UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-Q
☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2020
OR
☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number 001-36713
LIBERTY BROADBAND CORPORATION
(Exact name of Registrant as specified in its charter)
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State of Delaware |
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47-1211994 |
(State or other jurisdiction of incorporation or organization) |
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(I.R.S. Employer Identification No.) |
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12300 Liberty Boulevard
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80112 |
(Address of principal executive offices) |
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(Zip Code) |
Registrant's telephone number, including area code: (720) 875-5700
Securities registered pursuant to Section 12(b) of the Act:
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Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered |
Series A common stock |
LBRDA |
The Nasdaq Stock Market LLC |
Series C common stock |
LBRDK |
The Nasdaq Stock Market LLC |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes ⌧ No ◻
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ⌧ No ◻
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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Large Accelerated Filer ☒ |
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Accelerated Filer ☐ |
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Non-accelerated Filer ☐ |
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Smaller Reporting Company ☐ |
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Emerging Growth Company ☐ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company as defined in Rule 12b-2 of the Exchange Act. Yes ☐ No ☒
The number of outstanding shares of Liberty Broadband Corporation’s common stock as of October 31, 2020 was:
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Series A |
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Series B |
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Series C |
Liberty Broadband Corporation Common Stock |
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26,495,183 |
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2,451,119 |
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149,548,921 |
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Table of Contents
Part I - Financial Information
I-1
LIBERTY BROADBAND CORPORATION
Condensed Consolidated Balance Sheets
(unaudited)
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September 30, |
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December 31, |
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2020 |
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2019 |
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(amounts in thousands) |
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Assets |
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Current assets: |
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Cash and cash equivalents |
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$ |
400,268 |
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49,724 |
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Other current assets |
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2,224 |
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2,409 |
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Total current assets |
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402,492 |
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52,133 |
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Investment in Charter, accounted for using the equity method (note 4) |
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12,450,425 |
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12,194,674 |
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Other assets |
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8,772 |
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9,535 |
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Total assets |
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$ |
12,861,689 |
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12,256,342 |
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Liabilities and Equity |
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Current liabilities: |
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Accounts payable and accrued liabilities |
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$ |
7,699 |
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6,168 |
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Deferred revenue and other current liabilities |
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8,640 |
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5,971 |
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Total current liabilities |
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16,339 |
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12,139 |
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Debt, including $621,000 and $0 measured at fair value, respectively (note 5) |
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1,318,664 |
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572,944 |
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Deferred income tax liabilities |
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1,036,672 |
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999,757 |
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Other liabilities |
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2,764 |
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3,556 |
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Total liabilities |
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2,374,439 |
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1,588,396 |
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Equity |
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Preferred stock, $.01 par value. Authorized 50,000,000 shares; no shares issued |
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— |
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— |
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Series A common stock, $.01 par value. Authorized 500,000,000 shares; issued and outstanding 26,495,183 shares at September 30, 2020 and 26,493,197 shares at December 31, 2019 |
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265 |
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265 |
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Series B common stock, $.01 par value. Authorized 18,750,000 shares; issued and outstanding 2,451,119 shares at September 30, 2020 and 2,451,920 shares at December 31, 2019 |
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25 |
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25 |
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Series C common stock, $.01 par value. Authorized 500,000,000 shares; issued and outstanding 150,952,521 shares at September 30, 2020 and 152,956,316 shares at December 31, 2019 |
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1,510 |
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1,529 |
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Additional paid-in capital |
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7,587,627 |
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7,890,084 |
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Accumulated other comprehensive earnings, net of taxes |
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(3,394) |
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8,158 |
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Retained earnings |
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2,901,217 |
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2,767,885 |
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Total equity |
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10,487,250 |
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10,667,946 |
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Commitments and contingencies (note 7) |
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Total liabilities and equity |
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$ |
12,861,689 |
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12,256,342 |
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See accompanying notes to the condensed consolidated financial statements.
I-2
LIBERTY BROADBAND CORPORATION
Condensed Consolidated Statements of Operations
(unaudited)
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Three months ended |
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Nine months ended |
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September 30, |
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September 30, |
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2020 |
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2019 |
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2020 |
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2019 |
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(amounts in thousands, except per share amounts) |
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Revenue: |
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Software sales |
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$ |
4,209 |
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3,713 |
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12,317 |
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10,918 |
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Service |
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10 |
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— |
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120 |
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— |
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Total revenue |
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4,219 |
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3,713 |
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12,437 |
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10,918 |
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Operating costs and expenses |
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Operating, including stock-based compensation (note 6) |
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2,523 |
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2,323 |
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7,515 |
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6,803 |
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Selling, general and administrative, including stock-based compensation (note 6) |
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17,968 |
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8,507 |
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37,316 |
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23,662 |
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Depreciation and amortization |
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56 |
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471 |
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1,041 |
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1,408 |
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20,547 |
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11,301 |
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45,872 |
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31,873 |
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Operating income (loss) |
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(16,328) |
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(7,588) |
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(33,435) |
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(20,955) |
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Other income (expense): |
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Interest expense |
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(3,719) |
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(6,123) |
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(14,711) |
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(19,008) |
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Share of earnings (losses) of affiliates (note 4) |
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188,586 |
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61,633 |
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408,396 |
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141,882 |
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Gain (loss) on dilution of investment in affiliate (note 4) |
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(35,284) |
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(11,219) |
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(140,610) |
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(68,944) |
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Realized and unrealized gains (losses) on financial instruments, net (note 3) |
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(39,324) |
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(433) |
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(39,324) |
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(433) |
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Other, net |
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8 |
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350 |
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199 |
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1,179 |
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Net earnings (loss) before income taxes |
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93,939 |
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36,620 |
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180,515 |
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33,721 |
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Income tax benefit (expense) |
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(24,979) |
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(9,124) |
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(47,183) |
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(8,474) |
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Net earnings (loss) attributable to Liberty Broadband shareholders |
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$ |
68,960 |
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27,496 |
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133,332 |
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25,247 |
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Basic net earnings (loss) attributable to Series A, Series B and Series C Liberty Broadband shareholders per common share (note 2) |
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$ |
0.38 |
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0.15 |
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0.73 |
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0.14 |
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Diluted net earnings (loss) attributable to Series A, Series B and Series C Liberty Broadband shareholders per common share (note 2) |
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$ |
0.38 |
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0.15 |
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0.73 |
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0.14 |
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See accompanying notes to the condensed consolidated financial statements.
I-3
LIBERTY BROADBAND CORPORATION
Condensed Consolidated Statements of Comprehensive Earnings (Loss)
(unaudited)
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Three months ended |
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Nine months ended |
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September 30, |
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September 30, |
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2020 |
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2019 |
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2020 |
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2019 |
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(amounts in thousands) |
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Net earnings (loss) |
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$ |
68,960 |
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27,496 |
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133,332 |
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25,247 |
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Other comprehensive earnings (loss), net of taxes: |
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Comprehensive earnings (loss) attributable to debt credit risk adjustments |
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(11,552) |
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— |
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(11,552) |
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— |
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Other comprehensive earnings (loss), net of taxes |
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(11,552) |
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— |
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(11,552) |
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— |
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Comprehensive earnings (loss) attributable to Liberty Broadband shareholders |
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$ |
57,408 |
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27,496 |
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121,780 |
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25,247 |
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See accompanying notes to the condensed consolidated financial statements.
I-4
LIBERTY BROADBAND CORPORATION
Condensed Consolidated Statements of Cash Flows
(unaudited)
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Nine months ended |
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September 30, |
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2020 |
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2019 |
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(amounts in thousands) |
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Cash flows from operating activities: |
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Net earnings (loss) |
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$ |
133,332 |
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25,247 |
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Adjustments to reconcile net earnings (loss) to net cash provided by operating activities: |
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Depreciation and amortization |
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1,041 |
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1,408 |
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Stock-based compensation |
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5,736 |
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7,670 |
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Share of (earnings) losses of affiliates, net |
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(408,396) |
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(141,882) |
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(Gain) loss on dilution of investment in affiliate |
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140,610 |
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68,944 |
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Realized and unrealized (gains) losses on financial instruments, net |
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39,324 |
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433 |
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Deferred income tax expense (benefit) |
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47,183 |
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8,474 |
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Other, net |
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1,070 |
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1,016 |
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Changes in operating assets and liabilities: |
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Current and other assets |
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244 |
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(927) |
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Payables and other liabilities |
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3,044 |
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2,385 |
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Net cash provided (used) by operating activities |
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(36,812) |
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(27,232) |
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Cash flows from investing activities: |
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Capital expended for property and equipment |
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(42) |
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(75) |
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Exercise of preemptive right to purchase Charter shares |
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(14,910) |
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— |
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Net cash provided (used) by investing activities |
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(14,952) |
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(75) |
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Cash flows from financing activities: |
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Borrowings of debt |
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700,000 |
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50,000 |
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Repurchases of Liberty Broadband common stock |
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(285,722) |
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Payments from issuances of financial instruments |
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— |
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(46,330) |
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Payment to former parent under tax sharing agreement related to net settlement of Awards |
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— |
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(16,090) |
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Taxes paid in lieu of shares issued for stock-based compensation |
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(2,121) |
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— |
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Other financing activities, net |
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(9,849) |
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3,170 |
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Net cash provided (used) by financing activities |
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402,308 |
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(9,250) |
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Net increase (decrease) in cash |
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350,544 |
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(36,557) |
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Cash, cash equivalents and restricted cash, beginning of period |
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49,724 |
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83,103 |
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Cash, cash equivalents and restricted cash, end of period |
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$ |
400,268 |
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46,546 |
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See accompanying notes to the condensed consolidated financial statements.
I-5
LIBERTY BROADBAND CORPORATION
Condensed Consolidated Statements of Equity
(unaudited)
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Accumulated |
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Additional |
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other |
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Preferred |
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Common stock |
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paid-in |
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comprehensive |
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Retained |
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Stock |
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Series A |
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Series B |
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Series C |
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capital |
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earnings |
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earnings |
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Total equity |
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(amounts in thousands) |
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Balance at January 1, 2020 |
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$ |
— |
|
265 |
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25 |
|
1,529 |
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7,890,084 |
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8,158 |
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2,767,885 |
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10,667,946 |
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Net earnings (loss) |
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— |
|
— |
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— |
|
— |
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— |
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— |
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133,332 |
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133,332 |
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Other comprehensive loss |
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— |
|
— |
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— |
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— |
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— |
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(11,552) |
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— |
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(11,552) |
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Stock-based compensation |
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— |
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— |
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— |
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— |
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5,684 |
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— |
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— |
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5,684 |
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Issuance of common stock upon exercise of stock options |
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— |
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— |
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— |
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1 |
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25 |
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— |
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— |
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26 |
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Withholding taxes on net share settlements of stock-based compensation |
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— |
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— |
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— |
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— |
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(2,121) |
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— |
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— |
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(2,121) |
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Series C Liberty Broadband stock repurchases |
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— |
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— |
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— |
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(20) |
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(285,702) |
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— |
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— |
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(285,722) |
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Noncontrolling interest activity at Charter |
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— |
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— |
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— |
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— |
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(20,343) |
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— |
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— |
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(20,343) |
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Balance at September 30, 2020 |
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$ |
— |
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265 |
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25 |
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1,510 |
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7,587,627 |
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(3,394) |
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2,901,217 |
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10,487,250 |
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See accompanying notes to the condensed consolidated financial statements.
I-6
LIBERTY BROADBAND CORPORATION
Condensed Consolidated Statements of Equity (continued)
(unaudited)
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Accumulated |
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Additional |
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other |
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Preferred |
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Common stock |
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paid-in |
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comprehensive |
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Retained |
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Stock |
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Series A |
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Series B |
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Series C |
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capital |
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earnings |
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earnings |
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Total equity |
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(amounts in thousands) |
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Balance at January 1, 2019 |
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$ |
— |
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263 |
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25 |
|
1,526 |
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7,938,357 |
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7,778 |
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2,650,669 |
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10,598,618 |
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Net earnings (loss) |
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|
— |
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— |
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— |
|
— |
|
— |
|
— |
|
25,247 |
|
25,247 |
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Stock-based compensation |
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|
— |
|
— |
|
— |
|
— |
|
7,515 |
|
— |
|
— |
|
7,515 |
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Issuance of common stock upon exercise of stock options |
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— |
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1 |
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— |
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1 |
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4,418 |
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— |
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— |
|
4,420 |
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Tax sharing arrangement with former parent |
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— |
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— |
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— |
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— |
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(16,090) |
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— |
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— |
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(16,090) |
|
Noncontrolling interest activity at Charter |
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— |
|
— |
|
— |
|
— |
|
(7,538) |
|
— |
|
— |
|
(7,538) |
|
Balance at September 30, 2019 |
|
$ |
— |
|
264 |
|
25 |
|
1,527 |
|
7,926,662 |
|
7,778 |
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2,675,916 |
|
10,612,172 |
|
See accompanying notes to the condensed consolidated financial statements.
I-7
(1) Basis of Presentation
During May 2014, the board of directors of Liberty Media Corporation and its subsidiaries (“Liberty”) authorized management to pursue a plan to spin-off to its stockholders common stock of a wholly-owned subsidiary, Liberty Broadband Corporation (“Liberty Broadband” or the “Company”), and to distribute subscription rights to acquire shares of Liberty Broadband’s common stock (the “Broadband Spin-Off”). These financial statements refer to Liberty Broadband Corporation as “Liberty Broadband,” “the Company,” “us,” “we” and “our” in the notes to the condensed consolidated financial statements.
Through a number of prior years’ transactions, Liberty Broadband has acquired an interest in Charter Communications, Inc. (“Charter”). Pursuant to proxy agreements with GCI Liberty, Inc. (“GCI Liberty”) and Advance/Newhouse Partnership (“A/N”), Liberty Broadband controls 25.01% of the aggregate voting power of Charter.
The Company’s wholly owned subsidiary, Skyhook Holding, Inc. (“Skyhook”), focuses on the development and sale of Skyhook’s device-based location technology. Skyhook markets and sells two primary products: (1) a location determination service called the Precision Location Solution; and (2) a location intelligence and data insights service called Geospatial Insights.
The accompanying (a) condensed consolidated balance sheet as of December 31, 2019, which has been derived from audited financial statements, and (b) interim unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X as promulgated by the Securities and Exchange Commission. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of the results for such periods have been included. The results of operations for any interim period are not necessarily indicative of results for the full year. Additionally, certain prior period amounts have been reclassified for comparability with current period presentation. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in Liberty Broadband's Annual Report on Form 10-K for the year ended December 31, 2019. All significant intercompany accounts and transactions have been eliminated in the condensed consolidated financial statements.
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. The Company considers the application of the equity method of accounting for investments in affiliates and accounting for income taxes to be its most significant estimates.
In December 2019, Chinese officials reported a novel coronavirus outbreak (“COVID-19”). COVID-19 has since spread through China and internationally. On March 11, 2020, the World Health Organization assessed COVID-19 as a global pandemic, causing many countries throughout the world to take aggressive actions, including imposing travel restrictions and stay-at-home orders, closing public attractions and restaurants, and mandating social distancing practices.
We are not presently aware of any events or circumstances arising from the COVID-19 pandemic that would require us to update our estimates or judgments or revise the carrying value of our assets or liabilities. Our estimates may change, however, as new events occur and additional information is obtained, and any such changes will be recognized in the consolidated financial statements. Actual results could differ from estimates, and any such differences may be material to our financial statements.
Liberty Broadband holds an investment in Charter that is accounted for using the equity method. Liberty Broadband does not control the decision making process or business management practices of this affiliate. Accordingly, Liberty Broadband relies on the management of this affiliate to provide it with accurate financial information prepared in accordance with GAAP that the Company uses in the application of the equity method. In addition, Liberty Broadband relies on audit
I-8
LIBERTY BROADBAND CORPORATION
Notes to Condensed Consolidated Financial Statements
(unaudited)
reports that are provided by the affiliate's independent auditor on the financial statements of such affiliate. The Company is not aware, however, of any errors in or possible misstatements of the financial information provided by its equity affiliate that would have a material effect on Liberty Broadband's condensed consolidated financial statements.
On August 6, 2020, Liberty Broadband and GCI Liberty entered into a definitive merger agreement under which Liberty Broadband agreed to acquire all of the outstanding shares of GCI Liberty in a stock-for-stock merger (the “Combination”). Under the terms of the merger agreement each holder of Series A and B common stock of GCI Liberty will receive 0.58 of a share of Series C common stock and Series B common stock, respectively, of Liberty Broadband. Additionally, holders of a share of Series A Cumulative Redeemable Preferred Stock of GCI Liberty will receive one share of Series A Cumulative Redeemable Preferred Stock with mirror terms to be issued by Liberty Broadband. The Combination was recommended to the Company’s Board of Directors for approval by a special committee composed solely of independent, disinterested directors and advised by independent financial and legal advisors. The closing of the Combination is subject to certain customary conditions, including: (i) the adoption of the merger agreement by holders of a majority of the aggregate voting power of the GCI Liberty outstanding stock entitled to vote thereon not owned by John C. Malone and certain other persons, (ii) the adoption of the merger agreement by holders of a majority of the aggregate voting power of the Liberty Broadband outstanding stock entitled to vote thereon not owned by John C. Malone and certain other persons, (iii) the adoption of the merger agreement by holders of a majority of the aggregate voting power of the GCI Liberty outstanding stock entitled to vote thereon, (iv) approval of the Liberty Broadband stock issuance by holders of a majority of the aggregate voting power of the Liberty Broadband outstanding stock present in person or by proxy at the stockholder meeting and entitled to vote thereon and (v) the receipt of any applicable regulatory approvals. Liberty Broadband and GCI Liberty expect the Combination to close no later than the first quarter of 2021, subject to potential COVID-19 related delays.
Spin-Off Arrangements
Following the Broadband Spin-Off, Liberty and Liberty Broadband operate as separate, publicly traded companies, and neither has any stock ownership, beneficial or otherwise, in the other. In connection with the Broadband Spin-Off, Liberty (for accounting purposes a related party of the Company) and Liberty Broadband entered into certain agreements in order to govern certain of the ongoing relationships between the two companies after the Broadband Spin-Off and to provide for an orderly transition. These agreements include a reorganization agreement, a services agreement, a facilities sharing agreement and a tax sharing agreement.
The reorganization agreement provides for, among other things, the principal corporate transactions (including the internal restructuring) required to effect the Broadband Spin-Off, certain conditions to the Broadband Spin-Off and provisions governing the relationship between Liberty Broadband and Liberty with respect to and resulting from the Broadband Spin-Off. The tax sharing agreement provides for the allocation and indemnification of tax liabilities and benefits between Liberty and Liberty Broadband and other agreements related to tax matters. Pursuant to the services agreement, Liberty provides Liberty Broadband with general and administrative services including legal, tax, accounting, treasury and investor relations support. See below for a description of an amendment to the services agreement in December 2019. Under the facilities sharing agreement, Liberty Broadband shares office space with Liberty and related amenities at Liberty’s corporate headquarters. Liberty Broadband will reimburse Liberty for direct, out-of-pocket expenses incurred by Liberty in providing these services which will be negotiated semi-annually. Under these various agreements, amounts reimbursable to Liberty were approximately $1.0 million and $0.7 million for the three months ended September 30, 2020 and 2019, respectively, and $3.2 million and $18.6 million for the nine months ended September 30, 2020 and 2019, respectively.
In December 2019, the Company entered into an amendment to the services agreement with Liberty in connection with Liberty’s entry into a new employment arrangement with Gregory B. Maffei, the Company’s President and Chief Executive Officer. Under the amended services agreement, components of his compensation will either be paid directly to him by each of the Company, Liberty TripAdvisor Holdings, Inc., GCI Liberty, and Qurate Retail, Inc. (collectively, the “Service Companies”) or reimbursed to Liberty, in each case, based on allocations among Liberty and the Service Companies set forth in the amended services agreement, currently set at 18% for the Company.
I-9
LIBERTY BROADBAND CORPORATION
Notes to Condensed Consolidated Financial Statements
(unaudited)
(2) Earnings (Loss) per Share
Basic earnings (loss) per common share (“EPS”) is computed by dividing net earnings (loss) attributable to Liberty Broadband shareholders by the weighted average number of common shares outstanding (“WASO”) for the period. Diluted EPS presents the dilutive effect on a per share basis of potential common shares as if they had been converted at the beginning of the periods presented. The basic and diluted EPS calculations are based on the following weighted average number of shares of outstanding common stock.
(1) Potentially dilutive shares are excluded from the computation of diluted EPS during periods in which losses are reported since the result would be antidilutive.
(3) Assets and Liabilities Measured at Fair Value
For assets and liabilities required to be reported at fair value, GAAP provides a hierarchy that prioritizes inputs to valuation techniques used to measure fair value into three broad levels. Level 1 inputs are quoted market prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 2 inputs are inputs, other than quoted market prices included within Level 1, that are observable for the asset or liability, either directly or indirectly. Level 3 inputs are unobservable inputs for the asset or liability. The Company does not have any recurring assets or liabilities measured at fair value that would be considered Level 3.
The Company’s assets and (liabilities) measured at fair value are as follows:
The Company’s exchangeable senior debentures are debt instruments with quoted market value prices that are not considered to be traded on “active markets”, as defined in GAAP, and are reported in the foregoing table as Level 2 fair value.
Other Financial Instruments
The carrying amounts of other financial instruments not measured at fair value on a recurring basis include trade receivables, trade payables, and accrued and other current liabilities, which approximate fair value due to the short maturity
I-10
LIBERTY BROADBAND CORPORATION
Notes to Condensed Consolidated Financial Statements
(unaudited)
of these instruments as reported on our condensed consolidated balance sheets. The carrying value of our long-term debt under the Margin Loan Facility (as defined in note 5 to the accompanying condensed consolidated financial statements) bears interest at a variable rate and therefore is also considered to approximate fair value.
Realized and Unrealized Gains (Losses) on Financial Instruments
Realized and unrealized gains (losses) on financial instruments are comprised of changes in the fair value of the following:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
Nine months ended |
|
||||||
|
|
September 30, |
|
September 30, |
|
||||||
|
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|
||
|
|
(amounts in thousands) |
|
||||||||
Derivative instruments (1) |
|
$ |
— |
|
(433) |
|
|
— |
|
(433) |
|
Exchangeable senior debentures (2) |
|
|
(39,324) |
|
NA |
|
|
(39,324) |
|
NA |
|
|
|
$ |
(39,324) |
|
(433) |
|
|
(39,324) |
|
(433) |
|
(1) | In September 2019, the Company entered into a zero-strike call option on 460,675 shares of Liberty Broadband Series C common stock and prepaid a premium of $46.3 million. |
(2) | The Company has elected to account for its exchangeable senior debentures entered into in August 2020 using the fair value option. Changes in the fair value of the exchangeable senior debentures recognized in the condensed consolidated statements of operations are primarily due to market factors driven by changes in the fair value of the underlying shares into which debt is exchangeable. The Company isolates the portion of the unrealized gain (loss) attributable to the change in the instrument specific credit risk and recognizes such amount in other comprehensive income. The change in the fair value of the exchangeable senior debentures attributable to changes in the instrument specific credit risk before tax was a loss of $15.3 million for the three and nine months ended September 30, 2020. |
(4) Investment in Charter Accounted for Using the Equity Method
Through a number of prior years’ transactions, Liberty Broadband has acquired an interest in Charter. The investment in Charter is accounted for as an equity method affiliate based on our voting and ownership interest and the board seats held by individuals appointed by Liberty Broadband. As of September 30, 2020, the carrying and market value of Liberty Broadband’s ownership in Charter was approximately $12,450 million and $33,781 million, respectively. Liberty Broadband’s ownership in Charter is 27.1% of the outstanding equity of Charter as of September 30, 2020.
Pursuant to proxy agreements with GCI Liberty and A/N (the “GCI Liberty Proxy” and “A/N Proxy”, respectively), Liberty Broadband has an irrevocable proxy to vote certain shares of Charter common stock owned beneficially or of record by GCI Liberty and A/N, for a five year term expiring May 18, 2021, subject to extension upon the mutual agreement of both parties, subject to certain limitations.
Liberty Broadband’s overall voting interest (24.0% at September 30, 2020) is diluted by the outstanding A/N interest in a subsidiary of Charter because the A/N interest has voting rights in Charter. As a result of the A/N Proxy and the GCI Liberty Proxy, Liberty Broadband controls 25.01% of the aggregate voting power of Charter and is Charter’s largest stockholder.
Liberty Broadband’s equity ownership in Charter (on a fully diluted basis) is capped at the greater of 26% or the cap on its voting interest. Liberty Broadband’s voting interest in Charter is capped at the greater of (x) 25.01% (or 0.01% above the person or group holding the highest voting percentage of Charter) and (y) 23.5% increased one-for-one to a maximum of
I-11
LIBERTY BROADBAND CORPORATION
Notes to Condensed Consolidated Financial Statements
(unaudited)
35% for each permanent reduction in A/N’s equity interest in Charter below 15%. As of September 30, 2020, Liberty Broadband does not believe it has exceeded the cap on its equity ownership in Charter.
Additionally, so long as the A/N Proxy is in effect, if A/N proposes to transfer common units of Charter Communications Holdings, LLC (which units are exchangeable into Charter shares and which will, under certain circumstances, result in the conversion of certain shares of Charter class B common stock into Charter shares) or Charter shares, in each case, constituting either (i) shares representing the first 7.0% of the outstanding voting power of Charter held by A/N or (ii) shares representing the last 7.0% of the outstanding voting power of Charter held by A/N, Liberty Broadband will have a right of first refusal (“ROFR”) to purchase all or a portion of any such securities A/N proposes to transfer. The purchase price per share for any securities sold to Liberty Broadband pursuant to the ROFR will be the volume-weighted average price of Charter shares for the two trading day period before the notice of a proposed sale by A/N, payable in cash. Certain transfers are permitted to affiliates of A/N, subject to the transferee entity entering into an agreement assuming the transferor’s obligations under the A/N Proxy.
During the nine months ended September 30, 2020, Liberty Broadband exercised its preemptive right to purchase an aggregate of approximately 35 thousand shares of Charter’s Class A common stock for an aggregate purchase price of $14.9 million.
Investment in Charter
The excess basis in our investment in Charter of $5,167 million as of September 30, 2020 is allocated within memo accounts used for equity accounting purposes as follows (amounts in millions):
|
|
|
|
|
|
|
|
|
September 30, |
|
December 31, |
|
|
|
2020 |
|
2019 |
Property and equipment |
|
$ |
307 |
|
225 |
Customer relationships |
|
|
1,381 |
|
1,043 |
Franchise fees |
|
|
2,402 |
|
1,996 |
Trademarks |
|
|
29 |
|
29 |
Goodwill |
|
|
2,182 |
|
1,630 |
Debt |
|
|
(144) |
|
(9) |
Deferred income tax liability |
|
|
(990) |
|
(817) |
|
|
$ |
5,167 |
|
4,097 |
Property and equipment and customer relationships have weighted average remaining useful lives of approximately 5 years and 9 years, respectively, and franchise fees, trademarks and goodwill have indefinite lives. The excess basis of outstanding debt is amortized over the contractual period using the straight-line method. The increase in excess basis for the nine months ended September 30, 2020 was primarily due to Charter’s share buyback program. The Company’s share of earnings (losses) of affiliates line item in the accompanying condensed consolidated statements of operations includes expenses of $25.5 million and $32.7 million, net of related taxes, for the three months ended September 30, 2020 and 2019, respectively, and expenses of $107.3 million and $88.7 million, net of related taxes, for the nine months ended September 30, 2020 and 2019, respectively, due to the amortization of the excess basis related to assets with identifiable useful lives and debt.
The Company had a dilution loss of $35.3 million and $11.2 million during the three months ended September 30, 2020 and 2019, respectively, and a dilution loss of $140.6 million and $68.9 million during the nine months ended September 30, 2020 and 2019, respectively. The dilution losses for the periods presented were attributable to stock option exercises by employees and other third parties at prices below Liberty Broadband’s book basis per share.
I-12
LIBERTY BROADBAND CORPORATION
Notes to Condensed Consolidated Financial Statements
(unaudited)
Summarized unaudited financial information for Charter is as follows (amounts in millions):
Charter condensed consolidated balance sheets
Charter condensed consolidated statements of operations
I-13
LIBERTY BROADBAND CORPORATION
Notes to Condensed Consolidated Financial Statements
(unaudited)
(5) Debt
Debt is summarized as follows:
Margin Loan Facility
On August 12, 2020, a bankruptcy remote wholly owned subsidiary of the Company (“SPV”), entered into Amendment No. 3 to its multi-draw margin loan credit facility and Amendment No. 2 to its Collateral Account Control Agreement (the “Third Amendment”), which amends SPV’s margin loan agreement, dated as of August 31, 2017 (as amended by Amendment No. 1 to Margin Loan Agreement, dated as of August 24, 2018, and as further amended by Amendment No. 2 to Margin Loan Agreement and Amendment No. 1 to Collateral Account Control Agreement, dated August 19, 2019, the “Existing Margin Loan Agreement”; the Existing Margin Loan Agreement, as amended by the Third Amendment, the “Margin Loan Agreement”), with Wilmington Trust, National Association, as the administrative agent, BNP Paribas, as the calculation agent, and the lenders party thereto. The Margin Loan Agreement provides for, among other things, a multi-draw term loan credit facility (the “Margin Loan Facility”) in an aggregate principal amount of up to $2.3 billion, including the Incremental Facility (as defined below). SPV’s obligations under the Margin Loan Facility are secured by first priority liens on the shares of Charter owned by SPV.
SPV is permitted, subject to certain funding conditions, to borrow term loans up to an aggregate principal amount equal to $1.0 billion. SPV will also have the ability to borrow up to $1.3 billion of additional loans under the Margin Loan Facility (the “Incremental Facility” and the loans made under the Incremental Facility, the “Additional Loans”). The borrowings under the Incremental Facility are subject to certain conditions precedent, including the completion of the Combination (as defined in note 1 to the accompanying condensed consolidated financial statements). SPV drew down an additional $25 million on July 31, 2020 and an additional $100 million on August 20, 2020 on the Margin Loan Facility. Outstanding borrowings under the respective margin loan agreements were $700 million and $575 million as of September 30, 2020 and December 31, 2019, respectively. As of September 30, 2020, SPV was permitted to borrow an additional $300 million, which may be drawn through August 12, 2021. The maturity date of the loans under the Margin Loan Agreement is August 24, 2022 (except for any Additional Loans incurred thereunder to the extent SPV and the incremental lenders agree to a later maturity date). Borrowings under the Margin Loan Agreement bear interest at the three-month LIBOR rate plus a per annum spread of 1.5%, increasing to a per annum spread of 1.85% from and after the completion of the Combination. The Margin Loan Agreement also provides for customary LIBOR replacement provisions. Borrowings outstanding under this margin loan bore interest at a rate of 1.72% per annum at September 30, 2020 and is payable quarterly in arrears.
The Margin Loan Agreement contains various affirmative and negative covenants that restrict the activities of the SPV (and, in some cases, the Company and its subsidiaries with respect to shares of Charter owned by the Company and its subsidiaries). The Margin Loan Agreement does not include any financial covenants. The Margin Loan Agreement also contains restrictions related to additional indebtedness and events of default customary for margin loans of this type.
SPV’s obligations under the Margin Loan Agreement are secured by first priority liens on a portion of the Company’s ownership interest in Charter, sufficient for SPV to meet the loan to value requirements under the Margin Loan
I-14
LIBERTY BROADBAND CORPORATION
Notes to Condensed Consolidated Financial Statements
(unaudited)
Agreement. The Margin Loan Agreement indicates that no lender party shall have any voting rights with respect to the shares transferred, except to the extent that a lender party buys any shares in a sale or other disposition made pursuant to the terms of the loan agreements. As of September 30, 2020, 6.8 million shares of Charter with a value of $4.2 billion were pledged as collateral pursuant to the Margin Loan Agreement.
