This Amended and Restated Registration Rights Agreement (Agreement), dated as of this 30th day of June, 2001, is among General Communication, Inc., an Alaska corporation (GCI), MCI WORLDCOM Network Services, Inc., a Delaware corporation, as successor in interest to MCI Telecommunications Corporation, a Delaware corporation (Network Services), and WorldCom, Inc., a Georgia corporation (WorldCom).
A. In 1993, Network Services acquired Six Million Two Hundred Fifty One Thousand Five Hundred Nine (6,251,509) shares of GCIs Class A and One Million Two Hundred Seventy Five Thousand Seven Hundred Ninety One (1,275,791) shares of GCIs Class B Common Stock, no par value.
B. In 1996, Network Services acquired Two Million (2,000,000) shares of GCIs Class A Common Stock, no par value.
C. As of this date, WorldCom acquired Nine Thousand (9,000) and Network Services acquired One Thousand (1,000), respectively, for a total of Ten Thousand (10,000) shares, of GCIs Series C Convertible Redeemable Accreting Preferred Stock (Series C Preferred Stock) issued.
D. All such above-described shares of GCIs Class A Common Stock, Class B Common Stock and Series C Preferred Stock which Network Services and/or WorldCom now own(s) and any securities issued in exchange for or in respect of such stock, whether pursuant to a stock dividend, stock split, stock reclassification or otherwise, are collectively referred to in this Agreement as the Registrable Shares.
E. This Agreement supersedes and replaces the Registration Rights Agreements between GCI and Network Services dated as of March 31, 1993 and as of October 31, 1996. GCI hereunder grants registration rights to WorldCom and Network Services and any successor or assign thereof as the holder of all or any portion of the Registrable Shares. WorldCom and Network Services, and such successors and assigns, are referred to in this Agreement as the Holders, or, individually as a Holder.
In consideration of the premises and the mutual covenants contained in this Agreement, the parties agree as follows:
1. Demand Registration.
(a) Only if and as required to permit resales of the Registrable Shares by Holders, Holders shall at any time and from time to time, have the right to require registration under the Securities Act of 1933, as amended (Securities Act), of all or any portion of the Registrable Shares on the terms and subject to the conditions set forth in this Agreement.
(b) Upon receipt by GCI of a Holder's written request for registration, GCI shall (i) promptly notify each other Holder in writing of its receipt of such initial written request for registration, and (ii) as soon as is practicable, but in no event more than sixty (60) days after receipt of such written request, file with the Securities and Exchange Commission (Commission), and use its best efforts to cause to become effective, a registration statement under the Securities Act (Registration Statement) which shall cover the Registrable Shares specified in the initial written request and any other written request from any other Holder received by GCI within twenty (20) days of GCI giving the notice specified in clause (i) hereof.
(c) If so requested by any Holder requesting participation in a public offering or distribution of Registrable Shares pursuant to this Section 1 or Section 2 of this Agreement (Selling Holder), the Registration Statement shall provide for delayed or continuous offering of the Registrable Shares pursuant to Rule 415 promulgated under the Securities Act or any similar rule then in effect (Shelf Offering). If so requested by the Selling Holders, the public offering or distribution of Registrable Shares under this Agreement shall be pursuant to a firm commitment underwriting, the managing underwriter of which shall be an investment banking firm selected and engaged by the Selling Holders and approved by GCI, which approval shall not be unreasonably withheld. GCI shall enter into the same underwriting agreement as shall the Selling Holders, containing representations, warranties and agreements not substantially different from those customarily made by an issuer in underwriting agreements with respect to secondary distributions. GCI, as a condition to fulfilling its obligations under this Agreement, may require the underwriters to enter into an agreement in customary form indemnifying GCI against any Losses (as defined in Section 6) that arise out of or are based upon an untrue statement or an alleged untrue statement or omission or alleged omission in the Disclosure Documents (as defined in Section 6) made in reliance upon and in conformity with written information furnished to GCI by the underwriters specifically for use in the preparation thereof.
