI or Seller if the Closing has not occurred within 18 months after the effective date of the Purchase Agreement (such date, the “End Date”). Subject to certain exceptions, if the Purchase Agreement is terminated as a result of either (a) the failure to effect the Closing by the End Date or (b) a law or order prohibiting the consummation of the Transaction, and at such time Seller is not in breach of its regulatory efforts obligations and the conditions specific to GCI’s obligations to close have all been, or are capable of being satisfied, then GCI would be required pay to Seller a fee equal to $10 million.
Representations and Warranties. The Purchase Agreement contains customary representations and warranties made by each of the parties. GCI has obtained on a conditional basis a representation and warranty insurance policy, under which the issuer of such policy will insure GCI and its affiliates against certain claims, damages or other losses arising from breaches by Seller of its representations and warranties in the Purchase Agreement, subject to certain limitations and exclusions and other customary terms and conditions therein.
Covenants. Pursuant to the terms of the Purchase Agreement, during the period between entry into the Purchase Agreement and the Closing Date, Seller has agreed, among other things, except with the consent of GCI (not to be unreasonably withheld or delayed), to operate Quintillion’s business in the ordinary course, to use its reasonable best efforts to follow its capital expenditure schedule and to refrain from taking other specified actions. Each of GCI and Seller have agreed to use their reasonable best efforts to take, agree to take, or cause to be taken, any and all actions and to do, or cause to be done, any and all things necessary, proper or advisable under any applicable law or otherwise, so as to, as promptly as practicable, consummate the transactions contemplated by this Agreement.
Registration Rights. In connection with the Closing, GCI Liberty and Seller will enter into a registration rights agreement, pursuant to which GCI Liberty will agree to file with the SEC, as soon as practicable (and in any event within ten business days) following the issuance date of any Earnout Consideration Stock, a registration statement on Form S-3 covering the resale on a delayed or continuous basis of any Earnout Consideration Shares.
The foregoing description of the Purchase Agreement and the transactions contemplated thereby does not purport to be complete and is qualified in its entirety by the full text of the Purchase Agreement, a copy of which is filed herewith as Exhibit 2.1 and is incorporated by reference herein.
The Purchase Agreement is not intended to provide any other factual or financial information about GCI Liberty, GCI, Quintillion, Seller or their respective subsidiaries and affiliates. The representations, warranties and covenants contained in the Purchase Agreement were made only for purposes of that Purchase Agreement and as of specific dates; were solely for the benefit of the parties to the Purchase Agreement; may be subject to limitations agreed upon by the parties, including being qualified by, among other things, confidential disclosures, and may have been made for the purposes of allocating contractual risk between the parties to the Purchase Agreement instead of establishing these matters as facts. Investors should not rely on the representations, warranties and covenants, or any descriptions thereof, as characterizations of the actual state of facts or condition of GCI Liberty, GCI, Quintillion, Seller or any of their respective subsidiaries or affiliates. Moreover, information concerning the subject matter of the representations, warranties and covenants may change after the date of the Purchase Agreement, which subsequent information may or may not be fully reflected in GCI Liberty’s public disclosures. Investors should read the Purchase Agreement together with the other information that GCI Liberty publicly files in reports and statements with the SEC.
Term Loan Credit Agreement with Seller
Concurrent with the entry into the Purchase Agreement, GCI, LLC, a Delaware limited liability company and wholly owned subsidiary of GCI Liberty, as lender, Seller, as borrower (the “Q Borrower”), and Acquiom Agency Services LLC, as administrative agent, entered into a Term Loan Credit Agreement (the “Credit Agreement”) providing, subject to the satisfaction of certain condition precedents, for a term loan in an initial principal amount of $160 million (the “Upfront Loan”), which amount may increase pursuant to the paid-in-kind interest provisions of the Credit Agreement.
The Upfront Loan bears interest at the secured overnight financing rate (“SOFR”) as administered by the Federal Reserve Bank of New York plus a margin of 8.50% (with, subject to certain conditions, up to SOFR plus 2.00% payable in cash and the remainder paid-in-kind). Any amounts repaid on the Upfront Loan may not be reborrowed.
The Upfront Loan will (a) automatically be deemed paid in full upon the closing of the Transaction, with such outstanding amounts credited toward the purchase price in the Transaction or (b) if the Transaction does not close, mature on April 21, 2031. The Upfront Loan must be repaid at maturity in cash by the Q Borrower. Payment of the Upfront Loan may also be accelerated following certain customary events of default.
The payment and performance by the Q Borrower of the obligations under the Credit Agreement are not guaranteed or secured by it or any of its subsidiaries.
The Credit Agreement contains certain customary covenants, including covenants that restrict the Q Borrower and its subsidiaries (subject to certain exceptions) from, among other things: incurring additional indebtedness; creating liens on its assets; making certain capital expenditures; making certain investments; and disposing of certain assets.
The foregoing description of the Credit Agreement does not purport to be complete and is qualified in its entirety by the full text of the Credit Agreement, a copy of which is filed herewith as Exhibit 10.1 and the terms of which are incorporated by reference herein.
Item 3.02 Unregistered Sales of Equity Securities.
The information set forth under Item 1.01 is hereby incorporated by reference into this Item 3.02 in its entirety. Any Earnout Consideration Stock that may be issued under the Purchase Agreement may be offered and sold pursuant to one or more exemptions from registration under the Securities Act of 1933, as amended (the “Securities Act”), including in reliance on Section 4(a)(2) thereof.
Item 7.01 Regulation FD Disclosure.
On April 22, 2026, the parties issued a press release announcing the Transaction and the entry into the Purchase Agreement. A copy of the press release containing the announcement is furnished as Exhibit 99.1 and is incorporated by reference herein.
The information furnished pursuant to this Item 7.01, including Exhibit 99.1, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, and is not incorporated by reference into any filing under the Securities Act, except as shall be expressly set forth by specific reference in such a filing.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
| Exhibit No. | Description | |
| 2.1* | Securities Purchase Agreement, dated April 21, 2026, by and among Q Gateway Ultimate Holdings, LLC, GCI Holdings, LLC and GCI Liberty, Inc. | |
| 10.1* | Term Loan Credit Agreement, dated April 21, 2026, by and among GCI, LLC, as lender, Q Gateway Ultimate Holdings, LLC, as borrower, and Acquiom Agency Services LLC, as administrative agent | |
| 99.1 | Joint Press Release, dated April 22, 2026 | |
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
* Schedules and exhibits have been omitted pursuant to Item 601(b)(2) of Regulation S-K. GCI Liberty hereby undertakes to furnish supplemental copies of any of the omitted schedules upon request by the SEC; provided, however, that GCI Liberty may request confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended, for any schedules so furnished.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Dated: April 23, 2026
| GCI LIBERTY, INC. | |||
| | | ||
| By: | /s/ Craig Troyer | ||
| | Name: | Craig Troyer | |
| | Title: | Senior Vice President | |
Exhibit 2.1
Execution Version
Strictly Confidential
SECURITIES PURCHASE AGREEMENT
by and among
Q GATEWAY ULTIMATE HOLDINGS, LLC,
GCI HOLDINGS, LLC,
and, for the purposes of Section 5.20 only,
GCI LIBERTY, INC.
dated
April 21, 2026
TABLE OF CONTENTS
Page
| Article 1 | ||
| Definitions | 2 | |
| Section 1.1. | Definitions | 2 |
| Article 2 | ||
| Purchase and Sale; Closing | 28 | |
| Section 2.1. | Purchase and Sale | 28 |
| Section 2.2. | Closing Payment | 29 |
| Section 2.3. | Closing | 29 |
| Section 2.4. | Closing Adjustment | 29 |
| Section 2.5. | Deliveries by the Seller at the Closing | 31 |
| Section 2.6. | Deliveries by the Purchaser at the Closing | 33 |
| Section 2.7. | Withholding Tax | 34 |
| Section 2.8. | Post-Closing Adjustment | 34 |
| Article 3 | ||
| Representations and Warranties Concerning the Seller and the Group Companies | 37 | |
| Section 3.1. | Organization | 37 |
| Section 3.2. | Authorization; Enforceability | 37 |
| Section 3.3. | No Conflicts; Consents and Approvals | 38 |
| Section 3.4. | Governmental Filings | 38 |
| Section 3.5. | Ownership of Purchased Securities | 39 |
| Section 3.6. | Brokers | 39 |
| Section 3.7. | Organization and Good Standing; Qualification | 39 |
| Section 3.8. | Capital Structure | 39 |
| Section 3.9. | Financial Statements | 40 |
| Section 3.10. | No Undisclosed Liabilities | 41 |
| Section 3.11. | Absence of Certain Developments | 41 |
| Section 3.12. | Compliance with Laws | 42 |
| Section 3.13. | Solvency | 42 |
| Section 3.14. | Litigation | 42 |
| Section 3.15. | Material Permits; Regulatory Matters | 42 |
| Section 3.16. | Insurance Coverage | 44 |
| Section 3.17. | Material Contracts | 44 |
| Section 3.18. | Properties | 47 |
| Section 3.19. | Anti-Corruption; Internal Controls | 49 |
| Section 3.20. | Employee Benefit Plans | 50 |
| Section 3.21. | Employees and Labor | 52 |
| Section 3.22. | Taxes | 53 |
| Section 3.23. | Environmental Matters | 55 |
| Section 3.24. | Intellectual Property and Data Privacy/Security | 56 |
| Section 3.25. | Related Party Contracts | 58 |
| Section 3.26. | Adequacy of Assets and Network Information | 58 |
| Section 3.27. | Grant Compliance | 59 |
| Section 3.28. | Capital Improvements Required by Governmental Authorities | 60 |
| Section 3.29. | Projected CapEx Schedule | 61 |
| Section 3.30. | Other Capital Expenditures | 61 |
| Section 3.31. | Customers; Suppliers | 61 |
| Section 3.32. | Books and Records | 62 |
| Section 3.33. | Bank Accounts | 62 |
| Section 3.34. | Equity Financing | 62 |
| Section 3.35. | Investment Decision | 63 |
| Section 3.36. | Closing Payment Disbursement Schedule | 63 |
| Section 3.37. | No Other Representations or Warranties | 63 |
| Article 4 | ||
| Representations and Warranties Concerning Purchaser | 63 | |
| Section 4.1. | Organization and Good Standing | 63 |
| Section 4.2. | Authorization; Enforceability | 64 |
| Section 4.3. | No Conflicts; Consents and Approvals | 64 |
| Section 4.4. | Governmental Filings | 64 |
| Section 4.5. | Litigation | 65 |
| Section 4.6. | Brokers | 65 |
| Section 4.7. | No Registration | 65 |
| Section 4.8. | SEC Reports and Financial Statements | 65 |
| Section 4.9. | Sufficiency of Funds | 66 |
| Section 4.10. | No Other Representations or Warranties | 66 |
| Article 5 | ||
| COVENANTS | 66 | |
| Section 5.1. | Conduct of the Group Companies’ Businesses Prior to the Closing | 66 |
| Section 5.2. | Prohibition on Transfer of Group Company Equity Securities | 71 |
| Section 5.3. | Confidentiality; Control and Supervision | 71 |
| Section 5.4. | Third-Party Consents; Notices | 71 |
| Section 5.5. | Regulatory Filings | 72 |
| Section 5.6. | Public Announcements | 76 |
| Section 5.7. | Further Assurances | 76 |
| Section 5.8. | Notice; Supplemental Disclosures | 76 |
| Section 5.9. | Tax Matters | 77 |
| Section 5.10. | Access to Information; Retention of Business Records and Access to Business Records | 80 |
| Section 5.11. | Termination of Certain Arrangements | 84 |
| Section 5.12. | Financing Matters | 84 |
| Section 5.13. | Repayment of Indebtedness | 87 |
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| Section 5.14. | Employment Matters | 87 |
| Section 5.15. | Intercompany Debt | 89 |
| Section 5.16. | NTHE Reimbursement | 89 |
| Section 5.17. | Earn-Out | 91 |
| Section 5.18. | Projected CapEx Schedule | 102 |
| Section 5.19. | Projected CapEx Schedule Update | 102 |
| Section 5.20. | Obligations of Purchaser Parent | 103 |
| Section 5.21. | R&W Policy | 105 |
| Section 5.22. | Director and Officer Liability and Indemnification | 105 |
| Section 5.23. | Reimbursable Matters | 106 |
| Section 5.24. | Equity Commitment | 106 |
| Article 6 | ||
| Conditions Precedent | 106 | |
| Section 6.1. | Conditions to the Parties’ Obligations | 106 |
| Section 6.2. | Conditions to Seller’s Obligations | 107 |
| Section 6.3. | Conditions to Purchaser’s Obligations | 107 |
| Section 6.4. | Frustration of Closing Conditions | 108 |
| Article 7 | ||
| Termination | 108 | |
| Section 7.1. | Termination | 109 |
| Section 7.2. | Effect of Termination; Procedure | 108 |
| Article 8 | ||
| Survival; Indemnification | 111 | |
| Section 8.1. | Survival | 111 |
| Section 8.2. | Indemnification by the Seller | 112 |
| Section 8.3. | Indemnification by Purchaser | 112 |
| Section 8.4. | Limitations and Other Matters Relating to Indemnification | 112 |
| Section 8.5. | No Contribution | 112 |
| Section 8.6. | Procedures | 113 |
| Section 8.7. | Exclusive Remedy | 115 |
| Article 9 | ||
| Miscellaneous | 115 | |
| Section 9.1. | Amendments; No Waivers | 115 |
| Section 9.2. | Notices | 116 |
| Section 9.3. | Fees and Expenses | 117 |
| Section 9.4. | Successors and Assigns | 117 |
| Section 9.5. | Governing Law | 117 |
| Section 9.6. | Arbitration | 117 |
| Section 9.7. | Counterparts; Effectiveness | 119 |
| Section 9.8. | Entire Agreement | 120 |
iii
| Section 9.9. | Third-Party Beneficiaries | 120 |
| Section 9.10. | Severability | 120 |
| Section 9.11. | Specific Performance | 120 |
| Section 9.12. | Setoff | 121 |
| Section 9.13. | Release | 121 |
| Section 9.14. | Disclosure Schedule | 122 |
| Section 9.15. | Legal Representation of Seller and its Affiliates | 123 |
| Section 9.16. | Non-Recourse | 123 |
| Section 9.17. | Construction | 124 |
EXHIBITS
| Exhibit A | Form of Separation Agreement |
| Exhibit B | [Reserved] |
| Exhibit C | Accounting Principles |
| Exhibit D | Illustrative Working Capital Statement |
| Exhibit E | Allocation Methodology |
| Exhibit F | Form of Earn-Out Report |
| Exhibit G | Form of Registration Rights Agreement |
| Exhibit H | Consulting Agreements |
| Exhibit I | Restrictive Covenants Agreements |
SCHEDULES
| Schedule EO | Earn-out Methodologies and Protocols |
| Schedule 8.2 | Certain Indemnification Matters |
iv
SECURITIES PURCHASE AGREEMENT
This SECURITIES PURCHASE AGREEMENT (this “Agreement”), dated as of April 21, 2026, is entered into by and among Q Gateway Ultimate Holdings, LLC, a Delaware limited liability company (the “Seller”), GCI Holdings, LLC, a Delaware limited liability company (“Purchaser”), and, for the purposes of Section 5.20 only, GCI Liberty, Inc., a Nevada corporation (“Purchaser Parent”). Each of the Seller, Purchaser, and Purchaser Parent is referred to herein as a “party” and collectively as the “parties.”
RECITALS
WHEREAS, the Seller owns 100% of the issued and outstanding Equity Securities (the “Purchased Securities”) of Q Gateway Intermediate Holdings, LLC, a Delaware limited liability company (the “Company”);
WHEREAS, the Company, together with the subsidiaries of the Company (collectively, the “Group Companies”, and each, a “Group Company”), are engaged in the Business;
WHEREAS, upon the terms and subject to the conditions set forth herein, the Seller desires to sell, assign, transfer, convey and deliver to Purchaser, and Purchaser desires to purchase, acquire and accept from the Seller, the Purchased Securities;
WHEREAS, prior to or concurrently with the execution and delivery of this Agreement, and as an inducement and condition to Purchaser’s willingness to enter into this Agreement, an Affiliate of Purchaser has entered into consulting agreements (the “Consulting Agreements”) with the individuals set forth on Section 1.1(a) of the Disclosure Schedule and which are attached hereto as Exhibit H;
WHEREAS, prior to or concurrently with the execution and delivery of this Agreement, and as an inducement and condition to Purchaser’s willingness to enter into this Agreement, an Affiliate of Purchaser has entered into restrictive covenants agreements (the “Restrictive Covenants Agreements”) with the individuals set forth on Section 1.1(b) of the Disclosure Schedule and which are attached hereto as Exhibit I; and
WHEREAS, substantially concurrent with the execution of this Agreement, the Seller has delivered a duly executed equity commitment letter, dated the date hereof, among the Equity Financing Source and the Seller (including all exhibits, schedules and annexes thereto, the “Equity Commitment Letter”).
NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:
Article 1
Definitions
Section 1.1. Definitions. When used in this Agreement, the following terms shall have the respective meanings set forth below:
“2025 Audited Financial Statements” means the audited consolidated statements of financial position, statements of profit or loss and other comprehensive income, statements of changes in equity, cash flows statements and notes for QSH Parent Holdco, LLC and its Subsidiaries for the fiscal year ended December 31, 2025.
“2026 Audited Financial Statements” means the audited consolidated statements of financial position, statements of profit or loss and other comprehensive income, statements of changes in equity, cash flows statements and notes for QSH Parent Holdco, LLC and its Subsidiaries for the fiscal year ended December 31, 2026.
“Accounting Firm” has the meaning set forth in Section 2.8(b).
“Accounting Principles” means the accounting principles, policies, practices and methodologies as set forth on Exhibit C, to be used in the preparation of Closing Working Capital and Closing Indebtedness.
“Action” means any claim, action, suit, proceeding, investigation, audit, arbitral action or criminal prosecution whether by or before any Governmental Authority, mediator or other dispute resolution body or otherwise.
“Adjusted Gross Revenue” means (i) Gross Revenue minus (ii) $3,300,000 minus (iii) the Baseline Gateway Capacity Costs incurred by Purchaser or the Group Companies in the Final Earn-out Year.
“Adjusted Gross Revenue Lower Threshold” means $50,000,000.
“Adjusted Gross Revenue Upper Threshold” means $75,000,000.
“Affiliate” means, with respect to any Person, any other Person directly or indirectly Controlling, Controlled by or under common Control with, such first Person.
“Agreement” has the meaning set forth in the Preamble.
“Allocation” has the meaning set forth in Section 5.9(g)(ii).
“Allocation Negotiation Period” has the meaning set forth in Section 5.9(g)(iii).
“Annual Business Plan” has the meaning set forth in Section 5.17(f)(iii).
“Anti-Corruption Laws” means the U.S. Foreign Corrupt Practices Act of 1977 (as amended) and all other applicable laws prohibiting bribery and corruption.
2
“Anti-Money Laundering Laws” means the U.S. Money Laundering Control Act of 1986 (as amended) and all other applicable money laundering related Laws of any other applicable jurisdiction.
“Antitrust Law” means all Laws issued by a Governmental Authority that are designed or intended to prohibit, restrict or regulate actions or transactions having the purpose or effect of monopolization, restraint of trade, harm to competition, including the HSR Act.
“Applicable Reporting Company” has the meaning set forth in Section 5.10(b).
“Audited Financial Statements” means the audited consolidated statements of financial position, statements of profit or loss and other comprehensive income, statements of changes in equity, cash flows statements, and notes for QSH Parent Holdco, LLC and its Subsidiaries as of and for the fiscal years ended December 31, 2024 and December 31, 2023.
“A&R Service Agreement” means that certain Amended and Restated Service Agreement, dated as of October 3, 2023, by and between Quintillion Subsea Operations, LLC and GCI Communication Corp, as amended by that certain First Amendment, dated as of December 20, 2023 and that certain Second Amendment, dated as of February 25, 2025.
“Bank Accounts” has the meaning set forth in Section 3.33.
“Balance Sheet Date” means December 31, 2025.
“Baseline Gateway Capacity Costs” means the actual costs incurred for the Quintillion Starlink Community Gateways for Reserve Capacity during the applicable period.
“Broadband Grant” means any grant or extension of funding or financing (as the same may be renewed or amended from time to time) by any Governmental Authority or pursuant to any plan or program operated or promoted by any Governmental Authority to support the construction, installation, expansion and maintenance of any Fiber network or similar digital infrastructure network and related facilities.
“Business” means (a) the wholesale broadband telecommunications and infrastructure business conducted in the U.S. Arctic region and the State of Alaska by the Group Companies as of the date hereof and (b) the wholesale broadband telecommunications and infrastructure business being developed or conducted by the Group Companies as of the date hereof.
“Business Day” means any day that is not a Saturday, Sunday or any other day on which commercial banks in the State of New York or the State of Alaska are required or authorized to be closed.
3
“Business Records” means all books, records, data, files and documents (in any form or medium, including computerized or electronic) owned by and in the possession or control of the Seller, the Group Companies or their Affiliates that are related to or used in connection with the Business, including (a) all books and records of account and other financial records, (b) all catalogues, brochures, advertising materials, forms of purchase orders, and invoices and similar sales, lease or marketing materials, (c) all price lists, customer lists, supplier lists, mailing lists, credit records and similar lists and correspondence, (d) all manuals pertaining to software, products, operations, research, development and maintenance and all computer, software and system passwords and other electronic access items, (e) all records or lists pertaining to supply, production or distribution, (f) all documentation relating to the organization, existence and governance of the Group Companies, including all past and current Company Organizational Documents, minute books, and membership transfer records, (g) all Tax Returns filed by or on behalf of the Group Companies since their inception and copies of all work papers and documentation supporting the amounts and Tax items included in such Tax Returns, and (h) all personnel files; provided, however, that “Business Records” does not include any proposals to acquire the Business.
“Cash” means all cash, cash equivalents and marketable securities of the Group Companies; provided, that Cash shall exclude all Restricted Cash. For purposes of clarity and without duplication, Cash shall be (a) increased for (i) checks received but not yet deposited by the Group Companies prior to 12:01 a.m. Alaska Prevailing Time on the Closing Date and (ii) wire transfers, ACH transfers and other electronic payments to the Group Companies initiated but not received prior to 12:01 a.m. Alaska Prevailing Time on the Closing Date, in each case, unless the receivables associated with such checks, transfers or payments are included as Current Assets in the calculation of Closing Working Capital and (b) reduced for (x) checks issued by the Group Companies but not cleared as of 12:01 a.m. Alaska Prevailing Time on the Closing Date, and (y) wire transfers, ACH transfers and other electronic payments initiated by the Group Companies but not cleared prior to 12:01 a.m. Alaska Prevailing Time on the Closing Date, in each case, unless the payables associated with such checks, transfers or payments are included as Current Liabilities in the calculation of Closing Working Capital. For the avoidance of doubt, “Cash” shall exclude all amounts to the extent taken into account in the final determination of the Closing Working Capital.
“Claim Notice” has the meaning set forth in Section 8.6(a).
“Closing” means the purchase and sale of the Purchased Securities in accordance with Section 2.3.
“Closing Cash Amount” means the consolidated Cash of the Group Companies as determined as of the Closing Date in accordance with the Accounting Principles.
“Closing Consideration” has the meaning set forth in Section 5.9(g).
“Closing Date” has the meaning set forth in Section 2.3.
4
“Closing Date Payment” has the meaning set forth in Section 2.4(b).
“Closing Date Shortfall Amount” has the meaning set forth in Section 2.4(b).
“Closing Indebtedness” means the consolidated Indebtedness of the Group Companies (including, without duplication, Funded Indebtedness), as determined as of the Closing Date in accordance with the Accounting Principles.
“Closing Payment Amount” has the meaning set forth in Section 2.2(a).
“Closing Payment Disbursement Schedule” has the meaning set forth in Section 2.4(a)(ii).
“Closing Regulatory Approvals” has the meaning set forth in Section 6.1(a).
“Closing Statement” has the meaning set forth in Section 2.8(d).
“Closing Working Capital” means (a) the consolidated Current Assets of the Group Companies, minus (b) the consolidated Current Liabilities of the Group Companies, in each case, as determined as of the Closing Date in accordance with the Accounting Principles and the Illustrative Working Capital Statement attached hereto as Exhibit D.
“COBRA” means the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended.
“Code” means the Internal Revenue Code of 1986, as amended.
“Collective Bargaining Agreement” means any written or oral agreement or memorandum of understanding with any labor union, labor organization or authorized employee representative to which a Group Company is a party or subject or which covers any employee of a Group Company.
“Communications Act” means the Communications Act of 1934, as amended and all applicable FCC rules and regulations implementing such statute.
“Company” has the meaning set forth in the Recitals.
“Company Credit Agreement” means that certain Credit Agreement, dated as of February 15, 2024, by and among Quintillion Networks, LLC and Quintillion Subsea Operations, LLC, as borrowers, each of the guarantors party thereto, the lenders party thereto, and COBANK, ACB, in its capacity as administrative agent for the secured parties and as a lender, as amended by that First Amendment to Credit Agreement dated as of June 25, 2025 and as further amended, restated, amended and restated, supplemented or otherwise modified from time to time to the extent permitted by the terms hereof.
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“Company Credit Facility” means, collectively, the term loan facility and revolving credit facilities made pursuant to the Company Credit Agreement.
“Company Customers” means those customers identified on Annex A of Schedule EO referenced as “Company Customers.”
“Company Organizational Documents” has the meaning set forth in Section 3.3.
“Company Pipeline Customers” means those customers identified on Annex A of Schedule EO referenced as “Pipeline Customers.”
“Company Plan” means each (i) “employee benefit plan” (as defined in Section 3(3) of ERISA) or other agreement, plan, Contract, program, fund, policy or arrangement of any kind that provides for compensation or benefits, (ii) welfare benefit, bonus, incentive, equity or equity-based compensation, retirement, pension, profit sharing, retention, change in control, vacation, or deferred compensation plan, Contract, program, fund, policy or arrangement of any kind or (iii) employment, consulting, severance, termination protection or similar plan, Contract, program, fund, arrangement or policy, in each case whether or not written, that is (A) entered into, sponsored, maintained, contributed to, or required to be contributed to, by the Seller or any of its Affiliates (including the Group Companies) for the current or future benefit of any current or former Service Provider or (B) for which any Group Company has any direct or indirect liability.
“Company Transaction Expenses” means, except as otherwise expressly set forth in this Agreement and without double counting, the aggregate amount of all fees, costs and expenses (whether or not yet invoiced), incurred by, or on behalf of, or to be paid by, any Group Company in connection with the sale of the Purchased Securities or otherwise relating to the negotiation, preparation or execution of this Agreement or any documents or agreement contemplated hereby or the performance or consummation of the transactions contemplated hereby, in each case, to the extent agreed to or incurred at any time up until immediately before, and unpaid as of, the Closing, including: (a) fees and expenses of counsel, advisors, consultants, investment bankers, accountants and auditors and experts engaged by, or on behalf of, any Group Company, the Seller or any of their Affiliates in connection with the transactions contemplated by this Agreement; (b) any assignment, change in control or similar fees payable as a result of the execution of this Agreement or the other Transaction Agreements or the consummation of the transactions contemplated hereby or thereby; (c) all costs, fees, reimbursement obligations and expenses incurred as a result of (or that would be incurred as a result of) the termination of any Terminated Agreement as contemplated hereby; (d) obligations of any Group Company that remain unpaid as of the Closing in respect of all change in control, retention, severance, separation, transaction or similar payments payable by any Group Company triggered (or partially triggered) by the transactions contemplated by this Agreement; (e) the employer portion of any employment, payroll or similar Taxes attributable to the amounts set forth in clauses (c) or (d); (f) 50% of all fees payable to the Escrow Agent pursuant to the Escrow Agreement; (g) 100% of the cost, fees and expenses of obtaining the D&O Tail Policy; (h) the R&W Insurance Policy Costs; and (i) any other amount expressly identified herein as a Company Transaction Expense. Notwithstanding the foregoing, Company Transaction Expenses shall exclude all amounts to the extent (i) paid off or settled in connection with Closing directly by the Seller or any of its Affiliates (excluding the Group Companies) without drawing on any funds of any Group Company or (ii) taken into account in the final determination of the Closing Working Capital or Indebtedness.
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“Company 401(k) Plan” means the Oasis 401(k) Retirement Savings Plan, as adopted by Quintillion Subsea Operations, LLC.
“Confidentiality Agreement” has the meaning set forth in Section 5.3(a).
“Consent” means any consent, approval, authorization, exemption or waiver of any Person.
“Consulting Agreements” has the meaning set forth in the Recitals.
“Consumer Internet” has the meaning set forth in Schedule EO.
“Consumer Services” has the meaning set forth in Schedule EO.
“Contingent Stock Consideration” has the meaning set forth in Section 5.20(a).
“Continuing Arrangements” means the Related Party Contracts listed in Section 5.11(a) of the Disclosure Schedule.
“Continuing Employee” has the meaning set forth in Section 5.14(b).
“Contract” means any agreement, arrangement, commitment, contract, lease, license, easement, mortgage, indenture, promissory note or other evidence of Indebtedness, binding offer, purchase order or other legally binding arrangement, whether written or oral (including all amendments, waivers, renewals, extensions and modifications thereto).
“Control” (including, with correlative meanings, the terms “Controlling,” “Controlled”) means the possession, directly or indirectly, of the power or right to direct or cause the direction of management and policies of a Person through the ownership of voting securities or interests, by contract, or otherwise.
“Controlled Affiliates” of a Person (the “Subject”) means any other Person which, directly or indirectly, through one or more intermediaries, is controlled by the Subject. As used in this definition, “controlled” means the possession, directly or indirectly or as trustee, personal representative or executor, of the power to direct or cause the direction of the affairs or management or policies of a Person, whether through the ownership of voting securities, as trustee, personal representative or executor, by contract or otherwise.
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“Cumulative Outage Repair Costs” means an amount equal to the third-party costs reasonably incurred (net of insurance proceeds received from the insurance policies obtained pursuant to Section 5.17(e)(iii)) by Purchaser, the Group Companies or their Affiliates between the Closing Date and December 31, 2030 to repair, in accordance with normal industry practice, the cause of any Fiber Outage associated with the Quintillion Fiber Network and Joint Fiber Assets to the condition (functional, physical and performance) such Fiber Network or Joint Fiber Assets, as applicable, were immediately prior to such Fiber Outage (such costs to include vessel operating costs, costs arising from post-repair burial or reburial, costs of components, materials and equipment to effect the repairs and all Taxes associated with the repairs), together with all standby repair ship expenses incurred during such period (the “Standby Repair Ship Expenses”) and all costs and expenses associated with purchasing temporary capacity on a Quintillion Starlink Community Gateway to restore end user customers during a Fiber Outage in excess of the Baseline Gateway Capacity Costs; provided, that if no Fiber Outage has occurred or is continuing during such period, the Cumulative Outage Repair Costs shall equal the Standby Repair Ship Expenses. Restoration shall be performed using materials and installation methods that are substantially equivalent in type, specification, capacity, and burial profile to those existing immediately prior to the Fiber Outage, subject to reasonable commercial availability. For the avoidance of doubt, the Cumulative Outage Repair Costs will not include any Network Hardening Costs or Enhancement Costs. “Enhancement Costs” means costs associated with improving the capacity, performance, technology or economic value of the Fiber Network or Joint Fiber Assets beyond the condition prior to the Fiber Outage. “Hardening Costs” means costs associated with increasing the durability, protection or resilience of the Fiber Network or Joint Fiber Assets beyond the condition prior to the Fiber Outage.
“Current Assets” means, with respect to the Group Companies as of the Closing Date, those line items classified as “Current Assets” as set forth on the Illustrative Working Capital Statement attached hereto as Exhibit D, and as determined in accordance with the Accounting Principles.
“Current Liabilities” means, with respect to the Group Companies as of the Closing Date, those line items classified as “Current Liabilities” as set forth on the Illustrative Working Capital Statement attached hereto as Exhibit D, and as determined in accordance with the Accounting Principles.
“Dalton Fiber” means the Group Companies’ terrestrial fiber network along the Dalton Highway.
“Dalton Highway” means that certain industrial road extending from its southern terminus in Fairbanks, Alaska to its northern terminus in Deadhorse, Alaska.
“Damages” means all losses, damages, judgments, fines, penalties, costs and expenses (including reasonable costs of investigation, defense or settlement, court costs and reasonable and documented fees and expenses of attorneys and other professionals), claims, awards, assessments, charges, Taxes or other liabilities whatsoever, whether contractual, tortious, statutory or otherwise, suffered, sustained, paid or incurred by a Person, including in connection with any Action, whether involving a claim brought by a Governmental Authority, a Third Party Claim, or a claim solely among the parties hereto. For clarity, this definition is not intended and shall not be used in relation to or in respect of any breach of a representation or warranty in this Agreement for purposes of the R&W Policy.
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“DAS Services” has the meaning set forth in Schedule EO.
“Debt Documentation” means those certain documents related to the Upfront Debt Financing.
“Debt Payoff Letters” has the meaning set forth in Section 2.5(m).
“Designated Individual” has the meaning set forth in Treasury Regulation Section 301.6223-1(b)(3) (or any analogous provision of state, local or foreign Law).
“Direct Sold Services” has the meaning set forth in Schedule EO.
“Disclosure Schedules” means the written disclosure schedules delivered by the Seller to Purchaser concurrently with the execution and delivery of this Agreement dated as of the date hereof.
“Dispute” has the meaning set forth in Section 2.8(b).
“Dispute Period” has the meaning set forth in Section 2.8(b).
“Downlink Services” has the meaning set forth in Schedule EO.
“D&O Indemnitees” has the meaning set forth in Section 5.22(b).
“D&O Tail Policy” has the meaning set forth in Section 2.5(l).
“Earn-out Accountant” means PricewaterhouseCoopers LLP, or if PricewaterhouseCoopers LLP is not available for such engagement or at the time of such proposed engagement is no longer independent with respect to Purchaser and the Seller, such other internationally recognized independent certified public accounting firm reasonably agreed to by Purchaser and the Seller.
“Earn-out Disputed Item” has the meaning set forth in Section 5.17(c)(iv).
“Earn-out Objection Date” has the meaning set forth in Section 5.17(c)(iv).
“Earn-out Objection Notice” has the meaning set forth in Section 5.17(c)(iv).
“Earn-out Payments” has the meaning set forth in Section 5.17(a).
“Earn-out Statement” has the meaning set forth in Section 5.17(c)(ii).
“Earn-out Years” has the meaning set forth in Section 5.17(b)(ii).
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“Easement” means any easement, right of way, access right, license or similar right over real property granted to or otherwise being in favor of a Group Company.
“End Date” has the meaning set forth in Section 7.1(b).
“Environmental Law” means any Law related to pollution, to the protection, remediation or restoration of the environment, threatened, endangered or otherwise protected species, migratory birds, flora or fauna, or natural resources, to the presence, use, storage, transportation, disposal or Release of Hazardous Substances or to the assessment of environmental impacts.
“Equity Commitment Letter” has the meaning set forth in the Recitals.
“Equity Financing Source” means GCOF III.
“Equity Securities” of any Person means any and all equity interests, shares of capital stock, warrants or options of such Person, and all securities exchangeable for or convertible or exercisable into, any of the foregoing.
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.
“Escrow Agent” means Wells Fargo Bank, N.A., or such other escrow agent as the parties may mutually agree.
“Escrow Agreement” means an escrow agreement to be entered into on the Closing Date by Purchaser, the Seller and the Escrow Agent, in customary form and mutually agreed by Purchaser, the Seller and the Escrow Agent, acting reasonably and in good faith, pursuant to which the Purchase Price Escrow Account will be established and administered.
“Estimated Closing Working Capital” has the meaning set forth in Section 2.4(a)(i).
“Estimated Indebtedness” has the meaning set forth in Section 2.4(a)(i).
“Estimated NTHE Reimbursable Amount” means $50,000,000 minus the amount by which the Projected NTHE CapEx exceeds $50,000,000; provided, that in no event shall the Estimated NTHE Reimbursable Amount be less than $0.
“Estimated NTHE Reimbursement” has the meaning set forth in Section 5.16(c).
“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC thereunder.
“Exchange Act Report” has the meaning set forth in Section 5.10.
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“FCC” means the U.S. Federal Communications Commission or any successor Governmental Authority.
“FCC Consents” means any approvals, waivers and authorizations required to be obtained from, and notices required to be provided to, the FCC pertaining to the transactions contemplated by this Agreement.
“Fiber” means a strand or strands of optical fiber.
“Fiber Outage” means any interruption of communications or the provision of data connectivity services on Fiber.
“Final Allocation” has the meaning set forth in Section 5.9(g)(iii).
“Final Closing Payment Amount” has the meaning set forth in Section 2.8(d).
“Final Earn-out Payment” has the meaning set forth in Section 5.17(b)(ii).
“Final Earn-out Statement” has the meaning set forth in Section 5.17(c)(iv).
“Final Earn-out Year” has the meaning set forth in Section 5.17(b)(ii).
“Final NTHE CapEx” means the total NTHE CapEx actually incurred prior to the NTHE System RFS; provided, that for purposes of this calculation, the maximum amount of NTHE CapEx incurred prior to the Closing shall be $50,000,000 and any NTHE CapEx incurred prior to the Closing in excess of such maximum amount shall be disregarded.
“Final NTHE Reimbursable Amount” means $50,000,000 minus the amount by which the Final NTHE CapEx exceeds $50,000,000; provided, that in no event shall the Final NTHE Reimbursable Amount be less than $0.
“Final NTHE Reimbursement” has the meaning set forth in Section 5.16(f).
“Financial Statements” means the Audited Financial Statements and the Unaudited Financial Statements.
“Financing” has the meaning set forth in Section 5.12(a).
“Fraud” means, with respect to any Person, such Person’s intentional fraud as defined under common law of the Laws of the State of Delaware (including the element of scienter) with respect to the making of the representations and warranties set forth in this Agreement. For the avoidance of doubt, “Fraud” expressly excludes any claim for equitable fraud, promissory fraud, unfair dealing fraud, constructive fraud or any tort based on recklessness or negligence.
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“Freely Tradeable Shares” means shares of GCI Common Stock that, at the time of issuance thereof, (a) are duly authorized, validly issued, fully paid and non-assessable, (b) are not subject to, and not issued in violation of, any Lien, purchase option, call option, right of first refusal, preemptive right, subscription right or any similar right under any provision of applicable Law (except in each case for any restriction on transfer of securities pursuant to applicable securities Laws), Purchaser Parent’s organizational documents, or any material Contract to which Purchaser Parent is a party or is otherwise bound, (c) are of a class that is listed on Nasdaq and (d) are, or, subject to the terms of the Registration Rights Agreement, will become, the subject of an effective registration statement under the Securities Act that relates to the resale thereof by each of the recipients of Contingent Stock Consideration or their successors in interest, or may be sold by such person without any further holding period, limitation or condition (including any current public information requirement) pursuant to Rule 144 under the Securities Act.
“Funded Indebtedness” means, without duplication, any Indebtedness (other than those described in clauses (e), (f) and (n) of the definition of Indebtedness) of the Group Companies, including the Company Credit Facility, any other Indebtedness of the Group Companies permitted to be incurred under Section 5.1 and the Upfront Debt Financing (including any cash interest or payment-in-kind interest accrued thereon).
“Future Communities” has the meaning set forth in the Network Expansion Agreement.
“GAAP” means United States generally accepted accounting principles and practices in effect from time to time.
“GCI Common Stock” means Purchaser Parent’s Series C GCI Group Common Stock, par value $0.01 per share (or any securities issued in exchange or in substitution for Purchaser Parent’s Series C GCI Group Common Stock; provided, that, such substitute common stock is listed on a national securities exchange in the United States).
“GCOF III” means Grain Communications Opportunity Fund III Master, L.P., a Delaware limited partnership.
“General Enforceability Exceptions” has the meaning set forth in Section 3.2.
“Government Official” means any public or elected official or officer, employee (regardless of rank), or person acting on behalf of a national, regional, provincial, local or foreign government, including a department, agency, instrumentality, state-owned or state-controlled company, public international organization (such as the United Nations or World Bank), or political party, party official or any candidate for political office, whether in a paid or unpaid position.
“Governmental Authority” means any national, federal, state, municipal, tribal local, regional or foreign government; international authority (including, in each case, any central bank or fiscal, Tax or monetary authority); governmental agency, authority, division, or department; the government of any prefecture, state, province, country, municipality or other political subdivision thereof; and any governmental body, authority, board or commission, or any instrumentality or officer acting in an official capacity of any of the foregoing, including any court, arbitral tribunal or committee exercising any executive, legislative, judicial, taxing, regulatory or administrative functions of government or any quasi-governmental or regulatory authority, body or entity.
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“Grant Agreements” has the meaning set forth in Section 3.27(c).
“Grant Documents” means, with respect to any Broadband Grant, all notices of award, Grant Agreements (including any standard terms and conditions), program regulations and funding opportunity announcements incorporated by reference, award modifications or amendments, special conditions, post award guidance, drawdown records, performance and financial reports, material correspondence with the awarding Governmental Authority, and all certifications, audits, and filings required thereby.
“Gross Revenue” has the meaning set forth in Schedule EO.
“Gross Revenue Threshold” means (i) with respect to the Initial Earn-out Year if Closing occurs in the calendar year 2027, (A) $60,000,000 multiplied by (B) the number of calendar months (including any partial month, which shall be prorated) between the Closing Date and the end of such calendar year, divided by twelve, and (ii) with respect to each Earn-out Year (other than the Initial Earn-out Year if Closing occurs in the calendar year 2027), $60,000,000.
“Group Company” or “Group Companies” has the meaning set forth in the Recitals.
“Group Company Confidential Information” has the meaning set forth in Section 5.3(a).
“Hazardous Substance” means any substance, waste, contaminant or material that is listed, defined, designated, classified or regulated as hazardous, radioactive or toxic, or as a pollutant or contaminant, under or pursuant to any Environmental Law and includes petroleum, including crude oil or any fraction thereof.
“HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations promulgated thereunder, or any successor statute, rules and regulations thereto.
“Hybrid Resold Service” has the meaning set forth in Schedule EO.
“Included Communities” has the meaning set forth in the Network Expansion Agreement.
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“Indebtedness” means with respect to any Person and without duplication, all obligations (if any) of such Person, whether contingent or otherwise: (a) outstanding principal of and premium, and costs, charges, agent fees, penalties and all accrued and unpaid interest in respect of indebtedness for borrowed money, (b) obligations evidenced by notes, bonds, debentures, debt securities or similar instruments whether convertible or not, including those incurred in connection with the acquisition of property, assets or businesses, (c) all obligations under interest rate or currency swap transactions (including the cost of unwinding and settling such transactions in connection with Closing), (d) any obligations of any member of the Group Companies for or on account of any leases of the Group Companies classified as finance leases that are required to be capitalized in accordance with GAAP, (e) any deferred purchase price of property or services (including “holdback”, “earn-out” or similar payments), (f) dividends or distributions declared and payable but unpaid, (g) guarantees with respect to any indebtedness of any other Person of a type described in clauses (a) through (f) above, (h) all obligations with respect to any letter of credit (solely to the extent drawn) or letter of guaranty (excluding any guaranty required by any Broadband Grant), surety bonds, bank guarantees, bankers’ acceptance or similar instrument, (i) all obligations of any type referred to in clauses (a) through (h) above of any other Person secured (or for which the holder of such obligations has an existing right, contingent or otherwise, to be secured by) by any Lien on any property or asset of such Person (whether or not such obligation is assumed by such Person or any of its Subsidiaries) excluding any Lien related to any Broadband Grant, (j) all make-whole payments, redemption or prepayment premiums or penalties with respect to any of the foregoing, (k) insurance premium financing liabilities, measured in accordance with GAAP, (l) accrued but unpaid bonuses and commissions (inclusive of all payroll tax and employment tax burden), (m) any liabilities related to capital expenditures (other than those capital expenditures in connection with the Utqiagvik Expansion Ground Station that have been included in the UEGS CapEx Adjustment as a capital expenditure incurred by the Group Companies prior to Closing), measured in accordance with GAAP, and (n) (i) the unfunded or underfunded portion of any pension, deferred compensation, retiree health and welfare, termination indemnities, gratuity or other post-employment Company Plan, inclusive of any settlement obligations that remain unpaid at Closing, and (ii) outstanding severance obligations, and, in the case of each of sub clauses (i) and (ii), the employer portion of any payroll, employment or similar Taxes payable with respect thereto. For the avoidance of doubt, “Indebtedness” shall (A) include the Company Credit Facility and (B) exclude any item to the extent (1) taken into account in the final determination of Closing Working Capital or Company Transaction Expenses or (2) repaid in advance of Closing. Notwithstanding anything in this Agreement to the contrary, the balance of the Upfront Debt Financing (including any cash interest or payment-in-kind interest accrued thereon) shall be deemed Indebtedness of the Group Companies for purposes of this Agreement.
“Indemnified Party” has the meaning set forth in Section 8.6(a).
“Indemnifying Party” has the meaning set forth in Section 8.6(a).
“In-Field Fiber” means the Group Companies’ terrestrial fiber network on the North Slope of Alaska as existing on the date of this Agreement, other than the Dalton Fiber.
“Initial Earn-out Disputed Item” has the meaning set forth in Section 5.17(c)(i)(B).
“Initial Earn-out Report” has the meaning set forth in Section 5.17(c)(i)(A).
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“Initial Earn-out Statement” has the meaning set forth in Section 5.17(c)(i)(A).
“Initial Earn-out Year” has the meaning set forth in Section 5.17(b)(i)(A).
“Intellectual Property” means, collectively, all intellectual property and other similar proprietary rights, whether registered or unregistered, protected, created or arising under the Laws of any jurisdiction or under any international convention, including such rights in and to the following (i) patents and patent applications, including continuations, divisions, continuations-in-part, reissues, reexaminations, substitutions, renewals and extensions of any of the foregoing, (ii) trademarks, service marks, brand names, logos and domain names, (iii) copyrights and any other intellectual property in works of authorship, and all registrations, applications, renewals, extensions and reversions of any of the foregoing, (iv) trade secrets and confidential information that is protectable under the Laws of any jurisdiction by the right to limit the disclosure thereof and (v) intellectual property rights in software.
“Interim Earn-out Year” has the meaning set forth in Section 5.17(b)(i)(B).
“Interim Period” has the meaning set forth in Section 5.1(a).
“IRS” means the U.S. Internal Revenue Service.
“IRU” has the meaning set forth in the definition of “Material Network Agreements” in this Section 1.1.
“IT Assets” means any and all computers, software, firmware, middleware, servers, workstations, routers, hubs, switches, data communications lines, and all other information technology equipment, in each case, (i) owned by any Group Company or (ii) exclusively leased to and controlled by any Group Company.
“Joint Committee” has the meaning set forth in Section 5.17(f)(i).
“Joint Fiber Assets” has the meaning set forth in the Network Expansion Agreement.
“Knowledge of the Seller” (or any formulation herein expressly referencing “knowledge” of the Seller) means, as to a particular matter, the actual knowledge of those individuals set forth in Section 1.1(d) of the Disclosure Schedule, after due inquiry by such individuals of their direct reports.
“Late Customer Amount” has the meaning set forth in Section 5.17(b)(i)(D).
“Law” means any statute, law, treaty, ordinance, regulation, rule, code or other requirement of a Governmental Authority, or any Order issued by any Governmental Authority with jurisdiction.
“Law Firms” means Morgan, Lewis & Bockius LLP, Alston & Bird LLP, and Akin Gump Strauss Hauer & Feld LLP.
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“Lease” means each lease, sublease, license or other agreement for the use and occupancy of real property, including any applicable amendments thereto or guarantees thereof (other than Material Easement Agreements).
“Leased Property” has the meaning set forth in Section 3.18(b).
“Licensed Intellectual Property” means the Intellectual Property that is owned by another Person and that any Group Company uses in the Business.
“Lien” means any mortgage, lien, pledge, charge, hypothecation, claim, encroachment, easement, real property title defect, adverse claim, option, right of first refusal, security interest or encumbrance of any kind.
“Market Disruption Event” means (a) a failure by Nasdaq to open for trading during its regular trading session, (b) the occurrence or existence, prior to 1:00 p.m., New York City time, on any trading day on which Nasdaq is open for trading, of any suspension or limitation on trading (by reason of movements in price exceeding limits permitted by Nasdaq or otherwise) in GCI Common Stock or in any options contracts or futures contracts relating to GCI Common Stock for more than one half-hour period in the aggregate during such trading day or (c) any event that disrupts or impairs (as determined by Purchaser in its reasonable discretion) the ability of market participants during any period or periods aggregating one half-hour or longer during the regular trading session on the relevant day in general to effect transactions in, or obtain market values for, GCI Common Stock on Nasdaq or to effect transactions in, or obtain market values for, options contracts relating to GCI Common Stock on Nasdaq.
“Material Adverse Effect” means any change, event, circumstance, development, state of facts, occurrence or effect that, individually or in the aggregate, has had or would reasonably be expected to have (a) a material adverse effect on the condition (financial or otherwise) or business of the Group Companies, taken as a whole, or (b) a material adverse effect on the ability of the Seller to perform its obligations under this Agreement and the other Transaction Agreements or that would prevent, materially impede or delay the consummation by the Seller of the transactions contemplated hereby or thereby; provided, that none of the following, either alone or in combination, will constitute, or be considered in determining whether there has been, a Material Adverse Effect: (i) general economic or political conditions or conditions in the financial, credit or securities markets (including changes in interest or currency exchange rates or the price of any commodity, security or market index); (ii) acts of God, natural or manmade disasters, cable cuts, epidemic, pandemic, or disease outbreak, terrorism, hostilities, sabotage, war or any escalation or worsening of acts of terrorism, hostilities or war; (iii) any event, development, effect, fact or change generally affecting any of the industries in which the Group Companies operate; (iv) changes in legal or regulatory conditions, including any enactment of, change in, or change in interpretation of, applicable Law or in GAAP or applicable accounting standards; (v) the announcement, pendency or consummation of the transactions contemplated hereby or the identity of Purchaser or any of its Affiliates, including any actual or potential loss or impairment of any Contract or any loss or potential loss of any customer, supplier, landlord, employee or other business due to the foregoing in this clause (v); (vi) any failure, in and of itself, of any Group Company to meet any published or internally prepared projections, budgets, plans or forecasts of revenues, earnings predictions or other financial performance measures or operating statistics (it being agreed that the facts and circumstances giving rise to such failure that are not otherwise described in this proviso may be taken into account in determining whether a Material Adverse Effect has occurred); or (vii) any action or omission (A) pursuant to, or required by, the express terms of this Agreement or (B) at the prior written request of or with the prior written consent of Purchaser; provided that any effect arising out of or resulting from any change or event referred to in clauses (i)-(iv) above may be considered when determining whether there has been a Material Adverse Effect to the extent such change or event has a materially disproportionate impact on the Group Companies, taken as a whole, compared to other companies that operate in the industries in the U.S. Arctic region and the State of Alaska in which the Group Companies operate.
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“Material Consents” has the meaning set forth in Section 5.4.
“Material Contract” has the meaning set forth in Section 3.17(a).
“Material Customers” has the meaning set forth in Section 3.31(a).
“Material Easement Agreement” means any Contract under which a Group Company is granted an Easement, the absence of which would materially affect the ability of the Group Companies to operate all or part of the Network.
“Material Network Agreements” means each of the following that involves annual payment by or to any Group Company in excess of $100,000: (a) indefeasible-right-of-use (“IRU”), lease, license or similar right to use dark or lit Fiber (including any spectrum therein) to which a Group Company is a recipient of the IRU, lease, license or similar right; (b) underlying right, Easement, right-of-way, license, pole attachment agreement, approval occupancy right, permit, colocation or any similar right or agreement in relation to the Network Infrastructure owned or operated by a Group Company or permitting or requiring the laying, building operation or installation of, or the right to maintain and to keep installed any part of the Network Infrastructure (the rights described in clauses (a) and (b), the “Network Underlying Rights”); (c) other than Network Underlying Rights, each franchise agreement or similar agreement under which the Company is authorized or permitted to place, keep or otherwise locate any part of the Network Infrastructure in or on public property owned or otherwise held by a municipality or similar Governmental Authority, but for clarity excluding business licenses and construction Permits; (d) each agreement under which any material part of the Network is serviced, maintained or purchased; and (e) each amendment, modification or supplement to the agreements described in (a) through (d).
“Material Permit” has the meaning set forth in Section 3.15(a).
“Material Suppliers” has the meaning set forth in Section 3.31(b).
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“Measurement Price” means the average of the daily volume weighted average sales price per share of GCI Common Stock on Nasdaq, as such daily volume weighted average sales price per share is displayed under the heading “Bloomberg VWAP” on Bloomberg page “GLIBK.US” (or (a) its equivalent successor if such page is not available or (b) if securities are issued in exchange or in substitution for the GCI Common Stock, the daily volume weighted average sales price per share of such securities on the principal exchange upon which such securities are traded as quoted on Bloomberg), rounded to four decimal places, in respect of the period from the scheduled opening of trading until the scheduled close of trading of the primary trading session and determined without regard to after-hours trading or any other trading outside the regular trading session trading hours, for the ten Trading Days after the filing with the SEC of Purchaser Parent’s Annual Report on Form 10-K (or successor form) for the year ending December 31, 2030.
“Nasdaq” means the Nasdaq Stock Exchange, or any other national securities exchange on which the GCI Common Stock is listed at such time.
“Net Capital Costs” has the meaning set forth in Schedule EO.
“Network” has the meaning set forth in Section 3.26(a).
“Network Expansion Agreement” means that certain Amended and Restated Network Expansion and Cost Sharing Agreement, dated as of January 7, 2025, by and between Quintillion Subsea Operations, LLC and GCI Communication Corp., as amended by that certain Amendment No. 1 to the Amended and Restated Network Expansion and Cost Sharing Agreement, effective as of January 23, 2026, by and between Quintillion Subsea Operations, LLC and GCI Communication Corp.
“Network Fiber” means all Fiber in which a Group Company holds an ownership (including equitable or beneficial), leasehold, license or IRU interest.
“Network Infrastructure” means all infrastructure and equipment owned, operated, managed, or used by or on behalf of any of the Group Companies and which relate to or are used to operate, support or maintain the Network, including all Fiber, pipes, cables, conduits, ducts, subducts, vaults, manholes, handholes, splice chambers, cable landing stations and related infrastructure, fronthaul and backhaul facilities, amplification sites, repeaters and all equipment relating to any of the foregoing.
“Network Underlying Rights” has the meaning set forth in the definition of “Material Network Agreements” in this Section 1.1.
“Nome-to-Homer Express Route” means the subsea and terrestrial fiber network currently under construction by, or on behalf of, the Group Companies extending from Nome to Homer with breakouts in Emmonak, Naknek, and Igiugig, as described in greater detail in the Projected CapEx Schedule.
“Norton Sound Grant Project” means the project to build terrestrial telecommunications infrastructure to and in the communities of Diomede, Elim, Golovin, Koyuk, Shaktoolik, Stebbins, St. Michael, Unalakleet, Wales, and White Mountain funded by two grants awarded under the United States Department of Agriculture Rural Utility Service’s ReConnect Loan and Grant Project, Round 4 to Mukluk Telephone Company, Incorporated and Interior Telephone Company.
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“NTHE CapEx” means the aggregate amount of capital expenditures incurred by the Group Companies on the Nome-to-Homer Express Route that qualify as eligible expenses under the NTIA Middle Mile Program, minus any grant funds received under the NTIA Middle Mile Program. For purposes of the calculation of NTHE CapEx, the aggregate amount of capital expenditures incurred by the Group Companies shall be determined on an accrual basis to the extent the associated liability is taken into account in determining the Closing Indebtedness or Closing Working Capital. For the avoidance of doubt, NTHE CapEx does not include any in-kind contributions by the Group Companies under the NTIA Middle Mile Program.
“NTHE Final Statement” has the meaning set forth in Section 5.16(f).
“NTHE Initial Statement” has the meaning set forth in Section 5.16(b).
“NTHE Initial True-up” has the meaning set forth in Section 5.16(e).
“NTHE Purchaser Adjustment” has the meaning set forth in Section 5.16(h).
“NTHE Seller Adjustment” has the meaning set forth in Section 5.16(h).
“NTHE System RFS” means ready for service (or equivalent milestone as understood in the telecommunications industry) with respect to all segments (subsea and terrestrial) of the Nome-to-Homer Express Route so as to enable the transmission of third-party data connectivity services on such network on a commercial basis.
“NTIA Middle Mile Program” means the grant program established by the National Institute of Standards and Technology, servicing for the Telecommunications and Information Administration, pursuant to which QSH Parent Holdco, LLC was awarded a Broadband Grant (Award No: 02-40-MM503) to extend fiber from Nome to Homer.
“OFAC” means the Office of Foreign Assets Control of the U.S. Department of the Treasury.
“Order” means any order, writ, judgment, resolution, injunction, decree or award entered by or with any Governmental Authority.
“Ordinary Course of Business” means, with respect to any Person, the ordinary course of business, consistent with past practices of such Person. For the avoidance of doubt, “Ordinary Course of Business” with respect to the Group Companies shall include activities and expenditures consistent with the budgeted capital expenditures set forth on Section 3.29 or Section 3.30 of the Disclosure Schedule.
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“Outage Insurance Costs” has the meaning set forth in Section 5.17(e)(iii).
“Owned Intellectual Property” means any and all Intellectual Property owned or purported to be owned by any Group Company.
“Panel” has the meaning set forth in Section 5.17(c)(v)(B).
“Partnership Representative” has the meaning set forth in Section 6223 of the Code and the Treasury Regulations thereunder (or any analogous provision of state, local or foreign law).
“party” and “parties” has the meaning set forth in the Preamble.
“Permits” has the meaning set forth in Section 3.15(a).
“Permitted Liens” means (a) all defects, exceptions, restrictions, easements, rights of way and encumbrances on real property that do not, individually or when aggregated with other Permitted Liens affecting such real property, detract in any material respect from the value of the real property or interfere in any material respect with the use by the Group Companies of such real property as currently used or as otherwise necessary for the conduct of the Business; provided, however, that in no event shall (i) any liens or encumbrances securing any monetary indebtedness or (ii) any preferential rights or options granted to third parties to purchase such real property (or any portion thereof or interest therein) be deemed “Permitted Liens” pursuant to this clause (a); (b) statutory liens for any Taxes, assessments or other governmental charges not yet due and payable or the amount or validity of which is being contested in good faith by appropriate proceedings and in each case, for which adequate reserves have been established in accordance with GAAP and reflected in the Financial Statements, (c) mechanics’, carriers’, workers’, repairmen’s and similar Liens arising or incurred in the Ordinary Course of Business by the operation of law securing payments not yet due or payable or being contested in good faith by appropriate proceedings and in each case, for which adequate reserves have been established in accordance with GAAP and reflected in the Financial Statements or bonded over in accordance with applicable Laws, (d) zoning, entitlement and other land use and environmental regulations that do not, individually or when aggregated with other Permitted Liens affecting the real property affected thereby, detract in any material respect from the value of such real property or interfere in any material respect with the use by the Group Companies of such real property as currently used or as otherwise necessary for the conduct of the Business, (e) liens securing debt that will be released at Closing, (f) in respect of any Leased Property, title of the lessor under the applicable operating lease, (g) Liens arising or incurred in connection with grants awarded by the United States Department of Agriculture Rural Utility Service and disclosed on Section 1.1(e) of the Disclosure Schedule, (h) Liens securing any obligations of the Group Companies under any letters of credit required in connection with any grant program administered by a Governmental Authority and disclosed on Section 1.1(e) of the Disclosure Schedule, (i) non-exclusive licenses entered into by any Group Company in the Ordinary Course of Business and (j) Liens disclosed on Section 1.1(e) of the Disclosure Schedule; to the extent, with respect to clause (c), that such liens are not, individually or in the aggregate, material to the business of the Group Companies, taken as a whole.
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“Person” means any individual, corporation, partnership, limited liability company, unlimited liability company, limited liability partnership, joint venture, person, trust, association, organization or any other entity, including any Governmental Authority, and including any successor, by merger or otherwise, of any of the foregoing.
“Personal Information” means any data that constitutes personal information, personally identifiable information or “Personal Information” under applicable Law as well as data that identifies or can be used to identify individuals either alone or in combination with other information which is in the possession of any Group Company, including an individual’s name, address, phone number, username and password, social security number or other government-issued number, financial account number, date of birth, email address, Internet Protocol (IP) address, or other health information or account information, or any other information that can be used to contact someone or serve them with information online or offline (including identifiers used to engage in interest based advertising), or other information that is regulated by one or more Privacy Laws.
“Post-Closing Statement” has the meaning set forth in Section 2.8(a).
“Post-Closing Tax Period” means a Tax period both beginning and ending after the Closing Date and, with respect to any Straddle Period, the portion of such Straddle Period beginning after the Closing Date.
“Pre-Closing Statement” has the meaning set forth in Section 2.4(a)(i).
“Pre-Closing Tax Period” means a Tax period ending on or prior to the Closing Date and, with respect to any Straddle Period, the portion of such Straddle Period ending on and including the Closing Date.
“Prevailing Time” means the local time then prevailing in the specified jurisdiction, as adjusted for daylight saving time when applicable.
“Privacy Laws” has the meaning set forth in Section 3.24(k).
“Projected CapEx Schedule” has the meaning set forth in Section 3.29.
“Projected NTHE CapEx” means the Seller’s good faith estimate, as of the Closing, of the total NTHE CapEx required to achieve the NTHE System RFS; provided, that for purposes of this calculation, the maximum amount of NTHE CapEx incurred prior to the Closing shall be $50,000,000 and any NTHE CapEx incurred prior to the Closing in excess of such maximum amount shall be disregarded.
“Purchase Price” means the Final Closing Payment Amount, plus the Final NTHE Reimbursement, plus the dollar value of all Earn-out Payments made by Purchaser to the Seller, plus all other amounts that are payable to the Seller pursuant to this Agreement.
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“Purchase Price Escrow Account” means the account established with the Escrow Agent pursuant to the Escrow Agreement to hold the Purchase Price Escrow Amount.
“Purchase Price Escrow Amount” means $4,000,000.
“Purchased Securities” has the meaning set forth in the Recitals.
“Purchaser” has the meaning set forth in the Preamble.
“Purchaser Adjustment Amount” has the meaning set forth in Section 2.8(f).
“Purchaser Fundamental Representations” means the representations and warranties set forth in Section 4.1 (Organization and Good Standing), Section 4.2 (Authorization; Enforceability), and Section 4.6 (Brokers).
“Purchaser Indemnitees” has the meaning set forth in Section 8.2.
“Purchaser Material Adverse Effect” means a material adverse effect on the ability of Purchaser to perform its obligations under this Agreement or the other Transaction Agreements, or that would prevent, materially impede or delay the consummation by Purchaser of the transactions contemplated hereby or thereby.
“Purchaser Parent” has the meaning set forth in the Preamble.
“Purchaser Parent SEC Documents” has the meaning set forth in Section 4.8(a).
“Quintillion Fiber Network” means the Group Companies’ operational network as of the date hereof together with the Nome-to-Homer Express Route.
“Quintillion Starlink Community Gateways” means the Starlink Community Gateways constructed and owned by the Group Companies in Utqiagvik, Alaska and Nome, Alaska.
“Quintillion-Served Community” means the following communities:
(i) Utqiagvik;
(ii) Point Hope;
(iii) Wainwright;
(iv) Kotzebue;
(v) Nome;
(vi) Naknek, following the NTHE System RFS;
(vii) Igiugig, following the NTHE System RFS;
(viii) Included Communities; and
(ix) Future Communities.
“R&W Insurance Policy Costs” has the meaning set forth in Section 5.21(c).
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“R&W Policy” has the meaning set forth in Section 5.21(a).
“Release” means any spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping, or disposing into the environment (including the abandonment or discarding of barrels, containers, and other closed receptacles containing any Hazardous Substance).
“Released Purchaser Person” has the meaning set forth in Section 9.13.
“Releasing Seller Person” has the meaning set forth in Section 9.13.
“Registered Intellectual Property Rights” means active (i) patents and patent applications, (ii) registered trademarks, service marks or logos and applications therefor; (iii) domain names, and (iv) copyright registrations and applications therefor, in each case owned by any Group Company.
“Registration Rights Agreement” has the meaning set forth in Section 5.20(d).
“Registration Statement & Prospectus” has the meaning set forth in Section 5.10.
“Regulatory Fees” means all regulatory fees, charges (including any universal service fund or equivalent charge) or commissions applied or charged by any Governmental Authority in connection with, or related to, the Business or any service provided by any of the Group Companies.
“Related Parties” means, with respect to a Person, such Person and any of its Affiliates, and each of their respective current directors, officers and general partners; provided that in the case of the Group Companies, the term “Related Party” shall include any “associate” or any member of the “immediate family” (as such terms are respectively defined in Rules 12b-2 and Rule 16a-1 of the Exchange Act) of any current director, officer or employee of either Seller or the Group Companies.
“Related Party Contract” means any Contract, transaction or other business dealing between any one or more Group Companies, on the one hand, and any one or more of the Seller or any of its Affiliates (other than a Group Company), on the other hand.
“Reports” has the meaning set forth in Section 3.15(e).
“Representative” means, with respect to any Person, its officers, directors, employees, financial advisors, attorneys, accountants, actuaries, consultants and other agents, advisors and representatives acting on behalf of such Person.
“Representation Letter” has the meaning set forth in Section 5.20(f).
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“Reserve Capacity” means the minimum available contracted bandwidth and pricing tier required to reserve at least 5Gbps of standby capacity, or the then available most comparable tier for serving the Quintillion Starlink Community Gateways.
“Resold Services” has the meaning set forth in Schedule EO.
“Restricted Cash” means any Cash that is not freely usable by the Group Companies because it is subject to restrictions, limitations or the imposition of Taxes on use or distribution by law or Contract, including deposits to secure a liability or obligation of the Group Companies, cash collateralizing any liability or obligation, cash in reserve or escrow accounts, custodial cash and cash subject to a lockbox, dominion, control or similar agreement. Restricted Cash shall also include any balances that should be considered restricted cash under GAAP.
“Revenue” means end user plan fees, usage charges, and activation charges, less any discounts, refunds, and end-user account-level or service-level credits, as recognized in accordance with GAAP and subject to the adjustments thereto specified on Schedule EO. For the avoidance of doubt, Revenue does not include any non-discretionary pass-through charges (e.g., state, federal, or local taxes, Alaska Connect Fund, Federal Communications Commission fees and contributions to federally mandated funds, and other governmental or regulatory charges), equipment sales, accessories sales, handset insurance fees, deferred liabilities arising from grants, IRU arrangements, or leases that are run through revenues over time or late fees.
“Reverse Termination Fee” has the meaning set forth in Section 7.2(b).
“Review Period” has the meaning set forth in Section 2.8(b).
“Rules of Arbitration” has the meaning set forth in Section 5.17(c)(v).
“Sanctions Laws” means economic or financial sanctions, embargoes laws, regulations, embargoes or restrictive measures imposed, administered or enforced from time to time by the U.S. government, including those administered by OFAC, the U.S. Department of Treasury or the U.S. Department of State.
“SEC” means the Securities and Exchange Commission.
“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations of the SEC thereunder.
“Security Breach” means any breach, security breach, breach of Personal Information and all similar terms as defined under any relevant Law.
“Security Incident” means any attempted or successful unauthorized access, use, disclosure, modification or destruction of any Personal Information or IT Asset.
“Seller” has the meaning set forth in the Preamble.
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“Seller Adjustment Amount” has the meaning set forth in Section 2.8(e).
“Seller Fundamental Representations” means the representations and warranties set forth in Section 3.1 (Organization), Section 3.2 (Authorization; Enforceability), Section 3.3(a) (No Conflicts; Consents and Approvals), Section 3.4 (Governmental Filings), Section 3.5 (Ownership of Purchased Securities), Section 3.6 (Brokers), Section 3.7(a) through (c) (Organization and Good Standing; Qualification), and Section 3.8 (Capital Structure).
“Seller Indemnitees” has the meaning set forth in Section 8.3.
“Seller Return” has the meaning set forth in Section 5.9(a)(i).
“Separation Agreements” has the meaning set forth in Section 2.5(g).
“Service Provider” means any employee, non-employee director or individual independent contractor of any Group Company.
“SLI Grant Project” means the project to build a hybrid fiber and satellite network to and in the communities of Gambell and Savoonga on St. Lawrence Island that is the subject of a pending grant application under the Alaska Broadband Grant Program, a state program to distribute funds from the National Telecommunications and Information Administration’s Broadband, Equity, Access, and Deployment Program (“BEAD Program”).
“Specified Debt Payoff Amount” means the amount necessary to pay in full all obligations (including outstanding unpaid principal and unpaid interest) under the Funded Indebtedness as of the Closing.
“Specified Matters” has the meaning set forth in Schedule 8.2.
“State Regulator” means any state public service commission or state public utility commission or similar Governmental Authority regulating telecommunications, including any state, local, municipal or tribal Governmental Authority that may be acting as a local franchising authority.
“Statement of Objections” has the meaning set forth in Section 2.8(b).
“Straddle Period” means any Tax period that begins on or before and ends after the Closing Date.
“Subsidiary” means, with respect to any specified Person any: (a) corporation, more than 50% of the voting or capital stock of which is, as of the time in question, directly or indirectly owned by such Person; and (b) partnership, joint venture, association, or other entity in which such Person, directly or indirectly, owns more than 50% of the equity economic interest thereof or has the power to elect or direct the election of more than 50% of the members of the governing body of such partnership, joint venture, association or other entity.
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“Survival Expiration Date” has the meaning set forth in Section 8.1(b).
“Target Working Capital” means negative $1,433,000.
“Tax Allocation Assets” has the meaning set forth in Section 5.9(f).
“Tax Return” means any return, declaration, election, report, claim for refund, information return, certificate, bill, statement or other written information filed or required to be filed with any Taxing Authority relating to Taxes, including any supplement, schedule or attachment thereto, and including any amendment thereof.
“Tax Sharing Agreement” means any Tax sharing, allocation, indemnification, reimbursement, receivables or similar agreement or other Contract that provides for the allocation, apportionment, sharing or assignment of any Tax liability or benefit (other than a Contract entered into in the Ordinary Course of Business and that is not primarily related to Taxes). For the avoidance of doubt, the term “Tax Sharing Agreement” shall not include the operating agreement or other organizational documents of a Group Company.
“Taxes” means (a) any United States, foreign, federal, state, national, municipal, county, local or other income, profits, franchise, gross receipts, environmental, customs, duty, capital stock, severance, stamp, payroll, sales, employment, unemployment, disability, use, transfer, property, capital gains, withholding, excise, value added, occupancy or other taxes, and any fees, assessments, levies, or other charges in the nature of a tax, and any unclaimed property or escheat obligations, in each case together with all interest, penalties, and additions with respect to such amounts, whether disputed or not; and (b) any liability for any item described in clause (a) as a result of being or having been a member of an affiliated, aggregate, combined, consolidated, unitary or similar group (including pursuant to Treasury Regulation Section 1.1502-6 or any analogous or similar provision of state or local Law), as a transferee or successor (whether by merger, conversion, liquidation or otherwise), pursuant to any contractual obligation or otherwise.
“Taxing Authority” shall mean the IRS and any other Governmental Authority exercising any authority to impose, regulate, collect or administer the imposition of Taxes.
“Team Telecom” means the Committee for the Assessment of Foreign Participation in the United States Telecommunications Services Sector, as established under Executive Order No. 13913 issued April 4, 2020, including any Members or Committee Advisors of such Committee acting in their individual capacities pursuant to such Executive Order.
“Telecom Regulatory Authorizations” has the meaning set forth in Section 3.15(b).
“Terminated Agreements” has the meaning set forth in Section 5.11(a).
“Third Party Claim” has the meaning set forth in Section 8.6(a).
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“Trading Day” means a day on which Nasdaq is scheduled to be open for business and on which there has not occurred a Market Disruption Event.
“Transaction Agreements” means this Agreement, the Escrow Agreement, the Debt Documentation, the Registration Rights Agreement and all other agreements, instruments, and documents delivered or required to be delivered by any party pursuant hereto or thereto.
“Transaction Dispute” has the meaning set forth in Section 9.6(a).
“Transfer Taxes” means any sales, use, value added, excise (other than, for the avoidance of doubt, excise taxes under Section 409A of the Code and similar Taxes), stock transfer, real property transfer, transfer, stamp, registration, documentary, recording or similar Tax or similar fee, including any interest, addition to Tax or penalties related thereto, incurred in connection with the transactions contemplated hereby.
“Tribunal” has the meaning set forth in Section 9.6(d).
“UEGS CapEx Adjustment” means the greater of (i) $7,000,000 or such other amount as may be mutually agreed in writing by the Seller and Purchaser minus the aggregate amount of capital expenditures incurred by the Group Companies prior to Closing in connection with the Utqiagvik Expansion Ground Station and (ii) $0; provided, that if either (A) the Seller does not make the UEGS Election, or (B) the Seller has prior to Closing completed development of the Utqiagvik Expansion Ground Station consistent with the plan of development attached as Annex C to Schedule EO, the UEGS CapEx Adjustment shall equal $0.
“UEGS Election” means written notice provided by Seller to Purchaser prior to Closing that Seller elects to develop the Utqiagvik Expansion Ground Station.
“Unaudited Financial Statements” means the unaudited consolidated statements of financial position, statements of profit or loss and other comprehensive income, statements of changes in equity, cash flows statements, and notes for the Group Companies as of and for the twelve-month period ended December 31, 2025.
“Updated Projected CapEx Schedule” has the meaning set forth in Section 5.19(a).
“Updated Projected CapEx Schedule Delivery Date” has the meaning set forth in Section 5.19(a).
“Upfront Debt Financing” means the debt financing in an amount up to $160,000,000 to be obtained by the Seller from Purchaser or one of its Affiliates.
“Upfront Debt Interest Distributions” means distributions from the Company to the Seller to service cash interest payments of the Seller to the Upfront Lender required in connection with the Upfront Debt Financing.
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“Upfront Lender” means the lender under the Upfront Debt Financing.
“Upload Deadline” has the meaning set forth in Section 9.17(b).
“Utqiagvik CLS Ground Station” means the property in Utqiagvik leased from Arctic Slope Telephone Association Cooperative, Inc. at 71 16' 30.43'' N, 156 48' 22.02'' W that currently includes a 3.7-meter S & X band antenna owned by Seller.
“Utqiagvik Expansion Ground Station” means Seller’s undeveloped five-acre property in Utqiagvik, Alaska leased from Ukpeagvik Inupiat Corporation that, if Seller makes the UEGS Election, Seller will develop with gravel, roads, power infrastructure, and a communications shelter consistent with the plan of development attached as Annex C to Schedule EO.
“Utqiagvik Ground Stations” means the Utqiagvik CLS Ground Station and Utqiagvik Expansion Ground Station.
“Utqiagvik Terrestrial Route” means the terrestrial fiber network currently under construction by the Group Companies to be operated by the Group Companies between the In-Field Fiber and Utqiagvik, as described in greater detail in the Projected CapEx Schedule.
“UTR System RFS” means ready for service (or equivalent milestone as understood in the telecommunications industry) with respect to all segments of the Utqiagvik Terrestrial Route so as to enable the transmission of third-party data connectivity services on such network on a commercial basis.
“VDR” means the “Quintillion” virtual data room hosted by Bank Street Group on the Firmex platform.
“Wireless Service” has the meaning set forth in Schedule EO.
“Yukon-Kuskokwim Grant Project” means the projects to build terrestrial telecommunications infrastructure to and in the Included Communities funded in part by grants awarded to the parties under the United States Department of Agriculture Rural Utility Service’s ReConnect Loan and Grant Project and subject in part to pending grant applications filed by the parties under the BEAD Program.
Article 2
Purchase and Sale; Closing
Section 2.1. Purchase and Sale.
(a) On the terms and subject to the conditions set forth in this Agreement, on the Closing Date and at the Closing, the Seller shall sell, assign, transfer, convey and deliver to Purchaser, and Purchaser shall purchase, acquire and accept from the Seller, all of the Seller’s right and title to, and interest in, the Purchased Securities, free and clear of all Liens except for any restriction on transfer of securities pursuant to applicable securities Laws.
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(b) In consideration for the sale, conveyance, assignment, transfer and delivery of the Purchased Securities by the Seller, upon the terms and subject to the conditions set forth in this Agreement, (i) at the Closing, Purchaser shall pay to the Seller an aggregate amount of cash equal to the Closing Date Payment, as described in Section 2.2, (ii) following the Closing, Purchaser shall pay to the Seller an aggregate amount of cash equal to the Final NTHE Reimbursement, as described in Section 5.16, and (iii) following the Closing, the Seller shall be entitled, subject to the satisfaction of the conditions in Section 5.17, to receive from Purchaser earn-out payments, as further described in Section 5.17.
Section 2.2. Closing Payment.
(a) The aggregate cash payment at Closing for the Purchased Securities shall be $310,000,000, subject to adjustments pursuant to Section 2.4(b) and Section 2.8 hereof (the “Closing Payment Amount”). The Closing Payment Amount shall be delivered by Purchaser at such times and in such amounts as provided in this Article 2.
(b) At the Closing, Purchaser shall pay in accordance with the Closing Payment Disbursement Schedule delivered pursuant to Section 2.4(a)(ii) (i) the Closing Date Payment to the Seller, (ii) the Company Transaction Expenses to the applicable Person(s) set forth on the Closing Payment Disbursement Schedule and (iii) the Specified Debt Payoff Amount (on behalf of the relevant debtors) to the account or accounts designated in the applicable Debt Payoff Letters.
Section 2.3. Closing. The Closing shall take place: (a) at the offices of Baker Botts L.L.P., 30 Rockefeller Plaza, New York, NY 10112 (or remotely via the electronic exchange in PDF form of closing deliveries), at 10:00 A.M., Eastern Prevailing Time, on the fifth Business Day after the last of the conditions required to be satisfied or waived (to the extent waiver is not prohibited by applicable Law) pursuant to Article 6 is either satisfied or waived (to the extent waiver is not prohibited by applicable Law) (other than any conditions that by their nature are to be satisfied at the Closing, it being understood that in all cases the occurrence of the Closing shall remain subject to the satisfaction or waiver in writing of such conditions at the Closing); or (b) at such other place, time or date as Purchaser and the Seller may agree upon in writing. The date on which the Closing occurs is referred to herein as the “Closing Date.”
Section 2.4. Closing Adjustment.
(a) No later than three Business Days prior to the Closing Date, the Seller shall cause the Group Companies to prepare and deliver to Purchaser:
(i) a written statement (the “Pre-Closing Statement”) that sets forth: (A) an estimated consolidated balance sheet of the Group Companies as of the Closing Date prepared in good faith; (B) a good faith estimate of the Closing Cash Amount; (C) a good faith estimate of Closing Working Capital (the “Estimated Closing Working Capital”); (D) a good faith estimate of Closing Indebtedness (the “Estimated Indebtedness”); (E) a good faith estimate of the unpaid Company Transaction Expenses as of the Closing Date; (F) a good faith estimate of the UEGS CapEx Adjustment; and (G) Seller’s calculation of the Closing Date Payment based on the foregoing amounts. The Pre-Closing Statement and the applicable components thereof shall be prepared in accordance with the Accounting Principles. Each line item included in the Closing Working Capital shall be calculated in the same manner, using the same methods, and applying the same principles as the corresponding line item was calculated for purposes of determining the illustrative calculation of Closing Working Capital as of December 31, 2025 (as if such date were the Closing Date), set forth on Exhibit D; and
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(ii) a true, correct and accurate schedule (the “Closing Payment Disbursement Schedule”) that sets forth: (A) the Closing Date Payment, as determined pursuant to Section 2.4(b), due to the Seller and the applicable account or accounts of the Seller to which the funds should be wired on the Closing Date; (B) the Person(s) to which the Company Transaction Expenses are due, the applicable amounts due to such Person(s) and the applicable accounts to which the funds should be wired on the Closing Date; (C) the Specified Debt Payoff Amount (on behalf of the relevant debtors) and the corresponding account or accounts (or, in the case of the Upfront Debt Financing, any payment instruction set forth by the Upfront Lender) designated in the applicable Debt Payoff Letters; and (D) if applicable, the Closing Date Shortfall Amount, as determined pursuant to Section 2.4(b).
