$110,000,000 AGGREGATE PRINCIPAL AMOUNT

ALASKA COMMUNICATIONS SYSTEMS GROUP, INC.

5.75% CONVERTIBLE NOTES

DUE 2013

1

Purchase Agreement
dated April 2, 2008Purchase Agreement

April 2, 2008

BANC OF AMERICA SECURITIES LLC
OPPENHEIMER & CO. INC.

As the Representatives of the several Initial Purchasers

9 West 57th Street
New York, New York 10019

Ladies and Gentlemen:

Alaska Communications Systems Group, Inc., a Delaware corporation (the
“Company”), proposes to issue and sell to the several purchasers named in
Schedule A (the “Initial Purchasers”) $110,000,000 in aggregate principal amount
of its 5.75% Convertible Notes due 2013 (the “Firm Notes”), guaranteed on a
joint and several basis by the subsidiaries of the Company listed in Schedule D
and each domestic subsidiary of the Company hereafter created or acquired, other
than its license subsidiaries, (the “Guarantors,” and such guarantees, the “Firm
Guarantees”). In addition, the Company has granted to the Initial Purchasers an
option to purchase up to an additional $15,000,000 in aggregate principal amount
of its 5.75% Convertible Notes due 2013 (the “Optional Notes” and, together with
the Firm Notes, the “Notes”), as provided in Section 2, guaranteed by the
Guarantors (such guarantees, the “Optional Guarantees” and, together with the
Firm Guarantees, the “Guarantees”). Banc of America Securities LLC (“BAS”) and
Oppenheimer & Co. Inc. (“Oppenheimer”) have agreed to act as the representatives
of the several Initial Purchasers (in such capacity, the “Representatives”) in
connection with the offering and sale of the Notes. To the extent that there are
no additional Initial Purchasers listed on Schedule A other than you, the terms
“Representatives” and “Initial Purchasers” as used herein shall mean you, as
Initial Purchasers. The terms “Representatives” and “Initial Purchasers” shall
mean either the singular or plural as the context requires.

The Notes will be convertible on the terms, and subject to the conditions, set
forth in the indenture (the “Indenture”) to be entered into among the Company,
the Guarantors and the The Bank of New York Trust Company, N.A., as trustee (the
“Trustee”), on the Closing Date (as defined herein). As used herein, “Conversion
Shares” means the fully paid, nonassessable shares of common stock, par value
$0.01 per share, of the Company (the “Common Stock”) to be received by the
holders of the Notes upon conversion of the Notes pursuant to the terms of the
Notes and the Indenture. The Notes will be convertible initially at a conversion
rate of 77.5013 shares per $1,000 principal amount of the Notes, on the terms,
and subject to the conditions, set forth in the Indenture. In connection with
the offering of the Notes, the Company is entering into convertible note hedge
and warrant transactions with Bank of America, N.A. and certain other
counterparties pursuant to confirmation letters, dated April 2, 2008, to the
form of the ISDA 2002 Master Agreement (the “Convertible Note Hedge and Warrant
Transaction Documentation”).

The Notes will be offered and sold to the Initial Purchasers without being
registered under the Securities Act of 1933, as amended, and the rules and
regulations of the Securities and Exchange Commission (the “Commission”)
thereunder (the “Securities Act”), in reliance upon an exemption therefrom.

Holders of the Notes (including the Initial Purchasers and their direct and
indirect transferees) will be entitled to the benefits of a Resale Registration
Rights Agreement, dated the Closing Date, between the Company and the Initial
Purchasers (the “Registration Rights Agreement”), pursuant to which, with
respect to any Notes held by non-affiliates of the Company that are not freely
transferable under Rule 144 under the Securities Act, the Company will agree to
file or have on file with the Commission a shelf registration statement pursuant
to Rule 415 under the Securities Act (the “Registration Statement”) covering the
resale of the Notes and the related Conversion Shares, subject to certain
conditions. This Agreement, the Indenture, the Notes, the Guarantees and the
Registration Rights Agreement are referred to herein collectively as the
“Operative Documents.”

The Company understands that the Initial Purchasers propose to make an offering
of the Notes on the terms and in the manner set forth herein and in the
Disclosure Package (as defined below), including the Preliminary Offering
Memorandum (as defined below), and the Final Offering Memorandum (as defined
below) and agrees that the Initial Purchasers may resell, subject to the
conditions set forth herein, all or a portion of the Notes to purchasers at any
time after the date of this Agreement.

The Company has prepared an offering memorandum, dated the date hereof, setting
forth information concerning the Company, the Notes, the Registration Rights
Agreement and the Common Stock, in form and substance reasonably satisfactory to
the Initial Purchasers. As used in this Agreement, “Offering Memorandum” means,
collectively, the Preliminary Offering Memorandum dated as of April 2, 2008 (the
“Preliminary Offering Memorandum”) and the offering memorandum dated the date
hereof (the “Final Offering Memorandum”), each as then amended or supplemented
by the Company. As used herein, each of the terms “Disclosure Package,”
“Offering Memorandum,” “Preliminary Offering Memorandum” and “Final Offering
Memorandum” shall include in each case the documents incorporated or deemed to
be incorporated by reference therein.

The Company hereby confirms its agreements with the Initial Purchasers as
follows:

Section 1. Representations, Warranties and Covenants of the Company and the
Guarantors.

Each of the Company and the Guarantors, jointly and severally, hereby represent
and warrant to, and covenant with, each Initial Purchaser as follows:

(a) No Registration. Assuming the accuracy of the representations and warranties
of the Initial Purchasers contained in Section 6 and their compliance with the
agreements set forth therein, it is not necessary, in connection with the
issuance and sale of the Notes to the Initial Purchasers, the initial offer,
resale and delivery of the Notes by the Initial Purchasers and the conversion of
the Notes into Conversion Shares, in each case in the manner contemplated by
this Agreement, the Indenture, the Disclosure Package and the Offering
Memorandum, to register the Notes or the Conversion Shares under the Securities
Act or to qualify the Indenture under the Trust Indenture Act of 1939, as
amended (the “Trust Indenture Act”).

(b) No Integration. None of the Company or any of its subsidiaries has, directly
or through any agent, sold, offered for sale, solicited offers to buy or
otherwise negotiated in respect of, any “security” (as defined in the Securities
Act) that is or will be integrated with the sale of the Notes or the Conversion
Shares in a manner that would require registration of the Notes or the
Conversion Shares under the Securities Act.

(c) Rule 144A. No securities of the same class (within the meaning of
Rule 144A(d)(3) under the Securities Act) as the Notes are listed on any
national securities exchange registered under Section 6 of the Exchange Act, or
quoted on an automated inter-dealer quotation system.

(d) Exclusive Agreement. Neither the Company nor any of the Guarantors has paid
or agreed to pay to any person any compensation for soliciting another person to
purchase any securities of the Company or the Guarantors (except as contemplated
in this Agreement).

(e) Offering Memoranda. Each of the Company and the Guarantors hereby confirms
that it has authorized the use of the Disclosure Package and the Final Offering
Memorandum in connection with the offer and sale of the Notes by the Initial
Purchasers. Each document, if any, filed or to be filed pursuant to the Exchange
Act and incorporated by reference in the Disclosure Package or the Final
Offering Memorandum complied when it was filed, or will comply when it is filed,
as the case may be, in all material respects with the Exchange Act and the rules
and regulations of the Commission thereunder. The Preliminary Offering
Memorandum, at the date thereof, did not contain any untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. At the date of this Agreement, the Closing Date and on any
Subsequent Closing Date, the Final Offering Memorandum did not and will not (and
any amendment or supplement thereto, at the date thereof, at the Closing Date
and on any Subsequent Closing Date, will not) contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided that the Company makes no representation or
warranty as to information contained in or omitted from the Preliminary Offering
Memorandum or the Final Offering Memorandum in reliance upon and in conformity
with written information furnished to the Company and the Guarantors by any
Initial Purchaser through BAS expressly for use therein, it being understood and
agreed that the only such information furnished by any Initial Purchaser
consists of the information described as such in Section 8 hereof.

(f) Disclosure Package. The term “Disclosure Package” shall mean (i) the
Preliminary Offering Memorandum, as amended or supplemented at the Applicable
Time, (ii) the Final Term Sheet (as defined herein) and (iii) any other writings
that the parties expressly agree in writing to treat as part of the Disclosure
Package (“Issuer Written Information”). As of 5:30 p.m., New York time, on the
date of execution and delivery of this Agreement (the “Applicable Time”), the
Disclosure Package did not contain any untrue statement of a material fact or
omit to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading. The preceding sentence does not apply to statements in or omissions
from the Disclosure Package based upon and in conformity with written
information furnished to the Company and the Guarantors by any Initial Purchaser
through BAS expressly for use therein, it being understood and agreed that the
only such information furnished by any Initial Purchaser consists of the
information described as such in Section 8 hereof.

(g) Statements in Offering Memorandum. The statements in the Disclosure Package
and the Final Offering Memorandum under the heading “Certain United States
Federal Income Tax Consequences,” insofar as such statements summarize legal
matters are accurate and fair summaries of such legal matters.

(h) Offering Materials Furnished to Initial Purchasers. To the extent not
publicly available, the Company has delivered to the Representatives copies of
the materials contained in the Disclosure Package and the Final Offering
Memorandum, each as amended or supplemented, in such quantities and at such
places as the Representatives have reasonably requested for each of the Initial
Purchasers.

(i) Authorization of the Purchase Agreement. This Agreement has been duly
authorized, executed and delivered by the Company and each of the Guarantors.

(j) Authorization of the Indenture. The Indenture has been duly authorized by
the Company and each of the Guarantors and, in the event a Registration
Statement is required to be prepared and filed in accordance with the
Registration Rights Agreement, upon effectiveness of such Registration
Statement, will be qualified under the Trust Indenture Act; on the Closing Date,
the Indenture will have been duly executed and delivered by the Company and each
of the Guarantors, respectively, and, assuming due authorization, execution and
delivery thereof by the Trustee, will constitute a valid and legally binding
agreement of the Company and each of the Guarantors enforceable against the
Company and each of the Guarantors in accordance with its terms, except as
enforcement thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to or affecting the rights and
remedies of creditors or by general equitable principles; and the Indenture
conforms in all material respects to the description thereof contained in the
Disclosure Package and the Final Offering Memorandum.

(k) Authorization of the Notes. The Notes have been duly authorized by the
Company; when the Notes are executed, authenticated and issued in accordance
with the terms of the Indenture and delivered to and paid for by the Initial
Purchasers pursuant to this Agreement on the Closing Date or any Subsequent
Closing Date, as the case may be, (assuming due authentication of the Notes by
the Trustee), such Notes will constitute valid and legally binding obligations
of the Company, entitled to the benefits of the Indenture and enforceable
against the Company in accordance with their terms, except as enforcement
thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or
other similar laws relating to or affecting the rights and remedies of creditors
or by general equitable principles; and the Notes will conform in all material
respects to the description thereof contained in the Disclosure Package and the
Final Offering Memorandum.

(l) Authorization of the Guarantees. The Guarantees have been duly authorized by
the Guarantors; when the Guarantees are executed, authenticated and issued in
accordance with the terms of the Indenture and delivered to and paid for by the
Initial Purchasers pursuant to this Agreement on the respective Closing Date
(assuming due authentication of the Guarantees by the Trustee), such Guarantees
will constitute valid and legally binding obligations of the Guarantors,
entitled to the benefits of the Indenture and enforceable against the Guarantors
in accordance with their terms, except as enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, or other similar laws relating to or
affecting the rights and remedies of creditors or by general equitable
principles; and the Guarantees will conform in all material respects to the
description thereof contained in the Disclosure Package and the Final Offering
Memorandum.

(m) Authorization of the Conversion Shares. The Conversion Shares have been duly
authorized and reserved and, when issued upon conversion of the Notes in
accordance with the terms of the Notes and the Indenture, will be validly
issued, fully paid and nonassessable, and the issuance of such shares will not
be subject to any preemptive or similar rights.