(d) Each Selling Holder may, before such a Registration Statement becomes effective, withdraw its Registrable Shares from sale, should the terms of sale not be reasonably satisfactory to such Selling Holder; if all Selling Holders who are participating in such registration so withdraw, however, such registration shall be deemed to have occurred for the purposes of Section 4 of this Agreement, unless such Selling Holders pay (pro rata, in proportion to the number of Registrable Shares requested to be included) within twenty (20) days after any such withdrawal, all of GCIs out-of-pocket expenses incurred in connection with such registration.
2
(e) Notwithstanding the foregoing, GCI shall not be obligated to effect a
registration pursuant to
this Section 1 during the period starting with the date sixty (60) days prior to
GCIs estimated date of filing of, and ending on a date six (6) months
following the effective date of, a registration statement pertaining to an
underwritten public offering of equity securities for GCIs account,
provided that (i) GCI is actively employing in good faith all reasonable efforts
to cause such registration statement to become effective and that GCIs
estimate of the date of filing on such registration statement is made in good
faith, and (ii) GCI shall furnish to the Holders a certificate signed by
GCIs President stating that in the Board of Directors good-faith
judgment, it would be seriously detrimental to GCI or its shareholders for a
Registration Statement to be filed in the near future; and in such event,
GCIs obligations to file a Registration Statement shall be deferred for a
period not to exceed six (6) months.
2. Incidental Registration. Each time that GCI proposes to register any of
its equity securities under the Securities Act (other than (a) a registration
effected solely to implement an employee benefit or stock option plan, (b) to
sell shares obtained under an employee benefit or stock option plan or a
transaction to which Rule 145 or any other similar rule of the Commission under
the Securities Act is applicable or (c) a registration effected pursuant to
Section 10.1 of the General Communication, Inc. Preferred Stock Purchase
Agreement dated April 30, 1999 for which the holders of securities relating to
such registration have demanded that only their securities be included in such
registration), GCI will give written notice to the Holders of its intention to
do so. Each of the Selling Holders may give GCI a written request to register
all or some of its Registrable Shares in the registration described in GCI's
written notice as set forth in the foregoing sentence, provided that such
written request is given within twenty (20) days after receipt of any such GCI
notice. Such request will state (i) the amount of Registrable Shares to be
disposed of and the intended method of disposition of such Registrable Shares,
and (ii) any other information GCI reasonably requests to properly effect the
registration of such Registrable Shares. Upon receipt of such request, GCI will
use its best efforts promptly to cause all such Registrable Shares intended to
be disposed of to be registered under the Securities Act so as to permit their
sale or other disposition (in accordance with the intended methods set forth in
the request for registration), unless (i) the sale is a firmly underwritten
public offering and GCI determines reasonably and in good faith in writing that
the inclusion of such securities would adversely affect the offering or
materially increase the offering's costs or (ii) inclusion of such Registrable
Shares is prohibited pursuant to the terms and conditions of any other
registration rights agreement granting other GCI equity security holders the
right to demand registration. In the case of clause (i) or (ii) above, such
Registrable Shares and all other securities to be registered, other than those
to be offered for GCI's account or those required to be included pursuant to the
terms and conditions of any other registration rights agreement granting other
GCI equity security holders the right to request registration, shall be excluded
to the extent the underwriter determines. The total number of secondary shares
included in such registration shall be shared pro rata by all security holders
having contractual registration rights (other than those security holders having
priority in a registration pursuant to the terms and conditions of any other
registration rights agreement with GCI, whose securities shall be included first
in the number of secondary shares that may be included in such registration)
based upon the amount of GCI's securities requested by such security holders to
be sold thereunder. GCI's obligations under this Section 2 shall apply to a
registration to be effected for securities to be sold for GCI's account as well
as a registration statement which includes securities to be offered for the
account of other holders of GCI equity securities having contractual
registration rights. Nothing in this Agreement shall give WorldCom or Network
Services priority in its rights to register the Class A common stock issuable
upon conversion of the Series C Preferred Stock over the Class A common stock
issuable upon conversion of GCI's Series B Convertible Preferred Stock issued to
Toronto Dominion Investments, Inc., and Prime VIII, L.P. under that Series B
Preferred Registration Rights Agreement dated April 30, 1999. 3
In
connection with a registration to be effected pursuant to this Section 2, the
Selling Holders shall enter into the same underwriting agreement as shall GCI
and the other selling security holders, if any, provided that such underwriting
agreement contains representations, warranties and agreements on the part of the
Selling Holders that are not substantially different from those customarily made
by selling-security holders in underwriting agreements with respect to secondary
distributions. If,
at any time after giving notice of GCIs intention to register any of its
securities under this Section 2 and prior to the effective date of the
registration statement filed in connection with such registration, GCI shall
determine for any reason not to register such securities, GCI may, at its
election, give notice of such determination to Holder and thereupon will be
relieved of its obligation to register the Registrable Shares in connection with
such registration.