The Seller shall use its reasonable best efforts to deliver a preliminary draft of the Pre-Closing Statement and Closing Payment Disbursement Schedule to Purchaser not later than five Business Days prior to the Closing Date, and shall consider in good faith any reasonable comments to each such pre-Closing deliverable made by Purchaser prior to the final delivery of such pre-Closing deliverable in accordance with the first sentence of this Section 2.4(a). Concurrently with the delivery of the preliminary draft of the Pre-Closing Statement and Closing Payment Disbursement Schedule, the Seller shall deliver to Purchaser reasonable documentation in the possession of the Seller or any of its Affiliates to support the items for which any adjustments are proposed or made to the preliminary draft of the Pre-Closing Statement delivered by the Seller and a brief explanation of any such adjustments and the reasons therefor.
(b) At Closing, the Closing Payment Amount shall be adjusted based on the Pre-Closing Statement by the following amounts in the following manner (without duplication):
(i) increased by the estimated amount of the Closing Cash Amount;
(ii) either (A) increased by the amount, if any, by which the Estimated Closing Working Capital exceeds the Target Working Capital, or (B) decreased by the amount, if any, by which the Target Working Capital exceeds the Estimated Closing Working Capital, as applicable;
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(iii) decreased by the amount of the Estimated Indebtedness;
(iv) decreased by the estimated amount of any unpaid Company Transaction Expenses;
(v) decreased by the Purchase Price Escrow Amount; and
(vi) decreased by the UEGS CapEx Adjustment.
The net amount resulting from the adjustments of the Closing Payment Amount as set forth in this Section 2.4(b) shall be referred to herein as the “Closing Date Payment”; provided, that if such net amount is less than zero, the amount by which such net amount is less than zero shall be referred to herein as the “Closing Date Shortfall Amount” and the Closing Date Payment for purposes of the Pre-Closing Statement shall be deemed to be zero.
(c) Any Closing Date Shortfall Amount shall be set off from the Estimated NTHE Reimbursement payable to the Seller based upon a NTHE Initial Statement prepared in good faith by the Seller and using its reasonable best efforts and delivered together with the Pre-Closing Statement; provided, that in the event the Closing Date Shortfall Amount exceeds such Estimated NTHE Reimbursement, then the Seller shall cause the Equity Financing Source to fund the remaining portion of such Closing Date Shortfall Amount from the Equity Commitment Letter and the Seller shall deliver such amount to Purchaser in cash, by wire transfer of immediately available funds; provided, further, in no event shall the Seller be required to pay any Closing Date Shortfall Amount in excess of the Estimated NTHE Reimbursement and the amount of funds available under the Equity Commitment Letter. Other than with respect to the set-off of the Estimated NTHE Reimbursement, Purchaser shall have no right to withhold, set-off or deduct from any sum that is or may be owed to Seller pursuant to this Agreement the portion of the Closing Date Shortfall Amount that remains unpaid.
Section 2.5. Deliveries by the Seller at the Closing. At the Closing, the Seller shall deliver, or cause to be delivered:
(a) to Purchaser, a certificate, duly executed by an authorized officer of the Seller, dated as of the Closing Date, certifying that the conditions set forth in Section 6.3(a) and Section 6.3(b) have been satisfied or waived;
(b) to Purchaser, an assignment of the Purchased Securities, in form and substance satisfactory to Purchaser, duly executed by the Seller;
(c) to Purchaser, a properly completed and executed valid IRS Form W-9 from the Seller;
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(d) to Purchaser, a certificate, in a form satisfactory to Purchaser, signed by the secretary of the Seller and dated as of the Closing Date, certifying to: (A) the certificates of formation of each of the Group Companies and the limited liability company agreements of each of the Group Companies and (B) the resolutions of the board of managers or other governing body of the Seller authorizing and approving the execution, delivery and performance of the Transaction Agreements and the transactions contemplated hereby and thereby as having been duly and validly adopted and being in full force and effect as of the date of this Agreement and the Closing Date;
(e) to Purchaser, evidence in form and substance satisfactory to Purchaser, of the termination of each of the Terminated Agreements;
(f) to Purchaser, written resignation and release letters, dated as of the Closing Date, of the officers, managers and members of the board of directors of each Group Company, which resignation and release letters shall be effective as of the Closing and in form and substance satisfactory to Purchaser; provided that such releases shall not include any release of claims related to such Person’s capacity as an officer, manager or member of the board of directors of any Group Company;
(g) to Purchaser, copies of the separation and release agreements substantially in the form attached hereto as Exhibit A (the “Separation Agreements”), duly executed by the applicable Group Company and each employee employed by a Group Company immediately prior to the Closing;
(h) to Purchaser Parent, a copy of the Registration Rights Agreement, duly executed by the Seller;
(i) to Purchaser, an updated schedule setting forth, as of the Closing Date, the Network information required to be set forth in Section 3.26(a) of the Disclosure Schedule;
(j) to Purchaser, the NTHE Initial Statement;
(k) to Purchaser, a good standing certificate of each of the Group Companies issued by the secretary of state of the state of incorporation or formation, as applicable, dated as of a date not more than five Business Days prior to the Closing Date;
(l) to Purchaser, evidence, in form and substance satisfactory to Purchaser, of an instruction to bind, effective as of the Closing Date, a six-year extension (or “tail”) of the current level and scope of management liability insurance or a tail insurance policy of the same level or scope for the six-year period (including directors and officers liability and employment practices liability), in each case covering those persons who are covered by the Group Companies’ management and/or directors’ and officers’ liability insurance policy as of the Closing (the “D&O Tail Policy”);
(m) to Purchaser, (i) customary payoff letters from the holders of the Funded Indebtedness, in form and substance satisfactory to Purchaser (the “Debt Payoff Letters”), in each case, duly executed by each holder of such Funded Indebtedness, with an agreement to deliver any related Lien and guarantee releases, as applicable, to Purchaser (including termination statements on Form UCC-3), together with authority to file, record or deliver, as applicable, such terminations or other releases at and following the Closing, which when filed, recorded or delivered, as applicable, will release and satisfy any and all Liens relating to such Funded Indebtedness; and (ii) final invoices from any Person with respect to the Company Transaction Expenses evidencing the aggregate amount of Company Transaction Expenses, the instructions for paying the same and, if reasonably requested by Purchaser, an agreement that, if such aggregate amount so identified is paid to the applicable payee, such payment will constitute full and final payment in satisfaction of all obligations of the applicable Group Company to such payee, in form and substance reasonably satisfactory to Purchaser;
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(n) to Purchaser, a copy of the Escrow Agreement, duly executed by the Seller and the Escrow Agent; and
(o) to Purchaser, such documents as are necessary to authorize Purchaser or its designees to exert dominion and control over the Bank Accounts from and after the Closing.
Section 2.6. Deliveries by the Purchaser at the Closing. At the Closing, Purchaser shall deliver, or cause to be delivered:
(a) to the Seller, a certificate, duly executed by an authorized officer of Purchaser, dated as of the Closing Date, certifying that the conditions set forth in Section 6.2(a) and Section 6.2(b) have been satisfied or waived;
(b) to the Person(s) and the account(s), and in the amounts, specified in the Closing Payment Disbursement Schedule pursuant to Section 2.4(a)(ii), cash, by wire transfer of immediately available funds, in the amount necessary to pay all outstanding Company Transaction Expenses;
(c) to the Seller, in the amounts specified in the Closing Payment Disbursement Schedule pursuant to Section 2.4(a)(ii), cash, by wire transfer of immediately available funds, in an aggregate amount equal to the Closing Date Payment;
(d) to the Person(s) and the account(s), and in the amounts, specified in the Debt Payoff Letters and listed in the Closing Payment Disbursement Schedule, cash, by wire transfer of immediately available funds, in an amount equal to the Funded Indebtedness owing to such Person, in each case as set forth in the applicable Debt Payoff Letter; provided, that this Section 2.6(d) shall be satisfied with respect to the Upfront Debt Financing if Purchaser has complied with the settlement instructions set forth in the related Debt Payoff Letter, which may provide for settlement by wire transfer, set-off or such other method as directed by the Upfront Lender;
(e) to the Escrow Agent, the Purchase Price Escrow Amount;
(f) to the Seller, a copy of the Registration Rights Agreement, duly executed by Purchaser Parent;
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(g) to the Seller, duly executed resolutions of Purchaser authorizing and approving the execution, delivery and performance of the Transaction Agreements and the transactions contemplated hereby and thereby as having been duly and validly adopted and being in full force and effect as of the date of this Agreement and the Closing Date; and
(h) to the Seller, a copy of the Escrow Agreement, duly executed by Purchaser and the Escrow Agent.
Section 2.7. Withholding Tax. Notwithstanding anything to the contrary in this Agreement, the Escrow Agent, Purchaser, its Affiliates (including, at and after the Closing, the Group Companies) and any Person acting on behalf of any of the foregoing shall be entitled to deduct and withhold from the Purchase Price under this Agreement any amounts required to be deducted or withheld under the Code or any other applicable Tax Laws; provided that if the applicable payor is Purchaser or its Affiliates then the applicable payor shall provide the applicable payee with no less than five Business Days written notice prior to withholding any amounts pursuant to this Section 2.7, and shall work in good faith with such payee to eliminate or reduce any such withheld or deducted amounts. Each party agrees and acknowledges that, as of the date of this Agreement, it is not aware of any Tax Law that would require Purchaser to withhold from amounts payable under this Agreement to the Seller (other than compensatory payments) if Purchaser has in its possession at all relevant times on and after the Closing Date a properly completed and executed valid IRS Form W-9 from the Seller establishing that payments to the Seller are not subject to backup withholding. Any amounts that are so deducted and withheld shall be treated for all purposes of this Agreement as having been paid to the Person in respect of which such deduction and withholding was made and at the time and in the manner required by this Agreement. All such withheld amounts shall be paid to the applicable Taxing Authority in accordance with applicable Law.
Section 2.8. Post-Closing Adjustment. The Closing Payment Amount shall be adjusted following the Closing as provided in this Section 2.8:
(a) Within 90 calendar days after the Closing Date, Purchaser shall prepare in good faith and deliver to the Seller a statement (the “Post-Closing Statement”) that sets forth: (i) an unaudited consolidated balance sheet of the Group Companies as of the Closing Date; (ii) Purchaser’s calculation of the Closing Cash Amount; (iii) Purchaser’s calculation of Closing Working Capital; (iv) Purchaser’s calculation of Closing Indebtedness; (v) Purchaser’s calculation of the unpaid Company Transaction Expenses as of the Closing Date; (vi) Purchaser’s calculation of the UEGS CapEx Adjustment; and (vii) Purchaser’s calculation of the Closing Date Payment based on the foregoing amounts (instead of the estimated amounts in the Pre-Closing Statement) and the deposit of the Purchase Price Escrow Amount. In the event that Purchaser shall fail to deliver the Post-Closing Statement within the 90-day period provided in this Section 2.8(a), at the Seller’s option, the Pre-Closing Statement, and the calculation of the Closing Payment Amount included therein, shall be treated as the Post-Closing Statement for all purposes hereof and the Seller may deliver a Statement of Objections objecting to such Post-Closing Statement in accordance with Section 2.8(b) (with the expiration of the 90-day period provided in this Section 2.8(a) as being the deemed date of receipt of the Post-Closing Statement for purposes of Section 2.8(b)).
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(b) The Seller shall have 45 calendar days from receipt of the Post-Closing Statement (the “Review Period”) to review such Post-Closing Statement (including Purchaser’s determination of the Closing Payment Amount). In connection with the Seller’s review of the Post-Closing Statement, Purchaser shall, and shall cause the Group Companies and their respective Affiliates and Representatives to (i) give, to the Seller and its Representatives, reasonable access, during normal business hours and upon reasonable advance written notice, to the relevant books and records of the Group Companies and (ii) use reasonable best efforts to cause the personnel of Purchaser or the Group Companies or their respective accountants and Representatives to reasonably cooperate with the Seller and its Representatives, including by providing access to such historical financial information relating to any of the Group Companies as the Seller or its Representatives may reasonably request, in each case, in order to permit review of the Post-Closing Statement by the Seller in accordance with this Section 2.8(b). If the Seller has accepted such Post-Closing Statement in writing or has not given written notice to Purchaser setting forth any objections to the Post-Closing Statement, which notice shall include, to the extent practicable, specific adjustments that the Seller propose be made to the Post-Closing Statement (a “Statement of Objections”), prior to the expiration of the Review Period, then the Post-Closing Statement (including the determination of the Closing Payment Amount) shall be final and binding upon the parties. In the event that the Seller delivers a Statement of Objections during the Review Period, each of Purchaser and the Seller shall use its reasonable best efforts to resolve such objections within 30 calendar days (or such longer period as they may mutually agree) following the receipt by Purchaser of such Statement of Objections (the “Dispute Period”) (any objection that remains unresolved following the Dispute Period, a “Dispute”). After such Dispute Period, any item or matter that is not a Dispute shall become final and binding. If Purchaser and the Seller are unable to resolve all objections during the Dispute Period, then any remaining Disputes, and only such remaining Disputes, shall be resolved by PricewaterhouseCoopers LLP, or, if PricewaterhouseCoopers LLP is not available for such engagement or at the time of such proposed engagement is no longer independent, such other internationally recognized independent certified public accounting firm reasonably agreed to by Purchaser and the Seller (the “Accounting Firm”). The Accounting Firm shall be instructed to resolve any such remaining Disputes in accordance with the terms of this Agreement within 60 calendar days after its appointment and to consider only those items and amounts set forth in the Post-Closing Statement as to which the Seller has specified and set forth their disagreement in a Statement of Objections and which Purchaser and the Seller have not resolved. In resolving any such disagreement, the Accounting Firm may not assign a value to such item greater than the greatest value for such item claimed by Purchaser in the Post-Closing Statement or by the Seller in the Statement of Objections or less than the lowest value for such item claimed by Purchaser in the Post-Closing Statement or by the Seller in the Statement of Objections. Once appointed, the Accounting Firm shall have no ex parte communications with any of the parties concerning the expert determination or the underlying dispute and shall only have communications with the Seller and/or Purchaser as provided in this Section 2.8(b). All communications between the Seller and/or the Purchaser, on the one hand, and the Accounting Firm, on the other hand, shall be conducted in writing, with copies sent simultaneously to the Seller and the Purchaser, as applicable, or at a meeting (which may be electronic or telephonic) involving both the Seller and the Purchaser where both the Seller and the Purchaser have been provided at least five Business Days’ advance written notice or at such shorter time as Purchaser and the Seller may agree upon in writing. In resolving such Disputes, the Accounting Firm will function as an expert and not an arbitrator. The resolution of such Disputes by the Accounting Firm shall be conclusive and binding upon the parties, absent intentional fraud or manifest error (provided that such manifest error can only be corrected by the Accounting Firm). During the review by the Accounting Firm, Purchaser, the Seller and their respective accountants shall each make available to the Accounting Firm such information, books and records and work papers as may be required by the Accounting Firm to fulfill its obligations pursuant to this Section 2.8(b).
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(c) Each of Purchaser, on the one hand, and the Seller, on the other hand, shall pay its own respective costs and expenses incurred in connection with this Section 2.8 and be responsible for the fees and expenses of the Accounting Firm on a pro rata basis based on the amount of the adjustment relative to the respective positions of Purchaser, on the one hand, and the Seller, on the other hand (which shall be determined by the Accounting Firm and set forth in the Accounting Firm’s resolution).
(d) The Post-Closing Statement, as prepared and determined pursuant to this Section 2.8 shall be deemed final and binding for all purposes upon the earliest of: (i) the failure of the Seller to deliver a Statement of Objections to Purchaser prior to the expiration of the Review Period; (ii) the resolution of all Disputes pursuant to Section 2.8(b) by the Seller and Purchaser; and (iii) the resolution of all Disputes pursuant to Section 2.8(b) by the Accounting Firm. “Closing Statement” shall mean the Post-Closing Statement, as finally determined (including by modification or adjustment) pursuant to the terms and conditions of this Section 2.8, and “Final Closing Payment Amount” means the Closing Payment Amount, as set forth in the Closing Statement, as finally determined (including by modification or adjustment) pursuant to the terms and conditions of this Section 2.8.
(e) If the Final Closing Payment Amount exceeds the Closing Date Payment (such excess amount, the “Seller Adjustment Amount”), then within five Business Days after the Closing Statement and the Final Closing Payment Amount have been determined pursuant to this Section 2.8, (i) Purchaser shall pay, or cause to be paid, to the Seller the Seller Adjustment Amount, by wire transfer of immediately available funds, in accordance with the wire transfer instructions designated in writing by the Seller to Purchaser; and (ii) Purchaser and the Seller shall deliver joint written instructions to the Escrow Agent instructing the Escrow Agent to release to the Seller all funds in the Purchase Price Escrow Account, by wire transfer of immediately available funds, in accordance with the wire transfer instructions designated in writing by the Seller to the Escrow Agent.
(f) If the Closing Date Payment exceeds the Final Closing Payment Amount (such excess amount, the “Purchaser Adjustment Amount”), then within five Business Days after the Closing Statement and the Final Closing Payment Amount have been determined pursuant to this Section 2.8, Purchaser and the Seller shall deliver joint written instructions to the Escrow Agent instructing the Escrow Agent to (i) release to Purchaser, solely from the funds available in the Purchase Price Escrow Account, an amount up to the Purchaser Adjustment Amount, by wire transfer of immediately available funds, in accordance with the wire transfer instructions designated in writing by Purchaser to the Escrow Agent and (ii) release to the Seller, to the extent that any balance in the Purchase Price Escrow Account remains after the Escrow Agent’s payment of the Purchaser Adjustment Amount to Purchaser pursuant to clause (i), the amount remaining in the Purchase Price Escrow Account, by wire transfer of immediately available funds, in accordance with the wire transfer instructions designated in writing by the Seller to the Escrow Agent; provided that, in the event the Purchaser Adjustment Amount exceeds the Purchase Price Escrow Amount, Purchaser shall have the right (unless any Closing Date Shortfall Amount remains after the application of Section 2.4(c), in which event Purchaser shall have no set-off right with respect to the portion of the Purchaser Adjustment Amount that exceeds the Purchase Price Escrow Amount) to withhold, set-off and deduct from any sum that is or may be owed to Seller pursuant to Section 5.17 the portion of the Purchaser Adjustment Amount that exceeds the funds available in the Purchase Price Escrow Account.
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(g) The parties acknowledge and agree that:
(i) Purchaser’s recovery of any amount from the Purchase Price Escrow Amount shall not reduce, offset, or otherwise affect any claim for indemnification to which Purchaser may be entitled pursuant to Article 8, and any such indemnification claim shall be recoverable without regard to any amounts recovered by Purchaser pursuant to Section 2.8(f); and
(ii) the pendency of any dispute regarding the Final Closing Payment Amount shall not delay, suspend, or otherwise affect Purchaser’s right to assert claims for indemnification pursuant to Article 8.
Article 3
Representations and Warranties Concerning the Seller and the Group Companies
The Seller hereby represents and warrants to Purchaser that the statements contained in this Article 3 are true and correct as of the date hereof and as of the Closing Date, except for such representations and warranties as are made only as of a specific date, which shall only be made as of such date:
Section 3.1. Organization. The Seller is a company duly formed and validly existing and in good standing under the Laws of its jurisdiction of formation.
Section 3.2. Authorization; Enforceability. The Seller has all requisite power and authority to execute, deliver, and perform its obligations under this Agreement and the other Transaction Agreements to which it is a party, and to consummate the transactions contemplated hereby and thereby (including all power and authority to sell, assign, transfer and convey the Purchased Securities as provided by this Agreement). The execution, delivery and performance by the Seller of this Agreement and the other Transaction Agreements to which it is a party, and the consummation of the transactions contemplated hereby and thereby, have been duly and validly authorized by all necessary corporate or other similar action on the part of the Seller. This Agreement has been, and the other Transaction Agreements to which it is or will be a party is or shall be, duly and validly executed and delivered by the Seller, and assuming the due authorization, execution and delivery by the other parties hereto and thereto, shall, upon such execution and delivery hereof and thereof, be the legal, valid and binding obligations of the Seller hereunder and thereunder, as applicable, enforceable against the Seller in accordance with its terms, except as limited by applicable bankruptcy, reorganization, insolvency, moratorium or other similar Laws affecting the enforcement of creditors’ rights generally from time to time in effect, and the availability of equitable remedies (regardless of whether enforceability is considered in a proceeding at law or in equity) (collectively, the “General Enforceability Exceptions”).
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Section 3.3. No Conflicts; Consents and Approvals. Except as set forth in Section 3.3 of the Disclosure Schedule, neither the execution, delivery nor performance of this Agreement by the Seller or the Group Companies, or of the other Transaction Agreements to which the Seller or Group Company is a party, nor the consummation by the Seller or the Group Companies of the transactions contemplated hereby or thereby, shall: (a) conflict with, violate or result in a breach of any provisions of the certificate of formation, certificate of limited partnership, limited liability company agreement or limited partnership agreement (or equivalent organizational or governing documents) of the Seller or any of the Group Companies (as applicable) (collectively, the “Company Organizational Documents”); (b) constitute or result in the breach of any term, condition or provision of, or constitute a default under, or give rise to any right of termination, cancellation or acceleration with respect to, or result in the creation or imposition of a Lien (other than Liens created by or through Purchaser) upon any property or assets of the Seller or any Group Company pursuant to, any Material Contract or Permit; or (c) subject to obtaining the Closing Regulatory Approvals, violate any material Law applicable to the Seller or any Group Company or its properties or assets.
Section 3.4. Governmental Filings. Except for the Closing Regulatory Approvals or disclosure requirements under securities laws or stock exchange rules, no filing or registration with, notification to, or authorization, consent or approval of any applicable Governmental Authority is required by the Seller in connection with (a) the execution, delivery and performance of this Agreement by the Seller, or of the other Transaction Agreements to which the Seller is a party, or (b) the consummation by the Seller and the Group Companies of the transactions contemplated hereby or thereby, except, in each case, for such filings, registrations, notifications, authorizations, consents or approvals that the failure to make would not reasonably be expected to have, individually or in the aggregate, a material adverse effect on the ability of the Seller or any Group Company to perform its obligations under this Agreement or that would prevent, materially impede or delay the consummation by the Seller or any Group Company of the transactions contemplated hereby or thereby.
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Section 3.5. Ownership of Purchased Securities. The Seller is the direct sole record and beneficial owner of, and has good, valid and marketable title to, all of the issued and outstanding Purchased Securities reflected as being owned by the Seller on Section 3.5 of the Disclosure Schedule, free and clear of all Liens (other than transfer restrictions under applicable securities Laws). Upon delivery of the Purchased Securities to Purchaser at the Closing, Purchaser shall acquire all of the Purchased Securities free and clear of any Liens (other than transfer restrictions under applicable securities Laws or Liens created by, in favor of, or through Purchaser). The Purchased Securities constitute all of the equity interests in the Company.
Section 3.6. Brokers. No broker, finder, investment banker, agent or other similar Person is or shall be entitled to any broker’s, finder’s, financial advisor’s or other similar fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of the Seller or the Group Companies other than as included in the Company Transaction Expenses.
Section 3.7. Organization and Good Standing; Qualification.
(a) Each of the Group Companies is an entity, duly organized or formed, as applicable, validly existing and in good standing, or the applicable local Law equivalent (to the extent such entity is in a jurisdiction where such concept is recognized) under the Laws of its jurisdiction of incorporation or formation, as applicable. None of the Group Companies are in violation of any of the provisions of their respective Company Organizational Documents in any material respect. True and correct copies of the Company Organizational Documents have been made available to Purchaser.
(b) Each of the Group Companies has the requisite corporate or limited liability company power and authority to own, lease and operate its properties and to carry on the Business in all material respects.
(c) Each of the Group Companies is duly qualified or licensed to do business and is in good standing in each jurisdiction where the character of its properties owned, operated or leased or the nature of its activities makes such qualification or licensure necessary, except where failure to be so qualified would not reasonably be expected to be material to the Group Companies, taken as a whole.
(d) All minutes or other records of meetings and actions taken by written consent of the directors, managers and the members of the Group Companies relating to the Group Companies (i) are maintained in accordance with applicable Law, (ii) are up-to-date and in the possession (or under the control) of such Group Company and (iii) contain true, correct and complete records of all matters required to be reflected therein.
Section 3.8. Capital Structure.
(a) Section 3.8(a) of the Disclosure Schedule sets forth the (i) name, jurisdiction of organization or incorporation, (ii) the number and class of authorized and outstanding Equity Securities of each Group Company and (iii) the Equity Securities thereof owned, directly or indirectly (without duplication), by the Company. No other Equity Securities in any Group Company are authorized or outstanding.
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(b) (i) All of the issued and outstanding Equity Securities of each Group Company have been duly authorized and validly issued in compliance with all applicable Law (or pursuant to valid exemptions therefrom) and none have been issued in violation of any preemptive rights, rights of first refusal or similar rights, (ii) except as set forth in Section 3.8(a) of the Disclosure Schedule, the Group Companies have no other Equity Securities authorized, issued or outstanding, and there are no agreements, options, warrants or other rights or arrangements existing or outstanding that provide for the sale or issuance of any of the foregoing by any Group Company, (iii) except as set forth in the Company Organizational Documents, there are no shareholder agreements, proxies, voting trusts or other agreements or understandings in effect with respect to the voting or transfer of any Equity Securities of any Group Company, and (iv) there are no outstanding contractual obligations of any Group Company obligating the Seller or any Group Company to repurchase, redeem or otherwise acquire any Equity Securities of any Group Company. There are no outstanding or authorized stock appreciation, phantom stock, profit participation or similar rights, plans or arrangements of any Group Company.
Section 3.9. Financial Statements.
(a) Section 3.9(a) of the Disclosure Schedule sets forth correct and complete copies of the Financial Statements and the 2025 Audited Financial Statements. The Financial Statements have been prepared in accordance with GAAP applied on a consistent basis throughout the period involved, subject, in the case of the Unaudited Financial Statements, to normal and recurring year-end adjustments (the effect of which will not be material to the Group Companies) and the absence of notes (that, if presented, would not differ materially from those presented in the Audited Financial Statements). The Financial Statements are based on the books and records of the Group Companies, and fairly present in all material respects the financial condition of the Group Companies as of the respective dates they were prepared and the results of the operations of the Group Companies for the periods indicated. The Group Companies maintain a standard system of accounting established and administered in accordance with GAAP.
(b) All Indebtedness of the Group Companies, and the holders of and amounts (as of the date of this Agreement) owed thereto, is set forth on Section 3.9(b) of the Disclosure Schedule.
(c) The Group Companies make and keep books, records and accounts which, in reasonable detail, accurately and fairly reflect in all material respects the transactions and dispositions of their assets. The Group Companies maintain systems of internal accounting controls and procedures with respect to the accounting practices, procedures and policies employed thereby sufficient to provide reasonable assurances regarding the reliability of financial reporting, including that: (i) transactions are executed in accordance with management’s general or specific authorization; and (ii) transactions are recorded as necessary to permit the preparation of financial statements in conformity with GAAP and to maintain accountability for assets.
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(d) Except as set forth on Section 3.9(d) of the Disclosure Schedule, to the Knowledge of the Seller, all accounts receivable of the Group Companies are valid and collectible in the Ordinary Course of Business and no such accounts receivable (i) are subject to any pending or threatened set-off, discount or counterclaim, other than for which a reserve has been established on the Financial Statements, or (ii) have been assigned or pledged to any Person.
(e) Except as set forth on Section 3.9(e) of the Disclosure Schedule, all accounts payable of the Group Companies are payable in the Ordinary Course of Business and no such accounts payable (i) are subject to any pending or potential set-off, discount or counterclaim or (ii) have been assigned or pledged to any Person. The Group Companies have remitted all payments to each of their respective suppliers, vendors and other third parties that are necessary to ensure that none of the accounts payable of the Group Companies are overdue or in any condition other than good standing (according to each applicable supplier’s, vendor’s or other third party’s terms), except where the amount thereof is being contested in good faith or would be not be material to the Group Companies, taken as a whole.
Section 3.10. No Undisclosed Liabilities. Except as set forth in Section 3.10 of the Disclosure Schedule, the Group Companies do not have any liabilities or obligations of the nature required to be disclosed on a balance sheet prepared in accordance with GAAP, other than (a) liabilities that are specifically reflected and adequately reserved against in the Financial Statements (or disclosed in the notes thereto), (b) liabilities that have been incurred in the Ordinary Course of Business since the Balance Sheet Date (none of which is a liability resulting from the breach of a Material Contract or violation of applicable Law), (c) liabilities incurred pursuant to the terms of this Agreement, (d) liabilities or obligations that have been discharged or paid in full prior to the date hereof or (e) liabilities which, individually or in the aggregate, are not material to the Group Companies, taken as a whole.
Section 3.11. Absence of Certain Developments.
(a) Since the Balance Sheet Date, (i) the Group Companies have operated in the Ordinary Course of Business, (ii) there has not been any event, occurrence, development or state of circumstances or facts that has had or would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, and (iii) there has not been any material change in the Group Companies’ accounting principles, procedures or methods.
(b) Except for the transactions contemplated by this Agreement or as set forth in Section 3.11(b) of the Disclosure Schedule, from the Balance Sheet Date to the date of this Agreement, the Group Companies have not taken any action that, if taken during the period from the date of this Agreement through the Closing without Purchaser’s prior written consent, would constitute a breach of Section 5.1(b) (other than relating to clauses (i) and (iv) of Section 5.1(b)).
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Section 3.12. Compliance with Laws. Except as set forth in Section 3.12 of the Disclosure Schedule, each Group Company is, and since January 1, 2023, has been, in material compliance with all Laws applicable to such Group Company. Except as set forth in Section 3.12 of the Disclosure Schedule, since January 1, 2023, no Group Company has violated any Law or received from any Governmental Authority any written notification that asserts that any Group Company is not in compliance with any such Law, in each case, except as would not reasonably be expected to be material to the Group Companies, taken as a whole. There is no material Order of any Governmental Authority outstanding against any Group Company or any of its assets. The Seller is not in violation of or default under any applicable Law, the effect of which would, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
Section 3.13. Solvency. No Group Company (a) has been declared insolvent or bankrupt and, to the Knowledge of the Seller, no action or request is pending to declare a Group Company insolvent or bankrupt, (b) has filed for insolvency, bankruptcy, reorganization or liquidation, (c) is unable to pay its debts when and as they fall due or (d) is in the process of dissolution, liquidation, compulsory administration, recovery, or suspension of payments or equivalent in any jurisdiction.
Section 3.14. Litigation. Except as set forth in Section 3.14 of the Disclosure Schedule, there is no Action pending or, to the Knowledge of the Seller, threatened, against the Seller or any of its Affiliates (including the Group Companies) by or before (or, in the case of threatened Actions, that would be before) any Governmental Authority that, if determined adversely in accordance with the plaintiff’s demands, would reasonably be expected to be, individually or in the aggregate, material to the Group Companies.
Section 3.15. Material Permits; Regulatory Matters.
(a) Section 3.15(a) of the Disclosure Schedule contains a true, correct and complete list of all approvals, authorizations, consents, licenses, permits, exemptions, variances, clearances, franchises or certificates of or from Governmental Authorities (“Permits”) required for the operation of the Group Companies’ Business, except those that are not, individually or in the aggregate, material to the Group Companies (the “Material Permits”).
(b) Section 3.15(b) of the Disclosure Schedule contains a true, correct and complete list of the permits or licenses issued or granted to the Group Companies by the FCC, or other forms of authorization or conditions to operate, including the 2024 National Security Agreement by and between certain Group Companies, GCOF III and Team Telecom (collectively, the “Telecom Regulatory Authorizations”).
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(c) Except as set forth on Section 3.15(c) of the Disclosure Schedule, each Material Permit is validly issued in the name of a Group Company, in full force and effect, is not subject to any restrictions or conditions other than those appearing on the face of the Material Permit that limit the operations of the Group Companies (other than restrictions or conditions generally applicable to Material Permits of that type), and has not been suspended, canceled, revoked or modified. The Group Companies have operated their businesses and installed, maintained and operated the Network in compliance in all material respects with the terms and conditions of the Material Permits. No other Material Permits are necessary for the Group Companies to own, lease or use their assets or to operate their business as currently conducted. Subject to the receipt of the Closing Regulatory Approvals, the consummation of the transactions contemplated by this Agreement will not result in the termination, suspension, revocation, amendment or non-renewal of, or any limitation or restriction on, any Material Permit.
(d) Except as set forth in Section 3.15(d) of the Disclosure Schedule, the Group Companies comply, and since January 1, 2023 have complied, in all material respects, with applicable communications Laws and the requirements applicable to each of the Telecom Regulatory Authorizations. There is no outstanding or, to the Knowledge of the Seller, threatened, notice of cancellation or termination of any Telecom Regulatory Authorizations. No Telecom Regulatory Authorization is subject to any restrictions or conditions that limit the operations of the Group Companies (other than restrictions or conditions generally applicable to licenses of that type). There is no pending, or to the Knowledge of the Seller, threatened, application, action, petition, objection or other pleading, or any audit or proceeding, against any of the Group Companies, with the FCC or any State Regulator that questions or contests the validity of, or any rights of the holder under, or that seeks the non-renewal or suspension of any Telecom Regulatory Authorization.
(e) Except as listed in Section 3.15(e) of the Disclosure Schedule, since the last renewal date of each Telecom Regulatory Authorization, or January 1, 2023 for those reports not related to any Telecom Regulatory Authorization, the Company or one or more of its Subsidiaries has filed all material forms, reports, and documents required to be filed with the FCC and other applicable Governmental Authorities in relation to Telecom Regulatory Authorizations or the Group Companies’ obligations under the Communications Act or other applicable communications Laws (the “Reports”). Each Report was true, correct and complete in all material respects at the time of filing.
(f) The Group Companies have timely paid and remitted to each relevant Governmental Authority all required Regulatory Fees due and payable by or with respect to any Group Company. Since January 1, 2023, none of the Group Companies has received from any Governmental Authority (i) any written notice revoking, canceling, rescinding, materially restricting, materially modifying or refusing to renew any Material Permit or (ii) a written statement of deficiency, citation or notice of material violation, revocation or suspension of a Material Permit (including any condition or provision of any Material Permit) that is reasonably likely to result in the revocation, suspension or limitation of a Material Permit.
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Section 3.16. Insurance Coverage.
(a) Section 3.16(a) of the Disclosure Schedule sets forth a list, as of the date hereof, of all material insurance policies and surety bonds owned or held by the Group Companies that cover the Group Companies (including the name of the insurer, the policy number, the policy period and the amount of coverage), including property and general commercial liability insurance policies, each of which is in full force and effect, except where the failure to be in full force and effect would not reasonably be expected to be material to the Group Companies, taken as a whole. A copy of each such insurance policy has been made available to Purchaser. Such policies provide coverage as required in connection with the Business. The Group Companies are in compliance in all material respects with such policies, including with respect to the payment of premiums.
(b) Except as set forth in Section 3.16(b) of the Disclosure Schedule, there is no material claim pending with respect to any Group Company under any such insurance policy or surety bond (or such other policies and surety bonds that cover any Group Company) as to which coverage has been denied or disputed by the insurer.
(c) Except as disclosed in Section 3.16(c) of the Disclosure Schedule, the Group Companies do not have any self-insurance programs.
(d) Except as disclosed in Section 3.16(d) of the Disclosure Schedule, to the Knowledge of the Seller, there is no threatened termination of, premium increase with respect to or alteration of coverage under any of such insurance policies or surety bonds (or such other policies and surety bonds that cover any Group Company), in each case, that would be material to the Business.
(e) Section 3.16(e) of the Disclosure Schedule sets forth a true, correct and complete list of all claims and material notices delivered under such material insurance policies since January 1, 2023.
Section 3.17. Material Contracts.
(a) Section 3.17(a) of the Disclosure Schedule sets forth a true, correct and complete list of the following Contracts to which any Group Company is party as of the date hereof (a Contract responsive to any of the following categories being hereinafter referred to as a “Material Contract”):
(i) all Contracts with a Material Customer;
(ii) all Contracts with a Material Supplier;
(iii) all Leases (where any Group Company is either the lessee or the lessor) providing for annual payments of $100,000 or more;
(iv) all Contracts or group of related Contracts with the same counterparty (including for the sale, license, lease or other purchase of goods or services) pursuant to which any of the Group Companies is obligated to pay more than $500,000 in the aggregate;
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(v) all Contracts or group of related Contracts with the same counterparty (including for the sale, license, lease or other disposition of goods or services) pursuant to which any of the Group Companies may be entitled to receive more than $500,000 in the aggregate;
(vi) all Contracts pursuant to which a Group Company has a commitment to make any capital expenditure in excess of $500,000;
(vii) all Contracts that limit or purport to limit the ability of any Group Company (or, after the Closing, that purports to so limit or restrict Purchaser or any of its Affiliates) from (A) selling any products or services of or to any other Person or in any geographic region, (B) competing in any line of business, (C) obtaining products or services from any Person or (D) soliciting any individuals for employment;
(viii) all Contracts that, after the Closing, would impose or purport to impose any requirements or obligations on Purchaser or its Affiliates (other than any of the Group Companies), or that would otherwise seek to affect the operations of Purchaser or its Affiliates (other than any of the Group Companies);
(ix) all Contracts under which any Group Company has (A) created, incurred, assumed or guaranteed, directly or indirectly, any outstanding Indebtedness, (B) granted a Lien on its assets to secure such Indebtedness or (C) extended credit to any Person;
(x) all Contracts that (A) grant the other party or any Person “most favored nation” status or similar exclusive discount rights; or (B) require a Group Company to purchase its total requirements of any product or service from a third party;
(xi) all Contracts involving payments of more than $100,000 in the aggregate pursuant to which any Group Company grants any license, sublicense, right or authorization to use or covenant not to be sued under any Owned Intellectual Property, other than non-exclusive licenses granted to third parties in the Ordinary Course of Business;
(xii) all Contracts pursuant to which any Group Company obtains any license, sublicense, right or authorization to use or covenant not to be sued under any Licensed Intellectual Property (other than any non-exclusive licenses for shrink-wrap, click-wrap or off-the-shelf software or other licenses of software that is commercially available to the public generally, with aggregate fees of less than $250,000 per year);
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(xiii) all Contracts that relate to the acquisition or disposition of any business, a material amount of stock or assets of any Person or any real property (whether by merger, sale of stock, sale of assets or otherwise);
(xiv) all stockholders, investors rights, registration rights or similar Contracts;
(xv) all Contracts granting any Person an option or a right of first refusal or first offer or similar preferential right to purchase or acquire any Equity Securities or any material assets of any Group Company;
(xvi) all partnership, joint venture or other similar agreements or arrangements that require the sharing of profits or revenues of the Group Companies;
(xvii) all outstanding agreements providing for any guaranty or surety or all Contracts the principal purpose of which is indemnification;
(xviii) all Contracts that contain any indemnification (other than customary indemnification provisions entered into in the Ordinary Course of Business), earnout, royalty payment or similar obligations that are ongoing and have not been satisfied;
(xix) all Contracts with a Governmental Authority;
(xx) all Contracts that include any obligation to make payments contingent or otherwise, arising out of the prior acquisition or disposition of a business;
(xxi) all (A) employment or service Contracts with any Service Provider that provides for annual compensation in excess of $100,000 or is not terminable at-will by the Company without notice, severance, or other cost or liability in excess of $100,000 or (B) Contracts providing for retention, change in control or transaction bonuses or benefits;
(xxii) all Collective Bargaining Agreements or other arrangements with any union or similar employee representative;
(xxiii) all Related Party Contracts;
(xxiv) all Contracts relating to the settlement or conciliation of any Action in the last three years and providing for payment by any of the Group Companies thereunder or pursuant to which any of the Group Companies will have any material outstanding obligation after the date of this Agreement;
(xxv) all Contracts that involve the sale of any assets, or the acquisition of any assets of any Person by any member of the Group Companies, in any business combination transaction (whether by merger, sale of stock, sale of assets or otherwise) under which material obligations of any party thereto remain outstanding;
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(xxvi) all Contracts that result in any Person holding a power of attorney from any Group Company;
(xxvii) all Material Network Agreements;
(xxviii) all Contracts that expressly restrict, limit or otherwise prohibit a Group Company from making dividends or distributions to its equity holders; and
(xxix) all legally binding commitments to enter into any of the foregoing.
(b) The Seller has made available to Purchaser true, correct and complete copies of each Material Contract in effect as of the date hereof. Each Material Contract (i) is a valid, binding and enforceable obligation of the applicable Group Company and, to the Knowledge of the Seller, the other parties thereto, in accordance with its terms and conditions, except that such enforceability may be limited by (A) applicable bankruptcy, insolvency, reorganization, moratorium and similar applicable Laws affecting creditors’ rights generally, and (B) the actual exercise of judicial or administrative discretion in accordance with general equitable principles, and (ii) is in full force and effect. No Group Company nor, to the Knowledge of the Seller, any other party to any Material Contract, is in material breach of or default under any Material Contract. To the Knowledge of the Seller, from the Balance Sheet Date to the date of this Agreement, no Group Company has provided or received any notice of any intention to terminate or not renew, any Material Contract.
Section 3.18. Properties.
(a) No Group Company owns any real property or has ever owned any real property.
(b) A true, correct and complete list of all Leases pursuant to which any real property is leased, subleased, licensed or otherwise occupied or used by any Group Company (the “Leased Property”) and all Material Easement Agreements is set forth on Section 3.18(b) of the Disclosure Schedule. The Seller has made available to Purchaser true, correct and complete copies of such Leases and Material Easement Agreements (including all amendments, modifications, supplements, exhibits, schedules, addenda and restatements thereto and thereof and all consents, including consents for alterations, assignments and sublets, documents recording variations, memoranda of lease, options, rights of expansion, extension, first refusal and first offer and evidence of commencement dates and expiration dates). The applicable Group Company identified on Section 3.18(b) of the Disclosure Schedule has, as applicable, a good and valid leasehold, subleasehold, license or other contractual (as applicable) interest in the Leased Property pursuant to such Leases, or a good and valid easement interest in the Easements pursuant to such Material Easement Agreements, in each case free and clear of all Liens (other than Permitted Liens). Each such Lease or Material Easement Agreement is in full force and effect and is the legal, valid and binding obligation of the applicable Group Company, enforceable by and against the applicable Group Company, and, to the Knowledge of the Seller, each other party thereto, in accordance with its terms, except as enforceability may be limited by the General Enforceability Exceptions. No Group Company is in default under or in breach or violation of any such Lease or Material Easement Agreement; no Group Company has received written notice alleging any default, breach or violation by a Group Company; to the Knowledge of the Seller, no other party to any Lease or Material Easement Agreement is in default under or in breach or violation in any material respect of any such Lease or Material Easement Agreement; and no event has occurred that (with or without notice, lapse of time or both) would constitute a default on the part of the applicable Group Company under any such Lease or Material Easement Agreement or permit the counterparty thereto to accelerate the obligations of the applicable Group Company under, or to terminate, any such Lease or Material Easement Agreement. To the Knowledge of the Seller, no event has occurred and is currently continuing or in effect that (with or without notice, lapse of time or both) would constitute a default, breach or violation on the part of any other party under any of such Leases or Material Easement Agreements. The Leased Property currently has sufficient access to public roads (or valid easements over private streets or private property) and utilities, in each case, as and to the extent necessary to conduct the Business.
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(c) The Leased Property and the Easements constitute all of the real property necessary and sufficient for the operation of the Business. There are no conditions affecting any of the improvements on the Leased Property or the Easements that would reasonably be expected to, individually or in the aggregate, interfere in any material respect with the ordinary course conduct of the Business. Except for the Leased Property and Easements, none of the Group Companies occupy, is legally obligated for, or has any interest in, or otherwise uses, any other real property, nor has any rights or obligations to acquire such interests.
(d) Except as set forth in Section 3.18(d) of the Disclosure Schedule, there are no leases, subleases, licenses, concessions or other agreements, written or oral, pursuant to which any Group Company has granted to any party or parties the right to occupy or use any portion of the Leased Property or the Easements and there is no Person (other than a Group Company) in possession of the Leased Property or the Easements.
(e) No Group Company has received written notice from any Governmental Authority of any condemnation, expropriation or other proceeding in eminent domain pending or threatened, against such Group Company’s interest in the Leased Property or the Easements, or any portion thereof or interest therein.
(f) No third party has challenged or repudiated, or to the Seller’s Knowledge, threatened to challenge or repudiate, or has the right to terminate or repudiate any Network Underlying Rights and no property owner or other third party has challenged any right of the Group Companies to install, operate or maintain any part of the Network Infrastructure, including cable, wires, conduits or other equipment or facilities, in a customer or other third-party location. The Network Underlying Rights constitute all of the rights or interests reasonably necessary to operate the Network in the Ordinary Course of Business.
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(g) Except for assets disposed of in the Ordinary Course of Business since the Balance Sheet Date, the applicable Group Company has good and valid title to, or a valid leasehold interest in, all of the material tangible personal property shown to be owned or leased by it on the Unaudited Financial Statements, free and clear of any Lien, other than Permitted Liens. Each of the Group Companies owns or has the exclusive right to use all tangible assets and personal properties necessary for the conduct of the Business. All of such tangible assets and personal properties, including Network Infrastructure, (i) are structurally sound, in good operating condition, ordinary wear and tear excepted, (ii) are not in need of material maintenance or repairs except for maintenance or repairs in the Ordinary Course of Business, and (iii) are adequate for the purposes for which they are currently being used.
Section 3.19. Anti-Corruption; Internal Controls.
(a) The Group Companies, their respective directors, officers or employees, and to the Knowledge of the Seller, their respective shareholders acting on their behalf, or any other Person acting on behalf of or at the direction of any Group Company is, and has been since January 1, 2021, in compliance with Anti-Corruption Laws.
(b) Neither the Group Companies nor any of their respective directors, officers nor employees acting on their behalf nor, to the Knowledge of the Seller, any shareholders or any other Person acting on behalf of the Group Companies, in each case in violation of applicable Anti-Corruption Laws, (i) has offered, promised, solicited, facilitated, given or authorized the giving or will offer, promise, solicit, facilitate, give or authorize the giving of money or anything else of value, regardless of form or amount, whether directly or through another person or entity, to (A) any Government Official or (B) any other Person with the knowledge that all or any portion of the money or thing of value will be offered or given to a Government Official, in each of cases (A) and (B) for the purpose of influencing any action or decision of the Government Official in his or her official capacity, including a decision to fail to perform his or her official duties, or inducing the Government Official to delay, omit, or effectively execute an act that must be fulfilled or not fulfilled, as applicable, in his or her functions, or improperly use his or her influence with any Governmental Authority, in each case in order to assist any Group Company in obtaining or retaining business for or with, or directing business to, any person, or obtaining any other improper advantage; or (ii) has made or authorized any other person to make any payments or transfers of value to any person, including directors, representatives, employees or advisors of a third party, which have the purpose or effect of commercial bribery, or acceptance or acquiescence in kickbacks or other unlawful means of obtaining or retaining business. For purposes of cases (A) and (B), a person shall be deemed to have “knowledge” with respect to conduct, circumstances or results if such person is aware of (1) the existence of or (2) a high probability of the existence of such conduct, circumstances or results.
(c) The Group Companies, and to the Knowledge of the Seller, each of their respective directors, officers, employees, and their respective shareholders acting on their behalf, or any other Person acting on behalf of or at the direction of any Group Company is, and has been since January 1, 2021, in compliance with Sanctions Laws.
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(d) The Group Companies, and to the Knowledge of the Seller, each of their respective directors, officers, employees, and their respective shareholders acting on their behalf, or any other Person acting on behalf of or at the direction of any Group Company is, and has been since January 1, 2021, in compliance with Anti-Money Laundering Laws in each case, except as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.
(e) The Group Companies currently maintain (i) books, records and accounts which, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Group Companies in all material respects, and (ii) internal accounting controls sufficient to provide reasonable assurances that all transactions and access to assets of the Group Companies are executed only in accordance with management’s general or specific authorization.
(f) The Group Companies have in place and maintain policies, procedures and controls that are reasonably designed to promote and ensure compliance with Anti-Corruption Laws, Sanctions Laws and Anti-Money Laundering Laws in each jurisdiction in which the Group Companies do business.
(g) Since January 1, 2021, to the Knowledge of the Seller, no Group Company is, or has been, the subject of any investigation, inquiry or enforcement proceedings by any Governmental Authority regarding any violation or alleged violation under any Anti-Corruption Laws, Sanctions Laws, or Anti-Money Laundering Laws, and, to the Knowledge of the Seller, no such investigation, inquiry or proceedings are pending or have been threatened.
Section 3.20. Employee Benefit Plans.
(a) Section 3.20(a) of the Disclosure Schedule lists each material Company Plan. For each material Company Plan, the Seller has made available to Purchaser a true, correct and complete copy of such plan (or a description, if such plan is not written) and, as applicable, (i) all trust agreements, insurance contracts or other funding arrangements, (ii) the current summary plan description and all summaries of material modifications, (iii) the most recent favorable determination or opinion letter from the Internal Revenue Service, (iv) the most recent annual return/report (Form 5500) and accompanying schedules and attachments thereto, (v) the most recently prepared actuarial reports and financial statements, (vi) nondiscrimination and Affordable Care Act compliance testing results for each of the past three years, including ADP/ACP testing or safe harbor, health plan coverage testing and mental health parity analyses and (vii) all COBRA election forms for former employees who are currently covered by COBRA.
(b) Each Company Plan has been established, maintained, and operated in compliance in all material respects with its terms and all applicable Law, including ERISA and the Code. With respect to each Company Plan, no material Action is pending or, to the Knowledge of the Seller, threatened in writing. No Company Plan is currently the subject of any IRS or U.S. Department of Labor audit, investigation, or proceeding that remains unresolved.
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(c) Other than as would not reasonably be expected to result in a material liability borne by the Group Companies, all contributions, benefits, vacation, premiums and any other payments that are due have been made for each Company Plan within the time periods prescribed by the terms of such Company Plan and applicable Law, and all contributions, benefits, vacation, premiums and any other payments for any period ending on or before the Closing Date that are not due are properly accrued to the extent required to be accrued under applicable accounting principles.
(d) With respect to each Company Plan that covers Service Providers located primarily outside the United States, (i) if such Company Plan is intended to qualify for special tax treatment, such Company Plan meets all the requirements for such treatment, and (ii) if such Company Plan is required, to any extent, to be funded, book-reserved or secured by an insurance policy, such Company Plan is fully funded, book-reserved or secured by an insurance policy, as applicable, based on reasonable actuarial assumptions in accordance with applicable accounting principles. From and after the Closing, Purchaser will receive the full benefit of any funds, accruals and reserves under such Company Plans.
(e) No Group Company, nor any other entity that, together with any Group Company, would be treated as a single employer under Section 414 of the Code, sponsors, maintains or contributes to (or has any obligation to contribute to), or has in the past six years sponsored, maintained or contributed to (or had any obligation to contribute to), or has or is reasonably expected to have any direct or indirect liability with respect to, any plan that is subject to Title IV of ERISA.
(f) Each Company Plan that is intended to be qualified under Section 401(a) of the Code has received a favorable determination or opinion letter from the IRS, and to the Knowledge of the Seller, no event has occurred that would disqualify the plan or would reasonably be expected to result in the letter being revoked.
(g) All required nondiscrimination, coverage, and top-heavy testing (including under Sections 401(a)(4), 401(a)(26), 410(b), 414(s) and 416 of the Code, and any required ADP/ACP testing) has been timely performed for each qualified Company Plan for each applicable plan year, and each qualified Company Plan has either passed all such tests or been corrected in full within the time periods prescribed by Law, including through applicable correction programs. There are no uncorrected operational failures, demographic failures, coverage failures, or nondiscrimination failures.
(h) No Group Company has any current or projected liability for, and no Company Plan provides or promises, any post-employment or post-retirement medical, dental, disability, hospitalization, life or similar benefits (whether insured or self-insured) to any current or former Service Provider (other than coverage mandated by applicable Law).
(i) Except as set forth in Section 3.20(i) of the Disclosure Schedule, neither the execution of this Agreement nor the consummation of the transactions contemplated hereby (either alone or together with any other event) will (i) entitle any current or former Service Provider to any payment or benefit, including any bonus, retention, severance, retirement or job security payment or benefit, in each case, payable by any Group Company, the Seller or any of their respective Affiliates (ii) accelerate the time of payment or vesting or trigger any payment or funding (through a grantor trust or otherwise) of compensation or benefits under, or increase the amount payable under, any Company Plan or (iii) limit or restrict the right of any Group Company or, after the Closing, Purchaser, to merge, amend or terminate any Company Plan.
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(j) No Company Plan, individually or collectively, would reasonably be expected to result in any “excess parachute payment” within the meaning of Section 280G of the Code. Each Company Plan that is a “nonqualified deferred compensation plan” within the meaning of Section 409A of the Code has been operated in compliance in all material respects with all applicable requirements of Section 409A of the Code. The Group Companies do not have any obligations to gross up, indemnify or otherwise reimburse any current or former Service Provider for any Tax incurred by such Service Provider.
Section 3.21. Employees and Labor.
(a) The Group Companies are, and have been since January 1, 2023, in compliance in all material respects with all applicable Collective Bargaining Agreements, arbitral awards, contractual obligations, acquired rights and practices and all Laws, in each case, relating to labor and employment, including those relating to labor management relations, wages in cash or in kind and other fringe benefits, vacations, commissions, employee benefit plans, travel expenses, working hours, overtime, work, collective rights, job protection status, terminations, employee and contractor classification, discrimination, sexual and labor harassment, civil rights, affirmative action, work authorization, immigration, safety and health, information privacy and security related to employee or personnel data, workers compensation, continuation coverage under group health plans, wage payment and the payment and withholding of employment and payroll Taxes.
(b) None of the Group Companies is a party to or subject to, or is currently negotiating in connection with entering into, any Collective Bargaining Agreement, and, to the Knowledge of the Seller, there has not been any organizational campaign, petition or other unionization activity seeking recognition of a collective bargaining unit relating to any Service Provider. None of the Group Companies has failed to comply in any material respect with the provisions of any Collective Bargaining Agreement, and there are no material grievances outstanding against any Group Company under any such agreement. There are no unfair labor practice complaints pending or, to the Knowledge of the Seller, threatened against any Group Company before any Governmental Authority or any current union representation questions involving Service Providers. There is no, and since January 1, 2023, there has not been any, labor strike, slowdown, stoppage, picketing, interruption of work or lockout pending or, to the Knowledge of the Seller, threatened against or affecting any Group Company. The consent or consultation of, or the rendering of formal advice by, any labor or trade union, works council or other employee representative body is not required for the Seller to enter into this Agreement or to consummate any of the transactions contemplated hereby.
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(c) As of the date hereof, no Service Provider of any Group Company has indicated in writing to the Seller or Group Company that he or she intends to resign or retire as a result of the transactions contemplated by this Agreement or otherwise prior to, or within one year after, the Closing.
(d) The Seller has made available to Purchaser a schedule that sets forth, as of the date hereof, (i) for each employee of any Group Company, such employee’s name or identification number, employer, title, start date, location, whether full- or part-time, whether active or on leave (and, if on leave, the nature of the leave and the expected return date), whether exempt from the Fair Labor Standards Act, annual salary or wage rate, most recent annual bonus received and current annual bonus opportunity, and (ii) for each individual independent contractor engaged by any Group Company, such contractor’s name or identification number, engaging entity, start date, location, duties and rate of compensation.
Section 3.22. Taxes.
(a) All Tax Returns required to be filed by or with respect to any Group Company or with respect to the assets of any Group Company have been timely filed, taking into account all available extensions, in accordance with applicable Law and such Tax Returns are true, correct, and complete in all material respects. All Taxes due and payable by or with respect to a Group Company (whether or not reflected on a Tax Return) or its assets have been timely paid, or withheld and remitted, to the appropriate Taxing Authority.
(b) No Group Company has engaged in any “reportable transaction,” as defined in Section 6707A(c)(1) of the Code and Section 1.6011-4(b) of the Treasury Regulations.
(c) There is no Tax dispute, audit, assessment, deficiency, claim or other proceeding either claimed, raised, ongoing, threatened or proposed in writing with respect to any Group Company or the assets of any Group Company. No Group Company has granted any extension or waiver of the statute of limitations period, or of the time for assessment or collection, applicable to any Tax or Tax Return, which period (after giving effect to such extension or waiver) has not yet expired.
(d) The Group Companies have withheld or have caused to be withheld, and have paid over or have caused to have been paid over to the appropriate Taxing Authorities, all Taxes required to be so withheld and paid over for all periods under all applicable Laws in connection with amounts paid or owing to any employee, independent contractor, creditor, customer, or other Person.
(e) No claim has been made by any Taxing Authority in a jurisdiction where a Group Company has not filed a Tax Return of a particular type that it is or may be subject to Tax, or required to file Tax Returns, of such type in that jurisdiction, other than any such claims that have been fully resolved.
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(f) No Group Company will be required to include any item of income in, or exclude any item of deduction from, taxable income for any taxable period (or portion thereof) ending after the Closing as a result of any: (i) “closing agreement” as described in Section 7121 of the Code (or any corresponding or similar provision of state, local or non-U.S. Law) executed prior to the Closing; (ii) installment sale or open transaction disposition made prior to the Closing; (iii) intercompany transaction or excess loss account described in Treasury Regulations under Section 1502 of the Code (or any corresponding or similar provision of state, local or non-U.S. Law); (iv) prepaid amount or advance payment received prior to the Closing; or (v) change in accounting method made prior to the Closing.
(g) All of the properties and assets of the Group Companies that are subject to ad valorem or property Tax have been properly listed and described on the ad valorem or property Tax rolls of the appropriate Taxing Authority and no portion of such properties or assets constitutes omitted property for ad valorem or property Tax purposes.
(h) There are no Liens for Taxes (other than Taxes not yet due and payable) upon any of the assets of or interests in any Group Company.
(i) In the last two years, no Group Company has distributed equity interests in another Person, or had any of its equity interests distributed by another Person, in a transaction that was purported or intended to be governed in whole or in part by Sections 355 or 361 of the Code.
(j) Each Group Company is disregarded as an entity separate from the Seller within the meaning of Treasury Regulation Section 301.7701-2(c)(2) for U.S. federal income tax purposes. No such classification of any Group Company has changed from the time of such Group Company’s formation (or, if later, the time that such Group Company was acquired by the Company). No election has ever been made or filed (on IRS Form 8832 or otherwise) to treat a Group Company for U.S. federal income tax purposes other than as a disregarded entity or partnership for U.S. federal income Tax purposes under Treasury Regulation Section 301.7701-3.
(k) No Group Company has entered into or requested, or is bound by, (i) any private letter ruling, technical advice memorandum or similar ruling or memorandum with any Taxing Authority with respect to any Taxes; or (ii) any Contract or other agreement or arrangement with any Taxing Authority with respect to Taxes that requires any Person to take, or refrain from taking, any action after the Closing. No power of attorney granted by or with respect to any Group Company in respect of any Taxes is in effect that will not be revoked or cancelled at or prior to the Closing.
(l) No Group Company (i) is or has been a member of an affiliated, combined, consolidated, unitary or aggregate group that files or has filed (or is or has been required to file) a consolidated or combined Tax Return; or (ii) has any liability for the Taxes of any Person under Treasury Regulation Section 1.1502-6 (or any similar provision of state, local or foreign Law), or as a transferee or successor or by Contract (other than a Contract entered into in the Ordinary Course of Business and not primarily related to Taxes) or otherwise. No Group Company is a party to or otherwise bound by (nor do any of the Group Companies have any obligation under) any Tax Sharing Agreement.
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(m) Each Group Company is in compliance with all state unclaimed property and escheat Laws and has timely and accurately filed all required unclaimed property or escheat reports or Tax Returns, and no Group Company holds amounts of property required to have been remitted or escheated to a Governmental Authority.
(n) No Group Company directly or indirectly owns, or has ever directly or indirectly owned, an interest in any “controlled foreign corporation” or “passive foreign investment company” within the meanings of Sections 957 and 1297, respectively, of the Code.
(o) None of the Group Companies or any of their assets is currently entitled or subject to any Tax incentive, deferral, holiday or abatement Contract or other agreement or arrangement with any Governmental Authority or would be subject to any recapture, clawback, termination or similar adverse consequence with respect to any Tax incentive, holiday, credits or other Tax reduction, deferral or abatement Contract or other agreement or arrangement as a result of any of the transactions contemplated by this Agreement.
(p) Neither the organizational documents of any Group Company formerly classified or treated as a “partnership” for U.S. federal income tax purposes nor any other Contract to which such a Group Company or the Seller is a party restricts making a “push out” election under Section 6226 of the Code with respect to any Group Company formerly classified or treated as a “partnership” for U.S. federal income tax purposes.
Section 3.23. Environmental Matters. Except as set forth in Section 3.23 of the Disclosure Schedule:
(a) each Group Company is, and since January 1, 2023, has been, in compliance in all material respects with all applicable Environmental Laws and has obtained and maintained in effect all material Permits required by applicable Environmental Laws to construct the Network and to operate the Business;
(b) none of the Group Companies have engaged in the unpermitted taking of any species listed as endangered or threatened or otherwise protected under any Environmental Law applicable to any Group Company or their activities, or of the critical habitat of any such species, in any way related to the development, construction or operation of the Network;
(c) no Hazardous Substances have been Released by any Group Company or, to Seller’s Knowledge, any other Person under circumstances that could reasonably be expected to result in any material liability or obligation of any Group Company under any Environmental Law to investigate or clean-up any such Hazardous Substances or to notify any Governmental Authority about the Release;
(d) there is no Action, notice, notification, citation, request for information pending or, to the Knowledge of the Seller, threatened, and there is no Order entered, against any Group Company pursuant to any Environmental Law that would reasonably be expected to result in a material liability or obligation of any Group Company; and
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(e) there has been no environmental investigation, assessment, study, audit, test, review or other analysis conducted by the Group Companies or the Seller in relation to the Business of the Group Companies or any property or facility owned, leased or operated by the Group Companies which has not been made available to Purchaser prior to the date hereof.
Section 3.24. Intellectual Property and Data Privacy/Security.
(a) Section 3.24 of the Disclosure Schedule contains a true, correct and complete list, as of the date hereof, of all Registered Intellectual Property Rights. None of the Registered Intellectual Property Rights material to the operation of the Business has been adjudged invalid or unenforceable in whole or part, and, to the Knowledge of the Seller, all such Registered Intellectual Property Rights are valid and enforceable.
(b) A Group Company owns the Owned Intellectual Property free and clear of any and all Liens, other than Permitted Liens. To the Knowledge of the Seller, there exist no material restrictions on any Group Company’s disclosure, use, license or transfer of any of the Owned Intellectual Property.
(c) A Group Company owns or has a valid and enforceable license to use the Licensed Intellectual Property that is necessary for the conduct of the Business.
(d) To the Knowledge of the Seller, no Group Company, nor any Owned Intellectual Property, has infringed, misappropriated or otherwise violated since January 1, 2023, or is currently infringing, misappropriating or otherwise violating, any Intellectual Property of any Person in any material respect. There is no claim, action, suit, investigation or proceeding pending, or to the Knowledge of the Seller, threatened in writing against any Group Company (i) challenging the validity, enforceability, registrability or ownership of any of the Owned Intellectual Property or (ii) alleging that the use of the Owned Intellectual Property conflicts with, infringes, misappropriates or otherwise violates any Intellectual Property of any Person.
(e) To the Knowledge of the Seller, since January 1, 2023, no Person has infringed, misappropriated or otherwise violated any Owned Intellectual Property, and no Group Company has asserted or threatened such a claim against any Person.
(f) The Group Companies have taken commercially reasonable steps to protect the confidentiality of all trade secrets included in the Owned Intellectual Property or owned by any Person to whom the Company has a confidentiality obligation, and to the Knowledge of the Seller, no such Intellectual Property has been the subject of any unauthorized disclosure.
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(g) The Group Companies have procedures in place designed to provide that all material Intellectual Property conceived or developed by employees performing their duties for or on behalf of the Group Companies is or shall be duly assigned to any Group Company. Each current employee who has contributed to the development of any material Owned Intellectual Property has signed a written agreement pursuant to which such Person assigns to the appropriate Group Company any and all right, title and interest such Person may have in and to any and all such Intellectual Property, except where ownership thereof vests in a Group Company by operation of Law. To the Knowledge of the Seller, no such agreement has been breached or violated.
(h) To the Knowledge of the Seller, none of the material software (containing confidential source code) included in the Owned Intellectual Property contains any software code that is licensed under any terms or conditions that require that any material proprietary software of a Group Company to be (i) made available or distributed in source code form, (ii) licensed for the purpose of making derivative works, (iii) licensed under terms that allow reverse engineering, reverse assembly or disassembly of any kind or (iv) redistributable at no charge.
(i) To the Knowledge of the Seller, there are no material viruses, worms, Trojan horses, bombs, backdoors, clocks, timers or similar harmful, malicious or hidden programs in any of the material software included in the Owned Intellectual Property.
(j) Since January 1, 2023, none of the Group Companies has (i) experienced any material error, disruption, interruption or breakdown in any material IT Asset owned by such Group Company that has had a material impact on any Group Company or (ii) to the Knowledge of the Seller, experienced any material Security Incident in which confidential or sensitive information, payment card data, Personal Information, or other protected information relating to any individual Person was stolen or improperly accessed from such Group Company that would require providing any government entity, regulator or other third party with notice and would reasonably be expected to, individually or in the aggregate, result in Damages to the Group Companies greater than $100,000. The IT Assets (i) operate and perform in all material respects as required by the Group Companies and have not malfunctioned or failed in any material respect since January 1, 2023, (ii) to the Knowledge of the Seller, do not contain unauthorized code or other technological means designed and intended to disrupt, damage or interfere with operation of such IT Assets that would reasonably be expected to, individually or in the aggregate, result in Damages to the Group Companies greater than $100,000, and (iii) to the Knowledge of the Seller, since January 1, 2023, have not experienced any material Security Breach or material Security Incident that would reasonably be expected to, individually or in the aggregate, result in Damages to the Group Companies greater than $100,000. The Group Companies have in place commercially reasonable procedures in accordance with past practice of the Group Companies regarding taking and storing back-up copies of the software and data in the IT Assets, and hardware and software support and maintenance. The Group Companies have taken commercially reasonable actions, consistent with current industry standards, to protect the integrity and security of the IT Assets (and all information and transactions stored or contained therein or transmitted thereby) against any unauthorized use, access, interruption, modification or corruption.
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(k) To the Knowledge of the Seller, each Group Company is in compliance and since January 1, 2023 has complied with, in each case, in all material respects, all (i) Laws relating to privacy, data protection and the collection, transfer and use of Personal Information (“Privacy Laws”), (ii) applicable contractual obligations of the respective Group Company regarding Personal Information, (iii) applicable internal privacy policies of the respective Group Company and (iv) applicable privacy policies of the respective Group Company provided to customers. To the Knowledge of the Seller, no material indemnification requests or claims are pending or threatened against any Group Company alleging any violation of Privacy Laws. The Group Companies are each subject to a privacy policy regarding the collection and use of information that identifies, or could reasonably be used to identify, any Personal Information. To the Knowledge of the Seller, no material claim or Action is pending or threatened against any Group Company relating to its use of Personal Information in the conduct of the Business. Neither the execution, delivery nor performance of this Agreement nor the consummation of any of the transactions contemplated hereby will result in any material violation of the Group Companies’ privacy policies applicable to the Business.
(l) The Group Companies are in compliance in all material respects with a written information security program or programs covering the Business.
Section 3.25. Related Party Contracts. Except (i) as set forth in Section 3.25 of the Disclosure Schedule, and (ii) for the Transaction Agreements, no Related Party is a party to or otherwise involved, directly or indirectly, in any Contract, transaction or other business dealing with, provides any services to, is owed any money by or owes any money to any Group Company (other than in connection with employment, severance or other similar arrangements with directors, officers, employees or Service Providers of any Group Company), or directly or indirectly owns, or otherwise has any right, title or interest in, to or under, any property, asset or right (whether tangible or intangible) that is used by any Group Company or performs any material service that is used in the Business. On and after the Closing Date, the Group Companies shall have no liabilities under any such Contract, transaction or other business dealing and no Related Party or any Affiliate shall owe any outstanding obligations or payments to the Group Companies.
Section 3.26. Adequacy of Assets and Network Information.
(a) Section 3.26(a) of the Disclosure Schedule sets forth a list of the material assets and maps showing in reasonable detail, as of the date hereof, the route and location of the telecommunication networks and related systems (both terrestrial and subsea) (including, without limitation, Network Fiber, buried conduits and aerial pole lines, fiber optic lines and other cabling, regeneration sites, wireless Network Infrastructure and hub sites for interconnections) of the Group Companies as operated for the purposes of the Business (the “Network”). Except as set forth on Section 3.26(a) of the Disclosure Schedule, there are no material Network Infrastructure assets other than any such assets (including Network Fibers) added to the Network after the date of this Agreement. The Network substantially performs the functions which the Network is intended to perform in all material respects. The Group Companies have valid rights of use over all Network Infrastructure assets to operate the Business in all material respects.
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(b) The Group Companies have a network continuation plan available so as to ensure in all material respects the availability of the Network.
(c) The Network and all Network Infrastructure has been designed, constructed, installed, licensed, operated and maintained in all material respects in accordance with all applicable Laws (including, for the avoidance of doubt, all applicable building, construction and safety codes) and, to the extent applicable, in accordance with the respective specifications of the vendors of all critical components of the Network Infrastructure. The Network and all Network Infrastructure is in proper operating condition, free from all material defects (subject to ordinary wear and tear), and is fit for the purposes for which it is intended.
(d) Except as set forth on Section 3.26(d) of the Disclosure Schedule, the Network has not, during the past five years preceding the date hereof, suffered any Fiber Outages that were not remedied (so as to not be service-impacting) within 48 hours of such Fiber Outage first occurring. To the Knowledge of the Seller, there are no disputes or challenges to the title and rights of the Group Companies in relation to their ownership or operation of any material part of the Network or the Network Infrastructure. Each of the Group Companies is using components comprised in the Network Infrastructure pursuant to a valid ownership or usage title.
(e) Except for Permitted Liens, each of the Group Companies has (i) valid title to, or to the extent leased, a valid lease interest, free and clear of all Liens, and (ii) the right to use (including pursuant to IRUs, leases, licenses or swaps) for all purposes for which it is currently being used, and (iii) access rights to the Network Infrastructure. In the past five years preceding the date hereof, no incident has occurred which has materially affected the respective rights of any of the Group Companies with respect to all or any part of the Network Infrastructure.
(f) The Group Companies have a valid right to use the Network Underlying Rights free and clear of all Liens, except for Permitted Liens, and have held all of the Network Underlying Rights in a manner that does not violate in any material respect the terms of any such Network Underlying Right. The Material Network Agreements constitute all rights necessary to allow the Business to be operated in the Ordinary Course of Business in all material respects.
Section 3.27. Grant Compliance.
(a) Section 3.27(a) of the Disclosure Schedule sets forth a true, correct and complete list, as of the date hereof, of each Broadband Grant received or applied for by any Group Company from a Governmental Authority pursuant to which any Group Company (i) is or would be entitled to receive any funding or financing or other support or benefits or (ii) has any ongoing or outstanding obligations. Other than the Broadband Grants set forth on Section 3.27(a) of the Disclosure Schedule, as of the date hereof, the Group Companies have not applied for or accepted any grants from any Governmental Authority in connection with the construction, maintenance, extension of or modifications to the Network or the Network Infrastructure, or any other network or related network infrastructure.
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(b) True and correct copies of all Grant Documents related to Broadband Grants in excess of $1,000,000 have been furnished to Purchaser.
(c) In all applications, certifications, progress and financial reports, draw requests, and other submissions, for each of the Broadband Grants set forth on Section 3.27(a) of the Disclosure Schedule, none of the Group Companies or their respective representatives made any untrue or inaccurate statement, misrepresentation or material omission to any Governmental Authority that, if discovered by or disclosed to such Governmental Authority, could reasonably be expected to result in the invalidation, forfeiture or termination of any such Broadband Grant or Grant Agreement, or the clawback, return or reimbursement of all or any portion of the proceeds of any such Broadband Grant.
(d) The Group Companies have, in all material respects, (i) complied with all provisions of the grant agreements with respect to the Broadband Grants set forth on Section 3.27(a) of the Disclosure Schedule (the “Grant Agreements”) and all applicable Laws, award conditions and program requirements related thereto, and (ii) used all of the proceeds of such Broadband Grants in the manner required or permitted by such Grant Documents.
(e) None of the Group Companies has received any written notice from any Governmental Authority that (i) any Group Company is not in compliance in any material respect with any provisions of any Grant Agreement or any applicable Laws, (ii) any material cost or disbursement is disallowed or (iii) such Governmental Authority is seeking any clawback, return or reimbursement of all or any portion of the proceeds of any Broadband Grant. To the Seller’s Knowledge, no investigation, audit or review by any Governmental Authority relating to the Broadband Grants is pending or threatened in writing, except as disclosed in Section 3.27(e) of the Disclosure Schedule.
(f) The material assets acquired or constructed with Broadband Grant funds are accurately identified in Section 3.27(f) of the Disclosure Schedule and are not subject to any Lien in favor of any person other than (i) any security interest or reversionary interest required by the Grant Documents in favor of the United States or a Governmental Authority providing funding under the applicable Broadband Grant, and (ii) Liens permitted under the Grant Documents. No such asset has been sold, transferred, or disposed of in violation of the Grant Documents.
Section 3.28. Capital Improvements Required by Governmental Authorities. Except as set forth in Section 3.28 of the Disclosure Schedule or pursuant to a Broadband Grant, no Group Company is required by any Governmental Authority to make any changes, upgrades or enhancements with respect to all or any part of the Network Infrastructure.
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Section 3.29. Projected CapEx Schedule. Section 3.29 of the Disclosure Schedule sets forth the status, projected timeline and capital expenditure budget (including the network and facilities required to be built, applicable plan of work, construction milestones, timeline for achievement of the ready for service date, and project costs incurred and budgeted) for any awarded Broadband Grant projects in process, in each case, with respect to the Group Companies, as of the date hereof (the “Projected CapEx Schedule”). The budgeted amounts set forth in the Projected CapEx Schedule have been approved by the board of directors (or similar governing body) of the applicable Group Companies. Except as specifically set forth on the Projected CapEx Schedule, as of the date hereof, there are no grant-related capital expenditure requirements of the Group Companies, and as of the Closing Date, except as specifically set forth in the then-current Update Statement, there are no expected grant-related capital expenditure requirements of the Group Companies.
Section 3.30. Other Capital Expenditures. Section 3.30 of the Disclosure Schedule sets forth the status and projected timeline and capital expenditure budget for each capital project in process or otherwise required to be completed under any contractual obligation by any of the Group Companies (other than any projects on the Projected CapEx Schedule) as of the date hereof, as well as the amount of the actual capital expenditures for each such capital project made by the Group Companies for the years ended December 31, 2024 and December 31, 2025. The budgeted amounts set forth on Section 3.30 of the Disclosure Schedule have been approved by the board of directors (or similar governing body) of the applicable Group Companies.
Section 3.31. Customers; Suppliers.
(a) Section 3.31(a) of the Disclosure Schedule sets forth a true, correct and complete list of the ten largest customers of the Group Companies based on the amounts paid to the Group Companies in respect of the Business during the twelve months ended each of December 31, 2024 and December 31, 2025, showing the approximate total revenues generated by each such customer during such period, together with (to the extent not included in such list) any customers that are party with any of the Group Companies to any IRU or lease with an outstanding term of five years or more (the “Material Customers”). As of the date hereof, none of the Material Customers has delivered a written or oral notice to any of the Group Companies indicating that it has terminated, canceled or materially adversely modified, or has provided written notice of an intention or request to terminate, cancel or materially adversely modify, its business relationship with the Group Companies, and the Seller does not have a reasonable basis to believe that any Material Customer intends to do so.
(b) Section 3.31(b) of the Disclosure Schedule sets forth a true, correct and complete list of the top ten suppliers of the Group Companies based on the consolidated purchases (whether for goods or services) of the Group Companies for the twelve months ended each of December 31, 2024 and December 31, 2025, showing the approximate total dollar value of such purchases made from each such supplier during such period (the “Material Suppliers”). As of the date hereof, no Material Supplier has delivered a written notice to any of the Group Companies indicating that it has terminated, canceled or materially adversely modified, or has provided written notice of an intention or request to terminate, cancel or materially adversely modify, its business relationship with the Group Companies.
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(c) No rebates (volume or otherwise) are due or payable to any customer of any Group Company, and, except as set forth in the Contracts made available to Purchaser, no discounts or rebates have been promised to any customer of any Group Company.
(d) No supplier of any Group Company is a sole source supplier, nor during the twelve months preceding the date of this Agreement, has any Group Company been dependent upon any one supplier for more than 10% by value of its purchases (whether for goods or services). Except as set forth on Section 3.31(d) of the Disclosure Schedule, no Material Supplier has failed to deliver or had any material delay in delivering any supplies (whether for goods or services) to any Group Company.
Section 3.32. Books and Records. The Group Companies are in possession of (i) true, correct and complete minute books and stock record books (or equivalent ownership records) of each of the Group Companies and (ii) all Business Records of the Group Companies.
Section 3.33. Bank Accounts. Section 3.33 of the Disclosure Schedule lists, as of the date hereof, all banks or other financial institutions with which any of the Group Companies has an account or maintains a lock box or safe deposit box (the “Bank Accounts”), showing (a) the Group Company named on each Bank Account, (b) the type and account number of each Bank Account and (c) the names of the Persons authorized as signatories or to act or deal in relation to each Bank Account.
Section 3.34. Equity Financing.
(a) Section 3.34 of the Disclosure Schedule sets forth a true, correct and complete copy of the Equity Commitment Letter. As of the date of this Agreement, the Seller has received the Equity Commitment Letter from the Equity Financing Source. The Equity Commitment Letter provides that Purchaser is an express third-party beneficiary thereto.
(b) The Equity Commitment Letter is a legal, valid and binding obligation of the Seller and the Equity Financing Source, enforceable in accordance with its terms, subject to the General Enforceability Exceptions. The Equity Commitment Letter is in full force and effect and has not been withdrawn, rescinded or terminated or otherwise amended, supplemented or modified in any respect and no waiver has been granted thereunder, no such amendment, supplement, modification or waiver is contemplated, and no withdrawal, rescission or termination thereof is contemplated. Neither the Seller nor the Equity Financing Source is in breach of any of the terms or conditions set forth in the Equity Commitment Letter.
(c) The Equity Financing Source has the financial capacity to pay and perform its obligations under the Equity Commitment Letter, and all funds necessary to fulfill its obligations under the Equity Commitment Letter will be available to the Equity Financing Source as long as the Equity Commitment Letter remains in effect.
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(d) To the Knowledge of the Seller, no event or circumstance exists that would prevent the Equity Financing Source from satisfying on a timely basis its commitments under the Equity Commitment Letter.
Section 3.35. Investment Decision. The Seller is an “accredited investor” as defined in Regulation D of the Securities Act, is able to bear the economic risk of its investment in any GCI Common Stock issuable pursuant to Section 5.17(d) and has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risk of any investment in the GCI Common Stock. The Seller is acquiring any GCI Common Stock for investment and not with a view toward or for the sale in connection with any distribution thereof, or with any present intention of distributing or selling such GCI Common Stock. The Seller acknowledges that, subject to the terms of the Registration Rights Agreement, any GCI Common Stock issuable pursuant to Section 5.17(d) has not been registered under the Securities Act or any other federal, state, foreign or local securities Law, and agrees that such GCI Common Stock may not be sold, transferred, offered for sale, pledged, distributed, hypothecated or otherwise disposed of without registration under the Securities Act, except pursuant to an exemption from such registration available under the Securities Act, and in compliance in all material respects with any other federal, state, foreign or local securities Law, in each case, to the extent applicable.
