--------------------------------------------------------------------------------

 

Information indicated by [***] in the text has been omitted and filed separately
with the Securities and Exchange Commission pursuant to a request for
Confidential Treatment under Rule 24b-2 under the Securities Exchange Act of
1934.

 
 

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Exhibit 10.193 

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ASSET PURCHASE AND CONTRIBUTION AGREEMENT
 
DATED AS OF JUNE 4, 2012
 
BY AND AMONG
 
ALASKA COMMUNICATIONS SYSTEMS GROUP, INC.,
 
ACS WIRELESS, INC.,
 
GENERAL COMMUNICATION, INC.,
 
GCI WIRELESS HOLDINGS, LLC
 
AND
 
THE ALASKA WIRELESS NETWORK, LLC

 

 
 

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TABLE OF CONTENTS
Page
 
 
 
SECTION 1.
DEFINED TERMS
1

 
 
1.1
Terms Defined in this Section
1

 
1.2
Clarifications
13

 
 
SECTION 2.
CONTRIBUTION OF ASSETS BY THE MEMBERS
13

 
 
2.1
Agreement to Purchase and Sell
13

 
2.2
ACS Agreement to Contribute
14

 
2.3
GCI Agreement to Contribute
15

 
2.4
Excluded Assets
15

 
2.5
Assumed Liabilities
16

 
2.6
Excluded Liabilities
17

 
2.7
Issuance of Membership Interests
18

 
2.8
Working Capital Loan
18

 
2.9
Business Process Licenses
18

 
2.10
Prepaid Costs and Expenses
18

 
2.11
Effectiveness of Transactions
18

 
 
SECTION 3.
REPRESENTATIONS AND WARRANTIES REGARDING THE PARTIES
18

 
 
3.1
Organization, Standing and Authority
19

 
3.2
Authorization and Binding Obligation
19

 
3.3
Absence of Conflicting Agreements
19

 
3.4
Claims and Legal Actions
19

 
3.5
Compliance with Laws
20

 
3.6
Solvency
20

 
 
SECTION 4.
REPRESENTATIONS AND WARRANTIES REGARDING THE ASSETS
20

 
 
4.1
Sufficiency of Assets
21

 
4.2
Licenses and Contracts
21

 
4.3
Title to and Condition of Real and Personal Property
21

 
4.4
Intellectual Property
22

 
4.5
Consents
22

 
4.6
Licenses and FCC Matters
22

 
4.7
Insurance and Bonds
23

 
4.8
Environmental Law
23

 
4.9
Taxes and Tax Returns
23

 
4.10
Conduct of Activities in Ordinary Course
23

 
4.11
Unions
24

 
4.12
Financial Information
24

 
4.13
Software and Hardware
24

 
 
i

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TABLE OF CONTENTS
(Continued)
 
 
 
4.14
Assets and Liabilities of the Company
24

 
4.15
Full Disclosure
24

 
 
SECTION 5.
COVENANTS OF EACH PARTY
24

 
 
5.1
Pre-Closing Covenants
24

 
5.2
No Unauthorized Transfer of Control or Assignment of Licenses
28

 
5.3
Rationalization Plans
28

 
5.4
Further Assurances
28

 
5.5
Form 8-K Filing
28

 
5.6
Legacy GCI and ACS Wireless Plans
28

 
5.7
Asset List
29

 
 
SECTION 6.
SPECIAL COVENANTS AND AGREEMENTS
29

 
 
6.1
Consents
29

 
6.2
Cooperation
30

 
6.3
Taxes, Fees and Expenses
31

 
6.4
Brokers
31

 
6.5
Employee Matters
31

 
6.6
Title Policies
32

 
6.7
Risk of Loss
32

 
6.8
Post-Closing Access to Information
32

 
6.9
Post-Closing Consents and Subsequent Transfers
32

 
6.10
Confidentiality/Press Releases
33

 
6.11
Assignments to Members
34

 
6.12
Bulk Sales Law
34

 
6.13
HSR Act
34

 
6.14
Network Capacity and Maintenance
35

 
6.15
Payment of CETC Amounts
35

 
6.16
Agreed Tax Treatment; Allocation
36

 
6.17
Forwarding Inquiries and Payments; Collection of Accounts Receivable
36

 
6.18
ICA Order
37

 
6.19
Transaction Opinion
37

 
 
SECTION 7.
CONDITIONS TO THE OBLIGATIONS TO CLOSE
37

 
 
7.1
Conditions to Obligations of ACS Contributing Group
37

 
7.2
Conditions to Obligations of GCI Contributing Group
39

 
 
SECTION 8.
CLOSING AND CLOSING DELIVERIES
41

 
 
8.1
Time and Place of Closing
41

 
8.2
Deliveries by the Members
42

 
8.3
Deliveries by the Company
43

 
 
ii

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TABLE OF CONTENTS
(Continued)
 
 
 
SECTION 9.
RIGHTS OF THE COMPANY AND THE MEMBERS ON TERMINATION OR BREACH
43

 
 
9.1
Termination Rights
43

 
9.2
Termination Fee
44

 
9.3
Specific Performance
45

 
 
SECTION 10.
SURVIVAL OF REPRESENTATIONS AND WARRANTIES, AND INDEMNIFICATION
45

 
 
10.1
Affiliates
45

 
10.2
Representations and Warranties
45

 
10.3
Indemnification by Each Parent
45

 
10.4
Indemnification by the Company
47

 
10.5
Procedure for Indemnification
47

 
10.6
Limitations
49

 
10.7
Recoupment and Deduction
50

 
10.8
Taxes
50

 
10.9
Treatment of Indemnification Payments
50

 
10.10
Exclusive Remedy
50

 
 
SECTION 11.
MISCELLANEOUS
51

 
 
11.1
Notices
51

 
11.2
Benefit and Binding Effect
52

 
11.3
Entire Agreement
52

 
11.4
Waiver of Compliance; Consents
52

 
11.5
Severability
52

 
11.6
Dispute Resolution
53

 
11.7
Prevailing Party
53

 
11.8
No Consequential or Indirect Damages
53

 
11.9
Governing Law
53

 
11.10
Selection of Forum; Venue; Service of Process
53

 
11.11
WAIVER OF JURY TRIAL
53

 
11.12
Counterparts
54

iii
 
 

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LIST OF EXHIBITS
 
Exhibit A              –           Operating Agreement
Exhibit B              –           Loan Agreement
Exhibit C              –           Instrument of Assignment
Exhibit D              –           Instrument of Assumption
Exhibit E               –           ACS Knowledge Group
Exhibit F               –           GCI Knowledge Group
Exhibit G               –           IRU Contribution Agreement
Exhibit H              –           Arbitration Agreement
Exhibit I                –           Joint Maintenance Agreement
Exhibit J                –           Transmission Service Agreement
Exhibit K              –           Additional Capacity Purchase Agreement

LIST OF SCHEDULES
 
Schedule 2.1         –         Purchased Assets
Schedule 2.4         –         Excluded Assets
Schedule 2.5         –         Assumed Liabilities
Schedule 3.4         –         Claims and Legal Actions
Schedule 3.5         –         Compliance with Laws
Schedule 4.1         –         Sufficiency of Assets
Schedule 4.2         –         Licenses and Contracts
Schedule 4.3         –         Real and Personal Property
Schedule 4.5         –         Consents
Schedule 4.6         –         FCC Licenses
Schedule 4.7         –         Insurance and Bonds
Schedule 4.8         –         Environmental Laws
Schedule 4.11       –         Collective Bargaining Agreements
Schedule 4.12       –         Financial Information
Schedule 5.1         –         Capital Budgets
Schedule 5.7         –         Assets
Schedule 6.4         –         Brokers
 
Note:  With respect to Schedules 4.1 through 4.12, ACS and ACS Member and GCI
and GCI Member are delivering separate disclosure schedules with Schedule “4A”
referring to ACS’s schedules, and Schedule “4B” referring to GCI’s schedules.
 

iv
 
 

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ASSET PURCHASE AND CONTRIBUTION AGREEMENT
 
This ASSET PURCHASE AND CONTRIBUTION AGREEMENT (this “Agreement”) is dated as of
June 4, 2012, by and among Alaska Communications Systems Group, Inc., a Delaware
corporation (“ACS”), ACS Wireless, Inc., an Alaska corporation (“ACS Member”),
General Communication, Inc., an Alaska corporation (“GCI”), GCI Wireless
Holdings, LLC, an Alaska limited liability company (the “GCI Member”) and The
Alaska Wireless Network, LLC, a Delaware limited liability company (the
“Company”).  Capitalized terms used and not otherwise defined in this Agreement
have the meanings given such terms in Section 1.
 
R E C I T A L S:
 
A.           ACS and its Affiliates are engaged in the ACS Wireless Activities.
 
B.           GCI and its Affiliates are engaged in the GCI Wireless Activities.
 
C.           The ACS Contributing Group desires to sell to GCI Member, and GCI
Member desires to purchase from the ACS Contributing Group, certain of the ACS
Assets, on the terms and conditions hereinafter set forth.
 
D.           ACS desires to contribute the remainder of the ACS Assets (other
than the Purchased Assets) to the Company, and GCI Member and its Affiliates
desire to contribute the GCI Assets and the Purchased Assets to the Company, on
the terms and conditions hereinafter set forth.
 
E.           Concurrently with the execution of this Agreement, certain of the
Parties are entering into the Pre-Closing Agreements.
 
A G R E E M E N T S:
 
In consideration of the representations, warranties, covenants and agreements
contained herein and other consideration the receipt and sufficiency of which
are hereby acknowledged, each of ACS, ACS Member, GCI and GCI Member intending
to be legally bound do hereby agree as follows:
 
SECTION 1.  
DEFINED TERMS

 
1.1 Terms Defined in this Section
The following terms shall have the following meanings in this Agreement:
 
“120 Day Consents” means with respect to ACS, the Consents designated in
Schedule 4.5A as “120 Day Consents” and, with respect to GCI, the Consents
designated in Schedule 4.5B as “120 Day Consents”.
 
“Accounts Receivable” means all rights of any member of a Contributing Group to
payment for goods or services provided by such Person in connection with its
Activities, including amounts due from customers for services provided by such
Person prior to Closing.
 
 
1

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“ACS” has the meaning given such term in the Preamble.
 
“ACS Assets” means the tangible and intangible assets owned, leased or held by
ACS or any of its Affiliates (including the Purchased Assets) and used primarily
in connection with the conduct of the ACS Wireless Activities, including the
assets described in Section 2.2(a) through (k) but excluding the Excluded Assets
described in Section 2.4.
 
“ACS Board” means the board of directors of ACS.
 
“ACS Contributing Group” means ACS and its Affiliates.
 
“ACS Member” has the meaning given such term in the Preamble.
 
“ACS Services Agreement” has the meaning given such term in the Operating
Agreement.
 
“ACS Wireless Activities” means the wireless voice and data services conducted
by ACS and its Affiliates, including Wireless Backhaul and Transport, spectrum
and Public WiFi related thereto.
 
“Activities” means with respect to ACS, ACS Contributing Group or ACS Member,
the ACS Wireless Activities and with respect to GCI, GCI Contributing Group or
GCI Member, the GCI Wireless Activities.
 
“Additional Capacity Purchase Agreement” means the Additional Capacity Purchase
and Contributed Pool Construction Agreement by and among the Company, GCI
Communication Corp. and the ACS Member substantially in the form attached hereto
as Exhibit K.
 
“Affiliate” means, with respect to any Person, any other Person that, directly
or indirectly through one or more intermediaries, controls, is controlled by, or
is under common control with such Person, except that the Company shall not be
deemed to be an Affiliate of either Member.  For purposes of this definition,
“control” (including the terms “controlled by,” and “under common control with”)
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management or policies of a Person, whether through the
ownership of voting securities or partnership or other ownership interests, by
contract, or otherwise.
 
“Affiliate Contract” means any Contract between a Party, on one hand, and one or
more of such Party’s Affiliate(s), on the other hand.
 
“Agreement” has the meaning given such term in the Preamble.
 
“Allocation Schedule” has the meaning given such term in Section 6.16(b).
 
“Ancillary Agreements” means the Arbitration Agreement, the Operating Agreement,
the Loan Agreement, the Instruments of Assignment, the Instruments of
Assumption, the Facilities and Network Use Agreement, the GCI Services
Agreement, the IRU Contribution Agreement, the ACS Services Agreement, the Joint
Maintenance Agreement, the Additional Capacity Purchase Agreement, the
Transmission Service Agreement and the other agreements and instruments executed
and delivered in connection with this Agreement and the Operating Agreement.
 
 
2

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“Antitrust Division” has the meaning given such term in Section 6.13(a).
 
“Antitrust Law” means the Sherman Act, the Clayton Act, the HSR Act, the Federal
Trade Commission Act, and all other federal, state and foreign statutes, rules,
regulations, orders, decrees, administrative and judicial doctrines and other
laws that are designed or intended to prohibit, restrict or regulate actions
having the purpose or effect of monopolization or restraint of trade or
lessening of competition.
 
“Arbitration Agreement” means that certain Arbitration Agreement among ACS, GCI,
the Company and the Members substantially in the form attached hereto as Exhibit
H.
 
“Assets” means with respect to any member of ACS Contributing Group or ACS
Member, the ACS Assets and with respect to any member of GCI Contributing Group
or GCI Member, the GCI Assets.
 
“Assumed Contracts” means, with respect to the applicable Contributing Group,
(a) all Contracts listed in Schedule 4.2A or Schedule 4.2B hereto and (b) all
Contracts in existence on the Closing Date that have been entered into in
accordance with Section 5.1(a)(1)(ii) hereof.
 
“Assumed Liabilities” has the meaning given such term in Section 2.5.
 
“Bankruptcy Event” means, with respect to any Person, the commencement or
occurrence of any of the following:  (a) a voluntary or involuntary case under
Title 11 of the U.S. Code (the “Bankruptcy Code”), as now constituted or
hereafter amended, or under any other applicable federal, state or foreign
bankruptcy or insolvency law or other similar law, in which such Person is a
debtor; (b) the appointment of (or a proceeding to appoint) a trustee or
receiver for a substantial portion of such Person’s property interest, or a
custodian (as such term is defined in section 101 of the Bankruptcy Code);
(c) an attachment, execution or other judicial seizure of (or a proceeding to
attach, execute or seize) a substantial property interest of such Person; (d) a
general assignment for the benefit of creditors; (e) the taking of, failure to
take, or submission to any action indicating (after reasonable investigation) an
inability to meet its obligations as they accrue; or (f) the general failure to
pay debts as such debts become due.
 
“Basket Exclusions” has the meaning given such term in Section 10.6(c).
 
“Business Day” means any day (other than a Saturday or Sunday) on which
commercial banks are not required or authorized to close in New York City, New
York or Anchorage, Alaska.
 
“Cell Sites” means with respect to the ACS Contributing Group or the GCI
Contributing Group, as applicable, the assets located at a location that
radiates radio frequency signals within one or more of the FCC granted Spectrum
licenses held by such Contributing Group or in a band designated for unlicensed
use and intended to connect to voice or data bearing devices; for this purpose
the assets located at such a  location generally consist of antennas, coax,
distributed antenna systems, radio access node electronics, batteries and
associated power equipment, power connections and telecommunications network
connections and where present a tower or a shelter and used for the Company’s
Wireless Business.
 
 
3

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“CETC Cash Flow” means all revenues from the Universal Service Fund for high
cost support (including all support disbursed pursuant to 47 C.F.R. § 54.307 for
Wireless services, 47 C.F.R. Subpart L, the FCC’s Mobility Fund or Tribal
Mobility Fund, or any successor or other provisions created hereafter to provide
universal service support for Wireless services in rural, insular or high cost
areas, as defined by the FCC) received by a Contributing Group after the Closing
with respect to Wireless services provided prior to the Closing, regardless of
whether line counts were submitted prior to or after the Closing or were
associated with Wireless service provided to end users prior to Closing.
 
“CETC Claim Deductible” has the meaning given such term in Section 10.6(e).
 
“CETC Designations” has the meaning given such term in the Facilities and
Network Use Agreement.
 
“Claimant” has the meaning given such term in Section 10.2.
 
“Clayton Act” means title 15 of the United States Code §§ 12-27 and title 29 of
the United States Code §§ 52-53.
 
“Closing” has the meaning given such term in Section 8.1.
 
“Closing Date” has the meaning given such term in Section 8.1.
 
“COBRA” means Section 4980B of the Code and Section 601 et seq. of ERISA.
 
“Code” means the Internal Revenue Code of 1986, as amended from time to time
(including corresponding provisions of subsequent revenue laws).
 
“Company” has the meaning given such term in the Preamble.
 
“Communications Act” means the Communications Act of 1934, as amended.
 
“Compensation Arrangement” means any plan or compensation arrangement other than
an Employee Plan, whether written or unwritten, which provides to employees,
former employees, officers, directors or independent contractors of a
Contributing Group, any compensation or other benefits, whether deferred or not,
in excess of base salary or wages and excluding overtime pay, including any
bonus or incentive plan, stock rights plan, deferred compensation arrangement,
life insurance, stock purchase plan, severance pay plan and any other
perquisites and employee fringe benefit plan.
 
“Consents” means all of the consents, permits or approvals of Governmental
Authorities and other Third Parties (including shareholders or members of any
Party) necessary to transfer a Contributing Group’s or a Member’s Assets to the
Company or otherwise to consummate the Transactions.
 
 
4

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“Contracts” means all contracts, leases, deeds, mortgages, license agreements,
instruments, notes, undertakings, indentures, joint ventures and all other
agreements, commitments and legally binding arrangements, whether written or
oral, relating to a Contributing Group’s Activities or Assets and to which a
member of such Contributing Group is a party or which are binding upon a member
of such Contributing Group or affect such Contributing Group’s Activities or
Assets.
 
“Contributed Assets” means certain assets of the Members and their Affiliates
that are being sold, transferred, or otherwise conveyed to the Company
hereunder, as specified in Sections 2.2 and 2.3, as applicable.
 
“Contributing Group” means ACS Contributing Group or GCI Contributing Group, as
the context requires.
 
“Damages” has the meaning given such term in Section 10.3(a).
 
“Deductible” has the meaning given such term in Section 10.6(c).
 
“Effective Time” means 11:59 p.m., Alaska time, on the Closing Date.
 
“Employee Plan” means any pension, retirement, profit-sharing, deferred
compensation, vacation, severance, bonus, incentive, medical, vision, dental,
disability, life insurance or any other employee benefit plan as defined in
Section 3(3) of ERISA to which a member of the Contributing Group or an ERISA
Affiliate contributes, or which such Member or any of its ERISA Affiliates
sponsor or maintain, or by which such member of the Contributing Group or any of
its ERISA Affiliates is otherwise bound.
 
“Enforceability Exceptions” means the exceptions or limitations to the
enforcement of contract terms arising in the instance of bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors’ rights
generally, and the application of general principles of equity.
 
“Environmental Claim” means any claim, action, cause of action, demand, lawsuit,
arbitration, inquiry, audit, notice of violation, proceeding, litigation,
citation, summons, subpoena or investigation of any nature, civil, criminal,
administrative, regulatory or otherwise, whether at law or in equity, any order,
writ, judgment, injunction, decree, stipulation, determination or award entered
by or with any Governmental Authority, or any lien, fine, penalty, or, as to
each, any settlement or judgment arising therefrom, by or from any Person
alleging liability of whatever kind or nature (including liability or
responsibility for the costs of enforcement proceedings, investigations,
cleanup, governmental response, removal or remediation, natural resources
damages, property damages, personal injuries, medical monitoring, penalties,
contribution, indemnification and injunctive relief) arising out of, based on or
resulting from:  (a) the presence, release of, or exposure to, any Hazardous
Substance; or (b) any actual or alleged non-compliance with any Environmental
Law.
 
 
5

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“Environmental Law” means any statute, code or law (including common law)
pertaining to land use, air, soil, surface water, groundwater (including the
protection, cleanup, removal, remediation or damage thereof), the use, handling,
storage, disposal or exposure to any Hazardous Substance, or any other
environmental matter, including the following statutes as the same may be
amended from time to time:  (a) Clean Air Act (42 U.S.C. § 7401, et seq.);
(b) Clean Water Act (33 U.S.C. § 1251, et seq.); (c) Resource Conservation and
Recovery Act (42 U.S.C. § 6901, et seq.); (d) Comprehensive Environmental
Response, Compensation and Liability Act (42 U.S.C. § 9601, et seq.); (e) Safe
Drinking Water Act (42 U.S.C. 300f, et seq.); (f) Toxic Substance Control Act
(15 U.S.C. § 2601, et seq.); and (g) Occupational Safety and Health Act
(29 U.S.C. § 651, et seq.) and including any rule, regulation, order, permit or
other standard request or procedure enacted, adopted, promulgated or applied by
any Governmental Authority with respect to such matters.
 
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended,
and the regulations thereunder, as in effect from time to time.
 
“ERISA Affiliate” means a trade or business affiliated within the meaning of
Sections 414(b), (c) or (m) of the Code.
 
“ETC Designation” means the designation by RCA as an Eligible Telecommunications
Carrier for Wireless services within the State of Alaska.
 
“Exchange Act” means the Securities Exchange Act of 1934, and the regulations
thereunder, as in effect from time to time.
 
“Excluded Assets” means certain assets of the Members and their Affiliates that
are not being sold, transferred, or otherwise conveyed to the Company hereunder,
as specified in Section 2.4 and includes, whether so specified or not, any
assets used by any member of either Contributing Group primarily to provide
local exchange services under the Communications Act.
 
“Excluded Liabilities” has the meaning given such term in Section 2.6.
 
“Existing NDA” means that certain Mutual Nondisclosure Agreement dated July 27,
2011, by and between ACS and GCI Communication Corp., as amended.
 
“FAA” means the Federal Aviation Administration.
 
“Facilities and Network Use Agreement” has the meaning given such term in the
Operating Agreement.
 
“FCC” means the Federal Communications Commission.
 
“Federal Trade Commission Act” means title 15 of the United States Code
§§ 41-58.
 
“Fine” has the meaning given such term in Section 10.3(d).
 
“First Year Budgets” has the meaning given such term in the Operating Agreement.
 
 
6

--------------------------------------------------------------------------------

 
“FTC” has the meaning given such term in Section 6.13(a).
 
“GCI” has the meaning given such term in the Preamble.
 
“GCI Assets” means all the tangible and intangible assets owned, leased or held
by GCI or any of its Affiliates and used primarily in connection with the GCI
Wireless Activities, including the assets described in Section 2.3(a) through
(k) but excluding the Purchased Assets and the Excluded Assets described in
Section 2.4.
 
“GCI Contributing Group” means GCI and its Affiliates.
 
“GCI Member” has the meaning given such term in the Preamble.
 
“GCI Services Agreement” has the meaning given such term in the Operating
Agreement.
 
“GCI Wireless Activities” means the wireless voice and data services conducted
by GCI and its Affiliates, including Wireless Backhaul and Transport spectrum
and Public WiFi related thereto.
 
“Governmental Authority” any government or any arbitrator, tribunal or court of
competent jurisdiction, administrative agency, board, department or commission,
legislative body or other governmental authority or instrumentality (in each
case whether Federal, state, local, foreign, international or multinational) or
entity which lawfully assumes the powers and functions of the same (including
any taxing or other revenue collecting authority or other body).
 
“Governmental Consents” means all Consents of the FCC and any other Material
Consents of Governmental Authorities required for the Transactions, as well as
the declaratory ruling, or its functional equivalent, of the Federal
Communications Commission specified in Section 6.1(e).
 
“Hazardous Substance” means any pollutant, contaminant, hazardous or toxic
substance, material, constituent or waste that is defined, labeled or regulated
as such by any Governmental Authority, or for which liability or standards of
care are imposed, pursuant to an Environmental Law and includes asbestos and
asbestos-containing materials and any material or substance that
is:  (a) designated as a “hazardous substance” pursuant to 33 U.S.C. § 1317;
(b) defined as a “hazardous waste” pursuant to 42 U.S.C. § 6903; (c) defined as
a “hazardous substance” pursuant to Section 101 of CERCLA; or (d) is so
designated or defined under any other applicable Legal Requirements.
 
“HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended.
 
“ICA Order” means an order issued by the SEC either (i) pursuant to Section
3(b)(2) of the Investment Company Act of 1940, as amended, (the “Investment
Company Act”), declaring that as a result of and after giving effect to the
Transactions, ACS is primarily engaged in a business other than that of
investing, reinvesting, owning, holding or trading in securities, or,
alternatively, (ii) pursuant to Section 6(c) of the Investment Company Act
granting ACS an exemption from all provisions of the Investment Company Act.
 
 
7

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“Indemnifier” has the meaning given such term in Section 10.2.
 
“Information” has the meaning given such term in Section 6.10.
 
“Initial Four Year Plan” has the meaning given such term in the Operating
Agreement.
 
“Instrument of Assignment” means the Instrument of Assignment substantially in
the form of Exhibit C.
 
“Instrument of Assumption” means the Instrument of Assumption substantially in
the form of Exhibit D.
 
“Intellectual Property” means all rights and privileges relating to intellectual
property, whether arising under United States, multinational or foreign laws or
otherwise, including copyrights, copyright licenses, patents, patent licenses,
patent applications, proprietary information, know-how and processes of a member
of the applicable Contributing Group and primarily used in the conduct of such
Contributing Group’s Activities.
 
“IRU” means an indefeasible right of use.
 
“IRU Contribution Agreement” means the Fiber, Facilities, and Capacity
Contribution IRU Agreement by and among ACS, the Company and GCI Communication
Corp. substantially in the form attached hereto as Exhibit G.
 
“Joint Maintenance Agreement” means the Joint Maintenance Agreement by and among
ACS, the Company and GCI Communication Corp. substantially in the form attached
hereto as Exhibit I.
 
“Knowledge” when used with respect to (i) ACS, means the actual knowledge of any
fact, circumstance or condition of those officers of ACS set forth on Exhibit E
and (ii) GCI, means the actual knowledge of any fact, circumstance or condition
of those officers of GCI set forth on Exhibit F, and, in each case, the
knowledge that such officers would have had if such officers had conducted a
reasonable inquiry.
 
“Legal Requirements” means applicable common law and any applicable statute,
ordinance, code or other law, rule, regulation, order, technical or other
standard, requirement or procedure enacted, adopted, promulgated or applied by
any Governmental Authority, including any applicable order, decree or judgment
which may have been handed down, adopted or imposed by any Governmental
Authority.
 
“Licenses” means all domestic wireless, business radio and other FCC licenses,
and any pending applications therefor granted to a member of the applicable
Contributing Group by the FCC in connection with such Contributing Group’s
Activities, and all other licenses, authorizations and permits and any pending
applications therefor, issued to such Person or any of its Affiliates by any
Governmental Authority that are primarily used in the conduct of such
Contributing Group’s Activities, other than FCC licenses and other licenses,
authorizations and permits and any pending applications therefor related to IRU
or capacity purchases.
 
 
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“Liens” means all claims, charges, restrictions, mortgages, pledges, security
interests, liens or other encumbrances of any nature whatsoever (whether
absolute, accrued, contingent or otherwise).
 
“Loan Agreement” means the Loan Agreement to be entered into between the Company
and GCI Holdings, Inc. in the form attached hereto as Exhibit B.
 
“Material Consents” means, with respect to ACS, the Consents designated in
Schedule 4.5A as “Material Consents,” and, with respect to GCI, the Consents
designated in Schedule 4.5B as “Material Consents.”
 
“Member” means either the ACS Member or the GCI Member or the ACS Member and the
GCI Member, as the context requires.
 
“Network Assets” means with respect to the ACS Contributing Group or the GCI
Contributing Group, as applicable, the assets to be contributed by such
Contributing Group to the Company pursuant to the IRU Contribution Agreement.
 
“Network Capacity” means dark fiber capacity and IRU capacity.
 
“Operating Agreement” means the First Amended and Restated Operating Agreement
of the Company to be entered into by ACS, the ACS Member, GCI, the GCI Member
and the Company in the form attached hereto as Exhibit A.
 
“Outside Date” has the meaning given such term in Section 9.1(g).
 
“Parent” means either ACS or GCI as the context requires and references to the
other Parent mean, with respect to ACS, ACS Member or ACS Contributing Group,
GCI, and with respect to GCI, GCI Member or GCI Contributing Group, ACS.
 
“Parties” means ACS, ACS Member, GCI, GCI Member and the Company and a “Party”
means any such Person.
 
“Permitted Liens” means:
 
(a)           Liens for Taxes not yet due and payable;
 
(b)           Mechanics’, carriers’, workmen’s, warehousemen’s, landlord’s,
repairmen’s or other like Liens arising or incurred in the ordinary course of
business consistent with past practice that secure obligations not yet due;
 
(c)           (A) easements, rights of way, zoning ordinances, building and
other similar restrictions of record and Liens affecting Real Property and any
conditions that may be shown by a current, accurate survey or physical
inspection made before the Closing, (B) Liens that have been placed by any
developer, landlord or other Third Party on property over which easement rights
have been granted or on any leased property and subordination or similar
agreements relating thereto and (C) unrecorded easements, covenants,
rights-of-way and other similar restrictions, in each case that are not,
individually or in the aggregate, material to the Activities or the Assets,
which do not prohibit or interfere with the current operation of any Real
Property and which do not render title to any Real Property unmarketable;
 
 
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(d)           Deposits to secure the performance of bids, trade contracts,
leases, statutory obligations, surety and appeal bonds, performance bonds and
other obligations of a like nature, in each case in the ordinary course of
business to the extent such deposits constitute Assets contributed to the
Company;
 
(e)           Pledges and deposits made in the ordinary course of business in
compliance with any Legal Requirements and Liens arising by statute in
connection with worker’s compensation, unemployment insurance, old age benefits,
social security obligations, taxes, assessments, statutory obligations or other
similar charges, good faith cash deposits in connection with tenders, contracts
or leases to which such Person is a party or other cash deposits in any such
foregoing case that is required to be made in the ordinary course of business,
provided in each case that the obligation is not for borrowed money and that the
obligation secured is not overdue or, if overdue, is being contested in good
faith by appropriate proceedings which prevent enforcement of the matter under
contest and adequate reserves have been established therefor;
 
(f)           Purchase money security interests for goods purchased in the
ordinary course to the extent that the obligations secured by such security
interests constitute Assumed Contracts; and
 
(g)           imperfections of title or encumbrances that, individually or in
the aggregate, do not impair materially, and would not reasonably be expected to
impair materially, the continued use and operation of the Assets to which they
relate in the conduct of the Activities as presently conducted.
 
“Person” means any natural person, corporation, general or limited partnership,
limited liability company, joint venture, trust, association, unincorporated
entity of any kind, or a Governmental Authority.
 
“Personal Property” means all of the equipment, leasehold improvements, plant,
spare parts inventory that are owned or leased by a member of the applicable
Contributing Group and primarily used in the conduct of such Contributing
Group’s Activities, other than equipment, leasehold improvements, plant and
spare parts inventory related to IRU or capacity purchases.
 
“Pre-Closing Agreements” means (a) HSPA Services Agreement dated as of June 4,
2012 by and between ACS Member and GCI Communication Corp., (b) Bilateral IRU
Agreement made as of June 4, 2012 by and between ACS Cable Systems, Inc. and GCI
Communication Corp., (c) Network Access Agreement made as of June 4, 2012 by and
between ACS Member and GCI Communication Corp., (d) ACS to GCI Master License
Agreement for Wireless Tower Space and Power Agreement dated as of May 18, 2012
by and between GCI Communication Corp. and ACS Member, and (e) GCI to ACS Master
License Agreement for Wireless Tower Space and Power Agreement dated as of May
18, 2012 by and between GCI Communication Corp. and ACS Member.
 
 
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“Prepaids” has the meaning given such term in Section 2.10.
 
“Proceeding” means any suit, action, proceeding, arbitration, audit, hearing, or
investigation (in each case, whether civil, criminal, administrative,
investigative, or informal) commenced, brought, conducted or heard by or before,
or otherwise involving, any Governmental Authority.
 
“Provider” has the meaning given such term in Section 6.10.
 
“Public WiFi” means any WiFi service established and owned by a Contributing
Group that is provided for use by its customers on a Wireless device, and is
password protected or has other secure authentication protocols established and
managed by such Contributing Group.
 
“Purchase Price” has the meaning given such term in Section 2.1(b).
 
“Purchased Assets” has the meaning given such term in Section 2.1(a).
 
“RCA” means the Regulatory Commission of Alaska.
 
“Real Property” means all of the fee estates and buildings and other
improvements thereon, leasehold interests, easements, licenses, rights to
access, rights-of-way and other real property interests which are owned or
leased by a member of the applicable Contributing Group and primarily used in
the conduct of such Contributing Group’s Activities.
 
“Receiver” has the meaning given such term in Section 6.10.
 
“SEC” means the U.S. Securities and Exchange Commission.
 
“Sherman Act” means title 15 of the United States Code §§ 1-7.
 
“Spectrum” means all Wireless spectrum that is owned, leased, licensed or
otherwise made available or allocated to a member of the applicable Contributing
Group.
 
“Superior Proposal” means, with respect to a Parent, any offer or proposal by
any Person concerning any (i) merger, consolidation, other business combination
or similar transaction involving such Parent or its Activities, (ii) sale,
lease, license or other disposition directly or indirectly by merger,
consolidation, business combination, share exchange, joint venture or otherwise,
of assets representing a majority of the consolidated assets, revenues or net
income of such Parent or its Activities, (iii) issuance, sale or other
disposition (including by way of merger, consolidation, business combination,
share exchange, joint venture or similar transaction) of equity interests
representing a majority of the voting power of such Parent or an Affiliate of
such Parent that owns a significant portion of its Activities, (iv) transaction
or series of transactions in which any Person (or the stockholders of such
Person) would acquire beneficial ownership or the right to acquire beneficial
ownership of equity interests representing a majority of the voting power of
such Parent or an Affiliate of such Parent that owns a significant portion of
its Activities or (v) any combination of the foregoing, in each case that such
Parent’s board or directors determines in good faith to be more favorable to the
holders of such Parent’s common stock than the transactions contemplated by this
Agreement.
 
 
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“Superior Proposal Fee” has the meaning given such term in Section 9.2(b).
 
“Tax Benefit” has the meaning given such term in Section 10.6(b).
 
“Tax Return” means, with respect to a Person, any federal, state, local or
foreign tax return, report, declaration of estimated Tax payments, statement,
information return or statement, or other similar filing, including any related
or supporting information with respect to any of the foregoing and any amendment
thereof, filed or to be filed by such Person with any Taxing Authority in
connection with the determination, assessment, collection or administration of
any Taxes.
 
“Tax Savings” has the meaning given such term in Section 10.6(b).
 
“Taxes” means (a) all Federal, state, county, local, municipal, foreign and
other taxes, assessments, duties fees, regulatory impositions, price support
impositions or similar charges of any kind whatsoever, including all franchise,
capital, income, sales, use, ad valorem, receipts, value added, profits,
license, withholding, payroll, employment, excise, premium, property, customs,
net worth, capital gains, transfer, stamp, documentary, social security,
environmental, alternative minimum, occupation, recapture gross receipts,
universal service, recovery and other taxes and levies, and including all
interest, penalties and additions imposed with respect to such amounts, and
(b) any liability for any amounts described in clause (a) under Treasury
Regulations Section 1.1502-6 (or any similar provision of state, local, or
foreign Law), or as a transferee or co-vendor, agent, responsible person, by
contract, by operation of law or otherwise.
 
“Third Party” has the meaning specified in the Operating Agreement.
 
“Transaction Opinion” means an opinion from a nationally recognized valuation or
investment banking firm approved by each Parent in its reasonable discretion,
addressed to each Parent opining that (i) the Purchase Price to be received by
the selling ACS Affiliates as consideration for the Purchased Assets as set
forth in Section 2.1 of this Agreement, as of the date of transfer of the
Purchased Assets, represents at least reasonably equivalent value for the
Purchased Assets and (ii) as set forth in Section 2.7 of this Agreement, and in
accordance with the terms of the Operating Agreement, the membership interest in
the Company to be received by ACS Member as consideration for transferring and
delivering to the Company all of the ACS Assets (other than the Purchased
Assets), as of the date of transfer of such ACS Assets, represents at least
reasonably equivalent value for such assets.
 
“Transmission Service Agreement” means the Transmission Service Agreement by and
among the Company, the ACS Member and GCI Communication Corp. substantially in
the form attached hereto as Exhibit J.
 
“Transactions” means the transactions contemplated by this Agreement and the
Ancillary Agreements.
 
 
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“Treasury Regulations” means the Treasury regulations promulgated under the
Code.
 
“Union” has the meaning given such term in Section 4.11.
 
“WARN Act” has the meaning given such term in Section 6.5(c).
 
“Wireless” means (a) Commercial Mobile Radio Services (as defined by the
Communications Act and the rules and regulations thereunder), (b) Public WiFi
and (c) any additional mobile voice, text messaging and data products and
services provided over wireless spectrum licensed or authorized for use by the
FCC other than, in the case of clause (c), any such products or services
provided by satellite directly to Wireless devices.
 
“Wireless Backhaul and Transport” has the meaning given such term in the
Operating Agreement.
 
1.2 Clarifications
 
Words used in this Agreement, regardless of the gender and number specifically
used, shall be deemed and construed to include any other gender and any other
number as the context requires.  As used in this Agreement, the word “including”
shall be deemed to be followed by the words “without limiting the generality of
the foregoing”, and the word “or” has the inclusive meaning of “and/or”.  Except
as specifically otherwise provided in this Agreement in a particular instance, a
reference to a Section, Exhibit or Schedule is a reference to a Section of this
Agreement or an Exhibit or Schedule hereto, and the terms “hereof,” “herein,”
and other like terms refer to this Agreement as a whole, including the Exhibits
and Schedules to this Agreement, and not solely to any particular part of this
Agreement.  The descriptive headings in this Agreement are inserted for
convenience of reference only and are not intended to be part of or to affect
the meaning or interpretation of this Agreement.  This Agreement shall be
construed without regard to any presumption or rule requiring construction or
interpretation against the Party drafting an instrument or causing any
instrument to be drafted.
 
SECTION 2.  
CONTRIBUTION OF ASSETS BY THE MEMBERS

 
2.1 Agreement to Purchase and Sell
 
(a) Subject to the terms and conditions set forth in this Agreement, at the
Closing, ACS shall cause one or more of its Affiliates to sell, assign,
transfer, convey and deliver to GCI Member, and GCI Member shall purchase from
such ACS Affiliate, the assets identified in Schedule 2.1 hereto (the “Purchased
Assets”), free and clear of any Liens (except for Permitted Liens) and without
the creation of any successor or derivative liability by operation of law or
otherwise, such sale, assignment, transfer conveyance and delivery to be
effected by execution and delivery of an Instrument of Assignment.  The final
form of Schedule 2.1 will be delivered to GCI Member by ACS Member no later than
five months from the date hereof and the assets identified thereon will be
identified by the categories set forth on Schedule 2.1 as of the date hereof,
such list to be reasonably acceptable to the Parties.  Notwithstanding the
provisions of this Section 2.1 or any other provision in this Agreement, GCI
Member shall not assume and shall not be responsible to pay, perform or
discharge any liabilities, obligations or commitments of such ACS Affiliate of
any kind or nature whatsoever, asserted or unasserted, known or unknown,
absolute or contingent, accrued or unaccrued, matured or unmatured or otherwise,
provided that the GCI Member shall not take any action or fail to take any
action during the period it owns the Purchased Assets that would be a violation
of this Agreement if such action was taken or failed to be taken by ACS or the
Company from and after the Closing.
 
 
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(b) The aggregate purchase price for the Purchased Assets shall be $100 million
(the “Purchase Price”).  Each of the selling ACS Affiliates will be paid its
portion of the Purchase Price on the Closing Date by wire transfer of
immediately available funds to an account of such ACS Affiliate designated no
later than three Business Days prior to the Closing Date.
 
2.2 ACS Agreement to Contribute
 
Subject to the terms and conditions set forth in this Agreement, at the Closing
(immediately following the transaction set forth in Section 2.1), ACS Member
shall transfer and deliver or cause to be transferred and delivered to the
Company all of the ACS Assets (other than the Purchased Assets), free and clear
of any Liens (except for Permitted Liens) and without the creation of any
successor or derivative liability by operation of law or otherwise, such
transfer and delivery to be evidenced by execution and delivery of an Instrument
of Assignment, including:
 
(a) All Personal Property of the ACS Wireless Activities other than the
Purchased Assets;
 
(b) All Real Property of the ACS Wireless Activities other than the Purchased
Assets;
 
(c) All Licenses of the ACS Wireless Activities;
 
(d) All Assumed Contracts of the ACS Wireless Activities;
 
(e) All Spectrum of the ACS Wireless Activities;
 
(f) All Intellectual Property of the ACS Wireless Activities;
 
(g) All CETC Cash Flow received by or as a result of an Alaska Communications
Systems Holding, Inc.’s designation as a Competitive Eligible Telecommunications
Carrier within the State of Alaska;
 
(h) The Network Assets of the ACS Wireless Activities;
 
(i) The Cell Sites of the ACS Wireless Activities;
 
(j) All Tax Returns regarding real property, personal property and ad valorem
Taxes imposed on the ACS Assets, to the extent each relates solely to the ACS
Assets; and
 
(k) All books and records relating to the foregoing (except as expressly
excluded by Section 2.4(c)), including executed copies of the Licenses and
Assumed Contracts, and all filings made with or records required to be kept by
the FCC; provided, however that ACS Member may retain copies of any such books,
records, Contracts and filings.
 
 
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2.3 GCI Agreement to Contribute
 
Subject to the terms and conditions set forth in this Agreement, at the Closing
(immediately following the transaction set forth in Section 2.1), GCI Member
shall transfer and deliver to the Company all of the GCI Assets and all of the
Purchased Assets, in each case, free and clear of any Liens (except for
Permitted Liens) and without the creation of any successor or derivative
liability by operation of law or otherwise, such transfer and delivery to be
effected by execution and delivery of an Instrument of Assignment, including:
 
(a) All Personal Property of the GCI Wireless Activities;
 
(b) All Real Property of the GCI Wireless Activities;
 
(c) All Licenses of the GCI Wireless Activities;
 
(d) All Assumed Contracts of the GCI Wireless Activities;
 
(e) All Spectrum of the GCI Wireless Activities;
 
(f) All Intellectual Property of the GCI Wireless Activities;
 
(g) All CETC Cash Flow received by or as a result of a GCI Communication Corp.’s
designation as a Competitive Eligible Telecommunications Carrier within the
State of Alaska;
 
(h) The Network Assets of the GCI Wireless Activities;
 
(i) The Cell Sites of the GCI Wireless Activities;
 
(j) All Tax Returns regarding real property, personal property and ad valorem
Taxes imposed on the GCI Assets, to the extent each relates solely to the GCI
Assets; and
 
(k) All books and records relating to the foregoing (except as expressly
excluded by Section 2.4(c)), including executed copies of the Licenses and
Assumed Contracts, and all filings made with or records required to be kept by
the FCC; provided, however that GCI Member may retain copies of any such books,
records, Contracts and filings.
 
2.4 Excluded Assets
 
The Assets being contributed to the Company shall exclude the following assets:
 
(a) Each Contributing Group’s cash on hand as of the Closing Date and all other
cash and cash equivalents in any member of such Contributing Group’s bank,
savings or other depository accounts; any and all letters of credit or other
similar items; and any stocks, bonds, certificates of deposit and similar
investments;
 
(b) Any Contracts other than the Assumed Contracts;
 
(c) Any books and records each Member is required by any Legal Requirement to
retain (subject to the right of the Company to access and to copy for a period
of three years after the Closing Date), and such Member’s corporate minute books
and other books and records related to internal corporate matters;
 
 
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(d) Any claims, rights and interest in and to any refunds of federal, state or
local income or other Taxes, fees or assessments for periods (or portions
thereof) ending on or prior to the Closing Date or otherwise relating to the
other Excluded Assets or Excluded Liabilities;
 
(e) All judgments, choses in action or Proceedings of each Contributing Group
relating to the ownership or operation of such Contributing Group’s Assets or
conduct of such Contributing Group’s Activities prior to the Closing Date;
 
(f) All Employee Plans, Compensation Arrangements and employment agreements
unless any such Employee Plan, Compensation Arrangement or employment agreement
is expressly included in the Assumed Contracts;
 
(g) The account books of original entry, general ledgers, and financial records;
 
(h) Medical records and personnel records to the extent required by Legal
Requirements;
 
(i) Insurance policies and rights and claims thereunder;
 
(j) Contracts for the provision of wireless services to subscribers, Lifeline
subscriber agreements and agreements with Lifeline agents;
 
(k) Accounts Receivable;
 
(l) All Tax Returns and all supporting documentation for such Tax Returns,
except to the extent specifically identified in Section 2.2(h) and
Section 2.3(h); and
 
(m) The assets set forth in Schedule 2.4A and 2.4B (which Schedules may be
amended prior to Closing; provided that any such amendment does not materially
reduce the aggregate value of the Assets being contributed by the applicable
Contributing Group and provided further that the other Contributing Group agrees
in its reasonable discretion to such amendment).
 
2.5 Assumed Liabilities
 
Upon the terms and subject to the conditions of this Agreement, the Company
shall assume, effective as of the Closing, and from and after the Closing the
Company shall pay, perform and discharge when due, all the following
liabilities, obligations and commitments of the ACS Contributing Group and the
ACS Member, or the GCI Contributing Group and the GCI Member, as applicable (the
“Assumed Liabilities”), such assumption to be evidenced where appropriate by
execution and delivery of an Instrument of Assumption, other than any Excluded
Liabilities:
 
(a) All post-closing liabilities, obligations and commitments under the Assumed
Contracts; and
 
 
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(b) All other liabilities, obligations and commitments of any member of the GCI
Contributing Group or the ACS Contributing Group set forth on Schedule 2.5.
 
2.6 Excluded Liabilities
 
The Company shall not assume or be obligated to pay, perform or otherwise
discharge any liability or obligation of the ACS Contributing Group or the ACS
Member, or the GCI Contributing Group or the GCI Member, whether direct or
indirect, known or unknown, absolute or contingent, not expressly assumed by the
Company pursuant to Section 2.5 (all such liabilities and obligations not being
assumed being herein called the “Excluded Liabilities”) and, notwithstanding
anything to the contrary in Section 2.5 or by operation of law or otherwise,
none of the following shall be Assumed Liabilities for purposes of this
Agreement:
 
(a) Any liabilities in respect of Taxes for which the ACS Member, the GCI Member
or any of their respective Affiliates is liable for periods ending as of the
effectiveness of the transactions contemplated by Section 2.1, 2.2, or 2.3
hereof or otherwise, except to the extent provided in Section 6.3;
 
(b) Any accounts payable owed by or to the ACS Member or the GCI Member (as
applicable) or any of their respective Affiliates other than those accounts
payable that are expressly assumed by the Company pursuant to Section 2.5;
 
(c) Any other liabilities, obligations or commitments owed by or to the ACS
Member or the GCI Member (as applicable) or any of their respective Affiliates
other than those expressly assumed by the Company pursuant to Section 2.5;
 
(d) Any costs and expenses incurred by the ACS Contributing Group or the ACS
Member, or the GCI Contributing Group or the GCI Member, in connection with its
negotiation and preparation of this Agreement, the Ancillary Agreements and the
Pre-Closing Agreements and its performance and compliance with the agreements
and conditions contained herein and therein;
 
(e) Any liabilities, obligations or commitments in respect of any Excluded
Assets;
 
(f) Any liabilities, obligations or commitments in respect of any Proceedings to
which the ACS Contributing Group or the ACS Member, or the GCI Contributing
Group or the GCI Member, is a party prior to the Closing;
 
(g) Any liabilities, obligations or commitments in respect of employees of the
GCI Wireless Activities or the ACS Wireless Activities;
 
(h) Any liabilities, obligations or commitments resulting from any Environmental
Claims (regardless of whether any representation or warranty contained in
Section 4.8 is incorrect) related to the ownership or operation of Real Property
prior to the Effective Time; and
 
 
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(i) Any liabilities, obligations or commitments with respect to any universal
service support received from the federal or Alaska Universal Service Funds
received prior to the Closing.
 
2.7 Issuance of Membership Interests
 
In consideration for the contributions to the Company by the ACS Contributing
Group, the ACS Member shall receive at Closing a membership interest in the
Company as set forth in, and in accordance with the terms of, the Operating
Agreement.  In consideration for the contributions to the Company by the GCI
Contributing Group, the GCI Member shall receive at Closing a membership
interest in the Company as set forth in, and in accordance with the terms of,
the Operating Agreement.
 
2.8 Working Capital Loan
 
In accordance with the terms of the Operating Agreement, GCI Holdings, Inc. and
the Company will enter into the Loan Agreement.
 
