Exhibit 10.148

 

 

 

 

 

STOCK PURCHASE AGREEMENT

 

dated as of October 12, 2007

 

among

 

GCI COMMUNICATION CORP.,

 

UNITED COMPANIES, INC.,

 

SEA LION CORPORATION

 

and

 

TOGIAK NATIVES LTD.

 

 

 

 

 

 

 

BUS_RE\1394606.17

TABLE OF CONTENTS

 

 

Page

ARTICLE 1 PURCHASE AND SALE

1

1.1

Purchase and Sale of the Shares

1

1.2

Payments at the Closing

1

1.3

Escrow Arrangements

2

1.4

Closing

2

1.5

Closing Deliveries

2

1.6

Adjustment of Cash Consideration

3

 

 

 

ARTICLE 2 REVENUE GROWTH PAYMENTS

4

2.1

Structure

4

2.2

Amount & Payment

4

2.3

Gross Revenue Statement

5

2.4

Non-Transferability of Right to Revenue Growth Payments

5

 

 

 

ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF THE COMPANY

6

3.1

Organization and Good Standing

6

3.2

Capitalization; Other Equity

6

3.3

Authority

7

3.4

No Conflict; Consents and Approvals

7

3.5

Financial Statements; No Undisclosed Liabilities

8

3.6

Absence of Certain Changes or Events

9

3.7

Litigation; Regulatory Actions

9

3.8

Tax Matters

10

3.9

Employee Benefit Plans

11

3.10

Employment Matters

12

3.11

Leases, Contracts & Agreements

13

3.12

Risk Insurance

15

3.13

Intellectual Property

17

3.14

Environmental Matters

17

3.15

Assets; Title to Property

19

3.16

Books and Records

20

3.17

Transactions With Affiliates

20

3.18

Communications Regulatory Matters

21

3.19

Microwave Network

23

3.20

Capital Expenditures

23

3.21

Accounts Receivable

23

3.22

Licenses and Authorizations

24

3.23

Compliance With Laws

24

3.24

Brokers

24

3.25

Bank Accounts; Powers of Attorney

24

3.26

Representations Not Misleading

24

 

 

 

ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF GCI

24

 

 

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BUS_RE\1394606.17

 

4.1

Organization and Authority

25

4.2

Execution and Validity of Agreements

25

4.3

Brokers

25

4.4

Representations Not Misleading

25

 

 

 

ARTICLE 5 PRE-CLOSING COVENANTS

25

5.1

Exclusivity; Acquisition Proposals

25

5.2

Notices and Consents

26

5.3

Preparation for Closing

27

5.4

Notification of Certain Matters

27

5.5

Other Limitations on Conduct of Business Prior to the Closing Date

27

5.6

Capital Expenditure Requirements

30

5.7

Access to Information

30

5.8

Company Audited Financial Statements

30

5.9

Transfer of Manley Utility Company Assets

31

5.10

Assignment of Cellular Switch

31

5.11

Employee Benefit Plans

31

5.12

Relocation of Business Assets

31

5.13

Microwave Network Monitoring Program

32

5.14

No Transfers of Common Stock

32

5.15

Cooperation

32

5.16

Confidentiality

32

5.17

Announcements

33

5.18

Non-Disparagement

33

5.19

Assumption of Employment Agreements

33

 

 

 

ARTICLE 6 CONDITIONS PRECEDENT

34

6.1

Conditions to Each Party's Obligations

34

6.2

Conditions to the Obligations of GCI

34

6.3

Conditions to the Obligations of the Sellers

36

 

 

 

ARTICLE 7 INDEMNIFICATION

36

7.1

By GCI

36

7.2

By the Sellers

37

7.3

Survival; Time Limits for Indemnification

37

7.4

Basket and Cap

38

7.5

Defense of Claims

38

7.6

Recovery from Escrow Fund

40

7.7

Set-off

40

7.8

Limitations

40

7.9

Insurance

40

7.10

Recovery from Third Parties

40

 

 

 

ARTICLE 8 TERMINATION

40

 

 

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BUS_RE\1394606.17

 

8.1

Right to Terminate

40

8.2

Effect of Termination

41

 

 

 

ARTICLE 9 POST-CLOSING COVENANTS

41

9.1

Tax Matters

41

9.2

Additional Covenants

43

 

 

 

ARTICLE 10 MISCELLANEOUS

44

10.1

Arbitration

44

10.2

Remedies

45

10.3

Amendments and Supplements

45

10.4

Governing Law

45

10.5

Notices

45

10.6

Entire Agreement, Assignability, Etc.

47

10.7

Exclusivity of Representations

47

10.8

Counterparts

47

10.9

Representations as to Knowledge

47

10.10

Headings

47

10.11

Waivers

47

10.12

Severability

47

10.13

Expenses

47

10.14

Construction

48

10.15

Incorporation of Exhibits

48

 

EXHIBITS

 

Exhibit A

Definitions

Exhibit B

Escrow Agreement

Exhibit C

Illustration of Revenue Growth Payments

Exhibit D

Form of Opinion of Kemppel, Huffman & Ellis, P.C.

Exhibit E

Form of Opinion of Kemppel, Huffman & Ellis, P.C. (Regulatory

 

Opinion)

 

 

 

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BUS_RE\1394606.17

STOCK PURCHASE AGREEMENT

 

THIS STOCK PURCHASE AGREEMENT (this “Agreement”), is made and entered into as of
October 12, 2007 by and among GCI Communication Corp., an Alaska corporation
(“GCI”), United Companies, Inc., an Alaska corporation (the “Company”), Sea Lion
Corporation, an Alaska corporation (“Sea Lion”), and Togiak Natives Limited, an
Alaska corporation (“Togiak” and, together with the Company and Sea Lion, the
“Sellers”).

Recitals

A.    Collectively, Sea Lion and Togiak own all of the issued and outstanding
shares of common stock of the Company.

B.     The Company owns 100% of the issued and outstanding shares of all classes
of capital stock of each of United Utilities, Inc., an Alaska Corporation
(“UUI”), and Unicom, Inc., an Alaska corporation (collectively, the “Common
Stock”).

C.    Subject to the terms and conditions of this Agreement, in consideration of
the sale of the outstanding Common Stock, GCI will pay aggregate consideration
in immediately available funds at the times and in the amounts set forth in this
Agreement (the “Acquisition”).

D.    Defined terms used as capitalized terms and not otherwise defined herein
shall have the respective meanings set forth in Exhibit A hereto.

NOW, THEREFORE, in consideration of the foregoing premises, and the
representations, warranties, covenants and other agreements set forth herein,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged and accepted by the Parties, and intending to be
legally bound hereby, the Parties hereto hereby agree as follows:

ARTICLE 1

PURCHASE AND SALE

1.1   Purchase and Sale of the Shares Upon the terms and subject to the
conditions set forth in this Agreement, at the Closing the Company shall sell,
assign, transfer, convey and deliver to GCI or cause to be sold, assigned,
transferred, conveyed and delivered to GCI, free and clear of any and all Liens
and GCI shall purchase, all Common Stock owned by the Company.

 

1.2

Payments at the Closing.

1.2.1Subject to Section 1.6 below, the aggregate purchase price to be paid by
GCI to the Company on the Closing Date in consideration for the Common Stock
will be $40,000,000, less cash and marketable securities retained by the Company
in the amount of $1,318,242, payable in cash (the “Cash Consideration”). At the
Closing, the Company shall

 

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BUS_RE\1394606.17

receive the Estimated Cash Consideration less the Escrow Amount (such amount the
“Closing Payment”) by wire transfer of immediately available funds to accounts
designated by the Company in writing and delivered to GCI at least two Business
Days prior to the Closing Date.

1.2.2GCI shall be entitled to deduct and withhold from any consideration payable
or otherwise deliverable pursuant to this Agreement such amounts as may be
required to be deducted or withheld therefrom under any provision of federal,
local, or foreign Tax law or under any applicable legal requirement. To the
extent such amounts are so deducted or withheld, such amounts shall be treated
for all purposes under this Agreement as having been paid to the Person to whom
such amounts would otherwise have been paid.

1.3   Escrow Arrangements. At the Closing, GCI, the Company and the Escrow Agent
will enter into an Escrow Agreement substantially in the form attached hereto as
Exhibit B (the “Escrow Agreement”) pursuant to which, among other things, GCI
will deposit an amount of cash equal to the Escrow Amount to be held in an
escrow fund (the “Escrow Fund”), with such Escrow Fund to be used to compensate
GCI for any Losses incurred or sustained by it for which it is entitled to
recovery pursuant Article 7 hereof.Closing. The consummation of the transactions
contemplated by this Agreement (the “Closing”) shall occur at 10:00 a.m. AKST on
the third Business Day following the day on which the last of the conditions set
forth in Article 6 (other than those based on acts to be performed at Closing)
has been fulfilled or waived by the Party entitled to the benefit of such
condition (the “Closing Date”) at the offices of GCI, unless another date, time
or place is agreed upon by the Parties.

 

1.5

Closing Deliveries.

1.5.1Closing Deliveries of the Company. Upon the terms and subject to the
conditions set forth in this Agreement, at the Closing (unless otherwise
indicated below), the Company shall deliver, or cause to be delivered, to GCI
the following:

1.5.1.1          a stock certificate, or certificates, representing the Common
Stock held by the Company, duly endorsed in blank or accompanied by stock powers
duly executed in blank;

1.5.1.2          a receipt for the Cash Consideration paid to the Company at the
Closing pursuant to Section 1.2;

 

1.5.1.3

evidence of the assignment contemplated by Section 5.9;

 

1.5.1.4

evidence of the assignment contemplated by Section 5.10;

1.5.1.5          evidence of the transfer of Employee Benefit Plans pursuant to
Section 5.11;

1.5.1.6          evidence of the easements required to be obtained pursuant to
Section 5.12;

1.5.1.7          each of the documents required to be delivered by the Company
pursuant to Section 6.2 that has not been delivered prior to the Closing; and

 

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BUS_RE\1394606.17

1.5.1.8          such certificates or other documents as may be reasonably
requested by GCI, including without limitation certificates of legal existence,
good standing and certified articles of incorporation from the Alaska Department
of Community and Economic Development and certificates of officers of the
Company with respect to minutes, resolutions, bylaws and any other relevant
matters concerning the authorization of the transactions contemplated hereby.

1.5.2Closing Deliveries of GCI. Upon the terms and subject to the conditions set
forth in this Agreement, at the Closing (unless otherwise indicated below), GCI
shall deliver, or cause to be delivered:

1.5.2.1          to the Company, the Closing Payment payable at the Closing on
account of the Common Stock held by the Company, as shown on Schedule I hereto;

1.5.2.2          to the Escrow Agent, the Escrow Amount to be held in the Escrow
Fund pursuant to the Escrow Agreement; and

1.5.2.3          each of the documents required to be delivered by GCI pursuant
to Section 6.3 that has not been delivered prior to the Closing.

 

1.6

Adjustment of Cash Consideration.

1.6.1Estimated Cash Consideration. Not less than two nor more than five Business
Days prior to the Closing Date, the Company shall prepare and deliver to GCI a
good faith estimate of Closing Date Shareholder’s Equity (“Estimated Closing
Date Shareholder’s Equity”) determined as if it were the actual Closing Date
Shareholder’s Equity, but based on the Company’s review of financial information
then available and inquiries of personnel responsible for the preparation of the
financial information relating to the Acquired Companies in the Ordinary Course.
If the Estimated Closing Date Shareholder’s Equity is less than $26,991,189 (the
“Shareholder’s Equity Target”; the amount of such shortfall being referred to as
the “Shareholder’s Equity Shortfall”), then the Cash Consideration shall be
decreased dollar-for-dollar by the Shareholder’s Equity Shortfall. If Estimated
Closing Date Shareholder’s Equity is greater than the Shareholder’s Equity
Target (the amount of such excess being referred to as the “Shareholder’s Equity
Excess”), then the Cash Consideration shall be increased dollar-for-dollar by
the Shareholder’s Equity Excess. The Cash Consideration that would result if the
Estimated Closing Date Shareholder’s Equity were the actual Closing Date
Shareholder’s Equity is referred to as the “Estimated Cash Consideration.”

 

1.6.2

Post-Closing Adjustment.

1.6.2.1          No later than 45 days following the Closing Date, GCI will
prepare and deliver to the Company a statement (the “Closing Date Statement”)
showing, in reasonable detail, a calculation of Shareholders’ Equity as of
immediately prior to the Closing (the “Closing Date Shareholders’ Equity”).

1.6.2.2          Within 45 days after the date GCI delivers to the Company the
Closing Date Statement, if the Company disagrees in good faith with GCI’s
calculation of Closing Date Shareholders’ Equity as set forth in the Closing
Date Statement, then the Company may give

 

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BUS_RE\1394606.17

written notice (the “Objection Notice”) to GCI within such 45-day period (i)
setting forth the Company’s determination of Closing Date Shareholders’ Equity
and (ii) specifying in reasonable detail the Company’s basis for disagreement
with GCI’s determination of Closing Date Shareholders’ Equity. The failure by
the Company to deliver an Objection Notice within such 45-day period shall
constitute the acceptance of GCI’s computation of Closing Date Shareholders’
Equity. If the Company and GCI are unable to resolve any matter raised in the
Objection Notice with respect to the determination of Closing Date Shareholders’
Equity within 30 days after delivery of the Objection Notice, the items in
dispute shall be submitted to binding arbitration in accordance with Section
10.1. The final computation of Closing Date Shareholders’ Equity, determined by
reference to either GCI’s computation of Closing Date Shareholders’ Equity,
agreement of the parties or binding arbitration, as the case may be, is referred
to herein as the “Final Shareholders’ Equity.”

1.6.2.3          If, after the Final Shareholders’ Equity has been determined,
the Cash Consideration is less than the Estimated Cash Consideration, the
Sellers shall promptly pay to GCI, within five days after the Final
Shareholders’ Equity has been determined, an amount equal to such difference
plus interest accruing on such amount at a rate of 8% per annum from the Closing
Date until such amount is paid, by wire transfer of immediately available funds
to an account designated by GCI. If the Estimated Cash Consideration is less
than the Cash Consideration, GCI shall promptly pay to the Company, within five
days after the Final Shareholders’ Equity has been determined, an amount equal
to such difference plus interest accruing on such amount at a rate of 8% per
annum from the Closing Date until such amount is paid, by wire transfer of
immediately available funds to the account designated by the Company.

ARTICLE 2

REVENUE GROWTH PAYMENTS

2.1   Structure. In addition to the Cash Consideration payable at Closing, the
Company shall be entitled to receive additional payments determined and payable
as provided in this Article 2 (the “Revenue Growth Payments”) to reflect
additional revenues generated from the Specified Customers. The Revenue Growth
Payments shall be calculated separately for each of the following periods
(collectively, the “Revenue Sharing Period”): (i) calendar year 2008 (“Period
One”); (ii) calendar year 2009 (“Period Two”); (iii) calendar year 2010 (“Period
Three”); (iv) calendar year 2011 (“Period Four”); and (iv) calendar year 2012
(“Period Five”). In no event shall the Sellers be required to make payments to
GCI under this Article 2 if revenues decline instead of increase. Attached as
Exhibit C is an illustration of the calculation of the Revenue Growth Payments
payable to the Company. In the event of any conflict between the illustration
and the provisions of this Article 2, the provisions of this Article 2 shall
control.

 

2.2

Amount & Payment.

2.2.1The Revenue Growth Payment for Period One shall be an amount equal to the
product of (i) ten percent (0.10) and (ii) the difference, if any, between the
Gross Revenue for Period One and the Gross Revenue for calendar year 2007 (the
“Baseline Gross Revenue”). The Revenue Growth Payment for Period Two shall be an
amount equal to the product of (i) ten percent (0.10) and (ii) the difference,
if any, between the Gross Revenue for Period Two and the

 

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BUS_RE\1394606.17

Baseline Gross Revenue. The Revenue Growth Payment for Period Three shall be an
amount equal to the product of (i) ten percent (0.10) and (ii) the difference,
if any, between the Gross Revenue for Period Three and the Baseline Gross
Revenue. The Revenue Growth Payment for Period Four shall be an amount equal to
the product of (i) ten percent (0.10) and (ii) the difference, if any, between
the Gross Revenue for Period Four and the Baseline Gross Revenue. The Revenue
Growth Payment for Period Five shall be an amount equal to the product of (i)
ten percent (0.10) and (ii) the difference, if any, between the Gross Revenue
for Period Five and the Baseline Gross Revenue.

2.2.2 The Revenue Growth Payments for each of the Revenue Sharing Periods under
Section 2.2.1 shall be made as soon as reasonably practicable after the
completion of GCI’s annual audit for each respective period, and in any event,
on or prior to forty-five (45) days following the completion of such audit.

2.3   Gross Revenue Statement. The Revenue Growth Payments for each period shall
be accompanied by a schedule reflecting the calculation of the Revenue Growth
Payments in reasonable detail. The Company shall have the right, at its expense,
to audit the underlying statements and accounts relating to the Specified
Customers, which GCI shall make or cause to be made reasonably available to the
Company, to verify the accuracy of the Revenue Growth Payments; provided that
only one audit shall be conducted by the Company in respect of the Revenue
Growth Payment for any given period. All information obtained in any such audit
shall be maintained in confidence and used only for the purpose contemplated by
this Section 2.3. Any such audit shall be conducted upon reasonable notice,
during normal business hours and in a manner that does not unnecessarily or
unreasonably interfere with the operations of GCI. If, as a result of such
audit, the Company believes that an additional Revenue Growth Payment is due, it
shall notify GCI in writing and shall provide GCI reasonably detailed
information reflecting the basis for the additional payment claimed. Within ten
(10) days of receipt of that notice, GCI shall either pay the additional amount
claimed or notify the Company that GCI disagrees with the claim, which notice
shall specify the amount, if any, of the additional Revenue Growth Payment that
GCI agrees is due. If the Parties are unable to resolve any disagreement within
ten (10) days after a notice of disagreement is given by GCI, either party may
have such disagreement resolved pursuant to arbitration provided for in Section
10.1.

2.4   Non-Transferability of Right to Revenue Growth Payments. The rights of the
Company to receive Revenue Growth Payments cannot be sold, assigned,
hypothecated or otherwise transferred except to an Affiliate of the Company or
the Sellers. Any attempted transfer in violation of this provision shall be null
and void and GCI shall not be obligated to recognize any rights in the purported
transferee. In the event that GCI in good faith is uncertain after consulting
with outside legal counsel as to the legal rights of any purported transferee or
any other person claiming the right to receive Revenue Growth Payments, it may
withhold the Revenue Growth Payments in question until it is presented with a
court order establishing the rights of the parties and then pay the amount
withheld, without interest, to the person entitled thereto in accordance with
that order. No transfer shall affect the rights of GCI to set off against
Revenue Growth Payments as provided in Section 7.7.

ARTICLE 3

 

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BUS_RE\1394606.17

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

Except for representations and warranties that, by their terms, are made only as
of a specified date, all representations and warranties of the Parties shall be
deemed to be made at and as of the date hereof and at and as of the Closing
Date. For purposes of applying the representations and warranties as of the
Closing Date, all references to the date of this Agreement (or words of similar
import) shall be deemed to refer to the Closing Date. Except as set forth in the
corresponding sections of the disclosure schedule (the “Disclosure Schedule”),
each of the Sellers, severally and not jointly, hereby represents and warrants
to GCI that:

3.1   Organization and Good Standing. Section 3.1 of the Disclosure Schedule
contains a complete and accurate list for each of the Acquired Companies of its
name, its jurisdiction of incorporation, other jurisdictions in which it is
authorized to do business, and its capitalization (including the identity of
each shareholder and the number of shares held by each). Each of the Acquired
Companies is a corporation duly organized, validly existing, and in good
standing under the laws of its jurisdiction of incorporation, with full
corporate power and authority to conduct its business as it is now being
conducted, to own or use the properties and assets that it purports to own or
use, and to perform all its obligations under the Contracts in Section 3.11.1 of
the Disclosure Schedule. Each of the Acquired Companies is duly qualified to do
business as a foreign corporation and is in good standing under the laws of each
state or other jurisdiction in which either the ownership or use of the
properties owned or used by it, or the nature of the activities conducted by it,
requires such qualification. The Company has delivered to GCI or has made
available for inspection (i) copies of the Organizational Documents of each of
the Acquired Companies and (ii) all minutes of actions of the board of directors
since January 1, 2004 of the Company and each of the Acquired Companies.

 

3.2

Capitalization; Other Equity.

3.2.1The Company owns all of the outstanding shares of Common Stock, all of
which are owned free and clear of Liens. The shares of Common Stock owned by the
Company are set forth on Schedule I. There are no outstanding subscriptions,
options, employee stock options, rights, warrants, calls, convertible securities
or other rights, agreements or commitments of any kind issued or granted by, or
binding upon, any of the Acquired Companies to issue any shares or other equity
interests of any of the Acquired Companies or irrevocable proxies or any
agreements, instruments or understandings restricting the transfer of or
otherwise relating to shares or other equity interests of any of the Acquired
Companies, including any stockholder agreements, voting agreements or trusts or
proxies. There are no outstanding or authorized stock appreciation, phantom
stock, profit participation, or other similar rights with respect to any of the
Acquired Companies. All of the outstanding shares of capital stock or other
equity interests of each of the Acquired Companies were not issued in violation
of any preemptive or similar right of any Person and have not been transferred
in violation of, and are not currently subject to, any right of first refusal or
similar right of any Person. All of the outstanding shares of capital stock or
other equity interests of each of the Acquired Companies have been duly
authorized, validly issued and are fully paid and non-assessable, and are free
of preemptive rights. Except as set forth on Section 3.2.1 of the Disclosure
Schedule, there are no restrictions applicable to the payment of dividends or
distributions on the capital stock or other equity interests of any of the
Acquired Companies and all dividends or distributions declared prior to the date
hereof have

 

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BUS_RE\1394606.17

been paid. All issuances of securities by any of the Acquired Companies were
exempt from any registration requirements under all applicable securities laws.

3.2.2UUI owns all of the outstanding shares of capital stock or other equity
interests of United-KUC, Inc., an Alaska corporation (“KUC”) as set forth on
Schedule I, all of which are, except as set forth on Schedule 3.2.2, owned free
and clear of Liens. Section 3.2.2 of the Disclosure Schedule sets forth a
complete list of all Subsidiaries and Equity Affiliates of each of the Acquired
Companies. Except as set forth on Section 3.2.2 of the Disclosure Schedule, none
of the Acquired Companies own, directly or indirectly, any equity interest in
any other Person including any general or limited partnership interest, limited
liability company interest or other form of joint venture.

3.3   Authority. Each of the Sellers has all requisite power and authority to
enter into this Agreement and the Transaction Agreements and to consummate the
transactions contemplated hereby and thereby. The execution and delivery of this
Agreement and the Transaction Agreements and the consummation of the
transactions contemplated hereby and thereby have been duly authorized by all
necessary corporate action on the part of the Sellers and no further action is
required on the part of such entities or any of the Acquired Companies to
authorize the Agreement and the Transaction Agreements and the transactions
contemplated hereby and thereby. The execution, delivery and performance of this
Agreement and the Transaction Agreements each have been unanimously approved by
the board of directors of each of the Sellers and have been approved by the
shareholders of each of the Sellers to the extent such approval is required.
This Agreement and the Transaction Agreements have been duly executed and
delivered by each of the Sellers and assuming the due authorization, execution
and delivery by the other parties hereto and thereto, constitute the valid and
binding obligations of the Sellers enforceable against them in accordance with
their respective terms, subject to applicable bankruptcy, insolvency, moratorium
or other similar laws relating to creditors’ rights and general principles of
equity.

3.4   No Conflict; Consents and Approvals. Except as and to the extent set forth
on Section 3.4 of the Disclosure Schedule, neither the execution, delivery nor
performance of this Agreement in its entirety, nor the consummation of all of
the transactions contemplated hereby, will:

3.4.1contravene, conflict with, or result in a violation of (i) any provision of
the Organizational Documents of the Acquired Companies or the Sellers, or (ii)
any resolution adopted by the board of directors or the shareholders of any of
the Acquired Companies or the Sellers;

3.4.2violate (with or without the giving of notice or the passage of time), any
law, order, writ, judgment, injunction, award, decree, rule, statute, ordinance
or regulation applicable to any of the Acquired Companies or the Sellers;

3.4.3contravene, conflict with, result in a breach or termination of any
provision of, cause the acceleration of the maturity of any debt or obligation
pursuant to, constitute a default (or give rise to any right of termination,
cancellation or acceleration) under, or result in the creation of any Lien upon
any property or assets of any of the Acquired

 

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BUS_RE\1394606.17

Companies or the Common Stock pursuant to any terms, conditions or provisions of
any note, license, instrument, indenture, mortgage, deed of trust or other
agreement or understanding or any other restriction of any kind or character, to
which any of the Acquired Companies or any of the Sellers is a party or by which
any of the Acquired Companies’ or any of the Sellers’ assets or properties is
subject or bound;

3.4.4require notice to, or consent, approval, order or authorization of, or
declaration, filing or registration with, any Governmental Body or any Person,
domestic or foreign; or

3.4.5terminate or impair the corporate existence, business organization, assets,
licenses, permits, authorizations, or other contracts and agreements of any of
the Acquired Companies or the Sellers.

 

3.5

Financial Statements; No Undisclosed Liabilities.