Section 3.36. Closing Payment Disbursement Schedule. At the Closing, the Closing Payment Disbursement Schedule will contain a true, correct and accurate list of (a) the amounts payable to each Person required to be listed thereon and (b) the account or accounts of each such Person to which payments are due.
Section 3.37. No Other Representations or Warranties. Except for the representations and warranties contained in Article 4, or as expressly set forth in any other Transaction Agreement or in any certificate delivered by Purchaser in connection with the Closing, the Seller acknowledges that neither Purchaser nor any Person on behalf of Purchaser or any of its Affiliates or its or their Representatives has made or makes, and the Seller expressly disclaims any reliance upon, any other express or implied representation, warranty or other statement with respect to Purchaser or with respect to any other information provided or made available to the Seller in connection with this Agreement or the transactions contemplated hereby.
Article 4
Representations and Warranties Concerning Purchaser
Purchaser represents and warrants to the Seller that the statements contained in this Article 4 are true and correct as of the date hereof and as of the Closing Date except for such representations and warranties as are made only as of a specific date, which shall only be made as of such date:
Section 4.1. Organization and Good Standing. Purchaser is an entity, duly formed, validly existing and in good standing under the Laws of its jurisdiction of formation.
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Section 4.2. Authorization; Enforceability. Purchaser has all requisite limited liability company power and authority to execute, deliver, and perform its obligations under this Agreement and the other Transaction Agreements to which Purchaser is a party, and to consummate the transactions contemplated hereby and thereby. The execution, delivery and performance by Purchaser of this Agreement and of the other Transaction Agreements to which it is a party, and the consummation of the transactions contemplated hereby and thereby, have been duly and validly authorized by all necessary limited liability company action on the part of Purchaser, including any necessary approval or consent of its partners, members, stockholders or other equity owners. This Agreement has been, and the other Transaction Agreements to which it is or will be a party shall be, duly and validly executed and delivered by Purchaser and, assuming the due authorization, execution and delivery by the other parties hereto and thereto, shall, upon such execution and delivery hereof and thereof, be the legal, valid and binding obligations of Purchaser hereunder and thereunder, as applicable, enforceable against Purchaser in accordance with its terms, except as limited by the General Enforceability Exceptions.
Section 4.3. No Conflicts; Consents and Approvals. Neither the execution, delivery and performance of this Agreement by Purchaser, or of the other Transaction Agreements to which it is a party, nor the consummation by Purchaser of the transactions contemplated hereby or thereby, shall: (a) conflict with, violate or result in a breach of any provisions of the certificate of formation or limited liability company agreement (or equivalent organizational documents) of Purchaser; (b) constitute or result in the breach of any term, condition or provision of, or constitute a default under, or give rise to any right of termination, cancellation or acceleration with respect to, or result in the creation or imposition of a Lien upon any property or assets of Purchaser pursuant to, any material Contract or any approvals, authorizations, consents, licenses, permits or certificates of Governmental Authorities that are required for the operation of the business of Purchaser as presently conducted in all material respects; or (c) subject to obtaining the Closing Regulatory Approvals, violate any material Law or material Order applicable to Purchaser or any of its properties or assets, except in the case of (b) or (c), as would not reasonably be expected to have, individually or in the aggregate, a Purchaser Material Adverse Effect.
Section 4.4. Governmental Filings. Except for the Closing Regulatory Approvals or disclosure requirements under securities laws or stock exchange rules, no filing or registration with, notification to, or authorization, consent or approval of any Governmental Authority is required by the Purchaser in connection with (a) the execution, delivery and performance of this Agreement by Purchaser or the other Transaction Agreements to which the Purchaser is a party, or (b) the consummation by Purchaser of the transactions contemplated hereby or thereby, in each case, except as would not reasonably be expected to have, individually or in the aggregate, a Purchaser Material Adverse Effect.
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Section 4.5. Litigation.
(a) There is no Action pending or, to Purchaser’s knowledge, threatened against Purchaser or any of its Affiliates by or before (or, in the case of threatened Actions, that would be before) any Governmental Authority that if determined adversely and in accordance with the plaintiff’s demands, would reasonably be expected to have, individually or in the aggregate, a Purchaser Material Adverse Effect.
(b) There is no Order outstanding against Purchaser or any of its Affiliates that would reasonably be expected to have, individually or in the aggregate, a Purchaser Material Adverse Effect.
Section 4.6. Brokers. Except for TD Securities (USA) LLC, no broker, finder or similar agent has been employed by, or on behalf of, Purchaser, and no Person with which Purchaser has had any dealings or communications is entitled to any brokerage commission or finder’s fee in connection with this Agreement or the transactions contemplated hereby.
Section 4.7. No Registration. Purchaser is acquiring the Purchased Securities for the purpose of investment and not with a view to, or for resale in connection with, the distribution thereof in violation of applicable securities Laws. Purchaser acknowledges that the sale of the Purchased Securities hereunder has not been registered under any securities Laws, and that the Purchased Securities may not be sold, transferred, offered for sale or otherwise disposed of without registration under applicable securities laws or an exemption therefrom.
Section 4.8. SEC Reports and Financial Statements.
(a) Since the completion of the spin-off of Purchaser Parent from Liberty Broadband Corporation on July 14, 2025 until the date of this Agreement, Purchaser Parent has timely filed all forms, statements, schedules, reports and other documents required to be filed by it with the SEC (such forms, statements, schedules, reports and other documents filed since July 14, 2025 until the date of this Agreement, the “Purchaser Parent SEC Documents”). As of their respective filing dates or, if amended or supplemented prior to the date hereof, as of the date of the last such amendment or supplement, (A) the Purchaser Parent SEC Documents complied as to form in all material respects with the applicable requirements of the Sarbanes-Oxley Act, the Securities Act, and the Exchange Act, as the case may be, and the applicable rules and regulations promulgated thereunder, in each case as in effect on the date of any such filing, and (B) none of the Purchaser Parent SEC Documents contained, when filed, any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary to make the statements therein, at the time and in light of the circumstances under which they were made, not misleading.
(b) As of the date of this Agreement, the consolidated financial statements (including all related notes and schedules) of Purchaser Parent and its consolidated subsidiaries included or incorporated by reference in the Purchaser Parent SEC Documents when filed or, if amended or supplemented prior to the date hereof, as of the date of (and giving effect to) the last such amendment or supplement, (i) complied in all material respects with the applicable accounting requirements and the published rules and regulations of the SEC with respect thereto, in each case in effect at the time of such filing, and (ii) fairly presented in all material respects the consolidated financial position of Purchaser Parent and its consolidated subsidiaries, as at the respective dates thereof, and the consolidated results of their operations and their consolidated cash flows for the respective periods then ended (subject, in the case of the unaudited quarterly financial statements, to normal period-end adjustments and the absence of notes) in conformity with GAAP, in all material respects, during the periods involved (subject, in the case of the unaudited quarterly financial statements, to normal period-end adjustments and the absence of notes).
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Section 4.9. Sufficiency of Funds. Purchaser has, or will have at the Closing, sufficient access to cash, available lines of credit and/or other sources of immediately available funds to enable it to make payment of the Closing Payment Amount and the Final NTHE Reimbursement and Purchaser acknowledges and agrees that the availability of funds shall not be a condition to the obligation of Purchaser to consummate the transactions contemplated hereby.
Section 4.10. No Other Representations or Warranties. Except for the representations and warranties contained in Article 3 or as expressly set forth in any other Transaction Agreement or in any certificate delivered by the Seller in connection with the Closing, Purchaser acknowledges that neither the Seller nor any Person on behalf of the Seller or any of their Affiliates or their Representatives has made or makes, and Purchaser expressly disclaims any reliance upon, any other express or implied representation, warranty or other statement with respect to the Seller or the Group Companies or with respect to any other information provided or made available to Purchaser in connection with this Agreement or the transactions contemplated hereby.
Article 5
COVENANTS
Section 5.1. Conduct of the Group Companies’ Businesses Prior to the Closing.
(a) Except: (i) for the matters set forth in Section 5.1(a) of the Disclosure Schedule; (ii) as expressly required by this Agreement; (iii) with the prior written consent of Purchaser (which consent shall not be unreasonably withheld, delayed or conditioned); or (iv) for actions required by applicable Law, in each case, during the period from the date hereof until the Closing, or until such earlier date as this Agreement may be terminated in accordance with its terms (such period, the “Interim Period”), the Seller shall, and shall cause the Group Companies to (A) conduct the business of the Group Companies in the Ordinary Course of Business, (B) maintain and preserve the Group Companies’ present business organizations, and (C) use reasonable best efforts to: (1) maintain in effect all of their respective Material Permits; (2) maintain and preserve the Group Companies’ business relationships and good will with Governmental Authorities, customers, suppliers, lenders and others having material business dealings with the Group Companies; and (3) maintain an appropriate level of working capital for the Group Companies (including with respect to the timing of accounts receivable and payment of accounts payable). Without limiting the foregoing, during the Interim Period, the Seller shall cause the Group Companies to:
(i) pay their debts and other obligations (including all Regulatory Fees) when due; and
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(ii) use reasonable best efforts to:
(A) maintain the properties and assets owned, operated or used by the Group Companies (including all components of the Network Infrastructure) in good working order and condition in all material respects, except for ordinary wear and tear;
(B) enforce, in accordance with their respective terms, all warranties granted in favor of any of the Group Companies in respect to any component of the Network Infrastructure;
(C) perform in a timely manner all of their obligations under all Material Contracts; and
(D) comply in all material respects with all applicable Laws;
provided, that, Purchaser’s approval of any action restricted by this Section 5.1(a) shall not be unreasonably withheld, conditioned or delayed and shall be considered granted within ten Business Days (unless a shorter time is reasonably required by the circumstances and is not attributable to a delay caused primarily by the Seller, and such shorter time is specified in the Seller’s notice; provided that in no event will such period be less than four Business Days) after receipt by Purchaser of the Seller’s written notice requesting such consent unless Purchaser notifies the Seller in writing to the contrary during that period. In the event of an emergency threatening life, material property of the Group Companies, the environment or a Fiber Outage, the Seller may take such action as a prudent owner would take under the circumstances and shall use reasonable best efforts to notify Purchaser in writing of such action prior to taking such action, and otherwise shall notify Purchaser promptly thereafter.
(b) Without limiting the provisions of the foregoing Section 5.1(a), except: (i) for the matters set forth in Section 5.1(b) of the Disclosure Schedule; (ii) as expressly required by this Agreement; (iii) with the prior written consent of Purchaser (which consent shall not be unreasonably withheld, delayed or conditioned); or (iv) for actions required by applicable Law, from the date hereof until the earlier of Closing or the date on which this Agreement may be terminated in accordance with its terms, the Seller shall not, and shall not permit the Group Companies to, take any of the following actions:
(i) (A) split, combine, subdivide or reclassify any Equity Securities, (B) redeem, repurchase or otherwise acquire or offer to redeem, repurchase or otherwise acquire any Equity Securities of any Group Company, (C) except with respect to Upfront Debt Interest Distributions, set any record dates or payment dates for the payment of any dividends or distributions (whether payable in cash, stock, property or a combination thereof) on any Equity Securities of the Company or (D) enter into any agreement with respect to the voting of its Equity Securities;
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(ii) create any Subsidiary of the Group Companies;
(iii) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization, spin-off or other reorganization of any Group Company, file a petition in bankruptcy, reorganization or liquidation, under any provisions of applicable Law on behalf of any Group Company or alter through merger, liquidation, reorganization or restructuring the corporate structure of any Group Company;
(iv) amend, modify or waive any provision of the Company Organizational Documents (other than ministerial changes);
(v) except as required by a Company Plan as in effect on the date hereof, (A) enter into, adopt or amend any Company Plan or Collective Bargaining Agreement; (B) increase the compensation or benefits provided to any current or former Service Provider, except for increases in compensation or benefits which are made in the Ordinary Course of Business; or (C) amend, terminate, or take any action with respect to any qualified Company Plan that could reasonably be expected to affect qualification, nondiscrimination testing, or aggregation;
(vi) make any change in financial accounting methods, principles or practices, except as required by a change in GAAP or applicable Law;
(vii) make any material change to its cash management practices or its policies, practices and procedures with respect to collection or accrual of accounts receivable, establishment of reserves for uncollectible accounts, prepayment of expenses, payment of trade accounts payable, accrual of other expenses, deferral of revenue and acceptance of customer deposits, except in the Ordinary Course of Business or as required by a change in GAAP or applicable Law;
(viii) (A) accelerate, terminate (excluding any expiration in accordance with its terms), cancel, renew, amend, grant a waiver under or otherwise modify any Material Contract in any material respect other than, in each case, in the Ordinary Course of Business, (B) enter into any Contract that would constitute a Material Contract if in effect as of the date hereof (unless such Contract would be terminable by the applicable Group Company following Closing without liability) or (C) waive, release or assign any material rights, claims or benefits of any Group Company; provided, that the foregoing shall not limit the ability of any Group Company to renew any Material Contract on substantially similar terms or in a manner consistent with Section 5.17(e) of the Disclosure Schedule; provided, further, that notwithstanding anything in this Agreement to the contrary, in no event shall the Seller permit the Group Companies to enter into any Contract that contains a change of control provision in favor of the other party or parties thereto or would otherwise require a payment or give any right (including a termination right) to such other party or parties in connection with any transaction contemplated by this Agreement;
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(ix) sell, lease, sublease, mortgage, sell and leaseback, transfer, terminate or otherwise dispose of, or grant or permit any Lien (other than Permitted Liens) to encumber any tangible or intangible property or assets of any Group Company (including the applicable Group Company’s interest in any Leased Property, Easements or Network Underlying Rights or any interests therein); or acquire fee title to any real property or acquire, other than in the Ordinary Course of Business, any additional Leases or Easements;
(x) sell, assign, lease, sublease, license, sublicense or otherwise transfer or dispose of, abandon or permit to lapse, fail to take any action necessary to maintain, enforce or protect, or create or incur any Lien (other than Permitted Liens) on, in each case, any Owned Intellectual Property other than licenses or the abandonment of such Intellectual Property, in each case, in the Ordinary Course of Business;
(xi) enter into a new line of business;
(xii) purchase or acquire, directly or indirectly (including by merger, consolidation, or acquisition of stock or assets or any other business combination), any corporation, partnership, other business organization or division thereof;
(xiii) (A) make or change any Tax election (other than in the Ordinary Course of Business consistent with past practice), (B) change any annual Tax accounting period, (C) adopt or change any method of Tax accounting, (D) amend any Tax Returns or file or surrender a claim for a Tax refund, (E) consent to any extension or waiver of the limitations period applicable to any Tax claim or assessment (other than extensions obtained in the Ordinary Course of Business), (F) enter into any closing agreement with a Taxing Authority or settle any examination, audit, proceeding or other action with respect to the Taxes or Tax Returns, (G) agree to any restriction to making a “push out” election under Section 6226 of the Code with respect to any Group Company, or (H) change or file an election to change the Tax classification of any Group Company;
(xiv) (A) incur, assume, guaranty, endorse or otherwise become responsible for any Indebtedness; (B) guarantee any Indebtedness of any Person that is not a Group Company; or (C) amend, restate, waive or otherwise modify any documentation related to any outstanding Indebtedness (including the Company Credit Agreement);
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(xv) settle, compromise, discharge or agree to settle any litigation, investigation, arbitration or proceeding other than those that involve only the payment by or to the Group Companies of Damages; provided that any such settlement, compromise or discharge shall not involve any non-monetary relief;
(xvi) assign, terminate or amend in any material respect any Material Permit, except in the Ordinary Course of Business;
(xvii) enter into, terminate, or modify, waive or amend, in each case, in any manner that is adverse to the Group Companies, any Related Party Contract, except in the Ordinary Course of Business;
(xviii) open or close any bank accounts of the Group Companies or execute or modify any general or special powers of attorney of the Group Companies, except in the Ordinary Course of Business;
(xix) make any loans, advances or capital contributions to, or investments in, any Person (other than loans, advances or capital contributions solely among the Group Companies);
(xx) except with respect to Upfront Debt Interest Distributions, (A) declare, set aside, make or pay any dividend or make any other distribution (whether payable in cash, stock, property or a combination thereof) with respect to any of the Equity Securities of any Group Company (other than any dividend or distribution by and between Group Companies), (B) redeem, purchase or otherwise acquire, directly or indirectly, any Equity Securities in any Group Company, or (C) propose or commit to take any action described in the foregoing clauses (A) and (B);
(xxi) (A) withdraw, relinquish or transfer any Broadband Grant set forth in Section 3.27(a) of the Disclosure Schedule, (B) submit any material amendment, re-budgeting, extension of the period of performance, or scope change to any Broadband Grant set forth in Section 3.27(a) of the Disclosure Schedule or (C) accept any new Broadband Grant, in each case other than in the Ordinary Course of Business; or
(xxii) commit, resolve, agree to take or authorize any of the foregoing actions;
provided, that, Purchaser’s approval of any action restricted by this Section 5.1(b) shall not be unreasonably withheld, conditioned or delayed and shall be considered granted within ten Business Days (unless a shorter time is reasonably required by the circumstances and is not attributable to a delay caused primarily by the Seller, and such shorter time is specified in the Seller’s notice; provided, that in no event will such period be less than four Business Days) of receipt by Purchaser of the Seller’s written notice requesting such consent unless Purchaser notifies the Seller in writing to the contrary during that period. In the event of an emergency threatening life, material property of the Group Companies, the environment or a Fiber Outage, the Seller may take such action as a prudent owner would take under the circumstances and shall use reasonable best efforts to notify Purchaser in writing of such action prior to taking such action, and otherwise shall notify Purchaser promptly thereafter.
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Section 5.2. Prohibition on Transfer of Group Company Equity Securities. During the Interim Period, except to the extent contemplated by this Agreement, the Seller shall not, and shall cause the Group Companies not to, directly or indirectly, (a) transfer, sell, assign, exchange, pledge or otherwise dispose of or encumber any Equity Securities of any Group Company, or enter into any Contract or other arrangement relating thereto or (b) grant any proxies or powers of attorney with respect to any Equity Securities of any Group Company, deposit any such Equity Securities into a voting trust, or enter into a voting agreement with respect to any such Equity Securities, in either case, without the prior written consent of Purchaser in its sole and absolute discretion.
Section 5.3. Confidentiality; Control and Supervision.
(a) All information provided or obtained in connection with the transactions contemplated by this Agreement shall, for a period of five years after the date hereof, be kept confidential by the parties in accordance with the Mutual Nondisclosure Agreement, effective as of August 5, 2024, by and between GCI Communication Corp., Purchaser Parent, and Grain Management, LLC, an Affiliate of the Company and the Seller (as so amended and supplemented the “Confidentiality Agreement”) (notwithstanding any termination of the Confidentiality Agreement); provided, however, that any confidentiality obligations of Purchaser and its Representatives, Subsidiaries or Affiliates with regard to information regarding the Group Companies shall terminate at Closing. In the event of a conflict or inconsistency between the terms of this Agreement and the Confidentiality Agreement, the terms of this Agreement shall govern. For a 5-year period beginning on the Closing Date, the Seller shall, and shall cause its Affiliates and Representatives to, keep all non-public, confidential or proprietary information in respect of the Group Companies (including “Confidential Information” as defined in the Confidentiality Agreement) (“Group Company Confidential Information”) in confidence and not use or disclose such Group Company Confidential Information, except (w) for information that is available to the public prior to or on the Closing Date or thereafter becomes available to the public (other than as a result of a breach of this Agreement, including this Section 5.3(a)), (x) to the extent the Seller or its Representatives (or any of their Affiliates) must, upon the advice of counsel, disclose the same in any Action brought by it to enforce its rights under this Agreement, or (y) as may be required under applicable Law.
(b) Nothing contained in this Agreement shall provide Purchaser, directly or indirectly, with any right to control or direct the operation of any Group Company prior to the Closing.
Section 5.4. Third-Party Consents; Notices. The Seller shall, and shall cause each of the Group Companies to, upon Purchaser’s request, use reasonable best efforts to obtain prior to the Closing, and deliver to Purchaser at or prior to the Closing, all the consents, filings, declarations, registrations and notices required to be obtained by the Seller or any Group Company pursuant to the terms of any (a) Material Contract, (b) Leased Property or (c) Material Easement Agreement in connection with the consummation of the transactions contemplated by this Agreement (collectively, the “Material Consents”), using forms reasonably acceptable to Purchaser. The Seller shall, upon Purchaser’s request, promptly cause the Group Companies to send requests for each of the Material Consents to the applicable third parties, using forms reasonably acceptable to Purchaser. The Seller shall not permit the Group Companies to make any payment (other than a payment as expressly required by the terms of the underlying Contract (as in existence as of the date hereof) in order to receive such Material Consent) or otherwise agree to modify, amend or waive any terms of any Contract in order to receive any Material Consent without the prior written consent of Purchaser, which shall not be unreasonably conditioned, withheld or delayed.
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Section 5.5. Regulatory Filings.
(a) Under the terms and subject to the conditions of this Agreement, each of Purchaser and the Seller shall (and shall cause their respective Controlled Affiliates to) use their respective reasonable best efforts to take, agree to take, or cause to be taken, any and all actions and to do, or cause to be done, any and all things necessary, proper or advisable under any Law or otherwise, so as to, as promptly as practicable, consummate the transactions contemplated by this Agreement, and each such party shall, and shall cause its respective Controlled Affiliates to, cooperate fully to that end.
(b) Subject to and without limiting the generality of Section 5.5(a):
(i) Each of Purchaser and the Seller shall use, subject in all respects to Section 5.5(b)(v), its reasonable best efforts to:
(A) prepare and file Notification and Report Forms pursuant to the HSR Act with respect to the transactions contemplated by this Agreement within 20 Business Days after the date of this Agreement;
(B) cause the expiration or termination of the applicable waiting periods under the HSR Act or any other Antitrust Law as soon as practicable;
(C) prepare and file or cause to be filed with the FCC all applications and notifications necessary to obtain the FCC Consents within 20 Business Days after the date of this Agreement;
(D) supply as promptly as practicable any additional information and documentary material that may be reasonably requested or required by any Governmental Authority pursuant to the filing and notifications contemplated in parts (A)-(C) of this subsection and to comply as promptly as practicable with a so-called “Second Request” pursuant to HSR Act from the U.S. Department of Justice or U.S. Federal Trade Commission; and
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(ii) Purchaser shall be solely responsible for the payment of all filing fees required under the HSR Act or any other Antitrust Law.
(iii) If any Governmental Authority or other third party institutes any Action (whether judicial or administrative) to enjoin, restrain, delay, prohibit, or otherwise prevent the consummation of the transactions contemplated by this Agreement, Purchaser shall (and shall cause its Subsidiaries and Controlled Affiliates to) and the Seller shall (and shall cause its Subsidiaries and Affiliates to) take any and all steps necessary to contest, resist, and defend against such Action. Purchaser’s and the Seller’s obligations under this subsection include:
(A) defending through litigation on the merits any claim asserted in any court or administrative tribunal by any Governmental Authority or other third party;
(B) seeking to vacate, reverse, or overturn any stay, restraining order, preliminary injunction, or permanent injunction entered by any court or Governmental Authority; and
(C) pursuing and defending through the exhaustion of all available appeals, including petitions for certiorari or similar discretionary review.
(iv) In connection with the efforts referenced in Section 5.5(a) and this Section 5.5(b), Purchaser and the Seller shall use reasonable best efforts to:
(A) promptly notify the other party of any substantive communication it receives from any Governmental Authority in connection with any of the transactions contemplated by this Agreement and, in the case of written substantive communications, provide copies thereof to the other party;
(B) cooperate with each other in connection with all aspects of satisfying the conditions set forth in Section 6.1;
(C) cooperate with each other in connection with any response to any investigation or other inquiry brought by any Governmental Authority in connection with the transactions contemplated by this Agreement and to defend or contest any claim, suit, action or other proceeding brought by a Governmental Authority or other third party that would otherwise prevent or materially impede, interfere with, hinder or delay the consummation of the transactions described herein;
(D) provide each other with advance copies and a reasonable opportunity to comment on all material proposed notifications, submissions, filings, applications, undertakings, and information and correspondence proposed to be supplied to or filed with any Governmental Authority, in each case related in any way to any of the transactions contemplated by this Agreement; and
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(E) to the extent permitted by applicable Law, provide a reasonable opportunity to attend and participate in any substantive meetings, discussions, telephone conversations, or correspondence with a Governmental Authority related to such Governmental Authority’s review or approval of the transactions contemplated by this Agreement.
Subject to applicable Law, each party shall, upon request by the other party, furnish the Seller or Purchaser, as applicable, with all information concerning itself, its Controlled Affiliates, officers, directors or equity holders, as applicable, and such other matters or assistance as may be reasonably necessary or advisable in connection with any statement, filing, notice, application or other submission made (or to be made) by or on behalf of Purchaser or the Seller to any Governmental Authority related in any way to any of the transactions contemplated by this Agreement.
Notwithstanding the foregoing, materials required to be provided pursuant to this section may be redacted (1) to remove references concerning the valuation of the Group Companies, (2) as necessary to comply with Contracts, (3) as necessary to comply with applicable Laws (including Antitrust Laws), and (4) as necessary to address reasonable privilege or confidentiality concerns; provided, that each party may further designate competitively sensitive material provided pursuant to this Section 5.5(b)(iv) as “outside counsel only”.
The obligations in this Section 5.5(b)(iv) shall be subject to the Confidentiality Agreement and any attorney-client, work product or other privilege.
(v) Notwithstanding any efforts obligations in this Section 5.5, neither Purchaser nor its Affiliates shall be required to:
(A) propose, negotiate, offer to commit and effect (and if such offer is accepted, commit to and effect), by order, consent decree, hold separate order, trust or otherwise, the sale, divestiture, license, issuance, disposition or hold separate of such assets, businesses or equity of Purchaser or its Affiliates (including such properties, assets, or operations of the Seller), or otherwise offer or commit to any action, non-action, condition or conduct requirement (including those that limit Purchaser’s or its Affiliates’ freedom of action, ownership or control with respect to, or its ability to retain, hold or operate, any of the businesses, assets, product lines, properties or services of Purchaser or its Affiliates (including such properties, assets, or operations of the Group Companies));
(B) terminate, relinquish, modify or waive existing relationships, ventures, contractual rights, obligations or other arrangements of Purchaser or its Affiliates (including such properties, assets, or operations of the Seller);
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(C) create any relationships, ventures, contractual rights, obligations or other arrangements on Purchaser or its Affiliates (including such properties, assets, or operations of the Seller);
(D) enter or offer to enter into agreements and stipulate to the entry of an order or decree or file appropriate applications with any Governmental Authority in connection with any of the actions contemplated by the foregoing clauses (A) through (C) or otherwise offer to take or offer to commit to take any action that limits its freedom of action with respect to, or its ability to retain, any of the businesses, holdings, or assets of Purchaser or its Affiliates or the Seller or their Affiliates; or
(E) agree to obtain prior approval or other approval from a Governmental Authority, or submit a notification or otherwise notify the Governmental Authority prior to (other than with respect to the transactions contemplated by this Agreement) or to appoint a monitor with respect to, in each case, consummating any future acquisition, merger, or similar transaction.
(vi) Each of the Seller, in connection with those filings and notifications contemplated in Section 5.5(b)(i), shall not commit to and effect, by consent decree, hold separate order or otherwise, without the prior written consent of Purchaser, any restrictions on the Seller or that would otherwise bind Purchaser after Closing.
(vii) Notwithstanding anything to the contrary in this Agreement, in connection with (y) those filings and notifications referenced in Section 5.5(b)(i) and otherwise in (z) any communications (whether written or oral), litigation, suits, or actions with a Governmental Authority or other third party relating to (i) the transactions contemplated by this Agreement and (ii) antitrust, communications, or Alaskan regulatory Laws, Purchaser and the Seller shall consult and cooperate with the other party and shall consider in good faith the views of the other party prior to and in connection with any filing, decision pursuant to 16 CFR § 803.12, analysis, appearance, presentation, memorandum, submission, brief, argument, opinion, letter, proposal, motion, or brief or any agreement, arrangement, undertaking, or understanding (oral or written) with any Governmental Authority or other third party; provided, however, that in the event of any disagreement that cannot be resolved following good faith discussion by the parties’ outside legal counsels, the disagreement shall be escalated to each of Purchaser’s and the Seller’s representatives identified in Section 5.5 of the Disclosure Schedule (or their successors) within two Business Days, and the determination of Purchaser’s representative as to strategy shall be final and conclusive, so long as such determination does not otherwise breach any provision in this Agreement.
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Section 5.6. Public Announcements. None of Purchaser, the Seller or any of their respective Affiliates will issue or make any press release or public statement with respect to this Agreement or transactions contemplated hereby without the prior consent of Purchaser, on one hand if the Seller or any of its Affiliates is proposing to issue or make any such press release or public statement, and the Seller, on the other, if Purchaser or any of its Affiliates is proposing to issue or make any such press release or public statement, except as may be required by applicable Law, court process or by obligations pursuant to any listing agreement with, or the rules and regulations of, any national securities exchange, automated inter-dealer quotation system or over-the-counter markets; provided, that the party proposing to issue any press release or similar public announcement or communication in compliance with any such disclosure obligations shall use reasonable best efforts to consult in good faith with the other party before doing so. Notwithstanding the foregoing, after the issuance of any press release or the making of any public statement with respect to which the consultation procedures set forth in this Section 5.6 have been followed, either party may issue such additional publications or press releases and make such other customary announcements without consulting with any other party hereto so long as such additional publications, press releases and announcements do not disclose any information regarding the transactions contemplated by this Agreement beyond the scope of, and are reasonably consistent in tone and tenor with, the disclosure included in the press release or public statement with respect to which the other party had been consulted.
Section 5.7. Further Assurances.
(a) On and after the Closing Date, each of Purchaser and the Seller shall use its reasonable best efforts from time to time to execute and deliver at the reasonable request of the other party such additional documents and instruments, and to take, or refrain from taking, such other actions, as may be reasonably required to give effect to this Agreement and the transactions contemplated hereby.
Section 5.8. Notice; Supplemental Disclosures. Until the Closing, each of Purchaser and the Seller shall promptly notify each other in writing of any material notice or other material communication from any Person asserting that such Person’s consent is required, or that such Person is entitled to compensation or consideration from any of Purchaser, the Seller or any of the Group Companies or any of their respective Affiliates, in connection with the transactions contemplated by this Agreement or the other Transaction Agreements or any material notice, letter or other written communication received from a Governmental Authority relating to the transactions contemplated by this Agreement or the other Transaction Agreements. Notwithstanding anything to the contrary herein, a party’s good faith failure to comply with this Section 5.8 shall not provide the other party the right not to effect the transactions contemplated by this Agreement or to assert a claim for breach of this Agreement, except if any other provision of this Agreement would independently provide such right. No such notification shall (i) be deemed to modify, amend or supplement the representations or warranties (including the Disclosure Schedule) or any agreement given or made by a party, (ii) modify the conditions set forth in Article 6 or (iii) limit or otherwise affect the remedies available hereunder to the party receiving such notice.
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Section 5.9. Tax Matters.
(a) Preparation of Tax Returns.
(i) The Seller shall prepare or cause to be prepared and timely file or cause to be timely filed all Tax Returns required to be filed on or prior to the Closing Date by any Group Company with respect to a Pre-Closing Tax Period (a “Seller Return”). All such Tax Returns shall be prepared in accordance with past practices of the applicable Group Company, except as otherwise required by applicable Law or as otherwise expressly provided herein; provided that if there are no applicable past practices, the Seller shall exercise its reasonable discretion in the preparation of such Tax Return.
(ii) Each Seller Return that is an income Tax Return that has not been filed prior to the date of this Agreement shall be delivered to Purchaser no later than 30 days prior to the due date for filing such Tax Return (taking into account applicable extensions) for Purchaser’s review and comment, and all reasonable comments submitted by Purchaser to the Seller on or before the date that is the later of (1) ten days prior to such due date for filing (taking into account applicable extensions) or (2) 20 days after such Seller Return is delivered to Purchaser shall be incorporated in such Seller Return for original filing; provided that, if such a Seller Return is due (taking into account any applicable extensions) within 30 days after the date of this Agreement, the Seller shall instead provide Purchaser an opportunity to review and comment on such Seller Return that is reasonable under the circumstances.
(iii) Purchaser shall prepare or cause to be prepared and timely file or cause to be timely filed all Tax Returns required to be filed after the Closing Date by any Group Company with respect to a Pre-Closing Tax Period, including any Tax Returns with respect to a Straddle Period.
(b) Transfer Taxes. All Transfer Taxes shall be paid 50% by the Seller and 50% by Purchaser. All Tax Returns with respect to Transfer Taxes shall be timely filed by the party responsible for such filing under applicable Law. If Purchaser or any Group Company pays a Transfer Tax at or after the Closing, the Seller will reimburse such Person for the Seller’s share thereof within five Business Days of such Person’s written demand therefor. If the Seller pays a Transfer Tax at or after the Closing, Purchaser will reimburse the Seller for Purchaser’s share thereof within five Business Days of the Seller’s written demand therefor.
(c) Purchase Price Adjustment. Each of Purchaser and the Seller shall treat any payment made pursuant to Section 2.8(e), Section 2.8(f), Section 5.9, Section 5.16, Section 5.17 or Article 8 as an adjustment to the Closing Payment Amount for all Tax purposes, except as otherwise required by applicable Law, and the relevant party shall bear any applicable Tax consequences resulting from such an adjustment to the Closing Payment Amount, in accordance with the applicable Law.
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(d) Allocation of Taxes.
(i) For all purposes of this Agreement, the portion of any Taxes for a Straddle Period that are properly allocable to a Pre-Closing Tax Period shall (i) with respect to any Taxes based upon or related to income or other Taxes based on or measured by receipts, payroll, or sales, or other non-periodic Taxes, be deemed equal to the amount that would be payable if the relevant taxable period ended on and included the Closing Date (and for such purpose, the taxable period of any partnership or other pass through entity in which a Group Company owns a beneficial interest shall be deemed to terminate at such time), and (ii) with respect to any property Taxes or other Taxes not described in the foregoing clause (i), be deemed to be the amount of such Tax for the entire taxable period multiplied by a fraction, the numerator of which is the number of days in the taxable period ending on and including the Closing Date and the denominator of which is the number of days in the entire taxable period.
(ii) For purposes of allocating to a Pre-Closing Tax Period or Post-Closing Tax Period any franchise Tax or similar Taxes imposed in connection with the right to do business, the taxable period shall mean the accounting period with respect to which the Tax is calculated, and not (if different) the privilege period with respect to which the right to do business is conferred.
(e) Tax Cooperation. Each of Purchaser, on the one hand, and the Seller, on the other hand, shall provide the other with such information and records, and make such of its officers, directors, employees and agents available, as may reasonably be requested by the other in connection with the preparation of any Tax Return of a Group Company with respect to a Pre-Closing Tax Period or the conduct of any audit or other proceeding relating to Taxes or Tax Returns of a Group Company for any Pre-Closing Tax Period. Without limiting the generality of the foregoing, the Seller shall:
(i) at the reasonable request of Purchaser, to the extent permitted under applicable Law, cooperate with Purchaser and the Group Companies in causing to be made a timely “push-out” election described in Section 6226 of the Code and the Treasury Regulations thereunder (or any analogous provision of state, local or foreign Law), or causing to be taken any action permitted under Section 6225(c) of the Code and the Treasury Regulations thereunder (or any analogous provision of state, local or foreign Law), with respect to any “imputed underpayment” or adjustment (or portion thereof) relating to any Pre-Closing Tax Period for which the applicable Group Company was treated as a partnership for applicable tax purposes (including by exercising any Contract rights of the Seller to compel such an election or action);
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(ii) at the reasonable request of Purchaser, cooperate with Purchaser and the Group Companies in causing the revocation of any designation of, or obtaining the resignation of, any Partnership Representative or any Designated Individual for any of the Group Companies for any Pre-Closing Tax Period for which such Group Company was treated as a partnership for applicable tax purposes and in causing the designation or appointment of a replacement Partnership Representative and/or Designated Individual, in each case of Purchaser’s choosing (including, in each case, by exercising any Contract rights of the Seller to compel such action); and
(iii) cause to be promptly provided to Purchaser any notices, correspondence or written communication with respect to the Group Companies received from a Governmental Authority by the Seller.
(f) Tax Treatment. Purchaser and the Seller acknowledge and agree that the acquisition of the Purchased Securities pursuant to this Agreement is intended to be characterized and shall be reported for U.S. federal income Tax purposes (and for any applicable state, local or non-U.S. income Tax purposes to the extent permitted under applicable Law) as the sale and purchase of the assets (other than Equity Securities of any Person that is a disregarded entity for U.S. federal income tax purposes) of the Company and the Subsidiaries of the Company that are treated as disregarded entities for U.S. federal income tax purposes (collectively, the “Tax Allocation Assets”) in accordance with Section 1001 of the Code.
(g) Company Asset Valuations.
(i) For U.S. federal income (and applicable state and local) Tax purposes, the parties agree that the Final Closing Payment Amount (and other items constituting consideration for U.S. federal income Tax purposes) (the “Closing Consideration”), will be allocated among the Tax Allocation Assets in accordance with the provisions of Section 1060 of the Code and the Treasury Regulations thereunder.
(ii) After the Closing, Purchaser shall prepare an allocation of the Closing Consideration among the Tax Allocation Assets in accordance with Section 1060 of the Code and the Treasury Regulations promulgated thereunder, and the methodology set forth in Exhibit E (the “Allocation”). Purchaser shall deliver the Allocation to the Seller for approval no later than 90 days following the determination of the Final Closing Payment Amount in accordance with Section 2.8.
(iii) Purchaser and the Seller will work together in good faith to agree upon a final Allocation within 60 days following the Seller’s receipt of Purchaser’s Allocation or such longer period as mutually agreed to by Purchaser and the Seller (the “Allocation Negotiation Period”). If Purchaser and the Seller reach agreement on an Allocation within the Allocation Negotiation Period (such Allocation, the “Final Allocation”), each party shall, and shall cause each of its Affiliates to, (1) file all Tax Returns and other applicable Tax documents in all respects consistent with the Final Allocation, (2) not take any position for Tax purposes (whether in Tax proceedings, Tax Returns, or otherwise) that is inconsistent with the Final Allocation and (3) promptly advise the other parties regarding the existence of any Tax proceeding related to the Final Allocation and reasonably cooperate in good faith in responding to any such Tax proceeding; provided, however, that nothing in this Agreement will prevent a party or any of its Affiliates from negotiating, compromising or settling any proposed deficiency or adjustment or other Tax proceeding based upon or arising out of the Allocation, and no party or its Affiliates will be required to litigate before any Governmental Authority any proposed deficiency or adjustment or other Tax proceeding challenging the Allocation, as applicable. If Purchaser and the Seller are not able to reach mutual agreement on a Final Allocation within the Allocation Negotiation Period, each party shall be entitled to determine its own Allocation.
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(h) Tax Sharing Agreements. Prior to the Closing, the Seller shall (and shall cause its Affiliates, including the Group Companies, to) take such actions as may be necessary to (i) terminate any and all Tax Sharing Agreements between a Group Company, on the one hand, and the Seller or its Affiliates (other than a Group Company), on the other hand, and (ii) pay, settle or otherwise discharge any amounts due under any such Tax Sharing Agreement.
(i) Tax Forms. If any IRS form delivered pursuant to Section 2.5(c) expires or becomes obsolete or inaccurate in any respect prior to the final payment of the Purchase Price, the Seller shall promptly provide to Purchaser an updated IRS Form W-9 (or equivalent form) reasonably satisfactory to Purchaser.
(j) Tax Actions. From and after the Closing until the determination of the Final Closing Payment Amount pursuant to Section 2.8, without the consent of the Seller (not to be unreasonably withheld, conditioned or delayed), Purchaser shall not, and shall not permit any of its Affiliates (including any Group Company) to (i) make any Tax election with respect to a Group Company in a manner that would increase the Taxes of a Group Company, (ii) amend any Tax Return of a Group Company in a manner that would increase the Taxes of a Group Company, (iii) initiate any voluntary disclosure with respect to Taxes of a Group Company, or (iv) voluntarily approach a Governmental Authority with respect to Taxes of a Group Company, in each case, with respect to any Tax period (or portion thereof) ending on or before the Closing Date for a Tax that would be taken into account in the calculation of the Final Closing Payment Amount. Other than as contemplated under this Agreement (or any other Contract with the Seller) or as required by Law, Purchaser shall not, and shall not permit any of its Affiliates (including the any Group Company) to, take any action with respect to a Group Company outside the Ordinary Course of Business on the Closing Date after the Closing that would reasonably be expected to increase the amount of Taxes directly imposed on the Seller.
Section 5.10. Access to Information; Retention of Business Records and Access to Business Records.
(a) From the date hereof until the Closing, subject to any applicable Law, upon reasonable prior notice, the Seller shall, and shall cause the Group Companies to, provide Purchaser and its Representatives with reasonable access during normal business hours and in such a manner as not to interfere with the normal operations of the business of the Seller or the Group Companies to (i) such information (including financial information) to the extent relating to the business, properties, assets, operations and personnel of the Group Companies; (ii) members of senior management of the Group Companies as the parties may reasonably agree whose assistance and expertise is reasonably necessary to assist Purchaser in connection with Purchaser’s preparation to integrate the Group Companies, in each case, as Purchaser or its Representatives may reasonably request and (iii) the premises, including the Leased Property, personal property, Network Infrastructure, IT Assets and information technology systems and other assets of the Group Companies.
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(b) Without limiting the generality of the foregoing, during the Interim Period, subject to any applicable Laws, the Seller shall provide Purchaser Parent and its Affiliates (each such entity, an “Applicable Reporting Company”) with reasonable access to the financial information of the Business as such Applicable Reporting Company may reasonably require in order to obtain or develop historical or pro forma financial information and other disclosures required by such Applicable Reporting Company to comply with its public reporting obligations under the Securities Act, the Exchange Act, and the rules and regulations of the SEC promulgated thereunder, including but not limited to the requirements of Form 8-K, Form S-3, Rule 3-05 of Regulation S-X, Article 11 of Regulation S-X and any related interpretive guidance promulgated by the SEC, including in connection with any report required to be filed under the Exchange Act (each, an “Exchange Act Report”) or any registration statement (including any pre- or post-effective amendment thereto or any prospectus or prospectus supplement in respect thereof, each a “Registration Statement & Prospectus”), it being understood that such reporting obligations are the sole obligation of such Applicable Reporting Company. All information received by Purchaser, such Applicable Reporting Company, or their respective Representatives pursuant to this Section 5.10 shall be governed by the terms of the Confidentiality Agreement. The Seller shall (i) provide reasonable cooperation in connection with the preparation of each Exchange Act Report and Registration Statement & Prospectus, including providing reasonable access to auditors, employees, books and records, and any financial data reasonably requested by Purchaser Parent or such Applicable Reporting Company in connection therewith, but solely if any such information or cooperation (A) is necessary to include in an Exchange Act Report or Registration Statement & Prospectus and (B) reasonably obtainable by the Seller, and (ii) use reasonable best efforts to cause the Group Companies’ independent public accountants to provide any consent necessary for the filing of such documents (at the sole expense of Purchaser) with respect to financial information for time periods before the Closing relating to the transactions contemplated by this Agreement included as part of such documents. Notwithstanding the foregoing, Purchaser shall not be required to reimburse the Seller or any Group Company for any costs and expenses incurred by the Seller or any Group Company with respect to financial statements, financial information or other materials (x) prepared prior to the date hereof that may be used in connection with the preparation of any Exchange Act Report or Registration Statement & Prospectus or (y) prepared after the date hereof (1) in connection with the requirements of applicable Law or (2) in the Ordinary Course of Business. Purchaser shall indemnify and hold harmless the Seller and, prior to the Closing, the Group Companies from and against any and all Damages suffered or incurred by them in connection with the matters described in this Section 5.10(b) or any action taken by them pursuant to the requirements of this Section 5.10(b) or requested of them by Purchaser in connection with the matters contemplated by this Section 5.10(b), except to the extent suffered or incurred as a result of the gross negligence or Fraud of the Seller or, prior to the Closing, any Group Company.
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(c) Nothing in this Section 5.10 or Section 5.12 will require the Seller or any Group Company to (i) engage in any action that would, in the good faith determination of the Seller, unreasonably interfere with the business or operations of a Group Company, (ii) cause any representation or warranty in this Agreement to be breached, (iii) cause any condition to Closing to fail to be satisfied or otherwise cause any breach of this Agreement, (iv) provide any information the disclosure of which is prohibited or restricted under applicable Law or any binding agreement with a third party or is legally privileged or consists of attorney work product (provided that (A) no such obligation shall be entered into primarily because of this sentence and (B) the Seller shall cause the Group Companies to notify Purchaser in writing of the nature of the information that is not being provided on the basis of such Law, binding agreement, legal privilege or attorney-client privilege solely to the extent the Group Companies are able to do so without violating the applicable obligation or compromising privilege), (v) require the Group Companies to take any action that will conflict with or violate their Company Organizational Documents as in effect on the date hereof, any Laws or result in a violation or breach of, or default under, any agreement to which the Group Companies are a party as of the date hereof, (vi) require the Seller or any Group Company to pay any commitment or other similar fee prior to the Closing or incur any other liability or other obligation prior to Closing or have any obligation of the Seller or any Group Company under any agreement, certificate, document or instrument (other than this Agreement) be effective until the Closing, (vii) cause any director, officer, employee or stockholder of the Seller or any Group Company to incur any personal liability, (viii) provide access to or disclose information that is subject to attorney-client privilege of the Company or any of its Subsidiaries or cause a violation of applicable Law or confidentiality obligation, (ix) disclose information that would reasonably be likely to cause significant competitive harm to the Group Companies or Business if the transactions contemplated hereby are not consummated or, in the reasonable opinion of the Seller’s outside counsel, would otherwise create material risk from an antitrust or competition Law point of view, (x) disclose information that constitutes a trade secret, or (xi) disclose information or provide access to any Person that is not bound by the terms of a confidentiality agreement. Notwithstanding the foregoing, Purchaser shall have the right to perform or conduct customary cybersecurity testing on the IT Assets and information technology systems of the Group Companies.
(d) After the Closing, until the later of at least (i) the sixth anniversary of the Closing Date and (ii) the statute of limitations (including extensions thereof) pertaining to the retention or management of the applicable records, Purchaser shall cause the Group Companies to, hold at least one copy of all Business Records relating to the conduct of the Business or the Group Companies on or before the Closing Date and not to destroy or dispose of such copy for such period of time from the Closing Date as may be required by applicable Law. From and after the Closing, subject to any applicable Law, Purchaser shall, and shall cause its Subsidiaries, including the Group Companies, to, at the Seller’s expense, (A) give the Seller and its Representatives reasonable access to the Business Records of the Group Companies relating to the conduct of the Business and the Group Companies on or before the Closing Date during normal business hours and upon reasonable prior written notice and permit the Seller or its Representatives to make copies of such records, in each case at no cost to the Seller (other than for reasonable out-of-pocket expenses), (B) furnish to the Seller and its Representatives such financial and operating data and other information relating to the conduct of the Business and the Group Companies on or before the Closing Date, and (C) cause the employees, counsel, auditors and other Representatives of Purchaser and its Subsidiaries, including the Group Companies, to cooperate with the Seller and its Representatives, in each case, to the extent reasonably requested by the Seller in connection with accounting, Tax, legal defense and other similar needs; provided, that the access to such Business Records will not be permitted if such access would (1) in the reasonable opinion of Purchaser’s outside counsel, disclose information that would create material risk from an antitrust or competition Law point of view, (2) disclose information subject to attorney-client privilege, (3) disclose information that constitutes a trade secret or (4) disclose information or provide access to any Person that is not bound by similar terms as the Confidentiality Agreement.
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(e) After the Closing and until the later of the sixth anniversary of the Closing Date, the Seller shall reasonably cooperate with Purchaser and the Group Companies in connection with any audit or inquiry by a relevant Governmental Authority relating to any Broadband Grant awarded to any of the Group Companies during the pre-Closing period.
(f) The Seller shall use commercially reasonable efforts to deliver to Purchaser: (i) with respect to each interim quarterly period (other than the fourth fiscal quarter of any fiscal year) following QSH Parent Holdco, LLC’s fiscal years ended December 31, 2025 and December 31, 2026, unaudited consolidated statements of financial position, statements of profit or loss and other comprehensive income, statements of changes in equity and cash flow statement for QSH Parent Holdco, LLC and its Subsidiaries within 45 days after the end of each such quarterly period; and (ii) if the Closing has not occurred on or before February 28, 2027, a copy of the 2026 Audited Financial Statements within 90 days after the end of fiscal year 2026, which in each case shall fairly present, in all material respects, the financial condition and results of operations of the Group Companies as of the dates indicated therein and for the periods covered thereby, in accordance with GAAP.
(g) For a period of six years after the Closing Date, to the extent that any Business Records have not already been provided to the Group Companies or Purchaser and which are in the possession or control of Seller or its Affiliates, the Seller shall, and shall cause each of their Affiliates to (i) give Purchaser and the Group Companies reasonable access to such Business Records during normal business hours and upon reasonable prior notice or (ii) as soon as reasonably practicable upon the reasonable written request of the Purchaser, furnish to the Group Companies and Purchaser copies of such Business Records.
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Section 5.11. Termination of Certain Arrangements.
(a) Effective prior to the Closing, the Seller (on its own behalf and on behalf of its Affiliates) shall, and shall cause each of its Affiliates to, terminate, cancel, retire, or otherwise extinguish all Related Party Contracts (other than the Continuing Arrangements) and the Contracts listed in Section 5.11(a) of the Disclosure Schedule (collectively, the “Terminated Agreements”), without any continuing liability (contingent or otherwise) of any Group Company thereunder. On the Closing Date, any accounts payable and accounts receivable existing between the Seller or any of its Affiliates (other than the Group Companies), on one hand, and any of the Group Companies, on the other hand, pursuant to any of the Terminated Agreements shall be settled or otherwise extinguished, and all amounts due thereunder shall be fully paid by the Seller or any of its Affiliates (other than the Group Companies) and any of the Group Companies, as applicable.
(b) The Seller, on behalf of itself and its Affiliates, agrees not to exercise any termination right under any Continuing Arrangement that may arise as a result of the consummation of the transactions contemplated hereby, including any right to terminate as a result of a change of control of any Group Company pursuant to the transactions contemplated by this Agreement. The Seller agrees to deliver to Purchaser at or prior to Closing any Consents required under the terms of the Continuing Arrangements in connection with the transactions contemplated hereby, in a form reasonably satisfactory to Purchaser.
Section 5.12. Financing Matters.
(a) During the Interim Period, if Purchaser or any of its Affiliates decides to obtain any financing (such financing, the “Financing”), the Seller shall, and shall cause the Group Companies to, use commercially reasonable efforts to provide, and to use commercially reasonable efforts to cause their respective Representatives to provide, to Purchaser or any of its Affiliates such cooperation as may be reasonably requested by Purchaser or any of its Affiliates to assist it in arranging such Financing, which cooperation shall include, but not be limited to:
(i) furnishing to Purchaser promptly such financial information regarding the Seller and the Group Companies as may be reasonably requested (and updated as reasonably requested) by Purchaser or any of its Affiliates to consummate the contemplated Financing, including data and other information (including preliminary or “flash” information) that would be included customarily in marketing materials and offering documents for such Financing, and all information and data that would be reasonably necessary for an independent accountant or auditor to issue customary “comfort letters” (including “negative assurance” comfort);
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(ii) promptly providing assistance and information necessary to prepare pro forma financial statements of Purchaser or its Affiliates giving effect to the transactions contemplated in this Agreement (for the avoidance of doubt, neither the Seller nor the Group Companies shall be responsible for preparing such pro forma financial statements);
(iii) participating in a reasonable number of meetings, presentations and due diligence sessions in connection with the Financing, in each case at reasonably mutually agreed times, and with reasonable advanced notice;
(iv) assisting with the preparation of and commenting on rating agency presentations, roadshow presentations, offering memoranda (including any customary private placement memorandum or prospectus), bank information memoranda and similar documents required in connection with the Financing;
(v) providing customary authorization letters authorizing the distribution of information regarding the Seller and the Group Companies to prospective lenders or investors;
(vi) causing the Seller and the Group Companies’ independent accountants and/or auditors to provide customary cooperation with such Financing (including providing and consenting to the use of their audit reports relating to the Seller and the Group Companies’ financial statements and providing any requested “comfort letters” (which shall include customary “negative assurance” comfort));
(vii) providing customary representation letters to the extent required by accountants in connection with the Financing;
(viii) furnishing Purchaser such documentation and information as may be reasonably requested under applicable “know your customer” and anti-money laundering rules and regulations, including the USA PATRIOT ACT, Title III of Pub. L. 107-56 (signed into law October 26, 2001) and the Customer Due Diligence Requirements for Financial Institutions issued by the U.S. Department of Treasury Financial Crimes Enforcement Network under the Bank Secrecy Act, in each case to the extent requested in writing at least ten Business Days prior to the Closing; and
(ix) cooperating in the reasonable and customary due diligence of the Group Companies by any financing sources providing such Financing (or their legal advisors).
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(b) Notwithstanding the foregoing: (i) such requested cooperation (x) shall not unreasonably interfere, in the reasonable judgment of the Seller in consultation with Purchaser, with the ongoing operations of the Seller, the Group Companies or any of their respective Subsidiaries and (y) shall not cause any director, officer or employee or stockholder of any Group Company to incur any personal liability in his or her capacity as such, (ii) nothing shall require, and in no event shall the commercially reasonable efforts of the Seller or the Group Companies be deemed or construed to require, the Seller or any Group Company to (x) take any action that will conflict with or violate any applicable Law or (y) execute or enter into, or perform, any agreement with respect to the Financing that is not conditioned upon or only effective as of the occurrence of the Closing, and (iii) neither the Seller, the Group Companies nor any of their Subsidiaries shall be required to provide any cooperation to the extent such cooperation would cause a breach of this Agreement or any other Material Contract to which the Seller or any Group Company is a party on the date of this Agreement.
(c) Purchaser shall from time to time, promptly upon request by the Seller or any Group Company, reimburse the Seller and the Group Companies for all reasonable and documented out-of-pocket costs and expenses incurred by the Seller or any Group Company made solely in connection with the financing cooperation contemplated by this Section 5.12 to the extent such costs or expenses are incurred by the Seller or any Group Company after the date of this Agreement; provided that Purchaser shall not be required to reimburse the Seller or any Group Company for any costs and expenses incurred by the Seller or any Group Company with respect to financial statements, financial information or other materials (x) prepared prior to the date hereof that may be used in connection with any financing contemplated by this Section 5.12 or (y) prepared after the date hereof (1) in connection with the applicable requirements of applicable Law or (2) in the Ordinary Course of Business (including, for the avoidance of doubt, the financial statements and information contemplated by Section 5.10(a)).
(d) The Seller, for themselves and on behalf of each of the Group Companies, hereby expressly (i) authorize the use of the financial statements and any other financial information provided by the Seller or the Group Companies under this Section 5.12 for purposes of any Financing and (ii) consent to the reasonable use of the Group Companies’ logos in connection with the Financing contemplated by this Section 5.12 so long as such logos are used solely in a manner that is not intended or reasonably likely to harm, disparage or otherwise adversely affect any Group Company or the reputation or goodwill of any Group Company and their respective marks.
(e) Purchaser shall indemnify and hold harmless the Seller and, prior to the Closing, the Group Companies from and against any and all Damages suffered or incurred by them in connection with the matters described in this Section 5.12 or any action taken by them pursuant to the requirements of this Section 5.12 or requested of them by Purchaser in connection with the matters contemplated by this Section 5.12, except (x) to the extent suffered or incurred as a result of the willful misconduct, gross negligence or Fraud of the Seller or, prior to the Closing, any Group Company or (y) to the extent such Damages is in connection with a material breach by the Seller or, prior to the Closing, any Group Company, of this Section 5.12.
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(f) Upon reasonable request of the Seller or any Group Company, the Seller or Group Company and its legal counsel will be given reasonable opportunity to review and comment upon excerpts of any materials prepared in connection with the Financing that include information about the Seller or any Group Company or their respective businesses.
Section 5.13. Repayment of Indebtedness.
The Seller and the Group Companies shall deliver or cause to be delivered drafts of the Debt Payoff Letter(s) to the Purchaser and its counsel at least ten Business Days prior to the Closing Date and the Seller and the Group Companies shall respond in good faith to the comments of Purchaser and its counsel with respect to the Debt Payoff Letter(s). At least three Business Days prior to the Closing Date, the Seller shall, and shall cause the Group Companies to, deliver to Purchaser executed copies of Debt Payoff Letter(s) with respect to each outstanding Funded Indebtedness (which effectiveness may be subject to delivery of funds as arranged by Purchaser pursuant to Section 2.2). The Seller shall, and shall cause the Company and its Subsidiaries to, take all actions necessary to effect the termination and payoff of Funded Indebtedness on the Closing Date, including the cash collateralization, termination or replacement of all letters of credit outstanding thereunder in connection with the Closing.
Section 5.14. Employment Matters.
(a) No later than 30 days prior to the anticipated Closing Date, Purchaser may elect to deliver to the Seller a list of employees of the Group Companies whose employment will not continue following the Closing. The Seller shall cause the applicable Group Company to terminate the employment of each such employee effective as of no later than the day immediately prior to the Closing Date.
(b) During the Interim Period, upon reasonable prior notice to the Seller, Purchaser may solicit employees of the Group Companies for potential continued employment or a consulting arrangement with the Group Companies (or with Purchaser or its Affiliate) commencing on the Closing Date. The Seller agrees to cooperate and assist with Purchaser’s reasonable requests to communicate with such employees in connection with such solicitation. Each such employee who receives and accepts an offer for such continued employment and commences such continued employment on the Closing Date is referred to herein as a “Continuing Employee.” With respect to each such employee who does not receive and accept an offer for such continued employment, on Purchaser’s written notice to the Seller delivered no later than five Business Days prior to the anticipated Closing Date, the Seller shall cause the applicable Group Company to terminate the employment of such employee effective as of no later than the day immediately prior to the Closing Date.
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(c) Each (i) employee of a Group Company whose employment was terminated prior to the Closing Date in accordance with Section 5.14(a) or (ii) Continuing Employee whose employment is terminated by a Group Company (or Purchaser or its Affiliate) on or within 90 days after the Closing Date shall be eligible for severance benefits on the terms set forth in Section 5.14(c) of the Disclosure Schedule. With respect to each such terminated Continuing Employee, promptly (and in all events within ten Business Days) after Purchaser provides the Seller with written notice of such Continuing Employee’s termination, the Seller shall reimburse Purchaser for the full amount of such severance benefits, along with the employer portion of any employment, payroll or similar Taxes attributable to such amount and any other costs or expenses reasonably incurred by any Group Company following the Closing relating to or in connection with such termination of employment; provided, that the Seller shall not be required to reimburse any such amounts to Purchaser to the extent such amounts were included as Company Transaction Expenses or Closing Indebtedness; provided, further, that the Seller shall not be required to reimburse Purchaser for any such amounts, and any such reimbursement payment previously made by the Seller shall be promptly refunded by Purchaser, if Purchaser rehires or retains in any service provider capacity (other than pursuant to a Consulting Agreement) any such terminated Continuing Employee within six months following the termination date.
(d) Unless otherwise instructed by Purchaser, effective as of no later than the day immediately prior to the Closing Date, the Seller shall take all actions necessary to terminate each Company Plan that is entered into, sponsored, maintained, contributed to, or required to be contributed to, by a Group Company, including to fully vest all participant accounts under the Company 401(k) Plan. All resolutions, notices, participant communications or other documents issued, adopted or executed in connection with the termination of such Company Plans shall be subject to Purchaser’s prior review and reasonable approval.
(e) The Seller and the Group Companies shall be responsible for providing a COBRA notice to each employee of a Group Company whose employment terminates prior to the Closing Date. Purchaser shall be responsible for providing a COBRA notice to each Continuing Employee whose employment terminates on or after the Closing Date.
(f) Notwithstanding anything in this Section 5.14 to the contrary, nothing contained herein, whether express or implied, shall be treated as an establishment, amendment or other modification of any Company Plan or any employee benefit plan of Purchaser or any of its Affiliates, or shall limit the right of Purchaser or any of its Affiliates to amend, terminate or otherwise modify any Company Plan or other employee benefit plan following the Closing Date. The Seller and Purchaser acknowledge and agree that all provisions contained in this Section 5.14 are included for their sole benefit, and that nothing in this Section 5.14, whether express or implied, shall create any third-party beneficiary or other rights: (i) in any other Person, including any Service Provider, any participant in any Company Plan or employee benefit plan of Purchaser or any of its Affiliates, or any dependent or beneficiary thereof, or (ii) to continued employment with Purchaser or any of its Affiliates or to any particular term or condition of employment.
(g) During the Interim Period, the Seller shall promptly notify Purchaser in writing if any Group Company hires any Service Provider or terminates the employment or engagement of any Service Provider.
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Section 5.15. Intercompany Debt. Unless otherwise agreed by the parties, prior to Closing, the Seller shall cause all outstanding Indebtedness owed by the Group Companies to the Seller or their Affiliates to have been repaid or contributed to capital, such that no Group Company shall remain liable for any amount with respect to or in connection with such Indebtedness.
Section 5.16. NTHE Reimbursement.
(a) The Seller shall cause the Group Companies to use reasonable best efforts to (i) (A) purchase and make any and all capital commitments and capital expenditures (whether by way of purchase, lease or otherwise) in amounts and at times and for purposes consistent in all material respects with the Ordinary Course of Business on the date of this Agreement as described in the Projected CapEx Schedule, and (B) take all actions required to be taken in order to execute and effectuate the Projected CapEx Schedule, (ii) operate in accordance with the Projected CapEx Schedule, and otherwise use reasonable best efforts to take all actions required to be taken in order to execute and effectuate the Projected CapEx Schedule and (iii) not materially deviate from the Projected CapEx Schedule (with respect to the schedule for completion of any particular project, amounts of capital commitments or capital expenditures, or otherwise), in each case without the prior written consent of Purchaser (not to be unreasonably withheld, delayed or conditioned); provided, that such prior written consent of Purchaser shall not be required to the extent that the Seller’s failure to comply with any provision of this Section 5.16(a) is due to project delays outside the reasonable control of the Seller and the Group Companies, and the Group Companies shall be permitted to make additional capital expenditures in the Ordinary Course of Business.
(b) The Seller shall prepare and deliver to Purchaser at the Closing a written statement (the “NTHE Initial Statement”) containing the Seller’s good faith calculations of (i) the Projected NTHE CapEx, (ii) the amount of NTHE CapEx incurred by the Group Companies prior to the Closing and (iii) the Estimated NTHE Reimbursable Amount, if any, together with reasonable supporting detail. During the 20-day period after the Closing Date, Purchaser shall have the opportunity to provide to the Seller any comments regarding the NTHE Initial Statement, and the Seller shall consider in good faith any comments to the NTHE Initial Statement provided by Purchaser during such period. Each of Purchaser and the Seller shall use its reasonable best efforts to resolve any objections raised by Purchaser regarding the NTHE Initial Statement as promptly as practicable, but in any event within 25 calendar days after the Closing Date. Thereafter, the Seller shall promptly (but in any event within 25 days after the Closing Date) deliver to Purchaser an updated NTHE Initial Statement containing updated calculations.
(c) Within 30 calendar days after the Closing Date, Purchaser shall pay to the Seller an amount of cash (the “Estimated NTHE Reimbursement”) equal to the lesser of (i) the Estimated NTHE Reimbursable Amount and (ii) the amount of NTHE CapEx incurred by the Group Companies prior to the Closing, in each case as determined based on the latest NTHE Initial Statement delivered by the Seller pursuant to Section 5.16(b); provided, that if any Closing Date Shortfall Amount remained after the application of Section 2.4(c), then the Seller shall not be entitled to, and Purchaser shall not be obligated to pay, any Estimated NTHE Reimbursement.
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(d) Within 90 calendar days after the Closing Date, Purchaser shall notify Seller in writing of whether Purchaser agrees with the Seller’s calculation of the amount of NTHE CapEx incurred by the Group Companies prior to the Closing, as set forth in the latest NTHE Initial Statement. If Purchaser agrees with the Seller’s calculation of the amount of NTHE CapEx incurred by the Group Companies prior to the Closing, as set forth in the latest NTHE Initial Statement, then such determination shall be final and binding upon the parties. If Purchaser does not agree with the Seller’s calculation of the amount of NTHE CapEx incurred by the Group Companies prior to the Closing, as set forth in the NTHE Initial Statement, then Purchaser shall give written notice to the Seller setting forth any objections to such calculation, which notice shall include specific adjustments with reasonable supporting detail that Purchaser proposes be made to the NTHE Initial Statement. In the event Purchaser delivers such notice to the Seller, each of Purchaser and the Seller shall use its reasonable best efforts to resolve such objections within 30 calendar days (or such longer period as they mutually agree) following the receipt by the Seller of Purchaser’s notice of objections. If within 30 calendar days (or such longer period as mutually agreed) after the Seller receives the Purchaser’s notice of objections, Purchaser and the Seller do not agree on the amount of NTHE CapEx incurred by the Group Companies prior to the Closing, then such disputed matters shall be submitted to the Accounting Firm, and the parties shall follow the procedures, terms and conditions set forth in Section 2.8(b) but with respect to the determination of disputes concerning the NTHE Initial Statement rather than with respect to the determination of Disputes concerning the Post-Closing Statement.
(e) Within five Business Days after the final determination of the amount of NTHE CapEx incurred by the Group Companies prior to the Closing pursuant to Section 5.16(d), the Seller shall pay to Purchaser an amount of cash (the “NTHE Initial True-up”) equal to the excess, if any, of (i) the Estimated NTHE Reimbursement paid by Purchaser to the Seller pursuant to Section 5.16(c) over (ii) the adjusted amount of NTHE CapEx incurred by the Group Companies prior to the Closing as determined pursuant to Section 5.16(d).
(f) Within 20 calendar days after the NTHE System RFS, Purchaser shall prepare and deliver to the Seller a written statement (the “NTHE Final Statement”) containing Purchaser’s good faith calculations of (i) the Final NTHE CapEx and (ii) the Final NTHE Reimbursable Amount, if any, together with reasonable supporting detail. The “Final NTHE Reimbursement” means the lesser of (A) the Final NTHE Reimbursable Amount and (B) the amount of NTHE CapEx incurred by the Group Companies prior to the Closing.
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(g) The Seller shall have ten calendar days from the receipt of the NTHE Final Statement to review such NTHE Final Statement (including Purchaser’s determination of the Final NTHE Reimbursable Amount). If the Seller has accepted the NTHE Final Statement in writing or has not given written notice to Purchaser setting forth any objections to the NTHE Final Statement, which notice shall include specific adjustments with reasonable supporting detail that the Seller proposes be made to the NTHE Final Statement, prior to the expiration of such ten-day review period, then the NTHE Final Statement shall be final and binding upon the parties. In the event that the Seller objects to the NTHE Final Statement, then each of Purchaser and the Seller shall use its reasonable best efforts to resolve such objections within ten calendar days (or such longer period as they mutually agree) following the receipt by Purchaser of the Seller’s notice of objections. If within ten calendar days after the Seller receives the NTHE Final Statement, Purchaser and the Seller do not agree on the amount of the Final NTHE Reimbursable Amount, then such disputed matters shall be submitted to the Accounting Firm, and the parties shall follow the procedures, terms and conditions set forth in Section 2.8(b) but with respect to the determination of disputes concerning the NTHE Final Statement rather than with respect to the determination of Disputes concerning the Post-Closing Statement.
(h) If (i) the Final NTHE Reimbursement exceeds the Estimated NTHE Reimbursement (as reduced by the NTHE Initial True-up, if any) (such excess amount, the “NTHE Purchaser Adjustment”), then Purchaser shall pay, or cause to be paid, the NTHE Purchaser Adjustment by wire transfer of immediately available funds to the Seller in accordance with written instructions provided by the Seller; provided, that if any Closing Date Shortfall Amount remained after the application of Section 2.4(c), then the Seller shall not be entitled to, and Purchaser shall not be obligated to pay, any NTHE Purchaser Adjustment; and (ii) the Estimated NTHE Reimbursement (as reduced by the NTHE Initial True-up, if any) exceeds the Final NTHE Reimbursement (such excess amount, the “NTHE Seller Adjustment”), then the Seller shall pay, or cause to be paid, the NTHE Seller Adjustment by wire transfer of immediately available funds to Purchaser in accordance with written instructions provided by Purchaser. Any payment pursuant to this Section 5.16(h) shall be made within five Business Days after the Final NTHE Reimbursement has been determined pursuant to Section 5.16(g).
Section 5.17. Earn-Out.
(a) Following the Closing, as additional consideration for the Seller’s sale of the Purchased Securities, the Seller shall be entitled to receive from Purchaser (subject to the satisfaction of the conditions set forth in this Section 5.17) payments of cash or, at Purchaser’s election, GCI Common Stock (the “Earn-out Payments”) as determined in accordance with Section 5.17(b) and Section 5.17(d).
(b) Earn-out Payments.
(i) Growth Performance Participation Payments.
(A) If the Gross Revenue for, (1) if Closing occurs in the calendar year 2026, the calendar year ending December 31, 2027 or (2) if Closing occurs in the calendar year 2027, the period beginning on the Closing Date and ending on December 31, 2027 (the “Initial Earn-out Year”) exceeds the Gross Revenue Threshold with respect to the Initial Earn-out Year, the Seller shall be entitled to receive an Earn-out Payment with respect to the Initial Earn-out Year in an amount equal to 50% of the amount by which the Gross Revenue exceeds the Gross Revenue Threshold in the Initial Earn-out Year from Purchaser.
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(B) If the Gross Revenue for the calendar year ending December 31, 2028 (the “Interim Earn-out Year”) exceeds the Gross Revenue Threshold with respect to the Interim Earn-out Year, the Seller shall be entitled to receive an Earn-out Payment with respect to the Interim Earn-out Year in an amount equal to 50% of the amount by which the Gross Revenue exceeds the Gross Revenue Threshold in the Interim Earn-out Year from Purchaser.
(C) For the avoidance of doubt, if Gross Revenue for the Initial Earn-out Year or the Interim Earn-out Year is less than the Gross Revenue Threshold in respect of such year, the Seller shall not be entitled to receive any Earn-out Payment for such Initial Earn-out Year or Interim Earn-out Year pursuant to this Section 5.17(b).
(D) In the event Purchaser or any Group Company actually receives payment for services from any customers that would have otherwise been included in the Gross Revenue calculation for the Initial Earn-out Year, the Interim Earn-out Year or the Final Earn-out Year, as the case may be, following the payment of such Earn-out Year’s Earn-out Payment (a “Late Customer Amount”), provided, that such Late Customer Amount was not otherwise included in such Earn-out Payment, Purchaser shall include a supplemental payment to the Seller accounting for such Late Customer Amount in the next occurring Earn-out Payment (or in the case of the Final Earn-out Year, within one year following the end of the Final Earn-out Year). For the avoidance of doubt, any Late Customer Amount related to the Initial Earn-out Year or the Interim Earn-out Year shall not be taken into account for purposes of the calculation of the Final Earn-out Payment.
(ii) Final Payment. If the Adjusted Gross Revenue for the calendar year ending on December 31, 2030 (the “Final Earn-out Year” and, together with the Initial Earn-out Year and the Interim Earn-out Year, the “Earn-out Years”) exceeds the Adjusted Gross Revenue Lower Threshold, the Seller shall be entitled to receive an Earn-out Payment (the “Final Earn-out Payment”) from Purchaser with respect to the Final Earn-out Year in an amount determined as follows:
(A) if the Adjusted Gross Revenue is greater than the Adjusted Gross Revenue Lower Threshold but is less than or equal to the Adjusted Gross Revenue Upper Threshold, an amount equal to 5.0 times the amount by which the Adjusted Gross Revenue exceeds the Adjusted Gross Revenue Lower Threshold in the Final Earn-out Year; or
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(B) if the Adjusted Gross Revenue is greater than the Adjusted Gross Revenue Upper Threshold, an amount equal to $125,000,000, plus 7.0 times the amount by which the Adjusted Gross Revenue exceeds the Adjusted Gross Revenue Upper Threshold in the Final Earn-out Year;
provided, that, notwithstanding the foregoing, the amount of the Final Earn-out Payment will be reduced by an amount equal to the Cumulative Outage Repair Costs.
For the avoidance of doubt, (1) if the Adjusted Gross Revenue for the Final Earn-out Year is less than the Adjusted Gross Revenue Lower Threshold, then the Seller shall not be entitled to receive any Earn-out Payment for the Final Earn-out Year pursuant to this Section 5.17(b) and (2) in no event shall the Seller be entitled to receive a payment under both (A) and (B) of this paragraph.
(c) Earn-out Statements.
(i) Initial Earn-out Statement.
(A) Within 90 days after December 31 of the Initial Earn-out Year, Purchaser shall prepare and deliver to the Seller a statement (the “Initial Earn-out Statement”) containing (x) Purchaser’s good faith determination of the Gross Revenue calculation for the Initial Earn-out Year in a manner consistent with this Agreement and the methodologies and protocols set forth in Schedule EO and (y) the resulting amount of the Earn-out Payment, if any. Purchaser shall, concurrently with the delivery of the Initial Earn-out Statement, deliver to the Seller a report setting forth all Gross Revenue included in the Earn-out Payment, if any, for the Initial Earn-out Year, including a breakdown by service type, in each case, with reasonable supporting detail, substantially in the form of Exhibit F (the “Initial Earn-out Report”).
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(B) The Initial Earn-out Statement shall be final, conclusive and binding against the Purchaser and the Seller, unless within 30 days after receipt of the Initial Earn-out Statement, the Seller elects for the parties to engage the Earn-out Accountant to review the Initial Earn-out Statement by delivery of written notice to Purchaser. The Earn-out Accountant shall review the Initial Earn-out Statement and Initial Earn-out Report to ensure that Initial Earn-out Statement was prepared in a manner consistent with this Agreement and the methodologies and protocols set forth in Schedule EO. The Earn-out Accountant shall promptly render its findings in writing within 30 days of the Earn-out Accountant’s appointment and the Earn-out Accountant shall agree to comply with this schedule before accepting such appointment. However, this time limit may be extended by the Earn-out Accountant for good cause shown, or by mutual agreement of the parties. The Earn-out Accountant’s findings shall be final, conclusive and binding against the Purchaser and the Seller for purposes of the Earn-out Payment for the Initial Earn-out Year, unless within 15 days following the Earn-out Accountant’s determination, either party provides the other a written notice of objection and provides a description with specificity of each item and amount in dispute from the Initial Earn-out Statement as modified by the Earn-out Accountant’s findings (each, an “Initial Earn-out Disputed Item”). Such dispute shall be resolved in accordance with the dispute resolution procedures specified in Section 5.17(c)(v). The fees and expenses of the Earn-out Accountant shall be borne equally by the Purchaser, on the one hand, and the Seller, on the other hand. During the Earn-out Accountant’s engagement, Purchaser, the Seller and their respective Representatives shall each make available to the Earn-out Accountant such information, books and records and work papers as may be reasonably requested by the Earn-out Accountant to fulfill its obligations pursuant to this Section 5.17(c)(i)(B). In making its findings, the Earn-out Accountant shall (i) consider only the items and amounts in the Initial Earn-out Statement in accordance with the definitions provided in this Agreement and the methodologies and protocols set forth in Schedule EO and (ii) act as an accounting expert and not as an arbitrator.
(ii) Within 90 days after December 31 of each Earn-out Year (other than the Initial Earn-out Year), Purchaser shall prepare and deliver to the Seller a statement (the “Earn-out Statement”) containing (x) Purchaser’s good faith determination of the Gross Revenue or Adjusted Gross Revenue calculation, as the case may be, for the Earn-out Year in a manner consistent with this Agreement and the methodologies and protocols set forth in Schedule EO and (y) the resulting amount of the Earn-out Payment, if any. Purchaser shall, concurrently with the delivery of the Earn-out Statement, deliver to the Seller a report setting forth all Gross Revenue included in the Earn-out Payment, including a breakdown by service type, in each case, with reasonable supporting detail.
(iii) Until such time as the Initial Earn-out Statement or Earn-out Statement, as applicable, shall become final and binding on the parties in accordance with the terms of this Agreement, Purchaser shall permit the Seller to review, and Purchaser shall make available, the books and records used in the preparation of the Initial Earn-out Statement or Earn-out Statement (including the calculations of Gross Revenue and Adjusted Gross Revenue), as applicable. Purchaser shall provide the Seller timely and reasonable access to such books and records of the Purchaser and the Group Companies, in each case, in connection with the Seller’s review of the Initial Earn-out Statement or Earn-out Statement, as applicable, only upon reasonable prior written notice, during normal business hours; provided, however, that the foregoing will not: (A) interfere with the day-to-day operations of the Purchaser, the Group Companies, or any of their Affiliates or (B) require the Purchaser or the Group Companies to provide access or to disclose information where such access or disclosure would contravene any applicable Law or Contract, would relate to commercially sensitive information absent customary clean team protocols (if necessary), or would result in the waiver of any legal privilege or work-product protection.
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(iv) The Seller shall be entitled to dispute the determination of any amount set forth in the Earn-out Statement if the Seller delivers a written notice (an “Earn-out Objection Notice”) to Purchaser within 30 days after receipt of such Earn-out Statement with respect to which it objects to the determination by Purchaser of such amount and provides a description with specificity of each item and amount in dispute (each, an “Earn-out Disputed Item,” and the date of delivery of such Earn-out Objection Notice to Purchaser, the “Earn-out Objection Date”). If the Seller delivers an Earn-out Objection Notice to Purchaser within such 30-day period, Purchaser and the Seller shall attempt in good faith to agree upon the Earn-out Disputed Items during the period commencing on the Earn-out Objection Date. If Purchaser and the Seller do not agree in writing upon all Earn-out Disputed Items within 30 days after the Earn-out Objection Date, then either Purchaser or the Seller may by written notice to the other parties elect that the Earn-out Disputed Items that have not been previously resolved by written agreement (but no other matters) shall be submitted to the dispute resolution procedures specified in Section 5.17(c)(v).
(v) Any dispute arising out of or related to this Section 5.17 that is not otherwise resolved in accordance with Section 5.17(c)(i)(B) or Section 5.17(c)(iv), as the case may be, shall be settled by binding arbitration in accordance with the JAMS Comprehensive Arbitration Rules that are in force at the time (the “Rules of Arbitration”) as follows:
(A) The legal place or seat of such arbitration shall be Delaware. The law of this arbitration clause shall be the law of the State of Delaware. Any physical hearing in such arbitration shall be held in Anchorage, Alaska, provided that the location of any physical hearing shall not change the seat of such arbitration from Delaware. Any witness who is unable or unwilling to travel to Anchorage, Alaska may appear by videoconference at the hearing or by prior recorded and transcribed testimony. The merits hearing shall occur within 150 days after the Preliminary Conference. The language of such arbitration shall be English. Any award shall be final and binding on the parties and may be confirmed in, and judgment upon the award entered by, any state or federal court. The parties consent to the consolidation of arbitrations commenced hereunder in respect of any Earn-out Payments.
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(B) Any dispute subject to arbitration hereunder shall be settled by a panel of three arbitrators (the “Panel”), unless the amount of the dispute is less than $5 million, in which case the Panel shall comprise one arbitrator. In a dispute where the Panel shall comprise three arbitrators, the Seller and Purchaser shall each select one arbitrator within seven Business Days of the commencement of the arbitration. The third arbitrator shall be selected by mutual agreement between the two party-appointed arbitrators within seven Business Days of the appointment of the latter of the two party-appointed arbitrators, and shall be a certified public accountant or have a similar accounting background relevant to the determination of the Earn-out Payments. In a dispute where the Panel shall comprise one arbitrator, the parties shall hold a meeting within seven Business Days of receipt of notice of a request for arbitration to select a mutually acceptable arbitrator not affiliated with Purchaser or the Seller and who shall be a certified public accountant or have a similar accounting background relevant to the determination of the Earn-out Payments. If, in an arbitration with a panel of three arbitrators, the two party-appointed arbitrators are unable to agree on the appointment of the third arbitrator within the time limit set forth above or, in an arbitration with a panel of one arbitrator, the parties are unable to agree upon such an appointment within 30 days of the meeting to select the arbitrator set forth above, the parties shall obtain an odd numbered list of not less than five potential arbitrators with relevant accounting background from the JAMS Seattle office. The Seller, on the one hand, and the Purchaser, on the other hand, shall alternatively strike a single name from the list until only one name remains, with such person to be the arbitrator comprising the Panel. The party that first requested the arbitration shall strike the first name. An arbitrator (whether on a single-member or three-member Panel) shall be neutral and independent.