Exchangeable Senior Debentures
On August 27, 2020, the Company closed a private offering of $575 million aggregate original principal amount of its 2.75% Exchangeable Senior Debentures due 2050 (the “Debentures”), including Debentures with an aggregate original principal amount of $75 million issued pursuant to the exercise of an option granted to the initial purchasers. Upon an exchange of Debentures, the Company, at its election, may deliver shares of Charter Class A common stock, the value thereof in cash, or any combination of shares of Charter Class A common stock and cash. Initially, 1.1661 shares of Charter Class A common stock are attributable to each $1,000 original principal amount of Debentures, representing an initial exchange price of approximately $857.56 for each share of Charter Class A common stock. A total of 670,507 shares of Charter Class A common stock are attributable to the Debentures. Interest is payable quarterly on March 31, June 30, September 30 and December 31 of each year, commencing December 31, 2020. The Debentures may be redeemed by the Company, in whole or in part, on or after October 5, 2023. Holders of the Debentures also have the right to require the Company to purchase their Debentures on October 5, 2023. The redemption and purchase price will generally equal 100% of the adjusted principal amount of the Debentures plus accrued and unpaid interest to the redemption date, plus any final period distribution. The Company has elected to account for the Debentures using the fair value option. Accordingly, changes in the fair value of these instruments are recognized as unrealized gains (losses) in the accompanying condensed consolidated statements of operations. See note 3 for information related to unrealized gains (losses) on debt measured at fair value. As of September 30, 2020, a holder of the Debentures does not have the ability to exchange and, accordingly, the Debentures are classified as long-term debt in the condensed consolidated balance sheets.
(6) Stock-Based Compensation
Liberty Broadband grants, to certain of its directors, employees and employees of its subsidiaries, restricted stock, restricted stock units (“RSUs”) and stock options to purchase shares of its common stock (collectively, "Awards"). The Company measures the cost of employee services received in exchange for an equity classified Award (such as stock options and restricted stock) based on the grant-date fair value (“GDFV”) of the Award, and recognizes that cost over the period during which the employee is required to provide service (usually the vesting period of the Award). The Company measures the cost of employee services received in exchange for a liability classified Award based on the current fair value of the Award, and remeasures the fair value of the Award at each reporting date.
Included in the accompanying condensed consolidated statements of operations are the following amounts of stock-based compensation for the three and nine months ended September 30, 2020 and 2019 (amounts in thousands):
I-15
LIBERTY BROADBAND CORPORATION
Notes to Condensed Consolidated Financial Statements
(unaudited)
Liberty Broadband – Grants of Awards
During the nine months ended September 30, 2020, Liberty Broadband granted 100 thousand options to purchase shares of Series C Liberty Broadband common stock to our CEO. Such options had a GDFV of $27.39 per share and vest on December 31, 2020.
There were no options to purchase shares of Series A or Series B common stock granted during the nine months ended September 30, 2020.
During the nine months ended September 30, 2020, Liberty Broadband granted 2 thousand time-based RSUs of Series C Liberty Broadband common stock to our CEO. The RSUs had a GDFV of $120.71 per share and cliff vest on December 10, 2020. This RSU grant was issued in lieu of our CEO receiving 50% of his remaining base salary for the last three quarters of calendar year 2020, and he has waived his right to receive the other 50%, in each case, in light of the ongoing financial impact of COVID-19.
The Company calculates the GDFV for all of its equity classified awards and any subsequent remeasurement of its liability classified awards using the Black-Scholes Model. The Company estimates the expected term of the Awards based on historical exercise and forfeiture data. The volatility used in the calculation for Awards is based on the historical volatility of Liberty Broadband common stock. The Company uses a zero dividend rate and the risk-free rate for Treasury Bonds with a term similar to that of the subject options.
Liberty Broadband – Outstanding Awards
The following tables present the number and weighted average exercise price (“WAEP”) of Awards to purchase Liberty Broadband common stock granted to certain officers, employees and directors of the Company, as well as the weighted average remaining life and aggregate intrinsic value of the Awards.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted |
|
|
|
|
|
|
|
|
|
|
average |
|
|
|
|
|
|
|
|
|
|
remaining |
|
Aggregate |
|
|
|
|
|
|
|
|
contractual |
|
intrinsic |
|
|
|
Series A |
|
WAEP |
|
life |
|
value |
||
|
|
(in thousands) |
|
|
|
|
(in years) |
|
(in millions) |
|
Outstanding at January 1, 2020 |
|
4 |
|
$ |
47.92 |
|
|
|
|
|
Granted |
|
— |
|
$ |
— |
|
|
|
|
|
Exercised |
|
(3) |
|
$ |
51.84 |
|
|
|
|
|
Forfeited/cancelled |
|
— |
|
$ |
— |
|
|
|
|
|
Outstanding at September 30, 2020 |
|
1 |
|
$ |
39.70 |
|
1.7 |
|
$ |
— |
Exercisable at September 30, 2020 |
|
1 |
|
$ |
39.70 |
|
1.7 |
|
$ |
— |
I-16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted |
|
|
|
|
|
|
|
|
|
|
average |
|
|
|
|
|
|
|
|
|
|
remaining |
|
Aggregate |
|
|
|
|
|
|
|
|
contractual |
|
intrinsic |
|
|
|
Series C |
|
WAEP |
|
life |
|
value |
||
|
|
(in thousands) |
|
|
|
|
(in years) |
|
(in millions) |
|
Outstanding at January 1, 2020 |
|
1,932 |
|
$ |
61.43 |
|
|
|
|
|
Granted |
|
122 |
|
$ |
116.09 |
|
|
|
|
|
Exercised |
|
(6) |
|
$ |
51.82 |
|
|
|
|
|
Forfeited/cancelled |
|
— |
|
$ |
— |
|
|
|
|
|
Outstanding at September 30, 2020 |
|
2,048 |
|
$ |
64.73 |
|
4.7 |
|
$ |
160 |
Exercisable at September 30, 2020 |
|
1,616 |
|
$ |
50.00 |
|
4.2 |
|
$ |
150 |
As of September 30, 2020, the total unrecognized compensation cost related to unvested Awards was approximately $9.0 million. Such amount will be recognized in the Company's condensed consolidated statements of operations over a weighted average period of approximately 2.7 years.
As of September 30, 2020, Liberty Broadband reserved 2.0 million shares of Series A and Series C common stock for issuance under exercise privileges of outstanding stock Awards.
Skyhook Equity Incentive Plans
Long-Term Incentive Plans
Skyhook has a long-term incentive plan which provides for the granting of phantom stock appreciation rights and phantom stock units to employees, directors, and consultants of Skyhook that is not significant to Liberty Broadband. As of September 30, 2020 and December 31, 2019, $1.0 million and $1.2 million, respectively, are included in other liabilities for the fair value (Level 2) of the Company’s long-term incentive plan obligations.
(7) Commitments and Contingencies
General Litigation
In the ordinary course of business, the Company and its consolidated subsidiary are parties to legal proceedings and claims involving alleged infringement of third-party intellectual property rights, defamation, and other claims. Although it is reasonably possible that the Company may incur losses upon conclusion of such matters, an estimate of any loss or range of loss cannot be made. In the opinion of management, it is expected that amounts, if any, which may be required to satisfy such contingencies will not be material in relation to the accompanying condensed consolidated financial statements.
Certain Risks and Concentrations
The Skyhook business is subject to certain risks and concentrations including dependence on relationships with its customers. The Company’s largest customers, that accounted for greater than 10% of revenue individually, aggregated 59% and 59% of total revenue for the three months ended September 30, 2020 and 2019, respectively, and 59% and 71% of total revenue for the nine months ended September 30, 2020 and 2019, respectively.
Off-Balance Sheet Arrangements
Liberty Broadband did not have any off-balance sheet arrangements that have, or are reasonably likely to have, a current or future effect on the Company’s financial condition, results of operations, liquidity, capital expenditures or capital resources.
I-17
LIBERTY BROADBAND CORPORATION
Notes to Condensed Consolidated Financial Statements
(unaudited)
(8) Segment Information
Liberty Broadband identifies its reportable segments as (A) those consolidated companies that represent 10% or more of its consolidated annual revenue, annual Adjusted OIBDA or total assets and (B) those equity method affiliates whose share of earnings or losses represent 10% or more of Liberty Broadband’s annual pre-tax earnings (losses).
Liberty Broadband evaluates performance and makes decisions about allocating resources to its operating segments based on financial measures such as revenue and Adjusted OIBDA. In addition, Liberty Broadband reviews nonfinancial measures such as subscriber growth.
For segment reporting purposes, Liberty Broadband defines Adjusted OIBDA as revenue less operating expenses and selling, general and administrative expenses (excluding stock-based compensation). Liberty Broadband believes this measure is an important indicator of the operational strength and performance of its businesses by identifying those items that are not directly a reflection of each business’ performance or indicative of ongoing business trends. In addition, this measure allows management to view operating results and perform analytical comparisons and benchmarking between businesses and identify strategies to improve performance. This measure of performance excludes depreciation and amortization, stock-based compensation, separately reported litigation settlements and restructuring and impairment charges that are included in the measurement of operating income pursuant to GAAP. Accordingly, Adjusted OIBDA should be considered in addition to, but not as a substitute for, operating income, net earnings, cash flow provided by operating activities and other measures of financial performance prepared in accordance with GAAP. Liberty Broadband generally accounts for intersegment sales and transfers as if the sales or transfers were to third parties, that is, at current prices.
For the nine months ended September 30, 2020, Liberty Broadband has identified the following consolidated company and equity method investment as its reportable segments:
● | Skyhook—a wholly owned subsidiary of the Company that provides the Precision Location Solution (a location determination service) and Geospatial Insights product (a location intelligence and data insights service). |
● | Charter—an equity method investment that is one of the largest providers of cable services in the United States, offering a variety of entertainment, information and communications solutions to residential and commercial customers. |
Liberty Broadband’s operating segments are strategic business units that offer different products and services. They are managed separately because each segment requires different technologies, distribution channels and marketing strategies. The accounting policies of the segments that are also consolidated companies are the same as those described in the Company’s summary of significant accounting policies in the Company’s annual financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2019. We have included amounts attributable to Charter in the tables below. Although Liberty Broadband owns less than 100% of the outstanding shares of Charter, 100% of the Charter amounts are included in the tables below and subsequently eliminated in order to reconcile the account totals to the Liberty Broadband condensed consolidated financial statements.
I-18
Performance Measures
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended September 30, |
|
|||||||
|
|
2020 |
|
2019 |
|
|||||
|
|
|
|
|
Adjusted |
|
|
|
Adjusted |
|
|
|
Revenue |
|
OIBDA |
|
Revenue |
|
OIBDA |
|
|
|
|
|
(amounts in thousands) |
|
||||||
Skyhook |
|
$ |
4,219 |
|
(662) |
|
3,713 |
|
(1,105) |
|
Charter |
|
|
12,039,000 |
|
4,625,000 |
|
11,450,000 |
|
4,072,000 |
|
Corporate and other |
|
|
— |
|
(13,608) |
|
— |
|
(3,481) |
|
|
|
|
12,043,219 |
|
4,610,730 |
|
11,453,713 |
|
4,067,414 |
|
Eliminate equity method affiliate |
|
|
(12,039,000) |
|
(4,625,000) |
|
(11,450,000) |
|
(4,072,000) |
|
Consolidated Liberty Broadband |
|
$ |
4,219 |
|
(14,270) |
|
3,713 |
|
(4,586) |
|
Other Information
|
|
|
|
|
|
|
|
|
|
|
September 30, 2020 |
|
|||||
|
|
Total |
|
Investments |
|
Capital |
|
|
|
|
assets |
|
in affiliates |
|
expenditures |
|
|
|
|
(amounts in thousands) |
|
|||||
Skyhook |
|
$ |
16,071 |
|
— |
|
42 |
|
Charter |
|
|
144,193,000 |
|
— |
|
5,352,000 |
|
Corporate and other |
|
|
12,845,618 |
|
12,450,425 |
|
— |
|
|
|
|
157,054,689 |
|
12,450,425 |
|
5,352,042 |
|
Eliminate equity method affiliate |
|
|
(144,193,000) |
|
— |
|
(5,352,000) |
|
Consolidated Liberty Broadband |
|
$ |
12,861,689 |
|
12,450,425 |
|
42 |
|
I-19
The following table provides a reconciliation of Adjusted OIBDA to Operating income (loss) and Earnings (loss) before income taxes:
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
Nine months |
|
|||||
|
|
September 30, |
|
ended September 30, |
|
|||||
|
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|
|
|
|
|
(amounts in thousands) |
|
||||||
Adjusted OIBDA |
|
$ |
(14,270) |
|
(4,586) |
|
(26,658) |
|
(11,877) |
|
Stock-based compensation |
|
|
(2,002) |
|
(2,531) |
|
(5,736) |
|
(7,670) |
|
Depreciation and amortization |
|
|
(56) |
|
(471) |
|
(1,041) |
|
(1,408) |
|
Operating income (loss) |
|
|
(16,328) |
|
(7,588) |
|
(33,435) |
|
(20,955) |
|
Interest expense |
|
|
(3,719) |
|
(6,123) |
|
(14,711) |
|
(19,008) |
|
Share of earnings (loss) of affiliates, net |
|
|
188,586 |
|
61,633 |
|
408,396 |
|
141,882 |
|
Gain (loss) on dilution of investment in affiliate |
|
|
(35,284) |
|
(11,219) |
|
(140,610) |
|
(68,944) |
|
Realized and unrealized gains (losses) on financial instruments, net |
|
|
(39,324) |
|
(433) |
|
(39,324) |
|
(433) |
|
Other, net |
|
|
8 |
|
350 |
|
199 |
|
1,179 |
|
Earnings (loss) before income taxes |
|
$ |
93,939 |
|
36,620 |
|
180,515 |
|
33,721 |
|
I-20
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Certain statements in this Quarterly Report on Form 10-Q constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding new service and product offerings; future expenses; the performance of our equity affiliate, Charter Communications, Inc. (“Charter”), and its expectations related to COVID-19 (as defined below); the Combination (as defined below); our projected sources and uses of cash; indebtedness; and the anticipated non-material impact of certain contingent liabilities related to legal proceedings and other matters arising in the ordinary course of business. Forward-looking statements inherently involve many risks and uncertainties that could cause actual results to differ materially from those projected in these statements. Where, in any forward-looking statement, we express an expectation or belief as to future results or events, such expectation or belief is expressed in good faith and believed to have a reasonable basis, but such statements necessarily involve risks and uncertainties and there can be no assurance that the expectation or belief will result or be achieved or accomplished. The following include some but not all of the factors (as they relate to our consolidated subsidiary and equity affiliate) that could cause actual results or events to differ materially from those anticipated:
● | The impact of the novel coronavirus (“COVID-19”) pandemic and local, state and federal governmental responses to the pandemic on the economy, our customers, our vendors, and our businesses generally; |
● | the satisfaction of conditions to the Combination; |
● | Charter’s ability to sustain and grow revenue and cash flow from operations by offering Internet, video, voice, mobile, advertising and other services to residential and commercial customers, to adequately meet the customer experience demands in its service areas and to maintain and grow its customer base, particularly in the face of increasingly aggressive competition, the need for innovation and the related capital expenditures; |
● | the impact of competition from other market participants, including but not limited to incumbent telephone companies, direct broadcast satellite operators, wireless broadband and telephone providers, digital subscriber line providers, fiber to the home providers, and providers of video content over broadband Internet connections; |
● | Charter’s ability to obtain programming at reasonable prices or to raise prices to offset, in whole or in part, the effects of higher programming costs (including retransmission consents); |
● | Charter’s ability to develop and deploy new products and technologies, including mobile products and any other consumer services and service platforms; |
● | any events that disrupt Charter’s or Skyhook’s networks, information systems or properties and impair their operating activities or negatively impact their respective reputation; |
● | the effects of governmental regulation on the business of Charter and Skyhook, including costs, disruptions and possible limitations on Charter’s operating flexibility related to, and its ability to comply with, regulatory conditions applicable to Charter as a result of previous mergers; |
● | general business conditions, economic uncertainty or downturn, including the impacts of the COVID-19 pandemic to unemployment levels and the level of activity in the housing sector; |
● | failure to protect the security of personal information about the customers of our operating subsidiary and equity affiliate, subjecting us to costly government enforcement actions or private litigation and reputational damage; |
● | changes in, or failure or inability to comply with, government regulations, including, without limitation, regulations of the Federal Communications Commission, and adverse outcomes from regulatory proceedings; |
● | the ability to retain and hire key personnel; |
● | the ability of suppliers and vendors to deliver products, equipment, software and services; |
I-21
● | the outcome of any pending or threatened litigation; |
● | changes in the nature of key strategic relationships with partners, vendors and joint ventures; |
● | the availability and access, in general, of funds to meet debt obligations prior to or when they become due and to fund operations and necessary capital expenditures, either through (i) cash on hand, (ii) free cash flow, or (iii) access to the capital or credit markets; |
● | the ability of Charter and our company to comply with all covenants in their and our respective debt instruments, any violation of which, if not cured in a timely manner, could trigger a default of other obligations under cross-default provisions; and |
● | our ability to successfully monetize certain of our assets. |
For additional risk factors, please see Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2019 and Part II, Item 1A in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2020 and this Quarterly Report on Form 10-Q. These forward-looking statements and such risks, uncertainties and other factors speak only as of the date of this Quarterly Report, and we expressly disclaim any obligation or undertaking to disseminate any updates or revisions to any forward-looking statement contained herein, to reflect any change in our expectations with regard thereto, or any other change in events, conditions or circumstances on which any such statement is based.
The following discussion and analysis provides information concerning our results of operations and financial condition. This discussion should be read in conjunction with our accompanying condensed consolidated financial statements and the notes thereto and our Annual Report on Form 10-K for the year ended December 31, 2019.
Overview
During May 2014, the board of directors of Liberty Media Corporation and its subsidiaries (“Liberty”) authorized management to pursue a plan to spin-off to its stockholders common stock of a wholly-owned subsidiary, Liberty Broadband Corporation (“Liberty Broadband” or the “Company”), and to distribute subscription rights to acquire shares of Liberty Broadband’s common stock. Liberty Broadband was formed in 2014 as a Delaware corporation.
Through a number of prior years’ transactions, Liberty Broadband has acquired an interest in Charter. Pursuant to proxy agreements with GCI Liberty, Inc. (“GCI Liberty”) and Advance/Newhouse Partnership, Liberty Broadband controls 25.01% of the aggregate voting power of Charter.
The Company’s wholly owned subsidiary, Skyhook Holding, Inc. (“Skyhook”), focuses on the development and sale of Skyhook’s device-based location technology. Skyhook markets and sells two primary products: (1) a location determination service called the Precision Location Solution; and (2) a location intelligence and data insights service called Geospatial Insights.
The financial information represents a consolidation of the historical financial information of Skyhook, Liberty Broadband’s interest in Charter and certain deferred tax liabilities. This financial information refers to Liberty Broadband Corporation as “Liberty Broadband,” “the Company,” “us,” “we” and “our” here and in the notes to the accompanying condensed consolidated financial statements.
On August 6, 2020, Liberty Broadband and GCI Liberty entered into a definitive merger agreement under which Liberty Broadband agreed to acquire all of the outstanding shares of GCI Liberty in a stock-for-stock merger (the “Combination”). Under the terms of the merger agreement each holder of Series A and B common stock of GCI Liberty will receive 0.58 of a share of Series C common stock and Series B common stock, respectively, of Liberty Broadband. Additionally, holders of a share of Series A Cumulative Redeemable Preferred Stock of GCI Liberty will receive one share of Series A Cumulative Redeemable Preferred Stock with mirror terms to be issued by Liberty Broadband. The Combination was recommended to the Company’s Board of Directors for approval by a special committee composed solely of independent, disinterested directors and advised by independent financial and legal advisors. The closing of the Combination is subject to certain customary conditions, including: (i) the adoption of the merger agreement by holders of a majority of the aggregate
I-22
voting power of the GCI Liberty outstanding stock entitled to vote thereon not owned by John C. Malone and certain other persons, (ii) the adoption of the merger agreement by holders of a majority of the aggregate voting power of the Liberty Broadband outstanding stock entitled to vote thereon not owned by John C. Malone and certain other persons, (iii) the adoption of the merger agreement by holders of a majority of the aggregate voting power of the GCI Liberty outstanding stock entitled to vote thereon, (iv) approval of the Liberty Broadband stock issuance by holders of a majority of the aggregate voting power of the Liberty Broadband outstanding stock present in person or by proxy at the stockholder meeting and entitled to vote thereon and (v) the receipt of any applicable regulatory approvals. Liberty Broadband and GCI Liberty expect the Combination to close no later than the first quarter of 2021, subject to potential COVID-19 related delays.
In December 2019, Chinese officials reported a novel coronavirus outbreak. COVID-19 has since spread through China and internationally. On March 11, 2020, the World Health Organization assessed COVID-19 as a global pandemic, causing many countries throughout the world to take aggressive actions, including imposing travel restrictions and stay-at-home orders, closing public attractions and restaurants, and mandating social distancing practices. During this time, Skyhook has maintained function of all departments and service has been uninterrupted. Skyhook’s business results for the three and nine months ended September 30, 2020 were largely unaffected by the pandemic; however, Skyhook cannot predict the ultimate impact of COVID-19 on its business, including its customer renewals, ability to generate new business and its ability to collect on payments from customers.
As the COVID-19 pandemic continues to significantly impact the United States, Charter has continued to deliver services uninterrupted by the pandemic. Because Charter has invested significantly in its network and through normal course capacity increases, Charter has been able to respond to the significant increase in network activity from the private and public response to COVID-19 as Charter does its part as a major provider of Internet services in the United States by, among other things, enabling social distancing through telecommuting and e-learning across its footprint of 41 states. Charter has invested significantly in its self-service infrastructure, and customers have accelerated the adoption of its self-installation and digital self-service capabilities. Increased demand for Charter’s connectivity and the positive response to Charter’s Remote Education Offer pursuant to which new customers with students or educators in the household were eligible to receive Internet service for free for 60 days and the Keep Americans Connected (“KAC”) Pledge, which paused collection efforts and related disconnects for residential and small and medium business (“SMB”) customers with COVID-19 related payment challenges through June 30, 2020, have positively impacted Charter’s results for the nine months ended September 30, 2020 with retention rates for these customers similar to Charter’s average customer base.
During the three and nine months ended September 30, 2020, Charter’s results were negatively impacted by COVID-19, including recording $218 million of estimated customer credits to be provided to video customers offset by $173 million in-period recognition of estimated rebates from sports programming networks as a result of canceled sporting events and related costs. The difference between the $218 million estimated credit to customers which lowered video revenue and the $163 million reduction in programming expense and $10 million reduction in regulatory, connectivity and produced content costs relates to an expected reduction in sports rights content costs which is being amortized over the life of the contract, consistent with the deferral of expense in the three months ended June 30, 2020 when games were canceled. Charter intends to provide a credit on customers’ invoices for all of the rebates provided by the sports programming networks when details are finalized with these networks.
Charter has also seen declines in advertising revenue as a result of COVID-19 and lower revenue from seasonal plans offered to SMB and Enterprise hospitality customers that have requested a reduced level of service due to temporary business closure or because these customers have reduced their service offering to their own customers. In addition, in an effort to assist COVID-19 impacted customers with overdue balances at the end of the KAC program, Charter waived approximately $85 million of receivables which was recorded as a reduction of revenue in the second quarter of 2020.
Charter cannot predict the ultimate impact of COVID-19 on its business, including the depth and duration of the economic impact to household formation and growth and its residential and business customers’ ability to pay for its products and services including the impact of extended unemployment benefits and other stimulus packages. Charter expects that some of the COVID-19 programs discussed above may result in incremental churn and bad debt during the remainder of the year and into 2021. In addition, there is uncertainty regarding the impact of government emergency declarations, the ability of suppliers and vendors to provide products and services to Charter, the pace of new housing construction, changes in business spend in its local and national ad sales business, the effects to employees’ health and safety and resulting reorientation
I-23
of its work activities, and the risk of limitations on the deployment and maintenance of services (including by limiting customer support and on-site service repairs and installations).
Results of Operations—Consolidated—September 30, 2020 and 2019
Consolidated operating results:
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
Nine months ended |
|
|||||
|
|
September 30, |
|
September 30, |
|
|||||
|
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|
|
|
|
(amounts in thousands) |
|
|||||||
Revenue |
|
$ |
4,219 |
|
3,713 |
|
12,437 |
|
10,918 |
|
Operating expense |
|
|
2,513 |
|
2,311 |
|
7,492 |
|
6,743 |
|
Selling, general and administrative |
|
|
15,976 |
|
5,988 |
|
31,603 |
|
16,052 |
|
Stock-based compensation |
|
|
2,002 |
|
2,531 |
|
5,736 |
|
7,670 |
|
Depreciation and amortization |
|
|
56 |
|
471 |
|
1,041 |
|
1,408 |
|
Operating income (loss) |
|
|
(16,328) |
|
(7,588) |
|
(33,435) |
|
(20,955) |
|
Less impact of stock-based compensation and depreciation and amortization |
|
|
2,058 |
|
3,002 |
|
6,777 |
|
9,078 |
|
Adjusted OIBDA |
|
$ |
(14,270) |
|
(4,586) |
|
(26,658) |
|
(11,877) |
|
Revenue
Revenue increased $0.5 million and $1.5 million for the three and nine months ended September 30, 2020, respectively, as compared to the corresponding periods in the prior year. The increase in revenue for the three and nine months ended September 30, 2020, as compared to the corresponding periods in the prior year, was primarily due to increased revenue from existing customers.
Operating expense and selling, general and administrative expenses
Operating expense increased by $0.2 million and $0.7 million for the three and nine months ended September 30, 2020, respectively, as compared to the corresponding periods in the prior year, primarily due to increased personnel and cloud computing costs. Selling, general, and administrative expense increased by $10.0 million and $15.6 million for the three and nine months ended September 30, 2020, respectively, as compared to the corresponding periods in the prior year. The increases in selling, general and administrative expense during the three and nine months ended September 30, 2020, compared to the corresponding periods in the prior year, were primarily due to increased professional service fees at the corporate level of $9.8 million and $15.2 million, respectively, due to the Combination and certain fees related to debt activity.
Stock-based compensation
The decrease in stock-based compensation expense of $0.5 million and $1.9 million for the three and nine months ended September 30, 2020, respectively, as compared to the corresponding periods in the prior year, was primarily due to a decrease in the value of restricted stock units of Liberty Broadband Series C common stock granted during the first half of 2020.
Depreciation and amortization
Depreciation and amortization expense decreased by $0.4 million for both the three and nine months ended September 30, 2020, as compared to the corresponding periods in the prior year, primarily due to certain intangible assets becoming fully amortized.
Operating income (loss)
Operating loss increased $8.7 million and $12.5 million for the three and nine months ended September 30, 2020, respectively, as compared to the corresponding periods in the prior year due to the items discussed above.
I-24
Adjusted OIBDA
To provide investors with additional information regarding our financial results, we also disclose Adjusted OIBDA, which is a non-GAAP financial measure. We define Adjusted OIBDA as operating income (loss) plus depreciation and amortization, stock-based compensation, separately reported litigation settlements, restructuring, acquisition and other related costs and impairment charges. Our chief operating decision maker and management team use this measure of performance in conjunction with other measures to evaluate our businesses and make decisions about allocating resources among our businesses. We believe this is an important indicator of the operational strength and performance of our businesses by identifying those items that are not directly a reflection of each business’ performance or indicative of ongoing business trends. In addition, this measure allows us to view operating results, perform analytical comparisons and benchmarking between businesses and identify strategies to improve performance. Accordingly, Adjusted OIBDA should be considered in addition to, but not as a substitute for, operating income, net income, cash flow provided by operating activities and other measures of financial performance prepared in accordance with U.S. generally accepted accounting principles.
Adjusted OIBDA decreased $9.7 million and $14.8 million during the three and nine months ended September 30, 2020, respectively, as compared to the corresponding periods in the prior year. The decreases in Adjusted OIBDA for the three and nine months ended September 30, 2020, as compared to the corresponding periods in the prior year, were due primarily to the increases in operating and selling, general and administrative expenses, partially offset by the increases in revenue, as discussed above.
Other Income and Expense
Components of Other income (expense) are presented in the table below.
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
Nine months ended |
|
|||||
|
|
September 30, |
|
September 30, |
|
|||||
|
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|
|
|
|
(amounts in thousands) |
|
|||||||
Other income (expense): |
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
$ |
(3,719) |
|
(6,123) |
|
(14,711) |
|
(19,008) |
|
Share of earnings (losses) of affiliates |
|
|
188,586 |
|
61,633 |
|
408,396 |
|
141,882 |
|
Gain (loss) on dilution of investment in affiliate |
|
|
(35,284) |
|
(11,219) |
|
(140,610) |
|
(68,944) |
|
Realized and unrealized gains (losses) on financial instruments, net |
|
|
(39,324) |
|
(433) |
|
(39,324) |
|
(433) |
|
Other, net |
|
|
8 |
|
350 |
|
199 |
|
1,179 |
|
|
|
$ |
110,267 |
|
44,208 |
|
213,950 |
|
54,676 |
|
Interest expense
Interest expense decreased $2.4 million and $4.3 million during the three and nine months ended September 30, 2020, respectively, as compared to the corresponding periods in the prior year. The decreases were driven by a decrease in our weighted average interest rate during the current periods as compared to the corresponding periods in the prior year, partially offset by additional amounts outstanding on the Margin Loan Facility and Debentures (as defined in note 5 to the accompanying condensed consolidated financial statements) that were borrowed in August 2020.
Share of earnings (losses) of affiliates
Share of earnings of affiliates increased $127.0 million and $266.5 million during the three and nine months ended September 30, 2020, respectively, as compared to the corresponding periods in the prior year. The Company’s Share of earnings (losses) of affiliates line item in the accompanying condensed consolidated statements of operations includes expenses of $25.5 million and $32.7 million, net of related taxes, for the three months ended September 30, 2020 and 2019, respectively, and $107.3 million and $88.7 million, net of related taxes, for the nine months ended September 30, 2020 and 2019, respectively, due to the increase in amortization of the excess basis of assets with identifiable useful lives and debt, which was primarily due to Charter’s share buyback program. The change in the share of earnings of affiliates in the three
I-25
and nine months ended September 30, 2020, as compared to the corresponding periods in the prior year, was the result of the corresponding change in net income at Charter.
The following is a discussion of Charter’s results of operations. In order to provide a better understanding of Charter’s operations, we have included a summarized presentation of Charter’s results from operations.
Charter net earnings increased $465 million and $1,105 million for the three and nine months ended September 30, 2020, respectively, as compared to the corresponding periods in the prior year.
Charter’s revenue increased $589 million and $1,470 million for the three and nine months ended September 30, 2020, respectively, as compared to the corresponding periods in the prior year, primarily due to increases in the number of residential Internet and mobile customers, price adjustments and during the three months ended September 30, 2020, advertising sales offset by a decrease in video customers and $218 million of estimated customer credits to be issued to video customers due to canceled sporting events. For the nine months ended September 30, 2020, revenue also decreased as compared to the corresponding prior period due to $85 million of waived receivables related to the KAC program.
During the three and nine months ended September 30, 2020, operating expenses, excluding stock-based compensation, increased $36 million and $224 million as compared to the corresponding periods in the prior year, respectively. Operating costs increased primarily due to increased mobile device costs and mobile service and operating costs, and for the nine months ended September 30, 2020, increases in costs to service customers offset by lower regulatory, connectivity and produced content costs.
Programming costs during the three and nine months ended September 30, 2020 were reduced by $163 million of estimated rebates from sports programming networks as a result of canceled sporting events due to COVID-19 and further benefited from a higher mix of lower cost video packages within Charter’s video customer base and lower video customers. The decrease was offset by contractual rate adjustments, including renewals and increases in amounts paid for retransmission consent. Charter expects programming expenses will continue to increase due to a variety of factors, including annual increases imposed by programmers with additional selling power as a result of media consolidation, increased demands by owners of broadcast stations for payment for retransmission consent or linking carriage of other services to retransmission consent, and additional programming, particularly new services. Charter has been unable to fully pass these increases on to its customers nor does it expect to be able to do so in the future without a potential loss of customers.
Costs to service customers increased primarily due to higher labor costs resulting from COVID-19 related wage increases and flex time benefits along with 6.8% customer growth offset by a decrease in bad debt expense given the revenue write-off associated with the KAC program and better collections enhanced by government stimulus benefits.
I-26
Regulatory, connectivity and produced content costs remained constant and decreased during the three and nine months ended September 30, 2020, respectively, due to deferred sports rights costs associated with the shortened baseball season resulting from COVID-19.