(n) Authorization of the Registration Rights Agreement. The Registration Rights
Agreement has been duly authorized, executed and delivered by the Company.

(o) Authorization of the Convertible Note Hedge and Warrant Transaction
Documentation. The Convertible Note Hedge and Warrant Transaction Documentation
has been duly authorized, executed and delivered by the Company, and, assuming
due authorization, execution and delivery by the counterparties thereto, will
constitute a valid and legally binding agreement of the Company and each of the
Guarantors enforceable against the Company and each of the Guarantors in
accordance with its terms, except as enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting the rights and remedies of creditors or by general
equitable principles; and the Convertible Note Hedge and Warrant Transaction
Documentation conforms in all material respects to the description contained in
the Disclosure Package and the Final Offering Memorandum.

(p) No Material Adverse Change. Except as otherwise disclosed in the Disclosure
Package and the Final Offering Memorandum (exclusive of any amendments or
supplements thereto subsequent to the date of this Agreement), subsequent to the
respective dates as of which information is given in the Disclosure Package:
(i) there has been no material adverse change, or any development that could
reasonably be expected to result in a material adverse change, in the condition,
financial or otherwise, or in the earnings, business, properties, operations or
prospects, whether or not arising from transactions in the ordinary course of
business, of the Company and its subsidiaries, considered as one entity (any
such change is called a “Material Adverse Change”); (ii) the Company and its
subsidiaries, considered as one entity, have not incurred any material liability
or obligation, indirect, direct or contingent, nor entered into any material
transaction or agreement; and (iii) there has been no dividend or distribution
of any kind declared, paid or made by the Company or, except for (x) dividends
paid to the Company or other subsidiaries, any of its subsidiaries on any class
of capital stock or repurchase or redemption by the Company or any of its
subsidiaries of any class of capital stock and (y) the regular quarterly
dividend of $0.215 per share declared on the Company’s common stock to be paid
on April 16, 2008.

(q) Independent Accountants. KPMG LLP, who have expressed their opinion with
respect to the financial statements (which term as used in this Agreement
includes the related notes thereto) and supporting schedules included as a part
of or incorporated by reference in the Disclosure Package and the Final Offering
Memorandum, are independent registered public accountants with respect to the
Company as required by the Securities Act and the Exchange Act and the
applicable published rules and regulations thereunder.

(r) Preparation of the Financial Statements. The financial statements and the
supporting schedules included or incorporated by reference in the Disclosure
Package and the Final Offering Memorandum present fairly the consolidated
financial position of the Company and its consolidated subsidiaries as of and at
the dates indicated and the results of their operations and cash flows for the
periods specified. Such financial statements and supporting schedules comply as
to form with the applicable accounting requirements of Regulation S-X and have
been prepared in conformity with generally accepted accounting principles as
applied in the United States (“GAAP”) applied on a consistent basis throughout
the periods involved, except as may be expressly stated in the related notes
thereto. The financial data set forth in the Disclosure Package and the Final
Offering Memorandum under the captions “Summary—Summary Selected Financial
Data”, “Selected Financial Data” and “Capitalization” fairly present the
information set forth therein on a basis consistent with that of the audited
financial statements contained in the Disclosure Package and the Final Offering
Memorandum. The Company’s ratios of earnings to fixed charges set forth in the
Disclosure Package and the Final Offering Memorandum have been calculated in
compliance with Item 503(d) of Regulation S-K under the Securities Act.

(s) Incorporation and Good Standing of the Company and its Subsidiaries. Each of
the Company and its subsidiaries has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the jurisdiction of
its incorporation and has corporate power and authority to own or lease, as the
case may be, and operate its properties and to conduct its business as described
in the Disclosure Package and the Final Offering Memorandum and, in the case of
the Company, to enter into and perform its obligations under this Agreement. The
Company and each of its subsidiaries is duly qualified as a foreign corporation
to transact business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except for such jurisdictions where the
failure to so qualify or to be in good standing would not, individually or in
the aggregate, result in a material adverse effect on the condition, financial
or otherwise, or on the earnings, business, properties, operations or prospects,
whether or not arising from transactions in the ordinary course of business, of
the Company and its subsidiaries, considered as one entity (a “Material Adverse
Effect”). All of the issued and outstanding shares of capital stock of each
subsidiary have been duly authorized and validly issued, are fully paid and
nonassessable and are owned by the Company, directly or through subsidiaries,
free and clear of any security interest, mortgage, pledge, lien, encumbrance or
claim. The Company does not own or control, directly or indirectly, any
corporation, association or other entity other than the subsidiaries listed in
Exhibit 21 to the Company’s Annual Report on Form 10-K for the fiscal year ended
December 31, 2007.

(t) Capitalization and Other Capital Stock Matters. The authorized, issued and
outstanding capital stock of the Company is as set forth in the Disclosure
Package and the Final Offering Memorandum under the caption “Capitalization”
(other than for subsequent issuances, if any, pursuant to employee benefit plans
described in the Disclosure Package and the Final Offering Memorandum or upon
exercise of outstanding options or warrants described in the Disclosure Package
and the Final Offering Memorandum, as the case may be). The Common Stock
(including the Conversion Shares) conforms in all material respects to the
description thereof contained in the Disclosure Package and the Final Offering
Memorandum. All of the issued and outstanding shares of Common Stock have been
duly authorized and validly issued, are fully paid and nonassessable and have
been issued in compliance with federal and state securities laws. None of the
outstanding shares of Common Stock were issued in violation of any preemptive
rights, rights of first refusal or other similar rights to subscribe for or
purchase securities of the Company. There are no authorized or outstanding
options, warrants, preemptive rights, rights of first refusal or other rights to
purchase, or equity or debt securities convertible into or exchangeable or
exercisable for, any capital stock of the Company or any of its subsidiaries
other than those accurately described in the Disclosure Package and the Final
Offering Memorandum. The description of the Company’s stock option, stock bonus
and other stock plans or arrangements, and the options or other rights granted
thereunder, set forth or incorporated by reference in the Disclosure Package and
the Final Offering Memorandum accurately and fairly presents and summarizes such
plans, arrangements, options and rights.

(u) Non-Contravention of Existing Instruments; No Further Authorizations or
Approvals Required. Neither the Company nor any of its subsidiaries is (i) in
violation or in default (or, with the giving of notice or lapse of time, would
be in default) (“Default”) under its charter or by-laws, (ii) in Default under
any indenture, mortgage, loan or credit agreement, deed of trust, note,
contract, franchise, lease or other agreement, obligation, condition, covenant
or instrument to which the Company or such subsidiary is a party or by which it
may be bound (including, without limitation, the Credit Agreement, dated as of
February 1, 2005, among the Company, Alaska Communications Systems Holdings,
Inc., the lenders named therein and Canadian Imperial Bank of Commerce, acting
through its New York agency, as Administrative Agent), or to which any of the
property or assets of the Company or any of its subsidiaries is subject (each,
an “Existing Instrument”) or (iii) in violation of any statute, law, rule,
regulation, judgment, order or decree of any court, regulatory body,
administrative agency, governmental body, arbitrator or other authority having
jurisdiction over the Company or such subsidiary or any of its properties, as
applicable, except with respect to clause (ii) only, for such Defaults as would
not, individually or in the aggregate, have a Material Adverse Effect.

The execution, delivery and performance by the Company and each of the
Guarantors of the Operative Documents and the Convertible Note Hedge and Warrant
Transaction Documentation and consummation of the transactions contemplated
thereby, by the Disclosure Package and by the Final Offering Memorandum (i) have
been duly authorized by all necessary corporate action and will not result in
any Default under the charter or by-laws of the Company or any such Guarantor,
(ii) will not conflict with or constitute a breach of, or Default or a Debt
Repayment Triggering Event (as defined below) under, or result in the creation
or imposition of any lien, charge or encumbrance upon any property or assets of
the Company or any such Guarantor pursuant to, or require the consent of any
other party to, any Existing Instrument and (iii) will not result in any
violation of any statute, law, rule, regulation, judgment, order or decree
applicable to the Company or any such Guarantor of any court, regulatory body,
administrative agency, governmental body, arbitrator or other authority having
jurisdiction over the Company or any such Guarantor or any of its or their
properties.

No consent, approval, authorization or other order of, or registration or filing
with, any court or other governmental or regulatory authority or agency is
required for the Company’s or the Guarantors’ execution, delivery and
performance of the Operative Documents and the Convertible Note Hedge and
Warrant Transaction Documentation and consummation of the transactions
contemplated thereby, by the Disclosure Package and by the Final Offering
Memorandum, except (i) with respect to the transactions contemplated by the
Registration Rights Agreement, as may be required under the Securities Act, the
Trust Indenture Act and the rules and regulations promulgated thereunder, (ii)
such as have been obtained or made by the Company and are in full force and
effect under the Securities Act, applicable state securities or blue sky laws
and from the Financial Industry Regulatory Authority (“FINRA”) and (iii) such as
have been obtained or made by the Company under the rules of the Nasdaq Stock
Market LLC.

As used herein, a “Debt Repayment Triggering Event” means any event or condition
which gives, or with the giving of notice or lapse of time would give, the
holder of any note, debenture or other evidence of indebtedness (or any person
acting on such holder’s behalf) the right to require the repurchase, redemption
or repayment of all or a portion of such indebtedness by the Company or any of
its subsidiaries.

(v) No Stamp or Transfer Taxes. There are no stamp or other issuance or transfer
taxes or duties or other similar fees or charges under federal law or the laws
of any state, or any political subdivision thereof, or any other U.S. or
non-U.S. governmental authority required to be paid in connection with the
execution and delivery of this Agreement, the issuance or sale by the Company of
the Notes, upon the issuance of Common Stock upon the conversion of the Notes or
upon the issuance by the Guarantors of the Guarantees.

(w) No Material Actions or Proceedings. Except as otherwise disclosed in the
Disclosure Package and the Final Offering Memorandum, there are no legal or
governmental actions, suits or proceedings pending or, to the best of the
Company’s knowledge, threatened against or affecting the Company or any of its
subsidiaries, (i) which has as the subject thereof any officer or director of,
or property owned or leased by, the Company or any of its subsidiaries or
(ii) relating to environmental or employment discrimination matters, where in
either such case, (A) there is a reasonable possibility that such action, suit
or proceeding might be determined adversely to the Company or such subsidiary,
or any officer or director of, or property owned or leased by, the Company or
any of its subsidiaries and (B) any such action, suit or proceeding, if so
determined adversely, would reasonably be expected to have a Material Adverse
Effect or adversely affect the consummation of the transactions contemplated by
this Agreement.

(x) Labor Matters. No labor problem or dispute with the employees of the Company
or any of its subsidiaries exists or is threatened or imminent, and none of the
Company or any of the Guarantors is aware of any existing, threatened or
imminent labor disturbance by the employees of any of its or its subsidiaries’
principal suppliers, contractors or customers, that could have a Material
Adverse Effect.

(y) Intellectual Property Rights. The Company and its subsidiaries own, possess,
license or have other rights to use, on reasonable terms, all patents, patent
applications, trade and service marks, trade and service mark registrations,
trade names, copyrights, licenses, inventions, trade secrets, technology,
know-how and other intellectual property (collectively, the “Intellectual
Property”) necessary for the conduct of the Company’s business as now conducted
or as proposed in the Disclosure Package and the Final Offering Memorandum to be
conducted. Except as set forth in the Disclosure Package and the Final Offering
Memorandum, (a) no party has been granted an exclusive license to use any
portion of such Intellectual Property owned by the Company; (b) there is no
material infringement by third parties of any such Intellectual Property owned
by or exclusively licensed to the Company; (c) there is no pending or threatened
action, suit, proceeding or claim by others challenging the Company’s rights in
or to any material Intellectual Property, and none of the Company or any of the
Guarantors is aware of any facts that would form a reasonable basis for any such
claim; (d) there is no pending or threatened action, suit, proceeding or claim
by others challenging the validity or scope of any such Intellectual Property,
and none of the Company or any of the Guarantors is aware of any facts that
would form a reasonable basis for any such claim; and (e) there is no pending or
threatened action, suit, proceeding or claim by others that the Company’s
business as now conducted infringes or otherwise violates any patent, trademark,
copyright, trade secret or other proprietary rights of others, and none of the
Company or any of the Guarantors is aware of any other fact that would form a
reasonable basis for any such claim.