(C) In agreeing to the arbitration procedures and rules set forth in this Section 5.17, the parties specifically intend to control and limit the time, money, and other resources committed to resolving any disputes or issues that may arise among them so long as no party is denied a full and fair opportunity to present their case to the Panel. Therefore, the parties specifically waive the discovery rights they might otherwise have under the Rules of Arbitration, or that of the State of Delaware or any other jurisdiction, and instead agree that the Seller, on the one hand, and Purchaser on the other hand, may conduct only the following limited discovery:
(1) Up to two document production requests, without subparts;
(2) No interrogatories of other parties; provided that each party shall identify knowledgeable witnesses by employer, job title, last known address, and subject matter of the witness’s knowledge on a mutually agreeable date or, in the absence of agreement, a date determined by the Panel;
(3) A party shall have the right to conduct one seven-hour deposition of a corporate designee of a party on specific topics designated by the notice party and a seven-hour deposition of each witness designated to testify at the arbitration hearing; and
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(4) Depositions of any expert witnesses, provided, however, that no party may designate or call as witnesses more than two experts.
(5) No party may file a dispositive motion with the Panel (e.g., motion to dismiss for summary judgment).
(D) In any arbitration arising out of or related to this Section 5.17, the Panel is not empowered to award punitive or exemplary damages, and the parties waive any right to recover any such damages.
(E) The parties shall treat the existence of any dispute arising out of or related to this Section 5.17 and any arbitration proceedings as confidential, and the Panel shall have the power to enter appropriate orders of confidentiality enforcing the parties’ agreement that any such dispute and resulting arbitration shall be and remain confidential. Except as may be required by applicable law, or otherwise required by a court or Panel or to enforce or challenge a legal right or an award, the parties undertake to keep confidential the existence, content or results of any arbitration hereunder (including any arbitral orders and awards), and undertake not to disseminate outside the arbitration nor use for any purpose other than the arbitration any documents or information disclosed to them in any such arbitration, without the prior written consent of all the parties concerned; provided that nothing in this paragraph shall prohibit a party from disclosing information to actual or potential witnesses or experts where necessary for their selection or the preparation of any claim or defense in any arbitration. In any filing in a court having jurisdiction relating to any arbitration proceeding or award, the parties shall seek to file under seal and seek to maintain the confidentiality of such information consistent with this paragraph.
(F) Within 15 Business Days of the Panel’s appointment, Purchaser, on the one hand, and the Seller, on the other hand, shall each prepare and deliver to both the Panel and the other party its last, best offer for the applicable unresolved terms (including proposals for the breakdown of applicable revenue categories) and a memorandum in support thereof. The Panel shall promptly render a written decision within 30 days of the conclusion of the hearing or any supplemental briefing, and the Panel shall agree to comply with this schedule before accepting appointment. However, this time limit may be extended by the Panel for good cause shown, or by mutual agreement of the parties. The Panel shall select the proposal for each unresolved term (including each applicable revenue category, if applicable) that the Panel believes is most consistent with this Agreement and the methodologies and protocols set forth on Schedule EO. The award shall be accompanied by a reasoned opinion.
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(G) The parties acknowledge and agree that all offers, promises, conduct, statements and discussions related to the Earn-out Objection Notice or any Initial Earn-out Disputed Item or any Earn-out Disputed Items, whether oral or written, made within the 30-day period following the Earn-out Objection Date at meetings or otherwise in the course of this dispute resolution process by the Purchaser and the Seller or their Affiliates, or the parties’ or Affiliates’ agents, employees, experts and attorneys are communications made in confidence with the intent of attempting to settle a dispute, will not be disclosed to the Panel and are subject to settlement privilege. Nothing in this subparagraph prevents a party from contemporaneously designating a communication, whether oral or written, as a protected settlement communication protected by a settlement privilege either during or following the 30-day period.
(H) The fees and expenses of the arbitration, including the fees and other costs charged by the Panel, and other reasonable and documented costs of the party that has prevailed in such arbitration, including reasonable attorneys’ fees, shall be borne by the losing party as designated by the Panel, taking into account to what extent a party prevails on the central claims presented in any dispute, the overall scope of the litigation, the amount in dispute and what was achieved. The Panel may decide, in its discretion, that neither party is the losing party. In the absence of a designation of a losing party, each party shall bear its own costs to prepare for and participate in the arbitration, and the fees and other costs charged by the Panel shall be apportioned among the parties according to the respective percentages of the parties’ proposals selected by the Panel.
(vi) If (A) no Earn-out Objection Notice is delivered by the Seller within the 30-day period specified in Section 5.17(c)(iv), (B) the Seller confirms in writing to Purchaser that it will not submit an Earn-out Objection Notice or (C) an Earn-out Objection Notice is timely delivered by the Seller, and the Earn-out Disputed Items are resolved by (i) the written agreement of Purchaser and the Seller or (ii) the written determination of the Panel, then the Earn-out Statement, in the case of clause (A) or (B), as delivered to the Seller, or in the case of clause (C)(i) and (ii), as adjusted by the written agreement of Purchaser and the Seller or by the written determination of the Panel (the “Final Earn-out Statement”), shall be final, conclusive and binding against the Purchaser and the Seller. If the Initial Earn-out Statement is subject to the provisions of Section 5.17(c)(v), then the Initial Earn-out Statement, as adjusted by the written determination of the Panel shall be final, conclusive and binding against the Purchaser and the Seller.
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(d) Earn-out Consideration. Following the final determination of the Final Earn-out Statement for any Earn-out Year in which an amount is payable by Purchaser pursuant to Section 5.17(b), Purchaser shall:
(i) with respect to the Initial Earn-out Year or the Interim Earn-out Year, within five Business Days of such final determination, make a cash payment to the account or accounts designated in writing by the Seller in an amount equal to the Earn-out Payment for such Earn-out Year; and
(ii) with respect to the Final Earn-out Year, at the option of Purchaser, (A) within five Business Days of such final determination, make a cash payment to the account or accounts designated in writing by the Seller, (B) deliver, or arrange to be delivered, to the Seller Freely Tradeable Shares issued in the name of the Seller, its designees or its successor(s) in interest, as applicable, or into a securities account designated by the Seller, such designees or such successor(s) in interest, as applicable, or (C) any combination of (A) and (B) that Purchaser determines, in any case, in an aggregate amount equal to the Earn-out Payment for the Final Earn-out Year, so long as, to the best of Purchaser’s knowledge, no recipient of such Freely Tradeable Shares and any other Persons whose beneficial ownership of GCI Common Stock would be aggregated with such recipient for purposes of Section 13(d) of the Exchange Act (including shares beneficially owned by any “group” of which such recipient is a member, but excluding shares beneficially owned by virtue of the ownership of securities or rights to acquire securities that have limitations on the right to convert, exercise or purchase similar to the limitation set forth herein), would exceed 4.9% of the total number of shares of GCI Common Stock issued and outstanding (excluding treasury shares) at such time. For purposes hereof, “group” has the meaning set forth in Section 13(d) of the Exchange Act and applicable regulations of the SEC, and the percentage beneficially owned by any Person shall be determined in a manner consistent with the provisions of Section 13(d) of the Exchange Act.
For purposes of this Section 5.17(d)(ii), the value of GCI Common Stock issued and delivered shall be deemed to be equal to (1) the number of shares of GCI Common Stock delivered to the Seller multiplied by (2) the Measurement Price, rounded to the nearest share.
Purchaser shall not be in breach of this Section 5.17(d) as a result of any delay in delivery of shares of GCI Common Stock, provided that Purchaser uses reasonable best efforts to effect delivery of such shares of GCI Common Stock in cooperation with the Seller as promptly as possible.
(e) Post-Closing Obligations.
(i) Subject to the terms of this Agreement, following the Closing, Purchaser shall have sole discretion with regard to all matters relating to the operation of its business and the Group Companies; provided, that (A) Purchaser shall agree to offer to enter into contract extensions with those customers who are customers of the Group Companies as of the Closing listed in Section 5.17(e) of the Disclosure Schedule, subject to the limitations therein, (B) Purchaser shall act in good faith and fair dealing in all matters related to the Earn-out and shall not, directly or indirectly, take any action or fail to take any action in bad faith for the specific purpose of avoiding or reducing any of the Earn-out Payments hereunder, (C) Purchaser shall use a similar level of effort and resources to generate revenue for the services set forth on Schedule EO that Purchaser uses and deploys for its own products and services, where such services are, in Purchaser’s reasonable discretion, competitive and the preferred solution relative to alternatives.
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(ii) Following the Closing until the end of the Final Earn-out Year, Purchaser shall:
(A) use reasonable best efforts to offer the Group Company’s fiber network-enabled solutions to customers where such offerings are, in Purchaser’s reasonable discretion, competitive and the preferred solution relative to alternatives;
(B) not dispose of or abandon any material asset of the Group Companies in a manner that would adversely reduce any of the Earn-out Payments hereunder; and
(C) not migrate any Company Customers or Company Pipeline Customers to substitute Purchaser infrastructure in a manner that would reduce any of the Earn-out Payments hereunder.
(iii) Following the Closing until the end of the Final Earn-out Year, Purchaser and Seller shall cooperate in good faith and use commercially reasonable efforts to obtain insurance for the Group Companies to protect against Cumulative Outage Repair Costs during the Earn-out Years. Seller shall be solely responsible for the payment of all premiums, deductibles, fees and other costs and expenses associated with such insurance (“Outage Insurance Costs”). In connection therewith, the Group Companies shall forward to Seller the invoices for the Outage Insurance Costs, and Seller shall pay such invoices when due.
(f) Joint Committee.
(i) Promptly following the Closing, but not later than 30 days following the Closing, the Seller, on the one hand, and the Purchaser, on the other hand, shall each appoint in writing up to three representatives to participate in a joint monitoring committee (the “Joint Committee”).
(ii) The Joint Committee shall meet every six months during the Earn-out Years (or such other frequency mutually agreed upon by the Seller and Purchaser) to monitor and review the Gross Revenue to-date for the then applicable Earn-out Year. For the avoidance of doubt, the Joint Committee shall have no operating or management authority related to Purchaser or any of its Affiliates, including the Group Companies.
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(iii) Purchaser shall provide to the Joint Committee (A) an annual business plan for the Quintillion Fiber Network, customers and other network assets, in each case, relevant to the Earn-out Payments covering the period beginning July 1st of a calendar year and ending on June 30th of the following calendar year (the “Annual Business Plan”) within 30 days following the date on which the Purchaser finalizes the Annual Business Plan for such year, provided, that no Annual Business Plan is required to be delivered in connection with the Final Earn-out Year, (B) a report, at least five Business Days prior to each Joint Committee meeting, setting forth a summary of any changes to the services provided to customers that may materially impact Gross Revenue as well as any updates on ongoing capital projects, and (C) such other information that Purchaser reasonably determines is related to the calculation of the Gross Revenue during any portion of the applicable Earn-out Year; provided, that Purchaser shall not be required to provide to the Joint Committee any information to the extent that such disclosure would be reasonably likely to: (A) jeopardize any attorney-client or other legal privilege; or (B) contravene any applicable Laws, fiduciary duty or binding agreement. All information and documentation reviewed by or provided to the Seller or its representatives participating in the Joint Committee will be deemed confidential and will be kept confidential in accordance with, and will otherwise be subject to, the terms set forth in Section 5.3(a). If Purchaser believes that any information may constitute material non-public information in respect of Purchaser for purposes of U.S. securities laws, Purchaser may withhold such information until the parties enter into a customary “wall crossing” agreement in respect thereof.
(iv) The parties intend that the Seller shall use good faith efforts to identify for the Joint Committee matters that may give rise to a potential dispute relating to this Section 5.17, and the parties intend that the Joint Committee shall serve as a forum for good faith resolution of any such disputes prior to any escalation procedures set forth in Section 5.17(c)(iv) and Section 5.17(c)(v).
(g) The parties understand and agree that (i) the contingent rights to receive any Earn-out Payment shall not be represented by any form of certificate or other instrument, and do not constitute an equity or ownership interest in Purchaser or any of its Affiliates, (ii) the Seller shall not have any rights as a securityholder of Purchaser or the Group Companies as a result of the Seller’s contingent right to receive any Earn-out Payment hereunder and (iii) no interest is payable with respect to any Earn-out Payment prior to the date that the Earn-out Payment is due.
(h) The Seller acknowledges and agrees that:
(i) upon Closing, Purchaser and its Affiliates shall have the sole right to operate the Group Companies in any way they deem appropriate, subject to the Purchaser’s obligations in Section 5.17(e),
(ii) the Earn-out Payments that may become due or payable, (if any) are subject to numerous factors outside the control of Purchaser or the Seller,
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(iii) there is no assurance that the Seller will receive any Earn-out Payment and Purchaser has not projected nor made any representation regarding the likelihood or amount of any Earn-out Payment, and
(iv) the parties solely intend the express provisions of this Agreement to govern their contractual relationship, including any duties expressly set forth in this Agreement and that Purchaser and its Affiliates owe no express or implied duty to the Seller, and in no case does Purchaser or any of its Affiliates owe to the Seller any fiduciary duty or any other duty implied at law except as expressly set forth in this Agreement.
Section 5.18. Projected CapEx Schedule.
(a) During the Interim Period, the Seller shall cause the Group Companies to use reasonable best efforts to comply with the Projected CapEx Schedule, including with respect to the amount and timing of the capital expenditures set forth therein; provided, that the Seller shall not be in breach of such obligation to the extent that any delay in making any scheduled capital expenditure is outside of the reasonable control of the Group Companies, and the Group Companies shall be permitted to make additional capital expenditures in the Ordinary Course of Business. In the case of any material delay in the anticipated completion of, or overrun in the anticipated total capital expenditure to complete, a project in the Projected CapEx Schedule, the Seller shall notify Purchaser in writing as soon as practicable upon determining that such delay or overrun is reasonably likely and shall keep Purchaser apprised of the facts and circumstances causing such delay or overrun and any significant developments in respect thereof.
(b) The Seller shall deliver to Purchaser (i) at the end of each quarter following the date hereof until the Closing Date and (ii) at least 30 days prior to the Closing Date, a written update (each, an “Update Statement”) on the current status of the projects under development pursuant to the Projected CapEx Schedule, including by reference to the applicable plan of work and construction milestones, timeline for achievement of the ready for service date, project costs incurred and budgeted, any updates to grant award statuses and ongoing grant applications, together with reasonably sufficient detail to support such updates. The Seller shall cooperate in all reasonable respects with Purchaser and its Representatives in their review of such Update Statement, including by providing Purchaser with reasonable access to officers of the Group Companies and reasonably requested information.
Section 5.19. Projected CapEx Schedule Update.
(a) No later than 120 days following the Closing Date (the “Updated Projected CapEx Schedule Delivery Date”), Purchaser shall deliver to the Seller a schedule setting forth the status and projected timeline and capital expense budget for all projects listed on the Projected CapEx Schedule (the “Updated Projected CapEx Schedule”). The Updated Projected CapEx Schedule shall be prepared by Purchaser in good faith. Concurrently with the delivery of the Updated Projected CapEx Schedule, Purchaser shall deliver to the Seller reasonable documentation to support the adjustments between the Projected CapEx Schedule, as modified by the Update Statements, and the Updated Projected CapEx Schedule.
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(b) Following the Updated Projected CapEx Schedule Delivery Date until the end of the Final Earn-out Year, Purchaser shall use reasonable best efforts to comply with the Updated Projected CapEx Schedule, including with respect to the amount and timing of the capital expenditures set forth therein; provided, that Purchaser shall not be in breach of such obligation to the extent that any delay in making any scheduled capital expenditure is outside of the reasonable control of Purchaser (including to the extent of any delay or cancellation of any grant funding).
Section 5.20. Obligations of Purchaser Parent.
(a) Issuance by Purchaser Parent. In the event that Purchaser elects to satisfy its Earn-out Payment obligation with respect to the Final Earn-out Year by delivery of Freely Tradeable Shares pursuant to Section 5.17(d)(ii) (such shares, “Contingent Stock Consideration”), Purchaser Parent shall promptly issue such Contingent Stock Consideration to the Seller, together with customary evidence of such issuance and the recordation of such issuance on the books and records of Purchaser Parent’s transfer agent.
(b) Representations of Purchaser Parent. At the time of any issuance of Contingent Stock Consideration in accordance with Section 5.17(d), Purchaser Parent shall provide representations and warranties to the Seller consistent with those set forth in this Section 5.20(b).
(i) The Contingent Stock Consideration, when issued and delivered by Purchaser Parent in accordance with the terms of this Agreement, will be duly authorized and validly issued, fully paid and non-assessable and free and clear of any Liens.
(c) Nasdaq Approval. In the event that Purchaser elects to deliver the Contingent Stock Consideration pursuant to Section 5.17(d), Purchaser Parent shall promptly prepare and submit to Nasdaq a listing application covering the Contingent Stock Consideration, and Purchaser Parent shall use its reasonable best efforts to cause the Contingent Stock Consideration to be approved for listing on the Nasdaq, subject to official notice of issuance, prior to the expected delivery date.
(d) Registration Rights Agreement. At the Closing, Purchaser Parent and the Seller shall enter into a Registration Rights Agreement substantially in the form attached hereto as Exhibit G (the “Registration Rights Agreement”) providing for the registration for resale of the shares of GCI Common Stock constituting the Contingent Stock Consideration, on the terms and subject to the conditions set forth in the Registration Rights Agreement.
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(e) Restrictive Legend. Subject to the terms of the Registration Rights Agreement, any certificates representing the shares of GCI Common Stock issued and delivered hereunder as Contingent Stock Consideration shall bear the following legend (it being agreed that if such shares are not in certificated form, other appropriate restrictions shall be implemented to give effect to the following):
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. THEY MAY NOT BE SOLD OR OFFERED FOR SALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THE SECURITIES UNDER SUCH ACT AND ANY APPLICABLE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION OR AN EXEMPTION FROM SUCH REGISTRATION UNDER SUCH ACT AND SUCH LAWS. THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE ISSUER THAT SUCH OFFER, SALE OR OTHER TRANSFER OTHERWISE COMPLIES WITH THE SECURITIES ACT AND ANY APPLICABLE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION.
(f) Legend Removal. If Purchaser Parent issues any Contingent Stock Consideration with a restrictive legend or other similar restrictions pursuant to Section 5.20(e), subject to the holder’s compliance with the provisions and requirements of Rule 144 promulgated under the Securities Act, including receipt of a Representation Letter (as defined below) in connection with each such issuance, Purchaser Parent agrees to assist the holder of such Contingent Stock Consideration with the removal of the restrictive legend or similar restriction from such Contingent Stock Consideration upon reasonable request of Seller, including promptly (i) authorizing and directing upon Purchaser Parent’s receipt of the Representation Letter, Purchaser Parent’s transfer agent to remove the restrictive legends, (ii) obtaining a legal opinion from Purchaser Parent’s authorized counsel at Purchaser Parent’s expense, and (iii) cooperating and communicating with the holder of such Contingent Stock Consideration, its broker and Purchaser Parent’s transfer agent to remove such restrictive legend from such Contingent Stock Consideration as soon as reasonably practicable. In connection with any such legend removal, the holder of such Contingent Stock Consideration shall provide Purchaser Parent any such information that Purchaser Parent, its transfer agent or its counsel reasonably deems necessary to determine that the legend is no longer required under the Securities Act or applicable state laws, including (if applicable) a certification (x) that the holder of such Contingent Stock Consideration is not an Affiliate of Purchaser Parent (and a covenant to inform Purchaser Parent if it should thereafter become an Affiliate and to consent to the notation of an appropriate restriction) and (y) regarding the length of time since the Contingent Stock Consideration were transferred from Purchaser Parent or an Affiliate of Purchaser Parent (it being understood that Purchaser Parent has informed the Seller that Rule 144(d)(3)(iii) shall apply to any Contingent Stock Consideration) (any such certification, a “Representation Letter”).
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Section 5.21. R&W Policy.
(a) At or prior to the Closing, Purchaser may, at its discretion, obtain a buyer-side representation and warranty insurance policy with respect to the transactions contemplated by this Agreement (the “R&W Policy”).
(b) Any R&W Policy obtained by Purchaser pursuant to this Section 5.21 shall provide that the insurer shall have no subrogation rights against the Seller except solely in the case of Fraud. Following the Closing Date, Purchaser shall not, without the written consent of the Seller, (i) amend the subrogation or third-party beneficiary provisions of the R&W Policy benefitting the Seller or (ii) otherwise amend or modify the R&W Policy in a manner that is detrimental to the Seller.
(c) Seller agrees to bear the cost of the R&W Policy, including all premiums, ticking or other similar fees, underwriting fees, commissions, and taxes, in an amount not to exceed $750,000 (the “R&W Insurance Policy Costs”), which amount shall be treated as a Company Transaction Expense. Any costs of the R&W Policy in excess of $750,000 shall be borne by Purchaser.
(d) Within five days following the date of this Agreement, the Seller shall cause the Company to deliver to the Purchaser and any of its designees, on one or more USB or other electronic storage device(s), complete and accurate electronic copies of all documents in the VDR as of the Upload Deadline, together with a certificate duly executed by an authorized officer of the Company, certifying that such electronic storage device(s) contain complete and accurate electronic copies of all documents in the VDR as of the Upload Deadline.
(e) Prior to the Closing, the Seller shall, and shall cause the Group Companies to, cooperate with Purchaser’s efforts and provide assistance and information as reasonably requested by Purchaser to obtain the R&W Policy, including in connection with any bring-down conditions or other requirements under the R&W Policy or reasonably requested by the applicable insurer(s).
(f) Within five days following the Closing Date, the Seller shall (i) submit a request via the VDR provider to deliver to Purchaser and any of its designees, on one or more USB or other electronic storage device(s), complete and accurate electronic copies of all documents in the VDR as of the Closing, and (ii) use reasonable best efforts to deliver to Purchaser a certificate duly executed by an authorized officer of the Seller, certifying that such electronic storage device(s) contain complete and accurate electronic copies of all documents in the VDR as of the Closing.
Section 5.22. Director and Officer Liability and Indemnification.
(a) Seller shall cause the Company and its Subsidiaries to obtain, as of the Closing Date, the D&O Tail Policy. The cost, fees and expenses of obtaining the D&O Tail Policy shall be borne by the Seller and treated as a Company Transaction Expense.
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(b) For six years following the Closing, Purchaser shall not, and shall cause the Company and its Subsidiaries not to, amend the rights to exculpation, indemnification and advancement of expenses now existing in their respective certificate of incorporation or bylaws or similar organizational documents in a manner materially adverse to the individuals who on or prior to the Closing Date were directors, managers or officers of the Group Companies (collectively, the “D&O Indemnitees”); provided, that, notwithstanding the foregoing, Purchaser shall be entitled to cause the Company or any of its Subsidiaries to amend their respective organizational documents to provide that a D&O Indemnitee shall not be entitled to advancement, indemnification or exculpation for any claim made pursuant to Article 8 or any Transaction Agreement, except to the extent of amounts actually recovered by the Company under the D&O Tail Policy in connection with any such claim (net of any collection costs, premium increases, retention amounts or self-insured amounts incurred in connection with such recovery).
(c) Notwithstanding anything herein to the contrary, no D&O Indemnitee shall be entitled to make any claim for indemnification, advancement of expenses, exculpation or contribution from Purchaser or any of its Affiliates or, after the Closing, the Company or any of its Subsidiaries under the applicable organizational documents or any indemnification agreement, arrangement or other understanding, arising out of a claim made pursuant to Article 8 or any Transaction Agreement.
Section 5.23. Reimbursable Matters. From and after the Closing and until the date of the Final Earn-out Payment, to the extent any cash proceeds are recovered by any of the Group Companies relating to the Specified Matters (other than any amounts recovered by the Group Companies pursuant to Section 8.2), Purchaser shall, or shall cause the Group Companies to, promptly pay such recovered amounts to the Seller, net of any Damages (including collection costs and the amount of any Taxes imposed with respect thereto) incurred or suffered by Purchaser, its Affiliates or the Group Companies in connection with the Specified Matters that are not otherwise recovered pursuant to Section 8.2 of this Agreement.
Section 5.24. Equity Commitment. The Seller covenants and agrees that, if any equity commitment is contributed or otherwise provided by the Equity Financing Source pursuant to the terms of the Equity Commitment Letter, Seller shall, unless such equity commitment is contributed for the purpose of the Seller’s payment of excess Closing Date Shortfall Amount pursuant to Section 2.4(c), promptly contribute such funds to the Company.
Article 6
Conditions Precedent
Section 6.1. Conditions to the Parties’ Obligations. Subject to Section 2.3, the respective obligation of each party to consummate the Closing is subject to the satisfaction or waiver, to the extent permitted by applicable Law, on or prior to the Closing Date of the following conditions:
(a) the regulatory approvals set forth in Section 6.1 of the Disclosure Schedule (the “Closing Regulatory Approvals”) shall have been obtained and any related waiting periods required by Law or any voluntary extensions thereof shall have expired or been terminated.
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(b) No Governmental Authority of competent jurisdiction shall have enacted, issued, promulgated, enforced or entered any Law or Order that is in effect and would (i) make the Closing illegal or (ii) otherwise prohibit or enjoin the Closing.
Section 6.2. Conditions to Seller’s Obligations. The obligation of the Seller to consummate the Closing is further subject to the satisfaction or waiver, to the extent permitted by applicable Law, on or prior to the Closing Date, of the following conditions:
(a) (i) Each of the Purchaser Fundamental Representations shall be true and correct in all respects on the date hereof and at and as of the Closing Date as if made or given on the Closing Date (except for any representations and warranties that are made expressly as of a specific date, which representations and warranties shall be true and correct in all respects as of such date) and (ii) all of the other representations and warranties made by Purchaser in Article 4 (other than the Purchaser Fundamental Representations) shall be true and correct (it being understood that, for purposes of determining satisfaction of this Section 6.2(a), all “materiality,” “material” and “Material Adverse Effect” (which instead shall be read as any adverse effect or change) qualifications contained in such representations and warranties shall be disregarded) on and as of the Closing Date as if made or given on the Closing Date (except for any representations and warranties that are made expressly as of a specific date, which representations and warranties shall be true and correct as of such date), except where the failure of any such representations or warranties to be so true and correct would not, individually or in the aggregate, have a Purchaser Material Adverse Effect.
(b) Purchaser shall have performed or complied in all material respects with all of its agreements, covenants and obligations set forth in this Agreement, in each case required to be performed or complied with on or prior to the Closing Date.
Section 6.3. Conditions to Purchaser’s Obligations. The obligation of Purchaser to consummate the Closing is further subject to the satisfaction or waiver, to the extent permitted by applicable Law, on or prior to the Closing Date, of the following conditions:
(a) (i) Each of (A) the representations and warranties set forth in Section 3.5, Section 3.8, Section 3.27(d) and Section 3.27(e) shall be true and correct in all respects and (B) the Seller Fundamental Representations shall be true and correct in all respects, other than with respect to any inaccuracies the effect of which is de minimis, in each case on the date hereof and at and as of the Closing Date as if made or given on the Closing Date (except for any representations and warranties that are made expressly as of a specific date, which representations and warranties shall be true and correct in all respects as of such date), and (ii) all of the other representations and warranties made by the Seller and set forth in Article 3 (other than the Seller Fundamental Representations and the representations and warranties set forth in Section 3.27(d) and Section 3.27(e)) shall be true and correct (it being understood that, for purposes of determining satisfaction of this Section 6.3(a)(ii), all “materiality,” “material” and “Material Adverse Effect” (which instead shall be read as any adverse effect or change) qualifications contained in such representations and warranties shall be disregarded, other than in respect of the defined term “Material Contract” or for purposes of Section 3.11(a)) in all respects on and as of the Closing Date as if made or given on the Closing Date (except for any representations and warranties that are made expressly as of a specific date, which representations and warranties shall be true and correct as of such date), except, with respect to this clause (ii), where the failure of such representations and warranties to be true and correct would not, individually or in the aggregate, have, or reasonably be expected to have, a Material Adverse Effect.
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(b) The Seller shall have performed or complied in all material respects with all of its agreements, covenants and obligations set forth in this Agreement required to be performed or complied with on or prior to the Closing Date.
(c) Since the date of this Agreement, there shall not have occurred any Material Adverse Effect.
(d) Purchaser shall have received duly executed copies of the Separation Agreements.
(e) The fiber network of the Group Companies shall be operational with no Fiber Outages that are not capable of being remedied (so as to not be service-impacting) within 48 hours of the relevant Fiber Outage first occurring.
(f) The Group Companies shall have completed (in accordance with the project plan set forth on Section 6.3(f) of the Disclosure Schedule) the construction of the Utqiagvik Terrestrial Route and achieved the UTR System RFS.
Section 6.4. Frustration of Closing Conditions. Neither Purchaser nor the Seller may rely on the failure of any condition set forth in Section 6.2 or Section 6.3, as the case may be, if such failure was primarily caused by such party’s willful and material breach of this Agreement.
Article 7
Termination
Section 7.1. Termination. This Agreement may be terminated and the transactions contemplated hereby may be terminated and abandoned at any time prior to the Closing:
(a) by the mutual written consent of the Seller and Purchaser;
(b) by either the Seller or Purchaser, if the Closing has not occurred on or before the date that is 18 months after the date of this Agreement or such other date that the Seller and Purchaser may agree upon in writing (the “End Date”); provided, that the right to terminate this Agreement pursuant to this Section 7.1(b) shall not be available to a party whose breach of or failure to comply with any provision of this Agreement has been the cause of, or resulted in, the failure of the Closing to occur on or before such date;
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(c) by either Purchaser or the Seller, if any Governmental Authority shall have issued an Order permanently enjoining, making illegal or prohibiting the transactions contemplated by this Agreement, and such Order shall have become final and non-appealable;
(d) by the Seller, if Purchaser is in breach of any of its representations or warranties contained in this Agreement or breaches or fails to perform any of its covenants or agreements contained in this Agreement, which breach or failure to perform (i) would render a condition precedent to the Seller’s obligations to consummate the transactions contemplated hereby set forth in Section 6.2 not capable of being satisfied, and (ii) after the giving of written notice of such breach or failure to perform to Purchaser by the Seller, cannot be cured or, if capable of being cured, has not been cured within 20 Business Days after receipt of such written notice; provided, however, that the right to terminate this Agreement under this Section 7.1(d) shall not be available to the Seller if the Seller is then in material breach of any representation, warranty, covenant or agreement contained in this Agreement so as to cause the conditions to Closing set forth in Section 6.3 not to be satisfied as of such time; or
(e) by Purchaser, if the Seller is in breach of any of its representations or warranties contained in this Agreement or if the Seller breaches or fails to perform any of its covenants or agreements contained in this Agreement, which breach or failure to perform (i) would render a condition precedent to Purchaser’s obligation to consummate the transactions contemplated hereby set forth in Section 6.3 not capable of being satisfied, and (ii) after the giving of written notice of such breach or failure to perform to the Seller by Purchaser, cannot be cured or, if capable of being cured, has not been cured within 20 Business Days after receipt of such written notice; provided, however, that the right to terminate this Agreement under this Section 7.1(e) shall not be available to Purchaser if Purchaser is then in material breach of any representation, warranty, covenant or agreement contained in this Agreement so as to cause the conditions to Closing set forth in Section 6.2 not to be satisfied as of such time.
The party desiring to terminate this Agreement pursuant to this Section 7.1 shall give written notice of such termination to the other parties in accordance with Section 7.2 and Section 9.2, specifying the provision hereof pursuant to which such termination is effected.
Section 7.2. Effect of Termination; Procedure.
(a) Except as set forth in this Section 7.2, if this Agreement is validly terminated pursuant to Section 7.1, this Agreement shall become void and of no effect with no liability or further obligation on the part of any party hereto or any of its Related Parties, except that:
(i) this Section 7.2, Section 5.3(a) (Confidentiality), Section 5.6 (Public Announcements), Section 9.3 (Fees and Expenses), Article 9 (Miscellaneous) shall survive the termination of this Agreement; and
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(ii) nothing herein, except for and subject in all cases to Section 7.2(b) (including any limitations of liability set forth in Section 7.2(c)), shall relieve any party hereto from liability for any willful breach of any provision of this Agreement or Fraud prior to termination, in which case the non-breaching party shall be entitled to all rights and remedies available at law or in equity.
Notwithstanding the foregoing, the Confidentiality Agreement shall survive any termination of this Agreement in accordance with its express terms. For the avoidance of doubt, no termination of this Agreement will affect the rights or obligations of any party pursuant to the Upfront Debt Financing, which rights, obligations and agreements will survive termination of this Agreement in accordance with, and subject to, the terms of the Debt Documentation.
(b) In the event (i) this Agreement is validly terminated pursuant to Section 7.1(b) or Section 7.1(c) and (ii) the Seller shall not have breached in any material respect its obligations under Section 5.5 in respect of any Closing Regulatory Approval and (iii) all of the conditions set forth in Section 6.3 have been satisfied or waived, other than any conditions that by their nature are to be satisfied at the Closing, then Purchaser shall be obligated to pay to the Seller a termination fee of $10,000,000 (the “Reverse Termination Fee”). Notwithstanding the foregoing, Purchaser may satisfy its obligation to pay the Reverse Termination Fee pursuant to this Section 7.2(b) by, at Purchaser’s election, either (1) paying to the Seller, by wire transfer of immediately available funds, cash in the amount of the Reverse Termination Fee or (2) causing the Upfront Lender to reduce the outstanding principal amount of the Upfront Debt Financing by the amount of the Reverse Termination Fee, in either case, within five Business Days after the date on which this Agreement is terminated. Purchaser shall notify the Seller in writing of its intent to satisfy its Reverse Termination Fee obligation pursuant to clauses (1) or (2) above within three Business Days after the date on which this Agreement is terminated. An appropriate amendment to the Debt Documentation shall be made reflecting any offset contemplated by this Section 7.2(b), and Purchaser shall cause the Upfront Lender to, and the Seller shall promptly, effectuate such amendment.
(c) In no event shall Purchaser be required to pay or satisfy the Reverse Termination Fee on more than one occasion. Notwithstanding anything to the contrary in this Agreement, the parties acknowledge that (i) damages suffered by the Seller in the event that this Agreement is terminated in any of the circumstances described in Section 7.2(b) are impossible or very difficult to accurately estimate and (ii) the Reverse Termination Fee shall constitute liquidated damages and represents the parties’ reasonable forecast of the losses that would be suffered by the Seller in the event that such Reverse Termination Fee becomes payable under the terms of this Agreement, which amount would otherwise be impossible to calculate with precision. Notwithstanding anything to the contrary in this Agreement, upon termination of this Agreement in any of the circumstances described in Section 7.2(b) or at a time when the Seller would have been entitled to terminate this Agreement pursuant to Section 7.1(b), the Seller’s right to receive the Reverse Termination Fee shall be the sole and exclusive remedy of the Seller and its Affiliates against Purchaser, its Affiliates and its and their respective Representatives for any losses or liabilities suffered as a result of the failure of the Closing to be consummated. In the event that the Reverse Termination Fee becomes payable, the payment or satisfaction of the Reverse Termination Fee shall be the Seller’s and their Affiliates’ sole and exclusive remedy (whether at law, in equity, in contract, in tort or otherwise) for any loss suffered as a result of the failure of the transactions contemplated by this Agreement to be consummated or any other losses, damages, obligations or liabilities that may be suffered or incurred as a result of, relating to or under this Agreement, or any Transaction Agreements, and the transactions contemplated hereby and thereby, and none of Purchaser, Purchaser Parent or any of their respective Affiliates or any of their respective stockholders, partners, members, or Representatives shall have any further liability or obligation relating to or arising out of this Agreement or any of the Transaction Agreements. The Seller shall not be entitled under any circumstances to obtain both (i) a recovery of monetary damages in the form of the payment or satisfaction of the Reverse Termination Fee, and (ii) specific performance of the consummation of the Closing pursuant to this Agreement.
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Article 8
Survival; Indemnification
Section 8.1. Survival.
(a) The representations and warranties of the parties contained in this Agreement, or any certificate or other instrument delivered by or on behalf of a party pursuant to this Agreement, shall expire as of the Closing, except in the case of Fraud, which shall survive the Closing.
(b) All of the covenants and agreements contained in this Agreement or any certificate or other instrument delivered by or on behalf of a party pursuant to this Agreement that are to be performed on or prior to the Closing shall survive until the date that is 12 months after the Closing Date; and all of the covenants contained in this Agreement or any other certificate or other instrument delivered by or on behalf of a party pursuant to this Agreement that, by their nature, are required to be performed after the Closing, shall survive the Closing until fully performed or fulfilled or upon expiration of their respective terms, unless and only to the extent that non-compliance with such covenants or agreements is waived in writing by the party entitled to such performance (the applicable date on which the representations, warranties, covenants or agreements expire pursuant to Section 8.1(a) or Section 8.1(b), respectively, each a “Survival Expiration Date”).
(c) Notwithstanding the foregoing, any claim for the breach or inaccuracy of any covenant or agreement in respect of which indemnity may be sought under this Agreement shall survive the applicable Survival Expiration Date if notice of such claim shall have been delivered to the party against whom such indemnity may be sought prior to the applicable Survival Expiration Date in accordance with Section 8.6(e). The parties acknowledge and agree that with respect to any claim that any party may have against any other party that is permitted pursuant to the terms of this Agreement, the Survival Expiration Dates set forth and agreed to in this Section 8.1 shall govern when any such claim may be brought and shall replace and supersede any statute of limitations that may otherwise be applicable. The parties acknowledge that the statute-of-limitations-based survival periods in Section 8.1(a) and Section 8.1(b) are contractually selected periods and shall not be deemed to incorporate or rely upon any underlying statutory limitations period for purposes of Section 8.1(c).
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(d) Notwithstanding anything to the contrary in this Agreement, the survival periods set forth herein shall not affect, or be construed as limiting, any claim made or available under the R&W Policy.
Section 8.2. Indemnification by the Seller. Subject to the provisions of this Article 8, effective at and after the Closing, the Seller shall indemnify, defend and hold harmless Purchaser and each of Purchaser’s Affiliates (including, after the Closing, the Group Companies) and their respective officers, directors and employees (collectively, the “Purchaser Indemnitees”) from and against, and shall pay and reimburse any Purchaser Indemnitee for, any and all Damages incurred or suffered by any Purchaser Indemnitee to the extent arising from, consisting of or relating to:
(a) any breach or non-fulfillment of any covenant, agreement or obligation to be performed by the Seller pursuant to this Agreement; and
(b) those matters set forth on Schedule 8.2.
Section 8.3. Indemnification by Purchaser. Subject to the provisions of this Article 8, effective at and after the Closing, Purchaser shall indemnify, defend and hold harmless the Seller and the Seller’s Affiliates and their respective officers, directors and employees (collectively, the “Seller Indemnitees”) against, and shall pay and reimburse any Seller Indemnitee for, any and all Damages incurred or suffered by any Seller Indemnitee to the extent arising from or relating to any breach or non-fulfillment of any covenant, agreement or obligation to be performed by the Purchaser pursuant to this Agreement.
Section 8.4. Limitations and Other Matters Relating to Indemnification.
(a) Except in the case of Fraud, the Seller’s aggregate liability with respect to indemnification obligations pursuant to Section 8.2(a) in respect of the covenants and agreements that are to be performed prior to or at the Closing shall not exceed $30,000,000; provided, that of such amount, (i) the Seller shall not be required to pay an aggregate amount of cash in excess of $15,000,000 and (ii) Purchaser shall have the right to withhold, set-off and deduct from any sum that is or may be owed to the Seller pursuant to Section 5.17 up to an amount equal to $15,000,000 with respect to the excess of any such indemnification obligations above $15,000,000.
(b) The provisions of this Section 8.4 are not applicable to, and shall not in any way limit, claims under the R&W Policy.
Section 8.5. No Contribution. The Seller waives, and the Seller acknowledges and agrees that the Seller shall not have and shall not exercise or assert (or attempt to exercise or assert), any right of contribution, right of indemnity or advancement of expenses or other right or remedy against Purchaser or the Group Companies in connection with any indemnification obligation or any other Damages to which the Seller may become subject under or in connection with this Agreement or any other agreement, document, certificate or instrument delivered to Purchaser in connection with this Agreement. Effective as of the Closing, the Seller expressly waives and releases any and all rights of subrogation, contribution, advancement, indemnification or other claim against Purchaser or the Group Companies.
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Section 8.6. Procedures. Subject to Section 5.9, claims for indemnification under this Agreement shall be asserted and resolved as follows:
(a) Any Purchaser Indemnitee or Seller Indemnitee claiming indemnification under this Agreement (an “Indemnified Party”) with respect to any claim asserted against the Indemnified Party by a third party (“Third Party Claim”) in respect of any matter that is subject to indemnification under this Article 8 shall (i) as promptly as reasonably practicable notify the other party (the “Indemnifying Party”) of the Third Party Claim and (ii) transmit to the Indemnifying Party a written notice (a “Claim Notice”) stating the nature, basis, the amount thereof (to the extent known or estimated, which amount shall not be conclusive of the final amount of such Third Party Claim), the method of computation thereof (to the extent known or estimated), any other remedy sought thereunder, any relevant time constraints relating thereto, and, to the extent practicable, any other material details pertaining thereto, along with copies of the relevant documents evidencing such Third Party Claim and the basis for indemnification sought. Failure to promptly notify the Indemnifying Party in accordance with this Section 8.6(a) will not relieve the Indemnifying Party of any liability that it may have to the Indemnified Party, except to the extent (A) the Indemnifying Party is prejudiced by the Indemnified Party’s failure to promptly give such notice, or (B) the Indemnified Party fails to notify the Indemnifying Party of such claim prior to the applicable Survival Expiration Date.
(b) Except as provided in Section 8.6(d), an Indemnifying Party may elect at any time to assume and thereafter conduct the defense of any Third Party Claim with counsel of the Indemnifying Party’s choice and to settle or compromise any such Third Party Claim, and each Indemnified Party shall cooperate in all respects with the conduct of such defense by the Indemnifying Party (including the making of any related claims, counterclaims or cross complaints against any Person in connection with the Third Party Claim) or the settlement of such Third Party Claim by the Indemnifying Party; provided, however, that (i) prior to assuming control of such defense, the Indemnifying Party must furnish the Indemnified Party with reasonably satisfactory evidence that the Indemnifying Party has adequate resources to defend the Third Party Claim and fulfill its indemnity obligations hereunder, and (ii) the Indemnifying Party will not approve of the entry of any judgment or enter into any settlement or compromise with respect to such Third Party Claim without the Indemnified Party’s prior written approval (not to be unreasonably withheld, conditioned or delayed), unless the terms of such settlement provide for a complete release of the claims that are the subject of such Third Party Claim in favor of the Indemnified Party and do not impose any obligation or liability on the Indemnified Party (other than any obligation or liability that is de minimis in nature or obligations or liabilities that are to be satisfied by the Indemnifying Party). If the Indemnified Party gives an Indemnifying Party notice of a Third Party Claim and the Indemnifying Party does not, within 30 calendar days after such notice is given, or if the legal term to provide the response is 20 days or shorter, then within the first half of the legal term to provide such response, (1) give notice to the Indemnified Party of its election to assume the defense of the Third Party Claim and (2) thereafter promptly assume such defense, or is otherwise prohibited from assuming the defense pursuant to Section 8.6(c), then the Indemnified Party may conduct the defense of such Third Party Claim; provided, however, that (x) the Indemnified Party will not agree to the entry of any judgment or enter into any settlement or compromise with respect to such Third Party Claim without the prior written consent of the Indemnifying Party (not to be unreasonably withheld, conditioned or delayed) unless the terms of such settlement provide for a complete release of the claims that are the subject of such Third Party Claim in favor of the Indemnified Party and the Indemnifying Party and do not impose any obligation or liability on the Indemnified Party or the Indemnifying Party (other than any obligation or liability that is de minimis in nature), (y) the Indemnified Party shall retain counsel reasonably acceptable to the Indemnifying Party in connection with such Third Party Claim and the reasonable fees, charges and disbursements of no more than one such counsel per jurisdiction selected by the Indemnified Party shall be reimbursed by the Indemnifying Party, and (z) the Indemnified Party shall keep the Indemnifying Party reasonably informed with respect to such Third Party Claim and cooperate with the Indemnifying Party in connection therewith.
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(c) The Indemnifying Party shall not be entitled to assume or maintain control of the defense of any Third Party Claim to the extent (i) the Third Party Claim relates to or arises in connection with any criminal proceeding, action, indictment, allegation or investigation, (ii) the Third Party Claim seeks an injunction or equitable relief against the Indemnified Party or any of its Affiliates or their respective stockholders or Representatives, (iii) the amount of the Third Party Claim, if determined in accordance with the claimant’s demands, would reasonably be expected to result in an aggregate amount of Damages that, when taken together with all other unresolved claims for indemnification by the Purchaser Indemnitees, would constitute an amount that would not be available for recovery under this Article 8, or (iv) there may be one or more defenses or claims available to the Indemnified Party that are different from or additional to those available to the Indemnifying Party and that the failure to make could reasonably be expected to be materially adverse to the Indemnified Party.
(d) Notwithstanding the foregoing, (i) the party that is not controlling the defense of any Third Party Claim shall have the right, at its own cost and expense, to participate in the defense of such Third Party Claim with counsel selected by it, and (ii) subject to the requirements of Section 8.6(b), the defense of the matters set forth on Schedule 8.2 as currently in effect on the date hereof shall continue.
(e) If any Indemnified Party becomes aware of any circumstances that may give rise to a claim for indemnification pursuant to this Article 8 for any matter not involving a Third Party Claim, then such Indemnified Party shall promptly (i) notify the Indemnifying Party and (ii) deliver to the Indemnifying Party a written notice describing in reasonable detail the nature of the claim, describing in reasonable detail the basis of the Indemnified Party’s request for indemnification under this Agreement and including the Indemnified Party’s best estimate of the amount of Damages that may arise from such claim. Failure to promptly notify the Indemnifying Party in accordance with this Section 8.6(e) will not relieve the Indemnifying Party of any liability that it may have to the Indemnified Party, except to the extent (A) the Indemnifying Party is prejudiced by the Indemnified Party’s failure to promptly give such notice or (B) the Indemnified Party fails to notify the Indemnifying Party of such claim in accordance with this Section 8.6(e) prior to the applicable Survival Expiration Date.
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(f) In respect of a Third Party Claim, at the reasonable request of the Indemnifying Party, each Indemnified Party shall grant the Indemnifying Party and its Representatives reasonable access to the books, records, employees and properties of such Indemnified Party to the extent reasonably related to the matters to which the applicable indemnification claim relates. All such access shall be granted during normal business hours and upon reasonable advance written notice and shall be granted under the conditions which shall not unreasonably interfere with the business and operations of such Indemnified Party.
(g) With respect to any claim for indemnification pursuant to this Article 8, the Indemnified Party shall use commercially reasonable efforts to mitigate any Damages related thereto.
(h) As of the Closing Date, Purchaser shall be deemed to have submitted a notice of a Third-Party Claim for indemnification pursuant to this Section 8.6 with respect to those matters set forth on Schedule 8.2.
Section 8.7. Exclusive Remedy(a). Except for (a) equitable relief, (b) the remedies provided to Purchaser or its Affiliates pursuant to the R&W Policy, (c) claims based on Fraud, (d) payment obligations and setoff rights set forth in Section 7.2(b), and (e) post-Closing payment obligations expressly set forth in this Agreement, including as set forth in Section 2.8, Section 5.9, Section 5.14, Section 5.16, and Section 5.17 (in each case, subject to the right to setoff, as applicable, pursuant to Section 9.12), from and after the Closing, this Article 8 will be the sole and exclusive remedies of the parties and any Person claiming by or through any party (including the Indemnified Parties) any Damages for any breach of this Agreement.
Article 9
Miscellaneous
Section 9.1. Amendments; No Waivers.
(a) Any provision of this Agreement (including the Disclosure Schedule and the Exhibits, schedules, and annexes hereto and thereto) may be amended or waived if, and only if, such amendment or waiver is in writing and signed, in the case of an amendment, by each party, or in the case of a waiver, by the party against whom the waiver is to be effective.
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(b) No failure or delay by any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by Law or in equity.
Section 9.2. Notices. All notices, consents, requests, demands or other communications required or permitted hereunder shall be: (a) in writing; (b) sent by messenger, certified or registered U.S. mail, a reliable overnight delivery service or e-mail, charges prepaid as applicable, to the appropriate address(es) set forth below; and (c) deemed to have been given on the date of delivery to the addressee (or, if the date of delivery is not a Business Day, on the first Business Day after the date of delivery), as evidenced by: (i) a receipt executed by the addressee (or a responsible Person in his or her office), the records of the Person delivering such communication or a notice to the effect that such addressee refused to claim or accept such communication, if sent by messenger, U.S. mail or express delivery service; or (ii) confirmation of transmission or receipt generated by the sender’s computer showing that such communication was sent to the appropriate e-mail address on a specified date, if sent by e-mail. All such communications shall be sent to the following addresses, or to such other addresses as any party may inform the others by giving five Business Days’ prior written notice pursuant to this Section 9.2:
(a) if to Purchaser or Purchaser Parent or, following the Closing, to the Group Companies, to:
GCI Holdings, LLC
2550 Denali Street, Suite 1000
Anchorage, Alaska 99503
Attention: General Counsel
Email: [***]
and
GCI Liberty, Inc.
12300 Liberty Boulevard
Englewood, Colorado 80112
Attention: Legal Department
E-mail: [***]
with a copy (which shall not constitute notice) to:
Baker Botts L.L.P.
30 Rockefeller Plaza, FL 43
New York, New York 10112
Attention: Jonathan Gordon; James Marshall
| Email: | [email protected]; | |
| [email protected] |
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(b) if to the Seller or, prior to the Closing, to the Group Companies, to:
Quintillion Networks, LLC
3601 C Street
Anchorage, Alaska 99503
Attention: Chad Crank; George Tronsrue III
Email: [***]
with a copy (which shall not constitute notice) to:
Morgan, Lewis & Bockius LLP
One Oxford Centre, Fl. 32
Pittsburgh, Pennsylvania 15219
Attention: Kimberly Taylor
Email: [email protected]
Section 9.3. Fees and Expenses. Other than as expressly provided in this Agreement, including as specifically set forth in Section 5.5 and Section 5.21(c), all fees, costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such costs or expenses, whether or not the transactions contemplated by this Agreement are consummated.
Section 9.4. Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and permitted assigns; provided, however, that no party may assign, delegate or otherwise transfer any of its rights or obligations pursuant to this Agreement without the prior written consent of the other party, except that Purchaser may transfer and/or assign any or all of its rights or obligations hereunder to one or more of its Affiliates at any time. Any transfer of rights or obligations in violation of this Section 9.4 shall be null and void.
Section 9.5. Governing Law. This Agreement, and any and all claims arising directly or indirectly out of or concerning this Agreement (whether based in contract, tort or otherwise) shall be governed by, and construed and enforced in accordance with, the Laws of the State of Delaware (without regard to the principles of conflicts of Laws that would apply the Laws of any other jurisdiction).
Section 9.6. Arbitration.
(a) If any dispute, claim or controversy results from, relates to or arises out of this Agreement, or the breach, termination or validity thereof (any such dispute, claim or controversy, a “Transaction Dispute”), other than those in respect of Section 5.17, which are subject to the dispute resolution procedures set forth therein, the party raising such Transaction Dispute shall promptly give written notice (which written notice shall provide a reasonably detailed explanation of the basis for the Transaction Dispute) to the other parties. The parties shall meet (which may be telephonically or by other audiovisual means) to attempt to resolve such Transaction Dispute within 20 calendar days following the date on which a Party provides written notice to the other Party.
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(b) With respect to any Transaction Dispute not resolved under Section 9.6(a), any party may require that such matter be settled by binding arbitration in accordance with the Rules of Arbitration, and judgment on the award rendered by the arbitrators may be entered in any court having jurisdiction thereof.
(c) The legal place or seat of such arbitration shall be Delaware. The law of this arbitration clause shall be the law of the State of Delaware. Any physical hearing in such arbitration shall be held in Anchorage, Alaska, provided that the location of any physical hearing shall not change the seat of such arbitration from Delaware. The language of such arbitration shall be English. Any award shall be final and binding on the parties and may be confirmed in, and judgment upon the award entered by, any court having jurisdiction.
(d) Claims shall be heard by a panel of three arbitrators (the “Tribunal”). Within 15 days after the commencement of arbitration, the Seller and Purchaser shall each select one person to act as arbitrator and the two party-nominated arbitrators shall select a third arbitrator within 15 Business Days following their appointment. If the two (2) arbitrators designated by the Seller and Purchaser do not reach an agreement as to their appointment of the third arbitrator within 15 Business Days following the date the second arbitrator is appointed hereunder, then such third arbitrator will be appointed in accordance with the Rules of Arbitration. If there is more than one claimant or more than one respondent, the claimants shall together appoint one arbitrator or the respondents shall together appoint one arbitrator. In the event that claimants cannot jointly agree on an arbitrator or the respondents cannot jointly agree on an arbitrator within the time for appointment, then JAMS Seattle Office shall appoint the members of the Tribunal.
(e) By agreeing to arbitration, the parties do not intend to forgo any right they may have to seek emergency or interim relief in aid of arbitration or, prior to the Closing, to compel specific performance in accordance with Section 9.11. The Tribunal shall have full authority to grant provisional remedies, to issue interim awards and to award damages for the failure of any party to respect the Tribunal’s orders to that effect. The parties shall treat the existence of any Transaction Dispute and arbitration proceedings as confidential, and the Tribunal shall have the power to enter appropriate orders of confidentiality enforcing the parties’ agreement that any Transaction Dispute and resulting arbitration shall be and remain confidential; provided, that any such confidentiality obligations shall not prohibit disclosure required by applicable Law, court process or by obligations pursuant to any listing agreement with, or the rules and regulations of, any national securities exchange, automated inter-dealer quotation system or over-the-counter markets. This agreement regarding confidentiality, however, shall not restrict in any way any party’s right to pursue enforcement of any partial or final award in a court of competent jurisdiction.
(f) The Tribunal may order document discovery, including electronic discovery, and may order the parties to make witnesses available for depositions.
(g) The award shall be made within twelve months of the filing of the commencement of the arbitration, and the arbitrators shall agree to comply with this schedule before accepting appointment; provided, however, that this time limit may be extended by the arbitrators for good cause shown, or by mutual agreement of the parties; provided, further, that equitable relief may be sought or obtained on an accelerated or expedited basis. The award may include equitable relief and shall be accompanied by a reasoned opinion.
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(h) Each of the parties irrevocably and unconditionally submits to the jurisdiction of the Court of Chancery of the State of Delaware (unless the Court of Chancery of the State of Delaware declines to accept jurisdiction over a particular matter, in which case, in any state or federal court within the State of Delaware), in any action seeking to compel arbitration under this Section 9.6, for any action to enforce any award rendered in an arbitration brought pursuant to this Section 9.6 and for any action prior to the Closing to compel specific performance pursuant to Section 9.11.
(i) With respect to any action for which it has submitted to jurisdiction pursuant to this Section 9.6, each party irrevocably consents to service of process in the manner provided for the giving of notices pursuant to Section 9.2. Nothing in this Section 9.6 shall affect the right of any party to serve process in any other manner permitted by Law. The foregoing consent to jurisdiction shall not (i) constitute submission to jurisdiction or general consent to service of process in the State of Delaware for any purpose except with respect to this Section 9.6 or (ii) be deemed to confer rights on any Person other than the respective parties to this Agreement.
(j) TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW, THE PARTIES HEREBY WAIVE, AND COVENANT THAT THEY WILL NOT ASSERT, ANY RIGHT TO TRIAL BY JURY IN ANY ACTION ARISING IN WHOLE OR IN PART UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE CONTEMPLATED TRANSACTIONS, WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE. THE PARTIES AGREE THAT ANY OF THEM MAY FILE A COPY OF THIS PARAGRAPH WITH ANY COURT AS WRITTEN EVIDENCE OF THE KNOWING, VOLUNTARY AND BARGAINED-FOR AGREEMENT AMONG THE PARTIES IRREVOCABLY TO WAIVE ITS RIGHT TO TRIAL BY JURY IN ANY PROCEEDING WHATSOEVER BETWEEN THEM RELATING TO THIS AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY
Section 9.7. Counterparts; Effectiveness. This Agreement may be executed in counterparts (which may be delivered by electronic transmission), all of which together shall constitute one and the same instrument. This Agreement shall become effective when each party hereto shall have received a counterpart hereof signed by all of the other parties hereto. Until and unless each party has received a counterpart hereof signed by the other parties hereto, this Agreement shall have no effect and no party shall have any right or obligation hereunder (whether by virtue of any other oral or written agreement or other communication).
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Section 9.8. Entire Agreement. This Agreement (including the Disclosure Schedule and the Exhibits, schedules, and annexes hereto and thereto), the other Transaction Agreements and the Confidentiality Agreement constitute the entire agreement among the parties with respect to the subject matter of this Agreement and supersede, cancel and annul all prior agreements, negotiations, correspondence, undertakings, understandings, statements, representations, discussions and any other communications of the parties, whether oral or written, with respect to the subject matter hereof and thereof.
Section 9.9. Third-Party Beneficiaries. Except as specifically set forth herein, this Agreement is for the sole benefit of the parties and their successors and permitted assigns, and nothing herein expressed or implied shall give or be construed to give any Person, other than the parties and such successors and permitted assigns, any legal or equitable rights hereunder.
Section 9.10. Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party. Upon such a determination, the parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated hereby be consummated as originally contemplated to the fullest extent possible and in a manner so as to as closely as possible provide the parties with the intended benefits, net of the intended burdens, set forth in any such invalid, void or unenforceable provision.
Section 9.11. Specific Performance. The parties agree that irreparable damage, for which monetary damages (even if available) would not be an adequate remedy, shall occur in the event that the parties do not perform the provisions of this Agreement (including failing to take such actions as are required of them hereunder to consummate the transactions contemplated hereby) in accordance with its specified terms or otherwise breach such provisions. Accordingly, the parties acknowledge and agree that the parties shall be entitled to an injunction, specific performance or other equitable relief to prevent breaches of this Agreement and to enforce specifically the terms and provisions hereof, in addition to any other remedy to which they are entitled at Law or in equity. Each of the parties agrees that it shall not oppose the granting of an injunction, specific performance or other equitable relief on any basis, including the basis that any other party has an adequate remedy at Law or that any award of an injunction, specific performance or other equitable relief is not an appropriate remedy for any reason at Law or in equity. Any party seeking: (a) an injunction or injunctions to prevent breaches of this Agreement; (b) to enforce specifically the terms and provisions of this Agreement; or (c) other equitable relief, shall not be required to show proof of actual damages or to provide any bond or other security in connection with any such remedy. The equitable remedies described in this Section 9.11 shall be in addition to, and not in lieu of, any other remedies at law or in equity that the parties to this Agreement may elect to pursue. For the avoidance of doubt, under no circumstances shall the Seller be entitled to receive both a grant of specific performance to require Purchaser to consummate the Closing and payment of the Reverse Termination Fee.
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Section 9.12. Setoff.
(a) Other than as expressly provided in this Agreement, including as set forth in Section 2.4(c), Section 2.8(f), Section 7.2(b) and Section 9.12(b), each of the parties acknowledges and agrees (on its own behalf and on behalf of its Affiliates) that it and its Affiliates shall have no right hereunder or pursuant to applicable Law to, and shall not, offset any amounts due and owing (or that becomes due and owing) pursuant to this Agreement or any other Contract to any other party hereto or thereto or such other party’s Affiliates against any amounts due and owing by such other party or such other party’s Affiliates pursuant to this Agreement or any other Contract.
(b) Notwithstanding Section 9.12(a), Purchaser shall have the right to withhold, set-off and deduct from any sum that is or may be owed to Seller pursuant to Section 5.17 any amount that is payable by the Seller to any Purchaser Indemnitee in respect of any claim for indemnification pursuant to Section 8.2 but has not yet been paid.
Section 9.13. Release.
(a) As of the Closing (but only if the Closing actually occurs), the Seller and its Affiliates (each, a “Releasing Seller Person”), hereby release and forever discharge Purchaser and each of its Affiliates (including, as of immediately following the Closing, the Group Companies), successors, assigns, former, current or future direct or indirect stockholders, equity holders, controlling persons, portfolio companies, directors, officers, employees, incorporators, managers, members, trustees, general or limited partners, agents, attorneys or other Representatives (in each case, solely in their capacities as such) (each, a “Released Purchaser Person”) from all debts, demands, causes of action, suits, covenants, torts, damages and any and all claims, defenses, offsets, judgments, demands and liabilities whatsoever, of every name and nature, both at law and in equity, known or unknown, accrued or unaccrued, that have been or could have been asserted against any Released Purchaser Person, that any Releasing Seller Person has or ever had, that arises out of or in any way relates to events, circumstances or actions occurring, existing or taken prior to or as of the Closing Date in respect of matters relating to the Group Companies; provided, however, that this Section 9.13 does not apply to and shall not constitute a release of (i) claims of Fraud, (ii) any rights or obligations to the extent arising under this Agreement, any other Transaction Agreement or any certificate or other instrument delivered by or on behalf of Purchaser pursuant to this Agreement, (iii) claims covered by the D&O Tail Policy or subject to Section 5.22, (iv) contractual claims or rights under any Continuing Arrangement or (v) claims pursuant to the Escrow Agreement. Each Released Purchaser Person shall be a third-party beneficiary of this Section 9.13(a).
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(b) As of the Closing (but only if the Closing actually occurs), Purchaser and its Affiliates (each, a “Releasing Purchaser Person”), hereby release and forever discharge the Seller and each of their Affiliates (other than the Group Companies), successors, assigns, former, current or future direct or indirect stockholders, equity holders, controlling persons, portfolio companies, directors, officers, employees, incorporators, managers, members, trustees, general or limited partners, agents, attorneys or other Representatives (in each case, solely in their capacities as such) (each, a “Released Seller Person”) from all debts, demands, causes of action, suits, covenants, torts, damages and any and all claims, defenses, offsets, judgments, demands and liabilities whatsoever, of every name and nature, both at law and in equity, known or unknown, accrued or unaccrued, that have been or could have been asserted against any Released Seller Person, that any Releasing Purchaser Person has or ever had, that arises out of or in any way relates to events, circumstances or actions occurring, existing or taken prior to or as of the Closing Date in respect of matters relating to the Group Companies; provided, however, that this Section 9.13 does not apply to and shall not constitute a release of (i) claims of Fraud, (ii) any rights or obligations to the extent arising under this Agreement, any other Transaction Agreement or any certificate or other instrument delivered by or on behalf of the Seller pursuant to this Agreement, (iii) claims relating to or in connection with the Upfront Debt Financing, (iv) contractual claims or rights under any Continuing Arrangement, (v) any claims pursuant to the Consulting Agreements, (vi) claims against any Person in such Person’s capacity as an officer, director, employee or independent contractor of any Group Company or (vii) claims pursuant to the Escrow Agreement. Each Released Seller Person shall be a third-party beneficiary of this Section 9.13(b).
Section 9.14. Disclosure Schedule. Each of the disclosures set forth in the Disclosure Schedule shall clearly indicate the section and, if applicable, the subsection of this Agreement to which it relates. The disclosures with respect to any representation and warranty of the Seller in the Disclosure Schedule shall qualify the Section of this Agreement that corresponds to the Section of the Disclosure Schedule and are to be taken as qualifying and relating to the other representations and warranties by the Seller to the extent the applicability of such disclosure is reasonably apparent on its face. The inclusion of information in the Disclosure Schedule shall not be construed as, and shall not constitute, an admission or agreement that a violation, right of termination, default, liability or other obligation of any kind exists with respect to any item, nor shall it be construed as or constitute an admission or agreement that such information is material.
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Section 9.15. Legal Representation of Seller and its Affiliates. Purchaser agrees, on its own behalf and on behalf of its Affiliates, that (a) one or more of the Group Companies and Seller have retained the Law Firms to act as their counsel in connection with the transactions contemplated by this Agreement as well as other past matters, (b) the Law Firms have not acted as counsel for any other Person in connection with the transactions contemplated by this Agreement and no Person other than the Group Companies and Seller has the status of a Law Firm client for conflict of interest or any other purpose as a result thereof, and (c) following the Closing, each Law Firm may serve as counsel to Seller and their Affiliates in connection with any matters related to this Agreement, the negotiation, execution or performance of this Agreement or the transactions contemplated hereby, including any litigation, claim, or obligation arising out of or relating to this Agreement or the transactions contemplated by this Agreement notwithstanding any representation by any Law Firm prior to the Closing Date of any Group Company. Purchaser (on behalf of itself and its Subsidiaries) hereby (i) irrevocably waives any claim that it has or may have that any Law Firm has a conflict of interest or is otherwise prohibited from engaging in such representation (to the extent such conflict or prohibition is related to the negotiation, execution or performance of this Agreement) and (ii) agrees that, in the event that a dispute arises after the Closing between Purchaser or any Group Company and the Seller or any of its Affiliates, each Law Firm may represent the Seller or any of its Affiliates in such dispute even though the interests of such Persons may be directly adverse to Purchaser or any Group Company and even though such Law Firm may have represented a Group Company in a matter substantially related to such dispute. Purchaser represents that it has consulted with its own attorney regarding the implications and risks of waiving the right to assert a future conflict against each of the Law Firms, and Purchaser’s consent with respect to this waiver is fully informed. Purchaser (on behalf of itself and its Subsidiaries) also further agrees that, as to all communications prior to the Closing among any of the Law Firms, on the one hand, and the Group Companies, and the Seller or the Seller’s Affiliates and representatives, on the other hand, that relate in any way to this Agreement, the negotiation, execution or performance of this Agreement or the transactions contemplated by this Agreement, the attorney-client privilege and the expectation of client confidence belongs to the Seller and may be controlled by the Seller and will not pass to or be claimed by Purchaser or any Group Company following the Closing. In addition, if the Closing occurs, all of the client files and records in the possession of any of the Law Firms related to the negotiation, execution and performance of this Agreement or the transactions contemplated hereby will continue to be property of (and be controlled by) the Seller and no Group Company will retain any copies of such records or have any access to them. Notwithstanding the foregoing, in the event that a dispute arises between Purchaser or any Group Company and a third party other than a party to this Agreement (or an Affiliate thereof) after the Closing, the Group Companies may assert the attorney-client privilege to prevent disclosure of confidential communications by a Law Firm to such third party; provided, however, that no Group Company may waive such privilege without the prior written consent of the Seller (such consent not to be unreasonably withheld or delayed).
Section 9.16. Non-Recourse. Except in the case of Fraud, this Agreement may only be enforced against, and any claim or suit or cause of action based upon, arising out of, or related to this Agreement, or the negotiation, execution or performance of this Agreement or any other Transaction Agreement (including any representation or warranty made in or in connection with this Agreement or any other Transaction Agreement), whether in contract or in tort, in law or in equity or otherwise, may only be brought against the express named parties to this Agreement or other Transaction Agreements (or any successor or permitted assign), as applicable, and then only with respect to the specific obligations set forth herein or therein with respect to such parties to this Agreement or any other Transaction Agreement (in all cases, as limited by the provisions set forth therein). No Person who is not an express named party to this Agreement or any other Transaction Agreement, as applicable, including any past, present or future director, manager, officer, employee, incorporator, member, partner, stockholder, Affiliate, agent, attorney, or representative of Purchaser, Purchaser Parent, any Group Company, the Seller or any of their respective Affiliates (the “Non-Recourse Parties”), will have or be subject to any liability or indemnification obligation (whether in contract or in tort, in law or in equity, based upon any theory that seeks to impose liability of an entity party against its owners or affiliates, or otherwise) to any other Person resulting from (nor will any party hereto have any claim with respect to) this Agreement, any other Transaction Agreement, or the transactions contemplated herein or therein, including, (i) the distribution to Purchaser, or Purchaser’s use of, or reliance on, any information, documents, projections, forecasts or other material made available to Purchaser in certain “data rooms,” information memorandum, management presentations or in any other form, including meetings, calls or correspondence with management of any Group Company or the Seller or their respective Affiliates or Representatives and whether delivered to or made available prior to or after the date hereof in expectation of, or in connection with, the transactions contemplated by this Agreement, (ii) any claim based on, in respect of, or by reason of, the sale and purchase of the Group Companies, including any alleged non-disclosure or misrepresentations made by any such Persons, or (iii) for any obligations or liabilities otherwise arising under, in connection with or related to this Agreement or any other Transaction Agreement (as the case may be) or for any claim based on, in respect of, or by reason of this Agreement or any such other Transaction Agreement (as the case may be) or the negotiation or execution hereof or thereof, in each case, regardless of the legal theory under which such liability or obligation may be sought to be imposed, whether sounding in contract or tort, or whether at law or in equity, or otherwise; and each party irrevocably waives and releases all such liabilities and obligations against any such Persons. Each of the Non-Recourse Parties shall be a third party beneficiary of the provisions of this Section 9.16. For the avoidance of doubt, notwithstanding anything in this Agreement to the contrary, nothing in this Section 9.16 shall limit any liability of (x) the Seller for breaches of the terms and conditions of this Agreement or (y) the respective parties to the other Transaction Agreements for breaches of the terms and conditions therein.
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Section 9.17. Construction.
(a) The headings contained in this Agreement are solely for the purpose of reference, are not part of the agreement of the parties and shall not in any way affect the meaning or interpretation of this Agreement. The contents of the Disclosure Schedule and each of the Exhibits, schedules and annexes attached hereto and thereto form an integral part of this Agreement and any reference to “this Agreement” will be deemed to include the Disclosure Schedule and each such Exhibit, schedule and annex.
(b) As used in this Agreement: (i) the term “including” means “including, without limitation;” (ii) words in the singular shall be held to include the plural and vice versa and words of one gender shall be held to include the other genders as the context requires; (iii) the words “hereof,” “herein,” and “herewith” and words of similar import shall, unless the context otherwise requires, refer to this Agreement as a whole (including the Disclosure Schedule and the Exhibits, schedules and annexes hereto and thereto) and not to any particular provision of this Agreement, and all references to the preamble, recitals, Sections, Articles, Exhibits or Disclosure Schedule are to the preamble, recitals, Sections, Articles, Exhibits or Disclosure Schedule of, or to, this Agreement; (iv) the word “or” shall not be exclusive; (v) the words “date hereof” shall mean the date of this Agreement as identified above; (vi) all references to “$” or “Dollars” shall refer to U.S. dollars, unless otherwise specified, and all references to “U.S.” are to the United States of America; (vii) to the extent computation of any amounts contemplated by this Agreement include a currency other than U.S. dollars, such amounts shall be converted to U.S. dollars using the U.S. dollar equivalent; (viii) an accounting term not otherwise defined herein has the meaning assigned to it in accordance with GAAP; (ix) the word “extent” in the phrase “to the extent” shall mean the degree to which a subject or other theory extends and such phrase shall not mean “if”; (x) the words “will” and “will not” are expressions of command and not merely expressive of future intent or expectation; (xi) any reference to any federal, state, local statute or Law shall be deemed also to refer to all rules and regulations promulgated thereunder and amendments thereto; (xii) when calculating the number of days before which, within which or following which, any act is to be done or step is to be taken pursuant to this Agreement, the date from which such period is to be calculated shall be excluded from such count; provided, however, that, if the last calendar day of such period is a non-Business Day, the period in question shall end on the next succeeding Business Day; (xiii) the measure of a period of one month or year for the purposes of this Agreement shall be the date of the following month or year corresponding to the starting date; provided, however, that, if no corresponding date exists, then the end date of such period being measured shall be the next actual date of the following month or year (for example, one month following February 18 is March 18 and one month following March 31 is May 1); provided further, that, if the last calendar day of such period is a non-Business Day, then the period in question shall end on the next succeeding Business Day; and (xiv) for the purposes of this Agreement, references to the term “delivered by the Seller,” “delivered by the Company,” “delivered to Purchaser,” “furnished to Purchaser,” “made available to Purchaser” or similar expressions shall mean that the Seller or the Company has: (A) posted such materials to the VDR, in a manner that enables viewing of such materials by Purchaser or its Representatives no later than noon Eastern Prevailing Time two calendar days immediately prior to the date of this Agreement (such time, the “Upload Deadline”) and have remained continuously available since being uploaded; or (B) set forth a copy of such materials in the Disclosure Schedule.
(c) The parties have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provisions of this Agreement.
(d) References to the “Group Companies” shall mean, as the context requires, any member of the Group Companies.
[Signature pages follow]
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IN WITNESS WHEREOF, each party hereto has caused this Agreement to be duly executed by its authorized signatory as of the date first written above.
| SELLER: | ||
| Q GATEWAY ULTIMATE HOLDINGS, LLC | ||
| By: | /s/ Chad Crank | |
| Name: Chad Crank | ||
| Title: Authorized Representative | ||
[Signature Page to Securities Purchase Agreement]
| PURCHASER: | ||
| GCI HOLDINGS, LLC | ||
| By: | /s/ William J. Wailand | |
| Name: William J. Wailand | ||
| Title: Senior Vice President, Corporate Development | ||
| For the purposes of Section 5.20 only, | ||
| PURCHASER PARENT: | ||
| GCI LIBERTY, INC. | ||
| By: | /s/ Martin E. Patterson | |
| Name: Martin E. Patterson | ||
| Title: Senior Vice President | ||
[Signature Page to Securities Purchase Agreement]
List of Omitted Exhibits
The following exhibits and schedules to this Securities Purchase Agreement, by and among Q Gateway Ultimate Holdings, LLC, GCI Holdings, LLC, and GCI Liberty, Inc., dated April 21, 2026, have not been provided herein:
Exhibit A – Form of Separation Agreement
Exhibit B – [Reserved]
Exhibit C – Accounting Principles
Exhibit D – Illustrative Working Capital Statement
Exhibit E – Allocation Methodology
Exhibit F – Form of Earn-out Report
Exhibit G – Form of Registration Rights Agreement
Exhibit H – Consulting Agreements
Exhibit I – Restrictive Covenants Agreements
Schedule EO – Earn-out Methodologies and Protocols
Schedule 8.2 – Certain Indemnification Matters
The registrant hereby undertakes to furnish supplementally a copy of any omitted exhibit to the Securities and Exchange Commission upon request.
