Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
On August 12, 2020, a bankruptcy remote wholly owned subsidiary ("SPV") of
Liberty Broadband Corporation (the "Company") entered into Amendment No. 3 to
Margin Loan Agreement and Amendment No. 2 to 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). No borrowings under the Margin Loan Agreement were
made at the closing of the Third Amendment and, as of the date of and after
giving effect to the Third Amendment, there were (i) $600.0 million in loans
outstanding, comprised of $500.0 million of initial loans and $100.0 million of
delayed draw loans, (ii) $400.0 million of delayed draw loan commitments and
(iii) $1.3 billion of additional loan commitments under the Incremental Facility
(as defined and described below). SPV's obligations under the Margin Loan
Facility are secured by first priority liens on the shares of Charter
Communications, Inc. owned by SPV.
The Third Amendment amends the Existing Margin Loan Agreement to provide for,
among other things, (i) the extension of the maturity date for the Margin Loan
Agreement to August 24, 2022, (ii) the extension of the availability of the
delayed draw loans to August 12, 2021, (iii) customary LIBOR replacement
provisions, (iv) an incremental agreement for the commitment of 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"), (v) upon the funding of the Additional Loans, an increase in (A) the
Base Spread (as defined below) applicable to all loans funded under the Margin
Loan and (B) the commitment fees applicable to any undrawn delayed draw loans,
(vi) allow SPV to effect the GCI Liberty SPV Payoff (as defined below) and (vii)
certain conforming changes related to the foregoing.
The borrowings under the Incremental Facility are subject to certain conditions
precedent, including the completion of the transactions pursuant to the
previously announced merger agreement among the Company, GCI Liberty, Inc., a
Delaware corporation ("GCI Liberty"), and the other parties thereto. The
Additional Loans will accrue interest at a rate equal to the 3-month LIBOR rate
plus a per annum spread (the "Base Spread"). SPV is permitted to use the
Additional Loans to satisfy obligations (the "GCI Liberty SPV Payoff") of
Broadband Holdco, LLC, a Delaware limited liability company and a bankruptcy
remote wholly owned subsidiary of GCI Liberty ("GCI Liberty SPV"), under 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), among GCI Liberty SPV, as borrower, each lender from time to time party
thereto, JPMorgan Chase Bank, N.A., London Branch, as administrative agent, and
JPMorgan Chase Bank, N.A., London Branch, as calculation agent.
The description of the Third Amendment set forth above is qualified in its
entirety by reference to the Third Amendment, which will be filed as an exhibit
to the Company's Quarterly Report on Form 10-Q for the quarter ended September
30, 2020.
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