Charter’s Adjusted OIBDA for the three and nine months ended September 30, 2020 increased for the reasons described above.
Depreciation and amortization expense decreased $45 million and $170 million during the three and nine months ended September 30, 2020, respectively, as compared to the corresponding periods in the prior year primarily due to a decrease in depreciation and amortization as certain assets acquired in acquisitions become fully depreciated offset by an increase in depreciation as a result of more recent capital expenditures.
Charter’s results were also impacted by other expenses, net which increased $70 million and $243 million for the three and nine months ended September 30, 2020, respectively, as compared to the corresponding periods in the prior year. The increase in other expenses, net for the three months ended September 30, 2020, as compared to the corresponding period in the prior year, was primarily due to increased other pension costs and a loss on extinguishment of debt, partially offset by increased gains on financial instruments. The increase in other expenses, net for the nine months ended September 30, 2020, as compared to the corresponding period in the prior year, was primarily due to increased other pension costs and a loss on extinguishment of debt, partially offset by a decrease to other expense.
Income tax expense increased $51 million and $43 million for the three and nine months ended September 30, 2020, respectively, as compared to the corresponding periods in the prior year. Income tax expense increased during the three and nine months ended September 30, 2020 compared to the corresponding periods in 2019 primarily as a result of higher pretax income offset by increased recognition of excess tax benefits resulting from share-based compensation during 2020.
Gain (loss) on dilution of investment in affiliate
The loss on dilution of investment in affiliate increased by $24.1 million and $71.7 million during the three and nine months ended September 30, 2020, respectively, as compared to the corresponding periods in the prior year, primarily due to an increase in issuance of Charter common stock from the exercise of stock options held by employees and other third parties, at prices below Liberty Broadband’s book basis per share. As Liberty Broadband’s ownership in Charter changes due to exercises of Charter stock options, a loss is recorded with the effective sale of common stock, because the exercise price of Charter stock options is typically lower than the book value of the Charter shares held by Liberty Broadband.
Realized and unrealized gains (losses) on financial instruments, net
Realized and unrealized gains (losses) on financial instruments, net for the three and nine months ended September 30, 2020, were primarily related to changes in fair value of the Debentures related to changes in market price of underlying Charter stock. Realized and unrealized gains (losses) on financial instruments, net for the three and nine months ended September 30, 2019, were related to the zero-strike call options. See discussion in note 3 to the accompanying condensed consolidated financial statements for additional information.
Other, net
Other, net decreased $0.3 million and $1.0 million during the three and nine months ended September 30, 2020, respectively, as compared to the corresponding periods in the prior year. The decreases were primarily due to decreases in dividend and interest income as a result of lower interest rates and lower cash balances during the current year.
Income tax benefit (expense)
During the three and nine months ended September 30, 2020, we had an income tax expense of $25.0 million and $47.2 million, respectively, and the effective rate was approximately 26.6% and 26.1%. For the three and nine months ended September 30, 2019, we had an income tax expense of $9.1 million and $8.5 million, respectively, and the effective tax rate was approximately 24.9% and 25.1%, respectively. The differences between the effective income tax rates and the U.S.
I-27
Federal income tax rate of 21% for the three and nine months ended September 30, 2020 and September 30, 2019 were primarily due to the effect of state income taxes.
Liquidity and Capital Resources
As of September 30, 2020, substantially all of our cash and cash equivalents are invested in U.S. Treasury securities, other government securities or government guaranteed funds, AAA rated money market funds and other highly rated financial and corporate debt instruments.
The following are potential sources of liquidity: available cash balances, cash generated by the operating activities of our privately-owned subsidiaries (to the extent such cash exceeds the working capital needs of the subsidiaries and is not otherwise restricted), proceeds from asset sales, monetization of our investments, outstanding debt facilities, including $300 million available to be drawn under the Margin Loan Facility (as defined in note 5 to the accompanying condensed consolidated financial statements) until August 12, 2021, debt and equity issuances, and dividend and interest receipts.
As of September 30, 2020, Liberty Broadband had a cash balance of $400 million.
The increase in cash used by operating activities in the nine months ended September 30, 2020, as compared to the corresponding period in the prior year, was primarily driven by the increase in operating loss.
During the nine months ended September 30, 2020, net cash flows used by investing activities were primarily for the exercise of preemptive rights to purchase an aggregate of approximately 35 thousand shares of Charter’s Class A common stock for an aggregate purchase price of $14.9 million.
During the nine months ended September 30, 2020, net cash flows provided by financing activities were primarily borrowings of $700 million under the Company’s margin loan and Debentures (see note 5 to the accompanying condensed financial statements for more information), partially offset by repurchases of Series C Liberty Broadband common stock of $285.7 million.
The projected use of our cash will be primarily to fund any operational needs of our subsidiary, to service debt, to reimburse Liberty for amounts due under various agreements, to fund potential investment opportunities, the potential buyback of common stock under the approved share buyback program and to refinance Liberty Broadband’s margin loan, under its Margin Loan Facility, maturing in 2022. We expect corporate cash and other available sources of liquidity to cover corporate expenses for the foreseeable future.
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Item 3. Quantitative and Qualitative Disclosures about Market Risk
We are exposed to market risk in the normal course of business due to our ongoing investing and financial activities. Market risk refers to the risk of loss arising from adverse changes in stock prices and interest rates. The risk of loss can be assessed from the perspective of adverse changes in fair values, cash flows and future earnings. We have established policies, procedures and internal processes governing our management of market risks and the use of financial instruments to manage our exposure to such risks.
We are exposed to changes in interest rates primarily as a result of our borrowing and investment activities, which could include investments in fixed and floating rate debt instruments and borrowings used to maintain liquidity and to fund business operations. The nature and amount of our long-term and short-term debt are expected to vary as a result of future requirements, market conditions and other factors. We manage our exposure to interest rates by maintaining what we believe is an appropriate mix of fixed and variable rate debt. We believe this best protects us from interest rate risk. We could achieve this mix by (i) issuing fixed rate debt that we believe has a low stated interest rate and significant term to maturity, (ii) issuing variable rate debt with appropriate maturities and interest rates and (iii) entering into interest rate swap arrangements when we deem appropriate. As of September 30, 2020, our debt is comprised of the following amounts:
Our stock in Charter (our equity method affiliate) is publicly traded and not reflected at fair value in our balance sheet. Our investment in Charter is also subject to market risk that is not directly reflected in our financial statements.
Item 4. Controls and Procedures
In accordance with Rules 13a-15 and 15d-15 under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), the Company carried out an evaluation, under the supervision and with the participation of management, including its chief executive officer and its principal accounting and financial officer (the "Executives"), of the effectiveness of its disclosure controls and procedures as of the end of the period covered by this report. Based on that evaluation, the Executives concluded that the Company's disclosure controls and procedures were effective as of September 30, 2020 to provide reasonable assurance that information required to be disclosed in its reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms.
There has been no change in the Company's internal control over financial reporting that occurred during the three months ended September 30, 2020 that has materially affected, or is reasonably likely to materially affect, its internal control over financial reporting.
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PART II—OTHER INFORMATION
Item 1. Legal Proceedings
Our Annual Report on Form 10-K for the year ended December 31, 2019 and our Quarterly Reports on Form 10-Q for the quarters ended on March 31, 2020 and June 30, 2020 include "Legal Proceedings" under Item 3 of Part I and Item 1 of Part II, respectively. There have been no material changes from the legal proceedings described in these Forms 10-K and 10-Q, except as described below.
On December 19, 2011, Sprint Communications Company L.P. (“Sprint”) filed a complaint in the United States District Court for the District of Kansas alleging that Time Warner Cable, Inc. (“TWC” or “Legacy TWC”) infringed certain U.S. patents purportedly relating to Voice over Internet Protocol (“VoIP”) services. At the trial, the jury returned a verdict of $140 million against TWC and further concluded that TWC had willfully infringed Sprint’s patents. The court subsequently declined to enhance the damage award as a result of the purported willful infringement and awarded Sprint an additional $6 million, representing pre-judgment interest on the damages award. Charter has now paid the verdict, interest and costs in full. Charter continues to pursue indemnity from its vendors and has brought a patent suit against Sprint (TC Tech, LLC v. Sprint) in the United States District Court for the District of Delaware implicating Sprint's LTE technology and a similar suit against T-Mobile USA, Inc. in the Western District of Texas. The ultimate outcomes of the pursuit of indemnity against Charter’s vendors and the TC Tech litigation cannot be predicted. Charter does not expect the outcome of its indemnity claims nor the outcome of the TC Tech litigation will have a material adverse effect on its operations or financial condition.
Sprint filed a second patent suit against Charter and Bright House Networks, LLC (“Bright House”) on December 2, 2017 in the United States District Court for the District of Delaware. This suit alleges infringement of 11 patents related to Charter's provision of VoIP services (ten of which were asserted against Legacy TWC in the matter described above).
On February 18, 2020 Sprint filed a lawsuit against Charter, Bright House, and TWC in the District Court for Johnson County, Kansas. Sprint alleges that Charter misappropriated trade secrets from Sprint years ago through employees hired by Bright House. Sprint asserts that the alleged trade secrets relate to the VoIP business of Charter and Bright House. Charter has removed this case to the United States District Court for the District of Kansas.
Sprint filed a third patent suit against Charter on May 17, 2018 in the United States District Court for the Eastern District of Virginia. This suit alleges infringement of two patents related to Charter's video on demand services. The court transferred this case to the United States District Court for the District of Delaware on December 20, 2018 pursuant to an agreement between the parties.
While Charter is vigorously defending these suits and is unable to predict the outcome of the Sprint lawsuits, it does not expect that the litigation will have a material effect on its operations, financial condition, or cash flows.
On October 23, 2020, a lawsuit was filed by a purported GCI Liberty stockholder in the United States District Court for the District of Delaware under the caption Lewis Baker v. GCI Liberty, Inc., et al., Case No. 1:20-cv-01425-UNA. The lawsuit named as defendants GCI Liberty, the members of the GCI Liberty board of directors, Liberty Broadband and certain subsidiaries of Liberty Broadband. The lawsuit asserted claims under Section 14(a) of the Exchange Act and Rule 14a-9 under the Exchange Act, as well as Section 20(a) of the Exchange Act. The lawsuit alleged that the defendants caused a registration statement that omitted material information to be filed in connection with the Combination, which allegedly rendered the registration statement false and misleading. The lawsuit further alleged that the members of the GCI Liberty board of directors and Liberty Broadband acted as controlling persons of GCI Liberty and had knowledge of the allegedly false and misleading statements contained in the registration statement. The lawsuit sought an injunction barring the Combination, rescission of the Combination in the event it had been consummated, an order directing the GCI Liberty board of directors to disseminate a registration statement that did not contain any allegedly untrue statements or omit material facts, a declaration that defendants violated the Exchange Act, costs and attorneys’ fees, and other relief.
Liberty Broadband believes this lawsuit was without merit. On October 29, 2020, the plaintiff voluntarily dismissed the lawsuit with prejudice.
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Item 1A. Risk Factors
Except as discussed below, there have been no material changes in the Company's risk factors from those disclosed in Part I, Item 1A. Risk Factors of its Annual Report on Form 10-K for the year ended December 31, 2019 and Part II, Item 1A. Risk Factors of its Quarterly Report on Form 10-Q for the quarter ended March 31, 2020.
Liberty Broadband will incur direct and indirect costs as a result of the Combination.
Liberty Broadband will incur substantial expenses in connection with and as a result of completing the Combination, including advisory, legal and other transaction costs, and, following the completion of the Combination, Liberty Broadband expects to incur additional expenses in connection with combining the companies. A majority of these costs have already been incurred or will be incurred regardless of whether the Combination is completed. Factors beyond Liberty Broadband’s control could affect the total amount or timing of these expenses, many of which, by their nature, are difficult to estimate accurately. Management of Liberty Broadband continues to assess the magnitude of these costs, and additional unanticipated costs may be incurred in connection with the Combination. Although Liberty Broadband expects that the realization of benefits related to the Combination will offset such costs and expenses over time, no assurances can be made that this net benefit will be achieved in the near term, or at all.
The announcement and pendency of the Combination could divert the attention of management and cause disruptions in the businesses of Liberty Broadband, which could have an adverse effect on the business and financial results of Liberty Broadband.
Management of Liberty Broadband may be required to divert a disproportionate amount of attention away from its day-to-day activities and operations, and devote time and effort to consummating the Combination. The risks, and adverse effects, of such disruptions and diversions could be exacerbated by a delay in the completion of the Combination. These factors could adversely affect the financial position or results of operations of Liberty Broadband, regardless of whether the Combination is completed.
Liberty Broadband is subject to contractual restrictions while the Combination is pending, which could adversely affect its business and operations.
Under the terms of the merger agreement, Liberty Broadband is subject to certain restrictions on the conduct of its business prior to completing the Combination which may adversely affect its ability to execute certain of its business strategies, including the ability in certain cases to amend its organizational documents, pay extraordinary dividends or distributions or incur indebtedness. Such limitations could adversely affect Liberty Broadband prior to the completion of the Combination. These risks may be exacerbated by delays or other adverse developments with respect to the completion of the Combination.
The Combination is subject to conditions, some or all of which may not be satisfied, or completed on a timely basis, if at all. Failure to complete the Combination could have material adverse effects on Liberty Broadband.
The completion of the Combination is subject to a number of conditions, including, among other things, receipt of the required Liberty Broadband and GCI Liberty stockholder approvals, including approval of the merger agreement by the affirmative vote of holders of a majority of the aggregate voting power of outstanding shares of each company that are not owned by John C. Malone and certain other persons for each company. While the parties have agreed in the merger agreement to use reasonable best efforts to satisfy the closing conditions, the parties may not be successful in their efforts to do so. The failure to satisfy all of the required conditions could delay the completion of the Combination for a significant period of time or prevent it from occurring at all. Any delay in completing the Combination could cause Liberty Broadband not to realize some or all of the benefits, or realize them on a different timeline than expected, that Liberty Broadband expects to achieve if the Combination is successfully completed within the expected timeframe. There can be no assurance that the conditions to the closing of the Combination will be satisfied or (to the extent permitted) waived or that the Combination will be completed. Also, subject to limited exceptions, either Liberty Broadband or GCI Liberty may terminate the merger agreement if the Combination has not been completed by August 6, 2021, subject to possible extension as set forth in the merger agreement.
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If the Combination is not completed, Liberty Broadband may be materially adversely affected and, without realizing any of the benefits of having completed the Combination, and Liberty Broadband will be subject to a number of risks, including the following:
● | the market price of Liberty Broadband common stock could decline; |
● | Liberty Broadband could owe a substantial termination fee to GCI Liberty under certain circumstances; |
● | if the merger agreement is terminated and Liberty Broadband seeks another business combination, Liberty Broadband may not find a party willing to enter into a transaction on terms equivalent to or more attractive than the terms agreed to in the merger agreement; |
● | time and resources, financial and other, committed by Liberty Broadband’s and its subsidiaries’ management to matters relating to the Combination could otherwise have been devoted to pursuing other beneficial opportunities; |
● | Liberty Broadband and its subsidiaries may experience negative reactions from the financial markets or from its customers, suppliers or employees; |
● | Liberty Broadband will be required to pay its costs relating to the Combination, such as legal, accounting, financial advisory and printing fees, whether or not the Combination is completed; and |
● | reputational harm due to the adverse perception of any failure to successfully complete the Combination. |
In addition, if the Combination is not completed, Liberty Broadband could be subject to litigation related to any failure to complete the Combination or related to any enforcement proceeding commenced against it to perform its obligations under the merger agreement. Any of these risks could materially and adversely impact Liberty Broadband’s financial condition, financial results and stock price.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Share Repurchase Programs
In December 2016, the Board of Directors authorized the repurchase of $250 million of Liberty Broadband Series A and Series C common stock. In August 2020, the Board of Directors increased its repurchase authorization by $1.0 billion, with an aggregate repurchase amount not to exceed $1.3 billion.
A summary of the repurchase activity for the three months ended September 30, 2020 is as follows:
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There were no repurchases of Series A or Series B common stock during the three months ended September 30, 2020.
During the three months ended September 30, 2020, no shares of Liberty Broadband Series A common stock and no shares of Series C common stock were surrendered by our officers and employees to pay withholding taxes and other deductions in connection with the vesting of their restricted stock.
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Item 6. Exhibits
(a) | Exhibits |
Listed below are the exhibits which are filed as a part of this Report (according to the number assigned to them in Item 601 of Regulation S-K):
* Filed herewith
** Furnished herewith
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
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LIBERTY BROADBAND CORPORATION |
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Date: November 4, 2020 |
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By: |
/s/ GREGORY B. MAFFEI |
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Gregory B. Maffei President and Chief Executive Officer |
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Date: November 4, 2020 |
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By: |
/s/ BRIAN J. WENDLING |
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Brian J. Wendling Chief Accounting Officer and Principal Financial Officer |
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Exhibit 4.1
FORM OF AMENDMENT NO. 3 TO MARGIN LOAN AGREEMENT AND AMENDMENT NO. 2 TO COLLATERAL ACCOUNT CONTROL AGREEMENT
This AMENDMENT NO. 3 TO MARGIN LOAN AGREEMENT AND AMENDMENT NO. 2 TO COLLATERAL ACCOUNT CONTROL AGREEMENT (this “Agreement”), dated as of August 12, 2020, is entered into by and among LBC CHEETAH 6, LLC, a Delaware limited liability company (“Borrower”), each financial institution party to the Loan Agreement (as defined below) and Control Agreement (as defined below), in each case, immediately prior to the effectiveness of this Agreement (in their respective capacities as Lenders (as such term is used in the Loan Agreement) and as Secured Parties (used herein as such term is used and defined in the Control Agreement)), each, a “C6 Lender” and, collectively, the “C6 Lenders”), each Lender (as such term is defined in the Kodiak Loan Agreement) party to the Kodiak Loan Agreement (as defined below) on the date hereof (in their respective capacities as a Kodiak Pay-off Loan Lenders (as defined below) and as Secured Parties, collectively, the “Kodiak Pay-off Loan Lenders”), Wilmington Trust, National Association, as administrative agent (together with its successors and assigns in such capacity, “Administrative Agent”), and BNP Paribas, as calculation agent (together with its successors and assigns in such capacity, “Calculation Agent”), and, solely for purposes of Sections 2.3 and 13 of this Agreement, U.S. Bank National Association, as securities intermediary and as a bank under the Control Agreement (as defined below) (together with its successors and assigns in such capacities, the “Securities Intermediary”).
RECITALS
WHEREAS, reference is made to the Agreement and Plan of Merger, dated as of August 6, 2020 (as amended, restated, amended and restated, modified or supplemented, the “GCI Liberty Merger Agreement”), by and among, by and among Liberty Broadband Corporation, a Delaware corporation, Grizzly Merger Sub I, LLC, a single member Delaware limited liability company and a direct wholly owned subsidiary of Liberty Broadband Corporation (“Merger LLC”), Grizzly Merger Sub 2, Inc. a Delaware corporation and a direct wholly owned subsidiary of Merger LLC (“Merger Sub”), and GCI Liberty, Inc., a Delaware corporation, pursuant to which (i) Merger Sub shall merge with and into GCI Liberty, Inc. with GCI Liberty, Inc. surviving and (ii) GCI Liberty, Inc. shall merge with and into Merger LLC with Merger LLC surviving (the “Upstream GCI Liberty Merger”; the “GCI Liberty Merger Effective Date” shall mean the time and date of the filing of the certificate of ownership and merger with the Secretary of State of the State of Delaware relating to the Upstream GCI Liberty Merger or at such later date and time as Liberty Broadband Corporation and GCI Liberty, Inc. may agree upon and as is set forth in such certificate of ownership and merger in accordance with the GCI Liberty Merger Agreement).
WHEREAS, Borrower, the lenders party thereto, Administrative Agent (as successor to Bank of America, N.A., in its capacity as administrative agent (the “Original Administrative Agent”)) and Calculation Agent (as successor to Bank of America, N.A., in its capacity as calculation agent (the “Original Calculation Agent”)) entered into that certain Margin Loan Agreement, dated as of August 31, 2017 (the “Original Loan Agreement”) (as amended, restated, amended and restated, supplemented or otherwise modified and in effect immediately prior to the effectiveness of this Agreement, the “Loan Agreement”).
WHEREAS, Borrower, the Secured Parties party thereto, Administrative Agent, as successor to the Original Administrative Agent, Calculation Agent, as successor to the Original Calculation Agent, and the Securities Intermediary are party to that certain Collateral Account Control Agreement, dated as of August 31, 2017 (as amended, restated, amended and restated, supplemented or otherwise modified and in effect, the “Control Agreement”).
WHEREAS, in connection with the amendments contemplated hereby, including the implementation of Kodiak Pay-off Loan Commitments, each of the parties that will be party to the Control Agreement immediately following the effectiveness of this Agreement, including Borrower, each of the Secured
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Parties as of the date hereof, Administrative Agent, Calculation Agent and Securities Intermediary, desire to acknowledge the additional Collateral Accounts (use herein as defined in the Control Agreement) that have been added to the Control Agreement through and including the date hereof.
WHEREAS, Broadband Holdco, LLC, a Delaware limited liability company (“Kodiak Borrower”), the lenders party thereto and JPMorgan Chase Bank, N.A., London Branch (“JPM”), as administrative agent and as calculation agent (in each such capacity, a “Kodiak Agent”) entered into that certain Margin Loan Agreement, dated as of December 29, 2017 (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, the “Kodiak Loan Agreement”) pursuant to which Loans (under and as defined in therein) have been made to Kodiak Borrower in an aggregate principal amount outstanding as of the date hereof equal to $1.3 billion (the “Kodiak Loans”).
WHEREAS, Borrower has requested, and each C6 Lender, Administrative Agent and the Calculation Agent have agreed, that Borrower, each C6 Lender, Administrative Agent and Calculation Agent, will make certain amendments to the Loan Agreement as provided in Section 2.1 of this Agreement (collectively, the “C6 Amendments”) (the Loan Agreement, as so amended by the C6 Amendments and as further amended, restated, amended and restated, supplemented or otherwise modified from time to time, including pursuant to the Kodiak Pay-off Amendments (hereinafter defined), being herein referred to as the “Amended Loan Agreement”).
WHEREAS, in connection with the GCI Liberty Merger Agreement and pursuant to and in accordance with Section 2.15(a) of the Amended Loan Agreement, Borrower has informed Administrative Agent that it wishes to (a) obtain Additional Loan Commitments (as defined as the Amended Loan Agreement) in the amount of up to $1.3 billion (the “Kodiak Pay-off Loan Commitments”), (b) use the proceeds of the Kodiak Pay-off Loan Commitments (the “Kodiak Pay-off Loans”) to satisfy (via cashless roll) the aggregate principal amount of the Kodiak Loans outstanding as of the GCI Liberty Merger Effective Date (and immediately after the occurrence of the Upstream GCI Liberty Merger) and (c) further amend the Amended Loan Agreement to provide for the Kodiak Pay-off Loan Commitments and the Kodiak Pay-off Loans, and to effect the other modifications to the Amended Loan Agreement set forth in Amended Loan Agreement.
WHEREAS, each Kodiak Pay-off Loan Lender, in their capacity as a Lender under the Kodiak Loan Agreement, has agreed to, (a) substantially simultaneously but immediately following the occurrence of the C6 Amendments Effective Time, provide to Borrower on the date hereof the Kodiak Pay-off Loan Commitments up to the amount set forth on Part C of Schedule I of the Amended Loan Agreement, subject to the terms and conditions set forth herein and in and (b) to fund the Kodiak Pay-off Loans on the GCI Liberty Merger Agreement Effective Date (immediately after the occurrence of the Upstream GCI Liberty Merger), subject to the terms and conditions set forth in the Amended Loan Agreement with regard thereto.
WHEREAS, substantially concurrently but immediately following the occurrence of the C6 Amendments Effective Time, each Lender, Borrower, Administrative Agent and Calculation Agent desire to make certain additional amendments to the Amended Loan Agreement as provided in Section 2.2 of this Agreement in order to, among other things, evidence the effectiveness of the Kodiak Pay-off Loan Commitments and provide for the terms and conditions relating to the Kodiak Pay-off Loans (collectively, the “Kodiak Pay-off Amendments”).
NOW, THEREFORE, in consideration of the covenants made hereunder, and other good and valuable consideration, the receipt and legal sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:
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2.1 | The C6 Amendments. Immediately upon the occurrence of the C6 Amendments Effective Time (hereinafter defined), the Loan Agreement shall be amended as follows: |
“Amendment No. 3” means that certain Amendment No. 3 to Margin Loan Agreement, dated as of August 12, 2020, by and among the Borrower, the Lenders party thereto and each Agent.
“Availability Period” means (a) with respect to Delayed Draw Loans, the period from and including the first Business Day following the date on which the C6 Amendments Effective Time occurs to the earlier of (x) the twelve (12) month anniversary of date on which the C6 Amendments Effective Time occurs and (y) the date of termination of all of the Delayed Draw Commitments and (b) with respect to Additional Loans, the period from and including the relevant Additional Loans Closing Date to the earlier of (x) thirty (30) days prior to the Maturity Date of such Additional Loans and (y) the date of termination of all of the Additional Loan Commitments.
“C6 Amendments Effective Time” has the meaning set forth in Amendment No. 3; for the avoidance of doubt, the date on which the C6 Amendments Effective Time occurred is the date of Amendment No. 3.
“Maturity Date” means (i) with respect to all Initial Loans and Delayed Draw Loans, August 24, 2022 (or, if such date is not a Business Day, the immediately preceding Business Day) and (ii) with respect to any Additional Loans, the Maturity Date set forth in the relevant Incremental Agreement with respect to such Additional Loans; provided that such Maturity Date shall not be earlier than the Maturity Date for any then-outstanding Loans at the time such Additional Loans are incurred.
“Minimum Price” means $[__]; provided that, in the event of an Issuer Merger Event or Spin-Off Event, the Calculation Agent may adjust the Minimum Price and provide for a Minimum Price applicable to the Merger Shares or Spin-Off Shares, as applicable, as it deems reasonably necessary pursuant to Section 1.02(d).
2.2 | The Kodiak Pay-off Amendments. Immediately upon the occurrence of the Kodiak Pay-off Amendments Effective Time (hereinafter defined): |
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LBC Cheetah 6, LLC, as the Borrower
12300 Liberty Boulevard
Englewood, Colorado 80112
Attention: Assistant Vice President
Telephone No.: [Separately provided]
Facsimile No.: [Separately provided]
E-mail: [Separately provided]
with a copy to:
LBC Cheetah 6, LLC, as the Borrower
12300 Liberty Boulevard
Englewood, Colorado 80112
Attention: Chief Legal Officer
Telephone No.: [Separately provided]
Facsimile No.: [Separately provided]
E-mail: [Separately provided]
2.3 | Control Agreement Amendment. Each of the parties hereto acknowledge and agree that, as of the Amendment No. 3 Effective Date, Exhibit E attached hereto is a complete reflection of the Collateral Accounts for all Secured Parties and Annex I in the form of Exhibit E attached hereto amends, restates and replaces Annex I in the Control Agreement in effect immediately prior to the Amendment No. 3 Effective Date. |
3.1 | This Agreement and the Kodiak Pay-off Amendments constitute an Incremental Agreement for purposes of Section 2.15(a) of the Amended Loan Agreement. |
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3.2 | Immediately upon the occurrence of the Kodiak Pay-off Amendments Effective Time, each Kodiak Pay-off Loan Lender acknowledges and agrees hereby that (i) it shall be bound by the provisions of the Amended Loan Agreement (as amended hereby) as a “Lender” and an “Additional Lender”, (ii) the Kodiak Pay-off Loan Commitments shall constitute “Additional Loan Commitments” under the Amended Loan Agreement (as amended hereby) and (iii) any and all Kodiak Pay-off Loans shall constitute “Additional Loans” and “Loans”, in each case, under and as defined in the Amended Loan Agreement (as amended by this Agreement). |
5.1 | Conditions to the C6 Amendments. |
5.2 | Conditions to the Kodiak Pay-off Amendments. Together with the occurrence of the C6 Amendments Effective Time: |
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in each case, the effectiveness of which shall be subject to the satisfaction or waiver of the conditions precedent to the funding of the Kodiak Pay-off Loans (which shall be limited to the conditions precedent expressly set forth in the Amended Loan Agreement).
5.3 | Conditions to the C6 Amendments and Kodiak Pay-off Amendments. |
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6.1 | The execution, delivery and performance by Borrower of this Agreement has been duly authorized by all necessary corporate or other organizational action, and does not and will not (a) contravene the terms of any of its respective Organization Documents (as amended hereby); (b) result in any breach, or default under, any Contractual Obligation to which it is a party or by which it is bound; (c) result in the creation or imposition of any Transfer Restriction or Lien on the Collateral (other than the Permissible Transfer Restrictions) under, or require any payment to be made under, any Contractual Obligation; (d) violate any written corporate policy of any Issuer applicable to Borrower or, to Borrower’s knowledge, affecting Borrower; (e) violate any order, injunction, writ or decree of any Governmental Authority or any arbitral award to which Borrower is subject; or (f) violate any Law, except, in the case of clauses (b), (d), (e), and (f) above, where any such breach or violation, either individually or in the aggregate, has not had and could not reasonably be expected to have a Material Adverse Effect. |
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6.2 | No Default exists as of the date hereof. |
7.1 | Validity of Obligations. Borrower hereby ratifies and reaffirms the validity, enforceability and binding nature of the Obligations (including in respect to the Kodiak Pay-off Loans). |
7.2 | Validity of Liens and Loan Documents. Borrower hereby ratifies and reaffirms the validity and enforceability (without defense, counterclaim or offset of any kind) of the Liens and security interests granted in the Security Agreement to secure the Obligations and hereby confirms and agrees that (i) notwithstanding the effectiveness of this Agreement, and except as expressly amended by this Agreement, each such Loan Document is, and shall continue to be, in full force and effect and each is hereby ratified and confirmed in all respects, except that, on and after the effectiveness of this Agreement, each reference in the Loan Documents to the “Loan Agreement”, “thereunder”, “thereof” (and each reference in the Loan Agreement to this “Agreement”, “hereunder” or “hereof”) or words of like import shall mean and be a reference to the Amended Loan Agreement and (ii) upon the occurrence of the Amendment No. 3 Effective Date, the Kodiak Pay-off Loan Lenders shall be a “Lender,” “Additional Lender,” “Applicable Lender” and “Secured Party”. |
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15.1 | SUBMISSION TO JURISDICTION. EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE EXCLUSIVE JURISDICTION OF ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN THE STATE, COUNTY AND CITY OF NEW YORK, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, 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 SHALL BE HEARD AND DETERMINED IN SUCH STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES |
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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. |
15.2 | WAIVER OF VENUE. EACH OF THE PARTIES HERETO 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 IN ANY COURT REFERRED TO IN SECTION 15.1. 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. |
15.3 | SERVICE OF PROCESS. EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 10.02 OF THE AMENDED LOAN AGREEMENT. NOTHING IN THIS AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW. |
15.4 | 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 THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). |
18.1 | In the event that any Lender that is a Covered Entity becomes subject to a proceeding under a U.S. Special Resolution Regime, the transfer from such Lender of the Amended Loan Agreement, and any interest and obligation in or under the Amended Loan Agreement, will be effective to the same extent as the transfer would be effective under the U.S. Special Resolution Regime if the Amended Loan Agreement, and any such interest and obligation, were governed by the laws of the United States or a state of the United States. |
18.2 | In the event that any Lender that is a Covered Entity or a BHC Act Affiliate of such Lender becomes subject to a proceeding under a U.S. Special Resolution Regime, Default Rights under the Amended Loan Agreement that may be exercised against such Lender are permitted to be exercised to no greater extent than such Default Rights could be exercised under the U.S. Special Resolution Regime if the Amended Loan Agreement were governed by the laws of the United States or a state of the United States. |
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18.3 | Definitions. |
(i) | a “covered entity” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 252.82(b); |
(ii) | a “covered bank” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 47.3(b); or |
(iii) | a “covered FSI” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 382.2(b). |
[Signature Pages Follow]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first above written.