Exhibit 10.1
Execution Version
TERM LOAN CREDIT AGREEMENT
by and among
Q GATEWAY ULTIMATE HOLDINGS, LLC
AS BORROWER
THE LENDERS PARTY HERETO
and
ACQUIOM AGENCY SERVICES LLC, as Administrative Agent
Dated as of April 21, 2026
TABLE OF CONTENTS
Page
| I. | CERTAIN DEFINITIONS | 1 | |
| 1.1 | Certain Definitions | 1 | |
| 1.2 | Construction | 45 | |
| 1.3 | Accounting Principles | 45 | |
| 1.4 | Rounding | 46 | |
| 1.5 | [Reserved] | 46 | |
| 1.6 | Covenant Compliance Generally | 46 | |
| 1.7 | Holidays | 47 | |
| 1.8 | Divisions | 47 | |
| 1.9 | UCC Terms | 48 | |
| 1.10 | Cashless Rollovers | 48 | |
| II. | CREDIT FACILITIES | 48 | |
| 2.1 | Term Loans | 48 | |
| 2.2 | [Reserved] | 48 | |
| 2.3 | [Reserved] | 49 | |
| 2.4 | Interest Rate Provisions | 49 | |
| 2.5 | Interest Periods | 50 | |
| 2.6 | Making of Loans | 50 | |
| 2.7 | Fees | 51 | |
| 2.8 | Notes | 52 | |
| 2.9 | [Reserved] | 52 | |
| 2.10 | Payments | 52 | |
| 2.11 | Interest Payment Dates | 53 | |
| 2.12 | Voluntary Prepayments and Reduction of Commitments | 53 | |
| 2.13 | Mandatory Prepayments | 54 | |
| 2.14 | Sharing of Payments by Lenders | 55 | |
| 2.15 | Defaulting Lenders | 56 | |
| III. | INCREASED COSTS; TAXES; ILLEGALITY; INDEMNITY | 57 | |
| 3.1 | Increased Costs | 57 | |
| 3.2 | Taxes | 58 | |
| 3.3 | Illegality | 62 | |
| 3.4 | Inability to Determine Rate; Cost; Interest After Default | 63 | |
| 3.5 | Indemnity | 64 | |
| 3.6 | Mitigation Obligations; Replacement of Lenders | 64 | |
| 3.7 | Benchmark Replacement Setting | 66 | |
| 3.8 | Survival | 67 | |
| IV. | CONDITIONS OF LENDING | 67 | |
| 4.1 | Conditions Precedent | 67 | |
| 4.2 | Conditions Precedent to any Loan | 69 | |
| V. | REPRESENTATIONS AND WARRANTIES | 69 | |
| 5.1 | Organization and Qualification | 69 | |
| 5.2 | Compliance With Laws | 69 | |
| 5.3 | Title to Properties | 70 | |
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| 5.4 | Investment Company Act | 70 | |
| 5.5 | Event of Default | 70 | |
| 5.6 | Subsidiaries and Owners | 70 | |
| 5.7 | Power and Authority; Validity and Binding Effect | 70 | |
| 5.8 | No Conflict; Material Agreements; Consents | 71 | |
| 5.9 | Litigation | 71 | |
| 5.10 | Financial Statements | 71 | |
| 5.11 | Margin Stock | 72 | |
| 5.12 | Full Disclosure | 72 | |
| 5.13 | Taxes | 73 | |
| 5.14 | Intellectual Property; Other Rights | 73 | |
| 5.15 | [Reserved] | 73 | |
| 5.16 | Insurance | 73 | |
| 5.17 | Employee Benefits Compliance | 73 | |
| 5.18 | Environmental Matters | 74 | |
| 5.19 | Communications Regulatory Matters | 74 | |
| 5.20 | Solvency | 75 | |
| 5.21 | [Reserved] | 75 | |
| 5.22 | Transactions with Affiliates | 76 | |
| 5.23 | Labor Matters | 76 | |
| 5.24 | Anti-Corruption; Anti-Terrorism and Sanctions | 76 | |
| 5.25 | Borrower as a Holding Compan | 77 | |
| 5.26 | Acquisition Not Subject to Exon Florio Provision of the Defense Production Act | 77 | |
| VI. | AFFIRMATIVE COVENANTS | 77 | |
| 6.1 | Reporting Requirements | 77 | |
| 6.2 | Preservation of Existence, Etc | 80 | |
| 6.3 | Preservation of Licenses | 81 | |
| 6.4 | Payment of Liabilities, Including Taxes, Etc | 81 | |
| 6.5 | Maintenance of Insurance | 81 | |
| 6.6 | Maintenance of Properties | 81 | |
| 6.7 | Visitation Rights; Quarterly Lender Calls | 81 | |
| 6.8 | Keeping of Records and Books of Account | 82 | |
| 6.9 | Compliance with Laws | 82 | |
| 6.10 | [Reserved] | 82 | |
| 6.11 | [Reserved] | 82 | |
| 6.12 | Use of Proceeds | 82 | |
| 6.13 | Updates to Schedules and Annexes | 83 | |
| 6.14 | Material Agreements | 83 | |
| 6.15 | Benefit Plan Compliance | 83 | |
| VII. | NEGATIVE COVENANTS | 83 | |
| 7.1 | Indebtedness | 83 | |
| 7.2 | Liens | 85 | |
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| 7.3 | Affiliate Transactions | 85 | |
| 7.4 | Contingent Obligations | 86 | |
| 7.5 | Loans and Investments | 87 | |
| 7.6 | Dividends and Related Distributions | 88 | |
| 7.7 | Liquidations, Mergers, Consolidations, Acquisitions | 89 | |
| 7.8 | Dispositions of Assets or Subsidiaries | 90 | |
| 7.9 | Use of Proceeds | 91 | |
| 7.10 | [Reserved] | 91 | |
| 7.11 | Continuation of or Change in Business | 91 | |
| 7.12 | Fiscal Year | 91 | |
| 7.13 | [Reserved] | 91 | |
| 7.14 | Changes in Organizational Documents | 91 | |
| 7.15 | Negative Pledges; Other Inconsistent Agreements | 91 | |
| 7.16 | Material Agreements | 92 | |
| 7.17 | Employee Plans | 93 | |
| 7.18 | [Reserved] | 93 | |
| 7.19 | Borrower as a Holding Company | 93 | |
| 7.20 | Anti-Layering | 94 | |
| 7.21 | Anti-Corruption; Anti-Terrorism; Sanctions | 94 | |
| 7.22 | Independence of Covenants | 94 | |
| VIII. | FINANCIAL COVENANTS | 94 | |
| 8.1 | Maximum Total Net Leverage Ratio | 94 | |
| 8.2 | Minimum Fixed Charge Coverage Ratio | 94 | |
| IX. | EVENTS OF DEFAULT | 95 | |
| 9.1 | Events of Default | 95 | |
| 9.2 | Consequences of Event of Default | 97 | |
| 9.3 | Right to Cure | 99 | |
| X. | THE ADMINISTRATIVE AGENT | 99 | |
| 10.1 | Appointment and Authority | 99 | |
| 10.2 | Rights as a Lender | 100 | |
| 10.3 | No Fiduciary Duty | 100 | |
| 10.4 | Exculpation | 100 | |
| 10.5 | Reliance by the Administrative Agent | 102 | |
| 10.6 | Delegation of Duties | 102 | |
| 10.7 | Filing Proofs of Claim | 102 | |
| 10.8 | Resignation of the Administrative Agent | 103 | |
| 10.9 | [Reserved] | 103 | |
| 10.10 | Non-Reliance on the Administrative Agent and Other Lenders | 104 | |
| 10.11 | Enforcement | 104 | |
| 10.12 | [Reserved] | 104 | |
| 10.13 | [Reserved] | 104 | |
| 10.14 | [Reserved] | 104 | |
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| 10.15 | No Reliance on the Administrative Agent’s Customer Identification Program | 105 | |
| 10.16 | Certain ERISA Matters | 105 | |
| 10.17 | Rate Disclaimer | 106 | |
| XI. | MISCELLANEOUS | 106 | |
| 11.1 | Modifications, Amendments or Waivers | 106 | |
| 11.2 | No Implied Waivers; Cumulative Remedies | 108 | |
| 11.3 | Expenses; Indemnity; Damage Waiver | 109 | |
| 11.4 | Notices; Effectiveness; Electronic Communication | 110 | |
| 11.5 | Severability | 111 | |
| 11.6 | Duration; Survival | 111 | |
| 11.7 | Successors and Assigns | 112 | |
| 11.8 | Confidentiality | 116 | |
| 11.9 | Counterparts; Integration; Effectiveness | 116 | |
| 11.10 | Choice of Law; Submission to Jurisdiction; Waiver of Venue; Service of Process; Waiver of Jury Trial | 117 | |
| 11.11 | USA Patriot Act Notice | 119 | |
| 11.12 | Payments Set Aside | 119 | |
| 11.13 | [Reserved] | 119 | |
| 11.14 | Interest Rate Limitation | 119 | |
| 11.15 | FCC and PUC Compliance | 119 | |
| 11.16 | [Reserved] | 120 | |
| 11.17 | No Advisory or Fiduciary Responsibility | 120 | |
| 11.18 | [Reserved] | 120 | |
| 11.19 | Recovery of Erroneous Payments | 121 | |
| 11.20 | Acknowledgment and Consent to Bail-In of Affected Financial Institutions | 121 | |
| 11.21 | Deemed Payment in Full; Automatic Termination | 121 | |
LIST OF SCHEDULES AND EXHIBITS
| SCHEDULES | ||
| SCHEDULE 1.1(A) | ___ | NOTICE ADDRESSES |
| SCHEDULE 1.1(B) | ___ | COMMITMENTS OF LENDERS AND ADDRESSES FOR NOTICES |
| SCHEDULE 1.1(P) | ___ | EXISTING LIENS |
| SCHEDULE 5.1 | ___ | QUALIFICATIONS TO DO BUSINESS AND JURISDICTION OF ORGANIZATION |
| SCHEDULE 5.6 | ___ | SUBSIDIARIES |
| SCHEDULE 5.19 | ___ | LICENSES |
| SCHEDULE 7.1 | ___ | EXISTING INDEBTEDNESS |
| SCHEDULE 7.5 | ___ | INVESTMENTS |
| EXHIBITS | ||
| EXHIBIT A | ___ | ASSIGNMENT AND ASSUMPTION |
| EXHIBIT B | ___ | COMPLIANCE CERTIFICATE |
| EXHIBIT C | ___ | [RESERVED] |
| EXHIBIT D | ___ | LOAN REQUEST |
| EXHIBIT E | ___ | [RESERVED] |
| EXHIBIT F | ___ | NOTE |
| EXHIBIT G | ___ | SOLVENCY CERTIFICATE |
| EXHIBIT H | ___ | TAX COMPLIANCE CERTIFICATES |
| EXHIBIT I | ___ | CONVERSION OR CONTINUATION NOTICE |
| EXHIBIT J | ___ | PERMITTED ACQUISITION QUESTIONNAIRE |
| EXHIBIT K | ___ | PERMITTED ACQUISITION CERTIFICATE |
term loan CREDIT AGREEMENT
THIS TERM LOAN CREDIT AGREEMENT (this “Agreement”) is dated as of April 21, 2026 and is made by and among Q Gateway Ultimate Holdings, LLC (the “Borrower”), the LENDERS (as hereinafter defined), and ACQUIOM AGENCY SERVICES LLC, in its capacity as Administrative Agent.
RECITALS
WHEREAS, the Borrower has requested that the Lenders provide to the Borrower an unsecured term loan facility in an aggregate principal amount up to $160,000,000; and
WHEREAS, the Lenders have agreed to provide such unsecured term loan facility on the terms and conditions set forth herein.
In consideration of their mutual covenants and agreements hereinafter set forth and intending to be legally bound hereby, the parties hereto covenant and agree as follows:
I. CERTAIN DEFINITIONS
1.1 Certain Definitions. In addition to words and terms defined elsewhere in this Agreement, the following words and terms shall have the following meanings, respectively, unless the context hereof clearly requires otherwise:
“Acquired Business” means any Person or all or substantially all of the assets of, or any line of business or division or business unit of, any other Person acquired in an Acquisition.
“Acquisition” means any acquisition, in a single transaction or in a series of related transactions, of all or any substantial portion of the assets of, or any line of business, division or business unit of, another Person, or at least a majority of the equity interests of another Person, in each case whether involving a merger or consolidation with such other Person and whether for cash, property, services, assumption of Indebtedness, securities or otherwise.
“Acquisition Agreement” means each stock purchase agreement, merger agreement, asset purchase agreement, or similar document executed and delivered in connection with an Acquisition.
“Acquisition Agreement Period” means the period commencing on the Closing Date through and including the date of the termination of the Closing Date Acquisition Agreement (including as a result of the consummation of the GCI Transaction or otherwise).
“Acquisition Consummation Date” has the meaning set forth in Section 11.21.
“Administrative Agent” means Acquiom Agency Services LLC, in its capacity as administrative agent under the Loan Documents.
“Administrative Questionnaire” means an administrative questionnaire in a form supplied by the Administrative Agent, if any.
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“Affected Financial Institution” means (a) any EEA Financial Institution or (b) any UK Financial Institution.
“Affiliate” means, with respect to any specified Person, another Person that directly, or indirectly through one or more intermediaries, Controls, is Controlled by or is under common Control with the Person specified.
“Agent Fee Letter” means, that certain agent fee letter, dated as of hereof, between the Borrower and the Administrative Agent.
“Agent Parties” has the meaning set forth in Section 11.4(d)(ii).
“Alternate Base Rate” means, for any day, a rate per annum equal to the highest of (a) the Prime Rate in effect on such day, (b) the Federal Funds Effective Rate in effect on such day plus one half of one percent (0.50%) per annum, and (c) the Term SOFR Rate for an Interest Period of one month in effect on such day plus one percent (1.00%) per annum; provided that, in no event shall the Alternate Base Rate be less than one percent (1.00%) per annum. Any change in the Alternate Base Rate due to a change in the Prime Rate, Federal Funds Effective Rate or Term SOFR Rate shall be effective from and including the effective date of such change in the Prime Rate, Federal Funds Effective Rate or Term SOFR Rate, respectively, and without necessity of notice being provided to the Borrower or any other Person.
“Annualized Consolidated EBITDA” means the product of (x) Consolidated EBITDA for the then most recently completed fiscal quarter multiplied by (y) 4.
“Anti-Corruption Laws” means any Laws of any Governmental Authority concerning or relating to bribery or corruption.
“Anti-Terrorism Laws” means any Laws of any Governmental Authority concerning or relating to financing terrorism, “know your customer” or money laundering.
“Applicable Margin” means, as applicable: (a) 6.50%, to be added to the Alternate Base Rate applicable to Base Rate Loans, or (b) 7.50%, to be added to the Term SOFR Rate applicable to Term SOFR Rate Loans; provided, in each case, that if interest is paid in-kind for any portion of the Loans in any Interest Period (in accordance with the terms and conditions set forth herein), interest payable on all Loans for such Interest Period shall increase to a percentage per annum equal to, in the case of (a) Loans maintained as Base Rate Loans, 7.50% and (b) in the case of Loans maintained as Term SOFR Rate Loans, 8.50%.
“Approved Fund” means any Fund that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender.
“Assignment and Assumption” means an assignment and assumption agreement entered into by a Lender and an assignee permitted under Section 11.7, in substantially the form of Exhibit A or any other form approved by the Administrative Agent.
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“Attorney Costs” means and includes all reasonable and documented out-of-pocket fees, expenses and disbursements of (a) one external counsel selected by the Lenders, (b) to the extent reasonably necessary, one external local counsel in each relevant material jurisdiction selected by the Lenders, (c) one external regulatory counsel selected by the Lenders if reasonably required, (d) one external counsel selected by the Administrative Agent (and to the extent reasonably necessary, one external local counsel in each relevant material jurisdiction, and one external regulatory counsel), and (e) solely in the event of an actual or perceived conflict of interest, one additional external counsel (and, if necessary, one external local counsel in each relevant material jurisdiction and one regulatory counsel if reasonably required) to each group (which may be a single Person) of similarly situated affected Persons.
“Authorized Officer” means, the Chief Executive Officer, President, Chief Financial Officer, Treasurer or Assistant Treasurer or a manager or member authorized under the Organizational Documents of the Borrower or such other individuals, designated by written notice to the Administrative Agent from the Borrower, authorized to execute notices, reports and other documents on behalf of the Borrower required hereunder. The Borrower may amend such list of individuals from time to time by giving written notice of such amendment to the Administrative Agent.
“Availability Period” means the period commencing on the Closing Date and ending on the date that is ninety (90) days from the Closing Date.
“Available Tenor” means, as of any date of determination and with respect to the applicable then-current Benchmark, as applicable, (a) if the applicable then-current Benchmark is a term rate, any tenor for such Benchmark that is or may be used for determining the length of an Interest Period or (b) otherwise, any payment period for interest calculated with reference to such Benchmark, as applicable, pursuant to this Agreement as of such date.
“Bail-In Action” means the exercise of any Write-Down and Conversion Powers by the applicable Resolution Authority in respect of any liability of an Affected Financial Institution.
“Bail-In Legislation” means (a) with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law, regulation, rule or requirement for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule and (b) with respect to the United Kingdom, Part I of the United Kingdom Banking Act 2009 (as amended from time to time) and any other law, regulation or rule applicable in the United Kingdom relating to the resolution of unsound or failing banks, investment firms or other financial institutions or their affiliates (other than through liquidation, administration or other insolvency proceedings).
“Bankruptcy Code” means title 11 of the United States Code.
“Base Rate Loan” means a Loan bearing interest calculated in accordance with the Base Rate Option. A Base Rate Loan is a Loan not subject to an Interest Period.
“Base Rate Option” means the option of the Borrower to have Loans bear interest at the rate and under the terms set forth in Section 2.4(a)(i).
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“BBNB Amount” means an amount to be added or subtracted, as applicable, from Consolidated EBITDA for any applicable fiscal quarter equal to the difference between (a) the contracted revenue that would have been earned during such fiscal quarter from booked but not billed customer contracts of the Borrower and its Subsidiaries that have been signed and will commence billing within 120 days after the end of the applicable fiscal quarter as if all such contracts had been billed beginning on the first day of such fiscal quarter, and (b) the revenue recognized during such fiscal quarter from customer contracts of the Borrower and its Subsidiaries for which any of the Borrower or its Subsidiaries has received a notice of termination but which were not actually disconnected as of the last day of the applicable fiscal quarter.
“Benchmark” means, initially, the Term SOFR Rate; provided that if a Benchmark Transition Event has occurred with respect to the Term SOFR Rate or any then-current Benchmark, then “Benchmark” means the applicable Benchmark Replacement to the extent that such Benchmark Replacement has replaced such prior benchmark rate pursuant to Section 3.7(a). Any reference to a “Benchmark” shall include, as applicable, the published component used in the calculation thereof.
“Benchmark Replacement” means, for any Available Tenor:
(a) for the Term SOFR Rate, the first alternative set forth below that can be determined by the Administrative Agent (acting at the written direction of the Required Lenders):
i. Daily Simple SOFR Rate, or
ii. the sum of (a) the alternate benchmark rate and (b) an adjustment (which may be a positive or negative value or zero), in each case, that has been selected by the Administrative Agent, the Lenders and the Borrower as the replacement for such Available Tenor of such Benchmark giving due consideration to any evolving or then-prevailing market convention, including any applicable recommendations made by the Relevant Governmental Body, for U.S. Dollar-denominated syndicated credit facilities at such time; and
(b) for all other Benchmarks, the sum of (i) the alternate benchmark rate and (ii) an adjustment (which may be a positive or negative value or zero), in each case, that has been selected by the Administrative Agent, the Lenders and the Borrower as the replacement for such Available Tenor of such Benchmark giving due consideration to any evolving or then-prevailing market convention, including any applicable recommendations made by the Relevant Governmental Body, for U.S. Dollar-denominated syndicated credit facilities at such time;
provided that, if the Benchmark Replacement as determined pursuant to clause (a) or (b) above would be less than the Floor, the Benchmark Replacement will be deemed to be the Floor for the purposes of this Agreement and the other Loan Documents; provided, further, that, if the Benchmark Replacement is calculated using the Daily Simple SOFR Rate, all interest payments will be payable on a quarterly basis.
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“Benchmark Replacement Conforming Changes” means, with respect to either the use or administration of any initial Benchmark or adjusted initial Benchmark or the use, administration, adoption or implementation of any Benchmark Replacement, any technical, administrative or operational changes (including changes to the definition of “Alternate Base Rate,” the definition of “Business Day,” the definition of “U.S. Government Securities Business Day,” the definition of “Interest Period” or any similar or analogous definition (or the addition of a concept of “interest period”), timing and frequency of determining rates and making payments of interest, timing of borrowing requests or prepayment, conversion or continuation notices, the applicability and length of lookback periods, the applicability of Section 3.5 and other technical, administrative or operational matters) that the Administrative Agent, in consultation with the Required Lenders, decides may be appropriate to reflect the adoption and implementation of any such rate or to permit the use and administration thereof by the Administrative Agent in a manner substantially consistent with market practice (or, if the Administrative Agent, in consultation with the Required Lenders, decides that adoption of any portion of such market practice is not administratively feasible or if the Administrative Agent determines that no market practice for the administration of any such rate exists, in such other manner of administration as the Administrative Agent, in consultation with the Required Lenders, decides is reasonably necessary in connection with the administration of this Agreement and the other Loan Documents).
“Benchmark Transition Event” means, with respect to any then-current Benchmark, the occurrence of a public statement or publication of information by or on behalf of the administrator of the then-current Benchmark, the regulatory supervisor for the administrator of such Benchmark, the Board of Governors of the Federal Reserve System, the Federal Reserve Bank of New York, an insolvency official with jurisdiction over the administrator for such Benchmark, a resolution authority with jurisdiction over the administrator for such Benchmark or a court or an entity with similar insolvency or resolution authority over the administrator for such Benchmark, announcing or stating that (a) such administrator has ceased or will cease on a specified date to provide all Available Tenors of such Benchmark, permanently or indefinitely, provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide any Available Tenor of such Benchmark or (b) all Available Tenors of such Benchmark are or will not be representative of the underlying market and economic reality that such Benchmark is intended to measure and that representativeness will not be restored.
“Beneficial Ownership Certification” means a certification regarding beneficial ownership as required by the Beneficial Ownership Regulation.
“Beneficial Ownership Regulation” means 31 C.F.R. § 1010.230.
“Benefit Plan” means any of (a) an “employee benefit plan” (as defined in ERISA) that is subject to Title I of ERISA, (b) a “plan” as defined in Section 4975 of the Code or (c) any Person whose assets include (for purposes of ERISA Section 3(42) or otherwise for purposes of Title I of ERISA or Section 4975 of the Code) the assets of any such “employee benefit plan” or “plan”.
“Board” means the Board of Governors of the Federal Reserve System of the United States of America.
“Borrower” has the meaning specified in the preamble.
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“Borrower LLC Agreement” means the Amended and Restated Limited Liability Company Agreement of the Borrower, dated as of February 15, 2024, as provided in the VDR (as defined in the Closing Date Acquisition Agreement) as of April 16, 2026.
“Borrowing” means as of any date of determination (a) with respect to Term SOFR Rate Loans outstanding as of such date, a borrowing consisting of Term SOFR Rate Loans and having the same Interest Period and (b) with respect to Base Rate Loans, all Base Rate Loans outstanding as of such date.
“Borrowing Date” means, with respect to any Loan, the date for the making thereof or the renewal or conversion thereof at or to the same or a different Interest Rate Option, which shall be a Business Day.
“Budget” means, for the Borrower and its Subsidiaries on a Consolidated basis, forecasted: (a) balance sheets, (b) profit and loss statements, (c) cash flow statements, (d) operating budget, and (e) capital budget, all prepared on a consistent basis with the historical financial statements of Intermediate Holdings and its Subsidiaries. The Budget represents and will represent as of the date thereof the good faith estimate of the Borrower and its senior management concerning the probable course of its and its Subsidiaries’ business.
“Business Day” means any day that is not a Saturday, Sunday or other day that is a legal holiday under the laws of the State of New York or is a day on which banking institutions in such state are authorized or required by Law to close.
“Calculation Date” has the meaning specified in Section 1.6(b).
“Capital Expenditures” means, with respect to any Person, the aggregate costs incurred by such Person during any measuring period for the acquisition of any fixed assets or improvements or replacements of, substitutions for or additions to any existing fixed asset resulting in a future economic benefit to such Person, and that are required to be capitalized in accordance with GAAP.
“Capital Lease” means any lease of real or personal property that is required to be capitalized under GAAP or that is treated as an operating lease under regulations applicable to the Borrower and its Subsidiaries but that otherwise would be required to be capitalized under GAAP.
“Capped Addbacks” means addbacks to Consolidated EBITDA set forth in clauses (b)(iv), (b)(vii), (b)(ix), (b)(xi) and (b)(xiv) of the definition thereof.
“Cash Equivalents” means:
(a) direct obligations of the United States of America or any agency or instrumentality thereof or obligations backed by the full faith and credit of the United States of America maturing in twelve (12) months or less from the date of acquisition;
(b) commercial paper maturing in 180 days or less rated not lower than A-1, by Standard & Poor’s or P-1 by Moody’s on the date of acquisition;
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(c) demand deposits, time deposits or certificates of deposit maturing within one year in commercial banks that are organized under the laws of the United States or any state thereof or that is a foreign bank or branch or agency thereof acceptable to the Administrative Agent and, in any case, having combined capital, surplus and undivided profits in an amount equal to at least $1,000,000,000; and
(d) money market or mutual funds whose investments are limited to those types of investments described in clauses (a) through (c) above.
“Casualty Event” means, with respect to any property of any Person, any loss of or damage to, or any condemnation or other taking of, such property for which such Person or any of its Subsidiaries receives insurance proceeds, or proceeds of a condemnation award or other compensation.
“Change in Law” means the occurrence, after the date of this Agreement, of any of the following: (a) the adoption or taking effect of any Law, (b) any change in any Law or in the administration, interpretation, implementation or application thereof by any Official Body or (c) the making or issuance of any request, rule, guideline or directive (whether or not having the force of Law) by any Official Body; provided that notwithstanding anything herein to the contrary, (i) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, regulations, guidelines, interpretations or directives thereunder or issued in connection therewith (whether or not having the force of Law) and (ii) all requests, rules, regulations, guidelines, interpretations or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities (whether or not having the force of Law), in each case pursuant to Basel III, shall in each case be deemed to be a Change in Law regardless of the date enacted, adopted, issued, promulgated or implemented.
“Change of Control” means (a) the Sponsor ceases to control, directly or indirectly, all of the economic and voting rights associated with ownership of at least 50.1% in the aggregate of all classes of the outstanding membership interests of the Borrower on a fully diluted basis, taking into account any option rights as though such rights have been exercised; (b) the Borrower shall cease to own directly 100% of the Equity Interests in Intermediate Holdings or the Borrower shall ceases to indirectly own 100% of the Equity Interests in its Subsidiaries (other than Intermediate Holdings or the Excluded Subsidiaries (as defined in the CoBank Credit Agreement)) or (c) Sponsor shall cease for any reason to possess, directly, or indirectly, the power to direct or cause the direction of the management of policies of the Borrower and its Subsidiaries (other than the Excluded Subsidiaries (as defined in the CoBank Credit Agreement)).
“Closing Date” means the Business Day on which each of the conditions precedent in Section 4.1 has been satisfied, or waived by the Required Lenders.
“Closing Date Acquisition Agreement” means that certain Securities Purchase Agreement, dated as of April 21, 2026, by and among the Borrower, GCI Holdings, LLC, a Delaware limited liability company, as purchaser, for the purposes of Section 5.20 thereof only, GCI Liberty, Inc., a Nevada corporation, as purchaser parent, and the other parties from time to time party thereto, together with the exhibits and disclosure schedules attached thereto.
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“Closing Date Transactions” means, the execution of the Closing Date Acquisition Agreement and this Agreement.
“CoBank” means CoBank, ACB, a federally chartered instrumentality of the United States.
“CoBank Credit Agreement” means that certain Credit Agreement, dated as of February 15, 2024 (as the same has been amended, modified, supplemented, increased or extended on or prior to the date hereof, by the amendment described in Section 4.2(d), and, to the extent permitted by the terms of this Agreement, as the same may be further amended, modified, supplemented, increased or extended from time to time on or after the date hereof), among QUINTILLION NETWORKS, LLC, an Alaska limited liability company and QUINTILLION SUBSEA OPERATIONS, LLC, a Delaware limited liability company, the guarantors from time to time party thereto, the lenders from time to time party thereto and CoBank, in its capacity as administrative agent thereunder.
“CoBank Credit Agreement Agent” means CoBank.
“CoBank Loan Documents” means the CoBank Credit Agreement and all other “Loan Documents” (as defined in the CoBank Credit Agreement).
“Code” means the Internal Revenue Code of 1986.
“Commitment” means as to any Lender the aggregate of its Term Loan Commitments and “Commitments” means the aggregate of the Term Loan Commitments of all the Lenders.
“Commodity Exchange Act” means the Commodity Exchange Act (7 U.S.C. § 1 et seq.).
“Communications” has the meaning specified in Section 11.4.
“Communications Act” means the Communications Act of 1934, as amended, the rules and regulations of the FCC thereunder and codified in Title 47 of the Code of Federal Regulations, and the effective orders, decisions, rulings, published policies, and public notices of the FCC.
“Communications Systems” means a system, network or business (a) providing (or capable of providing) voice, data, Internet access or video transport, connection, monitoring services, answering services or other communications and/or information or entertainment services (including cable television), through any means or medium, (b) providing (or capable of providing) facilities, marketing, management, technical and financial (including call rating) or other services to companies providing such transport, connection, monitoring service or other communications and/or information services, or (c) that is (or that is capable of) constructing, creating, developing or marketing communications-related networks, network equipment, software and other devices for use in any system or business described above.
“Compliance Certificate” means a certificate of the Borrower, signed by a Compliance Officer of Borrower, substantially in the form of Exhibit B hereto.
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“Compliance Officer” means the Chief Executive Officer, President or Chief Financial Officer or a manager or member authorized under the Borrower’s Organizational Documents of the Borrower.
“Connection Income Taxes” means Other Connection Taxes that are imposed on or measured by net income (however denominated) or that are franchise Taxes or branch profits Taxes.
“Consolidated” means, when used with reference to financial statements or financial statement items of any Person, such statements or items on a consolidated basis in accordance with applicable principles of consolidation under GAAP.
“Consolidated EBITDA” means for any period of determination, for any Person and its Subsidiaries on a Consolidated basis:
(a) Consolidated Net Income for such period plus
(b) to the extent deducted in calculating Consolidated Net Income (other than (x) amounts excluded in accordance with clauses (a) through (c) in the proviso to the definition of Consolidated Net Income, which, for the avoidance of doubt, shall not be added back to Consolidated EBITDA, (y) adjustments for lost revenue made pursuant to clause (xix) of this clause (b) and (z) adjustments made pursuant to clause (vii) below), without duplication, the sum of:
(i) depreciation, amortization and other non-cash charges (except to the extent that such non-cash charges are reserved for cash charges to be taken in the future) during such period,
(ii) Consolidated Interest Expenses (including interest expense attributable to Capital Leases and all net payment obligations pursuant to Interest Rate Hedge agreements) for such period,
(iii) all income taxes payable during such period,
(iv) adjustments equal to the lesser of (x) the applicable BBNB Amount during such period and (y) 20% of Consolidated EBITDA (calculated prior to making any adjustment in respect of Capped Addbacks),
(v) losses from discontinued operations for such period and losses from dispositions for such period (excluding sales, expenses or losses related to current assets) outside of the ordinary course of business,
(vi) fees and expense reimbursements paid to directors of Borrower and its subsidiaries permitted pursuant to the terms hereof during such period aggregating not more than an amount to be agreed during such period,
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(vii) (x) [reserved] and (y) pro forma “run rate” cost savings, operating expense reductions, operating improvements, integration costs and synergies related to the Specified Transaction, that are reasonably identifiable, factually supportable and projected by the Borrower in good faith to result from actions that have been taken or with respect to which substantial steps have been taken or are expected to be taken (in the good faith determination of the Borrower) within the first twelve (12) months after such Specified Transaction,
(viii) to the extent not capitalized, transaction costs incurred in connection with a Permitted Acquisition, including the amount of costs, expenses and fees paid to third parties during such period in connection with the incurrence, prepayment, or modification of any Indebtedness in connection with such Permitted Acquisition, in each case whether or not such transaction is consummated, aggregating not more than an amount to be agreed during such period,
(ix) any non-recurring, extraordinary, or unusual gains or losses, expenses or charges,
(x) non-cash foreign exchange, transaction, translation or performance losses for such period,
(xi) severance costs and other costs incurred in connection with the termination and relocation of employees (including relocation costs incurred in connection with the hiring of new employees), and any costs paid to recruiters for the hiring of employees, in each case, during such period,
(xii) (x) losses associated with new market or footprint expansion for a period of twenty-four (24) months with respect to each such new market or footprint expansion and (y) any non-recurring or extraordinary expenses for such period, including, but not limited to, (A) expenses associated with new market or footprint expansion that are not included in the calculation of losses in clause (xii)(x) above (including expenses associated with review and consideration thereof (whether or not such capital investment is ultimately undertaken) and expenses associated with recruiting and onboarding new employees in connection therewith), for a period of twenty-four (24) months with respect to each such new market or footprint expansion and (B) expenses incurred in connection with implementation of business optimization and other cost savings initiatives,
(xiii) any other non-cash losses and charges for such period (excluding any such non-cash charges to the extent (x) there were cash charges with respect to such charges and losses in past accounting periods or (y) there is a reasonable expectation that there will be cash charges with respect to such charges and losses in future accounting periods),
(xiv) restructuring and similar charges and expenses, integration and facilities opening costs and other business optimization costs and expenses, signing costs, retention or completion bonuses, recruiting costs, transition costs and expenses, project start-up costs, closing costs, costs related to closure/consolidation of facilities or other transaction costs or other operational changes or improvements; provided that the amounts added back in the calculation of Consolidated EBITDA for any applicable measurement period pursuant to this clause shall not exceed 20% of Annualized Consolidated EBITDA for such measurement period (calculated prior to making any adjustment in respect of Capped Addbacks),
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(xv) non-cash losses arising from write-down in the book value of any asset during such period,
(xvi) other non-operating expenses for such period in accordance GAAP,
(xvii) proceeds of business interruption insurance and charges, losses or expenses to the extent indemnified, insured, reimbursed or reimbursable or otherwise covered by an unaffiliated third party, in each case, to the extent received in cash by the Borrower or any of its Subsidiaries,
(xviii) fees, costs and expenses incurred, and cash payments made, in connection with any litigation or claim involving Borrower or any of its Subsidiaries, including any settlement payments, provided that the amount permitted to be added back during any such period pursuant to this clause (xviii) shall not exceed $1,500,000,
(xix) solely for the period commencing on the first day of the fiscal quarter ending March 31, 2025, and ending on the last day of the fiscal quarter ending March 31, 2026, the following adjustments, in each case as reasonably identified by the Borrower:
(A) adjustments to exclude the impact of Starlink/PDI service utilized to restore a portion of the service lost as a result of the Fiber Cut;
(B) adjustments for insurance reimbursements for lost revenue and documented repair expenses related to the Fiber Cut and the Fiber Cut Repair;
(C) adjustments for revenue losses resulting from the Fiber Cut not covered by insurance proceeds; and
(D) adjustments for fiber repair costs related to the Fiber Cut Repair to the extent not otherwise covered by insurance proceeds, and
(xx) fees, costs and expenses incurred, and cash payments made, in connection with the Closing Date Transactions, the amendment to the CoBank Credit Agreement and the GCI Transaction, minus
(c) the sum of the following, to the extent included in calculating such Consolidated Net Income:
(i) any extraordinary gains for such period;
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(ii) any non-cash items of income for such period;
(iii) any gain arising from any write-up (including write-ups of inventory to fair market value) in the book value of any asset for such period;
(iv) any interest income for such period;
(v) any gains from dispositions for such period outside of the ordinary course of business;
(vi) any gains from discontinued operations for such period; and
(vii) any non-operating gains for such period.
For purposes of calculating Consolidated EBITDA of the Borrower, Consolidated EBITDA of any Acquired Business acquired pursuant to Permitted Acquisitions made during any applicable period shall be calculated on a pro forma basis. Further, for the purposes of calculating Consolidated EBITDA for any relevant period, notwithstanding the foregoing, (x) amounts added back in the calculation of Consolidated EBITDA for such period pursuant to the foregoing clauses (b)(vii), (ix) and (xi) of this definition shall not, in the aggregate, exceed 25% of Annualized Consolidated EBITDA for such period (calculated prior to making any adjustment in respect of Capped Addbacks) and (y) Consolidated EBITDA shall be deemed to be the amount set forth below opposite such fiscal quarter:
| Fiscal Quarter Ended | Consolidated EBITDA | |||
| December 31, 2025 | $ | 9,183,399.50 | ||
“Consolidated Interest Expenses” means, for any period, for Borrower and its Subsidiaries on a consolidated basis, the sum of (a) all interest, premium payments, debt discount, fees, charges and related expenses of Borrower and its Subsidiaries in connection with borrowed money (including capitalized interest) or in connection with the deferred purchase price of assets, in each case to the extent treated as interest in accordance with GAAP, and (b) the portion of rent expense of Borrower and its Subsidiaries with respect to such period under Capital Leases that is treated as interest in accordance with GAAP.
“Consolidated Net Income” means, for any period, the sum of (a) Consolidated net income (or loss) of any Person and its Subsidiaries, determined on a consolidated basis in accordance with GAAP with adjustments for the run-rate impact of new installs during the fiscal quarter, the revenue for which was not recognized for the full fiscal quarter plus (b) marine maintenance costs associated with the marine maintenance program for the then most recently completed fiscal quarter multiplied by 4 minus (c) marine maintenance costs associated with the marine maintenance program for the then most recently completed four fiscal quarters; provided that there shall be excluded (to the extent otherwise included therein) (i) except for determinations expressly required to be made on a pro-forma basis, the income (or deficit) of any Person accrued prior to the date it becomes a subsidiary or is merged into or consolidated with the Borrower or a Subsidiary, (ii) the income (or deficit) of any Person (other than a Subsidiary) in which the Borrower or a Subsidiary has an ownership interest, except to the extent that any such income is actually received by the Borrower or such Subsidiary, as applicable, in the form of dividends or similar distributions, (iii) the undistributed earnings of any Subsidiary to the extent that the declaration or payment of dividends or similar distributions by such Subsidiary is not at the time permitted by the terms of any contractual obligation (other than under the Loan Documents) or law applicable to such Subsidiary.
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“Contingent Obligations” means, as applied to any Person, any direct or indirect liability of that Person: (a) with respect to any indebtedness, lease, dividend or other obligation of another Person if the primary effect thereof, is to provide assurance to the obligee of such liability that such liability will be paid, performed or discharged, or that any agreements relating thereto will be complied with, or that the holders of such liability will be protected (in whole or in part) against loss with respect thereto; (b) with respect to any letter of credit issued for the account of that Person or as to which that Person is otherwise liable for reimbursement of drawings; or (c) under any foreign exchange contract, currency swap agreement, interest rate swap agreement or other similar agreement or arrangement designed to alter the risks of that Person arising from fluctuations in currency values or interest rates. Contingent Obligations should also include (i) the direct or indirect guaranty, endorsement (other than for collection or deposit in the ordinary course of business), co-making, discounting with recourse or sale with recourse by such Person of the obligations of another (ii) obligations to make take-or-pay or similar payments if required regardless of the nonperformance by any other party or parties to any agreement to purchase, repurchase or otherwise acquire such obligation or any property constituting security therefor, to provide funds for the payment or discharge of such obligation or to maintain the solvency, financial condition or any balance sheet item or level of income of another and (iii) obligations under any revenue sharing agreement with vendors. The amount of any Contingent Obligation shall be equal at all times to the amount of the obligations so guaranteed or otherwise supported or, if not a fixed and determined amount, the maximum amount so guaranteed.
“Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. Without limiting the generality of the foregoing, a Person shall be deemed to be “controlled by” a Person if such Person holds, directly or indirectly, power to vote 10% or more of the securities having ordinary voting power for the election of directors of such other Person. “Controlling” and “Controlled” have meanings correlative thereto.
“Controlled Investment Affiliate” means, as to any Person, any other Person that (a) directly or indirectly, is in control of, is controlled by, or is under common control with, such Person and (b) is organized by such Person primarily for the purpose of making equity or debt investments in one or more companies. For purposes of this definition, “control” of a Person means the power, directly or indirectly, to direct or cause the direction of the management and policies of such Person whether by contract or otherwise.
“Conversion or Continuation Notice” has the meaning specified in Section 2.5.
“Credit Extension” means the making, conversion or continuation of any Borrowing or Loan.
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“Cure Deadline” has the meaning specified in Section 9.3(a).
“Daily Simple SOFR Rate” means, for any day (a “Daily Simple SOFR Rate Day”), a rate per annum equal to the greater of (a) SOFR for the day (such day, a “Daily Simple SOFR Determination Date”) that is five U.S. Government Securities Business Days prior to (i) if such Daily Simple SOFR Rate Day is a U.S. Government Securities Business Day, such Daily Simple SOFR Rate Day or (ii) if such Daily Simple SOFR Rate Day is not a U.S. Government Securities Business Day, the U.S. Government Securities Business Day immediately preceding such Daily Simple SOFR Rate Day, in each case, as such SOFR is published by the SOFR Administrator on the SOFR Administrator’s Website, and (b) the Floor. If by 3:00 p.m. on the second U.S. Government Securities Business Day immediately following any Daily Simple SOFR Determination Date, SOFR in respect of such Daily Simple SOFR Determination Date has not been published on the SOFR Administrator’s Website and a Benchmark Transition Event with respect to the Daily Simple SOFR Rate has not occurred, then SOFR for such Daily Simple SOFR Determination Date will be SOFR as published in respect of the first preceding U.S. Government Securities Business Day for which SOFR was published on the SOFR Administrator’s Website; provided that any SOFR determined pursuant to this sentence shall be utilized for purposes of the calculation of the Daily Simple SOFR Rate for no more than three consecutive Daily Simple SOFR Rate Days. Any change in the Daily Simple SOFR Rate due to a change in SOFR shall be effective from and including the effective date of such change in SOFR without notice to the Borrower or any other Person.
“Debt Incurrence” means the incurrence by the Borrower or any of its Subsidiaries on or after the Closing Date of any Indebtedness other than the Obligations.
“Debtor Relief Laws” means the Bankruptcy Code, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief Laws of the United States of America or other applicable jurisdictions from time to time in effect.
“Default” means any event or condition that with notice or passage of time, or both, would constitute an Event of Default.
“Default Rate” means, as of any date of determination, the following: (a) for Base Rate Loans, the rate determined in accordance with the Base Rate Option as of such date plus an additional margin of 2.00% per annum, (b) for Term SOFR Rate Loans, the rate determined in accordance with the Term SOFR Rate Option as of such date plus an additional margin of 2.00% per annum and (c) for all other Obligations, the rate determined in accordance with the Term SOFR Rate Option as of such date plus an additional margin of 2.00% per annum.
“Defaulting Lender” means, subject to Section 2.15(b), any Lender that (a) has failed to (i) fund all or any portion of its Loans within two Business Days of the date such Loans were required to be funded hereunder unless such Lender notifies the Administrative Agent and the Borrower in writing that such failure is the result of such Lender’s determination that one or more conditions precedent to funding (each of which conditions precedent, together with any applicable default, shall be specifically identified in such writing) has not been satisfied, or (ii) pay to the Administrative Agent or any other Lender any other amount required to be paid by it hereunder within two (2) Business Days of the date when due, (b) has notified the Borrower or the Administrative Agent in writing that it does not intend to comply with its funding obligations hereunder, or has made a public statement to that effect (unless such writing or public statement relates to such Lender’s obligation to fund a Loan hereunder and states that such position is based on such Lender’s determination that a condition precedent to funding (which condition precedent, together with any applicable default, shall be specifically identified in such writing or public statement) cannot be satisfied) or (c) has failed, within three (3) Business Days after written request by the Administrative Agent or the Borrower, to confirm in writing to the Administrative Agent and the Borrower that it will comply with its prospective funding obligations hereunder (provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon receipt of such written confirmation by the Administrative Agent and the Borrower); provided that a Lender shall not be a Defaulting Lender solely by virtue of the ownership or acquisition of any equity interest in that Lender or any direct or indirect parent company thereof by a Governmental Authority so long as such ownership interest does not result in or provide such Lender with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Lender (or such Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts or agreements made with such Lender. Any determination by the Administrative Agent that a Lender is a Defaulting Lender under any one or more of clauses (a) through (c) above shall be conclusive and binding absent manifest error, and, subject to any cure rights expressly provided above, such Lender shall be deemed to be a Defaulting Lender (subject to Section 2.15) upon delivery of written notice of such determination to the Borrower, and each Lender.
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“Disposition” or “Dispose” means the sale, transfer, license, lease or other disposition (including any sale and leaseback transaction) of any property or asset by any Person.
“Disqualified Equity Interests” means any Equity Interest that, by its terms (or the terms of any security or other Equity Interests into which it is convertible or for which it is exchangeable), or upon the happening of any event or condition (a) matures or is mandatorily redeemable (other than solely for Equity Interests that are Qualified Equity Interests), pursuant to a sinking fund obligation or otherwise (except as a result of a “change of control” or asset sale so long as any rights of the holders thereof upon the occurrence of a “change of control” or asset sale event shall be subject to the Payment In Full of all Obligations), (b) is redeemable at the option of the holder thereof, in whole or in part, (c) provides for scheduled payments of dividends in cash, (d) is or becomes convertible into or exchangeable for Indebtedness or any other Equity Interests that would not constitute Qualified Equity Interests, in each case, prior to the date that is 181 days after the Payment In Full of all Obligations or (e) the issuance of which are otherwise prohibited under or would result in a Default or an Event of Default under any other provision of this Agreement.
“Disqualified Institutions” means, collectively, (a) competitors of the Borrower and its Subsidiaries specified to the Administrative Agent and the Lenders by the Borrower in writing from time to time (subject to the consent of the Lenders not to be unreasonably withheld, conditioned or delayed), (b) certain banks, financial institutions, other institutional lenders and other entities, in each case, that have been specified to the Administrative Agent and the Lenders by the Borrower or the Sponsor in writing on or prior to the Closing Date and (c) as to any entity referenced in each case of clauses (a) and (b) above (the “Primary Disqualified Institution”), any of such Primary Disqualified Institution’s affiliates identified in writing to the Administrative Agent and the Lenders by the Borrower or the Sponsor or otherwise readily identifiable by name, but excluding any affiliate that is primarily engaged in, or that advises funds or other investment vehicles that are engaged in, making, purchasing, holding or otherwise investing in commercial loans, bonds and similar extensions of credit or securities in the ordinary course and with respect to which the Primary Disqualified Institution does not, directly or indirectly, possess the power to direct or cause the direction of the investment policies of such entity. Any designation shall not apply retroactively to disqualify any person that has acquired an assignment or participation interest in the commitments or loans prior to the delivery of such designation.
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“Division” means, in reference to any Person which is an entity, the division of such Person into two (2) or more separate Persons with the dividing Person either continuing or terminating its existence as part of the division including as contemplated under Section 18-217 of the Delaware Limited Liability Act for limited liability companies formed under Delaware Law or any analogous action taken pursuant to any applicable Law with respect to any corporation, limited liability company, partnership or other entity. The word “Divide”, when capitalized shall have correlative meaning.
“Dollar,” “Dollars,” “U.S. Dollars” and the symbol “$” means lawful money of the United States of America.
“Domestic Subsidiary” means any Subsidiary that is organized and existing under the Laws of the United States of America or any state, commonwealth or territory thereof or under the Laws of the District of Columbia.
“EEA Financial Institution” means (a) any credit institution or investment firm established in any EEA Member Country which is subject to the supervision of an EEA Resolution Authority, (b) any entity established in an EEA Member Country which is a parent of an institution described in clause (a) of this definition, or (c) any financial institution established in an EEA Member Country which is a subsidiary of an institution described in clauses (a) or (b) of this definition and is subject to consolidated supervision with its parent.
“EEA Member Country” means any of the member states of the European Union, Iceland, Liechtenstein, and Norway.
“EEA Resolution Authority” means any public administrative authority or any Person entrusted with public administrative authority of any EEA Member Country (including any delegee) having responsibility for the resolution of any EEA Financial Institution.
“Environmental Laws” means any and all applicable current and future federal, state, local and foreign Laws and any consent decrees, concessions, permits, grants, franchises, licenses, agreements or other restrictions of a Governmental Authority or common Law causes of action relating to: (a) protection of the environment or natural resources from, or emissions, discharges, releases or threatened releases of, any materials, including Hazardous Materials, in the environment including ambient air, surface, water, ground water or land, (b) the generation, handling, use, labeling, disposal, transportation, reclamation and remediation of Hazardous Materials; (c) human health or safety; (d) the protection of endangered or threatened species; and (e) the protection of environmentally sensitive areas.
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“Environmental Liability” means any liability, contingent or otherwise (including any liability for damages, costs of environmental remediation, fines, penalties or indemnities), of the Borrower or any Subsidiary of the Borrower resulting from or based upon (a) violation of any Environmental Law; (b) the generation, use, handling, transportation, storage, treatment, disposal or permitting or arranging for the disposal of any Hazardous Materials; (c) exposure to any Hazardous Materials; (d) the release or threatened release of any Hazardous Materials; or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.
“Equity Commitment Letter” means the entry by the Sponsor into a commitment letter on terms reasonably acceptable to the Lenders and the Sponsor to provide an equity contribution in an aggregate amount of up to $20,000,000 to the Borrower and its Subsidiaries to fund working capital solely in the event that, in the reasonable determination of the Borrower, operating free cash flow of the Borrower and its Subsidiaries, together with borrowing availability under the CoBank Credit Agreement, is not sufficient to fund the completion of the NTHE and the terrestrial fiber route between Prudhoe Bay and Utqiagvik; provided that it is understood and agreed that the terms of such commitment letter shall provide that such commitment shall terminate upon the earlier to occur of (i) the completion of both the redundant terrestrial route and NTHE and (ii) the consummation of the GCI Transaction.
“Equity Interests” shall mean, collectively, the rights and interests in (A) all securities, whether certificated or uncertificated, (B) all of the issued and outstanding shares, interests or other equivalents of capital stock of any corporation (including, any corporation that is a Subsidiary of the Borrower or a Minority Investment), whether voting or non-voting and whether common or preferred, (C) all partnership, joint venture, limited liability company or other equity interests in any Person not a corporation (including, any such Person that is a Subsidiary of the Borrower or a Minority Investment), (D) all options, warrants and other rights to acquire, and all securities convertible into, any of the foregoing, (E) all rights to receive interest, income, dividends, distributions, returns of capital and other amounts (whether in cash, securities, property, or a combination thereof), (F) all additional stock, warrants, options, securities, interests and other property, paid or payable or distributed or distributable, with respect to any of the foregoing, (G) all rights of access to the books and records of any such Person, and (H) all other rights, powers, privileges, interests, claims and other property in any manner arising out of or relating to any of the foregoing, of whatever kind or character (including any tangible or intangible property or interests therein), and whether provided by contract or granted or available under applicable Law in connection therewith, including, the Borrower’s right to vote and to manage and administer the business of any such Person pursuant to any applicable organizational document, together with all certificates, instruments and entries upon the books of financial intermediaries evidencing any of the foregoing.
“Equity Issuance” means (a) any issuance or sale by Borrower or any of its Subsidiaries of any Equity Interests, or (b) any equity contribution or capital contribution in respect of any Equity Interests of Borrower or any of its Subsidiaries, in each case at any time after the Closing Date.
“ERISA” means the Employee Retirement Income Security Act of 1974.
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“ERISA Affiliate” means any trade or business (whether or not incorporated) under common control with the Borrower such that such trade or business, together with the Borrower and all other ERISA Affiliates, are treated as a single employer under Section 414 of the Code or Section 4001(b)(1) of ERISA.
“ERISA Event” means (a) a “reportable event” (under Section 4043 of ERISA and regulations thereunder other than those events as to which the 30-day notice period is waived under PBGC Regulation Section 4043) with respect to a Pension Plan; (b) a withdrawal by the Borrower or any ERISA Affiliate from a Pension Plan subject to Section 4063 of ERISA during a plan year in which it was a substantial employer (as defined in Section 4001(a)(2) of ERISA) or a cessation of operations that is treated as such a withdrawal under Section 4062(e) of ERISA; (c) a complete or partial withdrawal by the Borrower or any ERISA Affiliate from a Multiemployer Plan; (d) the filing of a notice of intent to terminate, the treatment of an amendment to a Pension Plan or a Multiemployer Plan as a termination under Section 4041 or 4041A of ERISA, or the commencement of proceedings by the PBGC to terminate a Pension Plan or Multiemployer Plan; (e) an event or condition that constitutes grounds or that could reasonably be expected to constitute grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan or Multiemployer Plan; (f) an event or condition that results or could reasonably expected to result in any liability under Title IV of ERISA, other than for PBGC premiums due but not delinquent under Section 4007 of ERISA, to the Borrower or any ERISA Affiliate; (g) with respect to any Pension Plan or Multiemployer Plan, the failure to satisfy the minimum funding standards under the Plan Funding Rules (whether or not waived); (h) with respect to any Pension Plan, the occurrence of any event that would result in the imposition of any limitation under Section 436 of the Code or Section 206(g) of ERISA; (i) the determination that any Pension Plan or Multiemployer Plan is considered an at-risk plan or a plan in endangered or critical status within the meaning of the Plan Funding Rules; (j) the occurrence of an aggregate Unfunded Liability for all Plans exceeding the Threshold Amount, (k) any transaction that could subject the Borrower or any ERISA Affiliate to liability under Section 4069 or 4212 of ERISA; and (l) a prohibited transaction with respect to a Plan within the meaning of Section 4975 of the Code or Section 406 of ERISA or a violation of the fiduciary responsibility rules of Section 404 of ERISA.
“EU Bail-In Legislation Schedule” means the EU Bail-In Legislation Schedule published by the Loan Market Association (or any successor Person), as in effect from time to time.
“Event of Default” means any of the events described in Section 9.1 and referred to therein as an “Event of Default.”
“Excess Cash Flow” means, with respect to the Borrower and its Subsidiaries on a Consolidated basis for any period, the excess of:
(a) Consolidated EBITDA for such period over
(b) the sum (without duplication) of the following:
(i) Capital Expenditures made during such period; plus
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(ii) scheduled principal payments with respect to Indebtedness and paid for such period; plus
(iii) unscheduled principal payments with respect to (x) any Loans in respect of prepayments required by Section 2.13(b) or (c), but only to the extent the Disposition or Casualty Event giving rise to such prepayment was included in the calculation of EBITDA for such period or (y) principal component of payments in respect of Capital Leases, in each case, made during such Excess Cash Flow period or within ninety (90) days after the close of such Excess Cash Flow period (it being understood such amounts may not then be included in reducing Excess Cash Flow in any subsequent period); plus
(iv) the amount of Taxes paid during such period; plus
(v) any increases (or minus any decreases) in working capital from the first day to the last day of such period; plus
(vi) Consolidated Interest Expense; plus
(vii) Restricted Payments permitted by Section 7.6(d); plus
(viii) the purchase price paid in cash for all Permitted Acquisitions and other Investments permitted hereunder; plus
(ix) the aggregate amount of marine maintenance costs added back to Consolidated EBITDA in accordance with the definition thereof; plus
(x) the proceeds received by the Borrower in respect of any Funding Program; plus
(xi) amounts required to pay Indebtedness in respect of the financing of insurance premiums; plus
(xii) all adjustments for lost revenue made pursuant to clause (xix) of the definition of Consolidated EBITDA for such period; plus
(xiii) any non-cash addbacks or adjustments to Consolidated Net Income for purposes of calculating Consolidated EBITDA for such period.
“Excluded Swap Obligation” means, with respect to the Borrower or any Subsidiary providing a Guaranty of or granting a security interest to secure any Swap Obligation of another Subsidiary, if, and to the extent that, all or a portion of the Guaranty of such Subsidiary of, or the grant by such Subsidiary of a security interest to secure, such Swap Obligation (or any Guaranty thereof) is or becomes illegal under the Commodity Exchange Act or any rule, regulation or order of the Commodity Futures Trading Commission (or the application or official interpretation of any thereof) by virtue of the Borrower’s or any Subsidiary’s failure for any reason not to constitute an “eligible contract participant” as defined in the Commodity Exchange Act (determined after giving effect to Section 11.16 and any other “keepwell, support or other agreements” for the benefit of such guarantor) at the time the Guaranty of, or the grant of such security interest by, the Borrower or any Subsidiary becomes effective with respect to such related Swap Obligation. If a Swap Obligation arises under a master agreement governing more than one swap, such exclusion shall apply only to the portion of such Swap Obligation that is attributable to swaps for which such Guaranty or grant of security interest is or becomes illegal.
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“Excluded Taxes” means any of the following Taxes imposed on or with respect to a Recipient or required to be withheld or deducted from a payment to a Recipient, (a) Taxes imposed on or measured by net income (however denominated), franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a result of such Recipient being organized under the laws of, or having its principal office or, in the case of any Lender, its applicable lending office located in, the jurisdiction imposing such Tax (or any political subdivision thereof) or (ii) that are Other Connection Taxes, (b) in the case of a Lender, U.S. federal withholding Taxes imposed on amounts payable to or for the account of such Lender with respect to an applicable interest in a Loan or Commitment pursuant to a law in effect on the date on which (x) such Lender acquires such interest in such Loan or Commitment (other than pursuant to an assignment request by the Borrower under Section 3.6) or (y) such Lender changes its lending office, except in each case to the extent that, pursuant to Section 3.2, amounts with respect to such Taxes were payable either to such Lender’s assignor immediately before such Lender became a party hereto or to such Lender immediately before it changed its lending office, (c) Taxes attributable to such Recipient’s failure to comply with Section 3.2 and (d) any withholding Taxes imposed under FATCA.
“Facility” means the Term Loan Facility.
“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with) and any current or future regulations or official interpretations thereof and any agreements entered into pursuant to Section 1471(b)(1) of the Code and any fiscal or regulatory legislation, rules or practices adopted pursuant to any intergovernmental agreement, treaty or convention among Governmental Authorities entered into in connection with the implementation of the foregoing.
“FCC” means the Federal Communications Commission or any Governmental Authority succeeding to any of its principal functions.
“Federal Funds Effective Rate” means, for any day, the greater of (a) the rate of interest per annum (rounded upward, if necessary, to the nearest whole multiple of 1/100th of 1%) equal to the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System, as published by the Federal Reserve Bank of New York on such date, or if no such rate is so published on such day, on the most recent day preceding such day on which such rate is so published and (b) 0%.
“Fiber Cut” means the network outage on January 18, 2025 affecting North Slope and Northwest Alaska, which occurred as a result of a fiber cut of certain of the Borrower’s Subsidiaries cables located off the coast of Oliktok Point.
“Fiber Cut Repair” means the costs of the repair of the Fiber Cut.
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“Fixed Charge Coverage Ratio” means, as of any date of determination, the ratio of (a) the difference of (i) Annualized Consolidated EBITDA of Intermediate Holdings and its Subsidiaries minus (ii) maintenance capital expenditures for Intermediate Holdings and its Subsidiaries, in each case for the most recently ended consecutive fiscal four quarter period to (b) Fixed Charges for Intermediate Holdings and its Subsidiaries for the most recently ended consecutive fiscal four quarter period.
“Fixed Charges” means for any period of determination the sum of (i) cash interest expense, (ii) federal, state and local income taxes paid in cash, (iii) scheduled principal installments on Indebtedness (or reductions in commitments on lines of credit to the extent such reductions cause the repayment of principal amounts then outstanding under such lines), and (iv) dividends paid in cash in each case of Intermediate Holdings and its Subsidiaries for such period determined and consolidated in accordance with GAAP.
“Flood Laws” means, collectively, (a) the National Flood Insurance Act of 1968, (b) the Flood Disaster Protection Act of 1973, (c) the National Flood Insurance Reform Act of 1994 and (d) the Flood Insurance Reform Act of 2004, and all other applicable Laws related thereto.
“Floor” means a rate of interest equal to 0.00%.
“Foreign Lender” means a Lender that is not a U.S. Person.
“Foreign Subsidiary” means any Subsidiary that is not a Domestic Subsidiary.
“Fund” means any Person (other than a natural Person) that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its activities.
“Funding Agency” means the Universal Service Administrative Company (USAC), National Telecommunications and Information Administration (NTIA), the Rural Utilities Service (RUS), in each case, including any successor agency or organization.
“Funding Date” has the meaning set forth in Section 4.2.
“Funding Program” means any federal, state (including any state-funded program to distribute funds received by such state in respect of the Broadband Equity, Access and Deployment (BEAD) program or any similar federal broadband initiative), or local loan, grant/loan combinations, support program or similar program or arrangement entered into with a Governmental Authority and/or Funding Agency and the Borrower or Subsidiary of the Borrower.
“Funding Program Agreement” means any grant, loan, security or other similar agreement, or any mortgage or other security document, in each case executed in favor of a Funding Agency in connection with a Funding Program.
“GAAP” means generally accepted accounting principles as are in effect from time to time, subject to the provisions of Section 1.3, and applied on a consistent basis both as to classification of items and amounts.
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“GCI Transaction” means: (a) the acquisition directly or indirectly by a member of the GCI Group of all or substantially all of the equity interests in the Borrower’s Subsidiaries; and/or (b) a member of the GCI Group’s acquisition of all or substantially all of the assets or Equity Interests of the Borrower’s Subsidiaries.
“GCI Group” means GCI Holdings, LLC, a Delaware limited liability company, together with its affiliates.
“Governmental Authority” means the government of the United States of America or any other nation, or of any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supra-national bodies such as the European Union or the European Central Bank), including the FCC and any applicable PUC.
“Guaranty” or “Guarantee” means, with respect to any Person, without duplication, any obligation, contingent or otherwise, of such Person pursuant to which such Person has directly or indirectly guaranteed or had the economic effect of guaranteeing any Indebtedness or other obligation or liability of any other Person and, without limiting the generality of the foregoing, any obligation, direct or indirect, contingent or otherwise, of any such Person (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation or liability (whether arising by virtue of partnership arrangements, by agreement to keep well, to purchase assets, goods, securities or services, to take-or-pay, or to maintain financial statement condition or otherwise), (b) to purchase or lease property or services for the purpose of assuring another Person’s payment or performance of any Indebtedness or other obligations or liabilities, (c) to maintain the working capital of such Person to permit such Person to pay such Indebtedness or other obligations or liabilities or (d) entered into for the purpose of assuring in any other manner the obligee of such Indebtedness or other obligation or liability of the payment thereof or to protect such obligee against loss in respect thereof (in whole or in part); provided, that the term Guaranty/Guarantee shall not include endorsements for collection or deposit in the ordinary course of business. Unless otherwise specified, the amount of any Guaranty shall be deemed to be the lesser of the principal amount of the Indebtedness or other obligations or liabilities guaranteed and still outstanding and the maximum amount for which the guaranteeing Person may be liable pursuant to the terms of the instrument embodying such Guaranty.
“Hazardous Materials” means (a) any explosive or radioactive substances, materials or wastes, (b) any hazardous or toxic substances, materials or wastes, defined or regulated as such in or under, or that could reasonably be expected to give rise to liability under, any applicable Environmental Law, including, asbestos or asbestos containing materials, infectious or medical waste, polychlorinated biphenyls, radon gas, urea-formaldehyde insulation, gasoline or petroleum (including crude oil or any fraction thereof) or petroleum products and (c) all other substances, materials or wastes of any nature regulated under or with respect to which liability or standards of conduct are imposed pursuant to any Environmental Law.
“Hedge Agreement” means (a) any and all rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions, interest rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross-currency rate swap transactions, currency options, spot contracts, or any other similar transactions or any combination of any of the foregoing (including any options to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any master agreement, and (b) any and all transactions of any kind, and the related confirmations, which are subject to the terms and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement, or any other master agreement.
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“Hedge Termination Value” means, in respect of any one or more Hedge Agreements, after taking into account the effect of any legally enforceable netting agreement relating to such Hedge Agreements, (a) for any date on or after the date such Hedge Agreements have been closed out and termination value(s) determined in accordance therewith, such termination value(s), and (b) for any date prior to the date referenced in clause (a), the amount(s) determined as the mark-to-market value(s) for such Hedge Agreements, as determined based upon one or more mid-market or other readily available quotations provided by any recognized dealer in such Hedge Agreements (which may include a Lender or any Affiliate of a Lender).
“Indebtedness” means, as to any Person at a particular time, without duplication, all of the following, whether or not included as indebtedness or liabilities in accordance with GAAP:
(a) all obligations of such Person for borrowed money and all obligations of such Person evidenced by bonds, debentures, notes, loan agreements or other similar instruments;
(b) the undrawn face amount of all letters of credit issued for the account of such Person (or for which such Person is liable) (but excluding any letters of credit that are cash collateralized in an amount at least equal to the undrawn amount of such letter of credit) and without duplication, all drafts drawn thereunder that are past due and all reimbursement or payment obligations that are past due with respect to letters of credit, surety bonds and other similar instruments issued by such Person (or for which such Person is liable);
(c) all net obligations of such Person under each Hedge Agreement to which it is a party (provided, that the amount of any net obligation under any Hedge Agreement on any date shall be deemed to be the Hedge Termination Value thereof as of such date);
(d) all obligations of such Person to pay the deferred purchase price of property or services (other than trade accounts payable in the ordinary course of business and, in each case, not past due for more than 60 days after the date on which such trade account payable was created); provided that any such obligations in respect of earn-outs or similar obligations incurred in connection with a Permitted Acquisition or other permitted investment shall only be included as Indebtedness for all purposes hereunder (including for the purpose of calculating any financial ratio) to the extent a specific Dollar amount has been determined to be earned and the same has not been paid within five (5) Business Days of the same becoming due and payable;
(e) obligations (excluding prepaid interest thereon) secured by a Lien on property owned or being purchased by such Person (including indebtedness arising under conditional sales or other title retention agreements), whether or not such obligations shall have been assumed by such Person or is limited in recourse;
(f) all obligations of such Person under Capital Leases and all its Synthetic Lease Obligations;
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(g) all obligations of such Person to purchase, redeem, retire, defease or otherwise make any payment in respect of any Equity Interest in such Person or any other Person, valued, in the case of a redeemable preferred interest, at the greater of its voluntary or involuntary liquidation preference plus accrued and unpaid dividends; and
(h) all fixed payment obligations of any Person under any Guarantee of such Person in respect of any of the foregoing.
“Indemnified Taxes” means (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation of the Borrower under any Loan Document and (b) to the extent not otherwise described in the preceding clause (a), Other Taxes.
“Indemnitee” has the meaning specified in Section 11.3.
“Information” has the meaning specified in Section 11.8.
“Insolvency Proceeding” means, with respect to any Person, (a) a case, action or proceeding with respect to such Person (i) before any court or any other Governmental Authority under any Debtor Relief Law or other similar law now or hereafter in effect, or (ii) for the appointment of a receiver, liquidator, assignee, custodian, trustee, sequestrator, conservator (or similar official) of any such Person or otherwise relating to the liquidation, dissolution, winding-up or relief of such Person, or (b) any general assignment for the benefit of creditors, composition, marshaling of assets for creditors, or other, similar arrangement in respect of such Person’s creditors generally or any substantial portion of its creditors; undertaken under any Law.
“Intellectual Property” means, collectively, (a) all copyrights, copyright registrations and applications for copyright registration, whether under the Laws of the United States or any other country or jurisdiction, including all recordings, supplemental registrations and derivative or collective work registrations, and all renewals and extensions thereof (“Copyrights”), (b) all internet domain names and associated URL addresses and all goodwill associated therewith or symbolized thereby (“Domain Names”), (c) all letters patent, whether under the Laws of the United States or any other country or jurisdiction, all recordings and registrations thereof and applications therefor, including the inventions described therein, all reissues, continuations, divisions, renewals, extensions, or continuations-in-part thereof (“Patents”), (d) all trademarks, service marks, trade names, corporate and company names, business names, logos, trade dress, trade styles, other source of business identifiers, designs, Domain Name (to the extent such Domain Name constitutes a trade name, corporate or company name, business name, logo, trade dress, trade style, other source of business identifier or design), and “general intangibles” (as defined in Article 9 of the UCC) of a similar nature, whether under the Laws of the United States or any other country or jurisdiction, all recordings and registrations thereof and applications therefor, all renewals and extensions thereof, all rights corresponding thereto, and all goodwill associated therewith or symbolized thereby (“Trademarks”) and (e) such licenses related to the aforementioned Copyright, Patent, Trademark and Domain Names.
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“Interest Payment Date” means the first day of each calendar quarter after the date hereof and the Maturity Date.
“Interest Period” means the period of time selected by the Borrower in connection with (and to apply to) any election permitted hereunder by the Borrower to have Term Loans bear interest under the Term SOFR Rate Option. Subject to the last sentence of this definition, at the Borrower’s election, such period shall be one or three months. Such Interest Period shall commence on the effective date of such Term SOFR Rate Loan, which shall be (a) the Borrowing Date if the Borrower is requesting new Loans, or (b) the date of renewal of or conversion to a Term SOFR Rate Loan if the Borrower is renewing or converting an existing Loan. Notwithstanding the second sentence hereof: (i) any Interest Period that would otherwise end on a date that is not a Business Day shall be extended to the next succeeding Business Day unless such Business Day falls in the next calendar month, in which case such Interest Period shall end on the next preceding Business Day, (ii) the Borrower shall not select, convert to or renew an Interest Period for any portion of the Loans that would end after the applicable Maturity Date and (iii) if any Interest Period begins on the last Business Day of a month or on a day of a month for which there is no numerically corresponding day in the month in which such Interest Period is to end, such Interest Period shall be deemed to end on the last Business Day of the final month of such Interest Period.
“Interest Rate Hedge” means a Hedge Agreement entered into by the Borrower or its Subsidiaries in order to provide protection to, or minimize the impact upon, the Borrower and/or its Subsidiaries of increasing floating rates of interest applicable to Indebtedness.
“Interest Rate Option” means any Term SOFR Rate Option, and, solely to the extent the Term SOFR Rate Option is unavailable, any Base Rate Option.
“Intermediate Holdings” means Q Gateway Intermediate Holdings, LLC, a Delaware limited liability company.
“Investment” means, with respect to any Person, any direct or indirect acquisition or investment by such Person, whether by means of (a) the purchase or other acquisition of capital stock or other securities of another Person, (b) a loan, advance or capital contribution to, Guarantee or assumption of debt of, or purchase or other acquisition of any other debt or equity participation or interest in, another Person, including any partnership or Joint Venture interest in such other Person and any arrangement pursuant to which the investor Guarantees Indebtedness of such other Person, or (c) the purchase or other acquisition (in one transaction or a series of transactions) of assets of another Person that constitute a business unit. For purposes of covenant compliance, the amount of any Investment shall be the amount actually invested, without adjustment for subsequent increases or decreases in the value of such Investment.
“IRS” means the United States Internal Revenue Service.
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“Joint Venture” means a corporation, partnership, limited liability company or other entity in which any Person other than the Borrower and its Subsidiaries holds, directly or indirectly, an equity interest.
“Law” means any law (including common law), constitution, statute, code, treaty, regulation, rule, ordinance, opinion, release, ruling, order, injunction, writ, decree, bond, judgment, authorization or approval, or award by or settlement agreement with any Governmental Authority applicable to any Person or the properties of any Person, including the Licenses, and, including the Communications Act, any applicable PUC Laws and all Environmental Laws.
“LCA Test Date” means the date of execution and effectiveness of any Acquisition Agreement entered into in connection with a Limited Condition Acquisition.
“Lender Representatives” means (i) Moira Smith ([email protected]) and (ii) Peter Pounds ([email protected]); provided, that, if GCI, LLC or its Affiliates or Approved Fund are no longer Lenders under this Agreement, then “Lender Representatives” shall mean the Administrative Agent.
“Lenders” means each party hereto from time to time as a lender and their respective successors and assigns as permitted hereunder, each of which is referred to herein as a Lender.
“Licenses” means any cable television franchise or any wireline telephone, cellular telephone, microwave, personal communications, commercial mobile radio service, broadband, undersea cable or other telecommunications or similar license, authorization, registration, certificate, certificate of compliance, waiver, franchise (including cable television and telecommunications franchise), approval, ordinance, right of way, material filing, exemption, order, or permit, or any renewal or extension of any of the foregoing, whether for the acquisition, construction or operation of any Communications System, including the lease of any spectrum (and attendant rights and obligations), or to otherwise provide the services related to any Communications System, granted or issued by the FCC or any applicable PUC.
“Lien” means any mortgage, deed of trust, pledge, hypothecation, collateral assignment, lien (statutory or otherwise), security interest, charge or other encumbrance or security arrangement of any nature whatsoever, whether voluntarily or involuntarily given, including any conditional sale or title retention arrangement, and any assignment, deposit arrangement or lease intended as, or having the effect of, security and any filed financing statement or other notice of any of the foregoing (whether or not a lien or other encumbrance is created or exists at the time of the filing).
“Limited Condition Acquisition” means any Permitted Acquisition by any Subsidiary of the Borrower, the consummation of which is not conditioned on the availability of, or on obtaining, third party financing; provided that in the event the consummation of any such Permitted Acquisition shall not have occurred on or prior to the date that is three hundred and sixty-five (365) days following the execution and effectiveness of the Acquisition Agreement relating thereto (or such longer period agreed to by Administrative Agent in its sole discretion), such Acquisition shall no longer constitute a Limited Condition Acquisition for any purpose without Administrative Agent’s consent.
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“Loan Documents” means this Agreement, the Equity Commitment Letter, the Agent Fee Letter, the Solvency Certificates, the Notes (if any) and any other instruments, certificates or documents delivered in connection herewith or therewith, all as amended, restated, reaffirmed, reconfirmed, replaced, substituted or otherwise modified from time to time.
“Loan Request” means a request for a Term Loan substantially in the form of Exhibit D hereto.
“Loans” means collectively all Term Loans and “Loan” means a reference to any Term Loan.
“Material Adverse Change” means (a) on the Closing Date, a Material Adverse Effect (as defined in the Closing Date Acquisition Agreement), (b) as it relates to a Limited Condition Acquisition, a “Material Adverse Effect” or similar term as defined in the applicable Acquisition Agreement, and (c) otherwise, after the Closing Date, any event, change or condition that, individually or in the aggregate, has had or would reasonably be expected to have a material adverse effect on (i) the business, properties, assets, financial condition, operations, liabilities (actual or contingent) of the Borrower and the Subsidiaries, taken as a whole, (ii) the ability of the Borrower to perform its material payment obligations under the Loan Documents, (iii) the rights and remedies of the Administrative Agent and the Lenders, taken as a whole, under the Loan Documents and (iv) the legality, binding effect, validity or enforceability of the Loan Documents.
“Material Agreement” means any (a) agreement, contract, note, bond, debenture or other instrument evidencing Material Indebtedness, (b) any Acquisition Agreement (including the Closing Date Acquisition Agreement), (c) any agreement executed in connection with a Funding Program or (d) any agreement, contract or other instrument to which the Borrower or any Subsidiary of the Borrower is a party or that is binding upon the Borrower or any Subsidiary of the Borrower or its respective property the revocation, suspension or termination (prior to the stated termination date therefor) of which could reasonably be expected to result in a Material Adverse Change.
“Material Indebtedness” means Indebtedness (other than the Obligations) in an aggregate principal amount exceeding $1,500,000.
“Maturity Date” means the earlier of (i) the date of acceleration of the Obligations in accordance with Section 9.2, and (ii) April 21, 2031.
“Maximum Netting Amount” means an amount up to $3,000,000.
“Maximum Rate” has the meaning specified in Section 11.14.
“Minority Investment” means, collectively, any Person in which the Borrower owns any Equity Interests; provided that such Person is not a Subsidiary of the Borrower.
“Modification Notice Deadline” has the meaning specified in Section 7.16.
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“MOIC” means with respect to any MOIC Trigger Event, a multiple on invested capital, calculated by the Borrower and the Lenders in good faith and in consultation with the Administrative Agent, expressed as a ratio:
(1) the numerator of which is, with respect to the prepayment or repayment of Loans outstanding under this Agreement, the sum of (i) the principal amount of Loans to be repaid or prepaid in connection with such MOIC Trigger Event, plus (ii) any MOIC Amount paid in connection with such MOIC Trigger Event, minus the aggregate amount of all fees, original issue discount and interest paid (including any PIK Interest), with respect to the Loans to be repaid or prepaid in connection with such MOIC Trigger Event (for the avoidance of doubt, MOIC shall not include any reimbursement of out-of-pocket costs or expenses, any indemnification payments made to any Lender or the Administrative Agent, or any payment, deduction or withholding in respect of Taxes), and
(2) the denominator of which is the total aggregate principal amount of such Loans being prepaid or repaid in connection with such MOIC Trigger Event.
“MOIC Amount” means with respect to any MOIC Trigger Event occurring at any time, the additional Dollar amount, if any, that, when added to the numerator of “MOIC” is sufficient to cause the Lenders to achieve, with respect to the prepayment or repayment occurring on the date of the MOIC Trigger Event, a MOIC of 1.30 to 1.00.
“MOIC Trigger Event” means the prepayment or repayment of the Loans in full at any time prior to the consummation of the GCI Transaction, unless the applicable member of the GCI Group has terminated the Closing Date Acquisition Agreement in accordance with Section 7.1(b) of the Closing Date Acquisition Agreement at or prior to such time.
“Moody’s” means Moody’s Investors Service, Inc., or any successor or assignee thereof in the business of rating securities and debt.
“Multiemployer Plan” means any employee benefit plan that is a “multiemployer plan” within the meaning of Section 3(37) of the Code or Section 4001(a)(3) of ERISA and to which the Borrower or any ERISA Affiliate is then making or accruing an obligation to make contributions or, within the preceding five (5) plan years of such Multiemployer Plan, has made or had an obligation to make such contributions or with respect to which otherwise has any obligation or liability (including a contingent liability).
“Net Cash Proceeds” means:
(a) in the case of any Debt Incurrence, an amount equal to: (i) the aggregate amount of all cash and Cash Equivalents received by the Borrower or any of its Subsidiaries in respect of such Debt Incurrence, minus (ii) all Taxes paid or payable, and other reasonable, bona fide, out-of-pocket direct costs incurred by the Borrower and its Subsidiaries in connection with such issuance;
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(b) in the case of any Casualty Event, an amount equal to: (i) the aggregate amount of all cash and Cash Equivalents received by the Borrower or any of its Subsidiaries from such Casualty Event, minus (ii) the sum of (x) without duplication, Permitted Tax Distributions, all income taxes and other taxes assessed by a Governmental Authority as a result of such transaction, and the Borrower’s reasonable and good faith estimate of income, franchise, sales, and other applicable Taxes payable by the Borrower or any Subsidiary of the Borrower in connection with such transaction; provided, that if such estimated amounts exceed the amount of actual Taxes required to be paid in respect of such transaction, the amount of such excess shall constitute Net Cash Proceeds, and (y) all customary, bona fide, out-of-pocket direct costs incurred by the Borrower and its Subsidiaries in connection with collecting such cash payments; and
(c) in the case of any Disposition, an amount equal to: (i) the aggregate amount of all cash and Cash Equivalents received by the Borrower or any of its Subsidiaries from such Disposition (including any such proceeds received by way of deferred payment of principal pursuant to a note or installment receivable or purchase price adjustment receivable or return of funds held in escrow or otherwise, but only as and when received), minus (ii) the sum of (w) without duplication, Permitted Tax Distributions, all income taxes and other taxes assessed by a Governmental Authority as a result of such transaction, and Borrower’s reasonable and good faith estimate of income, franchise, sales, and other applicable Taxes payable by Borrower or any Subsidiary of the Borrower in connection with such transaction; provided, that if such estimated amounts exceed the amount of actual Taxes required to be paid in respect of such transaction, the amount of such excess shall constitute Net Cash Proceeds, (x) all reasonable, bona fide, out-of-pocket direct transaction costs incurred by the Borrower and its Subsidiaries in connection with such Disposition (including legal, accounting and other professional fees incurred in connection with such Disposition), (y) amounts applied to repayment of permitted Indebtedness (including Indebtedness outstanding under the CoBank Credit Agreement but excluding the Obligations) secured by a Permitted Lien on the asset or property disposed and (z) appropriate amounts established as a reserve required by GAAP by Borrower or any Subsidiary in its good faith judgment against any liabilities associated with any Disposition, including, without limitation, pension or other post-employment benefit liabilities, liabilities related to environmental matters, and any escrow or reserve for any indemnification payments (fixed or contingent) attributable to seller’s indemnities and representations and warranties to purchaser in respect of the applicable Disposition undertaken by Borrower or any of its Subsidiaries or other liabilities in connection with such Disposition (provided that upon release of any such escrow or reserve, the amount released shall be considered Net Cash Proceeds);
provided that, Net Cash Proceeds shall not include any amounts applied to repay Indebtedness outstanding under the CoBank Credit Agreement; provided further, that, so long as no Default or Event of Default shall have occurred and be continuing or would result therefrom, Net Cash Proceeds shall not include any amounts: (1) with respect to clause (b) above to the extent that such amounts are applied to reimburse the Borrower for repairs to or replacements of the property subject to such Casualty Event, used for repairs to or replacements of the property subject to such Casualty Event, or reinvested (or committed to be reinvested) in productive assets (other than inventory unless such Net Cash Proceeds result from a Casualty Event with respect to inventory) of a kind then used or usable in the business of the Borrower, within twelve (12) months after the receipt thereof (or if committed to be reinvested, within six (6) months after the twelve-month period); or (2) with respect to clause (c) above to the extent that such amounts are reinvested (or committed to be reinvested) in productive assets (other than inventory) of a kind then used or usable in the business of the Borrower, including permitted Investments, within twelve (12) months after the receipt thereof (or if committed to be reinvested, within six (6) months after the twelve-month period).
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“Non-Consenting Lender” has the meaning specified in Section 11.1.
“Notes” means any promissory note of the Borrower substantially in the form of Exhibit F hereto evidencing any Term Loans.
“NTHE” means the sub-sea and terrestrial fiber network currently under construction by, or on behalf of the Borrower and its Subsidiaries extending from Nome, Alaska to Homer, Alaska with breakouts in Emmonak, Naknek and Iguigig.
“NTHE Shortfall” has the meaning specified in Section 6.11.
“NTIA” means the National Telecommunications and Information Administration, and any successor agency.
“Obligations” means any obligation or liability of the Borrower (other than Excluded Swap Obligations), howsoever created, arising or evidenced, whether direct or indirect, joint or several, absolute or contingent, for payment or performance, now or hereafter existing (and including obligations or liabilities arising or accruing after the commencement of any Insolvency Proceeding with respect to the Borrower or which would have arisen or accrued but for the commencement of such Insolvency Proceeding, even if the claim for such obligation or liability is not enforceable or allowable in such proceeding), or due or to become due, under or in connection with this Agreement, the Notes or any other Loan Document (regardless of whether any Credit Extension is in excess of the amount committed under or contemplated by the Loan Documents or are made in circumstances in which any condition to any Credit Extension is not satisfied) whether to the Administrative Agent, any of the Lenders or their Affiliates or other persons provided for under such Loan Documents.
“Official Body” means (a) any Governmental Authority and (b) any group or body charged with setting financial accounting or regulatory capital rules or standards (including the Financial Accounting Standards Board, the Bank for International Settlements or the Basel Committee on Banking Supervision or any successor or similar authority to any of the foregoing).
“Order” has the meaning specified in Section 2.9.
“Organizational Documents” means the certificate or articles of incorporation, bylaws, certificate of limited partnership, partnership agreement, certificate of formation, limited liability company agreement or other organizational documents of any Person.
“Other Connection Taxes” means, with respect to any Recipient, Taxes imposed as a result of a present or former connection between such Recipient and the jurisdiction imposing such Tax (other than connections arising from such Recipient having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced any Loan Document, or sold or assigned an interest in any Loan or Loan Document).
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“Other Taxes” means all present or future stamp, court or documentary, intangible, recording, filing or similar Taxes that arise from any payment made under, from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a security interest under, or otherwise with respect to, any Loan Document, except any such Taxes that are Other Connection Taxes imposed with respect to an assignment (other than an assignment made pursuant to Section 3.6).
“Parent Company” means any direct or indirect parent company of the Borrower.
“Participant” has the meaning specified in Section 11.7(d).
“Participant Register” has the meaning specified in Section 11.7(d).
“Payment In Full” means the payment in full in cash of the Loans and other Obligations (other than contingent indemnification obligations as to which no claim has been made) hereunder and the termination of the Commitments.
“PBGC” means the Pension Benefit Guaranty Corporation established pursuant to Subtitle A of Title IV of ERISA.
“Pension Plan” means any “employee pension benefit plan” (as defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that is subject to Title IV of ERISA or is subject to the minimum funding standards under Section 412 of the Code, and that the Borrower or any ERISA Affiliate sponsors, maintains, or contributes to or is required to contribute to or with respect to which the Borrower or any ERISA Affiliate otherwise has any obligation or liability (including any contingent liability).