2.9 Business Process Licenses
 
Subject to the terms and conditions set forth in this Agreement, from and after
the Closing, the members of each Contributing Group hereby grant to the Company
a perpetual, royalty-free, non-exclusive license to use the business processes
used by such member in connection with the Contributed Assets.  The business
processes and any information provided to the Company in connection therewith
shall be subject to the confidentiality restrictions set forth in Section 16.20
of the Operating Agreement.  The Company may not sub-license any license granted
to it pursuant to this Section 2.9 without the prior written consent of the
Parent of the applicable Contributing Group, other than to a wholly-owned
subsidiary of the Company.
 
2.10 Prepaid Costs and Expenses
 
Any deposits or prepayments made by either Contributing Group under the Assumed
Contracts or otherwise relating to the Assets or Assumed Liabilities that inure
to the benefit of the Company (the “Prepaids”) shall be prorated as of the
Closing Date.  As promptly as practicable, but in any event within 90 days
following the Closing Date, each Parent shall deliver to the Company a
statement, reasonably acceptable to the other Parent, setting forth the amount
of its Contributing Group’s Prepaids to the extent related to the post-Closing
period and upon receipt thereof the Company shall, within 30 days reimburse the
applicable Parent for the amount of its Prepaids.
 
2.11 Effectiveness of Transactions
 
All of the transactions in Sections 2.1 through 2.9 shall be effected at Closing
in the order set forth in this Section 2, except that those transactions in
Sections 2.2 and 2.3 shall occur simultaneously, and none of such transactions
shall be effective unless all such transactions are effected.
 
SECTION 3.  
REPRESENTATIONS AND WARRANTIES REGARDING THE PARTIES

 
In this Section 3, any particular reference to a “Schedule 3” shall be
understood (i) in the case of ACS, to refer to the corresponding “Schedule 3A”,
and (ii) in the case of GCI, to refer to the corresponding “Schedule 3B.”  Each
of ACS and ACS Member, jointly and severally, represents and warrants to GCI and
GCI Member, and each of GCI and GCI Member, jointly and severally, represents
and warrants to ACS and ACS Member, as of the date hereof and as of the Closing
Date except insofar as such representations and warranties are made as of the
date hereof or any other specified date (in which case as of such date), as
follows:
 
 
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3.1 Organization, Standing and Authority
 
Such Person is a corporation or limited liability company duly organized,
validly existing and in good standing under the laws of its jurisdiction of
organization, and such Person is duly qualified to conduct business in all such
foreign jurisdictions in which such qualification is necessary for its conduct
of its Activities.  Such Person and its Affiliates have all requisite power
(i) to own, lease, and use its Assets as presently owned, leased, and used,
(ii) to conduct its Activities as presently conducted, and (iii) to execute,
deliver, and perform this Agreement and the documents contemplated hereby
according to their respective terms.  Neither such Person nor any of its
Affiliates is a participant in any joint venture or partnership with any other
Person with respect to any part of its Activities or its Assets.
 
3.2 Authorization and Binding Obligation
 
The execution, delivery and performance of this Agreement and the Ancillary
Agreements by such Person have been duly authorized by all necessary corporate
or limited liability company action on the part of such Person.  No approval or
consent from any of its shareholders or members is required for such Person to
execute, deliver or perform this Agreement or the Ancillary Agreements or to
consummate the Transactions.  This Agreement has been duly executed and
delivered by such Person and constitutes its legal, valid, and binding
obligation, enforceable against it in accordance with its terms, except to the
extent such enforceability may be limited by the Enforceability Exceptions.
 
3.3 Absence of Conflicting Agreements
 
Subject to obtaining the Consents, the execution, delivery and performance of
this Agreement and the Ancillary Agreements (with or without the giving of
notice, the lapse of time, or both):  (i) does not require the consent of any
Third Party; (ii) will not conflict with any provision of the organizational
documents of such Person; (iii) will not conflict with, result in a breach of,
or constitute a default under, any Legal Requirements, (iv) will not conflict
with, constitute grounds for termination of, result in a breach of, constitute a
default under, or accelerate or permit the acceleration of any performance
required by the terms of, any material agreement, instrument, license or permit
to which such Member is a party or by which such Member may be bound; and
(v) will not create any Lien upon such Member’s Assets.
 
3.4 Claims and Legal Actions
 
Except as set forth in Schedule 3.4, there is no material claim, legal action,
arbitration, governmental investigation or other legal, administrative or Tax
proceeding, nor any order, decree or judgment, in progress or pending, or to the
Knowledge of such Person, threatened, against or relating to such Person or any
of its Affiliates relating to its Assets or Activities, or to such Person’s
performance of its obligations under this Agreement or the consummation of the
Transactions.  To the best of such Person’s Knowledge there are no pending
written complaints by customers or other users of such Person’s or any of its
Affiliates’ services that, individually or in the aggregate, would reasonably be
expected to materially and adversely affect the Assets of such Person’s
Contributing Group or the financial condition of its Activities.  Other than
requests described in Schedule 3.4, no written requests have been received by
such Person or any of its Affiliates during the preceding two year period from
the FCC, any state regulatory authority or other Governmental Authority or any
other Person challenging or questioning the right of such Person or its
Affiliates to conduct its Activities and any FCC-licensed or registered facility
used in conjunction with such Activities.
 
 
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3.5 Compliance with Laws
 
Except as set forth in Schedule 3.5, such Person and its Affiliates have
complied with, and to such Person’s Knowledge, the Activities and Assets of such
Person or its Contributing Group are in compliance with, in all material
respects, all applicable Legal Requirements and such Person and its Affiliates
have not received any notice of any claim that such Person or any of its
Affiliates is not in compliance with any applicable Legal Requirements, except
where such non-compliance would not reasonably be expected to have a material
impact, including the following Legal Requirements:
 
(a) Personnel Matters.  The Code, ERISA and the National Labor Relations Act, as
amended, or regarding employment conditions and practices (including hours,
payment of wages or salaries and overtime pay as well as withholding
requirements from wages or salaries), prohibitions upon employment
discrimination, occupational safety and unfair labor practices;
 
(b) Communications Act.  The Communications Act, including FCC filing
requirements, notices to subscribers and FCC equal opportunity rules; and
 
(c) FAA and RCA Rules and Regulations.  Rules and regulations of the FAA and
RCA.
 
3.6 Solvency
 
After giving effect to the Transactions, such Person and each of its Affiliates
that contributes Assets pursuant to this Agreement is solvent and each
shall:  (a) be able to pay its debts as they become due; (b) own property that
has a fair saleable value greater than the amounts required to pay its debts
(including a reasonable estimate of the amount of all contingent liabilities);
and (c) have adequate capital to carry on its business.  No transfer of property
is being made and no obligation is being incurred in connection with the
Transactions with the intent to hinder, delay or defraud either present or
future creditors of any such Person or any of its Affiliates.  In connection
with the Transactions, neither such Person nor any of its Affiliates has
incurred, or plans to incur, debts beyond its ability to pay as they become
absolute and matured.
 
SECTION 4.  
REPRESENTATIONS AND WARRANTIES REGARDING THE ASSETS

 
In this Section 4, any particular reference to a “Schedule 4” shall be
understood (i) in the case of ACS, to refer to the corresponding “Schedule 4A”,
and (ii) in the case of GCI, to refer to the corresponding “Schedule 4B.”  Each
of ACS and ACS Member, jointly and severally, represents and warrants to GCI and
GCI Member with respect to the ACS Wireless Activities and the ACS Assets
(including the Purchased Assets), and each of GCI and GCI Member, jointly and
severally, represents and warrants to ACS and ACS Member with respect to the GCI
Wireless Activities and the GCI Assets (but not the Purchased Assets), as of the
date hereof and as of the Closing Date except insofar as such representations
and warranties are made as of the date hereof or any other specified date (in
which case as of such date), as follows:
 
 
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4.1 Sufficiency of Assets
 
Except as set forth in Schedule 4.1 and except for the Excluded Assets and the
assets and services to be made available to the Company pursuant to the
Ancillary Agreements and (solely for the purposes of making this representation
as of the date hereof) the Pre-Closing Agreements, the Assets (i) constitute all
of the assets, tangible and intangible, of any nature whatsoever, necessary to
conduct such Person’s Activities in substantially the manner presently operated
by such Person’s Contributing Group and (ii) include all of the assets of such
Person and its Affiliates which are used in such Contributing Group’s
Activities.
 
4.2 Licenses and Contracts
 
(a) Schedule 4.2(a) sets forth a list organized by category, of all of the
Contracts in effect on the date hereof, except for:  (i) subscription agreements
with subscribers for wireless services provided by such Activities in the
ordinary course of business, (ii) employment contracts and miscellaneous service
contracts terminable on not more than 90 days’ notice, and (iii) any Contracts
included in the Excluded Assets or provided for in the Ancillary
Agreements.  True and complete copies of all Assumed Contracts (together with
all amendments thereto) of such Person’s Activities have been delivered to the
other Parent.  Other than the Licenses and Contracts listed in Schedule 4.2(a)
or not required to be listed thereon pursuant to the first sentence of this
Section 4.2(a), such Person’s Activities require no contract or agreement to
enable it to carry on its Activities in all material respects as presently
conducted.  All Licenses and Assumed Contracts are in full force and effect, and
are in all material respects valid, binding and enforceable in accordance with
their respective terms.  None of the Licenses or Assumed Contracts would be
materially breached by virtue of the Transactions or by virtue of the
assignments thereof to the Company or as otherwise contemplated by this
Agreement, provided that the Consents are obtained.  Except as set forth in
Schedule 4.2(a), there is not under any License or Assumed Contract any default
by such Person or any of its Affiliates or, to its Knowledge, any other party
thereto, or any event which, after notice or lapse of time, or both, would
constitute a material default which would give any party the right to terminate
such License or Assumed Contract.  Except as expressly set forth in
Schedule 4.2(a), such Person has not received any written notice of any
intention by any party to any material License or material Assumed Contract
(i) to amend the terms thereof in a manner that would materially and adversely
affect such Person’s rights thereunder, or to terminate such contract, (ii) to
refuse to renew the same upon expiration of its term, or (iii) to renew the same
upon expiration only on terms and conditions which materially and adversely
affect such Person’s rights thereunder.
 
(b) Except as set forth in Schedule 4.2(b), there are no Assumed Contracts in
effect on the date hereof between such Person or any of its Affiliates and
(i) any of its Affiliates, (ii) any of its or its Affiliates’ officers,
directors, shareholders, members, managers or “associates” (as defined in the
Exchange Act), or (iii) any Affiliate or “associate” (as defined in the Exchange
Act) of any of the Persons listed in clause (ii).
 
4.3 Title to and Condition of Real and Personal Property
 
(a) Except for any Real Property and Personal Property expressly included in the
Excluded Assets, Schedule 4.3 contains descriptions of all the Real Property
(excluding unrecorded easements, rights-of-way or rights-to-access which are not
material to the operation of such Person’s Activities) and categorical
descriptions of all material items of Personal Property which, together with the
Excluded Assets, comprise all real property interests and personal property
reasonably necessary to conduct such Person’s Activities in all material
respects as now conducted.
 
 
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(b) Such Person and its Affiliates have marketable title or leasehold interests,
as the case may be, to all Real Property and Personal Property listed on
Schedule 4.3 free and clear of all Liens except for Liens set forth on
Schedule 4.3 and Permitted Liens.
 
(c) All towers, guy anchors, buildings and other improvements included in such
Real Property and Personal Property are located entirely on the Real Property
listed in Schedule 4.3.  Such Person has delivered to the other Parent true and
complete copies of all deeds, leases and material Contracts pertaining to such
Real Property.  All of such Person’s Real Property and Personal Property (i) is
in good condition and repair (ordinary wear and tear excepted), and (ii) subject
to receipt of the Consents and in the case of leased Real Property or Personal
Property payment of any rent obligations in respect thereto that are not
overdue, is available for immediate use in the Activities as is contemplated to
be conducted by the Company subsequent to Closing.  Such Person or its
Affiliates have access to its Real Property to the extent necessary to conduct
such Person’s Activities and to permit the Company to continue to use such Real
Property following the Closing substantially as it is currently being used by
such Person or any of its Affiliates.  All items of plant and equipment included
in such Personal Property (i) have been maintained in a manner consistent with
generally accepted industry standards, and (ii) will permit such Person’s
Activities in all material respects to operate in accordance with the terms of
the Licenses and the Legal Requirements of the FCC or other Governmental
Authority as currently in effect.
 
4.4 Intellectual Property
 
To the Knowledge of such Person neither it nor any of its Affiliates is
infringing upon any patent, trademark, trade name, service mark, service name,
copyright or similar intellectual property right owned by any other Person in
the conduct of the Activities.
 
4.5 Consents
 
Except for the Consents described in Schedule 4.5, no Consent of, or filing
with, any Governmental Authority is required to permit such Person or any member
of its Contributing Group (i) to consummate this Agreement and the Transactions
or (ii) to permit such Person to assign or transfer the Assets as contemplated
hereby.  Except for the Consents described in Schedule 4.5, no Consent with
respect to a material Contract is required to be obtained by such Person or any
member of its Contributing Group (i) to consummate this Agreement and the
Transactions or (ii) to permit such Person to assign or transfer the Assets as
contemplated hereby.  All Consents required to operate the Assets of such
Person’s Contributing Group have been transferred to the Company as of the
Closing Date, other than Consents that are ministerial in nature and must be
obtained by the Party owning such Assets.
 
4.6 Licenses and FCC Matters
 
Schedule 4.6 lists all of the material franchises, licenses, designations and
permits required from the FCC or the RCA to enable such Person or its Affiliates
to carry on its Activities as presently conducted.  All required reports of such
Person and its Affiliates to the FCC, including those relating to Taxes
administered by the FCC, are true and correct in all material respects and have
been duly filed.  Such Person or its Affiliate has all of the material licenses,
designations and permits required under all applicable FCC rules, regulations
and orders to utilize all carrier frequencies generated by the operations of its
Activities and to receive High Cost Universal Service Support, and is licensed
in all material respects to operate all the facilities required by Legal
Requirements to be licensed.
 
 
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4.7 Insurance and Bonds
 
Such Person’s Activities and its Assets are insured against claims, loss or
damage in amounts set forth in Schedule 4.7.  Schedule 4.7 provides a true and
complete list of all surety and performance bonds or letters of credit
maintained in connection with such Person’s Activities.
 
4.8 Environmental Law
 
Except as disclosed in Schedule 4.8 hereto, to such Person’s Knowledge (i) such
Person’s and its Affiliates’ operations with respect to its Activities and the
use of its Real Property comply in all material respects with all applicable
Environmental Laws; (ii) such Person and its Affiliates have not used such Real
Property for, and have no Knowledge that such Real Property has previously been
used for, the manufacture, transportation, treatment, storage or disposal of
Hazardous Substances except for such use of Hazardous Substances (for backup
power and ordinary maintenance) customary in the construction, maintenance and
operation of such Person’s Assets and its Activities and in amounts or under
circumstances that would not reasonably be expected to give rise to any material
liability for remediation; and (iii) such Person’s Real Property complies in all
material respects with all applicable Environmental Laws.  Except as described
in Schedule 4.8 hereto, to such Person’s Knowledge, no underground storage tanks
have been installed by or are used by such Person at any of its Real
Property.  Such Person has delivered to the other Person true and complete
copies of all environmental reports and studies in the possession of or
reasonably available to such Person with respect to the Real Property.  Such
Person and its Affiliates are not, to its Knowledge, the subject of (x) any
“Superfund” evaluation or investigation or proceeding in connection with its
Real Property, (y) any investigation or proceeding of any Governmental Authority
evaluating whether any remedial action is necessary to respond to any release of
Hazardous Substances on or in connection with its Real Property, or (z) any
Environmental Claim.
 
4.9 Taxes and Tax Returns
 
All Tax Returns relating to its Assets or its Activities required to have been
filed have been duly and timely filed with the appropriate Governmental
Authorities.  All such Tax Returns are true, correct and complete and properly
reflect the liabilities for Taxes for the periods, property or events covered
thereby.  All material Taxes due and payable with respect to its Assets or its
Activities have been timely and duly paid to the appropriate Governmental
Authority.
 
4.10 Conduct of Activities in Ordinary Course
 
Since June 30, 2011, through the date of this Agreement, such Person and its
Affiliates have conducted their Activities and owned and maintained their Assets
only in the ordinary course and have not:
 
(a) Suffered any material adverse change in its Activities, Assets or condition
(financial or otherwise), including any damage, destruction or loss affecting
such Assets, other than any material adverse change resulting from general
economic conditions, governmental regulations or otherwise affecting the
wireless services industry generally;
 
 
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(b) Made any material increase in compensation payable or to become payable to
any employee or independent contractor of such Person’s Activities, or any bonus
payment made or promised to any employee or independent contractor of such
Person’s Activities except any bonus or similar payments that will be made by
such Person prior to Closing, or any material change in personnel policies,
insurance benefits, Compensation Arrangements or Employee Plans affecting the
employees or independent contractors of such Person’s Activities except to the
extent that the Company will not have any liabilities or obligations after
Closing with respect to any such changes; or
 
(c) Made any sale, assignment, lease or other transfer of any properties used in
its Activities other than in the normal and usual course of business with
suitable replacements being obtained therefor.
 
4.11 Unions
 
Subject to obtaining the applicable Consent on Schedule 4.5A, none of such
Person and its Affiliates are party to, bound by, or negotiating any collective
bargaining agreement or other contract with a union, works council or labor
organization (collectively, “Union”) that would be binding upon the Company,
that would impose on the Company any duty to bargain with any Union or that
would impose any successor liability or obligation on the Company or its
property.
 
4.12 Financial Information
 
The revenues and expenses of the ACS Wireless Activities or the GCI Wireless
Activities, as applicable, for the year ended December 31, 2011, set forth on
Schedule 4.12 fairly present the revenues and expenses of the ACS Wireless
Activities or the GCI Wireless Activities, as applicable, for such period.
 
4.13 Software and Hardware
 
All software and hardware used in the ACS Wireless Activities or the GCI
Wireless Activities, as applicable, and included in the Contributed Assets is
currently supported by the vendor of such software or hardware.
 
4.14 Assets and Liabilities of the Company
 
GCI represents and warrants that the Company (i) has been formed as a Delaware
limited liability company solely for purposes of this Agreement and the
transactions contemplated hereby and (ii) has conducted no business, and has no
assets, liabilities, obligations or commitments other than its activities
undertaken to comply with this Agreement and the Ancillary Agreements.
 
4.15 Full Disclosure
 
No representation or warranty made by such Person herein or in any certificate,
document or other instrument furnished or to be furnished by such Person
pursuant hereto contains or will contain any untrue statement of a material
fact, or omits or will omit to state any material fact known to such Person and
required to make the statements herein or therein, in light of the circumstances
under which they were made, not misleading.
 
SECTION 5.  
COVENANTS OF EACH PARTY

 
5.1 Pre-Closing Covenants
 
Unless a Party shall have obtained the prior written consent of the other
Parent, between the date hereof and the Closing Date, such Party shall conduct,
and shall cause its Affiliates to conduct, its Activities in the ordinary course
of business in accordance with its past practices (except where such conduct
would conflict with the following covenants or with such Party’s other
obligations hereunder) and shall abide by the following negative and affirmative
covenants:
 
 
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(a) Negative Covenants.  Such Person shall not, and shall cause its Affiliates
to not, do any of the following:
 
(1) Contracts.  (i) Modify, amend in any material respect or enter into any new
Affiliate Contracts affecting the Activities other than the Ancillary
Agreements; or modify or amend in any material respect any Assumed Contract
except (other than with respect to Affiliate Contracts) modifications or
amendments in the ordinary course of business that are not materially
inconsistent with the Initial Four Year Plan and First Year Budgets; (ii) enter
into any new Contracts that will be binding on the Company except Contracts
(other than Affiliate Contracts) entered into in the ordinary course of business
that are not materially inconsistent with the Initial Four Year Plan and First
Year Budgets; or (iii) enter into any modification or amendment to any Assumed
Contract, or enter into any new Contract, that would require a new or additional
material Consent;
 
(2) Disposition of Assets.  Sell, assign, lease, or otherwise transfer or
dispose of any of such Contributing Group’s Assets, except for assets consumed
or disposed of in the ordinary course of business that are obsolete and no
longer usable in such Contributing Group’s Activities or are replaced by
property of equivalent kind and value and except transfers to Affiliates of such
Person in order to facilitate the Transactions;
 
(3) Liens.  Create, assume or permit to exist any Liens upon its Assets, except
for Permitted Liens and except any Liens that will be removed prior to Closing;
 
(4) Licenses.  Do any act or fail to do any act which could reasonably be
expected to result in the expiration, revocation, suspension, non-renewal or
materially adverse modification of any of such Person’s Licenses or CETC
Designation, or fail to prosecute with due diligence any material applications
to any Governmental Authority in connection with such Person’s Activities;
 
(5) No Inconsistent Action.  Take any action which is inconsistent in any
material respect with such Person’s obligations hereunder or which would
reasonably be expected to materially hinder or delay the consummation of the
Transactions;
 
(6) Offers.  Sell, dispose of or offer to sell or dispose (including by way of
merger or equity sale or issuance) of any of such Person’s Assets or Activities,
or participate in any discussions pertaining to, or entertain offers for any
such Assets or Activities or otherwise negotiate for the sale of such Assets or
Activities or make information about such Assets or Activities available to any
Third Party in connection with the possible sale of any such Assets or
Activities provided, however, that each Party shall be permitted, in response to
an unsolicited request, offer or proposal by any Person, to participate in
discussions pertaining to, and entertain such offer or proposal and otherwise
negotiate for such sale and make information available in connection with, such
possible sale for a period of 60 days following the initiation of any such
discussions, negotiations or proposal; or
 
 
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(7) Waivers.  Waive any material right relating to its Activities or its Assets.
 
(b) Affirmative Covenants.  Such Person shall do, and shall cause its Affiliates
to do, the following:
 
(1) Access to Information.  Subject to the requirements set forth in
Section 6.10, allow the other Parent and its authorized representatives
reasonable access upon reasonable notice at the other Parent’s expense during
normal business hours to such Person’s Assets and to all other properties,
equipment, books, records, Contracts and documents relating to such Person’s
Assets and Activities for the purpose of audit and inspection and shall provide
the other Parent with such information as it may reasonably request for the
purpose of allowing the review necessary to issue the Transaction Opinion and to
obtain the ICA Order (as applicable), and furnish or cause to be furnished to
the other Parent or its authorized representatives all information which
directly related to the Activities, of such Person as the other Parent may
reasonably request.  Any such audit, investigation or request for information
shall be conducted in such a manner as not to interfere unreasonably with such
Person’s Activities, provided, however, that (i) neither the furnishing of such
information to the other Parent or its representatives nor any investigation
made heretofore or hereafter by the other Parent shall affect the other Parent’s
or its Affiliates right to rely on any representation or warranty made by such
Party or its Affiliates in this Agreement or such Person’s or its Affiliates’
covenants set forth herein, each of which representations, warranties and
covenants shall survive any furnishing of information to, or any investigation
by or Knowledge of the other Party in accordance with Section 10.2 and (ii) all
such information shall be subject to the confidentiality requirements set forth
in Section 6.10;
 
(2) Maintenance of Assets.  Use its commercially reasonable efforts to maintain
all of its Personal Property or replacements thereof and all buildings or other
improvements located on such Person’s Real Property in good condition (ordinary
wear and tear excepted) in a manner consistent with generally accepted industry
standards, and use all of such Person’s Personal Property and all buildings or
other improvements located on such Real Property in a reasonable manner, with
inventories of spare parts and expendable supplies being maintained at levels
consistent with generally accepted industry standards;
 
(3) Maintenance of Personnel.  Use its commercially reasonable efforts to
maintain appropriate staff and management personnel for such Person’s Activities
consistent with past and generally accepted industry practices;
 
(4) Insurance.  Use its commercially reasonable efforts to maintain insurance
policies covering its Activities and its Assets in such amounts and with such
coverages as are customarily maintained by similarly situated Persons consistent
with past practices;
 
(5) Consents.  Use its commercially reasonable efforts to obtain the Consents
required for each member of its Contributing Group to consummate the
Transactions;
 
 
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(6) Books and Records.  Maintain the books and records of its Contributing Group
in accordance with past practices and generally accepted accounting principles;
 
(7) Notification.  Promptly notify the other Parent of any fact or condition
known to such Person that causes or constitutes a material breach of any
representation, warranty, covenant or commitment made by such Person in this
Agreement or any material change in any of the information contained in such
Person’s and its Affiliates’ representations and warranties contained herein or
in the Schedules hereto;
 
(8) Compliance with Laws.  Comply in all material respects with all Legal
Requirements applicable to the operation of its Activities and the ownership of
its Assets;
 
(9) Keep Organization Intact.  Use such Person’s commercially reasonable efforts
to preserve intact its business and organization relating to its Activities and
preserve for the Company the goodwill of its suppliers, customers and others
having business relations with it;
 
(10) Contracts.  Prior to the Closing Date, promptly notify the other Parties
regarding any Contracts entered into or modified between the date hereof and the
Closing Date of the type required to be listed in Schedule 4.2, and promptly
provide copies of such Contracts and any amendments;
 
(11) CETC.  Take all commercially reasonable actions necessary to assure
continued receipt of CETC Cash Flow, including the filing for time periods that
occur prior to Closing for which payment is to be received after Closing, and
the continued filing of high cost line counts;
 
(12) Transition Planning.  Reasonably cooperate with one another in creating
joint plans for the transition of the Activities and the Assets from each
Contributing Group to the Company at the Closing;
 
(13) Offers.  Promptly notify the other Parties of any offer or proposal by any
Person concerning any (i) merger, consolidation, other business combination or
similar transaction involving it or its Activities, (ii) sale, lease, license or
other disposition directly or indirectly by merger, consolidation, business
combination, share exchange, joint venture or otherwise, of assets representing
a majority of the consolidated assets, revenues or net income of it or its
Activities, (iii) issuance, sale or other disposition (including by way of
merger, consolidation, business combination, share exchange, joint venture or
similar transaction) of equity interests representing a majority of its voting
power, (iv) transaction or series of transactions in which any Person (or the
stockholders of such Person) would acquire beneficial ownership or the right to
acquire beneficial ownership of equity interests representing a majority of its
voting power or (v) any combination of the foregoing;
 
(14) Systems and Software.  Use its commercially reasonable efforts to maintain
its systems and software used in its Activities in a manner consistent with
generally accepted industry standards; and
 
 
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(15) Construction Work in Process.  Continue its construction and development of
its Assets in the ordinary course of business consistent with its capital budget
attached as Schedule 5.1.
 
5.2 No Unauthorized Transfer of Control or Assignment of Licenses
 
Prior to receiving the FCC Consents, each Party will retain control of its
licensee Affiliates, and neither Party will act or fail to act in a manner that
would constitute an unauthorized assignment of one or more Licenses or an
unauthorized change in control of any of a Party’s Affiliates.
 
5.3 Rationalization Plans
 
GCI shall develop and deliver to the Company a plan that identifies (or sets
forth the terms and conditions for identifying after the Closing Date) redundant
cell site locations contributed or to be contributed to the Company.  ACS shall
develop and deliver to the Company a plan that identifies (or sets forth the
terms and conditions for identifying after the Closing Date) redundant CDMA
assets contributed or to be contributed to the Company.  Such plans will be
completed by the Closing Date or as soon as reasonably practicable thereafter
and each Party shall reasonably cooperate with the other Parties in the
development of such plans.
 
5.4 Further Assurances
 
Each Party shall use its reasonable best efforts and negotiate in good faith to
complete prior to Closing all exhibits to this Agreement and the Ancillary
Agreements that were not completed at the execution of this Agreement to the
reasonable satisfaction of the other Parties.  Each Party shall take, and cause
its Affiliates to take, such actions, and execute and deliver to the Company
such further deeds, bills of sale, assignments or other transfer documents as,
in the opinion of the Company, may be reasonably necessary to ensure the full
and effective transfer of the Assets to the Company pursuant to this Agreement;
provided that the Company shall be responsible for all fees, taxes and other
costs (other than such Party’s attorneys’ fees and expenses) payable with
respect to the filing or recording of any such further deeds, bills of sale,
assignments or other transfer documents.  For a reasonable period of time after
the Closing, each Party shall continue to reasonably cooperate with the other
Parties in transitioning the Activities from each Contributing Group to the
Company.
 
5.5 Form 8-K Filing
 
Not less than 5 Business days prior to the Closing Date, each of ACS and GCI
shall provide the other Parent with the financial statements (which shall be
audited to the extent required), or other financial information, required under
Item 9.01 of SEC Form 8-K for such other Parent and its Affiliates to file such
report.  Each of ACS and GCI shall cooperate with the other Parent and provide
such information or documentation as may be necessary for it to complete the
filing of SEC Form 8-K as may be required pursuant to Item 2.01 thereto to be
filed in connection with the Transactions.  GCI will cooperate with ACS to seek
from the SEC an exemption from any applicable audited financial statement
requirement under Item 9.01 of SEC Form 8-K.  Notwithstanding anything else set
forth herein, the Closing shall not occur until such time as (i) if required,
the audited financial statements required for the filing of SEC Form 8-K have
been completed or (ii) an exemption from any applicable audited financial
statement requirement has been obtained.  Each Parent will bear its own costs
and expenses with respect to this Section 5.5.
 
5.6 Legacy GCI and ACS Wireless Plans
 
Prior to Closing (but following the expiration of the notice periods under the
HSR Act or other Antitrust Laws with respect to the Transactions), the Company
shall, to the extent commercially reasonable, prepare to implement and integrate
the billing plans used in the GCI Wireless Activities and ACS Wireless
Activities prior to the Closing into the billing system that will be used by the
Company following the Closing.
 
 
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5.7 Asset List
 
Prior to Closing, each Parent will, and will cause its Affiliates to, cooperate
in producing a comprehensive list of its Assets.  Such Asset lists will include
the categories set forth on Schedule 5.7 and will be provided to the other
Parent no later than five months after the date hereof.
 
SECTION 6.  
SPECIAL COVENANTS AND AGREEMENTS

 
6.1 Consents
 
(a) As promptly as practicable after the date hereof, the appropriate Party
shall request the Consent of such Third Parties whose Consents are
required.  Each Party shall thereafter use its commercially reasonable efforts
to obtain those Consents that it requires as expeditiously as possible, subject
to the other provisions of this Section 6.1.  No Consent shall include any
material adverse change to the terms of any Assumed Contract unless otherwise
agreed to in writing by the other Parent.  If notwithstanding its commercially
reasonable efforts, any Party is unable to obtain any Consent for which it shall
be responsible (or is unable to cause its Affiliates to obtain any such
Consent), such Party shall not be liable for any breach of covenant (but such
members of the other Contributing Group shall have no obligation to effect the
Closing unless the condition set forth in, as the case may be, Section 7.1(c) or
Section 7.2(c) hereof shall have been satisfied) except as set forth in
Sections 6.9 and 9.2.  Nothing herein shall require the expenditure or payment
of any funds (other than in respect of normal and usual filing fees and such
Party’s attorneys fees, other normal costs of doing business or costs described
in Section 6.1(c)) or the giving of any other consideration by such Party in
order to obtain any Consent.
 
(b) To the extent requested by the Parent of the other Contributing Group, each
Party agrees to cooperate fully with the members of the other Contributing Group
in obtaining any necessary Consents, but such cooperating Party will not be
required (i) to make any payment to any Person from whom such Consent is sought
or (ii) to accept any material adverse changes in, or the imposition of any
material adverse condition to, any License or any Assumed Contract as a
condition to obtaining any Consent.  To the extent requested by the Parent of
the Contributing Group responsible for obtaining any Consent, the Parties shall
jointly participate in negotiations with Third Parties with respect to the
Consents.  Each Party shall not, and shall cause its Affiliates not to, without
the prior written consent of the other Parent (which may be withheld at such
Parent’s sole discretion), seek amendments or modifications to the Licenses or
other Assumed Contracts which would reasonably be expected to delay or prevent
obtaining any Consents necessary for the Closing.
 
(c) Each Party shall bear any costs required to remedy any item of noncompliance
by such Person or any member of its Contributing Group with the terms of its
Contracts and Licenses.  The Company shall bear any costs arising with respect
to the performance of the Contracts and Licenses post-Closing (other than any
costs arising as a result of noncompliance by any other Party or a member of its
Contributing Group) in accordance with the terms of any such Contracts or
Licenses (including any amendments or modifications) executed or assumed by the
Company.
 
 
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(d) Each Party shall promptly furnish to any Third Party such accurate and
complete information regarding the Company and such Party, including financial
information concerning such Party and other information relating to the wireless
and other operations of such Party (other than information which such Party
reasonably deems to be proprietary), as such Third Party may reasonably require
in connection with obtaining any Consent, and each Party shall promptly furnish
to the other Party needing such Consent, a copy of any such information provided
to such Third Party.  Each Party shall ensure that its appropriate officers and
employees shall be available to attend any scheduled hearings or meetings in
connection with obtaining such Consent.
 
(e) The Parties shall cooperate in seeking, and use commercially reasonable
efforts to obtain, a declaratory ruling, or its functional equivalent, from the
FCC or other Governmental Authority as the FCC may direct, confirming that:
 
(1) The Company’s assets constitute the “own facilities” of Alaska
Communications Systems Holdings, Inc. or one or more of its wholly-owned
subsidiaries, and GCI Communication Corp., respectively, for the purposes of
47 U.S.C. § 214(e)(1)(A), and 47 C.F.R. § 54.201(d)(1);
 
(2) Alaska Communications Systems Holdings, Inc. and GCI Communication Corp. may
remit all CETC Cash Flow to the Company in order to comply with 47 U.S.C.
§ 254(e)’s requirement that “a carrier that receives such support shall use that
support only for the provision, maintenance, and upgrading of facilities and
services for which the support is intended;” and
 
(3) Access by Alaska Communications Systems Holdings, Inc. or one or more of its
wholly-owned subsidiaries, and GCI Communication Corp., respectively, to the
Company’s facilities and services under the Facilities and Network Use Agreement
constitutes “access to spectrum” in areas in which the Company holds Licenses
for the purpose of 47 C.F.R. §54.1003(b).
 
6.2 Cooperation
 
The Parties shall cooperate fully with each other and their respective counsel
and accountants in connection with any actions required to be taken as part of
their respective obligations under this Agreement, and each Party shall execute
such other documents as may be reasonably necessary to the implementation and
consummation of this Agreement, and otherwise shall use its commercially
reasonable efforts in good faith to do all things necessary, proper or advisable
in order to consummate the Transactions in the most expeditious manner
practicable (including using commercially reasonable efforts to cause the
conditions to Closing set forth in Section 7 for which such Party is responsible
to be satisfied as soon as reasonably practicable) and to fulfill its
obligations hereunder.  Without limiting the foregoing, if a Governmental
Authority requires an arrangement to be addressed through another form of
agreement that requires Governmental Consent, or asserts that an arrangement
requires a Governmental Consent the Parties did not believe was required, the
Parties agree to work in good faith to obtain that Consent.
 
 
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6.3 Taxes, Fees and Expenses
 
(a) Each Parent shall hold the Company harmless from any liability for payment
or otherwise of any Taxes, without duplication, (i) of such Parent or its
Affiliates or (ii) relating to the operation of such Parent’s or Affiliates’
Activities or the ownership of its Assets for any Tax period (or portion
thereof) ending on or prior to the Closing Date (for purposes of this
clause (ii), all real property Taxes, personal property Taxes and similar
ad valorem obligations levied with respect to the Assets for a Tax period that
includes (but does not end on) the Closing Date shall be apportioned between
such Parent and the Company based upon the number of days of such period (which
period shall include the Closing Date) included in the pre-Closing Tax period
and the number of days of such Tax period after the Closing Date).
 
(b) Each Party shall pay, or shall reimburse the Company (to the extent the
Company shall have paid) for, all sales, use, transfer, and recordation and
documentary Taxes, if any, arising out of the transfer by such Person of its
Assets to the Company pursuant to this Agreement.  Each Parent shall pay, or
shall reimburse the other Parent (to the extent such other Parent or its
Affiliates shall have paid) for, 50 percent of all sales, use, transfer, and
recordation and documentary taxes and fees, if any, arising out of the transfer
by ACS of the Purchased Assets to GCI Member.
 
(c) Upon receipt of any bill for real or personal property Taxes or similar
ad valorem Taxes relating to the ACS Assets or the GCI Assets, or upon the
filing of any Tax Return with respect to any such ad valorem Taxes, ACS or GCI,
as applicable, and the Company shall present a statement to the other setting
forth the amount of such Taxes that is attributable to the portion of the
applicable Tax period that ended on the Closing Date, with such supporting
evidence as is reasonably necessary to calculate such prorated amount.  The
prorated amount shall be paid by the party owing it to the other within 30 days
after delivery of such statement.  Any payment required under this
Section 6.3(c) and not made within 30 days of delivery of the relevant statement
shall bear interest at LIBOR plus 2.5% until fully paid.
 
(d) Except as otherwise provided in this Agreement, each Member shall pay its
own attorney’s fees and other expenses incurred in connection with the
negotiation, authorization, preparation, execution, and performance of this
Agreement, provided that ACS shall pay 1/3rd and GCI shall pay 2/3rd of any
filing fee with respect to the Transactions related to the HSR Act.
 
6.4 Brokers
 
Each Party represents and warrants that, except as set forth in Schedule 6.4,
neither it nor any Person acting on its behalf has incurred any liability for
any finders’ or brokers’ fees or commissions in connection with the
Transactions.
 
6.5 Employee Matters
 
(a) The Company shall not be obligated to hire any employee of any
Party.  Nothing in this Agreement is intended to confer upon any employee of any
Party or its Affiliates or such employee’s legal representative or heirs any
rights as a third-party beneficiary or otherwise or any remedies of any kind
whatsoever under or by reason of this Agreement, or the Transactions, including
any rights of employment or continued employment.  All rights and obligations
created by this Agreement are solely among the Parties.
 
 
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(b) Each Member shall retain all liabilities with respect to any employees
terminated by such Member at or prior to the Effective Time.
 
(c) The Parties shall comply, as necessary, with the provisions of the Worker
Adjustment and Retaining Notification Act, as amended, 29 U.S.C. §2101, et seq.
(the “WARN Act”), as it relates to the Transactions, including providing all
affected employees and other necessary persons with any notice that may be
required under the WARN Act, and shall indemnify and hold harmless the Company
from and against all losses arising from any noncompliance with the WARN Act.
 
(d) Each Parent shall indemnify and hold harmless the Company following the
Closing from and against any liability the Company may incur under COBRA as a
successor to the Activities of such Parent.
 
6.6 Title Policies
 
With respect to each fee estate in Real Property that is owned by any member of
a Contributing Group, such Person shall, at its expense, deliver to the other
Parent prior to Closing a commitment for title insurance, in form and substance
reasonably satisfactory to the Company and the other Parent, showing no Liens
except for Permitted Liens.
 
6.7 Risk of Loss
 
The risk of any loss, damage or impairment, confiscation or condemnation of any
Person’s Assets from any cause whatsoever shall be borne by such Person at all
times prior to the completion of the Closing as and to the extent provided in
Section 10.  In the event of any loss, damage or impairment, confiscation or
condemnation, the proceeds of any claim for loss payable under any insurance
policy, judgment or award with respect thereto shall be applied by such Person
to repair, replace or restore such Assets to their prior condition as soon as
reasonably practicable after such loss, impairment, condemnation or
confiscation.
 
6.8 Post-Closing Access to Information
 
Following the Closing for a period of 24 months, each Party (i) shall allow the
Company and its authorized representatives reasonable access, on reasonable
notice and at the Company’s expense during normal business hours, to such
Party’s books and records, for the purpose of audit, inspection or investigation
relating to the business, tax and financial affairs of the Company as well as to
any third-party claims made against the Company, relating to or arising from the
acquisition, ownership or conduct of the operations of such Party’s Assets or
Activities during the time period prior to Closing, and (ii) shall furnish or
cause to be furnished to the Company or its authorized representatives all
information with respect to the Assets and Activities of such Person as the
Company may reasonably request.  Any such audit, investigation or request for
information shall be conducted in such manner as not to interfere unreasonably
with such Person’s then-ongoing business.
 
6.9 Post-Closing Consents and Subsequent Transfers
 
In the event that any Party shall be unable to obtain prior to Closing any
Consent required by such Party or its Affiliates to assign any of the Licenses
or Assumed Contracts to be transferred by such Person to the Company, the
Company and the Members agree that at the option of the Member not affiliated
with such non-performing Party, either (1) such Member shall waive such Consent
as a precondition to assignment and such License or Assumed Contract shall be
assigned by such Member to the Company, or (2) such License or Assumed Contract
to which such Consent relates shall not be assigned and (i) the Person required
to obtain such Consent shall cause such License or Assumed Contract to remain in
effect and shall use its commercially reasonable efforts to give the Company the
benefit of such License or Assumed Contract to the same extent as if it had been
assigned, and the Company shall perform such Person’s obligations under such
License or Assumed Contract relating to the benefit obtained by the Company, and
(ii) the Person that was required to obtain such Consent and the Company shall
continue to cooperate to try to obtain such Consent as soon as practicable after
Closing, with the provisions of Section 6.1 continuing to apply to such
Consent.  Upon the subsequent receipt of any such Consent to transfer any such
License or Assumed Contract, or upon the subsequent waiver by the non-affiliated
Member of the requirement that such Consent be obtained, such License or Assumed
Contract shall be promptly assigned to the Company.
 
 
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6.10 Confidentiality/Press Releases
 
Each Parent will hold, and will cause its Affiliates and its and their officers,
directors, employees, lenders, accountants, representatives, agents, consultants
and advisors to hold, in confidence all information (other than such information
as may be publicly available) furnished by, or obtained from, the other Parent
and its Affiliates (“Provider”) to such Parent and its Affiliates (“Receiver”)
in connection with the Transactions, as well as all information concerning
Provider, its Affiliates or its assets or Activities contained in any analyses,
compilations, studies or other documents prepared by or on behalf of Receiver
based on information provided by, or obtained from, Provider (collectively, the
“Information”) in the manner set forth in the Existing NDA or, following the
Closing, Section 16.20 of the Operating Agreement.
 
(a) If the Transactions are not consummated, each Party, as Receiver, agrees
that:  (i) the Information, except for that portion thereof which consists of
analyses, compilations, studies or other documents prepared by or on behalf of
Receiver, will be returned to Provider immediately upon Provider’s request
therefor; and (ii) that portion of the Information which consists of analyses,
compilations, studies or other documents prepared by or on behalf of Receiver
will be destroyed by Receiver.  Notwithstanding the foregoing, the Receiver may
retain data or electronic records containing Information (i) for the legal
department of the Receiver for compliance, evidentiary or archival purposes and
(ii) for the purposes of backup, recovery, contingency planning or business
continuity planning so long as such data or records are not accessible in the
ordinary course of business and are not accessed except as required for backup,
recovery, contingency planning or business continuity purposes.
 
(b) Each Parent and the Company shall consult with each other before issuing,
and provide each other the opportunity to review and comment upon, any press
release or other public statements with respect to the Transactions and shall
not issue any such press release or make any such public statement without the
prior written consent of the other Parent, except with respect to (i) any
disclosures to any Governmental Authority which it is required to make under any
Legal Requirement (including with respect to any such Person’s public reporting
obligations under applicable securities laws), or (ii) filing this Agreement
with, or disclosing the terms of this Agreement to, any institutional lender to
such Person or any of its Affiliates or potential investor in such Person or any
of its Affiliates.  The Parties shall cooperate to issue a press release
publicly announcing this Agreement and the Transactions and shall mutually agree
upon the timing and contents of such press release.  Notwithstanding the
foregoing, any Party may without consulting with any other Party make additional
announcements that are substantially similar in form as the mutually agreed upon
press release referenced in the prior sentence.
 
 
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6.11 Assignments to Members
 
ACS shall contribute and cause each of its Affiliates to contribute all of the
ACS Assets to the ACS Member prior to the Closing.  GCI shall contribute and
cause each of its Affiliates to contribute all of the GCI Assets to GCI Member
prior to or at the Closing.
 
6.12 Bulk Sales Law
 
Each Member shall cooperate with the Company and the other Member, be liable
for, and hold the Company harmless with respect to, compliance or failed
compliance with any bulk sales or other law, including with respect to Taxes,
that if not complied with would create successor or derivative liability by
operation of law, if applicable, of the states in which its Assets are located
and its Activities are conducted.
 
6.13 HSR Act
 
(a) Each Parent shall as promptly as practicable, but in no event later than
five Business Days following the execution and delivery hereof, file with the
United States Federal Trade Commission (the “FTC”) and the United States
Department of Justice (the “Antitrust Division”) the notification and report
form, if any, required for the Transactions and any supplemental information
requested in connection therewith pursuant to the HSR Act.  Any such
notification and report form and supplemental information shall be in
substantial compliance with the requirements of the HSR Act.  To the extent
permissible under applicable Legal Requirements, each Parent shall obtain all
requisite approvals, clearances and authorizations for the Transactions under
the HSR Act or other Antitrust Laws and use its reasonable best efforts to do
each of the following with respect to matters relating to Antitrust
Laws:  (i) cooperate reasonably in all respects with the other Parent in
connection with any filing or submission and in connection with any
investigation or other inquiry, including any proceeding initiated by a private
party, (ii) promptly inform the other Parent of any communication received by
such Party from, or given by such Party to, the Antitrust Division, the FTC or
any other Governmental Authority and of any material communication received or
given in connection with any proceeding by a private party, in each case
regarding any of the Transactions, (iii) permit the other Parent, or the other
Parent’s legal counsel, to review any material communication given by it to, and
consult with each other in advance of any meeting or conference with, the
Antitrust Division, the FTC or any such other Governmental Authority or, in
connection with any proceeding by a private party, with any other Person,
(iv) give the other Parent the opportunity to attend and participate in such
meetings and conferences to the extent allowed by applicable Legal Requirements
or by the applicable Governmental Authority, (v) in the event one Parent is
prohibited by applicable Legal Requirements or by the applicable Governmental
Authority from participating in or attending any meetings or conferences, keep
the other promptly and reasonably apprised with respect thereto, (vi) cooperate
reasonably in the filing of any memoranda, white papers, filings,
correspondence, or other written communications explaining or defending the
Transactions, articulating any regulatory or competitive argument, and/or
responding to requests or objections made by any Governmental Authority and
(vii) furnish the other Parent with copies of all correspondence, filings, and
written communications between the Parent and any Governmental Authority with
respect to this Agreement and the Transactions, except that any materials
containing valuation information, internal financial information, or
competitively sensitive information may be designated for limited distribution
as appropriate.  Either Parent may, as it deems advisable and necessary,
reasonably designate any competitively sensitive material provided to the other
Parent under this Section 6.13(a) as “outside counsel only.”  Such materials and
the information contained therein shall be given only to the outside legal
counsel of the recipient and will not be disclosed by such outside counsel to
employees, officers, or directors of the recipient, unless express written
permission is obtained in advance from the source of the materials.
 
 
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(b) Each Parent will use reasonable best efforts to resolve any objections that
may be asserted by any Person with respect to the Transactions under any
Antitrust Law.  In connection with the foregoing, if any proceeding is
instituted or threatened to be instituted challenging any Transaction as
violative of any Antitrust Law, each Parent will cooperate in good faith in all
respects with each other and use reasonable best efforts to contest and resist
any such proceeding and to have vacated, lifted, reversed or overturned any
decree, judgment, injunction or other order, whether temporary, preliminary or
permanent, that is in effect and that prohibits, prevents or restricts
consummation of the Transactions, including by pursuing all available avenues of
administrative and judicial appeal, unless by mutual agreement the Members
decide that litigation is not in their respective best interests.  Each Parent
shall use reasonable best efforts to take such action as may be required to
cause the expiration of the notice periods under the HSR Act or other Antitrust
Laws with respect to such Transactions as promptly as possible after the
execution of this Agreement.  In connection with and without limiting the
foregoing, each Parent shall use reasonable best efforts to take promptly any
and all steps necessary to avoid or eliminate each and every impediment under
any Antitrust Laws that may be asserted by any Governmental Authority, so as to
enable the Parties to close the Transactions as expeditiously as possible.
 
6.14 Network Capacity and Maintenance
 
All network capacity included in the Contributed Assets shall be contributed
pursuant to the IRU Contribution Agreement and maintenance shall be provided in
accordance with the Joint Maintenance Agreement.  The remedies set forth in such
agreements shall be the sole and exclusive remedies for breaches of any
representations, warranties and covenants with respect to such network capacity
and the maintenance thereof.
 
6.15 Payment of CETC Amounts
 
After the Closing, each Party shall promptly deliver, and cause its Affiliates
to promptly deliver, to the Company an amount equal to all CETC Cash Flow as and
when received by it and its Affiliates for support and maintenance of the
Company’s network.  Each Party shall take all commercially reasonable actions
necessary to assure continued receipt of CETC Cash Flow, including the continued
filing of high cost line counts and any other reports required by the FCC or
USAC as a condition of receipt of the CETC Cash Flow.  In the event that the FCC
and/or USAC do not agree to disburse the CETC Cash Flow directly to the Company,
each Party shall maintain with USAC separate Service Area Codes for Wireless
services and will establish financial accounts, with appropriate instructions,
such that any payments of CETC Cash Flow received by a Contributing Group will
be automatically transferred to the Company.
 