LBC CHEETAH 6, LLC, as Borrower
By: LMC Cheetah 1, LLC, as sole
member and a manager of LBC CHEETAH 6, LLC
By: Liberty Broadband Corporation, as sole member and manager of LMC
CHEETAH 1, LLC
By: __________________________________
Name:
Title:
WILMINGTON TRUST, NATIONAL ASSOCIATION, as Administrative Agent
By:
Name:
Title:
[Signature Page to Amendment No. 3 to Cheetah 6 Margin Loan Agreement]
BNP PARIBAS, as Calculation Agent
By:
Name:
Title:
By:
Name:
Title:
[Signature Page to Amendment No. 3 to Cheetah 6 Margin Loan Agreement]
BNP PARIBAS, as a Lender
By:
Name:
Title:
By:
Name:
Title:
[Signature Page to Amendment No. 3 to Cheetah 6 Margin Loan Agreement]
JPMORGAN CHASE BANK, N.A., LONDON BRANCH, as a Kodiak Pay-off Loan Lender
By:
Name:
Title:
[Signature Page to Amendment No. 3 to Cheetah 6 Margin Loan Agreement]
MUFG Union Bank, N.A., as a Kodiak Pay-off Loan Lender
By:
Name:
Title:
[Signature Page to Amendment No. 3 to Cheetah 6 Margin Loan Agreement]
CREDIT AGRICOLE CORPORATE AND INVESTMENT BANK, as a Kodiak Pay-off Loan Lender
By:
Name:
Title:
By:
Name:
Title:
[Signature Page to Amendment No. 3 to Cheetah 6 Margin Loan Agreement]
CREDIT AGRICOLE CORPORATE AND INVESTMENT BANK, as a Lender
By:
Name:
Title:
By:
Name:
Title:
[Signature Page to Amendment No. 3 to Cheetah 6 Margin Loan Agreement]
DEUTSCHE BANK ag, london branch, as a Kodiak Pay-off Loan Lender
By:
Name:
Title:
By:
Name:
Title:
[Signature Page to Amendment No. 3 to Cheetah 6 Margin Loan Agreement]
ROYAL BANK OF CANADA, as a Lender
By:
Name:
Title:
[Signature Page to Amendment No. 3 to Cheetah 6 Margin Loan Agreement]
CITIBANK, N.A., as a Kodiak Pay-off Loan Lender
By:
Name:
Title:
[Signature Page to Amendment No. 3 to Cheetah 6 Margin Loan Agreement]
UBS AG, LONDON BRANCH, as a Lender
By:
Name:
Title:
By:
Name:
Title:
[Signature Page to Amendment No. 3 to Cheetah 6 Margin Loan Agreement]
MIZUHO BANK, LTD., as a Lender
By:
Name:
Title:
[Signature Page to Amendment No. 3 to Cheetah 6 Margin Loan Agreement]
CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH, as a Kodiak Pay-off Loan Lender
By:
Name:
Title:
By:
Name:
Title:
[Signature Page to Amendment No. 3 to Cheetah 6 Margin Loan Agreement]
solely for purposes of sections 2.3 and 13
U.S. BANK NATIONAL ASSOCIATION, as Securities Intermediary
By:
Name:
Title:
[Signature Page to Amendment No. 3 to Cheetah 6 Margin Loan Agreement]
Exhibit A
Execution Version
FORM OF
MARGIN LOAN AGREEMENT
as amended by that certain Amendment No. 1 to Margin Loan Agreement, dated as of August 24, 2018,
and
as further amended by that certain Amendment No. 2 to Margin Loan Agreement and Amendment No. 1 to Collateral Account Control Agreement, dated as of August 19, 2019,
and
as further amended by that certain Amendment No. 3 to Margin Loan Agreement and Amendment No. 2 to Collateral Account Control Agreement, dated as of August 12, 2020
by and among
LBC CHEETAH 6, LLC,
as the Borrower
VARIOUS LENDERS,
BNP PARIBAS,
as the Calculation Agent,
and
WILMINGTON TRUST, NATIONAL ASSOCIATION,
as the Administrative Agent
ii
ARTICLE I DEFINITIONS AND ACCOUNTING TERMS2
1.01.Defined Terms2
1.02.Other Interpretive Provisions57
1.03.Accounting Terms58
1.04.Times of Day59
1.05.Timing of Payment and Performance.59
1.06.Divisions.59
1.07.Rates.59
ARTICLE II THE LOANS60
2.01.The Loans60
2.02.Funding of the Loans60
2.03.Repayment of the Loans61
2.04.Voluntary Prepayments61
2.05.Mandatory Prepayments62
2.06.Interest and Fees63
2.07.Computations67
2.08.Termination of Commitments67
2.09.LTV Maintenance; LTV Notice.68
2.10.Evidence of Debt76
2.11.Payments Generally.76
2.12.Sharing of Payments, Etc.79
2.13.Defaulting Lender79
2.14.Rebalancing81
2.15.Additional Commitments and Loans.81
ARTICLE III TAXES, YIELD PROTECTION AND ILLEGALITY84
3.01.Taxes84
3.02.Illegality88
3.03.Increased Costs; Reserves89
3.04.Compensation for Losses90
3.05.Mitigation Obligations91
ARTICLE IV CONDITIONS PRECEDENT TO THE LOAN92
4.01.Conditions Precedent to Closing Date and Funding Date92
4.02.Conditions Precedent to all Loans other than Kodiak Pay-off Loans94
4.03.Conditions Precedent to Kodiak Pay-off Loans95
ARTICLE V REPRESENTATIONS AND WARRANTIES97
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5.01.Existence, Qualification and Power97
5.02.Authorization; No Contravention97
5.03.Binding Effect97
5.04.Financial Statements; No Material Adverse Effect.97
5.05.Disclosure98
5.06.Litigation98
5.07.No Default98
5.08.Compliance with Laws98
5.09.Taxes98
5.10.Assets; Liens99
5.11.Governmental Authorization; Other Consents99
5.12.Governmental Regulation99
5.13.ERISA and Related Matters99
5.14.Organization Documents99
5.15.Margin Regulations; Investment Company Act100
5.16.Subsidiaries; Equity Interests100
5.17.Solvency100
5.18.Trading and Other Restrictions100
5.19.USA PATRIOT Act100
5.20.No Material Non-public Information101
5.21.Bulk Sale and Private Sale101
5.22.Status of Shares.101
5.23.Special Purpose Entity/Separateness101
5.24.Reporting Obligations101
5.25.Restricted Transactions102
5.26.Anti-Corruption Laws and Sanctions102
ARTICLE VI AFFIRMATIVE COVENANTS102
6.01.Financial Statements102
6.02.Certificates; Other Information102
6.03.Notices103
6.04.Preservation of Existence, Etc.104
6.05.Special Purpose Entity/Separateness104
6.06.Payment of Taxes and Claims104
6.07.Compliance with Laws and Material Contracts104
6.08.Books and Records105
6.09.Use of Proceeds105
6.10.Purpose Statement105
6.11.Further Assurances105
ARTICLE VII NEGATIVE COVENANTS106
7.01.Restricted Transaction106
7.02.Liens106
7.03.Indebtedness106
7.04.Dispositions106
ii
7.05.Investments107
7.06.Amendments or Waivers of Organization Documents107
7.07.Restricted Payments107
7.08.No Impairment of Collateral107
7.09.Fundamental Changes107
7.10.Limitation on Borrower’s Activities107
7.11.Status of Shares108
7.12.Investment Company108
7.13.Transactions with Affiliates108
7.14.No Subsidiaries108
7.15.ERISA and Related Matters108
7.16.Regulation of the Board of Governors109
7.17.Certification of Public Information109
7.18.Name, Form and Location109
7.19.Limitation on Certain Sales109
7.20.Anti-Terrorism Laws109
7.21.Dispositions of Shares by Parent.110
ARTICLE VIII EVENTS OF DEFAULT AND REMEDIES110
8.01.Events of Default110
8.02.Remedies upon Event of Default112
8.03.Application of Funds113
8.04.Certain Provisions Related to Applicable Lenders114
ARTICLE IX AGENTS115
9.01.Authorization and Authority115
9.02.Agent Individually116
9.03.Duties of the Agents; Exculpatory Provisions117
9.04.Reliance by Agent119
9.05.Delegation of Duties119
9.06.Resignation of an Agent.119
9.07.Non-Reliance on the Agents and Other Lenders120
9.08.Lenders’ Rights with Respect to Collateral121
9.09.Withholding Taxes123
9.10.Administrative Agent May File Proofs of Claim123
ARTICLE X MISCELLANEOUS124
10.01.Amendments, Etc.124
10.02.Notices; Effectiveness; Electronic Communications127
10.03.No Waiver; Cumulative Remedies129
10.04.Expenses; Indemnity; Damage Waiver129
10.05.Payments Set Aside131
10.06.Successors and Assigns131
10.07.Confidentiality135
iii
10.08.Right of Setoff136
10.09.Interest Rate Limitation136
10.10.Counterparts; Integration; Effectiveness136
10.11.Survival of Representations and Warranties137
10.12.Severability137
10.13.Governing Law; Jurisdiction; Etc.137
10.14. |
137 |
10.14.Waiver of Jury Trial138
10.15.USA PATRIOT Act Notice138
10.16.Bankruptcy Code139
10.17.No Recourse to Affiliates of Borrower139
10.18.Conflicts139
10.19.Electronic Execution of Assignments and Certain Other Documents140
10.20.No Advisory or Fiduciary Relationship140
10.21.Acknowledgment and Consent to Bail-In of Affected Financial Institutions141
iv
SCHEDULES
SCHEDULE I TO MARGIN LOAN AGREEMENT
SCHEDULE 10.02 TO MARGIN LOAN AGREEMENT
ACollateral Account Control Agreement
CCompliance Certificate
GSolvency Certificate
H-1Borrowing Request
H-2Voluntary Prepayment Notice
I-1U.S. Tax Compliance Certificate
I-2U.S. Tax Compliance Certificate
I-3U.S. Tax Compliance Certificate
I-4U.S. Tax Compliance Certificate
JPIK Interest Election Notice
KCollateral Reallocation Instruction
LMandatory Prepayment Notice
MCollateral Shortfall Notice
v
This MARGIN LOAN AGREEMENT (as amended by that certain Amendment No. 1 (as defined below), as further amended by that certain Amendment No. 2 (as defined below), as further amended by that certain Amendment No. 3 (as defined below), and as may be further amended, restated, amended and restated, supplemented or otherwise modified from time to time, this “Agreement”), dated as of August 31, 2017, is entered into by and among LBC CHEETAH 6, LLC, a Delaware limited liability company, as the Borrower (the “Borrower”), Bank of America, N.A., as Calculation Agent from the Closing Date until the Assignment Effective Time (in such capacity, the “Original Calculation Agent”), bnp paribas, as Calculation Agent as of the Assignment Effective Time and thereafter (in such capacity, together with its successors and assigns in such capacity, the “Successor Calculation Agent”), Bank of America, N.A., as Administrative Agent from the Closing Date until the Assignment Effective Time (in such capacity, the “Original Administrative Agent”), Wilmington Trust, National Association, as Administrative Agent as of the Assignment Effective Time and thereafter (in such capacity, together with its successors and assigns in such capacity, the “Successor Administrative Agent”), and the Lenders (as defined below) from time to time party hereto.
On the Closing Date (as defined below), the Borrower requested that the Lenders extend credit in the form of (i) Initial Loans (as defined below) in an aggregate principal amount not exceeding the aggregate principal amount of the Initial Loan Commitments (as defined below) and (ii) Delayed Draw Loans (as defined below) in an aggregate principal amount not exceeding the aggregate principal amount of the Delayed Draw Commitments (as defined below) and the Lenders made such Initial Loans on the Funding Date and made certain additional Delayed Draw Loans in accordance with the terms of this Agreement (as in effect immediately prior to the effectiveness of Amendment No. 1). On the Amendment No. 1 Effective Date, each Lender party to the Agreement (as in effect immediately prior to the effectiveness of Amendment No. 1) agreed to make certain amendments to the Agreement (as in effect immediately prior to the effectiveness of Amendment No. 1) in accordance with and pursuant to Amendment No. 1. On the Amendment No. 1 Effective Date, the aggregate principal amount of Loans outstanding was $525,000,000, including $500,000,000 of Initial Loans and $25,000,000 of Delayed Draw Loans.
The Borrower has further requested that each Lender and each Lender has agreed to (i) make certain amendments to this Agreement (as in effect immediately prior to the effectiveness of Amendment No. 2) in accordance with and as set forth in Amendment No. 2 and (ii) make any additional Delayed Draw Loans requested by the Borrower, subject to and in accordance with this Agreement. On the Amendment No. 2 Effective Date, the aggregate principal amount of Loans outstanding is $525,000,000, including $500,000,000 of Initial Loans and $25,000,000 of Delayed Draw Loans.
The Borrower has further requested that each Lender and each Lender has agreed to (i) make certain amendments to this Agreement (as in effect immediately prior to the effectiveness of Amendment No. 3) in accordance with and as set forth in
1
Amendment No. 3, (ii) make any additional Delayed Draw Loans requested by the Borrower, subject to and in accordance with this Agreement and (iii) make any Kodiak Pay-off Loans requested by the Borrower, subject to and in accordance with this Agreement. On the Amendment No. 3 Effective Date, the aggregate principal amount of Loans outstanding is $600,000,000, including $500,000,000 of Initial Loans and $100,000,000 of Delayed Draw Loans.
In consideration of the mutual covenants and agreements herein contained, the parties hereto covenant and agree as follows:
“Activities” has the meaning specified in Section 9.02(b).
“Additional Lender” means a Lender with an Additional Loan Commitment, unless and until (a) such Person ceases to be a “Lender” hereunder as a result of an assignment pursuant to Section 10.06, (b) all of the Additional Loan Commitments and Additional Loans, if any, held by such Person have been assigned pursuant to Section 10.06 or (c) all of the Additional Loan Commitments, if any, held by any such Person have been terminated and the Obligations relating to such Person’s Additional Loans (other than contingent obligations for which no claim has been made), if any, owing to such Person have been paid in full; provided, however, that the obligations of such Person as a Lender that the Loan Documents expressly provide survive the termination of the Commitments held by such Person and the payment in full of the Obligations owing to such Person shall survive such termination and payment. As of the Kodiak Pay-off Amendments Effective Time, unless and until a GCI Liberty Merger Agreement Termination occurs, each Kodiak Pay-off Loan Lender shall be an Additional Lender.
“Additional Loan Commitment” means, with respect to each Lender, the commitment, if any, of such Lender to make Additional Loans hereunder up to the amount set forth in the applicable Incremental Agreement, and/or in any Assignment and Assumption pursuant to which such Lender assumes an Additional Loan Commitment, as applicable, as the same may be (a) reduced from time to time or terminated pursuant to this Agreement and (b) increased from time to time pursuant to Section 2.15 or assignments to such Lender pursuant to Section 10.06. As of the Kodiak Pay-off Amendments Effective Time, unless and until a GCI Liberty Merger Agreement Termination occurs, each Kodiak Pay-off Loan Commitment shall be an Additional Loan Commitment hereunder.
“Additional Loans” has the meaning specified in Section 2.15(a). As of the Kodiak Pay-off Loan Funding Date, such Kodiak Pay-off Loans shall be Additional Loans hereunder.
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“Additional Loans Closing Date” has the meaning specified in Section 2.15(a).
“Administrative Agent” means, from the Closing Date until the Assignment Effective Time, the Original Administrative Agent and, as of the Assignment Effective Time and thereafter, the Successor Administrative Agent.
“Advance/Newhouse Proxy” means the Proxy and Right of First Refusal Agreement, dated as of May 18, 2016, by and among Parent, Advance/Newhouse Partnership, Charter and CCH I, LLC, as amended by the Side Letter, and as further amended, restated, amended and restated, supplemented or otherwise modified from time to time.
“Affected Financial Institution” means (a) any EEA Financial Institution or (b) any UK Financial Institution.
“Affiliate” means, with respect to any Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified.
“Affiliated Persons” mean, with respect to any specified natural Person, (a) such specified Person’s parents, spouse, siblings, descendants, step children, step grandchildren, nieces and nephews and their respective spouses, (b) the estate, legatees and devisees of such specified Person and each of the Persons referred to in clause (a) and (c) any company, partnership, trust or other entity or investment vehicle Controlled by any of the Persons referred to in clause (a) or (b) or the holdings of which are for the primary benefit of any of such Persons.
“Agency Assignment Agreement” has the meaning specified in Amendment No. 1.
“Agent” means each of the Administrative Agent and the Calculation Agent.
“Agent Account” means such account of the Administrative Agent as is designated in writing from time to time by the Administrative Agent to the Borrower and the Lenders for such purpose.
“Agent Fee Letter” means that certain letter agreement, dated the Amendment No. 1 Effective Date, between the Borrower and the Administrative Agent.
“Agent’s Group” has the meaning specified in Section 9.02(b).
“Agent Parties” has the meaning specified in Section 10.02(e).
“Agented Lender” means any Lender who has taken a Loan hereunder by assignment, but has not yet entered into joinders to the Security Agreement and the Collateral Account Control Agreement with respect to its Ratable Share of the Collateral
3
securing the Obligations. Any reference in the Loan Documents to an Applicable Lender with respect to an Agented Lender shall be to the Applicable Lender who assigned a Loan to such Agented Lender, and vice versa.
“Agreement” has the meaning specified in the introductory paragraph hereto.
“Amendment No. 1” means that certain Amendment No. 1 to Margin Loan Agreement, dated as of the Amendment No. 1 Effective Date, by and among the Borrower, the Lenders party thereto and each Agent.
“Amendment No. 1 Effective Date” means August 24, 2018.
“Amendment No. 2” means that certain Amendment No. 2 to Margin Loan Agreement and Amendment No. 1 to Collateral Account Control Agreement, dated as of the Amendment No. 2 Effective Date, by and among the Borrower, the Lenders party thereto and each Agent.
“Amendment No. 2 Effective Date” means August 19, 2019.
“Amendment No. 3” means that certain Amendment No. 3 to Margin Loan Agreement and Amendment No. 2 to Collateral Account Control Agreement, dated as of August 12, 2020, by and among the Borrower, the Lenders party thereto and each Agent.
“Amendment No. 3 Effective Date” means the date on which the C6 Amendment Effective Time occurs and the Kodiak Pay-off Amendments Effective Time occurs, which such date is August 12, 2020.
“Anti-Corruption Laws” means all laws, rules, and regulations of any jurisdiction applicable to the Borrower or any of its Subsidiaries from time to time concerning or relating to bribery or corruption, including, without limitation, the United States Foreign Corrupt Practices Act of 1977.
“Anti-Terrorism Laws” has the meaning specified in Section 5.19.
“Applicable Collateral” shall have the meaning assigned to it in the Security Agreement.
“Applicable Lender” means any Lender that has, or purports to have, control (other than a Lender that is an Agented Lender solely as it relates to that portion of the Collateral for which such Lender is an Agented Lender) over any portion of the Collateral pursuant to the Collateral Account Control Agreement (it being understood that the termination of the Collateral Account Control Agreement (or the termination of the Collateral Account Control Agreement with respect to such Lender’s Ratable Share of the Collateral) without the written consent of the relevant Applicable Lender shall not result in such Lender ceasing to be an Applicable Lender).
4
“Applicable Percentage” means, with respect to any Lender at any time, the percentage (carried out to the ninth decimal place) obtained by dividing (a) the aggregate principal amount of such Lender’s Loans outstanding under this Agreement (or (i) in the case of Sections 2.06(d) and (e), such Lender’s aggregate principal amount of applicable Commitments outstanding under this Agreement or (ii) in the case of Section 2.11(c), such Lender’s aggregate principal amount of Initial Loan Commitments, Delayed Draw Commitments and/or Additional Loan Commitments, as applicable, outstanding under this Agreement on the date of determination) by (b) the sum of the aggregate principal amount of the Loans outstanding under this Agreement (or (x) in the case of Sections 2.06(d) and (e), the aggregate principal amount of all Commitments outstanding under this Agreement or (y) in the case of Section 2.11(c), the aggregate principal amount of all Initial Loan Commitments, Delayed Draw Commitments and/or Additional Loan Commitments, as applicable, outstanding under this Agreement on the date of determination). Notwithstanding the foregoing, the Applicable Percentage of any Applicable Lender, when used with respect to any determination related to Collateral or payment or proceeds of Collateral, shall include the Applicable Percentage of each Agented Lender that such Applicable Lender holds Collateral for and the Applicable Percentage for such purpose of any Agented Lender with respect to such Collateral or payment or proceeds shall be zero (and if any Agented Lender has multiple Applicable Lenders, such Applicable Percentage shall be allocated proportionately among the Collateral held by such Applicable Lenders).
“Approved Fund” means any Fund that is, at the time of determination, administered or managed by (a) a Lender, (b) an Affiliate of any Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender.
“Assignment and Assumption” means an agreement substantially in the form of Exhibit E.
“Assignment Effective Time” means the Effective Time, as such term is defined in the Agency Assignment Agreement (as defined in Amendment No. 1).
“Attributable Debt” means, on any date, (a) in respect of any obligation of a Person to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, the amount thereof that would appear as a capital lease on a balance sheet of such Person prepared as of such date in accordance with GAAP, and (b) in respect of any Synthetic Lease Obligation, the capitalized amount of the remaining lease payments under the relevant lease that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP if such lease were accounted for as a capital lease.
“Availability Period” means (a) with respect to Delayed Draw Loans, the period from and including the first Business Day following the Amendment No. 3 Effective Date to the earlier of (x) the twelve (12) month anniversary of the Amendment No. 3 Effective Date and (y) the date of termination of all of the Delayed Draw Commitments, (b) with respect to Additional Loans other than Kodiak Pay-off Loans, the period from and including the relevant Additional Loans Closing Date to the earlier of (x)
5
thirty (30) days prior to the Maturity Date of such Additional Loans and (y) the date of termination of all of the Additional Loan Commitments and (c) with respect to the Kodiak Pay-off Loans, the period from and including the Amendment No. 3 Effective Date to the earlier of (x) the Maturity Date, (y) the GCI Liberty Merger Effective Date and (z) the date on which a GCI Liberty Merger Agreement Termination occurs.
“Bail-In Legislation” means, 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 regulation 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 the United States Bankruptcy Code.
“Base Rate” means, for any day, a fluctuating rate per annum equal to the highest of (a) the Federal Funds Rate plus 1/2 of 1%, (b) the Prime Rate and (c) LIBOR plus 1%; provided that, if the Base Rate as otherwise determined pursuant to this definition shall be less than zero, such rate shall be deemed zero for purposes of this Agreement.
“Base Rate Loan” means any Loan bearing interest at a rate determined by reference to the Base Rate.
“Base Spread” means (a) from and after the Closing Date until the Kodiak Pay-off Loan Funding Date, [__] basis points per annum and (b) from and after the Kodiak Pay-off Loan Funding Date, [__] basis points per annum.
6
“Benchmark Replacement Adjustment” shall mean, with respect to any replacement of the then-current Benchmark with an Unadjusted Benchmark Replacement for each applicable Interest Period, the spread adjustment, or method for calculating or determining such spread adjustment, (which may be a positive or negative value or zero) that has been selected by the Agents and the Borrower giving due consideration to (i) any selection or recommendation of a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of the then-current Benchmark with the applicable Unadjusted Benchmark Replacement by the Relevant Governmental Body and/or (ii) any evolving or then-prevailing market convention for determining a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of the then-current Benchmark with the applicable Unadjusted Benchmark Replacement for U.S. dollar-denominated syndicated credit facilities at such time; provided, further, that any such Benchmark Replacement Adjustment shall be administratively feasible as determined by the Administrative Agent in its reasonable discretion (in non-binding consultation with the Borrower).
“Benchmark Replacement Conforming Changes” shall mean, with respect to any Benchmark Replacement, any technical, administrative or operational changes (including changes to the definition of “Base Rate”, the definition of “Interest Period”, timing and frequency of determining rates and making payments of interest and other administrative matters) that the Administrative Agent decides in its reasonable discretion (in consultation with the Borrower and the Calculation Agent) may be appropriate to reflect the adoption and implementation of such Benchmark Replacement and to permit the administration thereof by the Administrative Agent in a manner substantially consistent with market practice (or, if the Administrative Agent 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 the Benchmark Replacement exists, in such other manner of administration as the Administrative Agent (x) decides (in consultation with the Borrower and the Calculation Agent) is reasonably necessary in connection with the administration of this Agreement and the other Loan Documents and (y) determines in its reasonable discretion (in non-binding consultation with the Borrower) that it is administratively feasible).
“Benchmark Replacement Date” shall mean the earlier to occur of the following events with respect to the then-current Benchmark:
(1) in the case of clause (1) or (2) of the definition of “Benchmark Transition Event”, the later of (a) the date of the public statement or publication of information referenced therein and (b) the date on which the administrator of the then-
7
current Benchmark (or the published component used in the calculation thereof) permanently or indefinitely ceases to provide the Benchmark (or such component);
(2) in the case of clause (3) of the definition of “Benchmark Transition Event”, the date of the public statement or publication of information referenced therein; or
(3) in the case of an Early Opt-in Election, the date specified by the Administrative Agent or the Required Lenders, as applicable, by notice to the Borrower, the Administrative Agent (in the case of such notice by the Required Lenders) and the Lenders.
“Benchmark Transition Event” shall mean the occurrence of one or more of the following events with respect to the then-current Benchmark:
(1) a public statement or publication of information by or on behalf of the administrator of the then-current Benchmark (or the published component used in the calculation thereof), announcing that such administrator has ceased or will cease to provide the Benchmark (or such component), permanently or indefinitely, provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide the Benchmark (or such component);
(2) a public statement or publication of information by the regulatory supervisor for the administrator of the then-current Benchmark (or the published component used in the calculation thereof), the U.S. Federal Reserve System, an insolvency official with jurisdiction over the administrator for the Benchmark (or such component), a resolution authority with jurisdiction over the administrator for the Benchmark (or such component) or a court or an entity with similar insolvency or resolution authority over the administrator for the Benchmark (or such component), in each case which states that the administrator of the Benchmark (or such component) has ceased or will cease to provide LIBOR permanently or indefinitely, provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide the Benchmark (or such component); and/or
(3) a public statement or publication of information by the regulatory supervisor for the administrator of the then-current Benchmark (or the published component used in the calculation thereof) announcing that the Benchmark (or such component)is no longer representative.
“Benchmark Transition Start Date” shall mean (a) in the case of a Benchmark Transition Event, the earlier of (i) the applicable Benchmark Replacement Date and (ii) if such Benchmark Transition Event is a public statement or publication of information of a prospective event, the 90th day prior to the expected date of such event as of such public statement or publication of information (or if the expected date of such prospective event is fewer than 90 days after such statement or publication, the date of such statement or publication) and (b) in the case of an Early Opt-in Election, the date specified by the Administrative Agent or the Required Lenders, as applicable, by notice
8
to the Borrower, the Administrative Agent (in the case of such notice by the Required Lenders) and the Lenders.
“Benchmark Unavailability Period” shall mean, if a Benchmark Transition Event and its related Benchmark Replacement Date have occurred with respect to the then-current Benchmark and solely to the extent that the Benchmark has not been replaced with a Benchmark Replacement, the period (x) beginning at the time that such Benchmark Replacement Date has occurred if, at such time, no Benchmark Replacement has replaced the Benchmark for all purposes hereunder in accordance with Section 2.06(i) and (y) ending at the time that a Benchmark Replacement has replaced the Benchmark for all purposes hereunder pursuant to Section 2.06(i).
“Beneficial Ownership Regulation” shall mean 31 C.F.R. § 1010.230.
“Borrower” has the meaning specified in the introductory paragraph hereto.
“Borrower Financial Statements” means a statement of assets and liabilities of the Borrower, dated as of the Closing Date, which shall (a) demonstrate that, after giving effect to the transactions to be consummated on the Closing Date and the Funding Date, the Borrower will have no other assets other than Permitted Assets, and (b) contain a list of all Indebtedness, other liabilities and/or commitments of the Borrower that are individually in excess of $100,000 (other than Indebtedness, other liabilities and/or commitments arising under or evidenced by the Loan Documents), a description of the material terms of each item on such list (including the amount of any liability thereunder, whether contingent, direct or otherwise, the due date for each such liability, the total unfunded commitment, if any, and the rate of interest, if any, applicable thereto).
“Borrower Materials” has the meaning specified in Section 10.02(f).
“Borrower Sole Member” means LMC Cheetah 1, LLC, a Delaware limited liability company, or its successor (provided that such successor shall be the Parent or a direct or indirect wholly-owned Subsidiary of the Parent), in its capacity as the sole member and a manager of the Borrower.
“Borrowing” means, individually or collectively, as the context may require, an Initial Loan Borrowing or a Subsequent Loan Borrowing.
“Borrowing Request” means a request by the Borrower in accordance with the terms of Section 2.02 and substantially in the form of Exhibit H-1, or such other form as shall be approved by the Administrative Agent (including any form on an electronic platform or electronic transmission system as shall be approved by the Administrative Agent), appropriately completed and signed by a Responsible Officer.
“Business Day” means (i) any day other than a Saturday, Sunday or other day on which commercial banks are required or authorized to close under the Laws of, or are in fact closed, in New York and (ii) additionally, with respect to all notices, determinations, fundings and payments in connection with the Loans (excluding, for the
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avoidance of doubt, any notices or determinations pursuant to Section 2.09), any day on which dealings in Dollar deposits are conducted by and between banks in the London interbank eurodollar market.
“C6 Amendment Effective Time” has the meaning set forth in Amendment No. 3; for the avoidance of doubt, the date on which the C6 Amendment Effective Time occurred is the date of the Amendment No. 3.
“Calculation Agent” means, from the Closing Date until the Assignment Effective Time, the Original Calculation Agent and, as of the Assignment Effective Time and thereafter, the Successor Calculation Agent. All calculations and determinations made by the Calculation Agent shall be made in good faith and in a commercially reasonable manner.
“Cash” means Dollars in immediately available funds.
“Cash Equivalents” means any of the following (a) readily marketable direct obligations of the government of the United States or any agency or instrumentality thereof that are obligations unconditionally guaranteed by the full faith and credit of the government of the United States and have a maturity of not greater than 12 months from the date of issuance thereof or (b) insured certificates of deposit issued by, or time or demand deposits with the Custodian (so long as the Custodian is a member of the Federal Reserve System, the Custodian or its parent issues commercial paper rated at least P-1 (or the then equivalent grade) by Moody’s or A-1 (or the then equivalent grade) by S&P, and the long-term, unsecured debt of the Custodian is rated P-3 or better by Moody’s and A-3 or better by S&P), having a remaining maturity of not longer than one year.
“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 or application thereof by any Governmental Authority or (c) the making or issuance of any request, rule, guideline or directive (whether or not having the force of Law) by any Governmental Authority; provided that notwithstanding anything herein to the contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith and (y) all requests, rules, guidelines 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, 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 or issued.
“Change of Control” means (i) with respect to the Borrower, any event or transaction, or series of related events or transactions, as a result of which the Parent, directly or indirectly, is the “beneficial owner” of less than 100% of the Borrower’s Equity Interests and (ii) with respect to the Parent, (x) any event or transaction, or series of related events or transactions, as a result of which a “person” or “group” (other than a Permitted Holder) becomes the “beneficial owner” of sufficient shares of the Parent to
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entitle such “person” or “group” to exercise more than 30% of the total voting power of all such shares entitled to vote generally at elections of directors of the Parent (all within the meaning of Section 13(d) of the Exchange Act and the rules promulgated thereunder) and (y) the Permitted Holders do not beneficially own shares of the Parent having a percentage of the voting power of all shares entitled to vote generally at elections of directors of the Parent in excess of such voting power held by such “person” or “group”.
“Charter” means Charter Communications, Inc., a Delaware corporation.
“Charter Issuer” means Charter.
“Cheetah 4 CA Margin Loan Documents” means that certain Margin Loan Agreement among, inter alia, LMC Cheetah 4, LLC, as borrower, Liberty Broadband, as guarantor, the various lenders party thereto and Credit Agricole Corporate and Investment Bank, as administrative agent and as calculation agent, dated as of October 30, 2014, together with each other Loan Document, as such term is defined thereunder.
“Cheetah 4 Margin Loan Documents” means, collectively, the Cheetah 4 CA Margin Loan Documents and the Cheetah 4 SG Margin Loan Documents.
