EXHIBIT 2.5


                            ASSET PURCHASE AGREEMENT


                                   dated as of


                                  May     , 1996


                                      among



                           GENERAL COMMUNICATION, INC.
                         or its wholly-owned subsidiary
                              an Alaska corporation
                                    ("Buyer")

                                       and




                            ALASKA CABLEVISION, INC.
                             a Delaware corporation
                                   ("Company")



                                                          REGISTRATION STATEMENT
                                                                     Page II-253
<PAGE>

<TABLE>
                                TABLE OF CONTENTS
<CAPTION>
                                                                                                               Page

<S>               <C>                                                                                           <C>
Section 1.        Definitions...................................................................................260
                  1.1      Affiliate............................................................................260
                           ---------
                  1.2      APUC.................................................................................260
                           ----
                  1.3      APUC Certificate.....................................................................260
                           ----------------
                  1.4      Assets...............................................................................260
                           ------
                  1.5      Basic CATV Services..................................................................260
                           -------------------
                  1.6      Basic Subscriber.....................................................................261
                           ----------------
                  1.7      CATV.................................................................................261
                           ----
                  1.8      CATV Business........................................................................261
                           -------------
                  1.9      CATV Instruments.....................................................................261
                           ----------------
                  1.10     CATV System(s).......................................................................261
                           --------------
                  1.11     Closing and Closing Date.............................................................261
                           ------------------------
                  1.12     COBRA................................................................................261
                           -----
                  1.13     Company Contracts....................................................................262
                           -----------------
                  1.14     Employees............................................................................262
                           ---------
                  1.15     Employee Plans.......................................................................262
                           --------------
                  1.16     Encumbrance..........................................................................262
                           -----------
                  1.17     Equipment............................................................................262
                           ---------
                  1.18     Equivalent Basic Subscribers or EBS's................................................262
                           -------------------------------------
                  1.19     ERISA................................................................................263
                           -----
                  1.20     Excluded Assets......................................................................263
                           ---------------
                  1.21     FCC..................................................................................263
                           ---
                  1.22     Financial Statements.................................................................263
                           --------------------
                  1.23     Governmental Authority...............................................................263
                           ----------------------
                  1.24     Intangibles..........................................................................263
                           -----------
                  1.25     MDU Agreements.......................................................................263
                           --------------
                  1.26     MDU Complex..........................................................................263
                           -----------
                  1.27     Note Holdback........................................................................263
                           -------------
                  1.28     Pay TV...............................................................................264
                           ------
                  1.29     Pay TV Units.........................................................................264
                           ------------
                  1.30     Permitted Encumbrances...............................................................264
                           ----------------------
                  1.31     Person...............................................................................264
                           ------
                  1.32     Purchase Price.......................................................................264
                           --------------
                  1.33     Real Property........................................................................264
                           -------------
                  1.34     Required Consents....................................................................265
                           -----------------
                  1.35     Security Interest....................................................................265
                           -----------------
                  1.36     Service Area.........................................................................265
                           ------------
                  1.37     Subscribers..........................................................................265
                           -----------
                  1.38     System...............................................................................265
                           ------


                                                          REGISTRATION STATEMENT
                                                                     Page II-254
<PAGE>
Section 2.        Sale of Assets................................................................................265
                  2.1      Sale of Assets.......................................................................265
                           --------------
                  2.2      Purchase Price.......................................................................265
                           --------------
                  2.3      Purchase Price Adjustment............................................................266
                           -------------------------
                  2.4      Convertible, Subordinated Notes......................................................268
                           -------------------------------
                  2.5      Note Holdback........................................................................269
                           -------------
                  2.6      Allocation of Consideration..........................................................270
                           ---------------------------

Section 3.        Company's Representations, Warranties, and Covenants..........................................270
                  3.1      Organization and Qualification.......................................................270
                           ------------------------------
                  3.2      Authority............................................................................270
                           ---------
                  3.3      Enforceability.......................................................................270
                           --------------
                  3.4      Cash Flow............................................................................271
                           ---------
                  3.5      Assets...............................................................................271
                           ------
                  3.6      Governmental Permits.................................................................271
                           --------------------
                  3.7      Company Contracts....................................................................272
                           -----------------
                  3.8      Records..............................................................................272
                           -------
                  3.9      No Breach or Violation...............................................................272
                           ----------------------
                  3.10     No Finders or Brokers................................................................272
                           ---------------------
                  3.11     Schedules............................................................................272
                           ---------
                  3.12     Compliance with Laws.................................................................272
                           --------------------
                  3.13     Financial Statements.................................................................273
                           --------------------
                  3.14     Tax Returns and Other Reports........................................................273
                           -----------------------------
                  3.15     Transfer Taxes.......................................................................273
                           --------------
                  3.16     Real Property........................................................................274
                           -------------
                  3.17     Employees............................................................................276
                           ---------
                  3.18     Employee Benefits....................................................................276
                           -----------------
                  3.19     Litigation and Violations............................................................280
                           -------------------------
                  3.20     Disclosure...........................................................................281
                           ----------
                  3.21     Investment Company...................................................................281
                           ------------------
                  3.22     CATV Instruments and Company Contracts...............................................281
                           --------------------------------------
                  3.23     FCC Compliance.......................................................................282
                           --------------
                  3.24     APUC Compliance......................................................................282
                           ---------------
                  3.25     Patents, Trademarks, and Copyrights..................................................283
                           -----------------------------------
                  3.26     No Other Assets or Liabilities.......................................................283
                           ------------------------------
                  3.27     Required Consents....................................................................283
                           -----------------
                  3.28     Overbuilds...........................................................................283
                           ----------
                  3.29     Effect of Certificates...............................................................283
                           ----------------------
                  3.30     Subscriber Numbers...................................................................284
                           ------------------
                  3.31     No Insolvency........................................................................284
                           -------------
                  3.32     Compliance with Law..................................................................284
                           -------------------
                  3.33     Disclosure...........................................................................285
                           ----------
                  3.34     Parent Entity........................................................................285
                           -------------



                                                          REGISTRATION STATEMENT
                                                                     Page II-255
<PAGE>
Section 4.        Assumed Liabilities and Excluded Assets.......................................................285
                  4.1      Assignment and Assumption............................................................285
                           -------------------------
                  4.2      Excluded Assets......................................................................286
                           ---------------

Section 5.        Buyer's Representations, Warranties, and Covenants............................................286
                  5.1      Organization and Authority...........................................................286
                           --------------------------
                  5.2      Capitalization.......................................................................286
                           --------------
                  5.3      Enforceability.......................................................................287
                           --------------
                  5.4      Records..............................................................................287
                           -------
                  5.5      No Breach or Violation...............................................................287
                           ----------------------
                  5.6      Compliance with Laws.................................................................287
                           --------------------
                  5.7      Financial Statements.................................................................287
                           --------------------
                  5.8      Tax Returns and Other Reports........................................................288
                           -----------------------------
                  5.9      Transfer Taxes.......................................................................288
                           --------------
                  5.10     Litigation and Violations............................................................288
                           -------------------------
                  5.11     Disclosure...........................................................................289
                           ----------
                  5.12     Investment Company...................................................................289
                           ------------------
                  5.13     No Finders or Brokers................................................................289
                           ---------------------
                  5.14     No Insolvency........................................................................289
                           -------------

Section 6.        Conduct Prior to Closing......................................................................289
                  6.1      Operation in Ordinary Course.........................................................289
                           ----------------------------
                  6.2      Agents...............................................................................290
                           ------
                  6.3      Company Contracts....................................................................290
                           -----------------
                  6.4      No New Buyer Securities..............................................................290
                           -----------------------
                  6.5      Employees............................................................................291
                           ---------
                  6.6      Access to Premises and Records.......................................................291
                           ------------------------------
                  6.7      Existing Relationships...............................................................291
                           ----------------------
                  6.8      Required Consents....................................................................291
                           -----------------
                  6.9      Compliance with CLI Standards........................................................292
                           -----------------------------
                  6.10     MDU Agreements.......................................................................292
                           --------------
                  6.11     Public Announcements.................................................................292
                           --------------------
                  6.12     Due Diligence........................................................................292
                           -------------
                  6.13     Correction of any Noncompliance Prior to Closing.....................................293
                           ------------------------------------------------
                  6.14     Leased Equipment.....................................................................293
                           ----------------
                  6.15     Estoppel Certificates, Franchise Forms...............................................293
                           --------------------------------------
                  6.16     HSR Notification.....................................................................293
                           ----------------
                  6.17     No Shopping..........................................................................294
                           -----------
                  6.18     Notification of Certain Matters......................................................294
                           -------------------------------
                  6.19     Risk of Loss; Condemnation...........................................................294
                           --------------------------
                  6.20     Lien and Judgment Searches...........................................................295
                           --------------------------
                  6.21     Transfer Taxes.......................................................................295
                           --------------
                  6.22     Letter to Programmers................................................................295
                           ---------------------
                  6.23     Updated Schedules....................................................................295
                           -----------------


                                                          REGISTRATION STATEMENT
                                                                     Page II-256
<PAGE>
                  6.24     Use of Company's Name................................................................296
                           ---------------------
                  6.25     Subscriber Billing Services..........................................................296
                           ---------------------------
                  6.26     Satisfaction of Conditions...........................................................296
                           --------------------------

Section 7.        Closing.......................................................................................296

Section 8.        Deliveries by Company at Closing..............................................................297

Section 9.        Deliveries by Buyer at Closing................................................................299

Section 10.       Conditions to Obligations of Buyer............................................................300
                  10.1     Accuracy of Representations and Compliance with Conditions...........................300
                           ----------------------------------------------------------
                  10.2     Deliveries Complete..................................................................300
                           -------------------
                  10.3     No Adverse Change....................................................................301
                           -----------------
                  10.4     Restraint of Proceedings.............................................................301
                           ------------------------
                  10.5     Inspection...........................................................................301
                           ----------
                  10.6     Cash Flow............................................................................301
                           ---------

Section 11.       Conditions to Obligations of Company..........................................................302
                  11.1     Accuracy of Representations and Compliance with Conditions...........................302
                           ----------------------------------------------------------
                  11.2     Deliveries Complete..................................................................302
                           -------------------
                  11.3     No Adverse Change....................................................................302
                           -----------------
                  11.4     Restraint of Proceedings.............................................................302
                           ------------------------

Section 12.       Conditions to Both Parties Obligations........................................................303
                  12.1     Consents.............................................................................303
                           --------
                  12.2     No Governmental Action...............................................................303
                           ----------------------
                  12.3     Waiver of Conditions.................................................................303
                           --------------------

Section 13.       Transactions Subsequent to Closing............................................................303
                  13.1     Further Actions......................................................................303
                           ---------------
                  13.2     COBRA Benefits.......................................................................303
                           --------------

Section 14.       Registration Rights Agreement.................................................................303

Section 15.       Agreement Not to Compete......................................................................304
                  15.1     Agreement............................................................................304
                           ---------
                  15.2     Breach of Agreement..................................................................304
                           -------------------
                  15.3     Enforceability.......................................................................304
                           --------------


                                                          REGISTRATION STATEMENT
                                                                     Page II-257
<PAGE>


Section 16.       Survival of Representations and
                  Warranties; Indemnification...................................................................304
                  16.1     Survival.............................................................................304
                           --------
                  16.2     Indemnity by Company.................................................................304
                           --------------------
                  16.3     Indemnity by Buyer...................................................................305
                           ------------------
                  16.4     Defense of Claims....................................................................305
                           -----------------
                  16.5     Right to Offset......................................................................306
                           ---------------
                  16.6     Determination of Indemnified Amounts.................................................307
                           ------------------------------------

Section 17.       Termination...................................................................................307
                  17.1     Mutual Consent.......................................................................307
                           --------------
                  17.2     Default by Company...................................................................307
                           ------------------
                  17.3     Default by Buyer.....................................................................308
                           ----------------

Section 18.       Miscellaneous.................................................................................308
                  18.1     Expenses.............................................................................308
                           --------
                  18.2     Modification.........................................................................309
                           ------------
                  18.3     Attorneys' Fees......................................................................309
                           ---------------
                  18.4     Right to Specific Performance........................................................309
                           -----------------------------
                  18.5     Notice...............................................................................309
                           ------
                  18.6     Waiver...............................................................................310
                           ------
                  18.7     Binding Effect; Assignment...........................................................310
                           --------------------------
                  18.8     No Third Party Beneficiaries.........................................................310
                           ----------------------------
                  18.9     Rights Cumulative....................................................................310
                           -----------------
                  18.10    Further Actions......................................................................310
                           ---------------
                  18.11    Severability.........................................................................311
                           ------------
                  18.12    Captions.............................................................................311
                           --------
                  18.13    Counterparts.........................................................................311
                           ------------
                  18.14    Governing Law........................................................................311
                           -------------
                  18.15    Incorporation by Reference...........................................................311
                           --------------------------
                  18.16    Construction.........................................................................311
                           ------------
                  18.17    Confidentiality......................................................................311
                           ---------------
</TABLE>
EXHIBITS
                  A    -   Registration Rights Agreement
                  B    -   Bill of Sale
                  C    -   Assumption Agreement
                  D    -   Assignment of Lease
                  E    -   Guaranty
                  F    -   Non-Compete Agreement
                  G    -   Letter to Programmers
                  H    -   FIRPTA Affidavit
                  I    -   Escrow Agreement
                  J    -   Convertible Subordinated Note


                                                          REGISTRATION STATEMENT
                                                                     Page II-258
<PAGE>

SCHEDULES

                  1    -   The CATV Business (including Rate Schedule)
                  2    -   CATV instruments
                  3    -   Company Contracts
                  4    -   Required Consents
                  5    -   Equipment and Vehicles Owned
                  6    -   Real Property Owned
                  7    -   Security Interests To Be Discharged Prior to Closing
                           and Permitted Security Interests
                  8    -   Proceedings and Judgments
                  9    -   Employee Matters
                  10   -   Excluded Assets
                  11   -   MDU Agreements
                  12   -   Buyer's Required Consents
                  13   -   Buyer's Tax Matters
                  14   -   Buyer's Proceedings and Judgments


                                                          REGISTRATION STATEMENT
                                                                     Page II-259
<PAGE>



                            ASSET PURCHASE AGREEMENT



                  This Asset Purchase Agreement  ("Agreement") is made as of May
10, 1996,  among  General  Communication,  Inc., an Alaska  corporation,  or its
wholly-owned  subsidiary  ("Buyer"),  and Alaska  Cablevision,  Inc., a Delaware
corporation  ("Company").  This  Agreement  states the terms upon which  Company
agrees to sell to Buyer,  and Buyer  agrees to  purchase  from  Company,  all of
Company's Assets (as defined below).

                  WHEREAS, Company is engaged in the business of providing cable
television  services  to  subscribers  in and around the Service  Area  (defined
below); and

                  WHEREAS, Buyer desires to purchase and Company desires to sell
all of  Company's  Assets used or useful in  connection  with the CATV  Business
(defined below);

                  In  consideration  of the terms,  conditions,  and  agreements
contained in this Agreement, the parties agree as follows:

Section 1                 Definitions

                  1.1  Affiliate.  "Affiliate"  shall  mean any person or entity
controlling,  controlled  by or under  common  control  with a person or entity;
"control" means the ownership,  directly or indirectly,  of equity securities or
other  ownership  interests  in a person or entity by another  person or entity,
which  represent  more than 50% of the voting power or equity  ownership in such
person or entity.

                  1.2  APUC.  "APUC"  shall  mean the  Alaska  Public  Utilities
Commission.

                  1.3  APUC  Certificate.  "APUC  Certificate"  shall  mean  the
applicable certificate of public convenience and necessity issued by APUC, being
Certificate  Nos. 158  (Petersburg  and  Wrangell),  157, 191, 168, 164 and 245,
respectively for the Service Area legally described herein.

                  1.4 Assets. "Assets" shall include all properties, privileges,
rights,  interests and claims,  real and personal,  tangible and intangible,  of
every type and  description,  that are owned,  held, used, or useful in the CATV
Business  located in and around the Service Area in which Company has any right,
title or  interest,  including  but not  limited  to the CATV  Instruments,  the
Intangibles,  Company  Contracts,  the  Equipment,  and the Real  Property,  but
excluding any Excluded Assets set forth on Schedule 10.

                  1.5 Basic CATV Services. "Basic CATV Services" shall mean CATV
programming  sold to Subscribers as a package and delivered to such  Subscribers
by 


                                                          REGISTRATION STATEMENT
                                                                     Page II-260
<PAGE>

coaxial cable, including broadcast and satellite service programming for which a
Subscriber pays a fixed monthly fee to Company, but not including Pay TV.

                  1.6 Basic Subscriber. "Basic Subscriber" shall mean any person
who pays Company the full monthly price (but including a subscriber who receives
a senior citizen  discount but not including a subscriber who receives any other
discount) for Basic CATV Services in accordance  with standard  rates charged by
Company as set forth on Schedule 1, who was not solicited  since March 14, 1996,
to  purchase  such  services  by  any  promotions,   offers  of  discounts,   or
extraordinary  marketing  techniques which promotions,  discounts,  or marketing
techniques were inconsistent with Company's previous business practices, and who
has paid in full without discount (except for senior citizen discounts) at least
one monthly  payment in the ordinary  course of business for CATV services,  and
who is not pending disconnection for any reason (other than for non-payment of a
delinquent  bill in an amount less than  $10.01),  and who is not  delinquent in
payment,  for an amount in excess of $10.00,  for such CATV  services.  For this
purpose,  a Subscriber  shall be delinquent if any part of his or her account is
more than 62 days past due from the invoice date.

                  1.7 CATV. "CATV" shall mean cable television.

                  1.8 CATV Business.  "CATV  Business" shall refer to all of the
Assets and business of the CATV Systems as presently conducted by Company in and
around the Service Area as described on Schedule 1 to this Agreement.

                  1.9 CATV Instruments.  "CATV  Instruments"  shall refer to all
intangible  CATV channel  distribution  rights  owned,  used, or held for use by
Company, all franchise  agreements,  pole attachment rights,  leases,  licenses,
easements,  crossing permits and service agreements,  as described on Schedule 2
to this Agreement.

                  1.10 CATV  System(s).  "CATV System" shall refer to a complete
CATV  reception  and  distribution  system of Company which is part of Company's
CATV Business and  consisting  of one or more  headends,  equipment,  Subscriber
drops and  associated  electronic  equipment,  which is, or is capable of being,
without modification, operated as an independent system without interconnections
to other systems.  Any systems which are  interconnected  or which are served in
total or in part by a common headend shall be considered a single CATV System.

                  1.11 Closing and Closing  Date.  "Closing"  shall refer to the
consummation of the transactions  contemplated by this Agreement,  to take place
at a meeting  held at the place and on the date  ("Closing  Date")  specified in
Section 7 of this Agreement.

                  1.12 COBRA. "COBRA" shall be as defined in Section 3.17.


                                                          REGISTRATION STATEMENT
                                                                     Page II-261
<PAGE>
                  1.13 Company Contracts. "Company Contracts" shall refer to all
contracts and  agreements  pertaining to the lawful  ownership,  operation,  and
maintenance of the CATV Business or used in the CATV  Business,  other than CATV
Instruments, as described on Schedule 3 to this Agreement.

                  1.14  Employees.  "Employees"  shall be as  defined in Section
3.17.

                  1.15 Employee Plans.  "Employee  Plans" shall be as defined in
Section 3.18.

                  1.16  Encumbrance.  Any  mortgage,  lien,  security  interest,
security  agreement,  conditional  sale  or  other  title  retention  agreement,
limitation,   pledge,   option,  charge,   assessment,   restrictive  agreement,
restriction,  encumbrance,  adverse  interest,  restriction  on  transfer or any
exception  to  or  defect  in  title  or  other  ownership  interest  (including
reservations,   rights-of-way,   possibilities   of   reverter,   encroachments,
easements, rights of entry, restrictive covenants, leases and licenses).

                  1.17  Equipment.  "Equipment"  shall  refer  to  all  tangible
personalty, electronic devices, trunk and distribution coaxial and optical fiber
cable, amplifiers, power supplies, conduit, vaults and pedestals,  grounding and
pole hardware, Subscriber's devices (including, without limitation,  converters,
encoders,   transformers   behind  television  sets  and  fittings),   "headend"
(origination,  earth stations,  transmission and distribution  system) hardware,
test  equipment,  vehicles,  and other personal  property and facilities  owned,
leased,  used, or held for use in the CATV Business,  as described on Schedule 5
to this Agreement.

                  1.18 Equivalent Basic Subscribers or EBS's.  "Equivalent Basic
Subscribers" or "EBS's" shall mean at a specified date a number representing the
sum of the  equivalent of Basic  Subscribers  of each franchise area in the CATV
Systems derived by dividing (a) the total monthly  billings for sales by Company
of Basic CATV  Services for the most recent month ended prior to such  specified
date to single  family  households  which pay less than the full  non-discounted
(other than senior citizen  discounts) monthly price for Basic CATV Services and
to bulk accounts  (provided  that in no event shall such  billings  include more
than a single  month's  charges for any such single  family  household or single
bulk account),  by (b) the full non-discounted  monthly price charged by Company
to single family  households for Basic CATV Services in accordance with standard
rates charged by Company at the Closing Date in such franchise  area;  provided,
however,  that in no event shall such  standard  rates charged by Company at the
Closing  Date be less than those set forth on  Schedule  1. For  purposes of the
foregoing,  there shall be excluded  (a) all billings to any  discounted  single
family household or bulk account for which a payment in excess of $10.00 is more
than 62 days past due from the invoice date  (whether for Basic CATV Services or
Pay TV or otherwise); (b) all billings to any discounted single family household
or bulk account  which has not paid at least one month's  payment for Basic CATV
Services,  including 


                                                          REGISTRATION STATEMENT
                                                                     Page II-262
<PAGE>
payment of all installation  charges owed and due; (c) that
portion of the billings to each discounted (other than senior citizen discounts)
single family  household or bulk account which  represents  an  installation  or
other non-recurring charge, a charge for any outlet or connection other than the
first outlet or first connection in any single family household or, with respect
to a bulk account, in any residential unit (e.g., individual apartment or rental
unit), a charge for any tiered service  (whether or not included within Pay TV),
or a pass-through charge for copyright fees, sales taxes, etc.; (d) all billings
to any  discounted  single  family  household or bulk  account  which is pending
disconnection  for any reason;  and (e) all  billings to any  discounted  single
family  household or bulk account which was  solicited  since March 14, 1996, by
any promotions, offers of discounts, or extraordinary marketing techniques which
promotions,  discounts, or marketing techniques were inconsistent with Company's
previous business practices.

                  1.19 ERISA. "ERISA" shall be as defined in Section 3.17.

                  1.20 Excluded Assets.  "Excluded  Assets" shall refer to those
Assets  which  will not be owned by  Company  on the  Closing  Date as listed on
Schedule 10.

                  1.21  FCC.   "FCC"  shall  mean  the  Federal   Communications
Commission.

                  1.22 Financial Statements.  "Financial Statements" shall be as
defined in Section 3.13.

                  1.23 Governmental Authority. (a) The United States of America,
(b) any state,  commonwealth,  territory or  possession  of the United States of
America   and   any   political   subdivision   thereof   (including   counties,
municipalities  and the  like),  (c) any  foreign  (as to the  United  States of
America)  sovereign  entity and any political  subdivision  thereof,  or (d) any
agency,  authority or  instrumentality  of any of the  foregoing,  including any
court, tribunal, department, bureau, commission or board.

                  1.24  Intangibles.   "Intangibles"   shall  mean  all  general
intangibles   including,   but  not  limited  to,  Subscriber  lists,   accounts
receivable,  claims (excluding any claims relating to Excluded Assets), patents,
copyrights, and goodwill, if any.

                  1.25 MDU  Agreements.  "MDU  Agreements"  shall mean the fully
executed agreements required by Section 6.10 hereof.

                  1.26 MDU  Complex.  "MDU  Complex"  shall mean any  apartment,
condominium, or townhome complex or mobile home park and any other multiple unit
dwelling  project subject to common  ownership  which  currently  receives cable
television service from the CATV Business.

                  1.27 Note  Holdback.  "Note  Holdback"  shall be the GCI Notes
held in escrow, as defined in Section 2.5.



                                                          REGISTRATION STATEMENT
                                                                     Page II-263
<PAGE>
                  1.28 Pay TV. "Pay TV" shall mean premium programming  services
selected by and sold to Subscribers  for monthly fees in addition to the fee for
Basic CATV Services.

                  1.29 Pay TV  Units.  "Pay TV  Units"  shall  mean  each Pay TV
service subscribed for by all Basic Subscribers.

                  1.30 Permitted  Encumbrances.  "Permitted  Encumbrances" shall
mean: (i) liens for taxes,  assessments and governmental charges not yet due and
payable,  or the validity of which are being  contested  diligently  and in good
faith,  and  installments of special  assessments not yet due and payable;  (ii)
statutory  liens arising in connection  with the ordinary course of business not
yet  delinquent or the validity of which are being  contested  diligently and in
good  faith;   (iii)  zoning  laws  and  ordinances  and  similar   governmental
regulations;  (iv) rights reserved to any municipality or government,  statutory
or public  authority  to  regulate  the  affected  property;  and (v) as to Real
Property  interests,   any  liens,   encumbrances,   easements,   rights-of-way,
servitudes,  permits, leases, other minor title defects,  conditions,  covenants
and restrictions,  and minor  imperfections or irregularities in title which are
reflected  in the public  records.  The  foregoing  notwithstanding,  "Permitted
Encumbrances"  shall not include any item of which  Company  has  warranted  the
absence of  elsewhere in this  Agreement  and  furthermore  shall not prevent or
inhibit,  in any way, the conduct of Company's CATV Business.  No implication is
made from the  foregoing  or any  reference to  Permitted  Encumbrances  in this
Agreement or in any documents or  instruments  delivered in connection  herewith
that Buyer shall be or shall become liable or responsible for any liens,  taxes,
assessments, charges, or statutory liens described in (i) or (ii) above accruing
or arising  for the period  prior to the  Closing  Date or which are  imposed or
assessed  against  Company for the period prior to the Closing Date; and Company
shall remain fully liable and responsible  therefor and shall indemnify and hold
Buyer harmless from and against any thereof pursuant to Section 16.

                  1.31 Person.  Any natural  person,  corporation,  partnership,
trust,  unincorporated  organization,  association,  limited liability  company,
Governmental Authority or other entity.

                  1.32 Purchase Price. The "Purchase Price" for Company's Assets
shall be as defined in Section 2.2.

                  1.33 Real  Property.  "Real  Property"  shall mean all realty,
including  appurtenances,  improvements,  and fixtures  located  thereon and any
other  interests in real  property  owned by Company and used or held for use in
the CATV Business,  including,  without  limitation,  fee interests in Company's
offices and headend sites, leasehold interests, easements, wire crossing permits
and rights of entry described on Schedule 6 to this Agreement.


                                                          REGISTRATION STATEMENT
                                                                     Page II-264
<PAGE>
                  1.34 Required  Consents.  "Required  Consents"  shall mean all
governmental franchises,  approvals,  licenses,  consents, and any and all other
authorizations or approvals and consents,  necessary and required for Company to
transfer and convey, and Buyer to purchase, the Assets, and for Buyer to conduct
Company's  CATV  Business  at the  places  and in the  manner in which such CATV
Business is presently  conducted and will be conducted on the Closing Date.  All
of  Company's  Required  Consents  are  listed on  Schedule 4 and all of Buyer's
Required Consents are listed on Schedule 12 to this Agreement.

                  1.35 Security  Interest.  "Security  Interest"  shall mean any
mortgage,  lien,  security interest,  security  agreement,  limitation,  pledge,
option, charge,  assessment,  restrictive agreement,  restriction,  encumbrance,
adverse  interest,  claim,  restraint on transfer,  or claim  against title with
respect to any of the Assets.

                  1.36 Service Area. "Service Area" shall mean the area in which
Company  operates  the CATV  Business,  specifically  in and around  Petersburg,
Wrangell,  Cordova,  Valdez,  Kodiak,  Nome and  Kotzebue,  Alaska,  pursuant to
applicable APUC Certificate  Nos. 158 (Petersburg and Wrangell),  157, 191, 168,
164 and 245 respectively.

                  1.37   Subscribers.   "Subscribers"   shall   mean  all  Basic
Subscribers and EBS's.

                  1.38  System.  A  complete  cable  television   reception  and
distribution  system operated in the conduct of the Business,  consisting of one
or  more  headends,   subscriber  drops  and  associated  electronic  and  other
equipment, and which is, or is capable of being, without modification,  operated
as an independent system without  interconnections to other systems. Any systems
which are  interconnected  or which  are  served in total or in part by a common
headend will be considered a single System.

Section 2                 Sale of Assets.

                  2.1  Sale of  Assets.  At the  Closing,  upon  the  terms  and
conditions  set  forth  in this  Agreement,  Company  agrees  to  sell,  convey,
transfer,  assign,  and  deliver to Buyer,  and Buyer  agrees to  purchase  from
Company,  all of the  Company's  right,  title and interest in, to and under the
Assets.  Except  as  otherwise  provided,  all the  Assets  are  intended  to be
transferred to Buyer, whether or not described in the Schedules.

                  2.2  Purchase  Price.  Buyer  will  deliver  to Company at the
Closing   Sixteen   Million  Six  Hundred  Fifty  Thousand  and  no/100  Dollars
($16,650,000.00)  in cash and Ten Million and no/100  Dollars  ($10,000,000)  in
Buyer's  subordinated notes ("Notes") which are convertible into shares of GCI's
voting Class A common stock (the "GCI Shares"),  in payment for the Assets.  The
Purchase Price shall be paid by wire transfer of immediately available funds and
delivery  of  Notes  on the  Closing  Date.  Such  


                                                          REGISTRATION STATEMENT
                                                                     Page II-265
<PAGE>
payment in cash and in Notes  constitutes  the  Twenty-Six  Million  Six Hundred
Fifty Thousand and no/100 Dollars ($26,650,000.00) "Purchase Price."