 
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6.16 Agreed Tax Treatment; Allocation
 
(a) The Parties acknowledge and agree that, for U.S. federal income Tax purposes
and for the purpose of any corresponding state, local or foreign Taxes, (x) at
the Effective Time (i) ACS will be treated as having sold the Purchased Assets
to GCI in a fully taxable transaction prior to the consummation of the
transactions described in (ii) and (iii) below, (ii) ACS will be treated as
having contributed the ACS Assets (other than the Purchased Assets) to the
Company in exchange for (A) a membership interest in the Company as set forth
in, and in accordance with the terms of, the Operating Agreement, in a
transaction qualifying as a tax-free contribution described in Section 721(a) of
the Code, and (B) the assumption by the Company of the Assumed Liabilities
relating to the ACS Assets or the ACS Wireless Activities, and (iii) GCI will be
treated as having contributed the GCI Assets and the Purchased Assets to the
Company in exchange for (A) a membership interest in the Company as set forth
in, and in accordance with the terms of, the Operating Agreement, in a
transaction qualifying as a tax-free contribution described in Section 721(a) of
the Code and (B) the assumption by the Company of the Assumed GCI Liabilities
relating to the GCI Assets or the GCI Wireless Activities and (y) the Parties
shall report the transactions for U.S. federal and applicable state income Tax
purposes in a manner consistent with the above described treatment.
 
(b) The Parties agree that the Purchase Price (including the Assumed
Liabilities, if any, attributable to the Purchased Assets to the extent properly
taken into account for U.S. federal income tax purposes) shall be allocated
among the Purchased Assets in accordance with Code Section 1060 and the Treasury
regulations thereunder (and any similar provision of state, local or foreign
law, as appropriate) as shown on the allocation schedule (the “Allocation
Schedule”).  The Allocation Schedule shall be prepared by the Parties prior to
the Closing Date and shall be subject to mutual agreement by ACS and GCI.  ACS,
GCI, the Company and their Affiliates shall file all Tax Returns (including
Internal Revenue Service Form 8594) in a manner consistent with, and shall take
no position in any audit, proceeding or otherwise inconsistent with, the
Allocation Schedule.
 
6.17 Forwarding Inquiries and Payments; Collection of Accounts Receivable
 
(a) For a period of 12 months from the Closing Date, each Contributing Group
shall forward to the Company any e-mail, facsimile, postal mail or telephone
inquiries that such Contributing Group receives to the extent relating to its
Activities and not otherwise addressed pursuant to the GCI Services Agreement or
the ACS Services Agreement and shall promptly after the Closing Date file
complete and adequate forwarding notices with the postal officials and
appropriate telephone utilities provided by the Company for the forwarding to
the Company of all mail and telephone calls relating to the Assets or the
Activities.
 
(b) To the extent (i) either Contributing Group receives any payments in respect
of any of their portion of the ACS Assets or GCI Assets that relate to the
post-Closing operations of the Activities, such Contributing Group shall
promptly forward the same to the Company, or (ii) the Company receives any
payments in respect of any of the Excluded Assets, the Company shall promptly
forward the same to the appropriate Contributing Group, in each case to the
extent not otherwise addressed pursuant to this Agreement or the Ancillary
Agreements.  The Parties also agree to use commercially reasonable efforts to
coordinate the collection of the accounts receivable of the Activities that
constitute Excluded Assets and those that arise in connection with the
Activities after the Closing Date, including advance notice of any referral of
unpaid accounts receivable to a collection agency or the initiation of
litigation or other enhanced collection procedures.
 
 
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6.18 ICA Order
 
ACS shall as promptly as practicable, but in no event later than 60 days
following the execution and delivery hereof, file with the SEC an application
for an order  to be issued by the SEC either (i) pursuant to Section 3(b)(2) of
the Investment Company Act, declaring that as a result of and after giving
effect to the Transactions, ACS is primarily engaged in a business other than
that of investing, reinvesting, owning, holding or trading in securities, or,
alternatively, (ii) pursuant to Section 6(c) of the Investment Company Act
granting ACS an exemption from all provisions of the Investment Company
Act.  ACS will use reasonable best efforts to obtain the ICA Order as soon as
reasonably practicable after the date hereof.
 
6.19 Transaction Opinion
 
GCI shall use reasonable best efforts to cause the Transaction Opinion to be
issued so as not to delay the Closing.  Such efforts shall include entering into
an engagement letter as soon as reasonably practicable with a nationally
recognized investment banking or valuation firm, paying any applicable fees,
providing all necessary information to such firm and requesting the Transaction
Opinion from such firm.
 
SECTION 7.  
CONDITIONS TO THE OBLIGATIONS TO CLOSE

 
7.1 Conditions to Obligations of ACS Contributing Group
 
All obligations of ACS, ACS Member and the Company at the Closing hereunder are
subject to the satisfaction, on or before the Closing Date, of each and every
one of the following conditions, all or any of which may be waived, in whole or
in part, by ACS for purposes of consummating such transactions, but without
prejudice to any other right or remedy which ACS or ACS Member may have
hereunder as a result of any misrepresentation by, or breach of any covenant or
warranty of, GCI or GCI Member contained in this Agreement or any other
certificate or instrument furnished by GCI or GCI Member hereunder:
 
(a) Representations and Warranties.  All representations and warranties of each
of GCI and GCI Member in this Agreement shall be true and correct in all
respects to the extent qualified by materiality and in all material respects to
the extent not so qualified at and as of the Closing Date as though such
representations and warranties were made at and as of such time, except insofar
as any such representation or warranty is made as of the date of this Agreement
or any other specified date (in which case it shall be true and correct in all
respects to the extent qualified by materiality and in all material respects to
the extent not so qualified as of the date of this Agreement or such other
specified date).  ACS and ACS Member shall have received a certificate signed by
authorized officers of GCI and GCI Member to the effect of the preceding
sentence.
 
(b) Covenants and Conditions.  Each of GCI and GCI Member shall have in all
material respects performed and complied with all covenants, agreements, and
conditions required by this Agreement to be performed or complied with by it
prior to or on the Closing Date.  ACS and ACS Member shall have received a
certificate signed by authorized officers of GCI and GCI Member to the effect of
the preceding sentence.
 
 
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(c) Consents.  Each of the Material Consents to be obtained by a member of the
GCI Contributing Group, in form and substance reasonably acceptable to ACS,
shall have been duly obtained and delivered to ACS with, as a result of
obtaining such Consent, no material adverse change having been made in the terms
of any License or Assumed Contract that is the subject of such Material Consent.
 
(d) Licenses.  No FCC Licenses or ETC Designations relating to the GCI Wireless
Activities shall have been revoked, canceled, expired without renewal or
suspended and no Proceeding shall be pending the effect of which is reasonably
likely to be to revoke, cancel, fail to renew, or suspend any FCC Licenses or
ETC Designations relating to the GCI Wireless Activities.
 
(e) Membership Documents.  The Operating Agreement and the other Ancillary
Agreements shall have been duly executed and delivered by GCI, GCI Member and
the other parties thereto, as applicable (other than ACS and ACS Member), and
all such parties shall have become parties to the Arbitration Agreement pursuant
to a joinder agreement in form and substance reasonably acceptable to the
Parties, and each Ancillary Agreement shall constitute the legal, valid, and
binding obligation of each of such parties, enforceable against it in accordance
with its terms, except to the extent such enforceability may be limited by the
Enforceability Exceptions.
 
(f) Lien Searches.  Any lien searches that shall have been obtained by ACS, at
its expense, shall disclose no Liens on any material GCI Assets other than
Permitted Liens.
 
(g) Governmental Consents.  All waiting periods under the HSR Act applicable to
this Agreement or the Transactions shall have expired or been terminated and any
Governmental Consents shall have been obtained.
 
(h) Material Adverse Change.  GCI and its Affiliates shall not have suffered any
material adverse change in the GCI Assets or the GCI Wireless Activities, its
liabilities, condition (financial or otherwise) or results of operations,
including as a result of any damage, destruction or loss affecting the GCI
Assets, other than any material adverse change resulting from (i) general
economic conditions, (ii) changes adversely affecting the wireless industry in
which GCI operates (so long as no Parent is disproportionately affected
thereby), (iii) the negotiation, announcement, execution, delivery, consummation
or pendency hereof or of the Transactions, any litigation relating to this
Agreement or the Transactions or any action or inaction by GCI or its Affiliates
contemplated by or required by this Agreement, (iv) changes in accounting
principles, (v) matters disclosed or referred to in the Schedules, or
(vi) attack, outbreak, hostility, terrorist activity, act or declaration of war
or act of public enemies or other geopolitical event (so long as no Parent is
disproportionately affected thereby).
 
(i) Governmental Orders.  No Governmental Authority shall have enacted, issued,
promulgated, enforced or entered any order, writ, judgment, injunction, decree,
stipulation, determination or award that is in effect and has the effect of
making any material aspect of the Transactions illegal, otherwise restraining or
prohibiting consummation of any material aspect of the Transactions or causing
any material aspect of the Transactions to be rescinded following completion
thereof.
 
 
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(j) Deliveries.  GCI and GCI Member shall have made or stand willing and able to
make all the deliveries to the Company set forth in Section 8.2.
 
(k) Absence of Proceedings.  There shall not be pending or threatened any
Proceeding (i) challenging or seeking to restrain or prohibit the Transactions
or seeking to obtain from ACS or ACS Member or any of their respective
Affiliates, in connection with the Transactions, any damages that are material
in relation to ACS or ACS Member (as the case may be) taken as whole,
(ii) seeking to prohibit or limit the ownership or operation by the Company of
any material portion of the Activities or the Assets or to compel ACS, ACS
Member or the Company to dispose of or hold separate any material portion of the
Activities or the Assets, in each case as a result of the Transactions, or
(iii) seeking to impose any conditions or restrictions that, individually or in
the aggregate, in the reasonable judgment of ACS or ACS Member, would materially
impair (or would reasonably be expected to materially impair) the ability of ACS
or ACS Member to consummate the Transactions or would reasonably be expected to
have a material adverse effect on the economic benefits to ACS or ACS Member
arising therefrom.
 
(l) Bankruptcy Event.  No Bankruptcy Event shall have occurred and be continuing
with respect to any member of the GCI Contributing Group.
 
(m) Investment Company Act.                                           The ICA
Order shall have been granted to ACS.
 
(n) Transaction Opinion.                                           GCI shall
have received the Transaction Opinion.
 
(o) Exhibits.  All exhibits to this Agreement, the Ancillary Agreements, the
Pre-Closing Agreements and the Operating Agreement that were not completed at
the execution of this Agreement shall have been completed to the reasonable
satisfaction of ACS.
 
7.2 Conditions to Obligations of GCI Contributing Group
 
All obligations of GCI and GCI Member at the Closing hereunder are subject to
the satisfaction, on or before the Closing Date, of each and every one of the
following conditions, all or any of which may be waived, in whole or in part, by
GCI for purposes of consummating the Transactions, but without prejudice to any
other right or remedy which GCI or GCI Member may have hereunder as a result of
any misrepresentation by, or breach of any covenant or warranty of, ACS or ACS
Member contained in this Agreement or any other certificate or instrument
furnished by ACS, ACS Member or the Company hereunder:
 
(a) Representations and Warranties.  All representations and warranties of each
of ACS and ACS Member in this Agreement shall be true and correct in all
respects to the extent qualified by materiality and in all material respects to
the extent not so qualified at and as of the Closing Date as though such
representations and warranties were made at and as of such time, except insofar
as any such representation or warranty is made as of the date of this Agreement
or any other specified date (in which case it shall be true and correct in all
respects to the extent qualified by materiality and in all material respects to
the extent not so qualified as of the date of this Agreement or such other
specified date).  GCI and GCI Member shall have received a certificate signed by
authorized officers of ACS and ACS Member to the effect of the preceding
sentence.
 
 
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(b) Covenants and Conditions.  Each of ACS and ACS Member shall have in all
material respects performed and complied with all covenants, agreements, and
conditions required by this Agreement to be performed or complied with by it
prior to or on the Closing Date.  GCI and GCI Member shall have received a
certificate signed by authorized officers of ACS and ACS Member to the effect of
the preceding sentence.
 
(c) Consents.  Each of the Material Consents to be obtained by a member of the
ACS Contributing Group, in form and substance reasonably acceptable to GCI,
shall have been duly obtained and delivered to GCI with, as a result of
obtaining such Consent, no material adverse change having been made in the terms
of the License or Assumed Contract that is the subject of such Material Consent.
 
(d) Licenses.  No FCC Licenses or ETC Designations relating to the ACS Wireless
Activities shall have been revoked, cancelled, expired without renewal or
suspended and no Proceeding shall be pending the effect of which is reasonably
likely to be to revoke, cancel, fail to renew, or suspend any FCC Licenses or
ETC Designations relating to the ACS Wireless Activities.
 
(e) Membership Documents.  The Operating Agreement and the other Ancillary
Agreements shall have been duly executed and delivered by ACS, ACS Member and
the other parties thereto, as applicable (other than GCI and GCI Member), and
all such parties shall have become parties to the Arbitration Agreement pursuant
to a joinder agreement in form and substance reasonably acceptable to the
Parties, and each Ancillary Agreement shall constitute the legal, valid, and
binding obligation of each of such parties enforceable against it in accordance
with its terms, except to the extent such enforceability may be limited by the
Enforceability Exceptions.
 
(f) Lien Searches.  Any lien searches that shall have been obtained by GCI, at
its expense, shall disclose no Liens on any material ACS Assets other than
Permitted Liens.
 
(g) Governmental Consents.  All waiting periods under the HSR Act applicable to
this Agreement or the Transactions shall have expired or been terminated and any
Governmental Consents shall have been obtained.
 
(h) Material Adverse Change.  ACS and its Affiliates shall not have suffered any
material adverse change in the ACS Assets or the ACS Wireless Activities, its
liabilities, condition (financial or otherwise) or results of operations,
including as a result of any damage, destruction or loss affecting the ACS
Assets, other than any material adverse change resulting from (i) general
economic conditions, (ii) changes adversely affecting the wireless industry in
which ACS operates (so long as no Parent is disproportionately affected
thereby), (iii) the negotiation, announcement, execution, delivery, consummation
or pendency hereof or of the Transactions, any litigation relating to this
Agreement or the Transactions or any action or inaction by ACS or its Affiliates
contemplated by or required by this Agreement, (iv) changes in accounting
principles, (v) matters disclosed or referred to in the Schedules, or
(vi) attack, outbreak, hostility, terrorist activity, act or declaration of war
or act of public enemies or other geopolitical event (so long as no Parent is
disproportionately affected thereby).
 
 
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(i) Governmental Orders.  No Governmental Authority shall have enacted, issued,
promulgated, enforced or entered any order, writ, judgment, injunction, decree,
stipulation, determination or award that is in effect and has the effect of
making the Transactions illegal, otherwise restraining or prohibiting
consummation of such Transactions or causing such Transactions to be rescinded
following completion thereof.
 
(j) Deliveries.  ACS and ACS Member shall have made or shall stand willing and
able to make all the deliveries to the Company set forth in Section 8.2.
 
(k) Absence of Proceedings.  There shall not be pending or threatened any
Proceeding (i) challenging or seeking to restrain or prohibit the Transactions
or seeking to obtain from GCI or GCI Member or any of their respective
Affiliates, in connection with the Transactions, any damages that are material
in relation to GCI or GCI Member (as the case may be) taken as whole,
(ii) seeking to prohibit or limit the ownership or operation by the Company of
any material portion of the Activities or the Assets or to compel GCI, GCI
Member or the Company to dispose of or hold separate any material portion of the
Activities or the Assets, in each case as a result of the Transactions, or
(iii) seeking to impose any conditions or restrictions that, individually or in
the aggregate, in the reasonable judgment of GCI or GCI Member, would materially
impair (or would reasonably be expected to materially impair) the ability of GCI
or GCI Member to consummate the Transactions or would reasonably be expected to
have a material adverse effect on the economic benefits to GCI or GCI Member
arising therefrom.
 
(l) Bankruptcy Event.  No Bankruptcy Event shall have occurred and be continuing
with respect to any member of the ACS Contributing Group.
 
(m) Transaction Opinion.  GCI shall have received the Transaction Opinion.
 
(n) Exhibits.  All exhibits to this Agreement, the Ancillary Agreements, the
Pre-Closing Agreements and the Operating Agreement that were not completed at
the execution of this Agreement shall have been completed to the reasonable
satisfaction of GCI.
 
SECTION 8.  
CLOSING AND CLOSING DELIVERIES

 
8.1 Time and Place of Closing
 
Subject to (i) the satisfaction or, to the extent permissible by Legal
Requirements, waiver (by the Parent for whose benefit the closing condition is
imposed), of the closing conditions described in Section 7, and (ii) the
provisions of Section 9 hereof, the closing of the Transactions (the “Closing”)
will take place at the offices of GCI, 2550 Denali Street, Suite 1000,
Anchorage, Alaska, at 10:00 a.m., local time, on the fifth Business Day
following the date on which each of the conditions set forth in Section 7 is
satisfied or waived by the Party entitled to waive such condition (except for
any conditions that by their nature can only be satisfied on the Closing Date,
but subject to the satisfaction of such conditions or waiver by the Party
entitled to waive such conditions) (the “Closing Date”); or on such other date
or other location as shall otherwise be mutually agreed upon by the Parents.
 
 
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8.2 Deliveries by the Members
 
Prior to or on the Closing Date, and subject to the terms of Section 6.10
hereof, the appropriate Member shall deliver to the Company the following, in
form and substance reasonably satisfactory to the other Member and its counsel:
 
(a) Transfer Documents.  Duly executed Instruments of Assignment and duly
executed bills of sale, deeds, motor vehicle titles, assignments of the Licenses
and other Assumed Contracts and such other transfer documents which shall be
sufficient to vest good and marketable title to such Member’s Assets in the name
of the Company, free and clear of any Liens (except for the Permitted Liens);
 
(b) Consents.  The original of each Consent which has been obtained relating to
such Contributing Group;
 
(c) Secretary’s Certificate.  A certificate dated as of the Closing Date,
executed by the Secretary or Assistant Secretary of each of such
Member:  (i) certifying that the resolutions, as attached to such certificate,
were duly adopted by such Person’s board of directors and shareholders (if
required), or managers and members (if required), as applicable, authorizing and
approving the execution of this Agreement and the consummation of the
Transactions and that such resolutions remain in full force and effect; and
(ii) providing, as attachments thereto, such Person’s articles of incorporation
or other organizational documents and a certificate of good standing certified
by an appropriate state official, and, if appropriate, certificates of
qualification as a foreign corporation certified by an appropriate state
official of those states in which such Person conducts it Activities, all
certified by such state officials as of a date not more than 20 days before the
Closing Date and by such Person’s Secretary or Assistant Secretary as of the
Closing Date, and a copy of such Person’s bylaws or operating agreement, as
applicable, certified by such Person’s Secretary or Assistant Secretary as of
the Closing Date;
 
(d) Title Insurance on Fee Estates.  A commitment for an owner’s title insurance
policy, in customary form for commercial property in such location, obtained by
such Member at its expense, insuring the Company’s fee simple title in any fee
estates included in must Member’s Real Property, in an amount equal to the fair
market value of such real property, subject only to Permitted Liens, or any
Liens with respect to which such Member shall agree to indemnify the Company,
with the final title insurance policy being delivered as soon as practicable
after the Closing;
 
(e) Contracts, Activities Records, Etc.  Promptly after Closing, copies of all
Licenses and Assumed Contracts relating to such Member or its Contributing
Group, and all files and records included in such Member’s Assets; and
 
(f) Operating Agreement.  The Operating Agreement, and any other Ancillary
Agreements to which such Member is specified to be a party, duly executed by
such Member.
 
 
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8.3 Deliveries by the Company
 
On the Closing Date, and subject to the terms of Section 6.10 hereof, the
Company shall deliver to the Members the following, in form and substance
reasonably satisfactory to the Members and their counsels:
 
(a) Assumption Agreements.  Duly executed Instruments of Assumption, pursuant to
which the Company shall assume and undertake to perform each Member’s
obligations arising after the Effective Time under the Licenses and Assumed
Contracts; and
 
(b) Loan Agreement.  The Loan Agreement, and any other Ancillary Agreements to
which the Company is specified to be a party, duly executed by the Company.
 
SECTION 9.  
RIGHTS OF THE COMPANY AND THE MEMBERS ON TERMINATION OR BREACH

 
9.1 Termination Rights
 
This Agreement shall automatically terminate on the date that is 120 days after
the date of this Agreement, if (i) the Closing has not occurred and (ii) all of
the 120 Day Consents have not been obtained.  This Agreement may be terminated
prior to the Closing:
 
(a) At any time by mutual written consent of both Parents;
 
(b) By either Parent if on and after the 121st day after the date of this
Agreement, the non-terminating Parent or any of its Affiliates has failed to
maintain in full force and effect any of its non-regulatory Material Consents
that it or any of its Affiliates has obtained; provided, however, that a Parent
shall not be permitted to terminate this Agreement pursuant to this
Section 9.1(b) if (i) the failure of the other Parent or any of its Affiliates
to maintain in full force and effect such Material Consent results from a
material breach by such terminating Parent or any of its Affiliates of any of
their representations, warranties, covenants or agreements contained herein or
in any Ancillary Agreement or (ii) the Parent seeking to terminate has failed to
maintain in full force and effect all of its non-regulatory Material Consents;
 
(c) By ACS if (A) there have been one or more breaches by GCI or the GCI Member
of any of their representations, warranties, covenants or agreements contained
herein or in any Ancillary Agreement that have not been waived by ACS and would
result in the failure to satisfy any of the conditions set forth in Section 7.1
(Conditions to Obligations of ACS Contributing Group) and such breaches have not
been cured within 10 days after written notice thereof has been received by GCI
or (B) any of the conditions set forth in Section 7.1 (Conditions to Obligations
of ACS Contributing Group) has become incapable of being satisfied on or before
the Outside Date and has not been waived by ACS; provided, in each case that ACS
and its Affiliates are not in material breach of any of their representations,
warranties, covenants or agreements contained herein or in any Ancillary
Agreement;
 
(d) By GCI if (A) there have been one or more breaches by ACS or the ACS Member
of any of their representations, warranties, covenants or agreements contained
herein or in any Ancillary Agreement that have not been waived by GCI and would
result in the failure to satisfy any of the conditions set forth in Section 7.2
(Conditions to Obligations of GCI Contributing Group) and such breaches have not
been cured within 10 days after written notice thereof has been received by ACS
or (B) any of the conditions set forth in Section 7.2 (Conditions to Obligations
of GCI Contributing Group) has become incapable of being satisfied on or before
the Outside Date and has not been waived by GCI; provided, in each case that GCI
and its Affiliates are not in material breach of any of their representations,
warranties, covenants or agreements contained herein or in any Ancillary
Agreement;
 
 
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(e) By either Parent if the terminating Parent’s board of directors has received
a Superior Proposal and such Parent has previously paid or pays no later than
three Business Days after such termination to the other Parent the Superior
Proposal Fee due under Section 9.2(b), and acceptance by the other Parent of the
Superior Proposal Fee shall constitute acceptance by it of the validity of any
termination of this Agreement under this Section 9.1(e);
 
(f) If the Closing hereunder has not taken place within 15 months and ten days
of the date of this Agreement (the “Outside Date”); provided, however, that a
Parent shall not be permitted to terminate this Agreement pursuant to this
Section 9.1(f) if the failure to consummate the Closing by such date results
from material breach by such Parent or any of its Affiliates of any of their
representations, warranties, covenants or agreements contained herein or in any
Ancillary Agreement.
 
In the event of termination by either Parent pursuant to this Section 9.1,
written notice thereof shall promptly be given to the other Parent, setting
forth the clause of Section 9.1 pursuant to which such Party is terminating and
the facts giving rise to such Party’s termination right in reasonable detail,
and this Agreement and the Transactions shall be terminated, without further
action by any Party.  Upon such termination:  (i) if no Party is in intentional
or willful material breach of any provision of this Agreement, the Parties shall
not have any further liability to each other except as set forth in Section 9.2
hereof; or (ii) except as set forth in Section 9.2(c), if any Party shall be in
intentional or willful material breach of any provision of this Agreement, the
other Parties shall have all rights and remedies available at law or equity.
 
9.2 Termination Fee
 
(a) If a Parent terminates this Agreement pursuant to Section 9.1(b), the
Parties agree that the terminating Parent shall have suffered a loss and value
of an incalculable nature and amount, unrecoverable in law, and the other Parent
shall pay to the terminating Parent a fee of $5 million in immediately available
funds by wire transfer no later than three Business Days after such termination.
 
(b) If a Parent terminates this Agreement pursuant to Section 9.1(e), the
Parties agree that the other Parent shall have suffered a loss and value of an
incalculable nature and amount, unrecoverable in law, and if the terminating
Parent is ACS, then ACS shall pay to GCI a fee of $20 million, or if the
terminating Parent is GCI, then GCI, shall pay to ACS a fee of $40 million (in
either case, the “Superior Proposal Fee”), in immediately available funds by
wire transfer no later than three Business Days after such termination or such
sale.
 
(c) Notwithstanding anything to the contrary in this Agreement, upon termination
of this Agreement pursuant to Section 9.1(b) or 9.1(e), a Parent’s right to
receive payment of the fees pursuant to this Section 9.2 shall be the sole and
exclusive remedy of such Parent and its Affiliates against the other Parent or
any of its Affiliates or any of their respective stockholders or representatives
for any and all Damages that may be suffered based upon, resulting from or
arising out of the circumstances giving rise to such termination, and upon
payment of the fees owed under this Section 9.2, none of the other Parties or
any of its Affiliates or any of their respective stockholders or representatives
shall have any further liability or obligation relating to or arising out of
this Agreement or the Transactions.
 
 
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9.3 Specific Performance
 
Prior to termination of this Agreement, in the event any Party refuses to
perform under the provisions of this Agreement, monetary damages alone will not
be adequate.  The other Parties shall therefore be entitled, in addition to any
other remedies that may be available, including money damages, to obtain
specific performance of the terms of this Agreement.  In the event of an action
by any of the Parties to obtain specific performance of the terms of this
Agreement, each other Party hereby waives the defense that there is an adequate
remedy at law.
 
SECTION 10.  
SURVIVAL OF REPRESENTATIONS AND WARRANTIES, AND INDEMNIFICATION

 
10.1 Affiliates
 
The indemnification rights provided in this Section 10 shall, in any instance,
extend to any Affiliate of either Parent although any indemnification claims by
such Persons shall be made by and through the Claimant.
 
10.2 Representations and Warranties
 
All representations, warranties and pre-closing covenants contained in this
Agreement shall be deemed continuing representations, warranties and covenants,
and shall survive the Closing Date for 18 months following the Closing Date with
respect to any claim by the Company or the other Parent or its Member as the
Person claiming indemnification (the “Claimant”) that a Parent or its Member
(the “Indemnifier”) has breached its representations or warranties contained in
this Agreement or failed to comply with its pre-closing covenants contained
herein; provided, however, that the representations and warranties set forth in
Section 4.3(b) regarding title of Assets shall survive for the period of the
applicable statute of limitations, and those set forth in Section 4.8
(Environmental Laws) relating to the pre-Closing period shall survive for five
years following the Closing Date.  In clarification of the foregoing, the
Parties confirm that the covenants herein to be performed following the Closing,
including under this Section 10, shall survive in each instance until 18 months
after the required performance thereof.  Any investigations by or on behalf of
any Party or Knowledge of any Party shall not constitute a waiver by such Party
of its rights to enforce any representation, warranty or covenant contained
herein of the other Parties.
 
10.3 Indemnification by Each Parent
 
Subsequent to the Closing, and regardless of any investigation made at any time
by or on behalf of the Company or a member of the other Contributing Group, or
any information or Knowledge the Company or any other Party may have, each
Parent and its Member as Indemnifier shall indemnify and hold the Company and
the other Parent and its Member, as Claimant, harmless against and with respect
to, and shall reimburse the Company and the other Parent and its Member for:
 
 
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(a) Any and all expenses, losses, liabilities or damages (“Damages”) resulting
from any untrue representation, breach of warranty or nonfulfillment of any
covenant contained herein by such Parent and its Member;
 
(b) Any and all obligations or liabilities of such Parent and its Member not
assumed by the Company pursuant to the terms hereof;
 
(c) Any and all Damages resulting from such Parent’s and its Contributing
Group’s Activities or the ownership or operation of its Assets prior to the
Effective Time (including, in the case of ACS, the Purchased Assets) including
any and all liabilities which relate to events occurring prior to the Effective
Time arising under its Licenses and Assumed Contracts (other than Damages
described in Section 10.3(e));
 
(d) (i) To the extent final and not subject to further appeal or requests for
waiver, any and all forfeitures, fines or monetary judgments (including
voluntary contributions to the U.S. Treasury paid pursuant to an FCC-approved
Consent Decree or other settlement to which the FCC is a party) in excess of
overpayments of High Cost Universal Service Support from the Universal Service
Fund (each a “Fine”) to the extent that any such Fine results from acts or
omissions of any member of the applicable Contributing Group, including but not
limited to deficiencies in the customer billing address, line type, line count
or other information provided by such Contributing Group, rather than from acts
or omissions by the Company;
 
(ii) To the extent final and not subject to further appeal or requests for
waiver, any decrease in CETC Cash Flow from a Contributing Group’s activities
due to failure to file any required reports necessary to maintain that
Contributing Group’s eligibility to receive High Cost Universal Service Support,
failure to cooperate with any FCC or USAC required audit, including a Payment
Quality Assurance review, or other investigation, or failure to respond to
lawful process, in each case before the closing, except to the extent that such
failure resulted from acts or omissions by the Company with respect to actions
required of the Company by Exhibit F to Facilities and Network Use Agreement;
 
(e) Any and all Damages resulting from any Environmental Claims (regardless of
whether any representation or warranty contained in Section 4.8 is incorrect)
related to the ownership or operation of such Parent’s or its Affiliate’s Real
Property (including, in the case of ACS, any Real Property included in the
Purchased Assets) prior to the Effective Time;
 
(f) Any and all Damages resulting from any claim that a collective bargaining
agreement or other contract with a Union is binding upon the Company or imposes
on the Company any duty to bargain with any Union to the extent such claim
relates to any collective bargaining agreement or other contract with a Union by
such Parent or any of its Affiliates; and
 
(g) Any and all actions, suits, proceedings, claims, demands, assessments,
judgments, reasonable costs and expenses, including reasonable legal fees and
expenses, incident to any of the foregoing or reasonably incurred in
investigating or attempting to avoid the same or to oppose the imposition
thereof, or in enforcing this indemnity.
 
 
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10.4 Indemnification by the Company
 
Subsequent to the Closing, the Company shall indemnify and hold each Member
harmless against and with respect to, and shall reimburse each Member for:
 
(a) Any and all Damages resulting from (i) the Company’s operation or ownership
of the Members’ Assets or Activities on and after the Effective Time, including
any and all liabilities arising under the Licenses and Assumed Contracts which
relate to events occurring after the Effective Time and (ii) Assumed
Liabilities;
 
(b) Any and all Damages resulting from the contribution to the Company by a
Member of any License or Assumed Contract prior to the receipt by such Member of
the Consent required for the assignment thereof, contingent upon such Consent
having been waived by the other Member as a precondition to such assignment;
 
(c) Any and all actions, suits, proceedings, claims, demands, assessments,
judgments, costs and expenses, including reasonable legal fees and expenses,
incident to any of the foregoing or incurred in investigating or attempting to
avoid the same or to oppose the imposition thereof, or in enforcing this
indemnity; and
 
(d) (i)           To the extent final and not subject to further appeal or
requests for waiver, any and all amounts of overpayment of High Cost Universal
Service Support required to be remitted to the Universal Service Administrator
or the U.S. Treasury, regardless of the cause of the overpayment relating to
High Cost Universal Service Support that was transferred to Company as CETC Cash
Flow at the Closing; and
 
(ii) To the extent final and not subject to further appeal or requests for
waiver, (x) any and all Fines to the extent that such Fine results from acts or
omissions by the Company in the preparation of line count forms or other
information supplied by Company to a Contributing Group for an FCC or USAC
required submission, report or audit, Payment Quality Assurance review or other
investigation or litigation with respect to High Cost Universal Service Support;
and (y) favorable CETC adjustments that increase the High Cost Universal Service
Support with respect to a period for which the ordinary course payment of such
support occurred during the period prior to the Closing.
 
10.5 Procedure for Indemnification
 
The procedure for indemnification shall be as follows:
 
(a) The Claimant, as the party claiming indemnification, shall give written
notice to the Indemnifier of any claim, whether between or among Parties or
brought by a Third Party, within 20 days of receiving notice, or becoming aware,
thereof and specifying (i) the factual basis for such claim (to the extent known
by the Claimant) and (ii) if known, the amount of the claim; provided that,
failure to give such notice within 20 days shall not constitute a defense to any
claim for indemnification unless, and only to the extent that, such failure
materially prejudices the Indemnifier except that the Indemnifier shall not be
liable for any expenses incurred during the period in which the Claimant failed
to give such notice.  Thereafter, the Claimant shall deliver to the Indemnifier,
promptly following the Claimant’s receipt thereof, copies of all notices and
documents (including court papers) received by the Claimant relating to the
claim.
 
 
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(b) Following receipt of notice from the Claimant of a claim, the Indemnifier
shall have 30 days to make such investigation of the claim as the Indemnifier
deems necessary or desirable.  For the purposes of such investigation, the
Claimant agrees to make available to the Indemnifier and/or its authorized
representative(s) the information relied upon by the Claimant to substantiate
the claim.  If the Claimant and the Indemnifier agree at or prior to the
expiration of said 30 day period (or any mutually agreed upon extension thereof)
to the validity and amount of such claim, the Indemnifier shall immediately pay
to the Claimant the full amount of the claim.  If the Claimant and the
Indemnifier do not agree within such period (or any mutually agreed upon
extension thereof), the Claimant may seek a remedy in accordance with the
Arbitration Agreement.
 
(c) With respect to any claim by a Third Party as to which the Company or either
Parent and its Member is claiming indemnification hereunder, the Indemnifier
shall have the right, at its own expense, to participate in or assume control of
the defense of such claim with counsel selected by the Indemnifier, and the
Claimant shall cooperate fully with the Indemnifier, subject to reimbursement
for actual out-of-pocket expenses incurred by the Claimant as the result of a
request by the Indemnifier.  Such cooperation shall include the retention and
(upon the Indemnifier’s request) the provision to the Indemnifier of records and
information that are reasonably relevant to such Third Party claim, and making
employees available at such times and places as may be reasonably necessary to
defend against such Third Party claim for the purpose of providing additional
information, explanation or testimony in connection with such Third Party
claim.  If the Indemnifier elects to assume control of the defense of any Third
Party claim, the Indemnifier shall have the right to assert any counterclaims or
defenses available to Claimant against such Third Party, and the Claimant shall
have the right to participate in the defense of such claim at its own expense
and to employ counsel (not reasonably objected to by the Indemnifier), at its
own expense, separate from the counsel employed by the Indemnifier, it being
understood that the Indemnifier shall control such defense; provided that if the
Claimant shall have reasonably concluded that separate counsel is required
because a conflict of interest would otherwise exist, the Claimant shall have
the right to select separate counsel to participate in the defense of such
action on its behalf, at the expense of the Indemnifier.  If the Indemnifier
does not elect to assume control or otherwise participate in the defense of any
Third Party claim, it shall be bound by the results obtained by the Claimant
with respect to such claim.  If the Indemnifier assumes the defense of a Third
Party claim in accordance with this Section 10.5(c), the Indemnifier shall not
be liable to the Claimant for any legal expenses subsequently incurred by the
Claimant in connection with the defense thereof (other than during the period in
which the Claimant shall have failed to give notice of the claim as provided
above).  Whether or not the Indemnifier assumes the defense of a Third Party
claim, the Claimant shall not admit any liability with respect to, or settle,
compromise or discharge, such Third Party claim without the Indemnifier’s prior
written consent, and the Indemnifier shall not have any indemnification
obligation with respect to any settlement, compromise or discharge effected
without its prior written consent.
 
 
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(d) If ACS Member reasonably believes that the Company, as Claimant, has a claim
for indemnification under Section 10.3 against GCI and GCI Member and the
Company has not brought such claim against GCI and GCI Member, ACS Member may
send written notice to the CEO of the Company specifying in reasonable detail a
description of such claim and if the CEO does not subsequently agree to cause
the Company to bring such claim, ACS Member may, on behalf of the Company, bring
such claim against GCI and GCI Member pursuant to the provisions of Section 10
hereof.
 
10.6 Limitations
 
The Indemnifier’s obligations to indemnify the Claimant pursuant to Section 10.3
or 10.4 shall be subject to the following limitations:
 
(a) The Claimant shall be entitled to indemnification only for those Damages
arising with respect to any claim as to which Claimant has given the Indemnifier
written notice within the appropriate time period set forth in Section 10.2
hereof for such claim.
 
(b) Claimant’s Damages sought to be recovered under Section 6.3, 10.3 or 10.4
hereof shall be net of any insurance proceeds actually received by Claimant with
respect to the events giving rise to such Damages.  If the incurrence or payment
of any such Damages makes allowable to the Indemnified Party any deduction,
amortization, exclusion from income or other allowance (a “Tax Benefit”) which
would not, but for such adjustment, be allowable, then the indemnification
payment to the Claimant under this Section 10 shall be an amount equal to
(i) the amount otherwise due but for this sentence, minus (ii) the amount of Tax
savings actually realized by the Claimant as a result of the Tax Benefit in the
Tax year in which the Damages were incurred (a “Tax Savings”).  If and to the
extent that subsequent to any payment of Damages by any Indemnifier to a
Claimant hereunder, such Claimant receives insurance proceeds or realizes a Tax
Savings with respect to the events giving rise to such Damages, which proceeds
or Tax Savings would have been netted against such Damages if they had been
received prior to the Indemnifier’s payment of such Damages, then the Claimant
shall remit such insurance proceeds or the amount of such Tax Savings to
Indemnifier to the extent such proceeds would have been netted against such
Damages.
 
(c) Neither ACS and its Member nor GCI and its Member shall be liable for
indemnification under Section 10.3(a), 10.3(e) or 10.3(g) (to the extent
relating to Section 10.3(a) or 10.3(e)) (other than with respect to claims for
indemnification based upon, arising out of, with respect to or by reason of
fraud or any breach of any covenant to be performed following the Closing (the
“Basket Exclusions”)), until the aggregate amount of all indemnification
payments for which ACS and its Member or GCI and its Member, as the case may be,
is liable in respect of indemnification under such Sections (other than with
respect to claims for indemnification based upon the Basket Exclusions) exceeds
$1,500,000 (the “Deductible”), in which event ACS and its Member or GCI and its
Member, as the case may be, shall only be required to pay such indemnification
payments in excess of the Deductible.
 
(d) The aggregate amount of all indemnification payments for which ACS and its
Member and the aggregate amount of all indemnification payments for which GCI
and its Member shall be liable pursuant to Section 10.3(a), 10.3(e) and 10.3(g)
(to the extent relating to Section 10.3(a) or 10.3(e)) (other than with respect
to claims for indemnification based upon, arising out of, with respect to or by
reason of the Basket Exclusions) shall not exceed $50,000,000.
 
 
49

--------------------------------------------------------------------------------

 
(e) Neither ACS and the ACS Member nor GCI and the GCI Member shall be liable
for indemnification under Section 10.3(d) or 10.3(g) (to the extent relating to
Section 10.3(d)) (other than with respect to a Basket Exclusion), until the
aggregate amount of all indemnification payments for which ACS and the ACS
Member or GCI and the GCI Member, as the case may be, is liable in respect of
indemnification under such Sections (other than with respect to claims for
indemnification based upon the Basket Exclusions) exceeds $500,000 (the “CETC
Claim Deductible”), in which event ACS and its Member or GCI and its Member, as
the case may be, shall only be required to pay such indemnification payments in
excess of the CETC Deductible.
 
(f) The Company shall not be liable for indemnification under Section 10.4(d)
(other than with respect to a Basket Exclusion), until the aggregate amount of
all indemnification payments for which the Company is liable in respect of
indemnification under such Section (other than with respect to claims for
indemnification based upon the Basket Exclusions) exceeds the CETC Claim
Deductible, in which event the Company shall only be required to pay such
indemnification payments in excess of the CETC Deductible.
 
10.7 Recoupment and Deduction
 
ACS, ACS Member, GCI, GCI Member and the Company acknowledge and agree that the
transactions contemplated by this Agreement and the Ancillary Agreements (the
“Transaction Agreements”) are integral parts of the same transaction and that
the parties entered into each of the Transaction Agreements contingent on the
parties thereto entering into all such Transaction Agreements, accordingly, the
Parties desire to set forth the circumstances and the terms and conditions on
which the Company shall be entitled to recoup by deducting amounts from
Distributions (as defined in the Operating Agreement) that otherwise would be
made to GCI Member or ACS Member as a result of indemnification payments under
this Agreement.  In furtherance of the foregoing, any indemnification payment
finally determined to be due and payable pursuant to this Agreement shall be
entitled to the benefits of the right to recoupment by deducting such obligation
from such Distributions to the extent provided in Section 16.22 of the Operating
Agreement.
 
10.8 Taxes
 
In the event of any inconsistency between the provisions of Section 6.3 and the
provisions of Section 10 hereof, the provisions of Section 6.3 shall govern.
 
10.9 Treatment of Indemnification Payments
 
All indemnity payments made pursuant to this Section 10 shall be treated for all
Tax purposes as adjustments to the contributions made by the relevant Party to
the Company; provided, however, that any indemnity payment attributable to the
Purchased Assets shall be treated as an adjustment to the Purchase Price.
 
10.10 Exclusive Remedy
 
Subject to Section 9.3 and Section 10.7, the Parties acknowledge and agree that,
following the Closing, their sole and exclusive remedy with respect to any and
all claims (other than claims arising from fraud on the part of a Party hereto
in connection with the Transactions) for any breach of any representation,
warranty, covenant, agreement or obligation set forth herein, shall be pursuant
to the indemnification provisions set forth in Section 6.3 or this
Section 10.  In furtherance of the foregoing, each Party hereby waives, to the
fullest extent permitted under law, any and all rights, claims and causes of
action for any breach of any representation, warranty, covenant, agreement or
obligation set forth herein it may have against the other Parties hereto and
their Affiliates and each of their respective representatives arising under or
based upon any law, except pursuant to the provisions set forth in Section 6.3
or this Section 10.  Nothing in this Section 10.10 shall limit any Person’s
right to seek and obtain any equitable relief to which any Person shall be
entitled or to seek any remedy on account of any fraud.
 
 
50

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SECTION 11.  
MISCELLANEOUS

 
11.1 Notices
 
All notices, demands and requests required or permitted to be given under the
provisions of this Agreement shall be (i) in writing, (ii) sent by telecopy
(with automatic machine confirmation), delivered by personal delivery, or sent
by commercial delivery service or certified mail, return receipt requested,
(iii) deemed to have been given on the date telecopied with receipt confirmed,
the date of personal delivery, or the date set forth in the records of the
delivery service or on the return receipt, and (iv) addressed as follows:
 
 
If to the Company:
The Alaska Wireless Network, LLC

c/o General Communication, Inc.
 
2550 Denali Street, Suite 1000

 
Anchorage, Alaska  99503

 
Attention:  CEO

 
Facsimile: (907) 868-9501

with a copy (which shall
not alone constitute notice) to:                         Sherman & Howard L.L.C.
633 17th Street, Suite 3000
Denver, CO  80202
Attention:  Steven D. Miller
Facsimile:  (303) 298-0940
 
 
If to GCI or GCI Member:
General Communication, Inc.

2550 Denali Street, Suite 1000

 
Anchorage, Alaska 99503
Attention:  General Counsel
Facsimile:  (907) 868-5676

 

with a copy (which shall
not alone constitute notice) to:                         Sherman & Howard L.L.C.
633 17th Street, Suite 3000
Denver, CO  80202
Attention:  Steven D. Miller
Facsimile:  (303) 298-0940
 
 
51

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If to ACS or ACS Member:
Alaska Communications Systems Group, Inc.

 
600 Telephone Avenue

 
Anchorage, Alaska 99503

 
Attention:  General Counsel

 
Facsimile:  (907) 297-3153

with a copy (which shall
not alone constitute notice) to:                         Sidley Austin LLP
787 Seventh Avenue
New York, New York 10019
Attention:  Irving L. Rotter
Gabriel Saltarelli
Facsimile:  (212) 839-5599

or to any such other or additional Persons and addresses as the Person to whom
notice is to be provided may from time to time designate in a writing delivered
in accordance with this Section 11.1.
 
11.2 Benefit and Binding Effect
 
This Agreement shall inure solely to the benefit of the other Parties, without
conferring on any other Person any rights of enforcement or other rights.  No
Party may assign this Agreement without the prior written consent of the other
Parties.  This Agreement shall be binding upon and inure to the benefit of the
Parties and their respective successors and permitted assigns.
 
11.3 Entire Agreement
 
This Agreement together with the Ancillary Agreements and all exhibits and
schedules hereto or thereto, and all documents and certificates delivered by the
Parties contemporaneously and in connection herewith, or to be delivered by the
Parties pursuant hereto or in connection herewith, collectively represent the
entire understanding and agreement between the Parties with respect to the
subject matter hereof.  This Agreement together with the Ancillary Agreements
supersede all prior negotiations, letters of intent or other writings between
the Parties with respect to the subject matter hereof, and cannot be amended,
supplemented or modified except by a written agreement which makes specific
reference to this Agreement or an Ancillary Agreement, as the case may be, and
which is signed by the Party against which enforcement of any such amendment,
supplement or modification is sought.
 
11.4 Waiver of Compliance; Consents
 
Except as otherwise provided in this Agreement, any failure of any Party to
comply with any obligation, representation, warranty, covenant, agreement or
condition herein may be waived by the Party entitled to the benefits thereof
only by a written instrument signed by the Party granting such waiver, but such
waiver or failure to insist upon strict compliance with such obligation,
representation, warranty, covenant, agreement or condition shall not operate as
a waiver of, or estoppel with respect to, any subsequent or other
failure.  Whenever this Agreement requires or permits consent by or on behalf of
any Party, such consent shall be given in writing in a manner consistent with
the requirements for a waiver of compliance as set forth in this Section 11.4.
 
11.5 Severability
 
If any provision hereof or the application thereof to any Person or circumstance
shall be invalid or unenforceable to any extent, the remainder of this Agreement
and the application of such provision to other Persons or circumstances shall
not be affected thereby and shall be enforced to the greatest extent permitted
by applicable Legal Requirements.
 
 
52

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11.6 Dispute Resolution
 
Subject to Section 9.3, if a dispute of any kind arises under or in connection
with, or relates to, this Agreement (including any dispute concerning its
construction, performance or breach), the rights of the parties to the dispute
will be governed by the Arbitration Agreement.  By executing this Agreement,
each Party agrees that such Party has become a party to the Arbitration
Agreement, without the necessity of signing the Arbitration Agreement as a
separate document.
 
11.7 Prevailing Party
 
If any Party commences any arbitration or Proceeding against another Party to
interpret or enforce any of the terms of this Agreement as a result of an
alleged breach by the other Party of any terms hereof, the nonprevailing Party
shall pay to the prevailing Party reasonable attorneys’ fees, costs and expenses
incurred in connection with the prosecution or defense of such Proceeding
(including at any appellate level).
 
11.8 No Consequential or Indirect Damages
 
Except to the extent payable to a Third Party with respect to indemnification
claims under Section 10.5(c), in no event shall any Party be liable under this
Agreement to another Party for any punitive, incidental, indirect special or
consequential damages, including any damages for business interruption, loss of
use, revenue or profit, whether arising out of breach of contract, tort
(including negligence) or otherwise, regardless of whether such damages were
foreseeable and whether or not the breaching Party was advised of the
possibility of such damages.
 
11.9 Governing Law
 
This Agreement shall be governed, construed, and enforced in accordance with the
laws of the State of Delaware, without regard to conflicts of law principles
thereunder.
 
11.10 Selection of Forum; Venue; Service of Process
 
Subject to Section 11.6, the Parties hereby irrevocably submit in any Proceeding
arising out of or relating to this Agreement or any Transactions to the
exclusive jurisdiction of the United State District Court for the District of
Alaska or if jurisdiction is not available therein the jurisdiction of any court
of the State of Alaska, and waive any and all objections to such jurisdiction or
venue that they may have under the laws of any state or country, including any
argument that jurisdiction, sites and/or venue are inconvenient or otherwise
improper.  Each Party further agrees that process may be served upon such Party
in any manner authorized under the laws of the United States or Alaska, and
waives any objections that such Party may otherwise have to such process.
 
11.11 WAIVER OF JURY TRIAL
 
SUBJECT TO SECTION 11.6, EACH PARTY HEREBY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY
LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, INVOLVING OR OTHERWISE IN
RESPECT OF THIS AGREEMENT, ANY ANCILLARY AGREEMENT OR ANY TRANSACTION
CONTEMPLATED HEREBY OR THEREBY.  EACH PARTY (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE ANCILLARY
AGREEMENTS, AS APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION 11.11.
 