3. Expenses of Registration. GCI shall pay all costs and expenses incident to GCI's
performance of or compliance with this Agreement, including, without limitation, all expenses incurred in
connection with the registration of the Registrable Shares, fees and expenses of compliance with Securities or
blue sky laws, printing expenses, messenger, delivery and shipping expenses and fees and expenses of counsel for
GCI and for certified public accountants and underwriting expenses (but not fees) except that each Selling Holder
shall pay all fees and disbursements of such Selling Holder's own attorneys and accountants, and all transfer
taxes and brokerage and underwriters' discounts and commissions directly attributable to the Registrable Shares
being offered and sold by such Selling Holder. 4
4. Limitations on Registration Rights. Notwithstanding the provisions of Section 1 of
this Agreement, GCI shall not be required to effect any registration under that Section if (i) the request(s) for
registration cover an aggregate number of Registrable Shares having an aggregate Market Value (as defined below)
of less than One Million Five Hundred Thousand Dollars ($1,500,000.00) as of the date of the last of such
requests, (ii) GCI has previously filed four (4) registration statements under the Securities Act pursuant to
Section 1, (iii) GCI, in order to comply with such request, would be required to (A) undergo a special interim
audit or (B) prepare and file with the Commission, sooner than would otherwise be required, pro forma or other
financial statements relating to any proposed transaction, or (iv) if, in the opinion of counsel to GCI, the form
of which opinion of counsel shall be acceptable to the Holders, a registration is not required in order to permit
resale by Holders. The first demand registration under this Agreement may be requested only by the Holders of a
minimum of thirty percent (30%) of the Registrable Shares. "Market Value" as used in this Agreement shall mean,
as to each class of Registrable Shares at any date, the average of the daily closing prices for such class of
Registrable Shares, for the ten (10) consecutive trading days before the day in question. The closing price for
shares of such class for each day shall be the last reported sale price regular way, or, in case no such reported
sale takes place on such day, the average of the reported closing bid and asked prices regular way, in either
case on the composite tape, or if the shares of such class are not quoted on the composite tape, on the principal
United States securities exchange registered under the Securities Exchange Act of 1934, as amended ("Exchange
Act"), on which shares of such class are listed or admitted to trading, or if they are not listed or admitted to
trading on any such exchange, the closing sale price (or the average of the quoted closing bid and asked price if
no sale is reported) as reported by the National Association of Securities Dealers Automated Quotation System
("NASDAQ") or any comparable system, or if the shares of such class are not quoted on NASDAQ or any comparable
system, the average of the closing bid and asked prices as furnished by any market maker in the securities of
such class who is a member of the National Association of Securities Dealers, Inc., or in the absence of such
closing bid and asked price, as determined by such other method as GCI's Board of Directors shall from time to
time deem to be fair.