(z) All Necessary Permits, etc. The Company and each subsidiary possess such
valid and current licenses, certificates, authorizations or permits issued by
the appropriate state, federal or foreign regulatory agencies or bodies
necessary to conduct their respective businesses, and neither the Company nor
any subsidiary has received any notice of proceedings relating to the revocation
or modification of, or non-compliance with, any such license, certificate,
authorization or permit which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, could have a Material Adverse Effect.

(aa) Title to Properties. The Company and each of its subsidiaries has good and
marketable title to all the properties and assets reflected as owned in the
financial statements referred to in Section 1(p) above or elsewhere in the
Disclosure Package and the Final Offering Memorandum, in each case free and
clear of any security interests, mortgages, liens, encumbrances, equities,
claims and other defects, except such as do not materially and adversely affect
the value of such property and do not materially interfere with the use made or
proposed to be made of such property by the Company or such subsidiary. The real
property, improvements, equipment and personal property held under lease by the
Company or any subsidiary are held under valid and enforceable leases, with such
exceptions as are not material and do not materially interfere with the use made
or proposed to be made of such real property, improvements, equipment or
personal property by the Company or such subsidiary.

(bb) Tax Law Compliance. The Company and its consolidated subsidiaries have
filed all necessary federal, state, local and foreign income and franchise tax
returns in a timely manner and have paid all taxes required to be paid by any of
them and, if due and payable, any related or similar assessment, fine or penalty
levied against any of them, except for any taxes, assessments, fines or
penalties (i) as may be being contested in good faith and by appropriate
proceedings or (ii) the non-payment of which would not result in a Material
Adverse Effect. The Company has made appropriate provisions in the financial
statements referred to in Section 1(r) above in respect of all federal, state,
local and foreign income and franchise taxes for all current or prior periods as
to which the tax liability of the Company or any of its consolidated
subsidiaries has not been finally determined.

(cc) Neither Company nor any Guarantor is an “Investment Company”. The Company
and each of the Guarantors has been advised of the rules and requirements under
the Investment Company Act of 1940, as amended, and the rules and regulations
promulgated thereunder (the “Investment Company Act”). None of the Company or
any of the Guarantors is, and after receipt of payment for the Notes and the
application of the proceeds thereof as contemplated under the caption “Use of
Proceeds” in the Disclosure Package and the Final Offering Memorandum will be,
an “investment company” within the meaning of the Investment Company Act and
will conduct its business in a manner so that it will not become subject to the
Investment Company Act.

(dd) Compliance with Reporting Requirements. The Company is subject to and in
full compliance with the reporting requirements of Section 13 or Section 15(d)
of the Exchange Act.

(ee) Insurance. Each of the Company and its subsidiaries are insured by
recognized, financially sound and reputable institutions with policies in such
amounts and with such deductibles and covering such risks as are generally
deemed adequate and customary for their businesses including, but not limited
to, policies covering real and personal property owned or leased by the Company
and its subsidiaries against theft, damage, destruction, acts of terrorism or
vandalism and earthquakes. All policies of insurance and fidelity or surety
bonds insuring the Company or any of its subsidiaries or their respective
businesses, assets, employees, officers and directors are in full force and
effect; the Company and its subsidiaries are in compliance with the terms of
such policies and instruments in all material respects; and there are no claims
by the Company or any of its subsidiaries under any such policy or instrument as
to which any insurance company is denying liability or defending under a
reservation of rights clause; and neither the Company nor any such subsidiary
has been refused any insurance coverage sought or applied for. The Company has
no reason to believe that it or any subsidiary will not be able (i) to renew its
existing insurance coverage as and when such policies expire or (ii) to obtain
comparable coverage from similar institutions as may be necessary or appropriate
to conduct its business as now conducted and at a cost that would not have a
Material Adverse Effect.

(ff) No Restriction on Dividends or other Distributions. No subsidiary of the
Company is currently prohibited, directly or indirectly, from paying any
dividends or other distributions to the Company or any of the Guarantors, from
making any other distribution on such subsidiary’s capital stock, from repaying
to the Company or any Guarantor any loans or advances to such subsidiary from
the Company or such Guarantor or from transferring any of such subsidiary’s
property or assets to the Company or any other subsidiary of the Company, except
as described in or contemplated by the Disclosure Package and the Final Offering
Memorandum.

(gg) No Price Stabilization or Manipulation. The Company has not taken and will
not take, directly or indirectly, any action designed to or that might be
reasonably expected to cause or result in stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale of the
Notes. The Company acknowledges that the Initial Purchasers may engage in
passive market making transactions in the Common Stock on the Nasdaq Stock
Market LLC in accordance with Regulation M under the Exchange Act.

(hh) Related Party Transactions. There are no material business relationships or
related party transactions involving the Company or any subsidiary or any other
person that have not been described in the Disclosure Package or the Final
Offering Memorandum.

(ii) No General Solicitation. None of the Company or any of its affiliates (as
defined in Rule 501(b) of Regulation D under the Securities Act
(“Regulation D”)), has, directly or through an agent, engaged in any form of
general solicitation or general advertising (as those terms are used in
Regulation D) in connection with the offering of the Notes or the Conversion
Shares under the Securities Act or in any manner involving a public offering
within the meaning of Section 4(2) of the Securities Act; the Company has not
entered into any contractual arrangement with respect to the distribution of the
Notes or the Conversion Shares except for this Agreement, and the Company will
not enter into any such arrangement except for the Registration Rights Agreement
and as may be contemplated thereby.

(jj) No Unlawful Contributions or Other Payments. Neither the Company nor any of
its subsidiaries nor, to the knowledge of the Company, any director, officer,
agent, employee or affiliate of the Company or any of its subsidiaries is aware
of or has taken any action, directly or indirectly, that would result in a
violation by such persons of the FCPA, including, without limitation, making use
of the mails or any means or instrumentality of interstate commerce corruptly in
furtherance of an offer, payment, promise to pay or authorization of the payment
of any money, or other property, gift, promise to give, or authorization of the
giving of anything of value to any “foreign official” (as such term is defined
in the FCPA) or any foreign political party or official thereof or any candidate
for foreign political office, in contravention of the FCPA and the Company, its
subsidiaries and, to the knowledge of the Company and each Guarantor, its
affiliates have conducted their businesses in compliance with the FCPA and have
instituted and maintain policies and procedures designed to ensure, and which
are reasonably expected to continue to ensure, continued compliance therewith.
“FCPA” means the Foreign Corrupt Practices Act of 1977, as amended, and the
rules and regulations thereunder.

(kk) No Conflict with Money Laundering Laws. The operations of the Company and
its subsidiaries are and have been conducted at all times in compliance with
applicable financial recordkeeping and reporting requirements of the Currency
and Foreign Transactions Reporting Act of 1970, as amended, the money laundering
statutes of all applicable jurisdictions, the rules and regulations thereunder
and any related or similar rules, regulations or guidelines issued, administered
or enforced by any governmental agency (collectively, the “Money Laundering
Laws”) and no action, suit or proceeding by or before any court or governmental
agency, authority or body or any arbitrator involving the Company or any of its
subsidiaries with respect to the Money Laundering Laws is pending or, to the
best knowledge of the Company or any of the Guarantors, threatened.

(ll) No Conflict with OFAC Laws. Neither the Company nor any of its subsidiaries
nor, to the knowledge of the Company or any Guarantor, any director, officer,
agent, employee or affiliate of the Company or any of its subsidiaries is
currently subject to any U.S. sanctions administered by the Office of Foreign
Assets Control of the U.S. Treasury Department (“OFAC”); and the Company will
not directly or indirectly use the proceeds of the offering, or lend, contribute
or otherwise make available such proceeds to any subsidiary, joint venture
partner or other person or entity, for the purpose of financing the activities
of any person currently subject to any U.S. sanctions administered by OFAC.

(mm) Compliance with Environmental Laws. Except as otherwise disclosed in the
Disclosure Package and the Final Offering Memorandum, (i) neither the Company
nor any of its subsidiaries is in violation of any federal, state, local or
foreign law, regulation, order, permit or other requirement relating to
pollution or protection of human health or the environment (including, without
limitation, ambient air, surface water, groundwater, land surface or subsurface
strata) or wildlife, including without limitation, laws and regulations relating
to emissions, discharges, releases or threatened releases of chemicals,
pollutants, contaminants, wastes, toxic substances, hazardous substances,
petroleum and petroleum products (collectively, “Materials of Environmental
Concern”), or otherwise relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling of Materials of
Environmental Concern (collectively, “Environmental Laws”), which violation
includes, but is not limited to, noncompliance with any permits or other
governmental authorizations required for the operation of the business of the
Company or its subsidiaries under applicable Environmental Laws, or
noncompliance with the terms and conditions thereof, nor has the Company or any
of its subsidiaries received any written communication, whether from a
governmental authority, citizens group, employee or otherwise, that alleges that
the Company or any of its subsidiaries is in violation of any Environmental Law,
except as would not, individually or in the aggregate, have a Material Adverse
Effect; (ii) there is no claim, action or cause of action filed with a court or
governmental authority, no investigation with respect to which the Company has
received written notice, and no written notice by any person or entity alleging
potential liability for investigatory costs, cleanup costs, governmental
responses costs, natural resources damages, property damages, personal injuries,
attorneys’ fees or penalties arising out of, based on or resulting from the
presence, or release into the environment, of any Material of Environmental
Concern at any location owned, leased or operated by the Company or any of its
subsidiaries, now or in the past (collectively, “Environmental Claims”), pending
or, to the best of the Company’s and each Guarantor’s knowledge, threatened
against the Company or any of its subsidiaries or any person or entity whose
liability for any Environmental Claim the Company or any of its subsidiaries has
retained or assumed either contractually or by operation of law, except as would
not, individually or in the aggregate, have a Material Adverse Effect; (iii) to
the best of the Company’s and each Guarantor’s knowledge, there are no past,
present or anticipated future actions, activities, circumstances, conditions,
events or incidents, including, without limitation, the release, emission,
discharge, presence or disposal of any Material of Environmental Concern, that
reasonably could result in a violation of any Environmental Law, require
expenditures to be incurred pursuant to Environmental Law, or form the basis of
a potential Environmental Claim against the Company or any of its subsidiaries
or against any person or entity whose liability for any Environmental Claim the
Company or any of its subsidiaries has retained or assumed either contractually
or by operation of law, except as would not, individually or in the aggregate,
have a Material Adverse Effect; and (iv) neither the Company nor any of its
subsidiaries is subject to any pending or threatened proceeding under
Environmental Law to which a governmental authority is a party and which is
reasonably likely to result in monetary sanctions of $100,000 or more.

(nn) Periodic Review of Costs of Environmental Compliance. In the ordinary
course of its business, the Company conducts a periodic review of the effect of
Environmental Laws on the business, operations and properties of the Company and
its subsidiaries, in the course of which it identifies and evaluates associated
costs and liabilities (including, without limitation, any capital or operating
expenditures required for cleanup, closure of properties or compliance with
Environmental Laws or any permit, license or approval, any related constraints
on operating activities and any potential liabilities to third parties). On the
basis of such review and the amount of its established reserves, the Company has
reasonably concluded that such associated costs and liabilities would not,
individually or in the aggregate, have a Material Adverse Effect.