                  2.3 Purchase Price  Adjustment.  The Purchase Price payable in
cash shall be:

                           decreased by:

                                       (i)       the  Assumed   Liabilities   as
                                                 described in Section 4.1 (a)(i)
                                                 and  (ii)  which,   as  of  the
                                                 Closing Date,  are  liabilities
                                                 as  accrued   and/or  which  in
                                                 accordance   with  GAAP  should
                                                 have    been     accrued     as
                                                 liabilities  as of the  Closing
                                                 Date;

                           and increased by:

                                       (ii)      current  assets other than cash
                                                 and cash equivalents  ("Current
                                                 Assets")  of the Company at the
                                                 Closing  Date,  such as prepaid
                                                 expenses of the  Company  which
                                                 relate  to goods  and  services
                                                 that  are  to  be  received  by
                                                 Buyer  after the  Closing  Date
                                                 and in respect  of which  Buyer
                                                 will  receive  a  benefit,  and
                                                 accounts receivable.

                           Receivables  Adjustment.   The  Company's  subscriber
accounts  receivable  which relate to the billing  periods  prior to the billing
period in which the Closing Date occurs,  and in the event the Closing Date does
not  occur on the last day of a billing  period,  the  amount of the  subscriber
accounts receivable which relate to the billing period in which the Closing Date
occurs (the "Billing Period  Receivables")  which are attributable to the period
prior to the  Closing  Date  (together,  subject to the  immediately  succeeding
sentence, herein called the "Customer Accounts Receivable"), shall be considered
Current  Assets to the extent  actually  collected  within the two month  period
following  the  Closing  Date by or for the  benefit  of the  Buyer and shall be
included as such in the Final  Adjustments  Report.  Billing Period  Receivables
shall be prorated  based on the days in the billing  period before and after the
Closing  Date,  the portion  attributable  to the period before the Closing Date
shall be included in Customer Accounts  Receivable and the portion  attributable
to the period after the Closing Date shall not be so included.

                           In addition to the foregoing, to the extent the Buyer
receives payments for other accounts  receivable or similar  receivables  (other
than Customer  Accounts  Receivable),  which  payments are  attributable  to the
period  prior to the Closing  Date in  connection  with the  calculation  of the
Preliminary  Adjustments Report and/or the Final Adjustments  Report, the amount
of such  accounts  receivable or similar  receivables  


                                                          REGISTRATION STATEMENT
                                                                     Page II-266
<PAGE>
actually   collected  (the  "Other   Receivables")   shall  be  considered  cash
equivalents  and an  adjustment  shall be made to the  Purchase  Price,  and any
additional payments shall be paid by check from Buyer to the Company.

                           To the extent that the Customer  Accounts  Receivable
and Other Receivables  actually collected by Buyer within the three-month period
following the Closing Date exceed the amount of the Customer Accounts Receivable
and Other  Receivables  which were collected  during the first two-month  period
following the Closing and for which an adjustment was made pursuant to the Final
Adjustments  Report,  a  further  adjustment  shall  be made  (the  "Post-Period
Adjustment") and any additional payment shall be paid by check from Buyer to the
Company.  A Post-Period  Adjustment  Report  regarding the collections  shall be
certified by an authorized officer of Buyer to be true,  complete and correct as
of the date it is  delivered.  Any Customer  Accounts  Receivable  and any Other
Receivables  not  previously  assigned  which Buyer does not collect  within the
three-month  period  following  the  Closing  Date  shall,  promptly  after said
three-month period, be reassigned to the Company.

                           Buyer shall not forgive any of said receivables prior
to the end of said  three-month  period.  All Customer  Accounts  Receivable and
Other Receivables collected by Buyer shall be deemed allocated to receivables in
the order in which they were  incurred.  At the  Company's  reasonable  request,
Buyer's  records with  reference to collection of accounts  receivable  shall be
made available to the Company.

                           Preliminary Adjustments. A complete and detailed list
(the  "Preliminary  Adjustments  Report")  of  all  such  known  prorations  and
adjustments  in the  Purchase  Price  shall be  prepared  in good faith and on a
reasonable  basis by the Company.  The parties hereto agree that the Preliminary
Adjustments Report shall consist of an adjustment to the Purchase Price pursuant
hereto as of the end of the last quarter prior to the Closing Date, and that the
amount of the Purchase Price  delivered on the Closing Date shall be adjusted in
accordance  with such  Report.  Buyer's  representatives  shall be  permitted to
participate in the preparation of the report, with access to all books, records,
and  other  documents  used  in  the  preparation   thereof.   Said  Preliminary
Adjustments  Report  shall be  delivered  by Company to Buyer at least five days
prior to the Closing,  and subject to the  provisions  below,  the party thereby
obligated  to pay shall pay the items by increase  or  decrease of the  Purchase
Price. In the event Buyer  disagrees with any items on said list,  Buyer and the
Company  shall in good faith  estimate  such item,  and the  average of such two
estimates  shall be utilized in making the  adjustment of the Purchase  Price at
the  Closing  Date,  subject to final  adjustment  as provided  for below.  With
respect to the adjustments done pursuant to the Preliminary  Adjustments  Report
as of the end of the last quarter prior to the Closing  Date,  the amount of the
increase in the Purchase Price resulting from Customer Accounts Receivable shall
be calculated as of such date based upon (a) (95%) of the face value of Customer
Accounts  Receivable which, as of such date, are one month (either 30 days or 31
days,  depending upon the month in question) or less past due from the first day


                                                          REGISTRATION STATEMENT
                                                                     Page II-267
<PAGE>

of the billing period to which the amount relates; (b) 90% of the face amount of
any Customer Accounts  Receivable which, as of such date, is more than one month
but not more than two months past due from the first day of the  billing  period
to  which  the  amount  relates;  (c)  60% of the  face  amount  of any  amounts
receivable  which,  as of such date,  are more than two months but not more than
three  months  past due from the  first day of the  billing  period to which the
amount  relates;  and  (d) 0% of  the  face  amount  of  any  Customer  Accounts
Receivable  which, as of such date, are more than three months past due from the
first day of the billing period to which the amount relates.  Other  Receivables
which are to be collected  following  the Closing Date shall also be included in
the Preliminary Adjustments Report.

                           Post-Closing  Adjustment.  Within  60 days  after the
Closing  Date,  the  Company  and  Buyer  will  prepare  a  report  (the  "Final
Adjustments Report"),  prepared in good faith and on a reasonable basis, setting
forth in  reasonable  detail  the  adjustments  described  above  including  any
adjustments  based on Company's  and Buyer's  actual  collection of the Customer
Accounts  Receivable  and Other  Receivables  as of the date one day before such
Report.  The Final Adjustments Report shall make such changes to the Preliminary
Adjustments Report as are necessary to recalculate as of the Closing Date all of
the  adjustments  and  prorations to the Purchase  Price set forth herein (which
were calculated in the Preliminary  Adjustments  Report generally as of the last
day of the quarter prior to the Closing Date).

                           The Company and Buyer shall  provide  each other with
reasonable  access to all  records  which  they have in their  possession  which
pertain to such  collections  for the period after the Closing  Date,  which are
necessary for a review of the Post-Period Adjustment Report.

                           The  Purchase  Price as  determined  pursuant  to the
Preliminary  Adjustments  Report  shall be  compared  to the  Purchase  Price as
determined pursuant to the Final Adjustments Report and, within 10 business days
following  acceptance of the Final Adjustments  Report by Buyer and the Company,
any  adjustment  amount to be paid  pursuant to such report shall be paid to the
proper party from the Escrow described in Section 2.5.

                           To the extent the  parties are unable to agree on the
Final  Adjustments  Report within 90 days after the Closing Date,  all issues in
the  Report  which  are not  agreed  upon  shall be  submitted  to the  national
accounting firm of Deloitte & Touche,  LLP together with a written  statement of
the issues by Buyer and by the Company, and the determination of such accounting
firm shall be final and binding on all parties.

                  2.4 Convertible,  Subordinated  Notes. As set forth in Section
2.2, Buyer shall issue Ten Million and no/100 Dollars  ($10,000,000.00) in Notes
to Company as part of the Purchase Price.  Such Notes shall be transferable only
to shareholders of the 


                                                          REGISTRATION STATEMENT
                                                                     Page II-268
<PAGE>
Company and to their family  members,  heirs and assigns by operation of law and
to other  limited  transferees.  The Notes  shall be  substantially  in the form
attached  hereto as Exhibit  J. The Notes  shall  bear  simple,  non-compounding
interest at the lowest allowable IRS rate under imputed interest rules in effect
as of the Closing Date. Any indebtedness on Notes not previously  converted into
GCI Shares shall be due and payable in full in a single, lump sum payment on the
tenth (10th)  anniversary of their initial date of issuance  ("Issuance  Date").
The  Notes  shall be  subordinated  to all of  Buyer's  now  existing  and later
incurred  senior  indebtedness,  including,  without  limitation,  the Sixty-Two
Million  Five  Hundred  Thousand  and  no/100  Dollars  ($62,500,000.00)  credit
facility from NationsBank of Texas, N.A.,  pursuant to that amended and restated
Credit Agreement dated as of April 26, 1996, as extended, increased, replaced or
re-financed,  and any and all bank or similar financial institution indebtedness
assumed or later  incurred as part of, or in furtherance of the purposes of, the
transactions  referred to in Section 6.4 hereof.  Any outstanding Notes shall be
convertible by the holders thereof on an annual basis into GCI Shares,  during a
fifteen (15) day period each year for ten (10) years  ("Conversion  Period(s)").
The first Conversion  Period shall commence on the Issuance Date, and the second
through the tenth (10th)  Conversion  Periods shall commence on each anniversary
of  the  Issuance  Date,  and  shall  conclude  fifteen  (15)  days  thereafter,
respectively.  All or any portion of the then-outstanding  Notes,  including the
accrued interest thereon,  shall be convertible into GCI Shares.  The Conversion
Price on the Issuance  Date and for the first  Conversion  Period shall be $6.50
per GCI Share and the Conversion  Price for each  subsequent  Conversion  Period
shall be an  amount  equal to $6.50  plus an amount  per GCI Share  equal to the
accrued interest on each $6.50 principal amount of the Note being converted,  on
a  non-compounded  basis.  For  example,  assuming a five  percent  (5%)  annual
interest rate, the Notes would convert into GCI Shares in the following amounts:

                           Conversion Period                  Price
                           -----------------                  -----

                           Issuance Date                      $6.500
                           Year One (1)                       $6.825
                           Year Two (2)                       $7.150
                           Year Three (3)                     $7.475
                           Year Four (4)                      $7.800
                           Year Five (5)                      $8.125
                           Year Six (6)                       $8.450
                           Year Seven (7)                     $8.775
                           Year Eight (8)                     $9.100
                           Year Nine (9)                      $9.425
                           Year Ten (10)                      $9.750

                  2.5 Note  Holdback.  At the Final  Closing,  Company and Buyer
shall  each  deposit  in  escrow,  pursuant  to an  escrow  agreement  in a form
substantially  similar to Exhibit  I,  Notes  with a  principal  amount of Eight
Hundred Thousand Dollars ($800,000), 


                                                          REGISTRATION STATEMENT
                                                                     Page II-269
<PAGE>
or  provide  a letter of  credit  or cash in an  amount  equal to Eight  Hundred
Thousand  Dollars  ($800,000)  (the  "Note  Holdback")  to secure  each  party's
indemnification for breaches of representations, warranties and covenants. If no
breach of this Agreement has occurred or is reasonably alleged to have occurred,
such  escrowed  Notes,  letters of credit or cash shall be released to the party
which  placed such Notes,  letters of credit or cash in escrow,  effective as of
one hundred eighty (180) days after the Closing Date.

                  2.6 Allocation of  Consideration.  The parties hereto agree to
use their best  efforts,  based upon an appraisal of the Assets to be made by an
independent  appraiser,  to agree upon an allocation of the Purchase Price among
the  Assets,  and to agree to  allocate  the form of  consideration  among  such
Assets,  at or before the Final  Closing.  The parties agree to be bound by such
allocations and to file all returns and reports with respect to the transactions
contemplated  by this Agreement,  including,  without  limitation,  all federal,
state and local tax returns, on the basis of such allocation.

Section 3                 Company's Representations, Warranties, and Covenants

                  Company,  represents,  warrants, and covenants to Buyer, as of
the date of this Agreement and as of the Closing, as follows:

                  3.1  Organization  and   Qualification.   Company  is  a  duly
organized  corporation,  validly existing and in good standing under the laws of
its place of incorporation. Company is duly qualified or licensed to do business
as a  foreign  corporation  and is in  good  standing  under  the  laws  of each
jurisdiction  in which  Company is  required  to be so  qualified  or  licensed.
Company has all  requisite  power and authority to carry on the CATV Business as
currently  conducted and to own, lease,  use, and operate its Assets as they are
currently  owned,  leased  and used and to  conduct  its  business  as it is now
conducted. The copies of Company's Articles of Incorporation,  as amended, which
has been delivered to Buyer are complete and correct, and each of such documents
is in full force and effect and have not been further amended.

                  3.2  Authority.  Company has all  requisite  capacity,  power,
right, capitalization, and authority to enter into this Agreement and to perform
its obligations under this Agreement.  The execution,  delivery, and performance
of this  Agreement and all other  documents and  instruments  to be executed and
delivered in connection herewith  ("Transaction  Documents") by Company has been
duly authorized by all applicable corporate or partnership action of Company. No
consent of or  authorization  from any  person or other  entity,  including  any
Governmental  Authority,  is  required to be  obtained  in  connection  with the
execution,  delivery,  and  performance of this Agreement and of the Transaction
Documents by Company, except for the Required Consents described in Schedule 4.

                  3.3 Enforceability. This Agreement, the Transaction Documents,
and all documents,  instruments,  and  certificates  to be delivered  under this
Agreement, assuming 


                                                          REGISTRATION STATEMENT
                                                                     Page II-270
<PAGE>
all such documents,  instruments,  and certificates constitute legal, valid, and
binding  obligations of Buyer,  constitute legal, valid, and binding obligations
of Company,  enforceable  against  Company in accordance  with their  respective
terms,   except  as  the  same  may  be  limited  by   bankruptcy,   insolvency,
reorganization,  moratorium,  or other  similar  laws  affecting  generally  the
enforcement of creditors' rights and by general principles of equity.

                  3.4 Cash Flow.  Company's  actual cash flow  before  corporate
overhead  (identified  in  Company's  financial  statements  as  "Administration
Expenses") and after  elimination  of the  inter-company  transactions  with the
McCaw/Rock  Systems  in  Homer  and  Seward  was not  less  than  Three  Million
Sixty-Seven  Thousand  and  no/100  Dollars  ($3,067,000.00)  for the year ended
December 31, 1995.  Company's audited  financial  statements as and for the year
ended December 31, 1995, have been provided to Buyer.

                  3.5 Assets.  Company has exclusive,  good and marketable title
to (or, in the case of Assets that are leased, valid leasehold interests in) the
Assets (other than Real Property, as to which the representations and warranties
in Section 3.16 apply). The Assets are free and clear of all Encumbrances of any
kind or nature,  except (a) Permitted  Encumbrances,  (b) restrictions stated in
the  Governmental  Permits and (c)  Encumbrances  disclosed on Schedule 7, which
will be removed and released at or prior to the Closing.  Except as set forth on
Schedules  2 or 3, none of the  Equipment  is leased by  Company  from any other
Person.  The Assets are all the assets  necessary to permit Buyer to conduct the
Business  substantially  as it is being  conducted on the date of this Agreement
and in  compliance  with the  Company  Contracts  and to perform all the Assumed
Liabilities  (defined  in Section  4.1).  Except as set forth on Schedule 5, the
Equipment is in good  operating  condition  and repair,  ordinary  wear and tear
excepted, given the age of such equipment and the use to which it is put, and is
suitable and adequate for  continued  use in the manner in which it is presently
used.  No Person  other  than  Company  has been  granted  or, to the  Company's
knowledge,  has applied for a cable  television  franchise in any area currently
served by the Business.

                  3.6 Governmental  Permits.  Complete and correct copies of the
Governmental Permits, all of which are listed on Schedule 2 or Schedule 10, have
been delivered by Company to Buyer.  The  Governmental  Permits are currently in
full force and effect,  are not in default,  and are valid under all  applicable
legal  requirements  according  to  their  terms.  There  is  no  legal  action,
governmental proceeding or investigation,  pending or threatened,  to terminate,
suspend or modify any Governmental  Permit and Company is in compliance with the
material  terms and  conditions of all the  Governmental  Permits and with other
applicable  requirements of all Governmental  Authorities (including the FCC and
the Register of Copyrights) relating to the Governmental Permits,  including all
requirements for  notification,  filing,  reporting,  posting and maintenance of
logs and records.


                                                          REGISTRATION STATEMENT
                                                                     Page II-271
<PAGE>
                  3.7 Company Contracts.  All Company Contracts are described on
Schedule 3 or Schedule 10. Complete and correct copies of all Company  Contracts
have been provided to Buyer.  Each Company  Contract is in full force and effect
and constitutes the valid, legal, binding and enforceable  obligation of Company
and Company is not and to Company's  knowledge,  each other party thereto is not
in breach or default of any terms or conditions thereunder.

                  3.8  Records.  Company's  books,  as made  available to Buyer,
contain current,  complete,  and accurate records of all meetings and actions of
Company's shareholders and directors,  and, if any, committees of the directors.
All  material  actions  and  transactions  taken or  entered  into by Company or
otherwise  requiring  action by its  shareholders  and directors  have been duly
authorized  or ratified as necessary  and are  evidenced  in such minute  books.
Company's books and ledgers,  as made available to Buyer,  contain  complete and
accurate  records of all  issuances and transfers of its shares of common stock.
The  signatures  appearing  in such  minute  books,  and ledgers are the genuine
signatures of the persons purporting to have signed them.

                  3.9 No Breach or  Violation.  Subject  only to  obtaining  the
consents and approvals  set forth on Schedule 4, the  execution,  delivery,  and
performance  of this  Agreement  by Company  (a) does not and will not (with the
giving of notice or  passage of time or both) (i)  conflict  with or result in a
breach or  violation  by  Company  of, or (ii)  constitute  a default by Company
under, or (iii) create any right of termination,  cancellation,  or acceleration
by any party pursuant to, any of the CATV Instruments or Company Contracts,  any
statute, ordinance, rule, or regulation, or any agreement, instrument, judgment,
or order to which Company is a party or by which Company, the CATV Business,  or
any of the  Assets  is bound or may be  affected,  and (b) does not and will not
(with the  giving of notice or  passage  of time or both)  create or impose  any
Security Interest on any of the Assets.

                  3.10 No Finders or Brokers.  Company has not entered  into any
contract, arrangement, or understanding with any person or firm which may result
in any obligation of Buyer or Company to pay any finder's,  broker's, or agent's
fees or  commissions  or other  like  payments  as a result of the  transactions
contemplated  by this  Agreement,  except  that  Company  shall pay all fees and
expenses due to Daniels and Associates.

                  3.11  Schedules.  The  Schedules  to this  Agreement  list all
Assets owned, held, used, or useful for the performance of any CATV Instruments,
Company Contracts and for the lawful conduct of the CATV Business. All Schedules
to this Agreement are true, accurate, and complete.

                  3.12 Compliance  with Laws.  Company is in compliance with all
applicable  laws,  rules,  regulations,  orders,  ordinances,  and  codes of the
Governmental  Authorities  having  jurisdiction over the business and affairs of
Company.


                                                          REGISTRATION STATEMENT
                                                                     Page II-272
<PAGE>
                  3.13  Financial  Statements.  Company has  delivered  to Buyer
correct and complete copies of Company's audited  financial  statements for each
of the two most recent  fiscal  years ended prior to the date of this  Agreement
and will deliver to Buyer unaudited interim quarterly  financial  statements for
periods  subsequent to the end of the most recent fiscal year end within 30 days
after the end of each such quarter (the "Financial  Statements").  The Financial
Statements are complete and correct,  were prepared in accordance with generally
accepted  accounting  principles  applied on a consistent  basis  throughout the
periods covered thereby (except,  in the case of interim  financial  statements,
subject to normal recurring year-end  adjustments and the absence of footnotes),
and fairly present in accordance with generally accepted  accounting  principles
the  financial  condition  and results of  operation  of Company as of the dates
indicated  and for the  periods  covered  thereby.  Except as  disclosed  by, or
reserved  against in, its most recent  balance  sheet  included in the Financial
Statements,  Company  did not  have as of the  date of such  balance  sheet  any
liability  or  obligation,  whether  accrued,  absolute,  fixed,  or  contingent
(including,  without  limitation,  liabilities  for taxes or unusual  forward or
long-term  commitments),   which  was  material  to  the  business,  results  of
operations,  or  financial  condition  of Company  and which is  required  to be
disclosed on, or reserved  against in, a balance sheet.  Company has received no
notice of any fact  which  would  form a basis  for any  claim by a third  party
which, if asserted,  could result in a liability affecting Company not disclosed
by or reserved  against in the most recent  balance  sheet of Company.  From the
date of the most recent  balance sheet  included in the Financial  Statements to
and including  the date hereof,  (i) the CATV Business has been operated only in
the ordinary  course,  (ii) Company has not sold or disposed of any assets other
than in the  ordinary  course of  business,  (iii)  there has not  occurred  any
material  adverse  change  or  event  in  the  business,   operations,   assets,
liabilities,  financial condition,  or results of operations of Company compared
to the  business,  operations,  assets,  liabilities,  financial  condition,  or
results of operations reflected in the Financial Statements,  and (iv) there has
not occurred any theft,  damage,  destruction,  or loss which has had a material
adverse effect on Company.

                  3.14 Tax  Returns  and  Other  Reports.  Company  has duly and
timely  filed in proper form all federal,  state,  local,  and foreign,  income,
franchise,  sales, use,  property,  excise,  payroll,  and other tax returns and
other  reports  (whether or not  relating to taxes)  required to be filed by law
with the appropriate governmental authority, and, to the extent applicable,  has
paid or made  provision  for  payment of all taxes,  fees,  and  assessments  of
whatever  nature  including  penalties and interest,  if any, which are due with
respect to any aspect of its  business or any of its  properties.  Except as set
forth  on  Schedule  8,  there  are no tax  audits  pending  and no  outstanding
agreements or waivers  extending the statutory period of limitations  applicable
to any relevant tax return.

                  3.15  Transfer  Taxes.  There  are no  sales,  use,  transfer,
excise,  or license  taxes,  fees,  or charges  applicable  with  respect to the
transactions contemplated by this Agreement.


                                                          REGISTRATION STATEMENT
                                                                     Page II-273
<PAGE>
                  3.16 Real Property. With respect to all Real Property:

                             3.16.1  The  Real  Property  and  the  improvements
located  thereon and the  continuation  of business  presently  being  conducted
thereon does not violate any material  applicable laws,  statutes,  regulations,
codes, rules, or orders.

                             3.16.2 The Real  Property has  unobstructed  access
for purposes of ingress and egress to public  roads or streets or private  roads
over which  Company  has a valid  right-of-way.  The Real  Property is served by
utilities  and services  necessary  for the present use of the Real  Property in
connection with the CATV Business.

                             3.16.3  Company  possesses  all  rights  needed  to
operate,  maintain,  repair,  replace,  and  locate all  cable,  lines,  towers,
equipment,  or other facilities owned or used by Company in the CATV Business on
the Real Property.

                             3.16.4  None  of  the   improvements  on  the  Real
Property encroaches upon the property of others.

                             3.16.5 Company holds good and marketable fee simple
title to the Real Property shown as being owned by Company on Schedule 6 and the
valid and enforceable right to use and possess such Real Property,  subject only
to the Permitted  Encumbrances.  Company has the valid and enforceable  right to
use all other Real  Property,  subject to the leases,  easements,  licenses,  or
rights-of-way described on Schedule 2.

                             3.16.6 The Real Property is in full compliance with
all material  applicable  health,  safety,  and  environmental  laws, rules, and
regulations  ("environmental  laws"). During Company's ownership or operation of
the Real Property,  all activities  undertaken on or affecting the Real Property
by Company or any other  person has been in full  compliance  with all  material
environmental  laws. During Company's  occupation of the Real Property there has
been no abatement,  removal,  remedial or other  response  actions for hazardous
substances (as defined below) at the Real Property.

                                       3.16.6.1  Company  is  not  aware  of any
instance,  prior to Company's  ownership or operation,  of  noncompliance of the
Real Property or any activities  thereon with any environmental  law. Company is
not aware of any aspects of the Real  Property or any  operations  thereon which
reasonably  might give rise to any  civil,  criminal,  administrative,  or other
proceeding or notice  thereof  under any  environmental  law (an  "environmental
claim").

                                       3.16.6.2  To  Company's   knowledge,   no
environmental  claim has been  asserted  in the past,  currently  exists,  or is
threatened  or  contemplated  against  Company,  or against any other  person or
entity, which relates to the Real Property or any operations thereon.


                                                          REGISTRATION STATEMENT
                                                                     Page II-274
<PAGE>
                                       3.16.6.3 To Company's knowledge, the Real
Property  has not in the past,  and is not now,  subject  to any  investigation,
assessment,  or study by any person or government agency related to potential or
actual enforcement of any environmental law.

                                       3.16.6.4  No  hazardous  substances  have
been or are being  released to, from,  or under the Real Property or outside the
Real Property by the Company, which substances have entered or threaten to enter
onto, into, or under the Real Property. No hazardous substances have been or are
stored, treated,  handled, disposed of, created, or otherwise located on, in, or
under the Real Property during the Company's occupancy.

                                       3.16.6.5 No  underground  storage  tanks,
surface impoundments,  solid waste management units, tank systems,  waste piles,
land treatment  areas,  landfills,  or incinerators are located or, to Company's
knowledge,  have  been  located  on the  Real  Property.  For  purposes  of this
paragraph,  the  foregoing  terms shall have the  meanings  defined in RCRA,  42
U.S.C.  section 6901 et seq., or analogous state or local laws. Without limiting
the preceding  representation in this paragraph,  to Company's knowledge none of
the Real Property has been used at any time as a gasoline service station or any
other  station or  facility  for  storing,  pumping,  dispensing,  or  producing
gasoline or any other petroleum product, byproduct, or waste.

                                       3.16.6.6  There  are no "PCB  Items,"  as
that term is defined in 40 C.F.R. section 761.3, located on the Real Property.

                                       3.16.6.7 Any and all  permits,  licenses,
and other  authorizations or approvals required under  environmental laws to own
or operate the Real  Property have been secured by Company and are in full force
and effect. A list of all such permits, licenses,  approvals, and authorizations
is included on Schedule 2. All bonds and other security devices  associated with
any permit, license, authorization, or approval is in place.

                                       3.16.6.8 No  building or other  structure
on the Real Property contains asbestos.

                                       3.16.6.9  Company  has  provided to Buyer
true,  complete  and correct  copies of all  Environmental  Reports in Company's
possession  or control  as of the date of this  Agreement  relating  to the Real
Property  or any of it.  Company  shall  provide  all  additional  Environmental
Reports,  including  supplements  to  existing  reports,  relating  to the  Real
Property  within  a three  (3)  working  days of  receipt  of  such  reports  or
supplements by Company.  For purposes of this Section  3.16.6.9,  "Environmental
Reports"  shall mean and include any writing  containing  statements or opinions
about the presence or suspected  presence of any Hazardous  Substances on, under
or affecting the Real Property or any of it.



                                                          REGISTRATION STATEMENT
                                                                     Page II-275
<PAGE>
                                       3.16.6.10  "Company's  knowledge" as used
in this  Section 3 shall  refer to matters  within the  knowledge  of  Company's
current  officers and general  managers,  after due  investigation of reasonably
available Company records concerning the subjects herein discussed.

                                       3.16.6.11 The term "hazardous substances"
means: (i) any "hazardous substance" or "pollutant or contaminant" as defined in
Sections 101(14) and (33) of CERCLA, 42 U.S.C.  sections 9601(14) and (33); (ii)
any  "hazardous  material"  as  defined  in  Section  1802(2)  of the  Hazardous
Materials  Transportation  Act;  (iii) any  "oil" or  "hazardous  substance"  as
defined in Sections 311(a)(1) and (14) of the federal Clean Water Act, 33 U.S.C.
sections  1321(a)(1)  and (14);  (iv) any  "pesticide" as defined in the Federal
Insecticide, Fungicide, and Rodenticide Act, at 7 U.S.C. section 136(u); and (v)
any "byproduct," "source" or "special nuclear" material as defined in the Atomic
Energy  Act of  1954,  42  U.S.C.  sections  2014(e),  (z) and  (aa).  Hazardous
Substances also includes any chemical, compound, material, mixture, or substance
defined,  listed,  or  classified  under  any  environmental  law as  dangerous,
hazardous,  extremely  hazardous,  infectious,  or toxic.  It also  includes any
substance  regulated  under  any  environmental  law  due  to its  polluting  or
dangerous   properties   such   as   ignitability,    corrosivity,   reactivity,
carcinogenicity,   toxicity,   or  reproductive  effects.   Finally,   Hazardous
Substances specifically includes, but is not limited to, petroleum and petroleum
products,  asbestos  and  asbestos-containing   materials,  and  polychlorinated
biphenyls ("PCBs").

                  3.17  Employees.  Schedule 9 contains a true and complete list
of  names,  positions,   current  hourly  wages  or  monthly  salary  and  other
compensation  amounts of all of Company's  employees (the "Employees").  Company
has complied in all respects with all material  applicable  laws and regulations
relating to the employment of labor, including,  without limitation,  the Worker
Adjustment and Retraining  Notification Act, as amended, the Employee Retirement
Income  Security  Act of  1974,  as  amended  ("ERISA"),  continuation  coverage
requirements  of group  health  plans  ("COBRA"),  and those  relating to wages,
hours,  collective bargaining,  unemployment  insurance,  worker's compensation,
equal employment  opportunity,  age and disability  discrimination,  immigration
control,  and the payment and  withholding  of taxes.  Company has no employment
agreements,  either  written or oral,  with any person,  and all  Employees  are
terminable  at will.  Company  is not a party  to any  contract  with any  labor
organization  and has not  agreed to  recognize  any  union or other  collective
bargaining unit. No union or other collective bargaining unit has been certified
as  representing  any of Company's  employees,  and Company has not received any
requests from any party for  recognition  as a  representative  of employees for
collective bargaining purposes.