 
53

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11.12 Counterparts
 
This Agreement may be executed in any number of counterparts, each of which,
when so executed and delivered, shall be an original, and all of which
counterparts together shall constitute one and the same fully executed
instrument.
 
 
Signature page follows
 

 
54

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IN WITNESS WHEREOF, this Agreement has been executed by the Parties as of the
date first above written.
 
 
ALASKA COMMUNICATIONS SYSTEMS GROUP, INC.
 
 
By:       /s/ Anand Vadapalli  
 
Name: Anand Vadapalli
 
Title: CEO and President
 
ACS WIRELESS, INC.
 
 
By:         /s/ Anand Vadapalli  
 
Name: Anand Vadapalli
 
Title: CEO and President
 
GENERAL COMMUNICATION, INC.
 
 
By:        /s/ William C. Behnke 
 
Name: William C. Behnke 
 
Title: Senior Vice President
 
GCI WIRELESS HOLDINGS, LLC
 
 
By:         /s/ William C. Behnke 
 
Name: William C. Behnke 
 
Title: Senior Vice President
 
THE ALASKA WIRELESS NETWORK, LLC
By: GCI Wireless Holdings, LLC, its manager
 
 
By:         /s/ William C. Behnke 
 
Name: William C. Behnke 
 
Title: Senior Vice President
 
 
55

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  EXHIBIT A

--------------------------------------------------------------------------------

 

FIRST AMENDED AND RESTATED OPERATING AGREEMENT
 
OF
 
THE ALASKA WIRELESS NETWORK, LLC
 
_____________________, 201__

THE OWNERSHIP INTERESTS IN THIS LIMITED LIABILITY COMPANY HAVE NOT BEEN
REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR STATE SECURITIES
AUTHORITIES AND MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND ANY
APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL REASONABLY ACCEPTABLE
TO THE COMPANY THAT REGISTRATION IS NOT REQUIRED.  THE SALE OR OTHER TRANSFER OF
THE OWNERSHIP INTERESTS IS ALSO RESTRICTED BY CERTAIN PROVISIONS IN THIS
AGREEMENT.
 

 
 
 

--------------------------------------------------------------------------------

 

TABLE OF CONTENTS
 

 
 
ARTICLE 1: FORMATION; DEFINITIONS;
INTERPRETATION                                                                                                                          
 1

 
1.1
Formation. 
1

 
1.2
Name.               
1

 
1.3
Members. 
1

 
1.4
Equity Interests.                    
1

 
1.5
Registered Office and Agent. 
2

 
1.6
Principal Office. 
2

 
1.7
Foreign Qualification. 
2

 
1.8
Term. 
2

 
1.9
Definitions. 
26

 
1.10
Interpretation. 
26

 
1.11
General Appraisal Procedures. 
27

 
1.12
Put Right/Call Right Appraisal Procedures. 
28

 
ARTICLE 2: PURPOSES AND POWERS                            
 28

 
2.1
Principal Purpose. 
29

 
2.2
Powers. 
29

 
ARTICLE 3: CAPITAL OF THE COMPANY
 29

 
3.1
Capital Contributions. 
29

 
3.2
Capital Accounts. 
30

 
3.3
Transfer. 
30

 
3.4
Adjustments. 
31

 
3.5
Market Value Adjustments. 
31

 
3.6
No Withdrawal of Capital. 
31

 
3.7
No Interest on Capital. 
31

 
3.8
No Drawing Accounts. 
31

 
3.9
No Salary or Other Compensation. 
31

 
3.10
Working Capital. 
32

 
3.11
Member Cure Rights on GCI Working Capital Loan. 
32

 
ARTICLE 4: INCOME AND LOSSES
 33

 
4.1
Allocation of Net Income and Net Loss. 
33

 
4.2
Company Minimum Gain Chargeback. 
33

 
4.3
Minimum Gain Chargeback for Member Nonrecourse Debt. 
33

 
4.4
Qualified Income Offset. 
33

 
4.5
Limit on Net Loss Allocations. 
33

 
4.6
Loss from Member Nonrecourse Debt. 
33

 
4.7
Nonrecourse Deductions. 
34

 
4.8
§ 754 Adjustments. 
34

 
4.9
Reversal of Mandatory Allocations. 
34

 
4.10
Compliance with Code. 
34

 
4.11
Tax Allocations — § 704(c). 
34

 
4.12
Special Allocation of Contributed Asset Depreciation. 
34

 
4.13
Allocation on Transfer. 
34

 
ARTICLE 5: DISTRIBUTIONS
 34

 
 
i

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Information indicated by [***] in the text has been omitted and filed separately
with the Securities and Exchange Commission pursuant to a request for
Confidential Treatment under Rule 24b-2 under the Securities Exchange Act of
1934.

 
5.1
Distributions Generally. 
34

 
5.2
Payment. 
35

 
5.3
Withholding. 
35

 
5.4
Distribution Limitations. 
36

 
ARTICLE 6: MANAGEMENT
 36

 
6.1
Management; Consulting Fee. 
36

 
6.2
CEO; Other Officers; GCI Services Agreement; Employee Matters. 
37

 
6.3
Executive Board. 
38

 
6.4
Unanimous Vote of Members. 
39

 
6.5
Other Activities. 
43

 
ARTICLE 7: ANNUAL BUDGETS AND FOUR YEAR PLANS
 44

 
7.1
Operation in Accordance with Annual Budgets and Four Year Plans; Financial
Objectives. 
44

 
7.2
Initial Four Year Plan and First Year Budgets. 
44

 
7.3
Adoption of Annual Budgets, Revised Four Year Plans and Subsequent Four Year
Plans. 
45

 
7.4
Circumstances Requiring Unanimous Board Approval of Annual Budgets, Four Year
Plans and Revised Four Year Plans. 
47

 
7.5
GCI Member Right to [***] FCF [***]. 
48

 
ARTICLE 8: MEETINGS OF MEMBERS; MEETINGS OF THE BOARD
 50

 
8.1
Meetings of Members. 
50

 
8.2
Board Meetings. 
51

 
ARTICLE 9: OPERATIONAL MATTERS
 52

 
9.1
Option to Accelerate Capital Investment. 
52

 
9.2
Request for Wireless Device Approval. 
53

 
9.3
Facilities and Network Use Agreement. 
54

 
9.4
Connection Attrition Adjustments. 
54

 
9.5
Connection Maintenance Adjustments. 
57

 
9.6
Network Capacity Purchases. 
59

 
9.7
Option Regarding  Fixed Wireless Facilities. 
60

 
ARTICLE 10: LIABILITY OF A MEMBER; STANDARD OF CARE; INDEMNIFICATION; AND
EXCULPATION
 61

 
10.1
Limited Liability. 
61

 
10.2
Capital Contributions. 
62

 
10.3
Capital Return. 
62

 
10.4
Reliance. 
62

 
10.5
Standard of Care. 
62

 
10.6
Exculpation. 
63

 
10.7
Indemnification. 
63

 
10.8
Expense Advancement. 
63

 
10.9
Insurance. 
64

 
10.10
Indemnification of Others. 
64

 
ARTICLE 11: ACCOUNTING  AND  REPORTING
 64

 
11.1
Fiscal Year. 
64

 
11.2
Accounting Method. 
64

 
11.3
Tax Classification. 
64

 
 
ii

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11.4
Tax Filings. 
64

 
11.5
Company Reports. 
65

 
11.6
Financial Statement Audit. 
66

 
11.7
Books and Records. 
67

 
11.8
Banking. 
67

 
11.9
Tax Matters Partner. 
68

 
11.10
No Partnership. 
68

 
11.11
ACS Audit Rights. 
68

 
11.12
Maintenance of Insurance. 
69

 
ARTICLE 12: DISSOLUTION
 69

 
12.1
Dissolution. 
69

 
12.2
Events of Withdrawal. 
69

 
12.3
Continuation. 
69

 
ARTICLE 13: LIQUIDATION
 70

 
13.1
Liquidation. 
70

 
13.2
Priority of Payment. 
70

 
13.3
Liquidating Distributions. 
70

 
13.4
No Restoration Obligation. 
71

 
13.5
Liquidating Reports. 
71

 
13.6
Certificate of Cancellation. 
71

 
ARTICLE 14: TRANSFER RESTRICTIONS
 71

 
14.1
General Restrictions. 
71

 
14.2
No Member Rights. 
72

 
14.3
Permitted Transferees. 
72

 
14.4
General Conditions on Transfers. 
72

 
14.5
Rights of Transferees. 
73

 
14.6
Admission. 
73

 
14.7
Security Interest. 
74

 
14.8
Tag Along Right; Drag Along Election. 
74

 
14.9
Right of First Offer on Asset Sales. 
77

 
14.10
Connection Termination Event. 
79

 
ARTICLE 15: DISPUTE RESOLUTION
 81

 
ARTICLE 16: GENERAL PROVISIONS
 81

 
16.1
Amendment. 
81

 
16.2
Representations. 
82

 
16.3
Unregistered Interests. 
82

 
16.4
Waiver of Dissolution Rights. 
83

 
16.5
Waiver of Partition Right. 
83

 
16.6
Waivers and Consents. 
83

 
16.7
Equitable Relief. 
83

 
16.8
Remedies for Breach; Limitation of Damages. 
83

 
16.9
Costs. 
84

 
16.10
Indemnification. 
84

 
16.11
Counterparts. 
84

 
16.12
Notice 
84

 
16.13
Deemed Notice. 
85

 
 
iii

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16.14
Partial Invalidity. 
86

 
16.15
Entire Agreement. 
86

 
16.16
Benefit. 
86

 
16.17
Binding Effect. 
86

 
16.18
Further Assurances. 
86

 
16.19
Headings. 
86

 
16.20
Confidentiality. 
86

 
16.21
No Tax Advice. 
87

 
16.22
Coordination With Contribution Agreement and Ancillary Agreements; Recoupment of
Certain Claims from Distributions. 
87

 
16.23
Governing Law. 
88

 
iv

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FIRST AMENDED AND RESTATED OPERATING AGREEMENT
 
OF
 
THE ALASKA WIRELESS NETWORK, LLC
 
This First Amended and Restated Operating Agreement (the “Agreement”) of The
Alaska Wireless Network, LLC, a Delaware limited liability company (the
“Company”), is entered into as of _____________, 201__ (the “Effective Date”),
by and among the Company, GCI Wireless Holdings, LLC, an Alaska limited
liability company (the “Initial GCI Member”), and ACS Wireless, Inc., an Alaska
corporation (the “Initial ACS Member”), and, solely for purposes of Sections
3.10[b], 6.5, 9.6, 14.10, 15, 16.8, 16.20, and 16.22, Alaska Communications
Systems Group, Inc., a Delaware corporation, and, solely for purposes of
Sections 3.10[b], 6.5, 9.6, 11.11, 14.10, 15, 16.8, 16.20, and 16.22, General
Communication, Inc., an Alaska corporation.
 
In consideration of the mutual covenants set forth in this Agreement, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Company and the Members (as defined below) hereby agree
as follows:
 
ARTICLE 1: FORMATION; DEFINITIONS; INTERPRETATION
 
1.1 Formation.
 
  The Company was formed as a single member Delaware limited liability company
on ______________, 2012, by filing a Certificate of Formation with the Delaware
Secretary of State pursuant to the Act.  This Agreement amends and restates in
its entirety the original Operating Agreement of the Company dated as of
_____________, 2012.  Unless expressly provided otherwise in this Agreement, the
rights, duties and liabilities of the Company and the Members will be as
provided in this Agreement and the Act.  If any provisions of the Act conflict
with this Agreement, the provisions of this Agreement will control, and the
conflicting provision of the Act will be deemed waived, in each case to the
extent permitted by the Act.
 
1.2 Name.
 
  The name of the Company is The Alaska Wireless Network, LLC.  The business of
the Company will be conducted under such name, as well as any other name or
names as the Company may from time to time determine, provided that no such name
may suggest that the Company is an Affiliate of either the GCI Member or the ACS
Member.
 
1.3 Members.
 
  Unless and until a Transferee is admitted as a Member pursuant to
Section 14.6, the Initial GCI Member and the Initial ACS Member shall be the
sole Members of the Company within the meaning of the Act. Except as otherwise
expressly provided in this Agreement, no Member may be removed as a member of
the Company without such Member’s prior written approval. The address of each
Member is set forth on the attached Exhibit A, as it may be amended from time to
time in accordance with this Agreement.
 
1.4 Equity Interests.
 
  The Members agree that, as of the Effective Date, the Ownership Interests of
the Members in the equity of the Company based on the agreed Fair Market Value
of the Initial Capital Contributions made by the Members, expressed as a
percentage, are 66⅔% for the GCI Member and 33⅓% for the ACS Member (the “Equity
Interests”).
 
 
1

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Information indicated by [***] in the text has been omitted and filed separately
with the Securities and Exchange Commission pursuant to a request for
Confidential Treatment under Rule 24b-2 under the Securities Exchange Act of
1934.
 
 

1.5 Registered Office and Agent.
 
  The initial registered office of the Company in Delaware will be at 1209
Orange St., Wilmington, DE 19801, New Castle County, and its registered agent
will be The Corporation Trust Company.  The Company may change its registered
office and registered agent in Delaware by filing the appropriate documents with
the Secretary of State of Delaware in accordance with the Act.
 
1.6 Principal Office.
 
  The principal office of the Company where records of the Company will be
maintained initially is the GCI Member’s principal place of business in
Anchorage, Alaska.  The Company may change its principal office, provided that
such office may not be changed to a location outside Anchorage, Alaska without
the affirmative Vote of all Members.
 
1.7 Foreign Qualification.
 
  The Company will qualify as a foreign limited liability company under the
provisions of Alaska law and will maintain such status for so long as the
Company owns any real property or otherwise transacts business in the State of
Alaska.  The Company will also apply for any required certificate of authority
to do business in any other state or jurisdiction, as required or appropriate.
 
1.8 Term.
 
  The term of the Company as a limited liability company under the Act commenced
on the date its Certificate and the Certificate of Conversion were filed with
the Delaware Secretary of State and will continue in perpetuity until a
Dissolution occurs under Section 12.1 and a certificate of cancellation is filed
with the Delaware Secretary of State pursuant to Section 13.6.
 
1.9 Definitions.
 
  The following capitalized terms, when used in this Agreement, have the
meanings set forth below:
 
Accelerated Capital Investment:
as defined in Section 9.1[a].

 
Accelerated Capital Investment Notice:
as defined in Section 9.1[a].

 
ACI Purchase Price:
as defined in Section 9.1[e].

 
ACS:
Alaska Communications Systems Group, Inc., a Delaware corporation, the ultimate
parent company of the Initial ACS Member.

 
ACS [***] Connection Adjustment:
as defined in Section 9.4[c][i].

 
ACS Actual Average Connections:
as defined in Section 9.4[b].

 
ACS Annual Connection

Shortfall Adjustment:
as defined in Section 9.4[b].

 
ACS Connection Maintenance

Adjustment:
as defined in Section 9.5[a][iii].

 
 
2

--------------------------------------------------------------------------------

Information indicated by [***] in the text has been omitted and filed separately
with the Securities and Exchange Commission pursuant to a request for
Confidential Treatment under Rule 24b-2 under the Securities Exchange Act of
1934.

 
ACS First Partial Preferred

Distribution:
if the Effective Date is not on the first day of a calendar quarter, an amount
equal to $12,500,000 multiplied by a fraction [a] the numerator of which is the
number of Preference Period Partial First Quarter Days and [b] the denominator
of which is the number of days in the calendar quarter during which the first
day of the Preference Period Partial First Quarter occurs.

 
ACS Forecast Average Connections:
as defined in Section 9.4[a].

 
ACS Forecast Reduction Connections:
an amount equal to the lesser of [a] [***] and [b] the amount, if any, by which
the ACS Forecast Average Connections for Fiscal Year 2013 exceeds the ACS Actual
Average Connections for Fiscal Year 2013.

 
ACS Full Quarter Preferred

Distributions:
if the Effective Date is not on the first day of a calendar quarter, the
following amounts:

 
 
[a] an amount equal to $12,500,000 with respect to each of the first seven full
calendar quarters in the Preference Period Full Quarters;

 
 
[b] with respect to the eighth full calendar quarter in the Preference Period
Full Quarters, an amount equal to the sum of [i] $12,500,000 minus the amount of
the ACS First Partial Preferred Distribution, and [ii] $11,250,000 multiplied by
a fraction [A] the numerator of which is the number of Preference Period Partial
First Quarter Days, and [B] the denominator of which is the number of days in
the calendar quarter in which the Effective Date occurs; and

 
 
[c] an amount equal to $11,250,000 with respect to each of the last seven full
calendar quarters in the Preference Period Full Quarters.

 
ACS Last Partial Preferred

Distribution:
if the Effective Date is not on the first day of a calendar quarter, an amount
equal to $190,000,000 minus the sum of [a] the ACS First Partial Preferred
Distribution, and [b] the aggregate amount of the ACS Full Quarter Preferred
Distributions.

 
ACS Member:
initially, the Initial ACS Member, and shall include any successors thereto by
merger or consolidation (or otherwise by operation of law), any assignees or
transferees of all or substantially all the assets thereof, and any transferees
of the Ownership Interests thereof, in each case upon such successor, assignee
or transferee being admitted  as a substitute Member in accordance with the
terms of this Agreement.

 
 
3

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ACS Preference Period Last

Quarter Distribution:
if the Effective Date is not on the first day of a calendar quarter, an amount
equal to [a] the Equity Interest of the ACS Member, multiplied by [b] the
product of [i] Adjusted FCF for the Preference Period Last Quarter, multiplied
by [ii] a fraction [A] the numerator of which is the number of Preference Period
Partial First Quarter Days, and [B] the denominator of which is the number of
days in the Preference Period Last Quarter.

 
ACS Preferred Distributions:
an aggregate amount equal to [a] if the Effective Date is on the first day of a
calendar quarter, an amount equal to $12,500,000 with respect to each of the
first eight calendar quarters beginning on the Effective Date and $11,250,000
with respect to each of the next eight calendar quarters thereafter, or [b] if
the Effective Date is not on the first day of a calendar quarter, the sum of [i]
the ACS First Partial Preferred Distribution, [ii] the ACS Full Quarter
Preferred Distributions, and [iii] the ACS Last Partial Preferred Distribution.

 
ACS Services Agreement:
the ACS Services Agreement between the Company and ACS Wireless, Inc. attached
to this Agreement as Exhibit O.

 
ACS Transfer Date Connections:
as defined in Section 9.5[a][i].

 
Act:
the Delaware Limited Liability Company Act, as amended from time to time.

 
Additional Capital Contribution:
means any Capital Contribution made to the Company by a Member in accordance
with the terms of this Agreement other than an Initial Capital Contribution.

 
Additional Capacity Purchase Agreement:
as defined in the Contribution Agreement.

 
Adjusted ACS Forecast Average

Connections:
as defined in Section 9.4[a].

 
Adjusted Capital Account Deficit:
with respect to any Member, the deficit balance, if any, in such Member’s
Capital Account as of the end of the relevant taxable year, after giving effect
to the following adjustments:

 
 
4

--------------------------------------------------------------------------------

 
[a] credit to such Capital Account any amounts which such Member [i] is
obligated to restore to the Company upon liquidation of such Member’s interest
in the Company (or which is so treated pursuant to Regulation §
1.704-1(b)(2)(ii)(c)) pursuant to the terms of this Agreement or under state law
or [ii] is deemed to be obligated to restore pursuant to the penultimate
sentences of Regulations §§ 1.704-2(g)(1) and 1.704-2(i)(5); and
 
[b] debit to such Capital Account the items described in §§
1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5), and 1.704-1(b)(2)(ii)(d)(6) of
the Regulations.
 
The foregoing definition of Adjusted Capital Account Deficit is intended to
comply with the provisions of § 1.704-1(b)(2)(ii)(d) of the Regulations and will
be interpreted consistently with such section.
 
Adjusted FCF:
FCF minus the sum of [a] the Consulting Fee and [b] payments required to be made
in accordance with the terms of the Company Working Capital Loan or the GCI
Working Capital Loan, other than, in the case of the GCI Working Capital Loan,
payments financed pursuant to a refinancing of such loan.

 
Affiliate:
with respect to any Person, any other Person that directly or indirectly through
one or more intermediaries, Controls, is Controlled by, or is under common
Control with such Person, except that the Company shall not be deemed to be an
Affiliate of any Member.

 
Affiliate Contracts:
as defined in the Contribution Agreement.

 
Affiliate Transactions:
as defined in Section 6.4[n].

 
Aggregate Purchase Price:
as defined in Section 14.8[c].

 
Agreement:
this First Amended and Restated Operating Agreement, also known as a limited
liability company agreement under the Act, as amended from time to time.

 
Ancillary Agreements:
as defined in the Contribution Agreement.

 
 
5

--------------------------------------------------------------------------------

 
Annual Budgets:
the then current Annual Cap Ex Budget or Annual Operating Budget or both, as
applicable.

 
Annual Cap Ex Budget:
the capital expenditures budget of the Company for a given Fiscal Year,  each of
which will be consistent with the Four Year Plan applicable for the given Fiscal
Year and will be in the form of, and contain the same scope of information
included in, the First Year Cap Ex Budget.

 
Annual Operating Budget:
the operating budget of the Company for a given Fiscal Year, each of which will
be consistent with the Four Year Plan applicable for the given Fiscal Year and
will be in the form of, and contain the same scope of information included in,
the First Year Operating Budget.

 
Approved Affiliate Transactions:
the following agreements and transactions:  [a] the Contribution Agreement, all
Affiliate Contracts that are Assumed Contracts (as identified on the Schedules
to the Contribution Agreement) to which the Company, on the one hand, and a
Member or an Affiliate of a Member, on the other hand, are parties after the
Effective Date, and all agreements entered into in connection with closing of
the Contribution Agreement that are between a Member or an Affiliate of a Member
and the Company, including all agreements related to the contribution of assets
by the Members to the Company (and maintenance thereof) and the applicable
Ancillary Agreements, [b] the GCI Services Agreement, subject to the terms of
Section 6.4[n][x]  and [y], respectively, in the case of Professional Services
and Satellite Capacity Services provided under such agreement, [c] the ACS
Services Agreement, [d] the Facilities and Network Use Agreement, [e] the GCI
Working Capital Loan and [f] any other agreement or transaction that is approved
by the unanimous Vote of the Members.

 
Arbitration Agreement:
that certain Arbitration Agreement between the Company and the Members set forth
as the attached Exhibit E, as it may be amended from time to time, and which is
hereby incorporated into and made a part of this Agreement.

 
Arbitrator:
as defined in the Arbitration Agreement.

 
 
6

--------------------------------------------------------------------------------

Information indicated by [***] in the text has been omitted and filed separately
with the Securities and Exchange Commission pursuant to a request for
Confidential Treatment under Rule 24b-2 under the Securities Exchange Act of
1934.

 
Arbitrator’s Expenses:
as defined in the Arbitration Agreement.

 
ARPU:
average revenue per unit, with a unit for this purpose meaning a Connection.

 
Assumed Contracts:
as defined in the Contribution Agreement.

 

Average Connections:                                             with respect to
ACS or GCI, as applicable, for any applicable Fiscal Year, the sum of [a] the
number of its Connections, [***] the number of [***] the [***] for the [***] of
[***] that
                       have [***] of [***], as applicable (as determined by
[***] such other [***], as applicable, with respect to such Connections), and
[b] the number of its [***] that have [***] of any
                       [***] the [***] for the [***] of [***] (as determined by
[***] from [***], to such other Person with respect to such Connections), in
each case determined in accordance with
                       standard industry practices and consistent with past
practices, on the last day of each calendar month in such Fiscal Year divided by
12 (or divided by the number of calendar
                       months in the applicable Fiscal Year if it is a Fiscal
Year consisting of fewer than 12 months).  For purposes of this definition, both
[i] an [***] and [ii] any Connection to which [***]
                       are [***] pursuant to Section 2(a)(vii) of the Facilities
and Network Use Agreement shall be deemed a Connection of ACS.  Also for
purposes of this definition, any Connection to
                       which [***] are [***] pursuant to Section 2(a)(vii) of
the Facilities and Network Use Agreement shall be deemed a [***].
 
Bankruptcy Case:
as defined in Section 14.6.

 
Bankruptcy Code:
as defined in definition of Bankruptcy Event.

 
Bankruptcy Event:
means, with respect to a Person, the commencement of occurrence of any of the
following:

 
[a] a voluntary or involuntary case under Title 11 of the U.S. Code (the
“Bankruptcy Code”), as now constituted or hereafter amended, or under any other
applicable federal, state or foreign bankruptcy or insolvency law or other
similar law, in which such Person is a debtor; or
 
 
7

--------------------------------------------------------------------------------

 
[b] the appointment of (or a proceeding to appoint) a trustee or receiver for a
substantial portion of such Person’s property or a custodian (as such term is
defined in section 101 of the Bankruptcy Code); or
 
[c] an attachment, execution or other judicial seizure of (or a proceeding to
attach, execute or seize) a substantial property interest of such Person; or
 
[d] a general assignment for the benefit of creditors.
 
Board:
as defined in Section 6.3[a].

 
Book Value:
with respect to any asset, the asset’s adjusted basis for federal income tax
purposes, except as follows:

 
[a] the initial Book Value of any asset contributed by a Member to the Company
will be the asset’s Fair Market Value at the time of the contribution, which
shall be the amount set forth on Exhibit B for the Initial Capital Contributions
made by the Initial ACS Member and the Initial GCI Member;
 
[b] the Book Value of all Company assets will be adjusted to equal their
respective Fair Market Values, [i] as of [A] the acquisition of an additional
interest in the Company by any new or existing Member in exchange for more than
a de minimis Capital Contribution, [B] the distribution by the Company to a
Member of more than a de minimis amount of Company property as consideration for
an interest in the Company, or [C] the issuance of an interest in return for
services; and [ii] as of the liquidation of the Company within the meaning of
Regulations § 1.704-1(b)(2)(ii)(g);
 
[c] the Book Value of any Company asset distributed to any Member will be the
Fair Market Value of the asset on the date of Distribution; and
 
[d] the Book Values of Company assets will be increased or decreased to reflect
any adjustment to the adjusted basis of the assets under Code §§ 734(b) or
743(b), but only to the extent that the adjustment is taken into account in
determining Capital Accounts under Regulations § 1.704-1(b)(2)(iv)(m), but Book
Values will not be adjusted pursuant to this provision to the extent that an
adjustment under clause [b] is necessary or appropriate in connection with a
transaction that would otherwise result in an adjustment under this clause [d].
 
 
8

--------------------------------------------------------------------------------

 
After the Book Value of any asset has been adjusted under clause [a], clause [b]
or clause [d] above, Book Value will be adjusted by the Depreciation taken into
account with respect to the asset for purposes of computing Net Income and Net
Loss.
 
Budget Objection Notice:
as defined in Section 7.3[f].

 
Business Day:
any day (other than a Saturday or Sunday) on which commercial banks are not
required or authorized to close in New York City, New York or Anchorage, Alaska.

 
Capital Account:
the capital account of a Member established and maintained in accordance with
Section 3.2.

 
Capital Contribution:
any contribution of money or property by a Member to the Company, which is
either an Initial Capital Contribution or an Additional Capital Contribution.

 
Cause:
the CEO [i] commits any act of fraud  (including securities fraud), theft or
willful misconduct relating to the Company or any of its Subsidiaries or any
Member, or [ii] is convicted of, or pleads guilty or no contest to, a
misdemeanor involving fraud, deceit or embezzlement which is either in relation
to the Company or is reasonably likely to have a material adverse effect on the
business or reputation of the Company, or any felony or [iii] violates any
material federal or state securities law or other applicable material law or
regulation in connection with activities directly related to the Company and its
Subsidiaries, which violation is reasonably likely to have a material adverse
effect on the business or reputation of the Company or its Subsidiaries or [iv]
breaches his or her duty of loyalty to the Company.

 
CEO:
as defined in Section 6.2[a].

 
 
9

--------------------------------------------------------------------------------

 
Certificate:
the Certificate of Formation of the Company, as amended from time to time.

 
Challenged Aspects:
as defined in Section 7.3[g].

 
Changing Market Conditions:
includes material changes in market conditions that were not anticipated at the
time the then-current Plans were adopted by the Company, including unanticipated
(i) changes in subscriber demand, (ii) force majeure events, (iii) entrance of
new competitors into the Wireless Business in Alaska and (iv) introduction of
competitive technology.

 
Clawback Amount:
as defined in Section 7.5[c].

 
Code:
the Internal Revenue Code of 1986, as amended from time to time (including
corresponding provisions of subsequent revenue laws).

 
Commercially Sensitive Information

Policies and Procedures:
as set forth on Exhibit L.

 
Company:
The Alaska Wireless Network, LLC, as formed under the Certificate and governed
by this Agreement.

 
Company Asset Sale:
as defined in Section 14.9[a].

 
Company Minimum Gain:
the amount computed under Regulations § 1.704-2(d)(1) with respect to the
Company’s Nonrecourse Liabilities.

 
Company Network:
as defined in the Facilities and Network Use Agreement.

 
Company Working Capital Loan:
as defined in Section 3.10[b].

 
Connection:
each Wireless Device having a discrete International Mobile Subscriber Identity
(IMSI), including Wireless Devices provided by a Person [i] for use by its, or
any of its Affiliate’s, directors, officers, employees or consultants for
business or personal use, [ii] for demonstration purposes in such Person’s, (or
its Affiliate’s) retail stores or [iii] for other internal uses or purposes of
such Person or its Affiliates, that is connected to a network operated by the
Company and covered by the Facilities and Network Use Agreement or an agreement
between the Company and any other Person related to use of the Company’s network
for the provision of Wireless services, as the context requires.

 
 
10

--------------------------------------------------------------------------------

Information indicated by [***] in the text has been omitted and filed separately
with the Securities and Exchange Commission pursuant to a request for
Confidential Treatment under Rule 24b-2 under the Securities Exchange Act of
1934.

 
Connection Maintenance

Measurement Date:
as defined in Section 9.5[a][iii].

 
Connection Maintenance Transfer:
as defined in Section 9.5[a].

 
Connection Maintenance Transfer

Date:
as defined in Section 9.5[a].

 
Connection Termination Event:
as defined in Section 14.10[a].

 
Connection Termination Date:
the date on which a Connection Termination Event occurs.

 
Consulting Fee:
as defined in Section 6.1[c].

 
Contributed Assets:
as defined in the Contribution Agreement.

 
Contributed Asset Depreciation:
any Depreciation arising from the Company’s ownership of any Contributed Asset,
provided, however, that Contributed Asset Depreciation shall not include any
Depreciation attributable to an increase in the Book Value of any Contributed
Asset pursuant to clause [b] of the definition of Book Value.

 
Contribution Agreement:
the Asset Purchase and Contribution Agreement entered into by GCI, the Initial
GCI Member, ACS, the Initial ACS Member and the Company dated June __, 2012.

 
Control:
(including the terms “Controlled by” and “under common Control with”) the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract, or otherwise.

 
CTE Call Right:
as defined in Section 14.10[b][ii].

 
CTE Notice:
as defined in Section 14.10[b].

 
CTE Purchase Price:                                                    the price
payable by [***] pursuant to the exercise of the CTE Call Right or the CTE Put
Right, which shall be either [a] the price negotiated by the Members pursuant
                                            to Section 14.10[b][ii] or [iii], as
applicable, or [b] the [***] of [***] as of the [***], as determined pursuant to
[***].
 
11

--------------------------------------------------------------------------------

 
CTE Put Right:
as defined in Section 14.10[b][iii].

 
Cure Date:
as defined in Section 3.11[b].

 
Cure Offer:
as defined in Section 3.11[a].

 
Cure Offer Period:
as defined in Section 3.11[b].

 
Current Assets:
the current assets of the Company, determined in accordance with GAAP.

 
Current Liabilities:
the current liabilities of the Company, determined in accordance with GAAP.

 
Departing Member:
as defined in Section 14.10[b].

 
Depreciation:
for each taxable year or other period, an amount equal to the depreciation,
amortization or other cost recovery deduction allowable with respect to an asset
for the year or other period, except that if the Book Value of an asset differs
from its adjusted basis for federal income tax purposes at the beginning of the
year or other period, Depreciation will be an amount that bears the same ratio
to the beginning Book Value as the federal income tax depreciation, amortization
or other cost recovery deduction for the year or other period bears to the
beginning adjusted tax basis, but if the federal income tax depreciation,
amortization, or other cost recovery deduction for the year or other period is
zero, Depreciation will be determined with reference to the beginning Book Value
using any reasonable method selected by the Tax Matters Partner and mutually
agreed to by the Members; provided, however, that the Members will not
unreasonably withhold approval of a reasonable method selected by the Tax
Matters Partner so long as such method does not result in a disproportionate
effect on any Member.

 
Designated Budget Dispute Arbitrator:
as defined in the Arbitration Agreement.

 
Disclosing Party:
as defined in Section 16.20.

 
Disputed Expense:
as defined in Section 7.3[i].

 
 
12

--------------------------------------------------------------------------------

 
Dissolution:
the happening of any of the events set forth in Section 12.1.

 
Distribution:
the amount of any money or the Fair Market Value of any property distributed by
the Company to the Members as an operating or liquidating distribution in
accordance with this Agreement.

 
Drag Along Election:
as defined in Section 14.8[a].

 
Effective Date:
as defined in the preamble, which will be the Closing Date as defined in the
Contribution Agreement.

 
End User Data:
as defined in the Facilities and Network Use Agreement.

 
Entire Company Assumed

Purchase Price:
as defined in Section 14.8[c][ii].

 
Equity Interests:
as defined in Section 1.4.

 
Exchange Offer:
as defined in Section 14.9[d].

 
Facilities and Network Use Agreement:
as defined in Section 9.3.

 
Facilities and Network Use CTE:
as defined in Section 14.10[b][iii].

 
Fair Market Value:
the cash price at which a willing seller would sell and a willing buyer would
buy, both having full knowledge of the relevant facts and being under no
compulsion to buy or sell, in an arm’s-length transaction without time
constraints, as determined by:

 
[a] the Members by unanimous Vote in the case of a determination of Fair Market
Value pursuant to:  clause [a] (except as otherwise provided therein with
respect to the Fair Market Value of the Initial Capital Contributions), clause
[b] and clause [c] of the definition of Book Value; the definition of
Distribution; clause [c] of the definition of Income; clause [c] of the
definition of Loss; Section 3.2[a][ii] (but only with respect to Additional
Capital Contributions); Section 3.2[b][ii]; as provided in the penultimate
paragraph of Section 3.2; Section 13.3; or the definition of CTE Purchase Price;
provided, that if the Members do not unanimously agree on Fair Market Value in
any such case within 15 days after a determination of Fair Market Value is
required to be made (or such longer period as the Members may agree), then Fair
Market Value shall be determined by an Independent Appraiser in accordance with
Section 1.11 or Section 1.12, as applicable;
 
 
13

--------------------------------------------------------------------------------

 

Information indicated by [***] in the text has been omitted and filed separately
with the Securities and Exchange Commission pursuant to a request for
Confidential Treatment under Rule 24b-2 under the Securities Exchange Act of
1934.

 
[b] as set forth on Exhibit B in the case of a determination of Fair Market
Value pursuant to:  Section 1.4; as provided in clause [a] of the definition of
Book Value with respect to Initial Capital Contributions; or in Section
3.2[a][ii] with respect to Initial Capital Contributions; and
 
[c] by Majority Vote in all other instances;
 
provided, that the determination of the Fair Market Value of any Ownership
Interest being valued pursuant to this Agreement for any purpose shall not be
subject to any discount for lack of marketability or minority interest.
 
Fair Market Value

Determination Date:
as defined in Section 1.11.

 

FCF:                                         means, for any period, the
consolidated net income (or loss) of the Company and its Subsidiaries determined
in accordance with GAAP (“FCF Income”) plus (a) the amount of
                      depreciation and amortization expense reducing FCF Income
for such period, (b) the amount of interest expense reducing FCF Income for such
period and (c) any non-cash items
                      reducing FCF Income for such period, and minus (i) any
non-cash items increasing FCF Income for such period, and (ii) any capital
expenditures made in such period for tangible and
                       intangible assets; provided, that the amount of any [***]
by the [***] shall be excluded from the calculation of FCF for the purposes of
determining whether any Plan is subject to
                       unanimous Board approval pursuant to Section 7.4.
 
Final Adjusted ACS Forecast Average

Connections:
as defined in Section 9.4[a].

 
Financial Objectives:
as defined in Section 7.1[b].

 
First Year Budgets:
as defined in Section 7.2[b].

 
First Year Cap Ex Budget:
as defined in Section 7.2[b].

 
 
14

--------------------------------------------------------------------------------

 

Information indicated by [***] in the text has been omitted and filed separately
with the Securities and Exchange Commission pursuant to a request for
Confidential Treatment under Rule 24b-2 under the Securities Exchange Act of
1934.

First Year Operating Budget:
as defined in Section 7.2[b].

 
Fiscal Year:
as defined in Section 11.1.

 
Fixed Wireless Facility Investment:
as defined in Section 9.7[a].

 
Fixed Wireless Facility Notice:
as defined in Section 9.7[a].

 
Four Year Plan:
the then current four year business plan of the Company, as the same may be
revised pursuant to Article 7, each of which will be substantially in the form
of, and contain the same scope of information included in, the Initial Four Year
Plan.

 
FWF Option 2:
as defined in Section 9.7[b].

 
FWF Option 3:
as defined in Section 9.7[b].

 
FWF Purchase Price:
as defined in Section 9.7[e].

 
GAAP:
generally accepted accounting principles as in effect from time to time in the
United States, consistently applied.

 
GCI:
means General Communication, Inc., an Alaska corporation, the parent company of
the Initial GCI Member.

 
GCI [***] Connection Adjustment:
as defined in Section 9.4[c][ii].

 
GCI Connection Maintenance

Adjustment:
as defined in Section 9.5[a][iv].

 
GCI Member:
initially, the Initial GCI Member, and shall include any successors thereto by
merger or consolidation (or otherwise by operation of law), any assignees or
transferees of all or substantially all the assets thereof, and any transferees
of the Ownership Interests thereof, in each case upon such successor, assignee
or transferee being admitted  as an additional or substitute Member in
accordance with the terms of this Agreement.

 
GCI Preference Period Last

Quarter Distribution:
if the Effective Date is not on the first day of a calendar quarter, an amount
equal to [a] 100% of Adjusted FCF for the Preference Period Last Quarter, minus
[b] the sum of [i] the amount of any ACS Preferred Distributions made during the
Preference Period Last Quarter, and [ii] the amount of the ACS Preference Period
Last Quarter Distribution.

 
 
15

--------------------------------------------------------------------------------

 
GCI Services Agreement:
as defined in Section 6.2[c].

 
GCI Transfer Date Connections:
as defined in Section 9.5[a][ii].

 
GCI Working Capital Loan:
as defined in Section 3.10[a].

 
Governmental Authority:
any government or any arbitrator, tribunal or court of competent jurisdiction,
administrative agency, board, department or commission, legislative body or
other governmental authority or instrumentality (in each case whether federal,
state, local, foreign, international or multinational) or entity which lawfully
assumes the powers and functions of the same (including any taxing or other
revenue collecting authority or other body).

 
HSPA Services Agreement:
the HSPA Services Agreement dated as of June _-, 2012 by and between GCI and
ACS.

 
Income:
for each Fiscal Year, each item of income and gain as determined, recognized and
classified for federal income tax purposes, but [a] any income or gain that is
exempt from federal income tax will be included as if it were an item of taxable
income, [b] any income or gain attributable to the taxable disposition of any
Company asset will be computed by the Company as if the adjusted basis of such
asset as of the date of the disposition were equal in amount to the Company’s
Book Value with respect to such asset as of such date, [c] in the event of a
Distribution of any Company asset, whether or not in connection with a
Liquidation of the Company, such event will for Capital Account purposes be a
deemed taxable disposition of such Company asset immediately prior to such
Distribution and income or gain will be computed and allocated among the Members
in accordance with their Equity Interests as if such property were actually
disposed of for an amount realized equal to the Fair Market Value of such asset
and as if the adjusted basis of such asset was equal to its Book Value at such
time, and [d] in the event the Book Value of any Company asset is adjusted
upwards pursuant to the definition of Book Value, the amount of such adjustment
will be taken into account for Capital Account purposes as income or gain from
the disposition of such Company asset and allocated among the Members.

 
 
16

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Indebtedness:
with respect to a Person, without duplication, [i] all indebtedness for borrowed
money, [ii] all indebtedness for the deferred purchase price of property or
services (other than trade payables incurred in the ordinary course of business
and other than expense accruals and deferred compensation items arising in the
ordinary course of business), [iii] all obligations evidenced by notes, bonds,
debentures or other similar instruments (other than performance, surety and
appeal bonds arising in the ordinary course of business in respect of which such
Person’s liability remains contingent), [iv] all indebtedness created or arising
under any conditional sale or other title retention agreement with respect to
property acquired (even though the rights and remedies of the seller or lender
under such agreement in the event of default are limited to repossession or sale
of such property), [v] all obligations under leases that have been or should be,
in accordance with GAAP, recorded as capital leases, [vi] all reimbursement,
payment or similar obligations, contingent or otherwise, under acceptance,
letter of credit or similar facilities and [vii] any liability of others
described in clauses [i] through [vi] above that the Person has guaranteed or
that is otherwise its legal liability, and including in clauses [i] through
[vi] above any accrued and unpaid interest or penalties thereon.

 
Indemnified Losses:
losses, damages, expenses (including fees and expenses of attorneys and other
advisors and court costs) and liabilities.

 
Independent Appraiser:
a nationally recognized third-party appraiser which, as of the date of
appointment (or consideration for appointment), [i] shall be qualified to
appraise businesses in the Wireless industry; [ii] shall have been engaged in
the appraisal or business valuation business for not less than five years; and
[iii] unless the Members otherwise agree, shall not be, and shall not have been
at any time during the previous three years, engaged by the Company or either
Member, or any of their respective Affiliates, to provide services to the
Company, such Member or such Affiliate.

 
Individual Fees and Expenses:
as defined in the Arbitration Agreement.

 
 
17

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Initial ACS Member:
as defined in the preamble.

 
Initial Capital Contribution:
as defined in Section 3.1[a].

 
Initial Four Year Period:
the period consisting of Fiscal Years 2013 through 2016.

 
Initial Four Year Plan:
as defined in Section 7.2[a].

 
Initial GCI Member:
as defined in the preamble.

 
Intentional Service Area Elimination:
as defined in Section 9.4[d].

 
Investing Member:
as defined in Section 9.1[a].

 
Investing Member’s Cost:
as defined in Section 9.1[c].

 
LIBOR:
the three-month London Interbank Offered Rate of interest on the first day on
which an applicable interest rate is to be determined, adjusted on the first day
of each calendar quarter, for dollar deposits as published in The Wall Street
Journal (Eastern Edition) under “Money Rates” from time to time, or if such rate
does not so appear, in such other nationally recognized publication as the
Members, by Majority Vote, may, from time to time, specify.  On any day when
such a rate is not reported, the most recently reported rate on a preceding day
will be deemed the applicable rate.

 
Liquidation:
the process of winding up and terminating the Company after its Dissolution.

 
Loss:
for each Fiscal Year, each item of loss or deduction as determined, recognized
and classified for federal income tax purposes, but [a] any Code § 705(a)(2)(B)
expenditure will be included as if it were a deductible expenditure, [b] any
loss attributable to the taxable disposition of any Company asset will be
computed by the Company as if the adjusted basis of such asset as of the date of
the disposition were equal to the Company’s Book Value with respect to such
asset as of such date, [c] in the event of a Distribution of any Company asset,
whether or not in connection with a Liquidation of the Company, such event will
be a deemed taxable disposition of such asset immediately prior to such
Distribution and any loss will be computed and allocated among the Members in
accordance with their Equity Interests as if such property were actually
disposed of for an amount realized equal to the Fair Market Value of such asset
and as if the adjusted basis of such asset were equal to its Book Value at such
time, [d] in the event the Book Value of any Company asset is adjusted downward
pursuant to the definition of Book Value, the amount of such adjustment will be
taken into account as a loss from the disposition of such asset and allocated
among the Members, and [e] any deductions for Depreciation with respect to a
Company asset will be determined as if the adjusted basis of such asset were
equal to the Book Value of such asset pursuant to the methodology described in
Regulations § 1.704-1(b)(2)(iv)(g)(3).

 
 
18

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Majority Vote:
the affirmative Vote of Members holding a majority of the outstanding Equity
Interests.

 
Material Indebtedness:
as defined in Section 6.4[c].

 
Maximum Rate:
the maximum lawful rate of interest permitted by the State of Alaska.

 
Member:
initially, each of the Initial GCI Member and the Initial ACS Member, and any
other Person subsequently admitted to the Company as an additional or substitute
member in accordance with the terms of this Agreement.

 
Member Approval Request:
as defined in Section 6.4.

 
Member Carrier:
as defined in the Facilities and Network Use Agreement.

 
Member Carrier Customer:
as defined in the Facilities and Network Use Agreement.

 
Member Network Capacity

Purchases:
as defined in Section 9.6[a].

 
Member Nonrecourse Debt:
any Nonrecourse Liability of the Company for which any Member or related Person
bears the economic risk of loss under Regulations § 1.752-2 within the meaning
of Regulations § 1.704-2(b)(4).

 
Member Nonrecourse Deductions:
Company losses, deductions or Code § 705(a)(2)(B) expenditures attributable to a
particular Member Nonrecourse Debt.  The amount of Member Nonrecourse Deductions
for any Fiscal Year or other period will be determined in accordance with the
provisions of Regulations § 1.704-2(i)(2).

 
 
19

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Information indicated by [***] in the text has been omitted and filed separately
with the Securities and Exchange Commission pursuant to a request for
Confidential Treatment under Rule 24b-2 under the Securities Exchange Act of
1934.

 
Member’s Assumed Share:
as defined in Section 14.8[c][ii].

 
Minimum Gain:
the minimum gain attributable to Member Nonrecourse Debt as determined under
Regulations § 1.704-2(i)(3).

 
Minimum Required FCF Projection:
the minimum threshold amount of FCF that must be projected to be achieved in a
given Plan in order for such Plan not to be subject to unanimous Board approval
pursuant to any paragraph of Section 7.4.

 
Minimum Required FCF Results:
the minimum threshold amount of FCF that must be achieved by the Company in a
given period in order for a given Plan not to be subject to unanimous Board
approval pursuant to any paragraph of Section 7.4.

 
Net ACS [***] Connection

Adjustment:
as defined in Section 9.4[c][iii].

 
Net ACS Connection Maintenance

Adjustment:
as defined in Section 9.5[a][v].

 
Net GCI [***] Connection

Adjustment:
as defined in Section 9.4[c][iv].

 
Net GCI Connection Maintenance

Adjustment:
as defined in Section 9.5[a][vi].

 
Net Income and Net Loss:
for each Fiscal Year, [i] the excess of the Income for such period over the Loss
for such period, or [ii] the excess of the Loss for such period over the Income
for such period, respectively, but Net Income and Net Loss for a Fiscal Year
will be computed by excluding from such computation any Income or Loss specially
allocated under Sections 4.2 through 4.12 (including, for the avoidance of
doubt, Contributed Asset Depreciation), any Nonrecourse Deductions, and any
Member Nonrecourse Deductions.

 
Non-Investing Member:
as defined in Section 9.1[d].

 
Nonrecourse Deductions:
Losses, deductions or Code § 705(a)(2)(B) expenditures attributable to
Nonrecourse Liabilities of the Company.  The amount of Nonrecourse Deductions
for any Fiscal Year or other period will be determined in accordance with the
provisions of Regulations § 1.704-2(c).

 
 
20

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Nonrecourse Liability:
a nonrecourse liability as defined in Regulations § 1.752-1(a)(2) and referred
to in Regulations § 1.704-2(b)(3).

 
Non-Requesting Member:
as defined in Section 9.7[d].

 
Notice:
as defined in Section 16.12.

 
Offer:
as defined in Section 14.9[b].

 
Officers:
as defined in Section 6.2[b].

 
Option 2:
as defined in Section 9.1[b].

 
Ownership Interest:
with respect to any Person, all of the limited liability company interests of
the Company owned by such Person, including an interest in the Income and Losses
of the Company, a Capital Account interest, and all management rights, voting
rights, rights to consent and  other rights of such Person in and to the Company
as provided in this Agreement and the Act, together with all obligations of such
Person to comply with the terms of this Agreement and the Act.

 
Permitted Transferee:
a Person described in Section 14.3 to whom an Ownership Interest may be
Transferred.

 
Person:
an individual, corporation, partnership, limited liability company, trust,
unincorporated organization, association or other entity.

 
Plan(s):
one or more of an Annual Budget, Four Year Plan or Revised Four Plan, as
applicable.