(oo) ERISA Compliance. None of the following events has occurred or exists:
(i) a failure to fulfill the obligations, if any, under the minimum funding
standards of Section 302 of the United States Employee Retirement Income
Security Act of 1974, as amended (“ERISA”), and the regulations and published
interpretations thereunder with respect to a Plan, determined without regard to
any waiver of such obligations or extension of any amortization period; (ii) an
audit or investigation by the Internal Revenue Service, the U.S. Department of
Labor, the Pension Benefit Guaranty Corporation or any other federal or state
governmental agency or any foreign regulatory agency with respect to the
employment or compensation of employees by the Company or any of its
subsidiaries that could have a Material Adverse Effect; (iii) any breach of any
contractual obligation, or any violation of law or applicable qualification
standards, with respect to the employment or compensation of employees by the
Company or any of its subsidiaries that could have a Material Adverse Effect.
None of the following events has occurred or is reasonably likely to occur:
(i) a material increase in the aggregate amount of contributions required to be
made to all Plans in the current fiscal year of the Company and its subsidiaries
compared to the amount of such contributions made in the Company and its
subsidiaries’ most recently completed fiscal year; (ii) a material increase in
the Company and its subsidiaries’ “accumulated post-retirement benefit
obligations” (within the meaning of Statement of Financial Accounting Standards
106) compared to the amount of such obligations in the Company and its
subsidiaries’ most recently completed fiscal year; (iii) any event or condition
giving rise to a liability under Title IV of ERISA that could have a Material
Adverse Effect; or (iv) the filing of a claim by one or more employees or former
employees of the Company or any of its subsidiaries related to its or their
employment that could have a Material Adverse Effect. For purposes of this
paragraph, the term “Plan” means a plan (within the meaning of Section 3(3) of
ERISA) subject to Title IV of ERISA with respect to which the Company or any of
its subsidiaries may have any liability.

(pp) Brokers. There is no broker, finder or other party that is entitled to
receive from the Company any brokerage or finder’s fee or other fee or
commission as a result of any transactions contemplated by this Agreement.

(qq) No Outstanding Loans or Other Indebtedness. There are no outstanding loans,
advances (except normal advances for business expenses in the ordinary course of
business) or guarantees or indebtedness by the Company to or for the benefit of
any of the officers or directors of the Company or any of the members of any of
their families, except as disclosed in the Disclosure Package and the Final
Offering Memorandum.

(rr) Sarbanes-Oxley Compliance. There is and has been no failure on the part of
the Company and any of the Company’s directors or officers, in their capacities
as such, to comply with any provision of the Sarbanes-Oxley Act of 2002 and the
rules and regulations promulgated in connection therewith (the “Sarbanes-Oxley
Act”), including Section 402 related to loans and Sections 302 and 906 related
to certifications.

(ss) Internal Controls and Procedures. The Company maintains (i) effective
internal control over financial reporting as defined in Rule 13a-15 under the
Securities Exchange Act of 1934, as amended, and (ii) a system of internal
accounting controls sufficient to provide reasonable assurance that
(A) transactions are executed in accordance with management’s general or
specific authorizations; (B) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain asset accountability; (C) access to assets
is permitted only in accordance with management’s general or specific
authorization; and (D) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.

(tt) No Material Weakness in Internal Controls. Except as disclosed in the
Disclosure Package and the Final Offering Memorandum, since the end of the
Company’s most recent audited fiscal year, there has been (i) no material
weakness in the Company’s internal control over financial reporting (whether or
not remediated) and (ii) no change in the Company’s internal control over
financial reporting that has materially affected, or is reasonably likely to
materially affect, the Company’s internal control over financial reporting.

(uu) Disclosure Controls. The Company and its subsidiaries maintain an effective
system of “disclosure controls and procedures” (as defined in Rule 13a-15 of the
Exchange Act) that is designed to ensure that information required to be
disclosed by the Company in reports that it files or submits under the Exchange
Act is recorded, processed, summarized and reported within the time periods
specified in the Commission’s rules and forms, including controls and procedures
designed to ensure that such information is accumulated and communicated to the
Company’s management as appropriate to allow timely decisions regarding required
disclosure. The Company and its subsidiaries have carried out evaluations of the
effectiveness of their disclosure controls and procedures as required by
Rule 13a-15 of the Exchange Act.

(vv) Stock Options. With respect to the stock options (the “Stock Options”)
granted pursuant to the stock-based compensation plans of the Company and its
subsidiaries (the “Company Stock Plans”) (i) each Stock Option designated by the
Company or the relevant subsidiary of the Company at the time of grant as an
“incentive stock option” under Section 422 of the Internal Revenue Code of 1986,
as amended (the “Code”), so qualifies, (ii) each grant of a Stock Option was
duly authorized no later than the date on which the grant of such Stock Option
was by its terms to be effective (the “Grant Date”) by all necessary corporate
action, including, as applicable, approval by the board of directors of the
Company or the relevant subsidiary of the Company (or a duly constituted and
authorized committee thereof) and any required stockholder approval by the
necessary number of votes or written consents, and the award agreement governing
such grant (if any) was duly executed and delivered by each party thereto,
(iii) each such grant was made in accordance with the terms of the Company Stock
Plans, the Exchange Act and all other applicable laws and regulatory rules or
requirements, including the rules of Nasdaq Stock Market LLC and any other
exchange on which the securities of the Company or the relevant subsidiary of
the Company are traded, (iv) the per share exercise price of each Stock Option
was equal to or greater than the fair market value of a share of Common Stock on
the applicable Grant Date and (v) each such grant was properly accounted for in
accordance with GAAP in the consolidated financial statements (including the
related notes) of the Company and disclosed in the Company’s filings with the
Commission in accordance with the Exchange Act and all other applicable laws,
except in the case of clauses (ii), (iii) or (iv) for such grants that would
not, individually or in the aggregate, have a Material Adverse Effect.

(ww) . Neither the Company nor any of its subsidiaries has knowingly granted,
and there is no and has been no policy or practice of the Company or any of its
subsidiaries of granting, Stock Options prior to, or otherwise coordinating the
grant of Stock Options with, the release or other public announcement of
material information regarding the Company or its subsidiaries or their results
of operations or prospects.

(xx) Subsidiaries. The subsidiaries listed on Annex A attached hereto are the
only significant subsidiaries of the Company as defined by Rule 1-02 of
Regulation S-X (the “Subsidiaries”).

(yy) Lending Relationship. Except as disclosed in the Disclosure Package and the
Final Offering Memorandum, the Company (i) does not have any material lending or
other relationship with any bank or lending affiliate of any Initial Purchaser
and (ii) does not intend to use any of the proceeds from the sale of the Notes
hereunder to repay any outstanding debt owed to any affiliate of any Initial
Purchaser.

(zz) PORTAL. The Company has been advised by NASDAQ’s PORTAL Market that the
Notes have been designated PORTAL-eligible securities in accordance with the
rules and regulations of NASDAQ.

Any certificate signed by an officer of the Company or any Guarantor and
delivered to the Representatives or to counsel for the Initial Purchasers shall
be deemed to be a representation and warranty by the Company or such Guarantor
to each Initial Purchaser as to the matters set forth therein.

Section 2. Purchase, Sale and Delivery of the Notes

(a) The Firm Notes. The Company agrees to issue and sell to the several Initial
Purchasers the Firm Notes upon the terms herein set forth. On the basis of the
representations, warranties and agreements herein contained, and upon the terms
but subject to the conditions herein set forth, the Initial Purchasers agree,
severally and not jointly, to purchase from the Company the respective aggregate
principal amount of Firm Notes set forth opposite their names on Schedule A. The
purchase price per Firm Note to be paid by the several Initial Purchasers to the
Company shall be 97% of the aggregate principal amount thereof.

(b) The Closing Date. Delivery of the Firm Notes to be purchased by the Initial
Purchasers and payment therefor shall be made at the offices of Cleary Gottlieb
Steen & Hamilton LLP, One Liberty Plaza, New York, New York 10006 (or such other
place as may be agreed to by the Company, the Guarantors and the
Representatives) at 9:00 a.m., New York time, on April 8, 2008, or such other
time and date not later than 1:30 p.m., New York time, on April 22, 2008 as BAS
shall designate by notice to the Company (the time and date of such closing are
called the “Closing Date”).

(c) The Optional Notes; any Subsequent Closing Date. In addition, on the basis
of the representations, warranties and agreements herein contained, and upon the
terms but subject to the conditions herein set forth, the Company and the
Guarantors hereby grant an option to the several Initial Purchasers to purchase,
severally and not jointly, up to $18,750,000 aggregate principal amount of
Optional Notes, guaranteed by the Guarantors, from the Company at the same price
as the purchase price per Firm Note to be paid by the Initial Purchasers for the
Firm Notes. The option granted hereunder may be exercised at any time and from
time to time upon notice by BAS to the Company and the Guarantors, which notice
may be given at any time within 30 days from the date of this Agreement. Such
notice shall set forth (i) the amount (which shall be an integral multiple of
$1,000 in aggregate principal amount) of Optional Notes as to which the Initial
Purchasers are exercising the option, (ii) the names and denominations in which
the Optional Notes are to be registered and (iii) the time, date and place at
which such Optional Notes will be delivered (which time and date may be
simultaneous with, but not earlier than, the Closing Date; and in such case the
term “Closing Date” shall refer to the time and date of delivery of the Firm
Notes and the Optional Notes). Each time and date of delivery, if subsequent to
the Closing Date, is called a “Subsequent Closing Date” and shall be determined
by BAS and shall not be earlier than the Closing Date nor later than 10 business
days after delivery of such notice of exercise. If any Optional Notes are to be
purchased, each Initial Purchaser agrees, severally and not jointly, to purchase
the aggregate principal amount of Optional Notes (subject to such adjustments to
eliminate fractional amounts as BAS may determine) that bears the same
proportion to the total aggregate principal amount of Optional Notes to be
purchased as the aggregate principal amount of Firm Notes set forth on
Schedule A opposite the name of such Initial Purchaser bears to the total
aggregate principal amount of Firm Notes.

(d) Payment for the Notes. Payment for the Notes shall be made at the Closing
Date (and, if applicable, at any Subsequent Closing Date) by wire transfer of
immediately available funds to the order of the Company.

It is understood that the Representatives has been authorized, for its own
account and the accounts of the several Initial Purchasers, to accept delivery
of and receipt for, and make payment of the purchase price for, the Firm Notes
and any Optional Notes the Initial Purchasers have agreed to purchase. BAS,
individually and not as a Representative of the Initial Purchasers, may (but
shall not be obligated to) make payment for any Notes to be purchased by any
Initial Purchaser whose funds shall not have been received by the
Representatives by the Closing Date or any Subsequent Closing Date, as the case
may be, for the account of such Initial Purchaser, but any such payment shall
not relieve such Initial Purchaser from any of its obligations under this
Agreement.

(e) Delivery of the Notes. The Company shall deliver, or cause to be delivered,
to the Representatives for the accounts of the several Initial Purchasers the
Firm Notes at the Closing Date, against the irrevocable release of a wire
transfer of immediately available funds for the amount of the purchase price
therefor. The Company shall also deliver, or cause to be delivered, to the
Representatives for the accounts of the several Initial Purchasers, the Optional
Notes the Initial Purchasers have agreed to purchase at the Closing Date or any
Subsequent Closing Date, as the case may be, against the irrevocable release of
a wire transfer of immediately available funds for the amount of the purchase
price therefor. Delivery of the Firm Notes and the Optional Notes shall be made
through the facilities of The Depository Trust Company unless BAS shall
otherwise instruct. Time shall be of the essence, and delivery at the time and
place specified in this Agreement is a further condition to the obligations of
the Initial Purchasers.

Section 3. Covenants of the Company and the Guarantors

Each of the Company and the Guarantors, jointly and severally, covenant and
agree with each Initial Purchaser as follows:

(a) BAS’ Review of Proposed Amendments and Supplements. During such period
beginning on the date hereof and ending on the date of the completion of the
resale of the Notes by the Initial Purchasers (as notified by BAS to the
Company), prior to amending or supplementing the Disclosure Package or the Final
Offering Memorandum (other than any filings of any quarterly report on Form 10-Q
or any amendment or supplement to such form or to the Company’s Annual Report on
Form 10-K for the year ended December 31, 2007), the Company and the Guarantors
shall furnish to BAS for review a copy of each such proposed amendment or
supplement, and the Company shall not print, use or distribute such proposed
amendment or supplement to which BAS reasonably objects.