3.5.1The Company has delivered to GCI true and complete copies of (i) the
audited consolidated and consolidating balance sheets of each of the Acquired
Companies as of December 31, 2004, December 31, 2005 and December 31, 2006 and
the related statements of income, retained earnings, shareholders’ equity and
cash flows of each of the Acquired Companies for each of the 12-month periods
ended on such dates (the “Year End Financials”), and (ii) the unaudited balance
sheet of each of the Acquired Companies for the eight (8) months ended August
31, 2007 (the “Balance Sheet Date”) and the related statements of income,
retained earnings, shareholders’ equity and cash flows of each of the Acquired
Companies (the “Interim Financials” and collectively with the Year End
Financials and the Company Audited Financial Statements, the “Company Financial
Statements”). The Company Financial Statements have been prepared in accordance
with GAAP applied on a consistent basis throughout the periods indicated. The
Company Financial Statements present fairly in all material respects the
financial position and operating results of the Acquired Companies as of the
dates, and for the periods, indicated therein, subject, in the case of the
Interim Financials, to normal year-end audit adjustments. No financial
statements of any Person other than the Acquired Companies are required by GAAP
to be included in the Company Financial Statements.

3.5.2The accounting records underlying the Company Financial Statements
accurately and fairly reflect in all material respects the transactions of the
Acquired Companies. The Acquired Companies do not have any off balance sheet
liabilities associated with financial derivative products or potential
liabilities associated with financial derivative products.

3.5.3Except as set forth on Section 3.5 of the Disclosure Schedule, to the
knowledge of the Sellers, (i) none of the principal executive officers or
principal financial officers of the Sellers or any of the Acquired Companies has
concluded that a material weakness currently exists, other than what is
described on the Disclosure Schedule and (ii) no claim or allegation has been
made that a material weakness exists or that there has been any fraud with
respect to the preparation of the Company Financial Statements or the internal
control over financial reporting utilized by the Acquired Companies.

 

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3.5.4Except as set forth on Section 3.5 of the Disclosure Schedule, the Acquired
Companies do not have any Liabilities except those that are accrued or reserved
against in the Company Financial Statements for the period ended on the Balance
Sheet Date or incurred in the Ordinary Course (none of which Liabilities arises
out of or relates to any breach of contract, breach of warranty, tort,
infringement or violation of law). The Acquired Companies have not incurred or
paid any Liability since the Balance Sheet Date except for such Liabilities
incurred or paid in the Ordinary Course and which are fully reflected on the
books and records of the Acquired Companies. Except as set forth on Section 3.5
of the Disclosure Schedule, none of the Acquired Companies is (i) a guarantor or
otherwise liable by contract for any Liability of any other Person, (ii)
obligated in any way to provide funds in respect of any other Person, or (iii)
obligated to guaranty or assume any debt, commitment or dividend of any Person.

3.5.5Except as set forth on Section 3.5 of the Disclosure Schedule, none of the
Acquired Companies have any outstanding indebtedness (excluding trade payables,
rent, prepaid expenses, wages and taxes (“Company Indebtedness”) and the
Acquired Companies have no outstanding loans, advances or other extensions of
credit to any Person.

3.5.6Section 3.5.6 of the Disclosure Schedule sets forth a description, grouped
by site with respect to the Microwave Network, of all capital expenditures in
excess of $10,000 in the aggregate intended to occur on or prior to the Closing
Date or to which any of the Acquired Companies reasonably expects to become
obligated after the Closing Date based on actions taken as of the date of this
Agreement.

3.6   Absence of Certain Changes or Events. Except as and to the extent set
forth on Section 3.6 of the Disclosure Schedule, and except for this Agreement
and the transactions contemplated hereby, since January 1, 2007, (i) there has
occurred no fact, event or circumstance which has had or could, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect, (ii)
none of the Acquired Companies has taken any of the actions as are described in
Section 5.5 for which consent of GCI would be required if such actions had been
taken after the date of this Agreement, and (iii) none of the Acquired Companies
has entered into any contract or agreement to take any actions as are described
in Section 5.5 for which consent of GCI would be required if such actions had
been taken after the date of this Agreement.

3.7   Litigation; Regulatory Actions. Except as set forth on Section 3.7 of the
Disclosure Schedule, there are no actions, suits, claims, investigations,
reviews or other proceedings (excluding any docketed and non-confidential
action, suit, claim, investigation, review or other proceeding before the FCC or
RCA) that have been commenced by or against any of the Acquired Companies or
that otherwise relate to or may affect the business of, or any of the assets
owned or used by, any of the Acquired Companies or, to the knowledge of the
Sellers, threatened against any of the Acquired Companies or involving any of
their properties or assets, at law or in equity or before or by any Governmental
Body, or other instrumentality or Person or any board of arbitration or similar
entity. Section 3.7 of the Disclosure Schedule describes all material actions,
claims, suits, investigations or proceedings (excluding any docketed and
non-confidential action, suit, claim, investigation, review or other proceeding
before the FCC or RCA) commenced or made against any of the Acquired Companies
or any predecessor since January 1, 2002, that are no longer pending, including
the disposition thereof.

 

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3.8   Tax Matters. The Acquired Companies have duly filed, or will file when
due, all Tax Returns that are or were required to be filed by or with respect to
any of them, either separately or as a member of a group of corporations (the
“Filed Returns”). All such Filed Returns were correct and complete. The Acquired
Companies have paid all Taxes (whether or not shown on any tax return). None of
the Acquired Companies is currently the beneficiary of any extension of time
within which to file any Tax Return. There are no liens for any Taxes on any
assets of the Acquired Companies except for liens for taxes not yet due or for
Taxes being contested in good faith and for which adequate reserves have been
established in accordance with GAAP. None of the Acquired Companies has entered
into any Tax sharing agreement or other agreement regarding the allocation of
Tax liability. The Sellers have delivered to GCI prior to the date hereof true,
correct and complete copies of each Filed Return relating to periods beginning
on and after January 1, 2004 and each amended return filed for any period for
which statutory periods of limitation have not expired. All deficiencies
asserted as a result of any examination or audit relating to Taxes of the
Acquired Companies have been paid in full, and no such examination or audit is
currently in progress or, to the knowledge of the Sellers, threatened. There are
no outstanding agreements extending or waiving any statutory period of
limitations applicable to the assessment or collection of Taxes with respect to
any of the Acquired Companies. The Acquired Companies have withheld and paid
over all taxes required to be so withheld and paid over in connection with
amounts paid or owing to any employee, independent contractor, creditor,
stockholder or other third party. The Acquired Companies are not obligated to
make any payments, nor are they a party to any agreement, that under certain
circumstances could obligate them to make any payments that will not be
deductible under Section 280G of the Code. None of the Acquired Companies has
been a United States real property holding corporation within the meaning of
Section 897(c)(2) of the Code during the applicable period specified in Section
897(c)(1)(A)(ii) of the Code. None of the Acquired Companies has any liability
for the Taxes of any Person under Reg. Section 1.1502-6 (or any similar
provision of state, local or foreign law), as a transferee or successor, by
contract, or otherwise. Except as set forth on Section 3.8 of the Disclosure
Schedule, none of the Acquired Companies (i) has been a member of an affiliated
group filing a consolidated federal income tax return and (ii) has any liability
for the Taxes of any Person under Reg. Section 1.1502-6 (or any similar
provision of state, local, or foreign law), as a transferee or successor, by
contract, or otherwise. No claim has been made by any authority in a
jurisdiction where any of the Acquired Companies do not file Tax Returns that
any of such entities is or may be subject to taxation by that jurisdiction. None
of the Acquired Companies has agreed to make any adjustments under Section 481
of the Code by reason of a change in method of accounting. None of the Acquired
Companies has executed or entered into a closing agreement pursuant to Section
7121 of the Code or any similar provision of state, local or foreign law, or are
subject to any private letter ruling of the Internal Revenue Service or
comparable ruling of any other Governmental Body. None of the Acquired Companies
has engaged in any reportable transaction as defined in Treasury Regulation
Section 1.6011-4(b). None of the Acquired Companies has executed any power of
attorney with respect to Taxes that is currently in force. Since January 1,
2005, none of the Acquired Companies has been a party to a transaction described
in Section 355 of the Code.

 

3.9

Employee Benefit Plans.

3.9.1Section 3.9 of the Disclosure Schedule lists, and the Company has made
available to GCI copies of, all “employee benefit plans” within the meaning of §
3(3) of ERISA,

 

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all bonus, stock option, stock purchase, incentive, deferred compensation,
supplemental retirement, severance and other employee benefit plans, programs
and arrangements, all binding employment agreements, and all policies providing
for the indemnification of officers, directors or other employees, in each case
for the benefit of, or relating to, current or former employees, directors or
contractors of any of the Acquired Companies and, where applicable under plan
terms, their dependents, and any such plans, programs and arrangements of any
person (as defined in § 3(9) of ERISA) which together with any of the Acquired
Companies would be deemed to be a “single employer” within the meaning of § 414
of the Code (any such Person, an “ERISA Affiliate”) (collectively, the “Employee
Plans”).

3.9.1.1          All Employee Plans are in compliance in all material respects
with the requirements prescribed by applicable law currently in effect with
respect thereto, and each of the Acquired Companies has performed all material
obligations required to be performed by it under, and are not in any respect in
default under or in violation of, any of the Employee Plans. Each Employee Plan
by its terms is terminable at any time.

3.9.1.2          None of the Acquired Companies or any ERISA Affiliate has ever
maintained, established, sponsored, participated in, or contributed to, any
pension plan subject to Part 3 of Subtitle B of Title I of ERISA, Title IV of
ERISA or Section 412 of the Code.

3.9.2None of the Acquired Companies or any ERISA Affiliate has ever maintained,
established, sponsored, participated in or contributed to any self-insured plan
pursuant to which a stop-loss policy or insurance contract applies.

3.9.3At no time has any of the Acquired Companies or any ERISA Affiliate
contributed to or been obligated to contribute to any multiemployer plan (as
defined in Section 3(37) of ERISA). None of the Acquired Companies or any ERISA
Affiliate has at any time ever maintained, established, sponsored, participated
in or contributed to any multiple employer plan or to any plan described in
Section 413 of the Code.

3.9.4No Employee Plan or Employee Agreement provides, or reflects or represents
any liability to provide, retiree life insurance, retiree health or other
retiree employee welfare benefits to any Person for any reason, except as may be
required by COBRA or other applicable statute, and none of the Acquired
Companies has represented, promised or contracted (whether in oral or written
form) to any employee (either individually or to employees as a group) or any
other Person that such employee(s) or other Person would be provided with
retiree life insurance, retiree health or other retiree employee welfare
benefits, except to the extent required by statute.

3.9.5Each of the Acquired Companies and each ERISA Affiliate has, prior to the
Closing, complied in all material respects with COBRA, the Family Medical Leave
Act of 1993, as amended, the Health Insurance Portability and Accountability Act
of 1996, as amended (“HIPAA”), the Women’s Health and Cancer Rights Act of 1998,
the Newborns’ and Mothers’ Health Protection Act of 1996, the Mental Health
Parity Act, the Uniformed Services Employment and Reemployment Rights Act, as
amended, the Medicare Prescription Drug Improvement and Modernization Act of
2003, as amended, and any similar provisions of state law applicable to its
employees. To the extent required under HIPAA and the regulations issued

 

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thereunder, each of the Acquired Companies has, prior to the Closing, performed
all obligations under the medical privacy rules of HIPAA (45 C.F.R. Parts 160
and 164), the nondiscrimination rules of HIPAA (45 C.F.R. 146), the electronic
data interchange requirements of HIPAA (45 C.F.R. Parts 160 and 162), and the
security requirements of HIPAA (45 C.F.R. Part 142). None of the Acquired
Companies has any unsatisfied obligations to any employees or qualified
beneficiaries pursuant to COBRA, HIPAA or any state law governing health care
coverage or extension.

3.9.6The execution of this Agreement and the consummation of the transactions
contemplated hereby do not constitute a triggering event under any Employee Plan
which (either alone or upon the occurrence of termination of employment in
connection therewith) will or may result in any payment (whether of severance
pay or otherwise) that is a “parachute payment,” as such term is defined in §
280G of the Code, resulting in a penalty tax under § 4999 of the Code.

3.9.7With respect to nonqualified deferred compensation plans, as such term is
defined under Code Section 409A, each of the Acquired Companies and each ERISA
Affiliate has, prior to the Closing, administered each such plan in good-faith
compliance with the guidance issued under Code Section 409A.

3.10Employment Matters. Section 3.10 of the Disclosure Schedule lists all
employees of the Acquired Companies and shows for each such employee: (a) his or
her position and title; (b) his or her date of hire and, if different, deemed
date of hire (for service credits in connection with Employee Plans); (c) his or
her salary; (d) his or her unpaid wages owed and/or accrued vacation time and
accrued personal time as of September 8, 2007; (e) any bonuses paid to him or
her with respect to the fiscal year ended December 31, 2006, or earned or
promised to him or her with respect to the current fiscal year, and (f) setting
forth separately any vested or unvested: vacation, overtime, wages, personal
time, bonuses or similar items. The Acquired Companies have paid, or set forth
as an accrual on the Company Financial Statements, and performed all obligations
when due with respect to their respective employees, consultants, agents,
officers and directors, including without limitation the payment of any accrued
and payable wages, severance pay, vacation pay, benefits and commissions. Except
as disclosed on Section 3.10 of the Disclosure Schedule, the employment of all
employees of the Acquired Companies is terminable at will without any penalty or
severance obligation being incurred by any of the Acquired Companies. Except as
disclosed on Section 3.10 of the Disclosure Schedule, there is no management,
employment, severance, consulting, relocation or other agreement, contract or
understanding between the any of the Acquired Companies and any employee. None
of the employees of the Acquired Companies is subject to any covenant against
competition or similar agreement that would limit his or her ability to
participate in all aspects of the Acquired Companies’ respective businesses at
any present or future location. Except as disclosed on Section 3.10 of the
Disclosure Schedule, (a) none of the Acquired Companies is, nor have any of them
been a party to, or subject to compliance with, any union agreement or
collective bargaining agreement or work rules or practices agreed to with any
labor organization or employee association, and (b) no attempt to organize any
of the Acquired Companies’ employees has occurred, is pending or, to the
knowledge of the Company, has been proposed or threatened. Except as disclosed
on Section 3.10 of the Disclosure Schedule, (a) none of the Acquired Companies
has had any Equal Employment Opportunity Commission charges or other

 

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claims of employment discrimination, sexual harassment or wrongful discharge
made against it by any of its employees or any Wage and Hour Department
investigations with respect to its employees or independent contractors, and (b)
none of the Acquired Companies has any currently pending or, to the knowledge of
the Sellers, threatened Equal Employment Opportunity Commission charges or other
claims of employment discrimination or wrongful discharge made against it by any
of its employees or Wage and Hour Department investigations with respect to its
employees or independent contractors. Except as disclosed on Section 3.10 of the
Disclosure Schedule, none of the persons performing services for the Acquired
Companies are or have been improperly classified as independent contractors or
as being exempt from the payment of wages for overtime. Except as disclosed on
Section 3.10 of the Disclosure Schedule, there have not been and there are no
pending or, to the knowledge of the Sellers, threatened or reasonably
anticipated claims or actions against any of the Acquired Companies by any
employee, including without limitation, under any workers’ compensation policy
or long term disability policy.

 

3.11

Leases, Contracts & Agreements.

3.11.1            Section 3.11.1 of the Disclosure Schedule sets forth an
accurate and complete list, and the Sellers have made available to GCI true and
complete copies, of:

3.11.1.1        each Applicable Contract that involves performance of services
for or delivery of goods or materials by one or more Acquired Companies of an
amount or value in excess of twenty five thousand dollars ($25,000);

3.11.1.2        each Applicable Contract that involves performance of services
for or delivery of goods or materials to one or more Acquired Companies of an
amount or value in excess of twenty five thousand dollars ($25,000);

3.11.1.3        each Applicable Contract that was not entered into in the
Ordinary Course and that involves expenditures or receipts of one or more
Acquired Companies in excess of twenty five thousand dollars ($25,000);

3.11.1.4        each lease, rental agreement, license, installment and
conditional sale agreement, and other Applicable Contract affecting the
ownership of, leasing of, title to, use of, or any leasehold or other interest
in, any personal property (except personal property leases and installment and
conditional sales agreements having a value per item or aggregate payments of
less than twenty five thousand dollars ($25,000) and with terms of less than one
year);

3.11.1.5        each licensing agreement (other than shrink wrap licenses) or
other Applicable Contract with respect to Intellectual Property Rights,
including agreements with current or former employees, consultants, or
contractors regarding the appropriation or the non-disclosure of any
Intellectual Property Rights;

3.11.1.6        each collective bargaining agreement and other Applicable
Contract to or with any labor union or other employee representative of a group
of employees;

3.11.1.7        each joint venture, partnership, and other Applicable Contract
(however named) involving a sharing of profits, losses, costs, or liabilities by
any of the Acquired Companies with any other Person;

 

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3.11.1.8        each Applicable Contract containing covenants that in any way
purport to restrict the business activity of any of the Acquired Companies or
any of their Affiliates or limit the freedom of any of the Acquired Companies or
their Affiliates to engage in any line of business or to compete with any
Person;

3.11.1.9        each Applicable Contract providing for payments to or by any
Person based on sales, purchases, or profits, other than direct payments for
goods;

3.11.1.10     each Applicable Contract for capital expenditures in excess of
twenty five thousand dollars ($25,000);

3.11.1.11      each written warranty, guaranty, and or other similar undertaking
with respect to contractual performance extended by any of the Acquired
Companies other than in the Ordinary Course; and

3.11.1.12     each amendment, supplement, and modification (whether oral or
written) in respect of any of the foregoing.

Section 3.11.1 of the Disclosure Schedule sets forth reasonably complete details
concerning such Contracts, including the parties to the Contracts and the amount
of the remaining commitment of the Acquired Companies under the Contracts.

 

3.11.2

Except as set forth on Section 3.11.2 of the Disclosure Schedule:

3.11.2.1        None of the Sellers (and no Affiliate of any of the Sellers) has
or may acquire any rights under, and none of the Sellers has or may become
subject to any obligation or liability under, any Contract that relates to the
business of, or any of the assets owned or used by, any Acquired Company; and

3.11.2.2        no officer, director, agent, employee, consultant, or contractor
of any of the Acquired Companies is bound by any Contract that purports to limit
the ability of such officer, director, agent, employee, consultant, or
contractor to (A) engage in or continue any conduct, activity, or practice
relating to the business of any of the Acquired Companies, or (B) assign to any
of the Acquired Companies or to any other Person any rights to any invention,
improvement, or discovery.

3.11.3            Except as set forth in Section 3.11.3 of the Disclosure
Schedule, each Contract identified or required to be identified in Section
3.11.1 of the Disclosure Schedule is in full force and effect and is valid and
enforceable in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance or similar laws
affecting the enforcement of creditors rights generally and to general
principles of equity, and will continue to be legal, valid, binding, enforceable
and in full force and effect following the consummation of the transactions
contemplated hereby.

 

3.11.4

Except as set forth on Section 3.11.4 of the Disclosure Schedule:

3.11.4.1        each of the Acquired Companies is, and at all times since
January 1, 2006 has been, in full compliance with all applicable terms and
requirements of each Contract

 

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under which any of such Acquired Companies has or had any obligation or
liability or by which any of such Acquired Companies or any of the assets owned
or used by any of such Acquired Companies is or was bound;

3.11.4.2        each other Person that has or had any obligation or liability
under any Contract under which any of the Acquired Companies has or had any
rights is, and at all times since January 1, 2006 has been, in full compliance
with all applicable terms and requirements of such Contract;

3.11.4.3        no event has occurred or circumstance exists that (with or
without notice or lapse of time) may contravene, conflict with, or result in a
violation or breach of, or give any of the Acquired Companies or other Person
the right to declare a default or exercise any remedy under, or to accelerate
the maturity or performance of, or to cancel, terminate, or modify, any
Applicable Contract; and

3.11.4.4        other than notices or other communications given by an Acquired
Company to an employee regarding any actual or alleged breach of an employment
contract by such employee, none of the Acquired Companies has given to or
received from any other Person, at any time since January 1, 2006, any notice or
other communication (whether oral or written) regarding any actual, alleged,
possible, or potential violation or breach of, or default under, any Contract.

3.11.5            There are no renegotiations of, attempts to renegotiate, or
outstanding rights to renegotiate any material amounts paid or payable to any of
the Acquired Companies under current or completed Contracts with any Person and
no such Person has made written demand for such renegotiation.

3.11.6            The Contracts relating to the sale, design, manufacture, or
provision of products or services by the Acquired Companies have been entered
into in the Ordinary Course and have been entered into without the commission of
any act alone or in concert with any other Person, or any consideration having
been paid or promised, that is or would be in violation of applicable laws.

 

3.12

Risk Insurance.

 

3.12.1

The Sellers have made available to GCI:

3.12.1.1        true and complete copies of all policies of insurance to which
any of the Acquired Companies is a party or under which any of the Acquired
Companies, or any director of any of the Acquired Companies, is or has been
covered at any time within the three (3) years preceding the date of this
Agreement;

3.12.1.2        true and complete copies of all pending applications for
policies of insurance; and

3.12.1.3        any statement by the auditor of any of the Company Financial
Statements with regard to the adequacy of such entity's coverage or of the
reserves for claims.

 

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3.12.2

Section 3.12.2 of the Disclosure Schedule describes:

3.12.2.1        any self-insurance arrangement by or affecting any of the
Acquired Companies, including any reserves established thereunder; and

3.12.2.2        any contract or arrangement, other than a policy of insurance or
indemnification agreements entered into in the Ordinary Course, for the transfer
or sharing of any risk by any of the Acquired Companies.

3.12.3            Section 3.12.3 of the Disclosure Schedule sets forth, by year,
for the current policy year and each of the preceding three (3) policy years:

 

3.12.3.1

a summary of the loss experience under each policy;

3.12.3.2        a statement describing each claim under an insurance policy for
an amount in excess of five thousand dollars ($5,000), which sets forth:

 

(a)

the name of the claimant;

(b)  a description of the policy by insurer, type of insurance, and period of
coverage; and

 

(c)

the amount and a brief description of the claim; and

3.12.3.3        a statement describing the loss experience for all claims that
were self-insured, including the number and aggregate cost of such claims.

 

3.12.4

Except as set forth on Section 3.12.4 of the Disclosure Schedule:

3.12.4.1        All policies to which any of the Acquired Companies is a party
or that provide coverage to any of the Sellers, any of the Acquired Companies,
or any director or officer of any of the Acquired Companies:

 

(a)

are valid, outstanding, and enforceable;

 

(b)

are issued by an insurer that is financially sound and reputable;

(c)  taken together, provide adequate insurance coverage for the assets and the
operations of the Acquired Companies for all risks normally insured against by a
Person carrying on the same business or businesses as the Acquired Companies;

(d)   are sufficient for compliance with all applicable laws and Contracts to
which any of the Acquired Companies is subject or by which any of them is bound;

(e)    will continue in full force and effect following the consummation of the
transactions contemplated hereby; and

(f)     do not provide for any retrospective premium adjustment or other
experienced-based liability on the part of any of the Acquired Companies

 

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3.12.4.2        Neither the Sellers nor any of the Acquired Companies has
received (A) any refusal of coverage or any notice that a defense will be
afforded with reservation of rights, or (B) any notice of cancellation or any
other indication that any insurance policy is no longer in full force or effect
or will not be renewed or that the issuer of any policy is not willing or able
to perform its obligations thereunder.

3.12.4.3        The Acquired Companies have paid all premiums due, and have
otherwise performed all of their respective obligations, under each policy to
which any of the Acquired Companies is a party or that provides coverage to any
of the Acquired Companies or director thereof.

3.12.4.4        The Acquired Companies have given notice to the insurer of all
claims that may be insured thereby.

3.12.4.5        The Sellers have delivered to GCI a summary schedule of
insurance policies in effect as of the date of this Agreement which sets forth
the amount of coverage and the amount of any deductible under such policies.

3.13Intellectual Property. Section 3.13 of the Disclosure Schedule sets forth a
list of all Intellectual Property Rights and all material licenses (other than
shrink wrap licenses), including all registrations and applications (by name,
number, jurisdiction, and owner) for such rights and licenses, sublicenses, and
other similar agreements, including any ongoing software or website maintenance
agreements, as to which any of the Acquired Companies is a party, including the
identity of all parties thereto. The Acquired Companies own or have valid and
legally enforceable right to use, sell and license, as the case may be, free and
clear of any Liens, all Intellectual Property Rights necessary to conduct the
business of the Acquired Companies as currently conducted without any conflict
with or infringement or misappropriation of any rights or property, including
intellectual property rights, of third parties. Section 3.13 of the Disclosure
Schedule lists all actions that must be taken by the Acquired Companies within
thirty (30) days of the Closing Date to maintain the validity of the
Intellectual Property Rights. There is no unauthorized use, disclosure,
infringement, or misappropriation of, nor is there any valid basis for any claim
of infringement or misappropriation from any third party upon, the Intellectual
Property Rights or other proprietary rights of the Acquired Companies.

 

3.14

Environmental Matters.