 
Preference Period:
[a] if the Effective Date is on the first day of a calendar quarter, the 16
calendar quarters beginning on the Effective Date, and [b] if the Effective Date
is not on the first day of a calendar quarter, the Preference Period Partial
First Quarter, the Preference Period Full Quarters and the Preference Period
Last Quarter, collectively.

 
Preference Period Full Quarters:
if the Effective Date is not on the first day of a calendar quarter, the 15 full
calendar quarters beginning on (and including) the first day of the first full
calendar quarter beginning after the Effective Date and ending on (but
excluding) the first day of the Preference Period Last Quarter.

 
 
21

--------------------------------------------------------------------------------

 
Preference Period Last Quarter:
if the Effective Date is not on the first day of a calendar quarter, the
calendar quarter beginning on the first day of the calendar quarter after the
end of the last Preference Period Full Quarter.

 
Preference Period Partial

First Quarter:
if the Effective Date is not on the first day of a calendar quarter, the period
of time beginning on (and including) the Effective Date and ending on (but
excluding) the first day of the first calendar quarter after the Effective Date.

 
Preference Period Partial

First Quarter Days:
the number of days in the Preference Period Partial First Quarter.

 
Private WiFi:
any WiFi service that is not Public WiFi.

 
Proceeding:
any suit, action, proceeding, arbitration, audit, hearing, or investigation (in
each case, whether civil, criminal, administrative, investigative, or informal)
commenced, brought, conducted or heard by or before, or otherwise involving, any
Governmental Authority.

 
Professional Services:
as defined in the GCI Services Agreement.

 
Professional Services Guidelines:
the terms and conditions on which GCI Communication Corp. is permitted to
provide Professional Services to the Company, as set forth on Exhibit C to the
GCI Services Agreement.

 
Public WiFi:
any WiFi service established and owned by the Company that is provided to the
Member Carriers for use by the Member Carrier Customers on their Wireless
Devices, and is password protected or has other secure authentication protocols
established and managed by the Company.

 
Purchasing Member:
as defined in Section 14.9[c].

 
Reallocated Actual FCF Amount:
as defined in Section 7.5[b].

 
Reallocated Amount:
as defined in Section 7.5[b].

 
Reallocated Projected FCF Amount:
as defined in Section 7.5[a].

 
Receiving Party:
as defined in Section 16.20.

 
 
22

--------------------------------------------------------------------------------

 
Recommended Changes:
as defined in the Arbitration Agreement.

 
Redetermined Recommended Changes:
as defined in the Arbitration Agreement.

 
Regulations:
the Treasury Regulations (including temporary or proposed regulations)
promulgated under the Code, as amended from time to time (including
corresponding provisions of succeeding regulations).

 
Related Party:
as defined in Section 7.3[d].

 
Remaining Member:
as defined in Section 14.10[b].

 
Requesting Member:
as defined in Section 9.7[a].

 
Requesting Member’s Cost:
as defined in Section 9.7[c].

 
Required 704(b) Adjustment Notice:
as defined in Section 3.4.

 
Restricted Wireless Business:
the business of [a] engineering, operating and maintaining competitive Wireless
network(s) in Alaska, and [b] providing Wireless products (including Wireless
Devices) and services in the State of Alaska on any basis, including entering
into Wireless roaming agreements.  For the avoidance of doubt, the Restricted
Wireless Business does not include engineering, providing and maintaining
competitive Wireless Backhaul and Transport services for the benefit of Wireless
carriers serving the Alaska market, or providing competitive cell site leases.

 
Revised Four Year Plan:
as defined in Section 7.3[b][ii].

 
Right of First Offer:
as defined in Section 14.9[b].

 
ROFO Assets:
as defined in Section 14.9[a].

 
ROFO Notice:
as defined in Section 14.9[a].

 
ROFO Period:
as defined in Section 14.9[b].

 
SAE Cure Period:
as defined in Section 9.4[d].

 
Sale Notice:
as defined in Section 14.8[a].

 
Satellite Capacity Services:
as defined in the GCI Services Agreement.

 
Satellite Capacity Services Guidelines:
the terms and conditions on which GCI Communication Corp. is permitted to
provide Satellite Capacity Services to the Company, as set forth on Exhibit D to
the GCI Services Agreement.

 
 
23

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Second Four Year Plan:
as defined in Section 7.3[c].

 
Service Area Elimination:
any Intentional Service Area Elimination or Unintentional Service Area
Elimination.

 
Service Area Elimination

Company Notice:
as defined in Section 9.4[d].

 
Service Area Elimination

Member Notice:
as defined in Section 9.4[d].

 
Service Area Elimination Percentage:
as defined in Section 9.4[d].

 
Standard of Care:
as defined in Section 10.5[a].

 
Subsidiary:
of any Person means another Person, an amount of the voting securities, other
voting ownership or voting partnership interests of which is sufficient to elect
at least a majority of its board of directors or other governing body (or, if
there are no such voting interests, 50% or more of the equity interests of
which) is owned directly or indirectly by such first Person or by another
Subsidiary of such first Person.

 
Tag Along Notice:
as defined in Section 14.8[a].

 
Tag Along Right:
as defined in Section 14.8[a].

 
Tag/Drag Sale:
as defined in Section 14.8[a].

 
Tax Matters Partner:
as defined in Section 11.9.

 
Third Party:
a Person that is not a Member, the Company, an Affiliate of either, or an
officer or director of any of the foregoing.

 
Third Party Purchaser:
as defined in Section 14.8[a].

 
Third Party Purchaser Sale Period:
as defined in Section 14.9[d].

 
Transaction Agreements:
as defined in Section 16.22[a].

 
Transfer:
a direct or indirect sale, exchange, assignment, transfer, transfer upon or in
lieu of foreclosure, or other disposition (whether voluntary, involuntary or by
operation of law, including pursuant to a merger of the Company), and includes
any transaction that results directly or indirectly in a change in Control of a
Member or a transfer of more than 50% of the direct or indirect beneficial
ownership of a Member to a Person that is not an Affiliate of such Member,
including a spin-off or split-off, however structured; provided, however, that
in no event shall any issuance, transfer, conversion or exchange of ACS or GCI
securities (other than a tracking stock, spin-off or split-off that directly or
indirectly separates the Equity Interests from any substantial portion of the
other assets and liabilities of ACS or GCI) or any change in Control of ACS or
GCI, in each case by merger, consolidation or otherwise, be a “Transfer” for
purposes of this Agreement.

 
 
24

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Transferee:
a Person to whom an Ownership Interest is Transferred in compliance with this
Agreement, who will have the rights specified in Section 14.5.

 
Transferor:
a Person who Transfers an Ownership Interest in compliance with this Agreement.

 
Unintentional Service

Area Elimination:
as defined in Section 9.4[d].

 
Unpaid ACS Preferred

Distribution Amount:
as defined in Section 14.8[c][i].

 
Vote:
an action of the Company by the Members in accordance with Article 8.

 
WiFi:
any wireless local area network technology that is based on the Institute of
Electrical and Electronics Engineers’ (IEEE) 8.02.11 standards.

 
Wireless:
[i] Commercial Mobile Radio Services (as defined by the Communications Act and
the rules and regulations thereunder), [ii] Public WiFi and [iii] any additional
mobile voice, text messaging and data products and services provided over
wireless spectrum licensed or authorized for use by the FCC other than, in the
case of clause [iii], any such products or services provided by satellite
directly to Wireless Devices.

 
Wireless Backhaul and Transport:
capacity to carry and support voice and data traffic between [i] a cell site and
[ii] a switch and a Wireless network (for voice) or the nearest Internet peering
point (for data) to a carrier of Wireless service.

 
 
25

--------------------------------------------------------------------------------

 

Information indicated by [***] in the text has been omitted and filed separately
with the Securities and Exchange Commission pursuant to a request for
Confidential Treatment under Rule 24b-2 under the Securities Exchange Act of
1934.
 
 
 
Wireless Business:
as defined in Section 2.1[a].

 
Wireless Device:
Wireless phones, Wireless iPads and similar Wireless tablet devices, Wireless
routers and other devices used to transmit and receive voice, data and text by
means of Wireless services.

 
Wireless Parent:
in relation to the Initial ACS Member, ACS, in relation to the Initial GCI
Member, GCI, and in relation to any other Person, the Person that controls such
Person’s and its Affiliates’ provision of Wireless products (including Wireless
Devices) and services in the State of Alaska.

 
Withdrawal:
the occurrence of an event that terminates membership in the Company, as
provided in Section 12.2.

 
Working Capital:
Current Assets minus Current Liabilities.

 
1.10 Interpretation.
 
  For purposes of this Agreement, [a] the words “include,” “includes” and
“including” shall be deemed to be followed by the words “without limitation”;
[b] the word “or” has the inclusive meaning of “and/or”; and [c] the words
“herein,” “hereof,” “hereby,” “hereto” and “hereunder” refer to this Agreement
as a whole.  The definitions given for any defined terms in this Agreement shall
apply equally to both the singular and plural forms of the terms
defined.  Whenever the context may require, any pronoun shall include the
corresponding masculine, feminine and neuter forms.  Unless the context
otherwise requires, references herein:  [x] to Articles, Sections, Exhibits and
Schedules mean the Articles and Sections of, and Exhibits and Schedules attached
to, this Agreement; [y] to an agreement, instrument or other document means such
agreement, instrument or other document as amended, supplemented and modified
from time to time to the extent permitted by the provisions thereof; and [z] to
a statute means such statute as amended from time to time and includes any
successor legislation thereto and any regulations promulgated thereunder.  This
Agreement shall be construed without regard to any presumption or rule requiring
construction or interpretation against the party drafting an instrument or
causing any instrument to be drafted.  The Exhibits and Schedules referred to
herein shall be construed with, and as an integral part of, this Agreement to
the same extent as if they were set forth verbatim herein.
 
1.11 General Appraisal Procedures.
 
[a]  
For purposes of determining Fair Market Value under subparagraph [a] of the
definition of Fair Market Value, [***], within ten days following the end of the
15-day period specified in subparagraph [a] of the definition of Fair Market
Value for the Members to agree on a determination of Fair Market Value (a “Fair
Market Value Determination Date”), the Members shall appoint an Independent
Appraiser mutually acceptable to the Members.  If the Members are unable to
mutually agree on an Independent Appraiser within ten days following a Fair
Market Value Determination Date, then within five Business Days thereafter each
of the GCI Member and the ACS Member shall submit a list of two names of
qualified appraisers as such Member’s nominees for the Independent
Appraiser.  If either the GCI Member or the ACS Member does not submit a list of
nominees for the Independent Appraiser within the required time period, then the
Member that did not submit a list on a timely basis may select the Independent
Appraiser from the list submitted by the other Member within five Business Days
after such list is submitted and if that does not occur within the required time
period, then the Member that submitted its list on a timely basis may select the
Independent Appraiser from its list.  If both the GCI Member and the ACS Member
submit their lists within the required time period and the same name appears on
both lists, that Person shall become the Independent Appraiser.  If two names
are common to both lists, and the Members are unable to agree as between such
designees within five Business Days after such lists are submitted, the Members
shall request that the Chief Executive Officer of the American Society of
Appraisers (the “ASA”) make such selection, which will be binding on the
Members.  If no Person is named on both lists, either Member can notify the
other Member within five Business Days after such lists are submitted that it is
willing to select a Person named on the other’s list, in which case the first
such Person selected becomes the Independent Appraiser.  If no Independent
Appraiser is selected by this process, each of the GCI Member and the ACS Member
shall submit a new list of two names of qualified appraisers (without
duplication of a name identified on the prior list submitted by such Member) as
its nominees, which second list shall be submitted on the date that is not more
than ten Business Days after the original submission date.  If either the GCI
Member or the ACS Member does not submit its second list within the required
time period, then the same process shall apply as would apply if a Member did
not submit its initial list in a timely manner.  If no common name appears on
such second lists and neither Member notifies the other that a name on the
other’s list is acceptable to it within five Business Days after such second
lists are submitted, each Member shall designate one name from the other
Member’s list to be removed from consideration within five Business Days after
such second lists are submitted and the Members shall request the ASA to select
the Independent Appraiser from the remaining two names, which selection shall be
binding on the Members.  If the Independent Appraiser selected by this process
is unwilling or unable to proceed, then the Members will repeat the foregoing
process until an Independent Appraiser who is willing to act is selected.

 
 
26

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Information indicated by [***] in the text has been omitted and filed separately
with the Securities and Exchange Commission pursuant to a request for
Confidential Treatment under Rule 24b-2 under the Securities Exchange Act of
1934.

 
[b]  
Within 30 days following such appointment, the Independent Appraiser shall
determine Fair Market Value utilizing commonly used valuation methods and
practices.  The decision of the Independent Appraiser shall be binding and
conclusive on the Members and the Company.  The GCI Member on the one hand, and
the ACS Member, on the other hand, shall each pay 50% of the fees and expenses
of the Independent Appraiser.

 
1.12 Put Right/Call Right Appraisal Procedures.
 
[a]  
For purposes of determining Fair Market Value under this Agreement for purposes
of determining the [***], within ten days following the end of the Fair Market
Value Determination Date, each Member shall select an Independent Appraiser and
notify the other Member of its selection.  If a Member fails to so appoint an
Independent Appraiser within such time period, the Independent Appraiser
appointed by the other Member will determine Fair Market Value, utilizing
commonly used valuation methods and practices, which determination will be
binding and conclusive on the Members.

 
 
27

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[b]  
If both the GCI Member and the ACS Member timely appoint an Independent
Appraiser pursuant to Section 1.12[a], each of the GCI Member and the ACS Member
shall cause its selected Independent Appraiser to deliver to the parties within
30 days of its selection its determination of Fair Market Value utilizing
commonly used valuation methods and practices.  If the lower valuation is at
least 90% of the higher valuation, then the Fair Market Value, which will be
binding and conclusive on the Members, will be the average of the two
valuations.

 
[c]  
If the lower valuation is less than 90% of the higher valuation, and if neither
Member objects in writing to the other’s valuation within 5 Business Days of
delivery of the determination of Fair Market Value by each Independent Appraiser
pursuant to Section 1.12[b], then the Fair Market Value will be the average of
the two valuations.  If the lower valuation is less than 90% of the higher
valuation and if either Member objects in writing to the other’s valuation
within the five Business Day period referenced in the preceding sentence, then
the GCI Member and the ACS Member will request their respective Independent
Appraiser to jointly appoint a third Independent Appraiser.  If the first two
Independent Appraisers cannot agree on a third Independent Appraiser within ten
Business Days after being requested to do so, then either Member may request the
ASA to make the selection, which will be binding on the Members.

 
[d]  
Within 15 days after the appointment of the third Independent Appraiser, the
third Independent Appraiser will deliver its determination of Fair Market Value,
and the Fair Market Value will be the valuation determined by one of the first
two Independent Appraisers that is closest to the valuation determined by the
third Independent Appraiser, which will be binding and conclusive on the
Members.

 
[e]  
Each of the GCI Member, on the one hand, and the ACS Member, on the other hand,
shall pay [i] all of the fees and expenses of the Independent Appraiser selected
by it pursuant to Section 1.12[a] and [ii] 50% of the fees and expenses of the
third Independent Appraiser selected pursuant to Section 1.12[c].

 
ARTICLE 2: PURPOSES AND POWERS
 
2.1 Principal Purpose.
 
[a]  
Subject to the provisions of this Agreement, the business and sole purpose of
the Company is to [i] own and operate the assets contributed to the Company by
the Initial GCI Member and the Initial ACS Member pursuant to the Contribution
Agreement, [ii] engineer, operate and maintain competitive Wireless network(s)
in Alaska, [iii] design and implement competitive plans for the provision of
Wireless products (including procuring and reselling Wireless Devices) and
services, and provide such plans to Wireless carriers on a wholesale basis as
provided in this Agreement, that permit the Members to compete with other
facilities-based Wireless carriers in providing voice, data and text services,
[iv] engineer, provision and maintain competitive Wireless Backhaul and
Transport services for the benefit of the Company and other Wireless carriers
serving the Alaska market solely for Wireless Devices, [v] provide competitive
cell site leases, [vi] enter into Wireless roaming agreements, [vii] support the
Members in maintaining their respective eligible telecommunications carrier
designations, and [viii] to the extent related to the foregoing, support the
Members and their Affiliates in complying with their regulatory obligations
(collectively, the “Wireless Business”).  Except as otherwise provided in
Section 2.1[b], the Company will not engage in any activity or business other
than the Wireless Business.

 
 
28

--------------------------------------------------------------------------------

 

Information indicated by [***] in the text has been omitted and filed separately
with the Securities and Exchange Commission pursuant to a request for
Confidential Treatment under Rule 24b-2 under the Securities Exchange Act of
1934.

 
[b]  
The Company may engage in any business or investment activity not provided in
Section 2.1[a] subject to [i] obtaining the affirmative Vote of all Members and
unanimous approval of the Board, and [ii] any limitations in the Act on the
businesses in which a limited liability company may engage.

 
2.2 Powers.
 
  The Company has all of the powers granted to a limited liability company under
the Act, as well as all powers necessary or convenient to achieve its purposes
and to further its business.
 
ARTICLE 3: CAPITAL OF THE COMPANY
 
3.1 Capital Contributions.
 
[a]  
On the Effective Date, the Members have made the Capital Contributions to the
Company set forth on the attached Exhibit B (each, an “Initial Capital
Contribution”).

 
[b]  
No Member will be required, and no Member will have any right, except as
provided in Section 3.11, to make any Additional Capital Contribution at any
time, except as may be required by law [***].

 
3.2 Capital Accounts.
 
  A Capital Account will be maintained for each Member and credited, charged and
otherwise adjusted as required by § 704(b) of the Code and the § 704(b)
Regulations.  Each Member’s Capital Account will be:
 
[a]  
Credited with [i] the amount of money contributed by the Member as an Initial
Capital Contribution or Additional Capital Contribution, [ii] the Fair Market
Value of property contributed by the Member as an Initial Capital Contribution
or Additional Capital Contribution (net of liabilities that the Company assumes
or takes property subject to), [iii] the Member’s allocable share of Net Income,
and [iv] all other items properly credited to such Capital Account, including
any Income or items thereof allocated to such Member under Sections 4.2 through
4.12;

 
[b]  
Charged with [i] the amount of money distributed to the Member by the Company,
[ii] the Fair Market Value of property distributed to the Member by the Company
(net of liabilities that the Member assumes or takes subject to), [iii] the
Member’s allocable share of Net Losses, and [iv] all other items properly
charged to such Capital Account, including any Losses or deductions specially
allocated to such Member under Sections 4.2 through 4.12; and

 
 
29

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[c]  
Otherwise adjusted as required by the § 704(b) Regulations.

 
Any unrealized appreciation or depreciation with respect to any asset
distributed in kind will be allocated among the Members in accordance with the
provisions of Article 4 as though such asset had been sold on the date of
Distribution for its Fair Market Value as of such date, and the Members’ Capital
Accounts will be adjusted to reflect both the deemed realization of such
appreciation or depreciation and the Distribution of such property.
 
The foregoing provisions and the other provisions of this Agreement relating to
the maintenance of the Capital Accounts are intended to comply with the § 704(b)
Regulations and will be interpreted and applied in a manner consistent with such
Regulations and any amendment or successor provision thereto.  The Tax Matters
Partner also will make any appropriate modifications if unanticipated events
might otherwise cause this Agreement not to comply with the Regulations, so long
as such changes would not cause a material change in the relative economic
benefits of the Members under this Agreement.
 
3.3 Transfer.
 
  If all or any part of an Ownership Interest is Transferred in accordance with
this Agreement, the Capital Account of the Transferor that is attributable to
the Transferred Ownership Interest will carry over to the Transferee.
 
3.4 Adjustments.
 
  The Members intend to comply with the § 704(b) Regulations in all respects,
and the Tax Matters Partner is authorized and directed to adjust the Capital
Accounts of the Members to the full extent that the § 704(b) Regulations may
apply (including applying the concepts of qualified income offsets and minimum
gain chargebacks).  To this end, the Tax Matters Partner may make any Capital
Account adjustment that it determines to be necessary or appropriate to maintain
equality between the aggregate Capital Accounts of the Members and the amount of
Company capital reflected on the Company’s balance sheet (as computed for book
purposes), as long as such adjustments are consistent with the underlying
economic arrangement of the Members and are based, wherever practicable, on
federal tax accounting principles.  The Tax Matters Partner will provide written
notice to the Members of any material, discretionary adjustment that is made
pursuant to this Section 3.4 (a “Required 704(b) Adjustment Notice”).   A Member
may provide written notice to the Tax Matters Partner of any objection such
Member has to an adjustment that is the subject of a Required 704(b) Adjustment
Notice, which notice must be delivered within ten Business Days following the
Tax Matters Partner’s delivery of  a Required 704(b) Adjustment Notice regarding
such adjustment.  The Tax Matters Partner and the Members shall promptly meet to
discuss and resolve any such dispute.  If resolution cannot be reached and upon
written request by the disputing Member, the Tax Matters Partner shall retain a
national accounting firm (other than the Company’s regular accounting firm) to
determine whether such adjustment should be made.  The cost of such accounting
firm shall be paid by the disputing Member if such firm agrees with the
adjustments made by the Tax Matters Partner or by the Tax Matters Partner if
such firm agrees with the disputing Member.
 
3.5 Market Value Adjustments.
 
  The Tax Matters Partner is authorized and directed to make appropriate Capital
Account adjustments upon any Transfer of an Ownership Interest made in
accordance with this Agreement in accordance with the § 704(b) Regulations.  If
optional basis adjustments are made under § 734 or § 743 of the Code, the Tax
Matters Partner is authorized to make appropriate Capital Account adjustments as
required by the § 704(b) Regulations.
 
 
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3.6 No Withdrawal of Capital.
 
  Except as specifically provided in this Agreement, no Member will be entitled
to withdraw all or any part of such Member’s Capital Contribution from the
Company prior to the Company’s Dissolution and Liquidation, or, when such
withdrawal of capital is permitted, to demand a distribution of property other
than money or as otherwise provided in this Agreement.
 
3.7 No Interest on Capital.
 
  No Member will be entitled to receive interest on such Person’s Capital
Account or Capital Contribution.
 
3.8 No Drawing Accounts.
 
  The Company will not maintain a drawing account for any Member.  All
Distributions to Members will be governed by Article 5 (relating to
Distributions not in Liquidation of the Company) and by Article 13 (relating to
Distributions in Liquidation of the Company).
 
3.9 No Salary or Other Compensation.
 
  Except for the Consulting Fee to be paid pursuant to Section 6.1[d], or as
otherwise permitted by or approved pursuant to this Agreement, no Member or
Affiliate of a Member will be entitled to any salary or other form of
compensation paid by the Company for services rendered to the Company.
 
3.10 Working Capital.
 
[a]  
On the Effective Date, GCI and the Company are entering into a Working Capital
Loan Agreement in the form attached to the Contribution Agreement as Exhibit B
(the “GCI Working Capital Loan”).

 
[b]  
The Company shall, and ACS, GCI and the Members shall cause the Company to, use
its reasonable best efforts to obtain a senior revolving credit facility from a
third-party lender (that is not an Affiliate of any Member) to be in place at
the start of the Amortization Period on commercially reasonable terms, in the
principal amount of up to $50 million, which will be used solely to fund the
Company’s ongoing Working Capital needs and to repay the GCI Working Capital
Loan (the “Company Working Capital Loan”).  Upon closing the Company Working
Capital Loan, the Company will draw down funding on the Company Working Capital
Loan in an amount sufficient to repay the GCI Working Capital Loan in full.

 
3.11 Member Cure Rights on GCI Working Capital Loan.
 
[a]  
Upon delivery of any Exercise Notice (as defined in the GCI Working Capital
Loan) to the Members, each Member may offer to make a capital contribution to
the Company as set forth in Section 3.11[b] to cure the Event of Default (under
and as defined in the GCI Working Capital Loan) by sending a written notice (a
“Cure Offer”) to the Company and the Lender (under and as defined in the GCI
Working Capital Loan) no later than 15 Business Days after receipt of the
Exercise Notice (the “Cure Offer Period”).  Cure Offers shall be irrevocable,
and, to the extent such Cure Offers are accepted by the Company pursuant to
Section 3.11[b], the Members shall be bound and obligated to make the capital
contributions as set forth in Section 3.11[b].

 
 
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[b]  
If both Members deliver a Cure Offer during the Cure Offer Period, the Company
will promptly provide written acceptance to the Members of the Cure Offers, and
ACS Member will make a cash contribution to the Company on or prior to the
twentieth Business Day following delivery of the Exercise Notice (the “Cure
Date”) equal to one-third of the Company’s outstanding obligations under the GCI
Working Capital Loan as of the Cure Date by paying such amount to the Lender on
behalf of the Company by wire transfer of immediately available funds to the
Lender.  On the Cure Date, subject to receipt by the Lender of such payment by
the ACS Member on behalf of the Company on or prior to the Cure Date, the
remaining obligations of the Company under the GCI Working Capital Loan will be
forgiven in a deemed capital contribution by the GCI Member equal to two thirds
of the outstanding obligations under the GCI Working Capital Loan as of the Cure
Date.

 
[c]  
If one or both Members do not deliver a Cure Offer during the Cure Offer Period,
the Company will promptly provide written rejection of any Cure Offer made, no
capital contributions will be payable or permitted to be made by the Members
under this Section 3.11, and the rights of the Members under this Section 3.11
to cure the related Event of Default under the GCI Working Capital Loan will be
deemed waived.  Nothing in this Section 3.11[c] shall be deemed to waive any of
the ACS Member’s rights under Section 6.5(c) of the GCI Working Capital Loan.

 
ARTICLE 4: INCOME AND LOSSES
 
4.1 Allocation of Net Income and Net Loss.
 
  The Company’s Net Income or Net Loss, as the case may be, and each item of
income, gain, loss and deduction entering into the computation thereof, for each
Fiscal Year will be allocated as follows:
 
[a]  
Net Income for such Fiscal Year will be allocated as follows:

 
[i]  
first, an amount of Net Income equal, and in proportion, to the Distributions
made to each Member pursuant to Section 5.1 with respect to such Fiscal Year
will be allocated to such Member; and

 
[ii]  
second, any remaining Net Income will be allocated to the Members in proportion
to their Equity Interests.

 
[b]  
Net Loss for such Fiscal Year will be allocated to the Members in proportion to
their Equity Interests.

 
[c]  
Notwithstanding anything in this Agreement to the contrary, any Income or Loss
arising from an adjustment to the Book Value of the Company assets under clause
[b] of the definition of Book Value shall be allocated among the Members in
accordance with Section 4.1[a][ii].

 
 
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4.2 Company Minimum Gain Chargeback.
 
  Notwithstanding any other provision of this Agreement to the contrary, if in
any Fiscal Year or other period there is a net decrease in the amount of the
Company Minimum Gain, then each Member will first be allocated items of Income
for such year (and, if necessary, subsequent years) in an amount equal to such
Member’s share of the net decrease in such Minimum Gain during such year (as
determined under Regulations § 1.704-2(g)(2)), but if there is insufficient
Income in a year to make the allocation specified above for all Members for such
year, the Income will be allocated among the Members in proportion to the
respective amounts they would have been allocated had there been an unlimited
amount of Income for such year.
 
4.3 Minimum Gain Chargeback for Member Nonrecourse Debt.
 
  Notwithstanding any other provision of this Agreement to the contrary other
than Section 4.2, if in any Fiscal Year or other period there is a net decrease
in the amount of the Member Nonrecourse Debt Minimum Gain, then each Member will
first be allocated items of Income for such year (and, if necessary, subsequent
years) in an amount equal to such Member’s share of the net decrease in such
Minimum Gain during such year (as determined under Regulations § 1.704-2(i)(4)),
but if there is insufficient Income in a year to make the allocation specified
above for all Members for such year, the Income will be allocated among the
Members in proportion to the respective amounts they would have been allocated
had there been an unlimited amount of Income for such year.
 
4.4 Qualified Income Offset.
 
  Notwithstanding any other provision of this Agreement to the contrary (except
Sections 4.2 and 4.3 which will be applied first), if in any Fiscal Year or
other period a Member unexpectedly receives an adjustment, allocation or
distribution described in Regulations § 1.704-1(b)(2)(ii)(d)(4), (5) or (6),
such Member will be specially allocated items of Income in an amount and manner
sufficient to eliminate, to the extent required by the Regulations, the Adjusted
Capital Account Deficit of such Member as quickly as possible.
 
4.5 Limit on Net Loss Allocations.
 
  Notwithstanding the provisions of  Section 4.1, or any other provision of this
Agreement to the contrary, Net Loss will not be allocated to a Member if such
allocation would cause or increase such Member’s Adjusted Capital Account
Deficit and will be reallocated to the other Members, subject to the limitations
of this Section 4.5.
 
4.6 Loss from Member Nonrecourse Debt.
 
  Any Loss attributable to Member Nonrecourse Debt will be allocated to the
Member who bears the economic risk of loss with respect to such debt.
 
4.7 Nonrecourse Deductions.
 
  Nonrecourse Deductions for any Fiscal Year or other period will be allocated
to the Members in proportion to their Equity Interests.
 
4.8 § 754 Adjustments.
 
  The Company shall make an election under Section 754 of the Code upon the
written request of any Member.  To the extent an adjustment to the adjusted tax
basis of any Company asset under §§ 734(b) or 743(b) of the Code is required to
be taken into account in determining Capital Accounts under Regulations §
1.704-1(b)(2)(iv)(m), the amount of the adjustment to the Capital Accounts will
be treated as an item of gain (if the adjustment increases the basis of the
asset) or loss (if the adjustment decreases the basis), and the gain or loss
will be specially allocated to the Members in a manner consistent with the
manner in which their Capital Accounts are required to be adjusted under
Regulations § 1.704-1(b)(2)(iv)(m).
 
 
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4.9 Reversal of Mandatory Allocations.
 
  In the event that any Income, Loss or Net Loss is allocated pursuant to
Sections 4.2 through 4.7, subsequent Income, Loss or Net Loss (or items thereof)
will first be allocated (subject to Sections 4.2 through 4.7) to the Members in
a manner which will result in each Member having a Capital Account balance equal
to that which would have resulted had the original allocation of Income, Loss,
or Net Loss (or items thereof) pursuant to Sections 4.2 through 4.7 not
occurred.
 
4.10 Compliance with Code.
 
  The foregoing provisions of this Article 4 relating to the allocation of
Income, Net Income, Loss and Net Loss are intended to comply with Regulations
under § 704(b) of the Code and will be interpreted and applied in a manner
consistent with such Regulations.
 
4.11 Tax Allocations — § 704(c).
 
  In accordance with § 704(c) of the Code and the related Regulations, income,
gain, loss and deduction with respect to any property contributed to the capital
of the Company, solely for tax purposes, will be allocated among the Members so
as to take account of any variation between the adjusted basis to the Company of
the property for federal income tax purposes and the initial Book Value of the
property.  For the avoidance of doubt, as a result of the allocation of
Contributed Asset Depreciation described in Section 4.12, all allocations of
depreciation, amortization or other cost recovery deductions with respect to a
Contributed Asset shall be made solely to the relevant Member who contributed
such Contributed Asset.  Allocations under this Section 4.11 are solely for
purposes of federal, state and local taxes and will not affect, or in any way be
taken into account in computing, any Member’s Capital Account or share of
Income, Loss, Net Income, Net Loss or other items or distributions under any
provision of this Agreement.
 
4.12 Special Allocation of Contributed Asset Depreciation.
 
  Notwithstanding anything in this Agreement to the contrary, any Contributed
Asset Depreciation arising from the Company’s ownership of any Contributed Asset
will be allocated entirely to the Member who contributed such Contributed Asset.
 
4.13 Allocation on Transfer.
 
  If any Ownership Interest in the Company is transferred, or is increased or
decreased by reason of the admission of a new Member or otherwise, during any
Fiscal Year, the Company will allocate Net Income or Net Loss or items thereof
to the Persons who were the holders of such Ownership Interest during such
Fiscal Year in proportion to the number of days that each such holder was
recognized as the owner of such Ownership Interest during such Fiscal Year or,
if the Members agree otherwise by unanimous Vote, in any other proportion
permitted by the Code and in accordance with this Agreement, but in any event
without regard to the results of Company operations during the period in which
each such holder was recognized as the owner of such Ownership Interest during
such Fiscal Year, and without regard to the date, amount, or recipient of any
Distributions that may have been made with respect to such Ownership Interest.
 
ARTICLE 5: DISTRIBUTIONS
 
5.1 Distributions Generally.
 
  Subject to Sections 5.3 and 5.4, the Company will distribute in cash all its
preliminary Adjusted FCF on a quarterly basis as promptly as practicable, but in
no event later than 12 Business Days after the end of each quarter; provided
that subsequent quarterly Distributions pursuant to this Section 5.1 will be
trued up to reflect any increases or decreases necessary such that an amount
equal to all Adjusted FCF, as finally calculated with respect to the preceding
quarter, has been distributed in cash on a cumulative basis.  All Distributions
(other than Distributions made upon the Liquidation of the Company, which will
be made in accordance with the provisions of Article 13) will be made to the
Members in the following order and priority:
 
 
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[a]  
First, to the ACS Member, an amount equal to the excess of [i] the cumulative
amount of the ACS Preferred Distributions for the period beginning on the
Effective Date and ending on the last day of such calendar quarter over [ii] all
Distributions previously made to the ACS Member pursuant to this Section 5.1[a],
subject to adjustment pursuant to Section 9.4;

 
[b]  
Second, to the GCI Member, an amount equal to 100% of Adjusted FCF for such
calendar quarter in excess of amounts distributed to the ACS Member for such
calendar quarter pursuant to Section 5.1[a] for each calendar quarter (including
the Preference Period Partial First Quarter, if any) during the Preference
Period (but excluding the Preference Period Last Quarter, if any), subject to
adjustment pursuant to Section 9.4;

 
[c]  
Third, for the Preference Period Last Quarter, if any (and, for the avoidance of
doubt, after any Distributions for the Preference Period Last Quarter to be made
to the ACS Member pursuant to Section 5.1[a] are made), an amount equal to the
ACS Preference Period Last Quarter Distribution to the ACS Member and an amount
equal to the GCI Preference Period Last Quarter Distribution to the GCI Member,
in each case, if any, and subject to adjustment pursuant to Section 9.4;

 
[d]  
Fourth, to the ACS Member, an amount equal to the excess of [i] the cumulative
amount of the Reallocated Amount as of the date of such Distribution over
[ii] all Distributions previously made to the ACS Member pursuant to this
Section 5.1[d];

 
[e]  
Fifth, to the GCI Member, an amount equal to the excess of [i] the excess of
[x] the aggregate Clawback Amount over [y] [1] the Minimum Required FCF Results
for such Fiscal Year divided by four, multiplied by [2] the Equity Interest of
the ACS Member over [ii] all Distributions previously made to the GCI Member
pursuant to this Section 5.1[e]; and

 
[f]  
Sixth, to the Members in accordance with their respective Equity Interests,
subject to adjustment pursuant to Section 9.4 or Section 9.5.

 
5.2 Payment.
 
  All Distributions will be made to Members owning Ownership Interests on the
date of record, such date being the last day of the calendar month preceding the
date of Distribution, as reflected on the books of the Company.
 
5.3 Withholding.
 
  If required by the Code or by state or local law, the Company will withhold
any required amount from Distributions to a Member for payment to the
appropriate taxing authority.  Any amount so withheld from a Member will be
treated as a Distribution by the Company to such Member.  Each Member agrees to
file timely any agreement that is required by any taxing authority in order to
avoid any withholding obligation that would otherwise be imposed on the Company.
If the amount required to be withheld with respect to a Member exceeds the
amount of Distributions payable to such Member, such excess will be set off
against any future Distributions to which such Member otherwise would have been
entitled.  Upon the reasonable written request of a Member that is subject to
any withholding by the Company under this Section 5.3, the Company shall contest
or not withhold such amounts that the Member does not believe are legally
required to be withheld; provided, that such Member shall indemnify, defend and
hold the Company harmless from any losses, damages, expenses or liabilities
incurred by the Company in connection with such contest or failure to withhold.
 
 
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5.4 Distribution Limitations.
 
  Notwithstanding any other provision of this Agreement, the Company will not
make any Distribution to the Members to the extent making such Distribution
would violate the Act or other applicable law.  A Member’s right to receive
Distributions is subject in all respects to the provisions of Section 16.22.
 
ARTICLE 6: MANAGEMENT
 
6.1 Management; Consulting Fee.
 
[a]  
Except as otherwise expressly provided in this Agreement, the powers of the
Company shall be exercised by or under the authority of, and the business and
affairs of the Company shall be managed under the direction of, the Members.

 
[b]  
Subject to the provisions of the Act and the obligations and limitations imposed
upon it by this Agreement, and except as otherwise provided in this Agreement
(including Sections 6.3 and 6.4) and in the applicable Plans adopted pursuant to
this Agreement, the Members by Majority Vote have the right, power and authority
to do (or cause to be done) any and all things necessary, proper, convenient or
advisable to administer and carry on the business, properties and activities of
the Company in their discretion.  Except as otherwise provided in this
Agreement, no Person dealing with the Company will be required to inquire into
the authority of the Members by Majority Vote to take any action or make any
decision.  Except as specifically provided for in this Agreement, no Member will
have the power to sign documents for or otherwise bind the Company, which power
to sign documents for or otherwise bind the Company shall be vested solely in,
and shall be exercised solely by, the CEO and the Officers.

 
[c]  
The GCI Member shall cause its senior executive officers to provide consulting
services to the CEO and other senior Officers of the Company with respect to
high-level strategy decisions regarding legal, regulatory and finance
matters. In exchange for such services (which, for the avoidance of doubt, will
not be billed pursuant to the GCI Services Agreement), the Company will pay a
consulting fee to the GCI Member (the “Consulting Fee”).  The Consulting Fee
will be paid quarterly, in arrears, in the following amounts (it being
understood that the Consulting Fee will be pro rated for any calendar quarter in
which the GCI Member does not own any Equity Interests or provide such services
for the whole calendar quarter):

 
[i]  
4% of FCF from the Effective Date through the second anniversary of the
Effective Date;

 
 
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[ii]  
6% of FCF after the second anniversary of the Effective Date through the fourth
anniversary of the Effective Date; and

 
[iii]  
8% of FCF after the fourth anniversary of the Effective Date.

 
[d]  
The Consulting Fee will be paid concurrently with the Distributions to the
Members as provided in Section 5.1 and will be trued up each quarter to reflect
any adjustments made to FCF with respect to any calendar quarter after the
Consulting Fee related to such quarter has been paid.  The Consulting Fee will
be paid prior to making any Distributions to the Members pursuant to Article 5.

 
[e]  
The Company will treat the Consulting Fee for federal income tax purposes as a
guaranteed payment under § 707(c) of the Code.

 
6.2 CEO; Other Officers; GCI Services Agreement; Employee Matters.
 
[a]  
The responsibility for the day-to-day operations of the Wireless Business is
hereby delegated, subject to the ultimate control of the Members (including
Sections 6.3 and 6.4), and in accordance with the applicable Plans adopted
pursuant to this Agreement, to a Chief Executive Officer (the “CEO”).  The
initial CEO will be Wilson Hughes.  The CEO will serve at the pleasure of the
Members and may be removed at any time, with or without Cause, by Majority
Vote.  If the ACS Member reasonably believes that Cause to remove the CEO exists
and the CEO has not been removed, the ACS Member may send written notice to the
GCI Member specifying in reasonable detail the basis for which the ACS Member
believes that Cause exists and the Members shall, by Majority Vote, remove the
CEO if it is finally determined either by Majority Vote or pursuant to the
dispute resolution provisions provided for in Article 15 that Cause to remove
the CEO exists.  As specified in Section 11 of the Arbitration Agreement, if the
Arbitrator determines in a proceeding initiated by the ACS Member that [i] Cause
to remove the CEO does not exist, the ACS Member will pay the Company’s and the
GCI Member’s Individual Fees and Expenses and any Arbitrator’s Expenses paid by
such Persons in connection with such claim or [ii] Cause to remove the CEO does
exist, the GCI Member will pay the Company’s and the ACS Member’s Individual
Fees and Expenses and any Arbitrator’s Expenses paid by such Persons in
connection with such claim.  Any successor CEO to be appointed as a result of
the resignation or removal of the CEO will be appointed by Majority Vote,
subject to the approval rights set forth in Section 6.4[k].  The CEO will devote
the CEO’s full business time, attention and effort to the affairs of the Company
and its Subsidiaries.

 
[b]  
The CEO may from time to time appoint officers of the Company (the “Officers”)
and delegate to them the authority and duties to manage the day-to-day
operations of the Wireless Business under the supervision of the CEO, subject to
Sections 6.3 and 6.4, in accordance with the applicable Plans.  Each Officer
shall have such duties that are delegated to the Officer by the CEO.  Such
Officers will take all actions that are necessary and appropriate to conduct the
day-to-day operations of the Wireless Business under the supervision of the CEO,
subject to the provisions of this Agreement.  Each Officer will devote its full
business time, attention and effort to the affairs of the Company and its
Subsidiaries.  Each Officer will serve at the pleasure of the CEO, until such
Officer’s resignation or removal or until his or her successor has been duly
appointed and qualified.

 
 
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[c]  
On the Effective Date, the Company will enter into a Services Agreement with GCI
Communication Corp. (the “GCI Services Agreement”), substantially in the form of
attached Exhibit I, pursuant to which GCI Communication Corp.  will provide the
Company with specified services.

 
[d]  
Any performance based compensation for any Dedicated Employees (as defined in
the GCI Services Agreement) shall be based solely on the performance of the
Company, and not the performance of the GCI Member or any of their Affiliates
except for any grants of GCI equity awards to Dedicated Employees for employee
retention programs in accordance with the terms of the GCI Services
Agreement.  GCI shall provide to the ACS Member a written description of any
such performance based compensation.  The Company’s management incentive plan
will be designed to maximize the Company’s competitiveness and meet the
Company’s Financial Objectives, and any costs or expenses of the Company
thereunder shall be set forth in the applicable Plans of the Company.

 
[e]  
The Company shall be liable for any severance obligations owed by a Member to
any employee of such Member who devotes all or substantially all of his or her
business time to providing services to the Company and its Subsidiaries pursuant
to an agreement between the Company and such Member; provided that with respect
to any such employee who was employed by a Member or its Affiliates immediately
prior to the Effective Date, any severance obligations to such employee that
include service credit for any period prior to the Effective Date will be shared
pro rata by such Member and the Company based on the number of days such Person
was an employee of such Member prior to and after the Effective Date.  The
Company shall not be liable for any severance obligations owed by a Member to
any other employee of such Member (regardless of whether such employee provides
services to the Company or any of its Subsidiaries).

 
6.3 Executive Board.
 
[a]  
The Company will be governed by a three member executive board (the “Board”)
consisting of the Chief Executive Officer of GCI or the GCI Member’s then
current Wireless Parent, the Chief Executive Officer of ACS or the ACS Member’s
then current Wireless Parent, and the CEO of the Company.  By written notice to
the Company and the other Member given at least one Business Day prior to a
Board meeting, a Board member may designate an alternate Person to participate
in a given Board meeting in such Board Member’s stead.

 
[b]  
The primary function of the Board will be to review and approve the Plans in
accordance with the provisions of Article 7 and the other business and
technology plans of the Company and its Subsidiaries.  In addition, the Board
may consider other matters as specifically set forth in this Agreement or as
requested by any member of the Board; provided, however, that it is intended
that all day-to-day operations of the Company will be carried out by the CEO and
the other Officers of the Company.  Any member of the Board may request meetings
of the Board; provided that the Board is not required to meet more frequently
than once during each calendar quarter except in connection with the review and
approval of the Plans.  At any meeting of the Board, the CEO and other
appropriate Officers shall notify and update the Board with respect to the
business and affairs of the Company, including any material developments in the
business and activities of the Company since the last Board meeting at which
such an update was given, and shall notify and update the Board with respect to
any major decisions under consideration or expected to be made by the Company.

 
 
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6.4 Unanimous Vote of Members.
 
  The following actions or decisions by (or affecting) the Company or any of its
Subsidiaries may be taken or made only upon receipt of the affirmative Vote of
all Members and neither the Members nor the CEO or other Officers of the Company
or any of its Subsidiaries will have the power or authority to take any such
actions or make any such decisions without the affirmative Vote of all Members;
provided, that if a Member does not respond to a written request by the Company
for approval of a proposal pursuant to this Section 6.4 (a “Member Approval
Request”) within ten days following its receipt of such request, such Member
will be deemed to have Voted in favor of such proposal:
 
[a]  
A change in the lines of business of the Company or any of its Subsidiaries
beyond, or the expansion of the business of the Company or any of its
Subsidiaries beyond, the Wireless Business and related or incidental activities;

 
[b]  
The admission of an additional Member to the Company, other than a Permitted
Transferee of a Member in accordance with Article 14, or a change to the initial
Members’ Equity Interests;

 
[c]  
Incurring, or permitting to exist at any time, any Indebtedness in excess of $5
million in the aggregate (or in any amount from any Member) (“Material
Indebtedness”), the granting of a mortgage, deed of trust, pledge or other lien
on or security interest in all or any portion of the assets of the Company or
any its Subsidiaries to secure the obligations of the Company and its
Subsidiaries as debtor under any Material Indebtedness, or guaranteeing the
obligations of any other Person other than in the ordinary course of business;
provided, however, that [i] the GCI Working Capital Loan and the Company Working
Capital Loan shall be deemed to have been approved by the affirmative Vote of
all Members and shall not require any additional Vote of the Members (but any
material amendments or modifications thereof and any termination thereof that is
not in accordance with the terms of the applicable loan agreement shall require
the affirmative Vote of all Members in accordance with this Section 6.4),
[ii] incurrence of Indebtedness in the ordinary course of business (including
vendor financing in connection with purchases of products or construction of
facilities) not in excess of $10 million in the aggregate shall not be
considered Material Indebtedness requiring the affirmative Vote of all Members,
and [iii] incurrence of Indebtedness not in excess of $10 million in the
aggregate with a term of less than one year and granting any liens or security
interests on any of the Company’s assets in connection therewith shall not be
considered Material Indebtedness requiring the affirmative Vote of all Members
regardless of amount so long as [x] the Company does not enter into any
borrowing arrangement with the intent or expectation that the term of such
Indebtedness will be extended, and [y] the Company and its Subsidiaries shall
not extend the term of any such Indebtedness beyond one year without obtaining
the affirmative Vote of all Members with respect thereto;

 
 
39

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Information indicated by [***] in the text has been omitted and filed separately
with the Securities and Exchange Commission pursuant to a request for
Confidential Treatment under Rule 24b-2 under the Securities Exchange Act of
1934.

 
[d]  
The sale, exchange or other disposition of all or substantially all the
consolidated assets of the Company and its Subsidiaries in any transaction or
series of related transactions, or any sale of assets of the Company or any of
its Subsidiaries, in one transaction or a series of related transactions, [i]
having a Fair Market Value in excess of $5 million in the aggregate in any
twelve month period or [ii] that would impair any Member’s ability to meet its
carrier of last resort regulatory obligations applicable to local exchange
carriers under Alaska law in those exchanges identified by community on Exhibit
N-1, with respect to the ACS Member, or Exhibit N-2, with respect to the GCI
Member, in the case of each of clauses [i] and [ii] other than the disposition
of obsolete assets in the ordinary course of business and other than the sale of
IRU and other network capacity, including for Wireless Backhaul and Transport,
in the ordinary course of the Wireless Business, it being understood that
separate sales of assets shall be aggregated and viewed as a single transaction
for purposes of this clause [d] to the extent necessary to effectuate the intent
and purpose of this clause [d];

 
[e]  
The  Company or any of its Subsidiaries entering into any [***] pursuant to
which the Company or its Subsidiaries will provide [***] to [***], in each case
other than the Members [***]; provided, that the consent of the ACS Member will
not be unreasonably withheld, delayed or conditioned with respect to any of the
foregoing;

 
[f]  
Any action (including the filing of a U.S. Treasury Form 8832 Entity
Classification Election) that would cause the Company to be characterized as an
entity other than a partnership for federal income tax purposes or making any
other tax elections that would have a material adverse effect on, or affect the
tax status of, any Member;

 
[g]  
The voluntary Dissolution of the Company or any of its Subsidiaries (other than
a wholly-owned Subsidiary) or the Distribution of assets in kind to any Member
upon Liquidation;

 
[h]  
The filing of a voluntary petition that results in a Bankruptcy Event for the
Company or any of its Subsidiaries;

 
[i]  
Amending the Certificate or any organizational documents of any Subsidiary of
the Company (other than to make any ministerial or administrative changes that
would not have a material adverse effect on any Member, such as changing the
registered agent or registered office of the Company);

 
[j]  
The merger, conversion, consolidation or other combination of the Company or any
of its Subsidiaries with another Person other than the merger of a wholly-owned
Subsidiary of the Company with the Company or another wholly-owned Subsidiary of
the Company;

 
[k]  
The appointment of any successor CEO; provided, however, that the ACS Member
agrees to approve at least one individual from a list of three or more qualified
individuals with appropriate experience (any or all of whom may be GCI
employees) proposed by the GCI Member to be appointed as the successor CEO;

 
 
40

--------------------------------------------------------------------------------

 

Information indicated by [***] in the text has been omitted and filed separately
with the Securities and Exchange Commission pursuant to a request for
Confidential Treatment under Rule 24b-2 under the Securities Exchange Act of
1934.