5. Obligations with Respect to Registration. 5
(a) If and whenever GCI is obligated by the provisions of this Agreement to effect
the registration of any Registrable Shares under the Securities Act, GCI shall promptly:
(i) Prepare and file with the Commission a registration statement with
respect to such Registrable
Shares and use reasonable commercial efforts to cause such registration
statement to become effective, provided that before filing a registration
statement, or prospectus or any amendment or supplement thereto, GCI will
furnish to counsel selected by the holders of a majority of the Registrable
Shares covered by such registration statement copies of all such statements
proposed to be filed, which documents shall be subject to the review of such
counsel;
(ii) Prepare and file with the Commission any amendments and supplements
to the Registration
Statement and to the prospectus used in connection therewith as may be necessary
to keep the Registration Statement effective and to comply with the provisions
of the Securities Act and the rules and regulations promulgated thereunder with
respect to the disposition of all Registrable Shares covered by the Registration
Statement for the period required to effect the distribution of such Registrable
Shares, but in no event shall GCI be required to do so (i) in the case of a
Registration Statement filed pursuant to Section 1, for a period of more than
two hundred seventy (270) days following the effective date of the Registration
Statement and (ii) in the case of a Registration Statement filed pursuant to
Section 2, for a period exceeding the greater of (A) the period required to
effect the distribution of securities for GCIs account and (B) the period
during which GCI is required to keep such Registration Statement in effect for
the benefit of selling security holders other than the Selling Holders;
(iii) Notify the Selling Holders and their underwriter, and confirm such
advice in writing, (A) when
a Registration Statement becomes effective, (B) when any post-effective
amendment to a Registration Statement becomes effective, and (C) of any request
by the Commission for additional information or for any amendment of or
supplement to a Registration Statement or any prospectus relating thereto; (iv) Furnish at GCI's expense to the Selling Holders such number of copies of
a preliminary, final,
supplemental or amended prospectus, in conformity with the requirements of the
Securities Act and the rules and regulations promulgated thereunder, as may
reasonably be required in order to facilitate the disposition of the Registrable
Shares covered by a Registration Statement, but only while GCI is required under
the provisions hereof to cause a Registration Statement to remain effective; and
(v) Register or qualify at GCI's expense the Registrable Shares covered
by a Registration Statement
under such other securities or blue sky laws of such jurisdictions in the United
States as the Selling Holders shall reasonably request, and do any and all other
acts and things which may be necessary to enable each Selling Holder whose
Registrable Shares are covered by such Registration Statement to consummate the
disposition in such jurisdictions of such Registrable Shares; provided, however,
that GCI shall in no event be required to qualify to do business as a foreign
corporation or as a dealer in any jurisdiction where it is not so qualified, to
amend its articles of incorporation or to change the composition of its assets
at the time to conform with the securities or blue sky laws of such
jurisdiction, to take any action that would subject it to service of process in
suits other than those arising out of the offer and sale of the Registrable
Shares covered by the Registration Statement or to subject itself to taxation in
any jurisdiction where it has not therefore done so. 6
(vi) Notify each Holder of Registrable Shares, at any time when a
prospectus relating thereto
is required to be delivered under the Securities Act, of the happening of any
event as a result of which the prospectus included in such registration
statement contains an untrue statement of a material fact or omits to state a
material fact necessary to make the statements therein not misleading, and, at
the request of any such seller, GCI will prepare a supplement or amendment to
such prospectus so that, as thereafter delivered to purchasers of Registrable
Shares, such prospectus will not contain an untrue statement of a material fact
or omit to state any fact necessary to make the statements therein not
misleading;
(vii) Cause all such Registrable Shares to be listed on each securities
exchange on which similar
securities issued by GCI are then listed and to be qualified for trading on each
system on which similar securities issued by GCI are from time to time