3.14.1            Compliance. Except as set forth on Section 3.14 of the
Disclosure Schedule, each of the Acquired Companies is conducting and at all
times has conducted its business and operations, and has occupied, used and
operated all real property and facilities presently or previously owned,
occupied, used or operated by it, in compliance (in all material respects) with
all Environmental Laws and so as not to give rise to any Loss or Liability under
any Environmental Laws or to any adverse impact on the business or activities of
any of the Acquired Companies. The Sellers have no knowledge of pending or
proposed changes to any Environmental Laws that would require any changes in any
of the Acquired Companies’ premises, facilities, equipment, operations or
procedures or that would affect any of the Acquired Companies’ business or its
cost of conducting its business as now conducted. To the knowledge of the
Sellers, no conditions, circumstances or activities have existed or currently
exist

 

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BUS_RE\1394606.17

(including, without limitation, off-site disposal or treatment of Hazardous
Materials) which could give rise to any Loss or Liability pursuant to any
Environmental Laws.

3.14.2            Hazardous Materials. Except as set forth on Section 3.14 of
the Disclosure Schedule, any chemicals and chemical compounds and mixtures which
are included among the assets of any of the Acquired Companies, or are required
for the conduct of any of the Acquired Companies’ businesses, have not been and
are not intended to be discarded or abandoned, and are not Hazardous Materials.
Except as set forth on Section 3.14 of the Disclosure Schedule, none of the
Acquired Companies has generated, handled, used, transported or disposed of
Hazardous Materials. All Hazardous Materials which are generated as part of the
business of the Acquired Companies are handled, stored, treated and disposed of
in accordance with applicable Environmental Laws or are turned over to an
independent third-party contractor with appropriate licenses to handle, store,
treat or dispose of Hazardous Materials.

3.14.3            Tanks; Asbestos. Except as set forth on Section 3.14 of the
Disclosure Schedule, any underground storage tanks ever located at real property
owned or leased by any of the Acquired Companies have been removed in compliance
with all applicable Environmental Laws, all remediation required in connection
with such removal has been completed in accordance with applicable Environmental
Laws and all governmental agencies having jurisdictions have approved such
removal and remediation and issued appropriate certificates reflecting that no
further action is required. Except as set forth on Section 3.14 of the
Disclosure Schedule, all above ground storage tanks located at real property
owned or leased by any of the Acquired Companies comply with applicable
Environmental Laws and are appropriate and adequate for the conduct of the
Acquired Companies’ businesses. No real properties or facilities presently or
previously owned, occupied, used or operated by any of the Acquired Companies or
any predecessor have been used at any time as a gasoline service station, dry
cleaning facility or as a facility for storing, pumping, dispensing or producing
gasoline or any other petroleum products or any other Hazardous Materials. No
building or other structure on any of the real property owned, occupied, used or
operated by any of the Acquired Companies contains asbestos or
asbestos-containing materials. Except as set forth on Section 3.14 of the
Disclosure Schedule, there are not nor have there been any incinerators, septic
tanks, leach fields, cesspools or wells (including without limitation dry,
drinking, industrial, agricultural and monitoring wells) on any real property
owned, occupied, used or operated by any of the Acquired Companies.

3.14.4            Environmental Assessments. The Sellers have made available to
GCI correct and complete copies of all documents, correspondence, reports or
other materials in their possession or control, or the possession or control of
any of the Acquired Companies, concerning the environmental condition of any
real property currently or formerly used, owned or occupied by any of the
Acquired Companies, including, without limitation, all environmental site
assessments. None of the Acquired Companies have received any written
notification of the existence of any action, suit, investigation (other than a
routine inspection), demand, demand letter, claim, Lien, notice of
non-compliance or violation, notice of liability, proceeding, consent order or
consent agreement against any of the Acquired Companies or any Person made under
or in accordance with any Environmental Laws.

 

3.15

Assets; Title to Property.

 

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3.15.1            Section 3.15.1 of the Disclosure Schedule contains a true and
complete list of all depreciable tangible Business Assets (including tangible
Business Assets leased by any of the Acquired Companies under leases that are
required to be capitalized for accounting purposes), that reflects the
in-service dates of such tangible Business Assets, the depreciation methods and
periods of such tangible Business Assets and the net book value of such tangible
Business Assets as of August 31, 2007. Except as described in Section 3.15.1 of
the Disclosure Schedule, none of the Acquired Companies own or lease any
depreciable tangible assets used in its business. The tangible Business Assets,
taken as a whole, are in good operating condition and repair, subject to
ordinary wear and tear reasonably to be expected in a business of the type
operated by each of the Acquired Companies, and are suitable for the purposes
for which they are currently used.

3.15.2            Section 3.15.2 of the Disclosure Schedule contains a true and
complete list of all real property owned by any of the Acquired Companies (the
“Owned Real Property”). The Sellers have delivered or made available to GCI
copies of the deeds and other instruments (as recorded) by which the Acquired
Companies acquired the Owned Real Property, and copies of all title insurance
policies, opinions, abstracts and surveys in the possession of the Sellers or
the Acquired Companies and relating to such properties. Each parcel of Owned
Real Property is supplied with utilities and other services necessary for the
operation thereof. The Owned Real Property is free from material defects, has
been maintained in accordance with normal industry practice, is in good
operating condition and repair, and is suitable for the purposes for which it
presently is used. The Owned Real Property complies in all material respects
with applicable laws, rules and regulations and all applicable declarations and
covenants, has received all approvals of Governmental Bodies (including permits)
required in connection with the occupation and operation thereof and has been
occupied, operated and maintained in accordance with applicable law. The
Acquired Companies enjoy peaceful and undisturbed possession of all Owned Real
Property. All buildings, plants and structures contained on the Owned Real
Property lie wholly within the boundaries of such Owned Real Property and do not
encroach upon the property of, or otherwise conflict with the property rights
of, any other Person.

3.15.3            Section 3.15.3 of the Disclosure Schedule contains a true and
complete list of all leases and a description of the real property subject to
each. Such leases and other agreements or arrangements pursuant to which the
Acquired Companies occupy or use any real property are referred to herein as the
“Real Property Leases.” All of the Real Property Leases are in full force and
effect, and will continue to be in full force and effect following the
consummation of the transactions contemplated hereby, and neither the Acquired
Companies nor, to knowledge of the Sellers, any other Person is in default under
any Real Property Lease. Without limiting the generality of the foregoing, the
Acquired Companies are current in the performance of their maintenance
obligations under all Real Property Leases. Each parcel of Leased Real Property
is supplied with utilities and other services necessary for the operation
thereof. The Leased Real Property is free from material defects, has been
maintained in accordance with normal industry practice, is in good operating
condition and repair, and is suitable for the purposes for which it presently is
used. The Leased Real Property complies in all material respects with applicable
laws, rules and regulations and all applicable declarations and covenants, has
received all approvals of Governmental Bodies (including permits) required in
connection with the occupation and operation thereof and has been occupied,
operated and

 

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maintained in accordance with applicable law. The Acquired Companies enjoy
peaceful and undisturbed possession of all Leased Real Property.

3.15.4            Except as set forth on Section 3.15.4 of the Disclosure
Schedule and except for Liens securing current Taxes not yet due and payable,
the Acquired Companies have good and marketable title to all of the Business
Assets, Owned Real Property and Leased Real Property free and clear of all
Liens.

3.15.5            The Business Assets, the Owned Real Property and the Leased
Real Property constitute all of the assets, properties and rights used by any of
the Acquired Companies to conduct its business and are sufficient for the
continued conduct of the Acquired Companies' businesses after the Closing in
substantially the same manner as conducted prior to the Closing.

3.16Books and Records. The books of account, minute books, stock record books,
and other records of the Acquired Companies, all of which have been made
available to GCI, are complete and correct and have been maintained in
accordance with sound business practices and the requirements of Section
13(b)(2) of the Securities Exchange Act of 1934, as amended (regardless of
whether or not the Acquired Companies are subject to that section), including
the maintenance of an adequate system of internal controls. The minute books of
each of the Acquired Companies contain accurate and complete records of all
meetings held of, and corporate action taken by, the shareholders, the boards of
directors, and committees of the boards of directors of each of the Acquired
Companies, and no meeting of any such shareholders, board of directors, or
committee has been held for which minutes have not been prepared and are not
contained in such minute books. At the Closing, all of those books and records
will be in the possession of the Acquired Companies.

3.17Transactions With Affiliates. Section 3.17 of the Disclosure Schedule
contains a complete and accurate list of all amounts and obligations owed by any
one of the Acquired Companies, on the one hand, and the Sellers or any of their
Affiliates (other than an Acquired Company), on the other hand, and transactions
and services provided since January 1, 2002 between any one of the Acquired
Companies, on the one hand, and the Sellers or any of their Affiliates (other
than an Acquired Company), on the other hand.

 

3.18

Communications Regulatory Matters.

3.18.1            Each of the Telecom Entities is fully qualified under the
Communications Laws to be an FCC licensee. Schedule 3.18.1 lists all licenses
and authorizations issued by the FCC to each of the Telecom Entities (the “FCC
Licenses”), together with the name of the licensee or authorization holder, the
expiration date of the FCC Licenses and, where applicable, the relevant FCC
market designation. Each of the Telecom Entities validly holds the FCC Licenses
which represent all the FCC authorizations required in connection with the
ownership and operation of the Acquired Companies’ telecommunications business
as it is presently being conducted. The FCC Licenses are not subject to any
restrictions, requirements, or conditions that are not generally imposed by the
FCC upon holders of such FCC licenses. No person other than the Telecom Entities
has any right, title or interest (legal or beneficial) in or to, or any right or
license to use, the FCC Licenses. The FCC Licenses have been granted to the
Telecom Entities by Final Order and are in full force and effect.

 

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3.18.2            Each of the Acquired Companies is fully qualified under the
State Communications Laws to hold the RCA Authorizations. Schedule 3.18.2 lists
all licenses and authorizations issued by the RCA to each of the Acquired
Companies (the “RCA Authorizations” and, together with the FCC Licenses, the
“Telecom Licenses”), together with the name of the licensee or authorization
holder; where applicable, the expiration date of the RCA Authorization, and,
where applicable, the relevant service area designation. Each of the Acquired
Companies validly holds the RCA Authorizations which represent all the RCA
authorizations required in connection with the ownership and operation of the
Acquired Companies’ telecommunications business as it is presently being
conducted. The RCA Authorizations are not subject to any restrictions,
requirements, or conditions that are not generally imposed by the RCA upon
holders of such RCA authorizations. No person other than the Acquired Companies
has any right, title or interest (legal or beneficial) in or to, or any right or
license to use, the RCA Authorizations. The RCA authorizations have been granted
to the Acquired Companies by Final Order and are in full force and effect.

3.18.3            Except as disclosed on Section 3.18.3 of the Disclosure
Schedule, each of the Acquired Companies is in material compliance with the
Communications Laws, including without limitation those relating to: (i) the
Communications Assistance for Law Enforcement Act (CALEA); (ii) E-911 Phase I
and Phase II compliance; (iii) number porting, number pooling and related number
usage and utilization reports; (iv) Telecommunications Relay Service
obligations; (v) universal service obligations; (vi) the payment of regulatory
fees; (vii) Text Telephone Devices (TTY); (viii) the submission of quarterly,
semi-annual, annual or other periodic reports or filings with the FCC or other
Governmental Body or administrative body (e.g. the National Exchange Carrier
Association (NECA) and the Universal Service Administrative Company (USAC));
(ix) compliance with the National Environmental Protection Act (NEPA) provisions
applicable to telecommunications carriers; (x) compliance with any spectrum
clearing or incumbent relocation cost sharing obligations; (xi) compliance with
FCC and FAA antenna registration and painting and lighting requirements; and
(xii) compliance with the United States Fish and Wildlife Service antenna
requirements. Except as disclosed on Section 3.18.2 of the Disclosure Schedule,
each of the Acquired Companies is in material compliance with all State
Communications Laws, including without limitation those relating to: (i)
compliance with the Alaska Fish and Wildlife Service antenna requirements; and
(ii) compliance with the Alaska Department of Natural Resources antenna
requirements.

3.18.4            There are no objections, petitions to deny, complaints (formal
or informal) competing applications, investigation or letter of inquiry, or
other proceedings pending before the FCC or any other Governmental Body having
jurisdiction over any of the Acquired Companies or the Telecom Licenses relating
to any of the Acquired Companies or the Telecom Licenses. None of the Acquired
Companies have received any notice of any claim of default with respect to any
of the Telecom Licenses. Except for proceedings affecting the telecommunications
industry generally, and except as disclosed on Section 3.18.4 of the Disclosure
Schedule, there is not pending or, to the knowledge of the Sellers, threatened
against any of the Acquired Companies or the Telecom Licenses any action,
petition, objection or other pleading, investigation or letter of inquiry, or
any proceeding with the FCC or any other Governmental Body, which contests the
validity of, or seeks the revocation, forfeiture, non-renewal modification or
suspension of, the Telecom Licenses, or which would adversely affect

 

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the ability of the Acquired Companies to consummate the transactions
contemplated by this Agreement.

3.18.5            All documents required to be filed in connection with the
Telecom Licenses held by the Acquired Companies with the FCC or any other
Governmental Body have been timely filed or the time period for such filing has
not lapsed, except where such failure to timely file would not reasonably be
expected to result in the revocation, cancellation, forfeiture, non-renewal or
suspension of any authorization or license or the imposition of any monetary
forfeiture. All of such filings were complete and correct in all material
respects when filed.

3.18.6            None of the Acquired Companies are in breach or otherwise in
violation of any FCC build-out requirements with respect to any of the FCC
Licenses. Each FCC licensed station has been built out at least to the minimum
extent required by the Communications Laws. Any and all FCC notifications or
filings associated with the build-out were timely filed and were true complete
and correct when filed. There has been no discontinuance of service subsequent
to the completion of construction and certification that would cause any of the
FCC Licenses to be deemed forfeited or automatically cancelled by the FCC.

3.18.7            The Acquired Companies all are eligible to receive funding
from the federal Universal Service Fund (“USF”) program as RCA-designated
eligible telecommunications carriers (“ETCs”) and are vendors to organizations
that receive funding from the USF program. UUI and KUC (i) receive funding from
the Alaska Universal Service Fund program, (ii) participate in the Alaska
Exchange Carriers Association’s intrastate access charge pooling program and
(iii) the National Exchange Carriers Association’s interstate access charge
pooling program. UUI has received grants from the Rural Alaska Broadband
Internet Access Program and both UUI and Unicom, Inc., have received grants and
loans from Rural Utilities Services, an agency of the U.S. Department of
Agriculture. KUC has received loans from CoBank, an entity affiliated with the
U.S. Farm Credit System. Except as disclosed in Section 3.18.7 of the Disclosure
Schedule, the preceding sentence represents a complete and accurate list of all
government and government-affiliated funding, rate support, cost pooling, grant
and low-cost credit programs in which the Acquired Companies participate
(together the “Support Programs”). Except as set forth on Section 3.18.7 of the
Disclosure Schedule, the Acquired Companies are in compliance with all
conditions, covenants and other requirements of the Support Programs, are not
under investigation for potential non-compliance (and have not been under such
investigation since January 1, 2002), and do not face any regulatory,
contractual, or other action that would jeopardize their continuing
participation in such programs.

3.19Microwave Network. Section 3.19 of the Disclosure Schedule sets forth a
complete and accurate description of the microwave network that UUI and Unicom,
Inc., are deploying to provide broadband services in the Yukon-Kuskokwim Delta
(the “Microwave Network”). This description includes information on each
microwave site’s (i) stage of completion, (ii) design and documentation, (iii)
facilities and (iv) equipment as well as information on equipment and materials
procured for microwave sites not yet built. The Microwave Network has been
designed in accordance with industry standards for long-haul microwave networks.
There are no material defects or deficiencies in the design or construction of
the Microwave Network, and all construction was done in accordance with the
design documents of record. The Microwave Network was designed to perform at an
annual two way

 

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network availability level on the core network (ring protected) of 99.999% or
better and on any spur microwave hop subtending the core network at an annual
availability level of 99.995% or better per hop. The designed availability
assumed industry standard maintenance procedures are documented and performed
and excluded Force Majeure Events, human error, and network maintenance during
planned maintenance windows. All licenses, permits, and other governmental
authorizations required for the construction of the Microwave Network were
approved and received, and all design and construction work on the Microwave
Network was done in compliance with those licenses, permits, and governmental
authorizations and with applicable laws, regulations, and industry standards.
Section 3.19 of the Disclosure Schedule sets forth the additional network
construction that UUI and Unicom, Inc. plan to undertake prior to the Closing.

3.20Capital Expenditures. The Sellers have delivered to GCI copies of the
Acquired Companies’ 2007 capital expenditure budget (the “Capital Expenditure
Budget”).

3.21Accounts Receivable. All accounts receivable of the Acquired Companies that
are reflected on the Company Financial Statements or on the accounting records
of the Acquired Companies as of the Closing Date (collectively, the “Accounts
Receivable”) represent or will represent valid obligations arising from sales
actually made or services actually performed in the Ordinary Course. Unless paid
prior to the Closing Date, the Accounts Receivable are or will be as of the
Closing Date current and collectible net of the respective reserves shown on the
Company Financial Statements (which reserves are adequate and calculated
consistent with past practice). Except as set forth on Section 3.21 of the
Disclosure Schedule and subject to such reserves, each of the Accounts
Receivable either has been or will be collected in full, without any set-off,
within 90 days after the day on which it first becomes due and payable. There is
no contest, claim, or right of set-off relating to the amount or validity of
such Accounts Receivable. Section 3.21 of the Disclosure Schedule contains an
aged summary showing the amount of Accounts Receivable as of the Balance Sheet
Date for each local telephone exchange and showing the aging category for each
such local telephone exchange.

3.22Licenses and Authorizations. There is no material license, permit or other
governmental authorization issued to or held by any of the Acquired Companies
that by its terms or applicable law expires, terminates or is otherwise rendered
invalid upon the transfer of the Common Stock or the transactions contemplated
by this Agreement.

3.23Compliance With Laws. Each of the Acquired Companies has conducted its
operations in material compliance with applicable laws. The Sellers have no
knowledge of, nor has any of such parties received notice of, any violations of
law relating to the Acquired Companies, any of their operations or the Business
Assets. Neither any of the Acquired Companies nor any officer, employee or agent
of any of the Acquired Companies has directly or indirectly given or agreed to
give any gift, contribution, payment or similar benefit to any supplier,
customer, governmental official or employee or other Person who was, is or may
be in a position to help or hinder any of the Acquired Companies or made or
agreed to make any contribution, or reimbursed any political gift or
contribution made by any other Person, to any candidate for United States
federal, state, local or foreign public office, in any case, which would

 

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subject any of the Acquired Companies to any Liability or the failure to make
which in the future could adversely affect the business or prospects of any of
the Acquired Companies.

3.24Brokers. Except as set forth on Section 3.24 of the Disclosure Schedule, no
Person is entitled to any brokerage, finder’s or other fee or commission in
connection with the transactions contemplated by this Agreement based upon any
agreement, arrangement or understanding made by or on behalf of any of the
Acquired Companies or of the Sellers.

3.25Bank Accounts; Powers of Attorney. Section 3.25 of the Disclosure Schedule
sets forth a list of all bank and brokerage accounts or any other account
maintained at any financial institution maintained by the Acquired Companies,
together with a list of all authorized signatories for such accounts, and all
safe deposit boxes maintained by the Acquired Companies, and all persons
authorized to gain access thereto. Section 3.25 of the Disclosure Schedule also
sets forth a list of all powers of attorney granted by any of the Acquired
Companies.

3.26Representations Not Misleading. To the knowledge of the Sellers, no
representation or warranty by the Sellers in this Agreement, nor any summary,
exhibit or schedule furnished to GCI by the Sellers or any of the Acquired
Companies under and pursuant to, or in anticipation of this Agreement, contains
or will contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements contained herein or therein, in
light of the circumstances in which they were made, not misleading.

ARTICLE 4

REPRESENTATIONS AND WARRANTIES OF GCI

Except for representations and warranties that, by their terms, are made only as
of a specified date, all representations and warranties of the parties shall be
deemed to be made at and as of the date hereof and at and as of the Closing
Date. For purposes of applying the representations and warranties as of the
Closing Date, all references to the date of this Agreement (or words of similar
import) shall be deemed to refer to the Closing Date. GCI hereby represents and
warrants to the Sellers that:

 

4.1   Organization and Authority. GCI is an Alaska corporation duly
incorporated, validly existing, and in good standing under the laws of the State
of Alaska. GCI has all requisite corporate power and authority to enter into
this Agreement and the Transaction Agreements to which it is a party and to
consummate the transactions contemplated hereby and thereby. The execution and
delivery of this Agreement and any Transaction Agreements to which it is a party
and the consummation of the transactions contemplated hereby and thereby have
been duly authorized by all necessary corporate action on the part of GCI and no
further action is required on the part of GCI to authorize the Agreement and any
Transaction Agreements to which GCI is a party and the transactions contemplated
hereby and thereby.

4.2   Execution and Validity of Agreements. This Agreement and each of the
Transaction Agreements to which GCI is a party has been duly executed and
delivered by GCI

 

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and assuming the due authorization, execution and delivery by the other parties
hereto and thereto, constitute the valid and binding obligations of GCI
enforceable against GCI in accordance with their respective terms, subject to
applicable bankruptcy, insolvency, moratorium or other similar laws relating to
creditors’ rights and general principles of equity.

4.3   Brokers. Except as set forth on Section 4.3 of the Disclosure Schedule, no
Person is entitled to any brokerage, finder’s or other fee or commission in
connection with the transactions contemplated by this Agreement based upon any
agreement, arrangement or understanding made by or on behalf of GCI.

4.4   Representations Not Misleading. To the knowledge of GCI, no representation
or warranty by GCI in this Agreement, nor any summary, exhibit or schedule
furnished to the Sellers by GCI under and pursuant to, or in anticipation of
this Agreement, contains or will contain any untrue statement of a material fact
or omit to state a material fact necessary to make the statements contained
herein or therein, in light of the circumstances in which they were made, not
misleading. Nothing in the Disclosure Schedules will be deemed adequate to
disclose an exception to a representation or warranty made in this Agreement
unless the Disclosure Schedule identifies the exception with particularity and
describes the relevant facts in reasonable detail.

ARTICLE 5

PRE-CLOSING COVENANTS

 

5.1

Exclusivity; Acquisition Proposals.

5.1.1Unless and until this Agreement has been terminated pursuant to Section
8.1, except as required by law, none of the Sellers nor any of the Acquired
Companies shall take or cause, directly or indirectly, any of the following
actions with any Person other than GCI and the designees or agents of GCI: (i)
solicit, encourage, initiate or participate in any negotiations, inquiries or
discussions with respect to any offer or proposal to acquire the business or
assets of any of the Acquired Companies, whether by merger, consolidation, other
business combination, purchase of assets or stock, tender or exchange offer or
otherwise (each of the foregoing an “Acquisition Transaction”); (ii) disclose
any information not customarily disclosed to any Person who is or may be
requesting such information for purposes of a possible Acquisition Transaction;
(iii) agree to or execute any letter of intent, term sheet or agreement relating
to an Acquisition Transaction; or (iv) make or authorize any public statement or
solicitation with respect to any Acquisition Transaction or any offer or
proposal relating to an Acquisition Transaction other than with respect to the
transactions contemplated hereby. In the event that Sellers receive any offer or
proposal to acquire the business or assets of the Acquired Companies from a
Person other than GCI or the designees or agents of GCI, Sellers shall
immediately share such offer with GCI.

5.1.2In the event that Sellers are required by law to pursue a sale of the
Acquired Companies with a Person other than GCI or the designees or agents of
GCI and this Agreement has not been terminated pursuant to Section 8.1, Sellers
shall pay to GCI all out-of-pocket costs and expenses (including, without
limitation, all fees and expenses of counsel,

 

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advisors and consultants) incurred by GCI and its affiliates or on their behalf
in connection with this Agreement and the letter of intent dated August 23,
2007. Sellers shall make such payment within 30 days of receiving an invoice
from GCI. Such payment shall not limit any other rights available to GCI under
law or in equity. Notwithstanding anything to the contrary in this Agreement, in
no event shall such payment exceed $200,000.

 

5.2

Notices and Consents.

5.2.1GCI shall prepare and file as promptly as reasonably practicable all
documentation to effect all necessary notices, reports and other filings and to
obtain as promptly as reasonably practicable all consents, registrations,
approvals, permits and authorizations necessary or advisable to be obtained from
any third party and/or any Governmental Body in order to consummate the
transactions contemplated by this Agreement, including (i) all applications
required to be filed with the FCC and the RCA, and (ii) filings under any other
comparable pre-acquisition notification or control laws of any applicable
jurisdiction, as agreed by the Parties hereto (collectively, the “Regulatory
Consents”). The Parties agree that any reasonable fees, costs and expenses
associated with the preparation and filing of applications required to be filed
with the FCC in connection with obtaining Regulatory Consents from the FCC will
be paid 50% by GCI and 50% by the Sellers. The Parties agree that GCI will pay
any reasonable fees, costs and expenses associated with the preparation and
filing of applications required to be filed with the RCA in connection with
obtaining Regulatory Consents from the RCA.

5.2.2Each of the Sellers and GCI shall cooperate with each other and use, and
shall cause their respective Affiliates to use, their respective commercially
reasonable efforts to prepare and file the Regulatory Consents. GCI and the
Sellers shall, upon request by the other, furnish the other with all information
concerning itself, its Subsidiaries, directors, officers, members and such other
matters as may be reasonably necessary or advisable in connection with any
statement, filing, notice or application made by or on behalf of any such
parties to any Governmental Body in connection with the transactions
contemplated by this Agreement.