“Permitted Acquisition” means any Acquisition by any Subsidiary of the Borrower of all or substantially all the assets of, or any line of business or division or business unit of, any other Person, or all of the Equity Interests of any Person; provided that with respect to each such other Acquisition with respect to this clause (y):
(a) (i) at least fifteen (15) Business Days (or such shorter time period as the Administrative Agent and the Lenders may agree in their sole discretion) prior to the proposed closing date of such Acquisition, the Administrative Agent and the Lenders shall have received a completed Permitted Acquisition Questionnaire and (ii) prior to or concurrently with the consummation of such Acquisition, the Administrative Agent shall have a received a duly executed Permitted Acquisition Certificate;
(b) all assets acquired (other than immaterial assets) are usable in, and any Acquired Business (including any of the Acquired Business’s Subsidiaries) is primarily engaged in, a line of business permitted under Section 7.11;
(c) the aggregate amount of the consideration (including, in the case of consideration consisting of assets, the fair market value of the assets) paid or incurred by the Borrower and its Subsidiaries in connection with all such Acquisitions of Persons that do not become a Subsidiary shall not exceed $2,500,000 in the aggregate for all such Acquisitions during the term of this Agreement;
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(d) any Acquired Business (including any of its Subsidiaries) will be a direct or indirect, wholly-owned Domestic Subsidiary of the Borrower immediately after such Acquisition and the assets being acquired (other than a de minimis amount of assets) are located within the United States;
(e) such Acquisition shall not be hostile and shall have been approved by all necessary corporate or limited liability company action of the Acquired Business;
(f) to the extent the Acquisition exceeds the Threshold Amount, the Borrower shall have provided to the Administrative Agent and the Lenders not later than ten (10) Business Days prior to the anticipated closing date of such Acquisition (or such shorter period as the Administrative Agent may agree in its sole discretion) with any requested due diligence materials regarding the Acquired Business and such other information as the Administrative Agent may reasonably request, which may include, without limitation, the total amount of such Acquisition and other terms and conditions of the Acquisition, the full name and jurisdiction of organization of any new Subsidiary created or acquired for the purpose of effecting such Acquisition, copies of historical and projected financial statements of the Acquired Business, a detailed description of assets to be acquired, copies of material agreements of the Acquired Business and copies of any agreements (including, for the avoidance of doubt, any Acquisition Agreement and related material documents), schedules or due diligence delivered in connection with the consummation of such Acquisition;
(g) before and after giving effect to such Acquisition, no Default or Event of Default shall have occurred and be continuing or would reasonably be expected to result therefrom; provided that solely with respect to a Limited Condition Acquisition, this clause (g) may be satisfied if there is (x) no Default or Event of Default in existence at the time of execution and effectiveness of the Acquisition Agreement for such Limited Condition Acquisition and (y) no Specified Event of Default at the time such Limited Condition Acquisition is consummated;
(h) before and after giving pro forma effect to such Acquisition, the Borrower shall be in compliance with the financial covenants set forth in Article VIII for the Test Period; provided that the Borrower shall deliver a certificate of a Compliance Officer of the Borrower (supported by reasonably detailed calculations) certifying as to the foregoing; provided further that solely to the extent such Acquisition is a Limited Condition Acquisition, at the Borrower’s election, compliance with the financial covenants pursuant to this clause (h) shall be tested as of the LCA Test Date for such Limited Condition Acquisition in lieu of the date of consummation of such Limited Condition Acquisition;
(i) at least five (5) Business Days prior to the required satisfaction of clause (c) hereof, the Administrative Agent shall have received all documentation and other information requested by (or on behalf of) any Lender in order to comply with requirements of Anti-Corruption Laws, Anti-Terrorism Laws and Sanctions; and
(j) within five (5) Business Days (or such longer period as the Administrative Agent may agree in its sole discretion) following the closing date of such Acquisition, the Borrower shall deliver to the Administrative Agent and the Lenders (i) copies of the fully executed Acquisition Agreement for such Acquisition, together with all schedules, exhibits, attachments, amendments and other modifications thereto, (ii) any historical or pro forma financial statements or projections related to such Acquisition and (iii) such other documents and information as the Administrative Agent and the Lenders may request in its reasonable discretion.
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“Permitted Acquisition Certificate” means a certificate of the Borrower with respect to a Permitted Acquisition, substantially in the form of Exhibit K hereto.
“Permitted Acquisition Questionnaire” means the questionnaire for preliminary information regarding a proposed Permitted Acquisition and substantially in the form of Exhibit J hereto.
“Permitted Liens” means:
(a) Liens for taxes, assessments, or similar charges and levies of any Governmental Authority not yet due or which are being diligently contested in good faith by appropriate and lawful proceedings that suspend enforcement of such Liens and for which adequate reserves or other appropriate provisions in accordance with GAAP have been set aside on the Borrower’s books;
(b) pledges or deposits made in the ordinary course of business to secure payment of worker’s compensation, unemployment insurance, old age benefits, social security obligations, assessments, statutory obligations or other similar charges (other than Liens arising under ERISA, other than for contributions accrued but not yet due); provided in each case that the obligation is not for borrowed money and that the obligation secured is not overdue or, if overdue, is being diligently contested in good faith by appropriate and lawful proceedings that suspend enforcement of such Liens and for which adequate reserves or other appropriate provisions in accordance with GAAP have been set aside on the Borrower’s books;
(c) Liens of mechanics, repairmen, materialmen, warehousemen, carriers, suppliers, landlords or other like Liens that are incurred in the ordinary course of business and either (i) secure obligations that are not overdue by more than thirty (30) days or (ii) are being diligently contested in good faith by appropriate and lawful proceedings that suspend enforcement of such Liens and for which adequate reserves or other appropriate provisions in accordance with GAAP have been set aside on the Borrower’s books;
(d) good-faith pledges or deposits made in the ordinary course of business to secure performance of bids, tenders, trade contracts (other than Indebtedness) or leases, not in excess of the aggregate amount due thereunder, or to secure statutory obligations, or surety, appeal, performance or other similar bonds required in the ordinary course of business;
(e) encumbrances consisting of zoning restrictions, easements, right-of-way or other encumbrances, title defects and restrictions on the use of real property that in the aggregate are not substantial in amount and none of which materially impairs the use of such property or the value thereof, none of which is violated in any material respect by existing or proposed structures or land use and which do not interfere with the ordinary conduct of the business of the Borrower;
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(f) any Liens, security interests and mortgages in favor of the Administrative Agent (as defined in the CoBank Credit Agreement) for the benefit of the Secured Parties (as defined in the CoBank Credit Agreement);
(g) any Lien existing on the date of this Agreement and described on Schedule 1.1(P);
(h) solely for any Subsidiary of the Borrower, CoBank’s Lien (as defined in the CoBank Credit Agreement) (including the right of setoff) in CoBank Equities (as defined in the CoBank Credit Agreement) and in any cash patronage;
(i) Liens resulting from judgments or orders not constituting an Event of Default under Section 9.1(f);
(j) (x) cash collateralization of letters of credit issued by Person(s) to Governmental Authorities pursuant to Funding Program requirements; provided, that the aggregate amount of such cash collateralizations together with the Borrower’s and its Subsidiaries’ reimbursement obligations under such letters of credit does not exceed 105% of the undrawn stated amount of such letters of credit and (y) cash collateralization of other letters of credit; provided, with respect to any other letters of credit, the aggregate amount of such cash collateralizations together with the Borrower’s and any Subsidiary’s reimbursement obligations under such letters of credit does not exceed $250,000 in the aggregate at any one time;
(k) Liens securing Indebtedness permitted under Section 7.1(c), provided, that (i) such Liens do not at any time encumber any property other than the property purchased, leased or otherwise acquired with the proceeds of such Indebtedness and (ii) the Indebtedness secured thereby does not exceed the cost or fair market value, whichever is lower, of the property being so purchased, leased or otherwise acquired on the date of its purchase, lease or other acquisition;
(l) Liens securing Indebtedness permitted under Section 7.1(g); provided that such Liens (i) do not at any time encumber any property or assets of the Borrower or any of its Subsidiaries (other than the property or assets acquired in such Permitted Acquisition), (ii) extend only to the same assets (and any after acquired assets pursuant to an after-acquired property clause in the applicable security documents) that such Liens originally extended to, (iii) secure the same Indebtedness that such Liens secured immediately prior to the assumption of such Indebtedness and (iv) were existing at the time of closing such Permitted Acquisition and not incurred in contemplation of such Permitted Acquisition;
(m) additional Liens of Subsidiaries of the Borrower not otherwise permitted by this definition that do not secure outstanding obligations in excess of the greater of (x) $437,500 or (y) 2.5% of Annualized Consolidated EBITDA, as of the most recent measurement date, in the aggregate for all such Liens at any time;
(n) Liens in favor of Funding Agencies arising with respect to Funding Programs; provided that (i) the associated Funding Program is a grant program and not a loan program, and the obligations of the Borrower or any Subsidiary of the Borrower in connection with such Funding Program do not constitute Indebtedness, (ii) such Liens are required to be granted in connection with such Funding Program and (iii) no such Lien shall extend to or cover property of the Borrower or Subsidiary of the Borrower other than (x) the respective property financed by or acquired with the proceeds received by the Borrower or Subsidiary of the Borrower, as applicable, pursuant to any such Funding Program and (y) restricted deposit accounts into which the Borrower or Subsidiary of the Borrower, as applicable, is required to deposit any proceeds of such Funding Program;
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(o) Liens on any Property acquired, constructed, improved or held by the Borrower or Subsidiary of the Borrower securing Indebtedness incurred or assumed for the purpose of financing (or refinancing) all or any part of the cost of acquiring, constructing, improving or holding such property and permitted under Section 7.1(h) or (i); provided that (i) such Lien attaches solely to the property so acquired, constructed, improved or held in such transaction and the proceeds thereof and (ii) the principal amount of the Indebtedness secured thereby does not exceed 100% of the cost of such property and any accrued but unpaid interest and fees in respect thereof;
(p) Liens (i) in favor of collecting banks arising by operation of law under Section 4-210 of the UCC or, with respect to collecting banks located in the State of New York, under Section 4-208 of the UCC and (ii) attaching to customary initial deposits and margin deposits and commodity trading accounts or other commodities brokerage accounts incurred in the ordinary course of business;
(q) Liens (including the right of set-off) in favor of a bank or other depository institution (i) arising as a matter of law encumbering deposits or other funds maintained with a financial institution that are within the general parameters customary in the banking industry or arising pursuant to such banking institutions general terms and conditions or (ii) arising in the ordinary course of business in connection with cash management arrangements, employee credit card programs and purchasing card programs;
(r) Liens in favor of customs and revenue authorities arising as a matter of law which secure payment of customs duties in connection with the importation of goods in the ordinary course of business;
(s) Liens that are contractual rights of set-off (i) relating to pooled deposit or sweep accounts of the Borrower or Subsidiary of the Borrower to permit satisfaction of overdraft or similar obligations incurred in the ordinary course of business of the Borrower or Subsidiary of the Borrower or (ii) relating to purchase orders and other agreements entered into with customers of the Borrower or Subsidiary of the Borrower in the ordinary course of business;
(t) Liens consisting of an agreement to sell, transfer or otherwise Dispose of any property in a Disposition permitted by Section 6.2 (other than clause (d) thereof), solely to the extent such sale, transfer or other Disposition would have been permitted under this Agreement on the date of the creation of such Lien and such Lien encumbers only such property that is the subject of such Disposition;
(u) Liens which may arise as a result of municipal and zoning codes and ordinances, building and other land use laws imposed by any Governmental Authority which are not violated in any material respect by existing improvements or the present use or occupancy of any real estate, or in the case of any real estate subject to a Mortgage, encumbrances disclosed in the title insurance policy issued to Administrative Agent (with respect to encumbrances disclosed in such title insurance policy only, to the extent Administrative Agent has consented (which consent shall not be unreasonably delayed, withheld or conditioned) to such Liens if they do not comprise Permitted Liens under one or more of the other clauses of this definition);
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(v) Liens on unearned insurance premiums securing the financing thereof to the extent permitted under Section 7.1(j);
(w) Liens solely on cash earnest money deposits made by Borrower or its Subsidiaries in connection with any letter of intent or purchase agreement for an Acquisition or other Investment that would be permitted hereunder;
(x) Liens on Equity Interests in joint ventures which are not Subsidiaries arising solely under the Organizational Documents for such joint ventures to secure buy/sell arrangements not prohibited hereunder;
(y) any interest or title of a lessor or sublessor under any lease not prohibited by this Agreement or of a licensor or sublicensor under any license not prohibited by this Agreement;
(z) Liens arising from the filing of precautionary uniform commercial code financing statements with respect to any lease not prohibited by this Agreement; and
(aa) Liens that are replacements of Liens permitted under this definition to the extent that the original Indebtedness is permitted under Section 7.1 and so long as the replacement Liens only encumber those assets that secured the original Indebtedness (excluding the amount of any premiums or penalties and accrued and unpaid interest thereon) and if such original Indebtedness has been modified or replaced, the resulting Indebtedness constitutes a Permitted Refinancing thereof.
“Permitted Refinancing” means Indebtedness constituting a refinancing of Indebtedness that:
(a) has an aggregate outstanding principal amount not greater than the aggregate principal amount of the Indebtedness being refinanced or extended, except by an amount equal to the unpaid accrued interest and premium thereon, defeasance costs and other reasonable amounts paid and fees and expenses incurred in connection therewith;
(b) except in the case of secured Indebtedness that refinances obligations under the CoBank Credit Agreement, has a weighted average life to maturity (measured as of the date of such refinancing or extension) and maturity no shorter than that of the Indebtedness being refinanced or extended;
(c) is not secured by a Lien on any assets other than the collateral securing the Indebtedness being refinanced or extended;
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(d) the obligors of which are the same as the obligors of the Indebtedness being refinanced or extended;
(e) is payment and/or lien subordinated to the Obligations, if applicable, at least to the same extent and in the same manner as the Indebtedness being refinanced or extended; and
(f) is otherwise on terms no less favorable to the Borrower and its Subsidiaries, taken as a whole, than those of the Indebtedness being refinanced or extended.
“Permitted Tax Distributions” has the meaning specified in Section 7.6(d).
“Person” means any natural person, corporation, company, partnership, limited liability company, association, joint-stock company, trust, unincorporated organization, Joint Venture, Official Body, or any other entity.
“PIK Election” has the meaning specified in Section 2.11.
“PIK Election Notice” has the meaning specified in Section 2.11.
“PIK Interest” has the meaning specified in Section 2.11.
“Plan” means any employee benefit plan within the meaning of Section 3(3) of ERISA (including any Pension Plan) that the Borrower or any ERISA Affiliate sponsors, maintains, or contributes to or is required to contribute to or with respect to which the Borrower or any ERISA Affiliate otherwise has any obligation or liability.
“Plan Funding Rules” means the rules of the Code and ERISA regarding minimum required contributions (including any installment payment thereof) to Pension Plans and Multiemployer Plans and set forth in, Sections 412, 430, 431, 432 and 436 of the Code and Sections 206, 302, 303, 304 and 305 of ERISA.
“Plan Qualification Event” means with respect to any Plan that is intended to be a qualified plan under Section 401(a) of the Code, or exempt from tax under Section 501(a) or 501(c)(9) of the Code, any occurrence or event that results or could reasonably be expected to result in the loss of the Plan’s qualified or tax-exempt status.
“Platform” has the meaning specified in Section 11.4.
“Preferred Equity Interest” means as to an Equity Interest of any class or classes (however designated) which is preferred as to the payment of dividends or distributions, or as to the distribution of assets upon any voluntary or involuntary liquidation or dissolution or otherwise of the issuer of such Equity Interest, over any other Equity Interest issued by such Person.
“Prime Rate” means the rate of interest per annum last quoted by The Wall Street Journal as the “Prime Rate” in the U.S. or, if The Wall Street Journal ceases to quote such rate, the highest per annum interest rate published by the Federal Reserve Board in Federal Reserve Statistical Release H.15 (519) (Selected Interest Rates) as the “bank prime loan” rate or, if such rate is no longer quoted therein, any similar rate quoted therein (as determined by the Administrative Agent at the written direction of the Required Lenders) or any similar release by the Federal Reserve Board (as determined by the Administrative Agent at the written direction of the Required Lenders). Any change in the Prime Rate shall take effect at the opening of business on the day such change is publicly announced or quoted as being effective without the necessity of notice provided to the Borrower or any other Person.
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“Principal Office” means the main office of the Administrative Agent at 950 17th Street, Suite 1400, Denver, CO 80202, or such other office as may be designated by the Administrative Agent from time to time.
“Proposed Modification” has the meaning specified in Section 7.16.
“Pro Rata Share” means with respect to any Tranche of Term Loans as of any date of determination, (i) if any Term Loan Commitments with respect to such Tranche remain in effect, the proportion that a Term Lender’s unused Term Loan Commitments with respect to such Tranche bears to the aggregate amount of Term Loan Commitments of all of the Term Lenders for such Tranche as of such date, or (ii) if the Term Loan Commitments with respect to such Tranche have been terminated or have expired, the proportion that the outstanding principal amount of a Term Lender’s Term Loans for such Tranche as of such date bears to the aggregate principal amount of all outstanding Term Loans for such Tranche as of such date.
“PTE” means a prohibited transaction class exemption issued by the U.S. Department of Labor, as any such exemption may be amended from time to time.
“PUC” means any state, provincial or other local public utility commission, franchising authority, public right of way licensor or similar regulatory agency or body that exercises jurisdiction over the rates, terms or services or the ownership, construction or operation of any Communications System (and its related facilities and access to any public right of way) or over Persons who own, construct or operate a Communications System, in each case by reason of the nature or type of the services, operations or business subject to regulation and not pursuant to laws and regulations of general applicability to Persons conducting business in any such jurisdiction.
“PUC Laws” means all relevant rules, regulations, and published policies of, and all Laws administered by, any PUC asserting jurisdiction over the Borrower or its Subsidiaries.
“Purchase Money Security Interest” means Liens upon tangible personal property securing loans to the Borrower or Subsidiary of the Borrower or deferred payments by the Borrower or Subsidiary of the Borrower for the purchase of such tangible personal property.
“Qualified Equity Interests” means any Equity Interests of a Person that are not Disqualified Equity Interests.
“Recipient” means (a) the Administrative Agent and (b) any Lender, as applicable.
“Reduced Dividend” has the meaning specified in Section 6.11.
“Register” has the meaning specified in Section 11.7(c).
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“Regulation D” means Regulation D of the Federal Reserve Board, as in effect from time to time and all official rulings and interpretations thereunder or thereof.
“Related Parties” means, with respect to any Person, such Person’s Affiliates and the partners, directors, officers, employees, agents, trustees, administrators, managers, advisors and representatives of such Person and of such Person’s Affiliates.
“Relevant Governmental Body” means the Federal Reserve Board or the Federal Reserve Bank of New York, or a committee officially endorsed or convened by the Federal Reserve Board or the Federal Reserve Bank of New York, or any successor thereto.
“Required Lenders” means, at any time, Lenders having Total Credit Exposures representing more than fifty percent (50%) of the Total Credit Exposures of all Lenders.
“Resolution Authority” means an EEA Resolution Authority or, with respect to any UK Financial Institution, a UK Resolution Authority.
“Restricted Payment” means any dividend or other distribution (whether in cash, securities or other property) with respect to any capital stock or other Equity Interest of the Borrower or any Subsidiary, or any payment (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any such capital stock or other Equity Interest, or on account of any return of capital to the Holding’s stockholders, partners or members (or the equivalent Person thereof).
“Sanctioned Country” means, at any time, a country, territory or sector that is the subject or target of any Sanctions or that is, or whose government is, the subject of any list-based or territorial or sectorial Sanctions.
“Sanctioned Person” means, at any time, (a) any Person listed in any Sanctions-related list of designated Persons maintained by any Governmental Authority, (b) any Person operating, organized or resident in a Sanctioned Country, (c) any Person that is otherwise subject to any Sanctions, or (d) any Person, directly or indirectly, 50% or more in the aggregate owned by, otherwise controlled by, or acting for the benefit or on behalf of, any Person or Persons described in clause (a), (b) or (c) of this definition.
“Sanctions” means any economic or financial sanctions or trade embargoes imposed, administered or enforced from time to time by any Governmental Authority.
“Secured Bank Product” means agreements or other arrangements entered into by a financial institution, on the one hand, and the Borrower and/or any Subsidiary, on the other hand, under which such financial institution provides any of the following products or services to the Borrower or any Subsidiary: (a) credit cards, (b) credit card processing services, (c) debit cards, (d) purchase cards, (e) ACH transactions, (f) cash management, including controlled disbursement, accounts or services, or (g) foreign currency exchange.
“SOFR” means a rate per annum equal to the secured overnight financing rate as administered by the SOFR Administrator.
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“SOFR Administrator” means the Federal Reserve Bank of New York (or a successor administrator of the secured overnight financing rate).
“SOFR Administrator’s Website” means the website of the Federal Reserve Bank of New York, currently at http://www.newyorkfed.org, or any successor source for the secured overnight financing rate identified as such by the SOFR Administrator from time to time.
“Solvency Certificate” means the certificate of the Borrower in the form of Exhibit G hereto.
“Solvent” means, with respect to any Person on any date of determination, that on such date (a) the sum of the debt (including contingent liabilities) of such Person and its Subsidiaries, taken as a whole, does not exceed the present fair saleable value (on a going concern basis) of the assets of such Person and its Subsidiaries, taken as a whole, (b) the capital of Person and its Subsidiaries, taken as a whole, is not unreasonably small in relation to the business of such Person and its Subsidiaries, taken as a whole, contemplated as of such date, (c) the present fair saleable value of the assets (on a going concern basis) of such Person and its Subsidiaries is greater than the amount that will be required to pay the probable liabilities (including contingent liabilities) of such Person and its Subsidiaries as they become absolute and matured in the ordinary course and (d) such Person and its Subsidiaries, taken as a whole, do not intend to incur, or believe that they will incur, debts (including current obligations) beyond their ability to pay such debt as they mature in the ordinary course of business. For the purposes hereof, the amount of any contingent liability at any time shall be computed as the amount that, in light of all of the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability in the ordinary course of business.
“Specified Dividend” has the meaning specified in Section 6.11.
“Specified Equity Contribution” has the meaning specified in Section 9.3(a).
“Specified Event of Default” means any Event of Default under Section 9.1(a) or (l).
“Specified Representations” means the representations of the Borrower set forth in Sections 5.1, 5.2(b), 5.4, 5.7, 5.8(a)(i) and (ii), 5.8(b), 5.11, 5.15, 5.20 and 5.24(d) (solely with respect to the use of proceeds of any Loans funded pursuant to the consummation of a Limited Condition Acquisition). Notwithstanding anything to the contrary contained herein, to the extent that any of the Specified Representations are qualified or subject to a “material adverse effect” or equivalent term, the definition thereof for purposes of this definition only shall be “Material Adverse Effect” or equivalent term as defined in the applicable Acquisition Agreement, for purposes of any representations and warranties made as of the closing of such Limited Condition Acquisition.
“Specified Transaction” means any permitted Investment, Disposition, Restricted Payment, Acquisition, Borrowing, issuance, incurrence, assumption or permanent repayment of Indebtedness (and use of proceeds), and any dispositions or discontinuations of any Subsidiary, line of business or division, other similar transaction.
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“Sponsor” means Grain Communications Opportunity Fund III Master, L.P. and its Controlled Investment Affiliates.
“Standard & Poor’s” means Standard & Poor’s Ratings Services LLC, a subsidiary of The McGraw-Hill Companies, Inc., or any successor or assignee of the business of such division in the business of rating securities and debt.
“Subsidiary” of any Person at any time means any corporation, trust, partnership, any limited liability company or other business entity (a) of which more than 50% of the outstanding voting securities or other interests normally entitled to vote for the election of one or more directors or trustees (regardless of any contingency that does or may suspend or dilute the voting rights) is at such time owned, or the management of which is controlled, directly or indirectly through one or more intermediaries, or both, by such Person or one or more of such Person’s Subsidiaries, or (b) that is directly or indirectly controlled by such Person or one or more of such Person’s Subsidiaries.
“Swap Obligation” means, with respect to the Borrower or any Subsidiary, any obligation to pay or perform under any agreement, contract or transaction that constitutes a “swap” within the meaning of section 1a(47) of the Commodity Exchange Act.
“Synthetic Lease Obligation” means the monetary obligation of a Person under (a) a so-called synthetic, off-balance sheet or tax retention lease, or (b) an agreement for the use or possession of property creating obligations that do not appear on the balance sheet of such Person but which, for tax purposes or otherwise upon the insolvency or bankruptcy of such Person, would be characterized as the indebtedness of such Person (without regard to accounting treatment).
“Tax Compliance Certificate” means a tax certificate substantially in the form of Exhibit H hereto, prepared and delivered in accordance with Section 3.2(g).
“Taxes” means all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.
“Team Telecom” means Committee for the Assessment of Foreign Participation in the United States Telecommunications Services Sector and each member agency thereof, acting in such capacity.
“Term Lender” means each Lender having a Term Loan Commitment with respect to any Tranche of Term Loans or who has funded or purchased all or a portion of any Tranche of Term Loans in accordance with the terms hereof.
“Term Loan” means any term loan funded pursuant to the Term Loan Commitment together with any PIK Interest.
“Term Loan Commitment” means, with respect to each Lender, its obligation to make term loans pursuant to Section 2.1 in one draw during the Availability Period in an aggregate principal amount at any time outstanding set forth opposite such Lender’s name on Schedule 1.1(B). As of the Closing Date, the aggregate amount of the Term Loan Commitments of the Lenders is $160,000,000.
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“Term Loan Facility” means the term loan facility established pursuant to Section 2.1, as may be modified from time to time.
“Term SOFR Administrator” means CME Group Benchmark Administration Limited (CBA) (or a successor administrator of the Term SOFR Reference Rate selected by the Administrative Agent in its reasonable discretion).
“Term SOFR Rate” means,
(a) for any calculation with respect to a Term SOFR Rate Loan, the Term SOFR Reference Rate for a tenor comparable to the applicable Interest Period on the day (such day, the “Periodic Term SOFR Determination Day”) that is two U.S. Government Securities Business Days prior to the first day of such Interest Period, as such rate is published by the Term SOFR Administrator; provided, however, that if as of 3:00 p.m. on any Periodic Term SOFR Determination Day the Term SOFR Reference Rate for the applicable tenor has not been published by the Term SOFR Administrator and a Benchmark Transition Event with respect to the Term SOFR Reference Rate has not occurred, then the Term SOFR Rate will be the Term SOFR Reference Rate for such tenor as published by the Term SOFR Administrator on the first preceding U.S. Government Securities Business Day for which such Term SOFR Reference Rate for such tenor was published by the Term SOFR Administrator so long as such first preceding U.S. Government Securities Business Day is not more than three U.S. Government Securities Business Days prior to such Periodic Term SOFR Determination Day;
(b) for any calculation with respect to a Base Rate Loan on any day, the Term SOFR Reference Rate for a tenor of one month on the day (such day, the “Base Rate Term SOFR Determination Day”) that is two U.S. Government Securities Business Days prior to such day, as such rate is published by the Term SOFR Administrator; provided, however, that if as of 3:00 p.m. on any Base Rate Term SOFR Determination Day the Term SOFR Reference Rate for the applicable tenor has not been published by the Term SOFR Administrator and a Benchmark Transition Event with respect to the Term SOFR Reference Rate has not occurred, then Term SOFR Rate will be the Term SOFR Reference Rate for such tenor as published by the Term SOFR Administrator on the first preceding U.S. Government Securities Business Day for which such Term SOFR Reference Rate for such tenor was published by the Term SOFR Administrator so long as such first preceding U.S. Government Securities Business Day is not more than three U.S. Government Securities Business Days prior to such Base Rate Term SOFR Determination Day;
provided, further, that if the Term SOFR Rate determined as provided above (including pursuant to the proviso under clause (a) or clause (b) above) shall ever be less than the Floor, then Term SOFR Rate shall be deemed to be the Floor.
“Term SOFR Rate Loan” means a Loan bearing interest at the Term SOFR Rate Option, other than pursuant to clause (c) of the definition of “Alternate Base Rate”. A Term SOFR Rate Loan is a Loan subject to an Interest Period.
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“Term SOFR Rate Option” means the option of the Borrower to have Loans bear interest at the rate and under the terms set forth in Section 2.4(a)(ii).
“Term SOFR Reference Rate” means the forward-looking term rate based on SOFR.
“Termination Date” means the date as of which all of the following shall have occurred: (a) all Commitments under this Agreement have terminated and, (b) all Obligations have been paid in full (other than contingent indemnification obligations as to which no claim has been made).
“Test Period” means, as of any date of determination, the consecutive four quarter period ending as of the last day of the most recently ended fiscal quarter for which financials statements have been delivered to the Administrative Agent; provided that, for any date of determination prior to the first such delivery, Consolidated EBITDA shall be calculated as provided in the last sentence of such definition.
“Threshold Amount” means $2,500,000.
“Total Credit Exposure” means, as to any Lender at any time, the outstanding Term Loans of such Lender at such time.
“Total Funded Indebtedness” means (i) Indebtedness in respect of borrowed money or the deferred purchase price of property or services, (ii) indebtedness in respect of letters of credit solely to the extent drawn or funded and not reimbursed within two (2) Business Days, and (iii) obligations in respect of Capital Leases.
“Total Net Leverage Ratio” means, as of any date of determination, the ratio of (i) Total Funded Indebtedness of Intermediate Holding and its Subsidiaries as of such date, net of the Maximum Netting Amount of unrestricted cash and Cash Equivalents held by Intermediate Holdings and its Subsidiaries to (ii) Annualized Consolidated EBITDA for Intermediate Holdings for the Test Period.
“Tranche” means, the Term Loans funded during the Availability Period and any PIK Loans related thereto.
“U.S. Government Securities Business Day” means any day except for (a) a Saturday, (b) a Sunday or (c) a day on which the Securities Industry and Financial Markets Association recommends that the fixed income departments of its members be closed for the entire day for purposes of trading in United States government securities.
“U.S. Person” means any Person that is (1) a “United States person” as defined in Section 7701(a)(30) of the Code or (2) disregarded as an entity separate from its regarded owner for U.S. federal income tax purposes and whose regarded owner for U.S. federal income tax purposes is a U.S. Person.
“UCC” shall mean the Uniform Commercial Code as the same may be in effect from time to time in the State of New York; provided that if, by reason of applicable Law, the validity or perfection of any security interest in any Collateral granted under this Agreement is governed by the Uniform Commercial Code as in effect in a jurisdiction other than New York, then as to the validity or perfection, as the case may be, of such security interest. “Uniform Commercial Code” shall mean the Uniform Commercial Code as in effect from time to time in such other jurisdictions.
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“UK Financial Institution” means any BRRD Undertaking (as such term is defined under the PRA Rulebook (as amended from time to time) promulgated by the United Kingdom Prudential Regulations Authority) or any Person falling within IFPRU 11.6 of the FCA Handbook (as amended from time to time) promulgated by the United Kingdom Financial Conduct Authority, which includes certain credit institutions and investment firms and certain affiliates of such certain credit institutions or investment firms.
“UK Resolution Authority” means the Bank of England or any other public administrative authority having responsibility for the resolution of any UK Financial Institution.
“Unfunded Liability” means, (a) for a Pension Plan other than a Multiemployer Plan, any excess of the Pension Plan’s funding target under Section 430(d) of the Code or Section 303(d) of ERISA over the value of the Pension Plan’s assets, determined in accordance with Section 430(d)(2)(A) of the Code or Section 303(d)(2)(A) of ERISA for the applicable plan year, (b) for a Multiemployer Plan, any excess of the Multiemployer Plan’s current liability under Section 431(c)(6) of the Code or Section 304(c)(6) of ERISA over the value of the Multiemployer Plan’s assets determined in accordance with Section 431(c)(2) of the Code or Section 304(c)(2) of ERISA, and (c) for a Welfare Benefit Plan, the present value (determined using actuarial and other assumptions that are reasonable with respect to the benefits provided and the employees participating) of the liability of the Borrower and each ERISA Affiliate for post-retirement benefits other than pensions, net of all assets under all such Welfare Benefit Plans allocable to such benefits, determined in accordance with Financial Accounting Standard 106 (as amended).
“USA Patriot Act” means the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Public Law 107-56.
“Voting Participant” has the meaning specified in Section 11.7(d).
“Voting Participant Notice” has the meaning specified in Section 11.7(d).
“Welfare Benefit Plan” means a Plan which is an “employee welfare benefit plan” within the meaning of Section 3(1) of ERISA.
“Withholding Agent” means (a) the Borrower and (b) the Administrative Agent.
“Write-Down and Conversion Powers” means, (a) with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described in the EU Bail-In Legislation Schedule, and (b) with respect to the United Kingdom, any powers of the applicable Resolution Authority under the Bail-In Legislation to cancel, reduce, modify or change the form of a liability of any UK Financial Institution or any contract or instrument under which that liability arise, to convert all or part of that liability into shares, securities or obligations of that Person or any other Person, to provide that any such contract or instrument is to have effect as if a right had been exercised under it or to suspend any obligations in respect of that liability or any of the powers under that Bail-In Legislation that are related to or ancillary to any of those powers.
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1.2 Construction. Unless the context of this Agreement otherwise clearly requires, the following rules of construction shall apply to this Agreement and each of the other Loan Documents: (a) references to the plural include the singular, the plural, the part and the whole; (b) the words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation”; (c) the words “hereof,” “herein,” “hereunder,” “hereto” and similar terms in this Agreement or any other Loan Document refer to this Agreement or such other Loan Document as a whole; (d) article, section, subsection, clause, schedule and exhibit references are to this Agreement or other Loan Document, as the case may be, unless otherwise specified; (e) reference to any Person includes such Person’s successors and assigns; (f) reference to any agreement, including this Agreement and any other Loan Document together with the schedules and exhibits hereto or thereto, document or instrument means such agreement, document or instrument as amended, extended, modified, supplemented, replaced, substituted for, superseded, renewed, refinanced, refunded, reaffirmed or restated at any time and from time to time; (g) relative to the determination of any period of time, “from” means “from and including,” “to” means “to but excluding,” and “through” means “through and including”; (h) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights; (i) section headings herein and in each other Loan Document are included for convenience and shall not affect the interpretation of this Agreement or such Loan Document; (j) any pronoun shall include the corresponding masculine, feminine and neuter terms; (k) reference to any Law shall refer to such Law as amended, modified, supplemented, renewed, or extended from time to time and to any successor or replacement Law promulgated thereunder or substantially related thereto and to any rules and regulations related thereto; (l) reference to any Governmental Authority includes any similar or successor Governmental Authority; (m) the word “will” shall be construed to have the same meaning and effect as the word “shall”; (n) unless otherwise specified, all references herein to times of day shall be references to New York, New York time; (o) the word “or” is not exclusive; and (p) the word “year” shall refer to, (i) in the case of a leap year, to a year of three hundred sixty-six (366) days and, (ii) otherwise, a year of three hundred sixty-five (365) days.
1.3 Accounting Principles. Except as otherwise provided in this Agreement, all computations and determinations as to accounting or financial matters (including financial ratios and other financial covenants) and all financial statements to be delivered pursuant to this Agreement shall be made and prepared in accordance with GAAP (including principles of consolidation where appropriate), applied on a consistent basis and, except as expressly provided herein, in a manner consistent with that used in preparing audited financial statements in accordance with Section 6.1(b) and all accounting or financial terms have the meanings ascribed to such terms by GAAP; provided, however, that, unless otherwise expressly defined herein or in any other Loan Document, all accounting terms used in Article VIII (and all defined terms used in the definition of any accounting term used in Article VIII) has the meaning given to such terms (and defined terms) under GAAP as in effect on February 15, 2024, applied on a basis consistent with those used in preparing the financial statements referred to in Section 5.10. In the event of any change after the date hereof in GAAP, and if such change would affect the computation of any of the financial covenants set forth in Article VIII, then the parties hereto agree to endeavor, in good faith, to agree upon an amendment to this Agreement that would adjust such financial covenants in a manner that would preserve the original intent thereof, but would allow compliance therewith to be determined in accordance with the Intermediate Holdings’ financial statements at that time, provided that until so amended such financial covenants shall continue to be computed in accordance with GAAP prior to such change therein. Notwithstanding the foregoing, for purposes of determining compliance with any covenant (including the computation of any financial covenant) contained herein, Indebtedness of the Borrower and its Subsidiaries shall be deemed to be carried at 100% of the outstanding principal amount thereof, and the effects of FASB ASC 825 and FASB ASC 470-20 on financial liabilities shall be disregarded. Notwithstanding anything to the contrary above or in the definition of “Capital Leases” or “Capital Expenditures”, all obligations of any Person that are or would have been treated as operating leases for purposes of GAAP prior to the effectiveness of Accounting Standards Codification 842 shall continue to be accounted for as operating leases hereunder or under any other Loan Documents (whether or not such operating lease obligations were in effect on such date) notwithstanding the fact that such obligations are required in accordance with Accounting Standards Codification 842 (on a prospective or retroactive basis or otherwise) to be treated as Capital Leases.
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1.4 Rounding. Any financial ratios required to be maintained pursuant to this Agreement shall be calculated by dividing the appropriate component by the other component, carrying the result to one place more than the number of places by which such ratio or percentage is expressed herein and rounding the result up or down to the nearest number (with a rounding-up if there is no nearest number).
1.5 [Reserved].
1.6 Covenant Compliance Generally.
(a) Currency Conversion. For purposes of determining compliance under Article VIII, any amount in a currency other than Dollars will be converted to Dollars in a manner consistent with that used in calculating Consolidated Net Income in the most recent annual financial statements of the Intermediate Holdings and its Subsidiaries delivered pursuant to Section 6.1(b). Notwithstanding the foregoing, for purposes of determining compliance with Article VII, with respect to any covenant calculating the amount of Indebtedness or investment in a currency other than Dollars, no breach of any basket contained therein shall be deemed to have occurred solely as a result of changes in rates of exchange occurring after the time such Indebtedness or investment is incurred; provided, that for the avoidance of doubt, the result of any changes in rates of exchange occurring after the time such Indebtedness or investment is incurred shall otherwise apply in all other cases, including determining whether any additional Indebtedness or investment may be incurred at any time in accordance with Article VII and for purposes of calculating financial ratios in accordance with Article VIII.
(b) Pro Forma. For purposes of calculating the Total Net Leverage Ratio, Consolidated EBITDA or any other financial ratio, test or basket or determining compliance with any covenant or other provision under this Agreement or any other Loan Document that requires such calculation of such financial ratio, test or basket or such determination of compliance with any covenant or other provision be made on a pro forma basis, in each case, on any specified date (the “Calculation Date”), that calculation or determination, as the case may be, shall be made after giving effect to the consummation of any Specified Transaction that were consummated or that otherwise occurred, in each case, (x) during the applicable Test Period most recently ended prior to such Calculation Date or (y) after the last day of such Test Period and on or prior to the Calculation Date, in each case, as if such Specified Transaction had occurred on the first day of the Test Period most recently ended prior to the Calculation Date.
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(c) Limited Condition Acquisitions. In the case of the classification of an Acquisition as a Permitted Acquisition or the consummation of any other Specified Transactions in connection with a Limited Condition Acquisition, at the Borrower’s option, (i) the calculation of the relevant financial ratios, tests and baskets, (ii) determining whether no Default or Event of Default (other than a Specified Event of Default, which shall not exist on the date that such Limited Condition Acquisition is consummated) and (iii) determining the accuracy of any representation or warranty (other than the Specified Representations) shall be determined as of the LCA Test Date for such Limited Condition Acquisition and calculated as if the Acquisition and other pro forma events in connection therewith were consummated on such date; provided that if the Borrower has made such an election, in connection with the calculation of any financial ratios, tests or baskets with respect to the classification of an Acquisition as a Permitted Acquisition or the consummation of any other Specified Transactions on or following such date and prior to the earlier of the date on which such Limited Condition Acquisition is consummated or the Acquisition Agreement of such Limited Condition Acquisition is terminated, any such financial ratio (but not actual compliance with the covenants set forth in Article VIII, which shall be determined without regard to any Limited Condition Acquisition or any related transaction until consummated), test or basket shall be calculated on a pro forma basis assuming such Limited Condition Acquisition and other pro forma events in connection therewith (including any incurrence of Indebtedness) have been consummated.
1.7 Holidays. Whenever payment of a Loan to be made or taken hereunder shall be due on a day that is not a Business Day such payment shall be due on the next Business Day (except as provided in Section 2.5) and such extension of time shall be included in computing interest and fees, except that the Loans shall be due on the Business Day preceding the Maturity Date if the Maturity Date is not a Business Day. Whenever any payment or action to be made or taken hereunder (other than payment of the Loans) shall be stated to be due on a day that is not a Business Day, such payment or action shall be made or taken on the next following Business Day, and such extension of time shall not be included in computing interest or fees, if any, in connection with such payment or action.
1.8 Divisions. For all purposes under the Loan Documents, in connection with any Division or plan of Division: (a) if any asset, right, obligation or liability of any Person becomes the asset, right, obligation or liability of a different Person, then it shall be deemed to have been transferred from the original Person to the subsequent Person, and (b) if any new Person comes into existence, such new Person shall be deemed to have been organized on the first date of its existence by the holders of its Equity Interests at such time. Any reference in Section 7.7 or in Section 7.8 to a combination, merger, consolidation, Disposition, dissolution, liquidation, transfer or similar term shall be deemed to apply to a Division, or an allocation of assets to a series of limited liability companies (or the unwinding of such a Division or allocation) as if it were a combination, merger, consolidation, Disposition, dissolution, transfer or similar term, as applicable, to of or with a separate Person.
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1.9 UCC Terms. Terms defined in the UCC in effect on the Closing Date and not otherwise defined herein shall, unless the context otherwise indicates, have the meanings provided by those definitions. Subject to the foregoing, the term “UCC” refers, as of any date of determination, to the UCC then in effect.
1.10 Cashless Rollovers. Notwithstanding anything to the contrary contained in this Agreement or in any other Loan Document, to the extent that any Lender extends the maturity date of, or replaces, renews or refinances, any of its then-existing Loans with loans incurred under any new tranche or commitment hereunder, in each case, to the extent such extension, replacement, renewal or refinancing is effected by means of a “cashless roll” by such Lender, such extension, replacement, renewal or refinancing shall be deemed to comply with any requirement hereunder or any other Loan Document that such payment be made “in Dollars”, “in immediately available funds”, “in cash” or any other similar requirement.
II. CREDIT FACILITIES
2.1 Term Loans.
(a) Term Loan Commitments. Subject to the terms and conditions hereof, and relying upon the representations and warranties of the Borrower set forth herein and in the other Loan Documents, each Term Loan Lender severally agrees to make the Term Loan to the Borrower in one draw during the Availability Period in such principal amount as the Borrower shall request up to, but not exceeding, $160,000,000 on the Borrowing Date. The request by the Borrower for the Term Loan shall be deemed to be a representation by the Borrower that it shall be in compliance with Article IV both immediately before and immediately after giving effect to the requested Term Loan.
(b) Term Loan Request. The Borrower shall request the Term Loan Lenders to make the Term Loans by delivering to the Administrative Agent and the Lenders, not later than 11:00 a.m. (New York City time), five (5) U.S. Government Securities Business Days prior to the Borrowing Date, a duly completed Loan Request; provided that the Loan Request shall not be submitted until the duly executed and effective amendment to the CoBank Credit Agreement referred to in Section 4.2(d) has been delivered to the Administrative Agent and the Lenders. The Loan Request with respect to the Term Loan shall be subject to the occurrence of the Closing Date but otherwise shall be irrevocable and shall specify the aggregate amount of the proposed Term Loans comprising each Borrowing, and the Interest Period, which amounts shall be in integral multiples of $500,000 and not less than $1,000,000 for each Borrowing under the Term SOFR Rate Option.
(c) Nature of Lenders’ Obligations with Respect to Term Loans. The failure of any Term Lender to make a Term Loan shall not relieve any other Term Lender of its obligations to make a Term Loan nor shall it impose any additional liability on any other Lender hereunder. The Term Loan Commitments are not revolving commitments, and the Borrower shall not have the right to repay and reborrow under Section 2.1.
(d) [Reserved].
2.2 [Reserved].
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2.3 [Reserved].
2.4 Interest Rate Provisions. The Borrower shall pay interest in respect of the outstanding unpaid principal amount of the Loans, it being understood that, subject to the provisions of this Agreement, the Borrower may select different Interest Rate Options and different Interest Periods to apply to different Borrowings at any time outstanding and may convert to or renew one or more Interest Rate Options with respect to all or any portion of any Borrowing (subject to minimum amounts set forth in Sections 2.1(b), 2.2(b) and 2.3(b)); provided that there shall not be at any one time outstanding more than five (5) Borrowings of Term SOFR Rate Loans. If at any time the designated rate applicable to any Loan made by any Lender exceeds the Maximum Rate, the rate of interest on such Lender’s Loan shall be limited to such Lender’s Maximum Rate.
(a) Interest Rate Options. The Borrower shall have the right to select from the following Interest Rate Options applicable to the Term Loans:
(i) Base Rate Option: Only if the Term SOFR Rate is not available, an option to pay interest at a fluctuating rate per annum equal to the Alternate Base Rate in effect as of any date of determination plus the Applicable Margin as of such date; or
(ii) Term SOFR Rate Option: An option to pay interest at a fluctuating rate per annum equal to the Term SOFR Rate with respect to the applicable Interest Period and as in effect as of any date of determination plus the Applicable Margin as of such date.
(b) Day Count Basis. Interest and fees shall be calculated on the basis of a 360-day year for the actual number of days elapsed (which results in more interest or fees, as the case may be, being paid than if calculated on the basis of a 365-day year); provided that interest with respect to Base Rate Loans incurring interest based on the Prime Rate shall be calculated on the basis of a 365/366-day year. The date of funding or conversion of a Term SOFR Rate Loan to a Base Rate Loan and the first day of an Interest Period shall be included in the calculation of interest. The date of payment of any Loan and the last day of an Interest Period shall be excluded from the calculation of interest; provided, if a Loan is repaid on the same day that it is made, one (1) day’s interest shall be charged.
(c) SOFR. In connection with the use or administration of the Term SOFR Rate and clause (c) of the definition of Alternate Base Rate, the Administrative Agent, in consultation with the Required Lenders, will have the right to make Benchmark Replacement Conforming Changes from time to time and, notwithstanding anything to the contrary herein or in any other Loan Document, any amendments implementing such Benchmark Replacement Conforming Changes will become effective without any further action or consent of any other party to this Agreement or any other Loan Document. The Administrative Agent will promptly notify the Borrower and the Lenders of the effectiveness of any Benchmark Replacement Conforming Changes in connection with the use or administration of the Term SOFR Rate or clause (c) of the definition of the Alternate Base Rate.
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2.5 Interest Periods. In order to convert a Base Rate Loan or Term SOFR Rate Loan or continue a Term SOFR Rate Loan, the Borrower shall deliver to the Administrative Agent a duly completed, written request therefor substantially in the form of Exhibit I (each, a “Conversion or Continuation Notice”) not later than 11:00 a.m. (New York City time) (i) with respect to a conversion to or continuation of a Term SOFR Rate Loan, at least three (3) U.S. Government Securities Business Days prior to the proposed effective date of such conversion or continuation and (ii) with respect to a conversion to a Base Rate Loan, at least one (1) Business Day prior to the proposed effective date of such conversion. The Conversion or Continuation Notice shall specify (i) which Borrowings (including the principal amount thereof) are subject to such request, and, in the case of any Term SOFR Rate Loan to be converted or continued, the last day of the current Interest Period therefor, (ii) the proposed effective date of such conversion or continuation (which shall be a Business Day), (iii) whether the Borrower is requesting a continuation of Term SOFR Rate Loans or a conversion of Borrowings from one Interest Rate Option to another Interest Rate Option, and (iv) if a continuation of or conversion to Term SOFR Rate Loans is requested, the requested Interest Period with respect thereto. Notwithstanding the foregoing, for so long as the Term SOFR Rate is available, the Borrower shall not be able to (and shall not request to) borrow, or convert to, a Base Rate Loan. In addition, the following provisions shall apply to any continuation of or conversion of any Borrowings:
(a) Amount of Loans. After giving effect to such conversion or continuation, each Borrowing of Term Loans shall be in an amount no less than the applicable minimum amount for Term Loans as set forth in Section 2.1(b).
(b) Commencement of Interest Period. In the case of any borrowing of, conversion to or continuation of any Term SOFR Rate Loan, the Interest Period shall commence on the date of advance or continuation of, or conversion to, any Term SOFR Rate Loan and, in the case of immediately successive Interest Periods, each successive Interest Period shall commence on the date on which the immediately preceding Interest Period expires. Upon a conversion from a Term SOFR Rate Loan to a Base Rate Loan, interest at the Base Rate Option shall commence on the last day of the existing Interest Period.
(c) Selection of Interest Rate Options. If the Borrower elects to continue a Term SOFR Rate Loan but fails to select a new Interest Period to apply thereto, then a one-month Interest Period automatically shall apply. If the Borrower fails to duly request the continuation of any Borrowing consisting of Term SOFR Rate Loans on or before the date specified and otherwise in accordance with the provisions of this Section 2.5, then such Term SOFR Rate Loan shall be automatically continued as a Term SOFR Rate Loan with a one-month Interest Period.
2.6 Making of Loans.
(a) Notifications and Payments. The Administrative Agent shall, promptly after receipt by it of a Loan Request, notify the applicable Lenders of its receipt of such Loan Request specifying the information provided by the Borrower and the apportionment among the Lenders of the requested Loan as determined by the Administrative Agent in accordance with Section 2.1, Section 2.2 or Section 2.3, as applicable. Each applicable Lender shall remit the principal amount of their Pro Rata Share of the applicable Loan to the Administrative Agent such that the Administrative Agent is able to, and the Administrative Agent shall, to the extent the Lenders have made funds available to it for such purpose and subject to the terms and conditions of Section 2.1, Section 2.2 or Section 2.3, as applicable, fund such Loan to the Borrower in Dollars and immediately available funds to the account of the Borrower specified in the Loan Request prior to 2:00 p.m. (New York City time) on the proposed Borrowing Date.
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(b) Pro Rata Treatment of Lenders. The borrowing of any Tranche of Loan, as applicable, shall be allocated to each Lender of such Tranche of Loan, as applicable, according to its Pro Rata Share thereof, and each selection of, conversion to or renewal of any Interest Rate Option and each payment or prepayment by the Borrower with respect to principal and interest due from the Borrower hereunder to the Lenders with respect to the applicable Tranche of Commitments and Loan, as applicable, shall (except as otherwise may be provided with respect to a Defaulting Lender and except as provided in Section 2.3(e), Section 3.1 or Section 3.6) be payable ratably among the Lenders of such Tranche of Loan, as applicable, entitled to such payment in accordance with the amount of principal and interest then due or payable to such Lenders as set forth in this Agreement.
(c) Presumptions by the Administrative Agent. Unless the Administrative Agent shall have received written notice from a Lender prior to the proposed Borrowing Date that such Lender will not make available to the Administrative Agent such Lender’s Pro Rata Share of any Loan, the Administrative Agent may assume that such Lender has made such Pro Rata Share available on such date in accordance with Section 2.1, Section 2.2 or Section 2.3, as the case may be, and may (but is not required to), in reliance upon such assumption, make available to the Borrower a corresponding amount. In such event, if a Lender has not in fact made its share of such Loan available to the Administrative Agent, then the applicable Lender and the Borrower agree to pay to the Administrative Agent forthwith on demand such corresponding amount with interest thereon, for each day from and including the date such amount is made available to the Borrower to but excluding the date of payment to the Administrative Agent, at (i) in the case of a payment to be made by such Lender, the greater of the Federal Funds Effective Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation and (ii) in the case of a payment to be made by the Borrower, the interest rate then applicable to Base Rate Loans. If such Lender pays its share of the applicable Loan to the Administrative Agent, then the amount so paid shall constitute such Lender’s Loan. Any payment by the Borrower shall be without prejudice to any claim the Borrower may have against a Lender that shall have failed to make such payment to the Administrative Agent. If the Borrower and such Lender pay such interest for the same period, the Administrative Agent promptly shall remit to the Borrower the amount of interest paid by the Borrower for such overlapping period. Nothing in this Section 2.6(c) or elsewhere in this Agreement or the other Loan Documents, including the provisions of Section 2.14, shall be deemed to require the Administrative Agent (or any other Lender) to advance funds on behalf of any Lender or to relieve any Lender from its obligation to fulfill its commitments hereunder or to prejudice any rights that the Administrative Agent or the Borrower may have against any Lender as a result of any default by such Lender hereunder.
2.7 Fees.
(a) MOIC Payment. Upon the occurrence of a MOIC Trigger Event, the Borrower shall pay to the Administrative Agent, for the ratable benefit of the Lenders, as compensation for the costs of those Lenders making funds available to the Borrower under this Agreement, a fee equal to the MOIC Amount on such repayment or prepayment date.
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(b) Other Fees. The Borrower agrees to pay to the Administrative Agent pursuant to the terms of the Agent Fee Letter.
2.8 Notes. The obligation of the Borrower to repay the aggregate unpaid principal amount of the Term Loans made to it by each Lender, together with interest thereon, shall, at the request of the applicable Lender, be evidenced by a Note, dated as of the applicable Borrowing Date or the date of such request, as applicable, payable to such Lender in a face amount equal to the applicable Term Loan Commitment of such Lender. The Borrower hereby unconditionally promises to pay, to each of the Lenders, the Administrative Agent, as applicable, the Loans and other Obligations as provided in this Agreement and the other Loan Documents.
2.9 [Reserved].
2.10 Payments.
(a) Payments Generally. All payments and prepayments to be made in respect of principal, interest, other fees referred to in Section 2.7 or other fees or amounts due from the Borrower hereunder shall be payable prior to 11:00 a.m. (New York City time) on the date when due without presentment, demand, protest or notice of any kind, all of which are hereby expressly waived by the Borrower, and without set-off, counterclaim or other deduction of any nature, and an action therefor shall immediately accrue. Such payments shall be made to the Administrative Agent for the account of the Lenders to which they are owed, in each case in Dollars and in immediately available funds. The Administrative Agent shall promptly distribute such amounts to the applicable Lenders in immediately available funds. The Administrative Agent’s and each Lender’s statement of account, ledger or other relevant record shall, in the absence of manifest error, be conclusive as the statement of the amount of principal of and interest on the Loans and other amounts owing under this Agreement and shall be deemed an “account stated.”
(b) Payments by the Borrower; Presumptions by the Administrative Agent. Unless the Administrative Agent shall have received notice from the Borrower prior to the date on which any payment is due to the Administrative Agent for the account of the Lenders hereunder that the Borrower will not make such payment, the Administrative Agent may assume that the Borrower has made such payment on such date in accordance herewith and may (but is not required to), in reliance upon such assumption, distribute to the Lenders the amount due. In such event, if the Borrower has not in fact made such payment, then each of the Lenders severally agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to such Lender, with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Administrative Agent, at the greater of the Federal Funds Effective Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation.
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2.11 Interest Payment Dates. Interest on Base Rate Loans shall be due and payable in arrears on each applicable Interest Payment Date. Interest on Term SOFR Rate Loans shall be due and payable on the last day of each Interest Period for those Loans. Interest on mandatory prepayments of principal under Section 2.13 shall be due on the date such mandatory prepayment is due. Interest on the principal amount of each Loan not constituting a Base Rate Loan or Term SOFR Rate Loan or on other monetary Obligation shall be due and payable on demand after such principal amount or other monetary Obligation becomes due and payable (whether on the stated Maturity Date, upon an accelerated Maturity Date or otherwise). Any accrued and unpaid interest on the Loans shall be paid on the Maturity Date. All interest shall be payable in cash; provided that the Borrower may elect that a portion of the interest otherwise payable in cash with respect to the Loans for any Interest Period be paid in-kind (such interest amount, the “PIK Interest” and such election, the “PIK Election”) by delivering a written notice (each, a “PIK Election Notice”) to the Administrative Agent not later than two (2) Business Days prior to the commencement of such Interest Period. Each PIK Election Notice shall specify the applicable Interest Period and the percentage of interest for such Interest Period that shall be subject to such PIK Election; provided that, after giving effect to such PIK Election, the portion of interest payable in cash for such Interest Period on the Loans subject to the PIK Election shall not be less than the Term SOFR Rate plus 2.00% or, in the case of the Base Rate Option, Alternate Base Rate plus 1.00%. Following a PIK Election, any PIK Interest shall automatically (i) increase the principal amount of the Loans on such payment date in the amount of such PIK Interest on the date interest would otherwise have been due pursuant to Section 2.11, (ii) be treated as principal under the Loans for all purposes, (iii) accrue interest in accordance with the provisions of this Agreement applicable to the Term Loans and (iv) shall be payable in full in cash as a Loan on the Maturity Date, upon an accelerated Maturity Date or otherwise in accordance with the terms of this Agreement. To the extent all or any portion of the cash interest payment cannot be paid in cash by the Borrower due to the inability of the Borrower’s Subsidiaries to dividend cash to the Borrower in an amount necessary to make such cash interest payment due to the CoBank Credit Agreement’s restricted payments covenant exception governing the payment of cash interest on the Loans, any such interest amount (and solely with respect of the amount of cash interest that cannot be paid in cash), that would otherwise be payable in cash, shall be paid-in-kind for the applicable Interest Period pursuant to the terms herein and shall be deemed PIK Interest hereunder.
2.12 Voluntary Prepayments and Reduction of Commitments.
(a) Right to Prepay. The Borrower shall have the right at its option from time to time to prepay the Loans in whole or part without premium or penalty (except as provided in Sections 2.7, 11.3, 3.1 and 3.5). Whenever the Borrower desires to prepay any part of the Loans, it shall provide a prepayment notice to the Administrative Agent by 11:00 a.m. (New York City time) at least (A) three (3) U.S. Government Securities Business Days prior to the date of prepayment of Term SOFR Rate Loans or (B) one (1) Business Day prior to the date of prepayment of Base Rate Loans, in each case, setting forth the following information:
(i) the date, which shall be a Business Day, on which the proposed prepayment is to be made;
(ii) a statement indicating the application of the prepayment among Tranches of Loans and Borrowings, as applicable; and
(iii) the total principal amount of such prepayment, which shall not be less than the lesser of the following: (A) the then outstanding principal amount of such Tranche of Loans, or (B) $500,000 (provided, that the amount of any prepayment to which this Section 2.12(a)(iii)(B) applies shall be in integral multiples of $100,000).
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Except as otherwise expressly provided herein with respect to refinancings, all prepayment notices shall be irrevocable. The principal amount of the Loans for which a prepayment notice is given, together with interest on such principal amount, shall be due and payable on the date specified in such prepayment notice as the date on which the proposed prepayment is to be made. So long as no Event of Default has occurred and is continuing, voluntary prepayments shall be applied to any outstanding Term Loans as the Borrower may direct; provided that all prepayments with respect to Term Loans permitted pursuant to this Section 2.12 shall be applied pro rata among all Tranches of Term Loans. If the Borrower prepays a Loan but fails to specify the applicable Borrowing that the Borrower intends to prepay or if an Event of Default has occurred and is continuing, then such prepayment shall be applied first, ratably to all outstanding Term Loans that are Base Rate Loans, if any, and second ratably to all outstanding Term Loans that are Term SOFR Rate Loans. Any prepayment hereunder shall include all interest and fees due and payable with respect to the Loan being prepaid and shall be subject to the Borrower’s Obligation to indemnify the Lenders under Section 3.5. Notwithstanding the foregoing, any prepayment notice delivered in connection with any proposed refinancing of all of the Facilities may be, if expressly so stated in the applicable prepayment notice, contingent upon the consummation of such refinancing, and (x) the repayment date therefor may be amended from time to time by notice from the Borrower to the Administrative Agent and/or (y) such prepayment notice may be revoked by the Borrower in the event such refinancing is not consummated (provided that the failure of such contingency shall not relieve the Borrower from its obligations in respect thereof under Section 3.5).
2.13 Mandatory Prepayments.
(a) [Reserved].
(b) Disposition of Assets. Within five (5) Business Days following the receipt by the Borrower or Subsidiary thereof of the Net Cash Proceeds from any Disposition not expressly permitted by Section 7.7, the Borrower shall prepay, or cause such Subsidiary to prepay, Obligations in an aggregate amount equal to 100% of the Net Cash Proceeds of such Disposition. All such proceeds shall be paid and applied in accordance with Sections 2.13(g) and (h). Notwithstanding anything herein to the contrary, no such mandatory prepayment shall constitute or be deemed to constitute a cure of any Default or Event of Default arising as a result of the Disposition giving rise to such prepayment obligation.
(c) Casualty Events. Within five (5) Business Days following the receipt by the Borrower or Subsidiary thereof of the Net Cash Proceeds of any Casualty Event or series of related Casualty Events affecting any property of the Borrower, the Borrower shall prepay, or cause such Subsidiary thereof to prepay, Obligations in an aggregate amount equal to 100% of the Net Cash Proceeds of such Casualty Event(s). All such proceeds shall be paid and applied in accordance with Sections 2.13(g) and (h). Notwithstanding anything herein to the contrary, no such mandatory prepayment shall constitute or be deemed to constitute a cure of any Default or Event of Default arising as a result of such Casualty Event(s) giving rise to such prepayment obligation.
(d) [Reserved].
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(e) Debt Incurrence. Within five (5) Business Days following the receipt by the Borrower or Subsidiary thereof of the Net Cash Proceeds of any Debt Incurrence, other than a Debt Incurrence permitted under Section 7.1, the Borrower shall prepay, or cause such Subsidiary thereof to prepay, Obligations in an amount equal to 100% of the amount of such Net Cash Proceeds. All such proceeds shall be paid and applied in accordance with Sections 2.13(g) and (h). Notwithstanding anything herein to the contrary, any such prepayment shall not constitute or be deemed to be a cure of any Default or Event of Default arising as a result of such Debt Incurrence.
(f) Excess Cash Flow. Within ten (10) Business Days of delivery of the Borrower’s annual audited financial statements pursuant to Section 6.1 for the fiscal year ending December 31, 2026 and for each fiscal year ending thereafter during the term hereof but in any event no later than five (5) Business Days after the date on which the Compliance Certificate for such fiscal year is due in accordance with Section 6.1(c), the Borrower shall prepay the Obligations as follows in an aggregate amount equal to (i) fifty percent (50%) of Excess Cash Flow when the Total Net Leverage Ratio (calculated before giving effect to such prepayment) is greater than 5.00:1.00; (ii) twenty-five percent (25%) of Excess Cash Flow when the Total Net Leverage Ratio is greater than 4.50:1.00 but less than or equal to 5.00:1.00; and (iii) zero percent (0%) when the Total Net Leverage Ratio is less than or equal to 4.50:1.00, in each case, with Excess Cash Flow calculated for the immediately preceding fiscal year; provided, however, that no Excess Cash Flow payment pursuant to this clause (f) shall be required if such payment is equal to or less than $1,000,000 (and then only amounts in excess of $1,000,000 shall be required to be paid pursuant to this clause (f)). All such proceeds shall be paid and applied in accordance with Sections 2.13(g) and (h).
(g) Application Among Obligations. All prepayments pursuant to this Section 2.13 shall be applied, to prepay any remaining Term Loans, pro rata among all Tranches.
(h) Interest Payments; Application Among Interest Rate Options. All prepayments pursuant to this Section 2.13 shall be accompanied by accrued and unpaid interest upon the principal amount of each such prepayment and written notice to the Administrative Agent by 11:00 am (New York City time) at least two (2) Business Day’s prior to such prepayment pursuant to this Section 2.13. Subject to Section 2.13(g), all prepayments required pursuant to this Section 2.13 shall first be applied to Base Rate Loans and then to Term SOFR Rate Loans. In accordance with Section 3.5, the Borrower shall indemnify the Lenders for any loss or expense, including loss of margin, incurred with respect to any such prepayments applied against Term SOFR Rate Loans on any day other than the last day of the applicable Interest Period.
(i) Payments Not Required. Notwithstanding anything in this Section 2.13 to the contrary, no payments shall be required pursuant to this Section 2.13 at any time that the CoBank Credit Agreement is in effect.
2.14 Sharing of Payments by Lenders. If any Lender shall, by exercising any right of setoff, counterclaim or banker’s lien, by receipt of voluntary payment, by realization upon security, or by any other non-pro rata source or otherwise, obtain payment in respect of any principal of or interest on any of its Loans or other obligations hereunder resulting in such Lender receiving payment of a proportion of the aggregate amount of its Loans and accrued interest thereon or other such obligations greater than its pro-rata share of the amount such Lender is entitled hereunder, then the Lender receiving such greater proportion shall (a) notify the Administrative Agent of such fact, and (b) purchase (for cash at face value) participations in the Loans and such other obligations of the other Lenders, or make such other adjustments as shall be equitable, so that the benefit of all such payments shall be shared by the Lenders ratably in accordance with the aggregate amount of principal of and accrued interest on their respective Loans and other Obligations owing them, provided that:
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(a) if any such participations are purchased and all or any portion of the payment giving rise thereto is recovered, such participations shall be rescinded and the purchase price restored to the extent of such recovery, without interest other than interest or other amounts, if any, required by Law (including court order) to be paid by the Lender or the holder making such purchase; and
(b) the provisions of this Section 2.14 shall not be construed to apply to (x) any payment (including the application of funds arising from the existence of a Defaulting Lender) made by the Borrower pursuant to and in accordance with the express terms of the Loan Documents or (y) any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans or Participation Advances to any assignee or participant.
The Borrower consents to the foregoing and agrees, to the extent it may effectively do so under applicable Law, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against the Borrower rights of setoff and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of the Borrower in the amount of such participation.
2.15 Defaulting Lenders.
(a) Defaulting Lender Adjustments. Notwithstanding anything to the contrary contained in this Agreement, if any Lender becomes a Defaulting Lender, then, until such time as such Lender is no longer a Defaulting Lender, to the extent permitted by applicable Law:
(i) Waivers and Amendments. Such Defaulting Lender’s right to approve or disapprove any amendment, waiver or consent with respect to this Agreement shall be restricted as set forth in the definition of Required Lenders.
(ii) Defaulting Lender Waterfall. Any payment of principal, interest, fees or other amounts received by the Administrative Agent for the account of such Defaulting Lender (whether voluntary or mandatory, at maturity, pursuant to Article IX or otherwise) or received by the Administrative Agent from a Defaulting Lender pursuant to Section 9.2(c) shall be applied at such time or times as may be determined by the Administrative Agent as follows: first, to the payment of any amounts owing by such Defaulting Lender to the Administrative Agent hereunder; second, as the Borrower may request (so long as no Default or Event of Default exists), to the funding of any Loan in respect of which such Defaulting Lender has failed to fund its portion thereof as required by this Agreement, as determined by the Administrative Agent; third, if so determined by the Administrative Agent and the Borrower, to be held in a deposit account and released pro rata in order to satisfy such Defaulting Lender’s potential future funding obligations with respect to Loans under this Agreement ; fourth, to the payment of any amounts owing to the Lenders as a result of any judgment of a court of competent jurisdiction obtained by any Lender against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement; fifth, so long as no Default or Event of Default exists, to the payment of any amounts owing to the Borrower as a result of any judgment of a court of competent jurisdiction obtained by the Borrower against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement; and sixth, to such Defaulting Lender or as otherwise directed by a court of competent jurisdiction. Any payments, prepayments or other amounts paid or payable to a Defaulting Lender that are applied (or held) to pay amounts owed by a Defaulting Lender pursuant to this Section 2.15(a) shall be deemed paid to and redirected by such Defaulting Lender, and each Lender irrevocably consents hereto.
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(b) Defaulting Lender Cure. If the Borrower and the Administrative Agent agree in writing that a Lender is no longer a Defaulting Lender, the Administrative Agent will so notify the parties hereto, whereupon as of the effective date specified in such notice and subject to any conditions set forth therein, that Lender will, to the extent applicable, purchase at par that portion of outstanding Loans of the other Lenders or take such other actions as the Administrative Agent may determine to be necessary to cause the Loans to be held pro rata by the Lenders in accordance with the Commitments under the applicable Facility, whereupon such Lender will cease to be a Defaulting Lender; provided that no adjustments will be made retroactively with respect to fees accrued or payments made by or on behalf of the Borrower while that Lender was a Defaulting Lender; and provided, further, that except to the extent otherwise expressly agreed by the affected parties, no change hereunder from Defaulting Lender to Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lender’s having been a Defaulting Lender.
III. INCREASED COSTS; TAXES; ILLEGALITY; INDEMNITY
3.1 Increased Costs.
(a) Increased Costs Generally. If any Change in Law shall:
(i) impose, modify or deem applicable any reserve (including pursuant to regulations issued from time to time by the Federal Reserve Board for determining the maximum reserve requirement (including any emergency, special, supplemental or other marginal reserve requirement) with respect to eurocurrency funding (currently referred to as “Eurocurrency liabilities” in Regulation D)), special deposit, compulsory loan, insurance charge or similar requirement against assets of, deposits with or for the account of, or credit extended or participated in by, any Lender;
(ii) subject any Recipient to any Taxes (other than (A) Indemnified Taxes, (B) Taxes described in clauses (b) through (d) of the definition of Excluded Taxes and (C) Connection Income Taxes) on its loans, loan principal, letters of credit, commitments, or other obligations, or its deposits, reserves, other liabilities or capital attributable thereto; or
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(iii) impose on any Lender or any applicable offshore interbank market any other condition, cost or expense (other than Taxes) affecting this Agreement or Loans made by such Lender or participation in any such Loan;
and the result of any of the foregoing shall be to increase the cost to such Lender or such other Recipient of making, converting to, continuing or maintaining any Loan or of maintaining its obligation to make any such Loan, or to reduce the amount of any sum received or receivable by such Lender or other Recipient hereunder (whether of principal, interest or any other amount) then, upon request of such Lender or other Recipient, the Borrower will pay to such Lender or other Recipient, as the case may be, such additional amount or amounts as will compensate such Lender or other Recipient, as the case may be, for such additional costs incurred or reduction suffered.
(b) Capital Requirements. If any Lender determines that any Change in Law affecting such Lender or any lending office of such Lender or such Lender’s holding company, if any, regarding capital or liquidity requirements, has or would have the effect of reducing the rate of return on such Lender’s capital or on the capital of such Lender’s holding company, if any, as a consequence of this Agreement, the Commitments of such Lender or the Loans made by such Lender, to a level below that which such Lender or such Lender’s holding company could have achieved but for such Change in Law (taking into consideration such Lender’s policies and the policies of such Lender’s holding company with respect to capital adequacy), then from time to time the Borrower will pay to such Lender such additional amount or amounts as will compensate such Lender or such Lender’s holding company for any such reduction suffered.
(c) Certificates for Reimbursement. A certificate of a Lender setting forth the amount or amounts necessary to compensate such Lender or its holding company, as the case may be, as specified in this Section 3.1 and delivered to the Borrower shall be conclusive absent manifest error. The Borrower shall pay such Lender the amount shown as due on any such certificate within ten (10) days after receipt thereof.
(d) Delay in Requests. Failure or delay on the part of any Lender to demand compensation pursuant to this Section 3.1 shall not constitute a waiver of such Lender’s right to demand such compensation, provided that the Borrower shall not be required to compensate a Lender pursuant to this Section 3.1 for any increased costs incurred or reductions suffered more than nine (9) months prior to the date that such Lender notifies the Borrower of the Change in Law giving rise to such increased costs or reductions and of such Lender’s intention to claim compensation therefor (except that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the nine (9) month period referred to above shall be extended to include the period of retroactive effect thereof).
3.2 Taxes.
(a) [Reserved].
(b) Payments Free of Taxes. Any and all payments by or on account of any obligation of the Borrower hereunder or under any other Loan Document shall be made free and clear of and without deduction or withholding for any Taxes, except as required by applicable Law. If any applicable Law (as determined in the good faith discretion of an applicable Withholding Agent) requires the deduction or withholding of any Tax from any such payment by a Withholding Agent, then the applicable Withholding Agent shall be entitled to make such deduction or withholding and shall timely pay the full amount deducted or withheld to the relevant Governmental Authority in accordance with applicable Law and, if such Tax is an Indemnified Tax, then the sum payable by the Borrower shall be increased as necessary so that after such deduction or withholding has been made (including such deductions and withholdings applicable to additional sums payable under this Section 3.2) the applicable Recipient receives an amount equal to the sum it would have received had no such deduction or withholding been made.
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(c) Payment of Other Taxes by the Borrower. The Borrower shall timely pay to the relevant Governmental Authority in accordance with applicable Law, or at the option of the Administrative Agent timely reimburse it for the payment of, any Other Taxes.
(d) Indemnification by the Borrower. The Borrower shall indemnify each Recipient, within ten (10) days after demand therefor, for the full amount of any Indemnified Taxes (including Indemnified Taxes imposed or asserted on or attributable to amounts payable under this Section 3.2) payable or paid by such Recipient or required to be withheld or deducted from a payment to such Recipient and any reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to the Borrower by a Lender (with a copy to the Administrative Agent), or by the Administrative Agent on its own behalf or on behalf of a Lender, shall be conclusive absent manifest error.
(e) Indemnification by the Lenders. Each Lender shall severally indemnify the Administrative Agent, within ten (10) days after demand therefor, for (i) any Indemnified Taxes attributable to such Lender (but only to the extent that the Borrower has not already indemnified the Administrative Agent for such Indemnified Taxes and without limiting the obligation of the Borrower to do so), (ii) [reserved] and (iii) any Excluded Taxes attributable to such Lender, in each case, that are payable or paid by the Administrative Agent in connection with any Loan Document, and any reasonable expenses arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to any Lender by the Administrative Agent shall be conclusive absent manifest error. Each Lender hereby authorizes the Administrative Agent to set off and apply any and all amounts at any time owing to such Lender under any Loan Document or otherwise payable by the Administrative Agent to the Lender from any other source against any amount due to the Administrative Agent under this clause (e).
(f) Evidence of Payments. As soon as practicable after any payment of Taxes by the Borrower to a Governmental Authority pursuant to this Section 3.2, the Borrower shall deliver to the Administrative Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Administrative Agent.
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(g) Status of Lenders.
(i) Any Lender that is entitled to an exemption from or reduction of withholding Tax with respect to payments made under any Loan Document shall deliver to the Borrower and the Administrative Agent, at the time or times reasonably requested by the Borrower or the Administrative Agent, such properly completed and executed documentation reasonably requested by the Borrower or the Administrative Agent as will permit such payments to be made without withholding or at a reduced rate of withholding. In addition, any Lender, if reasonably requested by the Borrower or the Administrative Agent, shall deliver such other documentation prescribed by applicable Law or reasonably requested by the Borrower or the Administrative Agent as will enable the Borrower or the Administrative Agent to determine whether or not such Lender is subject to backup withholding or information reporting requirements. Notwithstanding anything to the contrary in the preceding two sentences, the completion, execution and submission of such documentation (other than such documentation set forth in Section 3.2(g)(ii)(A), (g)(ii)(B) and (g)(ii)(D) below) shall not be required if in the Lender’s reasonable judgment such completion, execution or submission would subject such Lender to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of such Lender.
(ii) Without limiting the generality of the foregoing:
(A) any Lender that is a U.S. Person shall deliver to the Borrower and the Administrative Agent, on or prior to the date on which such Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent), executed copies of IRS Form W-9 certifying that such Lender (or, if such Lender is disregarded as an entity separate from its regarded owner for U.S. federal income tax purposes, such regarded owner) is not subject to U.S. federal backup withholding Tax;
(B) any Foreign Lender shall, to the extent it is legally entitled to do so, deliver to the Borrower and the Administrative Agent (in such number of copies as shall be reasonably requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent), whichever of the following is applicable:
(1) in the case of a Foreign Lender claiming the benefits of an income tax treaty to which the United States is a party (x) with respect to payments of interest under any Loan Document, executed copies of IRS Form W-8BEN or IRS Form W-8BEN-E, as applicable, establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the “interest” article of such tax treaty and (y) with respect to any other applicable payments under any Loan Document, IRS Form W-8BEN or IRS Form W-8BEN-E, as applicable, establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the “business profits” or “other income” article of such tax treaty;
(2) executed copies of IRS Form W-8ECI;
(3) in the case of a Foreign Lender claiming the benefits of the exemption for portfolio interest under Section 881(c) of the Code, (x) a Tax Compliance Certificate to the effect that such Foreign Lender is not (A) a “bank” within the meaning of Section 881(c)(3)(A) of the Code, (B) a “10 percent shareholder” of the Borrower within the meaning of Section 871(h)(3)(B) of the Code, or (C) a “controlled foreign corporation” related to the Borrower as described in Section 881(c)(3)(C) of the Code and (y) executed copies of IRS Form W-8BEN or IRS Form W-8BEN-E, as applicable; or
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(4) to the extent a Foreign Lender is not the beneficial owner, executed copies of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BEN or IRS Form W-8BEN-E, as applicable, a Tax Compliance Certificate, IRS Form W-9, and/or other certification documents from each beneficial owner, as applicable; provided that if the Foreign Lender is a partnership and one or more direct or indirect partners of such Foreign Lender are claiming the portfolio interest exemption, such Foreign Lender may provide a Tax Compliance Certificate on behalf of each such direct and indirect partner;
(C) any Foreign Lender shall, to the extent it is legally entitled to do so, deliver to the Borrower and the Administrative Agent (in such number of copies as shall be reasonably requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent), executed copies of any other form prescribed by applicable Law as a basis for claiming exemption from or a reduction in U.S. federal withholding Tax, duly completed, together with such supplementary documentation as may be prescribed by applicable Law to permit the Borrower or the Administrative Agent to determine the withholding or deduction required to be made; and
(D) if a payment made to a Lender under any Loan Document would be subject to U.S. federal withholding Tax imposed by FATCA if such Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender shall deliver to the Borrower and the Administrative Agent at the time or times prescribed by law and at such time or times reasonably requested by the Borrower or the Administrative Agent such documentation prescribed by applicable Law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by the Borrower or the Administrative Agent as may be necessary for the Borrower and the Administrative Agent to comply with their obligations under FATCA and to determine that such Lender has complied with such Lender’s obligations under FATCA or to determine the amount, if any, to deduct and withhold from such payment. Solely for purposes of this clause (D), “FATCA” shall include any amendments made to FATCA after the date of this Agreement.
Each Lender agrees that if any form or certification it previously delivered expires or becomes obsolete or inaccurate in any respect, it shall update such form or certification or promptly notify the Borrower and the Administrative Agent in writing of its legal inability to do so.
(h) Treatment of Certain Refunds. If any party determines, in its sole discretion exercised in good faith, that it has received a refund of any Taxes as to which it has been indemnified pursuant to this Section 3.2 (including by the payment of additional amounts pursuant to this Section 3.2), it shall pay to the indemnifying party an amount equal to such refund (but only to the extent of indemnity payments made under this Section 3.2 with respect to the Taxes giving rise to such refund), net of all out-of-pocket expenses (including Taxes) of such indemnified party and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund). Such indemnifying party, upon the request of such indemnified party, shall repay to such indemnified party the amount paid over pursuant to this clause (h) (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) in the event that such indemnified party is required to repay such refund to such Governmental Authority. Notwithstanding anything to the contrary in this clause (h), in no event will the indemnified party be required to pay any amount to an indemnifying party pursuant to this clause (h) the payment of which would place the indemnified party in a less favorable net after-Tax position than the indemnified party would have been in if the Tax subject to indemnification and giving rise to such refund had not been deducted, withheld or otherwise imposed and the indemnification payments or additional amounts with respect to such Tax had never been paid. This clause (h) shall not be construed to require any indemnified party to make available its Tax returns (or any other information relating to its Taxes that it deems confidential) to the indemnifying party or any other Person.