qualified;
(viii) Provide a transfer agent and registrar for all such Registrable
Shares not later than the
effective date of such registration statement and thereafter maintain such a
transfer agent and registrar;
(ix) Enter into such customary agreements (including underwriting
agreements in customary
form) and take all such other actions as the holders of a majority of the shares
of Registrable Shares being sold or the underwriters, if any, reasonably request
in order to expedite or facilitate the disposition of such Registrable Shares;
(x) Make available for inspection by any underwriter participating in any
disposition pursuant to
such registration statement and any attorney, accountant or other agent retained
by any such underwriter, all financial and other records, pertinent corporate
documents and properties of GCI, and cause GCIs officers, directors,
employees and independent accountants to supply all information reasonably
requested by any such underwriter, attorney, accountant or agent in connection
with such registration statement; 7
(xi) Otherwise use reasonable commercial efforts to comply with all
applicable rules and
regulations of the Commission, and make available to its security holders, as
soon as reasonably practicable, all earning statements as and when filed with
the Commission, which earnings statements shall satisfy the provisions of
Section 11(a) of the Securities Act and Rule 158 thereunder;
(xii) Permit any Holder of Registrable Shares which might be deemed, in the
sole and exclusive judgment
of such Holder, to be an underwriter or a controlling person of GCI, to
participate in the preparation of such registration or comparable statement and
to require the insertion therein of material furnished to GCI in writing, which
in the reasonable judgment of such holder and its counsel should be included;
and
(xiii) In the event of the issuance of any stop order suspending the
effectiveness of a
registration statement, or of any order suspending or preventing the use of any
related prospectus or suspending the qualification of any Registrable Shares
included in such registration statement for sale in any jurisdiction, GCI will
use reasonable commercial efforts to promptly obtain the withdrawal of such
order.
(b) GCI's obligations under this Agreement with respect to the Selling Holder
shall be conditioned upon the Selling Holder's compliance with the following:
(i) Such Selling Holder shall cooperate with GCI in connection with the
preparation of the
Registration Statement, and for so long as GCI is obligated to file and keep
effective the Registration Statement, shall provide to GCI, in writing, for use
in the Registration Statement, all such information regarding the Selling Holder
and its plan of distribution of the Registrable Shares as may be necessary to
enable GCI to prepare the Registration Statement and prospectus covering the
Registrable Shares, to maintain the currency and effectiveness thereof and
otherwise to comply with all applicable requirements of law in connection
therewith;
(ii) During such time as the Selling Holder may be engaged in a
distribution of the
Registration Shares, such Selling Holder shall comply with Rules 10b-2, 10b-6
and 10b-7 promulgated under the Exchange Act and pursuant thereto it shall,
among other things: (A) not engage in any stabilization activity in connection
with GCIs securities in contravention of such rules; (B) distribute the
Registrable Shares solely in the manner described in the Registration Statement;
(C) cause to be furnished to each broker through whom the Registrable Shares may
be offered, or to the offeree if an offer is not made through a broker, such
copies of the prospectus covering the Registrable Shares and any amendment or
supplement thereto and documents incorporated by reference therein as may be
required by law; and (D) not bid for or purchase any GCI securities or attempt
to induce any person to purchase any GCI securities other than as permitted
under the Exchange Act; 8
(iii) If the Registration Statement provides for a Shelf Offering, then at
least ten (10) business
days prior to any distribution of the Registrable Shares, any Selling Holder who
is an affiliated purchaser (as defined in Rule 10b-6 promulgated
under the Exchange Act) of GCI shall advise GCI in writing of the date on which
the distribution by such Selling Holder will commence, the number of the
Registrable Shares to be sold and the manner of sale. Such Selling Holder also
shall inform GCI when each distribution of such Registrable Shares is over; and
(iv) GCI shall not grant any conflicting registration rights to other
holders of its shares, to
the extent that such rights would prevent Holders from timely exercising their
rights hereunder.