5.2.3None of GCI, the Sellers, nor any of their respective Affiliates shall
agree to participate in any substantive meeting or discussion with any such
Governmental Body in respect of any filing, investigation or inquiry concerning
the Regulatory Consents, this Agreement or the transactions contemplated by this
Agreement unless it consults with the other Parties reasonably in advance and,
to the extent permitted by such Governmental Body, gives the other Parties the
opportunity to attend and participate. Subject to applicable law and the
instructions of any Governmental Body, each of such Parties shall keep the
others apprised of the status of matters relating to completion of the
transactions contemplated hereby, including promptly furnishing the other with
copies of notices or other communications received by such Person from any
Governmental Body with respect to such transactions.

5.3   Preparation for Closing. Each of the Parties will use commercially
reasonable efforts to take all actions necessary, proper or advisable in order
to consummate and make effective the transactions contemplated by this Agreement
(including the satisfaction, but not the waiver, of the conditions precedent set
forth in Article 6) and the other Transaction Agreements.

 

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5.4   Notification of Certain Matters. Between the date of this Agreement and
the Closing Date, each of the Parties to this Agreement shall give prompt notice
in writing to the other Parties of: (i) any information that indicates that any
Party’s representations or warranties contained herein was not true and correct
in all material respects as of the date hereof or, to its knowledge, will not be
true and correct in all material respects at and as of the Closing Date, (ii)
the occurrence of any event that will result, or has a reasonable prospect of
resulting, in the failure of any condition specified in Article 6 to be
satisfied, (iii) any notice or other communication from any Person indicating
that such Person will not or may not grant any consent or approval required in
connection with the transactions contemplated by this Agreement or that such
transactions otherwise may violate the rights of or confer remedies upon such
Person and (iv) any other material development that occurs after the date of
this Agreement and affects the representations, warranties, covenants or
Disclosure Schedule contained herein. No notice given under this Section 5.4
will be deemed to amend or supplement any Disclosure Schedule or to prevent or
cure any misrepresentation, breach of warranty or breach of covenant of any
Party.

5.5   Other Limitations on Conduct of Business Prior to the Closing Date. Prior
to the Closing Date, unless the prior written consent of GCI shall have been
obtained (which consent shall not be unreasonably delayed or withheld) and
except as otherwise contemplated herein, the Sellers shall operate the business
of each of the Acquired Companies only in the usual, regular and Ordinary
Course. Without limiting the foregoing, unless the prior written consent of GCI
shall have been obtained (which consent shall not be unreasonably delayed or
withheld) and except as otherwise contemplated herein, prior to the Closing Date
each of the Sellers shall cause the Acquired Companies to:

5.5.1(A) conduct its business in the Ordinary Course, (B) pay or perform its
material obligations when due, subject to good faith disputes with respect
thereto, and (C) use commercially reasonable efforts to preserve intact its
present business organization;

5.5.2not amend or restate its Organizational Documents or merge, consolidate,
liquidate or dissolve;

5.5.3not authorize for issuance, issue, sell, deliver or agree or commit to
issue, sell or deliver (A) any capital stock of, or other equity or voting
interest in, any of the Acquired Companies, (B) any securities convertible into,
exchangeable for, or evidencing the right or option to subscribe for or acquire
either (1) any capital stock of, or other equity or voting interest in, any of
the Acquired Companies, or (2) any securities convertible into, exchangeable
for, or evidencing the right to subscribe for or acquire, any capital stock of,
or other equity or voting interest in, any of the Acquired Companies, (C) any
stock appreciation, phantom stock, profit participation or similar rights;

5.5.4not split, combine, redeem, reclassify, purchase or otherwise acquire
directly, or indirectly, any capital stock of, or other equity or voting
interest in, any of the Acquired Companies;

5.5.5not declare, pay or set aside for payment any dividend or make any other
distribution on its securities or make any other payment or distribution to any
of the shareholders of the Acquired Companies;

 

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BUS_RE\1394606.17

5.5.6not sell, transfer, lease, license or otherwise dispose of any assets or
properties other than in the Ordinary Course, provided that the fair market
value of such assets or properties shall not exceed twenty thousand dollars
($20,000) per item or one hundred thousand dollars ($100,000) in the aggregate;

5.5.7not make any material change in any method of accounting or accounting
practice, other than changes required by GAAP;

5.5.8not make any Tax election or accounting method change that is reasonably
likely to adversely affect in any material respect the tax liability or tax
attributes of the Acquired Companies or settle or compromise any material income
tax liability or consent to any extension or waiver of any limitation period
with respect to Taxes;

5.5.9not increase the compensation payable (including wages, salaries, bonuses
or any other remuneration) or to become payable to any officer or employee being
paid an annual base salary of $100,000 or more, or any director of any of the
Acquired Companies, or enter into any Employee Agreement with any Person, except
for (A) such increases that are required in accordance with the terms of any
Contracts binding on any of the Acquired Companies or any Employee Plans set
forth in the Disclosure Schedule, or (B) salary increases in the Ordinary
Course;

5.5.10            not make any profit sharing, pension, retirement or insurance
payment, distribution or arrangement to or with any officer, employee or agent
being paid an annual base salary of $100,000 or more, or any director of any of
the Acquired Companies, except for payments that are accrued on the company
financial statements used in determining the Closing Date Statement, and (A) are
required by the terms of any Contracts binding on an Acquired Company, or (B)
are required by the terms of any Employee Plans set forth in the Disclosure
Schedule;

5.5.11            not establish, adopt, enter into, amend or terminate any
Employee Plans or any collective bargaining, thrift, compensation or other plan,
agreement, trust, fund, policy or arrangement for the benefit of any directors,
officers or employees except as required by applicable law;

5.5.12            not acquire any Person or business, by merger or
consolidation, purchase of assets or equity interests, or by any other manner,
in a single transaction or a series of related transactions;

5.5.13            not grant any exclusive rights with respect to any
Intellectual Property Rights;

5.5.14            not enter into or renew any Contracts containing, or otherwise
subjecting any of the Acquired Companies or GCI to, any non-competition,
exclusivity or other material restrictions on any of the Acquired Companies or
GCI, or any of their respective businesses, following the Closing;

5.5.15            not make any loans, advances or capital contributions to, or
investments in, any other Person, other than loans or advances made in the
Ordinary Course;

 

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5.5.16            not incur any indebtedness for borrowed money or guarantee any
such indebtedness of another Person, issue or sell any debt securities or
options, warrants, calls or other rights to acquire any debt securities of any
of the Acquired Companies, guarantee any debt securities of another Person,
enter into any “keep well” or other agreement to maintain any financial
statement condition of any other Person or enter into any arrangement having the
economic effect of any of the foregoing, other than in connection with the
financing of ordinary course trade payables or the incurrence of indebtedness of
up to $13,500,000 (as an RUS loan), the proceeds of which are expended for the
capital expenditures set forth on Section 3.5.6 of the Disclosure Schedule;

5.5.17            not (A) enter into or terminate any Real Property Leases other
than those listed on Schedule II ; (B) create any Subsidiary; (C) release or
create any Liens or other security interests on assets of any of the Acquired
Companies, other than purchase money Liens granted in connection with additional
network construction of the Microwave Network; or (D) agree to any settlement of
any action, suit, claim, investigation or other proceeding other than in the
Ordinary Course, provided that such settlement involves no material obligation
of the Acquired Companies other than the payment of money not to exceed five
thousand dollars ($5,000) per claim or fifty thousand dollars ($50,000) in the
aggregate;

5.5.18            not: (A) make any capital expenditure or capital expenditure
commitment, other than as set forth on Section 3.5 of the Disclosure Schedule;
or (B) enter into any lease of capital equipment as lessee or lessor;

5.5.19            not sell any asset of any of the Acquired Companies or make
any commitment relating to any such assets other than in the Ordinary Course,
transfer any asset of the Acquired Companies to a shareholder, incur material
damage, destruction or loss to any assets of the Acquired Companies or have any
assets of the Acquired Companies subjected to a Lien;

5.5.20            not enter into or terminate any Contracts, other than in the
Ordinary Course, or do or fail to do anything that would cause a material breach
of, or material default under, any Contracts;

5.5.21            not increase or experience any adverse change in any
accounting assumption underlying any method of calculating bad debts,
contingencies or other reserves from that reflected in the Company Financial
Statements;

5.5.22            not cancel, write down, write off or waive any claim or right
of substantial value;

5.5.23            not pay any severance or termination pay to any officer,
director or manager of the Company, except for payments required by the terms of
any Contract binding on an Acquired Company set forth in the Disclosure
Schedule;

 

5.5.24

not enter into, add to or modify any Employee Plans;

 

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5.5.25            not change in any respect any of the material business
policies or practices of the Acquired Companies, enter into any material
transaction other than in the Ordinary Course or fail to operate the business of
Company in the Ordinary Course;

5.5.26            not file any rate case request with any third party or
Governmental Body; or

5.5.27            not enter into any Contracts or binding letter of intent with
respect to, or otherwise commit or agree, whether or not in writing, to do any
of the actions described in Sections 5.5.1 through 5.5.27, inclusive.

5.6   Capital Expenditure Requirements. In addition to the foregoing, the
Sellers shall cause the Acquired Companies to make capital expenditures in the
Ordinary Course and in a manner that will allow the Acquired Companies to
complete the construction described in Section 3.19 of the Disclosure Schedule
and in a manner consistent with the Capital Expenditure Budget.

5.7   Access to Information. The Sellers and each of the Acquired Companies
shall afford GCI and their accountants, counsel and other representatives
reasonable access during normal business hours prior to the Closing Date to (i)
all of the Sellers’ and each of the Acquired Companies’ financial statements,
properties, books, contracts, commitments and records and (ii) all other
information concerning the Acquired Companies’ business and assets as GCI may
reasonably request. No information or knowledge obtained after the date hereof
in any investigation pursuant to this Section 5.7 shall affect or be deemed to
modify any representation or warranty contained herein or the conditions to the
obligations of the Parties to consummate the transactions contemplated hereby.

5.8   Company Audited Financial Statements. The Sellers shall deliver to GCI as
soon as practicable after December 31, 2007, but in no event later than April
16, 2008 if the Closing has not occurred by such date, audited consolidated and
consolidating financial statements of the Acquired Companies, including an
unqualified audit report and balance sheet as of December 31, 2007 and the
statement of operations, changes in shareholders’ equity, and cash flows for the
year then ended (collectively, the “Company Audited Financial Statements”) if
such Company Audited Financial Statements were not required to be provided
pursuant to Section 6.2.12. The Company shall take all steps to have the
Acquired Companies’ December 31, 2007 financial statements audited as soon as
practicable. If the Closing occurs prior to such time as the Acquired Companies’
audited December 31, 2007 financial statements are needed under Section 6.2.12
and such audit is not completed, the Sellers and GCI shall cooperate to complete
such audit and allocates costs based on chargeable hours completed as of the
Closing. The Sellers shall cooperate with GCI and shall use their commercially
reasonable efforts to cause the Acquired Companies’ independent accounting firm
to deliver all necessary consents for inclusion of such firm’s audit report on
the Company Audited Financial Statements and the financial statements required
by Section 6.2.12 to be included, to the extent required, in GCI’s SEC filings
(including registration statements) from time to time. The Sellers shall also
provide unaudited interim consolidated and consolidating financial statements
for periods prior to the Closing for the Acquired Companies necessary to allow
GCI to timely complete and file required reports and filings necessary to comply
with SEC reporting obligations or necessary for the filing

 

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of registration statements that are required by Rule 3-05 of Regulation S-X
(including the corresponding period for the prior year) if such interim
financial statements were not required to be provided pursuant to Section
6.2.12.

5.9   Transfer of Manley Utility Company Assets. Prior to the Closing Date, the
Company shall cause UUI to assign, transfer and convey all real property and
buildings owned by UUI that are used in connection with the operations of MUC
(the “MUC Real Property”), to the Company or MUC, and not to an Acquired
Company. Such transfer shall be evidenced by an assignment in form and substance
satisfactory to GCI.

5.10Assignment of Cellular Switch. Prior to the closing Date, the Company shall
assign, transfer and convey the UT Starcom CDMA 2000 Cellular Switch and related
equipment to Unicom, Inc. In connection with such transfer, the Company shall
assign each Contract, including but not limited to any lease, easement, or other
rights, used in connection with such cellular switch. Such transfers shall be
evidenced by an assignment in form and substance satisfactory to GCI.

5.11Employee Benefit Plans. Prior to the Closing Date, the Company shall
transfer to UUI, and the Company shall cause UUI to assume the sponsorship of,
all Employee Benefit Plans sponsored by the Company that are applicable to
employees of the Acquired Companies. In connection with the transfer, the
Company shall notify each insurance carrier and each plan vendor (including
third party administrators and trustees) that UUI has assumed the sponsorship of
the Employee Benefit Plans. The Company shall report the change in sponsorship
on all applicable Form 5500s filed subsequent to the transfer and shall amend
all plan documents to reflect the new sponsor.

5.12Relocation of Business Assets. The Company shall relocate all tangible
Business Assets located on or within the MUC Real Property, including without
limitation the Redcom Cellular Switch, to other real property or buildings owned
or leased by the Acquired Companies. In connection with such relocation, the
Company shall cause the Acquired Companies to obtain all easements necessary to
enable the Acquired Companies to conduct their business following the relocation
in substantially the same manner as conducted prior to such relocation. If all
tangible Business Assets to be relocated pursuant to this Section have not been
moved on or before the Closing Date, then the Company or MUC, as the case may
be, shall enter into a collocation agreement for the subject equipment with the
applicable Acquired Companies for space and power at no cost, for a term
beginning on the Closing Date and ending on the earlier of (i) three (3) years
or (ii) the date on which the tangible Business Assets have been relocated in
accordance with this Section.

5.13Microwave Network Monitoring Program. Promptly, but in any event within
thirty (30) Days after the date of this Agreement, the Company shall commence a
continuous monitoring program measuring the availability performance of the
Microwave Network. The monitoring program shall track the availability of two T1
circuits, one provisioned between Bethel and Scammon Bay and the other
provisioned between Bethel and Mekoryuk. The Company shall provide GCI monthly
status reports regarding the Microwave Network and all information provided by
such monitoring program. Such monthly report shall include root cause analyses
of any outages on each of the two T1 circuits. In addition, the

 

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BUS_RE\1394606.17

Company shall make available for inspection by GCI prior to Closing all
documents relating to the design and documentation of the Microwave Network. If
either microwave ring availability performance or spur microwave hop
availability performance during the Measurement Period falls below the level
specified in Section 6.2.15, then GCI and the Sellers shall meet prior to the
Closing to determine what mitigation measures are reasonably available to remedy
the performance shortfall.

5.14No Transfers of Common Stock The Company may not sell, assign, hypothecate
or otherwise transfer any Common Stock or any interest therein (other than as
necessary to effect the transactions contemplated by this Agreement) without the
prior written consent of GCI, which GCI may withhold at its sole discretion.

5.15Cooperation. Each of the Parties, upon the reasonable request from time to
time of any other Party, shall take and cooperate with the other Parties in
taking such actions as may be reasonably necessary or desirable to consummate
the transactions contemplated hereby and to comply with the terms of this
Agreement.

5.16Confidentiality. Unless otherwise agreed to in writing by the party
disclosing (or whose Representatives disclosed) the same (a “Disclosing Party”),
each receiving party (a “Receiving Party”) will, and will cause its Affiliates,
directors, officers, employees, attorneys, accountants, consultants, and other
agents and advisors (such Affiliates and other Persons with respect to any Party
being collectively referred to as such Party’s “Representatives”) to, (i) keep
all Proprietary Information of the Disclosing Party confidential and not
disclose or reveal any such Proprietary Information to any Person other than
those Representatives of the Receiving Party who are participating in effecting
the transactions contemplated hereby or who otherwise need to know such
Proprietary Information, (ii) use such Proprietary Information only in
connection with consummating the transactions contemplated hereby and enforcing
the Receiving Party’s rights hereunder, and (iii) not use Proprietary
Information in any manner detrimental to the Disclosing Party. In the event that
a Receiving Party is requested pursuant to, or required by, applicable law or
regulation or by any legal process to disclose any Proprietary Information of
the Disclosing Party, the Receiving Party will provide the Disclosing Party with
prompt notice of such request(s) to enable the Disclosing Party to seek an
appropriate protective order. A Party’s obligations hereunder with respect to
Proprietary Information that (A) is disclosed to a third party with the
Disclosing Party’s written approval, (B) is required to be produced under order
of a court of competent jurisdiction or other similar requirements of a
governmental agency, or (C) is required to be disclosed by applicable law or
regulation will, subject in the cause of clauses (B) and (C) above to the
Receiving Party’s compliance with the preceding sentence, cease to the extent of
the disclosure so consented to or required, except to the extent otherwise
provided by the terms of such consent or covered by a protective order. In no
event will a Receiving Party be liable for any indirect, punitive, special or
consequential damages unless such disclosure resulted from its willful
misconduct or gross negligence in which event it will be liable in damages for
the Disclosing Party’s lost profits resulting directly and solely from such
disclosure. In the event this Agreement is terminated, each Party will, if so
requested by the Disclosing Party, promptly return or destroy all of the
Proprietary Information of such Disclosing Party, including all copies,
reproductions, summaries, analyses or extracts thereof or based thereon in the
possession of the Receiving Party or its Representatives; provided, however,
that the Receiving Party will not be required to return or

 

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BUS_RE\1394606.17

cause to be returned summaries, analyses or extracts prepared by it or its
Representatives, but will destroy (or cause to be destroyed) the same upon
request of the Disclosing Party. Notwithstanding the foregoing, GCI shall not
disclose any Proprietary Information to any of its Representatives that
currently or in the future may serve on the team that negotiates Interconnection
for GCI, including the current members of the negotiating team: Rick Hitz, Emily
Thatcher, Sue Keeeling, and Nancy Conklin. Sellers shall not disclose any
Proprietary Information pertaining to GCI or its Affiliates to any attorney,
paralegal/professional, other employee or Affiliate of Dorsey & Whitney LLP.
Nothing in this paragraph shall be construed to prohibit or otherwise limit the
Sellers from engaging the services of Dorsey & Whitney LLP on a matter other
than the Acquisition.

5.17Announcements. Prior to the Closing, except as may be required by law or
applicable stock exchange rules, no Party to this Agreement shall issue any
press release or make any public announcement relating to the subject matter of
this Agreement without the prior written approval of GCI and the Sellers, which
approval will not be unreasonably withheld or delayed. If any of GCI or the
Sellers believes that it is required by law or applicable stock exchange rules
to make such a public announcement, it shall promptly advise the other and use
reasonable efforts, consistent with its legal obligations, to allow the other an
opportunity to review and comment upon the announcement before the announcement
is made.

5.18Non-Disparagement. Neither Party will disparage or in any way portray in a
negative light the other Party or its Affiliates or any of such Person’s
products, services or businesses, either directly or indirectly, in the form of
oral statements, written statements, electronic communications or otherwise.
Neither Party will take any action to intentionally and improperly interfere
with the existing contractual or economic relationships of the other Party or
its Affiliates by encouraging or inducing any Person not to perform their
existing contracts with or otherwise conduct business with the other Party or
its Affiliates, provided, however, that nothing herein shall be deemed to
prohibit or change normal and customary sales and marketing activities.

5.19Assumption of Employment Agreements. Prior to the Closing Date, the Company
shall assign to UUI, and the Company shall cause UUI to assume, all employment
agreements between the Company and any employee performing work for the Acquired
Companies.

ARTICLE 6

CONDITIONS PRECEDENT

6.1   Conditions to Each Party’s Obligations. The obligations of each of the
Parties to consummate the transactions contemplated by this Agreement shall be
subject to the satisfaction or waiver of the following conditions on or prior to
the Closing Date:

6.1.1All Regulatory Consents shall have been made, obtained, granted or effected
without the imposition of any adverse condition on GCI or the Acquired Companies
and all such Regulatory Consents shall be in full force and effect as of the
Closing Date.

 

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6.1.2No temporary restraining order, preliminary or permanent injunction or
other order by court or governmental body prohibiting, preventing or restraining
the consummation of the transactions contemplated by this Agreement or the other
Transaction Agreements shall have been issued and shall not have expired or been
withdrawn or reversed and there shall be no pending or threatened litigation or
other proceeding seeking to prohibit, prevent or restrain the consummation of
such transactions.

6.2   Conditions to the Obligations of GCI. The obligations of GCI to consummate
the transactions contemplated by this Agreement shall be subject to the
satisfaction or waiver of the following conditions on or prior to the Closing
Date:

6.2.1The representations and warranties of the Sellers shall be true and correct
in all material respects as of the Closing Date with the same force and effect
as if made on and as of the Closing Date (other than any such representations
and warranties that are made as of a specified date, which shall have been true
and correct as of such specified date).

6.2.2The Sellers shall have performed in all material respects, or complied in
all material respects with, all covenants and agreements contained in this
Agreement to be performed or complied with by the Sellers prior to the Closing
Date.

6.2.3There shall not have occurred a Material Adverse Effect with respect to the
Sellers or the Acquired Companies.

6.2.4The Company shall have tendered delivery of all items required to be
delivered by it pursuant to Section 1.5.

6.2.5GCI shall have received from the Company a signed counterpart to the Escrow
Agreement.

6.2.6GCI shall receive an opinion of counsel of Kemppel, Huffman & Ellis, P.C.,
counsel for the Company, dated the Closing Date and addressed to GCI, in the
form of Exhibit D.

6.2.7GCI shall receive an opinion of counsel of Kemppel, Huffman & Ellis, P.C.,
counsel for the Company, dated the Closing Date and addressed to GCI, in the
form of Exhibit E.

6.2.8GCI shall have received resignations of all current members of the board of
directors of the Acquired Companies effective as of the Closing.

6.2.9GCI shall have received from the Company executed copies of all Tax forms
and documents required for the Section 338(h)(10) Election contemplated by
Section 9.2 to the extent that GCI has requested delivery of such forms and
documents prior to the Closing.

6.2.10            The Sellers and the Acquired Companies shall have received all
consents, including those identified in the Disclosure Schedule, as are required
to enable GCI to continue to enjoy the benefit of any governmental
authorization, lease, license, permit, contract or other

 

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agreement or instrument to or of which any of the Acquired Companies is a party
or a beneficiary.

6.2.11            GCI shall have received all consents, governmental
authorizations, permits, licenses, certifications and designations required for
it to acquire, own and operate the businesses conducted by the Acquired
Companies following the Closing in the same manner as such businesses were
conducted prior to the Closing.

6.2.12            GCI shall have received audited (including an audit report
with no qualifications) and unaudited consolidated financial statements of the
Acquired Companies necessary for GCI to comply with any applicable requirements
for filings under the Securities Act of 1933 or the Securities Exchange Act of
1934, each as amended, and the rules and regulations of the SEC promulgated
thereunder, which shall be certified by the Chief Financial Officer of the
Company as fairly presenting in all material respects the matters presented
therein and otherwise as materially consistent with the Company Financial
Statements previously provided to GCI.

6.2.13            As of the Closing Date, the Acquired Companies’ consolidated
Working Capital shall be greater than or equal to $0 and the Acquired Companies
shall have cash and marketable securities in an aggregate amount of at least
$4,000,000.

6.2.14            GCI shall have received all reports from the Company
disclosing the results of the Microwave Network monitoring program established
pursuant to Section 5.13 and a summary report specifying the duration and root
cause of any outages for the Bethel-Scammon Bay T1 circuit and Bethel-Mekoryuk
T1 circuit from the date the continuous monitoring program commenced through the
date that is five (5) Business Days before the Closing Date (the “Measurement
Period”) and a calculation and analysis of microwave ring and spur microwave hop
availability performance based on the monitoring results on the two T1 circuits.
For the purposes of calculating availability under this Section, outages
resulting from excluded Force Majeure Events, human error, and network
maintenance during planned maintenance windows shall be excluded. The
demarcation point for measuring availability is the transmission level point
(“TLP”) of the building housing the Harris microwave equipment.

6.2.15            As of the Closing Date, the Microwave Network shall have
demonstrated a two-way network availability level during the Measurement Period
of 99.995% or better between the Bethel microwave repeater and any repeater
station on the microwave ring, and two-way availability for any spur microwave
hop subtending the microwave ring during the Measurement Period shall have been
99.99% or better per hop.

6.2.16            GCI shall have received a certificate from the Company with
respect to the matters set forth in Sections 6.2.1, 6.2.2, 6.2.3, 6.2.10,
6.2.13, 6.2.14 and 6.2.15 signed for and on behalf of the Company by duly
authorized officers thereof.

6.3   Conditions to the Obligations of the Sellers. The obligations of the
Sellers to consummate the transactions contemplated by this Agreement shall be
subject to the satisfaction or waiver of the following conditions on or prior to
the Closing Date:

 

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6.3.1All representations and warranties of GCI shall be true and correct in all
material respects as of the Closing Date with the same force and effect as if
made on and as of the Closing Date (other than any such representations and
warranties that are made as of a specified date, which shall have been true and
correct as of such specified date);

6.3.2GCI shall have performed in all material respects, or complied in all
material respects with, all covenants and agreements contained in this Agreement
to be performed or complied with by GCI prior to the Closing Date;

6.3.3The Company shall have received from GCI a signed counterpart to the Escrow
Agreement;

6.3.4GCI shall have delivered all items required to be delivered by it pursuant
to Section 1.5; and

6.3.5The Sellers shall have received a certificate from GCI with respect to the
matters set forth in Sections 6.3.1 and 6.3.2 signed for and on behalf of GCI by
a duly authorized officer thereof.