“Cheetah 4 SG Margin Loan Documents” means that certain Margin Loan Agreement among, inter alia, LMC Cheetah 4, LLC, as borrower, Liberty Broadband, as guarantor, the various lenders party thereto and Société Générale, as administrative agent and as calculation agent, dated as of October 30, 2014, together with each other Loan Document, as such term is defined thereunder.
“Cheetah 5 CA Margin Loan Documents” means that certain Margin Loan Agreement among, inter alia, LMC Cheetah 5, LLC, as borrower, Liberty Broadband, as guarantor, the various lenders party thereto and Credit Agricole Corporate and Investment Bank, as administrative agent and as calculation agent, dated as of March 21, 2016, together with each other Loan Document, as such term is defined thereunder.
“Cheetah 5 Margin Loan Documents” means, collectively, the Cheetah 5 CA Margin Loan Documents and the Cheetah 5 SG Margin Loan Documents.
“Cheetah 5 SG Margin Loan Documents” means that certain Margin Loan Agreement among, inter alia, LMC Cheetah 5, LLC, as borrower, Liberty Broadband, as guarantor, the various lenders party thereto and Société Générale, as administrative agent and calculation agent, dated as of March 21, 2016, together with each other Loan Document, as such term is defined thereunder.
“Cheetah Payoff” means (a) the repayment in full of all outstanding Loans and other Obligations (each such term under and as defined in each of the Cheetah 4 Margin Loan Documents and the Cheetah 5 Margin Loan Documents) under the Cheetah 4 Margin Loan Documents and the Cheetah 5 Margin Loan Documents, in each case, other than contingent obligations for which no claim has been made, and termination of all Commitments (under and as defined in each of the Cheetah 4 Margin Loan Documents or the Cheetah 5 Margin Loan Documents) or arrangements for such
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repayment and termination reasonably satisfactory to Administrative Agent shall have been made, (b) all Liens and guarantees in respect of such obligations shall have been terminated or released (or arrangements for such termination or release reasonably satisfactory to Administrative Agent shall have been made), and Administrative Agent shall have received (or will, on the date of the Cheetah Payoff, receive) evidence thereof reasonably satisfactory to Administrative Agent, and (c) Administrative Agent shall have received customary “pay-off” letters reasonably satisfactory to Administrative Agent with respect to such obligations and such UCC termination statements, collateral account control agreement terminations and other documents as Administrative Agent shall have reasonably requested to release and terminate of record the Liens securing such obligations and the Cheetah 4 Margin Loan Documents and the Cheetah 5 Margin Loan Documents, in each case, other than contingent obligations for which no claim has been made (or arrangements for such termination or release reasonably satisfactory to Administrative Agent shall have been made).
“CHTR Shares” means the Class A common stock, par value $0.001 per share, of the Charter Issuer; provided that following the occurrence of an Issuer 251(g) Merger Event with respect to the Charter Issuer, the shares of common stock issued by the resulting Delaware corporation shall be deemed to be the “CHTR Shares” (except for purposes of the definition of “Issuer 251(g) Merger Event”).
“Closing Date” means the first date on which all the conditions precedent in Section 4.01 are satisfied or waived by the Lenders in accordance with Section 10.01.
“Code” means the Internal Revenue Code of 1986.
“Collateral” has the meaning specified in the Security Agreement.
“Collateral Account” has the meaning specified in the Security Agreement.
“Collateral Account Control Agreement” means a Collateral Account Control Agreement in substantially the form of Exhibit A, by and among the Borrower, the Applicable Lenders party thereto, the Administrative Agent, the Calculation Agent and the Custodian (as the same may be amended, restated or otherwise modified from time to time and including any successor or replacement agreement).
“Collateral Documents” means the Security Agreement, the Collateral Account Control Agreement and any additional pledge or security agreements required to be delivered or authorized by the Borrower pursuant to the Loan Documents and any other instruments of assignment or other instruments, documents or agreements delivered or authorized by the Borrower pursuant to the foregoing as security for the Obligations.
“Collateral Reallocation Instruction” means an instruction provided by the Calculation Agent to the Custodian in connection with any rebalancing or reallocation of Collateral contemplated in Section 2.14 and substantially in the form of Exhibit K, or such other form as shall be approved by the Calculation Agent, such approval not to be unreasonably withheld.
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“Collateral Requirement” means on any date the requirement that:
“Collateral Shortfall” has the meaning specified in Section 2.09(a).
“Collateral Shortfall Notice” means a notice delivered in accordance with Section 2.09(a) and substantially in the form of Exhibit M.
“Collateral Shortfall Notice Day” has the meaning specified in Section 2.09(a)(i).
“Collateral Value” means, as of any date of determination, an amount equal to
(a) | the sum of: |
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(b) | the amount of any withholding Tax that, in the reasonable determination of the Calculation Agent, would be imposed on a prospective sale of Collateral on behalf of the Borrower upon exercise by a Secured Party of any remedies available to it under the Loan Documents as a result of a Change in Law or change of jurisdiction of any Issuer (provided that commercially reasonable steps were taken to designate another lending office in order to avoid or mitigate such imposition). |
“Commitment” means, as to each Lender, the aggregate amount of such Lender’s Initial Loan Commitment, Delayed Draw Commitment and/or Additional Loan Commitment, as applicable.
“Commitment Fee” has the meaning specified in Section 2.06(d).
“Communication” has the meaning specified in Section 7.17.
“Compliance Certificate” means a certificate substantially in the form of Exhibit C.
“Compounded SOFR” shall mean the compounded average of SOFRs for the applicable Corresponding Tenor, with the rate, or methodology for this rate, and conventions for this rate (which may include compounding in arrears with a lookback and/or suspension period as a mechanism to determine the interest amount payable prior to the end of each Interest Period) being established by the Administrative Agent (and the Required Lenders) in accordance with:
(1) the rate, or methodology for this rate, and conventions for this rate selected or recommended by the Relevant Governmental Body for determining compounded SOFR; or
(2) if, and to the extent that, the Administrative Agent determines that Compounded SOFR cannot be determined in accordance with clause (1) above, then the rate, or methodology for this rate, and conventions for this rate that the Administrative Agent determines in its reasonable discretion (in consultation with the Borrower) are substantially consistent with any evolving or then-prevailing market convention for determining compounded SOFR for U.S. dollar-denominated syndicated credit facilities at such time;
provided that if the Administrative Agent in its reasonable discretion (in consultation with the Borrower) decides that any such rate, methodology or convention determined in accordance with clause (1) or clause (2) is not administratively feasible for the Administrative Agent, then Compounded SOFR will be deemed unable to be determined for purposes of the definition of “Benchmark Replacement”.
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“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.
“Constrictive Amendment” means an amendment to an Issuer’s certificate of incorporation or other organizational documents that includes Transfer Restrictions (whether such Transfer Restrictions would become effective upon the effectiveness of such an amendment or upon the occurrence of some other event or condition) that the Calculation Agent determines in its reasonable discretion would be more restrictive in respect of any Applicable Lender’s ability to foreclose on the Pledged Shares and/or subsequently sell such Pledged Shares and/or otherwise exercise its rights with respect to the Pledged Shares under the Collateral Documents than the then applicable Permissible Transfer Restrictions.
“Contractual Obligation” means, as to any Person, any agreement, instrument or other undertaking to which such Person is a party or by which it or any of its property is bound.
“Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management, investments or policies (including investment policies) of a Person, whether through the ability to exercise voting power, by contract or otherwise. “Controlling” and “Controlled” have meanings correlative thereto.
“Controlling Shareholder” means, as of any date of determination, and without duplication, (a) the Borrower, (b) the Parent, (c) John C. Malone or Gregory B. Maffei, (d) any Affiliate of the Borrower, the Parent or John C. Malone or Gregory B. Maffei, that (i) is or may reasonably be considered to be a member of a “group” (as defined in Section 13(d)(3) or Section 13(g)(3) of the Exchange Act and the regulations promulgated thereunder) that includes the Borrower or any Affiliate that Controls the Borrower or the Parent or (ii) files a joint Schedule 13D or 13G under the Exchange Act with the Borrower or the Parent or any Affiliate that Controls the Borrower or the Parent or (e) any other Person (including any Affiliate of the Borrower, the Parent, John C. Malone or Gregory B. Maffei to the extent not included in clause (d) above but excluding a Person that holds securities and other investment property as a custodian for others (but for the avoidance of doubt, any Merger Shares or Spin-Off Shares, as applicable, held by any such custodian for a Controlling Shareholder shall be included for purposes of this clause (e))) that “beneficially owns” within the meaning of Rules 13d-3 or 16a-1(a)(2) of the Exchange Act more than ten percent (10.0%) of the total number of Merger Shares or Spin-Off Shares, as applicable, issued and outstanding as determined by (i) any publicly available information issued by the applicable Issuer or (ii) any publicly available filings with, or order, decree, notice or other release or publication of, any Governmental Authority.
“Corresponding Tenor” with respect to a Benchmark Replacement shall mean a tenor (including overnight) having approximately the same length (disregarding business day adjustment) as the applicable tenor for the applicable Interest Period with respect to the then-current Benchmark.
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“Custodian” shall have the meaning assigned to it in the Security Agreement.
“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 or other applicable jurisdictions from time to time in effect and affecting the rights of creditors generally.
“Default” means any event or condition that constitutes an Event of Default or that, with the giving of any notice, the passage of time, or both, would be an Event of Default.
“Defaulting Lender” means, subject to Section 2.13(d), any Lender or Agent that (a) has failed to (i) fund all or any portion of its Loans within two (2) Business Days of the date such Loans were required to be funded hereunder 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 and 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, (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) or (d) has, or has a direct or indirect parent company that has, (i) become the subject of a proceeding under any Debtor Relief Law, (ii) had appointed for it a receiver, custodian, conservator, trustee, administrator, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business or assets, including the Federal Deposit Insurance Corporation or any other state or federal regulatory authority acting in such a capacity or (iii) become the subject of a Bail-In Action; 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 (d) above, and of the effective date of such status, shall be conclusive and binding absent manifest error, and such Lender shall be deemed to be a Defaulting Lender (subject to Section 2.13(d)) as of the date established therefor by the Administrative Agent in a written notice of such determination, which shall be delivered by the Administrative Agent to the Borrower and each Lender promptly following such determination.
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“Delayed Draw Commitment” means, with respect to each Lender, the commitment, if any, of such Lender to make Delayed Draw Loans hereunder up to the amount set forth on (x) Part A of Schedule I, on the Closing Date, (y) Part B of Schedule I, on the Amendment No. 2 Effective Date or (y) Part C of Schedule I, on the Amendment No. 3 Effective Date, or in the Assignment and Assumption pursuant to which such Lender assumed its Delayed Draw Commitment, as applicable, as the same may be (a) reduced from time to time or terminated pursuant to this Agreement and (b) increased from time to time pursuant to assignments to such Lender pursuant to Section 10.06. The aggregate amount of the Delayed Draw Commitments on the Closing Date was $500,000,000; the aggregate amount of the Delayed Draw Commitments on the Amendment No. 3 Effective Date is $400,000,000.
“Delayed Draw Lender” means a Lender with a Delayed Draw Commitment or a Delayed Draw Loan, unless and until (a) such Person ceases to be a “Lender” hereunder as a result of an assignment pursuant to Section 10.06 or (b) all of the Delayed Draw Commitments and Delayed Draw Loans, if any, held by such Person have been assigned pursuant to Section 10.06 or (c) all of the Delayed Draw Commitments, if any, held by any such Person have been terminated and the Obligations relating to such Person’s Delayed Draw Commitments and Delayed Draw Loans (other than contingent or indemnity obligations for which no claim has been made), if any, owing to such Person have been paid in full; provided, however, that the obligations of such Person as a Lender that the Loan Documents expressly provide survive the termination of the Commitments held by such Person and the payment in full of the Obligations owing to such Person shall survive such termination and payment.
“Delayed Draw Loan” means a Loan made pursuant to the Delayed Draw Commitments to the Borrower pursuant to Section 2.01. The aggregate principal amount of all Delayed Draw Loans outstanding on the Amendment No. 3 Effective Date is $100,000,000.
“Designated Exchange” means any of The New York Stock Exchange, The NASDAQ Global Select Market, The NASDAQ Global Market, or any successor to any of the foregoing.
“Designated Jurisdiction” means any country or territory to the extent that such country or territory is the subject of any Sanctions.
“Disclosures” has the meaning specified in Section 5.05.
“Disposition” and “Dispose” means (a) the sale, transfer, license, lease, dividend, distribution or other disposition (including any sale and leaseback transaction) of any property by any Person, including any sale, assignment, transfer or other disposal, with or without recourse, of any notes or accounts receivable or any rights and claims associated therewith or any Equity Interests held by such Person and (b) with respect to any Indebtedness owed to a Person by another Person, forgiveness of any such Indebtedness by the Person to whom such Indebtedness is owed. For the avoidance of doubt, none of the following shall constitute a “Disposition”: (i) any pledge of Shares in
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connection with any transaction permitted by this Agreement and (ii) any Restricted Transaction.
“Disqualified Person” has the meaning specified in the definition of “Independent Manager”.
“Dollar” and “$” mean lawful money of the United States.
“DTC” means The Depository Trust Company or any of its successors.
“Early Closure” means the closure on any Exchange Day of the applicable Exchange prior to its scheduled closing time for such day unless such earlier closing time is announced by such Exchange at least one hour prior to the actual closing time for the regular trading session on such Exchange on such Exchange Day, as determined by the Calculation Agent.
“Early Opt-in Election” shall mean the occurrence of:
(1) (i) a determination by the Administrative Agent or (ii) a notification by the Required Lenders to the Administrative Agent (with a copy to the Borrower) that the Required Lenders have determined that U.S. dollar-denominated syndicated credit facilities being executed at such time, or that include language similar to that contained in Section 2.06(h) are being executed or amended, as applicable, to incorporate or adopt a new benchmark interest rate to replace the then-current Benchmark, and
(2) (i) the election by the Administrative Agent or (ii) the election by the Required Lenders to declare that an Early Opt-in Election has occurred and the provision, as applicable, by the Administrative Agent of written notice of such election to the Borrower and the Lenders or by the Required Lenders of written notice of such election to the Administrative Agent (with a copy to the Borrower).
“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 clause (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.
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“Eligible Assignee” means any Person (other than a natural person, a Defaulting Lender, an Affiliate of a Defaulting Lender or any Person who, upon becoming a Lender hereunder, would constitute a Defaulting Lender or an Affiliate of a Defaulting Lender) that is (a) a Lender; (b) an Affiliate of any Lender, (c) an Approved Fund or (d) a commercial bank, insurance company, investment or mutual fund or other entity that extends credit or makes loans in the ordinary course of its activities, and, in each case, that makes the Purchaser Representations; provided that notwithstanding the foregoing, “Eligible Assignee” shall not include a Permitted Holder, the Parent, the Borrower, the Borrower Sole Member, any Issuer or any Affiliate of the Parent, the Borrower, the Borrower Sole Member or any Issuer.
“Eligible Cash Collateral” means Cash and Cash Equivalents held in a Collateral Account subject to a valid and perfected first priority Lien in favor of an Applicable Lender, created under the Collateral Documents.
“Eligible Pledged Shares” means the Pledged Shares (a) held in a Collateral Account subject to a valid and perfected first priority Lien in favor of an Applicable Lender, created under the Collateral Documents, (b) which are in book-entry format, (c) which are listed for trading on a Designated Exchange, (d) which are not subject to Transfer Restrictions (other than the Permissible Transfer Restrictions) and (e) the aggregate number of which does not exceed the Maximum Share Number for such Shares at any time.
“Equity Interests” means with respect to any Person (including the Borrower), all of the shares of capital stock of (or other ownership or profit interests in) such Person, all of the warrants, options or other rights for the purchase or acquisition from such Person of shares of capital stock of (or other ownership or profit interests in) such Person, all of the securities convertible into or exchangeable for shares of capital stock of (or other ownership or profit interests in) such Person or warrants, rights or options for the purchase or acquisition from such Person of such shares (or such other interests), and all of the other ownership or profit interests in such Person (including partnership, member or trust interests therein), whether voting or nonvoting, and whether or not such shares, warrants, options, rights or other interests are outstanding on any date of determination.
“ERISA” means the United States Employee Retirement Income Security Act of 1974.
“ERISA Affiliate” means any trade or business (whether or not incorporated) under common control with the Borrower within the meaning of Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for purposes of provisions relating to Section 412 of the Code).
“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.
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“Event of Default” means the occurrence of any of the events described in Section 8.01.
“Exchange” means the Designated Exchange on which the applicable Shares are then listed.
“Exchange Act” means the Securities Exchange Act of 1934.
“Exchange Day” means any day an applicable Exchange is open for trading during its regular trading session (it being understood and agreed that any day on which an applicable Exchange is open for trading but is scheduled to close early in connection with a current or pending holiday shall constitute a regular trading session).
“Exchange Disruption” means any event (other than a scheduled early closure of an applicable Exchange on any Exchange Day) that materially disrupts or impairs the ability of market participants in general to effect transactions in, or obtain market values for, any Shares on such Shares’ applicable Exchange on any Scheduled Trading Day, as determined by the Calculation Agent.
“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 (i) such Lender acquires such interest in the Loans or Commitments (other than pursuant to an assignment request by the Borrower under Section 3.05) or (ii) such Lender changes its lending office, except, in each case, to the extent that, pursuant to Section 3.01, 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 3.01(g), and (d) any U.S. federal withholding Taxes imposed under FATCA.
“Existing Transfer Restrictions” means Transfer Restrictions under or arising in connection with (a) any lien routinely imposed on all securities by the Exchange, (b) the federal securities laws of the United States to the extent that Borrower (or, if applicable, a Lender or the Administrative Agent) is deemed or determined to be an “affiliate” (within the meaning of Rule 144) of any Issuer, (c) the Stockholders Agreement (as of the Closing Date except for such amendments that do not adversely affect the Lenders in any material respect) or (d) the Advance/Newhouse Proxy (as of the Closing Date except for such amendments that do not adversely affect the Lenders in any material respect).
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“FATCA” means Sections 1471 through 1474 of the Code as of the Closing Date (or any amended or successor version that is substantially comparable and not materially more onerous to comply with), any current or future Treasury Regulations or official interpretations thereof, any agreements entered into pursuant to Section 1471(b) of the Code and any intergovernmental agreement entered into in connection with the implementation of such sections of the Code, and any fiscal or regulatory litigation, rules or practices adopted pursuant to such intergovernmental agreement.
“FCPA” has the meaning specified in Section 5.19.
“Federal Funds Rate” means, for any day, the rate per annum equal to the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System arranged by federal funds brokers on such day, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such day; provided that (a) if such day is not a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day, and (b) if no such rate is published on such next succeeding Business Day, the average (rounded upwards, if necessary, to the next 1/100 of 1%) of the quotations for such day for such transactions received by the Administrative Agent from three (3) federal funds brokers of recognized standing selected by it.
“Federal Reserve Bank of New York’s Website” shall mean the website of the Federal Reserve Bank of New York at http://www.newyorkfed.org, or any successor source.
“Fee Letter” means that certain letter agreement, dated the Closing Date, between the Borrower and the Original Administrative Agent (under and as defined in the Agency Assignment Agreement).
“First Priority” means, with respect to any Lien purported to be created in any Collateral pursuant to any Collateral Document, that such Lien is the only Lien to which such Collateral is subject other than Permitted Liens.
“Floating Rate” means, with respect to an Interest Period, a per annum rate equal to the applicable LIBOR plus the Base Spread (or, if the Loans have been converted to Base Rate Loans pursuant to clause (i) of Section 3.02, the Base Rate applicable to each day during such period plus the Base Spread less 1%).
“Floating Rate Loan” means any Loan bearing interest at a rate determined by reference to the Floating Rate.
“Foreign Lender” means any Lender that is not a U.S. Person.
“Form G-3” means the “Statement of Purpose for an Extension of Credit Secured by Margin Stock by a Person Subject to Registration Under Regulation U– FR G-3” form published by the FRB.
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“Form U-1” means the “Statement of Purpose for an Extension of Credit Secured by Margin Stock – FR U-1” form published by the FRB.
“FRB” means the Board of Governors of the Federal Reserve System of the United States.
“Free Float” means, as of any date of determination, the quotient, expressed as a percentage, obtained by dividing (a) the total number of Free Shares issued and outstanding by (b) the total number of Merger Shares or Spin-Off Shares, as applicable, issued and outstanding as determined by the applicable Issuer’s most recent filings with the SEC.
“Free Shares” means, as of any date of determination, and without duplication, a number of Merger Shares or Spin-Off Shares, as applicable, equal to (i) the total number of Merger Shares or Spin-Off Shares, as applicable, then issued and outstanding as determined by the applicable Issuer’s most recent filings with the SEC minus (ii) the total number of Merger Shares or Spin-Off Shares, as applicable, “beneficially owned” within the meaning of Rules 13d-3 or 16a-1(a)(2) of the Exchange Act by Controlling Shareholders as determined by the applicable Issuer’s or such Controlling Shareholder’s most recent filings with the SEC, to the extent such information is reported in such filings. For purposes of clause (ii), with respect to a Long Position of a Controlling Shareholder, the total number of Merger Shares or Spin-Off Shares, as applicable, underlying such Long Position shall be used.
“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 business.
“Funding Date” has the meaning specified in Section 2.02(c); provided that in no event shall the Funding Date be later than the tenth (10th) Business Day following the Closing Date.
“GAAP” means generally accepted accounting principles in the United States set forth in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or such other principles as may be approved by a significant segment of the accounting profession in the United States, that are applicable to the circumstances as of the date of determination, consistently applied.
“GCI Liberty” has the meaning set forth in the definition of GCI Liberty Merger Effective Date.
“GCI Liberty Merger Agreement” has the meaning set forth in the definition of GCI Liberty Merger Effective Date.
“GCI Liberty Merger Agreement Termination” means the termination of the GCI Liberty Merger Agreement without the occurrence of the GCI Liberty Merger
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Effective Date or a public announcement by all of the parties thereto that they no longer intend to consummate the transactions contemplated by the GCI Liberty Merger Agreement, in each case, prior to the Maturity Date.
“GCI Liberty Merger Effective Date” means the time and date of the filing of the certificate of ownership and merger with the Secretary of State of the State of Delaware relating to the Upstream GCI Liberty Merger (as defined below) or at such later date and time as Liberty Broadband and GCI Liberty, Inc., a Delaware corporation (“GCI Liberty”), may agree upon and as is set forth in such certificate of ownership and merger in accordance with that certain Agreement and Plan of Merger (as amended, restated, amended and restated, modified or supplemented, the “GCI Liberty Merger Agreement”), dated as of August 6, 2020, by and among, inter alia, Liberty Broadband, Grizzly Merger Sub I, LLC, a single member Delaware limited liability company and a direct wholly owned subsidiary of Liberty Broadband (“Merger LLC”), and GCI Liberty pursuant to which GCI Liberty shall merge with and into Merger LLC with Merger LLC surviving (the “Upstream GCI Liberty Merger”).
“Governmental Authority” means, with respect to any Person, the government of the United States 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 supranational bodies such as the European Union or the European Central Bank) having jurisdiction or authority over such Person.
“Guarantee” means, as to any Person, (a) any obligation, contingent or otherwise, of such Person guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation payable or performable by another Person (the “primary obligor”) in any manner, whether directly or indirectly, and including any obligation of such Person, directly or indirectly, (i) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation, (ii) to purchase or lease property, securities or services for the purpose of assuring the obligee in respect of such Indebtedness or other obligation of the payment or performance of such Indebtedness or other obligation, (iii) to maintain working capital, equity capital or any other financial statement condition or liquidity or level of income or cash flow of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation, or (iv) entered into for the purpose of assuring in any other manner the obligee in respect of such Indebtedness or other obligation of the payment or performance thereof or to protect such obligee against loss in respect thereof (in whole or in part); provided that the term “Guarantee” shall not include any endorsement of an instrument for deposit or collection in the ordinary course of business, or (b) any Lien on any assets of such Person securing any Indebtedness or other obligation of any other Person, whether or not such Indebtedness or other obligation is assumed by such Person (or any right, contingent or otherwise, of any holder of such Indebtedness or such other obligation to obtain any such Lien). The amount of the Guarantee shall be deemed to be an amount equal to the stated or determinable amount of the related primary obligation, or portion thereof, in respect of which such Guarantee is
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made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by the guaranteeing Person in good faith. The term “Guarantee” as a verb has a corresponding meaning.
“Impacted Interest Period” has the meaning specified in the definition of “LIBOR”.
“Incremental Agreement” has the meaning specified in Section 2.15(d). As of the Amendment No. 3 Effective Date, Amendment No. 3 shall be an Incremental Agreement for purposes of the Kodiak Pay-off Loan Commitments and/or Kodiak Pay-off Loans.
“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:
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For all purposes hereof the Indebtedness of any Person shall include the Indebtedness of any partnership or joint venture (other than a joint venture that is itself a corporation or limited liability company) in which such Person is a general partner or a joint venturer, unless such Indebtedness is expressly made non-recourse to such Person. The amount of any net obligation under any Swap Contract on any date shall be deemed to be the Swap Termination Value thereof as of such date. The amount of Indebtedness under clause (f) as of any date shall be deemed to be the amount of Attributable Debt in respect thereof as of such date.
For the avoidance of doubt, any obligation to pay (x) reasonable fees and expenses related to the ownership, administration, management and Disposition of Permitted Assets and/or Permitted Liabilities (including reasonable Independent Manager fees), in each case, incurred in the ordinary course of business or required pursuant to the terms of the Loan Documents, and (y) any other accrued expenses incurred in the ordinary course of business in an aggregate amount not to exceed $200,000 shall not, in the case of either clause (x) or clause (y), constitute Indebtedness.
“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 Documents and (b) to the extent not otherwise described in clause (a), Other Taxes.
“Indemnitee” has the meaning specified in Section 10.04(b).
“Independent Manager” means an individual who has prior experience as an independent director, independent manager or independent member with at least three (3) years of employment experience (who may be provided by CT Corporation, Corporation Service Company, National Registered Agents, Inc., Wilmington Trust Corporation (only, at such time that the Administrative Agent is not Wilmington Trust Corporation or an Affiliate thereof), Lord Securities Corporation or another nationally recognized company that is not an Affiliate of the Borrower, the Parent, any Permitted Holder or any Issuer and that provides independent managers and other corporate services in the ordinary course of its business) and which individual:
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“Independent Manager Matters” means any act (a) instituting or consenting to the institution of any proceeding with respect to the Borrower under any Debtor Relief Law, (b) making a general assignment for the benefit of creditors with respect to the Borrower or (c) applying for or consenting to the appointment of any receiver, trustee, custodian, conservator, liquidator, rehabilitator, ad hoc manager or similar officer for the Borrower or for all or any material part of the Borrower’s property.
“Information” has the meaning specified in Section 10.07.
“Initial Loan” means a Loan made by a Lender to the Borrower pursuant to Section 2.01 on the Funding Date. The aggregate principal amount of Initial Loans outstanding on the Amendment No. 3 Effective Date is $500,000,000.
“Initial Loan Borrowing” means a Borrowing comprised of Initial Loans.
“Initial Loan Commitment” means, with respect to each Lender, the commitment, if any, of such Lender to make Initial Loans hereunder up to the amount set forth on Part A of Schedule I, or in the Assignment and Assumption pursuant to which such Lender assumed its Initial Loan Commitment, as applicable, as the same may be (a) reduced from time to time or terminated pursuant to this Agreement and (b) increased from time to time pursuant to assignments to such Lender pursuant to Section 10.06. The aggregate amount of the Initial Loan Commitments on the Closing Date was $500,000,000. There are no Initial Loan Commitments outstanding on the Amendment No. 3 Effective Date.
“Initial Loan Lender” means each Lender holding an Initial Loan or an Initial Loan Commitment, unless and until (a) such Person ceases to be a “Lender” hereunder as a result of an assignment pursuant to Section 10.06, (b) all of the Initial Loan Commitments and Initial Loans, if any, held by such Person have been assigned pursuant to Section 10.06 or (c) all of the Initial Loan Commitments, if any, held by any such Person have been terminated and the Obligations relating to such Person’s Initial Loans (other than contingent or indemnity obligations for which no claim has been made), if any, owing to such Person have been paid in full; provided, however, that the obligations of such Person as a Lender that the Loan Documents expressly provide survive the termination of the Commitments held by such Person and the payment in full of the Obligations owing to such Person shall survive such termination and payment.
“Initial LTV Level” means [__]%.
“Initial Pledged Shares” has the meaning specified in the definition of “Pledged Shares”.
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“Interest Payment Date” means (a) the last Business Day of each of March, June, September and December (commencing with the first such date to occur after the Closing Date) and (b) the Maturity Date.
“Interest Period” means (a) in the case of the initial Interest Period for the Initial Loan Borrowings, the period commencing on the Funding Date and ending on but excluding the next succeeding Interest Payment Date, (b) in the case of the Interest Period for the Loans outstanding as of the Amendment No. 2 Effective Date, the period commencing on the Amendment No. 2 Effective Date and ending on but excluding the next succeeding Interest Payment Date, (c) in the case of the initial Interest Period for any Subsequent Loan Borrowing, the period commencing on the date of such Subsequent Loan Borrowing and ending on but excluding the next succeeding Interest Payment Date and (d) in the case of any subsequent Interest Period, the period commencing on the last day of the next preceding Interest Period and ending on but excluding the next succeeding Interest Payment Date; provided that if any Interest Period would end on a day other than a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless such next succeeding Business Day would fall in the next calendar month, in which case such Interest Period shall end on the next preceding Business Day; provided, however, that if any Interest Period would otherwise extend beyond the Maturity Date, such Interest Period shall end on the Maturity Date. For the avoidance of doubt, other than with respect to any Stub Period, all determinations hereunder of “LIBOR” shall be determined based on an Interest Period of three (3) months, and, at the end of each Interest Period, subject to Section 3.02, all outstanding Loans shall be continued as a Borrowing with an Interest Period of three (3) months.
“Investment” means, as to any Person, (a) the purchase or other acquisition by such Person of Equity Interests or securities of another Person, (b) a loan, advance or capital contribution by such Person to, Guarantee by such Person or assumption of Indebtedness by such Person of, or purchase or other acquisition by such Person of any Indebtedness or equity participation or interest in, another Person, including any partnership or joint venture interest in such other Person, or (c) the purchase or other acquisition (in one transaction or a series of transactions) by such Person of assets of another Person that constitute a business unit or all or substantially all of the assets of such Person.
“Investment Company Act” means the Investment Company Act of 1940.
“IRS” means the United States Internal Revenue Service.
“Issuer” means, collectively, (i) the Charter Issuer, (ii) following the occurrence of an Issuer Merger Event, Newco (if applicable), and (iii) following the occurrence of a Spin-Off Event, Spinco for so long as any Shares of Spinco are Eligible Pledged Shares, and each of the foregoing being an “Issuer”; provided that following the occurrence of an Issuer 251(g) Merger Event, the resulting Delaware corporation shall be deemed to be an “Issuer” (except for purposes of the definition of “Issuer 251(g) Merger Event”).
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“Issuer 251(g) Merger Event” means a merger of an Issuer pursuant to which such Issuer becomes a wholly-owned subsidiary of a holding company; provided that such merger satisfies each of the following conditions: (a) Persons that “beneficially owned” (within the meaning of Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder) the voting stock of such Issuer immediately prior to such transaction “beneficially own” (within the meaning of Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder) shares of voting stock representing 100% of the total voting power of all outstanding classes of voting stock of such holding company and such Persons’ proportional voting power immediately after such transaction, vis-à-vis each other, with respect to the securities they receive in such transaction will be in substantially the same proportions as their respective voting power, vis-à-vis each other, immediately prior to such transaction and (b) such transaction meets each of the requirements for a merger without a shareholder vote pursuant to Section 251(g) of the Delaware General Corporation Law. For purposes of this definition, “voting stock” means capital stock of any class or kind the holders of which are ordinarily, in the absence of contingencies, entitled to vote for the election of directors (or persons performing similar functions) of the applicable issuer, even if the right to vote has been suspended by the happening of such a contingency.