6. Indemnification.
(a) By GCI. In the event of any registration under the Securities Act of any
Registrable Shares pursuant
to this Agreement, GCI shall indemnify and hold harmless any Selling Holder, any
underwriter of such Selling Holder, each officer, director, employee or agent of
such Selling Holder, and each other person, if any, who controls such Selling
Holder or underwriter within the meaning of Section 15 of the Securities Act,
against any losses, costs, claims, damages or liabilities, joint or several (or
actions in respect thereof) (Losses), incurred by or to which each
such indemnified party may become subject, under the Securities Act or
otherwise, but only to the extent such Losses arise out of or based upon (i) any
untrue statement or alleged untrue statement of any material fact contained, on
the effective date thereof, in any Registration Statement under which such
Registrable Shares were registered under the Securities Act, in any preliminary
prospectus (if used prior to the effective date of such Registration Statement)
or in any final prospectus or in any post effective amendment or supplement
thereto (if used during the period GCI is required to keep the Registration
Statement effective) (Disclosure Documents), (ii) any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements made therein not misleading or (iii) any
violation of any federal or state securities laws or rules or regulations
thereunder committed by GCI in connection with the performance of its
obligations under this Agreement; and GCI will reimburse each such indemnified
party for all legal or other expenses reasonably incurred by such party in
connection with investigating or defending any such claims, including, subject
to such indemnified partys compliance with the provisions of the last
sentence of subsection (c) of this Section 6, any amounts paid in settlement of
any litigation, commenced or threatened, so long as GCIs counsel agrees
with the reasonableness of such settlement; provided, however, that GCI shall
not be liable to an indemnified party in any such case to the extent that any
such Losses arise out of or are based upon (i) an untrue statement or alleged
untrue statement or omission or alleged omission (x) made in any such Disclosure
Documents in reliance upon and in conformity with written information furnished
to GCI by or on behalf of such indemnified party specifically for use in the
preparation thereof, (y) made in any preliminary or summary prospectus if a copy
of the final prospectus was not delivered to the person alleging any loss,
claim, damage or liability for which Losses arise at or prior to the written
confirmation of the sale of such Registrable Shares to such person and the
untrue statement or omission concerned had been corrected in such final
prospectus or (z) made in any prospectus used by such indemnified party if a
court of competent jurisdiction finally determines that at the time of such use
such indemnified party had actual knowledge of such untrue statement or omission
or (ii) the delivery by an indemnified party of any prospectus after such time
as GCI has advised such indemnified party in writing that the filing of a
post-effective amendment or supplement thereto is required, except the
prospectus as so amended or supplemented, or the delivery of any prospectus
after such time as GCIs obligation to keep the same current and effective
has expired. 10
(b) By the Selling Holders. In the event of any registration under the Securities
Act of any Registrable
Shares pursuant to this Agreement, each Selling Holder shall, and shall cause
any underwriter retained by it who participates in the offering to agree to,
indemnify and hold harmless GCI, each of its directors, each of its officers who
have signed the Registration Statement and each other person, if any, who
controls GCI within the meaning of Section 15 of the Securities Act, against any
Losses, joint or several, incurred by or to which such indemnified party may
become subject under the Securities Act or otherwise, but only to the extent
such Losses arise out of or are based upon (i) any untrue statement or alleged
untrue statement of any material fact contained in any of the Disclosure
Documents or the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements made therein
not misleading, if the statement or omission was in reliance upon and in
conformity with written information furnished to GCI by such indemnifying party
specifically for use in the preparation thereof, (ii) the delivery by such
indemnifying party of any prospectus after such time as GCI has advised such
indemnifying party in writing that the filing of a post-effective amendment or
supplement thereto is required, except the prospectus as so amended or
supplemented, or after such time as the obligation of GCI to keep the
Registration Statement effective and current has expired or (iii) any violation
by such indemnifying party of its obligations under Section 5(b) of this
Agreement or any information given or representation made by such indemnifying
party in connection with the sale of the Selling Holders Registrable
Shares which is not contained in and not in conformity with the prospectus (as
amended or supplemented at the time of the giving of such information or making
of such representation); and each Selling Holder shall, and shall cause any
underwriter retained by it who participates in the offering to agree to,
reimburse each such indemnified party for all legal or other expenses reasonably
incurred by such party in connection with investigating or defending any such
claim, including, subject to such indemnified partys compliance with the
provisions of the last sentence of subsection (c) of this Section 6, any amounts
paid in settlement of any litigation, commenced or threatened; provided,
however, that the indemnity agreement contained in this Section 6(b)
shall not apply to amounts paid in settlement of any loss, claim, damage,
liability or action arising pursuant to a registration if such settlement is
effected without the consent of Selling Holder; and provided
further, that no Selling Holder shall be required to undertake liability
under this Section 6(b) for any amounts in excess of the proceeds to be received
by such Selling Holder from the sale of its securities pursuant to such
registration, as reduced by any damages or other amounts that such Selling
Holder was otherwise required to pay hereunder.