(b) Amendments and Supplements to the Offering Memorandum and Other Securities
Act Matters. If, at any time prior to the completion of the resale of the Notes
by the Initial Purchasers (as notified by BAS to the Company), any event or
development shall occur or condition exist as a result of which it is necessary
to amend or supplement the Disclosure Package or the Final Offering Memorandum
in order that the Disclosure Package or the Final Offering Memorandum will not
include an untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made or then prevailing, as the case may be,
not misleading, or if in the opinion of BAS or counsel for the Initial
Purchasers it is otherwise necessary to amend or supplement the Disclosure
Package or the Final Offering Memorandum to comply with law, the Company and
each of the Guarantors shall promptly notify the Initial Purchasers and prepare,
subject to Section 3(a) hereof, such amendment or supplement as may be necessary
to correct such untrue statement or omission.

(c) Copies of Disclosure Package and the Offering Memorandum. To the extent not
publicly available, the Company and the Guarantors agree to furnish to the
Representatives, without charge, until the earlier of nine months after the date
hereof or the completion of the resale of the Notes by the Initial Purchasers
(as notified by the Initial Purchasers to the Company) as many copies of the
materials contained in the Disclosure Package and the Final Offering Memorandum
and any amendments and supplements thereto as the Representatives may request.

(d) Blue Sky Compliance. The Company and the Guarantors shall cooperate with the
Representatives and counsel for the Initial Purchasers, as the Initial
Purchasers may reasonably request from time to time, to qualify or register the
Notes for sale under (or obtain exemptions from the application of) the state
securities or blue sky laws or Canadian provincial securities laws or other
foreign laws of those jurisdictions designated by the Representatives, shall
comply with such laws and shall continue such qualifications, registrations and
exemptions in effect so long as required for the distribution of the Notes. None
of the Company or any of the Guarantors shall be required to qualify as a
foreign corporation or to take any action that would subject it to general
service of process in any such jurisdiction where it is not presently qualified
or where it would be subject to taxation as a foreign corporation, other than
those arising out of the offering or sale of the Notes in any jurisdiction where
it is not now so subject. The Company and the Guarantors will advise the
Representatives promptly of the suspension of the qualification or registration
of (or any such exemption relating to) the Notes for offering, sale or trading
in any jurisdiction or any initiation or threat of any proceeding for any such
purpose, and in the event of the issuance of any order suspending such
qualification, registration or exemption, the Company and the Guarantors shall
use its best efforts to obtain the withdrawal thereof at the earliest possible
moment.

(e) Rule 144A Information. For so long as any of the Notes are “restricted
securities” within the meaning of Rule 144(a)(3) under the Securities Act, the
Company shall provide to any holder of the Notes or to any prospective purchaser
of the Notes designated by any holder, upon request of such holder or
prospective purchaser, information required to be provided by Rule 144A(d)(4) of
the Securities Act if, at the time of such request, the Company is not subject
to the reporting requirements under Section 13 or 15(d) of the Exchange Act.

(f) Compliance with Securities Law. The Company will comply with all applicable
securities and other laws, rules and regulations, including, without limitation,
the Sarbanes-Oxley Act, and use its best efforts to cause the Company’s
directors and officers, in their capacities as such, to comply with such laws,
rules and regulations, including, without limitation, the provisions of the
Sarbanes-Oxley Act.

(g) Legends. Each of the Notes will bear, to the extent applicable, the legend
contained in “Notice to Investors” in the Disclosure Package and the Final
Offering Memorandum for the time period and upon the other terms stated therein.

(h) Written Information Concerning the Offering. Without the prior written
consent of BAS, neither the Company nor any of the Guarantors will give to any
prospective purchaser of the Notes or any other person not in its employ any
written information concerning the offering of the Notes other than the
Disclosure Package, the Final Offering Memorandum or any other offering
materials prepared by or with the prior consent of the Representatives.

(i) No General Solicitation. Except following the effectiveness of the
Registration Statement, the Company will not, and will cause its subsidiaries
not to, solicit any offer to buy or offer to sell the Notes by means of any form
of general solicitation or general advertising (as those terms are used in
Regulation D under the Securities Act) or in any manner involving a public
offering within the meaning of Section 4(2) of the Securities Act.

(j) No Integration. The Company will not, and will cause its subsidiaries not
to, sell, offer for sale or solicit offers to buy or otherwise negotiate in
respect of any “security” (as defined in the Securities Act) in a transaction
that could be integrated with the sale of the Notes in a manner that would
require the registration under the Securities Act of the Notes.

(k) Information to Publishers. Any information provided by the Company or any of
the Guarantors to publishers of publicly available databases about the terms of
the Notes and the Indenture shall include a statement that the Notes have not
been registered under the Act and are subject to restrictions under Rule 144A of
the Act.

(l) DTC. The Company and each of the Guarantors will cooperate with the
Representatives and use its best efforts to permit the Notes to be eligible for
clearance and settlement through The Depository Trust Company.

(m) Rule 144 Tolling. During the period of one year after the last Closing Date,
the Company will not, and will not permit any of its “affiliates” (as defined in
Rule 144 under the Securities Act) to, resell any of the Notes that constitute
“restricted securities” under Rule 144 that have been reacquired by any of them.

(n) Use of Proceeds. The Company shall apply the net proceeds from the sale of
the Notes sold by it in the manner described under the caption “Use of Proceeds”
in the Disclosure Package and the Final Offering Memorandum.

(o) Transfer Agent. The Company shall engage and maintain, at its expense, a
registrar and transfer agent for the Common Stock.

(p) Available Conversion Shares. The Company will reserve and keep available at
all times, free of pre-emptive rights, the full number of Conversion Shares.

(q) Conversion Price. Between the date hereof and the Closing Date, none of the
Company or any of the Guarantors will do or authorize any act or thing that
would result in an adjustment of the conversion price.

(r) Company to Provide Interim Financial Statements and Other Information. Prior
to the Closing Date, the Company will furnish the Initial Purchasers, as soon as
they have been prepared by and are available to the Company, a copy of any
unaudited interim financial statements of the Company for any period subsequent
to the period covered by the most recent financial statements appearing in the
Disclosure Package and the Final Offering Memorandum.

(s) Agreement Not to Offer or Sell Additional Securities. During the period
commencing on the date hereof and ending on the 90th day following the date of
the Final Offering Memorandum, none of the Company or any of the Guarantors
will, without the prior written consent of BAS (which consent may be withheld at
the sole discretion of BAS), directly or indirectly, sell, offer, contract or
grant any option to sell, pledge, transfer or establish an open “put equivalent
position” or liquidate or decrease a “call equivalent position” within the
meaning of Rule 16a-1(h) under the Exchange Act, or otherwise dispose of or
transfer (or enter into any transaction that is designed to, or might reasonably
be expected to, result in the disposition of), or announce the offering of, or
file any registration statement under the Securities Act in respect of, any
shares of Common Stock, options or warrants to acquire shares of the Common
Stock or securities exchangeable or exercisable for or convertible into shares
of Common Stock (other than as contemplated by this Agreement with respect to
the Notes); provided, however, that (i) the Company may issue shares of its
Common Stock or options to purchase its Common Stock, or Common Stock upon
exercise of options, pursuant to any stock option, stock bonus or other stock
plan or arrangement described in the Disclosure Package and the Final Offering
Memorandum, but only if the holders of such shares, options, or shares issued
upon exercise of such options, agree in writing not to sell, offer, dispose of
or otherwise transfer any such shares or options (except forfeitures of Common
Stock or options to purchase Common Stock by the directors and executive
officers subject to the lock-up agreement attached as Exhibit F hereto to
satisfy tax withholding obligations and, in the case of options exercises,
payment of exercise price, in connection with the vesting of equity awards
acquired by directors and executive officers pursuant to equity incentive plans
existing and as in effect on the date of this Agreement will be permitted,
provided that the number of shares sold for consideration on the open market or
to any third party by all of the officers and directors of the Company who are
subject to the lock-up agreement does not in the aggregate exceed 200,000 shares
of Common Stock) during such 90-day period without the prior written consent of
BAS (which consent may be withheld at the sole discretion of the BAS) and
(ii) the foregoing shall not apply to the entry into the transactions
contemplated by the Convertible Note Hedge and Warrant Transaction
Documentation.

(t) Future Reports to Stockholders. The Company will make available to its
stockholders as soon as practicable after the end of each fiscal year an annual
report (including a balance sheet and statements of income, stockholders’ equity
and cash flows of the Company and its consolidated subsidiaries certified by
independent public accountants) and, as soon as practicable after the end of
each of the first three quarters of each fiscal year (beginning with the fiscal
quarter ending after the date of the Final Offering Memorandum), to make
available to its stockholders consolidated summary financial information of the
Company and its subsidiaries for such quarter in reasonable detail.

(u) Future Reports to the Representatives. During the period of five years
hereafter, the Company will furnish to the Representatives (i) as soon as
practicable after the end of each fiscal year, copies of the Annual Report of
the Company containing the balance sheet of the Company as of the close of such
fiscal year and statements of income, stockholders’ equity and cash flows for
the year then ended and the opinion thereon of the Company’s independent public
or certified public accountants; (ii) as soon as practicable after the filing
thereof, copies of each proxy statement, Annual Report on Form 10-K, Quarterly
Report on Form 10-Q, Current Report on Form 8-K or other report filed by the
Company with the Commission, FINRA or any securities exchange; and (iii) as soon
as available, copies of any report or communication of the Company mailed
generally to holders of its capital stock.

(v) Investment Limitation. The Company shall not invest or otherwise use the
proceeds received by the Company from its sale of the Notes in such a manner as
would require the Company or any of its subsidiaries to register as an
investment company under the Investment Company Act.

(w) No Manipulation of Price. None of the Company or any of the Guarantors will
take, directly or indirectly, any action designed to cause or result in, or that
has constituted or might reasonably be expected to constitute, under the
Exchange Act or otherwise, the stabilization or manipulation of the price of any
securities of the Company to facilitate the sale or resale of the Notes.

(x) Existing Lock-Up Agreements. The Company will enforce all existing
agreements between the Company and any of its security holders that prohibit the
sale, transfer, assignment, pledge or hypothecation of any of the Company’s
securities in connection with the Company’s initial public offering. In
addition, the Company will direct the transfer agent to place stop transfer
restrictions upon any such securities of the Company that are bound by such
existing “lock-up” agreements for the duration of the periods contemplated in
such agreements.

(y) New Lock-Up Agreements. The Company will enforce all agreements between the
Company and any of its security holders to be entered into pursuant to this
agreement that prohibit the sale, transfer, assignment, pledge or hypothecation
of any of the Company’s securities. In addition, the Company will direct the
transfer agent to place stop transfer restrictions upon any such securities of
the Company that are bound by such “lock-up” agreements for the duration of the
periods contemplated in such agreements.

(z) Final Term Sheet. The Company will prepare a final term sheet, containing
solely a description of the Notes and the offering thereof, in the form approved
by you and attached as Schedule B hereto (the “Final Term Sheet”).