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3.3 Illegality. If any Lender determines that any Law has made it unlawful, or that any Governmental Authority has asserted that it is unlawful, for any Lender or its applicable lending office to make, maintain or fund any Loans (other than Base Rate Loans) or to determine or charge interest based upon any Benchmark, then, upon notice thereof by such Lender to the Borrower (through the Administrative Agent), (a) any obligation of the Lenders to make such Loans, and any right of the Borrower to continue such Loans or to convert Base Rate Loans to such Loans, shall be suspended, and (b), if necessary to avoid such illegality, the interest rate on the Base Rate Loans shall be determined by the Administrative Agent without reference to clause (c) of the definition of “Alternate Base Rate”, in each case until such Lender notifies the Administrative Agent and the Borrower that the circumstances giving rise to such determination no longer exist. Upon receipt of such notice,
(i) the Borrower shall, if necessary to avoid such illegality, upon demand from any Lender (with a copy to the Administrative Agent), prepay or, if applicable, convert all such Loans to Base Rate Loans (if necessary to avoid such illegality, the interest rate on the Base Rate Loans of such Lender shall be determined by the Administrative Agent without reference to clause (c) of the definition of “Alternate Base Rate”),
(A) if such Loans are not subject to an Interest Period, immediately, or
(B) if such Loans are subject to an Interest Period, on the last day of the Interest Period therefor, if all affected Lenders may lawfully continue to maintain such Loans to such day, or immediately, if any Lender may not lawfully continue to maintain such Loans to such day, and
(ii) if necessary to avoid such illegality, the Administrative Agent shall during the period of such suspension compute the Alternate Base Rate without reference to clause (c) of the definition of “Alternate Base Rate,” in each case until the Administrative Agent is advised in writing by each affected Lender that it is no longer illegal for such Lender to determine or charge interest rates based upon such Benchmark. Upon any such prepayment or conversion, the Borrower shall also pay accrued and unpaid interest on the amount so prepaid or converted, together with any additional amounts required pursuant to Section 3.5.
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3.4 Inability to Determine Rate; Cost; Interest After Default.
(a) Inability to Determine Rate; Cost. Subject to Section 3.7, if, on or prior to the commencement of any Interest Period (or, in the case of any Benchmark that is not subject to an Interest Period, on any Business Day):
(i) the Administrative Agent determines (which determination shall be conclusive and binding absent manifest error) that for any reason (other than a Benchmark Transition Event) any Benchmark cannot be determined pursuant to the definition thereof;
(ii) the Required Lenders determine that for any reason in connection with any request for a Loan that is subject to an Interest Period or a conversion thereto or a continuation thereof that the Benchmark for any requested Interest Period with respect to a proposed Loan does not adequately and fairly reflect the cost to such Lenders of making and maintaining such Loan, and the Required Lenders have provided notice of such determination to the Administrative Agent; or
(iii) the Required Lenders determine that for any reason in connection with any request for a Loan that is not subject to an Interest Period (other than a Base Rate Loan) or a conversion thereto or a continuation thereof or the maintaining thereof that the Benchmark with respect to a proposed Loan or outstanding Loan does not adequately and fairly reflect the cost to such Lenders of making and maintaining such Loan, and the Required Lenders have provided notice of such determination to the Administrative Agent, then the Administrative Agent shall give notice thereof to the Borrower and the Lenders.
Upon notice thereof by the Administrative Agent to the Borrower,
(1) any obligation of the Lenders to make such Loans that are subject to an Interest Period, and any right of the Borrower to continue such Loans or to convert to such Loans, shall be suspended (to the extent of the affected Loans or affected Interest Periods) until the Administrative Agent (with respect to clause (ii), at the written instruction of the Required Lenders) revokes such notice;
(2) any obligation of the Lenders to make or maintain such Loans that are not subject to an Interest Period (other than Base Rate Loans), and any right of the Borrower to continue such Loans or to convert to such Loans (other than Base Rate Loans), shall be suspended (to the extent of the affected Loans) until the Administrative Agent (with respect to clause (iii), at the written instruction of the Required Lenders) revokes such notice;
(3) the Borrower may revoke any pending request for a borrowing of, conversion to or continuation of such Loans (to the extent of the affected Loans or affected Interest Periods) or, failing that, the Borrower will be deemed to have converted any such request into a request for a Borrowing of or conversion to Base Rate Loans in the amount specified therein;
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(4) any outstanding affected Loans will be deemed to have been converted into Base Rate Loans at the end of the applicable Interest Period (or if such Loans are not subject to an Interest Period, immediately) and, upon any such conversion, the Borrower shall also pay accrued interest on the amount so converted, together with any additional amounts required pursuant to Section 3.5; and
(5) in the case of any such notice under Section 3.4(a)(i) regarding any Benchmark used as a component of the Alternate Base Rate, such component will not be used in any determination of Base Rate Loans until such notice is revoked.
(b) Default Rate. To the extent permitted by Law, immediately upon the occurrence and during the continuation of an Event of Default under clause (a) or (l) of Section 9.1, or immediately after written demand by the Required Lenders to the Administrative Agent after the occurrence and during the continuation of any other Event of Default, then the principal amount of all Obligations shall bear interest at the Default Rate. The Borrower acknowledges and agrees that the increase in rates referred to in this Section 3.4(b) reflects, among other things, the fact that such Loans or other amounts have become a substantially greater risk given their default status and that the Lenders are entitled to additional compensation for such risk; and all such interest shall be payable by the Borrower upon demand by the Administrative Agent.
3.5 Indemnity. Upon demand of any Lender (with a copy to the Administrative Agent) from time to time, the Borrower shall promptly compensate such Lender for and hold such Lender harmless from any loss, cost or expense attributable to or incurred by it as a result of:
(a) any continuation, conversion, payment or prepayment of any Loan that is subject to an Interest Period on a day other than the last day of the Interest Period for such Loan (whether voluntary, mandatory, automatic, by reason of acceleration, or otherwise); or
(b) any failure by the Borrower (for a reason other than the failure of such Lender to make a Loan) to prepay, borrow, continue or convert any Loan subject to an Interest Period on the date or in the amount notified by the Borrower;
including any loss of anticipated profits and any loss, cost or expenses arising from the liquidation or reemployment of funds or from any fees payable. The Borrower shall also pay any customary administrative fees charged by such Lender in connection with the foregoing.
3.6 Mitigation Obligations; Replacement of Lenders. In each case, solely after the Acquisition Agreement Period:
(a) Designation of a Different Lending Office. If any Lender (other than any Lender that is an affiliate of the GCI Group) requests compensation under Section 3.1, or requires the Borrower to pay any Indemnified Taxes or additional amounts to any Lender (other than any Lender that is an affiliate of the GCI Group) or any Governmental Authority for the account of any Lender (other than any Lender that is an affiliate of the GCI Group) pursuant to Section 3.2, then such Lender shall (at the request of the Borrower) use reasonable efforts to designate a different lending office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the judgment of such Lender, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to Section 3.1 or Section 3.2, as the case may be, in the future, and (ii) would not subject such Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender. The Borrower hereby agrees to pay all reasonable costs and expenses incurred by any Lender in connection with any such designation or assignment.
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(b) Replacement of Lenders. If any Lender (other than any Lender that is an affiliate of the GCI Group) requests compensation under Section 3.1, or if the Borrower is required to pay any Indemnified Taxes or additional amounts to any Lender (other than any Lender that is an affiliate of the GCI Group) or any Governmental Authority for the account of any Lender (other than any Lender that is an affiliate of the GCI Group) pursuant to Section 3.2 and, in each case, such Lender has declined or is unable to designate a different lending office in accordance with Section 3.6(a) above or if any Lender is a Defaulting Lender or a Non-Consenting Lender, then the Borrower may, at its sole expense and effort, upon notice to such Lender and the Administrative Agent, require such Lender to assign and delegate, without recourse, all of its interests, rights (other than its existing rights to payments pursuant to Section 3.1 or 3.2) and obligations under this Agreement and the related Loan Documents to any Person that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment); provided that:
(i) [reserved];
(ii) such Lender shall have received payment of an amount equal to the outstanding principal of its Loans, accrued interest thereon, accrued fees and all other amounts payable to it hereunder and under the other Loan Documents (including any amounts under Section 3.5) from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the Borrower (in the case of all other amounts);
(iii) in the case of any such assignment resulting from a claim for compensation under Section 3.1 or payments required to be made pursuant to Section 3.2, such assignment will result in a reduction in such compensation or payments thereafter;
(iv) such assignment does not conflict with applicable Law; and
(v) in the case of any assignment resulting from a Lender becoming a Non-Consenting Lender, the applicable assignee shall have consented to the applicable amendment, waiver or consent.
A Lender shall not be required to make any such assignment or delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrower to require such assignment and delegation cease to apply.
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3.7 Benchmark Replacement Setting.
Notwithstanding anything to the contrary herein or in any other Loan Document:
(a) Replacing Benchmarks. Upon a date and time determined by the Administrative Agent as to any Benchmark which date shall be no later than the occurrence of a Benchmark Transition Event with respect to such Benchmark, the applicable Benchmark Replacement will replace the applicable then-current Benchmark for all purposes hereunder and under any Loan Document in respect of any setting of such Benchmark at or after 3:00 p.m. on the fifth Business Day after the date notice of such Benchmark Replacement is provided to the affected Lenders without any amendment to, or further action or consent of any other party to, this Agreement or any other Loan Document so long as the Administrative Agent has not received, by such time, written notice of objection to such Benchmark Replacement from the Required Lenders. At any time that the administrator of the applicable then-current Benchmark has permanently or indefinitely ceased to provide such Benchmark or such Benchmark has been announced by the regulatory supervisor for the administrator of such Benchmark pursuant to public statement or publication of information to be not representative of the underlying market and economic reality that such Benchmark is intended to measure and that representativeness will not be restored, the Borrower may revoke any request for a borrowing of, conversion to or continuation of Loans to be made, converted or continued that would bear interest by reference to such Benchmark until the Borrower’s receipt of notice from the Administrative Agent that a Benchmark Replacement has replaced such Benchmark, and, failing that, the Borrower will be deemed to have converted any such request into a request for a borrowing of or conversion to Base Rate Loans. During the period referenced in the foregoing sentence, the component of the Alternate Base Rate based upon such Benchmark (if any) will not be used in any determination of the Alternate Base Rate.
(b) Benchmark Replacement Conforming Changes. In connection with the use, administration, adoption or implementation of a Benchmark Replacement, the Administrative Agent, as directed in writing by the Required Lenders, will have the right to make Benchmark Replacement Conforming Changes from time to time and, notwithstanding anything to the contrary herein or in any other Loan Document, any amendments implementing such Benchmark Replacement Conforming Changes will become effective without any further action or consent of any other party to this Agreement or any other Loan Document.
(c) Notices; Standards for Decisions and Determinations. The Administrative Agent will promptly notify the Borrower and the Lenders of (i) the implementation of any Benchmark Replacement, and (ii) the effectiveness of any Benchmark Replacement Conforming Changes in connection with the use, administration, adoption or implementation of a Benchmark Replacement. The Administrative Agent will notify the Borrower of the removal or reinstatement of any tenor of a Benchmark pursuant to Section 3.7(d). Any determination, decision or election that may be made by the Administrative Agent or, if applicable, any Lender (or group of Lenders) pursuant to this Section 3.7, including any determination with respect to a tenor, rate or adjustment or of the occurrence or non-occurrence of an event, circumstance or date and any decision to take or refrain from taking any action, will be conclusive and binding absent manifest error and may be made in its or their sole discretion and without consent from any other party hereto or any other Loan Document, except, in each case, as expressly required pursuant to this Section 3.7.
(d) Unavailability of Tenor of Benchmark. At any time (including in connection with the implementation of a Benchmark Replacement), (i) if the applicable then-current Benchmark is a term rate (including the Term SOFR Rate), then the Administrative Agent (as directed in writing by the Required Lenders) may remove any tenor of such Benchmark that is unavailable or non-representative for Benchmark (including Benchmark Replacement) settings and (ii) the Administrative Agent (as directed in writing by the Required Lenders) may reinstate any such previously removed tenor for such Benchmark (including any applicable Benchmark Replacement) settings.
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3.8 Survival. Each party’s obligations under this Article III shall survive the resignation of the Administrative Agent or any assignment of rights by, or the replacement of, a Lender, the termination of the Commitments and the repayment, satisfaction or discharge of all obligations under any Loan Document.
IV. CONDITIONS OF LENDING
The obligation of each Lender to make Loans is subject to the performance by the Borrower of its Obligations to be performed hereunder at or prior to the making of any such Loans and to the satisfaction of the following further conditions:
4.1 Conditions Precedent. The obligation of each Lender to make the Term Loan Commitment and fund any Term Loans requested by the Borrower on the Closing Date are subject to the satisfaction of the following conditions on or before the Closing Date:
(a) Deliveries. The Administrative Agent and the Lenders shall have received each of the following:
(i) this Agreement, duly executed and delivered by the Borrower and each other Person which is a party hereto as of the Closing Date;
(ii) the Notes (if any), duly executed and delivered by the Borrower;
(iii) [reserved];
(iv) the Equity Commitment Letter, duly executed and delivered by the
Sponsor and accepted and agreed to by Borrower;
(v) [reserved];
(vi) a certificate of the Borrower signed by a Compliance Officer of the Borrower, dated as of the Closing Date, certifying as to the satisfaction of the conditions set forth in clauses (e), (f), (g) and (j) of this Section 4.1;
(vii) a duly completed, executed Solvency Certificate signed by a Compliance Officer of the Borrower;
(viii) [reserved];
(ix) a certificate dated as of the Closing Date and signed by the Secretary of the Borrower, certifying as appropriate as to: (a) resolutions of the governing body of the Borrower authorizing the execution, delivery and performance of the Loan Documents and all actions taken by the Borrower in connection with this Agreement and the other Loan Documents; (b) the names of the Authorized Officers authorized to sign the Loan Documents and their true signatures, (c) copies of its Organizational Documents as in effect on the Closing Date certified by the appropriate state official where such documents are filed in a state office (if so filed or required to be so filed) and (d) certificates from the appropriate state officials as to the continued existence and good standing or existence (as applicable) of the Borrower in each state where organized or qualified to do business;
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(x) customary written opinion of counsel for the Borrower (addressed to the Administrative Agent and the Lenders), dated as of the Closing Date, from Akin Gump Strauss Hauer & Feld LLP, counsel to the Borrower; and
(xi) the Agent Fee Letter, duly executed and delivered by the Borrower to the Administrative Agent.
(b) Closing Date Acquisition Agreement. The Administrative Agent shall have received a duly executed Closing Date Acquisition Agreement.
(c) [Reserved].
(d) [Reserved].
(e) Representations and Warranties. The representations and warranties specified in Section V of this Agreement and in the other Loan Documents shall then be true and correct in all material respects (or if qualified by materiality or a Material Adverse Change, in all respects) as of the Closing Date (except for any such representation and warranty that by its terms is made only as of an earlier date, which representation and warranty shall be true and correct in all material respects as of such earlier date).
(f) Default. No Default or Event of Default shall have occurred and be continuing or shall result therefrom.
(g) Material Adverse Change. Since December 31, 2024, no fact, event or circumstance shall have occurred or arisen that, individually or in combination with any other fact, event or circumstance, has had or would reasonably be expected to result in a Material Adverse Change with respect to Borrower and its Subsidiaries, taken as a whole.
(h) [Reserved].
(i) KYC Matters. The Administrative Agent shall have received, at least three (3) Business Days prior to the Closing Date, all documentation and other information requested by (or on behalf of) any Lender in order to comply with requirements of Anti-Corruption Laws, Anti-Terrorism Laws and Sanctions.
(j) Regulatory Approvals and Consents. Unless otherwise agreed to by the Lenders, the Lenders shall have received evidence that all material governmental (including, without limitation, HSR and FCC) authorizations, consents and waivers which are required with respect to the execution, delivery or performance of the Loan Documents, the Facilities, and the transactions contemplated hereby or thereby shall have been obtained or made and shall be in full force and effect.
(k) Payment of Fees. The Borrower shall have paid all fees and expenses related to the Facilities and this Agreement and the other Loan Documents payable on or before the Closing Date as required by this Agreement or any other Loan Document to the extent, solely in the case of reimbursement of expenses, invoices have been received at least five (5) Business Days prior to the Closing Date.
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4.2 Conditions Precedent to any Loan. The obligation of each Lender to fund any Term Loans requested by the Borrower is subject to the satisfaction of the following conditions on or before the funding of such Term Loan (such date, the “Funding Date”):
(a) the representations and warranties of the Borrower set forth in Article V of this Agreement and in the other Loan Documents shall then be true and correct in all material respects (or if qualified by materiality or a Material Adverse Change, in all respects) as of the Funding Date (except for any such representation and warranty that by its terms is made only as of an earlier date, which representation and warranty shall remain true and correct in all material respects as of such earlier date),
(b) no Event of Default or Default shall have occurred and be continuing,
(c) the Borrower shall have delivered a duly executed and completed Loan Request to the Administrative Agent for each Loan requested to be made pursuant to Section 2.1(b), and
(d) the Borrower shall have delivered a duly executed amendment to the CoBank Credit Agreement, in form and substance reasonably acceptable to the Borrower, the Administrative Agent and the Lenders.
V. REPRESENTATIONS AND WARRANTIES
On the Closing Date, on each Funding Date and each LCA Test Date, the Borrower represents and warrants to the Administrative Agent and each of the Lenders as follows:
5.1 Organization and Qualification. The Borrower and each Subsidiary of the Borrower (a) is a corporation, partnership or limited liability company or other entity as identified on Schedule 5.1, in each case duly organized, validly existing and in good standing under the laws of its jurisdiction of organization specified on Schedule 5.1, except to the extent that the failure of such Person to be in good standing would not reasonably be expected to result in a Material Adverse Change, (b) has the lawful power to own or lease its properties and to engage in the business it presently conducts or proposes to conduct, extent that the failure of such Person to do so would not reasonably be expected to result in a Material Adverse Change, and (c) is duly licensed or qualified and in good standing in each jurisdiction listed on Schedule 5.1 and in all other jurisdictions where the property owned or leased by it or the nature of the business transacted by it or both makes such licensing or qualification necessary except where the failure to be so duly licensed or qualified would not reasonably be expected to result in a Material Adverse Change.
5.2 Compliance With Laws.
(a) The Borrower and each Subsidiary of the Borrower is in compliance with all applicable Laws in all jurisdictions in which the Borrower and each Subsidiary of the Borrower is presently doing business except where the failure to do so could not reasonably be expected to result in a Material Adverse Change.
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(b) No Credit Extension, or use of any proceeds thereof, or entry into or performance by the Borrower of the Loan Documents to which it is a party contravenes any Law applicable to the Borrower or any Subsidiary of the Borrower or any of the Lenders.
5.3 Title to Properties. The Borrower and each Subsidiary of the Borrower (a) has good and marketable title to or valid leasehold interest in all properties, assets and other rights that it purports to own or lease or that are reflected as owned or leased on its books and records other than defects in title that do not materially interfere with its ability to conduct its business as currently conducted and except where the failure to have such title could not reasonably be expected to result in a Material Adverse Change, and (b) owns or leases all of its properties free and clear of all Liens except Permitted Liens.
5.4 Investment Company Act. The Borrower is not nor is any Subsidiaries of the Borrower an “investment company” registered or required to be registered under the Investment Company Act of 1940 or under the “control” of an “investment company” as such terms are defined in the Investment Company Act of 1940 and shall not become such an “investment company” or under such “control.”
5.5 Event of Default. No Event of Default or Default exists or is continuing.
5.6 Subsidiaries and Owners. As of the Closing Date, Schedule 5.6 states (a) the name of the Borrower and each Subsidiary of the Borrower, its jurisdiction of organization, the name of each direct holder of the Equity Interests of such Person, and the amount, percentage and type of, and the certificate number(s) (if any) evidencing, Equity Interests owned by such holder in such Person and (b) any options, warrants or other rights outstanding to purchase any such Equity Interests referred to in clause (a). All such Equity Interests have been validly issued and are fully paid and nonassessable (or, in the case of a partnership, limited liability company or similar Equity Interest, not subject to any capital call or other additional capital requirement) and are free and clear of all Liens, other than Permitted Liens. No Subsidiary of the Borrower is providing a Guarantee of the Obligations as of the Closing Date.
5.7 Power and Authority; Validity and Binding Effect.
(a) The Borrower has the full power to enter into, execute, deliver and carry out this Agreement and the other Loan Documents to which it is a party, to incur the Indebtedness contemplated by the Loan Documents and to perform its Obligations under the Loan Documents to which it is a party, and all such actions have been duly authorized by all necessary proceedings on its part.
(b) This Agreement and each of the other Loan Documents (i) has been duly and validly executed and delivered by the Borrower, and (ii) constitutes legal, valid and binding obligations of the Borrower, enforceable against the Borrower in accordance with its terms, subject only to limitations on enforceability imposed by (y) applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ rights generally, and (z) general equitable principles.
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5.8 No Conflict; Material Agreements; Consents.
(a) Neither the execution and delivery of this Agreement or the other Loan Documents by the Borrower nor the consummation of the transactions herein or therein contemplated or compliance with the terms and provisions hereof or thereof by any of them will conflict with, constitute a default under or result in any breach of (i) the terms and conditions of the Organizational Documents of the Borrower, (ii) any Material Agreement to which the Borrower or any of its Subsidiaries is a party or by which it or any of its Subsidiaries is bound or to which it is subject, or (iii) any applicable Law or any order, writ, judgment, injunction or decree to which the Borrower or any of its Subsidiaries is a party or by which it or any of its Subsidiaries or any of its respective property is bound or to which it is subject, or result in the creation or enforcement of any Lien, charge or encumbrance whatsoever upon any property (now or hereafter acquired) of the Borrower or any of its Subsidiaries. There is no default under any Material Agreement or order, writ, judgment, injunction or decree to which the Borrower or any of its Subsidiaries is a party or by which it or any of its Subsidiaries is bound or to which it is subject. The Borrower is not nor is any Subsidiary or their respective property is bound by any contractual obligation (including pursuant to any Material Agreement), or subject to any restriction in any of its Organizational Documents, or any requirement of Law that could reasonably be expected to result in a Material Adverse Change.
(b) No consent, approval, exemption, order or authorization of, or a registration or filing with, any Governmental Authority or any other Person is required by any Law or any agreement (including any Material Agreement) in connection with (i) the execution, delivery and carrying out of this Agreement, the other Loan Documents, (ii) [reserved], (iii) [reserved], (iv) [reserved] or (v) the execution of the Closing Date Acquisition Agreement, in each case except (i) those which have been duly obtained on or before the Closing Date, taken, given or made and are in full force and effect and (ii) those that could not reasonably be expected to result in a Material Adverse Change. Each of the Borrower’s Material Agreements is in full force and effect, and the Borrower has not received any written notice of termination, revocation or other cancellation (before any scheduled date of termination) in respect thereof.
5.9 Litigation. There are no actions, suits, proceedings or investigations pending or threatened in writing against the Borrower or any Subsidiary of the Borrower or any of their respective properties, including the Licenses, at law or in equity before any Governmental Authority that individually or in the aggregate (i) could reasonably be expected to result in a Material Adverse Change or (ii) purports to affect the legality, validity or enforceability of any Loan Document. The Borrower is not nor is any Subsidiary in violation of any order, judgement, writ, injunction or any decree of any Governmental Authority that could reasonably be expected to result in a Material Adverse Change.
5.10 Financial Statements.
(a) Audited Financial Statements. The audited financial statements most recently delivered in accordance with Section 6.1(b) (i) were prepared in accordance with GAAP consistently applied throughout the period covered thereby, except as otherwise expressly noted therein; (ii) fairly present the financial condition of Intermediate Holdings and its Subsidiaries as of the date thereof and their results of operations for the period covered thereby in accordance with GAAP consistently applied throughout the period covered thereby, except as otherwise expressly noted therein; and (iii) show all Material Indebtedness and other material liabilities and material Contingent Obligations, of Intermediate Holdings and its Subsidiaries as of the date thereof.
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(b) Unaudited Financial Statements. The unaudited financial statements most recently delivered by Borrower in accordance with Section 6.1(a) (i) were prepared in accordance with GAAP consistently applied throughout the period covered thereby, except as otherwise expressly noted therein, and (ii) fairly present in all material respects the financial condition of Intermediate Holdings and its Subsidiaries as of the date thereof and their results of operations for the period covered thereby, subject, in the case of clauses (i) and (ii), to the absence of footnotes and to normal year-end audit adjustments.
(c) Accuracy of Financial Statements. Neither Borrower nor any of its Subsidiaries has any liabilities, contingent or otherwise, or forward or long-term commitments that are not disclosed in the financial statements referred to in clauses (a) and (b) of this Section 5.10 or in the notes thereto, and except as disclosed therein there are no unrealized or anticipated losses from any commitments of Borrower or any Subsidiary of Borrower that could reasonably be expected to result in a Material Adverse Change.
(d) Material Adverse Change. Since December 31, 2024, no Material Adverse Change has occurred.
5.11 Margin Stock. The Borrower does not nor does any Subsidiary engage or intend to engage principally, or as one of its important activities, in the business of extending credit for the purpose, immediately, incidentally or ultimately, of purchasing or carrying margin stock (within the meaning of Regulation U, T or X as promulgated by the Board). No part of the proceeds of any Loan has been or will be used, immediately, incidentally or ultimately, to purchase or carry any margin stock or to extend credit to others for the purpose of purchasing or carrying any margin stock or that is inconsistent with the provisions of the regulations of the Board. The Borrower does not nor does any Subsidiary hold or intend to hold margin stock in such amounts that more than 25% of the reasonable value of the assets of the Borrower or Subsidiary of the Borrower are or will be represented by margin stock.
5.12 Full Disclosure. Neither this Agreement nor any other Loan Document, nor any certificate, written statement, agreement or other documents furnished to the Administrative Agent or any Lender in connection herewith or therewith (other than projections, budgets, estimates and other forward-looking statements), when taken as a whole, contains any untrue statement of a material fact or omits to state a material fact necessary in order to make the statements contained herein and therein, in light of the circumstances under which they were made, not misleading as of the time when made or delivered. Any projections, budgets, estimates or other forward-looking statements provided by or on behalf of the Borrower have been prepared by management in good faith and based on assumptions believed by management to be reasonable at the time such projections, budgets, estimates or other forward-looking statements were prepared, it being understood that the budgets, estimates or other forward-looking statements are as to future events and not to be viewed as fact and that actual results during the period or periods covered by such projections, budgets, estimates or other forward-looking statements may differ materially from such projected results. As of the Closing Date, the information included in the Beneficial Ownership Certification is true and correct in all respects.
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5.13 Taxes. All federal, state, local and other tax returns required to have been filed with respect to the Borrower and each Subsidiary of the Borrower have been filed, and payment or adequate provision has been made for the payment of all taxes, fees, assessments and other governmental charges that have or may become due pursuant to said returns or to assessments received, except to the extent that such taxes, fees, assessments and other charges are being contested in good faith by appropriate proceedings diligently conducted and for which such reserves or other appropriate provisions, if any, as shall be required by GAAP shall have been made.
5.14 Intellectual Property; Other Rights. Except as would not be expected to result in a Material Adverse Change, the Borrower and each Subsidiary of the Borrower owns or possesses all the Intellectual Property and all service marks, trade names, domain names, licenses, registrations, franchises, permits and other rights necessary to own and operate its properties and to carry on its business as presently conducted and planned to be conducted by the Borrower or Subsidiary, without known possible, alleged or actual conflict with the rights of others.
5.15 [Reserved].
5.16 Insurance. The properties of the Borrower are insured pursuant to policies and other bonds that are valid and in full force and effect and that provide coverage satisfying or surpassing the requirements set forth in Section 6.5.
5.17 Employee Benefits Compliance.
(a) Each Plan is in compliance in all material respects with its terms and with the applicable provisions of ERISA, the Code and other federal or state Laws. Each Plan that is intended to qualify under Section 401(a) of the Code has (i) received the most recently available favorable determination letter from the IRS, or (ii) an application for such a letter currently being processed by the IRS with respect thereto, or (iii) been adopted by means of a pre-approved plan document that has received the most recently available opinion letter from the IRS on which the plan sponsor is entitled to rely and, nothing has occurred that would reasonably be expected to prevent, or cause the loss of, such qualification.
(b) There are no pending or, to the best knowledge of the Borrower, threatened claims, actions or lawsuits, or action by any Governmental Authority, including any audit, investigation or enforcement action, with respect to any Plan that could reasonably be expected to result in a Material Adverse Change. There has been no prohibited transaction or violation of the fiduciary responsibility rules with respect to any Plan that has resulted or could reasonably be expected to result in a Material Adverse Change.
(c) No ERISA Event has occurred or is reasonably expected to occur that could reasonably be expected to result in a Material Adverse Change.
(d) The Unfunded Liability of each Plan is reflected on the financial statements referenced in Section 5.10.
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5.18 Environmental Matters.
(a) The facilities and properties currently or, to the knowledge of the Borrower, formerly, owned, leased or operated by the Borrower or any Subsidiary of the Borrower (the “Properties”) do not contain any Hazardous Materials attributable to the Borrower’s or Subsidiary’s ownership, lease or operation of the Properties in amounts or concentrations or stored or utilized which (i) constitute or constituted a violation of Environmental Laws, or (ii) could reasonably be expected to give rise to any Environmental Liability in excess of the Threshold Amount;
(b) The Borrower has not nor has any Subsidiary of the Borrower received any written notice of violation, alleged violation, non-compliance, liability or potential liability regarding environmental matters or compliance with Environmental Laws (and no related claim, complaint, proceeding, investigation or inquiry is pending or, to the knowledge of the Borrower or any Subsidiary of the Borrower, is threatened in writing, with regard to their activities at any of the Properties or the business operated by the Borrower (the “Business”)), or any prior Business for which the Borrower or any Subsidiary of the Borrower has retained liability under any Environmental Law;
(c) Hazardous Materials have not been transported or disposed of from the Properties in violation of, or in a manner or to a location which could reasonably be expected to give rise to any Environmental Liability for the Borrower or any Subsidiary of the Borrower, nor have any Hazardous Materials been generated, treated, stored or disposed of by or on behalf of the Borrower or any Subsidiary of the Borrower at, on or under any of the Properties in violation of Environmental Laws, or in a manner that could reasonably be expected to give rise to, Environmental Liability in excess of the Threshold Amount;
(d) The Borrower does not nor does any Subsidiary of the Borrower know of any basis for any permit, license or other approval required under any Environmental Law with regard to their activities at any of the Properties or the Business to be revoked, canceled, limited, terminated, modified, appealed or otherwise challenged where the failure to hold such permit, license or other approval could reasonably be expected, individually or in the aggregate, to result in a Material Adverse Change; and
(e) The Borrower does not nor does any Subsidiary of the Borrower know or any facts, events or circumstances that could give rise to any basis for any Environmental Liability of the Borrower or any Subsidiary of the Borrower.
5.19 Communications Regulatory Matters.
(a) As of the Closing Date and before and after giving effect to each Permitted Acquisition (if any), Schedule 5.19 (which Schedule shall be updated in accordance with Section 6.13) sets forth a true and complete list of the following information for each License issued to or utilized by the Borrower or its Subsidiaries: the granting authority, the name of the licensee, the type of service, the expiration date and the geographic area covered by such License. Other than as set forth in Schedule 5.19, each License is held by the Borrower or a wholly-owned, Domestic Subsidiary of the Borrower.
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(b) The Licenses are valid and in full force and effect without conditions, except for (x) such conditions as are generally applicable to holders of such Licenses, and (y) conditions pursuant to any letter of agreement, national security agreement, or similar arrangement or agreement with Team Telecom, or any of the DHS, the DOJ, or the DOD pursuant to their respective departmental authorities. The Borrower or a Subsidiary of the Borrower has all requisite power and authority required under the Communications Act and PUC Laws to hold the Licenses and to own and operate the Communications Systems. The Licenses constitute in all material respects all of the Licenses necessary for the operation of the Communications Systems in the same manner as it is presently conducted. No event has occurred and is continuing which could reasonably be expected to (i) result in the suspension, revocation, or termination of any such License or (ii) materially and adversely affect any rights of the Borrower or its Subsidiaries thereunder. The Borrower does not nor does any of its Subsidiaries have actual knowledge that any License will not be renewed in the ordinary course. The Borrower is not nor any of its Subsidiaries is a party to any investigation, notice of apparent liability, notice of violation, order or complaint issued by or before the FCC, PUC or any applicable Governmental Authority with respect to a License, and there are no proceedings pending by or before the FCC, PUC or any applicable Governmental Authority which would reasonably be expected to adversely affect the validity of any License.
(c) All of the material properties, equipment and systems owned, leased or managed by the Borrower or its Subsidiaries are, and (to the best knowledge of the Borrower and its Subsidiaries) all such property, equipment and systems to be acquired or added in connection with any contemplated system expansion or construction will be, in good repair, working order and condition (reasonable wear and tear excepted) and are and will be in compliance with all terms and conditions of the Licenses and all standards or rules imposed by any Governmental Authority or as imposed under any agreements with telecommunications companies and customers.
(d) Each of the Borrower and its Subsidiaries has made all material filings which are required to be filed by it, paid all material franchise, license, regulatory assessments or other fees and charges related to the Licenses or which are required to be paid or have become due pursuant to any authorization, consent, approval or license of, or registration or filing with, any Governmental Authority in respect of its business and has made appropriate provision as is required by GAAP for any such fees and charges which have accrued. All such filings are complete and accurate in all material respects.
(e) Each of the Borrower and its Subsidiaries has complied with all material requirements, rules, restrictions, and other terms and conditions required to be complied with respect to any Funding Program or associated with the receipt and use of funding from any Funding Agency. To the best of the Borrower’s knowledge, there are no pending audits or investigations by any Governmental Authority or Funding Agency threatened in writing regarding the Borrower’s or its Subsidiaries use of, or entitlement to, any funding received from any Funding Program.
5.20 Solvency. As of the Closing Date, the Borrower is Solvent.
5.21 [Reserved].
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5.22 Transactions with Affiliates.
No Affiliate and no officer or director of the Borrower or any of its Subsidiaries or any individual related by blood, marriage, adoption or otherwise to any such officer or director, or any Person in which any such officer or director or individual related thereto owns any beneficial interest, is a party to any agreement, contract, commitment or transaction with the Borrower or has any material interest in any material property used by the Borrower, except as permitted by Section 7.3.
5.23 Labor Matters.
There are no strikes, lockouts or slowdowns against the Borrower or any Subsidiary of the Borrower pending or, to the knowledge of the Borrower, threatened except as could not reasonably be expected to result in a Material Adverse Change. The hours worked by and payments made to employees of the Borrower and its Subsidiaries within the past five (5) years have not been in violation of the Fair Labor Standards Act or any other applicable Federal, state, local or foreign law dealing with such matters, except as could not reasonably be expected to result in a Material Adverse Change. The execution, delivery and performance of the Loan Documents will not give rise to any right of termination or right of renegotiation on the part of any union under any collective bargaining agreement to which the Borrower or any Subsidiary of the Borrower is bound.
5.24 Anti-Corruption; Anti-Terrorism and Sanctions.
(a) The Borrower or its Subsidiaries, Affiliates, and to the knowledge of Borrower, their officers, directors, employees and agents are in compliance, in all respects, with all applicable (i) Anti-Corruption Laws, (ii) Anti-Terrorism Laws and (iii) Sanctions.
(b) The Borrower has implemented and maintains in effect policies and procedures designed to ensure compliance by the Borrower and its Subsidiaries, Affiliates, officers, directors, employees and agents with all applicable (i) Anti-Corruption Laws, (ii) Anti-Terrorism Laws and (iii) Sanctions.
(c) The Borrower or its Subsidiaries, Affiliates, and to the knowledge of Borrower, their officers, directors, employees or agents are Sanctioned Persons or have engaged in, or are now engaged in, or will engage in, any dealings or transactions with any Sanctioned Person.
(d) No Credit Extension, use of proceeds or other transaction contemplated by this Agreement will violate any applicable (i) Anti-Corruption Laws, (ii) Anti-Terrorism Laws or (iii) Sanctions.
(e) The Borrower has provided to the Administrative Agent and the Lenders all information requested by the Administrative Agent and the Lenders regarding the Borrower and its Subsidiaries, Affiliates, officers, directors, employees and agents that is necessary for the Administrative Agent and the Lenders to collect to comply with applicable Anti-Corruption Laws, Anti-Terrorism Laws, Sanctions and other Laws.
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5.25 Borrower as a Holding Company. The Borrower does not own any assets other than the Equity Interests in Intermediate Holdings and does not conduct, transact or engage in any business or operations other than those incidental to its direct ownership of Intermediate Holdings. As the date hereof, prior to the incurrence of the Commitments hereunder, the Borrower does not have any liabilities for funded indebtedness.
5.26 Acquisition Not Subject to Exon Florio Provision of the Defense Production Act.
At the time any Acquisition or any other Investment is consummated, the Borrower is not a foreign person, the Borrower is not, directly or indirectly, owned or controlled by a foreign person and, therefore, such Acquisition or such Investment are not a transaction which the President has the authority to suspend or prohibit under the Exon Florio provision of the Defense Production Act of 1950, as amended. For the purpose of this section, (1) the term “foreign person” means either: (a) any foreign national foreign government or foreign entity; or (b) any entity, whether foreign or domestic, over which control is exercised or exercisable by a foreign national, foreign government or foreign entity; (2) the term “foreign entity” means any branch, partnership group or sub-group, association, estate, trust, corporation or division of a corporation, or organization organized under the laws of a foreign state if either its principal place of business is outside the United States or its equity securities are primarily traded on one or more foreign exchanges, except that, notwithstanding the foregoing, any such branch, partnership, group or sub-group, association, estate, trust, corporation or division of a corporation, or organization a majority of the equity interest in which is ultimately owned by U.S. nationals is not a foreign entity; (3) the term “owned” means ownership of the majority or largest minority share of outstanding voting interests of an entity; and (4) the term “control” means the power, direct or indirect, whether or not exercised, through the ownership of a majority or a dominant minority of the total outstanding voting interests in an entity, board, representation, proxy voting, a special share, contractual arrangements, formal or informal arrangements to act in concert, or other means, to determine, direct or decide important matters affecting an entity, including the sale, lease mortgage, pledge or other transfer of any of the tangible or intangible principal assets of the entity; the reorganization, merger, or dissolution of the entity; the closing, relocation or substantial alteration of the production, operational, or research and development facilities of the entity; major expenditures or investments, issuances of equity or debt, dividend payments or approval of the operating budget of the entity; the selection of new business lines or ventures that the entity will pursue; the entry into, termination, or nonfulfillment by the entity of significant contracts; the appointment or dismissal of officers or senior managers; and the amendment of the Articles of Incorporation, constituent agreement, or other Organizational Documents of the entity with respect to the matters set forth above.
VI. AFFIRMATIVE COVENANTS
The Borrower covenants and agrees that until Payment In Full of the Obligations, the Borrower shall comply at all times with the following covenants:
6.1 Reporting Requirements. The Borrower will furnish or cause to be furnished to the Administrative Agent and each of the Lenders:
(a) Quarterly Financial Statements. As soon as available and in any event within sixty (60) calendar days after the end of each of the first three fiscal quarters in each fiscal year, financial statements of Intermediate Holdings, consisting of a consolidated and consolidating balance sheet as of the end of such fiscal quarter and related consolidated and consolidating statements of income, stockholders or members equity and cash flows for the fiscal quarter then ended and the fiscal year through that date, all in reasonable detail and certified by a Compliance Officer of Intermediate Holdings as having been prepared in accordance with GAAP (subject to normal year-end audit adjustments and absence of footnote disclosures), consistently applied, and, commencing with the first full fiscal quarter ending after the Closing Date, setting forth in comparative form the respective financial statements for the corresponding date and period in the previous fiscal year.
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(b) Annual Financial Statements. As soon as available and in any event within one hundred and twenty (120) days after the end of each fiscal year of Intermediate Holdings, audited financial statements of Intermediate Holdings consisting of a consolidated and consolidating balance sheet as of the end of such fiscal year, and related consolidated and consolidating statements of income, stockholders’ equity and cash flows for the fiscal year then ended, all in reasonable detail, and certified by independent certified public accountants of nationally recognized standing reasonably satisfactory to the Administrative Agent and setting forth in comparative form the financial statements as of the end of and for the preceding fiscal year, including a comparison of actual performance to the Budget for such fiscal year and year-to-date delivered to the Administrative Agent pursuant to Section 6.1(d)(i). The certificate or report of accountants shall be free of qualifications as to “going concern” or scope of audit (other than (i) any consistency qualification that may result from a change in the method used to prepare the financial statements as to which such accountants concur and (ii) with respect to, or disclosure of an exception or qualification resulting from the impending maturity of the Obligations and/or the Obligations (as defined in the CoBank Credit Agreement) and breach or anticipated breach of the financial covenants set forth in Article VIII and/or the financial covenants set forth in Article VIII of the CoBank Credit Agreement) and shall not indicate the occurrence or existence of any event, condition or contingency that would materially impair the prospect of payment or performance of any covenant, agreement or duty of the Borrower under any of the Loan Documents. The Borrower shall deliver with such financial statements and certification by its accountants a letter of such accountants to the Administrative Agent and the Lenders substantially to the effect that, based upon their ordinary and customary examination of the affairs of Borrower, performed in connection with the preparation of such consolidated financial statements, and in accordance with GAAP, they are not aware of the existence of any condition or event that constitutes an Event of Default or Default or, if they are aware of such condition or event, stating the nature thereof.
(c) Compliance Certificate. Concurrently with the financial statements of Intermediate Holdings furnished to the Administrative Agent and to the Lenders pursuant to Sections 6.1(a) and (b), a Compliance Certificate duly executed by a Compliance Officer of the Borrower.
(d) Other Reports.
(i) Annual Budget. Commencing with the fiscal year ending December 31, 2027, the annual consolidated Budget and any forecasts or projections of the Borrower for the immediately following fiscal year, to be supplied not later than sixty (60) days after the end of each fiscal year;
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(ii) Management Report. Concurrently with the annual financial statements of Intermediate Holdings furnished to the Administrative Agent and to the Lenders pursuant to Section 6.1(b), a management report (A) outlining principal factors affecting performance and describing the operations and financial condition of the Borrower and its Subsidiaries for the fiscal year then ended, and (B) discussing the reasons for any significant variations. The information above shall be presented in reasonable detail and shall be certified by a Compliance Officer of the Borrower to the effect that, to his or her knowledge after reasonable diligence, such information fairly presents in all material respects the results of operations and financial condition of the Borrower and its Subsidiaries as at the dates and for the periods indicated.
(iii) Benefit Plan Documentation. Promptly upon request by any Lender, the Borrower will deliver to the Lender (A) all actuarial reports prepared in respect of any Pension Plan or Multiemployer Plan that are available to the Borrower or that may be made available to the Borrower upon request and (B) any documentation regarding withdrawal liability under or the funding status with respect to any Multiemployer Plan.
(e) Notices.
(i) Default. Promptly after any Authorized Officer of the Borrower has learned of the occurrence of an Event of Default or Default, a certificate by an Authorized Officer setting forth the details of such Event of Default or Default and the action that the Borrower proposes to take with respect thereto.
(ii) Regulatory and Other Notices. Promptly after filing, receiving or any Authorized Officer becoming aware thereof, the Borrower will deliver or cause to be delivered copies of any filings or written communications sent to, or notices and other written communications received by, the Borrower or any of its respective Subsidiaries from any Governmental Authority, including the FCC and any PUC, relating to any noncompliance by the Borrower or any of its Subsidiaries with any applicable Law, including the Communications Act and any applicable PUC Law, or with respect to any matter or proceeding, in each case, the effect of which could reasonably be expected to result in a Material Adverse Change (provided that, to the extent any such written communications are subject to confidentiality obligations or are privileged (such as legal analysis), such materials need not be delivered).
(iii) Litigation. Promptly after the commencement thereof, notice of all actions, suits, proceedings or investigations before or by any Governmental Authority or any other Person against the Borrower or Subsidiary of the Borrower that involves a claim or series of claims equal to or in excess of $1,500,000 or that if adversely determined could reasonably be expected to result in a Material Adverse Change.
(iv) Organizational Documents. Promptly after the execution thereof, any material amendment to the Organizational Documents of the Borrower or any Subsidiary of the Borrower.
(v) Material Agreements. Any material amendment, supplement, waiver or other modification to any of the Material Agreements, or any notice of default or of termination, cancellation or revocation (in each case, prior to any scheduled date of termination) delivered thereunder.
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(vi) Erroneous Financial Information. Within two (2) Business Days after any Authorized Officer of the Borrower becoming aware thereof, in the event that the Intermediate Holdings or its accountants conclude or advise that any previously issued financial statement, audit report or interim review should no longer be relied upon or that disclosure should be made or action should be taken to prevent future reliance.
(vii) ERISA Event. Immediately upon the occurrence of any ERISA Event or Plan Qualification Event that is reasonably expected to result in liability to the Borrower or its Subsidiaries in excess of the $1,500,000.
(viii) Material Adverse Change. Promptly after any Authorized Officer of the Borrower becomes aware thereof, the Borrower will give notice of any change in events or changes in facts or circumstances affecting the Borrower or any of its Subsidiaries which individually or in the aggregate have resulted in or could reasonably be expected to result in a Material Adverse Change.
(ix) Environmental Notices. Promptly after any Authorized Officer of the Borrower becomes aware of any material violation by the Borrower or any of its Subsidiaries of Environmental Laws or promptly upon receipt of any notice that a Governmental Authority or other Person has asserted that the Borrower or any of its Subsidiaries is not in compliance with Environmental Laws or that its compliance is being investigated, and, in either case, the same would reasonably be expected to result in a Material Adverse Change, the Borrower will give notice thereof and provide such other information as may be reasonably available to the Borrower or any of its Subsidiaries to enable the Administrative Agent and the Lenders to reasonably evaluate such matter.
(x) Beneficial Ownership Certificate. Promptly after the occurrence thereof, a notice of any change in the information provided in the Beneficial Ownership Certification that would result in a change to the list of beneficial owners identified in such certification.
(f) Other Information. Such other reports and information regarding the business, financial or corporate affairs of the Borrower and its Subsidiaries as the Administrative Agent (on behalf of the Lenders) may from time to time reasonably request.
6.2 Preservation of Existence, Etc. The Borrower shall, and shall cause each of its Subsidiaries to, maintain (a) its legal existence as a corporation, limited partnership or limited liability company or other entity, as the case may be as of the Closing Date or as of the date of Acquisition, creation or formation of the Borrower or Subsidiary, in each case, except as otherwise expressly permitted in Section 7.7, (b) its qualification and good standing in each jurisdiction in which its ownership or lease of property or the nature of its business makes such license or qualification necessary, except as otherwise expressly permitted in Section 7.7 or which failure to obtain same would not reasonably be expected to result in a Material Adverse Change and (c) all licenses, franchises, permits and other authorizations (other than the Licenses) and Intellectual Property, the loss, revocation, termination, suspension or adverse modification of which would reasonably be expected to result in a Material Adverse Change.
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6.3 Preservation of Licenses. The Borrower shall, and shall cause each of its Subsidiaries to, at all times preserve and keep in full force and effect all Licenses, except those (a) which are no longer required in the conduct of the Borrower’s or Subsidiary’s business and which cannot be sold or (b) which have de minimis fair market value.
6.4 Payment of Liabilities, Including Taxes, Etc. The Borrower shall, and shall cause each of its Subsidiaries to, duly pay and discharge all indebtedness and other liabilities (including all lawful claims that, if unpaid, would by Law become a Lien on the assets of the Borrower) to which it is subject or that are asserted against it, promptly as and when the same shall become due and payable, including all taxes, assessments and governmental charges upon it or any of its properties, assets, income or profits, prior to the date on which penalties attach thereto, except to the extent that such liabilities, including taxes, assessments or governmental charges, are being contested in good faith and by appropriate and lawful proceedings diligently conducted and for which such reserve or other appropriate provisions, if any, as shall be required by GAAP shall have been made.
6.5 Maintenance of Insurance. The Borrower shall, and shall cause each of its Subsidiaries to, insure its properties and assets against loss or damage by fire and such other insurable hazards as such assets are commonly insured (including fire, extended coverage, property damage, workers’ compensation, public liability and business interruption insurance) and against other risks (including errors and omissions) in such amounts as similar properties and assets are insured by prudent companies in similar circumstances carrying on similar businesses of a similar size, and with reputable insurers, including self-insurance to the extent customary.
6.6 Maintenance of Properties. The Borrower shall, and shall cause each of its Subsidiaries to (a) maintain, preserve and protect all of its properties and equipment necessary in the normal operation of its business in good working order and condition except to the extent the failure to do so could not reasonably be expected to have a material adverse impact on the operations or business of the Borrower and its Subsidiaries, ordinary wear and tear and casualty and condemnation excepted and (b) make all necessary repairs thereto and renewals and replacements thereof except where the failure to do so could not reasonably be expected to result in a Material Adverse Change.
6.7 Visitation Rights; Quarterly Lender Calls.
(a) The Borrower shall, and shall cause each of its Subsidiaries to, permit authorized representatives of the Administrative Agent (or any of the Lenders solely if accompanying the Administrative Agent) upon at least three (3) Business Days prior written notice, to visit and inspect during normal business hours any of its properties and to examine and make excerpts from its books and records (other than materials protected by the attorney-client privilege and materials which such Person may not disclose without violation of a confidentiality provision binding upon it) and discuss its business affairs, finances and accounts with its officers, in such detail and at such times and as often as the Administrative Agent may reasonably request, all at the Borrower’s expense.
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(b) Solely after the Acquisition Agreement Period, the management of the Sponsor, if applicable, and the Borrower shall, at the request of Administrative Agent participate in a conference call with the Administrative Agent and the Lenders to provide discussion and analysis with respect to the financial condition and results of operations of the Borrower and its Subsidiaries within thirty (30) days (or such later date as the Administrative Agent may agree in its sole discretion) following each delivery of a Compliance Certificate pursuant to Section 6.1(c) at such time as may be agreed to by the Borrower and the Administrative Agent.
6.8 Keeping of Records and Books of Account. The Borrower shall, and shall cause each Subsidiary of the Borrower to, maintain and keep proper books of record and account that enable the Borrower and its Subsidiaries to issue financial statements in accordance with GAAP and as otherwise required by applicable Laws of any Governmental Authority having jurisdiction over the Borrower or any Subsidiary of the Borrower, and in which full, true and correct entries shall be made in all material respects of all its dealings and business and financial affairs.
6.9 Compliance with Laws.
(a) The Borrower shall, and shall cause each of its Subsidiaries to, comply with all other applicable Laws, except where failure to comply with any applicable Law would not result in fines, penalties, remediation costs, other similar liabilities or injunctive relief that, in the aggregate, would reasonably be expected to result in a Material Adverse Change.
(b) The Borrower shall, and shall cause each of its Subsidiaries, Affiliates, officers, directors, employees and agents to, comply with all applicable (i) Anti-Corruption Laws, (ii) Anti-Terrorism Laws and (iii) Sanctions. The Borrower shall implement and maintain in effect policies and procedures designed to ensure compliance by the Borrower and its Subsidiaries, Affiliates, officers, directors, employees and agents with all applicable (i) Anti-Corruption Laws, (ii) Anti-Terrorism Laws and (iii) Sanctions.
(c) The Borrower shall, and shall cause each of its Subsidiaries (i) conduct its operations and keep and maintain its real property in compliance with all Environmental Laws and environmental permits; (ii) obtain and renew all environmental permits necessary for its operations and properties; and (iii) implement any and all investigation, remediation, removal and response actions that are necessary to maintain the value and marketability of the real property or to otherwise comply with Environmental Laws pertaining to any of its real property (provided, however, that neither the Borrower nor any of its Subsidiaries shall be required to undertake any such investigation, remediation, removal, response or other action to the extent that its obligation to do so is being contested in good faith and by proper proceedings and adequate reserves have been set aside and are being maintained by the Borrower with respect to such circumstances in accordance with GAAP).
6.10 [Reserved].
6.11 [Reserved].
6.12 Use of Proceeds. The proceeds of the Term Loans shall be used to fund a cash dividend up to $160,000,000 (minus any upfront, advisory and/or sponsor fees) (the “Specified Dividend”) to the direct and indirect holders of Equity Interests in the Borrower; provided that if the Borrower’s projected cash flow, together with borrowings under the Revolving A-3 Credit Facility (as defined in the CoBank Credit Agreement), are not sufficient to fund projected capital expenditures for completion of the NTHE (such shortfall, the “NTHE Shortfall”), then the Specified Dividend shall be reduced on a dollar-for-dollar basis by the amount of such NTHE Shortfall (the “Reduced Dividend”). If applicable, any difference between the Term Loan and the Reduced Dividend will be used to fund general corporate purposes of the Borrower and its Subsidiaries as determined by the Borrower in its sole discretion.
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6.13 Updates to Schedules and Annexes. Concurrently with the delivery of each Compliance Certificate accompanying the financial statements furnished to the Administrative Agent and the Lenders pursuant to Sections 6.1(a) and (b), the Borrower shall provide the Administrative Agent in writing with such revisions or updates to the Schedules to this Credit Agreement as may be necessary or appropriate to update or correct same.
6.14 Material Agreements. The Borrower covenants and agrees that it shall, and shall cause each of its Subsidiaries to, comply in all material respects with each of its (i) Funding Program Agreements and (ii) Material Agreements (other than any Funding Program Agreement) except, in the case of this clause (ii), where the failure to do so, in the aggregate, would reasonably be expected to result in a Material Adverse Change.
6.15 Benefit Plan Compliance.
Each Plan will be in compliance in all material respects with its terms and applicable Law, the Borrower and the ERISA Affiliates will satisfy their obligations and liabilities with respect to each Plan in all material respects and the Borrower and the ERISA Affiliates will make all required contributions with respect to any Plan on or before the required due date for such contribution.
VII. NEGATIVE COVENANTS
7.1 Indebtedness. The Borrower shall not, nor shall the Borrower permit any of its Subsidiaries, to, at any time create, incur, assume or suffer to exist any Indebtedness, except:
(a) Indebtedness under this Agreement and the other Loan Documents;
(b) existing Indebtedness as set forth on Schedule 7.1, including any Permitted Refinancing in respect thereof;
(c) Indebtedness incurred with respect to Purchase Money Security Interests, Synthetic Lease Obligations and Capital Leases for fixed or capital assets not in excess of $15,000,000 outstanding at any time and Permitted Refinancings in respect thereof;
(d) Unsecured, subordinated, intercompany Indebtedness permitted by Section 7.5(e);
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(e) Indebtedness (contingent or otherwise) of the Borrower or any of its Subsidiaries arising under (i) any Interest Rate Hedge, (ii) Indebtedness under any Secured Bank Product entered into in the ordinary course of business; provided however, that (x) the Borrower shall not and shall not permit any Subsidiary enter into or incur any Interest Rate Hedge that constitutes a Swap Obligation if at the time it enters into or incurs such Swap Obligation it does not constitute an “eligible contract participant” as defined in the Commodity Exchange Act, and (y) the Borrower and its Subsidiaries shall enter into an Interest Rate Hedge only for hedging (rather than speculative) purposes, (iii) the CoBank Loan Documents; provided that, unless otherwise agreed in writing by the Required Lenders (such agreement not to be unreasonably withheld, delayed or conditioned) during the Acquisition Agreement Period, the aggregate principal amount of the Obligations (as defined under the CoBank Credit Agreement) under the CoBank Credit Agreement shall not exceed the sum of (i) outstanding principal balance of the Term Loans (as defined under the CoBank Credit Agreement) under the CoBank Credit Agreement as of the Closing Date, plus (B) the Revolving Commitments (as defined under the CoBank Credit Agreement) under the CoBank Credit Agreement as of the Closing Date, plus (C) the Maximum Incremental Amount (as defined in the CoBank Credit Agreement); provided however, that the proceeds of the Maximum Incremental cannot be used to make any Restricted Payment (other than to a Subsidiary);
(f) Guarantees and other Contingent Obligations permitted by Section 7.4;
(g) Indebtedness in connection with trade payables arising in the ordinary course of business and outstanding no more than ninety (90) days after such obligation is due;
(h) Indebtedness assumed in connection with any Permitted Acquisition and Indebtedness of any new Subsidiary acquired in a Permitted Acquisition and Permitted Refinancings thereof; provided that (i) any such Indebtedness is not created in anticipation or contemplation of such Permitted Acquisition and (ii) all such Indebtedness, when combined with any Indebtedness permitted under clause (i) below, does not exceed $1,500,000 in the aggregate at any one time outstanding;
(i) Indebtedness consisting of the financing of insurance premiums, so long as the aggregate amount payable pursuant to such Indebtedness does not materially exceed the amount of the premium for such insurance and is financed with the insurer;
(j) endorsements for collection or deposit in the ordinary course of business;
(k) Indebtedness arising with respect to customary indemnification obligations, purchase price adjustments and other similar obligations in favor of (i) sellers in connection with Acquisitions or similar Investments permitted hereunder and (ii) purchasers in connection with Dispositions permitted under Section 7.8, in an aggregate amount not to exceed $1,500,000;
(l) Indebtedness arising under guaranties made in the ordinary course of business of obligations of any Subsidiary of the Borrower, which obligations are otherwise permitted hereunder (provided that if such obligation is subordinated to the Obligations, such guaranty shall be subordinated to the same extent) in an aggregate amount not to exceed $1,500,000;
(m) Indebtedness arising as a result of judgments, orders, awards or decrees against the Borrower or any of its Subsidiaries, in each case, not constituting an Event of Default under Section 9.1(f);
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(n) Indebtedness consisting of take or pay obligations contained in supply arrangements in the ordinary course of business;
(o) unsecured Indebtedness in respect of obligations to pay the deferred purchase price of goods or services or progress payments in connection with goods and services so long as such obligations are incurred in connection with open accounts extended by suppliers on customary trade terms (which require that all such payments be made within sixty (60) days after the incurrence of the related obligations) in the ordinary course of business;
(p) Indebtedness in respect of netting services, overdraft protections and otherwise in connection with deposit accounts maintained by the Borrower and its Subsidiaries as a part of their cash management program incurred in the ordinary course of business so long as such Indebtedness is promptly repaid; and
(q) Other unsecured Indebtedness in an aggregate amount not to exceed the greater of (x) $875,000 and (y) 5% of Annualized Consolidated EBITDA for the Test Period in the aggregate outstanding at any time; provided that such Indebtedness may be secured to the extent the Liens securing such Indebtedness are Permitted Liens.
7.2 Liens. The Borrower shall not, nor shall the Borrower permit any of its Subsidiaries to, at any time create, incur, assume or suffer to exist any Lien on any of its property or assets, tangible or intangible, now owned or hereafter acquired, or agree or become liable to do so, except Permitted Liens.
7.3 Affiliate Transactions. The Borrower shall not, nor shall the Borrower permit any of its Subsidiaries to, enter into or carry out any transaction with any Affiliate of the Borrower or any Subsidiary (including purchasing property or services from or selling property or services to any Affiliate of the Borrower or other Person) except to the extent such transaction:
(a) is not otherwise prohibited by this Agreement,
(b) is in accordance with all applicable Law, and
(c) meets at least one of the following additional conditions:
(i) is among the Borrower or its respective Subsidiaries,
(ii) is entered into in the ordinary course of business upon fair and reasonable arm’s-length terms and conditions that are fully disclosed to the Administrative Agent,
(iii) relates to the payment of compensation to directors, officers and employees in the ordinary course of business for services actually rendered in their capacities as directors, officers and employees, provided such compensation is reasonable and comparable with compensation paid by companies of like nature and similarly situated,
(iv) is a Restricted Payment permitted by Section 7.6 or an advance permitted by Section 7.5(b);
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(v) is contemplated under the terms of the Closing Date Acquisition Agreement;
(vi) is a transaction with a joint venture for the purchase or sale of goods, equipment and services entered into in the ordinary course of business and in a manner consistent with past practice (and not otherwise prohibited by the Loan Documents); or
(d) subject to the limitations of Section 7.6(d), is a payment by the Borrower or any of its Subsidiaries pursuant to tax sharing agreements among the Borrower and any of its Subsidiaries on customary terms that require each party to make payments when such taxes are due or refunds received of amounts equal to the income tax liabilities and refunds generated by each such party calculated on a separate return basis, and payments to the party generating tax benefits and credits of amounts equal to the value of such tax benefits and credits made available to the group by such party.
7.4 Contingent Obligations. The Borrower shall not, nor shall the Borrower permit any of its Subsidiaries to, at any time, directly or indirectly, create or become or be liable with respect to any Contingent Obligation except for those:
(a) resulting from endorsement of negotiable instruments for collection in the ordinary course of business;
(b) arising in the ordinary course of business with respect to customary indemnification obligations incurred in the ordinary course of business;
(c) incurred in the ordinary course of business (i) which may be deemed to exist pursuant to any grant matching requirements, guaranties, performance, surety, statutory, appeal, completion guarantees, export or import indemnities, bids, performance or surety bonds, customs and revenue bonds or similar instruments (for the avoidance of doubt, including pursuant to any requirement of any Funding Program), workers’ compensation claims, self-insurance obligations, unemployment insurance and other social security legislation and bankers acceptances issued for the account of the Borrower or Subsidiary in the ordinary course of business, and (ii) obligations of the Borrower or Subsidiary with respect to letters of credit supporting such bid, leases, performance or surety bonds (including any such letters of credit required pursuant to any Funding Program), workers’ compensation claims, health, disability, other employee benefits or property, deferred compensation to employees, self-insurance obligations, unemployment insurance and other social security legislation and bankers acceptances (in each case other than for an obligation for money borrowed) or similar obligations incurred in the ordinary course of business, including those incurred to secure health, safety, and environmental obligations in the ordinary course of business;
(d) constituting Investments permitted pursuant to Section 7.5;
(e) arising under the CoBank Credit Agreement; and
(f) Guarantees by the Borrower or any Subsidiary of Indebtedness permitted hereunder.
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7.5 Loans and Investments. The Borrower shall not, nor shall the Borrower permit any of its Subsidiaries to, at any time make or suffer to remain outstanding any Investment or agree, become or remain liable to make any Investment, except:
(a) accounts receivable arising under, and trade credit extended on, usual and customary terms in the ordinary course of business;
(b) advances to employees of the Borrower or its respective Subsidiaries to meet expenses incurred by such employees in the ordinary course of business not to exceed $250,000 at any time outstanding;
(c) Investments in the form of cash and Cash Equivalents;
(d) (i) the Borrower’s existing Investments in its respective Subsidiaries on the Closing Date or (ii) equity Investments made after the Closing Date in any Subsidiary;
(e) intercompany advances made from time to time (i) by the Borrower to a Subsidiary and (ii) by any Subsidiary to another Subsidiary;
(f) notes payable to, or equity interests issued by, account debtors to the Borrower or its Subsidiaries in good faith settlement of delinquent obligations and pursuant to any plan of reorganization or similar proceedings upon the bankruptcy or insolvency of any such account debtor;
(g) Investments set forth on Schedule 7.5 hereto;
(h) the CoBank Equities and any other stock or securities of, or Investments in, CoBank or its investment services or programs;
(i) Guaranties and other Contingent Obligations permitted by Section 7.4;
(j) any Interest Rate Hedge permitted under Section 7.1;
(k) Permitted Acquisitions;
(l) Investments (including debt obligations and Equity Interests) received (i) in connection with the bankruptcy or reorganization of suppliers, customers and other account debtors, (ii) in settlement of delinquent obligations of, and other disputes with, customers, suppliers and other account debtors, (iii) upon foreclosure with respect to any secured Investment or other transfer of title with respect to any secured Investment or (iv) as a result of the settlement, compromise, resolution of litigation, arbitration or other disputes, in each case in the ordinary course of business;
(m) to the extent constituting Investments, deposits, prepayments or other credits to suppliers made in connection with obtaining, maintaining or renewing client and customer contracts or in the form of advances made to distributors, suppliers, licensors and licensees, in each case, in the ordinary course of business;
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(n) Investments received in lieu of cash in connection with any Disposition permitted under Section 7.8(i);
(o) [reserved];
(p) to the extent constituting an Investment and not otherwise permitted by this Section 7.5, mergers, consolidations, dispositions and other transactions expressly permitted by Section 7.7; and
(q) other Investments not exceeding $3,000,000 in the aggregate at any time.
7.6 Dividends and Related Distributions. The Borrower shall not, nor shall the Borrower permit any of its Subsidiaries to, declare or make, directly or indirectly, any Restricted Payment, or incur any obligation (contingent or otherwise) to do so, except that:
(a) each Subsidiary of the Borrower may make Restricted Payments to any Person that owns an Equity Interest in such Subsidiary, ratably according to their respective holdings of the type of Equity Interest in respect of which such Restricted Payment is being made;
(b) the Borrower and each Subsidiary of the Borrower may declare and make dividend payments or other distributions payable solely in the common stock or other common Equity Interests of such Person;
(c) the Borrower and each Subsidiary of the Borrower may purchase, redeem or otherwise acquire Equity Interests issued by it with the proceeds received from the substantially concurrent issue of new shares of its common stock or other common Equity Interests other than from proceeds received from the Equity Commitment Letter;
(d) the Borrower may make, declare and pay cash dividends and distributions with respect to any taxable year (or portion thereof) for which the Borrower is treated as a disregarded entity or partnership for U.S. federal income tax purposes, to any Parent Company in amounts intended to cover the income tax obligations of the holders of Equity Interests of such Parent Company resulting from allocations of net income of the Borrower for such taxable year (or portion thereof) by such Parent Company to such holders, as permitted or required by the Organizational Documents of the Borrower as of the Closing Date (“Permitted Tax Distributions”); provided that the aggregate amount of Permitted Tax Distributions with respect to any taxable year (and any portion thereof) shall not exceed the aggregate amount of distributions that the Borrower is affirmatively permitted to make pursuant to Section 3.1 of the Borrower LLC Agreement with respect to such taxable year (or portion thereof, as applicable) on or after the Closing Date (taking into account any distributions made by the Borrower prior to the Closing Date and the deadlines specified in Section 3.1 of the Borrower LLC Agreement);
(e) the Borrower may make, declare and pay cash dividends and distributions in connection with the payment of (x) reasonable and documented legal, accounting, and other ordinary course corporate overhead or other operational expenses and/or (y) reasonable and documented salary, bonuses and compensation, in each case payable at the direct or indirect parent of the Borrower attributable solely to the ownership of the Borrower and its Subsidiaries;
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(f) the Borrower may make Restricted Payments in an amount equal to withholding or similar taxes payable or expected to be payable with respect to any present or former employee (or any spouses, former spouses, other immediate family members, successors, executors, administrators, heirs, legatees or distributees of any of the foregoing) of the Borrower or any Subsidiary in connection with the exercise of stock options or the vesting of restricted stock and any repurchases of capital stock or other Equity Interests in consideration of such payment including deemed repurchases in connection with the exercise of stock options; and
(g) to the extent constituting Restricted Payments, the Borrower and any Subsidiary may make working capital adjustment payments, purchase price adjustment payments, indemnity and similar obligation payments pursuant to any applicable acquisition agreement entered into in connection with a Permitted Acquisition or other Acquisition that is an Investment not prohibited under this Agreement;
(h) if the Sponsor or its Controlled Investment Affiliates shall have made direct or indirect cash equity contributions to the Borrower or any Subsidiary to fund any Investments permitted hereunder (other than any cash equity contributions made pursuant to the Equity Commitment Letter), and such Investment is not made within 10 Business Days after receipt of such equity contributions, the Borrower or any Subsidiary may return such equity contributions to the Sponsor or such Controlled Investment Affiliates either directly or indirectly by distribution to the Borrower for redistribution to a Parent Company or any direct or indirect parent of a Parent Company to effect such return of contributions so long as no Event of Default shall exist at the time of such return or result immediately therefrom;
(i) so long as no Default or Event of Default shall have occurred and be continuing or would result therefrom, the Borrower may (i) declare or pay cash dividends to its members and (ii) purchase, redeem or otherwise acquire for cash Equity Interests issued by it, in each case, in an aggregate amount not to exceed $1,000,000 in any fiscal year; and
(j) Borrower and each other Subsidiary may make the Specified Dividend (subject, for the avoidance of doubt, to the reduction (if any) contemplated by Section 6.12).
7.7 Liquidations, Mergers, Consolidations, Acquisitions. The Borrower shall not, nor shall the Borrower permit any of its Subsidiaries to, (i) dissolve, liquidate or wind-up its affairs, (ii) become a party to any merger or consolidation, or (iii) acquire by purchase, lease or otherwise of all or substantially all of the assets or capital stock of any other Person or group of related Persons; provided that:
(a) any Subsidiary may merge with (i) the Borrower, provided that the Borrower shall be the continuing or surviving Person, or (ii) any one or more other Subsidiaries; and
(b) any Subsidiary may Dispose of all or substantially all of its assets (upon voluntary liquidation or otherwise) to the Borrower or to another Subsidiary of the Borrower; and
(c) any Subsidiary of the Borrower may consummate the Permitted Acquisitions and other Investments permitted hereunder;
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provided, that, that, the Borrower shall not nor shall any Subsidiary of the Borrower engage in, allow or be party to any Division without the written prior consent of the Administrative Agent (at the direction of the Required Lenders).
7.8 Dispositions of Assets or Subsidiaries. The Borrower shall not, nor shall the Borrower permit any of its Subsidiaries to, Dispose of (including pursuant to any sale and leaseback transaction), voluntarily or involuntarily, any of its properties or assets, tangible or intangible (including sale, assignment, discount or other disposition of accounts, contract rights, chattel paper, equipment or general intangibles with or without recourse or of capital stock, shares of beneficial interest, partnership interests or limited liability company interests or other equity interests of a Subsidiary of the Borrower), except:
(a) any Disposition of assets in the ordinary course of business that are replaced by substitute assets acquired or leased as permitted in this Agreement;
(b) transactions involving the sale of inventory to customers in the ordinary course of business;
(c) any Disposition of assets in the ordinary course of business that are no longer necessary or required in the conduct of the Borrower’s or such Subsidiary’s business;
(d) any Disposition of assets by any Subsidiary to another Subsidiary;
(e) [reserved];
(f) any Disposition permitted by Sections 7.5, 7.6 or 7.7;
(g) any Disposition of Cash Equivalents;
(h) non-exclusive licenses of intellectual property rights in the ordinary course of business and substantially consistent with past practice for terms not exceeding five (5) years; and
(i) Dispositions not otherwise permitted pursuant to this Section 7.8 in an aggregate amount not to exceed $2,000,000 in the aggregate; provided that (i) at the time of such Disposition, no Event of Default shall exist or would result from such Disposition and (ii) at least 75% of the consideration received by the Borrower or any of its Subsidiaries in respect of any such Disposition is in the form of cash or Cash Equivalents and is received contemporaneously with the consummation of such Disposition.
provided, however, that any Disposition pursuant to clause (a) shall be for substantially equivalent value and any Disposition pursuant to clauses (b) through (i) shall be for fair market value; provided, further, that, that, the Borrower shall not nor shall any Subsidiary of the Borrower engage in, allow or be party to any Division without the written prior consent of the Administrative Agent (as directed in writing by the Required Lenders).
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7.9 Use of Proceeds. The Borrower shall not (a) use the proceeds of any Loan or other Credit Extension hereunder, whether directly or indirectly, and whether immediately, incidentally or ultimately, to purchase or carry margin stock (within the meaning of Regulation U of the Board) or to extend credit to others for the purpose of purchasing or carrying margin stock or to refund indebtedness originally incurred for such purpose or (b) request any Credit Extension or use (or permit the use by any of its Subsidiaries or its or their respective Affiliates, directors, officers, employees or agents) the proceeds of any Credit Extension, whether directly or indirectly, in violation of Anti-Corruption Laws, Anti-Terrorism Laws, Sanctions or other applicable Law.
7.10 [Reserved].
7.11 Continuation of or Change in Business. The Borrower shall not, nor shall the Borrower permit any of its Subsidiaries to, engage in any business other than the business of owning, constructing, managing and operating Communications Systems, or other lines of business necessary or ancillary to the foregoing or consistent with advances in the Communications Systems industry, in each case, substantially as conducted and operated by the Borrower or Subsidiary during the present fiscal year, and the Borrower or Subsidiary shall not permit any material change in such business.
7.12 Fiscal Year. Borrower shall not, and shall not permit any Subsidiary to, change its fiscal year from the twelve-month period beginning January 1 and ending December 31.
7.13 [Reserved].
7.14 Changes in Organizational Documents. The Borrower shall not, nor shall the Borrower permit any of its Subsidiaries to, amend its Organizational Documents in a manner materially adverse to the Lenders (as determined by the Administrative Agent in its sole discretion) without the prior written consent of the Required Lenders; provided, that, any changes permitted by the terms of (and in connection with) the Closing Date Acquisition Agreement shall not be deemed materially adverse to the Lenders.
7.15 Negative Pledges; Other Inconsistent Agreements. The Borrower covenants and agrees that it shall not, and shall not permit any of its Subsidiaries to, enter into any agreement containing any provision which would (a) be breached by any Borrowing by the Borrower hereunder or by the performance by the Borrower or its respective Subsidiaries of any of their obligations hereunder or under any other Loan Document, (b) limit the ability of the Borrower or any Subsidiary of the Borrower to create, incur, assume or suffer to exist Liens on property of such Person; (c) create or permit to exist or become effective any encumbrance or restriction on the ability of the Borrower or Subsidiary of the Borrower to (i) make Restricted Payments to the Borrower, or pay any Indebtedness owed to the Borrower, (ii) make loans or advances to the Borrower, (iii) transfer any of its assets or properties to the Borrower, or (iv) Guarantee the Indebtedness of the Borrower, provided, however, that this clause (c) shall not prohibit any negative pledge incurred or provided in favor of any holder of Indebtedness permitted under Section 7.1(c) solely to the extent any such negative pledge relates to the property financed by or the subject of such Indebtedness; or (d) require the grant of a Lien to secure an obligation of such Person if a Lien is granted to secure another obligation of such Person; provided, however, in each case, the foregoing shall not apply to restrictions and conditions imposed by applicable Law, by the CoBank Credit Agreement or by this Agreement.
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7.16 Material Agreements.
(a) The Borrower covenants and agrees that it shall not, and shall not permit any of its Subsidiaries to (i) amend, restate, supplement, waive or otherwise modify, or terminate, cancel or revoke (prior to any scheduled date of termination) any Material Agreement (other than the CoBank Loan Documents) if such modification, termination, cancellation or revocation could reasonably be expected to result in a Material Adverse Change, Default or Event of Default, or (ii) make any optional prepayments of Indebtedness arising under any Material Indebtedness (other than Indebtedness arising under the CoBank Loan Documents), except for optional prepayments of Indebtedness between the Borrower and its Subsidiaries, if any.
(b) The Borrower covenants and agrees that it shall not, and shall not permit any of its Subsidiaries to amend, restate, supplement, waive or otherwise modify the CoBank Credit Agreement such that:
(i) unless otherwise agreed in writing by the Required Lenders (such agreement not to be unreasonably withheld, delayed or conditioned), (A) during the Acquisition Agreement Period, the aggregate principal amount of the Obligations (as defined under the CoBank Credit Agreement) under the CoBank Credit Agreement exceeds the sum of (1) outstanding principal balance of the Term Loans (as defined under the CoBank Credit Agreement) under the CoBank Credit Agreement as of the Closing Date, plus (2) the Revolving Commitments (as defined under the CoBank Credit Agreement) under the CoBank Credit Agreement as of the Closing Date, plus (3) the Maximum Incremental Amount (as defined in the CoBank Credit Agreement); (B) the proceeds of the Maximum Incremental Amount (as defined in the CoBank Credit Agreement) can be used to make any Restricted Payment (other than to a Subsidiary of the Borrower); or (C) any material additional restrictions or limitations are imposed on the restricted payments covenant exception governing the payment of cash interest on the Loans in the CoBank Credit Agreement;
(ii) unless the Lender Representative has been consulted by CoBank (in such manner as CoBank may reasonably elect), during the Acquisition Agreement Period, the fees, interest rate or related terms to the CoBank Credit Agreement as of the Closing Date are increased; or
(iii) during the Acquisition Agreement Period, the CoBank Credit Agreement is otherwise amended, restated, supplemented, waived or modified (a “Proposed Modification”) in a manner materially adverse to the Lenders (as determined by Lender Representative in its reasonable judgement) unless the Lender Representative has been consulted according to the procedures described below; provided that the limitations in this clause (iii) shall not apply to any modification to the stated maturity date for any Secured Obligations (as defined in the CoBank Credit Agreement) under the CoBank Loan Documents or to any of the modifications described in clauses (i) or (ii).
The Borrower agrees that, at least ten (10) Business Days (or such lesser period of time as to which the Lender Representative may agree in its reasonable discretion) prior to the effective date of any Proposed Modification, the Borrower shall inform the Lender Representatives of the terms of the Proposed Modification. The Lender Representatives shall, within five (5) Business Days (commencing on the date a Lender Representative confirms receipt of the Proposed Modification) of notification of the Proposed Modification (the “Modification Notice Deadline”) confirm whether such Proposed Modification would be materially adverse to the Lenders, together with an explanation describing the reason for its decision and, upon providing such confirmation and description, the parties will engage in commercially reasonable negotiations to modify the Proposed Modification to address the potential materially adverse effect; provided that, the Borrower shall not be obligated to engage in such negotiations for more than five (5) Business Days. If the Lender Representative fails to respond to the Borrower’s notice by the Modification Notice Deadline, the Lender Representative shall be deemed to have determined that such Proposed Modification is not materially adverse to the Lenders and neither the Lenders nor the Administrative Agent shall have any future objection to such Proposed Modification.
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7.17 Employee Plans. Except to the extent that any liability associated therewith, individually or taken together with other Plans, would not reasonably be expected to result in a Material Adverse Change, the Borrower will not nor will any ERISA Affiliate acquire liability (by adopting a new plan, acquisition of another entity, participating in an asset transfer or plan merger, or otherwise) under any Pension Plan or Multiemployer Plan under which the Borrower or ERISA Affiliate has no liability as of the date of this Agreement. Except to the extent that any liability associated therewith, individually or taken together with other Plans, would not reasonably be expected to result in a Material Adverse Change, the Borrower will not nor will any ERISA Affiliate acquire liability (by adopting a new plan, acquisition of another entity, participating in an asset transfer or plan merger, or otherwise) under any Welfare Benefit Plan, under which the Borrower or ERISA Affiliate has no liability as of the date of this Agreement unless such Plan can be terminated by the Borrower or ERISA Affiliate in its sole discretion at any time without material liability other than the payment of insurance premiums for claims incurred in the current month.
7.18 [Reserved].
7.19 Borrower as a Holding Company.
(a) The Borrower (A) will not (1) incur any Indebtedness or Liens, (2) engage in any activities or consummate any transactions (including, without limitation, any Investments, Dispositions or acquisitions by purchase, lease or otherwise of all or substantially all the assets or capital stock of any other Person or group of related Persons), (3) make any Restricted Payments or (4) become party to any merger or consolidation (other than the Closing Date Acquisition Agreement) and (B) will not conduct, transact or otherwise engage in any business or operations, in each case, other than:
(i) the ownership of the Equity Interests of Intermediate Holdings;
(ii) the payment of Restricted Payments permitted by Sections 7.6(b), (c), (d), (e), (f), (h) and (j);
(iii) the performance of obligations under and compliance with its Organizational Documents or other Laws (including the maintenance of its legal existence, including the ability to incur fees, costs and expenses relating to such maintenance);
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(i) participating in tax, accounting and other administrative matters related to any Parent Company or any of its Subsidiaries, ordinance, regulation, rule, order, judgment, decree or permit, including without limitation as a result of or in connection with the activities of the Subsidiaries;
(ii) the entry into, and exercise of its rights and performance of, its obligations under and in connection with the Loan Documents;
(iii) incurring fees, costs and expenses relating to overhead and general operating including professional fees for legal, tax and accounting issues and paying taxes,
(iv) providing indemnification for its current and former officers, directors, members of management, managers, employees and advisors or consultants, and
(v) activities incidental to the businesses or activities described in the foregoing clauses.
7.20 Anti-Layering. The Borrower shall not permit any of its Subsidiary to issue any Preferred Equity Interest.
7.21 Anti-Corruption; Anti-Terrorism; Sanctions.
(a) The Borrower will not nor will its Subsidiaries, Affiliates, officers, directors, employees or agents engage in any dealings or transactions with any Sanctioned Person or in violation of any applicable Anti-Corruption Laws, Anti-Terrorism Laws or Sanctions.