                  3.18 Employee Benefits.

                             3.18.1 Except for those plans described on Schedule
9 hereto (the "Employee Plans"), with respect to the Employees, neither Company,
nor any of their  Affiliates  maintain,  are a party  to,  contribute  to or are
obligated to contribute to, and the 


                                                          REGISTRATION STATEMENT
                                                                     Page II-276
<PAGE>
Employees do not receive  benefits under,  any of the following  (whether or not
set forth in a written document):

                           (i)         any employee  pension  benefit  plan,  as
                                       defined   in   Section   3(2)  of  ERISA,
                                       including   (without    limitation)   any
                                       multiemployer plan, as defined in section
                                       3(37) of ERISA;

                           (ii)        any employee  welfare  benefit  plan,  as
                                       defined in section 3(1) of ERISA;

                           (iii)       any   bonus,    deferred    compensation,
                                       incentive,    restricted   stock,   stock
                                       purchase,     stock     option,     stock
                                       appreciation   right,    phantom   stock,
                                       debenture,  supplemental pension,  profit
                                       sharing,   royalty  pool,  commission  or
                                       similar  plan or  arrangement  other than
                                       bonuses of a  non-recurring  basis  which
                                       may  be  paid  to   some   employees   in
                                       connection with this transaction;

                           (iv)        any  plan,  program,  agreement,  policy,
                                       commitment or other arrangement  relating
                                       to severance or termination  pay, whether
                                       or not published or generally known;

                           (v)         any  plan,  program,  agreement,  policy,
                                       commitment   or  any  other   arrangement
                                       relating to the  provision of any benefit
                                       described  in  section  3(1) of  ERISA to
                                       former   employees  or  their  survivors,
                                       other than procedures  intended to comply
                                       with COBRA;

                           (vi)        any  plan,  program,  agreement,  policy,
                                       commitment or other arrangement  relating
                                       to loans or other  extensions  of credit,
                                       loan guarantees,  relocation  assistance,
                                       educational assistance,  tuition payments
                                       or similar benefits; or

                           (vii)       any  plan,  program,  agreement,  policy,
                                       commitment   or  any  other   arrangement
                                       relating to employee benefits,  executive
                                       compensation     or    fringe    benefits
                                       (including without limitation any foreign
                                       plan  described  in  section  4(b)(4)  of
                                       ERISA).

                             3.18.2 Prior to the date of this Agreement, Company
has  provided to Buyer  complete,  accurate  and  current  copies of each of the
following:

                           (i)         the text  (including  amendments) of each
                                       of the  Employee  Plans,  to  the  extent
                                       reduced to writing;



                                                          REGISTRATION STATEMENT
                                                                     Page II-277
<PAGE>
                           (ii)        a description of all material elements of
                                       each of the Employee Plans, to the extent
                                       not previously reduced to writing;

                           (iii)       with respect to each  Employee  Plan that
                                       is an employee  benefit  plan (as defined
                                       in section 3(3) of ERISA), the following:

                                       (A)       the most  recent  summary  plan
                                                 description,  as  described  in
                                                 section 102 of ERISA;

                                       (B)       any    summary   of    material
                                                 modifications   that  has  been
                                                 distributed to  participants or
                                                 filed with the U.S.  Department
                                                 of Labor  but that has not been
                                                 incorporated   in  an   updated
                                                 summary    plan     description
                                                 furnished  under   Subparagraph
                                                 (A) above;

                                       (C)       the    annual    reports,    as
                                                 described  in  section  103  of
                                                 ERISA,   for  the  most  recent
                                                 three (3) plan  years for which
                                                 an  annual   report   has  been
                                                 prepared     (including     any
                                                 actuarial     and     financial
                                                 statements,     opinions    and
                                                 schedules required by Form 5500
                                                 or Section 103 of ERISA);

                                       (D)       where applicable, the actuarial
                                                 reports  for  the  most  recent
                                                 three (3) reporting periods for
                                                 which  such a  report  has been
                                                 prepared; and

                                       (E)       any trust agreement, investment
                                                 management,  contract  with  an
                                                 insurance or service  provider,
                                                 administration   agreement   or
                                                 other  contract,  agreement  or
                                                 insurance policy;

                           (iv)        with respect to each  Employee  Plan that
                                       is an employee  pension  benefit plan (as
                                       defined  in  Section  3(2) of ERISA)  and
                                       that is  neither an excess  benefit  plan
                                       (as  defined in  Section  3(36) of ERISA)
                                       nor a plan exempted  under Section 201(2)
                                       of ERISA, the following:

                                       (A)       the most  recent  determination
                                                 letter  concerning  the  plan's
                                                 qualification   under   Section
                                                 401(a) of the  Code,  as issued
                                                 by   the    Internal    Revenue
                                                 Service; and



                                                          REGISTRATION STATEMENT
                                                                     Page II-278
<PAGE>
                                       (B)       any request for a determination
                                                 concerning      the      plan's
                                                 qualification   under   Section
                                                 401(a)  of the  Code,  as filed
                                                 with   the   Internal   Revenue
                                                 Service  since  the date of the
                                                 most    recent    determination
                                                 letter; and

                           (v)         any handbook,  manual, policy,  statement
                                       or similar written  guidelines  furnished
                                       to  employees,  excluding  any such  item
                                       that   has   been   superseded   by   any
                                       subsequent   handbook,   manual,   policy
                                       statement or similar written guidelines.

                             3.18.3 With respect to each  Employee  Plan that is
an  employee  benefit  plan (as  defined in  Section  3(3) of ERISA) and that is
subject to ERISA and the regulations thereunder,  each of such requirements has,
in all material respects, been fully met on a timely basis.

                             3.18.4 With respect to each  Employee  Plan that is
an  employee  benefit  plan (as  defined in  Section  3(3) of ERISA) and that is
subject to Part 4 of Subtitle B of Title I of ERISA,  none of the  following now
exist or has existed  within the six-year  period ending on the date hereof that
could result in liability to the Company:

                           (i)         any  act  or  omission   constituting   a
                                       material  violation  of  Section  402  of
                                       ERISA;

                           (ii)        any  act  or  omission   constituting   a
                                       violation of Section 403 of ERISA;

                           (iii)       any act or omission by the  Company,  its
                                       officers,  or  employees  constituting  a
                                       violation  of  Sections  404  or  405  of
                                       ERISA;

                           (iv)        to  Company's   knowledge,   any  act  or
                                       omission by any other person constituting
                                       a  violation  of  Sections  404 or 405 of
                                       ERISA;

                           (v)         any act or omission by the  Company,  its
                                       officers, or employees that constitutes a
                                       violation  of  Sections  406  and  407 of
                                       ERISA and is not  exempted by Section 408
                                       of ERISA and Section 4975(d) of the Code;
                                       or

                           (vi)        any act or omission by the  Company,  its
                                       officers,  or  employees  constituting  a
                                       violation of Sections  503, 510 or 511 of
                                       ERISA.



                                                          REGISTRATION STATEMENT
                                                                     Page II-279
<PAGE>
                             3.18.5  Each  Employee  Plan  that  is an  employee
pension  benefit  plan (as defined in Section 3(2) of ERISA) and that is neither
an excess  benefit  plan (as  defined  in  Section  3(36) of  ERISA)  nor a plan
exempted under Section 201(2) of ERISA meets all requirements for  qualification
under Section 401(a) of the Code and the regulations  thereunder,  except to the
extent  that  such  requirements  may  be  satisfied  by  adopting   retroactive
amendments under Section 401(b) of the Code and the regulations thereunder. Each
such Employee Plan has been  administered  substantially  in accordance with its
terms and the  applicable  provisions of ERISA and the Code and the  regulations
thereunder.

                             3.18.6 No Employee Plan to which Section 412 of the
Code applies has an accumulated funding deficiency (as defined in Section 412(a)
of the Code). No amendment to any such Employee Plan is precluded by any waiver,
extension or prior  amendment  described in Section  412(f) of the Code,  and no
such waiver has been requested.

                             3.18.7  Company  has no  liability  to the  Pension
Benefit Guaranty  Corporation,  to any multiemployer plan (as defined in Section
4001(a)(3)  of ERISA) or to any  trustee  under  Subtitles D or E of Title IV of
ERISA.  No event has occurred  which,  with the giving of notice under  Sections
4063 and 4219 of ERISA, would result in such liability.

                             3.18.8  All   contributions,   premiums   or  other
payments due to (or under) any Employee  Plan has been fully paid or  adequately
provided  for on the books and  financial  statements  of Company.  All accruals
(including,  where appropriate,  proportional accruals for partial periods) have
been made in accordance with prior practices.

                             3.18.9 Each Employee Plan  complies  with,  and has
been administered in compliance with, all applicable requirements of (A) the Age
Discrimination  in  Employment  Act of 1967,  as  amended,  and the  regulations
thereunder,  (B) Title VII of the Civil Rights Act of 1964, as amended,  and the
regulations thereunder and (C) the health care continuation provision of COBRA.

                             3.18.10 No Employee Plan provides  retiree  welfare
benefits  to former  employees  of Company  that  cannot be  canceled at will by
Company as of the Closing Date without residual liability.

                             3.18.11 All employee  welfare benefit plans provide
coverage  for all claims  relating to periods  prior to the Closing Date whether
such claims are filed prior to or after the Closing Date.

                  3.19  Litigation  and  Violations.  Except  as  set  forth  on
Schedule 8, there are no suits, claims,  grievances,  actions,  proceedings,  or
governmental investigations 


                                                          REGISTRATION STATEMENT
                                                                     Page II-280
<PAGE>
pending or, to Company's best knowledge, threatened against or affecting Company
which (i) seeks to  restrain  or enjoin  the  consummation  of the  transactions
contemplated  by this Agreement or (ii) might have a material  adverse effect on
the financial  position or results of  operations of Company.  Company is not in
violation of any term of any judgment,  decree, injunction, or order to which it
is  subject,  which  violation  could  have a  material  adverse  effect  on the
financial position or results of operations of Company.

                  3.20 Disclosure.  No written statement in this Agreement or in
any agreement or other  document  delivered  pursuant to this Agreement by or on
behalf of Company  contains any untrue  statement of a material fact or omits to
state a material fact  necessary to make the  statements  herein or therein,  in
light of the circumstances under which they were made, not misleading.

                  3.21  Investment  Company.   Company  is  not  an  "investment
company" or a company  "controlled" by an investment  company within the meaning
of the Investment  Company Act of 1940, as amended (the "Act"),  and Company has
not  relied  on rule  3a-2  under  the Act as a means of  excluding  it from the
definition of an "investment company" under the Act at any time within the three
(3) year period preceding the Closing Date.

                  3.22 CATV  Instruments  and  Company  Contracts.struments  and
Company Contracts.

                           3.22.1 The CATV Instruments and Company Contracts are
currently in full force and effect, are valid under all applicable laws, and are
enforceable  according to their terms.  Company is in compliance with and is not
material  violation  or  default  under any of the CATV  Instruments  or Company
Contracts. There is no legal action,  governmental proceeding, or investigation,
pending or threatened, to modify, revoke, terminate,  suspend, cancel, or reform
any of the CATV Instruments or Company Contracts.  Company is in compliance with
other  material   applicable   requirements   of  all  governing  or  regulatory
authorities  (including  the  APUC,  the  FCC and the  Register  of  Copyrights)
relating to the CATV Instruments,  including,  without limitation,  all material
requirements for notification,  filing,  reporting,  posting, and maintenance of
logs and  records.  Except as set forth on Schedule 2,  Company  holds valid and
continuing CATV Instruments, Company Contracts, rights-of-way,  rights-of-entry,
permits,  and other rights and authorizations  necessary to enable it to operate
its  CATV  Business.  The  APUC is not  currently  authorized  to  restrict  the
Company's ability to change any rates charged for CATV services, and Company has
not received any notice of any franchising  authority's intention to assert that
the CATV System is not  subject to  effective  competition.  There is no pending
assertion  or  claim  that  operations  pursuant  to  any  franchise  have  been
improperly conducted or maintained.

                           3.22.2 True, complete, and correct copies of the CATV
Instruments and Company Contracts and any amendments thereto effective as of the
date of this Agreement have been delivered by Company to Buyer.


                                                          REGISTRATION STATEMENT
                                                                     Page II-281
<PAGE>
                  3.23  FCC  Compliance.   Company  is  duly  authorized   under
applicable CATV Instruments and FCC rules, regulations, and orders to distribute
the FM signals and off-air television  broadcast signals presently being carried
to the  Subscribers  of its CATV  Business,  to utilize all carrier  frequencies
generated by its CATV Business,  and is licensed to operate all the  facilities,
including, without limitation, any business radio and any cable television relay
service  ("CARS")  system,  being  operated  by its CATV  Business.  Company has
provided all notices to Subscribers  required by The Communications Act of 1934,
as  amended  (the  "Communications  Act")  and FCC rules  and  regulations.  The
operation of Company's  CATV Business and of any  FCC-licensed  facility used in
conjunction  with the  operation  of its CATV  Business  has  been,  and is,  in
compliance  with the  Communications  Act and FCC  rules  and  regulations,  and
Company has  received no notice,  and  otherwise  has no reason to know,  of any
claimed default or violation with respect to the foregoing. Company has obtained
all  required  FCC  clearances  for the  operation  of the  CATV  System  in all
necessary  aeronautical  frequency  bands.  To the extent the CATV  System  uses
frequencies in the aeronautical  bands (108-137 and 225-400 MHZ) at power levels
at or greater  than 28 dBmV,  such  frequencies  have been offset from  standard
aeronautical  frequencies  as  provided  in FCC  rules and  regulations,  on the
channels in the Service Area.  During each calendar  quarter for each year since
January 12, 1992, at least 75% of the CATV System's plant has been monitored for
leakage,  such that 100% of the plant has been so monitored  each calendar year.
Each  system  keeps a log that  records  the  location of any leak of 20 uV/m or
greater, the date the leak was detected, the date the leak was repaired, and the
probable cause of the leak.  Company will continue such monitoring,  repair, and
record  keeping  activities  with respect to the CATV System through the Closing
Date. Prior to the Closing,  Company will have taken the necessary  measurements
for calculation of the CATV System's  cumulative leakage index (CLI) and filed a
CLI  report in  accordance  with  applicable  FCC rules and  regulations.  Where
required,  Company  has been  certified  as in  compliance  with the FCC's equal
employment  opportunity rules for each year since 1991 to the extent the FCC has
reviewed such filing for certification.  Company is in compliance with Subpart K
of FCC rules and regulations, including the network non-duplication,  syndicated
exclusivity,  and sports blackout requirements.  The CATV System has established
appropriate  record  keeping  procedures  and is in  compliance  with the  FCC's
Children's  Television  Rules.  Company has duly and timely  filed all  required
reports  with the FCC.  Company  has  delivered  to Buyer  copies of all current
reports and filings, and all reports and filings for the past two years, made or
filed with the FCC by Company  pursuant  to FCC rules and  regulations.  Company
shall make  available  to Buyer all other past reports and filings made or filed
by Company pursuant to FCC rules and regulations.

                  3.24 APUC  Compliance.  Company is duly  authorized to operate
its CATV Business  under APUC  certificates  as set forth in Schedule 2. Company
holds the APUC  certificates set forth in Schedule 2. The APUC  certificates are
in  full  force  and  effect,   without  any  materially  adverse  modification,
amendment, revocation,  suspension,  termination,  cancellation,  reformation or
condition.  To the best of Company's knowledge,  


                                                          REGISTRATION STATEMENT
                                                                     Page II-282
<PAGE>
after due inquiry, there is no APUC proceeding or any APUC investigation pending
or threatened, for the purpose of modifying, revoking, terminating,  suspending,
canceling  or  reforming  any of the  certificates.  Company  operates its Cable
Systems in accordance with all material APUC rules, regulations and orders.

                  3.25 Patents,  Trademarks, and Copyrights.  Company has timely
and  accurately  made all  requisite  filings and payments  with the Register of
Copyrights  and is  otherwise  in  compliance  with  all  applicable  rules  and
regulations  of the Copyright  Office.  Company has delivered to Buyer copies of
all current  reports and  filings,  and all reports and filings for the past two
(2) years, made or filed by Company pursuant to Copyright rules and regulations.
Company shall make available to Buyer all other past reports and filings made or
filed by Company pursuant to Copyright rules and  regulations.  Company does not
possess any patent, patent right,  trademark, or copyright and is not a party to
any  license or royalty  agreement  with  respect to any patent,  trademark,  or
copyright except for licenses  respecting program material and obligations under
the Copyright Act of 1976 applicable to CATV systems  generally.  The Assets are
free of the rightful  claim of any third party by way of copyright  infringement
or the like.

                  3.26 No Other Assets or Liabilities.  Company has no assets of
any  kind  other  than the  Assets,  CATV  Instruments,  and  Company  Contracts
described  on the  Schedules  and Company has no  liabilities,  obligations,  or
commitments of any kind other than  obligations  under the CATV  Instruments and
Company  Contracts  described on the Schedules and liabilities  disclosed on the
Financial Statements except liabilities, obligations and commitments incurred in
the normal course of business since the date of the Financial Statements.

                  3.27 Required  Consents.  As further set forth in Section 6.8,
Company  and Buyer  will  have as of the  Closing  Date  obtained  the  Required
Consents,  unless Buyer agrees in writing that any Required  Consent need not be
obtained  until after the Closing Date. A true and complete list of all Required
Consents is set forth on Schedule 4.

                  3.28  Overbuilds.  No area presently  served by Company's CATV
business is presently subject to or, to Company's best knowledge,  threatened to
be subject  to an  overbuild  situation.  Company  is  currently  the only cable
television  operator  providing or, to Company's  best  knowledge,  intending to
provide cable television  service in the Service Area. No person or entity other
than Company has been granted or, to the  Company's  knowledge,  has applied for
APUC  Certificates  or a CATV franchise  agreement in any of the communities (or
any of the unincorporated areas) presently served by Company's CATV Business.

                  3.29  Effect of  Certificates.  All  certificates  of  Company
delivered under this Agreement shall be deemed to be additional  representations
and warranties of Company.


                                                          REGISTRATION STATEMENT
                                                                     Page II-283
<PAGE>
                  3.30  Subscriber  Numbers.  As of the Closing  Date,  the CATV
Business  together with the CATV Systems operated by the McCaw/Rock Seward Cable
System Joint  Venture and the  McCaw/Rock  Homer Cable System Joint Venture will
have no fewer than 9,750  subscribers and no fewer than 4,390 Pay TV Units, none
of which were more than sixty-two (62) days delinquent in payment for service.

                  3.31 No  Insolvency.  As of even  date  and as of the  Closing
Date, Company is not and shall not be insolvent.

                  3.32 Compliance with Law.

                           3.32.1 The  ownership,  leasing and use of the Assets
as they  are  currently  owned,  leased  and used  and the  conduct  of the CATV
Business as it is currently conducted do not violate any state, federal or local
laws, which violation,  individually or in the aggregate,  would have a material
adverse effect on a System,  the CATV Business or Company.  Company has received
no notice  claiming a  violation  by Company or the CATV  Business  of any Legal
Requirement  applicable  to  Company  or the CATV  Business  as it is  currently
conducted and to Company's best knowledge,  there is no basis for any claim that
such a violation exists.

                           3.32.2 Company has complied, and the CATV Business is
in compliance,  in all material  respects,  with the specifications set forth in
Part 76, Subpart K of the rules and  regulations of the FCC,  Section 111 of the
Copyright  Act of 1976 and the  rules  and  regulations  of the  U.S.  Copyright
Office,  the Register of Copyrights  and the  Copyright  Royalty  Tribunal,  the
Communications  Act of 1934,  the rules and  regulations  of the FCC,  including
provisions of any thereof  pertaining to signal leakage,  to a utility pole make
ready and to grounding and bonding of cable television  systems (in each case as
the same is  currently  in  effect),  and all other  applicable  material  legal
requirements relating to the construction,  maintenance, ownership and operation
of the Assets, the Systems and the Business.

                           3.32.3  Notwithstanding  the  foregoing,  Company has
used its best efforts to comply in all material  respects with the provisions of
the Cable Television Consumer Protection and Competition Act of 1992 and the FCC
rules and regulations promulgated thereunder (the "1992 Cable Act") as such laws
relate to the  operation  of the  Business.  Except as  provided  in Schedule 8,
Company  has  complied  in  all  material  respects  with  the  must  carry  and
retransmission  consent  provisions of the 1992 Cable Act. Company has delivered
to Buyer  complete and correct copies of all FCC Forms 393,  1200,  1205,  1210,
1215,  1220,  1225, 1235 and 1240 filed with respect to the System and copies of
all other FCC Forms filed by Company and  correspondence  with any  Governmental
Authority  relating to rate  regulation  generally or specific  rates charged to
subscribers  with respect to the  Systems,  including  copies of any  complaints
filed with the FCC with  respect  to any rates  charged  to  Subscribers  of the
Systems,  and any other  documentation  supporting  an  exemption  from the rate
regulation  provisions  of 


                                                          REGISTRATION STATEMENT
                                                                     Page II-284
<PAGE>
the 1992  Cable Act  claimed  by  Company  with  respect  to any of the  Systems
(collectively, "Rate Regulation Documents"). Company has received no notice from
any  Governmental  Authority  with respect to an  intention to enforce  customer
service standards pursuant to the 1992 Cable Act and Company has not agreed with
any Governmental  Authority to establish  customer service standards that exceed
the standards in the 1992 Cable Act. In addition,  Company has also delivered to
Buyer  documentation for each of the Systems in which the franchising  authority
has not certified to regulate rates as of the date of this  Agreement  showing a
determination of allowable rates using a benchmark methodology.  Company has not
made any election  with respect to any cost of service  proceeding  conducted in
accordance  with Part 76.922 of Title 47 of the Code of Federal  Regulations  or
any similar proceeding (a "Cost of Service Election") with respect to any of the
Systems.

                  3.33 Disclosure.  No  representation or warranty by Company in
this  Agreement  or in  any  Schedule  or  Exhibit  to  this  Agreement,  or any
statement,  list or certificate furnished or to be furnished by Company pursuant
to this  Agreement,  contains or will  contain any untrue  statement of material
fact,  or omits or will  omit to state a  material  fact  required  to be stated
therein or necessary to make the statements  contained therein not misleading in
light of the circumstances in which made. Without limiting the generality of the
foregoing, the information set forth in the Schedules concerning the Business is
accurate and complete in all material respects.

                  3.34 Parent Entity.  Company is an ultimate  parent entity (as
the term "ultimate parent entity" is defined in 16 C.F.R. section  801.1(a)(3)).
The total assets based on the most recent  audited  balance sheet of Company are
(and,  immediately  prior to the  Closing,  will be) less than  $10,000,000,  as
determined in accordance with 16 C.F.R. sections 801.1(b), 801.1(c), and 801.11.
Neither  Seller nor any entity  directly or indirectly  controlled by Seller (as
the term  "control"  is defined  in 16 C.F.R.  section  801.1(b))  is engaged in
manufacturing.

Section 4                 Assumed Liabilities and Excluded Assets.

                  4.1 Assignment and Assumption.  Company will assign, and Buyer
will  assume and  perform,  the Assumed  Liabilities,  which are defined as: (a)
Company's obligations to subscribers of the Business for (i) subscriber deposits
held by Company as of the Closing Date and which are refundable, (ii) subscriber
advance  payments  held by Company as of the  Closing  Date for  services  to be
rendered  by a System  after the  Closing  Date and (iii) the  delivery of cable
television  service to  subscribers  of the Business after the Closing Date; and
(b)  obligations  accruing and relating to periods  after the Closing Date under
Governmental  Permits listed on Schedule 2 (to the extent that such Governmental
Permits are transferrable) and Company Contracts listed on Schedule 3. Except as
set forth in Section 2.3, Buyer will not assume or have any  responsibility  for
any liabilities or obligations of Company other than the Assumed 


                                                          REGISTRATION STATEMENT
                                                                     Page II-285
<PAGE>
Liabilities.  In no event will Buyer assume or have any  responsibility  for any
liabilities or obligations associated with the Excluded Assets.

                  4.2  Excluded  Assets.  The  Excluded  Assets,  which  will be
retained by Company,  will consist of the following:  (a) upon Buyer's  request,
programming contracts; (except for those set forth on Schedule 3); (b) insurance
policies  and rights and claims  thereunder  (except as  otherwise  provided  in
Section  6.19);  (c)  bonds,  letters of credit,  surety  instruments  and other
similar items; (d) cash and cash equivalents;  (e) Company's  trademarks,  trade
names,  service  marks,  service  names,  logos and similar  proprietary  rights
(subject to Buyer's rights under Section 6.24);  (f) Company's  rights under any
agreement  governing or evidencing an obligation of Company for borrowed  money;
(g) Company's rights under any contract,  license,  authorization,  agreement or
commitment other than those creating or evidencing Assumed Liabilities;  and (h)
the assets described on Schedule 10.

Section 5                 Buyer's Representations, Warranties, and Covenants

                  Buyer  represents,  warrants,  and  covenants  to  Company  as
follows:

                  5.1  Organization  and Authority.  Buyer is a corporation duly
organized,  validly existing, and in good standing under the laws of Alaska; has
all requisite power, right, and authority to execute,  deliver, and perform this
Agreement;   and  has  taken  all  action  required  by  law,  its  Articles  of
Incorporation  and Bylaws,  and otherwise to authorize the execution,  delivery,
and performance of this Agreement.

                  5.2  Capitalization.  The  authorized  capital  stock of Buyer
consists  of  50,000,000  shares of Class A common  stock,  of which  19,696,207
shares are issued and outstanding; 10,000,000 shares of Class B common stock, of
which 4,175,434 are issued and  outstanding,  and 1,000,000  shares of preferred
stock, of which no shares are issued and outstanding,  all as of April 15, 1996.
As of the Closing, the GCI Shares will be duly authorized, validly issued, fully
paid  and  nonassessable  and  free  of any  Security  Interests.  There  are no
outstanding  or  authorized  (i)  securities  of  Buyer   convertible   into  or
exchangeable  or exercisable  for any shares of its capital  stock,  except that
each  share of Class B common  stock is  convertible  into one  share of Class A
common  stock,  or  (ii)  subscriptions,   options,   warrants,  calls,  rights,
commitments,  or other agreements or obligations of any kind obligating Buyer to
issue  any  additional  shares  of its  capital  stock or any  other  securities
convertible  into or evidencing the right to acquire or subscribe for any shares
of its capital stock,  except pursuant to (a) Buyer's December 1986 Stock Option
Plan,  (b) Buyer's  December,  1986 Employee  Stock Purchase Plan; (c) that June
1989,  option  agreement  granted to John  Lowber to acquire  100,000  shares of
Buyer's Class A common stock at $0.75 per share;  (d) that June 1989,  incentive
agreement with William Behnke to acquire 85,190 shares of Buyer's Class A common
stock  for $.001  per  share;  and (e)  those  shares  proposed  to be issued as
follows:  (i) the proposed issuance of Two Million (2,000,000) shares of Buyer's
Class A common stock 


                                                          REGISTRATION STATEMENT
                                                                     Page II-286
<PAGE>
to MCI  Telecommunication  Corporation  ("MCI") for Thirteen  Million and no/100
Dollars  ($13,000,000.00),  (ii) the acquisition of the ongoing cable television
business and cable  television  systems of Alaskan Cable Network,  Inc., for not
more  than  Two  Million  Nine  Hundred  Twenty-Three   Thousand   Seventy-Seven
(2,923,077) shares of Buyer's Class A Common Stock; (iii) the acquisition of the
ongoing cable television  systems of Prime Cable of Alaska,  L.P.  ("Prime") for
not more than Eleven Million Eight Hundred Thousand (11,800,000) shares of GCI's
Class A Common Stock; and (iv) any Buyer's Shares and Notes issued in connection
with (ii) and (iii) herein for the escrow holdbacks.

                  5.3  Enforceability.  This  Agreement  constitutes  the legal,
valid, and binding  obligation of Buyer enforceable  against Buyer in accordance
with its terms,  except as the same may be limited  by  bankruptcy,  insolvency,
reorganization,  moratorium,  or other  similar  laws  affecting  generally  the
enforcement of creditors' rights and by general  principles of equity.  There is
no litigation  at law, in equity,  or in any other  proceeding or  investigation
pending or threatened against Buyer which might materially impair the ability of
Buyer to perform under this Agreement.

                  5.4  Records.  Buyer's  minute  books,  as made  available  to
Company,  contains current,  complete,  and accurate records of all meetings and
actions of Buyer's directors, and, if any, committees of the board of directors.
All  material  actions  and  transactions  taken  or  entered  into by  Buyer or
otherwise  requiring action by its directors and/or  shareholders have been duly
authorized  or ratified as necessary  and are  evidenced  in such minute  books.
Buyer's books and ledgers,  as made available to Company,  contain  complete and
accurate  records of all  issuances and  transfers of its stock  interests.  The
signatures  appearing  in  such  minute  books,  and  ledgers  are  the  genuine
signatures of the persons purporting to have signed them.

                  5.5 No Breach or  Violation.  Subject  only to  obtaining  the
consents and approvals set forth on Schedule 12, the  execution,  delivery,  and
performance  of this  Agreement  by Buyer  (a) does not and will not  (with  the
giving of notice or passage of time or both ) (i)  conflict  with or result in a
breach or violation by Buyer of, or (ii) constitute a default by Buyer under, or
(iii) create any right of  termination,  cancellation,  or  acceleration  by any
party  pursuant to, any of its  contracts,  any  statute,  ordinance,  rule,  or
regulation, or any agreement, instrument, judgment, or order to which Buyer is a
party or by which Buyer is bound or may be  affected,  and (b) does not and will
not (with the giving of notice or passage of time or, both) create or impose any
Security Interest on the GCI Shares.

                  5.6  Compliance  with Laws.  Buyer is in  compliance  with all
applicable  laws,  rules,  regulations,  orders,  ordinances,  and  codes of the
Governmental Authorities having jurisdiction over Buyer's business and affairs.