(c) Third Party Claims. Promptly after the receipt by any party hereto of notice
of any claim, action, suit
or proceeding by any person who is not a party to this Agreement (collectively,
an Action) which is subject to indemnification hereunder, such party
(Indemnified Party) shall give reasonable written notice to the
party from whom indemnification is claimed (Indemnifying Party). The
Indemnifying Party shall be entitled, at the Indemnifying Partys sole
expense and liability, to exercise full control of the defense, compromise or
settlement of any such Action unless the Indemnifying Party, within a reasonable
time after the giving of such notice by the Indemnified Party, shall (i) admit
in writing to the Indemnified Party, the Indemnifying Partys liability to
the Indemnified Party for such Action under the terms of this Section 6, (ii)
notify the Indemnified Party in writing of the Indemnifying Partys
intention to assume the defense thereof and (iii) retain legal counsel
reasonably satisfactory to the Indemnified Party to conduct the defense of such
Action. The Indemnified Party and the Indemnifying Party shall cooperate with
the party assuming the defense, compromise or settlement of any such Action in
accordance herewith in any manner that such party reasonably may request. If the
Indemnifying Party so assumes the defense of any such Action, the Indemnified
Party shall have the right to employ separate counsel and to participate in (but
not control) the defense, compromise, or settlement thereof, but the fees and
expenses of such counsel shall be the Indemnified Partys sole expense
unless (i) the Indemnifying Party has agreed to pay such fees and expenses, (ii)
any relief other than the payment of money damages is sought against the
Indemnified Party or (iii) the Indemnified Party shall have been advised by its
counsel that there may be one or more legal defenses available to it which are
different from or additional to those available to the Indemnifying Party, and
in any such case the fees and expenses of such separate counsel shall be borne
by the Indemnifying Party. No Indemnifying Party shall settle or compromise any
such Action in which any relief other than the payment of money damages is
sought against any Indemnified Party unless the Indemnified Party consents in
writing to such compromise or settlement, which consent shall not be
unreasonably withheld. No Indemnified Party shall settle or compromise any such
Action for which it is entitled to indemnification hereunder without the
Indemnifying Partys prior written consent, unless the Indemnifying Party
shall have failed, after reasonable notice thereof, to undertake control of such
Action in the manner provided above in this Section 6.
(d) Contribution. If the indemnification provided for in subsections (a) or (b)
of this Section 6 is
unavailable to or insufficient to hold the Indemnified Party harmless under
subsections (a) or (b) above in respect of any Losses referred to therein for
any reason other than as specified therein, then the Indemnified Party shall
contribute to the amount paid or payable by such Indemnified Party as a result
of such Losses in such proportion as is appropriate to reflect the relative
fault of the Indemnified Party on the one hand and such Indemnified Party on the
other in connection with the statements or omissions which resulted in such
Losses, as well as any other relevant equitable considerations; provided,
however, that the contribution obligations contained in this Section 6(d)
shall not apply to amounts paid in settlement of any loss, claim, damage,
liability or action arising pursuant to a registration if such settlement is
effected without the consent of Selling Holder; and provided
further, that no Selling Holder shall be required to make any
contributions under this Section 6(d) for any amounts in excess of the proceeds
to be received by such Selling Holder from the sale of its securities pursuant
to such registration, as reduced by any damages or other amounts that such
Selling Holder was otherwise required to pay hereunder. The relative fault shall
be determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by (or omitted to be supplied
by) GCI or the Selling Holder (or underwriter) and the parties relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The amount paid or payable by an indemnified party