Section 4. Payment of Expenses

Each of the Company and the Guarantors, jointly and severally, agrees to pay all
costs, fees and expenses incurred in connection with the performance of its
obligations hereunder and in connection with the transactions contemplated
hereby, including without limitation (i) all expenses incident to the issuance
and delivery of the Notes (including all printing and engraving costs), (ii) all
fees and expenses of the Trustee under the Indenture, (iii) all necessary issue,
transfer and other stamp taxes in connection with the issuance and sale of the
Notes to the Initial Purchasers, (iv) all fees and expenses of the Company’s and
the Guarantors’ counsel, independent public or certified public accountants and
other advisors, (v) all costs and expenses incurred in connection with the
preparation, printing, shipping and distribution of the materials contained in
the Disclosure Package and the Final Offering Memorandum, all amendments and
supplements thereto and this Agreement, (vi) all filing fees, attorneys’ fees
and expenses incurred by the Company, the Guarantors or the Initial Purchasers
in connection with qualifying or registering (or obtaining exemptions from the
qualification or registration of) all or any part of the Notes for offer and
sale under the state securities or blue sky laws or the provincial securities
laws of Canada, and, if requested by the Representatives, preparing and printing
a “Blue Sky Survey” or memorandum, and any supplements thereto, advising the
Initial Purchasers of such qualifications, registrations and exemptions, (vii) 
the expenses of the Company, the Guarantors and the Initial Purchasers in
connection with the marketing and offering of the Notes, including all
transportation and other expenses incurred in connection with presentations to
prospective purchasers of the Notes, except that the Company and the Guarantors,
on the one hand, and the Initial Purchasers, on the other hand, will each pay
50% of the cost of privately chartered airplanes used for such purposes,
(viii) the fees and expenses associated with listing the Conversion Shares on
the Nasdaq Stock Market LLC and (ix) all expenses and fees in connection with
admitting the Notes for trading in the PORTAL Market. Except as provided in this
Section 4, Section 7 and Section 11 hereof, the Initial Purchasers shall pay
their own expenses, including the fees and disbursements of their counsel.

Section 5. Conditions of the Obligations of the Initial Purchasers

The obligations of the several Initial Purchasers to purchase and pay for the
Notes as provided herein on the Closing Date and, with respect to the Optional
Notes, any Subsequent Closing Date, shall be subject to the accuracy of the
representations and warranties on the part of the Company set forth in Section 1
hereof as of the date hereof and as of the Closing Date as though then made and,
with respect to the Optional Notes, as of any Subsequent Closing Date as though
then made, to the accuracy of the statements of the Company made in any
certificates pursuant to the provisions hereof, to the timely performance by the
Company and the Guarantors of its covenants and other obligations hereunder, and
to each of the following additional conditions:

(a) Accountants’ Comfort Letter. On the date hereof, the Representatives shall
have received from KPMG LLP, independent public accountants for the Company, a
letter dated the date hereof addressed to the Initial Purchasers, the form of
which is attached as Exhibit A.

(b) No Material Adverse Change or Ratings Agency Change. For the period from and
after the date of this Agreement and prior to the Closing Date and, with respect
to the Optional Notes, any Subsequent Closing Date:

(i) in the judgment of BAS, there shall not have occurred any Material Adverse
Change;

(ii) there shall not have been any change or decrease specified in the letter or
letters referred to in paragraph (a) of this Section 5 which is, in the sole
judgment of BAS, so material and adverse as to make it impractical or
inadvisable to proceed with the offering or delivery of the Notes as
contemplated by the Disclosure Package and the Final Offering Memorandum; and

(iii) there shall not have occurred any downgrading, nor shall any notice have
been given of any intended or potential downgrading or of any review for a
possible change that does not indicate the direction of the possible change, in
the rating accorded any securities of the Company or any of its subsidiaries by
any “nationally recognized statistical rating organization” as such term is
defined for purposes of Rule 436(g)(2) under the Securities Act.

(c) Opinions of Counsel for the Company and the Guarantors. On each of the
Closing Date and any Subsequent Closing Date, the Representatives shall have
received the favorable opinion of (i) Sidley Austin LLP, counsel for the Company
and the Guarantors, the form of which is attached as Exhibit B, (ii) Leonard
Steinberg, General Counsel of the Company and the Guarantors, the form of which
is attached as Exhibit C, (iii) Birch Horton Bittner & Cherot, local Alaska
counsel for the Company and the Guarantors, the form of which is attached as
Exhibit D and (iv) Latham & Watkins LLP, special regulatory counsel for the
Company and the Guarantors, the form of which is attached as Exhibit E, each
dated as of such Closing Date or Subsequent Closing Date.

(d) Opinion of Counsel for the Initial Purchasers. On the Closing Date and any
Subsequent Closing Date, the Representatives shall have received the favorable
opinion of Cleary Gottlieb Steen & Hamilton LLP, counsel for the Initial
Purchasers, dated as of such Closing Date or Subsequent Closing Date, in form
and substance satisfactory to, and addressed to, the Representatives, with
respect to the issuance and sale of the Notes, the Disclosure Package, the Final
Offering Memorandum and other related matters as the Representatives may
reasonably require, and the Company shall have furnished to such counsel such
documents as they request for the purpose of enabling them to pass upon such
matters.

(e) Officers’ Certificate. On the Closing Date and any Subsequent Closing Date,
the Representatives shall have received a written certificate executed by the
Chairman of the Board, Chief Executive Officer or President of each of the
Company and the Guarantors and the Chief Financial Officer or Chief Accounting
Officer of each of the Company and the Guarantors, dated as of such Closing Date
or Subsequent Closing Date, to the effect that the signers of such certificate
have carefully examined the Disclosure Package and the Final Offering
Memorandum, any amendments or supplements thereto and this Agreement, to the
effect set forth in subsection (b)(iii) of this Section 5, and further to the
effect that:

(i) for the period from and after the date of this Agreement and prior to such
Closing Date or Subsequent Closing Date, as the case may be, there has not
occurred any Material Adverse Change with respect to the Company or such
Guarantor;

(ii) the representations and warranties of the Company and the Guarantors set
forth in Section 1 of this Agreement are true and correct on and as of such
Closing Date or Subsequent Closing Date with the same force and effect as though
expressly made on and as of such Closing Date or such Subsequent Closing Date,
as the case may be; and

(iii) the Company and each Guarantor has complied with all the agreements
hereunder and satisfied all the conditions on its part to be performed or
satisfied hereunder at or prior to such Closing Date or Subsequent Closing Date,
as the case may be.

(f) Bring-down Comfort Letter. On the Closing Date and any Subsequent Closing
Date, the Representatives shall have received from KPMG LLP, independent public
accountants for the Company, a letter dated such date, in form and substance
satisfactory to the Representatives, to the effect that they reaffirm the
statements made in the letter furnished by them pursuant to subsection (a) of
this Section 5, except that the specified date referred to therein for the
carrying out of procedures shall be no more than three business days prior to
such Closing Date or Subsequent Closing Date.

(g) Registration Rights Agreement. The Company and the Initial Purchasers shall
have executed and delivered the Registration Rights Agreement (in form and
substance satisfactory to the Initial Purchasers), and the Registration Rights
Agreement shall be in full force and effect.

(h) Lock-Up Agreement from Certain Securityholders of the Company. On or prior
to the date hereof, the Company and the Guarantors shall have furnished to the
Representatives an agreement in the form of Exhibit F hereto from each director
and executive officer of the company listed in Schedule E, and such agreement
shall be in full force and effect on each of the Closing Date and any Subsequent
Closing Date.

(i) PORTAL Designation. The Notes shall have been designated PORTAL-eligible
securities in accordance with the rules and regulations of NASDAQ.

(j) Listing. The Company and the Guarantors shall have caused the Conversion
Shares to be approved for listing, subject to notice of issuance, on the Nasdaq
Stock Market LLC.

(k) Additional Documents. On or before each of the Closing Date and any
Subsequent Closing Date, the Representatives and counsel for the Initial
Purchasers shall have received such information, documents and opinions as they
may reasonably require for the purposes of enabling them to pass upon the
issuance and sale of the Notes as contemplated herein, or in order to evidence
the accuracy of any of the representations and warranties, or the satisfaction
of any of the conditions or agreements, herein contained.

If any condition specified in this Section 5 is not satisfied when and as
required to be satisfied, this Agreement may be terminated by BAS by notice to
the Company and the Guarantors at any time on or prior to the Closing Date and,
with respect to the Optional Notes, at any time prior to the applicable
Subsequent Closing Date, which termination shall be without liability on the
part of any party to any other party, except that Section 4, Section 7,
Section 8, Section 9 and Section 14 shall at all times be effective and shall
survive such termination.

Section 6. Representations, Warranties and Agreements of Initial Purchasers

Each of the Initial Purchasers represents and warrants that it is a “qualified
institutional buyer”, as defined in Rule 144A of the Securities Act. Each
Initial Purchaser agrees with the Company that:

(a) it has not offered or sold, and will not offer or sell, any Notes within the
United States or to, or for the account or benefit of, U.S. persons (x) as part
of their distribution at any time or (y) otherwise until one year after the
later of the commencement of the offering and the date of closing of the
offering except to those it reasonably believes to be “qualified institutional
buyers” (as defined in Rule 144A under the Act);

(b) neither it nor any person acting on its behalf has made or will make offers
or sales of the Notes in the United States by means of any form of general
solicitation or general advertising (within the meaning of Regulation D) in the
United States;

(c) in connection with each sale pursuant to Section 6(a)(i), it has taken or
will take reasonable steps to ensure that the purchaser of such Notes is aware
that such sale is being made in reliance on Rule 144A;

(d) any information provided by the Initial Purchasers to publishers of publicly
available databases about the terms of the Notes and the Indenture shall include
a statement that the Notes have not been registered under the Act and are
subject to restrictions under Rule 144A under the Act;

(e) it acknowledges that additional restrictions on the offer and sale of the
Notes and the Common Stock issuable upon conversion thereof are described in the
Disclosure Package and the Final Offering Memorandum.

Section 7. Reimbursement of Initial Purchasers’ Expenses

If this Agreement is terminated pursuant to Section 5 or Section 11, or if the
sale to the Initial Purchasers of the Notes on the Closing Date or any
Subsequent Closing Date is not consummated because of any refusal, inability or
failure on the part of the Company or any Guarantor to perform any agreement
herein or to comply with any provision hereof, each of the Company and the
Guarantors, jointly and severally, agrees to reimburse the Representatives and
the other Initial Purchasers (or such Initial Purchasers as have terminated this
Agreement with respect to themselves), severally, upon demand for all
out-of-pocket expenses that shall have been reasonably incurred by the
Representatives and the Initial Purchasers in connection with the proposed
purchase and the offering and sale of the Notes, including but not limited to
fees and disbursements of counsel, printing expenses, travel expenses, postage,
facsimile and telephone charges.

Section 8. Indemnification

(a) Indemnification of the Initial Purchasers. Each of the Company and the
Guarantors, jointly and severally, agrees to indemnify and hold harmless each
Initial Purchaser, its directors, officers, employees and agents, and each
person, if any, who controls any Initial Purchaser within the meaning of the
Securities Act or the Exchange Act against any loss, claim, damage, liability or
expense, as incurred, to which such Initial Purchaser, director, officer,
employee, agent or controlling person may become subject, insofar as such loss,
claim, damage, liability or expense (or actions in respect thereof as
contemplated below) arises out of or is based upon any untrue statement or
alleged untrue statement of a material fact contained in the Disclosure Package,
the Final Offering Memorandum, the information contained in the Final Term Sheet
or any other written information used by or on behalf of the Company in
connection with the offer or sale of the Notes (or any amendment or supplement
to the foregoing), or the omission or alleged omission therefrom of a material
fact, in each case, necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading, and to
reimburse each Initial Purchaser, its officers, directors, employees, agents and
each such controlling person for any and all expenses (including the fees and
disbursements of counsel chosen by BAS) as such expenses are reasonably incurred
by such Initial Purchaser, or its officers, directors, employees, agents or such
controlling person in connection with investigating, defending, settling,
compromising or paying any such loss, claim, damage, liability, expense or
action; provided, however, that the foregoing indemnity agreement shall not
apply to any loss, claim, damage, liability or expense to the extent, but only
to the extent, arising out of or based upon any untrue statement or alleged
untrue statement or omission or alleged omission based upon and in conformity
with written information furnished to the Company and the Guarantors by any
Initial Purchaser through BAS expressly for use in the Disclosure Package, the
Final Offering Memorandum, the Final Term Sheet or any other written information
used by or on behalf of the Company in connection with the offer or sale of the
Notes (or any amendment or supplement thereto), it being understood and agreed
that the only such information furnished by any Initial Purchaser consists of
the information described as such in Section 8(b) hereof. The indemnity
agreement set forth in this Section 8(a) shall be in addition to any liabilities
that the Company and the Guarantors may otherwise have.