                  5.7  Financial  Statements.  Buyer has  delivered  to  Company
correct and complete copies of Buyer's audited financial  statements for each of
the two most recent  


                                                          REGISTRATION STATEMENT
                                                                     Page II-287
<PAGE>
fiscal years ended prior to the date of this  Agreement  and  unaudited  interim
monthly  financial  statements  for  periods  subsequent  to the end of the most
recent fiscal year end (the "Financial  Statements").  The Financial  Statements
are complete and correct,  were prepared in accordance  with generally  accepted
accounting  principles  applied on a  consistent  basis  throughout  the periods
covered thereby (except, in the case of interim financial statements, subject to
normal recurring year-end adjustments and the absence of footnotes),  and fairly
present  in  accordance  with  generally  accepted  accounting   principles  the
financial  condition and results of Buyer's operations as of the dates indicated
and for the periods covered thereby. Except as disclosed by, or reserved against
in, its most recent  balance sheet included in the Financial  Statements,  Buyer
did not have as of the date of such balance sheet any  liability or  obligation,
whether accrued,  absolute, fixed or contingent (including,  without limitation,
liabilities  for taxes or unusual forward or long-term  commitments),  which was
material to Buyer's business,  results of operations or financial  condition and
which is required to be disclosed on, or reserved  against in, a balance  sheet.
Buyer has received no notice of any fact which may form a basis for any claim by
a third party which,  if asserted,  could result in a liability  affecting Buyer
not disclosed by or reserved against in Buyer's most recent balance sheet.  From
the date of the most recent balance sheet  included in the Financial  Statements
to and including the date hereof, (i) Buyer's business has been operated only in
the  ordinary  course,  (ii) Buyer has not sold or disposed of any assets  other
than in the  ordinary  course of  business,  (iii)  there has not  occurred  any
material  adverse  change  or event in  Buyer's  business,  operations,  assets,
liabilities,  financial  condition,  or results of  operations  compared  to the
business,  operations,  assets, liabilities,  financial condition, or results of
operations  reflected  in the  Financial  Statements,  and  (iv)  there  has not
occurred  any  theft,  damage,  destruction,  or loss  which has had a  material
adverse effect on Buyer.

                  5.8 Tax Returns and Other  Reports.  Buyer has duly and timely
filed in proper form all federal, state, local, and foreign, income,  franchise,
sales, use, property,  excise,  payroll, and other tax returns and other reports
(whether  or not  relating  to  taxes)  required  to be  filed  by law  with the
appropriate governmental authority,  and, to the extent applicable,  has paid or
made  provision  for payment of all taxes,  fees,  and  assessments  of whatever
nature including  penalties and interest,  if any, which are due with respect to
any  aspect of its  business  or any of its  properties.  Except as set forth on
Schedule 13, there are no tax audits  pending and no  outstanding  agreements or
waivers extending the statutory period of limitations applicable to any relevant
tax return.

                  5.9 Transfer Taxes. There are no sales, use, transfer, excise,
or license taxes,  fees, or charges  applicable with respect to the transactions
contemplated by this Agreement.

                  5.10  Litigation  and  Violations.  Except  as  set  forth  on
Schedule 14, there are no suits, claims, grievances,  actions,  proceedings,  or
governmental  investigations  pending or, to Buyer's best knowledge,  threatened
against or affecting Buyer which 


                                                          REGISTRATION STATEMENT
                                                                     Page II-288
<PAGE>
(i) seek to restrain or enjoin the consummation of the transactions contemplated
by this  Agreement  or (ii)  might  have a  material  adverse  effect on Buyer's
financial  position or results of  operations.  Buyer is not in violation of any
term of any judgment, decree, injunction, or order to which it is subject, which
violation  could have a material  adverse  effect on the  financial  position or
results of operations of Buyer.

                  5.11 Disclosure.  No written statement in this Agreement or in
any agreement or other  document  delivered  pursuant to this Agreement by or on
behalf of Buyer  contains any untrue  statement  of a material  fact or omits to
state a material fact  necessary to make the  statements  herein or therein,  in
light of the circumstances under which they were made, not misleading.

                  5.12 Investment Company.  Buyer is not an "investment company"
or a company  "controlled"  by an investment  company  within the meaning of the
Investment Company Act of 1940, as amended (the "Act"), and Buyer has not relied
on rule 3a-2 under the Act as a means of excluding it from the  definition of an
"investment  company" under the Act at any time within the three (3) year period
preceding the Closing Date.

                  5.13 No  Finders  or  Brokers.  Neither  Buyer  nor any of its
Affiliates have entered into any contract,  arrangement,  or understanding  with
any  person or firm  which may  result in any  obligation  of Company to pay any
finder's,  broker's,  or agent's fees or commissions or other like payments as a
result of the transactions contemplated by this Agreement.

                  5.14 No  Insolvency.  As of even  date  and as of the  Closing
Date, Buyer is not and shall not be insolvent.

Section 6                 Conduct Prior to Closing

                  6.1 Operation in Ordinary  Course.  Company shall  continue to
operate the CATV  Business  prior to the Closing Date in the ordinary  course as
presently  operated  under its standard  operating  practices  and  generally in
accordance  with its 1996 budget,  including all required  budgeted  maintenance
capital expenditures for current maintenance,  unless otherwise agreed by Buyer,
including,  without  limitation,  payment  of all  expenses  in a timely  manner
consistent with prior business  practices  without  accelerating or delaying any
payments,  maintaining business books, records, and files all in accordance with
past practices,  consistently  applied,  and  maintaining the Assets  (including
maintenance of the  inventories of spare  equipment and parts listed on Schedule
5), and continuing to implement  procedures for disconnection and discontinuance
of  service  to  Subscribers  whose  accounts  are  delinquent  or past due,  in
accordance  with current  practice and policy as of the date of this  Agreement.
Without  limiting the generality of the foregoing,  Company agrees that Company,
or anyone acting on Company's  behalf,  shall not, without Buyer's prior written
consent,  (i)  enter  into  or  modify  any  material  agreement,  contract,  or
commitment which, if entered into prior to 


                                                          REGISTRATION STATEMENT
                                                                     Page II-289
<PAGE>
the date of this Agreement, would be required to be disclosed on any Schedule to
this Agreement,  (ii) place or permit to exist any lien,  encumbrance,  security
interest,  claim or charge of any kind  against the Assets,  (iii) enter into or
continue  any  discussions,  negotiations  or  contracts  relating  to the sale,
assignment,  or transfer any Assets of the Company or the CATV  Business  except
(a) in the  ordinary  course  of  business  and (b)  for  Company's  payment  of
dividends to its shareholders in cash, (iv) commit any act or omit to do any act
which would cause a breach of any CATV Instrument or Company  Contract or permit
any amendment to or cancellation of any CATV Instrument or Company Contract, (v)
commit any  violation of any law,  statute,  rule,  governmental  regulation  or
order,  (vi) change the rate  charged for Basic CATV Service or Pay TV or add or
delete any program service,  except in the ordinary course of business.  Company
shall  maintain  insurance on the CATV Business and the Assets until the Closing
Date consistent  with past practice and policy,  and Company shall bear all risk
of loss on or prior to Closing with respect to the CATV  Business and the Assets
as a result of any loss, claim,  casualty,  or calamity.  At Buyer's request and
expense, Company shall also make its budgeted capital expenditures for rebuilds,
upgrades or improvements.

                  6.2 Agents. Company agrees that Buyer's designated agent shall
be included in all material business discussions  regarding Company's conduct of
its affairs which are other than in the ordinary or usual course of business.

                  6.3 Company Contracts.  All Company Contracts are described on
Schedule 3 or Schedule 10. Complete and correct copies of all Company  Contracts
have been provided to Buyer.  Each Company  Contract is in full force and effect
and constitutes the valid, legal, binding and enforceable  obligation of Company
and Company is not and to Company's  knowledge,  each other party thereto is not
in breach or default of any terms or conditions thereunder.

                  6.4 No New Buyer  Securities.  Buyer  shall not issue or enter
into any  agreement  to issue any  additional  securities,  warrants  or options
(other than stock options issued in the ordinary course of business  pursuant to
its stock option plan) to purchase  securities prior to the Closing,  except (i)
for the proposed issuance of Two Million  (2,000,000)  shares of Buyer's Class A
common stock to MCI  Telecommunication  Corporation ("MCI") for Thirteen Million
and no/100 Dollars  ($13,000,000.00),  (ii) the acquisition of the ongoing cable
television business and cable television systems of Alaskan Cable Network, Inc.,
for not more than Two Million Nine Hundred Twenty Three  Thousand  Seventy Seven
(2,923,077) shares of Buyer's Class A Common Stock; (iii) the acquisition of the
ongoing cable television business and cable television systems of Prime Cable of
Alaska, L.P. ("Prime"),  for not more than Eleven Million Eight Hundred Thousand
(11,800,000)  shares of GCI's Class A Common Stock;  and (iv) any Buyer's Shares
and  Notes  issued in  connection  with (ii) and  (iii)  herein  for the  escrow
holdbacks. Neither Buyer nor anyone acting on Buyer's behalf shall enter into or
continue any discussions,  negotiations or contracts relating to the sale of all
or any  portion  of its  assets  or  equity,  except in the  ordinary  course of
business.


                                                          REGISTRATION STATEMENT
                                                                     Page II-290
<PAGE>
                  6.5 Employees.  Company shall use its best efforts to preserve
its relationship  with its employees and to pay to those employees all salaries,
commissions,  and other  compensation  to which they are  entitled  for services
rendered prior to the Closing Date.

                  6.6 Access to Premises  and Records.  The parties  shall cause
Company and Buyer to give to the parties and their  representatives  full access
at  reasonable  times to (i) all the  premises and books and records of the CATV
Business and to all of the Assets and (ii) Buyer's premises,  books and records,
and each shall furnish to the parties and their  representatives all information
regarding the business and properties of Company and Buyer as shall from time to
time reasonably requested.  Furthermore, Buyer shall be given the opportunity to
perform a field audit of Company's accounts with Company's  cooperation prior to
Closing.  Buyer agrees that it will exercise this right of access solely for the
purposes of completing its  investigation  in connection with this Agreement and
that  the  confidentiality  of any  data or  information  acquired  by  Buyer in
connection  with  this  transaction   shall  be  maintained  by  Buyer  and  its
representatives  in accordance  with Section  18.17.  Without  limiting  Buyer's
rights of access stated above,  Company shall permit Buyer and/or such agents or
experts as Buyer shall designate,  full access to the Real Property or any of it
and all records  concerning the Real Property during  reasonable  business hours
for purposes of such independent investigation Buyer shall desire to conduct. At
Buyer's  sole  option,  such  investigation  may  include  testing  of the soil,
groundwater,  building components,  tanks,  containers and equipment on the Real
Property  as Buyers or  Buyer's  agents  or  experts  shall  deem  necessary  to
determine  or  confirm  the  environmental   condition  of  the  Real  Property.
Performance  of such an  inspection  or review  shall  not in any way  modify or
otherwise affect Buyer's rights or Company's  obligations  under this Agreement,
including but not limited to Company's representations and warranties in Section
3.16 above.

                  6.7 Existing Relationships. Company shall use its best efforts
to  preserve  the CATV  Business as a going  concern  and to  preserve  existing
relationships  with the APUC,  and its suppliers,  customers,  and others having
business dealings with Company. Buyer shall use its best efforts to preserve its
business as a going  concern and to preserve  its  existing  relationships  with
suppliers, customers and others having business dealings with it.

                  6.8  Required  Consents.  Company and Buyer agree to cooperate
and use their reasonable commercial efforts to obtain all Required Consents in a
form and upon terms and conditions  reasonably  satisfactory  to Buyer.  Company
will afford Buyer the  opportunity  to review,  approve,  and revise the form of
Required Consents prior to delivery to any consenting  party.  Nothing contained
herein  shall be deemed to  require  Buyer to  undertake  any  extraordinary  or
unreasonable  measures  to obtain such  Required  Consents,  including,  without
limitation,  the initiation or prosecution of legal proceedings,  the payment of
any fees,  or  agreeing to change any terms of any CATV  Instruments  or Company
Contracts.


                                                          REGISTRATION STATEMENT
                                                                     Page II-291
<PAGE>
                  6.9 Compliance with CLI Standards.  Company shall notify Buyer
at least 10 days prior to the annual CLI compliance and reporting  tests,  which
tests shall be made not later than June 30, 1996, and  representatives  of Buyer
and Company  shall  jointly  inspect the CATV  Systems to  determine if the CATV
Systems are reasonably in compliance with the CLI standards under applicable FCC
rules and  regulations  ("CLI  Standards") and to the extent the CATV Systems or
any portion thereof are not in compliance  with CLI Standards,  to determine the
steps to be taken by Company (including, to the extent required, the replacement
or upgrading of equipment and the  institution  of  maintenance  procedures)  in
order to cause the CATV Systems to reasonably comply with CLI Standards prior to
the Closing Date ("the Remedial  Steps").  If Buyer and Company fail to agree as
to whether the CATV Systems or any portion thereof reasonably  complies with CLI
Standards  or as to the  Remedial  Steps to be taken,  Buyer and  Company  shall
jointly  select a qualified  engineering  firm to inspect the CATV  Systems (the
"Inspector").  Company  shall  cooperate  fully with any  representative  of the
Inspector in making such  inspection.  Once the  inspection  is  completed,  the
Inspector  shall,  as  promptly as  practical  after its  engagement,  deliver a
written report to Buyer and Company  stating whether or not the CATV Systems are
in compliance  and if not,  recommend  Remedial  Steps which will cause the CATV
Systems to fully comply with CLI Standards.  The Inspector's  determination  and
report  shall be final and  binding  on Buyer  and  Company.  Fees and  expenses
incurred by the  Inspector  shall be paid by Buyer if the CATV Systems are found
by the Inspector to comply and by Company if any substantial portion of the CATV
System is found not to comply with CLI Standards.

                  6.10 MDU  Agreements.  Company  represents  and warrants  that
agreements have been granted to Company from all MDU property owners serviced by
the Company,  and that it has provided access to all such  agreements  which are
listed on Schedule 11 to Buyer.

                  6.11  Public  Announcements.  Except  as  may be  required  by
applicable  law or  regulation,  neither Buyer nor Company shall issue any press
release or otherwise make any public statement with respect to this Agreement or
the  transactions  contemplated  hereby without the prior written consent of the
other  parties,  which consent shall not be  unreasonably  withheld and shall be
promptly given.  Notwithstanding the foregoing,  Company acknowledges and agrees
that Buyer shall make all press releases it deems necessary under the securities
law, rules and regulations.

                  6.12 Due Diligence. Within 10 days after the date of execution
of this Agreement,  the parties agree to deliver fully  completed  Schedules and
all due diligence materials  reasonably  requested by any party. Any party shall
have 10 days after receipt to review such completed  Schedules and due diligence
materials and to notify the applicable party of any problems or concerns arising
as a result of such review.  If Company and Buyer are unable to resolve any such
problems or concerns by negotiating a mutually satisfactory modification to this
Agreement,  the objecting party shall have the 


                                                          REGISTRATION STATEMENT
                                                                     Page II-292
<PAGE>
right to  terminate  this  Agreement  within 10 days after  notifying  the other
parties  of such  problems  or  concerns  and no party  shall  have any  further
obligations hereunder.

                  6.13  Correction  of  any  Noncompliance   Prior  to  Closing.
Notwithstanding  any other provision of this Agreement,  the parties acknowledge
and agree that  further  investigation  is  required  to  determine  whether the
representations  and warranties  contained in Sections 3.16, 3.17, 3.18 and 3.25
are true and  correct  as of the date of  execution  of this  Agreement.  To the
extent that the parties determine that any such  representation  and warranty is
not true and correct as of the date of execution of this Agreement,  the parties
intend that Company shall take whatever  action is necessary to assure that such
representations  and  warranties are true and correct as of the Closing Date and
the fact that such  representations  and warranties were not true and correct as
of the date of execution of this Agreement shall not be deemed to be a breach of
this Agreement.  With respect to any filings and associated payments required to
be made by Company in order to make the representations and warranties contained
in  Sections  3.24,  3.25 and 3.27  true and  correct,  copies  of such  filings
indicating  the filing date with the FCC,  the APUC,  or  Copyright  Office,  as
appropriate,  shall be  delivered  to Buyer at least ten (10) days  prior to the
Closing Date.

                  6.14  Leased  Equipment.   Company  shall  pay  the  remaining
balances on any leases for Equipment used in the CATV Business and deliver title
to such  Equipment  free and clear of all  Encumbrances  (other  than  Permitted
Encumbrances) to Buyer at the Closing.

                  6.15 Estoppel  Certificates,  Franchise Forms.

                           6.15.1 Company will use reasonable efforts to obtain,
at its expense, such estoppel certificates or similar documents from lessors and
other  Persons  who are  parties to Company  Contracts  as Buyer may  reasonably
request.

                           6.15.2  Company  will  execute  and  deliver  to  the
appropriate  Governmental  Authority,  the FCC Forms 394  prepared by Buyer with
respect  to each  franchise  as to which  such Form 394 is  required  within two
Business Days after it receives each such Form 394 from Buyer.

                  6.16 HSR Notification.  If applicable,  as soon as practicable
after the  execution of this  Agreement,  but in any event no later than 45 days
after such execution, Company and Buyer will each complete and file, or cause to
be completed and filed,  any  notification and report required to be filed under
the Hart-Scott-Rodino  Antitrust  Improvements Act of 1976, as amended (the "HSR
Act");  and each such filing  shall  request  early  termination  of the waiting
period  imposed by the HSR Act.  The  parties  shall use their  reasonable  best
efforts  to respond as  promptly  as  reasonably  practicable  to any  inquiries
received  from the  Federal  Trade  Commission  (the  "FTC")  and the  Antitrust
Division of the Department of Justice (the "Antitrust  Division") for additional


                                                          REGISTRATION STATEMENT
                                                                     Page II-293
<PAGE>
information  or   documentation   and  to  respond  as  promptly  as  reasonably
practicable to all inquiries and requests  received from any other  Governmental
Authority in  connection  with  antitrust  matters.  Company and Buyer shall use
their respective reasonable best efforts to overcome any objections which may be
raised by the FTC, the Antitrust  Division or any other  Governmental  Authority
having jurisdiction over antitrust matters. Notwithstanding the foregoing, Buyer
shall  not be  required  to make any  significant  change in the  operations  or
activities of the business (or any material assets employed therein) of Buyer or
any of its Affiliates,  if Buyer determines in good faith that such change would
be  materially  adverse to the  operations or activities of the business (or any
material  assets  employed  therein)  of Buyer or any of its  Affiliates  having
significant  assets,  net worth,  or  revenue.  Notwithstanding  anything to the
contrary in this Agreement,  if Buyer, in its sole opinion,  considers a request
from a  governmental  agency for additional  data and  information in connection
with the HSR Act to be unduly  burdensome,  Buyer may terminate this  Agreement.
Within 10 days after  receipt of a statement  therefor,  Company will  reimburse
Buyer for  one-half  of the  filing  fees  payable by Buyer in  connection  with
Buyer's filing under the HSR Act.

                  6.17 No Shopping.  None of Company,  its  shareholders  or any
agent or representative of any of them will, during the period commencing on the
date of this  Agreement  and ending  with the earlier to occur of the Closing or
the  termination  of this  Agreement,  directly  or  indirectly  (a)  solicit or
initiate  the  submission  of  proposals  or offers  from any Person for, or (b)
furnish any  information  to any Person other than Buyer relating to, any direct
or indirect acquisition or purchase of all or any portion of the Assets.

                  6.18  Notification of Certain  Matters.  Company will promptly
notify Buyer of any fact,  event,  circumstance or action (a) which, if known on
the date of this  Agreement,  would have been  required to be disclosed to Buyer
pursuant to this  Agreement or (b) the  existence or  occurrence  of which would
cause any of Company's representations or warranties under this Agreement not to
be correct and complete.

                  6.19 Risk of Loss; Condemnation.

                           6.19.1  Company  will  bear  the  risk of any loss or
damage to the  Assets  resulting  from  fire,  theft or other  casualty  (except
reasonable wear and tear) at all times prior to the Closing. If any such loss or
damage is so substantial as to prevent normal  operation of any material portion
of a System or the  replacement or  restoration of the lost or damaged  property
within 20 days  after the  occurrence  of the  event  resulting  in such loss or
damage,  Company will  immediately  notify Buyer of that fact and Buyer,  at any
time within 10 days after receipt of such notice, may elect by written notice to
Company either (i) to waive such defect and proceed toward  consummation  of the
acquisition  of the Assets in  accordance  with terms of this  Agreement or (ii)
terminate thi
s Agreement. If Buyer elects so to terminate this Agreement,  Buyer
and Company will be discharged of any and all  obligations  hereunder.  If Buyer
elects  to  consummate the


                                                          REGISTRATION STATEMENT
                                                                     Page II-294
<PAGE>
transactions  contemplated by this Agreement notwithstanding such loss or damage
and does so, there will be no adjustment in the consideration payable to Company
on account of such loss or damage but all insurance proceeds payable as a result
of the  occurrence  of the  event  resulting  in  such  loss or  damage  will be
delivered by Company to Buyer,  or the rights to such  proceeds will be assigned
by Company to Buyer if not yet paid over to Company.

                           6.19.2  If,  prior  to the  Closing,  any  part of or
interest in the Assets is taken or  condemned as a result of the exercise of the
power of  eminent  domain,  or if a  Governmental  Authority  having  such power
informs  Company or Buyer  that it  intends  to  condemn  all or any part of the
Assets (either such even, a "Taking"),  then Buyer may terminate this Agreement.
If Buyer does not elect to terminate  this  Agreement,  then (a) Buyer will have
the sole right,  in the name of Company,  if Buyer so elects,  to negotiate for,
claim,  contest and receive all damages with respect to the Taking,  (b) Company
will be relieved of its  obligation  to convey to Buyer the Assets or  interests
that are the subject of the Taking,  (c) at the Closing,  Company will assign to
Buyer all of Company's rights to all damages payable with respect to such Taking
and will pay to Buyer all damages previously paid to Company with respect to the
Taking and (d)  following  the  Closing,  Company  will give Buyer such  further
assurances of such rights and assignment with respect to the taking as Buyer may
from time to time reasonably request.

                  6.20  Lien  and  Judgment  Searches.   Buyer  will  obtain  at
Company's expense,  (a) the results of a lien search conducted by a professional
search  company of records in the  offices of the  secretaries  of state in each
state and county clerks in each county where there exist tangible Assets, and in
the state and county where Company's  principal  offices are located,  including
copies of all  financing  statements  or similar  notices  or  filings  (and any
continuation  statements)  discovered by such search company and (b) the results
of a search of the dockets of the clerk of each federal and state court  sitting
in the  city,  county  or  other  applicable  political  subdivision  where  the
principal office or any material assets of Company may be located,  with respect
to judgments,  orders,  writs or decrees against or affecting  Company or any of
the Assets.

                  6.21 Transfer Taxes.  Buyer and Company will share equally the
payment of any state or local  sales,  use,  transfer,  excise,  documentary  or
license taxes or fees.

                  6.22 Letter to Programmers.  At Buyer's request,  Company will
transmit a letter in the form of Exhibit G to all programmers from which Company
purchases programming.

                  6.23 Updated Schedules. Not less than five business days prior
to Closing,  Company will deliver to Buyer revised copies of Schedules 1 through
11 which  shall  have been  updated  and  marked to show any  changes  occurring
between the date of this Agreement and the date of delivery;  provided, however,
that for purposes of 


                                                          REGISTRATION STATEMENT
                                                                     Page II-295
<PAGE>
Company's  representations  and warranties and covenants in this Agreement,  all
references to the Schedules  will mean the version of the Schedules  attached to
this Agreement on the date of signing,  and provided  further that if the effect
of any such  updates to  Schedules  is to  disclose  any one or more  additional
properties,  privileges,  rights,  interests or claims as Assets,  Buyer,  at or
before  Closing,  will have the  right (to be  exercised  by  written  notice to
Company) to cause any one or more of such items to be  designated  as and deemed
to constitute Excluded Assets for all purposes under this Agreement.

                  6.24 Use of Company's Name.  Buyer may continue to operate the
Systems using Company's rights to the name  "Cablevision"  linked to the name of
the community being serviced and all derivations and  abbreviations of such name
and related marks.  Within one hundred eighty (180) days after the Closing Date,
Buyer  will  discontinue  using and will  dispose  of all  items of  stationery,
business cards and literature bearing such names or marks.  Notwithstanding  the
foregoing,  Buyer will not be required to remove or  discontinue  using any such
name or mark that is affixed to  converters  or other  items in or to be used in
subscriber homes or properties,  or as are used in a similar fashion making such
removal or discontinuation impracticable for Buyer.

                  6.25  Subscriber  Billing  Services.  Company  will provide to
Buyer,  access to its outside  billing system services  provider  ("Transitional
Billing Services") in connection with the System and Assets acquired by Buyer

                  6.26 Satisfaction of Conditions.  Each party will use its best
efforts  to  satisfy,  or to  cause  to be  satisfied,  the  conditions  to  the
obligations of the other party to consummate the  transactions  contemplated  by
this  Agreement,  as set forth in Section  17,  provided  that Buyer will not be
required to agree to any increase in the amount  payable with respect to, or any
modification  that makes more  burdensome  in any material  respect,  any of the
Assumed Liabilities.

Section 7                 Closing

                  The Closing shall occur at the law offices of Foster, Pepper &
Shefelman,  1111 Third Avenue,  Suite 3400,  Seattle, WA 98101, at 10:00 o'clock
a.m.  local time,  on such date  acceptable to Company and Buyer within five (5)
business days after all  conditions to Closing  contained in this Agreement have
been met, or at such different place,  time, or date as may be agreed by Company
and Buyer.  Until the  Closing or earlier  termination  of this  Agreement,  the
parties shall cooperate fully by exchanging  information upon reasonable request
and in all other  reasonable  ways to enable  all  parties  to  prepare  for the
Closing  and to  determine  whether  the  conditions  to the  Closing  have been
satisfied.  Either Buyer or Company may terminate  this  Agreement  upon written
notice to the others if the Closing  hereunder  has not  occurred by October 31,
1996,  or, if the Alaska Public  Utilities  Commission's  consent shall not have
been obtained by such date, then at Buyer's or Company's  option,  no later than
December  31,  


                                                          REGISTRATION STATEMENT
                                                                     Page II-296
<PAGE>
1996,  unless the APUC has earlier  notified the parties that no consent will be
given to this  transaction,  in which case the Agreement  shall be terminated at
that time, and the parties shall thereupon be relieved of any further obligation
hereunder;  provided,  however,  if a  party's  breach  of  this  Agreement  has
prevented the consummation of the transactions  contemplated  hereby, such party
shall not be entitled to  terminate  this  Agreement  under this  Section 7. The
Closing Date may be further extended by mutual consent of the parties.

Section 8                 Deliveries by Company at Closing

                  At Closing, Company shall deliver to Buyer:

                  8.1 the Bills of Sale for the Assets in the form  attached  as
Exhibit B;


                  8.2 an  Assignment  and  Assumption  of  Agreement in the form
attached as Exhibit C;

                  8.3 one or more  Assignments of Leases in the form attached as
Exhibit  D and,  if  requested  by  Buyer,  short  forms  or  memoranda  of such
Assignments in recordable form;

                  8.4  a  Non-Compete   Agreement  signed  by  Company  and  the
Shareholders  of the  Company,  excluding  Craig  McCaw,  Wayne Perry and Donald
Adams,  in the form  attached as Exhibit F; shall be delivered in  consideration
for the other agreements set forth herein and for no further consideration;

                  8.5 an affidavit of Company,  under  penalty of perjury,  that
Company is not a "foreign person" (as defined in the Foreign  Investment in Real
Property Tax Act and applicable  regulations)  and that Buyer is not required to
withhold any portion of the consideration payable under this Agreement under the
provisions of such Act in the form attached as Exhibit H;

                  8.6 motor vehicle title  certificates  and such other transfer
instruments  as Buyer may deem  necessary or advisable to transfer the Assets to
Buyer and to perfect Buyer's rights in the Assets;

                  8.7 incumbency and specimen signature certificates,  dated the
Closing  Date,  from Company with respect to the officers or managers of Company
executing  this Agreement and any other  document  delivered  hereunder by or on
behalf of Company;

                  8.8 a certificate of Company,  dated the Closing Date,  signed
by a proper officer of Company certifying that (A) except (1) as a result of the
taking by any person of any action  contemplated  under  this  Agreement  or (2)
insofar as any representation or warranty relates to any specified earlier date,
all of the  representations and warranties 


                                                          REGISTRATION STATEMENT
                                                                     Page II-297
<PAGE>
of Company in this  Agreement  are true and correct in all material  respects on
the  Closing  Date with the same  force  and  effect as if made on and as of the
Closing  Date,  and (B)  Company has  performed  and  complied  in all  material
respects with all of its covenants and agreements set forth in, and satisfied in
all material respects all conditions required to be satisfied by it pursuant to,
this Agreement  except as such covenants,  agreements,  or conditions shall have
been waived by Buyer at or before the Closing Date;

                  8.9  a  certified   copy  of  resolutions  of  the  boards  of
directors,  and if  necessary,  the  shareholders,  as  applicable,  of  Company
authorizing  the  execution  and delivery by Company of this  Agreement  and any
other agreements executed by Company pursuant hereto, and the performance of the
obligations of Company hereunder and thereunder;

                  8.10 an opinion of Company's counsel,  dated the Closing Date,
covering matters customary with respect to the transactions contemplated by this
Agreement, in form and substance satisfactory to Buyer;

                  8.11 an  opinion  of  special  communications,  FCC  and  APUC
counsel to Company,  dated the Closing Date,  covering  matters  customary  with
respect to the APUC and FCC  aspects of the  transactions  contemplated  by this
Agreement, in the form and substance satisfactory to Buyer;

                  8.12   releases  or   terminations,   in  form  and  substance
reasonably  satisfactory to Buyer, of all Security Interests with respect to the
Assets and all financing  statements or other  instruments  with respect thereto
except for the Permitted Encumbrances described in Schedule 7;

                  8.13 to the extent in the possession of Company or its agents,
all  contracts  not  terminated  pursuant  to  this  Agreement,   all  unexpired
warranties, any leases of personal property, any business and other licenses and
permits related to Company or the CATV Business;

                  8.14 to the extent in the possession of Company or its agents,
all blueprints,  schematics,  drawings,  maps,  system design bill of materials,
engineering and technical data related to the Assets or the CATV Business;

                  8.15 tax,  judgment,  and lien searches of the relevant public
records  dated no more than fifteen  (15) days prior to Closing,  or dated as of
such  other  date  acceptable  to Buyer and  Company,  indicating  all  Security
Interests against the Assets, the CATV Systems, or the CATV Business; and

                  8.16  Schedules  1-11 which have been  updated to reflect  any
material  changes from the date of  execution  of this  Agreement to the Closing
Date; provided,  


                                                          REGISTRATION STATEMENT
                                                                     Page II-298
<PAGE>
however, that if any such change has a material adverse effect on the condition,
financial or otherwise,  of Company or the CATV  Business,  Buyer shall have the
right to  terminate  this  Agreement  with no  further  obligations  to  Company
hereunder.