 
[l]  
Commencing or settling litigation or arbitration that individually, or together
with any other related litigation or reasonably foreseeable claim, involves an
amount in excess of $5 million, except with respect to a claim by the Company or
any of its Subsidiaries against a Member, or entering any plea of guilty or nolo
contendere on behalf of the Company or any of its Subsidiaries in any criminal
matter;

 
[m]  
Making any [***] that do not comply with [***];

 
[n]  
[i] Entering into any agreement or transaction with GCI or ACS or any of their
respective Affiliates (“Affiliate Transactions”), other than [v] as specifically
set forth in this Agreement, [w] Approved Affiliate Transactions, [x]
transactions involving the provision of Professional Services to the Company in
accordance with the Professional Services Guidelines and capacity purchases made
by the Company from GCI pursuant to the Additional Capacity Purchase Agreement,
pursuant to which in the aggregate the Company will pay GCI or its Affiliates
$10 million or less in the aggregate in any Fiscal Year; provided, that ACS will
not unreasonably withhold its consent to the Company making any additional
capacity purchases from GCI pursuant to the Additional Capacity Purchase
Agreement, [y] transactions involving the provision of Satellite Capacity
Services to the Company in accordance with the Satellite Capacity Services
Guidelines, and [z] including the Company in a third-party master services
agreement or master purchase agreement or similar contract to which GCI or an
Affiliate thereof is also a party, but pursuant to which the Company is treated
on an equal basis with GCI or its applicable Affiliates who are party thereto,
or [ii] terminating any Affiliate Transaction except in accordance with the
terms thereof, or modifying or waiving any material provision of any Affiliate
Transaction in a manner that is adverse to the Company;

 
[o]  
Making any decisions regarding major technology upgrade plans to be implemented
by the Company or any of its Subsidiaries in connection with the Wireless
Business; provided, however,  that the consent of the ACS Member with respect to
any major technology upgrade plan related to the Wireless Business of the
Company and its Subsidiaries will not be unreasonably withheld, delayed or
conditioned;

 
[p]  
Authorizing, creating, allocating, reserving, issuing or selling any limited
liability company interests or any other equity interests or securities, or
requesting or accepting any capital contributions in respect of any limited
liability company interests or any other equity interests or securities, other
than as contemplated by Sections 1.4 and 3.1[a];

 
[q]  
Redeeming or repurchasing any limited liability company interests or any other
equity interests or securities of the Company;

 
[r]  
Creating any Subsidiary of the Company other than a wholly-owned Subsidiary, or
transferring any assets of the Company to any Subsidiary other than a
wholly-owned Subsidiary, or entering into any joint venture arrangement;

 
 
41

--------------------------------------------------------------------------------

 
[s]  
Changing the name of the Company;

 
[t]  
Lending by the Company, other than supplier and trade receivables in the
ordinary course of business;

 
[u]  
[Intentionally omitted];

 
[v]  
As provided in the definition of Fair Market Value;

 
[w]  
Entering into or terminating (except in accordance with the terms of the
applicable contract or agreement), or waiving or modifying any material
provision of, any contract or agreement to which the Company or any Subsidiary
is (intends to become) a party (i) that is not consistent with the Plans in all
material respects, or (ii) that includes a financial commitment by the Company
or its Subsidiaries in excess of $10 million that would be payable during a
period after the end of the current Four Year Plan, in each case excluding
backhaul and roaming agreements;

 
[x]  
Entering into or terminating (except in accordance with the terms thereof), or
waiving or modifying any material provision of, the Company Working Capital
Loan; provided that such consent shall not be required so long as the Company
Working Capital Loan: [1] is secured only by collateral permitted by each
Member’s lenders, [2] does not contain any provision that would reasonably be
expected to affect the timing or amount of any ACS Preferred Distribution other
than restrictions upon the payment of such Distributions upon an event of
default under the Company Working Capital Loan; and [3] contains financial
covenants that are commercially reasonable;

 
[y]  
Declaring or paying any non-cash dividend or other Distribution to Members
except as specifically set forth in this Agreement; and

 
[z]  
As provided in Sections 1.6, 2.1[b], 4.13, 7.1[b], 8.1[a], 11.3, 12.1, 13.3 or
14.1[b].

 
Except as set forth in the preceding provisions of this Section 6.4, all actions
by the Members shall be taken by Majority Vote.  Each Member is entitled to act
in its own best interest (and its capacity as a member of the Board, the Chief
Executive Officer of each such Member is entitled to act in the best interest of
the Member of which it is the Chief Executive Officer) with respect to any
decisions related to the Company or its Subsidiaries that are to be made by the
Members or the Board, including pursuant to this Section 6.4 or pursuant to
Section 6.3.  Without limiting the foregoing, but subject in the case of the GCI
Member to the Standard of Care and in the case of the ACS Member to the implied
contractual covenant of good faith and fair dealing, [i] neither the Members in
their capacity as such nor their respective Chief Executive Officers in their
capacity as members of the Board have any express or implied fiduciary duties to
the Company, the other Members or the Board, including that there are no express
or implied fiduciary duties based on a Member’s status as a majority owner of
the Company; and [ii] the corporate law concepts of the duty of loyalty and the
duty of care applicable to officers and directors of a corporation, as well as
the partnership law duties that a general partner owes to a partnership and its
other partners, do not apply to the Members in their capacity as such or to
their respective Chief Executive Officers in their capacity as members of the
Board.
 
 
42

--------------------------------------------------------------------------------

 
 

Information indicated by [***] in the text has been omitted and filed separately
with the Securities and Exchange Commission pursuant to a request for
Confidential Treatment under Rule 24b-2 under the Securities Exchange Act of
1934.

6.5 Other Activities.
 
[a]  
Except as otherwise provided in Sections 6.5[a], [b] and [c], each Member, and
any Affiliate of any Member may engage in (or own interests in) other business
ventures of any nature and description, independently or with others, and
neither the Company nor any other Member will have any right by virtue of this
Agreement in such business venture or its profits, even if such business venture
is in direct competition with the Wireless Business of the Company, and no
Member or Affiliate of a Member will have any duty or obligation to bring any
such opportunities to the Company or any Member or to inform the Company or any
Member regarding any such business venture.

 
[b]  
Each Member, ACS and GCI each agrees to [***], and ACS and GCI each agree to
cause their respective controlled Affiliates to [***].  Unless earlier
terminated pursuant to the last sentence of this Section 6.5[b], such obligation
will continue in the case of the ACS Member, ACS and any controlled Affiliate of
ACS, for so long as an Affiliate of ACS is a Member or Transferee.  Unless
earlier terminated pursuant to the last sentence of this Section 6.5[b], such
obligation will continue in the case of the GCI Member, GCI and any controlled
Affiliate of GCI, for so long as an Affiliate of GCI is a Member or
Transferee.   The obligations under this Section 6.5[b] will terminate as to
both Members, ACS, GCI and their respective Affiliates [***].  This Section
6.5[b] shall not apply to ACS or any of its Affiliates with respect to any [***]
in respect of which the Company has exercised [***].

 
[c]  
Following the Transfer of a Member’s or Transferee’s Ownership Interest, such
Member or Transferee agrees that neither it nor its Affiliates (which in the
case of the Initial ACS Member includes ACS and its Affiliates and in the case
of the Initial GCI Member includes GCI and its Affiliates) [***] in the State of
Alaska for a period of [***] after the date of such Transfer (other than as
required to meet [***] of such Person applicable to [***]).  Notwithstanding the
foregoing, if the Transfer of an Ownership Interest is made [i] pursuant to a
[***] in which the GCI Member has exercised its [***], the foregoing restriction
in this clause [c] shall apply for the lesser of [***] by such restrictions for
the benefit of the [***] or [ii] pursuant to the exercise of a CTE Put Right,
the foregoing restriction in this clause [c] shall not apply to either Member
following exercise of such CTE Put Right.

 
[d]  
Nothing in this Agreement, including this Section 6.5, shall prevent ACS or GCI,
or any of their respective Affiliates, from providing Private WiFi or wireless
internet service provider (WISP) services.

 
 
43

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Information indicated by [***] in the text has been omitted and filed separately
with the Securities and Exchange Commission pursuant to a request for
Confidential Treatment under Rule 24b-2 under the Securities Exchange Act of
1934.

ARTICLE 7: ANNUAL BUDGETS AND FOUR YEAR PLANS
 
7.1 Operation in Accordance with Annual Budgets and Four Year Plans; Financial
Objectives.
 
[a]  
To the maximum extent feasible in light of Changing Market Conditions, the
Company will be operated in accordance with its Annual Budgets and Four Year
Plan or Revised Four Year Plan.

 
[b]  
The Company will take into account the objectives described in this Section
7.1[b] (the “Financial Objectives”) in connection with its adoption of Annual
Budgets, Four Year Plans and Revised Four Year Plans.  The Company will seek to
maximize the total value of the Company as measured by the [***] of its
[***].  To the extent possible, the Company will strive to achieve this
objective while providing [***] and [***] for [***] to [***] Members.  The
Company will recognize that the [***] of the Company’s [***] available for [***]
Members is important and, while not an absolute requirement, the Company will
seek to avoid making total [***] in any Fiscal Year that suppress the Company’s
[***] by more than [***]% without the unanimous Vote of the Members.  To the
extent that alternative Four Year Plans would provide [***], the Company will
prefer the Plan that provides the Company [***] and/or more [***] near term
[***].

 
7.2 Initial Four Year Plan and First Year Budgets.
 
[a]  
The Four Year Plan for Fiscal Years 2013 through 2016 is attached to this
Agreement as Exhibit F (as the same may be revised pursuant to Article 7, the
“Initial Four Year Plan”).

 
[b]  
The Annual Cap Ex Budget for Fiscal Year 2013 is attached to this Agreement as
Exhibit G (the “First Year Cap Ex Budget”), and the Annual Operating Budget for
Fiscal Year 2013 is attached to this Agreement as Exhibit H (the “First Year
Operating Budget” and, together with the First Year Cap Ex Budget, the “First
Year Budgets”).

 
[c]  
If the Effective Date occurs prior to January 1, 2013, the CEO will prepare
operating  and capital expenditures budgets for the remainder of Fiscal Year
2012, which budgets will be generally consistent with the Plans attached to this
Agreement as Exhibits F, G and H, taking into account that the operations of the
Company have been accelerated to start in Fiscal Year 2012.

 
[d]  
If the Effective Date occurs after January 1, 2013 but during Fiscal Year 2013,
the CEO will prepare a revised Initial Four Year Plan so that it covers the
period from the Effective Date through December 31, 2016 and will prepare
revised First Year Budgets so that they cover the period from the Effective Date
through December 31, 2013, which revised Plans will be generally consistent with
the Plans attached to this Agreement as Exhibits F, G and H, taking into account
that Fiscal Year 2013 will be a partial year.

 
 
44

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7.3 Adoption of Annual Budgets, Revised Four Year Plans and Subsequent Four Year
Plans.
 
[a]  
Not later than June 1 of each Fiscal Year, beginning with June 1, 2013, the
Company will provide each Member with a projection of products and services it
plans to provide in the next Fiscal Year, including any underlying
assumptions.  Not later than July 1 of each Fiscal Year, beginning with July 1,
2013, each Member will provide the Company with its projection determined in
good faith and on a reasonable basis of its Connections and ARPUs for the
following Fiscal Year in sufficient detail to allow the Company to incorporate
such information into its Annual Budgets for the following Fiscal Year.

 
[b]  
The Company will prepare, in consultation with the Board, and deliver to the
Board not later than July 15 of each Fiscal Year beginning with July 15, 2013:

 
[i]  
an Annual Operating Budget and an Annual Cap Ex Budget for the following Fiscal
Year, based on the projections of Connections and ARPUs for such Fiscal Year
submitted by the Members; and

 
[ii]  
a revised Four Year Plan (including any revised Initial Four Year Plan, a
“Revised Four Year Plan”) that reflects appropriate revisions based on such
proposed Annual Budgets and Changing Market Conditions.

 
[c]  
On July 15, 2016 and on each four year anniversary of such date, the Company
will also prepare and deliver to the Board a new Four Year Plan that begins with
the following Fiscal Year, which will be based on past performance of the
Company, any projections of Connections and ARPUs submitted by the Members and
market conditions.  For example, on July 15, 2016 the Company will prepare and
deliver to the Board a Four Year Plan that covers Fiscal Years 2017 through 2020
(the “Second Four Year Plan”) and on July 15, 2020, the Company will prepare and
deliver to the Board a Four Year Plan that covers Fiscal Years 2021 through
2024.

 
[d]  
Board members may consult with any employee or agent of their respective
Affiliates (including such Affiliates, a “Related Party”) in connection with
such Board member’s review and consideration of any proposed Plan and may
request additional information from the Company in connection with such review
and consideration.  The provision by a Board member of Company information to a
Related Party in connection with the Board member’s review and consideration of
any proposed Plan is subject to the Commercially Sensitive Information Policies
and Procedures and such Related Party must treat all information provided to it
as confidential information that is subject to the provisions of
Section 16.20.  The GCI Member will be responsible for any breach of
Section 16.20 by one of its Related Parties in relation to information provided
to it pursuant to this Section 7.3[d], and the ACS Member will be responsible
for any breach of Section 16.20 by one of its Related Parties in relation to
information provided to it pursuant to this Section 7.3[d].

 
[e]  
Except as provided in Section 7.4, no Plan (other than the Initial Four Year
Plan and the First Year Budgets) will become effective unless and until it is
approved by majority vote of the Board.  The Board will hold a meeting no later
than November 1 of each Fiscal Year for the purpose of voting on each Plan
proposed by the Company during such Fiscal Year pursuant to Section 7.3[b] or
Section 7.3[c].

 
 
45

--------------------------------------------------------------------------------

 
[f]  
If pursuant to Section 7.4 the unanimous approval of the Board is required with
respect to any proposed Plan, any Board member may deliver Notice to the Company
and each other Board member (a “Budget Objection Notice”) no later than August 1
of the Fiscal Year in which it received such Plan, which Notice will specify in
reasonable detail the objections that such Board member has, including such
Board member’s basis for determining that the disputed Plan does not meet the
Financial Objectives.   If no Budget Objection Notice is timely delivered with
respect to a given Plan, such Plan will be deemed to have been unanimously
approved by the Board.

 
[g]  
If a Budget Objection Notice is timely delivered, the Board members (in
consultation with any Officers of the Company as determined by the CEO) will
negotiate in good faith to resolve any objections to the Plans specified in such
Budget Objection Notice and to revise the disputed Plans in such manner so that
they can be adopted by unanimous approval of the Board.  If the Board members do
not unanimously approve any Plan that is subject to a Budget Objection Notice by
August 31 of the Fiscal Year during which such Budget Objection Notice was
delivered, then on September 1 the Company will submit all Plans that remain in
dispute to the Designated Budget Dispute Arbitrator for determination in
accordance with the terms and procedures specified in the Arbitration Agreement
with respect to each aspect of the disputed Plans challenged in a Budget
Objection Notice (the “Challenged Aspects”) as to whether such Challenged Aspect
is inconsistent with the Financial Objectives, taking into account the disputed
Plans as a whole, with instructions to the Designated Budget Dispute Arbitrator
to make its determination no later than December 1.

 
[h]  
If the Designated Budget Dispute Arbitrator makes a final determination pursuant
to the Arbitration Agreement that one or more Challenged Aspects are
inconsistent with the Financial Objectives, taking into account the disputed
Plans as a whole, and the Board by majority vote adopts the Designated Budget
Dispute Arbitrator’s Recommended Changes, the disputed Plans that included such
Challenged Aspects, as revised to fully reflect all the Recommended Changes,
shall be deemed approved by unanimous vote of the Board for all purposes of this
Agreement.  To the extent the Recommended Changes are not made by the Company,
then within 30 days following the Designated Budget Dispute Arbitrator’s final
determination the Company will revise the disputed Plan and submit the revised
Plan to the Board for unanimous approval; provided that if the basis on which a
Budget Objection Notice was delivered no longer exists (e.g., a revised Plan
meets the Minimum Required FCF Projection) and there exist no other
circumstances that would require unanimous Board approval pursuant to Section
7.4, such revised Plan may be approved by majority vote of the Board.  If the
Designated Budget Dispute Arbitrator issues any Redetermined Recommended Changes
pursuant to Section 10(f)(iii) of the Arbitration Agreement, the Company shall
make such Redetermined Recommended Changes.

 
 
46

--------------------------------------------------------------------------------

 

Information indicated by [***] in the text has been omitted and filed separately
with the Securities and Exchange Commission pursuant to a request for
Confidential Treatment under Rule 24b-2 under the Securities Exchange Act of
1934.

 
[i]  
If an Annual Operating Budget, Four Year Plan or Revised Four Year Plan is not
approved pursuant to this Section 7.3 on or before December 31 of the Fiscal
Year during which it was provided to the Board, the Company will conduct
operations during the following Fiscal Year in accordance with the Annual
Operating Budget, Four Year Plan or Revised Four Year Plan, as applicable,
proposed by the Company for such Fiscal Year until such time as a new Annual
Operating Budget, Four Year Plan or Revised Four Year Plan, as applicable, is
approved; provided, however, that any Member may request that the Designated
Budget Dispute Arbitrator determine, within 14 days following such request, if
any one-time expense item included in the proposed Annual Operating Budget, Four
Year Plan or Revised Four Year Plan, as applicable (a “Disputed Expense”), that
has not been approved is unreasonable.  Pending the Designated Budget Dispute
Arbitrator’s decision, the Company will not incur the Disputed Expense;
following such decision, the Company will operate in accordance with the
Designated Budget Dispute Arbitrator’s decision regarding the Disputed Expense
until such time as a new Annual Operating Budget, Four Year Plan or Revised Four
Year Plan, as applicable, is approved.  If an Annual Cap Ex Budget is not
approved pursuant to this Section 7.3 on or before December 31 of the Fiscal
Year during which it was provided to the Board, then until such time as a new
Annual Cap Ex Budget is approved, the Company will conduct operations during the
following Fiscal Year in accordance with the Annual Cap Ex Budget for the prior
Fiscal Year, less extraordinary one-time items.

 
7.4 Circumstances Requiring Unanimous Board Approval of Annual Budgets, Four
Year Plans and Revised Four Year Plans.
 
[a]  
Years 1-4 (Fiscal Years 2013-2016)

 
[i]  
Unanimous approval of the Board is required with respect to any revised Initial
Four Year Plan and any Annual Budget for Fiscal Years 2014 through 2016 if such
revised Initial Four Year Plan or Annual Budget provides for a [***] of the
Company of [***] in any single Fiscal Year covered by the Initial Four Year Plan
or of [***] the [***] over the entire period covered by the Initial Four Year
Plan.

 
[b]  
Years 5-8 (Fiscal Years 2017-2020)

 
[i]  
Subject to Section 7.5, unanimous approval of the Board is required with respect
to an Annual Budget for any of Fiscal Years 2017 through 2020 if such Annual
Budget forecasts [***] for such Fiscal Year that is [***] the [***] for the last
[***] Fiscal Years of the Initial Four Year Period [***] by [***]% per year.

 
[ii]  
Subject to Section 7.5, unanimous approval of the Board is required with respect
to the Second Four Year Plan or any revised Second Four Year Plan if the Second
Four Year Plan or such revised Second Four Year Plan forecasts [***] the [***]
for the last  [***] Fiscal Years of the Initial Four Year Period [***] by [***]%
per year.

 
 
47

--------------------------------------------------------------------------------

 

Information indicated by [***] in the text has been omitted and filed separately
with the Securities and Exchange Commission pursuant to a request for
Confidential Treatment under Rule 24b-2 under the Securities Exchange Act of
1934.

 
[iii]  
Subject to Section 7.5, if [***] for any of Fiscal Years 2017 through 2020 is
less than [***] for the last [***] years of the Initial Four Year Period [***]
by [***]% per year, then the subsequent Fiscal Year’s Annual Budgets and any
revisions to the Second Four Year Plan proposed in connection with such Annual
Budgets will require unanimous Board approval.

 
[c]  
Years 9 and Thereafter (Fiscal Years 2021 and Thereafter)

 
[i]  
Subject to Section 7.5, if the Annual Budgets proposed by the Company for Fiscal
Year 2021 or any Fiscal Year thereafter forecasts [***] that is less than [***]%
of the [***] for the last [***] years of the most recent Four Year Plan that
does not include such Fiscal Year (e.g., for the Fiscal Year 2021 the applicable
Four Year Plan would be the Second Four Year Plan), then such Annual Budgets
will require unanimous Board approval.

 
[ii]  
Subject to Section 7.5, if the Four Year Plan (including any revised Four Year
Plan) proposed by the Company for any four year period after the period covered
by the Second Four Year Plan forecasts [***] that is less than [***]% of
the[***] for the last [***] years of the period covered by the immediately
preceding Four Year Plan (e.g., for the four year period from Fiscal Year 2012
through Fiscal Year 2024 the applicable Four Year Plan would be the Second Four
Year Plan), then such Four Year Plan (including any revisions thereto) will
require unanimous Board approval.

 
[iii]  
Subject to Section 7.5, if actual FCF for Fiscal Year 2021 or any Fiscal Year
thereafter is less than [***]% of the [***] for the last [***] years of the
period covered by the immediately preceding Four Year Plan (e.g., for the four
year period from Fiscal Year 2021 through Fiscal Year 2024 the applicable Four
Year Plan would be the Second Four Year Plan), then the Annual Budgets for the
following Fiscal Year and any revision to the then current Four Year Plan will
be subject to unanimous Board approval.

 
7.5 GCI Member Right to [***] FCF [***].
 
[a]  
If unanimous approval of the Board is required with respect to a proposed Plan
on the basis that such Plan does not meet the [***], the GCI Member will have
the option at any time prior to final approval of such Plan (including after
such Plan has been submitted to the Designated Budget Dispute Arbitrator) to
agree to [***] of its [***] for each Fiscal Year covered by such Plan that does
not include the [***] to the [***] so that the [***] for each Fiscal Year
covered by such Plan that does not meet the [***] will be not less than the
[***] of [***] that the [***] would receive if FCF for such Fiscal Year were
equal to [***] (the “[***]).  However, the GCI Member may exercise this option
only if the [***] for such Fiscal Year, [***] the [***], would be $[***] or
[***] below the [***] of [***] that it would receive if the [***].  The option
provided for in this Section 7.5[a] is exercisable by the GCI Member delivering
to the ACS Member and the Company, at any time prior to final approval of such
Plan, an instrument in writing setting forth in reasonable detail its agreement
[***] the [***] the [***], and the Company shall honor and make Distributions
consistent with such agreement.  If the GCI Member exercises the option provided
for in this Section 7.5[a], the Company will be deemed to have met the
applicable [***] so that unanimous approval of the Board will not be required
with respect to the proposed Plan and such Plan will be deemed to have been
approved by majority vote of the Board.

 
 
48

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Information indicated by [***] in the text has been omitted and filed separately
with the Securities and Exchange Commission pursuant to a request for
Confidential Treatment under Rule 24b-2 under the Securities Exchange Act of
1934.

 
[b]  
If unanimous approval of the Board is required with respect to a proposed Plan
on the basis that the Company did not meet the [***] for the preceding Fiscal
Year, the GCI Member will have the option at any time prior to approval of such
Plan (including after such Plan has been submitted to the Designated Budget
Dispute Arbitrator) to agree to [***] a [***] of its [***] for the current
Fiscal Year to the [***] so that the [***] for the current Fiscal Year will be
increased by an amount equal to the [***] the [***] of the [***] the [***] for
the preceding Fiscal Year and the [***] of [***] that the [***] would have
received if [***] had been equal to the [***] for such preceding Fiscal Year
(the “[***]” and together with the [***], the “[***]”).  However, the GCI Member
may exercise this option only if the [***] for the preceding Fiscal Year, [***]
the [***], were $[***] or [***] below the [***] of [***] that it would have
received if the [***] had[***].  The option provided for in this Section 7.5[b]
is exercisable by the GCI Member delivering to the ACS Member and the Company,
at any time prior to final approval of such Plan, an instrument in writing
setting forth in reasonable detail its agreement [***] the ACS Member the
applicable [***], and the Company shall honor and make [***] with such
agreement.  If the GCI Member exercises the option provided for in this Section
7.5[b], the Company will be deemed to have met the applicable [***] for the
preceding Fiscal Year so that unanimous approval of the Board will not be
required with respect to the proposed Plan and such Plan will be deemed to have
been approved by majority vote of the Board.

 
[c]  
To the extent [***] are [***] to the ACS Member pursuant to this Section 7.5,
the [***] the [***] (“[***]”) the [***] of the [***] plus [***] at an [***] of
[i] [***] and [ii] the [***] the [***] from [***] the date a [***] of [***] is
made to the [***] to (but not including) the date a [***] to the [***] (the
“[***]”) in [***] to the extent [***] the [***] that would be required with
respect to such Fiscal Year in order for unanimous approval of the Board not to
be required pursuant to Section 7.4.

 
 
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ARTICLE 8: MEETINGS OF MEMBERS; MEETINGS OF THE BOARD
 
8.1 Meetings of Members.
 
  Meetings of the Members, for any purpose or purposes, may be, but are not
required to be, called by Members holding more than 50% of the Equity
Interests.  Without limiting the foregoing, meetings of the Members with respect
to those matters that require the affirmative Vote of all Members pursuant to
Section 6.4 are not required if the GCI Member or the CEO sends a Member
Approval Request to the Members with respect to such matter.
 
[a]  
The CEO may designate any place within Anchorage, Alaska, or such other city as
the Members unanimously agree, as the place for any meeting of the Members.

 
[b]  
Notice of any meeting of the Members must be given not less than five Business
Days nor more than 30 days before the date of the meeting.  Such Notice must
state the place, day, and hour of the meeting and the purpose for which the
meeting is called.  Any Member may waive, in writing, any Notice of a meeting of
the Members required to be given to such Member, whether before or after the
time stated in such Notice.  Any Member who signs minutes of action (or written
consent or agreement) will be deemed to have waived any required Notice with
respect to such action.  For the purpose of determining Members entitled to
Notice of or to Vote at any meeting of Members, the date on which Notice of the
meeting is first given will be the record date for the determination of
Members.  Any such determination of Members entitled to Vote at any meeting of
Members will apply to any adjournment of a meeting.

 
[c]  
A quorum at any meeting of Members will consist of Members owning more than 75%
of the Equity Interests held by all Members.  Any meeting of Members at which a
quorum is not present may adjourn the meeting to a place, day and hour without
further Notice, provided that at such adjourned meeting, the only business that
may be conducted are the matters that were set forth in the Notice for the
original meeting.

 
[d]  
If a quorum is present at any meeting of the Members, the affirmative Vote of
Members holding a majority of the Equity Interests will be the act of the
Members, except with respect to those matters set forth in this Agreement that
specifically require the unanimous Vote of the Members; provided that in the
case of actions requiring the unanimous Vote of the Members, such act is
evidenced by a written consent describing the action taken, signed by all
Members.

 
[e]  
At any meeting of Members, a Member may Vote in person or by written proxy given
to another Person.  Such proxy must be signed by the Member or by a duly
authorized attorney-in-fact and filed with the Company before or at the time of
the meeting.  No proxy will be valid after 11 months from the date of its
signing unless otherwise provided in the proxy.  Attendance at the meeting by
the Member giving the proxy will revoke the proxy during the period of
attendance.

 
[f]  
The Members may participate in a meeting by means of conference telephone or
similar communications equipment by which all Members participating in the
meeting can hear each other at the same time.  Such participation will
constitute presence in person at the meeting and waiver of any required Notice,
except when the Member so participates for the express purpose of objecting, at
the beginning of the meeting, to the transaction of any business because the
meeting is not lawfully called or convened.

 
 
50

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[g]  
Any action required or permitted to be taken at a meeting of Members may be
taken without a meeting if the action is evidenced by one or more written
consents describing the action taken, signed by Members owning total Equity
Interests sufficient for the particular action as set forth in Article 6 or as
set forth elsewhere in this Agreement.  Action so taken is effective when
sufficient Members approving the action have signed the consent, unless the
consent specifies a later effective date.

 
[h]  
Except as expressly provided elsewhere in this Agreement, with respect to any
action or decision with respect to the Company or its Subsidiaries that does not
expressly require the unanimous Vote of the Members in accordance with this
Agreement, the GCI Member may make such decision or Vote in favor of or cause
such action to be taken without notice, without calling a meeting of the Members
and without evidencing such action in a written consent or other writing.

 
8.2 Board Meetings.
 
  Meetings of the Board, for any purpose or purposes, may be called by any
member of the Board, subject to the limitation set forth in Section 6.3[b].
 
[a]  
Meetings of the Board will be held at the Company’s principal place of business
or such other place as all of the members of the Board may agree.

 
[b]  
Notice of any meeting must be given not less than five Business Days nor more
than 30 days before the date of the meeting; provided that the Person calling
the meeting reasonably takes into consideration the personal schedules of Board
members when scheduling meetings.  Such Notice must state the place, day, and
hour of the meeting and the purpose for which the meeting is called.

 
[c]  
Any member of the Board may waive, in writing, any Notice required to be given
to such individual, whether before or after the time stated in such Notice.  Any
member of the Board who signs minutes of action (or written consent or
agreement) will be deemed to have waived any required Notice with respect to
such action.

 
[d]  
A quorum at any meeting of the Board will consist of all three members of the
Board.  All members of the Board will act in good faith and use all reasonable
efforts to attend meetings of the Board and to find alternative dates that would
allow all members of the Board to participate in a meeting of the Board in order
to meet the quorum requirement.  Any meeting of the Board at which a quorum is
not present may adjourn the meeting to a place, day and hour without further
Notice, provided that at such adjourned meeting, the only business that may be
conducted are the matters that were set forth in the Notice for the original
meeting.  If a quorum is present at any meeting of the Board, the affirmative
vote of a majority of the members of the Board will be the act of the Board,
provided that such act is evidenced by a written consent describing the action
taken, signed by a majority of the members of the Board, unless unanimous
approval of all members of the Board is required in Article 7 or elsewhere in
this Agreement, in which case the affirmative vote of all of the members of the
Board will be the act of the Board, provided that such act is evidenced by a
written consent describing the action taken, signed by all members of the Board.

 
 
51

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Information indicated by [***] in the text has been omitted and filed separately
with the Securities and Exchange Commission pursuant to a request for
Confidential Treatment under Rule 24b-2 under the Securities Exchange Act of
1934.

 
[e]  
The members of the Board may participate in a meeting by means of conference
telephone or similar communications equipment by which all members of the Board
participating in the meeting can hear each other at the same time.  Such
participation will constitute presence in person at the meeting and waiver of
any required Notice, except when the Board member so participates for the
express purpose of objecting, at the beginning of the meeting, to the
transaction of any business because the meeting is not lawfully called or
convened.

 
[f]  
Any action required or permitted to be taken at a meeting of the Board may be
taken without a meeting if the action is evidenced by one or more written
consents describing the action taken, signed by all members of the Board.

 
ARTICLE 9: OPERATIONAL MATTERS
 
9.1 Option to Accelerate Capital Investment.
 
[a]  
If a Member desires the Company to make a capital investment the cost of which
is $[***] or less, such Member (the “Investing Member”) will have the option to
send Notice to the Company and the other Member (an “Accelerated Capital
Investment Notice”) that it desires the Company to make such capital investment
(the “Accelerated Capital Investment”) and specifying its proposed time period
and other material terms and conditions for the Accelerated Capital Investment
to be made.  In [***] a [***] Accelerated Capital Investment Notice [***].

 
[b]  
Within 30 days following its receipt of an Accelerated Capital Investment
Notice, the Company will send Notice to the Investing Member stating either [i]
that the Company will make the Accelerated Capital Investment on its own behalf
within the time period proposed and on the other material terms and conditions
set forth in such Accelerated Capital Investment Notice, or [ii] that the
Company will not make the Accelerated Capital Investment within the time period
proposed in such Notice but consents to the Investing Member making such
Accelerated Capital Investment in accordance with this Section 9.1 (“Option 2”),
or [iii] that the Company will not make the Accelerated Capital Investment but
does not consent to the Investing Member making such Accelerated Capital
Investment; provided, that the Company’s consent pursuant to this Section
9.1[b][iii] may be not be unreasonably withheld; provided further that, without
limitation, [x] it will not be unreasonable for the Company to withhold its
consent to a proposed Accelerated Capital Investment if such investment is
inconsistent with the technology standards or the manufacturer selections of the
Company and [y] it will be unreasonable for the Company to withhold its consent
to a proposed Accelerated Capital Investment solely on the basis that such
investment is not provided in the Plan or has costs that are included in the
Investing Member’s Cost.

 
 
52

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Information indicated by [***] in the text has been omitted and filed separately
with the Securities and Exchange Commission pursuant to a request for
Confidential Treatment under Rule 24b-2 under the Securities Exchange Act of
1934.

 
[c]  
If Option 2 is exercised by the Company, the Investing Member and the Company
will enter into an agreement pursuant to which the Company will design, install,
integrate and operate the Accelerated Capital Investment at the Investing
Member’s expense (the amount so paid by the Investing Member, the “Investing
Member’s Cost”), on the terms and conditions set forth in the Accelerated
Capital Investment Notice.

 
[d]  
At any time following completion of an Accelerated Capital Investment pursuant
to Section 9.1[c], the non-investing Member (the “Non-Investing Member”) may
send Notice to the Investing Member and the Company that the Non-Investing
Member also desires to use the Accelerated Capital Investment.  If the
Non-Investing Member sends such a Notice, the Investing Member and the
Non-Investing Member will negotiate in good faith to reach agreement on a
reasonable monthly user fee  and other terms for access by the Non-Investing
Member to the Accelerated Capital Investment.  For the avoidance of doubt, the
use of any Accelerated Capital Investment by the Investing Member or the
Non-Investing Member is subject to the provisions of Section 6.5.

 
[e]  
The Company will have the exclusive option at any time, exercisable by sending
Notice to both Members, to acquire the Accelerated Capital Investment at an
amount equal to the [***] at [***] of the [***] of [i] [***] and [ii] the [***]
or, if the Company and the Investing Member reach agreement on a different price
within 15 days following the Company’s exercise of such option, at such agreed
price (as applicable, the “ACI Purchase Price”); provided, that if the Investing
Member and the Non-Investing Member enter into an agreement pursuant to Section
9.1[d], the Company will be obligated to acquire the Accelerated Capital
Investment at the ACI Purchase Price within [***] years from the date the
Accelerated Capital Investment is placed in service or the date that the Non
Investing Member begins using the Accelerated Capital Investment, whichever is
later, with the [***] period referenced above beginning on the date that the
Company sends Notice it is acquiring the Accelerated Capital Investment.

 
[f]  
A Member’s right to use an Accelerated Capital Investment for its individual
benefit will terminate at such time as the Company acquires such investment.

 
9.2 Request for Wireless Device Approval.
 
[a]  
At any time after the Effective Date, either Member may send Notice to the
Company and the other Member requesting the Company to approve, in accordance
with the Company’s reasonable written Wireless Device approval standards, a
Wireless Device that the Company has otherwise elected not to consider for
approval or has not yet approved.

 
[b]  
The Company shall not be required to change its written Wireless Device approval
standards when considering a request for Wireless Device approval; however, such
approval shall not be unreasonably withheld.

 
[c]  
The Member that makes a request pursuant to Section 9.2[a] will reimburse the
Company for the Company’s reasonable costs associated with considering approval
of the Wireless Device, whether or not the Wireless Device is approved, with the
Company’s costs for this purpose being an amount equal to the Company’s direct
out-of-pocket costs incurred in connection with such approval process plus the
fully loaded labor costs per hour of those employees of the Company engaged in
such approval process; provided, that if the Wireless Device is approved
pursuant to this Section 9.2 and the non-requesting Member also subsequently
sells such Wireless Device, it shall so notify the Company and the requesting
Member, and the Company shall then reimburse the requesting Member for the
approval costs it previously paid to the Company.

 
 
53

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Information indicated by [***] in the text has been omitted and filed separately
with the Securities and Exchange Commission pursuant to a request for
Confidential Treatment under Rule 24b-2 under the Securities Exchange Act of
1934.
 
 

9.3 Facilities and Network Use Agreement.
 
  On the Effective Date, the Company will enter into a contract with ACS and GCI
in the form attached hereto as Exhibit J (the “Facilities and Network Use
Agreement”).  Neither Member is authorized to use the Company Network except in
accordance with the Facilities and Network Use Agreement.
 
9.4 Connection Attrition Adjustments.
 
[a]  
The forecast of the Average Connections of ACS covered by the Facilities and
Network Use Agreement during each Fiscal Year in the Initial Four Year Period
(the “ACS Forecast Average Connections”) is as follows:

 
Fiscal Year
Average Connections
   
2013
[***]
2014
[***]
2015
[***]
2016
[***]
   

; in each case, less an amount equal to the ACS Forecast Reduction Connections
(as so adjusted, the “Adjusted ACS Forecast Average Connections”), and in each
case the Adjusted ACS Forecast Average Connections will be [***] by the
applicable Service Area [***] (as so adjusted, the “Final Adjusted ACS Forecast
Average Connections”).
 
[b]  
If the actual Average Connections of ACS under the Facilities and Network Use
Agreement for any Fiscal Year during the Initial Four Year Period (the “ACS
Actual Average Connections”) are less than the Final Adjusted ACS Forecast
Average Connections for such Fiscal Year, then the Distributions to be made to
the ACS Member under Section 5.1 will be reduced by an amount (the “ACS Annual
Connection Shortfall Adjustment”) equal to the [***] [i] $21,800,000 and [ii]
[x] the difference between [A] [***] for such Fiscal Year, and [y] the ACS
Actual Average Connections for such Fiscal Year, multiplied by
[B] $[***].  [***] of the amount of any reduction to the Distributions to be
made to the ACS Member pursuant to the immediately preceding sentence plus [***]
on such amount at the [***] of the [***] will be made to the Distributions to be
made under Section 5.1[a] or Section 5.1[c] for the next succeeding four
quarters after the ACS Annual Connection Shortfall Adjustment is determined
until the Distributions made to the ACS Member under Section 5.1[a] or Section
5.1[c] have been [***] the [***] of each ACS Annual Connection Shortfall
Adjustment [***] the [***].  If, at the end of the Preference Period, the
Distributions to be made to the ACS Member under Section 5.1[a] or Section
5.1[c] have not been reduced by the cumulative amount of all ACS Annual
Connection Shortfall Adjustments, then any Distributions to be made to the ACS
Member under Section 5.1[f] will be reduced by the remaining cumulative amount
of all ACS Annual Connection Shortfall Adjustments.

 
 
54

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Information indicated by [***] in the text has been omitted and filed separately
with the Securities and Exchange Commission pursuant to a request for
Confidential Treatment under Rule 24b-2 under the Securities Exchange Act of
1934.

 
[c]  
In addition to any ACS Annual Connection Shortfall Adjustments made under
Section 9.4[b], a [***] and [***] will be made with respect to ACS Average
Connections and GCI Average Connections for [***] in accordance with the
following provisions:

 
[i]  
An amount (the “ACS [***] Connection Adjustment”) equal to the excess of [A] the
Final Adjusted ACS Forecast Average Connections for Fiscal Year [***], over
[B] the ACS Actual Average Connections for Fiscal Year [***], if any, will be
multiplied by $[***], provided that (for the avoidance of doubt) if the excess
of [A] over [B] is zero or a negative number, then the ACS [***] Connection
Adjustment will be zero and provided further that if the aggregate amount of all
ACS Annual Connection Shortfall Adjustments and the ACS [***] Connection
Adjustment would exceed $21,800,000, then the ACS [***] Connection Adjustment
will be an amount equal to $21,800,000 minus the sum of all ACS Annual
Connection Shortfall Adjustments.

 
[ii]  
An amount (the “GCI [***] Connection Adjustment”) equal to the excess of [A] an
amount equal to [x] [1] [***] (which is the forecast of the Average Connections
of GCI under the Facilities and Network Use Agreement for Fiscal Year [***]),
minus [2] the aggregate number of ACS Forecast Reduction Connections, [***] [y]
the applicable [***], over [B] the actual Average Connections of GCI under the
Facilities and Network Use Agreement for Fiscal Year [***], if any, will be
multiplied by $[***], provided that (for the avoidance of doubt) if the excess
of [A] over [B] is zero or a negative number, then the GCI [***] Connection
Adjustment will be zero and provided further that the maximum amount of the GCI
[***] Connection Adjustment will be $21,800,000.

 
[iii]  
If the ACS [***] Connection Adjustment is greater than the GCI [***] Connection
Adjustment, then the Distributions to be made to the ACS Member under
Section 5.1 will be reduced by an amount equal to the difference between the ACS
[***] Connection Adjustment and the GCI [***] Connection Adjustment (the “Net
ACS [***] Connection Adjustment”).  Any reduction to the Distributions to be
made to the ACS Member pursuant to the immediately preceding sentence will be
made to the Distributions to be made under Section 5.1[a] or Section 5.1[c] for
the next succeeding quarter or quarters after the Net ACS [***] Connection
Adjustment is determined until the Distributions made to the ACS Member under
Section 5.1[a] or Section 5.1[c] have been reduced by the full amount of the Net
ACS [***] Connection Adjustment.  If at the end of the Preference Period the
Distributions to be made to the ACS Member under Section 5.1[a] or Section
5.1[c] have not been reduced by the full amount of the ACS [***] Connection
Adjustment, then any Distributions to be made to the ACS Member under Section
5.1[f] will be reduced by the remaining amount of the ACS [***] Connection
Adjustment, and any reduction to the Distributions to be made to the ACS Member
under Section 5.1[f] will be added to and will increase the Distributions to be
made to the GCI Member under Section 5.1[f].

 
 
55

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Information indicated by [***] in the text has been omitted and filed separately
with the Securities and Exchange Commission pursuant to a request for
Confidential Treatment under Rule 24b-2 under the Securities Exchange Act of
1934.

 
[iv]  
If the GCI [***] Connection Adjustment is greater than the ACS [***] Connection
Adjustment, then the Distributions to be made to the GCI Member under
Section 5.1 will be reduced by an amount equal to the difference between the GCI
[***] Connection Adjustment and the ACS [***] Connection Adjustment (the “Net
GCI [***] Connection Adjustment”).  Any reduction to the Distributions to be
made to the GCI Member pursuant to the immediately preceding sentence will be
made to the Distributions to be made under Section 5.1[b] or Section 5.1[c] for
the next succeeding quarter or quarters after the Net GCI [***] Connection
Adjustment is determined until the Distributions made to the GCI Member under
Section 5.1[b] or Section 5.1[c] have been reduced by the full amount of the Net
GCI [***]Connection Adjustment, and any reduction to the Distributions to be
made to the GCI Member under Section 5.1[b] or Section 5.1[c] will be added to
and will increase the Distributions to be made to the ACS Member under Section
5.1[a] or Section 5.1[c].  If at the end of the Preference Period the
Distributions to be made to the GCI Member under Section 5.1[b] or Section
5.1[c] have not been reduced by the full amount of the Net GCI [***] Connection
Adjustment, then any Distributions to be made to the GCI Member under Section
5.1[f] will be reduced by the remaining amount of the Net GCI [***] Connection
Adjustment, and any reduction to the Distributions to be made to the GCI Member
under Section 5.1[f] will be added to and will increase the Distributions to be
made to the ACS Member under Section 5.1[f].

 
[d]  
If the Company intends to take any action in connection with managing its
network (including any network integration or call site rationalization) that
the Company knows or reasonably anticipates will result in Wireless service
being permanently eliminated in a particular geographic service area that was
served by any Connections to the Company’s network immediately prior to such
action (an “Intentional Service Area Elimination”), the Company will notify each
Member in writing at least 30 days prior to such Intentional Service Area
Elimination (a “Service Area Elimination Company Notice”).  Any Member may
contact the Company to discuss potential alternatives to avoid any planned
Intentional Service Area Elimination.  If the Company and the Members do not
mutually agree on an alternative to avoid any planned Intentional Service Area
Elimination within 30 days, the Company will agree to extend the date on which
the planned Intentional Service Area Elimination will occur for a period of up
to ten Business Days if requested by any Member to provide such Member an
opportunity to notify affected customers.  If the Company takes any action in
connection with managing its network that results in Wireless service being
permanently eliminated in a particular geographic service area that was served
by the Company’s network immediately prior to such action that results in
Connections unintentionally losing Wireless service (an “Unintentional Service
Area Elimination”), any Member may notify the Company in writing that such
Unintentional Service Area Elimination has resulted in some of its Connections
losing Wireless service (a “Service Area Elimination Member Notice”).  The
Company will have 30 days after receipt of a Service Area Elimination Member
Notice to take actions necessary to restore Wireless service to all or any part
of the geographic service area that was affected by an Unintentional Service
Area Elimination (the “SAE Cure Period”).  To the extent that the Company does
not restore Wireless service to any geographic service area affected by an
Unintentional Service Area Elimination during the SAE Cure Period or if the
Company implements an Intentional Service Area Elimination, the Company will
calculate the proportionate decrease in the population served by the Company’s
network as a result of each Service Area Elimination, which will [***] [i] [***]
will [***] [A] the reported population in all geographic service areas covered
by the Company’s network immediately prior to such Service Area Elimination
[***] [B] the reported population in any geographic service area to which
Wireless service was eliminated as a result of such Service Area Elimination and
not restored during the SAE Cure Period, if applicable, and [ii] [***] will be
the reported population in all geographic service areas covered by the Company’s
network immediately prior to such Service Area Elimination (the “Service Area
[***]”).  The Company will calculate the Service Area [***] on a cumulative
basis on the date each Intentional Service Area Elimination occurs, or at the
end of each SAE Cure Period, as applicable, if more than one Service Area
Elimination occurs.  The Company will notify each Member in writing of the
applicable Service Area [***] within ten Business Days after the date on which
any Intentional Service Area Elimination occurs or the end of each SAE Cure
Period, as applicable.  The Company will not be required to calculate a Service
Area Elimination Percentage at any time after the later of [i] the Connection
Maintenance Measurement Date, and [ii] [***].

 
 
56

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Information indicated by [***] in the text has been omitted and filed separately
with the Securities and Exchange Commission pursuant to a request for
Confidential Treatment under Rule 24b-2 under the Securities Exchange Act of
1934.

 
[e]  
From the Effective Date until the fourth anniversary of the Effective Date, each
of ACS and GCI agrees that it will, and will cause its applicable Affiliates to,
continue conducting reasonable marketing and sales efforts with respect to the
operation of such Person’s retail Wireless service offerings in a manner
consistent with the Four Year Plan.

 
[f]  
Example calculations of the connection attrition adjustments set forth in this
Section 9.4 are set forth on Exhibit M for illustrative purposes only.

 
9.5 Connection Maintenance Adjustments.
 
[a]  
If a Transfer of an Ownership Interest occurs prior to the [***] of the
Effective Date other than a Transfer pursuant to Section 14.3[a] or [b] (such
Transfer being a “Connection Maintenance Transfer” and the effective date of
such Transfer as determined pursuant to Section 14.4 being the “Connection
Maintenance Transfer Date”), a one-time calculation and adjustment will be made
with respect to ACS Connections and GCI Connections in accordance with the
following provisions; provided, however, that if more than one Transfer occurs
that would constitute a Connection Maintenance Transfer, the provisions of this
Section 9.5 will apply only with respect to the first Connection Maintenance
Transfer that occurs.

 
 
57

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Information indicated by [***] in the text has been omitted and filed separately
with the Securities and Exchange Commission pursuant to a request for
Confidential Treatment under Rule 24b-2 under the Securities Exchange Act of
1934.

 
[i]  
The Connections of ACS under the Facilities and Network Use Agreement as of the
last day of the calendar month immediately preceding the Connection Maintenance
Transfer Date will be multiplied by [***]%, and such amount will then be
multiplied by the applicable Service Area [***] (the “ACS Transfer Date
Connections”).

 
[ii]  
The Connections of GCI under the Facilities and Network Use Agreement as of the
last day of the calendar month immediately preceding the Connection Maintenance
Transfer Date will be multiplied by [***]%, and such amount will then be
multiplied by the applicable Service Area [***] (the “GCI Transfer Date
Connections”).

 
[iii]  
The excess of [A] the ACS Transfer Date Connections, over [B] Connections of ACS
under the Facilities and Network Use Agreement (which shall refer to the
successor to the Connections of ACS under the Facilities and Network Use
Agreement if the ACS Member is the Transferor in the Connection Maintenance
Transfer) on the earlier of [X] the last day of the calendar month immediately
preceding [***] of the [***] and [Y] the last day of the calendar month
immediately preceding the [***] of the Effective Date (the earlier of [X] and
[Y] being the “Connection Maintenance Measurement Date”), if any, will be
multiplied by $[***] (the “ACS Connection Maintenance Adjustment”); provided
that (for the avoidance of doubt) if the excess of [A] over [B] is zero or a
negative number, then the ACS Connection Maintenance Adjustment will be zero and
provided further that the maximum amount of the ACS Connection Maintenance
Adjustment will be $[***].