(b) Indemnification of the Company, the Guarantors and their Directors and
Officers. Each Initial Purchaser agrees, severally and not jointly, to indemnify
and hold harmless the Company and each Guarantor, each of their respective
directors, each of their respective officers and each person, if any, who
controls the Company or any such Guarantor within the meaning of the Securities
Act or the Exchange Act, against any loss, claim, damage, liability or expense,
as incurred, to which the Company, any such Guarantor, or any such director,
officer or controlling person may become subject, insofar as such loss, claim,
damage, liability or expense (or actions in respect thereof as contemplated
below) arises out of or is based upon any untrue or alleged untrue statement of
a material fact contained in the Disclosure Package, the Final Offering
Memorandum, the information contained in the Final Term Sheet or any other
written information used by or on behalf of the Company and the Guarantors in
connection with the offer or sale of the Notes (or any amendment or supplement
thereto), or arises out of or is based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, in each case to the extent, and only to
the extent, that such untrue statement or alleged untrue statement or omission
or alleged omission was made in the Disclosure Package, the Final Offering
Memorandum, the Final Term Sheet or any other written information used by or on
behalf of the Company and the Guarantors in connection with the offer or sale of
the Notes (or any amendment or supplement thereto), in reliance upon and in
conformity with written information furnished to the Company and the Guarantors
by BAS expressly for use therein; and to reimburse the Company, any such
Guarantor, or any such director, officer or controlling person for any legal and
other expense reasonably incurred by the Company, any such Guarantor, or any
such director, officer or controlling person in connection with investigating,
defending, settling, compromising or paying any such loss, claim, damage,
liability, expense or action. Each of the Company and the Guarantors hereby
acknowledges that the only information that the Initial Purchasers have
furnished to the Company and the Guarantors expressly for use in the Disclosure
Package, the Final Offering Memorandum, the Final Term Sheet or any other
written information used by or on behalf of the Company in connection with the
offer or sale of the Notes (or any amendment or supplement thereto) are the
statements set forth in Schedule C. The indemnity agreement set forth in this
Section 8(b) shall be in addition to any liabilities that each Initial Purchaser
may otherwise have.

(c) Notifications and Other Indemnification Procedures. Promptly after receipt
by an indemnified party under this Section 8 of notice of the commencement of
any action, such indemnified party will, if a claim in respect thereof is to be
made against an indemnifying party under this Section 8, notify the indemnifying
party in writing of the commencement thereof, but the failure to so notify the
indemnifying party (i) will not relieve it from liability under paragraph
(a) or (b) above unless and to the extent it did not otherwise learn of such
action and such failure results in the forfeiture by the indemnifying party of
substantial rights and defenses and (ii) will not, in any event, relieve the
indemnifying party from any obligations to any indemnified party other than the
indemnification obligation provided in paragraph (a) or (b) above. In case any
such action is brought against any indemnified party and such indemnified party
seeks or intends to seek indemnity from an indemnifying party, the indemnifying
party will be entitled to participate in, and, to the extent that it shall
elect, jointly with all other indemnifying parties similarly notified, by
written notice delivered to the indemnified party promptly after receiving the
aforesaid notice from such indemnified party, to assume the defense thereof with
counsel satisfactory to such indemnified party; provided, however, if the
defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that a conflict may arise between the positions of the indemnifying party and
the indemnified party in conducting the defense of any such action or that there
may be legal defenses available to it and/or other indemnified parties that are
different from or additional to those available to the indemnifying party, the
indemnified party or parties shall have the right to select separate counsel to
assume such legal defenses and to otherwise participate in the defense of such
action on behalf of such indemnified party or parties. Upon receipt of notice
from the indemnifying party to such indemnified party of such indemnifying
party’s election so to assume the defense of such action and approval by the
indemnified party of counsel, the indemnifying party will not be liable to such
indemnified party under this Section 8 for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof unless (i) the indemnified party shall have employed separate counsel in
accordance with the proviso to the preceding sentence (it being understood,
however, that the indemnifying party shall not be liable for the expenses of
more than one separate counsel (other than local counsel), reasonably approved
by the indemnifying party (or by BAS in the case of Section 8(b)), representing
the indemnified parties who are parties to such action) or (ii) the indemnifying
party shall not have employed counsel satisfactory to the indemnified party to
represent the indemnified party within a reasonable time after notice of
commencement of the action, in each of which cases the fees and expenses of
counsel shall be at the expense of the indemnifying party.

(d) Settlements. The indemnifying party under this Section 8 shall not be liable
for any settlement of any proceeding effected without its written consent, which
shall not be withheld unreasonably, but if settled with such consent or if there
is a final judgment for the plaintiff, the indemnifying party agrees to
indemnify the indemnified party against any loss, claim, damage, liability or
expense by reason of such settlement or judgment. Notwithstanding the foregoing
sentence, if at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses of
counsel as contemplated by Section 8(c) hereof, the indemnifying party agrees
that it shall be liable for any settlement of any proceeding effected without
its written consent if (i) such settlement is entered into more than 30 days
after receipt by such indemnifying party of the aforesaid request and (ii) such
indemnifying party shall not have reimbursed the indemnified party in accordance
with such request prior to the date of such settlement. No indemnifying party
shall, without the prior written consent of the indemnified party, effect any
settlement, compromise or consent to the entry of judgment in any pending or
threatened action, suit or proceeding in respect of which any indemnified party
is or could have been a party and indemnity was or could have been sought
hereunder by such indemnified party, unless such settlement, compromise or
consent (x) includes an unconditional release of such indemnified party from all
liability on claims that are the subject matter of such action, suit or
proceeding and (y) does not include a statement as to or an admission of fault,
culpability or a failure to act by or on behalf of any indemnified party.

Section 9. Contribution

If the indemnification provided for in Section 8 is for any reason unavailable
to or otherwise insufficient to hold harmless an indemnified party in respect of
any losses, claims, damages, liabilities or expenses referred to therein, then
each indemnifying party shall contribute to the aggregate amount paid or payable
by such indemnified party, as incurred, as a result of any losses, claims,
damages, liabilities or expenses referred to therein (i) in such proportion as
is appropriate to reflect the relative benefits received by the Company and the
Guarantors, on the one hand, and the Initial Purchasers, on the other hand, from
the offering of the Notes pursuant to this Agreement or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Company and the
Guarantors, on the one hand, and the Initial Purchasers, on the other hand, in
connection with the untrue statements or omissions or alleged untrue statements
or alleged omissions which resulted in such losses, claims, damages, liabilities
or expenses, as well as any other relevant equitable considerations. The
relative benefits received by the Company and the Guarantors, on the one hand,
and the Initial Purchasers, on the other hand, in connection with the offering
of the Notes pursuant to this Agreement shall be deemed to be in the same
respective proportions as the total net proceeds from the offering of the Notes
pursuant to this Agreement (before deducting expenses) received by the Company
and the Guarantors, and the total purchase discount received by the Initial
Purchasers bear to the aggregate initial offering price of the Notes. The
relative fault of the Company and the Guarantors, on the one hand, and the
Initial Purchasers, on the other hand, shall be determined by reference to,
among other things, whether any such untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates
to information supplied by the Company and the Guarantors, on the one hand, or
the Initial Purchasers, on the other hand, 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 a party as a result of the losses, claims,
damages, liabilities and expenses referred to above shall be deemed to include,
subject to the limitations set forth in Section 8(c), any legal or other fees or
expenses reasonably incurred by such party in connection with investigating or
defending any action or claim.

The Company and the Guarantors, on the one hand, and the Initial Purchasers, on
the other hand, agree that it would not be just and equitable if contribution
pursuant to this Section 9 were determined by pro rata allocation (even if the
Initial Purchasers were treated as one entity for such purpose) or by any other
method of allocation that does not take account of the equitable considerations
referred to in this Section 9.

Notwithstanding the provisions of this Section 9, no Initial Purchaser shall be
required to contribute any amount in excess of the purchase discount or
commission received by such Initial Purchaser in connection with the Notes
purchased by it hereunder. 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. The Initial Purchasers’ obligations to contribute pursuant to
this Section 9 are several, and not joint, in proportion to their respective
purchasing commitments as set forth opposite their names in Schedule A. For
purposes of this Section 9, each director, officer, employee and agent of an
Initial Purchaser and each person, if any, who controls an Initial Purchaser
within the meaning of the Securities Act and the Exchange Act shall have the
same rights to contribution as such Initial Purchaser, and each director of the
Company or any Guarantor, each officer of the Company or any Guarantor, and each
person, if any, who controls the Company or any Guarantor within the meaning of
the Securities Act or the Exchange Act shall have the same rights to
contribution as the Company or any such Guarantor.

Section 10. Default of One or More of the Several Initial Purchasers

If, on the Closing Date or a Subsequent Closing Date, as the case may be, any
one or more of the several Initial Purchasers shall fail or refuse to purchase
Notes that it or they have agreed to purchase hereunder on such date, and the
aggregate principal amount of Notes which such defaulting Initial Purchaser or
Initial Purchasers agreed but failed or refused to purchase does not exceed 10%
of the aggregate principal amount of the Notes to be purchased on such date, the
other Initial Purchasers shall be obligated, severally, in the proportions that
the aggregate principal amount of Firm Notes set forth opposite their respective
names on Schedule A bears to the aggregate principal amount of Firm Notes set
forth opposite the names of all such non-defaulting Initial Purchasers, or in
such other proportions as may be specified by BAS with the consent of the
non-defaulting Initial Purchasers, to purchase the Notes which such defaulting
Initial Purchaser or Initial Purchasers agreed but failed or refused to purchase
on such date. If, on the Closing Date or a Subsequent Closing Date, as the case
may be, any one or more of the Initial Purchasers shall fail or refuse to
purchase Notes and the aggregate principal amount of Notes with respect to which
such default occurs exceeds 10% of the aggregate principal amount of Notes to be
purchased on such date, and arrangements satisfactory to BAS, one the one hand,
and the Company and the Guarantors, on the other hand, for the purchase of such
Notes are not made within 48 hours after such default, this Agreement shall
terminate without liability of any party to any other party except that the
provisions of Section 4, Section 8 and Section 9 shall at all times be effective
and shall survive such termination. In any such case either BAS, on the one
hand, or the Company and the Guarantors, on the other hand, shall have the right
to postpone the Closing Date or a Subsequent Closing Date, as the case may be,
but in no event for longer than seven days in order that the required changes,
if any, to the Final Offering Memorandum or any other documents or arrangements
may be effected.

As used in this Agreement, the term “Initial Purchaser” shall be deemed to
include any person substituted for a defaulting Initial Purchaser under this
Section 10. Any action taken under this Section 10 shall not relieve any
defaulting Initial Purchaser from liability in respect of any default of such
Initial Purchaser under this Agreement.

Section 11. Termination of this Agreement

Prior to the Closing Date and, with respect to the Optional Notes, any
Subsequent Closing Date, this Agreement may be terminated by BAS by notice given
to the Company and the Guarantors if at any time (i) trading or quotation in any
of the Company’s or any Guarantor’s securities shall have been suspended or
limited by the Commission or by the Nasdaq Stock Market LLC, or trading in
securities generally on the New York Stock Exchange or the Nasdaq Stock Market
LLC shall have been suspended or limited, or minimum or maximum prices shall
have been generally established by the Commission or FINRA or on either such
stock exchange; (ii) a general banking moratorium shall have been declared by
federal or New York authorities or a material disruption in commercial banking
or securities settlement or clearance services in the United States has
occurred; or (iii) there shall have occurred any outbreak or escalation of
national or international hostilities or declaration of a national emergency or
war by the United States or any crisis or calamity, or any change in the United
States or international financial markets, or any substantial change or
development involving a prospective substantial change in United States’ or
international political, financial or economic conditions, as in the judgment of
BAS is material and adverse and makes it impracticable or inadvisable to market
the Notes in the manner and on the terms described in the Disclosure Package and
the Final Offering Memorandum or to enforce contracts for the sale of
securities. Any termination pursuant to this Section 11 shall be without
liability on the part of (a) the Company or any Guarantor to any Initial
Purchaser, except that the Company and the Guarantors shall be obligated to
reimburse the expenses of the Representatives and the Initial Purchasers
pursuant to Sections 4 and 7 hereof or (b) any Initial Purchaser to the Company
or any Guarantor.