ARTICLE 7

INDEMNIFICATION

7.1   By GCI. Subject to the limitations set forth in this Article 7, from and
after the Closing Date, GCI agrees to indemnify and hold harmless (in such
capacity, the “GCI Indemnifying Party”), to the fullest extent permitted by law,
the Sellers and any of their Affiliates, respectively (in such capacity, the
“Seller Indemnitee”) from, against and in respect of any Losses arising from or
otherwise related to, directly or indirectly, any of the following:

7.1.1Any breach of any representation or warranty made by or on behalf of GCI in
this Agreement (as each such representation or warranty would be read if all
qualifications as to materiality, knowledge or words of similar import were
deleted therefrom); or

7.1.2Any breach or default in performance by GCI of any covenant or other
agreement of such party contained in this Agreement.

7.2   By the Sellers. Subject to the limitations set forth in this Article 7,
from and after the Closing, (A) the Company; and (B) Sea Lion and Togiak,
severally and not jointly based on their percentage ownership of the Company;
agree to indemnify and hold harmless (in that capacity, the “Seller Indemnifying
Party”), to the fullest extent permitted by law, GCI and each of its officers,
directors, employees and Affiliates (each, in that capacity, the “GCI
Indemnitee”) from, against and in respect of any Losses arising from or
otherwise related to, directly or indirectly, any of the following:

7.2.1Any breach of any representation or warranty made by or on behalf of the
Sellers in this Agreement (as each such representation or warranty would be read
if all qualifications as to materiality, knowledge or words of similar import
were deleted therefrom);

 

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7.2.2Any breach or default in performance by the Sellers of any covenant or
other agreement of such parties contained in this Agreement;

7.2.3Any claim, Lien, notice of non-compliance or violation, notice of
liability, proceeding, consent order or consent agreement against any of the
Acquired Companies or any Person made under or in accordance with any
Environmental Laws or any Liability or obligation for injury or damages due to,
or as a result of, the presence of, effects of, or exposure to any Hazardous
Materials; or

7.2.4Any other event, act, omission, condition, fact or circumstance occurring,
existing or first arising prior to the Closing Date and relating to the Acquired
Companies or the Sellers, whether or not such event, act, omission, condition,
fact or circumstance is described in this Agreement or otherwise known to GCI or
was known to any of the Sellers or the Acquired Companies, except such as (A)
constitute or give rise to a breach of representations, warranties or covenants
of GCI under this Agreement, and (B) constitute Liabilities specifically
identified on the Closing Financial Statements.

7.3   Survival; Time Limits for Indemnification. The representations and
warranties made in this Agreement, or in any certificate or other document
delivered pursuant to this Agreement, will survive the Closing Date (even if the
damaged party knew or had reason to know of any misrepresentation or breach of
warranty at the time of Closing) for a period of three years from the Closing
Date, except that (a) the representations and warranties contained in Sections
3.8 (Tax Matters), 3.9 (Employee Benefit Plans) and 3.14 (Environmental Matters)
shall survive the Closing Date until the expiration of the applicable statutes
of limitation and (b) the representations and warranties contained in Sections
3.1 (Organization and Good Standing), 3.2 (Capitalization; Other Equity), 3.3
(Authority), 3.4 (No Conflict), 3.15.4 (Ownership of Property) and 3.25
(Representations Not Misleading) will survive the Closing Date indefinitely. The
covenants of the Parties contained in this Agreement will survive the Closing
Date indefinitely. The Sellers, on the one hand, and GCI, on the other hand,
shall promptly give written notice to the other of any facts or circumstances of
which any such Person becomes aware or has knowledge that is reasonably likely
to give rise to a claim for indemnification under this Article 7. No Party will
have any obligation to indemnify any Person pursuant to this Agreement with
respect to any breach of a representation or warranty unless a notice of such
breach is given to the Party against whom indemnification is sought on or prior
to the last day of the applicable survival period, except that if a Party has a
reasonable basis to believe that an indemnifiable claim will arise and gives
notice to the other Party concerning such matter within the survival period,
then all rights of such Party to seek indemnification with respect to such
matter will survive the expiration of such period for a period of 180 days. If
an indemnifiable claim has not arisen prior to the expiration of that 180-day
period but the Party continues to have a reasonable basis to believe that an
indemnifiable claim will arise and gives notice to such effect to the other
Party prior to the end of such 180-day period, then all rights of the Party to
seek indemnification with respect to such matter will survive for one additional
period of 180 days. If an indemnifiable claim does not arise prior to the end of
the second 180-day period, the rights of the Party to seek indemnification will
terminate at the expiration thereof. If a Party is obligated to indemnify
another Party against a particular breach, the indemnity obligation shall extend
to all Losses, whether occurring before or after the survival period.

 

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7.4

Basket and Cap.

7.4.1The Seller Indemnifying Party will have no obligation to indemnify any GCI
Indemnitee from and against any Losses under 7.2.1 until the GCI Indemnitees
have suffered Losses in the aggregate amount of $500,000 or more arising from,
or otherwise related to, directly or indirectly, any of the items set forth in
Section 7.2.1. If and when the aggregate of such Losses exceeds $500,000, the
GCI Indemnitees shall be entitled to indemnification against all Losses incurred
under Section 7.2.1, including the initial $500,000 of Losses.

7.4.2The aggregate indemnification obligations of the Sellers under Sections
7.2.1 and 7.2.4 shall not exceed 25% of the amount of the Cash Consideration.
The limits on liability contained in this Section 7.4 shall not apply to the
indemnification obligations of the Sellers under Sections 7.2.2 and 7.2.3.

7.4.3Notwithstanding anything to the contrary in this Agreement, there shall be
no limitation on any GCI Indemnitee’s right to indemnification from and against
any Losses arising directly or indirectly out of (a) any breach of any
representation, warranty or covenant of the Sellers that involves an intentional
misrepresentation or the commission of fraud by the Sellers or (b) any act or
omission or other matter arising prior to Closing that involves a claim by a
third party for material misrepresentation, fraud, gross negligence or
intentional misconduct, and each GCI Indemnitee shall have all remedies
available to it at law and in equity with respect to any such breach, act,
omission or matter.

7.5   Defense of Claims. Subject to Section 9.1.5, the procedures to be followed
with respect to the defense and settlement of any claim made by a third party
which, if true, would give rise to a right on the part of a Party to be
indemnified against resulting Losses (an “Indemnitee”), in whole or in part,
under this Article 7 (a “Claim”) shall be as follows:

7.5.1Right of Indemnifying Party to Defend. Unless in the reasonable and good
faith judgment of the Indemnitee (i) there is a material conflict between the
positions of the Party against whom indemnification is sought under this Article
7 (an “Indemnifying Party”) and the Indemnitee in conducting the defense of a
Claim or (ii) legitimate business considerations would require the Indemnitee to
defend or respond to a Claim in a manner that is materially different from the
defense or response that would be most beneficial to the Indemnifying Party, the
Indemnifying Party shall, by giving notice to the Indemnitee confirming the
Indemnifying Party’s obligation under this Article 7 to indemnify the Indemnitee
in respect of the Claim, be entitled to assume and control the defense of the
claim with counsel chosen by it and reasonably satisfactory to the Indemnitee.
The Indemnitee shall be entitled to participate in the defense after such
assumption, but the costs of such participation (other than the costs of
providing witnesses or documents at the request of the Indemnifying Party or in
response to legal process) following such assumption shall be at the expense of
the Indemnitee. Upon assuming such defense, the Indemnifying Party shall have
full right to enter into any compromise or settlement which is dispositive of
the matter involved; provided that, except for the settlement of a Claim that
involves no material obligation of the Indemnitee other than the payment of
money for which full indemnification is provided by the Indemnifying Party
hereunder, the Indemnifying Party shall not settle or compromise any Claim
without the prior written consent of the Indemnitee, which consent will not be
unreasonably delayed or withheld; and provided, further, that the

 

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Indemnifying Party may not consent to entry of any judgment or enter into any
settlement in respect of a Claim which does not include the giving by the
claimant or plaintiff to the Indemnitee of a complete and unconditional release
from all liability in respect of the Claim.

7.5.2Defense by Indemnitee. If the Indemnifying Party (i) does not have the
right to assume the defense of a Claim under Section 7.5.1 or (ii) shall not
have exercised its right to assume the defense of the Claim, the Indemnitee may
assume and control the defense of the Claim with counsel chosen by it that is
reasonably satisfactory to the Indemnifying Party and the Indemnifying Party
shall be obligated to pay all reasonable attorneys’ fees and expenses of the
Indemnitee incurred in connection with such defense; provided, however, that the
Indemnifying Party shall not be obligated to pay the fees and disbursements of
more than one counsel in each applicable jurisdiction for all Indemnitees in any
single action. The Indemnifying Party shall be entitled to participate in the
defense of such Claim, but the cost of such participation shall be at its own
expense. The Indemnitee shall not be required to defend any Claim under this
Section 7.5.2 that the Indemnifying Party had the right to defend under Section
7.5.1 and, if the Indemnitee elects to defend such a Claim, it shall owe no
duties to the Indemnifying Party with respect to the defense of such Claim, and
may defend, fail to defend or settle such Claim without affecting its right to
indemnity hereunder. The Indemnitee may compromise or settle any Claim that it
is defending at any time; provided, however, that the Indemnitee shall not
settle or compromise any Claim that the Indemnifying Party did not have the
right to defend under Section 7.5.1 without the prior written consent of the
Indemnifying Party, which consent will not be unreasonably delayed or withheld.

7.5.3Indemnitee’s Right to Settle. Without regard to whether the Indemnifying
Party or the Indemnitee is defending a Claim, if in the reasonable judgment of
the Indemnitee it would be materially harmed or otherwise materially prejudiced
by not entering into a proposed settlement or compromise and the Indemnifying
Party withholds consent to such settlement or compromise, the Indemnitee may
enter into such settlement or compromise, but such settlement or compromise
shall not be conclusive as to the existence or amount of the liability of the
Indemnifying Party to the Indemnitee.

7.5.4Cooperation. Both the Indemnifying Party and the Indemnitee shall cooperate
fully with one another in connection with the defense, compromise or settlement
of any Claim, including without limitation making available to the other all
pertinent information and witnesses within its control at reasonable intervals
during normal business hours.

7.6   Recovery from Escrow Fund. The Escrow Fund shall be available to
compensate any GCI Indemnitee for any Losses actually suffered or incurred by
the GCI Indemnitees for which the GCI Indemnitees are entitled to
indemnification pursuant to this Article 7. All claims for recovery for any Loss
or Losses from the Escrow Fund shall be made pursuant to and in accordance with,
and governed by the terms of, the Escrow Agreement.

7.7   Set-off. Subject to the limitations contained in this Article 7, GCI may
offset any Loss for which it is entitled to be indemnified under this Article 7
against any Revenue Growth Payments that subsequently become due pursuant to
Article 2. This provision is not intended to limit GCI’s right to
indemnification to amounts offset pursuant to this Section 7.7. In the event
that GCI intends to effect a set-off under this Section 7.7, it shall provide
the

 

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Sellers with notice thereof, including a reasonably detailed description of the
matter in respect of which the right to indemnification is claimed.

7.8   Limitations. Except in the case of intentional misrepresentation or the
commission of fraud, the right to be indemnified pursuant to this Article 7 will
constitute the exclusive remedy of the parties after the Closing Date for Losses
arising by virtue of a breach of any representation, warranty or covenant under
this Agreement, absent fraud.

7.9   Insurance. With respect to any Losses for which an Indemnitee is entitled
to indemnification under this Article 7 and which Losses may be covered by
insurance, such Indemnitee will be able to make a claim for indemnification (i)
to the extent that the Indemnitee has not received proceeds from insurance
applicable to such claim, (ii) in an amount equal to the Indemnitee’s applicable
deductible for such coverage, (iii) to the extent that the Loss otherwise
exceeds the applicable insurance coverage, and (iv) to the extent that the Loss
is otherwise excluded in whole or in part from any such applicable insurance
coverage. If an Indemnifying Party paid an Indemnitee for an indemnification
claim under this Agreement and the Indemnitee subsequently receives insurance
proceeds in respect of such indemnification claim, the Indemnitee shall remit
promptly to the Indemnifying Party who paid such indemnification claim the
lesser of the amount so paid by the Indemnifying Party or such insurance
proceeds.

7.10Recovery from Third Parties. With respect to any Losses for which an
Indemnitee is entitled to indemnification under this Article 7 and which Losses
may be covered by insurance, an Indemnitee shall use its commercially reasonable
efforts (and not more) to recover all insurance proceeds reasonably available.
An Indemnitee shall also use its commercially reasonable efforts (and not more)
to assist an Indemnifying Party in the recovery of any amounts reasonably
available from other third parties with respect to such Losses.

ARTICLE 8

TERMINATION

8.1   Right to Terminate. The Parties may terminate this Agreement as provided
below:

8.1.1The Sellers and GCI may terminate this Agreement by mutual written consent
at any time prior to the Closing.

8.1.2GCI may terminate this Agreement by giving written notice to the Sellers at
any time prior to the Closing (i) in the event the Sellers have breached any
representation, warranty or covenant contained in this Agreement in a way that
would result in the nonfulfillment of the conditions to the obligations of GCI
hereunder, GCI has notified each of the Sellers of the breach, and the breach
has not been cured within ten (10) days after the notice of breach or such
longer period as agreed by the Parties, or (ii) if the Closing has not occurred
on or before December 31, 2008 because of the failure of any condition precedent
to the obligations of GCI to consummate the Closing (unless the failure results
primarily from GCI breaching any representation, warranty or covenant contained
in this Agreement).

 

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8.1.3The Sellers may terminate this Agreement by giving written notice to GCI at
any time prior to the Closing (i) if GCI has breached any representation,
warranty or covenant contained in this Agreement in a way that would result in
the nonfulfillment of the conditions to the obligations of the Sellers
hereunder, the Sellers have notified GCI of the breach, and the breach has not
been cured within ten (10) days after the notice of breach or such longer period
as agreed by the Parties or (ii) if the Closing has not occurred on or before
December 31, 2008 because of the failure of any condition precedent to the
obligations of the Sellers to consummate the Closing (unless the failure results
primarily from the Sellers breaching any representation, warranty or covenant
contained in this Agreement).

8.2   Effect of Termination. The termination of this Agreement by a Party
pursuant to Section 8.1.2 or 8.1.3 will in no way limit any obligation or
liability of any other Party based on or arising from a breach or default by
such other Party with respect to any of its representations, warranties,
covenants or agreements contained in this Agreement prior to the termination,
and the terminating Party will be entitled to seek all relief to which it is
entitled under applicable law.

ARTICLE 9

POST-CLOSING COVENANTS

 

9.1

Tax Matters.

9.1.1The Sellers shall be responsible for the preparation of drafts of all Tax
Returns of the Acquired Companies for all tax periods ending on or prior to the
Closing Date (“Final Tax Returns”) and the submission of the Final Tax Returns
to GCI for its review and filing at least sixty (60) days before the due dates
thereof; in the case of the state income or franchise tax returns for the
Acquired Companies, such return shall be prepared by the Acquired Companies’
current accounting firm in a manner consistent with past practice. The Sellers
shall submit the Final Tax Returns to GCI’s corporate tax department in a form
suitable for immediate filing together with all schedules, supplemental forms
and other attachments required by applicable law for such Tax Returns, including
such schedules and forms necessary for the Section 338(h)(10) Election. The
Sellers shall consult with GCI regarding any material issue that GCI may have
with any matter reported on the Final Tax Returns as presented by the Sellers
and shall attempt in good faith to resolve any such issues. In the event any
such matter is not resolved to GCI’s satisfaction, the Sellers shall submit such
matter to tax counsel or an independent accounting firm reasonably acceptable to
GCI and the determination of such counsel or independent accounting firm shall
be binding on GCI and the Sellers. The Final Tax Returns (i) shall be signed on
behalf of the Acquired Companies by one or more of the officers of the Company
as appropriate in their official capacities with the Acquired Companies as of
the day immediately preceding the Closing Date and (ii) shall include such
schedules and forms necessary for the Section 338(h)(10) Election. Following the
procedure outlined above the Company shall file all Final Tax Returns.

9.1.2The Sellers shall be liable for income Taxes that may be imposed on the
Acquired Companies or the Sellers for any taxable period that ends on or before
the Closing Date, including transactions deemed to occur as a result of the
Section 338(h)(10) Election.

 

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9.1.3The Sellers shall be liable for Taxes other than income Taxes that may be
imposed on the Sellers for any taxable period that ends on or before the Closing
Date, including transactions deemed to occur as a result of the Section
338(h)(10) Election.

9.1.4With respect to any taxable period that begins before the Closing Date but
ends after the Closing Date, the Sellers shall pay the Taxes attributable to the
portion of such period ending on the Closing Date (inclusive thereof). The
amount of such Taxes attributable to such parties for such period shall be
determine on a daily pro-rata basis, unless the parties agree otherwise. With
respect to any Tax Return required to be filed by the Acquired Companies for any
period that includes a period (or portion thereof) ending on or prior to the
Closing Date, GCI shall provide the Sellers with copies of such Tax Return at
least 30 days prior to the due date for the filing of such Tax Return for the
Sellers’ review. GCI shall make any changes requested by the Sellers that are
consistent with and not in possible violation of any applicable laws.

9.1.5The Sellers and GCI will provide each other with such cooperation and
information as any of them reasonably may request of each other in matters
pertinent to the subject matter covered by this Section 9.1.5. GCI will retain
all Tax Returns, schedules and work papers and all material records or other
documents relating to Tax matters of the Acquired Companies until the expiration
of all applicable statute of limitations for further assessment. GCI shall
notify the Sellers in writing in the case of an audit or legal proceeding that
relates to periods ending on or prior to the Closing Date and the Sellers shall
have the right at their own expense to participate in and control the conduct of
such audit or proceeding to the extent that such audit or proceeding relates to
a potential adjustment for which the Sellers would be liable. With respect to a
potential adjustment of Taxes of the Acquired Companies for which both the
Sellers and GCI could be liable, or which involves an issue that recurs in any
period ending after the Closing Date (whether or not the subject of an audit at
such time), (i) both GCI and the Sellers may participate at their own expense in
the audit or proceeding and (ii) the audit or proceeding shall be controlled by
that Party which would bear the burden of the greater portion of the sum of the
adjustment and any corresponding adjustments that may reasonably be anticipated
for a future Tax period. Neither GCI nor the Sellers shall enter into any
compromise or agree to settle any claim pursuant to any Tax audit or proceeding
which would adversely affect the other Party for such year or a subsequent year
without the written consent of the other Party, which consent may not be
unreasonably withheld or delayed.

9.1.6At the request of GCI, at the Closing, the Company shall promptly join with
GCI in making an election (the “Section 338(h)(10) Election”) under Section
338(h)(10) of the Code and the Treasury Regulations promulgated thereunder and
any corresponding rules of any other jurisdiction, with respect to the purchase
of the Common Stock hereunder. Incident thereto, the Company agrees to include
any income, gain, loss, deduction or other Tax item resulting from the Section
338(h)(10) Election on its Tax Return to the extent required by applicable law.
GCI will be responsible for completing and filing the Tax forms in each state,
federal and other jurisdiction necessary to make any Section 338(h)(10) Election
and any corresponding election. The “aggregate deemed sale price,” determined in
accordance with Section 338 of the Code and Treasury Regulations promulgated
thereunder, shall be allocated among the assets of the Acquired Companies in the
manner set forth below. If any of such forms are required to be signed by the
Company then the Company agrees to sign and return such

 

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signed forms to GCI within ten days of receipt. The Company agrees to attach a
copy of such forms to its tax returns as required.

9.1.7GCI shall prepare an allocation of the purchase price among the assets of
the Acquired Companies based upon the following methodology: first, to tangible
fixed assets, the fair market value as reasonably determined by GCI; second, to
all other assets (other than intangibles and goodwill) GAAP value as reflected
on the Closing Financial Statements; and third, the remainder to goodwill and
other intangibles. GCI shall submit to the Company the preliminary allocation no
later than 90 days after the Closing Date. The Company shall have up to ten days
to review such allocation and comment thereon, after which time GCI and the
Company shall endeavor to mutually agree on an allocation. In the event that GCI
and the Company are unable to agree to an allocation of the purchase price in
accordance with this Section 9.1.7, any such dispute shall be resolved by an
independent accounting firm reasonably acceptable to both GCI and the Company,
the decision of which shall be binding on, and the cost of which shall be shared
equally by, GCI and the Company. GCI and the Company shall thereafter jointly
complete, and the Acquired Companies and GCI shall separately file, Form 8883’s
with the respective Tax Returns for the tax year in which the Closing Date
occurs in accordance with such allocation, and no Party shall take any position
on any Tax Return or before any governmental entity charged with the collection
of any Tax or in any legal proceeding that is in any manner inconsistent with
the terms of such conclusive allocation without written consent of the other
Parties unless required to do so by applicable law.

 

9.2

Additional Covenants.

9.2.1For a period of ten (10) years from the date of this Agreement, GCI shall
provide funding to the Company’s existing scholarship program described on
Schedule 9.2.1 at an annual funding level of no less than $300,000 per calendar
year, which amount shall be subdivided into one hundred fifty (150) student
scholarships at a value of two thousand dollars ($2,000) each. No less than 25
such scholarships shall be allocated to residents of Hooper Bay. GCI shall also
provide adequate administrative support for such program. All scholarship awards
shall be made by a committee composed of the then-current chief executive
officer of KUC and UUI, three members of the board of directors of Sea Lion, and
one member of the board of directors of Togiak. GCI shall reimburse all
reasonable travel expenses of such committee members, provided that GCI has
received adequate documentation supporting such expenses.

9.2.2For a period of ten (10) years from the date of this Agreement, GCI or its
Affiliates shall provide T-1 Internet connectivity service to the Hooper Bay
E-Commerce Center at no charge.

9.2.3GCI shall cause the Acquired Companies to provide funds to the Company to
satisfy its obligations to pay the incremental obligations owed to the current
chief executive officer of the Company at the Closing under the terms of the
second amendment to the CEO’s employment agreement dated October 5, 2007, a copy
of which has been provided to GCI.

9.2.4To the extent that the Company requests within twelve (12) months after the
Closing Date, GCI shall cause the Acquired Companies to allow MUC to attach its

 

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transmission lines to the existing poles owned by the Acquired Companies in the
village of Manley at no cost for a period equal to the remaining useful life of
such existing poles.

9.2.5GCI shall maintain or cause the Acquired Companies to maintain reasonable
D&O insurance coverage for the former directors of the Acquired Companies for a
period of at least three years beginning on the Closing Date. This insurance
shall be procured at the expense of GCI or the Acquired Companies.

9.2.6GCI shall maintain or cause the Acquired Companies to maintain a
maintenance program for the Microwave Network for a period of at least three (3)
years beginning on the Closing Date. Such maintenance program shall be adopted
by the Company with GCI’s agreement prior to the Closing Date.

9.2.7In addition, GCI shall direct the Acquired Companies to satisfy their
express responsibilities under each Acquired Companies "employee benefit plan",
as that term is defined in ERISA Section 3(3), to the extent vested and in
effect as of the date of this Agreement, including any vested interest any
employee of the Acquired Companies may have in any written nonqualified deferred
compensation arrangement.

ARTICLE 10

MISCELLANEOUS

10.1Arbitration. The Parties will attempt in good faith to resolve any
controversy or claim arising out of or relating to this Agreement or any other
Transaction Agreement through discussions between the senior management of the
Parties. As part of this process, either party may request a mediation. If these
attempts are unsuccessful, the Parties agree that any action asserting a claim
by one Party against any other Party or Parties hereto (collectively, the
“Disputing Parties”) arising out of or relating to this Agreement or any other
Transaction Agreement shall, on the written notice by one Disputing Party to the
others, be submitted to binding arbitration to be held in Anchorage, Alaska. The
arbitration shall be conducted by and in accordance with the Commercial
Arbitration Rules of the American Arbitration Association. The Disputing Parties
shall hold an initial meeting within 30 days from receipt of notice from the
requesting Party of a request for arbitration. Unless otherwise agreed in
writing, they will jointly appoint a mutually acceptable arbitrator not
affiliated with any of the Disputing Parties. If they are unable to agree upon
such appointment within 30 days of the initial meeting, the Disputing Parties
shall obtain an odd numbered list of not less than five potential arbitrators
from the Superior Court for the Third Judicial District, State of Alaska. Each
Disputing Party shall alternatively strike a single name from the list until
only one name remains, with such person to be the arbitrator. The Disputing
Party requesting the arbitration shall strike the first name. Each Disputing
Party shall pay an equal share of the costs related to the arbitration, unless
the arbitrator’s decision provides otherwise. Each Disputing Party shall bear
its own costs to prepare for and participate in the arbitration. Each Disputing
Party shall produce at the request of any other Disputing Party, at least 30
days in advance of the hearing, all documents to be submitted at the hearing and
such other documents as are relevant to the issues or likely to lead to relevant
information. The arbitrator shall promptly render a written decision, in
accordance with Alaska law and supported by substantial evidence in the record.
The

 

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prevailing Party shall be entitled to recover reasonable attorneys’ fees, costs,
charges and expended or incurred therein, if the arbitrator’s decision so
provides. Failure to apply Alaska law, or entry of a decision that is not based
on substantial evidence in the record, shall be additional grounds for modifying
or vacating an arbitration decision. Judgment on any arbitration award shall be
entered in any court of competent jurisdiction.