                  8.17  Guaranty.  Contemporaneously  with the  signing  of this
Agreement,  Company is causing its  Shareholders  to deliver the Guaranty in the
form of Exhibit E. The liability of each Shareholder  under the Guaranty for any
indemnity  for breach by the Company of a  representation,  warranty or covenant
shall be limited to an amount not to exceed such  Shareholders' pro rata portion
of such  liability  based upon the value of the  consideration  received by such
Shareholder  in this  transaction  and the maximum  aggregate  liability of each
Shareholder  shall be limited to the amount of  consideration  received  by such
Shareholder in this transaction.

                  Drafts of each of the items  listed in this Section 8 shall be
delivered  by Company to Buyer  within a  reasonable  time prior to Closing  for
Buyer's review and approval.

Section 9                Deliveries by Buyer at Closing

                  At Closing, Buyer shall deliver to Company:

                  9.1      certified check or wire transfer documents evidencing
                           payment of the  Sixteen  Million  Six  Hundred  Fifty
                           Thousand Dollars cash, as adjusted in accordance with
                           Section 2.3,  constituting  the Purchase Price,  such
                           payment to be made in  accordance  with  instructions
                           received  from the Company at least two business days
                           prior to the Closing Date;


                  9.2      Notes  in the  amount  of Nine  Million  Two  Hundred
                           Thousand Dollars together with Eight Hundred Thousand
                           Dollars of Notes to be placed in escrow in accordance
                           with Section 2.5;

                  9.3      a certificate of good standing of Buyer issued by the
                           Secretary of State of Alaska dated in 1996;

                  9.4      an  incumbency  and specimen  signature  certificate,
                           dated the Closing Date,  with respect to the officers
                           of  Buyer  executing  this  Agreement  and any  other
                           document  delivered  hereunder  by  or on  behalf  of
                           Buyer;

                  9.5      a  certificate  of  Buyer,  dated the  Closing  Date,
                           signed by a proper officer of Buyer  certifying  that
                           (A)  except  (1) as a  result  of the  taking  by any
                           person  of  any   action   contemplated   under  this
                           Agreement  or (2)  insofar as any  representation  or
                           warranty  relates to any specified  


                                                          REGISTRATION STATEMENT
                                                                     Page II-299
<PAGE>
                           earlier  date,   all  of  the   representations   and
                           warranties  of Buyer in this  Agreement  are true and
                           correct in all material  respects on the Closing Date
                           with the same  force and  effect as if made on and as
                           of the Closing Date,  and (B) Buyer has performed and
                           complied  in all  material  respects  with all of its
                           covenants and  agreements set forth in, and satisfied
                           in all material  respects all conditions  required to
                           be satisfied by it pursuant to, this Agreement except
                           as such  covenants,  agreements or  conditions  shall
                           have been  waived by Company at or before the Closing
                           Date;

                  9.6      a  certified  copy of  resolutions  of the  board  of
                           directors  of Buyer  authorizing  the  execution  and
                           delivery of this  Agreement and any other  agreements
                           executed pursuant hereto,  and the performance of the
                           obligations of Buyer hereunder and thereunder; and

                  9.7      Schedules  12-14  which have been  updated to reflect
                           any  material  changes  from the date of execution of
                           this   Agreement  to  the  Closing  Date;   provided,
                           however,  that  if any  such  change  has a  material
                           adverse  effect  on  the   condition,   financial  or
                           otherwise,  of Buyer, Company shall have the right to
                           terminate this Agreement with no further  obligations
                           to Buyer hereunder.

Section 10                Conditions to Obligations of Buyer

                  The  obligations  of  Buyer  to  consummate  the  transactions
contemplated  by  this  Agreement  shall  be  subject,  at  Buyer's  option,  to
fulfillment of each of the following conditions as of the Closing Date:

                  10.1  Accuracy  of   Representations   and   Compliance   with
Conditions.  All  representations  and  warranties of Company  contained in this
Agreement  shall be true and  accurate in all material  respects  when made and,
except (a) as a result of the  taking by any  person of any action  contemplated
hereby or (b) insofar as any  representation  or warranty  specifically  relates
solely to an  earlier  date in which case it shall be true and  accurate  in all
material  respects as of such  earlier  date,  shall be true and accurate in all
material  respects as of the Closing  Date, as though such  representations  and
warranties  were then made by Company,  and  Company  shall have  performed  and
complied in all material  respects with all of its covenants and  agreements set
forth herein and satisfied in all material  respects all conditions  required to
be satisfied by it pursuant to this Agreement at or before the Closing Date.


                  10.2 Deliveries Complete.  All documents required to have been
delivered  by Company to Buyer and all  actions  required  to have been taken by
Company, at or prior to the Closing Date, shall have been delivered or taken.



                                                          REGISTRATION STATEMENT
                                                                     Page II-300
<PAGE>
                           10.2.1   Company  has   executed  (or  caused  to  be
executed) and delivered to Buyer the items set forth in Section 8.

                           10.2.2 Company has delivered to Buyer:  (a) evidence,
in form and substance  satisfactory to Buyer,  that all of the Required Consents
have been  obtained  or given and are in full force and  effect;  and (b) to the
extent obtained,  the estoppel  certificates or similar  documents  described in
Section 6.15.

                           10.2.3  Company  has  delivered  releases,   in  form
satisfactory  to Buyer, of all  Encumbrances  affecting any of the Assets (other
than Permitted  Encumbrances)  and a certificate of no taxes due with respect to
Company and the Assets issued by  appropriate  state taxing  authorities as of a
date no earlier than 10 days prior to the Closing.

                  10.3 No Adverse Change. No material adverse change in the CATV
Business or the Assets shall have occurred  (other than changes which affect the
United States CATV industry  considered as a whole). The CATV Business shall not
have suffered,  on or prior to Closing, any loss, claim,  casualty,  or calamity
which materially and adversely affects the CATV Business or the Assets,  whether
or not covered by insurance;  provided, however, that if Company has repaired at
its expense all damage caused by any loss,  casualty,  or calamity  prior to the
Closing to Buyer's  reasonable  satisfaction,  the  condition  set forth in this
Section 10.3 shall be deemed satisfied.

                  10.4  Restraint  of  Proceedings.  No action,  proceeding,  or
investigation shall have been instituted or threatened,  on or prior to Closing,
to set aside or modify the  authorization  of the  transactions  contemplated by
this  Agreement  or to  enjoin  or  prevent  its  consummation  or  which  would
materially  impair  the  ability  of  Buyer  to  realize  the  benefits  of  the
transactions contemplated herein.

                  10.5  Inspection.  Within thirty (30) days of this  Agreement,
the results and findings of a due  diligence  inspection  of the Assets and CATV
Business by Buyer shall be satisfactory  to Buyer in its reasonable  discretion,
and the condition of the Assets and CATV  Business  shall be as  represented  by
Company  herein and as  otherwise  disclosed  to Buyer prior to the date hereof.
Buyer shall notify  Company  within 31 days of this  Agreement of the results of
such due diligence inspection.

                  10.6 Cash Flow. As of the Closing Date,  Company's twelve (12)
month trailing  operating  cash flow before  corporate  overhead  (identified in
Company's financial  statements as "Administrative  Expenses") together with the
twelve (12) month trailing operating cash flow before corporate overhead for the
McCaw/Rock  Homer Cable System  Joint  Venture and the  McCaw/Rock  Seward Cable
System Joint Venture  shall be no less than Three Million Five Hundred  Thousand
and no/100 Dollars ($3,500,000). Provided, however, if the sale of the assets of
the McCaw/Rock Homer Cable System Joint Venture and the McCaw/Rock  Seward Cable
System  Joint  Venture to Buyer or an 


                                                          REGISTRATION STATEMENT
                                                                     Page II-301
<PAGE>
affiliate of Buyer does not occur on about the Closing  Date,  Company's  twelve
(12) month trailing operating cash flow before corporate overhead (identified in
Company's  financial  statements as "Administrative  Expenses") shall be no less
than Three Million and no/100 Dollars ($3,000,000.00).

Section 11                Conditions to Obligations of Company

                  The  obligation  of Company  to  consummate  the  transactions
contemplated  by this  Agreement  shall be  subject,  at  Company's  option,  to
fulfillment of each of the following conditions as of the Closing Date:

                  11.1  Accuracy  of   Representations   and   Compliance   with
Conditions.  All  representations  and  warranties  of Buyer  contained  in this
Agreement  shall be true and  accurate in all material  respects  when made and,
except (a) as a result of the  taking by any  person of any action  contemplated
hereby or (b) insofar as any  representation  or warranty  specifically  relates
solely to an  earlier  date in which case it shall be true and  accurate  in all
material  respects as of such  earlier  date,  shall be true and accurate in all
material  respects as of the Closing  Date, as though such  representations  and
warranties were then made by Buyer,  and Buyer shall have performed and complied
in all material  respects  with all of its covenants  and  agreements  set forth
herein,  and satisfied in all material  respects all  conditions  required to be
satisfied by it pursuant to this Agreement at or before the Closing Date.

                  11.2 Deliveries Complete.  All documents required to have been
delivered  by Buyer to Company  and all  actions  required to have been taken by
Buyer, at or prior to the Closing Date, shall have been delivered or taken.

                  11.3 No Adverse Change.  No material adverse change in Buyer's
business shall have occurred  (other than changes which affect the United States
telephone industry considered as a whole). Buyer's business operations shall not
have suffered,  on or prior to Closing, any loss, claim,  casualty,  or calamity
which  materially  and  adversely  affects  Buyer,  whether  or not  covered  by
insurance;  provided,  however,  that if Buyer has  repaired  at its expense all
damage  caused  by any loss,  casualty,  or  calamity  prior to the  Closing  to
Company's reasonable satisfaction,  the condition set forth in this Section 11.3
shall be deemed satisfied.

                           11.3.1 Buyer has executed and delivered to Company an
Assignment and Assumption of Agreement in the form attached as Exhibit C.

                  11.4  Restraint  of  Proceedings.  No action,  proceeding,  or
investigation shall have been instituted or threatened,  on or prior to Closing,
to set aside or modify the  authorization  of the  transactions  contemplated by
this  Agreement  or to  enjoin  or  prevent  its  consummation  or  which  would
materially  impair  the  ability  of Company  to  realize  the  benefits  of the
transactions contemplated herein.


                                                          REGISTRATION STATEMENT
                                                                     Page II-302
<PAGE>
Section 12                Conditions to Both Parties Obligations

                  12.1  Consents.  All Required  Consents  and Buyer's  Required
Consents or waivers  thereof shall have been obtained and shall be in full force
and effect as of the Closing Date.

                  12.2 No Governmental  Action.  No  investigation,  action,  or
proceeding shall have been commenced by the Department of Justice or the Federal
Trade  Commission or any other  governmental  entity  challenging  or seeking to
enjoin the consummation of the  transactions  contemplated by this Agreement and
neither Buyer nor Company shall have been notified of a present intention by the
Assistant Attorney General in charge of the Antitrust Division of the Department
of Justice,  the  Director  of the Bureau of  Competition  of the Federal  Trade
Commission  or any  governmental  entity  (or  their  respective  designees)  to
commence,  or recommend the commencement of, such an  investigation,  action, or
proceeding.

                  12.3 Waiver of Conditions.  Any party may waive in writing any
or all of the conditions to its obligations under this Agreement.

Section 13                Transactions Subsequent to Closing.

                  13.1 Further Actions.  At any time and from time to time after
the Closing,  each party hereto agrees,  at its own expense (except as otherwise
provided herein), to take such actions and to execute and deliver such documents
as may be reasonably necessary to effectuate the purposes of this Agreement.


                  13.2  COBRA   Benefits.   Company   shall   comply   with  all
requirements of COBRA.

Section 14                Registration Rights Agreement.

                  In connection with each  Conversion  Period and any conversion
of the Notes by the holders of such Notes  during such  Conversion  Period,  the
distribution  to and,  to the extent  required  because of  affiliate  status or
otherwise,  subsequent  resales or  distributions  by holders of the GCI Shares,
will be  registered  under the  Securities  Act of 1933,  as  amended.  Any such
registration  required in connection with the resale or distribution by a holder
of the GCI  Shares  shall be upon the  terms  and  conditions  set  forth in the
Registration  Rights Agreement,  the form of which is attached hereto as Exhibit
A, which is hereby  incorporated  by reference.  All expenses in connection with
the registration  (other than underwriting  discounts,  selling  commissions and
fees and  expenses of counsel to holders in  connection  with any such resale or
distribution) and keeping any prospectus current will be paid by the Buyer.


                                                          REGISTRATION STATEMENT
                                                                     Page II-303
<PAGE>
Section 15.       Agreement Not to Compete

                  15.1  Agreement.  Company and  Shareholders,  excluding  Craig
McCaw,  Wayne  Perry and  Donald  Adams,  shall  provide  to Buyer at Closing an
executed Non-Compete Agreement in the form attached to this Agreement as Exhibit
F, the terms and conditions of which are hereby incorporated by reference.  Such
Non-Compete Agreements shall be given in consideration of the sale of Assets set
forth herein and shall not be subject to additional consideration.


                  15.2 Breach of  Agreement.  If this  Section 15 is breached or
threatened to be breached,  Company expressly  consents that, in addition to any
other  remedy  Buyer  may  have,  Buyer  may  apply to any  court  of  competent
jurisdiction  for injunctive  relief in order to prevent the continuation of any
existing breach or the occurrence of any threatened breach.

                  15.3  Enforceability.  If any  provision of this Section 15 is
determined to be unreasonable or unenforceable, such provision and the remainder
of this  Section 15 shall not be declared  invalid but rather  shall be modified
and enforced to the maximum extent permitted by law.

Section 16          Survival of Representations and Warranties; Indemnification

                  16.1   Survival.    Except   as   otherwise   provided,    the
representations,  warranties,  and  covenants and related  indemnity  agreements
contained  in or made  pursuant to this  Agreement  (including  the Exhibits and
Schedules) by Buyer and by Company shall survive the Closing and shall terminate
on the first  anniversary  of the Closing  Date.  Notwithstanding  the preceding
provisions of this Section 16.1, the representations,  warranties, and covenants
(and related  indemnities)  in Sections 3.15,  3.17,  3.18,  3.19 and 3.25 shall
survive the Closing  for the period of sixty (60) days after the  expiration  of
the  relevant   statute  of  limitations   for  claims  related   thereto.   The
representations  and  warranties  relating to the  ownership of the Assets shall
continue in full force and effect  without  limitation.  Buyer's  covenants  and
obligations  under the Notes and with  respect  to the  issuance,  delivery  and
registration  of GCI Shares  shall  continue  in full  force and effect  without
limitation.

                  16.2  Indemnity  by  Company.  Company  agrees  to  indemnify,
defend,  and  hold  harmless  Buyer  and its  officers,  directors,  Affiliates,
employees,  attorneys,  agents  and  shareholders  (the  "Buyer's  Indemnitees")
against  and in  respect  of any and all  claims,  suits,  actions,  proceedings
(formal and informal), investigations, judgments, deficiencies, losses, damages,
settlements, liabilities and expenses (including, without limitation, reasonable
legal fees and expenses of attorneys chosen by the Buyer's  Indemnitees),  or on
any Schedule to, this Agreement  (collectively,  "Losses"), as and when incurred
arising  out of or based  upon (1) any breach of any  representation,  warranty,
covenant,  or agreement of Company  contained in this  Agreement or in any 


                                                          REGISTRATION STATEMENT
                                                                     Page II-304
<PAGE>
other  agreement  executed and  delivered by Company  hereunder or in connection
herewith, or (2) the ownership of the Assets or the conduct of the CATV Business
or any other matters relating to the business of Company for the period prior to
the Closing Date,  including,  without limitation,  any actions taken by Company
prior to the  Closing  Date but which do not become  effective  until  after the
Closing Date. No  indemnification  shall be required to be made by Company under
this Section as a result of any breach of any representation, warranty, covenant
or  agreement  of the  Company  until the  amount of Buyer's  Losses  under this
Agreement exceed in the aggregate $50,000. At such time as such aggregate amount
of Buyer's Losses exceeds $50,000,  Buyer may seek to recover all of its Losses,
including  the first dollar  thereof in accordance  with the  provisions of this
Section, provided,  however, that no indemnification shall be required in excess
of the amount of the Notes actually received, in the aggregate,  pursuant to the
Agreement.  Company shall not be held liable for any unintentional  error in any
representation or warranty or any unintentional  inaccuracy or incompleteness of
data,  information  or material  which it  otherwise  might have been liable for
hereunder  if, on or before 10  business  days prior to the  Closing  Date,  the
Company shall have provided Buyer with written notices of such error, inaccuracy
or incompleteness  and a written statement of the corrections  necessary to cure
the same and if,  notwithstanding such notice, Buyer shall have elected to close
this transaction.

                  16.3  Indemnity by Buyer.  Buyer agrees to indemnify,  defend,
and hold  harmless  Company and its  partners,  managers,  officers,  directors,
Affiliates,   employees,  attorneys,  agents  and  shareholders  (the  "Sellers'
Indemnitees")  against and in respect of any Losses as and when incurred arising
out of or based upon (1) any breach of any representation, warranty, covenant or
agreement  of  Buyer  contained  in this  Agreement  or in any  other  agreement
executed and delivered by Buyer hereunder or in connection herewith;  or (2) the
conduct of the CATV  Business or any other  matters  relating to the business of
Company for the period on and after the Closing Date.

                  16.4 Defense of Claims. No right to indemnification under this
Section  16  shall  be  available  to  any of  Buyer's  Indemnitee  or  Sellers'
Indemnitee (the  "Indemnified  Party") unless such Indemnified  Party shall have
given to the party obliged to provide  indemnification of such Indemnified Party
(the  "Indemnitor") a notice (a "Claim Notice")  describing in reasonable detail
the facts giving rise to any claim for indemnification  hereunder promptly after
receipt of knowledge  by officers or  management  personnel  of the  Indemnified
Party of the facts upon which such claim is based;  provided,  however, that the
failure of any Indemnified  Party to so notify the Indemnitor  shall not relieve
the  Indemnitor  from any  indemnification  liability  it may have except to the
extent  that  failure  to so notify the  Indemnitor  materially  prejudices  the
Indemnitor's  ability  to  defend  against  such  claim.  Upon  receipt  by  the
Indemnitor  of the Claim  Notice from an  Indemnified  Party with respect to any
claim of a third  party,  such  Indemnitor  may assume the defense  thereof with
counsel  reasonably  satisfactory to the Indemnified  Party, and the Indemnified
Party shall  cooperate in the defense or  prosecution  thereof and shall furnish
such  records,  information  and  testimony  and  attend  all such  


                                                          REGISTRATION STATEMENT
                                                                     Page II-305
<PAGE>
conferences,  discovery  proceedings,  hearings,  trials  and  appeals as may be
reasonably requested in connection  therewith.  The Indemnified Party shall have
the right to employ its own counsel in any such case,  but the fees and expenses
of such counsel shall be at the expense of the Indemnified  Party unless (i) the
Indemnitor shall not have promptly employed counsel  reasonably  satisfactory to
such Indemnified Party to take charge of the defense of such action or (ii) such
Indemnified Party shall have reasonably  concluded that there may be one or more
legal  defenses  available  to it,  or to any  other  Indemnified  Party who has
submitted  a  Claim  Notice  to the  Indemnitor,  which  are  different  from or
additional to those available to the Indemnitor,  in either of which events such
fees and expenses  shall be borne by the  Indemnitor  (but in no event shall the
Indemnitor  be  required  to pay the fees and  expenses of more than one counsel
employed by more than one  Indemnified  Party with respect to any claim) and the
Indemnitor  shall not have the right to direct the defense of any such action on
behalf of the Indemnified Party. The Indemnified Party shall give written notice
to the Indemnitor of any proposed  settlement of any claim, which settlement the
Indemnitor may reject in its reasonable judgment within ten (10) days of receipt
of such notice. The Indemnitor shall have the right, in its sole discretion,  to
settle any claim for monetary damages for which  indemnification has been sought
and is available hereunder.

                  16.5 Right to Offset.  Company and Buyer shall have the option
to recoup  all or part of its Losses  (in lieu of  seeking  any  indemnification
therefor to which it is entitled  under this Section 16) by notifying  the other
that it is  offsetting  the  amount of the Note  Holdback  by the  amount of its
Losses if the amount of such Losses is determined before such party releases the
applicable  Note  Holdback.  The  Indemnitee  shall notify the Indemnitor of its
claim for Losses to be offset  against the applicable  Note Holdback  (including
the details  forming the basis of such  claim) as soon as  practically  possible
after obtaining knowledge of the basis for its claim for Losses to be so offset.
If a party  disagrees  with the asserted  claim for Losses to be so offset,  the
parties  shall submit the dispute to  arbitration.  The amount of such  disputed
claim shall then continue to be subject to the Note  Holdback  until the dispute
is resolved. At the end of the Note Holdback period the Indemnitee shall release
to the Indemnitor  the remaining  balance of the  applicable  Note Holdback.  An
arbitrator named by the accounting firm of Deloitte & Touche,  LLP shall resolve
any dispute  between the parties with respect to the Losses  offset  against the
Note Holdback within thirty (30) days, which  determination shall be binding and
conclusive;  provided,  however, that if the nature of the disputed claim is not
of the type which would normally be determined by a certified public accountant,
the parties  shall agree within ten (10) days on another  person to serve as the
arbitrator,  or if the parties cannot so agree,  the Indemnitee  shall select an
arbitrator from the list of arbitrators  maintained by the American  Arbitration
Association  and  Indemnitor  shall  select  an  arbitrator  from  the  list  of
arbitrators  maintained by the American Arbitration  Association and the two (2)
arbitrators  so  selected  shall  select  a third  arbitrator  from  the list of
arbitrators maintained by the American Arbitration Association and such panel of
three (3) arbitrators shall resolve the disputed claim for Losses offset against
the Note  Holdback  within thirty (30) days.  Nothing  contained in this Section
16.5 shall be 


                                                          REGISTRATION STATEMENT
                                                                     Page II-306
<PAGE>
deemed to limit a party's  obligation to indemnify to the extent that the amount
to which an  Indemnitee  is entitled  under Section 16 exceeds the amount of the
applicable Note Holdback.

                  16.6 Determination of Indemnified Amounts. The indemnification
obligations  of the  parties  under  this  Section  16 shall be  subject  to the
following:

                           16.6.1  The amount of Losses  required  to be paid by
the Indemnitor to indemnify the Indemnified Party pursuant to this Section 16 as
a result of any Loss suffered by the  Indemnified  Party shall be reduced to the
extent  the  amount  of such  Loss is  actually  offset  by the  receipt  by the
Indemnified  Party of insurance  proceeds pursuant to the terms of the insurance
policies,  if any,  covering  such Loss or by the receipt of any recovery by the
Indemnified Party from a third party with respect to such Loss.

                           16.6.2  The amount of Losses  required  to be paid by
the Indemnitor to indemnify the Indemnified Party pursuant to this Section 16 as
a result of any Loss suffered by the  Indemnified  Party shall be reduced by the
amount of any tax  benefit  actually  realized  by the  Indemnified  Party  with
respect to such Loss,  to the extent such  benefit  actually  offsets such Loss,
provided that such reduced  amount shall be increased by the amount of any taxes
payable by such  Indemnified  Party as a result of the  Indemnitor's  payment of
such Loss.

                           16.6.3  Amounts  payable by the Indemnitor in respect
of any Losses shall be payable by the  Indemnitor and shall bear interest at the
rate of ten and  one-half  percent  (10.5%) per annum from the date the Loss for
which indemnification is sought were incurred by the Indemnified Party until the
date of payment of indemnification by the Indemnitor.

Section 17                Termination

                  17.1 Mutual  Consent.  This Agreement may be terminated by the
written  consent of Buyer and Company.  Upon such  termination,  no party hereto
shall have any  further  liability  to the other,  except as provided in Section
17.2.

                  17.2  Default  by  Company.  Buyer  shall  have  the  right to
terminate  this  Agreement  at or prior to the  Closing  Date in the event  that
Company defaults in the performance of any material  obligation  hereunder or if
any representation or warranty of Company is materially false, and Company fails
to correct or satisfy such default or falsity within ten (10) days after written
notice is given to Company or such longer period as shall be required to correct
or  satisfy  such  default  or  falsity,  provided  that  Company  promptly  and
diligently  prosecutes the cure or satisfaction.  If such notice is given within
ten (10) days of the Closing  Date,  the Closing shall be delayed for the number
of days to permit the cure of the  default but in no event more than thirty (30)
days.  In the event  that  Company  has  failed to cure the  default  within the
required period, Buyer shall be 


                                                          REGISTRATION STATEMENT
                                                                     Page II-307
<PAGE>
entitled  to  exercise  all of its  rights  in law or in equity by reason of the
breach by Company of this  Agreement.  If Company  shall  breach or  threaten to
breach any of the provisions of this Agreement,  Buyer, in addition to any other
remedies  it may have at law or in equity,  will be  entitled  to a  restraining
order,  injunction or other similar remedy in order to specifically  enforce the
provisions of this Agreement.  Company and Buyer  specifically  acknowledge that
money damages  alone would be an  inadequate  remedy for the injuries and damage
which would be suffered and incurred by Buyer as a result of a breach by Company
of any provisions of this Agreement. In the event that Buyer seeks an injunction
hereunder,  Company hereby waives any  requirement  for the posting of a bond or
other  security.  Notwithstanding  anything to the  contrary  contained  in this
Section  17.2,  Buyer  shall have the right to waive any  default by Company and
require the transactions contemplated by this Agreement to be consummated on the
Closing Date.

                  17.3  Default  by  Buyer.  Company  shall  have  the  right to
terminate this Agreement at or prior to the Closing Date in the event that Buyer
defaults in the  performance  of any  material  obligation  hereunder  or if any
representation  or warranty  of Buyer is  materially  false,  and Buyer fails to
correct or satisfy  such default or falsity  within ten (10) days after  written
notice is given to Buyer or such  longer  period as shall be required to correct
or satisfy such default or falsity,  provided that Buyer promptly and diligently
prosecute the cure or satisfaction. If such notice is given within ten (10) days
of the  Closing  Date,  the  Closing  shall be delayed for the number of days to
permit the cure of the default  but in no event more than  thirty (30) days.  In
the event  Buyer has  failed to cure the  default  within the  required  period,
Company  shall be  entitled  to  exercise  all of its rights in law by reason of
Buyer's  breach of this  Agreement.  If Buyer shall breach or threaten to breach
the provisions of Section 18.17 of this Agreement,  Company,  in addition to any
other  remedies it may have at law,  will be entitled  to a  restraining  order,
injunction or other similar  equitable  remedy in order to specifically  enforce
such provision of this  Agreement.  Company and Buyer  specifically  acknowledge
that money  damages  alone would be an  inadequate  remedy for the  injuries and
damage  which would be suffered  and incurred by Company as a result of a breach
by Buyer of the provisions of Section 18.17 of this Agreement.  If Company seeks
an injunction hereunder,  Buyer hereby waives any requirement for the posting of
a bond or other security.  Notwithstanding anything to the contrary contained in
this Section  17.3,  Company  shall have the right to waive any default by Buyer
and require the transactions contemplated by this Agreement to be consummated on
the Closing Date.

Section 18                Miscellaneous

                  18.1 Expenses.  Except as otherwise expressly provided in this
Agreement,  Company  will bear its own  expenses,  and  Buyer  will bear its own
expenses  incident to the  negotiation,  preparation  and  consummation  of this
Agreement and all other agreements  executed and delivered by it hereunder or in
connection herewith,  including all fees and expenses of its or their respective
counsel and accountants,  


                                                          REGISTRATION STATEMENT
                                                                     Page II-308
<PAGE>
whether or not the transactions  contemplated hereby or thereby are consummated.
Buyer will pay the fees  necessary in  connection  with the transfer of the APUC
licenses and any FCC fees necessary in connection  with any approvals  which are
required to be  obtained  by Buyer and the Company  will pay the FCC filing fees
and the  transfer of the IB  business  radio  licenses.  The filing fees for any
filing mandated by the Hart-Scott-Rodino Antitrust Improvement Act of 1976 shall
be borne equally by Company and Buyer.

                  18.2 Modification.  This Agreement (including the Exhibits and
Schedules  hereto)  sets  forth the entire  understanding  of the  parties  with
respect to the subject matter hereof,  supersedes all existing  agreements among
them  concerning  such  subject  matter,  and may be modified  only by a written
instrument duly executed by each party hereto.

                  18.3 Attorneys' Fees. In the event of any action or suit based
upon or arising  out of any alleged  breach by any party of any  representation,
warranty,  covenant or agreement  contained in this  Agreement,  the  prevailing
party will be entitled to recover reasonable  attorneys' fees and other costs of
such action or suit from the other party.

                  18.4  Right  to  Specific   Performance.   Company  and  Buyer
acknowledge  that the unique  nature of the Assets to be  purchased by Buyer and
the convertible  Notes to be received by the Company  pursuant to this Agreement
renders  money  damages an  inadequate  remedy for the breach by Company  and/or
Buyer of their  obligations  under this  Agreement,  and Company and Buyer agree
that in the event of such breach,  Buyer and/or  Company will upon proper action
instituted  by it, be  entitled  to a decree  of  specific  performance  of this
Agreement.

                  18.5 Notice.  Any notice given  pursuant to this  Agreement to
any party hereto shall be deemed to have been duly given five (5) business  days
after being mailed by registered or certified mail, return receipt requested, or
when received if hand delivered, delivered via overnight messenger service or by
facsimile as follows:

                  If to Company:                 Alaska Cablevision, Inc.
                                                 135 Lake  Street  South,  Suite
                                                 265
                                                 Kirkland, WA 98033
                                                 Attention: Sam Evans
                                                 Facsimile No.: (206) 828-0226

                                                 with a copy to:

                                                 Foster Pepper & Shefelman
                                                 1111 Third Avenue, Suite 3400
                                                 Seattle, Washington 98101
                                                 Attention:  Robert Diercks
                                                 Facsimile No.:  (206) 447-9700


                                                          REGISTRATION STATEMENT
                                                                     Page II-309
<PAGE>
                  If to Buyer:                   General Communication, Inc.
                                                 2550 Denali Street
                                                 Suite 1000
                                                 Anchorage, Alaska 99503
                                                 Attention:  John M. Lowber, CFO
                                                             and Senior Vice 
                                                             President
                                                 Facsimile No.:  (907) 265-5676

or at such other  address as either  party shall from time to time  designate by
written notice,  in the manner provided herein,  to the other party hereto.  All
references to days in this  Agreement  shall be deemed to refer to calendar days
unless otherwise specified.

                  18.6 Waiver. Any waiver must be in writing,  and any waiver by
any party of a breach of any provision of this Agreement shall not operate as or
be  construed  to be a waiver of any other  breach of that  provision  or of any
breach of any other  provision  of this  Agreement.  The  failure  of a party to
insist  upon  strict  adherence  to any  term of this  Agreement  on one or more
occasions  will not be  considered  a waiver or deprive  that party of the right
thereafter  to insist  upon strict  adherence  to that term or any other term of
this Agreement.

                  18.7  Binding  Effect;  Assignment.  The  provisions  of  this
Agreement  shall be binding  upon and inure to the  benefit of Company and Buyer
and their respective  successors and permitted  assigns.  Neither this Agreement
nor any of the rights, interests or obligations hereunder shall be assignable by
any party without the prior written  consent of the others,  which consent shall
not be unreasonably withheld. Notwithstanding anything to the contrary contained
herein,  Buyer may,  without  Company's  consent,  assign its rights  under this
Agreement to any Affiliate of Buyer.

                  18.8 No Third Party  Beneficiaries.  This  Agreement  does not
create,  and shall not be construed as creating,  any rights  enforceable by any
person not a party to this Agreement.

                  18.9 Rights Cumulative. All rights and remedies of each of the
parties under this Agreement will be cumulative, and the exercise of one or more
rights or remedies  will not  preclude the exercise of any other right or remedy
available under this Agreement or applicable law.

                  18.10  Further  Actions.  Company  and Buyer will  execute and
deliver  to the  other,  from  time to  time at or  after  the  Closing,  for no
additional consideration and at no additional cost to the requesting party, such
further  assignments,  certificates,  instruments,  records, or other documents,
assurances or things as may be reasonably  necessary to give full effect to this
Agreement  and to allow  each  party  fully to enjoy  and  exercise  the  rights
accorded and acquired by it under this Agreement.


                                                          REGISTRATION STATEMENT
                                                                     Page II-310
<PAGE>
                  18.11  Severability.  If any  provision  of this  Agreement is
invalid, illegal or unenforceable, the balance of this Agreement shall remain in
effect at the option of the party for whose benefit such provision was made.

                  18.12  Captions.  The Article and Section  titles used in this
Agreement are inserted as a matter of convenience  and for reference only and in
no way define,  limit,  extend or describe  the scope of this  Agreement  or the
intent of any of the provisions hereof.

                  18.13  Counterparts.  This  Agreement  may be  executed in any
number of  counterparts,  each of which shall be deemed an original,  but all of
which together shall constitute one and the same instrument.

                  18.14  Governing Law. This Agreement  shall be governed by and
construed  in  accordance  with the laws of  Alaska  without  giving  effect  to
conflict of laws.

                  18.15  Incorporation by Reference.  The Exhibits and Schedules
attached  hereto are an integral  part of this  Agreement  and are  incorporated
herein by reference.

                  18.16  Construction.  This  Agreement  has been  negotiated by
Buyer and Company and their  respective  legal  counsel,  and legal or equitable
principles  that  might  require  the  construction  of  this  Agreement  or any
provision of this  Agreement  against the party drafting this Agreement will not
apply in any construction or interpretation of this Agreement.

                  18.17  Confidentiality.  The parties will hold and cause their
officers,   directors,    employees,    attorneys,    investors,    accountants,
representatives,  agents, consultants, and advisors to hold in strict confidence
the  provisions of this  Agreement as well as all  information  (other than such
information  as may be publicly  available)  furnished  in  connection  with the
transactions  contemplated  by this Agreement,  except as otherwise  required by
law, and except as to disclosure to the parties' agents,  advisors and financial
institutions.  Neither party shall issue any press release or otherwise make any
public statement with respect to this Agreement or the transactions contemplated
hereby without the prior written consent of the other party, which consent shall
not  be   unreasonably   withheld.   Notwithstanding   the  foregoing,   Company
acknowledges  that Buyer shall issue press releases  regarding the general terms
and  conditions  of the  transactions  contemplated  hereby,  as required by the
securities  disclosure  laws,  rules  and  regulations.   Buyer  shall  have  no
obligation  to obtain  Company's  consent  for such  press  releases,  but shall
provide  Company  with  copies  thereof  and give  reasonable  consideration  to
Company's suggestions thereon.


                                                          REGISTRATION STATEMENT
                                                                     Page II-311
<PAGE>
                  IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first written above.

                                                     ALASKA CABLEVISION, INC.


                                                     By: /s/
                                                     Name:
                                                     Title:

                                                     GENERAL COMMUNICATION, INC.


                                                     By /s/
                                                     John M. Lowber, Senior Vice
                                                     President



                                                          REGISTRATION STATEMENT
                                                                     Page II-312
<PAGE>


                                    EXHIBIT A
                          REGISTRATION RIGHTS AGREEMENT

                  This Registration Rights Agreement ("Agreement"),  dated as of
this       day of       ,  1996,  is between  General  Communication,  Inc.,  an
Alaska  corporation  ("GCI"),  and the  respective  owners of all of the capital
stock of Alaska  Cablevision,  Inc. ("ACI"),  who currently own shares of common
stock of GCI as described below (such holders collectively referred to herein as
"Sellers").

                                    RECITALS

                  A.  Pursuant to an Asset  Purchase  Agreement  dated as of May
   , 1996, between GCI and ACI (the "Purchase  Agreement"),  ACI has acquired in
aggregate Ten Million and no/100  Dollars  ($10,000,000)  of GCI's  subordinated
notes  ("Notes"),  which are  convertible  into shares of GCI's  voting  Class A
common stock, no par value ("GCI Stock").  GCI  understands  that ACI intends to
distribute  the Notes to Sellers who may then  exercise the right to convert the
Notes to GCI Stock.  The  distribution  of such  shares of GCI Stock will not be
registered  with  the  Securities  and  Exchange   Commission  pursuant  to  the
Securities Act of 1933, as amended,  however any Seller may require registration
of such shares in order to sell all of such shares. All such shares of GCI Stock
which Sellers may obtain following the conversion of all or any of the Notes and
any  securities  issued in  exchange  for or in respect of such  stock,  whether
pursuant to a stock dividend,  stock split, stock  reclassification or otherwise
are collectively referred to in this Agreement as the "Registrable Shares."

                  B. GCI desires to grant  registration  rights to Sellers,  and
any successor  affiliates permitted under Section 7(c) hereof of Sellers, as the
holders  of all or any  portion  of the  Registrable  Shares.  Sellers  and such
permitted  successors  and assigns  are  referred  to in this  Agreement  as the
"Holders" or, individually as a "Holder."

                                    AGREEMENT

                  In  consideration  of the  premises  and the mutual  covenants
contained in this Agreement, the parties agree as follows:

                  1.       Demand Registration.

                           (a)  GCI  hereby   covenants   and  agrees  that  the
distribution to Holders of the Notes and their  subsequent  conversion,  if any,
into  Registrable  Shares,  all  pursuant  to the terms set forth in that  Asset
Purchase  Agreement ("APA") dated May   , 1996 shall not be registered under the
Securities Act of 1933, as amended,  effective with such distribution.  However,
to the extent that subsequent  resales or  distributions by Holders are required
to be  registered,  GCI shall provide one (1)  Registration  per year to Holders
upon demand,  for the ten (10) year period commencing on the Final Closing 


                                                          REGISTRATION STATEMENT
                                                                     Page II-313
<PAGE>
Date.  Holders  hereby  covenant  and agree not to sell any  Registrable  Shares
during a one  hundred  and eighty  (180) day stand still  period  following  the
Closing Date (as defined in the Purchase Agreement), provided that a request for
registration  pursuant  to (b) below may be made  during such period in order to
begin  the  registration  process  during  such  period.  Any and all  remaining
Registrable  Shares may be sold  following  the stand still  period.  If further
required to permit resales of the Registrable  Shares by Holders,  Holders shall
at any time and from time to time, have the right to require  registration under
the Securities Act of 1933, as amended ("Securities Act"), of all or any portion
of the  Registrable  Shares on the terms and subject to the conditions set forth
in this Agreement.

                           (b) Upon receipt by GCI of a Holder's written request
for registration,  GCI shall (i) promptly notify each other Holder in writing of
its receipt of such initial written request for  registration,  and (ii) as soon
as is  practicable,  but in no event more than sixty (60) days after  receipt of
such  written  request,   file  with  the  Securities  and  Exchange  Commission
("Commission"),  and use its  best  efforts  to  cause to  become  effective,  a
registration statement under the Securities Act ("Registration Statement") which
shall cover the Registrable  Shares specified in the initial written request and
any other  written  request from any other Holder  received by GCI within twenty
(20) days of GCI giving the notice specified in clause (i) hereof.

                           (c)  If  so  requested   by  any  Holder   requesting
participation  in a  public  offering  or  distribution  of  Registrable  Shares
pursuant to this Section 1 or Section 2 of this  Agreement  ("Selling  Holder"),
the Registration  Statement shall provide for delayed or continuous  offering of
the Registrable Shares pursuant to Rule 415 promulgated under the Securities Act
or any similar  rule then in effect  ("Shelf  Offering").  If so  requested by a
majority  in  number of shares to be sold by the  Selling  Holders,  the  public
offering or  distribution  of Registrable  Shares under this Agreement  shall be
pursuant to a firm commitment  underwriting,  the managing  underwriter of which
shall be an investment  banking firm selected and engaged by the Selling Holders
and approved by GCI,  which  approval shall not be  unreasonably  withheld.  GCI
shall enter into the same  underwriting  agreement as shall the Selling Holders,
containing   representations,   warranties  and  agreements  not   substantially
different from those  customarily  made by an issuer in underwriting  agreements
with respect to secondary  distributions.  GCI, as a condition to fulfilling its
obligations under this Agreement,  may require the underwriters to enter into an
agreement in customary form  indemnifying  GCI against any Losses (as defined in
Section 6) that arise out of or are based upon an untrue statement or an alleged
untrue statement or omission or alleged omission in the Disclosure Documents (as
defined in Section  6) made in  reliance  upon and in  conformity  with  written
information  furnished to GCI by the  underwriters  specifically  for use in the
preparation thereof.

                           (d)  Each   Selling   Holder   may,   before  such  a
Registration  Statement becomes effective,  withdraw its Registrable Shares from
sale,  should the terms of sale not be reasonably  satisfactory  to such Selling
Holder;  if all Selling Holders 


                                                          REGISTRATION STATEMENT
                                                                     Page II-314
<PAGE>
who  are  participating  in  such  registration  so  withdraw,   however,   such
registration  shall be deemed to have  occurred for the purposes of Section 4 of
this Agreement,  unless such Selling Holders pay (pro rata, in proportion to the
number of Registrable  Shares  requested to be included) within twenty (20) days
after any such  withdrawal,  all of GCI's  out-of-pocket  expenses  incurred  in
connection with such registration.

                           (e) Notwithstanding  the foregoing,  GCI shall not be
obligated to effect a registration  pursuant to this Section 1 during the period
starting with the date thirty (30) days prior to GCI's  estimated date of filing
of, and  ending on a date four (4) months  following  the  effective  date of, a
registration  statement  pertaining to an underwritten public offering of equity
securities  for GCI's  account,  provided that (i) GCI is actively  employing in
good faith all reasonable efforts to cause such registration statement to become
effective  and that GCI's  estimate  of the date of filing on such  registration
statement  is made in good  faith,  and (ii) GCI shall  furnish to the Holders a
certificate  signed by GCI's  President  stating that in the Board of Directors'
good-faith  judgment,   it  would  be  seriously   detrimental  to  GCI  or  its
shareholders for a Registration Statement to be filed in the near future; and in
such event, GCI's obligations to file a Registration Statement shall be deferred
for a period not to exceed six (6) months.

                  2.  Incidental  Registration.  Each time that GCI  proposes to
register any of its equity  securities  under the  Securities  Act (other than a
registration  effected  solely to implement an employee  benefit or stock option
plan or to sell shares  obtained under an employee  benefit or stock option plan
or a transaction  to which Rule 145 or any other similar rule of the  Commission
under the  Securities  Act is  applicable),  GCI will give written notice to the
Holders of its  intention  to do so. Each of the Selling  Holders may give GCI a
written  request  to  register  all or some  of its  Registrable  Shares  in the
registration  described in GCI's  written  notice as set forth in the  foregoing
sentence,  provided  that such written  request is given within twenty (20) days
after receipt of any such GCI notice.  Such request will state (i) the amount of
Registrable  Shares to be disposed of and the intended  method of disposition of
such Registrable  Shares, and (ii) any other information GCI reasonably requests
to properly effect the registration of such Registrable  Shares. Upon receipt of
such  request,  GCI  will  use its  best  efforts  promptly  to  cause  all such
Registrable  Shares  intended  to be  disposed  of to be  registered  under  the
Securities  Act so as to permit their sale or other  disposition  (in accordance
with the intended methods set forth in the request for registration), unless the
sale is a firmly underwritten public offering and GCI determines  reasonably and
in good faith in writing that the inclusion of such  securities  would adversely
affect the offering or materially  increase the offering's  costs. In which case
such securities and all other  securities to be registered,  other than those to
be offered for GCI's  account,  shall be excluded to the extent GCI  determines.
The number of secondary shares included in such registration shall be shared pro
rata by all security holders based upon the amount of GCI's securities requested
by such security holders to be sold  thereunder.  GCI's  obligations  under this
Section 2 shall apply to a registration to be effected for securities to be sold
for GCI's account as well as a registration  statement which includes securities
to be  


                                                          REGISTRATION STATEMENT
                                                                     Page II-315
<PAGE>
offered for the account of other holders of GCI equity securities;  however, the
registration  rights  granted  pursuant to the  provisions of this Section 2 are
subject  to  the  registration  rights  granted  by  GCI  pursuant  to  (a)  the
Registration  Rights  Agreement  dated as of January 18,  1991,  between GCI and
WestMarc Communications, Inc.; (b) the Registration Rights Agreements  dated  as
of  March  31,  1993,  and                  ,  1996,  both  between  GCI and MCI
Telecommunications  Corporation;  (c) the Registration Rights Agreement dated as
of                       ,  1996,  between  GCI and the owner of  Alaskan  Cable
Network,   Inc.;  and  (d)  the  Registration   Rights  Agreement  dated  as  of
                 ,  1996,  between  GCI and the owners of Prime Cable of Alaska,
L.P.

                  In connection with a registration  to be effected  pursuant to
this  Section 2, the  Selling  Holders  shall  enter into the same  underwriting
agreement as shall GCI and the other selling security holders,  if any, provided
that  such  underwriting  agreement  contains  representations,  warranties  and
agreements  on the  part of the  Selling  Holders  that  are  not  substantially
different  from  those   customarily   made  by  selling   security  holders  in
underwriting agreements with respect to secondary distributions.

                  If, at any time  after  giving  notice of GCI's  intention  to
register any of its  securities  under this Section 2 and prior to the effective
date of the registration  statement filed in connection with such  registration,
GCI shall determine for any reason not to register such securities,  GCI may, at
its election, give notice of such determination to Holders and thereupon will be
relieved of its obligation to register the Registrable Shares in connection with
such registration.

                  3.  Expenses  of  Registration.  GCI  shall  pay all costs and
expenses incurred in connection with the registration of the Registrable Shares,
except that each  Selling  Holder shall pay all fees and  disbursements  of such
Selling  Holder's own  attorneys  and  accountants,  and all transfer  taxes and
brokerage  and  underwriters'  discounts  and  commissions  attributable  to the
Registrable Shares being offered and sold by such Selling Holder.

                  4.  Limitations on Registration  Rights.  Notwithstanding  the
provisions of Section 1 of this  Agreement,  GCI shall not be required to effect
any registration under that Section if (i) the request(s) for registration cover
an aggregate number of Registrable Shares of less than 150,000 shares,  (ii) GCI
has previously filed ten (10)  registration  statements under the Securities Act
pursuant to Section 1, (iii) GCI, in order to comply with such request, would be
required to (A) undergo a special interim audit or (B) prepare and file with the
Commission,  sooner  than  would  otherwise  be  required,  pro  forma  or other
financial  statements  relating  to  any  proposed  transaction,  or  (iv)  if a
registration  is not  required in order to permit  resale by Holders.  The first
demand registration under this Agreement may be requested only by the Holders of
a minimum of ten percent (10%) of the Registrable Shares.


                                                          REGISTRATION STATEMENT
                                                                     Page II-316
<PAGE>
                  5.       Obligations with Respect to Registration.

                           (a)  If  and   whenever   GCI  is  obligated  by  the
provisions  of this  Agreement  to effect the  registration  of any  Registrable
Shares under the Securities Act, GCI shall promptly:

                                       (i) Prepare and file with the  Commission
any  amendments  and  supplements  to  the  Registration  Statement  and  to the
prospectus  used  in  connection  therewith  as may be  necessary  to  keep  the
Registration  Statement  effective  and to  comply  with the  provisions  of the
Securities Act and the rules and regulations promulgated thereunder with respect
to the  disposition  of  all  Registrable  Shares  covered  by the  Registration
Statement for the period required to effect the distribution of such Registrable
Shares. However, in no event shall GCI be required to do so (i) in the case of a
Registration  Statement  filed  pursuant to Section 1, for a period of more than
thirty-six  (36)  months  following  the  effective  date  of  the  Registration
Statement and (ii) in the case of a  Registration  Statement  filed  pursuant to
Section 2, for a period  exceeding  the  greater of (A) the period  required  to
effect the  distribution  of  securities  for GCI's  account  and (B) the period
during which GCI is required to keep such  Registration  Statement in effect for
the benefit of selling security holders other than the Selling Holders;

                                       (ii) Notify the Selling Holders and their
underwriter,  and  confirm  such  advice  in  writing,  (A) when a  Registration
Statement  becomes  effective,  (B)  when  any  post-effective  amendment  to  a
Registration  Statement  becomes  effective,  and  (C)  of  any  request  by the
Commission for additional information or for any amendment of or supplement to a
Registration Statement or any prospectus relating thereto;

                                       (iii)   Furnish,   at  Selling   Holders'
expense,  to the Selling Holders such number of copies of a preliminary,  final,
supplemental or amended  prospectus,  in conformity with the requirements of the
Securities  Act and the rules and  regulations  promulgated  thereunder,  as may
reasonably be required in order to facilitate the disposition of the Registrable
Shares covered by a Registration Statement, but only while GCI is required under
the provisions hereof to cause a Registration Statement to remain effective; and

                                       (iv) Register or qualify at GCI's expense
the  Registrable  Shares  covered by a Registration  Statement  under such other
securities  or blue sky laws of such  jurisdictions  in the United States as the
Selling  Holders  shall  reasonably  request,  and do any and all other acts and
things which may be necessary  to enable each Selling  Holder whose  Registrable
Shares are covered by such Registration  Statement to consummate the disposition
in such jurisdictions of such Registrable Shares.  Provided,  however,  that GCI
shall in no event be required to qualify to do business as a foreign corporation
or as a dealer in any  jurisdiction  where it is not so qualified,  to amend its
articles of incorporation or to change the composition of its assets at the time
to conform 


                                                          REGISTRATION STATEMENT
                                                                     Page II-317
<PAGE>
with the  securities or blue sky laws of such  jurisdiction,  to take any action
that would  subject it to service of process in suits  other than those  arising
out of the offer and sale of the Registrable  Shares covered by the Registration
Statement or to subject itself to taxation in any jurisdiction  where it has not
therefore done so.

                           (b)  GCI's  obligations  under  this  Agreement  with
respect to the Selling  Holder shall be  conditioned  upon the Selling  Holder's
compliance with the following:

                                       (i) Such Selling  Holder shall  cooperate
with GCI in connection with the preparation of the Registration  Statement,  and
for so long as GCI is  obligated  to file and keep  effective  the  Registration
Statement,  shall  provide  to GCI,  in  writing,  for  use in the  Registration
Statement,  all such  information  regarding the Selling  Holder and its plan of
distribution  of the  Registrable  Shares as may be  necessary  to enable GCI to
prepare the  Registration  Statement  and  prospectus  covering the  Registrable
Shares,  to maintain  the currency and  effectiveness  thereof and  otherwise to
comply with all applicable requirements of law in connection therewith;

                                       (ii)  During  such  time  as the  Selling
Holder may be engaged in a distribution of the Registration Shares, such Selling
Holder  shall  comply with Rules 10b-2,  10b-6 and 10b-7  promulgated  under the
Exchange Act and pursuant thereto it shall,  among other things:  (A) not engage
in  any   stabilization   activity  in  connection  with  GCI's   securities  in
contravention of such rules; (B) distribute the Registrable Shares solely in the
manner  described in the  Registration  Statement;  (C) cause to be furnished to
each  broker  through  whom the  Registrable  Shares may be  offered,  or to the
offeree if an offer is not made through a broker,  such copies of the prospectus
covering the  Registrable  Shares and any  amendment or  supplement  thereto and
documents  incorporated by reference  therein as may be required by law; and (D)
not bid for or purchase  any GCI  securities  or attempt to induce any person to
purchase any GCI securities other than as permitted under the Exchange Act; and

                                       (iii)  If  the   Registration   Statement
provides for a Shelf Offering, then at least ten (10) business days prior to any
distribution of the Registrable Shares, any Selling Holder who is an "affiliated
purchaser" (as defined in Rule 10b-6  promulgated under the Exchange Act) of GCI
shall  advise  GCI in  writing  of the date on which  the  distribution  by such
Selling Holder will commence,  the number of the  Registrable  Shares to be sold
and the manner of sale.  Such  Selling  Holder  also shall  inform GCI when each
distribution of such Registrable Shares is over.

                           (c) Notwithstanding  anything to the contrary in this
Agreement,  if at any time after the filing of a Registration Statement or after
it is declared  effective by the Commission,  GCI determines,  in its reasonable
business judgment, that such registration and the offering of Registrable Shares
covered  by such  registration  could  materially  interfere  with or  otherwise
materially adversely affect any financing, 


                                                          REGISTRATION STATEMENT
                                                                     Page II-318
<PAGE>
acquisition,   corporate   reorganization  or  other  material   transaction  or
development  involving  GCI or any of its  Affiliates or require GCI to disclose
matters that otherwise  would not be required to be disclosed at such time, then
GCI may require the suspension by Sellers of the Distribution of any Registrable
Shares  for a  reasonable  period of time,  but not in excess  of  fifteen  (15)
consecutive  Business Days (a "Blackout  Period"),  by giving notice to Sellers.
Any such  notice  need not  specify  the  reasons  for  such  suspension  if GCI
determines,  in its reasonable business judgment, that doing so would materially
interfere with or materially adversely affect such transaction or development or
would result in the disclosure of material nonpublic  information.  In the event
that such  notice is given,  then until GCI has  determined,  in its  reasonable
business  judgment,  that such  registration  and  distribution  would no longer
materially  interfere with the matters  disclosed in the preceding  sentence and
has given notice thereof to Sellers,  GCI's  obligations  under Sections 1 and 2
will be  suspended.  No more than four (4) Blackout  Periods may occur,  and the
number of days included in all Blackout  Periods may not exceed  forty-five (45)
Business Days, in any period of twelve (12) consecutive  calendar months. In the
event of a suspension  pursuant to this Section,  then upon notice from GCI that
such suspension is no longer in effect,  Sellers may recommence  distribution of
Registrable  Shares. GCI will give notice to Sellers of the commencement and the
termination of any Blackout Period. Each Blackout Period will begin and end when
the  applicable  notice is given (unless it earlier  terminates  pursuant to the
terms hereof). The time period mentioned in Section 5(i) will be extended by the
number of days included in all Blackout Periods during which the distribution by
Sellers under an applicable Registration Statement has been suspended.

                  6.       Indemnification.

                           (a) By GCI.  In the event of any  registration  under
the Securities Act of any Registrable  Shares  pursuant to this  Agreement,  GCI
shall  indemnify and hold harmless any Selling  Holder,  any underwriter of such
Selling  Holder,  each  officer,  director,  employee  or agent of such  Selling
Holder,  and each other  person,  if any,  who controls  such Selling  Holder or
underwriter  within the meaning of Section 15 of the Securities Act, against any
losses, costs, claims,  damages or liabilities,  joint or several (or actions in
respect thereof) ("Losses"), incurred by or to which each such indemnified party
may become  subject,  under the  Securities  Act or  otherwise,  but only to the
extent  such  Losses  arise out of or based  upon (i) any  untrue  statement  or
alleged untrue  statement of any material fact contained,  on the effective date
thereof, in any Registration  Statement under which such Registrable Shares were
registered  under the  Securities  Act, in any  preliminary  prospectus (if used
prior to the  effective  date of such  Registration  Statement)  or in any final
prospectus or in any post  effective  amendment or  supplement  thereto (if used
during the period GCI is required to keep the Registration  Statement effective)
("Disclosure Documents"), (ii) any omission or alleged omission to state therein
a  material  fact  required  to be  stated  therein  or  necessary  to make  the
statements  made therein not misleading or (iii) any violation of any federal or
state  securities  laws or rules or regulations  thereunder  committed by GCI in
connection  with 


9
<PAGE>
the performance of its obligations under this Agreement. GCI will reimburse each
such indemnified  party for all legal or other expenses  reasonably  incurred by
such party in  connection  with  investigating  or  defending  any such  claims,
including, subject to such indemnified party's compliance with the provisions of
the last  sentence of  subsection  (c) of this  Section 6, any  amounts  paid in
settlement of any litigation,  commenced or threatened, so long as GCI's counsel
agrees with the reasonableness of such settlement  Provided,  however,  that GCI
shall not be liable to an indemnified  party in any such case to the extent that
any such  Losses  arise out of or are  based  upon (i) an  untrue  statement  or
alleged  untrue  statement or omission or alleged  omission (x) made in any such
Disclosure Documents in reliance upon and in conformity with written information
furnished to GCI by or on behalf of such indemnified party  specifically for use
in the preparation thereof, (y) made in any preliminary or summary prospectus if
a copy of the final  prospectus  was not  delivered  to the person  alleging any
loss,  claim,  damage or  liability  for which  Losses  arise at or prior to the
written  confirmation of the sale of such Registrable  Shares to such person and
the untrue  statement  or omission  concerned  had been  corrected in such final
prospectus or (z) made in any  prospectus  used by such  indemnified  party if a
court of competent  jurisdiction finally determines that at the time of such use
such indemnified party had actual knowledge of such untrue statement or omission
or (ii) the delivery by an indemnified  party of any prospectus  after such time
as GCI has  advised  such  indemnified  party in  writing  that the  filing of a
post-effective   amendment  or  supplement  thereto  is  required,   except  the
prospectus  as so amended or  supplemented,  or the  delivery of any  prospectus
after such time as GCI's  obligation  to keep the same current and effective has
expired.

                           (b) By the  Selling  Holders.  In  the  event  of any
registration under the Securities Act of any Registrable Shares pursuant to this
Agreement,  each Selling Holder shall, and shall cause any underwriter  retained
by it who  participates in the offering to agree to, indemnify and hold harmless
GCI,  each  of  its  directors,  each  of  its  officers  who  have  signed  the
Registration  Statement and each other  person,  if any, who controls GCI within
the meaning of Section 15 of the Securities  Act,  against any Losses,  joint or
several,  incurred  by or to which such  indemnified  party may become  subject,
under the Securities Act or otherwise,  but only to the extent such Losses arise
out of or are based upon (i) any untrue statement or alleged untrue statement of
any material fact contained in any of the  Disclosure  Documents or the omission
or alleged  omission  to state  therein a material  fact  required  to be stated
therein or necessary to make the statements made therein not misleading,  if the
statement  or  omission  was in reliance  upon and in  conformity  with  written
information  furnished to GCI by such indemnifying party specifically for use in
the preparation  thereof,  (ii) the delivery by such  indemnifying  party of any
prospectus after such time as GCI has advised such indemnifying party in writing
that the filing of a post-effective amendment or supplement thereto is required,
except the prospectus as so amended or  supplemented,  or after such time as the
obligation of GCI to keep the Registration  Statement  effective and current has
expired or (iii) any  violation by such  


                                                          REGISTRATION STATEMENT
                                                                     Page II-320
<PAGE>
indemnifying  party of its  obligations  under Section 5(b) of this Agreement or
any  information  given or  representation  made by such  indemnifying  party in
connection with the sale of the Selling Holder's Registrable Shares which is not
contained  in  and  not  in  conformity  with  the  prospectus  (as  amended  or
supplemented  at the time of the  giving of such  information  or making of such
representation).  Each Selling  Holder  shall,  and shall cause any  underwriter
retained by it who participates in the offering to agree to, reimburse each such
indemnified  party for all legal or other expenses  reasonably  incurred by such
party in connection with  investigating or defending any such claim,  including,
subject to such indemnified  party's  compliance with the provisions of the last
sentence of subsection  (c) of this Section 6, any amounts paid in settlement of
any litigation, commenced or threatened.

                           (c) Third Party Claims. Promptly after the receipt by
any party  hereto of notice of any  claim,  action,  suit or  proceeding  by any
person who is not a party to this Agreement (collectively, an "Action") which is
subject to indemnification  hereunder,  such party  ("Indemnified  Party") shall
give reasonable written notice to the party from whom indemnification is claimed
("Indemnifying  Party").  The  Indemnifying  Party  shall  be  entitled,  at the
Indemnifying Party's sole expense and liability, to exercise full control of the
defense,  compromise or  settlement  of any such Action unless the  Indemnifying
Party,  within  a  reasonable  time  after  the  giving  of such  notice  by the
Indemnified  Party,  shall (i) admit in writing to the  Indemnified  Party,  the
Indemnifying  Party's  liability to the Indemnified  Party for such Action under
the terms of this Section 6, (ii) notify the Indemnified Party in writing of the
Indemnifying  Party's  intention to assume the defense  thereof and (iii) retain
legal counsel  reasonably  satisfactory to the Indemnified  Party to conduct the
defense of such Action.  The Indemnified Party and the Indemnifying  Party shall
cooperate with the party  assuming the defense,  compromise or settlement of any
such Action in accordance  herewith in any manner that such party reasonably may
request.  If the  Indemnifying  Party so assumes the defense of any such Action,
the  Indemnified  Party shall have the right to employ  separate  counsel and to
participate in (but not control) the defense, compromise, or settlement thereof.
The fees and expenses of such separate counsel shall be the Indemnified  Party's
sole expense,  unless (i) the Indemnifying Party has agreed to pay such fees and
expenses,  (ii) any  relief  other than the  payment of money  damages is sought
against the  Indemnified  Party or (iii) the  Indemnified  Party shall have been
advised by its counsel that there may be one or more legal defenses available to
it which is different from or additional to those available to the  Indemnifying
Party, and in any such case the fees and expenses of such separate counsel shall
be borne by the  Indemnifying  Party.  No  Indemnifying  Party  shall  settle or
compromise  any such Action in which any relief  other than the payment of money
damages is sought against any  Indemnified  Party unless the  Indemnified  Party
consents in writing to such compromise or settlement, which consent shall not be
unreasonably  withheld. No Indemnified Party shall settle or compromise any such
Action  for  which it is  entitled  to  indemnification  hereunder  without  the
Indemnifying Party's prior written consent,  unless the Indemnifying Party shall
have failed,  after  reasonable  notice  thereof,  to undertake  control of such
Action in the manner provided above in this Section 6.



                                                          REGISTRATION STATEMENT
                                                                     Page II-321
<PAGE>
                           (d) Contribution. If the indemnification provided for
in subsections (a) or (b) of this Section 6 is unavailable to or insufficient to
hold the  indemnified  party  harmless  under  subsections  (a) or (b)  above in
respect of any Losses referred to therein for any reason other than as specified
therein,  then the  indemnifying  party shall  contribute  to the amount paid or
payable by such indemnified  party as a result of such Losses in such proportion
as is appropriate to reflect the relative fault of the indemnifying party on the
one  hand and  such  indemnified  party  on the  other  in  connection  with the
statements  or omissions  which  resulted in such  Losses,  as well as any other
relevant  equitable  considerations.  The relative  fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged  omission to state a material fact
relates to  information  supplied by (or  omitted to be supplied  by) GCI or the
Selling Holder (or  underwriter) and the parties'  relative  intent,  knowledge,
access to  information  and  opportunity to correct or prevent such statement or
omission.  The amount paid or payable by an indemnified party as a result of the
Losses  referred to above in this  subsection (d) shall be deemed to include any
legal  or  other  expenses  reasonably  incurred  by such  indemnified  party in
connection with  investigating  or defending any such action or claim. No person
guilty of fraudulent  misrepresentation  (within the meaning of Section 11(f) of
the Securities  Act) shall be entitled to  contribution  from any person who was
not guilty of such fraudulent misrepresentation.

                  7.       Miscellaneous.

                           (a) Notices. All notices, requests,  demands, waivers
and other communications  required or permitted to be given under this Agreement
shall be in  writing  and shall be deemed to have been duly  given if  delivered
personally or mailed, certified or registered mail with postage prepaid, or sent
by facsimile, as follows:

                                       (i)           if to GCI at:

                                                     General Communication, Inc.
                                                     2550 Denali  Street,  Suite
                                                     1000
                                                     Anchorage, Alaska 99503
                                                     ATTN:    Chief    Financial
                                                     Officer
                                                     Facsimile: (907) 265-5676

                                       (ii)          if to Sellers, at:

                                                     Alaska Cablevision, Inc.
                                                     135  Lake   Street   South,
                                                     Suite 265
                                                     Kirkland, WA 98033
                                                     ATTN: Sam Evans
                                                     Facsimile: (206) 828-0226


                                                          REGISTRATION STATEMENT
                                                                     Page II-322
<PAGE>
                                                     with a copy to:

                                                     Foster, Pepper & Shefelman
                                                     1111  Third  Avenue,  Suite
                                                     3400
                                                     Seattle, WA 98101
                                                     ATTN: Robert J. Diercks
                                                     Facsimile: (206) 447-9700

                                       (iii)         if  to  any  Holders  other
                                                     than   Sellers,    at   the
                                                     address   provided  to  GCI
                                                     (and if none  provided,  to
                                                     Sellers    at   the   above
                                                     address)

or to such  other  person or  address  as any party  shall  specify by notice in
writing to the other party.  All such notices,  requests,  demands,  waivers and
communications  shall be deemed to have been received on the date of delivery or
on the third business day after the mailing thereof, except that any notice of a
change of address shall be effective only upon actual receipt thereof.

                           (b) Entire Agreement.  This Agreement constitutes the
entire agreement  between the parties hereto and supersedes all prior agreements
and understandings, oral and written, between the parties hereto with respect to
the subject matter hereof.

                           (c) Assignment;  Binding Effect; Benefit. Sellers may
assign any of their  rights  under this  Agreement in whole or in part to any of
their  affiliates  to which  Sellers  transfer  any of the  Registrable  Shares,
without GCI's prior written  consent  (which shall  include  spouses,  children,
heirs,  beneficiaries,  personal  representatives and successors by operation of
law, assignees or transferees who receive a transfer by gift, by testamentary or
charitable trust, by any transfer among the Sellers, or by any transfer pursuant
to a pledge, encumbrance or hypothecation). Except for such permitted transfers,
(i) no party may assign  its  rights  under  this  Agreement  without  the prior
written  consent of GCI and (ii) this  Agreement will be binding on and inure to
the benefit of, the parties and their respective successors and assigns. Nothing
in this  Agreement,  expressed  or implied is  intended  to confer on any person
other  than the  parties  hereto  or their  respective  successors  and  assigns
(including,  in the case of Sellers,  any  successor or assign of Sellers as the
holder of Registrable Shares), any rights, remedies,  obligations or liabilities
under  or by  reason  of  this  Agreement,  other  than  rights  conferred  upon
indemnified persons under Section 6.

                           (d) Amendment and Modification. This Agreement may be
amended or modified only by an  instrument in writing  signed by or on behalf of
each party and any other  person then a Holder.  Any term or  provision  of this
Agreement may be waived in writing at any time by the party which is entitled to
the benefits thereof.


                                                          REGISTRATION STATEMENT
                                                                     Page II-323
<PAGE>
                           (e) Section Headings.  The section headings contained
in this Agreement are inserted for reference  purposes only and shall not affect
the meaning or interpretation of this Agreement.

                           (f)  Counterparts.  This Agreement may be executed in
counterparts,  each of which shall be deemed to be an original, and all of which
together shall be deemed to be one and the same instrument.

                           (g)  Applicable  Law.  This  Agreement  and the legal
relations  between the parties  hereto  shall be  governed by and  construed  in
accordance with the laws of the State of Alaska,  without regard to the conflict
of laws and rules thereof.

                  IN WITNESS  THEREOF,  the parties  hereto have  executed  this
Agreement as of the date first above written.

                                    GENERAL COMMUNICATION, INC.


                                    By
                                    John M. Lowber, Senior Vice President

                                    SELLERS:


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

                                    By:
                                    Name:
                                    Its:


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

                                    By:
                                    Name:
                                    Its:


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

                                    By:
                                    Name:
                                    Its:


                                                          REGISTRATION STATEMENT
                                                                     Page II-324
<PAGE>


                                    EXHIBIT B
                                  BILL OF SALE


                  Pursuant  to  the  terms  of  that  certain   Asset   Purchase
Agreement,  by and between GENERAL COMMUNICATION,  INC., and ALASKA CABLEVISION,
INC., dated May    , 1996, ALASKA CABLEVISION, INC., hereby sells, transfers and
conveys title to the fixtures and equipment and other personal  property  listed
on the attached  Schedules numbered     through    , free and clear of all liens
and encumbrances except those listed thereon, to GENERAL COMMUNICATION, INC.
                  Dated                                      , 1996.
                                    ALASKA CABLEVISION, INC.



                                    By:

                                    Name:

                                    Title:


                                                          REGISTRATION STATEMENT
                                                                     Page II-325
<PAGE>


                                    EXHIBIT C
                       ASSIGNMENT AND ASSUMPTION AGREEMENT


                           THIS ASSIGNMENT  ("Assignment")  is made effective as
of               ,  1996, by and between  ALASKA  CABLEVISION,  INC., a Delaware
corporation, 135 Lake Street South, Kirkland,  Washington 98033 ("Assignor") and
GENERAL  COMMUNICATION,  INC., an Alaska corporation,  2550 Denali Street, Suite
1000, Anchorage, Alaska 99503 ("Assignee").

                                 R E C I T A L S

                  A. Assignor is a party to that certain contract by and between
Assignor, and                    ("Contracting Party"), effective as of        ,
19    ("Contract"),  a true and  complete  copy of which is  attached  hereto as
Exhibit A and incorporated herein.

                  B. Pursuant to Section      of the Contract,  Assignor has the
right  at any  time  to  assign  the  contract  upon  the  written  approval  of
Contracting Party.

                  C. Assignor and Assignee  have entered into an Asset  Purchase
Agreement dated May    , 1996 (the "Asset Purchase Agreement"), whereby Assignee
is purchasing all of the assets of Assignor except those  expressly  excluded in
the Asset Purchase Agreement.

                  D.  Pursuant to the Asset  Purchase  Agreement,  Assignor  has
agreed to assign and  Assignee  has agreed to assume  all of  Assignor's  right,
title and interest in and obligations under the Contract.

                  NOW,  THEREFORE,  in  consideration  of the  foregoing and the
mutual covenants contained herein, the parties agree as follows:

                  1. Assignment and Assumption. Subject to the required approval
of Contracting Party as provided in Section 2 below, Assignor hereby assigns and
transfers  to  Assignee  all of  Assignor's  right,  title and  interest  in the
Contract,  and Assignee  hereby accepts the assignment and assumes and agrees to
perform, and fully comply with, from the effective date of this Assignment, as a
direct  obligation to the  Contracting  Party,  all of the duties,  obligations,
payments,  covenants,  terms and conditions of or applicable under the Contract.
Assignee  further  undertakes to defend,  indemnify  and hold Assignor  harmless
from, and against any liability  arising under the Contract,  from and after the
date of approval of this Assignment.


                                                          REGISTRATION STATEMENT
                                                                     Page II-326
<PAGE>
                  2.  Approval  by  Contracting  Party.  Assignor  agrees to act
promptly and in good faith to obtain the written  approval of this Assignment by
the Contracting Party as required by Section of the Contract.

                  3. Assignor's  Warranty.  Except as otherwise  provided in the
Asset Purchase Agreement, Assignor hereby warrants that as of the effective date
of this Assignment the Contract is in good standing,  with no claims,  lawsuits,
liens,  or defaults;  and with all required  monies,  fees,  and other  payments
having  been  timely  made,  and that  Assignor  and  Contracting  Party  are in
substantial compliance with all Contract terms.

                  4. Successors. This Assignment shall be binding upon and inure
to the benefit of the parties and their successors and permitted assigns.

                  5.  Governing  Law. This  Assignment  shall be governed by the
laws of the  State  of  Alaska.  Venue  for any  action  hereunder  shall  be in
Anchorage, Alaska.

                  IN WITNESS  WHEREOF,  the parties  hereto have  executed  this
Assignment on the date first written below.

                                    ASSIGNOR:

                                    ALASKA CABLEVISION, INC.


                                    By:
                                    Name:
                                    Its:


                                    ASSIGNEE:

                                    GENERAL COMMUNICATION, INC.



                                    By:
                                    Name:
                                    Its:


                                                          REGISTRATION STATEMENT
                                                                     Page II-327
<PAGE>
                                                       
                        CONSENT TO ASSIGNMENT AND RELEASE

                  The Contracting Party hereby  acknowledges and consents to the
above  Assignment and agrees to render to Assignee the performance  formerly due
the  Assignor  under the terms of the  Contract.  The  Contracting  Party hereby
releases  Assignor from all  obligations of the Contract from and after the date
hereof  and from the date  hereof  agrees  to look  solely to  Assignee  for the
performance of the obligations under the Contract.



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

                                    By:
                                    Name:
                                    Its:



                                                          REGISTRATION STATEMENT
                                                                     Page II-328
<PAGE>


                                    EXHIBIT D
                               ASSIGNMENT OF LEASE



                  THIS ASSIGNMENT OF LEASE  ("Assignment")  is made effective as
of               ,  1996, by and between  ALASKA  CABLEVISION,  INC., a Delaware
corporation, 135 Lake Street South, Kirkland, Washington 98033 ("Assignor"), and
GENERAL  COMMUNICATION,  INC., an Alaska corporation,  2550 Denali Street, Suite
1000, Anchorage, Alaska 99503 ("Assignee").

                                 R E C I T A L S

                  A.  Assignor  is the lessee  under that  certain  Lease by and
between Assignor and                   ("Lessor"), dated effective as of       ,
19   ,  ("Lease"),  a true and  complete  copy of which is  attached  hereto  as
Exhibit  A and  incorporated  herein;  and  which  Lease is made of  record by a
Memorandum of Lease dated      , 19  , and recorded in  the            Recording
District  on            , 19   , in Book      , at Page    , a true and complete
copy of which  memorandum  is  attached  hereto as  Exhibit  B and  incorporated
herein.

                  B.  Pursuant to Section       of the Lease,  Assignor  has the
right at any time to assign the Lease upon the written approval of Lessor.

                  C. Assignor and Assignee  have entered into an Asset  Purchase
Agreement dated May    , 1996 (the "Asset Purchase Agreement"), whereby Assignee
is purchasing all of the assets of Assignor except those  expressly  excluded in
the Asset Purchase Agreement.

                  D.  Pursuant to the Asset  Purchase  Agreement,  Assignor  has
agreed to assign and  Assignee  has agreed to assume  all of  Assignor's  right,
title and interest in and obligations under the Lease.

                  NOW,  THEREFORE,  in  consideration  of the  foregoing and the
mutual covenants contained herein, the parties agree as follows:

                  1. Assignment and Assumption. Subject to the required approval
of Lessor as provided in Section 2 below,  Assignor hereby assigns,  conveys and
transfers to Assignee all of Assignor's right,  title and interest in the Lease,
and Assignee  hereby  accepts the  assignment and assumes and agrees to perform,
and fully comply with, from the effective date of this  Assignment,  as a direct
obligation  to the  Lessor  under the  Lease,  all of the  duties,  obligations,
payments,  covenants,  terms and  conditions of or  applicable  under the Lease.
Assignee  further  undertakes to defend,  indemnify  and hold 


                                                          REGISTRATION STATEMENT
                                                                     Page II-329
<PAGE>
Assignor  harmless  from,  and against any liability  arising from and after the
date of the approval of the Assignment.

                  2. Approval
 by Lessor.  Assignor agrees to act promptly and in
good faith to obtain the written  approval of this  Assignment  by the Lessee as
required by Section     of the Lease.

                  3. Assignor's  Warranty.  Except as otherwise  provided in the
Asset Purchase Agreement, Assignor hereby warrants that as of the effective date
of this  Assignment  the Lease is in good  standing,  with no claims,  lawsuits,
liens, or defaults; and with all required rents, fees, and other payments having
been timely made,  and that  Assignor and Lessor are in  substantial  compliance
with all Lease terms.

                  4. Successors. This Assignment shall be binding upon and inure
to the benefit of the parties and their successors and permitted assigns.

                  5.  Recording.  The parties,  in conjunction  with the Lessor,
agree to execute a Notice of  Assignment  of the Lease  suitable  for  recording
purposes, the form of which is attached hereto as Attachment 1.

                  6.  Governing  Law. This  Assignment  shall be governed by the
laws of the  State  of  Alaska.  Venue  for any  action  hereunder  shall  be in
Anchorage, Alaska.

                  IN WITNESS  WHEREOF,  the parties  hereto have  executed  this
Assignment on the date first written below.

                                     ASSIGNOR:

                                     ALASKA CABLEVISION, INC.

                                     By:
                                     Its:

                                     ASSIGNEE:

                                     GENERAL COMMUNICATION, INC.


                                     By:
                                     Its:



                                                          REGISTRATION STATEMENT
                                                                     Page II-330
<PAGE>


                                 ACKNOWLEDGMENTS


STATE OF                   )
                           )         ss.
                COUNTY     )

                  The foregoing  instrument was  acknowledged  before me this  
day of        , 1996, by                       of Alaska  Cablevision,  Inc., a
Delaware corporation, on behalf of the corporation.
           



                                         NOTARY PUBLIC, STATE OF
                                         My Commission Expires:



STATE OF                   )
                           )         ss.
                           )

                  The foregoing instrument was acknowledged before me this     
by                 of GENERAL  COMMUNICATION,  INC., an Alaska corporation,  on
behalf of the corporation.



                                         NOTARY PUBLIC, STATE OF
                                         My Commission Expires:




                                                          REGISTRATION STATEMENT
                                                                     Page II-331
<PAGE>


                        CONSENT TO ASSIGNMENT AND RELEASE


                                    Lessor in the above-referenced Lease, hereby
acknowledges  and  consents  to the  above  assignment  and  agrees to render to
Assignee  the  performance  due  under the terms of said  Lease.  Lessor  hereby
releases  Assignor  from all  obligations  of the Lease  from and after the date
hereof  and from the date  hereof  agrees  to look  solely to  Assignee  for the
performance of Lessee's obligations under the Lease.



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

                                                 By:

                                                 Its:




STATE OF                               )
                                       )         ss.
                                       )

                  The foregoing instrument was acknowledged before me this     
by                 of                       , a                  corporation, on
behalf of the corporation.



                                         NOTARY PUBLIC, STATE OF
                                         My Commission Expires:




                                                          REGISTRATION STATEMENT
                                                                     Page II-332
<PAGE>


                            ATTACHMENT 1 TO EXHIBIT D
                          Notice of Assignment of Lease


RECORD THIS INSTRUMENT
IN THE
RECORDING DISTRICT.

                  This Notice of Assignment  of Lease  ("Notice") is made by and
among Alaska Cablevision,  Inc., a Delaware corporation,  135 Lake Street South,
Kirkland,  WAshington 98033  ("Assignor"),  and General  Communication,  Inc. an
Alaska corporation, 2550 Denali Street, Suite 1000, Anchorage, Alaska 99503, and
is made effective this            day of              , 199  .

                  1.  Under an  Assignment  of Lease  dated            ,  199  ,
Assignor has assigned and Assignee has accepted all of Assignor's  right,  title
and  interest  in  the  Lease,  a  memorandum  of  which  was  recorded  in  the
                recording district on            , in Book       , Page    .

                  2.  The  subject  property  description  is as set  out on the
attached Schedule A.

                                                 ALASKA CABLEVISION, INC.


DATED:                                           By:
                                                 Its:

                                                 GENERAL COMMUNICATION, INC.


DATED:                                           By:
                                                 Its:


                                                          REGISTRATION STATEMENT
                                                                     Page II-333
<PAGE>
                                                         
STATE OF                   )
                           )         ss.
                COUNTY     )

                  The foregoing  instrument was  acknowledged  before me this  
day of        , 1996, by                       of Alaska  Cablevision,  Inc., a
Delaware corporation, on behalf of the corporation.
           



                                         NOTARY PUBLIC, STATE OF
                                         My Commission Expires:



STATE OF                   )
                           )         ss.
                           )

                  The foregoing instrument was acknowledged before me this     
by                 of GENERAL  COMMUNICATION,  INC., an Alaska corporation,  on
behalf of the corporation.



                                         NOTARY PUBLIC, STATE OF
                                         My Commission Expires:



AFTER RECORDING, RETURN THIS DOCUMENT TO:

Hartig, Rhodes, Norman,
  Mahoney & Edwards, P.C.
717 K Street
Anchorage, Alaska 99501
Attn.: Bonnie J. Stratton, Esq.
(907) 276-1592


                                                          REGISTRATION STATEMENT
                                                                     Page II-334
<PAGE>


                                    EXHIBIT E
                                    GUARANTY


                  FOR  VALUE   RECEIVED,   and  in  order  to   induce   GENERAL
COMMUNICATION,  INC., a Alaska corporation ("Buyer"), to enter into that certain
Asset Purchase Agreement ("Agreement"), dated as of May    , 1996, between Buyer
and Alaska  Cablevision,  Inc.  ("Seller"),  and to induce  Buyer to perform its
obligations under and to consummate the transactions  described in the Agreement
the undersigned ("Guarantor"), agrees as follows:

                  1.  Definitions.   Capitalized   terms  used  herein,   unless
otherwise  defined  herein,  shall  have the  meanings  ascribed  to them in the
Agreement.

                  2.  Representations  and  Warranties of  Guarantor.  Guarantor
represents and warrants to Buyer that this Guaranty is Guarantor's legal, valid,
and binding  obligation,  enforceable  against  Guarantor in accordance with its
terms.

                  3. Guaranty.  Guarantor,  severally,  and not jointly,  hereby
absolutely,  irrevocably and unconditionally,  subject to the provisions herein,
guarantees  the full and prompt payment when due of any and all monies which may
become  due and  payable  at any time (1) as a result of  breaches  of  Seller's
representations,  warranties and covenants under the Agreement,  or (2) under or
pursuant  to  indemnification  provisions  therein  ("Obligations").   Guarantor
further  agrees  that the  following  terms and  conditions  shall apply to this
Guaranty. Guarantor further agrees that the following terms and conditions shall
apply to this Guaranty:

                           (a)  This  Guaranty  is in all  respects  continuing,
absolute and unconditional.

                           (b) This  Guaranty is a guaranty of payment when due,
and not of collection.

                           (c) Buyer may,  from time to time,  at  Buyer's  sole
discretion  and without  notice to  Guarantor,  take any or all of the following
actions:

                                       (i) Obtain or accept a security  interest
in any property of Company to secure payment of any or all of the Obligations;

                                       (ii)  Obtain  the  primary  or  secondary
obligation  of any third party in addition to  Guarantor  with respect to any or
all of the Obligations;


                                                          REGISTRATION STATEMENT
                                                                     Page II-335
<PAGE>
                                       (iii)  Release,  compromise or extend any
of the  Obligations  or any  obligation  of any nature of any other obligor with
respect to any of the Obligations;

                                       (iv)  Release,  compromise  or extend any
obligation of Guarantor hereunder; and

                                       (v) Release any security  interest in, or
surrender,  release, or permit any substitution or exchange for, all or any part
of any property securing any of the Obligations or any obligation hereunder,  or
release,  compromise,  extend,  alter, or modify any obligation of any nature of
any obligor with respect to any such property.

                           (d) As between Buyer and  Guarantor,  Buyer may apply
any amounts it receives from any source for any Obligation  (arising by whatever
means) toward the payment of any Obligation then due and payable,  in such order
of  application  as  Buyer  may from  time to time  elect.  Notwithstanding  any
performance or payments made by or for the account of Guarantor pursuant to this
Guaranty,  Guarantor  will not be  subrogated to any rights of Buyer until Buyer
shall have received full  performance  and payment of all of the Obligations and
Guarantor's  performance  of all  obligations  hereunder.  Without  limiting the
generality of the foregoing,  Guarantor agrees and acknowledges that if Buyer is
required at any time to return all or any part of any  payment  applied by Buyer
to the  payment  of the  Obligations  or any costs or  expenses  covered by this
Guaranty,   whether   by  virtue  of   Seller's   insolvency,   bankruptcy,   or
reorganization  or otherwise,  the Obligations to which the returned payment was
applied shall be deemed to have  continued in existence and this Guaranty  shall
continue to be  effective  or to be  reinstated,  as the case may be, as to such
Obligations, as though such payment had not been received and Buyer had not made
such application.

                           (e)         Guarantor hereby expressly waives:

                                       (i) Notice of Buyer's  acceptance of this
Guaranty;

                                       (ii)  Presentment,   demand,   notice  of
dishonor, protest, and all other notices whatsoever; and

                                       (iii) All  diligence in  collection of or
realization  upon any payments on, or  assurance of  performance  of, any of the
Obligations or any obligation hereunder,  or in collection on, realization upon,
or protection of any security for, or guaranty of, any of the Obligations or any
obligation hereunder.

                           (f) Provided that, notwithstanding anything set forth
above, the guaranty of Guarantor and Guarantor's  obligations hereunder shall be
limited  to an  amount:  (a) which does not  exceed  such  Guarantor's  pro rata
portion of such liability or 


                                                          REGISTRATION STATEMENT
                                                                     Page II-336
<PAGE>
liabilities  based upon a  percentage  determined  by dividing  the value of the
consideration  actually received by such Guarantor  pursuant to the Agreement by
the aggregate value of all the consideration actually received by all Guarantors
pursuant to the Agreement (including value received by any Guarantor released or
waived pursuant to the above provisions),  and (b) which does not exceed, in the
aggregate,  the amount of consideration  received by such Guarantor  pursuant to
the Agreement.

                  4. Notices. All notices and communications under this Guaranty
shall be in writing  and shall be deemed to have been duly given when  delivered
by  messenger,   by  overnight  delivery  service,   or  by  facsimile  (receipt
confirmed),  or mailed by first class certified mail, return receipt  requested;
if to  Guarantor  addressed  to                        ,                       ,
Attention:                 ;  and if to Buyer,  addressed to Buyer's address set
forth in the Agreement;  or in each case to such other address  respectively  as
the party shall have specified by notice to the other.

                  5. Integration,  Assignment, Modification, Payment of Expenses
and  Construction.  This Guaranty  constitutes the entire agreement  between the
parties  with  respect to the subject  matter  hereof and  supersedes  any prior
written or oral agreements between Guarantor and Buyer. Guarantor may not assign
this Guaranty without Buyer's prior written  consent.  Subject to the foregoing,
this Guaranty will inure to Buyer's benefit, and be binding upon Guarantor,  and
their  respective  successors  and  assigns.  This  Guaranty  may be  amended or
modified only by a writing  signed by Guarantor  and Buyer.  Buyer and Guarantor
shall each pay its own costs and expenses in connection with the negotiation and
execution  of this  Guaranty.  Guarantor  agrees to pay all of Buyer's  expenses
(including,  without limitation, costs and expenses of litigation and reasonable
attorneys' fees) in enforcing or endeavoring to realize upon this Guaranty or in
endeavoring  to collect any amount payable under this Guaranty which is not paid
when due. The  unenforceability  or invalidity of any provision of this Guaranty
shall not affect the validity of the remainder of this Guaranty.

                  6.  Waiver.  The  failure  of  Buyer  to  insist  upon  strict
performance of any of the terms,  conditions,  agreements,  or covenants in this
Guaranty  in any one or more  instances  shall  not be  deemed to be a waiver by
Buyer  of its  rights  to  enforce  thereafter  any of such  terms,  conditions,
agreements,  or covenants.  Any waiver by Buyer of any of the terms, conditions,
agreements, or covenants in this Guaranty must be in writing signed by Buyer.

                  7.  Applicable  Law.  This  Guaranty  will be governed by, and
construed and interpreted in accordance  with, the internal laws of the State of
Alaska, without regard to the conflicts of laws rules of such state.


                                                          REGISTRATION STATEMENT
                                                                     Page II-337
<PAGE>
                  8.  Section  Headings.  The  section  headings  used  in  this
Guaranty  are for the  convenience  of Buyer  and  Guarantor  only and shall not
affect the construction or interpretation of the provisions of this Guaranty.

                  IN WITNESS  WHEREOF,  Guarantor has caused this Guaranty to be
executed by a duly authorized officer as of                  , 1996.


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

                                      Name:


                                                          REGISTRATION STATEMENT
                                                                     Page II-338
<PAGE>


                                    EXHIBIT F
                              Non-Compete Agreement





                                 April    , 1996





Gentlemen:

         Reference is made to that certain Asset Purchase  Agreement dated as of
April        ,  1996,  (the  "Agreement")  between  Alaskan  Cablevision,   Inc.
("Seller")  and  General  Communication,  Inc.  ("Buyer").  This letter is being
delivered to you pursuant to Section      of the  Agreement.  Capitalized  terms
used herein,  unless otherwise defined herein,  shall have the meanings ascribed
to them in the Agreement.  The undersigned  ("Shareholders")  are certain of the
shareholders of the Seller (specifically excluding Craig McCaw, Wayne Perry, and
Donald Adams),  holding a majority of the shares of Seller,  and to induce Buyer
to perform its obligations under and to consummate the transactions described in
the Agreement, Seller and Shareholders are providing this Non-Compete Agreement.

         Seller and  Shareholders,  severally and not jointly,  agree that as of
the date hereof,  through the Final Closing  Date,  and for a period of five (5)
years  thereafter,  Seller and Shareholders  will not, and Seller will cause its
key employees for so long as such employees are employed by Seller,  not to own,
manage,  operate,  joint,  control,  or  be  connected  with  (as  an  employee,
consultant,  partner,  officer,  director,  shareholder or investor,  other than
through  ownership of up to a five  percent  (5%) equity  interest in a publicly
traded  entity),  any business  competing  with Company in the provision of CATV
services related to  distribution,  by means of cable,  microwave,  fiber optic,
satellite  receivers,  or broadcasts,  both  terrestrial  and spatial,  of data,
audio, and video signals,  to businesses,  residences,  multi-family  dwellings,
hotels, motels, trailers, and other users, within the Service Areas.

         If the terms or provisions of this  Non-Compete  Agreement are breached
or threatened to be breached, Seller and Shareholders, each for and on behalf of
itself  and  Seller  on  behalf  of  its  Affiliates,  employees,  officers  and
directors,  expressly  consent  that,  in addition to any other remedy Buyer may
have,  Buyer may apply to any court of  competent  jurisdiction  for  injunctive
relief  in order to  prevent  the  continuation  of any  existing  breach or the
occurrence of any threatened breach.


                                                          REGISTRATION STATEMENT
                                                                     Page II-339
<PAGE>
         If any  provision of this  Non-Compete  Agreement is  determined  to be
unreasonable  or  unenforceable,  such  provision  and  the  remainder  of  this
Non-Compete  Agreement  shall  not be  declared  invalid,  but  rather  shall be
modified and enforced to the maximum extent permitted by law.

Very truly yours,

ALASKA CABLEVISION, INC.



By:
Name:
Title:

SHAREHOLDERS:

By:
Name:
Title:

By:
Name:
Title:

By:
Name:
Title:

By:
Name:
Title:


                                                          REGISTRATION STATEMENT
                                                                     Page II-340
<PAGE>


                                    EXHIBIT G
                              LETTER TO PROGRAMMERS




                                     [DATE]




To:      Programmer from


Dear         :

         The  purpose of this letter is to inform you of the  impending  sale of
systems  now  owned  by  Alaska   Cablevision,   Inc.   ("Seller")   to  General
Communication,  Inc.  ("GCI").  GCI will not  assume  the  Seller's  programming
contract currently in place to serve the systems described in the Asset Purchase
Agreement  dated  May    , 1996,  between GCI and  Seller.  This is not a notice
deleting your programming from these systems;  GCI or its agent will contact you
about continuation of coverage of your service.

                                Very truly yours,



                                                          REGISTRATION STATEMENT
                                                                     Page II-341
<PAGE>


                                    EXHIBIT H
                                    AFFIDAVIT


STATE OF                               )
                                       )   ss.
COUNTY OF                              )

         This Affidavit is delivered  pursuant to the Asset  Purchase  Agreement
dated as of May   ,  1996,  between  Alaska  Cablevision,  Inc.  ("Seller")  and
General Communication,  Inc., an Alaska corporation  ("Buyer").  Section 1445 of
the United States Internal  Revenue Code of 1986, as amended  ("IRC"),  provides
that a transferee of a United States real property interest must withhold tax if
the transferor  is a  foreign person.  The undersigned,  being the duly  elected
                     of Seller  and  being  duly  sworn,  certifies  and  agrees
on behalf of Seller as follows:

         1.  Seller  is  not a  foreign  person,  foreign  corporation,  foreign
partnership, foreign trust, or foreign estate (as those terms are defined in the
IRC and the regulations promulgated thereunder).

         2. Seller's U.S. taxpayer identification number is             .

         3. Seller  understands that this  certification may be disclosed to the
Internal Revenue Service.

         4.  Seller  hereby  agrees to  indemnify  and hold  harmless  Buyer and
Buyer's shareholders, partners and agents of, from and against any and all loss,
liability, interest, penalties, costs, damages, claims or causes of action which
may arise or be incurred by Buyer or Buyer's  agents by reason of any failure of
any  representation or warranty made in this Affidavit to be true and correct in
all respects, including but not limited to any liability for failure to withhold
any amount required under IRC section 1445.



                                                          REGISTRATION STATEMENT
                                                                     Page II-342
<PAGE>


         Dated this        day of                     , 1996.

                                                 SELLER:

                                                 ALASKA CABLEVISION, INC.


                                                 By:
                                                 Name:
                                                 Title:

STATE OF                               )
                                       )   ss.
COUNTY OF                              )

      Subscribed and sworn to before me this       day of                , 1996.




                             Notary Public for the State of
                             My Commission Expires:


                                                          REGISTRATION STATEMENT
                                                                     Page II-343
<PAGE>


                                    EXHIBIT I
                                ESCROW AGREEMENT

         This Escrow Agreement  ("Agreement")  is dated as of        ,  1996 and
entered into among National Bank of Alaska ("Escrow Agent"), Alaska Cablevision,
Inc. a Delaware  corporation  ("Seller"),  and General  Communication,  Inc., an
Alaska corporation ("GCI").  Seller and GCI are collectively referred to in this
Agreement as "Transaction Parties." Seller and GCI are parties to Asset Purchase
Agreement dated as of May    , 1996 ("Purchase Agreement").

         For valuable consideration received, the parties agree as follows:

         1. Escrow Agent.  The Transaction  Parties appoint and designate Escrow
Agent as escrow agent for the purposes set forth in this  Agreement,  and Escrow
Agent accepts such appointment on the terms provided in this Agreement.

         2. Deposits with Escrow Agent. Escrow Agent will establish and maintain
an escrow account (which, together with all instruments and securities delivered
to Escrow Agent by and on behalf of Seller or GCI, are referred to  collectively
as the "Escrow Fund").  Upon the execution of this Agreement,  GCI shall deliver
on  behalf  of Seller to  Escrow  Agent  Convertible  Subordinated  Notes in the
aggregate   principal  amount  of  Eight  Hundred  Thousand  Dollars  ($800,000)
("Seller's  Escrow Notes").  Upon execution  hereof,  GCI will cause delivery to
Escrow Agent of Convertible Subordinated Notes in the aggregate principal amount
of Eight Hundred Thousand Dollars ($800,000) ("GCI Escrow Notes").  Escrow Agent
will hold and disburse the Escrow Fund in accordance with this Agreement.

         3.       Disbursement of Sellers' Escrow Deposit.

                  (a) Except as otherwise  provided in this Section 3(a), Escrow
Agent will disburse the Seller's Escrow Notes to Seller on              , 199  
[181 days after the Closing Date] ("Escrow Disbursement Date"). If, prior to the
Escrow  Disbursement  Date, Escrow Agent receives a certificate signed on behalf
of GCI (a "GCI  Claim  Certificate")  in the form of  Exhibit  A with  completed
information  concerning the nature and amount of an indemnification claim by GCI
under the Purchase  Agreement ("GCI Claim Amount"),  Escrow Agent will retain in
the Escrow  Fund that  number of the  Sellers'  Escrow  Notes as is equal to the
certified GCI Claim Amount for  disbursement  in accordance with Section 3(a)(i)
or (ii) as applicable  ("Retained  Seller's Notes").  Escrow Agent will disburse
the remainder of the Seller's  Escrow Notes that are not required to be retained
pursuant to the preceding sentence to Seller on the Escrow Disbursement Date. If
a GCI Claim  Certificate  is  delivered  to  Escrow  Agent  prior to the  Escrow
Disbursement  Date,  Escrow Agent will retain the Retained Seller's Notes in the
Escrow Fund pursuant to this Agreement until either:


                                                          REGISTRATION STATEMENT
                                                                     Page II-344
<PAGE>
                           (i) Escrow Agent receives joint written  instructions
                  signed on behalf of Seller and GCI  specifying  the method for
                  disbursing  the  Retained  Seller's  Notes in  which  case the
                  Escrow Agent shall  promptly  disburse  the Retained  Seller's
                  Notes in accordance with such instructions; or

                           (ii) Escrow Agent receives instructions from Deloitte
                  and  Touche,   LLP,  or  an   arbitrator   with  the  American
                  Arbitration  Association,  pursuant  to  Section  15.5  of the
                  Purchase   Agreement,   or  an  official   copy  of  a  final,
                  non-appealable   order   issued   by  a  court  of   competent
                  jurisdiction  specifying  the method for  disbursement  of the
                  Retained  Seller's  Notes in which  case  Escrow  Agent  shall
                  promptly  disburse  retained Seller's Notes in accordance with
                  such instructions.

                  (b)   Notwithstanding   anything  to  the   contrary  in  this
Agreement,  Escrow Agent will  disburse the Seller's  Escrow Notes in accordance
with any joint written instructions signed by the Transaction Parties.

                  (c) GCI will  deliver a copy of any GCI Claim  Certificate  to
Seller contemporaneously with or before delivery of the GCI Claim Certificate to
Escrow Agent.

         4.       Disbursement of the GCI Escrow Deposit.

                  (a) Except as otherwise  provided in this Section 4(a), Escrow
Agent will disburse the GCI Escrow Notes to GCI on the Escrow Disbursement Date.
If, prior to the Escrow  Disbursement  Date, Escrow Agent receives a certificate
signed  on behalf of Seller  (a  "Seller's  Claim  Certificate")  in the form of
Exhibit B with  completed  information  concerning  the  nature and amount of an
indemnification  claim by Seller under the Purchase  Agreement  ("Seller's Claim
Amount"), Escrow Agent shall retain in the Escrow Fund that number of GCI Escrow
Notes  as is  equal  to the  certified  Seller  Claim  Amount  for  disbursement
("Retained  GCI  Notes").  Escrow Agent will  disburse the  remainder of the GCI
Escrow  Notes that are not  required  to be retained  pursuant to the  preceding
sentence to GCI on the Escrow Disbursement Date. If a Seller's Claim Certificate
is delivered to Escrow Agent prior to the Escrow Disbursement Date, Escrow Agent
will  retain  the  Retained  GCI  Notes,  in the Escrow  Fund  pursuant  to this
Agreement until either:

                           (i) Escrow Agent receives joint written  instructions
                  signed on behalf of Seller and GCI  specifying  the method for
                  disbursing the Retained GCI Notes, in


                                                          REGISTRATION STATEMENT
                                                                     Page II-345
<PAGE>
                  which case such Notes  shall be  disbursed  promptly by Escrow
                  Agent in accordance with such instructions; or

                           (ii) Escrow Agent receives instructions from Deloitte
                  and  Touche,   LLP,  or  an   arbitrator   with  the  American
                  Arbitration  Association,  pursuant  to  Section  15.5  of the
                  Purchase   Agreement,   or  an  official   copy  of  a  final,
                  non-appealable   order   issued   by  a  court  of   competent
                  jurisdiction  specifying  the method for  disbursement  of the
                  Retained  GCI  Notes,  in  which  case  such  Notes  shall  be
                  disbursed  promptly by Escrow  Agent in  accordance  with such
                  instructions.

                  (b)   Notwithstanding   anything  to  the   contrary  in  this
Agreement,  Escrow Agent will disburse the GCI Escrow Notes in  accordance  with
any joint written instructions signed by Seller and GCI.

                  (c)  Seller  will  deliver  a  copy  of  any  Seller's   Claim
Certificate  to GCI  contemporaneously  with or before  delivery of the Seller's
Claim Certificate to Escrow Agent.

          5.      Rights, Duties and Liabilities of Escrow Agent.

                  (a) Escrow  Agent will have no duty to know or  determine  the
performance  or  nonperformance  of any provision of any  agreement  between the
Transaction  Parties,  including,  but not limited to, the  Purchase  Agreement,
which  will not bind  Escrow  Agent  in any  manner.  Escrow  Agent  assumes  no
responsibility  for the  validity  or  sufficiency  of any  document or paper or
payment deposited or called for under this Agreement, except as may be expressly
and   specifically   set  forth  in  this   Agreement,   and  the   duties   and
responsibilities  of Escrow  Agent  under this  Agreement  are  limited to those
expressly and specifically stated in this Agreement.

                  (b) Escrow Agent will not be personally  liable for any act it
may do or omit to do under this  Agreement  as such agent  while  acting in good
faith and in the exercise of its own best judgment,  and any act done or omitted
by it in  accordance  with the written  advice of its counsel will be conclusive
evidence of such good faith unless,  in any event,  the same  constitutes  gross
negligence or willful  misconduct.  Escrow Agent will have the right at any time
to consult with its counsel upon any question  arising under this  Agreement and
will incur no liability for any delay  reasonably  required to obtain the advice
of counsel.

                  (c) Other than those notices or demands expressly  provided in
this  Agreement,  Escrow Agent is expressly  authorized to disregard any and all
notices  or  demands  given by Seller or GCI,  or by any other  person,  firm or
corporation,  excepting  only  orders or process of court,  and Escrow  Agent is
expressly authorized to comply with and obey any and all final process,  orders,
judgments,  or decrees of any court,  and to the extent  Escrow  Agent  obeys or
complies  with any  thereof of any court,  it will not be liable to any party to
this  Agreement or to any other person,  firm or  corporation  


                                                          REGISTRATION STATEMENT
                                                                     Page II-346
<PAGE>
excepting  only  orders or  process  of court,  and  Escrow  Agent is  expressly
authorized to comply with and obey any and all final process, orders, judgments,
or decrees of any court,  and to the extent  Escrow Agent obeys or complies with
any thereof of any court,  it will not by reason of such compliance be liable to
any party to this  Agreement  or to any other  person,  firm or  corporation  by
reason of such compliance.

                  (d) In  consideration  of the  acceptance  of this  Escrow  by
Escrow Agent, GCI agrees for it and its successors and assigns, to pay to Escrow
Agent  its  charges,  fees  and  reasonable  expenses  as  contemplated  by this
Agreement.  The escrow fees or charges will be Two  Thousand and no/100  Dollars
($2,000.00).  Such sum is intended as compensation  for Escrow Agent's  ordinary
services as contemplated  by this  Agreement.  In the event Escrow Agent renders
services not provided  for in this  Agreement,  Escrow Agent will be entitled to
receive from the  Transaction  Parties  reasonable  compensation  and reasonable
costs, if any, for such extraordinary services.

                  (e)  Escrow  Agent  will be  under  no duty or  obligation  to
ascertain the identity, authority or right of Seller or GCI (or their agents) to
execute or deliver or  purport  to  execute  or deliver  this  Agreement  or any
certificates,  documents or papers or payments  deposited or called for or given
under this Agreement.

                  (f) Escrow  Agent will not be liable for the  outlawing of any
rights  under any  statute of  limitations  or by reason of laches in respect of
this Agreement or any documents or papers deposited with Escrow Agent.

                  (g) In the  event of any  dispute  among the  parties  to this
Agreement as to the facts or as to the  validity or meaning of any  provision of
this Agreement, or any other fact or matter relating to this Agreement or to the
transactions  between Seller and GCI, Escrow Agent is instructed that it will be
under no obligation to act,  except in accordance  with this  Agreement or under
process or order of court or, if there is no such process or order, until it has
filed or caused to be filed an appropriate action  interpleading  Sellers' Agent
and GCI and  delivering  the Escrow  Fund (or the  portion of the Escrow Fund in
dispute) to such  court,  and Escrow  Agent will  sustain no  liability  for its
failure to act pending such process of court or order or interpleader of action.

         6.  Modification of Agreement.  The provisions of this Agreement may be
supplemented,  altered, amended, modified, or revoked by writing only, signed by
GCI and Seller and approved in writing by Escrow Agent,  and upon payment of all
fees, costs and expenses incident thereto.

         7.  Assignment of Agreement.  No  assignment,  transfer,  conveyance or
hypothecation  of any right,  title or interest in and to the subject  matter of
this Agreement will be binding upon any party,  including  Escrow Agent,  unless
all fees,  


                                                          REGISTRATION STATEMENT
                                                                     Page II-347
<PAGE>
costs, and expenses  incident thereto have been paid and then only by the assent
thereto by all parties in writing.

         8.       Miscellaneous.

                  (a) All notices and  communications  under this Agreement will
be in writing  and will be deemed to be duly given if sent by  registered  mail,
return receipt requested, personal delivery or telecopier, as follows:

To Escrow Agent:           National Bank of Alaska
                           Escrow Department
                           301 W. Northern Lights Boulevard
                           Anchorage, Alaska 99503
                           Attention: Michael Walton, Vice President
                           Telecopy:  (907) 265-2139


To GCI at:                 General Communication, Inc.
                           2550 Denali Street
                           Suite 1000
                           Anchorage, Alaska 99503-2781
                           Attention:  John  M.  Lowber,  CFO  and  Senior  Vice
                           President
                           Telecopy: (907) 265-5676

                           With a copy (which will not constitute notice) to:

                           Hartig, Rhodes, Norman, Mahoney & Edwards, P.C.
                           717 K Street
                           Anchorage, Alaska 99501-3397
                           Attention: Bonnie J. Stratton, Esq.
                           Telecopy:  (907) 277-4352

To Seller at:              Alaska Cablevision, Inc.
                           135 Lake Street South, Suite 265
                           Kirkland, Washington  98033
                           Attention: Sam Evans
                           Telecopy:  (206) 828-0226



                                                          REGISTRATION STATEMENT
                                                                     Page II-348
<PAGE>
                           with a copy to:

                           Foster Pepper & Shefelman
                           Suite 3400
                           1111 Third Avenue
                           Seattle, Washington  98101
                           Attention: Robert Diercks
                           Telecopy:  (206)447-9700

or at such  other  address  or  telecopy  number  as any of the  above  may have
furnished to the other  parties in writing and any such notice or  communication
given in the manner  specified  in this Section 8(a) will be deemed to have been
given as of the date  received.  In the event  that  Escrow  Agent,  in its sole
discretion, determines that an emergency exists, Escrow Agent may use such other
means of communication as Escrow Agent deems advisable.

                  (b)  The  undertakings   and  agreements   contained  in  this
Agreement  will bind and inure to the benefit of the  parties to this  Agreement
and their respective successors and permitted assigns.

                  (c)  This   Agreement   may  be   executed   in  one  or  more
counterparts,  each of which will be deemed an  original.  Whenever  pursuant to
this  Agreement GCI and Seller are to deliver a jointly signed writing to Escrow
Agent or jointly  advise  Escrow Agent in writing,  such writing may in each and
all cases are signed jointly or in counterparts  and such  counterparts  will be
deemed to be one instrument.

                  (d) Escrow Agent may resign and be discharged  from its duties
or  obligations  under  this  Agreement  by  giving  notice in  writing  of such
resignation  to the  Transaction  Parties  at least 30 days in  advance  of such
resignation  (unless  waived  in  writing  by  the  Transaction  Parties).  Such
resignation will be effective upon the appointment by the Transaction Parties of
a  successor  escrow  agent,  which will be a  federally  chartered  bank having
combined capital and surplus of at least $100,000,000.00;  provided, that if any
such  appointment of any successor  agent is not  effectuated  within 30 days of
such  written  notice,  Escrow  Agent may file an action  for  interpleader  and
deposit all funds with a court of competent jurisdiction, all as provided for in
Section  5(g).  Any such  successor  escrow agent will be appointed by a written
instrument  mutually  satisfactory to and executed by GCI, Seller,  Escrow Agent
and the successor  escrow agent.  Any successor escrow agent appointed under the
provisions  of  this  Agreement  will  have  all of  the  same  rights,  powers,
privileges,  immunities and authority  with respect to the matters  contemplated
herein as are granted herein to the original Escrow Agent.

                  (e) GCI and  Seller  hereby  jointly  and  severally  agree to
indemnify Escrow Agent for, and to hold it harmless against, any loss, liability
or reasonable  


                                                          REGISTRATION STATEMENT
                                                                     Page II-349
<PAGE>
out-of-pocket  expense  arising out of or in connection  with this Agreement and
carrying out its duties hereunder,  including the reasonable out-of-pocket costs
and expenses of defending itself against any claim of liability, except in those
cases  where  Escrow  Agent  has been  guilty  of gross  negligence  or  willful
misconduct  (provided,  that in no event will the Transaction  Parties be liable
for any  allocated  cost or  expense  of persons  regularly  employed  by Escrow
Agent). Anything in this Agreement to the contrary notwithstanding,  in no event
will  Escrow  Agent be liable for  special,  indirect or  consequential  loss or
damage of any kind  whatsoever  (including,  but not limited to, lost  profits),
even if Escrow Agent has been advised of the  likelihood  of such loss or damage
and regardless of the form of action.

                  (h)  This  Agreement  will be  governed  by and  construed  in
accordance  with the law of the State of Alaska without regard to its principles
of conflicts of laws and any action brought under this Agreement will be brought
in the courts of the State of Alaska,  located in the Third Judicial District at
Anchorage.  Each party hereto irrevocably waives any objection on the grounds of
venue, forum  non-convenience or any similar grounds and irrevocably consents to
service of process by mail or in any other manner  permitted by  applicable  law
and consents to the jurisdiction of such courts.

                  (i) Except as otherwise  specified herein, each of the parties
will pay all costs and expenses  incurred or to be incurred by it in negotiating
and  preparing  this  Escrow  Agreement  and in  closing  and  carrying  out the
transactions contemplated by this Escrow Agreement.

                  (j) If any  legal  action or  proceeding  is  brought  for the
enforcement of this Escrow Agreement, or because of an alleged dispute,  breach,
default or  misrepresentation  in connection  with any of the provisions of this
Escrow Agreement, the successful or prevailing party or parties will be entitled
to recover reasonable attorneys' fees and other costs incurred in that action or
proceeding, in addition to any other relief to which it or they may be entitled.

                  The parties  have caused this  Agreement  to be signed the day
and year first above written.

                                       NATIONAL BANK OF ALASKA, N.A.


                                       By
                                       Roderick   R.   Shipley,    Senior   Vice
                                       President


                                                          REGISTRATION STATEMENT
                                                                     Page II-350
<PAGE>



                                       GCI:

                                       GENERAL COMMUNICATION, INC.

                                       By:
                                       Name:
                                       Title:

                                       TIN:


                                       Seller:

                                       ALASKA CABLEVISION, INC.


                                       By:
                                       Name:
                                       Title:

                                       TIN:


                                                          REGISTRATION STATEMENT
                                                                     Page II-351
<PAGE>


                          EXHIBIT A TO ESCROW AGREEMENT
                            FORM OF CLAIM CERTIFICATE

         The  undersigned,  on behalf of General  Communication,  Inc.  ("GCI"),
certifies as follows:

         A. GCI and Alaska  Cablevision,  Inc.  ("Seller")  are  parties to that
certain  Asset  Purchase   Agreement  dated  as  of  May     ,  1996  ("Purchase
Agreement").

         B.  GCI in  good  faith  believes  that  Seller  has  breached  certain
representations,  warranties,  covenants  or  obligations  made by Seller in the
Purchase  Agreement or are  obligated  to indemnify  GCI with respect to certain
claims.  In  particular,  GCI in good faith is asserting  claims  against Seller
based on the following:

                  [reasonably  detailed  description  of claim and  reference to
                  portion of  Purchase  Agreement  in question to be inserted by
                  GCI at time of delivery of Certificate].

         C.  Attached to this  Certificate  is a copy of GCI's  notice to Seller
relating to the claim pursuant to the Purchase Agreement.  GCI intends to pursue
the claim with due diligence. GCI in good faith believes the amount of its claim
described in its notice is $           .

         D. GCI is furnishing this  Certificate to National Bank of Alaska which
is acting as Escrow  Agent  pursuant to the terms of an Escrow  Agreement  dated
          ,  1996  among  GCI,  Seller  and  National  Bank of  Alaska.  GCI has
delivered  or  contemporaneously  is  delivering a copy of this  Certificate  to
Seller as well.

         This Certificate is signed this      day of       , 199  .

                                                     GENERAL COMMUNICATION, INC.


                                                     By:
                                                     Name:
                                                     Title:


                                                          REGISTRATION STATEMENT
                                                                     Page II-352
<PAGE>



         Receipt  of  this   Certificate  is   acknowledged   this       day  of
               , 199   .

                                                     NATIONAL BANK OF ALASKA


                                                     By:
                                                     Name:
                                                     Title:

                                                          REGISTRATION STATEMENT
                                                                     Page II-353
<PAGE>


                          EXHIBIT B TO ESCROW AGREEMENT
                            FORM OF CLAIM CERTIFICATE

         The  undersigned,  on  behalf of Alaska  Cablevision,  Inc.  ("Seller")
certifies as follows:

         A. Seller and General  Communication,  Inc. ("GCI") are parties to that
certain  Asset  Purchase   Agreement  dated  as  of  May     ,  1996  ("Purchase
Agreement").

         B.  Seller,  in good  faith,  believes  that GCI has  breached  certain
representations,  warranties,  covenants or obligations made by GCI in the Asset
Purchase  Agreement or is obligated to indemnify Seller. In particular,  Seller,
in good faith, is asserting claims against GCI based on the following:

[reasonably  detailed  description of claim and reference to portion of Purchase
Agreement  in  question  to be  inserted  by  Seller  at  time  of  delivery  of
Certificate].

         C.  Attached to this  Certificate  is a copy of Seller's  notice to GCI
relating to the claim  pursuant to the  Purchase  Agreement.  Seller  intends to
pursue the claim with due diligence.  Seller, in good faith, believes the amount
of the claim described in its notice is $              .

         D. Seller is  furnishing  this  Certificate  to National Bank of Alaska
which is acting as Escrow  Agent  pursuant  to the terms of an Escrow  Agreement
dated          ,  1996 among GCI, Seller and National Bank of Alaska. Seller has
delivered or  contemporaneously  is delivering a copy of this Certificate to GCI
as well.

         This Certificate is signed this      day of         , 1996.

                                                     ALASKA CABLEVISION, INC.

                                                     By:
                                                     Name:
                                                     Title:

         Receipt of this Certificate is acknowledged this      day of          ,
1996.

                                                     NATIONAL BANK OF ALASKA

                                                     By:
                                                     Name:
                                                     Title:


                                                          REGISTRATION STATEMENT
                                                                     Page II-354
<PAGE>


                                    EXHIBIT J
                          CONVERTIBLE SUBORDINATED NOTE


           , 1996                                                $


                  FOR VALUE  RECEIVED,  General  Communication,  Inc., an Alaska
corporation, of 2550 Denali Street, Suite 1000, Anchorage, Alaska 99503 ("GCI"),
promises to pay to Alaska Cablevision, Inc., a Delaware corporation, of 135 Lake
Street South, Suite 285, Kirkland,  Washington 98033 ("Company"),  the principal
sum  of                                             ($                  )   plus
interest from                 , 1996, according to the terms hereof. Payments on
this Note shall be  applied:  first,  to the  payment of accrued  interest;  and
second to the reduction of principal of this Note.

         1. Capitalized Terms. Capitalized terms used herein shall have the same
meaning  ascribed to such terms under that certain Asset  Purchase  Agreement by
and between GCI and Company dated May , 1996 ("APA"),  unless otherwise  defined
herein.

         2. Interest. This Note shall bear interest at the rate of             
percent (        %) per annum.

         3. Term.  All  amounts  due under this Note,  including  principal  and
interest not previously  converted into GCI Shares as provided for in Section 5,
shall be due and payable in full on                        , 2006.

         4. No Prepayment. This Note is not subject to prepayment, in full or in
part, except with the consent of both Permitted Holder and Company.  Payments of
principal  and interest  shall be made in lawful  money of the United  States of
America by wire transfer of immediately  available  federal funds to the account
of the Permitted  Holder at such banking  institution  as the  Permitted  Holder
shall designate in writing or in the absence of such designation or upon request
of the Permitted Holder by check sent to the address of the Permitted Holder.

         5.  Subordination.  This Note shall be subordinated to all of GCI's now
existing  and  later  incurred  senior  indebtedness,  as  defined  in the  APA,
including  without  limitation,  the credit facility from  NationsBank of Texas,
N.A.,  pursuant to that  amended and restated  credit  agreement as of April 26,
1996, as extended,  increased,  replaced or refinanced,  and any and all bank or
similar financial institution indebtedness assumed or later incurred as part of,
or in furtherance of the purposes of, the  transactions  contemplated  under the
APA and related agreements.  These subordination  provisions are intended solely
for the purpose of defining the relative  rights of the Permitted  Holder on the
one hand, and the holders of the senior indebtedness, on the other hand. Nothing
contained  herein is intended to or shall impair the  obligation of the Company,
which  is  unconditional  and  absolute,  to  pay to the  Permitted  Holder  the
principal  of and  interest due and payable in  accordance  with its terms,  nor
shall anything herein prevent the Permitted  Holder 


                                                          REGISTRATION STATEMENT
                                                                     Page II-355
<PAGE>
from exercising all remedies otherwise  permitted by applicable law or hereunder
subject to the rights of holders of senior indebtedness as provided for herein.

         6. Conversion.  This Note and the accrued interest shall be convertible
by the  Permitted  Holders  hereof on an annual  basis into GCI Shares  during a
fifteen (15) day period each year for ten (10) years  ("Conversion  Period(s)").
The first Conversion  Period shall commence on this date, and the second through
the  tenth  Conversion   Periods  shall  commence  on  the         day  of  each
              of each year  thereafter  and  shall  conclude  fifteen  (15) days
thereafter,   respectively.   All  or  any   portion  of  the   then-outstanding
indebtedness  under this Note  including the accrued  interest  thereon shall be
convertible  into GCI  Shares.  The  Conversion  Price for the first  Conversion
Period  is $6.50  per GCI Share  and the  Conversion  Price for each  subsequent
Conversion Period shall be an amount equal to $6.50 plus an amount per GCI share
equal to the accrued interest on each $6.50 principal amount of the indebtedness
being  converted,  on a  non-compounded  basis as set forth in  Schedule  1. The
number of GCI Shares into which this Note shall be converted shall be determined
by dividing  the unpaid  principal  amount and all  accrued and unpaid  interest
hereunder by the Conversion  Price.  The number of GCI Shares to be issued shall
be appropriately  adjusted in the event of a stock dividend,  any stock split or
combination   of   outstanding   shares   of  the   Company's   stock,   or  any
reclassification or reorganization of the Company's stock. As of the time of any
such conversion, the Company shall issue and deliver to the Permitted Holder, or
on the Permitted  Holder's  written order, a certificate or certificates for the
number of shares of fully-paid and  nonassessable  GCI Shares  issuable upon the
conversion of this Note. No fractional shares shall be issued in connection with
any exercise hereunder and the Company shall pay the amount  attributable to any
fractional share in lawful money of the United States.

         7. Sufficient Stock. During the period this Note or any portion thereof
remains outstanding, the Company shall at all times have authorized and reserved
for the purpose of issuance  upon  exercise  of the  conversion  right set forth
herein,  a  sufficient  number of GCI Shares to provide for the  exercise of the
conversion right.

         8.  Assignment.  This Note shall be  transferred  or  assigned  only to
Shareholders  of the Company and to their family  members,  heirs and assigns by
operation  of law and to other  limited  transferees  as set out in  Schedule  2
hereof  ("Permitted  Holders"),  and in all other  respects  is not  assignable,
transferable or negotiable.


                                                          REGISTRATION STATEMENT
                                                                     Page II-356
<PAGE>
         9. Place and Manner of Payment. Any indebtedness  outstanding hereunder
which  has not been  converted  to GCI  Shares  shall be paid at  maturity  upon
presentment  of this Note at GCI's place of business in  Anchorage,  Alaska,  or
such other  location as the  parties  may  mutually  agree.  The Company  waives
presentment, notice of dishonor and protest. No delay by the Permitted Holder in
exercising any rights hereunder shall be considered a waiver of such rights.

         10. Default.  If Default be made in the payment of this Note when it is
due and this Note is placed in the hands of an attorney  for  collection,  or if
any suit or action is instituted  to collect this Note or any part thereof,  the
undersigned   promises   and  agrees  to  pay  in  addition  to  the  costs  and
disbursements  provided by statute,  a reasonable  sum for  attorney's  fees. If
default is made in the payment of any amount  payable  hereunder,  including  by
conversion,  when due or following  request for conversion,  then all the unpaid
principal  balance of this Note and all accrued  interest shall bear interest at
the lower of twenty percent (20%) per year,  compounded  monthly, or the highest
rate allowed by applicable law, without the need for any notice or demand.

         11.  Waiver.  The  Undersigned  waives  demand,  protest  and notice of
demand.

         12. Governing Law. This Note shall be governed by the laws of the State
of Alaska.  Venue for any litigation  concerning this Note shall be in the State
of Alaska, Third Judicial District, at Anchorage.

         DATED this           day of               , 1996.

                                                     GENERAL COMMUNICATION, INC.



                                                     By:
                                                     Its:



                                                          REGISTRATION STATEMENT
                                                                     Page II-357