“Issuer Acknowledgment” means the notification and acknowledgment from Charter substantially in the form of Exhibit F hereto, pursuant to which, among other provisions, Charter provides certain acknowledgments to the Lenders in respect of the Loan Documents and the transactions contemplated thereunder.
“Issuer Acquisition” means, for any Issuer, the occurrence, effectiveness or consummation of any transaction or event pursuant to which such Issuer directly or indirectly becomes a “beneficial owner” (within the meaning of Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder) of (i) any Equity Interests in the Borrower or (ii) more than 5.0% of the Equity Interests issued by any of the following Persons: (x) the Parent or (y) the Borrower Sole Member.
“Issuer Delisting” means, for any Issuer, the public announcement that the Shares of such Issuer are no longer listed or admitted for trading on the applicable Exchange, for any reason (other than as a result of an Issuer Merger Event or an Issuer Tender Offer) and such Shares are not immediately re-listed, re-traded or re-quoted on any other Designated Exchange.
“Issuer Event” means, for any Issuer, the Triggering of (a) an Issuer Delisting or (b) an Issuer Trading Suspension.
“Issuer Merger Event” means, for any Issuer, as determined by the Calculation Agent, any (a) reclassification or change of the relevant Shares that results in a transfer of or an irrevocable commitment to transfer 100% of the outstanding Shares of such Issuer (without regard to any actions needed) to another Person, (b) consolidation, amalgamation, merger or binding share exchange of such Issuer with or into another Person (other than a consolidation, amalgamation, merger or binding share exchange in which such Issuer is the continuing entity and which does not result in a reclassification
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or change of 100% of the outstanding Shares of such Issuer), (c) takeover offer, tender offer, exchange offer, solicitation, proposal or other event by any Person to purchase or otherwise obtain 100% of the outstanding Shares of such Issuer that results in such Person purchasing, or otherwise obtaining or having the right to obtain, by conversion or other means, 100% of the outstanding Shares of such Issuer or (d) consolidation, amalgamation, merger or binding share exchange of such Issuer with or into another entity in which such Issuer is the continuing entity and which does not result in a reclassification or change of 100% of the outstanding Shares of such Issuer but results in the enterprise value of such Issuer being less than 100% of the enterprise value of the Person or Persons being acquired (prior to such acquisition), in each case determined by the Calculation Agent as of the date of the consummation of any such transaction; provided that notwithstanding the foregoing, an Issuer 251(g) Merger Event will not constitute an Issuer Merger Event.
“Issuer Tender Offer” means, for any Issuer, as determined by the Calculation Agent, a takeover offer, tender offer, exchange offer, solicitation, proposal or other event by any Person (including, for the avoidance of doubt, the respective Issuer) that results in such Person purchasing, or otherwise obtaining or having the right to obtain, by conversion or other means, directly or indirectly, (i) greater than 50% and less than 100% of the outstanding shares of any class of Equity Interests of such Issuer to the extent any shares of such class constitute Pledged Shares or (ii) a majority of the voting power of all Equity Interests entitled to vote generally in an election of directors of such Issuer as determined by the Calculation Agent, based upon the making of filings with governmental or self-regulatory agencies or such other information as the Calculation Agent deems relevant. Notwithstanding the foregoing, (i) if, based upon the making of public filings, an Issuer Tender Offer is in connection with a proposed Issuer Merger Event such that promptly following the final expiration (and, in any event, within three (3) Business Days following such final expiration) of such Issuer Tender Offer (and, in any event, prior to the latest Maturity Date in effect) an Issuer Merger Event is likely to occur, as reasonably determined by the Calculation Agent, (ii) if the Borrower tenders Pledged Shares within the 24 hour period prior to the expiration date of such Issuer Tender Offer and (iii) if the expiration date of such Issuer Tender Offer is extended following any tender of Pledged Shares by Borrower pursuant to clause (ii) and withdrawal rights are available to shareholders generally, then the Borrower agrees to withdraw all Pledged Shares tendered pursuant to clause (ii) and, if following such withdrawal, Borrower re-tenders such Shares within the 24 hour period prior to the expiration date, as extended, of such Issuer Tender Offer (clauses (i), (ii) and (iii), an “Issuer Tender to Merger Event”), then such Issuer Tender Offer shall be deemed not to have occurred for purposes of the definition of “Potential Adjustment Event” (but, for the avoidance of doubt, the related Issuer Merger Event may still occur upon its effectiveness), unless the Calculation Agent later determines that an Issuer Merger Event is not likely to occur promptly following the final expiration of such Issuer Tender Offer, in which case such Issuer Tender Offer shall be deemed to have occurred on the Business Day following such determination unless such Issuer Tender Offer fails and the parties terminate the agreement that would have resulted in the Issuer Merger Event, in which case such Issuer Tender Offer shall be deemed not to have occurred for purposes of the definition of “Potential Adjustment Event”.
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“Issuer Tender to Merger Event” has the meaning specified in the definition of “Issuer Tender Offer”.
“Issuer Trading Suspension” means, for any Issuer, any suspension of trading of the Shares of such Issuer by the applicable Exchange on any Scheduled Trading Day (whether by reason of movements in price exceeding limits permitted by the Exchange or otherwise) for more than seven (7) consecutive Scheduled Trading Days.
“Kodiak Borrower” means Broadband Holdco, LLC, a Delaware limited liability company.
“Kodiak Cashless Roll Letter” means that certain letter agreement by and among the Kodiak Pay-off Loan Lenders, the Kodiak Borrower, the Borrower, the Administrative Agent, the Calculation Agent, and JPMorgan Chase Bank, N.A., London Branch, as administrative agent under the Kodiak Margin Loan Agreement, which letter shall be dated on or around the date of the Kodiak Pay-off Loan Funding Date, substantially in the form attached as Exhibit C to Amendment No. 3, the executed signature pages to which have been delivered by each party thereto to each other party thereto in escrow pending the consummation of the Kodiak Payoff.
“Kodiak Loans” means the Loans under and as defined in the Kodiak Margin Loan Agreement.
“Kodiak Margin Loan Agreement” means that certain Margin Loan Agreement, dated as of December 29, 2017, by and among the Kodiak Borrower, the lenders from time to time party thereto and JPMorgan Chase Bank, N.A., London Branch, as administrative agent and as calculation agent (as amended, restated, amended and restated, supplemented or otherwise modified from time to time).
“Kodiak Margin Loan Documents” means each Loan Document, as such term is defined in the Kodiak Margin Loan Agreement.
“Kodiak Payoff” means (i) the satisfaction in full of all Obligations (under and as defined in the Kodiak Margin Loan Agreement) under the Kodiak Margin Loan Documents (other than in respect of (x) contingent obligations for which no claim has been made and (y) any Prepayment Amount (under and as defined in the Kodiak Margin Loan Agreement) that may be due by the Kodiak Borrower, which has been waived by each Lender thereunder), in the case of the principal amount of loans, on a cashless roll basis with the proceeds of the incurrence of the Kodiak Pay-off Loans by the Borrower, and in the case of accrued interest, fees and other non-principal amounts, by repayment in cash on the GCI Liberty Merger Effective Date (immediately after the occurrence of the Upstream GCI Liberty Merger) and (ii) the termination of all Commitments (under and as defined in the Kodiak Margin Loan Agreement) or other arrangements for such repayment and termination reasonably satisfactory to the Kodiak Pay-off Loan Lenders shall have been made.
“Kodiak Pay-off Amendments Effective Time” has the meaning specified in Amendment No. 3.
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“Kodiak Pay-off Letter” means that certain Pay-Off and Collateral Release Letter, by and among the Kodiak Pay-off Loan Lenders, the Kodiak Borrower and JPMorgan Chase Bank, N.A., London Branch, as administrative agent and as calculation agent under the Kodiak Margin Loan Agreement, which letter shall be dated on or around the date of the Kodiak Pay-off Loan Funding Date, substantially in the form attached as Exhibit B to Amendment No. 3, the executed signature pages to which have been delivered by each party thereto to each other party thereto in escrow pending the consummation of the Kodiak Payoff.
“Kodiak Pay-off Loan Commitments” means, with respect to each Lender, the commitment, if any, of such Lender to make Kodiak Pay-off Loans hereunder up to the amount set forth on Part C of Schedule I, on the Amendment No. 3 Effective Date, or in the Assignment and Assumption pursuant to which such Lender assumed its Kodiak Pay-off Loan Commitment, as applicable, as the same may be (a) reduced from time to time or terminated pursuant to this Agreement and (b) increased from time to time pursuant to assignments to such Lender pursuant to Section 10.06. The aggregate amount of the Kodiak Pay-off Loan Commitments on the Amendment No. 3 Effective Date is $1,300,000,000.
“Kodiak Pay-off Loan Funding Date” has the meaning specified in Section 2.02(c).
“Kodiak Pay-off Loan Lenders” means a Lender with a Kodiak Pay-off Loan Commitment or a Kodiak Pay-off Loan, unless and until (a) such Person ceases to be a “Lender” hereunder as a result of an assignment pursuant to Section 10.06 or (b) all of the Kodiak Pay-off Loan Commitments and Kodiak Pay-off Loans, if any, held by such Person have been assigned pursuant to Section 10.06 or (c) all of the Kodiak Pay-off Loan Commitments, if any, held by any such Person have been terminated and the Obligations relating to such Person’s Kodiak Pay-off Loan Commitments and Kodiak Pay-off Loans (other than contingent or indemnity obligations for which no claim has been made), if any, owing to such Person have been paid in full; provided, however, that the obligations of such Person as a Lender that the Loan Documents expressly provide survive the termination of the Commitments held by such Person and the payment in full of the Obligations owing to such Person shall survive such termination and payment.
“Kodiak Pay-off Loan Pledged Shares” has the meaning specified in the definition of “Pledged Shares”.
“Kodiak Pay-off Loans” means a Loan made pursuant to the Kodiak Pay-off Loan Commitments to the Borrower pursuant to Section 2.01. The aggregate principal amount of all Kodiak Pay-off Loans outstanding on the Amendment No. 3 Effective Date is $0.00.
“Kodiak Revolving Loans” means the Revolving Loans under and as defined in the Kodiak Margin Loan Agreement.
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“Laws” means, with respect to any Person, collectively, all international, foreign, U.S. federal, state and local statutes, treaties, rules, guidelines, regulations, ordinances, codes and administrative or judicial precedents or authorities, including the interpretation or administration thereof by any Governmental Authority charged with the enforcement, interpretation or administration thereof applicable to such Person, and all applicable administrative orders, directed duties, requests, licenses, authorizations, requirements and permits of, and agreements with, any Governmental Authority, in each case whether or not having the force of law.
“Lender” means (a) each Initial Loan Lender, (b) each Delayed Draw Lender, (c) each Additional Lender and (d) any other Person that becomes a party hereto pursuant to Section 10.06 unless and until (i) such Person ceases to be a “Lender” hereunder as a result of an assignment pursuant to Section 10.06 or (ii) the Commitments, if any, held by any such Person have been terminated and the Obligations (other than contingent obligations for which no claim has been made), if any, owing to such Person have been paid in full; provided, however, that the obligations of such Person as a Lender that the Loan Documents expressly provide survive the termination of the Commitments held by such Person and the payment in full of the Obligations owing to such Person shall survive such termination and payment.
“Lender Appointment Period” has the meaning specified in Section 9.06.
“Lender Participant Transaction” means, as to a Lender, any of the following: (a) a Permitted Derivatives Transaction or (b) a margin loan financing transaction secured by a substantial portion of the Pledged Shares, in each case, issued or incurred by the Parent or any wholly-owned Subsidiary of the Parent.
“Liberty Broadband” means Liberty Broadband Corporation, a Delaware corporation.
“Liberty Media” means Liberty Media Corporation, a Delaware corporation.
“LIBOR” means, with respect to any Interest Period or other period determined by the Administrative Agent with respect to any overdue amount, the per annum rate as determined by the Administrative Agent with such Interest Period (or other period) equal to the London interbank offered rate as administered by ICE Benchmark Administration (or any other Person that takes over the administration of such rate) for Dollars for a three (3)-month period as displayed on pages LIBOR01 or LIBOR02 of the Bloomberg screen that displays such rate (or, in the event such rate does not appear on a Bloomberg page or screen, on any successor or substitute page on such screen that displays such rate, or on the appropriate page of such other information service that publishes such rate from time to time as selected by the Administrative Agent in its reasonable discretion; in each case, the “Screen Rate”) at approximately 11:00 a.m., London time, two (2) Business Days prior to the commencement of such Interest Period (or other period); provided that if the Screen Rate shall not be available at such time for such three (3)-month period (an “Impacted Interest Period”) then “LIBOR” means the
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rate per annum determined by the Administrative Agent (which determination shall be conclusive and binding absent manifest error) to be equal to the rate that results from interpolating on a linear basis between: (a) the Screen Rate for the longest period for which the Screen Rate is available that is shorter than the Impacted Interest Period; and (b) the Screen Rate for the shortest period (for which that Screen Rate is available) that exceeds the Impacted Interest Period, in each case, at such time. Notwithstanding the foregoing, if LIBOR as otherwise determined pursuant to this definition shall be less than zero, such rate shall be deemed zero for purposes of this Agreement. Notwithstanding anything to the contrary contained in this Agreement, the LIBOR in effect for the Loans immediately prior to the Amendment No. 3 Effective Date and/or the Kodiak Pay-off Loan Funding Date shall be the LIBOR used in the calculation of interest for the Loans for the remainder of the current Interest Period following each of the Amendment No. 3 Effective Date and Kodiak Pay-off Loan Funding Date, as applicable, until the commencement of the next subsequent Interest Period; for the avoidance of doubt, on the Amendment No. 3 Effective Date, the LIBOR in effect for the current Interest Period, which shall be the LIBOR in effect for the remainder of the Interest Period, is (A) 0.30788% with respect to all Loans other than the Borrowing of Delayed Draw Loans made on July 31, 2020, and (B) 0.260630%, with respect to the Borrowing of Delayed Draw Loans made on July 31, 2020.
“Lien” means any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), charge, or preference, priority or other security interest or preferential arrangement in the nature of a security interest of any kind or nature whatsoever.
“Loan” means, individually or collectively, as the context may require, the Initial Loans, the Delayed Draw Loans and the Additional Loans. As of the Kodiak Pay-off Loan Funding Date, the Kodiak Pay-off Loans shall be Loans hereunder.
“Loan Document” means any of this Agreement, the Notes, if any, the Agent Fee Letter, the Collateral Documents, the Issuer Acknowledgment, Amendment No. 1, Amendment No. 2, Amendment No. 3, any Incremental Agreement and all other documents, instruments or agreements executed and delivered by the Borrower for the benefit of any Agent or any Lender in connection herewith on or after the Closing Date.
“Lock-Up” has the meaning specified in the definition of “Permissible Transfer Restrictions”.
“Long Position” means any option, warrant, convertible security, swap agreement or other security, contract right or derivative position, whether or not presently exercisable, in respect of the Merger Shares or Spin-Off Shares, as applicable, that is (i) a “call equivalent position” within the meaning of Rule 16a-1(b) of the Exchange Act, including any of the foregoing that would have been a “call equivalent position” but for the exclusion in Rule 16a-1(c)(6) of the Exchange Act, or (ii) otherwise constitutes an economic long position in respect of the Merger Shares or Spin-Off Shares, as applicable, in each case, as determined by the Calculation Agent by reference to the applicable Issuer’s or the relevant Person’s most recent filings with the SEC, to the extent such
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information is reported in such filings; provided that options, warrants and securities granted by the applicable Issuer (or, as to Spin-Off Shares, Spinco) which relate to securities that are not yet issued or outstanding shall not be deemed a “Long Position”, until such securities are actually issued and become outstanding.
“LTV Event Amount” has the meaning specified in Section 2.09(c).
“LTV Margin Call Level” means [__]%.
“LTV Ratio” means, as of any date of determination, the percentage determined by the Calculation Agent by dividing (a)(i) the sum of (x) the then outstanding principal amount of the Loans (including any PIK Interest that has been added to the principal amount of the Loans), plus (y) all accrued and unpaid interest (including any PIK Interest that has been accrued and not yet added to the principal amount of the Loans) and fees thereon to and including such date, minus (ii) the face amount of Eligible Cash Collateral consisting of Cash and 99% of the fair market value, as determined by the Calculation Agent, of the amount of Eligible Cash Collateral consisting of Cash Equivalents on deposit in the Collateral Accounts by (b) the Collateral Value.
“LTV Reset Level” means [__]%.
“Mandatory Prepayment Event” means the occurrence of (a) a Change of Control or (b) an Issuer Event.
“Mandatory Prepayment Notice” means a notice delivered in accordance with Section 2.05 and substantially in the form of Exhibit L.
“Market Disruption Event” means a Trading Disruption, an Exchange Disruption or an Early Closure, in each case, related to the relevant Shares.
“Market Reference Price” means, as of any date of determination, the closing sale price per share (or if no closing sale price is reported, the average of the last bid and ask prices or, if more than one in either case, the average of the average last bid and the average last ask prices) of the relevant Shares on the applicable Exchange as reported in composite transactions for the applicable Exchange on (x) such date of determination, if such date of determination is an Exchange Day and the relevant determination is made following the close of trading on the Exchange on such Exchange Day and (y) otherwise, the immediately preceding day (or if such date is not an Exchange Day for such Exchange, the immediately preceding Exchange Day for such Exchange); provided that if a Market Disruption Event has occurred on such date, the “Market Reference Price” shall be the “Market Reference Price” determined on the immediately preceding Exchange Day for such Exchange; provided, further, that if a Market Disruption Event has occurred and continues to occur for more than three consecutive Scheduled Trading Days, the “Market Reference Price” of one such Share shall be equal to the applicable “Market Reference Price” (determined without giving effect to this proviso) on the immediately preceding day (or if such date is not an Exchange Day for such Exchange, the immediately preceding Exchange Day for such Exchange) multiplied
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by a percentage (expressed as a fraction) equal to (A) 100% less (B) the product of (i) 5% and (ii) the number of consecutive Scheduled Trading Days for which a Market Disruption Event has occurred less one, until a Market Reference Price is determined for an Exchange Day on which no Market Disruption Event occurs. The Market Reference Price shall be determined by the Calculation Agent.
“Master Agreement” has the meaning specified in the definition of “Swap Contract”.
“Material Adverse Effect” means (a) a material adverse change in, or a material adverse effect upon, the operations, business, properties, liabilities (actual or contingent) or financial condition of the Borrower or the Parent and its Subsidiaries, taken as a whole; (b) a material adverse effect upon the legality, validity, binding effect or enforceability against the Borrower of any Loan Document; or (c) a material adverse effect on the ability of any Applicable Lender to exercise its remedies at the times and in the manner contemplated by the Collateral Documents (including, for the avoidance of doubt, the imposition of Transfer Restrictions on the Pledged Shares other than the Permissible Transfer Restrictions).
“Material Contract” means, with respect to any Person, any Contractual Obligation to which such Person is a party (other than the Loan Documents) for which breach thereof could reasonably be expected to have a Material Adverse Effect.
“Maturity Date” means (i) with respect to all Initial Loans, Kodiak Pay-off Loans and Delayed Draw Loans, August 24, 2022 (or, if such date is not a Business Day, the immediately preceding Business Day) and (ii) with respect to any Additional Loans, the Maturity Date set forth in the relevant Incremental Agreement with respect to such Additional Loans; provided that such Maturity Date shall not be earlier than the Maturity Date for any then-outstanding Loans at the time such Additional Loans are incurred.
“Maximum Rate” has the meaning specified in Section 10.09.
“Maximum Share Number” means up to [__] CHTR Shares; provided that, in the event of a Share Price Event, Issuer Merger Event or Spin-Off Event, the Calculation Agent may adjust the Maximum Share Number and provide for a Maximum Share Number applicable to such Shares after the occurrence of a Share Price Event with respect to such Shares, the relevant Merger Shares or the relevant Spin-Off Shares, as applicable, as it deems reasonably necessary pursuant to Section 1.02(d).
“Merger LLC” has the meaning set forth in the definition of GCI Liberty Merger Effective Date.
“Merger Shares” means shares of common stock into which the relevant Shares are reclassified, converted into or exchanged in connection with an Issuer Merger Event or Issuer Tender to Merger Event, as applicable, and are (or will be upon the consummation of such Issuer Merger Event or Issuer Tender to Merger Event, as applicable) listed for trading on a Designated Exchange and issued by an entity incorporated or organized under the law of the United States or any state thereof.
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“Minimum Price” means $[__]; provided that, in the event of an Issuer Merger Event or Spin-Off Event, the Calculation Agent may adjust the Minimum Price and provide for a Minimum Price applicable to the Merger Shares or Spin-Off Shares, as applicable, as it deems reasonably necessary pursuant to Section 1.02(d).
“Moody’s” means Moody’s Investors Service, Inc. and any successor thereto.
“Newco” means, in connection with an Issuer Merger Event, the issuer of the Merger Shares.
“Non-public Information” means information which has not been disseminated in a manner making it available to investors generally, within the meaning of Regulation FD.
“Note” means a promissory note made by the Borrower in favor of a Lender evidencing the Loans held by such Lender, substantially in the form of Exhibit B.
“Obligations” means all advances to, and debts, liabilities, obligations, covenants and duties of, the Borrower arising under any Loan Document or otherwise with respect to the Loans, whether direct or indirect (including those acquired by assumption), absolute or contingent, due or to become due, now existing or hereafter arising and including interest (whether in the form of any cash interest or PIK Interest) and fees (including any Prepayment Amount) that accrue after the commencement by or against the Borrower of any proceeding under any Debtor Relief Laws naming the Borrower as the debtor in such proceeding, regardless of whether such interest and fees are allowed claims in such proceeding.
“Organization Documents” means (a) the certificate of formation of the Borrower adopted on July 13, 2017 and (b) its limited liability company operating agreement adopted on July 14, 2017, as amended and restated by that certain Amended and Restated Limited Liability Company Operating Agreement of LBC Cheetah 6, LLC, by and between the Borrower Sole Member and the Independent Manager, and adopted on August 31, 2017 (as amended by Amendment No. 1 to Amended and Restated Limited Liability Company Operating Agreement, dated as of the Amendment No. 3 Effective Date).
“Original Administrative Agent” has the meaning specified in the introductory paragraph hereto.
“Original Calculation Agent” has the meaning specified in the introductory paragraph hereto.
“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
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transaction pursuant to or enforced any Loan Document, or sold or assigned an interest in any Loan or Loan Document).
“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 3.05).
“Parent” means Liberty Broadband (and its successors).
“Parent Company” has the meaning specified in Section 6.09(a).
“Participant” has the meaning specified in Section 10.06(c).
“Participant Register” has the meaning specified in Section 10.06(c).
“Permissible Transfer Restrictions” means:
(a) the Existing Transfer Restrictions as of the Closing Date;
(b) Transfer Restrictions arising from Permitted Liens (other than Liens described in clause (b) of the definition of “Permitted Liens”);
(c) Transfer Restrictions arising under the Loan Documents;
(d) solely with respect to any Issuer 251(g) Merger Event, Spin-Off Event, Issuer Merger Event, Spin-Off Shares or Merger Shares, any additional Transfer Restrictions that the Calculation Agent determines in its reasonable sole discretion are (x) analogous to, and no more restrictive than, the Existing Transfer Restrictions or (y) not applicable to the Pledged Shares; provided that, for the avoidance of doubt, Permissible Transfer Restrictions with respect to any Spin-Off Shares or Merger Shares that are, in each case, Pledged Shares shall not include any additional “holding period” restrictions under Rule 144 on such Pledged Shares, or upon any resale of such Pledged Shares, or any such Pledged Shares being “restricted securities” as defined in Rule 144;
(e) with respect to any Eligible Pledged Shares or any dividends or distributions thereon, any Transfer Restriction arising from a customary “lock up” imposed upon the Parent, the Borrower Sole Member or the Borrower in connection with an Issuer 251(g) Merger Event, a Spin-Off Event, an Issuer Merger Event, an Issuer Tender Offer, an Issuer Acquisition or any Disposition of Pledged Shares not prohibited by this Agreement (any such customary “lock up”, a “Lock-Up”) shall constitute a Permissible Transfer Restriction until (x) the consummation or effectiveness of the transaction constituting such Issuer 251(g) Merger Event, Spin-Off Event, Issuer Merger Event, Issuer Tender Offer, Issuer Acquisition or Disposition or (y) the termination of the documentation relating to such Issuer 251(g) Merger Event, Spin-Off Event, Issuer Merger Event, Issuer Tender Offer, Issuer Acquisition or Disposition without the
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consummation thereof. For the avoidance of doubt, such Lock-Up (A) will not be permitted in any way to limit the grant of a Lien on any Pledged Shares or other Collateral or a Lender’s ability to exercise its rights and remedies hereunder or under the other Loan Documents with respect to any Pledged Shares or other Collateral or otherwise, and (B) shall not constitute a Permissible Transfer Restriction on and after the consummation or effectiveness of the related Issuer 251(g) Merger Event, Spin-Off Event, Issuer Merger Event, Issuer Tender Offer, Issuer Acquisition or Disposition, as applicable; or
(f) any other Transfer Restrictions that arise after the Amendment No. 2 Effective Date (x) for which an adjustment has been or is being made under clause (i) and/or clause (j) of the definition of “Potential Adjustment Event” or (y) with respect to which the Calculation Agent has determined that no such adjustment is necessary; it being understood and agreed that any such Transfer Restriction shall be deemed to be a Permissible Transfer Restriction both before and after giving effect to any such adjustment or such determination by the Calculation Agent that no such adjustment is necessary; provided that nothing contained in this clause (f) shall be construed to limit the adjustment rights under Section 1.02(d) with respect to clause (i) and/or clause (j) of the definition of “Potential Adjustment Event”.
“Permitted Assets” means (i) Cash, Cash Equivalents, Permitted Securities, Shares and Collateral, (ii) proceeds of the foregoing consisting of Cash, Cash Equivalents, Permitted Securities, Shares and Collateral and (iii) dividends and distributions in respect of any Cash, Cash Equivalents, Permitted Securities, Shares, and/or Collateral.
“Permitted Derivatives Transactions” means (i) exchangeable or convertible securities issued by the Parent or a Subsidiary of the Parent (other than the Borrower) referencing or convertible into Shares or shares of the Parent that, in each case, (a) are sold in a broadly distributed registered offering or Rule 144A transaction and (b) contain customary terms for such securities or terms that are comparable to those contained in exchangeable or convertible securities that have been previously issued and sold by any of GCI Liberty, Liberty Expedia Holdings, Inc., Liberty Media, Liberty Broadband, Qurate Retail and/or any of their respective subsidiaries; and (ii) a transaction relating to a number of Shares owned by the Parent or a subsidiary of the Parent (other than the Borrower), which is not secured by Pledged Shares, that consists of (a) (x) put options purchased by the Parent or a subsidiary of the Parent (other than the Borrower) (“Put Options”) and/or (y) call options sold by such party (provided any such call options have a strike price greater than the strike price of the Put Options in the event that Put Options have been purchased in connection therewith), (b) forward transactions by the Parent or a subsidiary of the Parent (other than the Borrower) as seller and/or (c) any other similar sale transaction that has the same economic effect (including associated trading activity), including any related loans customarily entered into in connection with such transactions described in the foregoing clauses (a), (b) and (c).
“Permitted Holder” means any one or more of (a) Qurate Retail (or its successors), (b) Liberty Media (or its successors), (c) GCI Liberty, Inc., formerly known as General Communication, Inc. (or its successors), (d) John C. Malone, Gregory B.
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Maffei, or any other executive officer or director of Liberty Media (or its successors), Qurate Retail (or its successors) or the Parent (or its successors), (e) each of the respective Affiliated Persons of the Persons referred to in clause (d) and (f) any Person a majority of the aggregate voting power of all the outstanding classes or series of the Equity Interests of which are beneficially owned by any one or more of the Persons referred to in clauses (a), (b), (c), (d) or (e); provided that no Issuer or its Subsidiaries shall be, directly or indirectly, a Permitted Holder. For purposes of this definition, “person” and “group” have the meanings given to them for purposes of Section 13(d) and 14(d) of the Exchange Act or any successor provisions, and the term “group” includes any group acting for the purposes of acquiring, holding or disposing of securities within the meaning of Rule 13d-5(b)(1) under the Exchange Act, or any successor provision.
“Permitted Liabilities” means (a) all Contractual Obligations under the Loan Documents, (b) all taxes, assessments and governmental charges levied upon the Borrower or upon its income, profits or property, (c) all costs and expenses of the Independent Manager, (d) any other liabilities or obligations of any nature expressly allowed to be incurred by the Borrower pursuant to the definition of “Special Purpose Entity”, (e) liabilities and obligations incurred in the ordinary course of business or in connection with transactions not prohibited under the Loan Documents and (f) costs and expenses relating to the administration, ownership, management and Disposition of Permitted Assets which (A) do not exceed, at the date of determination, a maximum amount equal to $200,000 and (B) are paid within thirty (30) days of the date incurred, or, if later, invoiced.
“Permitted Liens” means (a) Liens pursuant to any Loan Document, (b) Permissible Transfer Restrictions, (c) inchoate Liens in respect of Taxes and claims permitted not to be paid in accordance with Section 6.06 and the other provisions of the Loan Documents and (d) the Liens of the Custodian to the extent expressly permitted under the Collateral Account Control Agreement.
“Permitted Securities” means any of the following:
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“Person” means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity.
“PIK Interest” means the interest that accrues and is added to the outstanding principal balance of the Loans in accordance with Section 2.06(a)(ii), which shall thereafter be deemed principal bearing interest at the Floating Rate.
“PIK Interest Election Notice” means a notice provided by the Borrower in accordance with the terms of Section 2.06(a)(ii)(A) and substantially in the form of Exhibit J, or such other form as shall be approved by the Administrative Agent.
“Plan” means any “employee benefit plan” (as such term is defined in Section 3(3) of ERISA) whether or not subject to ERISA or the Code, established by the Borrower or, with respect to any such plan that is subject to Section 412 of the Code or Title IV of ERISA or any substantially similar non-U.S. law, any ERISA Affiliate.
“Platform” has the meaning specified in Section 7.17.
“Pledged Shares” means, (i) as of the Closing Date, [__] CHTR Shares (the “Initial Pledged Shares”) and (ii) after the Closing Date, all Shares credited to any and all Collateral Accounts, in each case, for so long as the security interest and Liens granted in such Shares pursuant to the Security Agreement have not otherwise been terminated and released in accordance with the Loan Documents; provided that as of the Kodiak Pay-off Loan Funding Date, (x) the Initial Pledged Shares plus (y) an additional number of Shares sufficient to cause the LTV Ratio as of such date to be equal to or less than the Initial LTV Level (such additional Shares, the “Kodiak Pay-off Loan Pledged Shares”) shall be deposited to the Collateral Accounts.
“Potential Adjustment Event” means any of the following:
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Notwithstanding anything to the contrary herein, (i) an Issuer 251(g) Merger Event shall not result in a Potential Adjustment Event, and (ii) if a Potential Adjustment Event occurs with respect to any Pledged Shares that are Spin-Off Shares, (a) Borrower may elect, by notice to the Calculation Agent delivered promptly following notice of any adjustments as may be determined in accordance with Section 1.02(d) relating to such Potential Adjustment Event, to (1) exclude the Collateral Value of such Spin-Off Shares from the calculation of the LTV Ratio (A) to the extent that the LTV Ratio (calculated without giving any Collateral Value to such Spin-Off Shares) does not exceed the LTV Margin Call Level or (B) if the LTV Ratio exceeds the LTV Margin Call Level (calculated without giving any Collateral Value to such Spin-Off Shares), so long as the Borrower complies with the provisions of Section 2.09(a) in a manner that causes the LTV Ratio to be equal to or less than the LTV Reset Level, and (2) release such Spin-Off Shares from any Liens created under the Collateral Documents in accordance with Section 2.09(h)(iii) and, in any such event, the occurrence of any of the events set forth above shall not constitute a Potential Adjustment Event with respect to such Spin-Off Shares (or, for the avoidance of doubt, any other Shares other than the Shares of the Issuer subject to the relevant Potential Adjustment Event); provided that if (x) any such events occur during such time and subsequent to such time the Borrower desires to pledge Spin-Off Shares as Collateral in accordance with this Agreement, then prior to such pledge, the Calculation Agent (or the Lenders, to the extent permitted under Sections 2.05 or 2.09) shall be permitted to make such adjustments as may be determined in accordance with Section 1.02(d), (y) the relevant Spin-Off Shares are so released, they shall cease to constitute Eligible Pledged Shares at all times thereafter, and (b) any adjustment made in accordance with Section 1.02(d) by the Calculation Agent with respect to such Potential Adjustment Event which impacts a ratio or valuation determined by reference to both Spin-Off Shares and other Shares shall take into account the proportionate value, as reasonably determined by the Calculation Agent of such Spin-Off Shares and other Shares.
“Prepayment Amount” means [__].
“Prepayment Date” means the first Business Day immediately following the date that is twelve (12) months after the Amendment No. 3 Effective Date.
“primary obligor” has the meaning specified in the definition of “Guarantee”.
“Prime Rate” means, for any day, a rate per annum equal to the rate last quoted by The Wall Street Journal as the “Prime Rate” in the United States or, if The Wall Street Journal ceases to quote such rate, the per annum rate quoted as the base rate on corporate loans in a different national publication (as selected by the Administrative Agent). The “prime rate” is a rate set by the Administrative Agent based upon various factors including the Administrative Agent’s costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans,
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which may be priced at, above, or below such announced rate. Any change in such prime rate announced by the Administrative Agent shall take effect at the opening of business on the day specified in the public announcement of such change.
“Pro Rata Basis” means in proportion to each Lender’s Applicable Percentage relating to the Loans under this Agreement, subject, in each case, to rounding to the nearest Share, USD $0.01 or item or unit of other securities or property, as applicable.
“Purchaser Representations” means the following representations, warranties and agreements made by an assignee or participant, as applicable: (i) a representation and warranty that such assignee or participant is a QIB, a QP and an “accredited investor” as defined in Section 2(a)(15)(ii) of the Securities Act and is entering into such assignment or participation as principal and not for the benefit of any third party, (ii) a representation that such assignee or participant is not a natural person, a Defaulting Lender, any Person who, upon becoming a Lender under this Agreement, would constitute a Defaulting Lender or an Affiliate of a Defaulting Lender, a Permitted Holder, the Parent, the Borrower, the Borrower Sole Member, any Issuer or any Affiliate of a Defaulting Lender, the Parent, the Borrower, the Borrower Sole Member or any Issuer, (iii) an acknowledgment that such assignee or participant fully understands any restrictions on transfers, sales and other dispositions in the Loan Documents or relating to any Collateral consisting of the Pledged Shares, (iv) an acknowledgment that such assignee or participant is able to bear the economic risk of its investment in the assignment or participation and is currently able to afford a complete loss of such investment, (v) a covenant that such assignee or participant will only assign its Loans or sell its participation or participations therein pursuant to documentation including such Purchaser Representations, (vi) an acknowledgment by such assignee or participant that the Pledged Shares forming part of the Collateral cannot be sold by the Borrower without registration under, or in a transaction exempt from the registration requirements under, the Securities Act, (vii) an acknowledgment that such assignee or participant is not entering into such assignment or participation on the basis of any material Non-public Information with respect to the Borrower, any Issuer, their Subsidiaries or their securities, and, if applicable, it has implemented reasonable policies and procedures, taking into consideration the nature of its business, to ensure that individuals making investment decisions would not violate the laws prohibiting trading on the basis of material Non-public Information (it being understood that such assignee or participant may have material Non-public Information on the private side of its information wall, sometimes referred to as a “Chinese Wall”, at the time of such assignment or participation); provided that, for the avoidance of doubt, “material Non-public Information concerning the Borrower, any Issuer, their Subsidiaries or their securities” shall not include any information made available to both the assignee and the assignor or both the participant and the seller of a participation interest, as the case may be, and (vii) an acknowledgment that it has made an independent decision to purchase its Loans or participation based on information available to it, which it has determined adequate for the purpose.
“QIB” means a “qualified institutional buyer” as defined in Rule 144A under the Securities Act.
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“QP” means a “qualified purchaser” within the meaning of Section 2(a)(51) of the Investment Company Act.
“Qurate Retail” means Qurate Retail, Inc., a Delaware corporation (f/k/a Liberty Interactive Corporation f/k/a Liberty Media Corporation, in each case, a Delaware corporation).
“Ratable Share” (a) of any amount means, with respect to any Lender at any time, the product of (i) a fraction, the numerator of which is the aggregate principal amount of the Loans outstanding at such time owed to such Lender, and the denominator of which is the aggregate principal amount of the Loans outstanding at such time and (ii) such amount and (b) of any type of Collateral, means, with respect to any Applicable Lender at any time, the product of (i) a fraction, the numerator of which is the aggregate principal amount of the Loans outstanding at such time owed to such Applicable Lender, plus such portion of the Loans of each Agented Lender that such Applicable Lender is holding Collateral on behalf of, and the denominator of which is the aggregate principal amount of the Loans outstanding at such time and (ii) the aggregate amount of such type of Collateral, subject to rounding to the nearest Share, USD $0.01 or item or unit of other securities or property, as applicable.
“Recipient” means (a) any Agent and (b) any Lender.
“Register” has the meaning specified in Section 2.10(a).
“Regulation FD” means Regulation FD as promulgated under the Securities Exchange Act of 1934.
“Related Parties” means, with respect to any Person, such Person’s Affiliates and the branches, partners, directors, officers, employees, agents and advisors of such Person and of such Person’s Affiliates.
“Relevant Governmental Body” shall mean the Federal Reserve Board and/or the Federal Reserve Bank of New York, or a committee officially endorsed or convened by the Federal Reserve Board and/or the Federal Reserve Bank of New York or, in each case, any successor thereto.
“Required Lenders” means at any time Lenders holding at least a majority of the sum of (a) the then aggregate outstanding principal amount of the Loans and (b) the aggregate principal amount of the unused Commitments (if any); provided that the outstanding Loans held by, and unused Commitments of, any Defaulting Lender shall be excluded for purposes of making a determination of Required Lenders.
“Resolution Authority” means an EEA Resolution Authority or, with respect to any UK Financial Institution, a UK Resolution Authority.
“Responsible Officer” means (a) the chief executive officer, the president, the chief legal officer, the chief accounting officer, the principal financial officer, the chief corporate development officer, the chief portfolio officer, any senior vice president,
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the treasurer, any assistant treasurer, any vice president, any assistant vice president, the secretary or any assistant secretary of the Borrower, the Borrower Sole Member or the Parent, (b) solely for purposes of delivery of certificates pursuant to Section 4.01(a)(iii), the secretary or assistant secretary of the Borrower, the Borrower Sole Member or the Parent and (c) solely for purposes of notices given pursuant to Article II, any other person duly authorized to act for and on behalf of the Borrower, the Borrower Sole Member or the Parent, as applicable, so designated by any of the foregoing officers in a notice to the Administrative Agent, in each case of clauses (a), (b) and (c), as such officer is acting on behalf of the Borrower, the Borrower Sole Member on behalf of itself or the Borrower, or the Parent on behalf of itself, on behalf of the Borrower Sole Member or on behalf of the Borrower. Any document delivered hereunder that is signed by a Responsible Officer shall be conclusively presumed to have been authorized by all necessary corporate, partnership and/or other action on the part of the Borrower, the Borrower Sole Member or the Parent, as applicable, and such Responsible Officer shall be conclusively presumed to have acted on behalf of the Borrower, the Borrower Sole Member on behalf of itself or the Borrower or the Parent on behalf of itself, on behalf of the Borrower Sole Member or on behalf of the Borrower, as applicable.
“Restricted Payment” means, with respect to any Person, any dividend or other distribution (however denominated, including as “yield” and whether in cash, securities or other property) with respect to any capital stock or other Equity Interest of such Person, 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 such Person’s stockholders, partners or members (or the equivalent Person thereof).
“Restricted Transaction” means, in respect of the Parent and its Subsidiaries, including the Borrower: (i) any financing transaction, secured by or referencing the CHTR Shares (other than the Loans and, for the avoidance of doubt, any Permitted Derivatives Transactions), (ii) any grant, occurrence or existence of any lien on the CHTR Shares (other than (x) Liens securing the obligations under the Loan Documents, (y) Permitted Liens and (z) with respect to the Parent and its Subsidiaries (other than the Borrower), Liens on CHTR Shares in connection with any Permitted Derivatives Transaction), or (iii) any swap, hedge or derivative transaction (including by means of a physically- or cash-settled derivative or otherwise) related to the CHTR Shares other than any Permitted Derivatives Transaction. For the avoidance of doubt, none of the following shall constitute a Restricted Transaction: (a) the financing hereunder and the other Loan Documents; (b) until the Cheetah Payoff occurs in accordance with this Agreement, under the Cheetah 4 Margin Loan Documents or under the Cheetah 5 Margin Loan Documents; (c) any sale or other transfer of the Equity Interests of the Parent or the Borrower and (d) any “put”, makewell right or similar right or transaction that is entered into with a party that is not a financial institution in connection with a strategic transaction.
“Rule 144” means Rule 144 under the Securities Act.
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“S&P” means Standard & Poor’s Financial Services LLC, or any successor thereto.
“Sanctioned Country” means, at any time, a country or territory which is the subject or target of any Sanctions.
“Sanctioned Person” means, at any time, (a) any Person listed in any Sanctions-related list of designated Persons maintained by the Office of Foreign Assets Control of the U.S. Department of the Treasury or the U.S. Department of State or by the United Nations Security Council, the European Union or Her Majesty’s Treasury of the United Kingdom, (b) any Person operating, organized or resident in a Sanctioned Country or (c) any Person Controlled by any such Person.
“Sanctions” means economic or financial sanctions or trade embargoes imposed, administered or enforced from time to time by (a) the U.S. government, including those administered by the Office of Foreign Assets Control of the U.S. Department of the Treasury or the U.S. Department of State, or (b) the United Nations Security Council, the European Union or Her Majesty’s Treasury of the United Kingdom.
“Scheduled Trading Day” means any day on which the applicable Exchange is scheduled to be open for trading during the regular trading session (it being understood and agreed that any day on which an applicable Exchange is open for trading but is scheduled to close early in connection with a current or pending holiday shall constitute a regular trading session).
“SEC” means the U.S. Securities and Exchange Commission, or any Governmental Authority succeeding to any of its principal functions.
“Secured Parties” means, collectively, each of the Applicable Lenders, as collateral agent for the benefit of itself, its Agented Lenders and the Agents, and each such Applicable Lender, individually, being a “Secured Party”.
“Securities Act” means the Securities Act of 1933.
“Security Agreement” means the Security Agreement, substantially in the form of Exhibit D, by and among the Borrower, the Administrative Agent, the Calculation Agent and the Applicable Lenders.
“Share Price Event” means the occurrence, as of the close of business on any Scheduled Trading Day, of the Market Reference Price of any Pledged Shares being equal to or less than the Minimum Price for such Shares.
“Shares” means, collectively, (i) the CHTR Shares and (ii) following the occurrence of an Issuer Merger Event or Spin-Off Event, Merger Shares and/or Spin-Off Shares, as applicable; provided that following the occurrence of an Issuer 251(g) Merger Event, the shares of common stock issued by the resulting Delaware corporation shall be deemed to be “Shares” (except for purposes of the definition of “Issuer 251(g) Merger Event”).
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“Side Letter” means the letter, dated as of May 18, 2016, from Charter and CCH I, LLC to the Parent and Advance/Newhouse Partnership.
“SOFR” with respect to any day shall mean the secured overnight financing rate published for such day by the Federal Reserve Bank of New York, as the administrator of the benchmark (or a successor administrator), on the Federal Reserve Bank of New York’s Website.
“SOFR-Based Rate” shall mean SOFR, Compounded SOFR or Term SOFR.
“Solvency Certificate” means a solvency certificate substantially in the form of Exhibit G.
“Solvent” means, with respect to any Person, that as of any date of determination, (i) the present fair value of such Person’s assets exceeds the total amount of such Person’s liabilities (including contingent liabilities), (ii) such Person has capital and assets sufficient to carry on its businesses, (iii) such Person is not engaged and is not about to engage in a business or a transaction for which its remaining assets are unreasonably small in relation to such business or transaction and (iv) such Person does not intend to incur or believe that it will incur debts and/or liabilities beyond its ability to pay such debts or liabilities as they become due. The amount of contingent liabilities at any time shall be computed as the amount that, in the light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability.
“Special Purpose Entity” means a limited liability company which, at all times since its formation and thereafter, shall be (i) organized solely for the following purposes set forth in clauses (a) through (e) below and (ii) operated in accordance with clauses (f) through (ff) below:
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“Specified Representations” means the representations and warranties set forth in Sections 5.01, Section 5.02, Section 5.03, Section 5.15, Section 5.17, Section 5.19, Section 5.23 and Section 5.26.
“Spin-Off Event” means a distribution, whether as a dividend or otherwise, of the common stock of any Person (other than a Person that is then an Issuer) by an Issuer to the holders of the Shares of such Issuer, as determined by the Calculation Agent.
“Spin-Off Shares” means the shares of common stock of a Person (other than a Person that is then an Issuer) distributed to the holders of the Shares of such Issuer in connection with a Spin-Off Event and are (or will be upon the consummation of such Spin-Off Event) listed for trading on a Designated Exchange and issued by an entity incorporated or organized under the laws of the United States or any state thereof.
“Spinco” means, in connection with a Spin-Off Event, the issuer of the Spin-Off Shares.
“Stockholders Agreement” means the Second Amended and Restated Stockholders Agreement, dated as of May 23, 2015, by and among Charter, CCH I, LLC, Advance/Newhouse Partnership and the Parent, as amended by the Side Letter, and as further amended, restated, amended and restated, supplemented or otherwise modified from time to time.
“Stub Period” shall mean, (a) unless a Loan is made on an Interest Payment Date, the initial Interest Period with respect to such Loan and (b) unless the
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Maturity Date is on an Interest Payment Date, the Interest Period ending on the Maturity Date.
“Subsequent Loan Borrowing” means a Borrowing comprised of Delayed Draw Loans or Additional Loans; provided that, immediately upon the incurrence of the Kodiak Pay-off Loans, the term “Subsequent Loan Borrowing” shall include the Kodiak Pay-off Loans.
“Subsidiary” of a Person means a corporation, partnership, joint venture, limited liability company or other business entity of which a majority of the shares of securities or other interests having ordinary voting power for the election of directors or other governing body (other than securities or interests having such power only by reason of the happening of a contingency) are at the time beneficially owned, or the management of which is otherwise Controlled, directly, or indirectly through one or more intermediaries, or both, by such Person; provided that no Issuer shall be included as a “Subsidiary” of the Borrower for any purposes under this Agreement or the other Loan Documents.
“Successor Administrative Agent” has the meaning specified in the introductory paragraph hereto.
“Successor Calculation Agent” has the meaning specified in the introductory paragraph hereto.
“Swap Contract” 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 (any such master agreement, together with any related schedules, a “Master Agreement”), including any such obligations or liabilities under any Master Agreement.
“Swap Termination Value” means, in respect of any one or more Swap Contracts, after taking into account the effect of any legally enforceable netting agreement relating to such Swap Contract(s), (a) for any date on or after the date such Swap Contract(s) 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
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such Swap Contracts, as determined in accordance with the methodology for determining termination value in such Swap Contract.
“Synthetic Lease Obligation” means the monetary obligation of a Person under (a) a so-called synthetic or off-balance sheet 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, upon the insolvency or bankruptcy of such Person, would be characterized as the indebtedness of such Person (without regard to accounting treatment).
“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.
“Term SOFR” means the forward-looking term rate based on SOFR for the applicable Corresponding Tenor that is published by the Federal Reserve Bank of New York on the Federal Reserve Bank of New York’s Website.
“Threshold Amount” means $500,000.
“Trading Disruption” means the occurrence or existence during the one-half hour period ending on the scheduled close of trading on any Exchange Day of any material suspension of or limitation imposed on trading by the relevant Exchange (whether by reason of movements in price exceeding limits permitted by such Exchange or otherwise) in any Shares that are Pledged Shares as determined by the Calculation Agent other than as a result of an Early Closure.
“Trading with the Enemy Act” has the meaning specified in Section 5.19.
“Tranche” shall mean Loans of the same Type made, converted or continued on the same date and as to which a single Interest Period is in effect.
“Transfer Restrictions” means, with respect to any property (including, in the case of securities, security entitlements in respect thereof), any condition to or restriction on the ability of the holder thereof to sell, assign, pledge or otherwise transfer such property or to enforce the provisions thereof or of any document related thereto whether set forth in such property itself or in any document related thereto, including (i) any requirement that any sale, assignment, pledge or other transfer or enforcement of such property be subject to any volume limitations or be consented to or approved by any person, including the issuer thereof or any other obligor thereon, (ii) any limitations on the type or status, financial or otherwise, of any purchaser, pledgee, assignee or transferee of such property, (iii) any requirement of the delivery of any certificate, consent, agreement, opinion of counsel, notice or any other document of any person to the issuer of, any other obligor on or any registrar or transfer agent for, such property, prior to the sale, pledge, assignment or other transfer or enforcement of such property, (iv) any registration or qualification requirement or prospectus delivery requirement for such property pursuant to any federal, state or foreign securities law (including any such
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requirement arising under the Securities Act of 1933), (v) any condition to or restriction on the ability of a potential purchaser, assignee, pledgee or transferee to acquire such property from the holder thereof and (vi) any legend or other notification appearing on any certificate representing such property to the effect that any such condition or restriction exists; except that the required delivery of any assignment, instruction or entitlement order from the Borrower or any pledgor, assignor or transferor of such property, together with any evidence of the corporate or other authority of such Person, shall not constitute such a condition or restriction.
“Treasury Regulations” means the final or temporary regulations that have been issued by the U.S. Department of the Treasury pursuant to its authority under the Code, and any successor regulations.
“Triggering” means, with respect to an Issuer Event that is an Issuer Trading Suspension or Issuer Delisting, the occurrence or effectiveness thereof; provided that no Triggering of an Issuer Trading Suspension or Issuer Delisting, as applicable, that relates to Spin-Off Shares, shall be deemed to have occurred (A) to the extent that such Spin-Off Shares are not included in the Collateral or (B) if such Spin-Off Shares are included in the Collateral, to the extent that at the time of the Issuer Trading Suspension or Issuer Delisting, as applicable, with respect such Spin-Off Shares, (1) the LTV Ratio (calculated without giving any Collateral Value to such Spin-Off Shares) does not exceed the LTV Margin Call Level or (2) if the LTV Ratio exceeds the LTV Margin Call Level (calculated without giving any Collateral Value to such Spin-Off Shares), the Borrower complies with the provisions of Section 2.09(a) in a manner that causes the LTV Ratio to be equal to or less than the LTV Reset Level (it being understood and agreed that any Mandatory Prepayment Notice given in connection with the Triggering of an Issuer Event in substantially the form of Exhibit L hereto shall be deemed to satisfy the requirement to provide a Collateral Shortfall Notice to the Borrower); provided, however, that, on and after the Triggering of an Issuer Event with respect to any Issuer of Spin-Off Shares, such Spin-Off Shares shall cease to constitute Eligible Pledged Shares at all times thereafter.
“Type” means, as to any Loan, whether it is (a) an Initial Loan, (b) a Delayed Draw Loan or (c) an Additional Loan (provided that Additional Loans that are subject to different terms and conditions, including with respect to Base Spread and Maturity Date, shall be treated as different “Types” of Loans).
“UCC” means the Uniform Commercial Code as in effect from time to time in the State of New York.
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“Unadjusted Benchmark Replacement” shall mean the Benchmark Replacement excluding the Benchmark Replacement Adjustment.
“United States” and “U.S.” mean the United States of America.
“Upfront Fee” has the meaning specified in Section 2.06(e).
“Upstream GCI Liberty Merger” has the meaning set forth in the definition of GCI Liberty Merger Effective Date.
“U.S. Person” means any Person who is a “U.S. person” within the meaning of Section 7701(a)(30) of the Code.
“U.S. Tax Compliance Certificate” has the meaning specified in Section 3.01(g)(ii)(B)(III).
“USA PATRIOT Act” has the meaning specified in Section 10.15.
“Valuation Percentage” means, with respect to any Merger Shares or Spin-Off Shares, as the case may be, the applicable percentage reasonably determined by the Calculation Agent, in an equitable manner as the Calculation Agent determines necessary to preserve for the Lenders and the Borrower the intent of the parties (including the intention expressed through definitions) and the fair value and risks in the Loans after non-binding consultation with the Borrower for up to three (3) Business Days during the period prior to the effectiveness of the related Issuer Merger Event or Spin-Off Event, as applicable (or such longer period of time as determined by the Calculation Agent), for purposes of determining the Collateral Value with respect to such Merger Shares or Spin-Off Shares, as the case may be; provided that, for the avoidance of doubt, (i) the Valuation Percentage may be a percentage between 0% and 100%, inclusive, and (ii) the Calculation Agent may, but is not required to, determine the Valuation Percentage by reference to, among other factors and without limitation, applicable Transfer Restrictions other than Permissible Transfer Restrictions (whether in the hands of the Borrower or any Lender or Agent exercising its rights with respect thereto under the Loan Documents) and the liquidity of the relevant securities; provided, further, that if, in the reasonable judgment of the Calculation Agent, the Valuation Percentage cannot reasonably be determined prior to or upon the effectiveness of the related Issuer Merger Event or Spin-Off Event, then the Valuation Percentage shall be a good faith estimate as reasonably determined by the Calculation Agent which may be adjusted by the Calculation Agent as soon as practicable following such effectiveness in an equitable manner as the Calculation Agent determines necessary to preserve for the Lenders and the Borrower the intent of the parties (including the intention expressed through definitions) and the fair value and risks in the Loans and after non-binding consultation with the Borrower for up to three (3) Business Days. Notwithstanding the foregoing, if, with respect to such Merger Shares or Spin-Off Shares, as applicable, no Transfer Restrictions other than
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Permissible Transfer Restrictions (whether in the hands of the Borrower or any Lender or Agent exercising its rights with respect thereto under the Loan Documents) apply and such Merger Shares or Spin-Off Shares, as applicable, are (or, upon consummation of the relevant Issuer Merger Event or Spin-Off Event, will be (it being understood and agreed that such Shares shall not constitute Eligible Pledged Shares until such time as such Shares are listed for trading on a Designated Exchange)) listed for trading on a Designated Exchange, the Valuation Percentage shall be 100% with respect to such Merger Shares or Spin-Off Shares, as applicable, if the Calculation Agent determines that each of the following conditions is satisfied: (A) the issuer of such Merger Shares or Spin-Off Shares, as applicable, (i) has filed all required reports under Section 13 or 15(d) of the Exchange Act, as applicable, for at least twelve (12) months (or for such shorter period that such issuer was required to file such reports) and (ii) has submitted electronically and posted on its corporate web site, if any, every Interactive Data File (as defined in Rule 11 of Regulation S-T) required to be submitted and posted pursuant to Rule 405 of Regulation S-T, for at least twelve (12) months (or for such shorter period that such issuer was required to submit and post such files), and (B) the Free Float of the Merger Shares or Spin-Off Shares, as applicable, as determined by the Calculation Agent in a commercially reasonable manner is at least [__] percent ([__]%). Upon receipt of written request from the Borrower following any determination of a Valuation Percentage, the Calculation Agent shall reasonably promptly provide the Borrower with a written explanation describing in reasonable detail any calculation or determination made by it in determining such Valuation Percentage (including any quotations, market data or information from internal sources used in making such calculations, but without disclosing Calculation Agent’s proprietary models or confidential information).
“Voluntary Prepayment” has the meaning specified in Section 2.04.
“Voluntary Prepayment Notice” has the meaning specified in Section 2.04.
“Withholding Agent” means the Borrower or 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 arises, 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 obligation 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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Unless otherwise specified, all references herein to times of day shall be references to Eastern time (daylight or standard, as applicable) in the United States.
When the payment of any obligation or the performance of any covenant, duty or obligation is stated to be due or performance required on a day which is not a Business Day, the date of such payment (except as otherwise set forth herein or in any other Loan Document) or performance shall extend to the immediately succeeding Business Day and, in the case of any payment that accrues interest, interest thereon shall be payable for the period of such extension.
For all purposes under the Loan Documents, in connection with any division or plan of division under Delaware law (or any comparable event under a different jurisdiction’s laws): 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.
The Administrative Agent does not warrant or accept responsibility for, and shall not have any liability with respect to (a) the administration of, submission of, calculation of or any other matter related to LIBOR, any component definition thereof or rates referenced in the definition thereof or any alternative, comparable or successor rate thereto (including any then-current Benchmark or any Benchmark Replacement), including whether the composition or characteristics of any such alternative, comparable or successor 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, LIBOR or any other Benchmark, or (b) the effect, implementation or composition of any Benchmark Replacement Conforming Changes.
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provided that a Borrowing Request may state that such request is conditioned upon the effectiveness of certain events, in which case such notice may be revoked by the Borrower (by notice to Administrative Agent on or prior to the specified date of such Borrowing) if such conditions are not satisfied.
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The Borrower may, upon notice (which notice may be in the form attached as Exhibit H-2 hereto or any other form approved by the Administrative Agent (including any form on an electronic platform or electronic transmission system as shall be approved by the Administrative Agent, such approval not to be unreasonably withheld, conditioned or delayed), appropriately completed and signed by a Responsible Officer) to the Administrative Agent (a “Voluntary Prepayment Notice”), at any time or from time to time, voluntarily prepay the Loans in whole or in part (a “Voluntary Prepayment”) in an amount equal to the sum of (x) the aggregate principal amount of the Loans being prepaid, (y) in the case of a prepayment of Delayed Draw Loans, the applicable Prepayment Amount, if any, for such Delayed Draw Loans being prepaid and (z) all accrued interest on the amount prepaid, together with any additional amounts required pursuant to Section 3.04; provided that, except with respect to any prepayments made pursuant to Section 2.09(a), (i) such Voluntary Prepayment Notice must be received by the Administrative Agent not later than 12:00 p.m., two (2) Business Days prior to any date of prepayment (or such shorter period as the Administrative Agent and the Lenders may agree) and (ii) any prepayment shall be either (A) in an aggregate principal amount of at least $5,000,000 and a whole multiple of $1,000,000 in excess thereof or (B) the entire principal amount of the Loans then outstanding. Each such Voluntary Prepayment Notice shall specify the date of such prepayment, the amount of principal being prepaid, whether the Loans being prepaid are Initial Loans, Delayed Draw Loans, Kodiak Pay-off Loans or other Additional Loans, and, in the case of a prepayment of Delayed Draw Loans, the applicable Prepayment Amount, if any, determined with respect to such Delayed Draw Loans, as set forth in the definition thereof. The Borrower shall make such prepayment, together with all accrued interest thereon and the related Prepayment Amount, if any, and any additional amounts required pursuant to Section 3.04 on the date specified in such Voluntary Prepayment Notice, and all such amounts shall be due and payable on such date; provided that a Voluntary Prepayment Notice delivered by the Borrower may state that such notice is conditioned upon the effectiveness of certain events, including, without limitation, the closing of other credit facilities, in which case such notice may be revoked by the Borrower (by notice to Administrative Agent on or prior to the specified effective date) if such conditions are not satisfied. Subject to Section 2.11(j), any Voluntary Prepayment described in this Section 2.04 shall be made to the Administrative Agent for the ratable accounts of the Lenders. The Administrative Agent shall forward to each Lender its Ratable Share of each such payment.
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then the Administrative Agent shall give notice thereof to the Borrower and the Lenders by telephone, telecopy or electronic mail as promptly as practicable thereafter and, until the Administrative Agent notifies the Borrower and the Lenders that the circumstances giving rise to such notice no longer exist, any Borrowing of Loans shall be made as a Borrowing of Base Rate Loans. The Administrative Agent will promptly notify the Borrower and the Lenders of (i) any occurrence of a Benchmark Transition Event or an Early Opt-in Election, as applicable, and its related Benchmark Replacement Date, (ii) the implementation of any Benchmark Replacement, (iii) the effectiveness of any Benchmark Replacement Conforming Changes, (iv) the removal or reinstatement of any tenor of a Benchmark pursuant to this Section 2.06(h)(i) and (v) the commencement or conclusion of any Benchmark Unavailability Period.
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For purposes of delivery and receipt of any Collateral Shortfall Notice and Section 10.02 with respect to any such Collateral Shortfall Notice, (i) the Borrower consents to the delivery of such Collateral Shortfall Notice by electronic communications and (ii) the Borrower’s “normal business hours” shall be 9:00 a.m. to 6:00 p.m. each Business Day. Notwithstanding anything to the contrary contained herein, in the event that the LTV Ratio exceeds the LTV Margin Call Level, as determined by the Calculation Agent, following a Potential Adjustment Event, a Spin-Off Event or an Issuer Merger Event, then the Calculation Agent and the Lenders agree not to send a Collateral Shortfall Notice until such time as the Calculation Agent has made its (or, subject to the terms and conditions of the proviso to this sentence, the Required Lenders have made their) determination as to the appropriate adjustments, if any, to be made to (i) the Minimum Price, (ii) the Maximum Share Number, (iii) the LTV Margin Call Level and/or (iv) the LTV Reset Level, in each case, in accordance with and subject to the provisions of Section 1.02(d); provided that, if the Calculation Agent fails to make its determination with respect to such adjustments by 5:30 p.m. on such Collateral Shortfall Notice Day, the Required Lenders (provided that the outstanding Loans held by, and unused Commitments of, the Calculation Agent and its Affiliates shall be excluded for purposes of making such determination of Required Lenders) may make such adjustments, if any, in each case, in accordance with and subject to the provisions of Section 1.02(d) with the same effect as if they were made by the Calculation Agent.
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Within one (1) Business Day after the Calculation Agent determines the LTV Event Amount, which determination shall occur not more than eight (8) Business Days prior to the date on which such a distribution is scheduled to occur (or such shorter period of time if the scheduled distribution is less than eight (8) Business Days following the public announcement), the Calculation Agent shall deliver a notice to the Borrower setting forth the LTV Event Amount. No later than 4:00 p.m. on the earlier to occur of the (i) third Business Day after delivery of such notice and (ii) the date of such distribution, the Borrower shall cause Cash, Cash Equivalents and/or Shares that will constitute Eligible Cash Collateral and/or Eligible Pledged Shares, as applicable, upon such delivery, to be delivered to the Collateral Account of each Applicable Lender in accordance with Section 3 of the Security Agreement, in an amount equal to the LTV Event Amount. With effect from such delivery of the LTV Event Amount, the Calculation Agent shall adjust the Collateral Value in its commercially reasonable sole discretion to give effect to the foregoing determinations, with such adjustment terminating upon the earliest to occur of (i) the determination of a Valuation Percentage with respect to such securities upon their distribution and (ii) the announcement by any Issuer or relevant third party of the withdrawal or abandonment of such Issuer Merger Event or Spin-Off Event, as the case may be (it being understood that the withdrawal or abandonment of any such Issuer Merger Event or Spin-Off Event, as the case may be, does not preclude the occurrence of another Issuer Merger Event or Spin-Off Event).
If, following the delivery of Eligible Cash Collateral and/or Eligible Pledged Shares in the requisite LTV Event Amount, any Issuer or relevant third party announces the withdrawal or abandonment of such Issuer Merger Event or Spin-Off Event, or the Calculation Agent determines following consummation of such Issuer Merger Event or Spin-Off Event that the Valuation Percentage is greater than initially determined for purposes of calculating the LTV Event Amount, then, upon receipt of a written request therefor from the Borrower, the Calculation Agent shall promptly originate an instruction or entitlement order to the Custodian directing the release and transfer of any applicable Collateral constituting the LTV Event Amount from the Collateral Account of each Applicable Lender to the Borrower (or the Borrower’s designee) such that the LTV Ratio does not exceed the LTV Margin Call Level as calculated by the Calculation Agent to correspond to the revised Valuation Percentage (provided that the Borrower may elect to maintain in the Collateral Account all or any portion of such LTV Event Amount permitted to be so released). Notwithstanding the foregoing, prior to the Calculation Agent sending notice of an LTV Event Amount, the Calculation Agent shall make all other adjustments pursuant to Section 1.02(d) hereof and any LTV Event Amount shall be calculated based on such adjustments.