Section 12. No Advisory or Fiduciary Responsibility

Each of the Company and Guarantors acknowledges and agrees that: (i) the
purchase and sale of the Notes pursuant to this Agreement, including the
determination of the offering price of the Notes and any related discounts and
commissions, is an arm’s-length commercial transaction between the Company and
the Guarantors, on the one hand, and the several Initial Purchasers, on the
other hand, and the Company and the Guarantors are capable of evaluating and
understanding and understands and accepts the terms, risks and conditions of the
transactions contemplated by this Agreement; (ii) in connection with each
transaction contemplated hereby and the process leading to such transaction each
Initial Purchaser is and has been acting solely as a principal and is not the
financial advisor, agent or fiduciary of the Company, the Guarantors or their
respective affiliates, stockholders, creditors or employees or any other party;
(iii) no Initial Purchaser has assumed or will assume an advisory, agency or
fiduciary responsibility in favor of the Company or any Guarantor with respect
to any of the transactions contemplated hereby or the process leading thereto
(irrespective of whether such Initial Purchaser has advised or is currently
advising the Company or any Guarantor on other matters) and no Initial Purchaser
has any obligation to the Company or any Guarantor with respect to the offering
contemplated hereby except the obligations expressly set forth in this
Agreement; (iv) the several Initial Purchasers and their respective affiliates
may be engaged in a broad range of transactions that involve interests that
differ from those of the Company and the Guarantors and that the several Initial
Purchasers have no obligation to disclose any of such interests by virtue of any
advisory, agency or fiduciary relationship; and (v) the Initial Purchasers have
not provided any legal, accounting, regulatory or tax advice with respect to the
offering contemplated hereby and each of the Company and the Guarantors has
consulted its own legal, accounting, regulatory and tax advisors to the extent
it deemed appropriate.

This Agreement supersedes all prior agreements and understandings (whether
written or oral) among the Company, the Guarantors and the several Initial
Purchasers, or any of them, with respect to the subject matter hereof. Each of
the Company and the Guarantors hereby waives and releases, to the fullest extent
permitted by law, any claims that the Company or any Guarantor may have against
the several Initial Purchasers with respect to any breach or alleged breach of
agency or fiduciary duty.

Section 13. Research Analyst Independence

Each of the Company and the Guarantors acknowledges that the Initial Purchasers’
research analysts and research departments are required to be independent from
their respective investment banking divisions and are subject to certain
regulations and internal policies, and that such Initial Purchasers’ research
analysts may hold views and make statements or investment recommendations and/or
publish research reports with respect to the Company, the Guarantors and/or the
offering that differ from the views of their respective investment banking
divisions. Each of the Company and the Guarantors hereby waives and releases, to
the fullest extent permitted by law, any claims that the Company or any
Guarantor may have against the Initial Purchasers with respect to any conflict
of interest that may arise from the fact that the views expressed by their
independent research analysts and research departments may be different from or
inconsistent with the views or advise communicated to the Company or any
Guarantor by such Initial Purchasers’ investment banking divisions. Each of the
Company and the Guarantors acknowledges that each of the Initial Purchasers is a
full service securities firm and as such from time to time, subject to
applicable securities laws, may effect transactions for its own account or the
account of its customers and hold long or short positions in debt or equity
securities of the companies that may be the subject of the transactions
contemplated by this Agreement.

Section 14. Representations and Indemnities to Survive Delivery

The respective indemnities, agreements, representations, warranties and other
statements of the Company and each Guarantor, of their respective officers and
of the several Initial Purchasers set forth in or made pursuant to this
Agreement (i) will remain operative and in full force and effect, regardless of
any (A) investigation, or statement as to the results thereof, made by or on
behalf of any Initial Purchaser, the officers or employees of any Initial
Purchaser, or any person controlling the Initial Purchaser, the Company, any
Guarantor, the officers or employees of the Company or any Guarantor, or any
person controlling the Company or any Guarantor, as the case may be or
(B) acceptance of the Notes and payment for them hereunder and (ii) will survive
delivery of and payment for the Notes sold hereunder and any termination of this
Agreement.

Section 15. Notices

All communications hereunder shall be in writing and shall be mailed, hand
delivered or telecopied and confirmed to the parties hereto as follows:

      If to BAS:

Banc of America Securities LLC
9 West 57th Street
New York, NY 10019
Facsimile: 212-933-2217
Attention: Syndicate Department

      with a copy to:

Banc of America Securities LLC
9 West 57th Street
New York, NY 10019
Facsimile: 212-457-3745
Attention: ECM Legal

      If to Oppenheimer:

Oppenheimer & Co. Inc.
300 Madison Avenue
New York, NY 10017
Facsimile: 212-667-6140
Attention: Amanda Cenci

      If to the Company or any Guarantor:

Alaska Communications Systems Group, Inc.
600 Telephone Avenue
Anchorage, Alaska 99503-6091
Facsimile: 907-297-3153
Attention: Leonard Steinberg

      with a Copy to:

Sidley Austin LLP
787 Seventh Avenue
New York, NY 10019
Facsimile: 212-839-5599
Attn: Samir A. Gandhi

Any party hereto may change the address for receipt of communications by giving
written notice to the others.

Section 16. Successors and Assigns

This Agreement will inure to the benefit of and be binding upon the parties
hereto, including any substitute Initial Purchasers pursuant to Section 10
hereof, and to the benefit of (i) the Company and the Guarantors, their
respective directors, any person who controls the Company or any Guarantor
within the meaning of the Securities Act or the Exchange Act, (ii) the Initial
Purchasers, the officers, directors, employees and agents of the Initial
Purchasers and each person, if any, who controls any Initial Purchaser within
the meaning of the Securities Act or the Exchange Act and (iii) the respective
successors and assigns of any of the above, all as and to the extent provided in
this Agreement, and no other person shall acquire or have any right under or by
virtue of this Agreement. The term “successors and assigns” shall not include a
purchaser of any of the Notes from any of the several Initial Purchasers merely
because of such purchase.

Section 17. Partial Unenforceability

The invalidity or unenforceability of any Section, paragraph or provision of
this Agreement shall not affect the validity or enforceability of any other
Section, paragraph or provision hereof. If any Section, paragraph or provision
of this Agreement is for any reason determined to be invalid or unenforceable,
there shall be deemed to be made such minor changes (and only such minor
changes) as are necessary to make it valid and enforceable.

Section 18. Governing Law Provisions

(a) Governing Law Provisions. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

(b) Consent to Jurisdiction. Any legal suit, action or proceeding arising out of
or based upon this Agreement or the transactions contemplated hereby may be
instituted in the federal courts of the United States of America located in the
City and County of New York, Borough of Manhattan or the courts of the State of
New York in each case located in the City and County of New York, Borough of
Manhattan (collectively, the “Specified Courts”), and each party irrevocably
submits to the exclusive jurisdiction (except for proceedings instituted in
regard to the enforcement of a judgment of any such court, as to which such
jurisdiction is non-exclusive) of such courts in any such suit, action or
proceeding. Service of any process, summons, notice or document by mail to such
party’s address set forth above shall be effective service of process for any
suit, action or other proceeding brought in any such court. The parties
irrevocably and unconditionally waive any objection to the laying of venue of
any suit, action or other proceeding in the Specified Courts and irrevocably and
unconditionally waive and agree not to plead or claim in any such court that any
such suit, action or other proceeding brought in any such court has been brought
in an inconvenient forum.

Section 19. General Provisions

This Agreement constitutes the entire agreement of the parties to this Agreement
and supersedes all prior written or oral and all contemporaneous oral
agreements, understandings and negotiations with respect to the subject matter
hereof. This Agreement may be executed in two or more counterparts, each one of
which shall be an original, with the same effect as if the signatures thereto
and hereto were upon the same instrument. This Agreement may not be amended or
modified unless in writing by all of the parties hereto, and no condition herein
(express or implied) may be waived unless waived in writing by each party whom
the condition is meant to benefit. The Section headings herein are for the
convenience of the parties only and shall not affect the construction or
interpretation of this Agreement.

Each of the parties hereto acknowledges that it is a sophisticated business
person who was adequately represented by counsel during negotiations regarding
the provisions hereof, including, without limitation, the indemnification
provisions of Section 8 and the contribution provisions of Section 9, and is
fully informed regarding said provisions. Each of the parties hereto further
acknowledges that the provisions of Sections 8 and 9 hereto fairly allocate the
risks in light of the ability of the parties to investigate the Company, its
affairs and its business in order to assure that adequate disclosure has been
made in the Disclosure Package and the Final Offering Memorandum.

2

If the foregoing is in accordance with your understanding of our agreement,
kindly sign and return to the Company and the Guarantors the enclosed copies
hereof, whereupon this instrument, along with all counterparts hereof, shall
become a binding agreement in accordance with its terms.

Very truly yours,

ALASKA COMMUNICATIONS SYSTEMS

GROUP, INC.

By: /s/ David Wilson
Name: David Wilson
Title: Senior Vice President and Chief
Financial Officer

      ALASKA COMMUNICATIONS SYSTEMS     HOLDINGS, INC.   ACS OF THE NORTHLAND,
INC.
By: /s/ David Wilson
  By: /s/ David Wilson
 
   
Name: David Wilson
Title: Senior Vice President and
Chief Financial Officer
  Name: David Wilson
Title: Senior Vice President and
Chief Financial Officer
ACS OF ALASKA, INC.
By: /s/ David Wilson
  ACS OF FAIRBANKS, INC.
By: /s/ David Wilson
 
   
Name: David Wilson
Title: Senior Vice President and
Chief Financial Officer
  Name: David Wilson
Title: Senior Vice President and
Chief Financial Officer
ACS OF ANCHORAGE, INC.
By: /s/ David Wilson
  ACS WIRELESS, INC.
By: /s/ David Wilson
 
   
Name: David Wilson
Title: Senior Vice President and
Chief Financial Officer
  Name: David Wilson
Title: Senior Vice President and
Chief Financial Officer

     

      ACS LONG DISTANCE, INC.   ACS INTERNET, INC.
By: /s/ David Wilson
  By: /s/ David Wilson
 
   
Name: David Wilson
Title: Senior Vice President and
Chief Financial Officer
  Name: David Wilson
Title: Senior Vice President and
Chief Financial Officer
ACS INFOSOURCE, INC.
By: /s/ David Wilson
  ACS CABLE SYSTEMS, INC.
By: /s/ David Wilson
 
   
Name: David Wilson
Title: Senior Vice President and
Chief Financial Officer
  Name: David Wilson
Title: Senior Vice President and
Chief Financial Officer
ACS SERVICE, INC.
By: /s/ David Wilson
  ACS MESSAGING, INC.
By: /s/ David Wilson
 
   
Name: David Wilson
Title: Senior Vice President and
Chief Financial Officer
  Name: David Wilson
Title: Senior Vice President and
Chief Financial Officer

The foregoing Purchase Agreement is hereby confirmed and accepted by the Initial
Purchasers as of the date first above written.

BANC OF AMERICA SECURITIES LLC

By: /s/ Craig Mc Cracken
Name: Craig Mc Cracken
Title: Managing Director

OPPENHEIMER & CO. INC.

By: /s/ Andrew MacInnes
Name: Andrew MacInnes
Title: Managing Director

3