10.2Remedies. Subject to Section 10.1, all remedies under this Agreement and at
law shall be cumulative. In the event of a breach of this Agreement prior to
Closing, the Parties shall be entitled to all remedies available under
applicable law or in equity, including specific performance and other injunctive
relief, and in the event that any Party seeks an equitable remedy, the breaching
Party expressly waives, and shall not raise in any action or proceeding, the
claim or defense that an adequate remedy at law exists.

10.3Amendments and Supplements. At any time prior to the Closing Date, this
Agreement may be amended or supplemented by a written instrument signed by the
Sellers and GCI, and any such amendment shall be binding on all Parties.

10.4Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Alaska without giving effect to any
choice or conflict of laws rule or provision that would cause the application of
the domestic substantive laws of any other jurisdiction.

10.5Notices. All notices and other communications required or permitted
hereunder shall be in writing and shall be sent by any means selected by the
sender. Each such notice or other communication shall be effective (i) if given
by recognized overnight courier, one Business Day after being delivered to such
courier, addressed to the intended recipient at the address specified below or
(ii) if given by any other means, when actually received.

 

To GCI:

 

 

GCI Communication Corp.

 

2550 Denali Street, Suite 1000

 

Anchorage, AK 99503

 

Attention: Corporate Counsel

 

With a copy to (which copy shall not constitute notice to any Party):

 

 

General Communication, Inc.

 

2550 Denali Street, Suite 1000

 

Anchorage, AK 99503

 

Attention: General Manager & Executive Vice President

 

With a copy to (which copy shall not constitute notice to any Party):

 

 

Sherman & Howard L.L.C.

 

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633 Seventeenth Street, Suite 3000

 

Denver, CO 80202

 

Attention: Steven D. Miller

 

 

To the Company:

 

 

United Companies, Inc.

 

5450 A Street

 

Anchorage, AK 99518

 

Attention: President

 

With a copy to (which copy shall not constitute notice to any Party):

 

 

Kemppel, Huffman and Ellis, P.C.

 

255 East Fireweed Lane, Suite 200

 

Anchorage, Alaska 99503

 

Attention: John Andrew Leman

 

 

To Sea Lion:

 

 

Sea Lion Corporation. Inc.

 

PO Box 87

 

Hooper Bay, AK 99604

 

Attention: President

 

 

To Togiak:

 

 

Togiak Natives Limited

 

PO Box 150

 

Togiak AK 99678

 

Attention: President

 

Any Party may change its address for purposes of this Section 10.5 by notice to
the other Parties.

10.6Entire Agreement, Assignability, Etc. This Agreement (including the
Disclosure Schedules, the Exhibits, and a Letter Agreement executed by the
Parties contemporaneously with the execution of this Agreement) (i) constitutes
the entire agreement, and supersedes all other prior agreements and
understandings, both written and oral, among the Parties, or any of them, with
respect to the transactions and matters contemplated hereby, (ii) is not
intended to confer upon any Person other than the Parties hereto any rights or
remedies hereunder, (iii) shall not be assignable by a party without the prior
written consent of the other Parties and (iv) subject to that restriction, shall
be binding upon and inure to the benefit of the Parties and their successors and
assigns.

 

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10.7Exclusivity of Representations. The Sellers shall not be deemed to have made
to GCI any representation or warranty other than as expressly set forth in
Article 3. GCI shall not be deemed to have made to the Sellers any
representation or warranty other than as expressly set forth in Article 4. No
investigation made by any Party shall limit its right to rely on any
representation or warranty.

10.8Counterparts. This Agreement may be executed in any number of counterparts,
no one of which need be signed by all Parties, but all of which together shall
constitute one and the same instrument. This Agreement may be signed and
delivered by facsimile or other electronic transmission and any such signature
shall be deemed an original.

10.9Representations as to Knowledge. The representations and warranties
contained in this Agreement that are made to the “knowledge” (or words of
similar import) of any Party to this Agreement, shall be deemed to mean
knowledge in good faith after reasonable investigation and as to representations
and warranties of the Sellers, shall be the knowledge of the Sellers after such
reasonable investigation into the activities of the Acquired Companies.

10.10Headings. The section headings contained in this Agreement are inserted for
convenience only and will not affect in any way the meaning or interpretation of
this Agreement.

10.11Waivers. No failure by any Party to insist upon the strict performance of
any provision of this Agreement on one or more occasions shall constitute a
waiver of any right or remedy hereunder. Any waiver must be in writing signed by
the Party charged with the waiver. No waiver by any Party will be deemed to
extend to any prior or subsequent default, misrepresentation or breach.

10.12Severability. The invalidity or unenforceability of any term or provision
of this Agreement shall not affect the validity or enforceability of the
remaining terms and provisions hereof.

10.13Expenses. Except as specified in Section 5.1.2, whether or not the
transactions contemplated hereby are consummated, each Party shall bear its own
costs and expenses (including, without limitation, legal fees and expenses)
incurred either before or after the date of this Agreement in connection with
this Agreement or the transactions contemplated hereby.

10.14Construction. The Parties have participated jointly in the negotiation and
drafting of this Agreement. In the event an ambiguity or question of intent or
interpretation arises, this Agreement will be construed as having been drafted
jointly by the Parties and no presumption or burden of proof will arise favoring
or disfavoring any Party by virtue of the authorship of any of the provisions of
this Agreement. The Parties intend that each representation, warranty and
covenant contained herein will have independent significance. If any Party
breaches any representation, warranty or covenant contained herein in any
respect, the fact that there exists another representation, warranty or covenant
relating to the same subject matter (regardless of the relative levels of
specificity) which the Party has not breached will not detract from or mitigate
the fact that the Party is in breach of the first representation, warranty or

 

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covenant. Defined terms have the meanings specified, applicable to both singular
and plural forms. All pronouns include the masculine, feminine or neuter. The
singular or plural includes the other. The word include (and any variation) is
used in an illustrative rather than a limiting sense. The word day means a
calendar day, unless a Business Day is specified.

10.15Incorporation of Exhibits. The Exhibits and Disclosure Schedules identified
in this Agreement are incorporated herein by reference and made a part hereof.

[SIGNATURE PAGE FOLLOWS]

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BUS_RE\1394606.17

IN WITNESS WHEREOF, the Parties have duly executed this Agreement as of the date
first above written.

 

GCI COMMUNICATION CORP.

 

 

By:

/s/ Gregory F. Chapados

Name:

Gregory F. Chapados

Title:

Senior Vice President

 

 

 

 

UNITED COMPANIES, INC.

 

 

By:

/s/ Myron P. Naneng, Sr.

Name:

Myron P. Naneng, Sr.

Title:

Chairman

 

 

 

 

SEA LION CORPORATION

 

 

By:

/s/ Myron P. Naneng, Sr.

Name:

Myron P. Naneng, Sr.

Title:

President

 

 

 

 

TOGIAK NATIVES LIMITED

 

 

By:

/s/ Joe Alexie

Name:

Joe Alexie

Title:

Chairman

 

 

 

- 1 -

BUS_RE\1394606.17

EXHIBIT A

 

DEFINITIONS

 

As used in this Agreement, the following terms have the indicated meanings:

“Accounts Receivable” has the meaning set forth in Section 3.21.

“Acquired Companies” means United-KUC, Inc., an Alaska corporation, United
Utilities, Inc., an Alaska corporation, and Unicom, Inc., an Alaska corporation,
collectively.

“Acquisition” has the meaning set forth in the Recitals.

“Acquisition Transaction” has the meaning set forth in Section 5.1.

“Affiliate” means, as to any Person, another Person that controls, is controlled
by or is under common control with such Person, and control means the power,
directly or indirectly, by stock ownership, contract, family relationship,
employment, position or otherwise, to significantly influence the business
decisions of another Person.

“Agreement” has the meaning set forth in the Introduction.

“Applicable Contract” means any Contract (a) under which any of the Acquired
Companies has or may acquire any rights, (b) under which any of the Acquired
Companies has or may become subject to any obligation or liability, or (c) by
which any of the Acquired Companies or any of the assets owned or used by it is
or may become bound.

“Balance Sheet Date” has the meaning set forth in Section 3.5.1.

“Baseline Gross Revenue” has the meaning set forth in Section 2.2.1.

“Business Assets” means all assets and properties of the Acquired Companies,
whether real or personal, tangible or intangible, including, without limitation,
(a) the Telecom Licenses, (b) all furniture, office equipment, other equipment,
automobiles and other tangible personal property contained on the list delivered
to GCI pursuant to Section 3.15.1, (c) all of the Acquired Companies’ rights
under the Contracts listed on Section 3.11.1 of the Disclosure Schedule, (d) all
inventory, fixed assets and leasehold improvements, (e) all notes and accounts
receivable of the Acquired Companies, (f) all customer deposits, advance
payments, prepaid items and expenses, deferred charges, rights of offset and
credits and claims for refund, (g) all claims, rights and causes in action
against third parties and all rights to insurance proceeds relating to any
damage, destruction or impairment of the Business Assets, (h) all Intellectual
Property Rights, (i) all books of account and all customer and supplier lists
and other records related to the Acquired Companies’ businesses, and (j) all
goodwill associated with the Business Assets.

“Business Day” means any day other than a Saturday, Sunday or day on which banks
located in Anchorage, Alaska are authorized or required to close.

 

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“Capital Expenditure Budget” has the meaning set forth in Section 3.20.

“Cash Consideration” has the meaning set forth in Section 1.2.

“Claim” has the meaning set forth in Section 7.5.

“Closing” has the meaning set forth in Section 1.4.

“Closing Date” has the meaning set forth in Section 1.4.

“Closing Date Statement” has the meaning set forth in Section 1.6.2.1.

“Closing Date Shareholders’ Equity” has the meaning set forth in Section
1.6.2.1.

“Closing Payment” has the meaning set forth in Section 1.2.

“COBRA” means the Consolidated Omnibus Budget Reconciliation Act of 1985, as
amended.

“Code” means the United States Internal Revenue Code of 1986, as amended.

“Common Stock” has the meaning set forth in the Recitals.

“Communication Act” means the Communications Act of 1934, as amended.

“Communications Laws” means the Communications Act and the rules, regulations,
published policies, published decisions, published orders, published rulings,
and published notices of the FCC promulgated thereunder as well as judicial
interpretations of the Communications Act and items promulgated thereunder.

“Company” has the meaning set forth in the Introduction.

“Company Audited Financial Statements” has the meaning set forth in Section 5.8.

“Company Financial Statements” has the meaning set forth in Section 3.5.1.

“Company Indebtedness” has the meaning set forth in Section 3.5.5.

“Contract” means any agreement, contract, obligation, promise, or undertaking
(whether written or oral and whether express or implied) that is legally
binding.

“Current Assets” means, collectively, the Acquired Companies’ (i) cash,
(ii) accounts receivable (net of allowance for doubtful accounts),
(iii) inventory, (iv) prepaid expenses and (v) other current assets, all
determined in accordance with GAAP.

“Current Liabilities” means, collectively, the Acquired Companies’ (i) accounts
payable, (ii) unearned revenues, (iii) accrued liabilities, including accrued
payroll expenses and

 

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accrued liabilities for payroll, sales and use Taxes, (iv) current notes payable
and (v) other current liabilities, all determined in accordance with GAAP.

“Disclosing Party” has the meaning set forth in Section 5.16.

“Disclosure Schedule” has the meaning set forth in Article 3.

“Disputing Parties” has the meaning set forth in Section 10.1.

“Employee Agreement” means each management, employment, severance, consulting,
contractor, relocation, repatriation, expatriation, loan, visa, work permit or
other agreement, or contract (including any offer letter or any binding written
or oral agreement providing for acceleration of options, or other binding
written or oral agreement providing for compensation or benefits) between any of
the Acquired Companies or any ERISA Affiliate, on the one hand, and any employee
of an Acquired Company, on the other hand.

“Employee Plans” has the meaning set forth in Section 3.9.1.

“Environmental Laws” means all applicable laws, Environmental Permits, and
similar items of any Governmental Authority relating to the protection of human
health or safety or the environment, including: (i) all requirements pertaining
to liability for reporting, management, licensing, permitting, investigation,
and remediation of emissions, discharges, releases, or threatened releases of a
Hazardous Materials; (ii) all requirements pertaining to the protection of the
health and safety of employees or the public; and (iii) all other limitations,
restrictions, conditions, standards, prohibitions, obligations, and timetables
contained therein or in any notice or demand letter issued, entered,
promulgated, or approved thereunder. The term “Environmental Law” includes,
without limitation, (x) Federal Comprehensive Environmental Response,
Compensation, and Liability Act, 42 U.S.C. § 9601 et seq., the Federal Water
Pollution Control Act (which includes the Federal Clean Water Act), the Federal
Clean Air Act, the Federal Solid Waste Disposal Act (which includes the Resource
Conservation and Recovery Act), the Federal Toxic Substances Control Act, the
Federal Insecticide, Fungicide and Rodenticide Act, each as amended from time to
time, any regulations promulgated pursuant thereto, and any state or local
counterparts and (y) any common law or equitable doctrine (including injunctive
relief and tort doctrines such as negligence, nuisance, trespass, strict
liability, contribution and indemnification) that may impose liability or
obligations for injuries or damages due to, or threatened as a result of, the
presence of, effects of, or exposure to any Hazardous Materials.

“Environmental Permits” means all permits, licenses, authorizations,
certificates, and approvals of any Governmental Body relating to or required by
Environmental Laws and necessary for or held in connection with the conduct of
the business.

“Equity Affiliates” means all Persons in which the Company or any Subsidiaries
of the Company hold an equity interest that are not Subsidiaries of the Company
that are accounted for under the equity method of accounting in accordance with
GAAP.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

 

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“ERISA Affiliate” has the meaning set forth in Section 3.9.1.

“Escrow Agent” means Alaska Trust Company.

“Escrow Agreement” has the meaning set forth in Section 1.3.

“Escrow Amount” means Eight Million Dollars ($8,000,000).

“Escrow Fund” has the meaning set forth in Section 1.3.

“Estimated Cash Consideration” has the meaning set forth in Section 1.6.1.

“Estimated Closing Date Shareholders’ Equity” has the meaning set forth in
Section 1.6.1.

“ETCs” has the meaning set forth in Section 3.18.7.

“FCC” means the Federal Communications Commission.

“FCC Licenses” has the meaning set forth in Section 3.18.1.

“FCC Rules” means the rules, regulations, policies, instructions and orders of
the FCC.

“Filed Returns” has the meaning set forth in Section 3.8.

“Final Order” means any action or decision of the FCC, or a bureau or division
thereof under properly delegated authority, as to which (i) no request for a
stay or similar request is pending, no stay is in effect, the action or decision
has not been vacated, reversed, set aside, annulled or suspended and any
deadline for filing such request that may be designated by statute or regulation
has passed without the filing of any such request, (ii) no petition for
rehearing or reconsideration or application for review is pending and the time
for the filing of any such petition or application has passed, (iii) the FCC
does not have the action or decision under reconsideration on its own motion and
the time within which it ordinarily may effect such reconsideration has passed
and (iv) no appeal is pending or in effect including other administrative or
judicial review, and any deadline for filing any such appeal that may be
designated by statute or rule has passed.

“Final Tax Returns” has the meaning set forth in Section 9.1.1.

“Final Shareholders’ Equity” has the meaning set forth in Section 1.6.2.2.

“Force Majeure Events” means war or military operations; terrorism; sabotage;
vandalism, and other third-party aggression; insurrections or riots; tsunamis;
earthquakes; avalanches; a thirty-year storm or flood; a commercial power outage
of five days or more; or another cause (excluding radio wave propagation and
permafrost conditions) that was unforeseeable by the Company and the Acquired
Companies during the design and construction

 

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of the Microwave Network and is entirely beyond the control of the Company and
the Acquired Companies.

“GAAP” means United States generally accepted accounting principles consistently
applied from period to period.

“GCI” has the meaning set forth in the Introduction.

“GCI Indemnifying Party” has the meaning set forth in Section 7.1.

“GCI Indemnitee” has the meaning set forth in Section 7.2.

“Governmental Body” means any nation, state, county, city, town, village,
district, or other jurisdiction of any nature; federal, state, local, municipal,
foreign, or other government; governmental or quasi-governmental authority of
any nature (including any governmental agency, branch, department, official, or
entity and any court or other tribunal); multi-national organization or body; or
body exercising, or entitled to exercise, any administrative, executive,
judicial, legislative, police, regulatory, or taxing authority or power of any
nature.

“Gross Revenue” means the gross revenue generated from operations of the
Acquired Companies, GCI, or any of their respective Affiliates for services and
equipment provided to the Specified Customers, determined in accordance with
GAAP.

“Hazardous Materials” means any chemical, material, substance, element,
compound, mixture, contaminant, pollutant, toxic or hazardous material or waste
defined or regulated as toxic or hazardous or as a pollutant or contaminant or
as a waste under any applicable Environmental Law and includes, without
limitation, petroleum and petroleum products, by-products or breakdown products,
radioactive materials, urea formaldehyde insulation, asbestos containing
materials and polychlorinated biphenyls, any hazardous substance, hazardous
waste, hazardous material, pollutant or contaminant, any petroleum hydrocarbon
and any degradation product of a petroleum hydrocarbon, PCB, mold spores, or
similar substance.

“HIPAA” has the meaning set forth in Section 3.9.5.

“Indemnifying Party” has the meaning set forth in Section 7.5.1.

“Indemnitee” has the meaning set forth in Section 7.5.

“Intellectual Property Rights” means all trademarks, trademark rights, service
marks, service mark rights, trade names, trade name rights, copyrights, works of
authorship, inventions (whether patentable or not), invention disclosures,
industrial models, industrial designs, utility models, certificates of
invention, designs, emblems and logos, domain names, trade secrets,
manufacturing formulae, technical information, patents, patent applications,
moral rights, mask work registrations, franchises, franchise rights, customer
and supplier lists, and related identifying information together with the
goodwill associated therewith, product formulae, product designs, product
packaging, business and product names, slogans, rights of

 

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publicity, improvements, processes, specifications, technology, methodologies,
computer software (including all source code and object code), firmware,
development tools, flow charts, annotations, all Web addresses, sites and domain
names, all data bases and data collections and all rights therein, any other
confidential and proprietary right or information, whether or not subject to
statutory registration, as each of the foregoing rights may arise anywhere in
the world, and all related technical information, manufacturing, engineering and
technical drawings, know-how, and all pending applications and registrations of
patents, and the right to sue for past infringement, if any, in connection with
any of the foregoing, and all documents, disks, records, files, and other media
on which any of the foregoing is stored, and other proprietary rights, in the
case of each of the foregoing which is owned by any of the Acquired Companies or
used or held for use by any of the Acquired Companies in connection with any of
its businesses.

“Interim Financials” has the meaning set forth in Section 3.5.1.

“KUC” has the meaning set forth in Section 3.2.2.

“Leased Real Property” means real property leased by the Acquired Companies
pursuant to the Real Property Leases.

“Liability” means any debt, obligation, duty, or liability of any nature
(including any unknown, undisclosed, unfixed, unliquidated, unsecured,
unmatured, unaccrued, unasserted, contingent, conditional, inchoate, implied,
vicarious, joint, several or secondary liability, or any liability arising
pursuant to any Environmental Law), regardless of whether such debt, obligation,
duty, or liability would be required to be disclosed on a balance sheet prepared
in accordance with GAAP.

“Liens” means all liens, pledges, security interests, mortgages, claims, charges
and encumbrances and all options or other rights to purchase or otherwise
acquire an interest.

“Loss” means all liabilities (whether known or unknown, matured or unmatured,
stated or unstated, fixed or contingent), obligations, damages of any kind,
judgments, Liens, injunctions, charges, orders, decrees, rulings, demands,
claims, losses, assessments, Taxes, fines, penalties, expenses, fees, costs, and
amounts paid in settlement (including reasonable attorneys’ and expert witness
fees and disbursements in connection with investigating, defending or settling
any action or threatened action). For purposes of Section 7.2, any diminution in
the value of the Acquired Companies as compared to the value such entities would
have had if a representation or warranty of the Company had not been breached
shall constitute a Loss.

“Material Adverse Effect” means any effect or change that does have, or would
reasonably be expected to have, a material adverse effect on the assets,
business, condition (financial or other), operating results or prospects of a
specified Person and its subsidiaries, taken as a whole.

“Microwave Network” has the meaning set forth in Section 3.19.

“Measurement Period” has the meaning set forth in Section 6.2.14.

“MUC” means Manley Utility Company, Inc., an Alaska corporation.

 

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“MUC Real Property” has the meaning set forth in Section 5.9.

“Objection Notice” has the meaning set forth in Section 1.6.2.2.

“Ordinary Course” means the ordinary course of business, consistent with past
practices.

“Organizational Documents” means as to any corporation, its articles of
incorporation and bylaws, as amended through the relevant date.

“Owned Real Property” has the meaning set forth in Section 3.15.2.

“Party” means, individually or collectively, GCI, the Company, Sea Lion or
Togiak.

“Period One” has the meaning set forth in Section 2.1.

“Period Two” has the meaning set forth in Section 2.1.

“Period Three” has the meaning set forth in Section 2.1.

“Period Four” has the meaning set forth in Section 2.1.

“Period Five” has the meaning set forth in Section 2.1.

“Person” means an individual, and any corporation, partnership, trust, limited
liability company, association, governmental authority or any other entity or
organization.

“Proprietary Information” means all information that is disclosed pursuant to
this Agreement, regardless of the form or manner of disclosure, and any
information disclosed pursuant to the Reciprocal Non-Disclosure Agreement dated
August 21, 2007 between GCI and the Company, as amended. “Proprietary
Information” shall additionally include all notes, extracts, analyses, or
studies prepared by the Receiving Party or its Representatives based on the
Proprietary Information or any portion thereof and shall include items provided
in electronic, as well as hard copy, format. “Proprietary Information” shall not
include information that (a) is generally available to the public or becomes
generally available to the public without disclosure by a Receiving Party or its
Representatives, (b) was already in the possession of a Receiving Party or its
Representatives prior to its disclosure under this Agreement, provided that the
source of the information was not under an obligation of confidentiality to the
Disclosing Party (c) comes into the possession of a Receiving Party or its
Representatives from a source other than the Disclosing Party or its
Representatives, provided that such source is not under an obligation of
confidentiality to the Disclosing Party, or (d) is developed independently by a
Receiving Party or its Representatives without reliance on or reference to the
disclosed information.

“RCA” means the Regulatory Commission of Alaska.

“RCA Authorizations” has the meaning set forth in Section 3.18.2.

 

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“Real Property Leases” has the meaning set forth in Section 3.15.3.

“Receiving Party” has the meaning set forth in Section 5.16.

“Regulatory Consents” has the meaning set forth in Section 5.2.1.

“Representatives” has the meaning set forth in Section 5.16.

“Revenue Growth Payments” has the meaning set forth in Section 2.1.

“Revenue Sharing Period” has the meaning set forth in Section 2.1.

“Sea Lion” has the meaning set forth in the Introduction.

“SEC” means the United States Securities and Exchange Commission.

“Section 338(h)(10) Election” has the meaning set forth in Section 9.1.6.

“Seller Indemnifying Party” has the meaning set forth in Section 7.2.

“Seller Indemnitee” has the meaning set forth in Section 7.1.

“Sellers” has the meaning set forth in the Introduction.

“Shareholders’ Equity” means, without giving effect to the payment provided for
in Section 9.2.3, the aggregate net shareholders’ equity of the Acquired
Companies determined in accordance with GAAP.

“Shareholders’ Equity Excess” has the meaning set forth in Section 1.6.1.

“Shareholders’ Equity Shortfall” has the meaning set forth in Section 1.6.1.

“Shareholders’ Equity Target” has the meaning set forth in Section 1.6.1.

“Specified Customers” means each of Yukon Kuskokwim Health Corporation, Lower
Kuskokwim School District, Lower Yukon School District, Yupiit School District,
Association of Village Council Presidents, the Donlin Creek Mining Project and
Alaska Commercial Company, and any successor or wholly-owned subsidiary of any
of the foregoing.

“State Communications Laws” means the Alaska laws related to communications and
the rules, regulations, published policies, published decisions, published
orders, published rulings, and published notices of the state agencies,
including the RCA, Alaska Fish and Wildlife Service, and Alaska Department of
Natural Resources, promulgated thereunder.

“Subsidiary” means, when used with reference to an entity, any corporation,
fifty percent or more of the outstanding voting securities of which are owned
directly or indirectly by such entity or any partnership, limited liability
company, joint venture or other enterprise in which any entity has, directly or
indirectly, any equity interest.

 

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“Support Programs” has the meaning set forth in Section 3.18.7.

“Tax” means any federal, state, local or foreign income, gross receipts,
license, payroll, employment, excise, severance, stamp, occupation, premium,
windfall profits, environmental (including taxes under Section 59A of the Code),
customs duties, capital stock, franchise, profits, withholding, social security
(or similar), unemployment, disability, real property, personal property, sales,
use, transfer, registration, value added, alternative or add-on minimum,
estimated, or other tax of any kind whatsoever, including any interest, penalty,
or addition thereto, whether disputed or not.