 
[iv]  
The excess of [A] the GCI Transfer Date Connections over [B] the Connections of
GCI under the Facilities and Network Use Agreement (which shall refer to the
successor to the Connections of GCI under the Facilities and Network Use
Agreement if the GCI Member is the Transferor in the Connection Maintenance
Transfer) on the Connection Maintenance Measurement Date, if any, will be
multiplied by $[***] (the “GCI Connection Maintenance Adjustment”); provided
that (for the avoidance of doubt) if the excess of [A] over [B] is zero or a
negative number, then the GCI Connection Maintenance Adjustment will be zero and
provided further that the maximum amount of the GCI Connection Maintenance
Adjustment will be $[***].

 
[v]  
If the ACS Connection Maintenance Adjustment is greater than the GCI Connection
Maintenance Adjustment, then the Distributions to be made to the ACS Member (or
the Transferee of the ACS Member, if applicable) under Section 5.1[f] will be
reduced by an amount equal to the difference between the ACS Connection
Maintenance Adjustment and the GCI Connection Maintenance Adjustment (the “Net
ACS Connection Maintenance Adjustment”), and the amount of the Net ACS
Connection Maintenance Adjustment will be added to and will increase the
Distributions to be made to the GCI Member (or the Transferee of the GCI Member,
if applicable) under Section 5.1[f].  Any reduction to the Distributions to be
made to the ACS Member (or its Transferee, as applicable), and any corresponding
increases to Distributions to be made to the GCI Member (or its Transferee, as
applicable), pursuant to the immediately preceding sentence will be made to the
Distributions to be made under Section 5.1[f] for the next succeeding quarter or
quarters after the Net ACS Connection Maintenance Adjustment is determined until
the Distributions made to the ACS Member (or its Transferee, as applicable)
under Section 5.1[f] have been reduced by the full amount of the Net ACS
Connection Maintenance Adjustment.

 
 
58

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Information indicated by [***] in the text has been omitted and filed separately
with the Securities and Exchange Commission pursuant to a request for
Confidential Treatment under Rule 24b-2 under the Securities Exchange Act of
1934.

 
[vi]  
If the GCI Connection Maintenance Adjustment is greater than the ACS Connection
Maintenance Adjustment, then the Distributions to be made to the GCI Member (or
the Transferee of the GCI Member, if applicable) under Section 5.1[f] will be
reduced by an amount equal to the difference between the GCI Connection
Maintenance Adjustment and the ACS Connection Maintenance Adjustment (the “Net
GCI Connection Maintenance Adjustment”), and the amount of the Net GCI
Connection Maintenance Adjustment will be added to and will increase the
Distributions to be made to the ACS Member (or the Transferee of the ACS Member,
if applicable) under Section 5.1[f].  Any reduction to the Distributions to be
made to the GCI Member (or its Transferee, as applicable), and any corresponding
increases to Distributions to be made to the ACS Member (or its Transferee, as
applicable), pursuant to the immediately preceding sentence will be made to the
Distributions to be made under Section 5.1[f] for the next succeeding quarter or
quarters after the Net GCI Connection Maintenance Adjustment is determined until
the Distributions made to the GCI Member (or its Transferee, as applicable)
under Section 5.1[f] have been reduced by the full amount of the Net GCI
Connection Maintenance Adjustment.

 
9.6 Network Capacity Purchases.
 
[a]  
The Company will purchase network capacity from ACS and GCI as required for the
operation of the Company’s network for its Wireless Business (“Member Network
Capacity Purchases”).  Member Network Capacity Purchases may be made at any
time.  All Member Network Capacity Purchases will be subject to the Acceptable
Use Policy attached hereto as Exhibit K.

 
[b]  
[***] will [***] the [***] with the [***] for [***] as [***] to any [***] that
[***] from [***] of a [***] and [***]. ACS will provide to the Company, on June
30 and December 31 of each year, a certificate signed by its chief financial
officer certifying that [***] at [***] it [***] to [***] with this [***] at
[***] the [***].

 
[c]  
[***] will [***] the [***] with the [***] for [***] as [***] to any [***] that
[***] from [***] of a [***] and [***].  GCI will provide to the Company, on June
30 and December 31 of each year, a certificate signed by its chief financial
officer certifying that [***] at [***] it [***] to [***] with this [***] at
[***] the [***].

 
 
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Information indicated by [***] in the text has been omitted and filed separately
with the Securities and Exchange Commission pursuant to a request for
Confidential Treatment under Rule 24b-2 under the Securities Exchange Act of
1934.

 
[d]  
Member Network Capacity Purchases will be made by the Company in accordance with
the terms and provisions of the Additional Capacity Purchase Agreement and will
be subject to Section 6.4[n][x].

 
[e]  
Either ACS or GCI can decline to accept a proposed Member Network Capacity
Purchase available to the Company along a requested route due to network
capacity limitations.

 
9.7 Option Regarding  Fixed Wireless Facilities.
 
[a]  
If a Member desires the Company to construct a fixed Wireless facility that
would support a fixed Wireless service to qualify for [***] or [***] or [***],
the cost of which is $[***] or [***], such Member (the “Requesting Member”) will
have the option to send Notice to the Company and the other Member (a “Fixed
Wireless Facility Notice”) that it desires the Company to construct such
facility (the “ Fixed Wireless Facility Investment”) and specifying its proposed
time period and other material terms and conditions for the Fixed Wireless
Facility Investment to be made.  In no event may a Member send more than [***]
Fixed Wireless Facility Investment during any [***] period.

 
[b]  
Within 30 days following its receipt of a Fixed Wireless Facility Notice, the
Company will send Notice to the Requesting Member stating either [i] that the
Company will make the Fixed Wireless Facility Investment on its own behalf
within the time period proposed and on the other material terms and conditions
set forth in such Fixed Wireless Facility Notice, or [ii] that the Company will
not make the Fixed Wireless Facility Investment within the time period proposed
in such Notice but consents to the Requesting Member making such Fixed Wireless
Facility Investment in accordance with this Section 9.7 (“FWF Option 2”), or
[iii] that the Company will not make the Fixed Wireless Facility Investment but
does not consent to the Requesting Member making such Fixed Wireless Facility
Investment (“FWF Option 3”); provided, that the Company’s consent pursuant to
this Section 9.7[b][iii] may be not be unreasonably withheld; provided further
that, without limitation, [x] it will not be unreasonable for the Company to
withhold its consent to a proposed Fixed Wireless Facility Investment if such
investment would be disruptive to the Company, is inconsistent with the
technology standards or the manufacturer selections of the Company, or the
services to be offered in connection with the Fixed Wireless Facility Investment
would not allow the Company to recover its operating costs associated with the
Fixed Wireless Facility Investment, and [y] it will be unreasonable for the
Company to withhold its consent to a proposed Fixed Wireless Facility Investment
solely on the basis that such investment is not provided in the Plan or has
costs that are included in the Requesting Member’s Cost.

 
[c]  
If FWF Option 2 is exercised by the Company, the Requesting Member and the
Company will enter into an agreement pursuant to which the Company will design,
install, integrate and operate the Fixed Wireless Facility Investment at the
Requesting Member’s expense (the amount so paid by the Requesting Member, the
“Requesting Member’s Cost”), on the terms and conditions set forth in the Fixed
Wireless Facility Notice.

 
 
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Information indicated by [***] in the text has been omitted and filed separately
with the Securities and Exchange Commission pursuant to a request for
Confidential Treatment under Rule 24b-2 under the Securities Exchange Act of
1934.

 
[d]  
At any time following completion of a Fixed Wireless Facility Investment
pursuant to Section 9.7[c], the non-requesting Member (the “Non-Requesting
Member”) may send Notice to the Requesting Member and the Company that the
Non-Requesting Member also desires to use the Fixed Wireless Facility
Investment.  If the Non-Requesting Member sends such a Notice, the Requesting
Member and the Non-Requesting Member will negotiate in good faith to reach
agreement on a reasonable monthly user fee  and other terms for access by the
Non-Requesting Member to the Fixed Wireless Facility Investment.  For the
avoidance of doubt, the use of any Fixed Wireless Facility Investment by the
Requesting Member or the Non-Requesting Member is subject to the provisions of
Section 6.5.

 
[e]  
The Company will have the exclusive option at any time, exercisable by sending
Notice to both Members, to acquire the Fixed Wireless Facility Investment at an
amount equal to the [***] plus [***] at an [***] the [***] of [i] [***] and [ii]
[***] or, if the Company and the Requesting Member reach agreement on a
different price within 15 days following the Company’s exercise of such option,
at such agreed price (as applicable, the “FWF Purchase Price”); provided, that
if the Requesting Member and the Non-Requesting Member enter into an agreement
pursuant to Section 9.7[d], the Company will be obligated to acquire the Fixed
Wireless Facility Investment at the FWF Purchase Price within [***] from the
date the Fixed Wireless Facility Investment is placed in service or the date
that the Non Requesting Member begins using the Fixed Wireless Facility
Investment, whichever is later, with the [***] period referenced above beginning
on the date that the Company sends Notice it is acquiring the Fixed Wireless
Facility Investment.

 
[f]  
A Member’s right to use a Fixed Wireless Facility Investment for its individual
benefit will terminate at such time as the Company acquires such investment.

 
ARTICLE 10: LIABILITY OF A MEMBER; STANDARD OF CARE; INDEMNIFICATION; AND
EXCULPATION
 
10.1 Limited Liability.
 
  Except as otherwise provided in the Act, the debts, obligations and
liabilities of the Company (whether arising in contract, tort or otherwise) will
be solely the debts, obligations and liabilities of the Company, no Member
(including any Person who formerly held such status) is liable or will be
obligated personally for any such debt, obligation or liability of the Company
solely by reason of such status, and the Company will indemnify each of the
foregoing Persons with respect to Indemnified Losses incurred by such Person in
connection with any Proceeding to which such Person is made a party or is
threatened to be made a party based solely on such status.  No individual
trustee, officer, director, shareholder, member, partner, manager, employee,
agent or attorney of any entity Member, in its individual capacity as such, will
have any personal liability for the performance of any obligation of such Member
under this Agreement solely by reason of such status.
 
 
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10.2 Capital Contributions.
 
  Each Member is liable to the Company for any Capital Contribution or
Distribution that has been wrongfully or erroneously returned or made to such
Person in violation of the Act, the Certificate or this Agreement.
 
10.3 Capital Return.
 
  If any Member receives a Distribution that was wrongfully or erroneously made
by the Company, the Member will have no liability under the Act or other
applicable law for the amount of the Distribution after the expiration of three
years from the date of the Distribution, unless an action to recover the
Distribution from the Member is commenced within the period provided for in the
Act and an adjudication of liability against the Member is made in such
action.  The amount of any Distribution returned to the Company by a Member or
paid by a Member for the account of the Company or to a creditor of the Company
will be added to the account or accounts from which it was subtracted when it
was distributed to the Member.
 
10.4 Reliance.
 
  Each Member will be fully protected in relying in good faith upon the records
of the Company and upon such information, opinions, reports or statements by [a]
any of the Company's other Members, employees or committees or [b] any other
Person who has been selected with reasonable care as to matters that such Person
reasonably believes are within such other Person's professional or expert
competence.  Matters as to which such reliance may be made include the value and
amount of assets, liabilities, Income and Losses of the Company, as well as
other facts pertinent to the existence and amount of assets from which
Distributions to Members might properly be made.
 
10.5 Standard of Care.
 
[a]  
The only duty owed by the GCI Member to the Company and the ACS Member is to
refrain in managing the business and affairs of the Company (to the extent not
delegated to the CEO or requiring approval by the unanimous Vote of the Members)
and winding up the business and affairs of the Company from engaging in grossly
negligent or reckless conduct, intentional misconduct, a knowing violation of
the law or a transaction in which GCI or its Affiliates knowingly receive an
improper benefit that is to the detriment of the Company and to refrain from
breaching the implied contractual covenant of good faith and fair dealing (the
“Standard of Care”).   It is expressly acknowledged by the Company and the
Members that all other express or implied fiduciary duties of the GCI Member to
the Company and/or to the ACS Member are expressly disclaimed to the maximum
extent permitted by law, and that the GCI Member does not violate the Standard
of Care solely because the GCI Member’s conduct furthers the GCI Member’s own
interest.  Without limiting the foregoing, in no event will the following be
deemed to be a violation of the Standard of Care by the GCI Member: [i] the good
faith exercise by the GCI Member or any of its Affiliates of their rights under
any Approved Affiliate Transaction or other transaction permitted by Section
6.4[n], or the performance by them of their obligations in relation to such
agreements or transactions, or [ii] the good faith exercise by the GCI Member or
any of its Affiliates of their rights under this Agreement (including the taking
of any action that is permitted by Section 6.5), the Contribution Agreement or
any Ancillary Agreement or [iii] any action that is authorized by the unanimous
Vote of the Members following full disclosure.

 
 
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[b]  
No Member owes duties of any nature to any Transferee who is not admitted as a
Member.

 
[c]  
If the ACS Member reasonably believes that the GCI Member has breached the
Standard of Care in relation to the Company and the Company has not brought a
claim against the GCI Member with respect to such breach, the ACS Member may
send written notice to the CEO specifying in reasonable detail the alleged
breach of the Standard of Care and if the CEO does not subsequently agree to
cause the Company to bring such claim, the ACS Member may, on behalf of the
Company, bring such claim against the GCI Member pursuant to the dispute
resolution provisions provided for in Article 15.   As specified in Section 11
of the Arbitration Agreement, if the Arbitrator determines in a proceeding
initiated by the ACS Member that [i] the GCI Member has not breached the
Standard of Care, the ACS Member will pay the Company’s and the GCI Member’s
Individual Fees and Expenses and any Arbitrator’s Expenses paid by such Persons
in connection with such claim or [ii] the GCI Member has breached the Standard
of Care, the GCI Member will pay the Company’s and the ACS Member’s Individual
Fees and Expenses and any Arbitrator’s Expenses paid by such Persons in
connection with such claim.

 
[d]  
The CEO and each Officer shall be a fiduciary and shall have the same fiduciary
duties to the Members and the Company as the chief executive officer and other
officers of a Delaware corporation have to the corporation and its stockholders
under the Delaware General Corporation Law.

 
[e]  
Neither Member, in its capacity as such, shall exercise its voting rights
pursuant to this Agreement in favor of any action that would reasonably be
expected to result in the Company breaching any of its obligations under this
Agreement; it being acknowledged that the foregoing is not intended to make
either Member a guarantor of the Company’s obligations under this Agreement.

 
10.6 Exculpation.
 
  Neither Member will be liable to the Company or to any other Member or
Transferee for any losses, damages, expenses or liabilities on account of any
act or omission, unless such act or omission [a] in the case of the GCI Member,
constitutes a breach of the Standard of Care or [b] in the case of any Member, a
violation of the implied contractual covenant of good faith and fair dealing.
 
10.7 Indemnification.
 
  The Company will indemnify the Members from and against all Indemnified Losses
incurred by such Member in connection with any Proceeding to which such Member
is made a party or is threatened to be made a party because such Person was a
Member or acted or failed to act with respect to the business or affairs of the
Company, to the extent that [a] such action or failure did not constitute a
violation of the implied contractual covenant of good faith and fair dealing and
[b] with respect to the GCI Member, the GCI Member, in such action or failure to
act, did not breach the Standard of Care.
 
10.8 Expense Advancement.
 
  With respect to the reasonable expenses incurred by a Member when such Member
is a party to a Proceeding, the Company will provide funds to such Member in
advance of the final disposition of the Proceeding if [a] in the case of the GCI
Member, the GCI Member furnishes the Company with the GCI Member’s written
affirmation of a good faith belief that it has met the Standard of Care and in
the case of the ACS Member, the ACS Member furnishes the Company with the ACS
Member’s written affirmation of a good faith belief that it has not breached the
implied contractual covenant of good faith and fair dealing, and [b] in the case
of the GCI Member, the GCI Member agrees in writing to repay the advance if it
is determined in an arbitration under the Arbitration Agreement that it has not
met the Standard of Care, and in the case of the ACS Member, the ACS Member
agrees in writing to repay the advance if it is determined in an arbitration
under the Arbitration Agreement that it has breached the implied contractual
covenant of good faith and fair dealing.
 
 
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10.9 Insurance.
 
  The indemnification provisions of this Article do not limit Member’s or any
other Person’s right to recover under any insurance policy maintained by the
Company.  If, with respect to any loss, damage, expense or liability described
in Section 10.7, a Member or any other Person receives an insurance policy
indemnification payment, which, together with any indemnification payment made
by the Company, exceeds the amount of such loss, damage, expense or liability,
then the Member or such other Person will immediately repay such excess to the
Company.
 
10.10 Indemnification of Others.
 
  The Company shall indemnify and advance expenses to each member of the Board
and each manager, member, partner, owner, officer, employee or agent of the
Members to the same extent as the Company is obligated to indemnify and advance
expenses to the Members.  The Company may also indemnify and advance expenses to
any Officer, employee or agent of the Company to the same extent as (or to a
greater or lesser extent than) the Company is obligated to indemnify and advance
expenses to the Members.
 
 
ARTICLE 11: ACCOUNTING  AND  REPORTING
 
11.1 Fiscal Year.
 
  For income tax and accounting purposes, the fiscal year of the Company (the
“Fiscal Year”) is the period commencing on January 1 of each year and ending on
December 31 of such year (unless otherwise required by the Code), but the first
Fiscal Year will begin on the Effective Date and the last Fiscal Year will end
on the date on which the Company is terminated.
 
11.2 Accounting Method.
 
  For both book accounting and income tax purposes, the Company will use the
accrual method of accounting (unless otherwise required by the Code).  The
Company will prepare and maintain its financial books and records in accordance
with GAAP.
 
11.3 Tax Classification.
 
  Notwithstanding any other provision of this Agreement, neither the Company nor
any Member may take any action (including the filing of a U.S. Treasury Form
8832 Entity Classification Election) that would cause the Company to be
characterized as an entity other than a partnership for federal income tax
purposes without the affirmative unanimous Vote of the Members.
 
11.4 Tax Filings.
 
  The Company will use all reasonable efforts to cause the preparation and
timely filing of all tax returns required to be filed by the Company pursuant to
the Code, as well as all other tax returns required in each jurisdiction in
which the Company does business, and will cause all tax information related to
the Company required by a Member in order to file its own tax returns to be
provided to such Member in a timely manner.  The Company will provide draft
copies of all such income tax returns of the Company to each Member at least 30
days prior to filing, taking into account any extensions of the Company’s
obligation to file.  In the event that a Member has any questions or objections
to the draft income tax returns, it shall provide such questions or objections
to the Company in writing and in reasonable detail within ten days following its
receipt of such returns and the Company shall provide each Member with any
additional information reasonably requested by such Member.  One or more
knowledgeable representatives of the Company and each Member shall promptly
discuss any objections to reach a consensus on the filing of such tax
return.  The Company shall file for any available extension provided by law for
the  filing of the Company’s return to permit time to reach a resolution of any
such dispute. Upon written request by any Member, the Company shall retain a
national accounting firm (other than the Company’s regular accounting firm) to
determine how the tax return should be filed based on the objections raised by
the disputing Member in its written notice.  The cost of such accounting firm
shall be paid by the disputing Member if such firm agrees with the tax returns
as prepared by the Company or by the Company if such firm agrees with the
disputing Member’s proposed changes.
 
 
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11.5 Company Reports.
 
  The Company will provide the following information to each Member at the same
time:
 
[a]  
Annual Reports.  As soon as practicable and in any event within 40 days after
the end of each Fiscal Year, a preliminary consolidated balance sheet as of the
end of such Fiscal Year and a preliminary consolidated statement of operations,
preliminary consolidated statement of Members’ equity and a preliminary
consolidated statement of cash flows of the Company for such Fiscal Year, all
prepared in conformity with GAAP, and, as soon as practicable and in any event
within 67 days after the end of each Fiscal Year, the final versions of such
financial statements, together with a report on such financial statements from a
nationally recognized independent registered public accounting firm stating that
such statements are prepared and fairly stated in all material respects in
conformity with GAAP;

 
[b]  
Quarterly Reports.  As soon as practicable and in any event within 15 Business
Days after the end of each quarter close of the Company (except the last quarter
of the Company’s Fiscal Year), a preliminary unaudited consolidated balance
sheet as of the end of such fiscal quarter, and a preliminary unaudited
consolidated statement of operations and a preliminary unaudited consolidated
statement of cash flows of the Company and its Subsidiaries for such quarter,
all prepared in conformity with GAAP with the final versions of such quarterly
reports to be delivered within 37 days after the end of each such quarter close
and to be accompanied by a certification from the chief financial officer of the
Company as to the accuracy of such statements;

 
[c]  
Certifications.

 
[i]  
As soon as practicable and in any event within 70 days after the end of each
Fiscal Year, any certifications, assessments, reports and attestations
reasonably requested by a Member that are necessary for such Member to meet any
obligations that it has under the Sarbanes-Oxley Act of 2002 in relation to its
Ownership Interest in the Company;

 
 
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[ii]  
Within 90 days following the end of each Fiscal Year, a certificate signed by
the Company’s chief financial officer certifying [w] the dollar amount of all
Professional Services provided to the Company pursuant to the GCI Services
Agreement and that any such Professional Services were provided in accordance
with the Professional Services Guidelines, including the requirement that the
Company determine that the estimate is fair and reasonable and [x] that any
Satellite Capacity Services provided to the Company pursuant to the GCI Services
Agreement were provided in accordance with the Satellite Capacity Services
Guidelines.

 
[d]  
Monthly Reports.  As soon as practicable (but no later than 11 Business Days
after the end of each month close), an unaudited detailed balance sheet as of
the end of such month and an unaudited detailed statement of operations of the
Company for such month, together with a statement of the number of the Company’s
Connections during such month;

 
[e]  
Budget and Plan Updates.  As soon as practicable and in any event within 16
Business Days after the end of each month, budget reports with respect to the
then-current Annual Operating Budget, Four Year Plan and Annual Cap Ex Budget,
including comparisons of actual results to budgeted amounts and assumptions;

 
[f]  
Asset Reports.  As soon as practicable (but no later than 16 Business Days after
the end of each quarter close), a schedule of all Contributed Assets retired,
abandoned, sold or otherwise removed from service, together with the original
cost and accumulated depreciation thereof.

 
[g]  
Other Reports.  Such additional reports as a Member may reasonably request from
time to time.

 
Without limiting the foregoing, the Company shall, upon request of a Member
[i] provide in a timely manner such financial reports and other operational
information as are reasonably necessary for each Member to prepare financial
statements and other information required by the rules and regulations of the
Securities and Exchange Commission, any exchange on which the securities of such
Member are traded, and any other governmental authority, in each case to the
extent applicable to it, and [ii] maintain such systems, personnel and controls
as are reasonably necessary so that each Member is able to satisfy its internal
control, financial reporting and other compliance requirements, in each case, to
the extent required by any Member in order to comply with the rules and
regulations of the Securities and Exchange Commission and relevant stock
exchanges.
 
11.6 Financial Statement Audit.
 
  The Company will obtain an annual audit of its financial statements with
respect to each Fiscal Year and, to the extent that quarterly review procedures
of the Company’s financial statements are required to be performed in order for
a Member to meet its reporting obligations as a public company, the Company will
cause such review procedures to be performed, in each case from or by a
nationally recognized independent registered public accounting firm.  The
Company will furnish the Members with a copy of such audited or reviewed
financial statements as provided in Section 11.5.  Any exceptions to the audited
statements rendered must be made by a Member within one year from its receipt
and, if no exception is made within that time, the statements will be considered
to be correct.
 
 
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11.7 Books and Records.
 
[a]  
The following books and records of the Company (which may be in electronic form)
will be kept at the GCI Member’s principal place of business in Alaska:  [i] a
current list of the full name and last known business or mailing address of each
Member, [ii] the original of the Certificate  and of this Agreement, as the same
may be amended from time to time (as well as any signed powers of attorney
pursuant to which any such document was executed), [iii] a copy of the Company’s
federal, state and local income tax returns and reports, and annual financial
statements of the Company, for the six most recent years, and [iv] minutes, or
minutes of action by written consent, of every annual and special meeting of the
Members and of every meeting of the Board.

 
[b]  
The Company will keep at the GCI Member’s principal place of business in Alaska
separate books of account for the Company, which will show a true and accurate
record of all costs and expenses incurred, all credits made and received and all
income derived in connection with the operation of the Wireless Business by the
Company in accordance with GAAP consistently applied as to the Company’s
financial position and results of operations.  The Company will maintain a
system of internal accounting controls that complies with applicable law and
that will provide reasonable assurance that:  [i] transactions are executed in
accordance with the general or specific authorization of the  Members, the Board
or the CEO, as applicable; [ii] transactions are recorded as necessary to permit
preparation of financial statements in conformity with GAAP (or any other
criteria applicable to the statements) and to maintain accountability for
assets; [iii] access to assets is permitted only in accordance with the general
or specific authorization of the Members, the Board or the CEO, as applicable;
and [iv] the recorded accountability for inventory is compared with existing
inventory at reasonable intervals and appropriate action is taken with respect
to any differences.

 
[c]  
Each Member will, at its sole expense, have the right, at any time upon
reasonable Notice to the Company, to examine and copy, or cause its designee to
examine and copy, the Company’s books and records (including financial books and
records) during normal business hours for any proper purpose reasonably related
to such Person’s Ownership Interest, subject to Section 16.20 and to the
Commercially Sensitive Information Policies and Procedures.

 
[d]  
All books, records (including bills and invoices), reports and returns of the
Company required by this Article 11 will be maintained in a manner and form
reasonably determined by the CEO.

 
11.8 Banking.
 
  The Company may establish one or more bank or financial accounts and safe
deposit boxes.  The Company may authorize one or more individuals to sign checks
on and withdraw funds from such bank or financial accounts and to have access to
such safe deposit boxes, and may place such limitations and restrictions on such
authority as the Company deems advisable.
 
 
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11.9 Tax Matters Partner.
 
  The GCI Member is designated as the tax matters partner for the Company under
§ 6231(a)(7) of the Code (the “Tax Matters Partner”).  The Tax Matters Partner
will be responsible for notifying all Members of ongoing proceedings, both
administrative and judicial, and will represent the Company throughout any such
proceeding.  The Members will furnish the Tax Matters Partner with such
information as it may reasonably request to provide the Internal Revenue Service
with sufficient information to allow proper notice to the Members.  If an
administrative proceeding with respect to a partnership item under the Code has
begun, and the Tax Matters Partner so requests, each Member will notify the Tax
Matters Partner of its treatment of any partnership item on its federal income
tax return, if any, which is inconsistent with the treatment of that item on the
partnership return for the Company.  Any settlement agreement with the Internal
Revenue Service will be binding upon the Members only as provided in the
Code.  The Tax Matters Partner will not bind any other Member to any extension
of the statute of limitations or to a settlement agreement without such Member’s
written consent.  Any Member who enters into a settlement agreement with respect
to any partnership item will notify the other Members of such settlement
agreement and its terms within 30 days from the date of settlement.  If the Tax
Matters Partner does not file a petition for readjustment of the partnership
items in the Tax Court, federal District Court or Claims Court within the 90-day
period following a notice of a final partnership administrative adjustment, any
notice partner or 5-percent group (as such terms are defined in the Code) may
institute such action within the following 60 days.  The Tax Matters Partner
will timely notify the other Members in writing of its decision regarding filing
any petition for readjustment.  Any notice partner or 5-percent group will
promptly notify any other Member of its filing of any petition for readjustment.
 
11.10 No Partnership.
 
  The classification of the Company as a partnership will apply only for federal
(and, as appropriate, state and local) income tax purposes.  This
characterization, solely for tax purposes, does not create or imply a general or
limited partnership between the Members for state law or any other
purpose.  Instead, the Members acknowledge the status of the Company as a
limited liability company formed under the Act.
 
11.11 ACS Audit Rights.
 
  The ACS Member shall have the right to audit, no more than once per Fiscal
Year during the term of this Agreement and for one year thereafter, those books
and records of the Company and its Subsidiaries relating to any agreement or
transactions between the Company or any of its Subsidiaries, on the one hand,
and GCI or any of its Affiliates, on the other hand.  Any such audits shall be
subject to the Commercially Sensitive Information Policies and Procedures, and
shall be conducted only during normal business hours in such a manner as to not
unreasonably interfere with the Company’s normal business activities and only at
such places as the applicable books and records are kept.  The ACS Member shall
provide the Company with reasonable advance written notice of any such
audit.  The ACS Member agrees that the information derived from, and the process
of, such reviews shall be subject to the confidentiality provisions set forth
herein.  If any such audit reveals that GCI or its Affiliates overcharged the
Company and its Subsidiaries any amounts, or underpaid the Company and its
Subsidiaries any amounts, GCI shall immediately pay to the Company the amount of
any such overpayment or shortfall, plus interest compounded at a monthly rate
per annum equal to LIBOR plus 2.5%, from the month that any such overpayment was
made by the Company, or that any shortfall amounts were first due to the
Company, as applicable, in each case subject to the dispute resolution
provisions of Article 15.
 
 
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11.12 Maintenance of Insurance.
 
  The Company shall acquire and maintain or cause to be maintained, insurance
coverage of the types and with coverage amounts consistent with
telecommunications industry standards and such additional insurance as may
otherwise be reasonably determined by the CEO to be necessary or advisable from
time to time.
 
ARTICLE 12: DISSOLUTION
 
12.1 Dissolution.
 
  Dissolution of the Company will occur upon [a] the unanimous affirmative Vote
of the Members, [b] the sale, transfer or other disposition of all of the assets
of the Company in accordance with the terms of this Agreement, upon the receipt
of the consideration (including collection of any promissory notes or other
evidences of indebtedness received as consideration) paid for such sale,
transfer or other disposition, or [c] an event of Withdrawal of a Member and the
election of the remaining Members to dissolve in accordance with Section 12.3.
 
12.2 Events of Withdrawal.
 
  An event of Withdrawal of a Member occurs when any of the following occurs:
 
[a]  
With respect to any Member that is a corporation, upon filing of articles of
dissolution of the corporation;

 
[b]  
With respect to any Member that is a partnership, a limited liability company or
a similar entity, upon dissolution and liquidation of such entity (but not
solely by reason of a technical termination under § 708(b)(1)(B) of the Code);

 
[c]  
A Bankruptcy Event with respect to any Member or its Wireless Parent, it being
acknowledged that the Transferee in a Bankruptcy Case can be admitted as a
Member in accordance with the provisions of Section 14.6.;

 
[d]  
Any other event not otherwise defined in the preceding provisions of this
Section 12.2 as being an event of Withdrawal that terminates the continued
membership of a Member in the Company, including a voluntary resignation from
the Company; or

 
[e]  
With respect to any Member, upon the Transfer by such Member of any part of its
Ownership Interest that is not permitted by or done in accordance with the
requirements of Article 14.

 
Within ten days following the happening of any event of Withdrawal with respect
to a Member, such Member must give Notice of the date and the nature of such
event to the Company.
 
12.3 Continuation.
 
  In the event of Withdrawal of a Member, the Company will be continued, unless
all of the remaining Members elect to dissolve.  If the Company is so continued,
with respect to any Member as to which an event of Withdrawal has occurred, such
Member or such Member’s Transferee or other successor-in-interest (as the case
may be) will, without further act, become a Transferee of the withdrawn Member’s
Ownership Interest (with the limited rights of a Transferee as set forth in
Section 14.5, unless admitted as a substitute Member).
 
 
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ARTICLE 13: LIQUIDATION
 
13.1 Liquidation.
 
  Upon Dissolution of the Company, the Company will immediately proceed to wind
up its affairs and liquidate pursuant to this Section 13.1.  The GCI Member will
act as the liquidating trustee unless the GCI Member elects to appoint another
Person as the liquidating trustee.  The winding up and Liquidation of the
Company will be accomplished in a businesslike manner as determined by the
liquidating trustee.  A reasonable time will be allowed for the orderly
Liquidation of the Company and the discharge of liabilities to creditors so as
to enable the Company to minimize any losses attendant upon Liquidation.  Any
gain or loss on disposition of any Company assets in Liquidation will be
allocated to the Members in accordance with the provisions of Article 4.  Any
liquidating trustee is entitled to reasonable compensation for services actually
performed, and may contract for such assistance in the liquidating process as
such Person deems necessary or desirable.  Until the filing of a certificate of
cancellation under Section 13.6, and without affecting the liability of the
Members and without imposing liability on the liquidating trustee, the
liquidating trustee may settle and close the Company’s business, prosecute and
defend suits, dispose of its property, discharge or make provision for its
liabilities, and make Distributions in accordance with the priorities set forth
in this Article.
 
13.2 Priority of Payment.
 
  The assets of the Company will be distributed in Liquidation in the following
order:
 
[a]  
First, to creditors by the payment or provision for payment of the debts and
liabilities of the Company (other than any loans or advances that may have been
made by any Member or any Affiliate of a Member) and the expenses of
Liquidation;

 
[b]  
Second, to the setting up of any reserves that are reasonably necessary for any
contingent, conditional or unmatured liabilities or obligations of the Company
(other than any loans made by any Member or any Affiliate of a Member);

 
[c]  
Third, to the repayment of any loans or advances to the Company that were made
by any Member or any Affiliate of a Member, including interest (including the
GCI Working Capital Loan), according to the relative priority of repayment of
such loans or advances and proportionally among loans of equal priority if the
amount available for repayment is insufficient for payment in full;

 
[d]  
Fourth, to the ACS Member and the GCI Member in accordance with Sections 5.1[d]
and [e]; and

 
[e]  
Fifth, to the Members in proportion to the remaining positive balances in their
respective Capital Accounts after such Capital Accounts have been adjusted for
[i] all allocations of Income, Net Income, Loss, Net Loss and items thereof for
the Fiscal Year during which such Liquidation occurs and [ii] all Distributions
pursuant to Sections 13.2[d].

 
13.3 Liquidating Distributions.
 
  The liquidating Distributions due to the Members will be made by selling the
assets of the Company and distributing the net proceeds.  Notwithstanding the
preceding sentence, but only upon the affirmative Vote of all Members, the
liquidating Distributions may be made by distributing the assets of the Company
in kind to the Members in proportion to the amounts distributable to them
pursuant to Section 13.2, and valuing such assets at their Fair Market
 
 
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Value (net of liabilities secured by such property that the Member takes subject
to or assumes) on the date of Distribution.  Each Member agrees to save and hold
harmless the other Members from such Member’s proportionate share of any and all
such liabilities that are taken subject to or assumed.  Appropriate and
customary prorations and adjustments will be made incident to any Distribution
in kind.  The Members will look solely to the assets of the Company for the
return of their Capital Contributions, and if the assets of the Company
remaining after the payment or discharge of the debts and liabilities of the
Company are insufficient to return such Capital Contributions, no Member will
have any recourse against any other Member.  The Members acknowledge that
Section 13.2 may establish Distribution priorities different from those set
forth in the provisions of the Act applicable to Distributions upon Liquidation,
and the Members agree that they intend, to that extent, to vary those provisions
by this Agreement.
 
13.4 No Restoration Obligation.
 
  Except as otherwise specifically provided in Article 10, nothing contained in
this Agreement imposes on any Member an obligation to make a Capital
Contribution in order to restore a deficit Capital Account upon Liquidation of
the Company.
 
13.5 Liquidating Reports.
 
  The liquidating trustee will provide a report with each liquidating
Distribution to Members made pursuant to Section 13.3, showing the collections,
disbursements, and Distributions during the period subsequent to any previous
report.  The liquidating trustee will provide a final report, showing cumulative
collections, disbursements, and Distributions, to Members upon completion of the
liquidation process.
 
13.6 Certificate of Cancellation.
 
  Upon Dissolution of the Company and the completion of the winding up of its
business and the liquidation process, the Company will file a certificate of
cancellation (to cancel the Certificate) with the Delaware Secretary of State
pursuant to the Act.  At such time, the Company also will file an application
for withdrawal of its certificate of authority in any jurisdiction where it is
then qualified to do business.
 
ARTICLE 14: TRANSFER RESTRICTIONS
 
14.1 General Restrictions.
 
[a]  
No Person may Transfer all or any part of such Person’s Ownership Interest in
any manner whatsoever except [a] a Transfer of all of its Ownership Interest to
a Permitted Transferee as set forth in Section 14.3, and in such case only if
the requirements of Section 14.1[b] and Section 14.4 also have been satisfied or
[b] subject to Section 14.7, a Transfer that is a pledge of an Ownership
Interest.  Any other Transfer of all or any part of an Ownership Interest is
null and void, and of no effect, but if any such Transfer is nonetheless given
effect under applicable law and pursuant to the Arbitration Agreement, the
transferee in such Transfer will have the limited rights of a Transferee as
provided in Section 14.5.  Any Member who makes a Transfer of all of such
Person’s Ownership Interest will cease to be a Member on the effective date of
such Transfer and will cease to have any Ownership Interest or other rights
under this Agreement as of such date, but no Member will be released from any
obligation that arose prior to the date it ceased to have an Ownership Interest
or that is otherwise stated in this Agreement to survive a Person ceasing to be
a Member.  Any Member who makes a Transfer of part (but not all) of such
Person’s Ownership Interest will continue as a Member (with respect to the
Ownership Interest retained), and such partial Transfer will not constitute an
event of Withdrawal of such Member.  The rights and obligations of any resigning
Member or of any Transferee of an Ownership Interest are also governed by other
provisions of this Agreement.

 
 
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[b]  
No Person may Transfer all or any part of such Person’s Ownership Interest in
any manner whatsoever unless [i] the Transferee’s Wireless Parent assumes the
obligations of the Transferor’s Wireless Parent under the Facilities and Network
Use Agreement (unless another arrangement with respect to the Transferor’s
Connections is made with the Company that is approved by the unanimous Vote of
the Members), and the Transferor’s Wireless Parent is fully released from such
obligations to the extent such obligations relate to the period after the
Transfer, and [ii] the Transferee’s Wireless Parent assumes on its own behalf
and on behalf of its Affiliates, pursuant to an assumption agreement reasonably
satisfactory to the other Member, the obligations of the Transferor’s Wireless
Parent under Sections 6.5, 15, 16.8, 16.20, and 16.22.

 
14.2 No Member Rights.
 
  Subject to Section 14.6, no Member has the right or power to confer upon any
Transferee the attributes of a Member in the Company.  The Transferee of all or
any part of an Ownership Interest by operation of law does not, by virtue of
such Transfer, succeed to any rights as a Member in the Company.
 
14.3 Permitted Transferees.
 
  Subject to the requirements set forth in Section 14.1[b] and Section 14.4, a
Person may Transfer all, but, except pursuant to Section 14.8, not less than
all, of such Person’s Ownership Interest:
 
[a]  
To another Member;

 
[b]  
To an Affiliate of such Person; or

 
[c]  
At any time after the fourth anniversary of the Effective Date.

 
14.4 General Conditions on Transfers.
 
  No Transfer of an Ownership Interest will be effective unless all of the
conditions set forth below are satisfied:
 
[a]  
The Transferor signs and delivers to the Company an undertaking in form and
substance reasonably satisfactory to the Company to pay all reasonable expenses
incurred by the Company in connection with the Transfer (including reasonable
fees of counsel and accountants and the costs to be incurred with any additional
accounting required in connection with the Transfer, and the costs and fees
attributable to preparing, filing and recording such amendments to the
Certificate or other organizational documents or other filings as may be
required by law);

 
[b]  
The Transferor delivers to the Company an opinion of counsel for the Transferor
in form and substance reasonably satisfactory to the Company to the effect that
the Transfer of the Ownership Interest is in compliance with the applicable
federal and state securities laws;

 
 
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[c]  
The Transferor signs and delivers to the Company a copy of the assignment of the
Ownership Interest to the Transferee (substantially in the form of the attached
Exhibit C);

 
[d]  
The Transferee signs and delivers to the Company an agreement (substantially in
the form of the attached Exhibit D) to be bound by this Agreement, including the
Arbitration Agreement that is incorporated into and is a part of this Agreement;
and

 
[e]  
The Transfer is in compliance with the other provisions of this Article,
including Section 14.1[b].

 
The Transfer of an Ownership Interest will be effective as of 12:01 a.m.
(prevailing local time at the principal place of business of the Company) on the
first day of the month following the month in which all of the above conditions
have been satisfied or as otherwise mutually agreed by the Transferring Member
and the non-Transferring Member.  Upon the effective date of any Transfer, the
Company will amend Exhibit B to reflect the new Equity Interests.
 
14.5 Rights of Transferees.
 
  Any Transferee of an Ownership Interest (including a Permitted Transferee)
will, on the effective date of the Transfer, have only those rights of an
assignee as specified in the Act unless and until such Transferee is admitted as
a substitute Member.  This provision limiting the rights of a Transferee will
not apply if such Transferee is already a Member.  Any Transferee of all or any
part of an Ownership Interest who is not admitted as a substitute Member in
accordance with this Agreement has no right [a] to participate or interfere in
the management or administration of the Company’s business or affairs, [b] to
Vote or agree on any matter affecting the Company or any Member, [c] to require
any information on account of Company transactions, [d] except as provided in
the next succeeding sentence, to inspect the Company’s books and records, or [e]
to have its Chief Executive Officer serve on the Board or otherwise to appoint a
member to the Board.  The only rights of a Transferee of all or any part of an
Ownership Interest who is not admitted as a substitute Member in accordance with
this Agreement are [x] to receive the allocations and Distributions to which the
Transferor was entitled as if the Transferee held the Equity Interests of the
Transferor (to the extent of the Ownership Interest Transferred), and [y] to
receive all necessary tax reporting information.  Neither the Company nor any
Member will owe any fiduciary duty of any nature to a Transferee who is not
admitted as a substitute Member in accordance with this Agreement.  However,
each Transferee of all or any part of an Ownership Interest will be subject to
all of the obligations, restrictions and other terms contained in this Agreement
as if such Transferee were a Member, including Section 6.5.  To the extent of
any Ownership Interest Transferred, the Transferor Member does not possess any
right or power as a Member and may not exercise any such right or power directly
or indirectly on behalf of the Transferee.
 
14.6 Admission.
 
  A Transferee of an Ownership Interest will not become a substitute Member of
the Company unless the Ownership Interest is Transferred by a Member to a
Permitted Transferee in compliance with this Agreement, including the provisions
of Sections 14.1[b], 14.3 and 14.4.  Upon compliance with Sections 14.1[b], 14.3
and 14.4,  a Transferee of an Ownership Interest held by a Member (and, to the
extent a Bankruptcy Event has occurred pursuant to clause [a] of the definition
of Bankruptcy Event (a “Bankruptcy Case”), any Transferee who acquires or
continues to hold an Ownership Interest as a result of a transaction or
transactions approved pursuant to a final non-appealable order by a court of
competent jurisdiction in such Bankruptcy Case) shall be admitted to the Company
as a substitute Member, in each case without the need for any further action of
any Person.  Upon the admission of such Transferee as a substitute Member, the
Company will amend Exhibit A to reflect the address of such Member.
 
 
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14.7 Security Interest.
 
  The pledge or granting of a security interest, lien or other encumbrance in or
against all or any part of a Member’s Ownership Interest does not cause the
Member to cease to be a Member.  Upon foreclosure or sale in lieu of foreclosure
of any such secured interest, the secured party will be entitled to receive the
allocations and Distributions as to which a security interest has been granted
by such Member.  In no event will any secured party be entitled to exercise any
rights of a Member under this Agreement (unless and until such Person is
admitted as a substitute Member), and such secured party may look only to such
Member for the enforcement of any of its rights as a creditor.  In no event will
the Company have any liability or obligation to any Person by reason of the
Company’s payment of a Distribution to any secured party as long as the Company
makes such payment in reliance upon written instructions from the Member to whom
such Distributions would be payable.  Any secured party will be entitled, with
respect to the security interest granted, only to the Distributions to which the
assigning Member would be entitled under this Agreement, and only if, as and
when any such Distribution is made by the Company.  Notwithstanding anything in
this Section 14.7 to the contrary, during the pendency of a foreclosure action
by a secured party with respect to an Ownership Interest and following the
consummation thereof for so long as the secured party holds an Ownership
Interest, the secured party shall continue to be entitled to receive the
information set forth in Section 11.4, Sections 11.5[a], [b] and [d] and Section
11.6.  Neither the Company nor any Member will owe any fiduciary duty of any
nature to a secured party.  Reference to any secured party includes any assignee
or successor-in-interest of such Person.
 
14.8 Tag Along Right; Drag Along Election.
 
[a]  
If the GCI Member at any time proposes to Transfer, in accordance with this
Agreement, all of its Ownership Interests in the Company in any transaction or
series of related transactions (a “Tag/Drag Sale”) to any Person that is not a
Member or an Affiliate of the GCI Member (a “Third Party Purchaser”), then the
GCI Member shall notify the ACS Member in writing at least 30 days prior to the
date on which the GCI Member expects to consummate such Tag/Drag Sale (the “Sale
Notice”), which notice shall specify the price that the Third Party Purchaser
intends to pay for such Ownership Interests and all other material terms and
conditions of such Transfer, including any terms of any other material
transaction between GCI or any of its Affiliates and the Third Party Purchaser
or any of its Affiliates that is to be entered into in connection with such
Tag/Drag Sale.  If the Sale Notice is delivered on or after the fifth
anniversary of the Effective Date, the Sale Notice also may state that the GCI
Member is electing to require the ACS Member to sell all of its Ownership
Interests to the Third Party Purchaser in accordance with the provisions of this
Section 14.8 (the “Drag Along Election”), unless GCI or any of its Affiliates
would receive an improper benefit in connection with exercising such Drag Along
Election, including as a result of GCI or any of its Affiliates entering into a
transaction with the Third Party Purchaser or any of its Affiliates in
connection with such Tag/Drag Sale that would reasonably be expected to decrease
the price that the Third Party Purchaser would be willing to pay for such
Ownership Interests.  If the Sale Notice does not include a Drag Along Election,
then the ACS Member shall have a right to require that the proposed Third Party
Purchaser purchase from the ACS Member up to a pro rata portion of the ACS
Member’s Ownership Interests (determined by multiplying the percentage of the
Equity Interests proposed to be transferred in the Tag/Drag Sale by the
percentage of the Equity Interests held by the ACS Member) on the terms and
conditions set forth in this Section 14.8 (the “Tag Along Right”).  The Tag
Along Right may be exercised by the ACS Member by delivery of a written notice
to the GCI Member (the “Tag Along Notice”) within 15 days following receipt of
the Sale Notice from the GCI Member.  The Tag Along Notice shall state the
percentage of the Equity Interests represented by the Ownership Interests that
the ACS Member proposes to include in such Transfer to the proposed Third Party
Purchaser (which may be any percentage up to the pro rata portion determined in
accordance with this Section 14.8[a]).

 
 
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[b]  
The purchase by the Third Party Purchaser of Ownership Interests from the ACS
Member pursuant to Section 14.8[a] shall be on the same terms and conditions as
apply to the GCI Member and the Ownership Interests proposed to be Transferred
in the Tag/Drag Sale by the GCI Member; provided that [i] the ACS Member shall
not be required to make any representations or warranties with respect to the
GCI Member, the Company or any of its Subsidiaries, or any Ownership Interests
not owned by the ACS Member, [ii] the ACS Member shall not be required to make
any representations or warranties with respect to the ACS Member beyond its
power and authority to sell, free and clear of all liens, encumbrances and
rights of others, its Ownership Interests, its due authorization, execution,
delivery and enforceability of the definitive documents entered into by the ACS
Member in connection with the Tag/Drag Sale and its title to such Ownership
Interests, [iii] the ACS Member shall not have any indemnification obligation
with respect to its Ownership Interests sold in such Tag/Drag Sale other than
with respect to the representations and warranties referred to in clause [ii]
above, [iv] the ACS Member shall not have any indemnification obligation in
excess of the net proceeds received by it in such Tag/Drag Sale, and [v] the
portion of the consideration to be received by the GCI Member and the ACS Member
shall be determined in accordance with Section 14.8[c].

 
[c]  
If pursuant to a Drag Along Election or a Tag Along Right, the sale to a Third
Party Purchaser by the GCI Member also includes Ownership Interests of the ACS
Member, that portion of the consideration paid by the Third Party Purchaser for
all Ownership Interests included in the Tag/Drag Sale (the “Aggregate Purchase
Price”) that is payable to each Member participating in such sale will be
determined in accordance with the following provisions of this Section 14.8[c].