(b) The Borrower will not fund all or any part of any payment under this Agreement or any other Loan Document out of proceeds derived from transactions that violate Sanctions, or with any Sanctioned Person, or with or connected to any Sanctioned Country.
7.22 Independence of Covenants. All covenants contained in Articles VI, VII and VIII of this Agreement shall be given independent effect so that if a particular action or condition is not permitted by any of such covenants, the fact that such action or condition would be permitted by another covenant shall not avoid the occurrence of a Default or Event of Default if such action is taken or condition exists.
VIII. FINANCIAL COVENANTS
8.1 Maximum Total Net Leverage Ratio. Commencing with the last day of the first fiscal quarter ending after the Closing Date, as of the last day of each fiscal quarter, the Borrower shall not permit the Total Net Leverage Ratio of Intermediate Holdings and its Subsidiaries to exceed 5.35 to 1.00.
8.2 Minimum Fixed Charge Coverage Ratio. Commencing with the last day of the first fiscal quarter ending after the Closing Date, Intermediate Holdings and its Subsidiaries shall maintain, measured at the last day of each fiscal quarter, a Fixed Charge Coverage Ratio of not less than 1.05 to 1.00.
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IX. EVENTS OF DEFAULT
9.1 Events of Default. An Event of Default means the occurrence or existence of any one or more of the following events or conditions (whatever the reason therefor and whether voluntary, involuntary or effected by operation of Law):
(a) Payments Under Loan Documents. Failure by the Borrower to pay, (i) on the date on which such payment becomes due in accordance with the terms of this Agreement or any other applicable Loan Document, any principal of any Loan (including scheduled installments, mandatory prepayments or the payment due at maturity), or (ii) within three (3) days after such amount is due, any interest on any Loan or any other amount owing hereunder or under the other Loan Documents, or any other Obligation;
(b) Breach of Warranty. Any representation, warranty, certification or written statement of fact made or deemed made at any time by the Borrower herein or in any other Loan Document, or in any certificate, other instrument or written statement furnished pursuant to the provisions hereof or thereof, shall have been false or misleading as of the time it was made or furnished (i) as stated if such representation or warranty contains an express materiality qualification or (ii) in any material respect if such representation or warranty does not contain such qualification (including all representations and warranties (x) as of the initial funding on the Closing Date and (y) as of the closing date of any Limited Condition Acquisition, in each case, regardless of whether the accuracy thereof is a condition precedent to the initial funding or such other advance);
(c) Breach of Certain Covenants.
(i) The Borrower shall default in the observance or performance of any covenant contained in Section 6.2(a), Section 6.3, Section 6.7, Section 6.12, Article VII or Article VIII (subject to Section 9.3);
(ii) The Borrower shall default in the observance or performance of any covenant contained in Sections 6.1(a) or 6.1(b) and such default shall continue unremedied for a period of fifteen (15) days;
(d) Breach of Other Covenants. The Borrower shall default in the observance or performance of any other covenant, condition or provision hereof or of any other Loan Document, and such default shall continue unremedied for the expressly specified cure period with respect thereto or, if no such cure period is specified, for a period of thirty (30) days after the earlier of (i) the Administrative Agent’s delivery of written notice thereof to the Borrower and (ii) an Authorized Officer or any other executive officer of the Borrower having obtained knowledge thereof;
(e) Defaults in Other Agreements or Indebtedness. (x) A default or event of default shall occur at any time under the terms of any other agreement the Borrower or any of its Subsidiaries are party to with respect to Indebtedness or any other credit extension in an aggregate principal amount (including undrawn committed or available amounts) in excess of the Threshold Amount (other than any default or event of default occurring under the CoBank Credit Agreement), and such breach, default or event of default (i) arises from the failure to pay (beyond any period of grace permitted with respect thereto, whether waived or not) any such related Indebtedness or other credit extensions when due (whether at stated maturity, by acceleration or otherwise) or (ii) the effect of which is to cause, or to permit the holder or holders of such Indebtedness (or a trustee or agent on behalf of such holder or holders) to cause, with the giving of notice and/or lapse of time, if required, the acceleration of any related Indebtedness or other credit extensions (whether or not such right shall have been waived) or the termination of any commitment to lend or (y) a default or event of default shall occur at any time under the terms of the CoBank Credit Agreement, and the holder or holders of such Indebtedness under the CoBank Credit Agreement declare such Indebtedness to be due and payable prior to its stated maturity;
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(f) Final Judgments or Orders. Any final judgments or orders for the payment of money in excess of the Threshold Amount in the aggregate shall be entered against the Borrower and/or its Subsidiaries by a court having jurisdiction in the premises, which judgment is not discharged, satisfied, vacated, bonded or stayed pending appeal within a period of sixty (60) days from the date of entry;
(g) Loan Document Unenforceable. Any of the Loan Documents shall (other than pursuant to its terms) cease to be legal, valid and binding agreements enforceable against the party executing the same or such party’s successors and assigns (as permitted under the Loan Documents) in accordance with the respective terms thereof or shall in any way be terminated (except in accordance with its terms) or become or be declared ineffective or inoperative or shall in any way be challenged or contested by any party thereto (other than the Administrative Agent or any Lender);
(h) [Reserved];
(i) [Reserved];
(j) Events Relating to Employee Benefit Plans. (i) An ERISA Event or Plan Qualification Event occurs that has resulted or could reasonably be expected to result in a Material Adverse Change, or (ii) any event occurs that could reasonably be expected to result in the imposition of a Lien under Sections 430(k) or the Code or Section 303 or 4068 of ERISA on any assets of the Borrower or a Subsidiary of the Borrower;
(k) Change of Control. A Change of Control shall have occurred;
(l) Insolvency Proceedings. (i) An Insolvency Proceeding shall have been instituted against the Borrower or Subsidiary of the Borrower and such Insolvency Proceeding shall remain undismissed or unstayed and in effect for a period of sixty (60) consecutive days or such court shall enter a decree or order granting any of the relief sought in such Insolvency Proceeding, (ii) the Borrower or Subsidiary of the Borrower institutes, or takes any action in furtherance of, an Insolvency Proceeding, (iii) an order granting the relief requested in any Insolvency Proceeding (including, but not limited to, an order for relief under federal bankruptcy laws) shall be entered, (iv) the Borrower or Subsidiary of the Borrower shall commence a voluntary case under, file a petition seeking to take advantage of, any bankruptcy, insolvency, reorganization or other similar law, domestic or foreign, (v) the Borrower or Subsidiary of the Borrower shall consent to or fail to contest in a timely and appropriate manner any petition filed against it in any Insolvency Proceeding, (vi) the Borrower or Subsidiary of the Borrower shall apply for or consent to, or fail to contest in a timely and appropriate manner, the appointment of, or the taking of possession by, a receiver, custodian, trustee, or liquidator of itself or of a substantial part of its property, domestic or foreign, (vii) the Borrower or Subsidiary of the Borrower shall take any action to approve or authorize any of the foregoing, or (viii) the Borrower or any Subsidiary of the Borrower ceases to be Solvent or admits in writing its inability to pay its debts as they mature;
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(m) Funding Program Agreements. If the Borrower or any Subsidiary of the Borrower shall default, past any applicable grace and cure period, under any Funding Program Agreement not otherwise described in this Section 9.1 and such default would reasonably be expected to result in a Material Adverse Change; or
(n) FCC and PUC Matters. Any License (except for Licenses which are no longer required in the conduct of the Borrower’s or the Borrower’s Subsidiary’s business and which cannot be sold or which have de minimis fair market value) shall be cancelled, expired, revoked, terminated, rescinded, annulled, suspended or modified or shall no longer be in full force and effect, the effect of which has resulted in, or would reasonably be expected to result in, a Material Adverse Change.
9.2 Consequences of Event of Default.
(a) Events of Default Other Than Bankruptcy, Insolvency or Reorganization Proceedings. If an Event of Default specified under Section 9.1 (other than Section 9.1(l)) shall occur and be continuing, the Lenders and the Administrative Agent shall be under no further obligation to make Loans and the Administrative Agent may, and upon the request of the Required Lenders, shall by written notice to the Borrower, declare the unpaid principal amount of the Loans then outstanding and all interest accrued thereon, any unpaid fees and all other Indebtedness of the Borrower to the Lenders hereunder and thereunder to be forthwith due and payable, and the same shall thereupon become and be immediately due and payable to the Administrative Agent for the benefit of each Lender without presentment, demand, protest or any other notice of any kind, all of which are hereby expressly waived; and
(b) Bankruptcy, Insolvency or Reorganization Proceedings. If an Event of Default specified under Section 9.1(l) shall occur, the Lenders shall be under no further obligations to make Loans hereunder and the unpaid principal amount of the Loans then outstanding and all interest accrued thereon, any unpaid fees and all other Indebtedness of the Borrower to the Lenders hereunder and thereunder automatically shall be immediately due and payable,; and
(c) Set-off. If an Event of Default shall have occurred and be continuing, each Lender, and each of their respective Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted by applicable Law, to set off and apply any and all deposits (general or special, time or demand, provisional or final, in whatever currency) at any time held, and other obligations (in whatever currency) at any time owing, by such Lender, or any such Affiliate, 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 or any other Loan Document to such Lender or their respective Affiliates, irrespective of whether or not such Lender, or Affiliate shall have made any demand under this Agreement or any other Loan Document and although such obligations of the Borrower may be contingent or unmatured or are owed to a branch, office or Affiliate of such Lender different from the branch, office or Affiliate holding such deposit or obligated on such indebtedness; provided that in the event that any Defaulting Lender shall exercise any such right of setoff, (x) all amounts so set off shall be paid over immediately to the Administrative Agent for further application in accordance with the provisions of Section 2.13 and, pending such payment, shall be segregated by such Defaulting Lender from its other funds and deemed held in trust for the benefit of the Administrative Agent, and the Lenders, and (y) the Defaulting Lender shall provide promptly to the Administrative Agent a statement describing in reasonable detail the Obligations owing to such Defaulting Lender as to which it exercised such right of setoff. The rights of each Lender, and their respective Affiliates under this Section are in addition to other rights and remedies (including other rights of setoff) that such Lender, or their respective Affiliates may have. Each Lender agrees to notify the Borrower and the Administrative Agent promptly after any such setoff and application; provided that the failure to give such notice shall not affect the validity of such setoff and application.
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(d) Application of Proceeds. After the exercise of remedies provided for in Section 9.2 (or after the Loans have automatically become immediately due and payable), any amounts received on account of the Obligations shall be applied by the Administrative Agent in the following order:
First, to payment of that portion of the Obligations constituting fees, indemnities, expenses and other amounts (including Attorney Costs of the Administrative Agent and Lenders) payable to the Administrative Agent and Lenders in their respective capacity as such;
Second, to payment of that portion of the Obligations constituting indemnities, expenses, and other amounts (other than principal, interest and fees) payable to the Lenders, ratably among them in proportion to the amounts described in this clause Second payable to them;
Third, to payment of that portion of the Obligations constituting accrued and unpaid interest on the Loans, and other Obligations, and fees, ratably among the Lenders in proportion to the respective amounts described in this clause Third payable to them;
Fourth, to payment of that portion of the Obligations constituting unpaid principal of the Loans, ratably among the Lenders in proportion to the respective amounts described in this clause Fourth held by them;
Fifth, to payment of all other Obligations, ratably among the Lenders in proportion to the respective amounts described in this clause Fifth held by them; and
Last, the balance, if any, after Payment In Full of all of the Obligations, to the Borrower or as otherwise required by Law.
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9.3 Right to Cure.
(a) Notwithstanding anything in Sections 9.1 and 9.2 to the contrary, in the event that the Borrower fails to comply with the financial covenants under Article VIII, any cash received by the Borrower (or any direct or indirect parent entity thereof) in connection with an Equity Issuance constituting of Qualified Equity Interests of the Borrower (or such direct or indirect parent entity) that is contributed to the Borrower in connection with an Equity Issuance of Qualified Equity Interests of the Borrower on or before the date that is ten (10) calendar days after the earlier of (i) the date on which the related Compliance Certificate was delivered to the Administrative Agent and (ii) the date on which the related Compliance Certificate was due under Section 6.1(c) (such date, the “Cure Deadline”) shall, at the option of the Borrower, be included in the calculation of, and increase on a Dollar-for-Dollar basis, Consolidated EBITDA for such fiscal quarter, solely for the purposes of determining compliance with the applicable financial covenant under Article VIII and not for any other purpose under this Agreement (including to determine pricing, financial ratio-based conditions, the availability or the amount of any covenant baskets, carve-outs, unrestricted cash or other items governed by a reference to Consolidated EBITDA or Annualized Consolidated EBITDA) (any such contribution so included in the calculation of Consolidated EBITDA, a “Specified Equity Contribution”); provided that, (a) no more than two (2) Specified Equity Contributions may be made in any consecutive four fiscal quarter period and no more than five (5) Specified Equity Contributions may be made during the term of the Facilities, (b) a Specified Equity Contribution shall not be greater than the amount required to cause the Borrower to be in compliance with the financial covenants under Article VIII and shall not be required to be used to repay the Loans, (c) a Specified Equity Contribution shall be counted solely for the purposes of the applicable financial covenants under Article VIII and shall not be included for the purposes of determining pricing, financial ratio-based conditions, the availability or the amount of any covenant baskets, carve-outs or unrestricted cash with respect to any fiscal quarter in which such Specified Equity Contribution is made and (d) there shall be no effect given to any reduction of Indebtedness with the proceeds of any Specified Equity Contribution for purposes of determining compliance with the applicable financial covenant under Article VIII for the fiscal quarter in which such Specified Equity Contribution is made (other than, with respect to any future period that includes such fiscal quarter, any portion of such Specified Equity Contribution that is actually applied to repay any Indebtedness).
(b) Notwithstanding anything in Sections 9.1 and 9.2 to the contrary, until the expiration of the applicable Cure Deadline, the Lenders shall not be permitted to (and shall not) accelerate the Loans held by them or exercise any rights or remedies under Section 9.1 or 9.2 or under any other provision of this Agreement or any other Loan Document against the Borrower on the basis of a failure to comply with Article VIII, and thereafter; provided that, until the Borrower have exercised its cure right set forth in the foregoing clause (a), the Borrower and its Subsidiaries shall not be permitted (and shall not) take any action hereunder pursuant to which the ability of the Borrower or such Subsidiary to take such action is subject to the absence of a Default or Event of Default, as applicable.
X. THE ADMINISTRATIVE AGENT
10.1 Appointment and Authority. Each of the Lenders (on behalf of itself and each of its Affiliates) hereby irrevocably appoints Acquiom Agency Services LLC to act on its behalf as the Administrative Agent hereunder and under the other Loan Documents and authorizes the Administrative Agent to take such actions on its behalf and to exercise such powers as are delegated to the Administrative Agent by the terms hereof or thereof, together with such actions and powers as are reasonably incidental thereto. The provisions of this Article X (other than Section 10.9, Section 10.13 and any other provision herein that expressly requires the approval or consent of the Borrower) are solely for the benefit of the Administrative Agent, the Lenders, the Affiliates of the Lenders, and the Borrower shall not have rights as a third party beneficiary of any of such provisions. It is understood and agreed that the use of the term “agent” herein or in any other Loan Documents (or any other similar term) with reference to the Administrative Agent is not intended to connote any fiduciary or other implied (or express) obligations arising under agency doctrine of any applicable Law. Instead such term is used as a matter of market custom, and is intended to create or reflect only an administrative relationship between contracting parties.
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10.2 Rights as a Lender. The Person serving as the Administrative Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not the Administrative Agent and the term “Lender” or “Lenders” shall, unless otherwise expressly indicated or unless the context otherwise requires, include the Person serving as the Administrative Agent hereunder in its individual capacity. Such Person and its Affiliates may accept deposits from, lend money to, own securities of, act as the financial advisor or in any other advisory capacity for and generally engage in any kind of business with the Borrower or any Subsidiary or other Affiliate thereof as if such Person were not the Administrative Agent hereunder and without any duty to account therefor to the Lenders.
10.3 No Fiduciary Duty. The Administrative Agent shall not have any duties or obligations except those expressly set forth herein and in the other Loan Documents and its duties hereunder shall be administrative in nature. Without limiting the generality of the foregoing, the Administrative Agent:
(a) shall not be subject to any fiduciary or other implied duties, regardless of whether a Default or Event of Default has occurred and is continuing;
(b) shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby or by the other Loan Documents that the Administrative Agent is required to exercise as directed in writing by the Required Lenders (or such other number or percentage of the Lenders as shall be expressly provided for herein or in the other Loan Documents); provided that the Administrative Agent shall not be required to take any action that, in its opinion or the opinion of its counsel, may expose the Administrative Agent to liability or that is contrary to any Loan Document or applicable Law, including for the avoidance of doubt any action that may be in violation of the automatic stay under any Debtor Relief Law or that may affect a forfeiture, modification or termination of property of a Defaulting Lender in violation of any Debtor Relief Law; and
(c) shall not, except as expressly set forth herein and in the other Loan Documents, have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to the Borrower or any of its Affiliates that is communicated to or obtained by the Person serving as the Administrative Agent or any of its Affiliates in any capacity.
10.4 Exculpation.
(a) The Administrative Agent shall not be liable for any action taken or not taken by it (i) with the consent or at the request of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary, or as the Administrative Agent shall believe in good faith shall be necessary, under the circumstances as provided in Sections 11.1 and 9.2) or (ii) in the absence of its own gross negligence or willful misconduct as determined by a court of competent jurisdiction by final and non-appealable judgment. The Administrative Agent shall be deemed not to have knowledge of any Default or Event of Default unless and until notice describing such Default or Event of Default is given to the Administrative Agent by the Borrower or a Lender.
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(b) The Administrative Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with this Agreement or any other Loan Document, (ii) the contents of any certificate, report or other document delivered hereunder or thereunder or in connection herewith or therewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein or therein or the occurrence of any Default or Event of Default, (iv) the validity, enforceability, effectiveness or genuineness of this Agreement, any other Loan Document or any other agreement, instrument or document or (v) the existence, value, adequacy, enforceability, sufficiency, collectability or title of any Collateral or (vi) the satisfaction of any condition set forth in Article IV or elsewhere herein, other than to confirm receipt of items expressly required to be delivered to the Administrative Agent.
(c) In no event shall the Administrative Agent be liable for any indirect, special, punitive or consequential damages (including lost profits), even if advised of the possibility thereof.
(d) Without limiting the foregoing, the Administrative Agent shall not be responsible or have any liability for any failure or delay in the performance of its obligations under this Agreement or any other Loan Document arising out of or caused by, directly or indirectly, circumstances beyond their control, including acts of God, natural disasters, epidemics, pandemics, acts of war or terrorism, civil or military disturbances, labor disputes, failures or disruptions of utilities, communications or computer (hardware or software) services or other similar events.
(e) The Administrative Agent is not obliged to expend or risk its own funds or otherwise incur any financial liability in the performance of its duties, obligations or responsibilities or the exercise of any right, power, authority or discretion if it has grounds for believing the repayment of such funds or adequate indemnity against, or security for, such risk or liability is not reasonably assured to it.
(f) The Administrative Agent shall not be liable for any error of judgment, or for any act done or step taken or omitted by it in good faith or for any mistake in act or law, or for anything which it may do or refrain from doing in connection herewith, in each case except for its own gross negligence or willful misconduct.
(g) The Administrative Agent shall be entitled to request instructions from the Required Lenders (or such other Lenders as may be specified herein) as to the exercise of any rights or powers, and may refrain from taking any action unless and until such instructions are received. In the absence of such instructions, the Administrative Agent may act or refrain from acting in its reasonable discretion.
(h) Notwithstanding anything in the Loan Documents to the contrary, the Administrative Agent shall have no responsibility for the preparation, filing or recording of any instrument, document or financing statement or for the perfection or maintenance of any security interest created hereunder.
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10.5 Reliance by the Administrative Agent. The Administrative Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing (including any electronic message, Internet or intranet website posting or other distribution) believed by it to be genuine and to have been signed, sent or otherwise authenticated by the proper Person. The Administrative Agent also may rely upon any statement made to it orally or by telephone and believed by it to have been made by the proper Person, and shall not incur any liability for relying thereon. In determining compliance with any condition hereunder to the making of a Loan, that by its terms must be fulfilled to the satisfaction of a Lender, the Administrative Agent may presume that such condition is satisfactory to such Lender unless the Administrative Agent shall have received notice to the contrary from such Lender prior to the making of such Loan. The Administrative Agent may consult with legal counsel (who may be counsel for the Lenders), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.
10.6 Delegation of Duties. The Administrative Agent may perform any and all of its duties and exercise its rights and powers hereunder or under any other Loan Document by or through any one or more sub-agents appointed by the Administrative Agent. The Administrative Agent and any such sub-agent may perform any and all of its duties and exercise its rights and powers by or through their respective Related Parties. The exculpatory provisions of this Article X shall apply to any such sub-agent and to the Related Parties of the Administrative Agent and any such sub-agent, and shall apply to their respective activities in connection with the syndication of the Facilities as well as activities as Administrative Agent. The Administrative Agent shall not be responsible for the negligence or misconduct of any sub-agents except to the extent that a court of competent jurisdiction determines in a final and non-appealable judgment that the Administrative Agent acted with gross negligence or willful misconduct in the selection of such sub agents.
10.7 Filing Proofs of Claim. In case of the pendency of any proceedings under any Debtor Relief Law or any other judicial proceeding relating to the Borrower, the Administrative Agent (irrespective of whether the principal of any Loan shall then be due and payable as herein expressed or by declaration or otherwise and irrespective of whether the Administrative Agent shall have made any demand therefor) shall be entitled and empowered (but not obligated) by intervention in such proceeding or otherwise:
(a) to file and prove a claim for the whole amount of the owing and unpaid principal and interest in respect to the Obligations and to file such other documents as may be necessary or advisable in order to have the claims of the Lenders and the Administrative Agent (including any claim for the reasonable compensation, expenses, disbursements and advances of the Lenders and the Administrative Agent and their respective agents and counsel and all other amounts due the Lenders and the Administrative Agent under Sections 2.7, 2.10(b), 3.5 and 11.3) allowed in such proceeding;
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(b) to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same; and
(c) any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Lender to make such payments to the Administrative Agent and, in the event that the Administrative Agent shall consent to the making of such payments directly to the Lenders, to pay to the Administrative Agent any amount due for the reasonable compensation, expenses, disbursements and advances of the Administrative Agent and its agents and counsel, and any other amounts due the Administrative Agent under Sections 2.7, 2.10(b), 3.5 and 11.3.
10.8 Resignation of the Administrative Agent. The Administrative Agent may at any time give notice of its resignation to the Lenders and the Borrower. Upon receipt of any such notice of resignation, the Required Lenders and, subject to an absence of any Specified Event of Default, the Borrower shall have the right to appoint a successor Administrative Agent (which shall not in any event be a Disqualified Institution). If no such successor shall have been so appointed by the Required Lenders and, subject to an absence of any Specified Event of Default, the Borrower shall have accepted such appointment within thirty (30) days after the retiring Administrative Agent gives notice of its resignation (or such earlier date as the Required Lenders may approve), then the retiring Administrative Agent may (but shall not be obligated to) on behalf of the Lenders, appoint a successor Administrative Agent from among the Lenders; provided, that if the Administrative Agent shall notify the Borrower and the Lenders that no Person has accepted such appointment, then the Administrative Agent’s resignation shall nonetheless become effective in accordance with such notice and (i) the retiring Administrative Agent shall be discharged from its duties and obligations hereunder and under the other Loan Documents and (ii) except for any indemnity payments owed to the retiring Administrative Agent, all payments, communications and determinations provided to be made by, to or through the Administrative Agent shall instead be made by or to each Lender directly, until such time as the Required Lenders appoint a successor Administrative Agent as provided for above in this Section 10.8. Upon the acceptance of a successor’s appointment as Administrative Agent hereunder, such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring (or retired) Administrative Agent (other than any rights to indemnity payments owed to the retiring Administrative Agent), and the retiring Administrative Agent shall be discharged from all of its duties and obligations hereunder or under the other Loan Documents (if not already discharged therefrom as provided above in this Section). The fees payable by the Borrower to a successor Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed between the Borrower and such successor. After the retiring Administrative Agent’s resignation hereunder and under the other Loan Documents, the provisions of this Article X and Section 11.3 shall continue in effect for the benefit of such retiring Administrative Agent, its sub agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while the retiring Administrative Agent was acting as Administrative Agent.
10.9 [Reserved].
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10.10 Non-Reliance on the Administrative Agent and Other Lenders. Each Lender expressly acknowledges that the Administrative Agent has not made any representation or warranty to it, and that no act by the Administrative Agent hereafter taken, including any consent to, and acceptance of any assignment or review of the affairs of the Borrower of any Affiliate thereof, shall be deemed to constitute any representation or warranty by the Administrative Agent to any Lender as to any matter, including whether the Administrative Agent has disclosed material information in their (or their Related Parties’) possession. Each Lender represents to the Administrative Agent that it has, independently and without reliance upon the Administrative Agent, any other Lender or any of their Related Parties and based on such documents and information as it has deemed appropriate, made its own credit analysis of, appraisal of, and investigation into, the business, prospects, operations, property, financial and other condition and creditworthiness of the Borrower and its Subsidiaries, and all applicable bank or other regulatory Laws relating to the transactions contemplated hereby, and made its own decision to enter into this Agreement and to extend credit to the Borrower hereunder. Each Lender also acknowledges that it will, independently and without reliance upon the Administrative Agent, any other Lender or any of their Related Parties and based on such documents and information as it shall from time to time deem appropriate, continue to make its own credit analysis, appraisals and decisions in taking or not taking action under or based upon this Agreement, any other Loan Document or any related agreement or any document furnished hereunder or thereunder, and to make such investigations as it deems necessary to inform itself as to the business, prospects, operations, property, financial and other condition and creditworthiness of the Borrower. Each Lender represents and warrants that (i) the Loan Documents set forth the terms of a commercial lending facility and (ii) it is engaged in making, acquiring or holding commercial loans in the ordinary course and is entering into this Agreement as a Lender for the purpose of making, acquiring or holding commercial loans and providing other facilities set forth herein as may be applicable to such Lender, and not for the purpose of purchasing, acquiring or holding any other type of financial instrument, and each Lender agrees not to assert a claim in contravention of the foregoing. Each Lender represents and warrants that it is sophisticated with respect to decisions to make, acquire and/or hold commercial loans and to provide other facilities set forth herein, as may be applicable to such Lender, and either it, or the Person exercising discretion in making its decision to make, acquire and/or hold such commercial loans or to provide such other facilities, is experienced in making, acquiring or holding such commercial loans or providing such other facilities.
10.11 Enforcement. By its acceptance of the benefits of this Agreement and the other Loan Documents and once any portion of the Loans is held by a Lender that is not an affiliate of the GCI Group, each Lender agrees that (a) the Loan Documents may be enforced only by the Administrative Agent, subject to Section 11.2, (b) no Lender shall have any right individually to enforce or seek to enforce this Agreement or the other Loan Documents and (c) no Lender has any right to notice of any action or to consent to, direct or object to any action hereunder or under any other Loan Document other than in its capacity as a Lender and, in such case, only to the extent expressly provided in the Loan Documents.
10.12 [Reserved].
10.13 [Reserved].
10.14 [Reserved].
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10.15 No Reliance on the Administrative Agent’s Customer Identification Program. Each Lender acknowledges and agrees that neither such Lender, nor any of its Affiliates, participants or assignees, may rely on the Administrative Agent to carry out such Lender’s, Affiliate’s, participant’s or assignee’s customer identification program, or other obligations required or imposed under or pursuant to the USA Patriot Act or the regulations thereunder, including the regulations contained in 31 CFR 103.121 (as hereafter amended or replaced, the “CIP Regulations”), or any other Anti-Terrorism Law, Anti-Corruption Law or Sanctions, including any programs involving any of the following items relating to or in connection with any of the Borrower, its Affiliates or their agents, the Loan Documents or the transactions hereunder or contemplated hereby: (a) any identity verification procedures, (b) any recordkeeping, (c) comparisons with government lists, (d) customer notices or (e) other procedures required under the CIP Regulations or such other Laws.
10.16 Certain ERISA Matters.
(a) Each Lender (x) represents and warrants, as of the date such Person became a Lender party hereto, to, and (y) covenants, from the date such Person became a Lender party hereto to the date such Person ceases being a Lender party hereto, for the benefit of, the Administrative Agent and their respective Affiliates, and not, for the avoidance of doubt, to or for the benefit of the Borrower, that at least one of the following is and will be true:
(i) such Lender is not using “plan assets” (within the meaning of Section 3(42) of ERISA or otherwise) of one or more Benefit Plans with respect to such Lender’s entrance into, participation in, administration of and performance of the Loans, the Commitments or this Agreement,
(ii) the transaction exemption set forth in one or more PTEs, such as PTE 84-14 (a class exemption for certain transactions determined by independent qualified professional asset managers), PTE 95-60 (a class exemption for certain transactions involving insurance company general accounts), PTE 90-1 (a class exemption for certain transactions involving insurance company pooled separate accounts), PTE 91-38 (a class exemption for certain transactions involving bank collective investment funds) or PTE 96-23 (a class exemption for certain transactions determined by in-house asset managers), is applicable with respect to such Lender’s entrance into, participation in, administration of and performance of the Loans, the Commitments and this Agreement,
(iii) (A) such Lender is an investment fund managed by a “Qualified Professional Asset Manager” (within the meaning of Part VI of PTE 84-14), (B) such Qualified Professional Asset Manager made the investment decision on behalf of such Lender to enter into, participate in, administer and perform the Loans, the Commitments and this Agreement, (C) the entrance into, participation in, administration of and performance of the Loans, the Commitments and this Agreement satisfies the requirements of sub-sections (b) through (g) of Part I of PTE 84-14 and (D) to the best knowledge of such Lender, the requirements of subsection (a) of Part I of PTE 84-14 are satisfied with respect to such Lender’s entrance into, participation in, administration of and performance of the Loans, the Commitments and this Agreement, or
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(iv) such other representation, warranty and covenant as may be agreed in writing between the Administrative Agent, in its sole discretion, and such Lender.
(v) In addition, unless either (1) Section 10.17(a)(i) is true with respect to a Lender or (2) a Lender has provided another representation, warranty and covenant as provided in Section 10.17(a)(iv), such Lender further (x) represents and warrants, as of the date such Person became a Lender party hereto, to, and (y) covenants, from the date such Person became a Lender party hereto to the date such Person ceases being a Lender party hereto, for the benefit of, the Administrative Agent and their respective Affiliates, and not, for the avoidance of doubt, to or for the benefit of the Borrower, that the Administrative Agent and their respective Affiliates, are not a fiduciary with respect to the assets of such Lender involved in such Lender’s entrance into, participation in, administration of and performance of the Loans, the Commitments and this Agreement (including in connection with the reservation or exercise of any rights by the Administrative Agent under this Agreement, any Loan Document or any documents related hereto or thereto).
10.17 Rate Disclaimer. The Administrative Agent does not warrant or accept responsibility for, and each of the parties to this Agreement hereby acknowledge and agree (for the benefit of the Administrative Agent) that the Administrative Agent shall not have any liability with respect to (a) the continuation of, administration of, submission of, calculation of or any other matter related to the Alternate Base Rate, any Benchmark, or any component definition thereof or rates referred to in the definition thereof, or any alternative, successor or replacement rate thereto (including any Benchmark Replacement), including whether the composition or characteristics of any such alternative, successor or replacement rate (including any Benchmark Replacement) will be similar to, or produce the same value or economic equivalence of, or have the same volume or liquidity as, Alternate Base Rate, any initial Benchmark or any other Benchmark or Benchmark Replacement prior to its discontinuance or unavailability, or (b) the effect, implementation or composition of any Benchmark Replacement Conforming Changes. The Administrative Agent and its affiliates or other related entities may engage in transactions that affect the calculation of the Alternate Base Rate, or any Benchmark, any alternative, successor or replacement rate (including any Benchmark Replacement) or any relevant adjustments thereto, in each case, in a manner adverse to the Borrower. The Administrative Agent may select information sources or services in its reasonable discretion to ascertain the Alternate Base Rate, any initial Benchmark or any other Benchmark or Benchmark Replacement, in each case pursuant to the terms of this Agreement, and shall have no liability to the Borrower, any Lender or any other Person for damages of any kind, including direct or indirect, special, punitive, incidental or consequential damages, costs, losses or expenses (whether in tort, contract or otherwise and whether at law or in equity), for any error or calculation of any such rate (or component thereof) provided by any such information source or service.
XI. MISCELLANEOUS
11.1 Modifications, Amendments or Waivers. With the written consent of the Required Lenders, the Administrative Agent, acting on behalf of all the Lenders, and the Borrower may from time to time enter into written agreements amending or changing any provision of this Agreement or any other Loan Document or the rights of the Lenders or the Borrower hereunder or thereunder, or may grant written waivers or consents hereunder or thereunder. Any such agreement, waiver or consent made with such written consent shall be effective to bind all the Lenders and the Borrower; provided, that no such agreement, waiver or consent may be made that will:
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(a) extend or increase the Commitment of any Lender (or reinstate any obligation to make Loans terminated pursuant to Section 9.2) without the written consent of such Lender whose Commitment is being extended or increased (it being understood and agreed that a waiver of any condition precedent set forth in Section 4.2 or of any Default, Event of Default, mandatory prepayment or a mandatory reduction in Commitments is not considered an extension or increase in Commitments of any Lender);
(b) postpone any date fixed by this Agreement or any other Loan Document for any payment (including mandatory prepayment of Excess Cash Flow but excluding other mandatory prepayments of principal, interest, fees or other amounts due to the Lenders (or any of them) or any scheduled or mandatory reduction of the Commitments hereunder or under any other Loan Document or any waiver of the imposition of interest at the Default Rate) without the written consent of each Lender entitled to receive such payment or whose Commitments are to be reduced, it being understood that the waiver of any mandatory prepayment of Loans (or any definition relating thereto), other than a mandatory prepayment of Excess Cash Flow, shall not constitute a postponement of any date scheduled for the payment of principal or interest;
(c) reduce the principal of, or the rate of interest specified herein (except pursuant to Section 3.7) on, any Loan Borrowing or any fees or other amounts payable hereunder or under any other Loan Document, or any fee payable hereunder without the written consent of each Lender directly affected thereby; provided, however, that only the consent of the Required Lenders shall be necessary (i) to amend the definition of “Default Rate” or to waive any obligation of the Borrower to pay interest at the Default Rate or (ii) to amend any financial covenant hereunder (or any defined term used therein) even if the effect of such amendment would be to reduce the rate of interest on any Loan or to reduce any fee payable hereunder;
(d) change Section 2.14 or Section 9.2(d) in a manner that would alter the pro rata sharing of payments required thereby without the written consent of each Lender directly affected thereby;
(e) change any provision of this Section 11.1 or the definition of “Required Lenders” without the written consent of each Lender directly affected thereby;
(f) [reserved]; or
(g) release the Borrower without the consent of each Lender;
provided that no agreement, waiver or consent that would modify the interests, rights or obligations of the Administrative Agent may be made without the written consent of such Administrative Agent, as applicable; and provided, further that, if in connection with any proposed waiver, amendment or modification referred to in Sections 11.1(a) through 11.1(g) above, the consent of the Required Lenders is obtained but the consent of one or more of such other Lenders whose consent is required is not obtained (each a “Non-Consenting Lender”), then the Borrower shall have the right to replace any such Non-Consenting Lender with one or more replacement Lenders pursuant to Section 3.6.
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No Defaulting Lender shall have any right to approve or disapprove any amendment, waiver or consent hereunder (and any amendment, waiver or consent which by its terms requires the consent of all Lenders or each affected Lender may be effected with the consent of the applicable Lenders other than Defaulting Lenders), except that (x) the Commitment of such Defaulting Lender may not be increased or extended without the consent of such Lender and (y) any waiver, amendment or modification requiring the consent of all Lenders or each affected Lender that by its terms affects such Defaulting Lender disproportionately adversely relative to other affected Lenders shall require the consent of such Defaulting Lender.
Notwithstanding anything to the contrary contained herein, if following the Closing Date, the Administrative Agent and the Borrower shall have identified an obvious error or any error or omission of a technical or immaterial nature, in each case, in any provision of this Agreement or any other Loan Document, then the Administrative Agent and the Borrower shall be permitted to amend such provision and such amendment shall become effective without any further action or consent of any other party to this Agreement or any other Loan Document if the same is not objected to in writing by the Required Lenders within five (5) Business Days following receipt of notice thereof. It is understood that posting such amendment electronically on SyndTrak or another relevant website with notice of such posting by the Administrative Agent to the Required Lenders shall be deemed adequate receipt of notice of any such amendment.
11.2 No Implied Waivers; Cumulative Remedies. No course of dealing and no delay or failure of the Administrative Agent or any Lender in exercising any right, power, remedy or privilege under this Agreement or any other Loan Document shall affect any other or future exercise thereof or operate as a waiver thereof, nor shall any single or partial exercise thereof preclude any further exercise thereof or of any other right, power, remedy or privilege. The rights and remedies of the Administrative Agent and the Lenders under this Agreement and any other Loan Documents are cumulative and not exclusive of any rights or remedies that they would otherwise have.
Notwithstanding anything to the contrary contained herein or in any other Loan Document and once any portion of the Loans is held by a Lender that is not an affiliate of the GCI Group, the authority to enforce rights and remedies hereunder and under the other Loan Documents against the Borrower shall be vested exclusively in, and all actions and proceedings at law in connection with such enforcement shall be instituted and maintained exclusively by, the Administrative Agent for the benefit of the Lenders; provided, however, that the foregoing shall not prohibit (a) the Administrative Agent from exercising on its own behalf the rights and remedies that inure to its benefit (solely in its capacity as Administrative Agent) hereunder and under the other Loan Documents, (b) [reserved], (c) any Lender from exercising setoff rights in accordance with Section 9.2 (subject to the terms of Section 2.14), or (d) any Lender from filing proofs of claim or appearing and filing pleadings on its own behalf during the pendency of a proceeding relative to the Borrower in any Insolvency Proceedings.
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11.3 Expenses; Indemnity; Damage Waiver.
(a) Costs and Expenses. The Borrower shall pay (i) all reasonable out of pocket expenses incurred by the Administrative Agent and its Affiliates (including Attorney Costs of the Administrative Agent) in connection with the syndication of the Facilities, the preparation, negotiation, execution, delivery and administration of this Agreement and the other Loan Documents, or any amendments, modifications or waivers of the provisions hereof or thereof (whether or not the transactions contemplated hereby or thereby shall be consummated), (ii) [reserved], and (iii) all out of pocket expenses incurred by the Administrative Agent or any Lender (including Attorney Costs of the Administrative Agent or any Lender), in connection with the enforcement or protection of its rights (A) in connection with this Agreement and the other Loan Documents, including its rights under this Section, or (B) in connection with the Loans made hereunder, including all such out of pocket expenses incurred during any workout, restructuring or negotiations in respect of such Loans.
(b) Indemnification by the Borrower. The Borrower shall indemnify the Administrative Agent (and any sub-agent thereof) and each Lender, and each Related Party of any of the foregoing Persons (each such Person being called an “Indemnitee”) against, and hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities and related expenses (including Attorney Costs) incurred by any Indemnitee or asserted against any Indemnitee by any Person (including the Borrower and the expense of investigation) other than such Indemnitee and its Related Parties arising out of, in connection with, or as a result of (i) the execution or delivery of this Agreement, any other Loan Document or any agreement or instrument contemplated hereby or thereby, the performance by the parties hereto of their respective obligations hereunder or thereunder or the consummation of the transactions contemplated hereby or thereby, (ii) any Loan or the use or proposed use of the proceeds therefrom, (iii) any actual or alleged presence or release of Hazardous Materials on or from any property owned or operated by the Borrower or any of its Subsidiaries, or any Environmental Liability related in any way to the Borrower or any of its Subsidiaries, or (iv) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory, whether brought by a third party or by the Borrower, and regardless of whether any Indemnitee is a party thereto; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses (x) are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of such Indemnitee or (y) result from a claim brought by the Borrower against an Indemnitee for gross negligence and willful misconduct of such Indemnitee’s obligations hereunder or under any other Loan Document, if the Borrower has obtained a final and nonappealable judgment in its favor on such claim as determined by a court of competent jurisdiction. This Section 11.3(b) shall not apply with respect to Taxes other than any Taxes that represent losses, claims, damages and other similar amounts arising from any non-Tax claim.
(c) [reserved].
(d) Waiver of Consequential Damages, Etc. To the fullest extent permitted by applicable Law, the Borrower shall not assert, and each hereby waives, any claim against any Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement, any other Loan Document or any agreement or instrument contemplated hereby, the transactions contemplated hereby or thereby, any Loan or the use of the proceeds thereof. No Indemnitee referred to in Section 11.3 shall be liable for any damages arising from the use by unintended recipients of any information or other materials distributed by it through telecommunications, electronic or other information transmission systems in connection with this Agreement or the other Loan Documents or the transactions contemplated hereby or thereby other than for direct or actual damages resulting from the gross negligence or willful misconduct of such Indemnitee as determined by a final and non-appealable judgment of a court of competent jurisdiction.
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(e) Payments. All amounts due under this Section shall be payable not later than ten (10) days after demand therefor.
(f) Survival. Each party’s obligations under this Section 11.3 shall survive the resignation of the Administrative Agent, or the replacement of, a Lender, the termination of the Commitments and the repayment, satisfaction or discharge of all obligations under any Loan Document.
11.4 Notices; Effectiveness; Electronic Communication.
(a) Notices Generally. Except in the case of notices and other communications expressly permitted to be given by telephone (and except as provided in clause (b) below), all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by facsimile (i) if to a Lender, at the address (or facsimile number) set forth on Schedule 1.1(A) (as may be modified from time to time with prior notice to the Administrative Agent) or (ii) if to any other Person, to it at its address (or facsimile number) set forth on Schedule 1.1(B). Notices sent by hand or overnight courier service, or mailed by certified or registered mail, shall be deemed to have been given when received; notices sent by facsimile shall be deemed to have been given when sent (except that, if not given during normal business hours for the recipient, shall be deemed to have been given at the opening of business on the next business day for the recipient). Notices delivered through electronic communications, to the extent provided in clause (b) below, shall be effective as provided in said clause (b).
(b) Electronic Communications. Notices and other communications to the Lenders hereunder may be delivered or furnished by electronic communication (including e-mail and Internet or intranet websites) pursuant to procedures approved by the Administrative Agent, provided that the foregoing shall not apply to notices to any Lender pursuant to Article II if such Lender has notified the Administrative Agent that it is incapable of receiving notices under such Article by electronic communication. The Administrative Agent or the Borrower may, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it; provided that approval of such procedures may be limited to particular notices or communications.
Unless the Administrative Agent otherwise prescribes, (i) notices and other communications sent to an e-mail address shall be deemed received upon the sender’s receipt of an acknowledgement from the intended recipient (such as by the “return receipt requested” function, as available, return e-mail or other written acknowledgement), and (ii) notices or communications posted to an Internet or intranet website shall be deemed received upon the deemed receipt by the intended recipient, at its e-mail address as described in the foregoing clause (i), of notification that such notice or communication is available and identifying the website address therefor; provided that, for both clauses (i) and (ii) above, if such notice, email or other communication is not sent during the normal business hours of the recipient, such notice or communication shall be deemed to have been sent at the opening of business on the next business day for the recipient.
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(c) Change of Address, etc. Any party hereto may change its address, facsimile number or e-mail address, if applicable, for notices and other communications hereunder by notice to the other parties hereto.
(d) Platform.
(i) The Borrower agrees that the Administrative Agent may, but shall not be obligated to, make the Communications (as defined below) available to the Lenders by posting the Communications on Debt Domain, Intralinks, Syndtrak or a substantially similar electronic transmission system (the “Platform”).
(ii) The Platform is provided “as is” and “as available.” The Agent Parties (as defined below) do not warrant the adequacy of the Platform and expressly disclaim liability for errors or omissions in the Communications. No warranty of any kind, express, implied or statutory, including any warranty of merchantability, fitness for a particular purpose, non-infringement of third-party rights or freedom from viruses or other code defects, is made by any Agent Party in connection with the Communications or the Platform. In no event shall the Administrative Agent or any of its Related Parties (collectively, the “Agent Parties”) have any liability to the Borrower, any Lender or any other Person or entity for damages of any kind, including direct or indirect, special, incidental or consequential damages, losses or expenses (whether in tort, contract or otherwise) arising out of the Borrower’s or the Administrative Agent’s transmission of communications through the Platform. “Communications” means, collectively, any notice, demand, communication, information, document or other material provided by or on behalf of the Borrower pursuant to any Loan Document or the transactions contemplated therein which is distributed to the Administrative Agent or any Lender by means of electronic communications pursuant to this Section, including through the Platform.
11.5 Severability. The provisions of this Agreement are intended to be severable. If any provision of this Agreement shall be held invalid or unenforceable in whole or in part in any jurisdiction, such provision shall, as to such jurisdiction, be ineffective to the extent of such invalidity or unenforceability without in any manner affecting the validity or enforceability thereof in any other jurisdiction or the remaining provisions hereof in any jurisdiction.
11.6 Duration; Survival. All representations and warranties of the Borrower contained herein or made in connection herewith shall survive the execution and delivery of this Agreement, the completion of the transactions hereunder and Payment In Full. All covenants and agreements of the Borrower contained herein relating to the payment of principal, interest, premiums, additional compensation or expenses and indemnification, including those set forth in the Notes, Article II, Article III, Section 11.3 or any other provision of any Loan Document, the agreement of the Lenders set forth in Section 11.3(c), and the agreements of the Borrower set forth in Section 11.10 or any other provision of any Loan Documents shall survive Payment In Full and shall protect the Administrative Agent, the Lenders and any other Indemnitees against events arising after such termination as well as before. All other covenants and agreements of the Borrower shall continue in full force and effect from and after the date hereof and until Payment In Full.
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11.7 Successors and Assigns.
(a) Successors and Assigns Generally. The provisions of this Agreement shall be binding upon, and inure to the benefit of, the parties hereto and their respective successors and assigns permitted hereby, except that the Borrower may not assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of the Administrative Agent and each Lender and no Lender may assign or otherwise transfer any of its rights or obligations hereunder except (i) to an assignee in accordance with the provisions of this Section, (ii) by way of participation in accordance with the provisions of this Section, or (iii) by way of pledge, in each case, subject to the restrictions of this Section 11.7 (and any other attempted assignment or transfer by any party hereto shall be null and void). Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby, Participants to the extent provided in this Section and, to the extent expressly contemplated hereby, the Related Parties of each of the Administrative Agent and the Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement.
(b) Assignments by Lenders. (I) During the Acquisition Agreement Period, assignments of any portion of a Lender’s rights and obligations under this Agreement (including all or a portion of its Commitment, and the Loans at the time owing to it) shall be limited to such Lender’s Affiliates or Approved Fund (and any such assignment to a Person other than such Lender’s Affiliates or Approved Funds shall be deemed void ab initio) and (II) after the Acquisition Agreement Period, any Lender may at any time assign to one or more assignees all or any portion of its rights and obligations under this Agreement (including all or a portion of its Commitment, and the Loans at the time owing to it) provided that (in each case and with respect to any Facility) any such assignment shall be subject to the following conditions:
(i) Minimum Amounts.
(A) in the case of an assignment of the entire remaining amount of the assigning Lender’s Commitment and/or the Loans at the time owing to it (in each case with respect to any Facility) or contemporaneous assignments to related Approved Funds that equal at least the amount specified in clause (B) below in the aggregate or in the case of an assignment to a Lender, an Affiliate of a Lender or an Approved Fund, no minimum amount need be assigned; and
(B) in any case not described in clause (i)(A) of this clause (b), the aggregate amount of the Commitment (which for this purpose includes Loans outstanding thereunder) or, if the applicable Commitment is not then in effect, the principal outstanding balance of the Loans of the assigning Lender subject to each such assignment (determined as of the date the Assignment and Assumption with respect to such assignment is delivered to the Administrative Agent or, if “Trade Date” is specified in the Assignment and Assumption, as of the Trade Date) shall not be less than $1,000,000, in the case of any assignment in respect of any Term Loan Facility, unless each of the Administrative Agent and, so long as no Event of Default has occurred and is continuing, the Borrower otherwise consents (each such consent not to be unreasonably withheld or delayed).
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(ii) Proportionate Amounts. Each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender’s rights and obligations under this Agreement with respect to the Loan or the Commitment assigned, except that this clause (ii) shall not prohibit any Lender from assigning all or a portion of its rights and obligations among separate Facilities on a non-pro rata basis.
(iii) Required Consents. No consent shall be required for any assignment except to the extent required by clause (b)(i)(B) of this Section 11.7 and in addition:
(A) the consent of the Borrower (such consent not to be unreasonably withheld or delayed) shall be required unless (x) an Event of Default has occurred and is continuing at the time of such assignment or (y) such assignment is to a Lender, an Affiliate of a Lender or an Approved Fund; provided that the Borrower shall be deemed to have consented to any such assignment unless it shall object thereto by written notice to the Administrative Agent within ten (10) Business Days after having received notice thereof;
(B) the acknowledgment of the Administrative Agent shall be required for assignments in respect of (i) any unfunded Commitments with respect to any Term Loan Facility if such assignment is to a Person that is not a Lender with a Commitment in respect of such Facility or Tranche of such Facility, an Affiliate of such Lender or an Approved Fund with respect to such Lender, or (ii) any Term Loans to a Person who is not a Lender, an Affiliate of a Lender or an Approved Fund.
(iv) Assignment and Assumption. The parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Assumption. The assignee, if it is not a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire.
(v) No Assignment to Certain Persons. No such assignment shall be made to (i) the Borrower or any of the Borrower’s Affiliates or Subsidiaries or (ii) to any Defaulting Lender or any of its Subsidiaries, or any Person who, upon becoming a Lender hereunder, would constitute any of the foregoing Persons described in this clause (v) or (iii) any Disqualified Institution.
(vi) No Assignment to Natural Persons. No such assignment shall be made to a natural Person (or a holding company, investment vehicle or trust for, or owned or operated for the primary benefit of, a natural Person); provided that this clause (vi) shall not apply to John C. Malone (or a holding company, investment vehicle or trust for, or owned or operated for the primary benefit of, John C. Malone).
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(vii) Certain Additional Payments. In connection with any assignment of rights and obligations of any Defaulting Lender hereunder, no such assignment shall be effective unless and until, in addition to the other conditions thereto set forth herein, the parties to the assignment shall make such additional payments to the Administrative Agent in an aggregate amount sufficient, upon distribution thereof as appropriate (which may be outright payment, purchases by the assignee of participations or subparticipations, or other compensating actions, including funding, with the consent of the Borrower and the Administrative Agent, the applicable pro rata share of Loans previously requested but not funded by the Defaulting Lender, to each of which the applicable assignee and assignor hereby irrevocably consent), to (x) pay and satisfy in full all payment liabilities then owed by such Defaulting Lender to the Administrative Agent, the Issuing Lender and each other Lender hereunder (and interest accrued thereon), and (y) acquire (and fund as appropriate) its full Pro Rata Share of all Loans in accordance with its Pro Rata Share of the applicable Facility. Notwithstanding the foregoing, in the event that any assignment of rights and obligations of any Defaulting Lender hereunder shall become effective under applicable Law without compliance with the provisions of this paragraph, then the assignee of such interest shall be deemed to be a Defaulting Lender for all purposes of this Agreement until such compliance occurs.
Subject to acceptance and recording thereof by the Administrative Agent pursuant to this Section, from and after the effective date specified in each Assignment and Assumption, the assignee thereunder shall be a party to this Agreement and, to the extent of the interest assigned by such Assignment and Assumption, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto) but shall continue to be entitled to the benefits of Sections 3.1, 3.2, 3.5 and 11.3(b) with respect to facts and circumstances occurring prior to the effective date of such assignment; provided, that except to the extent otherwise expressly agreed by the affected parties, no assignment by a Defaulting Lender will constitute a waiver of release of any claim of any party hereunder arising from that Lender’s having been a Defaulting Lender. Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this Section shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with Section 11.7(d) below.
(c) Register. The Administrative Agent, acting solely for this purpose as a non-fiduciary agent of the Borrower, shall maintain at its Principal Office, a register for the recordation of the names and addresses of the Lenders, and the Commitments of, and principal amounts (and stated interest) of the Loans owing to, each Lender pursuant to the terms hereof from time to time (the “Register”). The entries in the Register shall be conclusive absent manifest error, and the Borrower, the Administrative Agent and the Lenders shall treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement. The Register shall be available for inspection by the Borrower, and any Lender, at any reasonable time and from time to time upon reasonable prior notice. The parties to this Agreement hereby acknowledge and agree that the Administrative Agent, in its capacity as such, has no duty to monitor or enforce assignments, participations or other actions with respect to Disqualified Institutions and no responsibility or liability with respect to any assignments made by Lenders to a Disqualified Institution.
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(d) Participations. Lender may at any time, without the consent of, or notice to, the Borrower or the Administrative Agent sell participations to any Participant (including John C. Malone (or a holding company, investment vehicle or trust for, or owned or operated for the primary benefit of, a natural Person)) in all or a portion of such Lender’s rights and/or obligations under this Agreement (including all or a portion of its Commitment and/or the Loans owing to it); provided that (i) such Lender’s obligations under this Agreement shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (iii) the Borrower, the Administrative Agent and the Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement. For the avoidance of doubt, each Lender shall be responsible for the indemnity under Section 11.3(c) with respect to any payments made by such Lender to its Participant(s).
Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, modification or waiver described in Sections 11.1(a) through (g) that affects such Participant. The Borrower agrees that each Participant shall be entitled to the benefits of Sections 3.1, 3.2 (subject to the requirements and limitations therein, including the requirements under Section 3.2 (it being understood that the documentation required under Section 3.2 shall be delivered to the participating Lender)), 3.5 and 11.3 to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to clause (b) of this Section 11.7; provided that such Participant (A) agrees to be subject to the provisions of Section 3.6 as if it were an assignee under clause (b) of this Section 11.7; and (B) shall not be entitled to receive any greater payment under Section 3.1 or 3.2, with respect to any participation, than its participating Lender would have been entitled to receive, except to the extent such entitlement to receive a greater payment results from a Change in Law that occurs after the Participant acquired the applicable participation. Each Lender that sells a participation agrees, at the Borrower’s request and expense, to use reasonable efforts to cooperate with the Borrower to effectuate the provisions of Section 3.6 with respect to any Participant. To the extent permitted by Law, each Participant also shall be entitled to the benefits of Section 9.2(c) as though it were a Lender; provided that such Participant agrees to be subject to Section 2.14 as though it were a Lender. Each Lender that sells a participation shall, acting solely for this purpose as a non-fiduciary agent of the Borrower, maintain a register on which it enters the name and address of each Participant and the principal amounts (and stated interest) of each Participant and the principal amounts (and stated interest) of each Participant’s interest in the Loans or other obligations under the Loan Documents (the “Participant Register”); provided that no Lender shall have any obligation to disclose all or any portion of the Participant Register (including the identity of any Participant or any information relating to a Participant’s interest in any Commitments, Loans or its other obligations under any Loan Document) to any Person except to the extent that such disclosure is necessary to establish that such Commitment, Loan or other obligation is in the registered form under Section 5f.103-1(c) of the United States Treasury Regulations. The entries in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat each Person whose name is recorded in the Participant Register as the owners of such participation for all purposes of this Agreement notwithstanding any notice to the contrary. Each Lender that sells a participation shall provide concurrent notice of the same to the Lender Representative and, in the event that such sale impacts the CoBank Credit Agreement’s restricted payments covenant exception governing the payment of cash interest on the Loans, the Lender Representative will give prompt notice of the same to Intermediate Holdings and CoBank.
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(e) Certain Pledges. Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement to secure obligations of such Lender, including any pledge or assignment to secure obligations to a Federal Reserve Bank; provided that no such pledge or assignment shall release such Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.
11.8 Confidentiality. Each of the Administrative Agent and the Lenders agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to its Affiliates and to its Related Parties (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential); (b) to the extent required or requested by any regulatory authority purporting to have jurisdiction over such Person or its Related Parties (including any self-regulatory authority, such as the National Association of Insurance Commissioners); (c) to the extent required by applicable Law or by any subpoena or similar legal process; (d) to any other party hereto; (e) in connection with the exercise of any remedies hereunder or under any other Loan Document or any action or proceeding relating to this Agreement or any other Loan Document or the enforcement of rights hereunder or thereunder; (f) subject to an agreement containing provisions substantially the same as those of this Section, to (i) any assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights and obligations under this Agreement, or (ii) any actual or prospective party (or its Related Parties) to any swap, derivative or other transaction under which payments are to be made by reference to the Borrower and its obligations, this Agreement or payments hereunder; (g) on a confidential basis to (i) any rating agency in connection with rating the Borrower or its Subsidiaries or the Facilities or (ii) the CUSIP Service Bureau or any similar agency in connection with the issuance and monitoring of CUSIP numbers with respect to the Facilities; (h) with the consent of the Borrower; (i) as permitted by the Closing Date Acquisition Agreement; or (j) to the extent such Information (x) becomes publicly available other than as a result of a breach of this Section, or (y) becomes available to the Administrative Agent, any Lender, or any of their respective Affiliates on a nonconfidential basis from a source other than the Borrower.
For purposes of this Section, “Information” means all information received from the Borrower or any of its Subsidiaries relating to the Borrower or any of its Subsidiaries or any of their respective businesses, other than any such information that is available to the Administrative Agent or any Lender on a nonconfidential basis prior to disclosure by the Borrower or any of its Subsidiaries; provided that, in the case of information received from the Borrower or any of its Subsidiaries after the date hereof, such information is clearly identified at the time of delivery as confidential. Any Person required to maintain the confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information.
11.9 Counterparts; Integration; Effectiveness.
(a) This Agreement may be executed in counterparts (and by different parties hereto in different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Agreement and the other Loan Documents, and any separate letter agreements with respect to fees payable to the Administrative Agent, constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof. Except as provided in Article IV, this Agreement shall become effective when it shall have been executed by the Administrative Agent and when the Administrative Agent shall have received counterparts hereof that, when taken together, bear the signatures of each of the other parties hereto. Delivery of an executed counterpart of a signature page of this Agreement by facsimile or in electronic (i.e., “pdf” or “tif”) format shall be effective as delivery of a manually executed counterpart of this Agreement.
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(b) Electronic Execution of Loan Documents. The parties agree that the electronic signature of a party to this Agreement and any other Loan Document shall be as valid as an original signature of such party and shall be effective to bind such party to this Agreement or such other Loan Document. The parties agree that any electronically signed Loan Document (including this Agreement) shall be deemed (i) to be “written” or “in writing,” (ii) to have been signed and (iii) to constitute a record established and maintained in the ordinary course of business and an original written record when printed from electronic files. The parties presently intend to authenticate the Loan Documents to which they are a party by either signing such Loan Document or attaching thereto or logically associating therewith an electronic sound, symbol or process as their respective electronic signature. The words “execution,” “signed,” “signature,” and words of like import in this Agreement and any other Loan Document (including any Assignment and Assumption) shall be deemed to include electronic signatures or electronic records, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions Act.
11.10 Choice of Law; Submission to Jurisdiction; Waiver of Venue; Service of Process; Waiver of Jury Trial.
(a) Governing Law. This Agreement and the other Loan Documents and any claims, controversy, dispute or cause of action (whether in contract or tort or otherwise) based upon, arising out of or relating to this Agreement or any other Loan Document (except, as to any other Loan Document, as expressly set forth therein) and the transactions contemplated hereby and thereby shall be governed by, and construed in accordance with, the law of the State of New York.
(b) SUBMISSION TO JURISDICTION. THE BORROWER IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK COUNTY AND OF THE UNITED STATES SOUTHERN DISTRICT COURT OF NEW YORK, SITTING IN NEW YORK COUNTY, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS AGREEMENT OR IN ANY OTHER LOAN DOCUMENT SHALL (I) AFFECT ANY RIGHT THAT THE ADMINISTRATIVE AGENT OR ANY LENDER MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AGAINST THE BORROWER OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION OR (II) WAIVE ANY STATUTORY, REGULATORY, COMMON LAW, OR OTHER RULE, DOCTRINE, LEGAL RESTRICTION, PROVISION OR THE LIKE PROVIDING FOR THE TREATMENT OF BANK BRANCHES, BANK AGENCIES, OR OTHER BANK OFFICES AS IF THEY WERE SEPARATE JURIDICAL ENTITIES FOR CERTAIN PURPOSES, INCLUDING UNIFORM COMMERCIAL CODE SECTIONS 4-106, 4-A-105(1)(B), AND 5-116(B), UCP 600 ARTICLE 3 AND ISP98 RULE 2.02, AND URDG 758 ARTICLE 3(A).
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(c) WAIVER OF VENUE. THE BORROWER IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT IN ANY COURT REFERRED TO IN THIS SECTION 11.10. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT AND AGREES NOT TO ASSERT ANY SUCH DEFENSE.
(d) SERVICE OF PROCESS. EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 11.4. NOTHING IN THIS AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW.
(e) WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, ADMINISTRATIVE AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
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11.11 USA Patriot Act Notice. Each Lender that is subject to the USA Patriot Act and the Administrative Agent (for itself and not on behalf of any Lender) hereby notifies the Borrower that pursuant to the requirements of the USA Patriot Act, it is required to obtain, verify and record information that identifies the Borrower, which information includes the name and address of the Borrower and other information that will allow such Lender or Administrative Agent, as applicable, to identify the Borrower in accordance with the USA Patriot Act. The Borrower shall, promptly following a request by the Administrative Agent or any Lender, provide all documentation and other information that the Administrative Agent or such Lender requests in order to comply with its ongoing obligations under applicable Anti-Corruption Laws, Anti-Terrorism Laws and Sanctions, including the USA Patriot Act.
11.12 Payments Set Aside. To the extent the Borrower makes a payment or payments to the Administrative Agent for the ratable benefit of the Lenders which payments or proceeds or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside and/or required to be repaid to a trustee, receiver or any other party under any Insolvency Proceeding, other applicable Law or equitable cause, then, to the extent of such payment or proceeds repaid, the Obligations or part thereof intended to be satisfied shall be revived and continued in full force and effect as if such payment or proceeds had not been received by the Administrative Agent.
11.13 [Reserved].
11.14 Interest Rate Limitation. Notwithstanding anything to the contrary contained in any Loan Document, the interest paid or agreed to be paid under the Loan Documents, together with all fees, charges and other amounts treated as interest under applicable Laws (collectively, “Charges”) shall not exceed the maximum rate of non-usurious interest permitted by applicable Law (the “Maximum Rate”). If the Administrative Agent or any Lender shall receive interest and Charges in an amount that exceeds the Maximum Rate, the excess interest and Charges shall be applied to the principal of the Loans or, if it exceeds such unpaid principal, refunded to the Borrower. In determining whether the interest and Charges contracted for, charged, or received by the Administrative Agent or a Lender exceeds the Maximum Rate, such Person may, to the extent permitted by applicable Law, (a) characterize any payment that is not principal as an expense, fee, or premium rather than interest, (b) exclude voluntary prepayments and the effects thereof, and (c) amortize, prorate, allocate, and spread in equal or unequal parts the total amount of interest throughout the contemplated term of the Obligations hereunder.
11.15 FCC and PUC Compliance. Notwithstanding anything to the contrary in this Agreement and the other Loan Documents, no party hereto or thereto shall take any action under this Agreement or the other Loan Documents that would constitute or result in an assignment of any License, or a Change of Control or action of the Borrower or Subsidiary directly or indirectly holding a License or other action, to the extent that such assignment or Change of Control would require the prior approval by the FCC under the Communications Act and/or any applicable PUC under the PUC Laws without first obtaining such required approval.
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Upon any action to commence the exercise of remedies hereunder or under the other Loan Documents, the Borrower hereby undertakes and agrees on behalf of itself and its Subsidiaries, to cooperate and join with the Administrative Agent and the Lenders, and cause its Subsidiaries, to cooperate and join with the Administrative Agent and the Lenders, in any application to any Governmental Authority which may be required in order to permit the Administrative Agent and the Lenders to exercise its rights and remedies under the Loan Documents and to provide such assistance in connection therewith as the Administrative Agent and the Lenders may request, including the preparation of, consenting to or joining in of filings and appearances of officers and employees of the Borrower or any Subsidiary of the Borrower before such Governmental Authority, in each case in support of any such application made by the Administrative Agent and the Lenders; provided, however, nothing herein shall be construed to require the Borrower nor any of its Subsidiaries to, directly or indirectly, violate any terms or conditions of any License. The obligation of the Borrower to make all payments required to be made under this Agreement or any other Loan Document shall be absolute and unconditional; provided, however, in the event any portion of the debt, is disallowed under applicable Law or by action of the FCC or any PUC, then such disallowance shall be limited to the Borrower and Loan amounts impacted by such FCC or PUC action or required by applicable Law.
11.16 [Reserved].
11.17 No Advisory or Fiduciary Responsibility. In connection with all aspects of each transaction contemplated hereby (including in connection with any amendment, waiver or other modification hereof or of any other Loan Document), the Borrower acknowledges and agrees, and acknowledges its Affiliates’ understanding, that: (a) (i) no fiduciary, advisory or agency relationship between the Borrower and its Subsidiaries, the Administrative Agent, or any Lender is intended to be or has been created in respect of the transactions contemplated hereby or by the other Loan Documents, irrespective of whether the Administrative Agent, or any Lender has advised or is advising the Borrower or any Subsidiary on other matters, (ii) the arranging and other services regarding this Agreement provided by the Administrative Agent, and the Lenders are arm’s-length commercial transactions between the Borrower and its Affiliates, on the one hand, and the Administrative Agent, and the Lenders, on the other hand, (iii) the Borrower has consulted its own legal, accounting, regulatory and tax advisors to the extent that it has deemed appropriate and (iv) the Borrower is capable of evaluating, and understands and accepts, the terms, risks and conditions of the transactions contemplated hereby and by the other Loan Documents; and (b) (i) the Administrative Agent, and the Lenders each is and has been acting solely as a principal and, except as expressly agreed in writing by the relevant parties, has not been, is not, and will not be acting as an advisor, agent or fiduciary for the Borrower or any of its Affiliates, or any other Person; (ii) none of the Administrative Agent, and the Lenders has any obligation to the Borrower or any of its Affiliates with respect to the transactions contemplated hereby except those obligations expressly set forth herein and in the other Loan Documents; and (iii) the Administrative Agent, and the Lenders and their respective Affiliates may be engaged, for their own accounts or the accounts of customers, in a broad range of transactions that involve interests that differ from those of the Borrower and its Affiliates, and none of the Administrative Agent and the Lenders has any obligation to disclose any of such interests to the Borrower or its Affiliates. To the fullest extent permitted by Law, the Borrower hereby waives and releases any claims that it may have against any of the Administrative Agent and the Lenders with respect to any breach or alleged breach of agency or fiduciary duty in connection with any aspect of any transaction contemplated hereby.
11.18 [Reserved].
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11.19 Recovery of Erroneous Payments. Without limitation of any other provision in this Agreement, if at any time the Administrative Agent makes a payment hereunder in error to any Lender (each, a “Lender Party”), whether or not in respect of an Obligation due and owing by the Borrower at such time (any such payment, an “Erroneous Payment”), then in any such event, each Lender Party receiving an Erroneous Payment severally agrees to repay to the Administrative Agent promptly upon demand the Erroneous Payment received by such Lender Party in immediately available funds (and in the currency so received). Each Lender Party irrevocably waives any and all defenses, including any “discharge for value” (under which a creditor might otherwise claim a right to retain funds mistakenly paid by a third party in respect of a debt owed by another) or similar defense to its obligation to return any Erroneous Payment. The Administrative Agent shall inform each Lender Party promptly upon determining that any payment made to such Lender Party comprised, in whole or in part, an Erroneous Payment (and such determination shall be conclusive absent manifest error).
11.20 Acknowledgment and Consent to Bail-In of Affected Financial Institutions. Notwithstanding anything to the contrary in any Loan Document or in any other agreement, arrangement or understanding among any such parties, each party hereto acknowledges that any liability of any Affected Financial Institution arising under any Loan Document, to the extent such liability is unsecured, may be subject to the write-down and conversion powers of the applicable Resolution Authority and agrees and consents to, and acknowledges and agrees to be bound by:
(a) the application of any Write-Down and Conversion Powers by the applicable Resolution Authority to any such liabilities arising hereunder which may be payable to it by any party hereto that is an Affected Financial Institution; and
(b) the effects of any Bail-In Action on any such liability, including, if applicable:
(i) a reduction in full or in part or cancellation of any such liability;
(ii) a conversion of all, or a portion of, such liability into shares or other instruments of ownership in such Affected Financial Institution, its parent undertaking, or a bridge institution that may be issued to it or otherwise conferred on it, and that such shares or other instruments of ownership will be accepted by it in lieu of any rights with respect to any such liability under this Agreement or any other Loan Document; or
(iii) the variation of the terms of such liability in connection with the exercise of the write-down and conversion powers of the applicable Resolution Authority.
11.21 Deemed Payment in Full; Automatic Termination. Notwithstanding anything to the contrary contained in this Agreement or in any other Loan Document, upon the consummation of the GCI Transaction pursuant to the terms of the Closing Date Acquisition Agreement (the “Acquisition Consummation Date”), the Obligations shall be automatically and irrevocably deemed paid and satisfied in full, and all Commitments shall be immediately and automatically terminated, in each case without the necessity of any further action, notice, payment, or consent by any party. On the Acquisition Consummation Date, this Agreement and all other Loan Documents shall automatically terminate and be of no further force or effect. Any security interests, pledges, and guarantees granted pursuant to any Loan Document shall be automatically released and discharged and the Administrative Agent and Lenders shall be deemed to have irrevocably authorized and directed the filing, recordation, and delivery of any instruments reasonably necessary or advisable to evidence such releases.
[SIGNATURE PAGES FOLLOW]
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IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be executed by such party, or to be executed by a duly authorized officer of such party, as of the date first above written.
| ACQUIOM AGENCY SERVICES LLC, | ||
| as Administrative Agent | ||
| By: | /s/ Jeremy Kuhn | |
| Name: Jeremy Kuhn | ||
| Title: Director | ||
[Signature Page to Term Loan Credit Agreement]
| BORROWER: | ||
| Q Gateway Ultimate Holdings, LLC | ||
| By: | /s/ Clover McNeil | |
| Name: | Clover McNeil | |
| Title: | Chief Financial Officer | |
[Signature Page to Term Loan Credit Agreement]
| GCI, LLC, | ||
| as a Lender | ||
| By: | /s/ Peter J. Pounds | |
| Name: | Peter J. Pounds | |
| Title: | Senior Vice President/Finance | |
[Signature Page to Term Loan Credit Agreement]
List of Omitted Exhibits
The following exhibits and schedules to this Term Loan Credit Agreement, by and among Q Gateway Ultimate Holdings, LLC, as borrower, the lenders party hereto and Acquiom Agency Services LLC, as administrative agent, dated as of April 21, 2026, have not been provided herein:
| Schedule 1.1(A) – Notice Addresses |
| Schedule 1.1(B) – Commitments of Lenders and Addresses for Notices |
| Schedule 1.1(P) – Existing Liens |
| Schedule 5.1 – Qualifications to do Business and Jurisdiction of Organization |
| Schedule 5.6 – Subsidiaries |
| Schedule 5.19 – Licenses |
| Schedule 7.1 – Existing Indebtedness |
| Schedule 7.5 – Investments |
| Exhibit A – Assignment and Assumption |
| Exhibit B – Compliance Certificate |
| Exhibit C – [Reserved] |
| Exhibit D – Loan Request |
| Exhibit E – [Reserved] |
| Exhibit F – Note |
| Exhibit G – Solvency Certificate |
| Exhibit H – Tax Compliance Certificates |
| Exhibit I – Conversion or Continuation Notice |
| Exhibit J – Permitted Acquisition Questionnaire |
| Exhibit K – Permitted Acquisition Certificate |
The registrant hereby undertakes to furnish supplementally a copy of any omitted exhibit to the Securities and Exchange Commission upon request.
Exhibit 99.1
Visit the GCI Digital Newsroom for the latest news and information
FOR IMMEDIATE RELEASE
April 22, 2026
GCI to Acquire Quintillion, Strengthening Alaska’s Fiber Infrastructure
Integrated networks will improve reliability, resiliency, and performance
ANCHORAGE, Alaska – GCI Holdings, LLC (“GCI”), a wholly owned subsidiary of GCI Liberty, Inc. (Nasdaq: GLIBA, GLIBK) and Grain Management, LLC announced today that they have entered into a definitive agreement under which GCI will acquire 100% of the equity in Q Gateway Intermediate Holdings, LLC (“Quintillion”), a fiber infrastructure provider in Alaska. The transaction will combine Quintillion’s 1,800+ miles of existing subsea and terrestrial fiber and ~1,500 miles of planned fiber expansion with GCI’s statewide network and operations, advancing GCI’s mission to deliver reliable connectivity for Alaskans.
“This combination is more than the sum of its parts,” said Billy Wailand, Senior Vice President of Corporate Development at GCI. “By bringing together complementary fiber routes, deep operational expertise, and long-term investment under one operating model, we’re building a network that is stronger, more resilient, and better suited to Alaska’s realities than either company could deliver on its own.”
“Quintillion set out to build resilient, Arctic-ready fiber infrastructure in some of the most challenging operating environments in the world, and I’m incredibly proud of the network and business our team has built,” said Mac McHale, President of Quintillion. “GCI brings Alaska expertise, long-term commitment, and the operational scale needed to carry this network forward. We’re confident these assets will be in good hands.”
Improving Reliability Through Ringed Networks
Network reliability is especially important in Alaska, where telecommunications are central to daily life, healthcare, education, and public safety, yet operators contend with some of the harshest conditions in North America. The integration of GCI’s and Quintillion’s complementary networks will materially improve reliability for customers by increasing routing diversity and reducing the risk and duration of outages. The combined network footprint will support a self-healing, ringed network architecture that allows traffic to automatically reroute when disruptions occur, providing more dependable connectivity for the residents of some of the most remote communities in the nation.
Kotzebue (pictured), one of the communities served by Quintillion’s fiber infrastructure, sits 26 miles above the Arctic Circle in Northwest Alaska.
Unified Network Operations with Alaska-Based Expertise
Following the close of the transaction, GCI will operate the combined network using its best-in-class monitoring, maintenance, and restoration capabilities. GCI’s Alaska-based operations teams bring decades of experience managing fiber, microwave, and satellite networks in some of the most remote and unforgiving environments in North America.
Centralizing network management under one operator will improve day-to-day performance and provide clear accountability during outages and restoration efforts. The combined network will benefit from unified network planning, preventative maintenance, coordinated repair readiness, and long-term capital investment decisions optimized across the full footprint.
Expanding Access Through Strategic Grants and Private Investment
GCI and Quintillion share a common approach to expanding broadband access across Alaska: pairing significant private investment with federal and state grant programs to extend high-capacity infrastructure into regions that would otherwise be difficult or uneconomic to serve.
Following the transaction closing, GCI will complete Quintillion’s existing grant projects in progress, leveraging its deep experience delivering large-scale projects and continuing its history of responsible stewardship of public funding. It will operate the combined infrastructure as part of a unified network, ensuring continuity for participating communities.
Supporting National Defense, Public Safety, and Strategic Communications
Reliable communications infrastructure in Alaska is critically important to U.S. national security and Arctic operations. Alaska’s strategic geographic position, harsh environment, and expanding mission requirements make resilient, quickly recoverable networks essential for defense, emergency response, aviation, maritime activity, and governmental operations.
By strengthening redundancy, improving restoration capabilities, and enhancing operational coordination, the combined GCI–Quintillion network will improve communications reliability in regions that support mission-critical and national defense-related activities across the Arctic.
Key Transaction Terms
| · | GCI will acquire 100% of Quintillion at a $310 million Enterprise Value, subject to customary working-capital and other adjustments. |
| · | GCI will reimburse up to $50 million of qualifying capital expenditures related to the Nome-to-Homer Express project. |
| · | Additional consideration may be payable in 2028, 2029, and 2031 through a post-closing earnout dependent on achievement of certain financial metrics. |
| · | Shortly after signing, GCI, LLC will provide a $160 million unsecured loan to Quintillion. |
Closing is anticipated following receipt of regulatory approval and satisfaction of customary closing conditions. Existing customer relationships, contractual obligations, and service arrangements are expected to continue without change following the close of the transaction.
Bank Street Group LLC is acting as exclusive financial advisor and Morgan Lewis is serving as legal advisor to Quintillion. TD Securities is acting as financial advisor and Baker Botts and O’Melveny & Myers are serving as legal advisors to GCI Liberty.
About GCI
Headquartered in Alaska, GCI provides data, mobile, voice and managed services to consumer, business, government, and carrier customers throughout Alaska, serving more than 200 communities. The company has invested $4.7 billion in its Alaska network and facilities over the past 47 years. Through a combination of ambitious network initiatives, GCI continues to expand and strengthen its statewide network infrastructure to deliver the best possible connectivity to its customers and close the digital divide in Alaska. Learn more about GCI at www.gci.com. GCI is a wholly owned subsidiary of GCI Liberty, Inc. (Nasdaq: GLIBA, GLIBK).
About GCI Liberty, Inc.
GCI Liberty, Inc. (Nasdaq: GLIBA, GLIBK) consists of its wholly owned subsidiary GCI. GCI is Alaska’s largest communications provider, providing data, voice and managed services to consumer and business customers throughout Alaska, serving more than 200 communities. GCI has invested $4.7 billion in its Alaska network and facilities over the past 47 years. Through a combination of ambitious network initiatives, GCI continues to expand and strengthen its statewide network infrastructure to deliver the best possible connectivity to its customers and close the digital divide in Alaska.
About Quintillion
Quintillion is a leading communications infrastructure provider in Alaska, providing subsea and terrestrial fiber connectivity primarily on a wholesale basis. Upon completion of planned expansion, the company’s total network will span over 3,316 route miles, comprised of 2,341 miles of subsea and 824 miles of terrestrial fiber. The existing network has 80.4% remaining capacity to address digital equity needs across Alaska. Quintillion operates a complementary subsea and terrestrial fiber network designed to deliver high-capacity, resilient connectivity across the state. Quintillion’s network supports carriers, healthcare providers, educational institutions, public safety organizations, and other mission-critical customers through long-term, contracted relationships.
Forward-Looking Statements
This press release includes certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including certain statements relating to the proposed acquisition of Quintillion and its completion and statements relating to expectations regarding the GCI and Quintillion businesses and prospects. All statements other than statements of historical fact are “forward-looking statements” for purposes of federal and state securities laws. These forward-looking statements generally can be identified by phrases such as “possible” or “expects” or other words or phrases of similar import or future or conditional verbs such as “will,” “may,” “would,” “could,” or similar variations. These forward-looking statements involve many risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements, including, without limitation, the timing to consummate the proposed transaction, the ultimate outcome and results of integrating Quintillion’s operations, the ultimate outcome of GCI Liberty’s operating efficiencies after the consummation of the transaction, and the ability of GCI Liberty to realize the expected synergies and other benefits. These forward-looking statements speak only as of the date of this communication, and GCI Liberty and GCI expressly disclaim any obligation or undertaking to disseminate any updates or revisions to any forward-looking statement contained herein to reflect any change in their expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based. Please refer to the publicly filed documents of GCI Liberty, including its most recent Form 10-K, as such risk factors may be amended, supplemented or superseded from time to time by other reports GCI Liberty subsequently files with the SEC, for additional information about GCI Liberty and about the risks and uncertainties related to GCI Liberty’s business which may affect the statements made in this communication.
Media Contacts
GCI
Megan Webb, 907-570-4239
Email: [email protected]
GCI Liberty, Inc.
Hooper Stevens, 720-875-5406
Email: [email protected]
Quintillion
Grace Jang, 907-301-3534
Email: [email protected]