“Tax Return” means any return, report, form or similar statement required to be
filed with respect to any tax (including any attached schedules), including,
without limitation, any information return, claim for refund, amended return or
declaration of estimated tax.

“Telecom Entities” means United Utilities, Inc., an Alaska corporation, and
Unicom, Inc., an Alaska corporation, collectively.

“Telecom Licenses” has the meaning set forth in Section 3.18.2.

“Togiak” has the meaning set forth in the Introduction.

“Transaction Agreements” means this Agreement, the Escrow Agreement and all
other instruments and agreements executed and delivered pursuant to this
Agreement.

“USF” has the meaning set forth in Section 3.18.7.

“UUI” has the meaning set forth in the Recitals.

“Working Capital” means an amount equal to Current Assets less Current
Liabilities.

“Year End Financials” has the meaning set forth in Section 3.5.1.

 

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EXHIBIT B

 

FORM OF ESCROW AGREEMENT

 

ESCROW AGREEMENT

 

dated as of _________, 2007

 

by and among

 

GCI COMMUNICATION CORP.,

 

UNITED COMPANIES, INC.

 

SEA LION CORPORATION

 

TOGIAK NATIVES LTD.

 

and

 

ALASKA TRUST COMPANY

 

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TABLE OF CONTENTS

Page

ARTICLE I

ESCROW

1.1

Definitions.

2

1.2

Establishment of the Escrow Account.

2

1.3

Investment of Escrowed Funds.

2

ARTICLE II

TRANSFER OF INTEREST IN ESCROWED FUNDS

2.1

Transfer of Interest in Escrowed Funds.

2

ARTICLE III

CLAIMS AGAINST THE ESCROWED FUNDS

3.1

Making a Claim for Indemnification.

2

ARTICLE IV

DISTRIBUTION OF THE ESCROWED FUNDS

4.1

Payment for the Escrow Claims.

2

4.2

First Scheduled Release of Escrowed Funds.

2

4.3

Second Scheduled Release of Escrowed Funds.

2

4.4

Final Release of Escrowed Funds.

2

4.5

Notice of Disbursements.

2

ARTICLE V

ESCROW TAXES

5.1

Escrow Taxes.

2

ARTICLE VI

ESCROW AGENT DUTIES AND FEES

6.1

Duties; Standard of Care.

2

6.2

Reliance.

2

6.3

Fees and Expenses.

2

6.4

Resignation or Removal of Escrow Agent.

2

ARTICLE VII

EXCULPATION AND INDEMNIFICATION OF AGENT

7.1

Liability.

2

7.2

Indemnification of the Escrow Agent.

2

ARTICLE VIII

TERM

8.1

Termination.

2

ARTICLE IX

NOTICE

9.1

Notices.

2

ARTICLE X

MISCELLANEOUS

10.1

Counterparts.

2

10.2

Governing Law.

2

10.3

Entire Agreement.

2

 

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10.4

Captions.

2

10.5

Amendment; Waiver.

2

10.6

Successors and Assigns.

2

10.7

Assignment.

2

 

 

ESCROW AGREEMENT

ESCROW AGREEMENT, dated as of _________, 2007 (this “Agreement”), is made and
entered into by and among GCI Communication Corp., an Alaska corporation
(“GCI”), United Companies, Inc., an Alaska corporation (the “Company”), Sea Lion
Corporation, an Alaska corporation (“Sea Lion”), Togiak Natives Limited, an
Alaska corporation (“Togiak” and, together with the Company and Sea Lion, the
“Sellers”), and Alaska Trust Company, as escrow agent (the “Escrow Agent”).

WHEREAS, GCI and the Sellers are parties to a Stock Purchase Agreement, dated as
of October ___, 2007 (the “Purchase Agreement”), providing, among other things,
for the purchase by GCI of the Common Stock pursuant to the terms and subject to
the conditions set forth in the Purchase Agreement;

WHEREAS, GCI and the Sellers wish to place in escrow the Escrowed Funds (defined
below), which represent a portion of the consideration payable pursuant to the
Purchase Agreement; and

WHEREAS, the Escrow Agent is willing to hold and distribute the Escrowed Funds
in accordance with the instructions of GCI and the Sellers, subject to the terms
of this Agreement.

NOW, THEREFORE, in consideration of the foregoing and the mutual
representations, warranties, covenants and agreements contained herein and in
the Purchase Agreement and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:

ARTICLE 1

 

ESCROW

1.4     Definitions. Capitalized terms used but not otherwise defined herein
shall have the meanings ascribed to such terms in the Purchase Agreement.

1.5     Establishment of the Escrow Account. On the Closing Date, GCI shall
deposit with the Escrow Agent an amount of cash equal to the Escrow Amount (the
“Escrowed Funds”) and the Escrowed Funds shall be held by the Escrow Agent in a
separate account (the “Escrow Account”), on the terms and conditions set forth
in this Agreement, to secure in part the obligations of the Sellers under
Article 7 of the Purchase Agreement. The Escrow Agent hereby agrees to act as
custodian of the Escrowed Funds and to hold and distribute the Escrowed Funds in
accordance with the terms of this Agreement.

1.6     Investment of Escrowed Funds. 1.6.1 The Escrow Agent shall invest the
Escrowed Funds upon written directions from the Sellers in (i) guaranteed
obligations of the United States of America maturing not more than ninety (90)
days from the date of purchase; (ii) a money market fund rated at least “AA” by
Standard & Poor’s Ratings Group (or an equivalent rating by Moody’s Investors
Service, Inc.) consisting of securities backed by the full faith and credit of
the U.S. Government with a maturity of ninety (90) days or less, and providing
for funds available on one Business Day advance notice; (iii) certificates of
deposit, time deposits or other interest bearing deposits, having a maturity of
not more than ninety (90) days, of Federal Deposit Insurance Corporation insured
commercial banks having total capital and surplus of at least

 

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$250,000,000, or (iv) such other investment options agreed to in writing by the
parties hereto. Portions of the Escrowed Funds not so invested may be kept in
cash pending such investment. The Escrow Agent shall have the power to withdraw
funds from the Escrow Account only in order to make such disbursements as
authorized by this Agreement. The Escrow Agent shall not invest the Escrowed
Funds except as provided in this subsection (a).

1.6.2 Any interest earned on the investment of the Escrowed Funds (the
“Interest”) shall be collected and reinvested by the Escrow Agent as part of the
Escrowed Funds pending distribution in accordance with ARTICLE 14 hereof.

1.6.3 The Escrow Agent is hereby authorized and directed to sell or liquidate
all or a portion of the instruments held in the Escrow Account whenever the
Escrow Agent shall be required to distribute all or any portion of the Escrowed
Funds pursuant to this Agreement. In the event of a sale to liquidate assets,
the Sellers shall have the right to instruct the Escrow Agent as to which
instruments shall be liquidated to obtain the cash necessary to make the
distribution.

1.6.4 Within thirty (30) days of the end of each calendar quarter, the Escrow
Agent shall deliver to GCI and the Sellers a statement of the holdings and
transactions in the Escrow Account in form and substance customarily provided to
clients of the Escrow Agent, which shall include, without limitation, Interest
earned during such quarter.

1.6.5 In no event shall any part of the Escrowed Funds be commingled with any
other funds held by the Escrow Agent or any of its Affiliates or invested in
obligations of GCI, the Sellers or any of their Affiliates.

 

ARTICLE 2

 

TRANSFER OF INTEREST IN ESCROWED FUNDS

2.4     Transfer of Interest in Escrowed Funds. Each Sellers’s interest in the
Escrowed Funds shall not be transferable or assignable, in whole or in part,
except to another Seller or Affiliate of a Seller.

ARTICLE 3

 

CLAIMS AGAINST THE ESCROWED FUNDS

3.4     Making a Claim for Indemnification. Any claim by GCI on behalf of itself
or any other GCI Indemnitee for indemnification pursuant to 7.2 of the Purchase
Agreement (an “Escrow Claim”) shall be made in accordance with this Section
13.4. GCI shall concurrently notify the Escrow Agent and the Sellers in writing
of an Escrow Claim, which notice shall set forth a description of the Escrow
Claim in reasonable detail and a description of the Losses suffered or incurred
(the “Escrow Claim Amount”). Upon receipt of notice of an Escrow Claim, the
Escrow Agent shall segregate from the Escrowed Funds, to the extent of the
unsegregated Escrowed Funds, the Escrow Claim Amount applicable thereto (each, a
“Reserve”). The Sellers may contest an Escrow Claim made under this Section 13.4
if they reasonably believe there is a basis for disputing such Escrow Claim or
disagree with the Escrow Claim Amount, by giving written notice to the Escrow
Agent and GCI (an “Objection”) within thirty (30) days after receipt of notice
of an Escrow Claim (the “Objection Period”). The timely delivery of the
Objection to an Escrow Claim or Escrow Claim Amount will give rise to a
contested claim (a “Contested Escrow Claim”). If the Objection is not delivered
prior to the termination of the Objection Period, the Sellers shall be deemed to
have accepted such Escrow Claim as valid (an “Uncontested Escrow Claim”).

 

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ARTICLE 4

 

DISTRIBUTION OF THE ESCROWED FUNDS

4.4

Payment for the Escrow Claims.

4.4.1 In the case of an Uncontested Escrow Claim, the Escrow Agent shall, within
two (2) Business Days following the expiration of an Objection Period, pay the
Reserve and applicable Interest earned on the Reserve (the “Reserve Interest”)
related to the Escrow Claim to GCI in immediately available funds by wire
transfer to such account as GCI shall have designated to the Escrow Agent.

4.4.2 In the case of a Contested Escrow Claim, the Escrow Agent shall distribute
the Reserve and applicable Reserve Interest only in accordance with the entry of
a written decision pursuant to the provisions of Section 10.1 of the Purchase
Agreement, or with the final, non-appealable judgment, order or decree of the
court or other judicial body of competent jurisdiction that decides the
underlying claim or in accordance with a duly executed and delivered settlement
agreement among GCI and the Sellers (any such decision, judgment, order, decree
or agreement being a “Determination of Escrow Claim”). If the Determination of
Escrow Claim requires payment of all or a portion of the Reserve (including any
applicable Reserve Interest) related to the Escrow Claim to GCI, the Escrow
Agent shall (i) pay such amount in immediately available funds by wire transfer
to such account as GCI shall have designated to the Escrow Agent within two (2)
Business Days of receipt of such Determination of Escrow Claim; and (ii) return
any remaining Reserve to the Escrowed Funds. If the Determination of Escrow
Claim does not require any payment to GCI, the Reserve shall be returned to the
Escrowed Funds.

4.5     First Scheduled Release of Escrowed Funds. On _______ [1st anniversary
of Closing Date] (the “First Release Date”), the Escrow Agent shall release to
the Company, by wire transfer of immediately available funds to such account as
the Sellers shall have designated to the Escrow Agent, an amount equal to (i)
Three Million Dollars ($3,000,000) plus all interest or other income earned on
such principal amount, minus (ii) the aggregate amount, if any, of the Escrowed
Funds previously distributed to GCI on behalf of itself or any other GCI
Indemnitee pursuant to Section 4.1 hereof as of the First Release Date, minus
(iii) the aggregate amount, if any, of any unresolved Escrow Claims for which
Reserves have been established pursuant to Section 3.1 hereof as of the First
Release Date. Thereafter, to the extent any Escrow Claims for which Reserves
have been established as of the First Release Date are ultimately resolved in
favor of the Sellers, the Company shall be entitled to receive that portion of
such Reserves in respect of such claims, provided, however, that at no time
shall the Company be entitled to receive any portion of such Reserves to the
extent the sum of all amounts distributed to the Company under this Section 4.2
would exceed Three Million Dollars ($3,000,000), plus the interest thereon.

4.6     Second Scheduled Release of Escrowed Funds. On _______ [2nd anniversary
of Closing Date] (the “Second Release Date”), the Escrow Agent shall release to
the Company, by wire transfer of immediately available funds to such account as
the Sellers shall have designated to the Escrow Agent, an amount equal to (i)
Six Million Dollars ($6,000,000) plus all interest or other income earned on
such principal amount, minus (ii) the aggregate amount, if any, of the Escrowed
Funds distributed to the Company pursuant to Section 4.2 hereof, minus (iii) the
aggregate amount, if any, of the Escrowed Funds distributed to GCI on behalf of
itself or any other GCI Indemnitee pursuant to Section 4.1 hereof as of the
Second Release Date, minus (iv) the aggregate amount, if any, of any unresolved
Escrow Claims for which Reserves have been

 

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established pursuant to Section 3.1 hereof as of the Second Release Date.
Thereafter, to the extent any Escrow Claims for which Reserves have been
established as of the Second Release Date are ultimately resolved in favor of
the Sellers, the Company shall be entitled to receive that portion of such
Reserves in respect of such claims, provided, however, that at no time shall the
Company be entitled to receive any portion of such Reserves to the extent the
sum of all amounts distributed to the Company under this Section 4.3 would
exceed the sum of (i) the aggregate amount, if any, of the Escrowed Funds
distributed to the Company pursuant to Section 4.2 hereof, and (ii) Three
Million Dollars ($3,000,000), plus the interest thereon.

4.7     Final Release of Escrowed Funds. Within two business days after ________
[3rd anniversary of Closing Date] (the “Termination Date”), the Escrow Agent
shall release to the Company, by wire transfer of immediately available funds to
such account as the Sellers shall have designated to the Escrow Agent, all
remaining Escrowed Funds (plus all interest or other income earned on such
Escrowed Funds) other than funds that are subject to a Reserve (and including,
without limitation, any Escrow Claim Amount for which a notice of Escrow Claim
has been given pursuant to Section 13.4 hereof but for which a Reserve has not
yet been established) as of the close of business on the Termination Date. Any
remaining Escrowed Funds shall continue to be held in escrow by the Escrow Agent
and shall be released only in accordance with the provisions of Article IV
hereof.

4.8     Notice of Disbursements. Upon the disbursement by the Escrow Agent of
any amount out of the Escrowed Funds pursuant to the terms of this Agreement,
the Escrow Agent shall promptly, but in no event later than three (3) Business
Days after such disbursement, send a written statement to GCI and the Sellers
stating the payee and the amount of the disbursement.

ARTICLE 5

 

ESCROW TAXES

5.4     Escrow Taxes. For tax purposes, the Escrowed Funds shall be the property
of the Sellers and all interest and other income earned on the Escrowed Funds
shall be the income of the Sellers. GCI and the Sellers shall file tax returns
and the Escrow Agent shall file a Form 1099 consistent with such treatment.

ARTICLE 6

 

ESCROW AGENT DUTIES AND FEES

6.4     Duties; Standard of Care. The Escrow Agent shall be obligated to perform
only such duties as are expressly set forth in this Agreement. The Escrow Agent
shall exercise the same degree of care towards the Escrowed Funds as it
exercises towards its own similar property. The Escrow Agent shall not be liable
for any mistake of fact or error of judgment or for any acts or omissions of any
kind unless caused by its own gross negligence, willful misconduct or bad faith.
The Escrow Agent shall not incur any liability for not performing any act or
fulfilling any duty, obligation or responsibility hereunder by reason of any
occurrence beyond the control of Escrow Agent (including but not limited to any
act or provision of any present or future law or regulation or governmental
authority, any act of God or war, or the unavailability of the Federal Reserve
Bank wire or telex or other wire or communication facility).

6.5     Reliance. The Escrow Agent may act in reliance upon any written notice,
request, or other document specifically provided for in this Agreement which the
Escrow Agent in good faith believes to be genuine and to have been signed or
presented by the proper party or parties. The Escrow Agent may seek legal
counsel with reference to any matter connected herewith. In

 

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the event of any ambiguity or uncertainty hereunder or in any notice,
instruction or other communication received by Escrow Agent hereunder, Escrow
Agent may, in its sole discretion, refrain from taking any action other than
retain possession of the Escrowed Funds, unless Escrow Agent receives written
instructions, signed by all parties, which eliminates such ambiguity or
uncertainty.

6.6     Fees and Expenses. All reasonable fees and expenses (including
reasonable counsel fees and disbursements) of the Escrow Agent shall be paid 50%
by GCI and 50% by the Sellers, except for any such fees and expenses as may
arise from the Escrow Agent’s own gross negligence, willful misconduct or bad
faith, which shall be borne by the Escrow Agent.

6.7     Resignation or Removal of Escrow Agent. 6.7.1 The Escrow Agent may
resign by giving written notice to all the other parties hereto. Such
resignation shall take effect upon delivery of the Escrowed Funds to a successor
Escrow Agent designated in writing by GCI and the Sellers, and the Escrow Agent
shall thereupon be discharged from all obligations under this Agreement, and
shall have no further duties or responsibilities in connection herewith.

6.7.2 The Escrow Agent may be removed upon written notice to the Escrow Agent
signed by GCI and the Sellers. Such removal shall take effect upon delivery of
the Escrowed Funds to a successor Escrow Agent designated in writing by all the
parties hereto, and the Escrow Agent shall thereupon be discharged from all
obligations under this agreement and shall have no further duties or
responsibilities in connection herewith. The Escrow Agent shall deliver the
Escrowed Funds without unreasonable delay after receiving the designation of a
successor Escrow Agent.

6.7.3 If after 30 days from the date of delivery of its written notice of intent
to resign or of notice of removal the Escrow Agent has not received a written
designation of a successor Escrow Agent, the Escrow Agent’s sole responsibility
shall be in its sole discretion either to retain custody of the Escrowed Funds
until it receives such designation (whereupon it shall deliver the Escrowed
Funds to the successor Escrow Agent so designated), or to apply to a court of
competent jurisdiction for appointment of a successor Escrow Agent and after
such appointment and the delivery of the Escrowed Funds to the successor Escrow
Agent so appointed, to have no further duties or responsibilities in connection
herewith.

ARTICLE 7

 

EXCULPATION AND INDEMNIFICATION OF AGENT

7.4

Liability.

7.4.1 The Escrow Agent shall have no duty to enforce any obligation of any
person to make any payment or delivery, or to direct or cause any payment or
delivery to be made, or to enforce any obligation of any person to perform any
other act. The Escrow Agent shall be under no liability to the other parties
hereto or to anyone else by reason of any failure on the part of any party
hereto or any maker, guarantor, endorser or other signatory of any document or
any other person to perform such person’s obligations under any such document.
Except for amendments to this Agreement referred to below, definitions of
capitalized terms used herein but defined in the Purchase Agreement, duly
executed and delivered settlement agreements among GCI and the Sellers and joint
instructions given to the Escrow Agent by the other parties hereto relating to
the Escrowed Funds, the Escrow Agent shall not be obligated to recognize any
agreement between any or all of the persons party hereto or referred to herein,
notwithstanding that references thereto may be made herein and whether or not it
has knowledge thereof.

7.4.2 The Escrow Agent shall not be liable to the other parties hereto or to
anyone else for any action taken or omitted by it, or any action suffered by it
to be taken or omitted, in good faith and

 

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in the exercise of its own best and reasonable judgment. The Escrow Agent may
rely conclusively and shall be protected in acting upon any order, notice,
demand, certificate, opinion or advice of counsel (including counsel chosen by
the Escrow Agent), statement, instrument, report or other paper or document (not
only as to its due execution and the validity and effectiveness of its
provisions, but also as to the truth and acceptability of any information
therein contained) which is believed by the Escrow Agent to be genuine and to be
signed or presented by the proper person or persons. The Escrow Agent shall not
be bound by any notice or demand, or any waiver, modification, termination or
rescission of this Agreement or any of the terms hereof, unless evidenced by a
writing delivered to the Escrow Agent signed by the proper party or parties and,
if the duties or rights of the Escrow Agent are affected, unless it shall
deliver its prior written consent thereto.

7.4.3 The Escrow Agent shall not be responsible for the sufficiency or accuracy
of the form of, or the execution, validity, value or genuineness of, any
document or property received, held or delivered by it hereunder, or of any
signature or endorsement thereon, or for any lack of endorsement thereon, or for
any description therein, nor shall the Escrow Agent be responsible or liable to
the other parties hereto or to anyone else in any respect on account of the
identity, authority or rights of the persons executing or delivering or
purporting to execute or deliver any document or property or this Agreement. The
Escrow Agent shall have no responsibility with respect to the use or application
of any funds or other property paid or delivered by the Escrow Agent pursuant to
the provisions hereof.

7.4.4 To the extent that the Escrow Agent becomes liable for the payment of
taxes, including withholding taxes, in respect of income derived from the
Escrowed Funds held hereunder or any payment made hereunder, the Escrow Agent
may pay such taxes. The Escrow Agent may withhold from any payment of monies
held by it hereunder such amount as the Escrow Agent estimates to be sufficient
to provide for the payment of such taxes not yet paid, and may use the sum
withheld for that purpose. The Escrow Agent shall be indemnified and held
harmless by the party or parties responsible for such taxes pursuant to Section
15.4 hereof, against any liability for taxes and for any penalties or interest
in respect of taxes, on such investment income or payments. Any payments of
income from this Escrow Account shall be subject to withholding regulations then
in force with respect to United States taxes. The parties hereto will provide
the Escrow Agent with appropriate W-9 forms for tax I.D., number certifications,
or W-8 forms for non-resident alien certifications. It is understood that the
Escrow Agent shall be responsible for income reporting only with respect to
income derived from the Escrowed Funds and is not responsible for any other
reporting.

7.5     Indemnification of the Escrow Agent. The Escrow Agent shall be
indemnified and held harmless jointly and severally by the other parties hereto
from and against any and all expenses, including counsel fees and disbursements,
or loss suffered by the Escrow Agent in connection with any action, suit or
other proceeding involving any claim, or in connection with any claim or demand,
which in any way, directly or indirectly, arises out of or relates to this
Agreement, the services of the Escrow Agent hereunder, the Escrowed Funds or
other property held by it hereunder or any income derived form the Escrowed
Funds, except for any matters resulting from its own gross negligence, willful
misconduct or bad faith. The indemnity set forth in this Section 17.5 will
survive the resignation or removal of the Escrow Agent or the termination of
this Agreement. The Escrow Agent shall have a lien for the amount of any such
expense or loss on the Escrowed Funds and other property held by it hereunder
and shall be entitled to reimburse itself from such Escrowed Funds or property
for the amount of any such expense or loss.

 

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Promptly after the receipt by the Escrow Agent of notice of any demand or claim
or the commencement of any action, suit or proceeding, the Escrow Agent shall,
if a claim in respect thereof is to be made against any of the other parties
hereto, notify such other parties thereof in writing; but the failure by the
Escrow Agent to give such notice shall not relieve any party from any liability
which such party may have to the Escrow Agent hereunder.

ARTICLE 8

 

TERM

8.4     Termination. This Agreement shall terminate upon the distribution of the
entire Escrow Account pursuant to ARTICLE 14 hereof. The obligations of GCI
pursuant to Section 16.6 hereof and the obligations of the parties hereto
pursuant to ARTICLE 15 and ARTICLE 17 hereof shall survive the termination of
this Agreement.

ARTICLE 9

 

NOTICE

9.4     Notices. Any notice, request, instruction or other document to be given
hereunder by any party to the other shall be in writing and shall be deemed to
have been duly given (i) on the date of delivery if delivered personally, (ii)
on the first Business Day following the date of dispatch if delivered by Federal
Express or other next-day courier service, or (iii) on the third Business Day
following the date of mailing if delivered by registered or certified mail,
return receipt requested, postage prepaid. Notices to Escrow Agent shall be
deemed to be given when actually received by [name of Escrow Agent’s relevant
department].

All notices hereunder shall be delivered as set forth below, or pursuant to such
other instructions as may be designated in writing by the party to receive such
notice.

If to Escrow Agent, to:

 

Alaska Trust Company

1029 W. Third Avenue, Suite 400

Anchorage, AK 99501

Attention: Brandon J. Cintula or Douglas J. Blattmachr

 

 

If to GCI, to:

 

 

GCI Communication Corp.

 

2550 Denali Street, Suite 1000

 

Anchorage, AK 99503

 

Attention: Corporate Counsel

 

 

with a copy (which shall not constitute notice) to:

 

Sherman & Howard L.L.C.

633 Seventeenth Street, Suite 3000

Denver, CO 80202

Attention: Steven D. Miller

Facsimile: (303) 298-0940

 

If to the Company, to:

 

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BUS_RE\1394606.17

 

 

United Companies, Inc.

 

5450 A Street

 

Anchorage, AK 99518

 

Attention: President

 

 

With a copy to (which copy shall not constitute notice to any Party):

 

 

Kemppel, Huffman and Ellis, P.C.

 

255 East Fireweed Lane, Suite 200

 

Anchorage, Alaska 99503

 

Attention: John Andrew Leman

 

 

If to Sea Lion, to:

 

 

Sea Lion Corporation. Inc.

 

PO Box 87

 

Hooper Bay, AK 99604

 

Attention: President

 

 

If to Togiak, to:

 

 

Togiak Natives Limited

 

PO Box 150

 

Togiak AK 99678

 

Attention: President

 

ARTICLE 10

 

MISCELLANEOUS

10.4   Counterparts. For the convenience of the parties hereto, this Agreement
may be executed in any number of counterparts, each such counterpart being
deemed an original instrument, and all such counterparts shall together
constitute the same agreement.

10.5   Governing Law. This Agreement is made and entered into in the State of
Alaska and the laws of that State shall govern the validity and interpretation
of this Agreement and the performance by the parties of their respective duties
and obligations hereunder.

10.6   Entire Agreement. This Agreement and the Purchase Agreement constitute
the entire agreement, and supersede all other prior agreements, understandings,
representations and warranties, both written and oral, among the parties, with
respect to the subject matter hereof and shall be binding upon and inure to the
benefit of the parties hereto, their respective successors, heirs, estate and
assigns.

10.7   Captions. The Articles, Section and paragraph captions herein are for
convenience of reference only, do not constitute part of this Agreement and
shall not be deemed to limit or otherwise affect any of the provisions hereof.

 

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10.8   Amendment; Waiver. Any provision of this Agreement may be amended or
waived if, and only if, such amendment or waiver is in writing and signed, in
the case of an amendment, by each of the parties hereto, or in the case of a
waiver, by the party or parties against whom the waiver is to be effective. No
failure or delay by any party in exercising any right, power or privilege
hereunder shall operate as a waiver thereof nor shall any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise
of any other right, power or privilege.

10.9   Successors and Assigns. This Agreement shall inure to the benefit of and
be binding upon the parties hereto and their respective successors and permitted
assigns. Nothing in this Agreement, express or implied, is intended to confer
upon any person other than the parties hereto, or their successors or permitted
assigns, any rights or remedies under or by reason of this Agreement.

10.10Assignment. Neither this Agreement, nor any of the rights, interests or
obligations hereunder, shall be assigned by any of the parties hereto by
operation of law or otherwise except as expressly provided in this Agreement or
with the prior written consent of the other parties; provided, however, that GCI
may pledge or assign any or all of its rights hereunder, without the prior
written consent of the other parties hereto, to (i) any of its Affiliates, or
(ii) to its lenders for security purposes only.

 

[Signature Page Follows]

 

IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by the
duly authorized officer of each party hereto as of the date first above written.

 

 

GCI COMMUNICATION CORP.

 

 

By:

 

Name:

 

Title:

 

                

 

UNITED COMPANIES, INC.

 

 

By:

 

Name:

 

Title:

 

                

 

SEA LION CORPORATION

 

 

By:

 

Name:

 

Title:

 

                

 

TOGIAK NATIVES LIMITED

 

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BUS_RE\1394606.17

 

 

By:

 

Name:

 

Title:

 

 

ALASKA TRUST COMPANY

 

 

By:

 

Name:

                Title:

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BUS_RE\1394606.17

 

EXHIBIT C

 

ILLUSTRATION OF REVENUE GROWTH PAYMENTS

 

This exhibit illustrates the operation of Article 2 using hypothetical facts.

 

Baseline Gross Revenue. Baseline Gross Revenue is calculated by aggregating all
GAAP revenues generated in calendar year 2007 by the Acquired Companies, GCI, or
any of their respective Affiliates for services and equipment provided to the
Specified Customers – the Yukon-Kuskokwim Health Corporation, Lower Kuskokwim
School District, Lower Yukon School District, Yupiit School District, the
Association of Village Council Presidents, the Donlin Creek mining project, and
the Alaska Commercial Company.

 

Gross Revenue for Each Revenue Sharing Period. Gross Revenue for each of
calendar years 2008 through 2012 shall be calculated in the same manner as
Baseline Gross Revenue.

 

Revenue Growth Payment for Each Revenue Sharing Period. For each of calendars
years 2008 through 2012, the Revenue Growth Payment shall be calculated by
subtracting Baseline Growth Revenue from the Gross Revenue for the calendar year
in question. If the resulting difference is a negative number, then GCI shall
not owe a Revenue Growth Payment to the Sellers, and the Sellers shall owe
nothing to GCI. If the resulting difference is positive, then the difference
shall be multiplied by ten percent (0.10), and the resulting product shall be
the Revenue Growth Payment owed by GCI to the Sellers.

 

Hypothetical Numbers.

 

2007 Baseline Gross Revenue is $9,000,000.

 

2008 Gross Revenue is $11,000,000.

 

2009 Gross Revenue is $8,000,000.

 

2010 Gross Revenue is 15,000,000.

 

2011 Gross Revenue is $17,000,000.

 

2012 Gross Revenue is $20,000,000.

 

Revenue Growth Payment Calculation.

 

2008: $11,000,000 - $9,000,000 = $2,000,000 x 0.10 = $300,000 Revenue Growth
Payment.

 

2009: $8,000,000 - $9,000,000 = -$1,000,000. No Revenue Growth Payment and no
payment from Sellers to GCI.

 

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2010: $15,000,000 - $9,000,000 = $6,000,000 x 0.10 = $600,000 Revenue Growth
Payment.

2011: $17,000,000 - $9,000,000 = $8,000,000 x 0.10 = $800,000 Revenue Growth
Payment.

 

2012: $20,000,000 - $9,000,000 = $11,000,000 x 0.10 = $1,100,000 Revenue Growth
Payment.

 

Aggregate 2008-12 Revenue Growth Payments = $2,800,000.

 

 

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BUS_RE\1394606.17

EXHIBIT D

 

FORM OF OPINION OF KEMPPEL, HUFFMAN & ELLIS, P.C.         

 

___________, 2008

GCI Communication Corp.

2250 Denali Street, Suite 1000

Anchorage, AK 99503

 

Re:     Stock Purchase Agreement dated as of October______, 2007, (the “Stock
Purchase Agreement”) among GCI Communication Corp., United Companies, Inc., Sea
Lion Corporation and Togiak Natives Ltd.

Ladies and Gentlemen:

We have acted as counsel to United Companies, Inc. in connection with the
preparation of the Stock Purchase Agreement and the other Documents (as defined
below). This opinion letter is provided to you pursuant to Section 6.2.6 of the
Stock Purchase Agreement. Except as otherwise indicated herein, capitalized
terms used in this opinion letter have the meanings given to them in the Stock
Purchase Agreement. For purposes of this opinion letter, the Stock Purchase
Agreement, the Escrow Agreement and the Transaction Agreements are collectively
referred to as the “Documents.”

In our capacity as counsel to United Companies, Inc., we have examined the
Documents and such other documents and records, and we have made such other
investigations, as we have deemed necessary to enable us to state the opinions
expressed below. As to certain factual matters, we have relied upon certificates
or comparable documents of officers, other representatives of the Sellers, and
upon the representations of the Sellers contained in the Stock Purchase
Agreement. In such examination, we have assumed the legal capacity of natural
persons, the genuineness of all signatures, the authenticity of all documents
submitted to us as originals, the conformity to originals of all documents and
instruments submitted to us as certified or photocopies, and the authenticity of
the originals of such documents.

When an opinion set forth below is given to the best of our knowledge, that
knowledge is limited to the actual knowledge of the individual lawyers in the
firm who have participated directly in the matters referred to our firm by
management of any of the Companies and without any special or additional
investigation undertaken for the purposes of the opinion.

 

We have furthermore assumed that GCI has all requisite power and authority to
execute, deliver, and perform the Stock Purchase Agreement and the other
agreements and instruments to be executed, delivered, or performed by it
pursuant thereto, that GCI has duly and validly executed and delivered the Stock
Purchase Agreement and such other agreements and instruments and that they
constitute valid, binding, and enforceable obligations of GCI.

 

Each opinion set forth below relating to the enforceability of any agreement or
instrument against the Sellers is subject to the following general
qualifications:

 

(i)    As to any instrument delivered by the Sellers, we assume that the Sellers
have received the agreed-to consideration therefor.

 

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BUS_RE\1394606.17

(ii)   The enforceability of any obligation of the Sellers may be limited by (i)
bankruptcy, insolvency, reorganization, receivership, moratorium, fraudulent
conveyance, marshaling, or other laws affecting the enforcement generally of
contractual parties’ or creditors rights and remedies (including such as may
deny giving effect to waivers of contractual parties’ rights) or (ii) by general
principles of equity, including, without limitation, limitations on the
availability of equitable remedies and concepts of materiality, reasonableness,
good faith and fair dealing, and other similar doctrines affecting the
enforceability of agreements generally (regardless of whether such
enforceability is considered in a proceeding at law or in equity); and

 

(iii) No opinion is given herein as to the availability of any specific or
equitable relief of any kind or as to the enforceability of any particular
equitable remedy provided in the Stock Purchase Agreement or the Documents.

 

The opinions expressed herein are limited solely to the federal law of the
United States and the law of the State of Alaska as applied by the Alaska state
courts. Subject to the limitations set forth in this letter, we have made such
examination of law as we have deemed necessary for the purposes of this opinion.
We express no opinion as to the laws of any other jurisdiction that may be
applicable as a result of the application by Alaska Courts of conflict of law
principles.

Based upon the foregoing and subject to our stated assumptions, qualifications,
and limitations, in our opinion:

ARTICLE 21Each of the Sellers and the Acquired Companies is a corporation
validly existing and in good standing under the laws of the State of Alaska.
Each of the Acquired Companies has all requisite corporate power and authority
to own or lease and operate its properties and assets and to carry on its
business as now conducted and as presently proposed to be conducted.

ARTICLE 22The execution, delivery, and performance by each of the Sellers of the
Documents are within such Seller’s corporate powers, have been duly authorized
by all necessary corporate action (including shareholder action, if necessary)
of such Seller, and do not conflict with any provisions of its Organizational
Documents or result in a violation of any applicable law or regulation.

ARTICLE 23Each of the Documents has been duly executed and delivered by each of
the Sellers and is a valid and binding obligation of such Seller enforceable
against such Seller in accordance with its terms.

ARTICLE 24None of the Sellers or any Acquired Company is required to make any
filings with or give any notice to, or obtain any consents, approvals or
authorizations from, any Governmental Body in connection with the execution,
delivery and performance by it of the Documents to which it is a party other
than those consents, approvals or authorizations which have been made or
obtained, or disclosed in the Disclosure Schedules.

ARTICLE 25Execution and delivery by each of the Sellers, and performance of its
agreements in, the Documents to which it is a party do not (i) result in the
creation of a Lien on the property of any of the Acquired Companies or the
Sellers under any Contract to which any of the Acquired Companies or any of the
Sellers is a party or by which any of the Acquired Companies’ or any of the
Sellers’ assets or properties is subject or bound, or (ii) breach, or result in
a default under, any material obligation of any of the Acquired Companies or any
Seller under any material Contract to which any of the Acquired Companies or any
of the Sellers is a party or by which any of the Acquired Companies’ or any of
the Sellers’ assets or properties is subject or bound.

 

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ARTICLE 26Based upon our review of the Organizational Documents and the stock
records of each of the Acquired Companies (i) the authorized capital stock of
United-KUC, Inc. consists of _________ shares of Common Stock, [$____] par value
per share, of which ___________ shares are issued and outstanding; (ii) the
outstanding shares of capital stock of United-KUC, Inc. have been validly issued
and are, to our knowledge, fully paid and are non-assessable, were issued free
of pre-emptive or similar rights, and are owned of record by the persons in the
amounts and types specified on Schedule I to the Purchase Agreement; (iii) the
authorized capital stock of United Utilities, Inc. consists of _________ shares
of Class A Common Stock and ___________ shares of Class B Common Stock, [$____]
par value per share of Class A stock and [$___] par value per share of Class B
stock, of which ___________ shares of Class A and ___________ shares of Class B
are issued and outstanding; (iv) the outstanding shares of capital stock of
United Utilities, Inc. have been validly issued and are, to our knowledge, fully
paid and are non-assessable, were issued free of pre-emptive or similar rights,
and are owned of record by the persons in the amounts and types specified on
Schedule I to the Purchase Agreement; (v) the authorized capital stock of
Unicom, Inc. consists of _________ shares of Common Stock, [$____] par value per
share, of which ___________ shares are issued and outstanding; and (vi) the
outstanding shares of capital stock of Unicom, Inc. have been validly issued and
are, to our knowledge, fully paid and are non-assessable, were issued free of
pre-emptive or similar rights, and are owned of record by the persons in the
amounts and types specified on Schedule I to the Purchase Agreement.

ARTICLE 27Based on our examination of the records of United Companies, Inc., and
the Acquired Companies (i) none of the Acquired Companies have issued any of its
securities which are outstanding and which are convertible into or evidencing
the right to purchase or subscribe for any shares of its stock, (ii) there are
no outstanding options, warrants, calls, subscriptions, rights, commitments or
any other instruments or agreements obligating any of the Acquired Companies to
issue any shares of its stock or any securities convertible into or evidencing
the right to purchase or subscribe for any shares of its stock and (iii) none of
the Acquired Companies is a party to any agreement with respect to the voting,
sale or transfer of any shares of its stock.

This opinion letter is furnished to you by us solely for your benefit and use in
connection with the Stock Purchase Agreement and the transactions contemplated
thereby, and may not be used or relied upon by you for any other purpose. This
opinion letter may not to be circulated, quoted, published or otherwise referred
to for any other purpose or relied upon by any other person without our prior
written consent. All of the foregoing opinions are rendered as of the date
hereof. We assume no obligation to update such opinions to reflect any facts,
changes in the law or circumstances that may hereafter come to our attention or
any changes in the law that may hereafter occur.

 

Very truly yours

 

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BUS_RE\1394606.17

EXHIBIT E

 

FORM OF OPINION OF KEMPPEL, HUFFMAN & ELLIS, P.C.

(Regulatory Opinion)

[date]

 

VIA FAX & FEDERAL EXPRESS

 

GCI Communication Corp.

 

 

Re:

Stock Purchase Agreement, dated as of [date] (the “Stock Purchase Agreement”)
between GCI Communication Corp. (“GCI” or the “Company”), United Companies, Inc.
(“UCI”), Sea Lion Corporation (“Sea Lion”), and Togiak Natives Ltd. (“Togiak”)
(together with Sea Lion, the “Sellers”)

Ladies and Gentlemen:

 

We have acted as counsel to United Companies, Inc., in connection with the
transaction contemplated by the Stock Purchase Agreement dated October ___,
2007, between the Sellers and GCI. This opinion letter is delivered to you by
Sellers pursuant to Section __ of the Stock Purchase Agreement. Except as
otherwise indicated herein, capitalized terms used in this opinion letter have
the meanings given to them in the Stock Purchase Agreement. In our capacity as
Counsel to UCI, we have examined the Stock Purchase Agreement and such other
documents and records of the Acquired Companies, and we have made such other
investigations, as we have deemed necessary to enable us to state the opinions
expressed below.

In such examination, we have assumed the legal capacity of natural persons, the
genuineness and authenticity of all documents submitted to us as originals, the
conformity with genuine and authentic originals of all documents submitted to us
as copies, the genuineness of all signatures, the power and authority of each
entity which may be a party thereto (other than Sellers and the Acquired
Companies), and the due organization, existence, qualification and authorization
to transact business of each such party (other than Sellers and the Acquired
Companies). As to questions of fact, we have relied upon certificates or
comparable documents of officers and representatives of the Sellers and upon the
representations of the Sellers contained in the Stock Purchase Agreement.

 

When an opinion set forth below is given to the best of our knowledge, that
knowledge is limited to the actual knowledge of the individual lawyers in the
firm who have participated directly in the matters referred to our firm by
management of the Acquired Companies, from consultations

 

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BUS_RE\1394606.17

with UCI, and our knowledge derived from an examination of the publicly
available files as of the close of business on _______________, 2007, of:

 

(1) the United States District Court for the District of Alaska and Ninth
Circuit Court of Appeals;

 

(2) the Superior and District Courts of Alaska, Third Judicial District and
Fourth Judicial District;

 

 

(3)

the Regulatory Commission of Alaska; and

 

 

(4)

the Federal Communications Commission.

 

We express no opinion relating to matters as to which notice may have been filed
after the dates these dockets were so examined and of which such lawyers have no
actual knowledge.

 

The law covered by the opinions expressed herein is limited to applicable
federal laws of the United States and applicable laws of the State of Alaska as
currently in effect as of the date of the signing of this letter.

 

 

On the basis of the foregoing and subject to stated qualifications, assumptions
and limitations, we are of the opinion that:

 

 

(i)

Schedule 1 to this opinion accurately lists all the FCC Licenses that have been
granted to the Acquired Companies. To the best of our knowledge, the FCC
Licenses include all licenses, permits, and authorizations from the FCC
necessary for the Acquired Companies to conduct their respective businesses as
presently conducted; such FCC Licenses have been duly and validly issued, are in
full force and effect and have not been revoked, reversed, stayed, set aside,
annulled, or suspended, and are not subject to any restrictions, requirements,
or conditions that are not generally imposed by the FCC upon holders of such FCC
Licenses. No proceedings to revoke, refuse to renew, modify or restrict such FCC
Licenses are pending or, to the best of our knowledge, threatened, and no
impediment to renewal expectancy in the normal course exists;

 

 

(ii)

Schedule 2 to this opinion accurately lists all the RCA Authorizations that have
been granted to the Acquired Companies. To the best of our knowledge, the RCA
Authorizations include all licenses, permits, and authorizations from the RCA
necessary for the Acquired Companies to conduct their respective businesses as
presently conducted or proposed to be conducted; such RCA Authorizations have
been duly and validly issued, are in full force and effect, and are not subject
to any restrictions or conditions outside the ordinary course. No proceedings to
revoke, refuse to renew, modify or restrict such RCA Authorizations are pending
or, to the best of our knowledge, threatened;

 

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BUS_RE\1394606.17

 

 

(iii)

For the period 2005 to the date hereof, the Acquired Companies have made all
reports and filings and paid all filing and/or regulatory fees required by the
FCC or RCA;

 

(iv)

Except with respect to general rulemakings, matters to which the Acquired
Companies are not named parties, and similar matters relating generally to the
telecommunications industry, (a) there are no unsatisfied adverse orders,
decrees, or rulings of the FCC or the RCA outstanding against the Acquired
Companies; (b) there are no proceedings, complaints, actions, formal inquiries,
or investigations against the Acquired Companies pending or threatened by or
before the FCC (including any pending judicial review of such an action by the
FCC) or before the RCA, except as set forth in Schedule 3; (c) none of the
Acquired Companies is a party to any complaint, action, or other proceeding at
the FCC or the RCA, including both complaints against other licensees or
applicants and rulemakings of general applicability, except as set forth in
Schedule 3; (d) none of the Acquired Companies has been the subject of any final
adverse order, decree, or ruling of the FCC or of the RCA (including any notice
of forfeiture which has not been paid); and (e) no action, suit, proceeding, or
investigation is pending or to the best of our knowledge threatened, and no
judgment, order, decree, or ruling has been entered, against the Acquired
Companies in any court or before the FCC or RCA that gives us reason to believe
that any of the Telecom Licenses will be revoked or will not be renewed in the
ordinary course or that might result in any other impairment or modification of
the rights of the Acquired Companies with respect to the Telecom Licenses;

 

 

(v)

To the best of our knowledge, the Acquired Companies are not, nor with the
passage of time or the giving of notice or both would be, in violation of the
Communications Laws or the State Communications Laws relating to the Acquired
Companies or to any properties of the Acquired Companies. To the best of our
knowledge, since [date], the Acquired Companies have not received any notice of
any violation of any governmental laws;

 

 

(vi)

All necessary consents, approvals, authorizations, licenses or orders of, or
filings, registrations or qualifications with, the Federal Communications
Commission and the Regulatory Commission of Alaska for the performance by the
Sellers of their obligations under the Stock Purchase Agreement, have been
obtained and such consents, approvals, authorizations, licenses, orders,
filings, registrations, and qualifications are in full force and effect and have
not been set aside, suspended, rescinded, or revoked; and

 

 

(vii)

The execution and delivery of the Stock Purchase Agreement, and the performance
by the Sellers of their obligations under the Stock Purchase Agreement, do not
violate the Communications Laws or the State Communications Laws.

 

 

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BUS_RE\1394606.17

The opinions expressed above are subject to and qualified in all respects by the
following:

 

 

1.

We have relied as to factual matters on documents of the Acquired Companies,
examination of public records, files and certificates on file with and, in
certain instances, telephone or other inquiry to the FCC and the RCA, including
the publicly available electronic databases of both, and have made no other
investigation or inquiry as to such factual matters.

 

 

2.

We have rendered the foregoing opinions as of the date of this opinion letter,
and do not undertake to supplement this opinion with respect to the factual
matters or changes in the law, which may hereafter occur.

 

 

3.

This opinion letter is given to you, in your capacity as purchaser under the
Stock Purchase Agreement, and may not be used or relied upon by you for any
other purpose whatsoever. This opinion letter may not, without my prior written
consent, be quoted, circulated or published, in whole or in part, or furnished
to or relied upon by any other person or entity, or otherwise referred to, or be
filed with or furnished to any governmental agency or other person or entity,
except as required by law or in connection with a governmental inquiry.

 

Very truly yours,

 

 

[[Counsel]]

 

 

 

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BUS_RE\1394606.17

Schedule I

Organization and Good Standing

 

[This schedule is not considered by the Company as material to investment
decisions by investors or prospective investors in the Company, and therefore is
not included in this filing with the Securities and Exchange Commission.]

Schedule 3.1

Organization and Good Standing

 

[This schedule is not considered by the Company as material to investment
decisions by investors or prospective investors in the Company, and therefore is
not included in this filing with the Securities and Exchange Commission.]

Disclosure Schedule 3.2.1

Liens, Restrictions on Dividends and other Distributions

 

[This schedule is not considered by the Company as material to investment
decisions by investors or prospective investors in the Company, and therefore is
not included in this filing with the Securities and Exchange Commission.]

Disclosure Schedule 3.4

Conflicts: Consents and Approvals

 

[This schedule is not considered by the Company as material to investment
decisions by investors or prospective investors in the Company, and therefore is
not included in this filing with the Securities and Exchange Commission.]

Disclosure Schedule 3.5

Financial Statements: No Undisclosed Liabilities

 

[This schedule is not considered by the Company as material to investment
decisions by investors or prospective investors in the Company, and therefore is
not included in this filing with the Securities and Exchange Commission.]

Disclosure Schedule 3.6

Absence of Certain Changes or Events

 

[This schedule is not considered by the Company as material to investment
decisions by investors or prospective investors in the Company, and therefore is
not included in this filing with the Securities and Exchange Commission.]

Disclosure Schedule 3.7

Litigation: Regulatory Actions

 

[This schedule is not considered by the Company as material to investment
decisions by investors or prospective investors in the Company, and therefore is
not included in this filing with the Securities and Exchange Commission.]

Disclosure Schedule 3.8

Tax Matters

 

[This schedule is not considered by the Company as material to investment
decisions by investors or prospective investors in the Company, and therefore is
not included in this filing with the Securities and Exchange Commission.]

Schedule 3.9

Employee Benefit Plans

 

[This schedule is not considered by the Company as material to investment
decisions by investors or prospective investors in the Company, and therefore is
not included in this filing with the Securities and Exchange Commission.]

Disclosure Schedule 3.10

Employment Matters

 

[This schedule is not considered by the Company as material to investment
decisions by investors or prospective investors in the Company, and therefore is
not included in this filing with the Securities and Exchange Commission.]

Disclosure Schedule 3.11.1

Leases, Contracts & Agreements

 

[This schedule is not considered by the Company as material to investment
decisions by investors or prospective investors in the Company, and therefore is
not included in this filing with the Securities and Exchange Commission.]

Disclosure Schedule 3.12

Risk Insurance

 

[This schedule is not considered by the Company as material to investment
decisions by investors or prospective investors in the Company, and therefore is
not included in this filing with the Securities and Exchange Commission.]

Disclosure Schedule 3.13

Intellectual Property

 

[This schedule is not considered by the Company as material to investment
decisions by investors or prospective investors in the Company, and therefore is
not included in this filing with the Securities and Exchange Commission.]

Disclosure Schedule 3.14

Environmental Matters

 

[This schedule is not considered by the Company as material to investment
decisions by investors or prospective investors in the Company, and therefore is
not included in this filing with the Securities and Exchange Commission.]

Disclosure Schedule 3.15.1

Assets; Titled Property

 

[This schedule is not considered by the Company as material to investment
decisions by investors or prospective investors in the Company, and therefore is
not included in this filing with the Securities and Exchange Commission.]

Disclosure Schedule 3.17

Transactions with Affiliates

 

[This schedule is not considered by the Company as material to investment
decisions by investors or prospective investors in the Company, and therefore is
not included in this filing with the Securities and Exchange Commission.]

Disclosure Schedule 3.18.1

Communications Regulatory Matters

 

[This schedule is not considered by the Company as material to investment
decisions by investors or prospective investors in the Company, and therefore is
not included in this filing with the Securities and Exchange Commission.]

Disclosure Schedule 3.19

Description of the Microwave Network

 

[This schedule is not considered by the Company as material to investment
decisions by investors or prospective investors in the Company, and therefore is
not included in this filing with the Securities and Exchange Commission.]

Disclosure Schedule 3.20

Capital Expenditures

 

[This schedule is not considered by the Company as material to investment
decisions by investors or prospective investors in the Company, and therefore is
not included in this filing with the Securities and Exchange Commission.]

Disclosure Schedule 3.21

Accounts Receivable Narrative

 

[This schedule is not considered by the Company as material to investment
decisions by investors or prospective investors in the Company, and therefore is
not included in this filing with the Securities and Exchange Commission.]

Disclosure Schedule 3.24

Brokers

 

[This schedule is not considered by the Company as material to investment
decisions by investors or prospective investors in the Company, and therefore is
not included in this filing with the Securities and Exchange Commission.]

Schedule 3.25

Bank and Investment Accounts; Powers of Attorney

 

[This schedule is not considered by the Company as material to investment
decisions by investors or prospective investors in the Company, and therefore is
not included in this filing with the Securities and Exchange Commission.]