 
[i]  
If the sale to the Third Party Purchaser includes all of the Ownership Interests
in the Company, the ACS Member will first receive from the Aggregate Purchase
Price an amount equal to the full amount of the ACS Preferred Distributions,
less the full amount of the ACS Preferred Distributions previously distributed
to the ACS Member (the “Unpaid ACS Preferred Distribution Amount”), and then
each Member will receive that portion of the balance of the Aggregate Purchase
Price that it would have received if the Company were liquidated and proceeds
equal to the balance of the Aggregate Purchase Price were distributed among the
Members in accordance with the priorities set forth in Section 5.1 (assuming for
this purpose that the full amount of the ACS Preferred Distributions shall be
deemed to have been made previously under Section 5.1).

 
 
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[ii]  
If the sale to the Third Party Purchaser includes less than all of the Ownership
Interests in the Company, the Aggregate Purchase Price will first be grossed up
to determine the imputed price that would be paid for all of the Ownership
Interests in the Company if all Ownership Interests were sold for the same price
per Equity Interest implicit in the Aggregate Purchase Price (the “Entire
Company Assumed Purchase Price”), and then the amount of the Entire Company
Assumed Purchase Price that would be distributed to each Member if the Company
were liquidated and proceeds equal to the Entire Company Assumed Purchase Price
less an amount equal to the Unpaid ACS Preferred Distribution Amount were
distributed among the Members in accordance with the priorities set forth in
Section 5.1 (assuming for this purpose that the full amount of the ACS Preferred
Distributions shall be deemed to have been made previously under Section 5.1)
will be determined (a “Member’s Assumed Share”).  The ACS Member will receive
from the Aggregate Purchase Price an amount equal to the sum of the Unpaid ACS
Preferred Distribution Amount, if any, and a percentage of its Member’s Assumed
Share equal to the percentage of the ACS Member’s total Ownership Interests that
are included in the Tag/Drag Sale to the Third Party Purchaser, and the GCI
Member will receive the balance of the Aggregate Purchase Price.

 
[d]  
If the GCI Member exercises its Drag Along Election or the ACS Member exercises
its Tag Along Right pursuant to this Section 14.8, at the closing of the
relevant Transfer to the Third Party Purchaser pursuant to this Section 14.8,
the Third Party Purchaser shall remit to the GCI Member and the ACS Member the
consideration to be paid to each for the Ownership Interests being purchased by
the Third Party Purchaser from each, and the GCI Member and the ACS Member shall
deliver to the Third Party Purchaser such transfer forms as are necessary to
transfer the Ownership Interests being sold by each Member to the Third Party
Purchaser.

 
[e]  
The ACS Member and the GCI Member will cooperate in good faith and will take all
actions and execute all documents reasonably required to effect any sale to a
Third Party Purchaser in connection with a Drag Along Election or Tag Along
Right in accordance with the provisions of this Section 14.8, including as
provided in Section 14.8[f].

 
[f]  
Notwithstanding any other provision of this Agreement providing that Members may
only Transfer all of their Ownership Interests, the Members and the Company
acknowledge and agree that a Tag/Drag Sale in which the ACS Member exercises its
Tag Along Right but the Third Party Purchaser is not acquiring all of the
Ownership Interests of all Members will result in a Transfer by the Members of
only a portion of their respective Ownership Interests.  In such event, the
Members and the Company recognize that amendments to this Agreement will be
required to reflect the addition of a new Member and the changes in the
Ownership Interests of the ACS Member and the GCI Member, and the Members agree
to negotiate in good faith and on a reasonable basis with each other and with
the Third Party Purchaser to reach agreement on appropriate amendments to this
Agreement that are necessary or advisable in connection with such Tag/Drag Sale.

 
 
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14.9 Right of First Offer on Asset Sales.
 
[a]  
If at any time the Company determines to sell or otherwise dispose of, in one
transaction or a series of related transactions [i] all or substantially all the
consolidated assets of the Company and its Subsidiaries, or [ii] any assets of
the Company or any of its Subsidiaries having a Fair Market Value in excess of
$500,000 or [iii] any Wireless Backhaul and Transport capacity or assets that
were contributed to the Company by a Member or any of its Affiliates that the
Company has decided to sell or dispose of that relate solely to a cell site that
the Company has decided to sell or dispose of, and any cell site that was
contributed to the Company by a Member or any of its Affiliates that the Company
has decided to sell or dispose of (each of [i], [ii] and [iii], a “Company Asset
Sale”), prior to consummating such Company Asset Sale, the Company first shall
deliver to the Members a letter signed by it (the “ROFO Notice”), setting forth
a description of the assets to be sold (the “ROFO Assets”) and an invitation for
the Members to submit offers to acquire the ROFO Assets during the ROFO
Period.  For the avoidance of doubt, in no event will the sale by the Company of
IRU and other network capacity, including for Wireless Backhaul and Transport,
in the ordinary course of the Wireless Business constitute a Company Asset Sale.

 
[b]  
Upon receipt of a ROFO Notice, each Member shall have a right, but not an
obligation, exercisable for a period of up to 30 days after receipt of the ROFO
Notice (the “ROFO Period”), to submit a binding, written offer (an “Offer”) to
acquire all, but not less than all, of the ROFO Assets on the terms and
conditions specified in the Offer (the right of the Members to make such an
Offer is referred to as the “Right of First Offer”).  Any Offer shall specify
the cash purchase price at which the Member would be willing to acquire the ROFO
Assets and all other material terms and conditions of such purchase; provided,
that with respect to any ROFO Assets constituting Wireless Backhaul and
Transport capacity or assets, the Member may propose an exchange of capacity or
assets in lieu of a cash purchase price.

 
[c]  
Upon receipt of an Offer, the Company shall have the right, but not the
obligation, to accept the same by delivering written notice to the Member
submitting such Offer (the “Purchasing Member”), which notice shall constitute a
contract between the Company to sell, and the Purchasing Member to purchase, all
of the ROFO Assets on the terms and conditions described in the Offer.  If the
Company receives more than one Offer, the Company may not accept an Offer if it
contains terms and conditions that are less favorable to the Company than the
terms and conditions of any other Offer timely received by the Company.  The
failure of a Member to deliver an Offer within the ROFO Period shall be deemed
to be a rejection and waiver of the Right of First Offer.

 
 
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[d]  
If the Company accepts an Offer, then the purchase and sale of the ROFO Assets
(or the exchange of the ROFO Assets, as applicable) contemplated thereby shall
be consummated within 60 days after the receipt by Company of the Offer;
provided, that if such purchase and sale is subject to any regulatory approvals
or other material Third party consents, the period for completing such purchase
and sale shall be extended for up to an additional 90 days if necessary to
obtain such approvals and consents.  If no Member delivers an Offer to the
Company within the ROFO Period, or if the Company determines not to accept any
Offer submitted, then the Company may, during the period beginning at the end of
the ROFO Period and ending on the 180th day thereafter (provided, that if such
sale is subject to any regulatory approvals or other material Third Party
consents, the period for completing such sale shall be extended for up to an
additional 90 days if necessary to obtain such approvals and consents, the 180
day period as the same may be extended being referred to as the “Third Party
Purchaser Sale Period”), sell the ROFO Assets to a Third Party Purchaser for a
purchase price and subject to other terms and conditions that are no more
favorable to such Third Party Purchaser than the purchase price and terms and
conditions contained in any Offer timely received by the Company; provided, that
if any Offer includes an exchange offer related to ROFO Assets constituting
Wireless Backhaul and Transport capacity or assets (an “Exchange Offer”), the
provisions of Section 14.9[e] and [f] shall apply.

 
[e]  
If the Company timely receives more than one Offer it does not accept with
respect to ROFO Assets constituting Wireless Backhaul and Transport capacity or
assets and only one of such Offers is an Exchange Offer, then the Company may,
during the Third Party Purchaser Sale Period, sell the ROFO Assets to a Third
Party Purchaser for a purchase price and subject to other terms and conditions
that are no more favorable to such Third Party Purchaser than the purchase price
and terms and conditions contained in the Offer that was not an Exchange Offer.

 
[f]  
If all Offers that the Company receives with respect to ROFO Assets constituting
Wireless Backhaul and Transport capacity or assets are Exchange Offers that it
does not accept, then the Company may, during the Third Party Purchaser Sale
Period, sell the ROFO Assets to a Third Party Purchaser for a purchase price
that is not less than Fair Market Value.  The Company will notify each Member of
the determination of Fair Market Value within 30 days following the end of the
ROFO Period.  If a Member objects to the determination of Fair Market Value it
may so notify the Company within 15 days following such Member’s receipt of the
Fair Market Value determination, whereupon the Company and the disputing Member
will negotiate in good faith for a period of five days to reach agreement on
Fair Market Value.  If no agreement is reached within such time period, the
Company may hire an independent third-party appraiser to determine Fair Market
Value and such appraiser’s determination shall be binding and non-appealable.

 
[g]  
If the Company does not consummate a sale of the ROFO Assets within the Third
Party Purchaser Sale Period, it may not thereafter sell any ROFO Assets except
in full compliance with all the provisions of this Section 14.9.

 
 
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Information indicated by [***] in the text has been omitted and filed separately
with the Securities and Exchange Commission pursuant to a request for
Confidential Treatment under Rule 24b-2 under the Securities Exchange Act of
1934.

 
14.10 Connection Termination Event.
 
[a]  
The provisions of Section 14.10[b] shall apply upon the occurrence of any of the
following with respect to a Member (a “Connection Termination Event”):

 
[i]  
such Member Transfers its Ownership Interest in breach of Section 14.1[b];

 
[ii]  
such Member’s Wireless Parent ceases to be a party to the Facilities and Network
Use Agreement or otherwise can not be compelled in accordance with applicable
law to perform its obligations under such agreement, including as a result of
assignment or termination of the Facilities and Network Use Agreement other than
an assignment that is made in accordance with the requirements of Section
14.1[b];

 
[iii]  
a Member or an Affiliate of a Member materially breaches Section 6.5[b] and
fails to cure such breach within 60 days following notice from the Company to
cure such breach; or

 
[iv]  
such Member and its Affiliates or a Transferee and its Affiliates are not or
cease to be engaged in the retail provision of Wireless products and services in
the Territory (as defined in the Facilities and Network Use Agreement).

 
For the avoidance of doubt, but without limiting Section 12.2, the mere
occurrence of a Bankruptcy Event with respect to a Member or its Wireless Parent
does not constitute a Connection Termination Event.
 
[b]  
If a Connection Termination Event occurs with respect to a Member (the
“Departing Member”), the Departing Member shall notify the Company and the other
Member (the “Remaining Member”) within ten days following the occurrence of such
event (a “CTE Notice”) and the provisions set forth in Sections 14.10[b][i]
through [v] shall apply.

 
[i]  
To the extent it retains an Ownership Interest following such Connection
Termination Event, the Departing Member shall become a [***] with the [***] of a
[***] as set forth in Section [***].  If the Connection Termination Event occurs
as the result of [***] but it does not exist [***] the [***] of the [***], the
Departing Member or its Transferee may be readmitted as a Member upon compliance
with Sections [***] as applicable.

 
[ii]  
Unless the Connection Termination Event is a [***] and [***], the Remaining
Member shall have the right (the “CTE Call Right”) to buy all, but not less than
all, of the Ownership Interest of the Departing Member for an amount equal to
the CTE Purchase Price, such right to be exercised by the Remaining Member, if
at all, by sending notice to the Departing Member within 90 days following the
Remaining Member’s receipt of the CTE Notice.  The Departing Member and the
Remaining Member shall negotiate in good faith for a period of 30 days following
exercise of the CTE Call Right to agree on the price that the Remaining Member
shall pay for the Departing Member’s Ownership Interest.  If the Departing
Member and the Remaining Member do not reach agreement on price during such
30-day period, the price payable by the Remaining Member for the Departing
Member’s Ownership Interest shall be the [***] of such [***] as of the
Connection Termination Date, as determined pursuant to [***].  The closing of
the Transfer of Ownership Interest pursuant to the proper exercise of the CTE
Call Right shall occur within 30 days after the Departing Member and the
Remaining Member reach agreement on price or the [***] of the [***] is
determined pursuant to [***], as applicable.  At such closing:  [w] the
Departing Member shall deliver to the Remaining Member an instrument of transfer
with respect to such Ownership Interests, duly executed on behalf of the
Departing Member; [x] the Remaining Member or its Wireless Parent shall deliver
or cause to be delivered to the Departing Member an amount equal to the CTE
Purchase Price in immediately available funds to an account or accounts
designated by the Departing Member; [y] the Departing Member shall not be
required to make any representations or warranties beyond its power and
authority to sell, free and clear of all liens, encumbrances and rights of
others, its Ownership Interest, its due authorization, execution, delivery and
enforceability of any definitive documents entered into by the Departing Member
in connection with the exercise of the CTE Call Right and its title to such
Ownership Interest, [z] the Departing Member shall not have any indemnification
obligation with respect to its Ownership Interest other than with respect to the
representations and warranties referred to in clause [y] above, nor shall it
have any indemnification obligation in excess of the net proceeds received by
it.

 
 
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Information indicated by [***] in the text has been omitted and filed separately
with the Securities and Exchange Commission pursuant to a request for
Confidential Treatment under Rule 24b-2 under the Securities Exchange Act of
1934.

 
[iii]  
If the ACS Member is the Departing Member and the Connection Termination Event
is the result of a termination of the [***] and [***] by the ACS Member pursuant
to Section [***] thereof (a “[***] and [***] CTE”), the ACS Member shall have
the right (the “CTE Put Right”) to require the GCI Member to buy all, but not
less than all, of the Ownership Interest of the ACS Member for an amount equal
to the CTE Purchase Price, such right to be exercised by the ACS Member, if at
all, by sending Notice to the GCI Member within 90 days following the occurrence
of the Facilities and Network Use CTE.  The Departing Member and the Remaining
Member shall negotiate in good faith for a period of 30 days following exercise
of the CTE Put Right to agree on the price that the Remaining Member shall pay
for the Departing Member’s Ownership Interest.  If the Departing Member and the
Remaining Member do not reach agreement on price during such 30-day period, the
price payable by the Remaining Member for the Departing Member’s Ownership
Interest shall be the [***] of such [***] as of the Connection Termination Date,
as determined pursuant to [***].  The closing of the Transfer of Ownership
Interest pursuant to the proper exercise of the CTE Put Right shall occur within
30 days after the Departing Member and the Remaining Member reach agreement on
price [***] or the [***] of the [***] is determined pursuant to Section [***],
as applicable.  At such closing: [w] the ACS Member shall deliver to the GCI
Member an instrument of transfer with respect to such Ownership Interest, duly
executed on behalf of the ACS Member; [x] the GCI Member or its Wireless Parent
shall deliver or cause to be delivered to the ACS Member an amount equal to the
CTE Alternate Purchase Price in immediately available funds to an account or
accounts designated by the ACS Member; [y] the ACS Member shall not be required
to make any representations or warranties beyond its power and authority to
sell, free and clear of all liens, encumbrances and rights of others, its
Ownership Interest, its due authorization, execution, delivery and
enforceability of any definitive documents entered into by the ACS Member in
connection with the exercise of the CTE Put Right and its title to such
Ownership Interest, [z] the ACS Member shall not have any indemnification
obligation with respect to its Ownership Interest other than with respect to the
representations and warranties referred to in clause [y] above, nor shall it
have any indemnification obligation in excess of the net proceeds received by
it.  Section 6.5[c] shall not apply to the ACS Member following consummation of
the CTE Put Right.]

 
 
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Information indicated by [***] in the text has been omitted and filed separately
with the Securities and Exchange Commission pursuant to a request for
Confidential Treatment under Rule 24b-2 under the Securities Exchange Act of
1934.

 
[iv]  
If the ACS Member is the Departing Member, the amount of [***], if any and if
not previously made, will be [***], and the amount of any [***], if applicable
and if not previously made, will be [***].  If the GCI Member is the Departing
Member, the amount of any remaining [***], if any and if not previously made,
will be [***], the amount of [***], if any and if not previously made, will be
[***], and the amount of any [***], if applicable and if not previously made,
will be [***].

 
[v]  
The provisions of Section 9.6 shall terminate.

 
ARTICLE 15: DISPUTE RESOLUTION
 
If a dispute of any kind arises under or in connection with, or relates to, this
Agreement (including any dispute concerning its construction, performance or
breach and including any claim for equitable relief) between the Company, the
Members, ACS, GCI or any combination of such Persons, the rights of the parties
to the dispute will be governed by the Arbitration Agreement.  By executing this
Agreement, the Company, each Member, ACS and GCI each agree that such Person has
become a party to the Arbitration Agreement, without the necessity of signing
the Arbitration Agreement as a separate document.  Any Transferee (whether or
not substituted as a Member) also will become a party to the Arbitration
Agreement, in each case without the necessity of signing the Arbitration
Agreement as a separate document.
 
ARTICLE 16: GENERAL PROVISIONS
 
16.1 Amendment.
 
  This Agreement may be amended only by a written amendment executed and
delivered by all Members, except for amendments to Exhibit A as specifically
provided in Sections 14.4, or to Exhibit B as specifically provided in Section
14.6.  Any amendment will become effective upon such execution and delivery,
unless otherwise provided.
 
 
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16.2 Representations.
 
  Each Member and each Transferee of an Ownership Interest represents and
warrants to the Company and to each other Member that, as of the Effective Date
(or, in the case of a substitute Member or such Transferee, as of the date of
admission or Transfer, as applicable):
 
[a]  
Such Member or Transferee is duly organized, validly existing and in good
standing under the laws of the jurisdiction where it purports to be organized,
and is not (as such terms are defined in the Code and Regulations) a nonresident
alien or a foreign corporation, foreign partnership, foreign trust, or foreign
estate;

 
[b]  
Such Member or Transferee has full power and authority to enter into and perform
this Agreement;

 
[c]  
All actions necessary to authorize the signing and delivery of this Agreement by
such Member or Transferee, and the performance of its obligations under it, have
been duly taken and are in full force and effect;

 
[d]  
This Agreement has been duly signed and delivered by a duly authorized officer
or other representative of such Member or Transferee and constitutes the legal,
valid and binding obligation of such Member or Transferee enforceable in
accordance with its terms (except as such enforceability may be affected by
applicable bankruptcy, insolvency or other similar laws affecting creditors’
rights generally, and except that the availability of equitable remedies is
subject to judicial discretion);

 
[e]  
No consent or approval of any other Person is required in connection with the
signing, delivery and performance of this Agreement by such Member or Transferee
except for those approvals that have been obtained and are in full force and
effect;

 
[f]  
The signing, delivery and performance of this Agreement do not violate the
organizational documents of such Member or Transferee, or any material agreement
to which such Member or Transferee is a party or by which such Member or
Transferee is bound; and

 
[g]  
Such Member or Transferee has had an opportunity to perform any due diligence
deemed necessary or desirable in connection with entering into this Agreement.

 
16.3 Unregistered Interests.
 
  Each Member and each Transferee of an Ownership Interest [a] acknowledges that
the Ownership Interests are being offered and sold without registration under
the Securities Act of 1933, as amended, or under similar provisions of state
law, [b] acknowledges that such Member or Transferee is fully aware of the
economic risks of an investment in the Company, and that such risks must be
borne for an indefinite period of time, [c] represents and warrants that such
Member or Transferee is acquiring an Ownership Interest for such Member’s or
Transferee’s own account, for investment, and with no view to the distribution
of the Ownership Interest in violation of applicable securities laws, and
[d] agrees not to Transfer, or to attempt to Transfer, all or any part of its
Ownership Interest without registration under the Securities Act of 1933, as
amended, and any applicable state securities laws, unless the Transfer is exempt
from such registration requirements and is otherwise permitted under this
Agreement.
 
 
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16.4 Waiver of Dissolution Rights.
 
  The Members agree that irreparable damage would occur if any Member should
bring an action for judicial dissolution of the Company.  Accordingly, each
Member accepts the provisions under this Agreement as such Person’s sole
entitlement on Dissolution of the Company and waives and renounces such Person’s
right to seek a court decree of dissolution or to seek the appointment by a
court of a liquidator for the Company.  Each Member further waives and renounces
any alternative rights which might otherwise be provided by law upon the
Withdrawal of such Person and accepts the provisions under this Agreement as
such Person’s sole entitlement upon the happening of such event.
 
16.5 Waiver of Partition Right.
 
  Each Member waives and renounces any right that it may have prior to
Dissolution and Liquidation to institute or maintain any action for partition
with respect to any property held by the Company.
 
16.6 Waivers and Consents.
 
  No waiver of any breach of any of the terms of this Agreement will be
effective unless such waiver is in writing and signed by the Member against whom
such waiver is claimed.  No course of dealing will be deemed to amend or
discharge any provision of this Agreement.  No delay in the exercise of any
right will operate as a waiver of such right.  No single or partial exercise of
any right will preclude its further exercise.  A waiver of any right on any one
occasion will not be construed as a bar to, or waiver of, any such right on any
other occasion.  Any consent of a Member required under this Agreement must be
in writing and signed by such Member to be effective.  No consent given by a
Member in any one instance will be deemed to waive the requirement for such
Member's consent in any other or future instance.
 
16.7 Equitable Relief.
 
  Each party hereto acknowledges and agrees that a breach of this Agreement may
give rise to irreparable harm for which monetary damages would not be an
adequate remedy.  Each party hereto accordingly agrees that for the purpose of
seeking relief under Section 16.8 or the Arbitration Agreement, and without
waiving any remedy under this Agreement or the Arbitration Agreement, each party
hereto shall be entitled to seek to enforce the terms of this Agreement by
decree of specific performance or to obtain injunctive relief against any breach
or threatened breach of this Agreement in accordance with the Arbitration
Agreement.  The party against whom such action or proceeding is brought waives
the claim or defense that an adequate remedy at law exists, and such party will
not urge in any such action or proceeding the claim or defense that such remedy
at law exists.
 
16.8 Remedies for Breach; Limitation of Damages.
 
  Except for the requirement to arbitrate disputes provided for in Article 15
and except as otherwise provided in this Agreement, the rights and remedies of
the Members and other parties that are set forth in this Agreement are neither
mutually exclusive nor exclusive of any right or remedy provided by law, in
equity or otherwise, and all legal remedies (such as monetary damages) as well
as all equitable remedies (such as specific performance) will be available for
any breach or threatened breach of any provision of this Agreement.  In no event
will ACS, GCI, the Company or any Member have any liability to the Company,
another Member, a Transferee, ACS or GCI for any consequential, incidental,
indirect, exemplary, special or punitive damages arising out of or related in
any way to this Agreement, the Act, the Company, a Person’s status as a Member
or the performance or non-performance by a Person of its obligations under this
Agreement (unless payable pursuant to an indemnification claim by the Company or
a Member where the Person making the indemnification claim is obligated to pay
such amounts to a Person that is not an Affiliate of the Company or any Member),
including any damages for business interruption, loss of use, revenue or profit,
whether arising out of breach of contract, tort (including negligence) or
otherwise, regardless of whether such damages were foreseeable and whether or
not the breaching party was advised of the possibility of such damages.
 
 
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16.9 Costs.
 
  If the Company or any Member retains counsel for the purpose of enforcing or
preventing the breach or any threatened breach of any provision of this
Agreement or for any other remedy relating to it, then the prevailing party will
be entitled to be reimbursed by the nonprevailing party for all fees and costs
so incurred (including reasonable attorney's fees).  The rights of the
prevailing party to recover such fees and costs will be separate from, will
survive and will not be merged into any judgment.  The “prevailing party” will
mean the party who receives substantially the relief desired, whether by
settlement, dismissal, summary judgment, judgment or otherwise.
 
16.10 Indemnification.
 
  Each Member hereby indemnifies and agrees to hold harmless the Company and
each other Member from any liability, cost or expense (including reasonable fees
and expenses of attorneys and other advisors and court costs) arising from or
related to any act or failure to act of such Member in its capacity as such
which is in violation of this Agreement; provided, however, that no Member will
have any obligation to indemnify any other Person (including any other Member)
to the extent that any liability, cost or expense arises from such other
Person’s own negligence, willful misconduct or wrongful act or failure to
act.  Each Member’s indemnification obligations will survive such Member’s
ceasing to be a Member of the Company and will survive the Dissolution and
Liquidation of the Company.
 
16.11 Counterparts.
 
  This Agreement may be signed in multiple counterparts (or with detachable
signature pages). Each counterpart will be considered an original instrument,
but all of them in the aggregate will constitute one agreement.  Telecopies or
facsimiles of signatures will be given effect for purposes of the signature page
of this Agreement and any amendments to this Agreement.
 
16.12 Notice
 
.  All notices, consents, approvals, waivers, elections and other communications
(collectively “Notices”) under this Agreement will be in writing and will be
either delivered or sent addressed as follows:
 
[a]           if to any Member (or any Board member appointed by such Member),
to the address of such Member set forth on Exhibit A hereto;

[b]           if to the Company or to the Company CEO as a Board member:

The Alaska Wireless Network, LLC
c/o General Communication, Inc.
2550 Denali Street, #1000
Anchorage, Alaska 99503
Attention: General Counsel
Facsimile: _________________             

 
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With a copy to each of the GCI Member and the ACS Member, addressed as set forth
in clause [a] above.

[c]           if to GCI, to:

General Communication, Inc.
2550 Denali Street, #1000
Anchorage, Alaska 99503
Attention: General Counsel
Facsimile: 907-868-9845

With a copy to:

Sherman & Howard L.L.C.
633 Seventeenth Street, Suite 3000
Denver, Colorado 80202
Attention: Steven D. Miller, Esq.
Facsimile: (303) 298-0940

[d]           if to ACS, to:

Alaska Communications Systems Group, Inc.
600 Telephone Avenue
Anchorage, Alaska 99503
Attention: General Counsel
Facsimile: 907-297-3153

With a copy to:

Sidley Austin LLP
787 Seventh Avenue
New York, New York 10019
Attention: Irving Rotter
Gabriel Saltarelli
Facsimile:  (212) 839-5599

Any Person entitled to Notice under this Section 16.12 may change the above
addresses by giving Notice as required by this Section 16.12.  In computing time
periods, the day of Notice will be excluded. For Notice purposes, a day means a
calendar day (unless provided otherwise herein).
 
16.13 Deemed Notice.
 
  Any Notices given to any Person in accordance with this Agreement will be
deemed to have been duly given and received: [a] on the date of receipt if
personally delivered, [b] five Business Days after being sent by U.S. first
class mail, postage prepaid, [c] the date of receipt, if sent by registered or
certified U.S. mail, postage prepaid, [d] one Business Day after receipt, if
sent by confirmed facsimile or telecopier transmission, or [e] one Business Day
after having been sent by a nationally recognized overnight courier service with
confirmation of delivery.
 
 
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16.14 Partial Invalidity.
 
  Wherever possible, each provision of this Agreement will be interpreted in
such manner as to be effective and valid under applicable law.  However, if for
any reason any one or more of the provisions of this Agreement are held to be
invalid, illegal or unenforceable in any respect, such action will not affect
any other provision of this Agreement.  In such event, this Agreement will be
construed as if such invalid, illegal or unenforceable provision had never been
contained in it.
 
16.15 Entire Agreement.
 
  This Agreement (including its Exhibits and Schedules), together with the
Contribution Agreement, the Ancillary Agreements and the Approved Affiliate
Transactions contains the entire agreement and understanding of the Members
concerning its subject matter and supersedes all prior agreements,
understandings and negotiations, both written and oral, among the Members with
respect to the subject matter thereof.
 
16.16 Benefit.
 
  This Agreement will inure solely to the benefit of the other parties hereto,
without conferring on any other Person any rights of enforcement or other
rights, except for any Person with respect to rights to indemnification under
Section 10.10.
 
16.17 Binding Effect.
 
  This Agreement is binding upon, and inures to the benefit of, the Members and
their Permitted Transferees, but any Transferee will have only the rights
specified in Section 14.5 unless admitted as a substitute Member in accordance
with this Agreement.
 
16.18 Further Assurances.
 
  Each Member agrees, without further consideration, to sign and deliver such
other documents of further assurance as are consistent with the provisions of
this Agreement and as may reasonably be necessary to effectuate the provisions
of this Agreement.
 
16.19 Headings.
 
  Article and section titles have been inserted for convenience of reference
only.  They are not intended to affect the meaning or interpretation of this
Agreement.
 
16.20 Confidentiality.
 
  Each party hereto recognizes and acknowledges that confidential information of
various kinds may exist, from time to time, with respect to the business and
assets of each party hereto and their respective Affiliates, including the
Company’s Wireless Business, whether provided in connection with this Agreement,
the Contribution Agreement or any Ancillary Agreement.  Accordingly, each party
hereto (the “Receiving Party”) covenants that, except with the prior written
consent of the party (or its Affiliate, as applicable) to whom such confidential
information belongs (the “Disclosing Party”), it will, and will cause its
Related Parties to, consistent with its reasonable practices and procedures
adopted in good faith for handling confidential information and consistent with
the Commercially Sensitive Information Policies and Procedures, keep
confidential all information regarding each Disclosing Party, including
information relating to the Company’s Wireless Business, furnished to it by the
Disclosing Party if a reasonable Person would know that such information is
confidential or which is clearly designated as “confidential,” and will not, and
will cause its Related Parties not to, disclose any such information to any
Person whatsoever (other than the Receiving Party’s officers, directors,
employees, beneficial owners, attorneys, accountants, advisors, lenders or
potential transferees, provided each of such Persons is informed of the
confidential nature of such information and, in the case of a potential
transferee, such Person executes an agreement for the benefit of the Disclosing
Party agreeing to keep such information confidential in accordance with this
Section 16.20).  The foregoing covenant of each party hereto will not apply to
any information (other than End User Data in the case of clauses [a], [b], [c]
and [d]):  [a] that was or becomes generally available to the public other than
as a result of disclosure by the Receiving Party, [b] that becomes available to
the Receiving Party from a source other than the Disclosing Party, provided that
such source is not (to the knowledge of Receiving Party) bound by a
confidentiality obligation with respect to such information, [c] that the
Receiving Party can establish was in the Receiving Party’s possession prior to
it being furnished to the Receiving Party by or on behalf of the Disclosing
Party, provided that the source of such information was not (to the knowledge of
the Receiving Party) bound by a confidentiality obligation with respect to such
information, [d] regarding the tax treatment of a Member’s investment in the
Company, [e] to the extent the disclosure of such information is required
pursuant to a court order or securities or other laws, rules or regulations, or
[f] in the context of litigation, mediation or arbitration between the parties
hereto or their respective Affiliates.
 
 
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16.21 No Tax Advice.
 
  All Members acknowledge that any tax advice express or implicit in the
provisions of this Agreement is not intended or written to be used, and cannot
be used, by any taxpayer for the purpose of avoiding penalties that may be
imposed on any taxpayer by the Internal Revenue Service.  Each Member should
seek advice based on its particular circumstances from an independent tax
advisor.
 
16.22 Coordination With Contribution Agreement and Ancillary Agreements;
Recoupment of Certain Claims from Distributions.
 
[a]  
ACS, the ACS Member, GCI, the GCI Member and the Company acknowledge and agree
that the transactions contemplated by the Contribution Agreement, the Ancillary
Agreements and this Agreement (the “Transaction Agreements”) are integral parts
of the same transaction and that the parties entered into each of the
Transaction Agreements contingent on the parties thereto entering into all such
Transaction Agreements.  The parties desire to set forth the circumstances and
the terms and conditions on which the Company shall be entitled to recoup
certain amounts in accordance with the terms and conditions set forth in this
Section 16.22 based on failure of such Member or its Parent (as defined in the
Contribution Agreement) to perform its or their respective obligations under any
of the Transaction Agreements by deducting such amounts from Distributions that
otherwise would be made to a Member hereunder.

 
[b]  
If a final, non-appealable determination is made that a Member (or its Parent
(as defined in the Contribution Agreement)) has an indemnification obligation
under the Contribution Agreement, and such obligation has not been paid, each
Member hereby acknowledges and agrees that the Company shall, subject to the
terms and conditions of this Section 16.22, and each Member authorizes the
Company to, recoup an amount up to the full amount of such Member’s
indemnification obligation under the Contribution Agreement by deducting such
amount from any Distributions that otherwise would be made to such Member, and
to pay such deducted amounts to the indemnified Member if the indemnification
obligation is owed to such other Member; provided, however, that the Company
will not be entitled to recoup by deducting from Distributions to be made to a
Member an amount that is greater than 25% of the amount of any quarterly
Distributions to be made to such Member pursuant to Section 5.1 and any
remaining amount to be recouped will carry over to subsequent quarterly
Distributions and will accrue simple interest at the annual rate of the lower of
LIBOR plus 2.5% and the Maximum Rate until the full amount of the
indemnification obligation (including accrued interest) is recouped by making
deductions from the Distributions that otherwise would be made to the Member
owing the indemnification obligation.  Notwithstanding the preceding provisions
of this Section 16.22[b], if requested in writing by the Member owing the
indemnification obligation, the Company will forebear from recouping the amount
of any such indemnification obligation by deducting all or any part of such
amount from any Distributions to be made to such Member for a period of up to 90
days, and the parties will negotiate in good faith regarding an alternative
method for satisfaction of all or any amount of such indemnification obligation
in lieu of recouping by deducting such amount from Distributions to be made to
such Member

 
 
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[c]  
Each Member hereby acknowledges and agrees that the Company has the right to,
and authorizes the Company to, recoup any undisputed amounts owed by such Member
or any of its Affiliates to the Company that are past due under any of the
Ancillary Agreements by deducting such amounts from any Distributions to be made
to such Member.

 
[d]  
Any amounts that are recouped by deducting such amounts from Distributions that
otherwise would be made to a Member (including any such amounts that are
redirected from one Member to another Member) in accordance with the preceding
provisions of this Section 16.22 will be deemed to be Distributions actually
made to the Member from whose Distributions such amounts were recouped and
deducted for all purposes of this Agreement.

 
16.23 Governing Law.
 
  This Agreement will be governed by, and construed in accordance with, the laws
of the State of Delaware (without considering Delaware choice of law
provisions).  Any conflict or apparent conflict between this Agreement and the
Act will be resolved in favor of this Agreement, except as otherwise required by
the Act.
 
[Signature page follows.]

 
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The Company and each of the Members has signed this First Amended and Restated
Operating Agreement of The Alaska Wireless Network, LLC to be effective from the
Effective Date, notwithstanding the actual date of signing.
 
The Alaska Wireless Network, LLC

By:                 
Name:                                                                      
Title:                                                                      

GCI Wireless Holdings, LLC

By:                 
Name:                                                                      
Title:                                                                      

ACS Wireless, Inc.

By:                 
Name:                                                                      
Title:                                                                      

Alaska Communications Systems Group, Inc., solely with respect to Sections
3.10[b], 6.5, 9.6, 14.10, 15, 16.8, 16.20 and 16.22

By:                 
Name:                                                                      
Title:                                                                      

General Communication, Inc., solely with respect to Sections 3.10[b[, 6.5, 9.6,
11.11, 14.10,  15, 16.8, 16.20 and 16.22

By:                 
Name:                                                                      
Title:                                                                      
 
[Signature Page to First Amended and Restated Operating Agreement]

 
 

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LIST OF EXHIBITS
 
Exhibit A                    Addresses of Members
 
Exhibit B                    Initial Capital Contributions
 
Exhibit C                    Assignment of Ownership Interest
 
Exhibit D                    Transferee’s Agreement
 
Exhibit E                    Arbitration Agreement
 
Exhibit F                    Initial Four Year Plan
 
Exhibit G                    First Year Cap Ex Budget
 
Exhibit H                    First Year Operating Budget
 
Exhibit I                    Form of GCI Services Agreement
 
Exhibit J                    Form of Facilities and Network Use Agreement
 
Exhibit K                    Acceptable Use Policy
 
Exhibit L                    Commercially Sensitive Information Policies and
Procedures
 
Exhibit M                    Example Connection Attrition Adjustments
Calculations
 
Exhibit N-1                    ACS Applicable Regulatory Exchanges
 
Exhibit N-2                    GCI Applicable Regulatory Exchanges
 
Exhibit O                    ACS Services Agreement
 

 

 

 
 

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EXHIBIT A

Addresses of Members
(as of ____________, 201__)

[a]           if to the Initial GCI Member or to the GCI CEO as a Board member,
to:

General Communication, Inc.
2550 Denali Street, #1000
Anchorage, Alaska 99503
Attention: General Counsel
Facsimile:

With a copy to:

Sherman & Howard L.L.C.
633 Seventeenth Street, Suite 3000
Denver, Colorado 80202
Attention: Steven D. Miller, Esq.
Facsimile: (303) 298-0940

[b]           if to the Initial ACS Member or to the ACS CEO as a Board member,
to:

Alaska Communications Systems Group, Inc.
600 Telephone Avenue
Anchorage, Alaska 99503
Attention: General Counsel
Facsimile: 907-297-3153

With a copy to:

Sidley Austin LLP
787 Seventh Avenue
New York, New York 10019
Attention: Irving Rotter
Gabriel Saltarelli
Facsimile:  (212) 839-5599

A-1
 
 

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EXHIBIT B

Initial Capital Contributions
 

Contributed Assets per the Contribution Agreement (Fair Market Value to be
determined for purposes of Section 1.4 at or prior to Closing under the
Contribution Agreement).

B-1
 
 

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EXHIBIT C
 
Assignment of Ownership Interest
 
The undersigned Transferor hereby transfers and assigns an Ownership Interest
representing a ___________% Equity Interest in The Alaska Wireless Network, LLC,
a Delaware limited liability company, to ________________________, as
Transferee.  The Capital Account of the Transferor that is attributable to the
transferred Ownership Interest will carry over to the Transferee.  The Ownership
Interest transferred is subject to all of the terms and conditions of that
certain First Amended and Restated Operating Agreement of The Alaska Wireless
Network, LLC, dated as of ______________, 201__, as such Agreement may be
amended, including the obligation to arbitrate disputes as set forth in the
First Amended and Restated Operating Agreement and the Arbitration Agreement.
 
Transferor:
 
                                                                                                                       
     
            Date

C-1
 
 

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EXHIBIT D
 
Transferee’s Agreement
 
As a Transferee of an Ownership Interest in The Alaska Wireless Network, LLC, a
Delaware limited liability company governed by a First Amended and Restated
Operating Agreement dated as of ______________, 201__ (the “Operating
Agreement”), the undersigned agrees to be bound as a party to such Agreement
(which, as it may be amended, is hereby incorporated by reference), including
the obligation to arbitrate disputes as set forth in the Operating Agreement and
the Arbitration Agreement, and including that the Transferee makes the
representations and warranties set forth in Sections 16.2 and 16.3 of the
Operating Agreement.  The Transferee acknowledges and agrees that, unless
admitted as a Member of the limited liability company as provided in such
Agreement, the Transferee will have only the limited rights of an assignee as
specified by law.
 

 
Name of Transferee:

                                                                                                                                 
           Date
Address:                                                                   
 
Taxpayer ID
Number:                                                                  
 
Telephone
Number:                                                                  
 
Fax Number:                                                                  
 

 
Name of Wireless Parent of Transferee:

                                                                                                                   
             
           Date
Address:                                                                                                                                     
 
Taxpayer ID Number:     
                                                                                                          
 
Telephone
Number:                                                                  
 
Fax Number:                                                                  
 

D-1
 
 

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EXHIBIT E
 
Arbitration Agreement
 

E-1
 
 

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EXHIBIT F
 
Initial Four Year Plan

F-1
 
 

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EXHIBIT G
 
First Year Cap Ex Budget

G-1
 
 

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EXHIBIT H
 
First Year Operating Budget

H-1
 
 

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EXHIBIT I
 
Form of GCI Services Agreement

I-1
 
 

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EXHIBIT J
 
Form of Facilities and Network Use Agreement

J-1
 
 

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EXHIBIT K
 
Acceptable Use Policy

In consideration of [ACS/GCI] (the “Provider”) providing [ ] (the “Network
Capacity”), the Company hereby agrees to use the Network Capacity to provision
capacity only for (i) Wireless services and (ii) Wireless networks in
Alaska.  Terms not otherwise defined in this Acceptable Use Policy are used as
defined in the First Amended and Restated Operating Agreement of the Company
dated as of _________ (the “Operating Agreement”).
 
Any traffic not falling within one of the two categories set forth above is
non-acceptable.  Non-acceptable traffic shall not be carried on the Network
Capacity, and the Provider shall be under no obligation to provision Network
Capacity for such non-acceptable traffic.
 
With respect to each calendar year, the Company shall attest in writing to the
Provider that it has complied with this Acceptable Use Policy.
 
If the Company at any time becomes aware that it is no longer compliant with
this Acceptable Use Policy, the Company shall advise the Provider of that fact
within ten Business Days of becoming aware of such fact and shall simultaneously
provide the Provider with a written plan for coming back into compliance with
this Acceptable Use Policy.
 
Disputes arising under this Acceptable Use Policy shall be subject to the
dispute resolution processes of the Arbitration Agreement.
 
If the Company is found by an arbitrator under the Arbitration Agreement not to
be in compliance with this Acceptable Use Policy, the Company shall immediately
take steps to come into compliance as soon as practicable, and in any event
within ninety days after the arbitrator’s decision.  If the Company has failed
to come into compliance within such period, the Provider shall be entitled, in
its sole and absolute discretion, to terminate the Company’s use of the Network
Capacity within one hundred twenty days of the arbitrator’s decision without any
liability to the Provider and without any obligation to refund past payments
with respect to the Network Capacity.  In either circumstance, the Company shall
be obligated to pay to the Provider an amount of cash equal to the revenue that
the non-acceptable traffic has generated for the Company from the date the
Company accepted such traffic for carriage.  The right to receive payment from
the Company shall not be the sole and exclusive remedy of the Provider for
non-compliance with this Acceptable Use Policy, and shall be in addition to any
other remedies available to the Provider under applicable law, subject to the
requirements of Article 15 of the Operating Agreement and the limitations on
damages set forth in Section 16.8 of the Operating Agreement.
 

K-1
 
 

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EXHIBIT L
 
Commercially Sensitive Information Policies and Procedures

In accordance with the Operating Agreement of The Alaska Wireless Network, LLC
(the “Company”), dated as of ___________ __, 20__ (the “Agreement”), the
Company, the Initial GCI Member and its Affiliates (including GCI), and the
Initial ACS Member and its Affiliates (including ACS), collectively referred to
in this Schedule as the “Parties,” adopt and agree to enforce the Policies and
Procedures (the “Policies”) set forth below to govern the handling of
Commercially Sensitive Information (as defined below).  Capitalized terms used
but not separately defined in this Exhibit shall have the meanings assigned to
them in the Agreement.

1.  Introduction:

A.  As more fully set forth in Section 2.1 of the Agreement, the business of the
Company concerns, in pertinent part, the engineering, operation, and maintenance
of competitive Wireless network(s) in Alaska, the design and implementation of
competitive plans for the provision of Wireless products and services in Alaska,
and the provision of competitive Wireless Backhaul and Transport services and
roaming services to carriers serving Alaska subscribers and roamers
(collectively, the “Company Services”).

B.  ACS and GCI will (a) market the Company’s Wireless products and services in
competition with each other and with other providers of Wireless products and
services in Alaska, and (b) may elect to compete with the Company and/or each
other in the pro-vision of Wireless Backhaul and Transport.  In addition, ACS
and GCI are competitors in lines of business other than the Company Services.

C.  The Parties recognize that the ACS and GCI Members’ participation in the
Company creates the risk of an improper exchange of non-public, commercially
sensitive information of ACS and GCI concerning the marketing, advertising,
promotion, pricing, distribution, sale, billing, or after-sale support regarding
Wireless products and services, Wireless Backhaul and Transport, and other
businesses in which ACS and GCI are competitors (collectively, “Commercially
Sensitive Information”).

D.  In order to ensure compliance with applicable antitrust laws and competition
laws, the Parties have adopted these Policies to govern the handling of
Commercially Sensitive Information.  All references in these Policies to the
Company, the ACS Member, and the GCI Member include their respective Affiliates
(including ACS and GCI), officers, directors and/or managers, employees, and
agents of those entities (each, a “Covered Person”).

2.  Company Procedures for Specific Information:

A.  Subscribers.  To the extent that the Company reports to the Board (and
thereby to the ACS and GCI Members) information involving subscribers, churn,
and commonly used subscriber industry metrics, such information will be
aggregated and presented by geographic area.

 
L-1

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B.  Service Plans.  To the extent that the Company reports to the Board (and
thereby to the ACS and GCI Members) information on the aggregate number of
subscribers purchasing and utilizing each type of service plan offered by the
Company, it will make such reports broken out by: 1) Anchorage, Fairbanks, and
Juneau and 2) the rest of the State.

C.  Transport Purchased From Parents.  The Company will regularly report to the
Board (and thereby to the ACS and GCI Members) information on the aggregate
dollar value of transport and backhaul capacity purchased from each parent
sufficient to permit the Members to monitor compliance with the proportionate
purchase requirements set forth in Section 9.6 of the Agreement.  The Company
will not report on pricing with respect to specific transport and backhaul
purchases except as provided in the Additional Capacity Purchase and Contributed
Pool Construction Agreement.

D.  Roaming Agreements.  The Company will regularly report to the Board (and
thereby to the ACS and GCI Members) information on roaming agreements entered
into with other wireless carriers, including the term, pricing, and reciprocal
rates.

E.  Wireless Backhaul Agreements.  The Company will regularly report to the
Board (and thereby to the ACS and GCI Members) information on requests received
from other wireless carriers for wireless backhaul facilities and the aggregate
revenue received by the Company under all wireless backhaul agreements.

3.  Competitive Independence and Information Exchange:

A.  All Commercially Sensitive Information received by the Company will be held
strictly confidential and will not be communicated or otherwise disclosed,
directly
or indirectly, to a Covered Person of the non-disclosing Parties, except in
compliance with the procedures set forth in Section 2 above; provided, however,
that Commercially Sensitive Information may be disclosed to employees of GCI or
ACS who are seconded to the Company (including the CEO of the Company) pursuant
to a written agreement.  All such secondment agreements will contain provisions
requiring such employees to comply with these Policies, to protect the
confidentiality of Commercially Sensitive In-formation, and not to communicate
such information to a Covered Person of the non-disclosing Parties.  All
employees of GCI or ACS who are involved in designing, marketing, pricing, or
selling the Company Services will do so pursuant to a secondment agreement.

B.  The Parties recognize and acknowledge that employees of GCI or ACS who are
not the subject of secondment agreements may in the course of their work
inadvertently become exposed to Commercially Sensitive Information, e.g., a GCI
technician maintaining the Company’s provisioning systems might see a subscriber
count for ACS in a geographic area.  All GCI or ACS employees who perform work
for the Company  will receive periodic training with respect to the Policies and
will certify annually that they are aware of the Policies and will not disclose
any Commercially Sensitive Information to any other Covered Person of the
non-disclosing Parties.

 
L-2

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C.  To the extent that it is necessary or appropriate for the Company to provide
to the Executive Board or the Members reports on the operations, finances, and
plans of the Company, all such data will be provided in an aggregated format in
accordance with the procedures set forth in Section 2 above, i.e., in a manner
that does not disclose Commercially Sensitive Information specific to a Member
or its customers.

D.  Each of the Parties will undertake to ensure that they do not, and their
Covered Persons do not, utilize the Company to facilitate or effect the
coordination of decision-making with respect to competitive services between ACS
and GCI with respect to assets that they own independent of the Company.

E.  The Parties will take all reasonable and appropriate steps necessary to
ensure compliance with these Policies.
 
 
F.  Nothing in the Policies will limit the audit and access rights of ACS to the
extent that third parties are used for such rights.

4.  Compliance.
 
A.  The person functioning as the chief legal counsel of the Company (the
“Company Counsel”) will be responsible for overseeing and enforcing compliance
with these Policies.  The Company Counsel will establish procedures and
mechanisms for suspected violations of the Policies to be reported and to ensure
there is no retaliation against any person who reports any such suspected
violations.
 
B.  A copy of these Policies shall be distributed to (i) all members of the
executive board of the Company (the “Board”), (ii) all officers of the Company
and all persons seconded to the Company pursuant to written secondment
agreements, and (iii) the general counsels of ACS and GCI.  Each recipient shall
certify annually in writing that he or she has reviewed these Policies and will
comply with them.  The Company Counsel will be responsible for ensuring that
these certifications are obtained and updated and that records of the
certifications are maintained.
 
B.  No less than one time each year, the Company Counsel shall review the
Policies with the members of the Board.
 
C.  The Company Counsel or his/her designee shall attend all meetings of the
Board to ensure compliance with the antitrust laws and the terms of the parties’
agreements and these Policies.  In furtherance of these duties, the Company
Counsel will ensure that Board members and observers are excused from those
portions of Board meetings that involve the review or discussion of information
that may not be shared with such member or observer under the antitrust laws,
the terms of the Parties’ agreements,
and these Policies.  If, at any time, the Company Counsel position is vacant,
the Company Counsel’s responsibilities will be performed by the General Counsel
of GCI or his/her designee.
 

L-3
 
 

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EXHIBIT M
 
Example Connection Attrition Adjustments Calculations

M-1
 
 

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EXHIBIT N-1

ACS Applicable Regulatory Exchanges

N1-1
 
 

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EXHIBIT N-2

GCI Applicable Regulatory Exchanges

None.

N2-1
 
 

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EXHIBIT O

ACS Services Agreement

O-1
 
 

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