as a result of the Losses referred to above in this subsection (d) shall be
deemed to include any legal or other expenses reasonably incurred by such
Indemnified Party in connection with investigating or defending any such action
or claim. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. 11
7. Miscellaneous.
(a) Notices. All notices, requests, demands, waivers and other communications
required or permitted to be
given under this Agreement shall be in writing and shall be deemed to have been
duly given if delivered personally or mailed, certified or registered mail with
postage prepaid, or sent by telecopier (with a conforming copy by U.S. mail), as
follows: 12
(iv) if to any Holder other than Network Services or WorldCom, at the
address provided to GCI (and if none provided, to WorldCom and Network Services) or to such other person or
address as any party shall specify by notice in writing to the other party. All
such notices, requests, demands, waivers and communications shall be deemed to
have been received on the date of delivery or on the third business day after
the mailing thereof, except that any notice of a change of address shall be
effective only upon actual receipt thereof.
(b) Entire Agreement. This Agreement constitutes the entire agreement between the
parties hereto and
supersedes all prior agreements and understandings, oral and written, between
the parties hereto with respect to the subject matter hereof.
(c) Binding Effect; Benefit. This Agreement shall inure to the benefit of and be
binding upon the parties
hereto and their respective successors and assigns. Nothing in this Agreement,
expressed or implied is intended to confer on any person other than the parties
hereto or their respective successors and assigns (including, in the case of
Network Services and WorldCom, any successor or assign thereof as the holder of
Registrable Shares), any rights, remedies, obligations or liabilities under or
by reason of this Agreement, other than rights conferred upon indemnified
persons under Section 6. 13
(d) Amendment and Modification. This Agreement may be amended or modified only by
an instrument in writing
signed by or on behalf of each party and any other person then a Holder. Any
term or provision of this Agreement may be waived in writing at any time by the
party which is entitled to the benefits thereof.
(e) Section Headings. The section headings contained in this Agreement are
inserted for reference
purposes only and shall not affect the meaning or interpretation of this
Agreement.
(f) Counterparts. This Agreement may be executed in counterparts, each of which
shall be deemed to be an original, and all of which together shall be deemed to be one and the same instrument.
(g) Applicable Law. This Agreement and the legal relations between the parties
hereto shall be governed by
and construed in accordance with the laws of the State of Alaska, without regard
to the conflict of laws and rules thereof. 14
IN
WITNESS THEREOF, the parties hereto have executed this Agreement as of the date
first above written. 15
(i)
if to GCI at:
General Communication, Inc.
2550 Denali Street, Suite 1000
Anchorage, Alaska 99503
ATTN: Chief Financial Officer
Telecopy: (907) 265-5676
With a copy to:
General Communication, Inc.
2550 Denali Street, Suite 1000
Anchorage, Alaska 99503
ATTN: Corporate Counsel
Telecopy: (907) 265-5676
(ii)
if to Network Services, at:
MCI WORLDCOM Network Services, Inc.
c/o WorldCom Venture Fund, Inc.
1133 19th Street, NW
Washington, DC 20036
ATTN: Mr. Stephen Mooney
Telecopy: (202) 736-6293
(iii)
if to WorldCom, at:
c/o WorldCom Venture Fund, Inc.
1133 19th Street, NW
Washington, DC 20036
ATTN: Mr. Stephen Mooney
Telecopy: (202) 736-6293
with a copy to:
WorldCom, Inc.
1133 19th Street, NW
Washington, DC 20036
ATTN: Office of the General Counsel
GENERAL COMMUNICATION, INC.
By:
John M. Lowber, Senior Vice President
MCI WORLDCOM NETWORK SERVICES, INC.
By:
Name:
Title:
WORLDCOM, INC.
By:
Name:
Title: