EXHIBIT 2.1
Amendment No. 1 to Securities
Purchase and Sale Agreement
This Amendment No. 1 to Securities Purchase and Sale Agreement
("Amendment") is entered into as of October 31, 1996 among General
Communication, Inc., an Alaska corporation ("Buyer"), Prime Venture I Holdings,
L.P., a Delaware limited partnership ("Holdings"), Prime Cable Growth Partners,
L.P. a Delaware limited partnership ("Growth"), Prime Venture II, L.P., a
Delaware limited partnership ("PVII"), Prime Cable Limited Partnership, a
Delaware limited partnership (`PCLP"), BancBoston Capital, Inc., a Massachusetts
corporation ("BBC"), First Chicago Investment Corporation, a Delaware
corporation ("FCIC"), Madison Dearborn Partners V, an Illinois partnership
("MDP"), Austin Ventures, L.P., a Delaware limited partnership ("AV"), Xxxxxxx
Xxxxx Ventures Partners III Limited Partnership, an Illinois limited partnership
("WBVP"), Centennial Fund II, L.P., a Delaware limited partnership ("CFII"),
Centennial Fund III, L.P., a Colorado limited partnership ("CFIII"), Centennial
Business Development Fund, Ltd., a Colorado limited partnership ("CBDF," and
collectively with Holdings, Growth, PVII, PCLP, BBC, FCIC, MDP, AV, WBVP, CFII
and CFIII, the "Sellers"), and Prime II Management, L.P., a Delaware limited
partnership ("PIIM"), individually and acting as Sellers' Agent on behalf of the
Sellers.
WHEREAS, Buyer, Sellers and PIIM are parties to that certain Securities
Purchase and Sale Agreement dated May 2, 1996 (as amended herein, the
"Agreement"), pursuant to which Sellers have agreed to sell to Buyer, directly
or indirectly, all of their respective interests in Prime Cable of Alaska, L.P.,
a Delaware limited partnership (the "Company"); and
WHEREAS, Buyer, Sellers and PIIM now desire to amend the Agreement to
provide for certain changes which the Company has agreed to make to its
historical financial statements in response to comments made by the Securities
and Exchange Commission (the "SEC") in response to Buyer's submission to the SEC
of its proxy statement/prospectus;
NOW, THEREFORE, for and in consideration of the premises and other good
and valuable consideration, the receipt and sufficiency of which are
acknowledged by the execution and delivery hereof, the parties agree as follows
(capitalized terms used herein and not otherwise defined shall have the meanings
ascribed to them in the Agreement):
1. Amendments to the Agreement.
1.1 Amendment to Section 3.9. Section 3.9 of the Agreement is amended
by deleting the existing Section 3.9 and inserting a new Section 3.9 which shall
read as follows:
"3.9 Indebtedness. As of February 29, 1996, Company's combined
outstanding subordinated and senior debt (i) less any
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positive working capital balance or plus any working capital
deficit, as the case may be, calculated without regard to the
current portion of long term debt, and (ii) excluding the
liability of Company related to the profit participation
interests in Company owned by BBC, FCIC and MDP (the "Profit
Participation Obligation")(which Profit Participation
Obligation will be discharged at the Closing by Buyer's
issuance of a portion of the GCI Shares to BBC, FCIC and MDP
pursuant to the terms of this Agreement), did not exceed
$107,000,000 in the aggregate."
1.2 Amendment to Section 3.16. Section 3.16 of the Agreement is amended
by deleting the existing Section 3.16 and inserting a new Section 3.16 which
shall read as follows:
"3.16 Financial Statements. Sellers have delivered to Buyer
correct and complete copies of Company's audited financial
statements for each of the two most recent fiscal years ended
prior to the date of this Agreement (such audit financial
statements for the fiscal year ended December 31, 1995 having
been restated in September 1996 to reflect the Profit
Participation Obligation) and unaudited interim monthly
financial statements for the two month period ended February
29, 1996 (the "Financial Statements"). The Financial
Statements were prepared in accordance with generally accepted
accounting principles applied on a consistent basis throughout
the periods covered thereby (and except, in the case of
interim financial statements, subject to normal recurring
year-end adjustments and the absence of footnotes), and fairly
present in accordance with generally accepted accounting
principles the financial condition and results of operation of
Company as of the dates indicated and for the periods covered
thereby. Except as disclosed by, or reserved against in, its
most recent balance sheet included in the Financial Statements
(and except for the subsequent adjustment made in September
1996 to reflect the Profit Participation Obligation), Company
did not have as of the date of such balance sheet any
liability or obligation, whether accrued, absolute, fixed, or
contingent (including, without limitation, liabilities for
taxes or unusual forward or long-term commitments), which was
material to the business, results of operations, or financial
condition of Company and which is required to be disclosed on,
or reserved against in, a balance sheet. Sellers have received
no notice of any fact which may form a basis for any claim by
a third party which, if asserted, could result in a liability
affecting Company not disclosed by or reserved against in the
most recent balance sheet of Company. From the date of the
most recent balance sheet included in the Financial Statements
to and
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Page 22
including the date of this Agreement, (i) the CATV Business
has been operated only in the ordinary course, (ii) Company
has not sold or disposed of any assets other than in the
ordinary course of business, (iii) there has not occurred any
material adverse change or event in the business, operations,
assets, liabilities, financial condition or results of
operations of Company compared to the business, operations,
assets, liabilities, financial condition, or results of
operations reflected in the Financial Statements, and (iv)
there has not occurred any theft, damage, destruction, or loss
which has had a material adverse effect on Company."
1.3 Amendment to Section 3.27. Section 3.27 of the Agreement is amended
by deleting the existing Section 3.27 and inserting a new Section 3.27 which
shall read as follows:
"3.27 No Other Assets or Liabilities. Except for the Excluded
Assets and the Other Required Assets, Company does not own,
use or hold for use any material assets of any kind other than
the Assets described on Schedules 2, 3, 5 and 6; and Company
has no material liabilities, obligations, or commitments of
any kind other than (i) obligations under the CATV Instruments
and Company Contracts described on Schedules 2 and 3, (ii)
liabilities disclosed on the Financial Statements (as adjusted
in September 1996 to reflect the Profit Participation
Obligation), and (iii) liabilities incurred after the date of
this Agreement in the ordinary course of business and in
compliance with the terms of this Agreement."
1.4 Amendment to Section 9.5. Section 9.5 of the Agreement is amended
by deleting the existing Section 9.5 and inserting a new Section 9.5 which shall
read as follows:
"9.5 Cash Flow, Indebtedness. As of the Closing Date,
Company's Operating Cash Flow for the full months in 1996 that
precede the Closing shall be no less than ninety percent (90%)
of Company's budgeted Operating Cash Flow for such period (the
difference between (A) such actual Operating Cash Flow to the
extent that it is not less than ninety percent (90%) of such
budgeted Operating Cash Flow, and (B) such budgeted Operating
Cash Flow, being referred to herein as the "Prime Cash flow
Shortfall"). Company's budgeted Operating Cash Flow for 1996
is $17,600,000. As of the Closing Date, the combined
outstanding subordinated and senior debt (i) less any positive
working capital balance or plus any working capital deficit,
as the case may be, calculated without regard to the current
portion of long term debt, and (ii) excluding the Profit
Participation Obligation, for the
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Company shall not exceed the sum of (A) $108,000,000, plus (B)
indebtedness in an amount equal to the sum of (X) the
aggregate amount not exceeding $7,000,000 to be spent (the
"Prime Upgrade Expense") on upgrading the CATV Business (the
"Alaska System Upgrade"), (Y) the aggregate amount of any
Prime Cap-Ex Excess excluding any expenditures on the Alaska
System Upgrade (including in such excluded expenditures the
Prime Upgrade Expense), and (Z) the Prime Cash Flow Shortfall
(provided, that the Profit Participation Obligation will be
discharged at the Closing by Buyer's issuance of a portion of
the GCI Shares to BBC, FCIC and MDP pursuant to the terms of
this Agreement)."
1.5 Amendment to Section 11.1. Section 11.1 of the Agreement is amended
by deleting the existing Section 11.1 and inserting a new Section 11.1 which
shall read as follows:
"11.1 Simultaneous Closing. The closing of the transactions
contemplated under the GCI and MCI Stock Purchase Agreement
dated September 13, 1996 (the "MCI Stock Purchase Agreement"),
shall occur on the Closing Date substantially simultaneously
with the Closing hereunder, whereby MCI shall purchase for
cash Two Million shares of Buyer's Class A common stock, at a
price equal to $6.50 per share."
2. Miscellaneous.
2.1 Counterparts. This Amendment may be executed by one or
more of the parties hereto in any number of counterparts and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument.
2.2 Construction. Each of the parties hereto acknowledges that
it has reviewed this Amendment and that the normal rule of construction to the
effect that any ambiguities are to be resolved against the drafting party shall
not be employed in the interpretation of this Agreement or any amendments
hereto.
2.3 Governing Law. This Amendment shall be governed by and
construed in accordance with the internal laws, and not the law of conflicts, of
the State of Alaska.
2.4 Further Assurances. The parties agree that they will take
all such further actions and execute and deliver all such further instruments
and documents as may be required in order to effectuate the agreements set forth
in this Amendment.
2.5 Miscellaneous. Except to the extent specifically amended
hereby, the provisions of the Agreement shall remain unmodified and the
Agreement is hereby confirmed as being in full force and effect. This Amendment
and the Agreement constitute the entire
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understanding of the parties with respect to the subject matter hereof an
thereof and supersede all prior and current understandings and agreements,
whether written or oral.
* * * * *
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Amendment as of the date first above written.
BUYER:
GENERAL COMMUNICATIONS, INC.
By: /s/
Name: Xxxx X. Xxxxxx
Title: Senior Vice President
SELLERS:
PRIME VENTURE I HOLDINGS, L.P.,
PRIME CABLE GROWTH PARTNERS,
L.P., PRIME CABLE LIMITED
PARTNERSHIP, BANCBOSTON CAPITAL,
INC., FIRST CHICAGO INVESTMENT
CORPORATION, MADISON DEARBORN
PARTNERS V, PRIME VENTURE II,
L.P., AUSTIN VENTURES, L.P.,
XXXXXXX XXXXX VENTURE PARTNERS
III LIMITED PARTNERSHIP,
CENTENNIAL FUND II, L.P.,
CENTENNIAL FUND III, L.P., and
CENTENNIAL BUSINESS DEVELOPMENT
FUND, LTD., by Prime II
Management, L.P. as Sellers'Agent
pursuant to Section 19.13 of the
Agreement
Prime II Managment L.P.
By: Prime II Management, Inc.
Its: General Partner
By: /s/
Name: Xxxxxxx X. Xxxxx
Title: Vice President
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PIIM:
PRIME II MANAGEMENT, L.P.
By: Its General Partner
Prime II Management, Inc.
By: /s/
Name: Xxxxxxx X. Xxxxx
Title: Vice President
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