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Any such notice delivered pursuant to the immediately preceding clause (i) shall contain a representation and warranty by the Borrower to the items set forth in the immediately preceding clauses (ii) and (iii). Upon satisfaction of the conditions set forth in this Section 2.09(e), the Calculation Agent shall be permitted, without the consent of the Lenders (but the Calculation Agent shall give each Applicable Lender prompt notice thereof), and hereby agrees, on the date specified in such written notice of the Borrower (which date shall be no earlier than the Business Day immediately following the first Business Day on which the Calculation Agent and the Applicable Lenders have received such notice by 1:00 p.m. (or such shorter period as the Calculation Agent
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and the Applicable Lenders may agree)), to release such Collateral from the Liens created under the Collateral Documents and send written directions to the Custodian, as provided and in accordance with the Collateral Account Control Agreement, to transfer such Collateral to an account or accounts as directed by the Borrower in such written notice; provided however, upon receiving written notice from the Borrower pursuant to Section 2.09(e)(i), if any Applicable Lender acting in a commercially reasonable manner disputes in good faith that the conditions set forth in Section 2.09(e) have been satisfied and subsequently notifies the Calculation Agent of such dispute prior to release, then absent manifest error on behalf of such Applicable Lender, the Calculation Agent shall not release such Lender’s Collateral from Liens under the Collateral Documents; provided, further, that the release of Collateral pursuant to Section 2.09(f) shall not be subject to the requirements of this Section 2.09(e). Collateral of the type requested to be released by the Borrower shall be released from any Lien created under the Collateral Documents (A) on a ratable basis among the Applicable Lenders in accordance with their respective Ratable Shares of the amount and type of Collateral being released and (B) in an aggregate amount equal to the lowest of (I) the amount of Collateral requested to be released by the Borrower in such written notice, (II) an amount of Collateral with a value such that, after giving effect to such release and any other release otherwise requested or effected pursuant to this Section 2.09(e) and any Disposition pursuant to Section 7.04, the LTV Ratio would not be greater than the Initial LTV Level and (III) the aggregate amount of such type of Collateral requested to be released by the Borrower held in the Collateral Accounts.
Notwithstanding anything to the contrary contained herein, in the case of an Issuer 251(g) Merger Event, Issuer Merger Event or Issuer Tender to Merger Event, (i) upon receipt of a written request therefor from the Borrower, the Calculation Agent shall (and may, without the consent of any Lender) promptly originate an instruction or entitlement order to the Custodian directing the release and transfer of any Pledged Shares subject to such Issuer 251(g) Merger Event, Issuer Merger Event or Issuer Tender to Merger Event (but excluding, for the avoidance of doubt, (A) any Shares or other shares received or to be received by the Borrower or that the Borrower is entitled or otherwise has any right or a claim to receive in connection with any such Issuer 251(g) Merger Event, Issuer Merger Event or Issuer Tender to Merger Event and (B) any and all proceeds in respect of any such Issuer 251(g) Merger Event, Issuer Merger Event or Issuer Tender to Merger Event) upon or following the occurrence of such Issuer 251(g) Merger Event, Issuer Merger Event or Issuer Tender to Merger Event, regardless of whether the conditions to release of Collateral set forth in this Section 2.09(e) are otherwise met, (ii) to the extent it is necessary for the Calculation Agent or any Applicable Lender to take action under the Collateral Documents to cause the Pledged Shares subject to such Issuer 251(g) Merger Event, Issuer Merger Event or Issuer Tender to Merger Event to cease to be Pledged Shares upon the occurrence of such Issuer 251(g) Merger Event, Issuer Merger Event or Issuer Tender to Merger Event, then the Calculation Agent or such Applicable Lender shall take such action (and each Secured Party authorizes the taking of such actions by the Calculation Agent and such Applicable Lender), and (iii) to the extent it is necessary for the Borrower to take action to cause (x) any Shares, Permitted Assets, other assets, consideration or proceeds received in respect of such Issuer 251(g) Merger Event, Issuer Merger Event or Issuer Tender to Merger Event or (y) any Shares tendered in the tender offer relating to an Issuer Tender to Merger Event where (A) such tender offer is not settled within three (3) Business Days following any tender of Shares by Borrower in such tender offer, (B) such Shares are properly withdrawn prior to expiration or (C) such tender offer is terminated prior to such Shares being accepted by the
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offeror, in the case of each of clause (x) and clause (y), to constitute Collateral pledged under the Security Agreement to each Applicable Lender, on a ratable basis, Borrower agrees to take such actions as may be reasonably requested by the Calculation Agent or any Lender to confirm or ensure that such Shares, Permitted Assets, other assets, consideration, proceeds or previously tendered Shares promptly constitute Collateral pledged under the Security Agreement to each Applicable Lender, on a ratable basis, and, if Shares, Permitted Assets, other assets, consideration, proceeds or previously tendered Shares are so pledged, then, to the extent such Shares, Permitted Assets, other assets, consideration, proceeds or previously tendered Shares may be held in an account subject to the Collateral Account Control Agreement, the Borrower will take such actions as may be reasonably requested by the Calculation Agent or any Lender to cause such Shares, Permitted Assets, other assets, consideration, proceeds or previously tendered Shares to be held in accounts subject to the Collateral Account Control Agreement.
(ii) Upon satisfaction of the conditions set forth in this Section 2.09(f), Eligible Cash Collateral shall be released from any Lien created under the Collateral Documents (A) among the Applicable Lenders in accordance with their respective ratable basis of the Eligible Cash Collateral being released and (B) in an aggregate amount equal to the lowest of (I) the amount of Collateral requested to be released by the Borrower in such written notice and (II) the aggregate amount Eligible Cash Collateral requested to be released by the Borrower held in the Collateral Accounts, and an amount equal to the amount of Eligible Cash Collateral released by each Applicable Lender shall be applied by the Administrative Agent in accordance with the preceding clause (i) to the Obligations owing to such Applicable Lender and its Agented Lenders.
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Each Lender and Agent 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.
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either (i) convert such Lender’s portion of the Loans to a Base Rate Loan, either on the last day of the Interest Period therefor, if such Lender may lawfully continue to maintain its portion of the Loans as Floating Rate Loans to such day or, immediately, if such Lender may not lawfully continue to maintain its portion of the Loans or (ii) prepay such Lender’s portion of the Loans, either on the last day of the Interest Period therefor, if such Lender may lawfully continue to maintain its portion of the Loans to such day, or immediately, if such Lender may not lawfully continue to maintain its portion of the Loans as Floating Rate Loans. Upon any such prepayment, the Borrower shall also pay accrued interest on the amount so prepaid.
and the result of any of the foregoing shall be to increase the cost to such Lender or Agent of making, continuing or maintaining its portion of the Loans (or of maintaining its obligation to make its portion of the Loan) or to reduce the amount of any sum received or receivable by such Lender or Agent hereunder (whether of principal, interest or any other amount) then, upon request of such Lender or Agent, the Borrower will pay to such Lender or Agent such additional amount or amounts as will compensate such Lender for such additional costs incurred or reduction suffered.
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including any loss of anticipated profits (other than Base Spread) and any loss or expense arising from the liquidation or reemployment of funds obtained by it to maintain its portion of the Loans or from fees payable to terminate the deposits from which such funds were obtained. The Borrower shall also pay any customary administrative fees charged by such Lender in connection with the foregoing.
Such loss, cost or expense to any Lender shall be deemed to include an amount determined by such Lender to be the excess, if any, of (i) the amount of interest which would have accrued on the principal amount of such Loan had such event not occurred, at the Floating Rate that would have been applicable to such Loan, for the period from the date of such event to the last day of the then current Interest Period therefor, over (ii) the amount of interest which would accrue on such principal amount for such period at the interest rate which such Lender would bid were it to bid, at the commencement of such period, for dollar deposits of a comparable amount and period from other banks in the eurodollar market.
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Each Lender waives any indemnity claim for LIBOR breakage costs under this Section 3.04 of this Agreement in connection with the repayment of interest pursuant to Section 2.06(a)(iii) on the Kodiak Pay-off Loan Funding Date.
(b)If any Lender requests compensation under Section 3.03, or if the Borrower is required to pay any Indemnified Taxes or additional amounts to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 3.01 and, in each case, such Lender has declined or is unable to designate a different lending office in accordance with Section 3.05(a), or if any Lender is a Defaulting Lender or declines to approve an amendment, waiver or consent that is approved by the Required Lenders, 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 (in accordance with and subject to the restrictions contained in, and consents required by, Section 10.06), all of its interests, rights (other than its existing rights to payments pursuant to Section 3.03 or Section 3.01) and obligations under this Agreement and the related Loan Documents to an Eligible Assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment); provided that:
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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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Without limiting the generality of the provisions of Section 9.03(c), for purposes of determining compliance with the conditions specified in this Section 4.01, each of the Lenders and the Administrative Agent that has signed this Agreement shall be deemed to have consented to, approved or accepted or to be satisfied with, each document or other matter required hereunder to be consented to or approved by or acceptable or satisfactory to a Lender unless the Administrative Agent shall have received notice from such Lender prior to the proposed Closing Date specifying its objection thereto.
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Each Borrowing Request shall be deemed to be a representation and warranty by the Borrower that the conditions specified in Section 4.01 (solely for the Initial Loan Borrowings on the Funding Date) and Section 4.02, as applicable, have been satisfied on and as of the date of the making of a Loan.
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The Borrowing Request shall be deemed to be a representation and warranty by the Borrower that the conditions specified in this Section 4.03 have been satisfied on and as of the Kodiak Pay-off Loan Funding Date.
Without limiting the generality of the provisions of Section 9.03(c), for purposes of determining compliance with the conditions specified in this Section 4.03, each Kodiak Pay-off Loan Lender (and, solely with respect to clause (d) of this Section 4.03, each other Lender hereunder) shall be deemed to have consented to, approved or accepted or to be satisfied with, each document or other matter required hereunder to be consented to or approved by or acceptable or satisfactory to such Lender unless the Administrative Agent shall have received notice from such Lender prior to the proposed funding date of the Kodiak Pay-off Loans specifying its objection thereto.
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The Borrower represents and warrants to the Lenders and the Agents that as of the Closing Date and as of the date of any Borrowing hereunder (provided such representation and warranty contained in Section 5.20 shall not be made as of the Funding Date to the extent the Funding Date occurs after the Closing Date, or as of the date of any Subsequent Loan Borrowing):
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been provided in accordance with GAAP. There is no proposed written Tax assessment against the Borrower and there is no current or, to the Borrower’s knowledge, pending audit or other formal investigation of the Borrower by any Governmental Authority, in each case, which could reasonably be expected to have a Material Adverse Effect. The Borrower does not have, and has never had, a trade or business or a permanent establishment in any country other than the United States. Each of the Borrower, and, unless the Parent is the Borrower Sole Member, the Borrower Sole Member is disregarded as an entity separate from the Parent for U.S. federal income tax purposes, and the Parent is a “domestic corporation” within the meaning of Section 7701(a)(30) of the Code.
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101
So long as the Loans or other Obligations (other than contingent obligations for which no claim has been made) shall remain unpaid or unsatisfied:
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Each notice delivered pursuant to this Section 6.03 shall be accompanied by a statement of a Responsible Officer setting forth details of the occurrence referred to therein and stating what action the Borrower has taken and proposes to take with respect thereto except, in the case of clause (a)(ii) above, to the extent (x) such information is subject to confidentiality obligations with a third party which prevents disclosure of such information or (y) such information is subject to attorney-client privilege or (z) the sharing of which information is prohibited by any applicable Law. Each notice pursuant to Section 6.03(a) shall describe with particularity any and all provisions of this Agreement and any other Loan Document that have been breached.
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So long as the Loans or other Obligations (other than contingent obligations for which no claim has been made) shall remain unpaid or unsatisfied, without the prior written consent of all of the Lenders:
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necessary for compliance with Permitted Liabilities and (z) the maintenance of its legal existence, including the ability to incur reasonable fees, costs and expenses in the ordinary course relating to such maintenance, (ii) enter into any Contractual Obligation, other than Permitted Liabilities or any other transaction or agreement between itself and any Person other than as not prohibited under this Agreement or the other Loan Documents, including with respect to Dispositions of Permitted Assets or (iii) have any employees or sponsor, maintain or contribute to, any Plan subject to Title IV of ERISA or any multiemployer plan, as defined in Section 3(37) of ERISA.
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provided that upon the occurrence of any Event of Default pursuant to Section 8.01(d) or 8.01(e), the Commitments of all Lenders shall automatically terminate and the unpaid principal amount of the Loans, any Prepayment Amount (if applicable to the Type of such Loans) and all interest and other amounts as aforesaid shall automatically become due and payable, in each case without further act of any Lender or Agent. If any Lender elects to take any of the foregoing actions individually (without the Administrative Agent acting on behalf of such Lender), such Lender shall notify the other Lenders and the Administrative Agent of such election and action prior to or substantially concurrently with the taking of such action.
First, to payment of that portion of the Obligations constituting fees, indemnities, expenses and other amounts (including fees, charges and disbursements of counsel to the Agents and amounts payable under Sections 3.01, 3.03 and 3.04) payable to each Agent in its capacity as such;
Second, to payment of that portion of the Obligations constituting fees, indemnities and other amounts (other than principal and interest) payable to the Lenders arising under the Loan Documents and amounts payable under Sections 3.01, 3.03 and 3.04, ratably among them in proportion to the respective 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 arising under the Loan Documents, 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 any other Obligations ratably to the Secured Parties according to such Obligations owing to the Secured Parties; and
Sixth, the balance, if any, after all of the Obligations (other than contingent or indemnity obligations for which no claim has been made) have been indefeasibly paid in full, to the Borrower or as otherwise required by Law.
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(b)Notwithstanding anything to the contrary contained herein, in connection with the exercise of any remedies by an Applicable Lender with respect to its Applicable Collateral all proceeds received by any Applicable Lender with respect to any sale of, any collection from, or other realization upon all or any part of such Applicable Lender’s Applicable Collateral, shall be applied by such Applicable Lender against the Obligations as provided in Section 6(g) of the Security Agreement and such Applicable Lender shall promptly notify the Administrative Agent thereof.
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Period”), then such retiring Agent may appoint, on behalf of the Lenders, a successor Agent meeting the qualifications set forth above; provided that in no event shall any such successor be a Defaulting Lender. In addition, and without any obligation on the part of the retiring Agent to appoint, on behalf of the Lenders, a successor Agent, a retiring Agent shall, at any time upon or after the end of the Lender Appointment Period, notify the Borrower and the Lenders that no qualifying Person has accepted appointment as successor Agent and of the effective date of such retiring Agent’s resignation, which effective date shall be no earlier than three (3) Business Days after the date of such notice. Upon the resignation effective date established in such notice, or the date on which the Required Lenders remove an Agent as set forth above, and regardless of whether a successor Agent has been appointed and accepted such appointment, the retiring or removed Agent’s resignation or removal shall nonetheless become effective and (i) the retiring or removed Agent shall be discharged from its duties and obligations as an Agent hereunder and under the other Loan Documents, but shall not be relieved of any of its obligations as a Lender, and (ii) all payments, communications and determinations provided to be made by, to or through such Agent shall instead be made by or to each Lender directly, until such time as the Required Lenders appoint a successor Agent as provided for above in this Section 9.06. Upon the acceptance of a successor’s appointment as an Agent hereunder, such successor shall succeed to and become vested with all of the rights, powers, privileges and duties as an Agent of the retiring, retired or removed Agent (other than any rights to indemnity payments owed to the retiring, retired or removed Agent) and the retiring, retired or removed Agent shall be discharged from all of its duties and obligations as an Agent hereunder and/or under the other Loan Documents but shall not be relieved of any of its obligations as a Lender (if not already discharged therefrom as provided above in this Section 9.06). The fees payable by the Borrower to a successor Agent shall be the same as those payable to its predecessor unless otherwise agreed between the Borrower and such successor. After the retiring, retired or removed Agent’s resignation or removal hereunder and under the other Loan Documents, the provisions of this Article IX and Section 10.04 shall continue in effect for the benefit of such retiring, retired or removed 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 or removed Agent was acting as an Agent. Notwithstanding anything herein to the contrary, (a) if at any time a Lender is serving as an Agent and such Person ceases to be a Lender hereunder, such Person shall be deemed to have provided its notice of resignation as Agent, which notice shall be automatically effective as of the date such Person ceased to be a Lender hereunder and (b) if at any time a Person is serving as both the Administrative Agent and the Calculation Agent, if at any time such Person ceases to be either the Administrative Agent or the Calculation Agent hereunder, such Person shall be deemed to have provided its notice of resignation as Calculation Agent or as Administrative Agent, respectively, in each case, which notice shall be automatically effective as of the date such Person ceased to be the Administrative Agent or the Calculation Agent hereunder.
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and 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 the Administrative Agent under the Loan Documents.
Nothing contained herein shall be deemed to authorize the Administrative Agent to authorize or consent to or accept or adopt on behalf of any Lender any plan of reorganization, arrangement, adjustment or composition affecting the obligations owed by the Borrower hereunder or the rights of any Lender or to authorize the Administrative Agent to vote in respect of the claim of any Lender in any such proceeding.
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provided, further, that notwithstanding anything to the contrary herein, (A) upon the occurrence of any Issuer Merger Event, Spin-Off Event or Potential Adjustment Event, the Calculation Agent may, without the consent of any other party but in consultation with each other Lender, (i) make corresponding adjustments to one or more of the terms of the Loan Documents in an equitable manner as the Calculation Agent determines necessary to preserve for the Lenders the fair value of the Loans then in effect and (ii) determine the effective date(s) of the adjustment(s), (B) if, following the Closing Date, the Administrative Agent, to the extent the Administrative Agent is a party to the applicable Loan Document, and/or the Calculation Agent and the Borrower have jointly identified an ambiguity, inconsistency, obvious error or any error or omission of a technical or immaterial nature, in each case, in any provision of any Loan Document, then the Administrative Agent, to the extent the Administrative Agent is a party to the applicable Loan Document, and/or the Calculation Agent and the Borrower shall be permitted to amend such provision to correct such ambiguity, inconsistency, error or omission, and such amendment shall become effective without any further action or consent of any other party to any Loan Documents if the same is not objected to in writing by the Required Lenders within five (5) Business Days following receipt of notice thereof, (C) the Borrower and the Persons providing any Additional Loan Commitments may enter into any Incremental Agreement (and any amendments thereto) in accordance with Section 2.15 without the consent of any other Lender, (D) an alternate interest rate may be adopted in replacement of LIBOR or the then-current Benchmark, as applicable, as provided in the definition of “LIBOR” and (E) 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 the Defaulting Lenders), except that (x) the Commitment of any 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 any Defaulting Lender disproportionately adversely relative to other affected Lenders shall require the consent of such Defaulting Lender. Any such adjustments
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pursuant to the immediately preceding proviso shall be binding on all parties to the Loan Documents (other than, in the case of the Collateral Account Control Agreement, the Custodian (unless the Custodian consents thereto)) and all such parties shall enter into such documentation required to reflect such adjustments.
Notices sent by hand or overnight courier service, or mailed by certified or registered mail, shall be deemed to have been delivered, received or given (as applicable) when received; notices sent by facsimile transmission shall be deemed to have been delivered, received or given (as applicable) when sent (except that, if not delivered, received or given during normal business hours for the recipient, shall be deemed to have been delivered, received or given (as applicable) at the opening of business on the next Business Day for the recipient). Notices delivered through electronic communications to the extent provided in subsection (b) below shall be effective as provided in such subsection (b).
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Unless a Person otherwise prescribes, (i) notices and other communications sent to an e-mail address shall be deemed delivered, received or given (as applicable) when sent (provided that, if the sender receives electronic notification that the message containing such notice or other communication is undeliverable, such notice or other communication shall not be deemed delivered, received or given, as applicable); provided that if such notice or other communication is not sent during the normal business hours of the recipient, such notice or communication shall be deemed to have been delivered, received or given (as applicable) at the opening of business on the next Business Day for the recipient, and (ii) notices or communications posted to an Internet or intranet website shall be deemed delivered, received or given (as applicable) 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 if such notice or communication is not sent during normal business hours of the recipient, such notice or communication shall be deemed delivered, received or given upon the opening of business on the next Business Day for the recipient.
Notwithstanding the foregoing, each Collateral Shortfall Notice, Borrowing Request, Voluntary Prepayment Notice, Mandatory Prepayment Notice, PIK Interest Election Notice, and any notice delivered pursuant to Section 2.09(e) and any notice of termination or reduction of Commitments may be delivered electronically.
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An Assignment and Assumption shall be delivered to the Administrative Agent together with a processing and recordation fee in the amount of $3,500 payable to the Administrative Agent; provided, however, that the Administrative Agent may, in its sole discretion, elect to waive such processing and recordation fee in the case of any assignment. The Administrative Agent shall acknowledge an assignment reasonably promptly upon receipt of an Assignment and Assumption that is executed by the Borrower (except where such assignment is not subject to the consent of the Borrower pursuant to this Section 10.06(b) and such Assignment and Assumption so specifies, which such specification may be relied upon by the Administrative Agent without further inquiry).
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For purposes of this Section 10.07, “Information” means all information received from or on behalf of the Borrower or the Parent relating to the Borrower or the Parent, other than any such information that is available to a Lender or Agent on a nonconfidential basis prior to disclosure by the Borrower or the Parent or which is public information. Any Person required to maintain the confidentiality of Information as provided in this Section 10.07 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.
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constitute an original, but all of which when taken together shall constitute a single contract. This Agreement and the other Loan Documents 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 Section 4.01, this Agreement shall become effective when it shall have been executed by the Administrative Agent, and the Administrative Agent shall have received counterparts hereof that, when taken together, bear the signatures of each of the other parties hereto (including, without limitation, each Person that is a Lender on the Closing Date, the Calculation Agent and the Borrower). Delivery of an executed counterpart of a signature page of this Agreement or any other Loan Document, or any certificate delivered hereunder or thereunder, via telecopy or e-mail (e.g., “pdf” or “tif”) shall be effective as delivery of a manually executed counterpart of this Agreement, such other Loan Document or certificate; provided that, without limiting the foregoing, upon the request of the Administrative Agent, any electronic signature shall be promptly followed by such manually executed counterpart.
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by such Lender or Agent in order to assist such Lender or Agent in maintaining compliance with its procedures, the USA PATRIOT Act and any other applicable Laws.
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position with respect to its portion of the Loans; (ii) any Lender and its affiliates may also be active in the market for the Shares other than in connection with any hedging activities in relation to its portion of the Loans; (iii) any Lender shall make its own determination as to whether, when or in what manner any hedging or market activities in Shares or other securities shall be conducted and shall do so in a manner that it deems appropriate; and (iv) any market activities of any Lender and its affiliates with respect to the Shares may affect the market price and volatility of the Shares, as well as the LTV Ratio, each in a manner that may be adverse to the Borrower.
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law, the Borrower hereby waives and releases any claims that it may have against the Administrative Agent, the Calculation Agent, each of the Lenders or their respective Affiliates with respect to any breach or alleged breach of agency or fiduciary duty in connection with any aspect of any transaction contemplated hereby.
[Remainder of Page Intentionally Left Blank]
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[SIGNATURE PAGES INTENTIONALLY OMITTED]
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SCHEDULE I TO
MARGIN LOAN AGREEMENT
COMMITMENTS
PART A
Commitments as of Closing Date
Lender |
Initial Loan Commitment |
Delayed Draw Commitment |
Bank of America, N.A. |
$[__] |
$[__] |
Mizuho Bank, Ltd. |
$[__] |
$[__] |
Credit Agricole Corporate and Investment Bank |
$[__] |
$[__] |
Royal Bank of Canada |
$[__] |
$[__] |
UBS AG, London Branch |
$[__] |
$[__] |
BNP Paribas |
$[__] |
$[__] |
Total |
$500,000,000.00 |
$500,000,000.00 |
PART B
Outstanding Loans and Commitments as of Amendment No. 2 Effective Date
Lender |
Initial Loans |
Delayed Draw Loans |
Delayed Draw Commitments |
BNP Paribas |
$[__] |
$[__] |
$[__] |
Credit Agricole Corporate and Investment Bank |
$[__] |
$[__] |
$[__] |
Royal Bank of Canada |
$[__] |
$[__] |
$[__] |
UBS AG, London Branch |
$[__] |
$[__] |
$[__] |
Mizuho Bank, Ltd. |
$[__] |
$[__] |
$[__] |
Total |
$500,000,000.00 |
$25,000,000.00 |
$475,000,000.00 |
SCHEDULE I - 2
PART C
Outstanding Loans and Commitments as of Amendment No. 3 Effective Date
Lender |
Initial Loans |
Delayed Draw Loans |
Delayed Draw Commitments |
Kodiak Pay-off Loan Commitments |
BNP Paribas |
$[__] |
$[__] |
$[__] |
N/A |
JPMorgan Chase Bank, N.A., London Branch |
N/A |
N/A |
N/A |
$[__] |
MUFG Union Bank, N.A. |
N/A |
N/A |
N/A |
$[__] |
Credit Agricole Corporate and Investment Bank |
$[__] |
$[__] |
$[__] |
$[__] |
Deutsche Bank AG, London Branch |
N/A |
N/A |
N/A |
$[__] |
Royal Bank of Canada |
$[__] |
$[__] |
$[__] |
N/A |
Citibank, N.A. |
N/A |
N/A |
N/A |
$[__] |
UBS AG, London Branch |
$[__] |
$[__] |
$[__] |
N/A |
Mizuho Bank, Ltd. |
$[__] |
$[__] |
$[__] |
N/A |
Credit Suisse, Cayman Islands Branch |
N/A |
N/A |
N/A |
$[__] |
Total |
$500,000,000.00 |
$100,000,000.00 |
$400,000,000.00 |
$1,300,000,000.00 |
SCHEDULE 10.02 TO
MARGIN LOAN AGREEMENT
BORROWER:
LBC Cheetah 6, LLC, as the Borrower
12300 Liberty Boulevard
Englewood, Colorado 80112
Attention: Assistant Vice President
Telephone No.: [Separately provided]
Facsimile No.: [Separately provided]
E-mail: [Separately provided]
with a copy to:
LBC Cheetah 6, LLC, as the Borrower
12300 Liberty Boulevard
Englewood, Colorado 80112
Attention: Chief Legal Officer
Telephone No.: [Separately provided]
Facsimile No.: [Separately provided]
E-mail: [Separately provided]
Authorized persons for telephonic notices: [Separately provided]
ADMINISTRATIVE AGENT:
Wilmington Trust, National Association
[Separately provided]
Attention: [Separately provided]
Telephone No.: [Separately provided]
Facsimile No.: [Separately provided]
E-mail: [Separately provided]
CALCULATION AGENT:
BNP Paribas
[Separately provided]
Attention: [Separately provided]
Facsimile No.: [Separately provided]
E-mail: [Separately provided]
with a copy to:
[Separately provided]
Telephone No.: [Separately provided]
E-mail: [Separately provided]
LENDERS:
BNP Paribas
[Separately provided]
Attention: [Separately provided]
Facsimile No.: [Separately provided]
E-mail: [Separately provided]
with a copy to:
[Separately provided]
Telephone No.: [Separately provided]
E-mail: [Separately provided]
JPMorgan Chase Bank, N.A., London Branch
JPMorgan Chase Bank, N.A., London Branch
[Separately provided]
Attention: [Separately provided]
Telephone No.: [Separately provided]
Facsimile No.: [Separately provided]
E-mail: [Separately provided]
with a copy to:
JPMorgan Chase Bank, N.A., London Branch
[Separately provided]
Attention: [Separately provided]
Telephone No.: [Separately provided]
Facsimile No.: [Separately provided]
E-mail: [Separately provided]
MUFG Union Bank, N.A.
MUFG Union Bank, N.A.
[Separately provided]
Attention: [Separately provided]
Telephone No.: [Separately provided]
Email: [Separately provided]
Credit Agricole Corporate and Investment Bank
Credit Agricole Corporate and Investment Bank
[Separately provided]
Attention: [Separately provided]
Telephone No: [Separately provided]
Email: [Separately provided]
Deutsche Bank AG, London Branch
Deutsche Bank AG, London Branch
[Separately provided]
Attention: [Separately provided]
Telephone No.: [Separately provided]
Email: [Separately provided]
with a copies to:
Deutsche Bank AG, London Branch
[Separately provided]
Attention: [Separately provided]
Telephone No.: [Separately provided]
Email: [Separately provided]
Deutsche Bank AG, London Branch
[Separately provided]
Attention: [Separately provided]
Telephone No.: [Separately provided]
Email: [Separately provided]
Royal Bank of Canada
Royal Bank of Canada
[Separately provided]
Attention: [Separately provided]
Telephone No.: [Separately provided]
Facsimile No.: [Separately provided]
Email: [Separately provided]
Citibank, N.A.
Citibank, N.A.
[Separately provided]
Attention: [Separately provided]
Telephone No.: [Separately provided]
Email: [Separately provided]
UBS AG, London Branch
UBS AG, London Branch
[Separately provided]
Attention: [Separately provided]
Telephone No.: [Separately provided]
E-mail: [Separately provided]
Mizuho Bank, Ltd.
Mizuho Bank, Ltd.
[Separately provided]
Attention: [Separately provided]
Telephone No.: [Separately provided]
E-mail: [Separately provided]
Credit Suisse AG, Cayman Islands Branch
Credit Suisse AG, Cayman Islands Branch
[Separately provided]
Attention: [Separately provided]
Telephone: No.: [Separately provided]
Facsimile No.: [Separately provided]
Email: [Separately provided]
with a copy to:
Credit Suisse AG, Cayman Islands Branch
[Separately provided]
Attention: [Separately provided]
Telephone No.: [Separately provided]
Facsimile No.: [Separately provided]
Email: [Separately provided]
List of Omitted Exhibits
The following exhibits to AMENDMENT NO. 3 TO MARGIN LOAN AGREEMENT AND AMENDMENT NO. 2 TO COLLATERAL ACCOUNT CONTROL AGREEMENT, dated as of August 12, 2020, by and among LBC CHEETAH 6, LLC, as Borrower, various Lenders and Secured Parties, Wilmington Trust, National Association, as Administrative Agent, BNP Paribas, as Calculation Agent, and U.S. Bank National Association, as Securities Intermediary, have not been provided herein:
EXHIBITS
Form of
BPayoff Letter
CCashless Roll Letter
DAmended Amended and Restated Operating Agreement
EAnnex I to Control Agreement as of the Amendment No. 3 Effective Date
The undersigned registrant hereby undertakes to furnish supplementally a copy of any omitted exhibit to the Securities and Exchange Commission upon request.
CERTIFICATION
I, Gregory B. Maffei, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Liberty Broadband Corporation;
2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;
3. Based on my knowledge, the financial statements and other financial information included in this quarterly report fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f))for the registrant and we have:
a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;
b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this quarterly report based on such evaluation; and
d) disclosed in this quarterly report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent function):
a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
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Date: |
November 4, 2020 |
|
|
/s/ GREGORY B. MAFFEI |
|
Gregory B. Maffei President and Chief Executive Officer |
CERTIFICATION
I, Brian J. Wendling, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Liberty Broadband Corporation;
2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;
3. Based on my knowledge, the financial statements and other financial information included in this quarterly report fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:
a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;
b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this quarterly report based on such evaluation; and
d) disclosed in this quarterly report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent function):
a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
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Date: |
November 4, 2020 |
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/s/ BRIAN J. WENDLING |
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Brian J. Wendling Chief Accounting Officer and Principal Financial Officer |
Exhibit 32
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
(Subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code)
Pursuant to section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of section 1350, chapter 63 of title 18, United States Code), each of the undersigned officers of Liberty Broadband Corporation, a Delaware corporation (the "Company"), does hereby certify, to such officer's knowledge, that:
The Quarterly Report on Form 10-Q for the period ended September 30, 2020 (the "Form 10-Q") of the Company fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 and information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.
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Dated: November 4, 2020 |
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/s/ GREGORY B. MAFFEI |
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Gregory B. Maffei President and Chief Executive Officer |
Dated: November 4, 2020 |
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/s/ BRIAN J. WENDLING |
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Brian J. Wendling Chief Accounting Officer and Principal Financial Officer |
The foregoing certification is being furnished solely pursuant to section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of section 1350, chapter 63 of title 18, United States Code) and is not being filed as part of the Form 10-Q or as a separate disclosure document.